2021-01-15_Friday

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00:00:30.360 | Today on Radical Personal Finance, live Q&A.

00:00:33.100 | ♪

00:00:49.040 | Welcome to Radical Personal Finance, a show dedicated to providing you with the knowledge, skills,

00:00:52.420 | insight, and encouragement you need to live a rich and meaningful life now,

00:00:56.120 | while building a plan for financial freedom in 10 years or less.

00:00:58.660 | Today is the first live Q&A show of 2021.

00:01:03.260 | These shows I do every week that I can arrange an internet connection and the appropriate technology to record them.

00:01:07.960 | Basically, it's live talk radio. You're able to call in, talk about anything you want.

00:01:12.900 | ♪

00:01:21.320 | I want to thank those of you who enjoy the-- who listen to--

00:01:24.580 | Let's try again.

00:01:25.360 | I want to thank those of you who call into the shows every week,

00:01:28.020 | and I want to thank those of you who listen to the show.

00:01:29.960 | These are my favorite shows to record. I really enjoy them because they allow me to speak

00:01:33.660 | extemporaneously about things that I enjoy talking about.

00:01:36.740 | And we don't always get great information, but I'll always tell you if I don't know something,

00:01:40.340 | and then try to refer you to somewhere else, and then sometimes a listener will chime in later,

00:01:44.940 | or suggest something that's really powerful.

00:01:48.180 | But I'd really love for these Q&A shows to grow even more throughout 2021.

00:01:52.220 | I'll be doing them regularly. Again, every week is the goal.

00:01:55.120 | So if you'd like to join me on next week's show, again, you can talk about anything you want.

00:01:58.460 | You can ask questions, you can discuss your situation, you can discuss anything you want.

00:02:01.720 | Totally open discussion forum. Just go to Patreon, sign up for-- support the show.

00:02:07.100 | Just look for Radical Personal Finance on Patreon.

00:02:09.300 | And if you join the show there on Patreon, you will gain access to all of the relevant information

00:02:14.240 | so that you can join these calls.

00:02:15.700 | By the way, they're not only limited to the United States.

00:02:18.500 | You can call into the United States, or you can call in from anywhere around the world.

00:02:22.140 | I have an international number as well, so you'll be able to use that no matter where you are located.

00:02:26.540 | So if you've wanted to talk with me about something, you want to chat about something,

00:02:29.320 | please make this the year that you do it.

00:02:31.220 | Just go to Patreon, search for Radical Personal Finance, and sign up to support the show there,

00:02:35.020 | and you will gain access to these calls.

00:02:37.820 | We begin with Jeremy in Ohio. Jeremy, welcome to the show. How can I serve you today, sir?

00:02:43.020 | - Hi, Joshua. So my wife and I are American citizens, and we're moving to Tokyo in July.

00:02:48.900 | I'll be teaching in an international school. She's self-employed.

00:02:51.740 | And because it's under $106,000, once we become eligible for the foreign earned income exclusion,

00:03:00.340 | our taxable earned income should drop to zero. And I just have a few questions on that.

00:03:05.740 | If we have no taxable income in the U.S., will IRAs and my wife's solo 401(k) still be available to us?

00:03:14.340 | And then when I start, my future school offers a 401(k) with a Roth option.

00:03:20.140 | So if I were to contribute to the Roth 401(k) and then roll the money into a Roth IRA when I leave,

00:03:27.140 | would that money be tax-free forever? And then finally, I think I know the answer to this,

00:03:33.440 | but is this a good time to convert money?

00:03:37.440 | - So let's start with the first one. The answer on—

00:03:41.540 | - Since we'll have no taxable income. Okay, sorry.

00:03:45.340 | - Oh, I apologize. Yeah, you broke up a little bit, so I thought you were done.

00:03:47.640 | We'll come back. Let's hand you your questions one at a time.

00:03:49.540 | So let's start with number one. The number one question is,

00:03:52.240 | will I be able to contribute to an IRA or will I be able to contribute to a solo 401(k)?

00:03:57.840 | And so let me just handle those separately.

00:04:01.540 | The answer is—so I have had a hard time finding the advice necessary and answering these questions.

00:04:09.540 | So I'll tell you what I do know and what I don't know.

00:04:12.640 | On the first question, with regard to contributing to an IRA,

00:04:17.740 | and I'm just going to say either one, IRA or Roth IRA,

00:04:21.540 | the answer is it depends on how you are taking the foreign earned income exclusion.

00:04:28.040 | If you are taking the foreign earned income exclusion under the—I'm blanking on the name of it—

00:04:37.040 | not the strict days test, but the bona fide residence test.

00:04:42.040 | If you are taking the foreign earned income exclusion under the bona fide residence test,

00:04:47.640 | that's the one where basically you affirm to the U.S. government,

00:04:51.340 | "Look, I live in Tokyo. This is where my home is in Tokyo.

00:04:54.740 | I don't have a home in the United States. My residence is Tokyo.

00:04:57.540 | Everything looks like I'm living in Tokyo."

00:05:00.240 | And so then the government says, "Okay, well, we'll give you the foreign earned income exclusion."

00:05:04.040 | The reason people like that one is there's a little bit more flexibility

00:05:07.140 | with how many days you can be in the United States,

00:05:09.740 | potentially up to several months per year, potentially even as much as four months per year.

00:05:14.540 | Although there's no clear guidance from the IRS.

00:05:17.340 | The reason we say the four months per year is because we know that if we trigger the substantial presence test,

00:05:22.940 | that's the test that applies to any person,

00:05:25.440 | whether they are a U.S. person or a foreign person simply visiting the United States.

00:05:30.240 | If they trigger the substantial presence test, then they will be subject to tax in the United States.

00:05:34.440 | So we know that that's the hard line. You can't trigger the substantial presence test.

00:05:38.840 | But you can probably get close to it.

00:05:42.140 | So you could spend perhaps, you know, every summer in the United States for three months and be totally fine.

00:05:46.740 | That's why people like the bonafide residency test.

00:05:48.940 | But if you take the bonafide residency test for your foreign earned income exclusion test,

00:05:55.040 | you will not be able to contribute to an IRA or to a Roth IRA.

00:05:59.740 | If you take the strict days test, it's possible that you can contribute to a Roth IRA or a traditional IRA

00:06:08.940 | by jiggering the days that you're in the United States.

00:06:12.640 | Because what you're trying to do is you're trying to jigger your days in the United States

00:06:16.640 | enough to expose some of your earnings to tax so that you can make your IRA contributions.

00:06:23.540 | You can't make the IRA contributions with the money that's being protected from tax,

00:06:27.540 | but you can do it if you'll expose it to tax.

00:06:30.040 | So to make it very simple, let's assume that you earn $5,000 per month.

00:06:35.040 | And you, so 5,000 times 12 equals $60,000 per year.

00:06:39.440 | Pretend that you spend the entire year in Tokyo.

00:06:42.840 | You are in Tokyo for 365 days, zero days in the United States.

00:06:48.640 | So if you claim the strict days test from January 1 to December 31,

00:06:55.340 | you will have no money exposed to tax and thus you won't be able to make your IRA contribution.

00:07:01.040 | But what you can do is when you file your tax return,

00:07:04.240 | you simply don't use January 1 to December 31 as your dates.

00:07:09.940 | You use February 1 to February 1 as your dates.

00:07:14.540 | And now you'll expose one month of income to taxation

00:07:18.640 | because you didn't claim the foreign-earned income exclusion for that month.

00:07:21.740 | That will now give you $5,000 of taxable income,

00:07:24.540 | which then you can pay taxes on and contribute to a Roth IRA

00:07:28.240 | or make a traditional IRA contribution as well.

00:07:31.840 | So it doesn't matter whether you, you're not saying that you were in the United States.

00:07:36.840 | You're just not taking the claim for the foreign-order income exclusion during that time.

00:07:41.240 | So it's basically a paperwork shuffle and you could do that every year.

00:07:43.940 | So if you were in Tokyo every single year for the next five years,

00:07:46.640 | you could just take, you could just say, hey, when you file your taxes from February 1 to February 1,

00:07:50.840 | that's the period that I'm claiming and every year expose enough of my income to tax

00:07:55.340 | in order to take the IRA contribution. Does that make sense?

00:08:00.240 | It does. Okay. Now the 401k question.

00:08:04.140 | I have not been able to get somebody knowledgeable enough to answer this for me

00:08:09.040 | because everything goes a little wacky when you go offshore depending on how you are doing it.

00:08:14.340 | So I guess I should just say I don't know. That would be the honest answer.

00:08:21.040 | I haven't been able to figure it out and it hasn't been a big priority for me personally

00:08:26.340 | because what I have done is I've stopped working for a US company

00:08:30.940 | and in order to eliminate my employment taxes in addition to my income taxes

00:08:35.940 | and I've lost my taste for being involved in much of the retirement system in the United States at all.

00:08:42.240 | And so in some ways if you do what I have done,

00:08:47.140 | if you do what I have done where you have an offshore company

00:08:51.640 | and you don't have any employment taxes

00:08:55.140 | and you are eliminating your income taxes with the offshore provisions,

00:09:00.940 | well now that's better than making any kind of contribution to any kind of Roth 401k

00:09:05.640 | or solo 401k of any kind because we've got zero tax and we can keep it all out of the system.

00:09:11.140 | So I would point out that that's a superior option to making the contributions to the 401k.

00:09:15.740 | However, it frankly is just a murky area in the law.

00:09:19.540 | So I've asked an attorney. I hired an attorney and asked him that question

00:09:23.540 | and he was not able to figure it out for me.

00:09:26.040 | And so my answer is I don't know.

00:09:28.840 | What I would say practically is that if it's already established

00:09:34.240 | and if everything's already set up, the paperwork is done, the plan has been designed,

00:09:38.040 | I'd say go for it. You know, make your contributions.

00:09:40.840 | Chances are it'll all disappear in the milieu of filings

00:09:45.540 | and many years from now it'll just be completely invisible.

00:09:48.740 | And I don't think that it's any, you're not breaking any laws.

00:09:51.440 | You're not, it doesn't obscure arcane rules.

00:09:54.340 | So if you have everything set up and you can do it, great,

00:09:57.540 | but I'm not going to go through and myself,

00:09:59.940 | I'm not going to go through and try to involve myself again in that system of retirement accounts

00:10:05.040 | when I've already achieved something significant by going offshore.

00:10:10.140 | I see. There's a difference between the law and practice, right?

00:10:14.940 | You could make, you know, you could make, you know, forbidden contributions all the time to a Roth IRA

00:10:20.040 | and chances are at the end of the day it'll all just work out.

00:10:22.340 | Now, if somebody comes along and does not and you found out,

00:10:25.340 | hey, there's something is really wrong here, the penalties for that are very substantial.

00:10:28.940 | So I'm, hear me clearly, I'm not saying, you know, do something willfully wrong.

00:10:34.740 | I'm just simply saying I don't know the answer.

00:10:36.540 | I haven't been able to figure out the answer. It's completely murky to me.

00:10:40.140 | It was murky to the attorney that I hired to ask that question of,

00:10:43.640 | if you can find an attorney that you can hire, a tax attorney who's knowledgeable enough

00:10:47.740 | in those plans and in that law, I'll happily chip in for the consultation fee

00:10:53.540 | because I'd like to have the answer myself.

00:10:56.840 | Okay. I've reached out to a CPA that specializes in expat taxes.

00:11:03.640 | She told me, she's like, yes, you can still contribute

00:11:06.540 | since you're still on the hook for self-employment taxes.

00:11:09.540 | But like you pointed out, it is, it's very murky. It's very unclear.

00:11:13.640 | And that would be my guess is that if you are based in the United States,

00:11:18.040 | so imagine this for a moment. Okay, let's say that you are an American executive.

00:11:22.640 | You earn $200,000 a year. I'm intentionally choosing a number

00:11:26.940 | that's over the $106,000 for an earned income exclusion.

00:11:30.940 | You now are moved, you're employed by the US company

00:11:36.340 | and you now get moved to Dubai to make things simple.

00:11:41.040 | So you earn your $200,000, you're in Dubai the entire year.

00:11:45.040 | Well, in that situation, as far as I can tell,

00:11:47.740 | you would be contributing to your company 401k.

00:11:51.340 | You could max out your company 401k.

00:11:53.640 | You would not receive, sorry, you would receive the foreign earned income exclusion

00:11:59.040 | on your first $106,000 of wages

00:12:01.840 | because you could satisfy the foreign earned income exclusion.

00:12:04.840 | And so you would be doing both because you're working for an American company.

00:12:09.140 | So that makes sense. Now, if you're making $100,000,

00:12:14.240 | can you do the same thing? I think so.

00:12:16.940 | I don't see any reason why you couldn't,

00:12:18.240 | but now we get into that wacky world of, well, wait a second.

00:12:21.140 | If I make a, it's hard with the Roth versus traditional.

00:12:24.240 | If it's a traditional 401k, I'm not getting a tax deduction

00:12:26.440 | because I'm already getting the foreign earned income exclusion.

00:12:28.140 | How does that shake out? But now when you move in as a self-employed person,

00:12:32.140 | if you're a self-employed person where your company is based in the United States,

00:12:36.640 | well, then you're going to pay self-employment tax.

00:12:38.440 | And so I think it would work the same.

00:12:40.040 | The problem in your wife's situation is that she's under the $106,000 of income limit.

00:12:44.840 | So if she makes, could she make a solo Roth 401k contribution?

00:12:50.140 | I think so. I think probably so. And it would be zero dollars of tax.

00:12:54.840 | I think that would work, but I can't figure it out on the return.

00:12:58.140 | I sat down and I noodled on the return. I looked at all of how it goes.

00:13:01.340 | I can't figure it out. And so I would say probably you can do it.

00:13:06.440 | And that's why I specified is the company based in the US or is the company based abroad?

00:13:10.640 | I think that's the key thing.

00:13:11.640 | And so if your wife's company is based in the US,

00:13:14.740 | so she's going to be continuing to pay her self-employment taxes,

00:13:17.040 | then yeah, I would go ahead and try the solo 401k.

00:13:21.040 | Okay. Okay. Thank you. What was your next question, please?

00:13:25.140 | Yeah, I know I broke up earlier. So my future school offers a 401k with a Roth option.

00:13:30.340 | And I'm just, I guess, kind of circling back to that.

00:13:32.640 | If I were to contribute to the Roth 401k and then roll it into a Roth IRA

00:13:37.540 | when I come back or leave the school, come back to the United States,

00:13:40.940 | is that money tax-free forever?

00:13:42.840 | Are you working for an American school that has a base in Tokyo?

00:13:48.540 | No. Okay. So when you say I'm going to contribute to a Roth 401k,

00:13:53.840 | do they have a Roth 401k under American law

00:13:56.940 | or is it a Japanese pension system or a Japanese account?

00:14:02.440 | So I would be paying taxes to the Japanese government.

00:14:07.240 | But because I'll be under the 106, I can put it in,

00:14:11.640 | will not owe tax to the US.

00:14:14.540 | But you can put it in where? What account are you putting it into?

00:14:20.240 | The 401k provided, I think it's through Thai Care, through the employer.

00:14:25.840 | But is the employer a Japanese employer or an American employer?

00:14:31.040 | Japanese. Okay. So they wouldn't have a 401k.

00:14:33.540 | They would have some form of Japanese retirement plan,

00:14:37.040 | some form of tax advantage Japanese retirement plan, not a 401k, correct?

00:14:44.140 | I know exactly what you're saying, but I've spoken to the rep.

00:14:49.240 | They do offer a 401k. So my answer is I don't know because every country is different.

00:14:57.040 | The country I have the most familiarity with would be Canadians and US Americans

00:15:01.240 | because you have US American, the Canadians who can participate

00:15:04.340 | in the retirement systems in both countries.

00:15:06.640 | It's actually a wacky area of law and they don't really play very well together.

00:15:11.040 | And so it's not that it's impossible to do,

00:15:13.440 | but there are a couple of wrinkles that you have to look out for.

00:15:16.740 | I don't know anything about the Japanese system

00:15:19.140 | and I don't know if it all comes down to what is the tax treaty

00:15:22.340 | between the Japanese government and the US government.

00:15:26.540 | So in general the way that the government's work is they ignore one another

00:15:32.740 | unless there's a tax treaty. So the United States doesn't care

00:15:35.940 | about any money that you put into a Japanese retirement plan.

00:15:38.940 | They judge everything based upon US American law

00:15:42.240 | and they ignore completely the fact that you're in Japan.

00:15:45.340 | The Japanese government ignores that you're a US American

00:15:48.040 | and they just do everything based upon Japanese law.

00:15:50.440 | So the wrinkle comes in simply when if there is a tax treaty.

00:15:56.140 | Now most major nations, I would guess that the United States

00:15:59.540 | and Japan have a tax treaty,

00:16:01.140 | but you would need to read that tax treaty in order to understand

00:16:04.240 | and in that tax treaty you'll look into the information

00:16:07.340 | on the equalization agreement whether it has one or not

00:16:10.340 | between the Japanese Social Security system

00:16:13.240 | and the US American Social Security system

00:16:15.440 | and then see if it covers this question that you're referring to.

00:16:19.040 | But that's a question for a specialist tax advisor

00:16:22.040 | for Japanese and Japanese American expats.

00:16:28.540 | Okay. Okay. I'm sorry. I just don't know.

00:16:32.040 | Yeah, my last question I think is pretty straightforward.

00:16:34.940 | I'm pretty sure I know the answer to is this assuming we're both under the 106.

00:16:40.540 | Is this a good time to convert money already in traditional IRAs to a Roth IRA

00:16:45.040 | because my understanding is any conversions below the standard deduction

00:16:50.440 | would be tax-free?

00:16:55.940 | I don't think so. I don't think that it's particularly advantageous.

00:16:59.940 | So I wish I knew the answer to this perfectly

00:17:03.540 | and this would be good for I don't have the tax software to run it.

00:17:06.740 | But here's the here's the thing. Here's why I say that.

00:17:09.940 | The foreign earned income exclusion does not the way that it works is it cuts.

00:17:15.940 | It gives you an exclusion to income that's generated from a foreign country.

00:17:22.340 | But but for example, let's hear here's how it works.

00:17:26.340 | If you have a hundred and seven thousand dollars of income on that last thousand dollars of income

00:17:31.740 | above the foreign earned income exclusion you pay the tax as though you had the

00:17:40.140 | as though you had had a hundred and six thousand dollars of previous income.

00:17:43.440 | So you don't start off at zero you start at a hundred and six thousand dollar bracket.

00:17:48.440 | So the exclusion is a blanket exclusion up to the annual limit amount,

00:17:53.140 | but then you immediately start at that higher tax bracket.

00:17:56.540 | So when you talk about converting you can't say oh look,

00:17:59.340 | I'm going to earn a hundred thousand dollars here of income from abroad

00:18:04.640 | and that's going to be tax-free and then I'll go ahead and do thirty thousand dollars worth of conversions

00:18:09.540 | and because I do my thirty thousand dollars worth of conversions,

00:18:12.740 | then I'll just be up to the thirty thousand dollar bracket.

00:18:15.040 | It doesn't work that way in the actual tax return.

00:18:18.140 | So my instinct while I haven't done it myself my instinct is the answer is no it won't work like that

00:18:24.940 | and the foreign earned income exclusion doesn't save you on any other taxes.

00:18:29.240 | It only applies to foreign earned income.

00:18:31.740 | So doesn't cut your capital gains taxes doesn't create any other wrinkles that are really awesome

00:18:36.440 | other than the just the savings on foreign taxes.

00:18:40.640 | So if your income is going to be high,

00:18:43.440 | I'm 95% confident that the answer is no doing conversions during this time is not a great idea.

00:18:51.240 | Somehow. It's not some magic wrinkle.

00:18:55.240 | So what might make sense is if I you know,

00:19:00.040 | take our salary and maybe do conversions to take us each up to that hundred and six thousand.

00:19:06.940 | I don't think that'll work either because I understand because the converted income.

00:19:10.940 | Yeah, the converted income is not the converted income is not foreign earned income.

00:19:16.840 | So the converted income is still over correct.

00:19:20.140 | It'll just be so the only thing that that exclusion applies to is your foreign earned income.

00:19:24.440 | The converted income is subject to ordinary tax.

00:19:29.140 | Got it at the higher bracket.

00:19:32.340 | Correct. Correct. Got it. What that's that's incredibly helpful.

00:19:37.540 | So thank you very much. Yeah, my pleasure.

00:19:39.640 | And if anyone found anything and anything that I said that was wrong feel free.

00:19:42.540 | Please just come on by and and correct it.

00:19:45.040 | But after studying it working it through the problem is it's just really hard.

00:19:48.140 | I've read the IRS documents and I hope I didn't just miss it obviously

00:19:52.440 | but I've and then but the reforms it just doesn't make a lot of sense.

00:19:55.540 | And so what's necessary I think is sit down with the CPA who basically runs some some,

00:20:01.240 | you know example forms sorry some example returns and models it a couple different ways,

00:20:05.840 | but I don't have the tax software to do that,

00:20:07.640 | but I'd love it if any of you could report back in the semi an email Joshua radical personal finance.com to let me know.

00:20:12.440 | All right, Katrina in Texas. Welcome to the show. Can I serve you today?

00:20:17.240 | Hi Joshua. Yeah, thanks for taking my question today.

00:20:20.140 | I'd like to ask you a question about whole life policy.

00:20:22.840 | Okay, I'm 26 years old single and I've worked as an engineer for about five years now.

00:20:28.840 | About three years ago. I hired a financial advisor to help me manage my money at that time.

00:20:34.440 | I knew very little about personal finance since then I've started to learn more.

00:20:38.640 | I've been listening to your podcast and anyway three years ago.

00:20:42.040 | I signed up for a whole life policy without fully understanding the term the reasons

00:20:46.540 | that I took the policy were that it will provide a guaranteed investment outside of the stock market

00:20:51.640 | for tax diversification and the ability to pull pull from the cash value during retirement

00:20:56.740 | when the market has down years the contribution is $4,600 a year

00:21:01.540 | and I've contributed for three years already the death benefit after 20 years is 422 K

00:21:07.840 | since I have no dependents or spouse and contributing to my 401 K.

00:21:11.940 | I'm questioning the need for the whole life policy

00:21:14.140 | and I'm wondering what my options are with it going forward.

00:21:17.840 | Could I reduce my yearly premium by reducing the death benefit without taking a loss on the policy?

00:21:24.640 | To end the policy now would be a significant loss,

00:21:27.440 | but I also struggle to pay for something.

00:21:29.940 | I'm not sure I will use and the cash value return seems pretty bleak.

00:21:34.940 | How much is your annual income?

00:21:39.740 | It's about a hundred fifty K.

00:21:41.340 | Okay, so do you have any debt?

00:21:46.240 | Do you are you are you in a overall healthy financial situation?

00:21:51.040 | Yes. Okay, and you are maxing out your 401 K every year.

00:21:57.440 | Actually, I hadn't been the last couple years,

00:21:59.940 | but I'm going to going forward.

00:22:01.340 | Okay, so it's it's in short the answer my my to give you the correct my direct answer in your situation

00:22:11.940 | because of your high income.

00:22:13.940 | I would probably just keep the policy as a percentage of your income.

00:22:17.740 | If your income is a hundred and fifty thousand dollars and anticipated to grow.

00:22:22.040 | I don't think it's unreasonable for you to have a little under five thousand dollars a year going to whole life insurance premiums.

00:22:29.540 | I and I'll explain why and kind of what I'm what I'm thinking about when we get to it.

00:22:35.740 | So whole life insurance does have unique attributes those attributes.

00:22:40.140 | I like to use the word attributes because it's judgment neutral doesn't say that their benefits doesn't say the disadvantages each of them are just simply attributes

00:22:47.040 | and in my mind this helps to defuse some of the emotionality around the subject.

00:22:52.340 | If you were to take that exact question that you just asked me

00:22:56.240 | and you were to go around and you were to post it in various online forums,

00:23:01.440 | you would receive very obvious answers very predictable answers from different forums in some forums the answer the the kind of culture is we hate whole life insurance by term insurance and invest the difference.

00:23:15.940 | You don't have any dependents and you already have and you don't need life insurance.

00:23:21.040 | So cancel it and you know buy more stocks.

00:23:23.640 | If you were to go into some of the the hardcore bank on yourself forums,

00:23:28.740 | then you would go in and they would say well you just getting started, you know buy a lot more.

00:23:31.640 | What are you doing only putting you know three three percent of your income into a whole life policy.

00:23:36.040 | It should be a lot bigger and so I'm kind of in the middle and I'll explain why how I get there first whole life insurance has certain attributes

00:23:44.540 | and you've named a couple of the benefits and a couple of the disadvantages.

00:23:48.340 | Some of the benefits are that the inside buildup of cash value grows tax-free other benefits are that you have an insurance policy.

00:23:55.540 | That's in force forever. You have a benefit that the cash values grow on a guaranteed basis.

00:24:02.540 | So they're not going to go down to the very stable asset.

00:24:06.240 | Those are those are good benefits disadvantages takes a long time for the cash value to grow up to go to grow.

00:24:11.840 | If you do your review now in the third year of the policy you and you were to cash the policy in and surrender the policy you would wind up of loss having lost a lot of money.

00:24:20.140 | One of the biggest benefit the disadvantages and so it's a mixture of these things that has certain benefits.

00:24:25.540 | So here's how I look at it for young people young people should focus most heavily on investment classes that have the highest potential rate of return.

00:24:35.140 | So this usually comes down to your career.

00:24:37.840 | It should be your primary area of investment.

00:24:40.140 | How can I you've done an awesome job of building a hundred fifty thousand dollar a year income at 26.

00:24:44.940 | How can I go from a hundred and fifty thousand to three hundred and fifty thousand over the next three to four years?

00:24:50.440 | How can I go from 350 to 750 within 10 years?

00:24:54.640 | You know, these are the the most fruitful areas of your focus is to invest in your career when you come to other investments.

00:25:01.440 | You want things that have a lot of opportunity for growth and while the benefit of whole life insurance is that it's very stable.

00:25:07.840 | The disadvantage of whole life insurance is that is never going to grow very much.

00:25:11.140 | You will never get a whole life insurance policy that grows by a ton assuming that we're talking about a traditional whole life insurance policy whose policy values are driven by the portfolio of the insurance company.

00:25:22.740 | That portfolio will be largely stocked with fixed income investments.

00:25:27.240 | Maybe a little bit of stocks a little bit of private equity a little bit of real estate around the edge, but the portfolio itself is fixed income.

00:25:32.740 | And so the returns are much and they do that because they have to pay the claims if those claims are required.

00:25:40.340 | And so I don't like to see young people putting a lot of money into things that are not going to grow a lot.

00:25:46.540 | I don't think that whole life insurance makes sense in any universe as a primary builder of wealth.

00:25:53.840 | I think that your career businesses private investments and stocks are going to be your primary builders of wealth.

00:26:02.340 | So if your income were $40,000 per year and you said I've got $4,600 a year premium payments that's way too much in my opinion.

00:26:11.340 | At $150,000 though you should be able to fully fund other things.

00:26:15.640 | Depending on your personal expenses you should be able to fully fund your IRA.

00:26:21.340 | You are still eligible for Roth IRA for now so you can go ahead and fully fund your Roth IRA.

00:26:26.440 | So that right there puts a lot of money into stocks.

00:26:30.440 | The benefit of whole life insurance as an asset class is its stability.

00:26:35.440 | And so how I look at it is it's a good place for some of my longer term safer dollars.

00:26:40.740 | Some of those dollars that I always want to have around as reserve.

00:26:43.940 | Some of those dollars that I want to have as just stable banking accounts, stable reserve dollars.

00:26:51.240 | And it works really well for that.

00:26:53.040 | And then because of some of the benefits, the fact that it goes up by a higher rate than a bank account does.

00:26:58.740 | In most states life insurance cash values are protected from creditors.

00:27:03.240 | It's an asset that doesn't show up on certain financial measurements and so it's really useful.

00:27:10.940 | The primary use that I use my whole life insurance for is as an emergency fund.

00:27:16.940 | And so I have a significant amount of reserves in whole life insurance and I use it as my emergency fund.

00:27:22.940 | And it's not going to go up as much as some of my other aggressive investments.

00:27:27.640 | I don't expect it to. I don't expect it to beat stocks. I don't expect it to.

00:27:31.440 | But what it works really well as is as a very stable place for me to put money where I get a higher return than I get on online high yield savings.

00:27:40.440 | And I get the protection from creditors which for me is very very important.

00:27:44.740 | I like to shield that. If I'm going to keep $50,000 in a bank account,

00:27:49.440 | that's a lot of money that could potentially be exposed to the claims of a creditor.

00:27:52.940 | But if I put $50,000 into a whole life insurance policy and I have $50,000 of cash value or $100,000 of cash value,

00:27:58.640 | whatever the number winds up being, that money is shielded from the claims of my creditors.

00:28:03.140 | But yet it's still very available to me.

00:28:06.340 | And so I teach in my How to Borrow Money Safely and Never Pay Interest Using Credit Cards course,

00:28:13.840 | I talk about this concept where what I would do if I had an emergency, I have cash, right?

00:28:18.940 | I have physical cash. I have money in bank accounts. I have savings.

00:28:21.640 | But if I had an emergency, the first thing I would do is I would start using 0% credit cards.

00:28:26.340 | I would apply for some new 0% credit cards. I would use those 0% credit cards to pay for my expenses.

00:28:30.540 | And I would just simply plan to pay them off at 0%.

00:28:33.140 | But if all of a sudden I needed to pay them off, maybe I had reached the end of my borrowing limits,

00:28:37.740 | I wasn't getting good offers, what I'll do is I'll take money from my whole life insurance policy

00:28:41.840 | and I'll pay off those credit cards. And I'll pay them down enough to get my credit score up.

00:28:46.140 | I'll apply for new cards. I'll surf the balance back over.

00:28:48.540 | And I'll tuck that money back aside into a credit or protected account.

00:28:51.940 | And so in that way, if my whole life falls apart, the emergency gets too big,

00:28:57.140 | I default on my credit cards, at least I still have something to rebuild with,

00:29:01.240 | but the money that's in my whole life insurance policy.

00:29:03.840 | So I'm okay with some amount. You know, I often say maybe 5%,

00:29:08.440 | maybe as high as 10% for someone who's super conservative, but under 5% or under, I'm okay with.

00:29:13.940 | To be clear, there's no like fancy formula for it.

00:29:17.140 | It's just kind of a gut feeling where you say, I need enough money into this account where it can,

00:29:22.340 | I need enough money in there for it to matter.

00:29:24.640 | But you know, what does it matter if you've got $2,000 in a whole life insurance policy?

00:29:28.640 | It's not that, it's not going to do anything for you.

00:29:30.940 | Better just to buy term and keep saving the money in something else

00:29:33.640 | where it's not even in a life insurance contract at that point in time.

00:29:37.140 | But 3% of your income, I think that's perfectly fine.

00:29:41.540 | Now, you don't have dependents.

00:29:43.340 | I think that that's not necessarily as worrisome as some other people might tell you.

00:29:51.540 | If I had an insurance license still, I would say to you, Katrina, you don't need life insurance.

00:29:57.940 | You don't have any dependents. But I would say you might want life insurance.

00:30:02.140 | You might want what it does for you.

00:30:03.940 | You might want the feeling of knowing that if you die and maybe your parents or your sister

00:30:09.640 | or your niece or your favorite charity are the beneficiaries of your policy right now,

00:30:15.140 | I would say you might like the feeling and want the feeling of knowing that if you die,

00:30:19.540 | they receive $422,000 of money.

00:30:24.040 | And so I had life insurance before I was married.

00:30:26.940 | My parents were the beneficiaries of it and I always felt really good about that.

00:30:30.640 | So if, you know, if the whole thing works for you,

00:30:34.640 | then based on what you're saying, I would keep the policy.

00:30:38.340 | Now, what you should do and should always do is you should keep an eye on the policy.

00:30:42.440 | You want to make sure that it's performing.

00:30:44.440 | And so you want to make sure it's with a good company.

00:30:46.340 | You want to make sure that you didn't get it with a lot of, you know, unnecessary expenses, etc.

00:30:50.440 | So you should regularly do policy reviews.

00:30:53.640 | It may be, if you do a review on the policy,

00:30:56.140 | it may be that the policy has some kind of extra riders or options that you don't need.

00:31:02.040 | And if you just want to cut back the premiums a little bit without cutting back your costs,

00:31:06.540 | maybe you could just drop off one of those riders.

00:31:09.040 | That's a perfectly reasonable thing that you can do.

00:31:12.540 | If you decide that you don't want the policy anymore,

00:31:15.440 | you just simply have decided, you know what,

00:31:17.440 | well, Joshua, I got sold something.

00:31:19.940 | I don't want it anymore.

00:31:21.040 | What can I do? You have three basic, what are called non-forfeiture benefits.

00:31:27.540 | If you pull out your policy, you'll find a section in it called the non-forfeiture benefits

00:31:32.240 | or non-forfeiture options written in the actual contract that you have.

00:31:35.840 | And you can read them there.

00:31:37.240 | But the first non-forfeiture benefit, and the idea is this,

00:31:40.240 | if you just keep the policy the way it is,

00:31:42.540 | then it'll be in force until you die and then your beneficiaries will get the money.

00:31:46.140 | But if you want to cancel the policy, what are your options?

00:31:48.340 | The first is to surrender for cash value.

00:31:50.640 | So you can call the insurance company.

00:31:51.940 | You can say, I want to surrender the policy.

00:31:53.740 | I don't want it anymore.

00:31:55.240 | Can you please give me the cash value of the contract?

00:31:59.240 | And they'll send you the cash value.

00:32:00.840 | As you said, that would be a hard pill to swallow for you right now

00:32:04.640 | because you will experience and realize a loss

00:32:09.140 | because you've put more money into the policy than it currently has in cash value.

00:32:12.540 | That's normal in life insurance policies.

00:32:14.840 | Usually takes anywhere from four, five, six, seven years for them to "break even."

00:32:20.040 | The second non-forfeiture option that you have is what's called extended term insurance.

00:32:24.840 | And so what you can do is you can call the insurance company and you can say,

00:32:30.940 | "Hey, listen guys, I currently have $8,000 in cash value with you.

00:32:36.440 | How long of term insurance will that $8,000 of cash value buy me

00:32:44.540 | if I just make a one-time premium payment?"

00:32:46.440 | And they'll run the calculations and they'll say,

00:32:48.140 | "Okay, Katrina, we'll give you 14.7 years of term life insurance for this cash value."

00:32:54.040 | So if you don't want to take the $8,000 and then go out and buy a term policy,

00:32:57.240 | you can just get a term policy that's extended term insurance

00:33:01.640 | based upon, hey, one-time payment of the cash value

00:33:04.140 | and they'll give you insurance for the next 14.7 years or whatever it is.

00:33:08.040 | The third thing that you can do is you can take the policy what's called reduced paid up.

00:33:12.940 | And so what they'll do is they'll calculate how much insurance you own currently.

00:33:17.740 | Maybe you say, "I don't need the $422,000,

00:33:20.440 | but I'd like to keep the policy and I'd like to just take a smaller amount of insurance."

00:33:25.640 | And so they'll drop it from $422,000 and depending on, you know,

00:33:30.440 | at this stage, maybe it's $28,000 of insurance.

00:33:34.440 | So they'll say, "Hey, listen, tell you what, we'll give you a reduced paid up policy.

00:33:37.940 | It'll have $8,000 of cash value in it and you'll have a $28,000 death benefit

00:33:42.940 | and then that'll be enforced forever.

00:33:44.440 | If we pay dividends, it'll grow a little bit more over time as we pay dividends,

00:33:48.340 | but that's called reduced paid up."

00:33:50.340 | And then of course, you can also just lower the face amount.

00:33:55.240 | If you lower the face amount though, it doesn't solve the fundamental problem

00:33:58.940 | because you're still, it'll go on a proportional basis.

00:34:02.440 | So if you drop the face amount by from $400,000 and something thousand dollars to $200,000,

00:34:07.940 | well, it'll liberate, you know, half of the cash value,

00:34:10.940 | but the math is still the same.

00:34:12.840 | So from what you're describing to me, I would keep the policy.

00:34:17.540 | If you decide five years or so from now that you really don't want it then,

00:34:23.140 | you would probably have broken even by then.

00:34:25.740 | You do, of course, have to think about the opportunity cost.

00:34:27.940 | If you had some great business that you were going to start

00:34:31.140 | and it would be a lot better for you just to take the $8,000 you have in the policy

00:34:35.340 | and go start the business, I would say start the business.

00:34:37.540 | But because of your income, because this is a relatively small percentage of your income,

00:34:42.140 | I don't think it's necessary to drop the policy at this point in time.

00:34:47.440 | - Thank you. - My pleasure.

00:34:49.740 | All right, we move, we have filled up the lines.

00:34:52.740 | Guys, I'm going to do my very best, but I'll have to move faster.

00:34:56.040 | All right, we'll go to Lane in Pennsylvania.

00:34:58.140 | Lane, welcome to the show. How can I serve you today?

00:35:01.540 | - Hey, how are you today? - I'm doing well,

00:35:03.740 | but you got the phone on the other side of the room.

00:35:07.040 | Your headset's off or something.

00:35:09.840 | - Does it sound any better? - No, it doesn't.

00:35:12.940 | - Try again. - Can you come back to me? Is that okay?

00:35:14.540 | I'll come back to you in a couple minutes. Yep.

00:35:16.240 | All right, we go to California, Fresno, California.

00:35:20.040 | Welcome to the show. How can I serve you today?

00:35:24.940 | Fresno, California is gone. We go to San Diego, California.

00:35:27.340 | Making my life easier. San Diego, California. Welcome to the show.

00:35:31.240 | - Is that me? - That's you, whoever you are.

00:35:35.040 | - Hi, thanks so much for taking my call, Joshua. - My pleasure.

00:35:39.740 | Okay, I'll make it quick. It's kind of general direction,

00:35:43.140 | but it comes out in three different sorts.

00:35:47.840 | It's just a rental property. I don't know if you remember me actually asking you about it back in November,

00:35:52.640 | but I'll just get you up to speed. It's about two hours from our house.

00:35:56.240 | It's a place my wife and I have stayed before as guests.

00:36:01.040 | Our friends just owned it and rented out to their friends,

00:36:03.940 | and we're kind of continuing on in the same spirit of that.

00:36:08.640 | Not really Airbnb-ing it, but we're using it for ourselves.

00:36:11.840 | We're renting it out to our friends, etc., and it's trying to make it a really good tax vehicle for us.

00:36:18.540 | So my questions are about taxes with a rental property for a short-term vacation.

00:36:25.540 | So I'm wondering about basically what works and what doesn't in terms of investing in the property,

00:36:36.440 | particularly when we go up there, we're cleaning it, we're making sure that things are in order,

00:36:43.540 | we're replacing paper towels, things of that nature.

00:36:47.540 | So we're writing off trips that we take to visit our rental property,

00:36:52.340 | and that's all pretty straightforward and kosher.

00:36:57.740 | For our vehicle, we're just taking the deduction mile by mile instead of trying to do the expense route.

00:37:08.040 | But I'm curious, if we head up there on a trip that's not in our personal vehicle,

00:37:13.840 | are we able to write off the miles, or do we have to be driving our car that we've specifically designated for tax purposes or whatever to be able to log those miles?

00:37:23.740 | Miles are miles. Doesn't matter what car.

00:37:26.640 | When you report it, you'll of course have to fill in the little worksheet that says,

00:37:31.940 | "What vehicle is this? How many miles total on the vehicle? How many were personal? How many were business?"

00:37:36.740 | So that can be complex depending on the car that you are using, but miles are miles.

00:37:41.740 | It doesn't matter what car you're driving.

00:37:43.740 | When you're taking a mileage deduction, miles are miles.

00:37:46.740 | Perfect. Okay. Thanks so much.

00:37:50.740 | Two more really quick kind of instances.

00:37:54.740 | We've done a lot of moving furniture, a lot of visits with lots of redecorating, reinstalling new locks, that sort of thing.

00:38:05.740 | And we've brought volunteers with us who have been helping us with that process.

00:38:11.740 | And I'm curious how much of their maybe meal expenses, food expenses, other entertainment and stuff,

00:38:20.240 | are we able to pretty straightforwardly write off stuff for them too, or is it only applicable to my wife and I, the owners?

00:38:28.240 | If you've brought a work crew over to your house, let's just talk about, because the rules are exactly the rules for business.

00:38:38.240 | So if you've brought a work crew to your property, generally of course you would be paying them wages.

00:38:46.240 | But if you serve them a meal for the convenience of the employer, then the cost of that meal,

00:38:54.240 | and it's for the convenience of the employer so that they can continue their work, the cost of that meal is a deductible expense.

00:39:01.240 | So as I would see it, if you have brought volunteers to your property and you are paying the costs for their food,

00:39:10.240 | to me that would be a deductible expense.

00:39:16.240 | Wonderful. Okay. And then my last question is, with the replacing of furniture and getting new dishware

00:39:24.240 | and trying to make things in that space as nice as possible for the guests,

00:39:29.240 | this is like the most gray area, the least confident I am.

00:39:33.240 | Where is the line between just doing that very straightforwardly and doing it in a way that funnels or maybe launders certain items through the business?

00:39:49.240 | Say like if we want to replace the couch up there, but the couch as it is up there isn't so bad, but we want to replace it anyways.

00:39:58.240 | Is there anything stopping us from taking that old couch and finding a better use for it that is personal,

00:40:05.240 | but then still writing off the cost of the new couch?

00:40:08.240 | Same with if we wanted to replace all the plates, but then maybe the plates in our home are really breaking down.

00:40:13.240 | We want to take the old plates from the cabin and just keep them as our own personal plates,

00:40:18.240 | but then buy a whole new set of plates and write them off for the purposes of the cabin.

00:40:22.240 | How far can we take that line of thinking in terms of, at the other side of the spectrum,

00:40:29.240 | I could say anything we ever want to buy new, we're technically buying for the cabin and it has to just stay there at least a month or something,

00:40:37.240 | and then we'll replace that and then we can keep it for ourselves and the whole thing was tax deductible,

00:40:41.240 | even though we intended it for personal use long term the whole time or something like that.

00:40:45.240 | Does that sort of make sense?

00:40:47.240 | If you were an IRS auditor and you were trying to answer that question, how would you answer that question?

00:40:57.240 | What would you guess is the answer? Just a guess.

00:41:03.240 | My guess would be that maybe there's a rule about it having been used for a certain amount of time

00:41:09.240 | or depreciated a certain amount before it was "scrapped" in terms of the business's use for it,

00:41:16.240 | or maybe something like that. I don't know if there are guidelines about that, but that would be my best guess.

00:41:21.240 | Okay. So what I would say is that if you were sitting across the table from an auditor,

00:41:27.240 | there are the technical rules of the situation, and then there's just a reasonableness factor that any human being would apply here,

00:41:42.240 | and you would say, "All right, let's just be reasonable."

00:41:47.240 | So let's talk about plates, for example.

00:41:51.240 | First, here would be my understanding of the technical rule.

00:41:55.240 | When a business acquires property, that's what you have, you have a business.

00:41:58.240 | The business acquires property.

00:42:00.240 | The business can either expense the cost of that property or depreciate the cost of that property per the relevant rules.

00:42:07.240 | Let's assume that the business is expensing the cost of the property.

00:42:11.240 | Now, when the business is done and it needs to dispose of the property,

00:42:15.240 | the business needs to dispose of the property at a fair market value.

00:42:19.240 | So if the business is done with this piece of furniture, then they will take it,

00:42:24.240 | they'll sell the piece of furniture, and then they'll recognize that amount of sale as income to the business,

00:42:32.240 | because it was income to the business from the sale of the piece of furniture.

00:42:36.240 | So that's the way the rules work, is that the property is going to be disposed of and the business is going to recognize it.

00:42:44.240 | Now, here's where I talk about reasonableness.

00:42:48.240 | Is it the case that frequently there are businesses that will come in and they'll buy furniture, they'll buy equipment,

00:42:58.240 | they'll use that furniture and equipment for years, they'll expense it fully, and then they just want it gone?

00:43:03.240 | Well, yeah, they just want it gone. So they'll give it away, they'll donate it frequently,

00:43:07.240 | they'll put it in the parking lot with a sign that says "free" on it.

00:43:10.240 | And there's no penalty for doing that, because the business needs to move on.

00:43:14.240 | Now, if you've got a business that has an annual revenue of $50 million,

00:43:18.240 | and they got rid of what maybe they could have sold, $500 worth of office furniture,

00:43:24.240 | they just got rid of it out of their parking lot because they needed it gone,

00:43:27.240 | well, no one's going to pay any attention to that.

00:43:30.240 | Now, if you've got a business where you've got $5,000 of revenue,

00:43:35.240 | and now you're getting rid of $5,000 of furniture for free,

00:43:38.240 | and it just happens to be your brother that's picking it up, and you're picking it up,

00:43:41.240 | and it winds up in your house, now we've got some problems.

00:43:43.240 | So it comes down to the reasonableness.

00:43:45.240 | So if you buy some new plates for the cabin, I mean, most places, plates don't have much value.

00:43:52.240 | And so is it really worth it for you to put those plates and take them and sell them,

00:43:59.240 | or take a--add a $5 cost to your expenses? Probably not.

00:44:03.240 | If it were me, I would buy the new plates for the cabin, I'd grab the other plates,

00:44:07.240 | I'd put them in the trunk of my car, I'd take them home and use them,

00:44:09.240 | and I would just identify them in my mind, "These are backup,"

00:44:12.240 | if I ever need to go and put them back.

00:44:14.240 | But I'm not going to worry about it.

00:44:16.240 | Now, if you go and say, "The cabin needs a new TV,"

00:44:19.240 | and so you go out and buy a $3,000 TV,

00:44:22.240 | then a month later you decide, "You know what? That TV isn't great,"

00:44:25.240 | and you go and buy another $3,000 TV, you take the old $3,000 TV,

00:44:28.240 | you put it in the back of your car, you take it home and hang it on your wall,

00:44:31.240 | and you don't, you know, mark out the fair market value, that ain't going to work.

00:44:35.240 | And so there's the law, and then there's just a matter of reasonableness.

00:44:39.240 | The law is that you expense the asset, and then whatever the terminal value of the asset is,

00:44:47.240 | if the business sells the asset, then it recognizes the gain.

00:44:50.240 | Or if the business gives the asset to a charity, then it takes a charitable deduction, etc.

00:44:54.240 | And if you're talking about, you know, an old TV or an old couch,

00:44:58.240 | I think it all just flows through.

00:45:00.240 | But if you're talking about something egregious where you're clearly cheating,

00:45:04.240 | then it ain't going to work if you get audited.

00:45:09.240 | Perfect. That's exactly what I was—

00:45:13.240 | well, I don't know if I was hoping to hear that,

00:45:15.240 | but I mean, that's the answer that I didn't have before.

00:45:18.240 | So it sounds like I just kind of—I mean, not to sound cheesy,

00:45:21.240 | but I kind of have to listen to my heart and be honest with myself about what we're doing

00:45:26.240 | and making sure that it's in good faith with what we think the IRS is trying to do.

00:45:32.240 | Just be reasonable and act in good faith.

00:45:35.240 | It is impossible for any one of us to follow the law perfectly on any of this tax stuff.

00:45:40.240 | It's impossible.

00:45:42.240 | Just act in good faith and be reasonable, and I think you'll be in good shape.

00:45:47.240 | All right, let's go back to Lane in Pennsylvania.

00:45:48.240 | Lane, welcome. You got your microphone figured out?

00:45:51.240 | I think so. You tell me.

00:45:53.240 | Sounds great this time. How can I serve you today?

00:45:56.240 | Awesome, awesome.

00:45:57.240 | I was thinking a lot about IRA money, like Roth IRA money.

00:46:02.240 | And in the pandemic last year, I did my taxes a little bit late,

00:46:07.240 | put the money in the Roth and really invest it,

00:46:11.240 | save some money up, ready to put money in for 2020,

00:46:16.240 | and I've got money I can put in for 2021.

00:46:19.240 | So I've got this big, huge thing of cash, but for those three years, for my wife and myself,

00:46:24.240 | that I find myself just hesitating to invest just because things seem a little uncertain and whatnot.

00:46:29.240 | And I just thought maybe I don't have to put it in IRA this year or for last year.

00:46:36.240 | I don't know if I wanted to—here's some different perspectives that you might have on that.

00:46:40.240 | Well, if you don't put it in—so if you don't make your 2020 contribution before the tax filing deadline for the 2020 tax year,

00:46:48.240 | you'll never, ever again be able to make a 2020 contribution.

00:46:53.240 | So you should be aware of that. That's an important point, that once you—if you don't use it, you lose it.

00:47:00.240 | So with any kind of IRA contribution, you need to always recognize that if I don't make this this year,

00:47:06.240 | I will never be able to do this again, and that can be important at certain times, and it can be unimportant.

00:47:13.240 | But you need to recognize that after the tax filing deadline for the 2020 tax year,

00:47:18.240 | I can never again go back and make a 2020 IRA contribution.

00:47:22.240 | I can't make a 2020 SEP IRA contribution. It's done, and it's gone.

00:47:27.240 | Recognize, if you're concerned about investment volatility, that you don't have to invest the money.

00:47:32.240 | You can always put money into an IRA, leave it in a cash account, and make your investment decisions down the road.

00:47:40.240 | If you're committed to the idea—if you're okay with the idea of having money in that type of retirement account,

00:47:46.240 | go ahead and put it in. Put it into a cash account and just keep it there until you make your investment decisions,

00:47:53.240 | and you can accumulate years' worth of that before you decide, "You know what? I'm going to go ahead and buy some mutual funds,"

00:47:58.240 | or, "I'm going to go ahead and do a self-directed IRA and invest in this other asset over here."

00:48:02.240 | But if you don't make it by the certain time, you lose it.

00:48:05.240 | Now, if you have an alternative use of the money that is better, I don't think there should be any emotional extra juice

00:48:15.240 | around putting money into the IRA or 401(k).

00:48:19.240 | I have personally found myself repeatedly telling people, "Take money out of your 401(k) and go do this other thing with it,"

00:48:26.240 | because they said this other thing is going to be a better use of the money, and I just can't do it in the 401(k).

00:48:31.240 | And so if you're sitting there looking at $50,000 and saying, "If I put it in the IRA, I have these investment options.

00:48:36.240 | I have these restrictions, but what I'd really like to do is I'd really like to go and open a surf camp on the beaches of Costa Rica,"

00:48:44.240 | then go open the surf camp on the beaches of Costa Rica if that's what you want to do, and don't do it in the IRA.

00:48:49.240 | So I think the IRA is a tool. If you understand its benefits, its drawbacks, its features, then you can decide appropriately.

00:48:55.240 | But if you want to use that tool, once the tax filing deadline passes for the year 2020,

00:49:01.240 | then you will not be able to make that contribution ever again. It will be lost for the rest of your life.

00:49:08.240 | I guess I feel like by not investing the money – because the 2019 money is sitting there in the settlement fund

00:49:17.240 | and not invested at all and just getting pennies of interest –

00:49:21.240 | that I'm somehow not being responsible for the future growth of it.

00:49:26.240 | I guess that's one of the things that holds me back.

00:49:29.240 | I do think about if I add all these three contributions for those three years, it's probably about $38,000.

00:49:37.240 | I'm definitely hesitant to lump sum that, but maybe I should just start dollar-cost averaging that into index funds,

00:49:44.240 | which has been my plan all along, like the Vanguard funds or whatever.

00:49:49.240 | But I also like the idea of even this last caller that was talking about having a property somewhere else that could make money.

00:49:57.240 | I loved what he said. I don't know if something like that's possible with some of this money to look at that kind of option.

00:50:06.240 | So I think you need to assess your own personal situation and do your best to coach yourself and ask yourself,

00:50:12.240 | "What am I waiting for? Why am I sitting here and waiting? What am I concerned about?"

00:50:17.240 | And the answer could be a few things. The answer could be, "I think I have another thing that would be better.

00:50:25.240 | I think that I should invest the money in this other area," in which case, just invest the money in the other area.

00:50:33.240 | It could be that you're fearful because you're uneducated.

00:50:36.240 | Make a target and say, "By this date, I'm going to make a decision."

00:50:40.240 | What you don't want to do is you don't want to just sit and wait and wait and wait and wait and then never invest the money

00:50:45.240 | because then you miss out on the whole point. So try to figure out why you're waiting.

00:50:49.240 | And then what I would do is pick a date. Maybe you could put the money in for now and then you say,

00:50:54.240 | "By December 31, I'm going to have made a decision on my investment strategy going forward,"

00:50:59.240 | or, "By June 1, I'm going to have made a decision on my investment strategy going forward," just to try to keep yourself accountable.

00:51:06.240 | Okay. Sounds like a plan. So sitting in cash for a little bit of time is okay. I guess that's what you're saying.

00:51:13.240 | Exactly. All right. Best of luck to you. And we move on to – let's go to John in Pennsylvania.

00:51:20.240 | John, welcome to the show. How can I serve you today, sir?

00:51:23.240 | Hi, Joshua. Thanks for taking my call.

00:51:26.240 | My pleasure.

00:51:27.240 | I recently was laid off from my job and I've been preparing for this moment for quite a time.

00:51:36.240 | Congratulations.

00:51:38.240 | Yeah. Thank you. So I'm fairly well situated for it. I have been kind of jumping into interviews

00:51:45.240 | and racing out to get another job pretty quickly as an activity to fill my time.

00:51:51.240 | If that happens, what happens, if not, I'll take it as an opportunity to try out some time off or explore other things in my life.

00:52:00.240 | But while I'm – and I asked this on the Facebook group and got some good responses back,

00:52:06.240 | but I'm looking for things that I'm missing in the last handful of weeks of employment while I'm still technically an employee

00:52:14.240 | and have a fairly high salary to report.

00:52:17.240 | I know in the past things like disability insurance you said it's hard to get once you don't have W-2 income.

00:52:23.240 | I have that already. One thing I thought of was kind of the term life that I never bought before.

00:52:29.240 | Maybe income has a factor to play in that.

00:52:33.240 | But I'm just kind of running down through my list of things.

00:52:35.240 | I think I have most things checked off that I need to be sorting out prior to this final transition to unemployment.

00:52:44.240 | But is there anything off the top of your head that you could think of that you would want to sort out in your final weeks before a layoff?

00:52:52.240 | I'm networking with my old industry and my new industry.

00:52:56.240 | I kind of have to make a decision between continuing COBRA coverage versus going on the ACA coverage.

00:53:04.240 | I have already asked for high credit limits on my credit cards.

00:53:09.240 | I didn't look in the home equity line of credit, but I didn't think I needed it.

00:53:13.240 | I already have a fairly low mortgage.

00:53:15.240 | I always try to cut expenses.

00:53:17.240 | I have some cash available.

00:53:19.240 | There's all the things I can think of that I think you would say I feel like I've covered, but I'm just wondering what I don't know.

00:53:26.240 | Things I don't know that I don't know.

00:53:28.240 | Let's start with just the group benefits.

00:53:32.240 | Those are the biggest things because in the United States system, most of our benefits are based around our jobs.

00:53:37.240 | So you want to think through those benefits and make sure you understand them and then see if there are any changes that are necessary.

00:53:44.240 | The big one is health insurance because in the United States, health insurance is tied to your job.

00:53:48.240 | You'll need to make a decision on that.

00:53:50.240 | So as you are doing, look at how long the company will pay for your health insurance.

00:53:54.240 | Look at the COBRA continuation provisions.

00:53:57.240 | Look at your alternative options for yourself and for your family, whether it be an Affordable Care Act government plan

00:54:05.240 | or whether it be private health insurance or health insurance with your wife or a health ministry sharing option or whatever it is that would be a good fit for you.

00:54:16.240 | Think that through for yourself.

00:54:18.240 | That would be the first thing.

00:54:20.240 | Now, it's not as big a deal as it once was.

00:54:23.240 | It once was a very big deal to make sure you had continual coverage because of the preexisting conditions clauses in health insurance.

00:54:30.240 | Now, I don't think it's excessively risky for someone to drop health insurance from time to time,

00:54:36.240 | although certainly you understand that it's not without risk, but there can be times where it makes sense.

00:54:43.240 | When you look at the cost of COBRA coverage, you look at the cost of an Affordable Care Act plan, it's a bit obscene at certain times.

00:54:49.240 | And so what you may be able to do though is take advantage of the subsidies when your income is low and/or sign up for Medicaid.

00:54:57.240 | If you're just living on unemployment for a time until you get something else.

00:55:00.240 | So that's clearly the most important one.

00:55:02.240 | Disability insurance, you've already got some and you want to make sure.

00:55:06.240 | Usually those policies that you have at your job are not portable.

00:55:09.240 | You can't take them with you.

00:55:10.240 | So the fact that you already have some covers that.

00:55:14.240 | Life insurance that you have through a group, usually if the policy is portable, it's only portable as whole life insurance.

00:55:21.240 | And usually the companies that do a lot of group life insurance are generally not companies that you would want to own their whole life insurance policies with.

00:55:28.240 | So you just want to make sure you have appropriate coverage.

00:55:31.240 | Yes, term life insurance, if you haven't gotten it, it's best to go ahead and get it.

00:55:35.240 | What I would say is it's not because of your income though.

00:55:38.240 | Life insurance is underwritten based upon financial calculations.

00:55:43.240 | However, if you said, look, I was making $150,000 at that job, I'm currently unemployed.

00:55:48.240 | They'll assume for the purposes of financial underwriting that you're going to get another $150,000 a year job.

00:55:54.240 | They're not going to say, oh, you're a deadbeat.

00:55:56.240 | You have $0 of income, so we're not going to give you insurance.

00:55:58.240 | They're not that hardcore on financial underwriting.

00:56:01.240 | What is important.

00:56:02.240 | Yeah, that's really what I was curious about.

00:56:04.240 | Okay, good.

00:56:05.240 | So that's not that big of a deal.

00:56:07.240 | What is important though about it is continuity of coverage.

00:56:10.240 | Because maybe you currently have a group insurance policy that's $500,000 for you.

00:56:15.240 | And then you go and apply for term insurance.

00:56:18.240 | Well, if you wait until that group policy ends and then you go and apply for term insurance and you get declined or you get rated, well, whoa, whoa, wait a second.

00:56:26.240 | Now, that could be a real problem.

00:56:28.240 | And so you want to go ahead and, if possible, get the new term insurance coverage in force before the group policy ends so that you have continuity of coverage.

00:56:36.240 | Because that's your major risk.

00:56:39.240 | Now, if you, for everything, you know your health situation is stable.

00:56:42.240 | I don't want to overstate the risk, but that's the technical risk to watch out for.

00:56:46.240 | Look at your group benefits.

00:56:48.240 | Sorry, look at your retirement plans, pension plans, et cetera.

00:56:52.240 | Make sure you understand them.

00:56:53.240 | Before you leave the company, make sure all the information is updated.

00:56:57.240 | Make sure that the beneficiaries are proper.

00:57:00.240 | Review all of that with the human resources department.

00:57:02.240 | Make sure they have your current information so you can keep tabs on that.

00:57:05.240 | Generally, you don't need to hurry to do a rollover.

00:57:08.240 | Obviously, you can do a rollover, but you don't need to hurry to do that until you figure out exactly what's right.

00:57:12.240 | But just take the fact that you're there and verify that.

00:57:16.240 | What I think makes the most sense is what you already said, credit cards.

00:57:20.240 | So before you lose your job, go ahead and go through your credit cards.

00:57:24.240 | Apply for increased credit limits.

00:57:27.240 | Maybe apply for a couple new 0% cards just as a bridge cards in case you ever needed them.

00:57:33.240 | It's a lot easier to apply for credit cards when you can say on the application, "I have an income of $150,000 a year," versus, "I have an income of $0 a year."

00:57:41.240 | They don't give you offers when you report $0 of income.

00:57:44.240 | And so those information forms are not particularly detailed, but it's just a lot easier to fill them out when you can honestly, forthrightly say, "My salary is currently this," and that helps out a lot.

00:57:58.240 | So I would just go through your credit card portfolio, request increased credit limits across the board, and then maybe grab another card or two, a couple of 0% cards just in case you needed them over the long term.

00:58:10.240 | Those are the big things from the financial perspective.

00:58:12.240 | Briefly, let me touch on the hireability.

00:58:15.240 | What you can do that would be excellent is make sure that you build your contact database with all the people that you work with.

00:58:24.240 | If you haven't done so, to the best of your ability, collect contact information.

00:58:29.240 | So I would grab a personal copy of the company directory, things like that.

00:58:34.240 | Obviously, I'm not saying for you to break any privacy laws, but for you to have a personal copy of the company directory of the employees of the company, that's not going to break any privacy laws.

00:58:44.240 | I'm not recommending that you go and steal the database of the company's customers, but recognize that the network, the good work that you've done at this company, is going to be the foundation of your network going forward.

00:58:56.240 | So you want to make sure that you are establishing a plan for keeping in touch, contact people on LinkedIn, etc., while it's still current and easy to do.

00:59:04.240 | Get recommendations, get letters of testimonial, collect carefully your award history or similar things like that, performance reviews, anything that you can do, anything that would be helpful for you to add to your portfolio of your resume and your other employment portfolio, that would be extremely helpful.

00:59:26.240 | And then just try to leave on a good note.

00:59:28.240 | When you get laid off, I think that the most important and valuable thing to do is to just simply leave on a good note.

00:59:36.240 | It's always my goal if I'm going to leave a company or close a business or something, it's always my goal that if I came back in the future and if they had the work to support me, that they would want to hire me again in the future.

00:59:48.240 | So don't storm out the door unnecessarily, just leave on good terms.

00:59:52.240 | Where I think you're already covering resumes and being active and applying for jobs, etc., but what I want to just emphasize to you is while you're doing that, don't lose sight of the opportunity that a layoff is.

01:00:08.240 | Don't lose sight of it for a few things.

01:00:10.240 | Because I think one of the biggest opportunities of a layoff or a job change is a fewfold.

01:00:17.240 | Number one, on the career side, it's a tremendous opportunity to level up your career.

01:00:22.240 | It's a tremendous opportunity for you to go back, start dreaming again, and say, "Where do I really want to be?"

01:00:30.240 | Think through and analyze all of the benefits of what you really loved about this job and then think about what would be even better in the future.

01:00:39.240 | And you've called many times, we've talked about this, it's a great job for you, but recognize those things and make it a chance to level up.

01:00:46.240 | Because as you well know, changing jobs semi-frequently is a very, very effective strategy for people who are working in the employment marketplace.

01:01:00.240 | And so you have an opportunity to do that afresh and don't pull back from it.

01:01:04.240 | The thing that I heard years ago, I believe it was Zig Ziglar, this is the kind of thing where they say they do it, I never saw the peer-reviewed study of it, but they said that they ran an ad in two cities.

01:01:15.240 | They took a classified ad back in the days of newspapers.

01:01:18.240 | They took the exact text and they said, "Help wanted and here are the details of the classified ad."

01:01:23.240 | And they ran one with a salary of $50,000 in Atlanta, Georgia, and they ran one with a salary of $150,000 in Charlotte, North Carolina.

01:01:32.240 | And they received, for exactly the same ad, same qualifications, same career, etc., they received, I'm making up the number, 10x more responses for the $50,000 job than the $150,000 job.

01:01:44.240 | And the point was that people often act based upon the way they see themselves, not based upon the strict requirements of the job.

01:01:51.240 | Anybody who was eligible for the $50,000 job was also eligible for the $150,000 job, but a lot of people just saw the salary figure and said, "Oh, well, that's not me."

01:02:00.240 | Well, I think you can turn that on its head and say, "Hey, I got laid off.

01:02:04.240 | Now's an opportunity.

01:02:06.240 | Let me just go ahead and let me apply for the jobs, not at the same level, but let me apply for the jobs that are at double the level where I was previously.

01:02:13.240 | And let me work significantly to stretch myself, to extend myself."

01:02:17.240 | So, on the career side, it's an opportunity to go several steps ahead.

01:02:22.240 | And while, as you've noted from listening to my past advice, while you want to stay employed and you want to stay connected, don't jump just because, "Well, I can't do without a job."

01:02:35.240 | The whole reason why you do all this financial planning, why you've done all the savings, et cetera, is so that this is an opportunity, not an emergency.

01:02:43.240 | So, focus, reassess, and refocus on something that's even a better fit for you.

01:02:49.240 | And then the second thing is whenever you get laid off, it's always an opportunity to take a sabbatical, in my opinion.

01:02:55.240 | The thing that U.S. Americans don't do well is take time off.

01:02:59.240 | And I think that's to our harm.

01:03:01.240 | It's to our harm that we culturally are committed.

01:03:03.240 | We work 50 weeks a year every single year, and then we just run around and get another job right away.

01:03:09.240 | And I think that taking time off is really, really helpful.

01:03:13.240 | But it's hard to negotiate the time off during the context of most employment contracts.

01:03:19.240 | It's hard to say to your employer, "Hey, I'd like to take four months off and go spend some time in the national parks," or, "I'd like to spend four months off and sit on the beach and work on a novel that I've always dreamed of writing."

01:03:30.240 | But yet, I believe that those sabbaticals, those mini-retirements, those things can help you to have a work life that's far more fulfilling than the traditional treadmill, treadmill, treadmill, work from 25 to 65, and then retire to do nothing.

01:03:45.240 | And it can help you to refresh and re-energize, really enjoy a season of change.

01:03:51.240 | You can be home with your children.

01:03:52.240 | You can spend time with them, and you can enjoy that.

01:03:54.240 | Give your wife a nice break from her child care duties and just change it up.

01:04:00.240 | And then you'll be excited to go back to work because you're like, "I'm ready to go away and do this other thing that's exciting again."

01:04:06.240 | So, think through, talk through with your family, and use it as an opportunity to do something that you've wanted to do for a while.

01:04:14.240 | I often, because of my enjoyment of travel, I often think it's a chance to take a trip.

01:04:20.240 | Shutter your house and jump on an airplane and go to Columbia for a couple of months.

01:04:25.240 | Or wherever it is that, go to the beach in Florida, whatever it is, take advantage of those multi-month things that are often difficult to do when you're in the job market.

01:04:38.240 | So that when you get back into the next job, you'll be excited to reapply yourself rather than feeling tired and worn out.

01:04:44.240 | That's my advice.

01:04:46.240 | Yeah, that's great stuff. I appreciate it. And especially the sabbatical talk, because in the back of my head, I think that's why I've,

01:04:52.240 | it's not that I've been intentionally blowing any interviews. I'm working towards it, but I'm, in the back of my mind, I think I don't want to rush back to work.

01:05:01.240 | That's why I kind of said I was applying to busy myself.

01:05:04.240 | I've really been thinking about maybe getting a pop-up. We only have a minivan to pull a pop-up, but I think it'll be more than adequate to take a few months trip, maybe go up to the West Coast.

01:05:13.240 | We have some family out there. And yeah, it's all the stuff that's been dancing around my head.

01:05:18.240 | So I think I just need to maybe give myself permission to explore that a little bit more and be okay with that.

01:05:24.240 | And my kids are a good age to spend extended time with, even possibly years, if it financially works out, because I have the runway to do so.

01:05:34.240 | So yeah, I appreciate the encouragement there.

01:05:37.240 | I think you should. And you're a longtime listener and caller of the show.

01:05:41.240 | We know that you've been working towards financial independence for a long time.

01:05:44.240 | You're not in a financially needy space.

01:05:47.240 | So what I would say is I don't believe that if you take some time and do some things like this, I don't think you're going to lose touch on the job market.

01:05:55.240 | The only thing that I would make sure to do is stay connected, and I would make sure to develop a good story.

01:06:03.240 | And I believe that's the most important thing.

01:06:05.240 | I don't believe it's going to harm your career.

01:06:07.240 | If you take six months, a year, three years, and you go and you spend some time out on the West Coast with your family and traveling, and I don't think it's going to harm your career.

01:06:17.240 | The gap on your resume is only important if you don't have a good story for it.

01:06:22.240 | So what I would do is make the good story.

01:06:25.240 | Hey, we took the girls on a trip of all the state parks or of 30 state parks from coast to coast.

01:06:32.240 | And now you have the thing to say to a recruiter, you have the thing to say at an interview that I got laid off.

01:06:40.240 | And what we did is we went and traveled for six months, and we had this amazing time.

01:06:44.240 | It was just awesome.

01:06:45.240 | And then you conveniently have the story to tell for the gap, quote unquote, on your resume, but it'll refresh you and it'll reenergize you and I think give you the chance to enjoy this precious time in a very convenient way.

01:06:59.240 | It's hard when you have a job and you have an income, it's very hard to walk away from it for something that you're not sure if you really need.

01:07:08.240 | But since that decision was made for you, it's a lot easier to simply say, "Hey, I'm going to send out some resumes.

01:07:13.240 | I'm going to talk to people, but I'm not – if you give me the right offer, I might be available immediately.

01:07:19.240 | But for right now, I'm only available – I'm more likely to be available starting in about six months because we're traveling.

01:07:26.240 | I'm taking my children across the country this year."

01:07:29.240 | But I think you definitely should do that.

01:07:33.240 | Well, thank you very much.

01:07:34.240 | I appreciate it.

01:07:35.240 | And let me say this, the re-listening to your three shows about how not to get laid off, what to do if you get laid off, et cetera, I've listened to those so many times and was prepared because of those for the emotions of this.

01:07:46.240 | But there is a very different thing from being prepared and going through it.

01:07:49.240 | I was surprised how many I still were affected by that you mentioned that even knowing they were coming, I was like, "Oh, that really did affect me."

01:07:57.240 | It's hard not to let it brew the ego even if it's a COVID-related downturn.

01:08:03.240 | Yeah, it's very interesting to have gone through it for the first time in my 19, 20 years of experience.

01:08:09.240 | But I appreciate those resources.

01:08:12.240 | Good.

01:08:13.240 | I'm glad it helped you.

01:08:14.240 | But I guess knowing that the emotions that are coming I think does help.

01:08:22.240 | And so I'm glad.

01:08:23.240 | I'm excited for you.

01:08:24.240 | Keep in touch and let us know what you're doing as you embark on your sabbatical.

01:08:27.240 | Three callers left.

01:08:28.240 | We go to the great state of Virginia.

01:08:30.240 | Welcome to the show.

01:08:31.240 | How can I serve you today?

01:08:32.240 | Hey, Joshua, can you hear me?

01:08:34.240 | Sounds good.

01:08:35.240 | Go ahead.

01:08:36.240 | All right.

01:08:37.240 | This is Andrew.

01:08:38.240 | And I've got a question about charitable giving.

01:08:42.240 | Specifically, I'm trying to wrap my head around donating appreciated stocks or index fund shares or whatever we want to call it.

01:08:51.240 | So essentially, if you're every month putting money into brokerage, taxable brokerage, but you're also every month donating to charities,

01:09:01.240 | should we be donating appreciated shares each month and then putting more money into the brokerage account?

01:09:09.240 | I don't quite understand what's the advantage and what I should be doing here.

01:09:14.240 | So here's the advantage.

01:09:15.240 | When you have appreciated property, you have purchased capital gains assets for $100.

01:09:21.240 | They have appreciated in value to $200.

01:09:25.240 | When you have that, if you sell those stocks, you sell for $200, you will incur capital gains taxes on the $100 of gain.

01:09:37.240 | So you'll have to pay your, let's just say 15%, so you'll pay $15 of capital gains taxes, which leaves you with $185 that you can then go and donate to charity.

01:09:49.240 | If you take the appreciated asset directly, the $200 asset, and you donate that asset to the charity, you will donate a full $200.

01:10:02.240 | You'll receive a $200 deduction, and then the charity will sell the asset.

01:10:07.240 | They won't pay any tax on it, and they'll be able to invest the money into their operations.

01:10:12.240 | And so basically, donating appreciated property is simply a way of making sure that instead of you getting $185 charitable deduction,

01:10:21.240 | the charity receiving $185 and the government receiving $15, you'll get a $200 charitable deduction.

01:10:29.240 | The charity will receive $200, and the government will receive zero.

01:10:32.240 | That's why we donate appreciated property.

01:10:34.240 | Let me quickly show on the opposite side for those who need to know it as well.

01:10:40.240 | So the rule on appreciated property is that you always look at appreciated property as a way of potentially enhancing your charitable contributions.

01:10:51.240 | Now, if you have property with a loss, let's say that you purchased $100 worth of capital gains assets.

01:10:57.240 | Now those assets are worth $50 instead of $100.

01:11:00.240 | You never donate capital gain property with a loss.

01:11:04.240 | What you always do with capital gain property with a loss is you sell it, you take the loss, and then you donate the money to the charity.

01:11:12.240 | Because when you transfer the $50 property with a loss to the charity, they don't get to take advantage of the embedded loss.

01:11:21.240 | So with property with a loss, you sell it, take the loss, lowers the tax bill, and then go ahead and make the donation to the charity of whatever amount that you're trying to do.

01:11:31.240 | So when you're doing charitable giving, a good thing to do is to look at your appreciated property and see if any of these assets are appropriate for gifting to the charity.

01:11:42.240 | Now, what about the mechanics of it?

01:11:44.240 | Well, you don't always want to sell appreciated property.

01:11:47.240 | Maybe your property appreciated from $100 to $200, but you think it has a lot of room to run.

01:11:52.240 | Well, you don't want to sell it, and so you might just go ahead and make your $200 gift out of your cash account to the charity.

01:12:00.240 | That's totally fine.

01:12:01.240 | It's just simply that if you want to, in the same tax year, if you want to sell assets that have an appreciation in them, a capital gain appreciation in them, and you want to make charitable contributions,

01:12:14.240 | you should consider making a direct transfer of the property to the charity, have them sell it instead of you.

01:12:22.240 | Okay. I guess that's where I'm confused because like, so we're in an accumulation stage, and so we're not looking to sell anything out of an appropriate account.

01:12:32.240 | But does it help me in the long term if we sort of flush out those gains over time?

01:12:38.240 | Will we be having an advantage in the long term when it is time to start selling and living off the portfolio?

01:12:45.240 | Let's play the math, right?

01:12:46.240 | Because the answer is yes.

01:12:47.240 | It would give you a step-up in basis, which could be helpful to you.

01:12:50.240 | So let's pretend that in January, you purchased an asset for $100.

01:12:55.240 | You want to make $200 of contributions to a charity.

01:12:59.240 | In January, you purchased an asset for $100.

01:13:02.240 | It doubles by June.

01:13:06.240 | It doubles by June to $200.

01:13:08.240 | So now you take that asset.

01:13:11.240 | You give that, let's just say it's a share of stock.

01:13:14.240 | You give that share of stock to the charity, and then you go and you take your own $200 from cash.

01:13:23.240 | And instead of giving the $200 of cash to charity and keeping the asset, you just go ahead and buy another share of stock for $200 now so you can own that in the brokerage.

01:13:32.240 | Is that superior to just simply giving the cash to the charity and keeping the stock?

01:13:41.240 | Yes, it is superior because you would get a step-up in basis.

01:13:44.240 | Now you have $200 worth of stock.

01:13:48.240 | So now if that stock further appreciates from $200 to $400 and you decide, "Now I want to sell it," you now have $100 ratcheting up in your basis.

01:13:57.240 | Or if the stock falls in value, you can now take your loss.

01:14:01.240 | So technically, it is superior.

01:14:03.240 | The challenge is can you work this out in a way where it's smooth enough that it's worth the hassle?

01:14:08.240 | I don't know, but technically, it is superior.

01:14:11.240 | Okay. So technically, that's the way to do it if it works out for all the parties, I guess.

01:14:18.240 | Right, right. If the charity has a mechanism where they can easily bring it in and they can easily sell it, then that works.

01:14:25.240 | So a share of stock, that's easy because assuming it's a marketable security, publicly traded, then that's easy.

01:14:31.240 | Where it's not easy is pieces of real estate or collectibles, things like that, because then that can place such a burden on the charity for properly disposing of it that now they have such high sales costs that you didn't do them any favors.

01:14:45.240 | So just think about whether it's – technically, it's superior.

01:14:49.240 | Just try to figure out if it's worth the hassle for you based upon the mechanics of doing it.

01:14:55.240 | Got it. I appreciate it. Thanks so much for everything you do.

01:14:58.240 | My pleasure.

01:14:59.240 | All right. Let's go back to Fresno, California. Let's see if you're there this time. Welcome to the show. How can I serve you today?

01:15:05.240 | Hey, Joshua. Sorry. I actually hung up last time when I tried to unmute myself.

01:15:09.240 | No worries. Go ahead.

01:15:11.240 | Hey. So I had a quick question for you regarding cryptocurrency.

01:15:15.240 | I have been in cryptocurrency for a very long time and haven't realized anything out of it, taking anything into normal dollars and looking obviously at the sky-high prices.

01:15:28.240 | I'm not really sure of the tax implications of what that looks like, how it's taxed.

01:15:33.240 | If I were to take it out of just like a standard coinbase into like my normal bank account, I was talking to my normal CPA who does all of my normal business taxes, and this was an area that he not surprisingly doesn't have a lot of experience in.

01:15:50.240 | And so I was just wondering if you had any insight or anywhere else that maybe I could look for more guidance.

01:15:56.240 | How much gain do you have, do you think, guesses?

01:16:00.240 | I mean, it's probably in the six-figure range of what I would be willing to bring out into cash.

01:16:07.240 | And I obviously have more that I don't want to go straight to the dollar, something that I'm waiting to see where it's going to go.

01:16:18.240 | Okay. Well, it's pretty simple in terms of the fact that basically cryptocurrency is taxed like property.

01:16:25.240 | So when you sell it, you pay tax on it as property, as a capital asset.

01:16:32.240 | So there'd be capital gains, capital losses.

01:16:34.240 | And so it would fall under the long-term capital gains rules, short-term capital gains rules, and so it's fairly simple.

01:16:42.240 | So there are a couple of hard things about it.

01:16:45.240 | And what I would say is that I could just spend some time reading some of the publications that are online for you personally.

01:16:53.240 | That's a good place to start.

01:16:55.240 | Some of the tax journals have done some stuff on it.

01:16:58.240 | You can go and you should start by reading the IRS guidance on it.

01:17:02.240 | So go to irs.gov, type cryptocurrency, and read the IRS page.

01:17:05.240 | That should always be your first stop on any financial thing is read the IRS page.

01:17:12.240 | The hard part is often calculating what the actual numbers are, depending on how you've held the coins, depending on what has happened with those coins.

01:17:23.240 | Did you trade the coins at some point?

01:17:26.240 | Did you trade out of one currency into another currency?

01:17:29.240 | Technically, that can be a sale that you're supposed to pay tax on when you do a trade.

01:17:36.240 | And that's exactly where I'm at is moving between Bitcoin and something like XMR, moving between privacy coins and other coins.

01:17:44.240 | All of that swapping, all of that looks like it's going to be taken into account.

01:17:50.240 | And that's basically just going to be a huge headache.

01:17:52.240 | But it was just one of those like, "Okay, I assume that's probably what I'm going to have to do and just track down all those transactions throughout the years when I finally realize all of it."

01:18:00.240 | It is. It is.

01:18:02.240 | And now that the IRS asks whether you own any virtual currencies, now everything becomes more difficult.

01:18:10.240 | And so I think you just have to – that's the problem that you face.

01:18:15.240 | It's not necessarily the numbers.

01:18:17.240 | It's tracking down all the transactions.

01:18:19.240 | And so as with anything, I think there's a balance here.

01:18:23.240 | I should add my disclaimer.

01:18:25.240 | I'm not a CPA.

01:18:26.240 | I'm not a tax advisor.

01:18:27.240 | I'm just a real-life person who tries to read about it and tries to say, "Okay, what are we saying here?"

01:18:32.240 | I think as with anything, a good-faith effort is what you're looking for.

01:18:36.240 | You're looking for some reasonable collection of data, some good-faith effort to say, "Look, here are some numbers that are accurate.

01:18:44.240 | Here is some support that I have for that."

01:18:47.240 | And so a good-faith effort to be honest with the actual data and the actual numbers while recognizing the fact that the odds of an auditor ever being able to come into your accounts and piece everything together on it are going to be very, very difficult.

01:19:06.240 | So I would not spend six months making a spreadsheet of every single thing that happened.

01:19:11.240 | I think that would be obscene.

01:19:13.240 | Just make a good-faith effort to give them an honest accounting of, "Here's what I think my basis is," and then deal with the taxes accordingly.

01:19:22.240 | Excellent. Okay, yeah.

01:19:23.240 | And that's basically where my mind is at after reading through everything and reading what I saw online.

01:19:28.240 | It was just – because some of the – not to get too complicated into it, but some of the transactions are incredible.

01:19:36.240 | You can basically think of millions, if not billions, of super micro transactions and how some of this stuff has been laid out for me.

01:19:42.240 | And so it's like, "Oh, gosh, I could fill up a hard drive just of a text document of how some of that laid out."

01:19:48.240 | But probably summarizing it somewhere of just like, "Hey, this is what happened. If you guys want to go dig into it, by all means."

01:19:54.240 | But just here's a quick summary of half a million transactions that were all within a dollar of each other kind of thing.

01:20:02.240 | Right, exactly.

01:20:03.240 | All right, well, you've given me something to think on, and I'll do some more research on it and then get back to you if I have any other questions.

01:20:09.240 | Yeah, my pleasure.

01:20:10.240 | It's interesting. I think the crypto stuff is – it's obviously going to be increasingly important in the coming years and increasingly something that we're going to talk about a lot here on Radical Personal Finance.

01:20:21.240 | But I think that if there's anything that – there are two or three things that continually make me want to walk away from the U.S. government legally, and this is one of those.

01:20:35.240 | There have been a number of crypto investors who've done it, and I think that the peace of mind – I'm not recommending this to you.

01:20:41.240 | It's a big step, but the peace of mind that can come when some of these investors just simply walk away, renounce their U.S. citizenship, and are done, it's going to become a nightmare in the coming years.

01:20:52.240 | You've got so many restrictions.

01:20:54.240 | Now that the IRS is saying, "Do you hold virtual currencies?"

01:20:57.240 | It's just going to get worse and worse and worse and worse.

01:21:00.240 | So if you are a big crypto investor and you haven't actively thought through and actively pursued relinquishing your U.S. citizenship, obviously there are benefits for going to Puerto Rico where you can enjoy 0% capital gains as a trader of this stuff.

01:21:21.240 | But if you are a big crypto investor and you have not actively searched through and thought through renouncing your U.S. citizenship, I really think you're missing out on one of the biggest opportunities over the coming years because it's just going to get worse from here.

01:21:34.240 | All right, James in Massachusetts, welcome to the show. How can I serve you today?

01:21:38.240 | Hey, Joshua. Good to talk to you again. Happy New Year.

01:21:42.240 | The last two callers have experienced something very similar to what I'm about to ask.

01:21:51.240 | Basically, I feel like I've kind of hit – I guess this past year I hit some complacency in terms of planning.

01:22:00.240 | Got out of debt, paid off my debts, and just saved money.

01:22:04.240 | I did well in a lot of the basics, but something I had focused on before the pandemic was actually having an option for expatriation.

01:22:13.240 | And I bought your How to Survive and Thrive in the Coming Economic Collapse, and I've listened to the course and everything.

01:22:20.240 | My follow-up question regarding that is we bought a new house in the fall because we were living in the city and didn't feel comfortable where we were.

01:22:30.240 | So we're out in the country now, and we like it here.

01:22:33.240 | However, I still have an eye towards being prepared to leave if we need to.

01:22:39.240 | And I'm not exactly sure what the strategy is when I'm thinking of potentially living in another country, whether I renounce citizenship or not.

01:22:55.240 | Because I have a house here, and it's a nice house.

01:22:59.240 | And I guess mentally I'm thinking like what are some ways that I can keep my home life relatively normal while it is normal, feasible, but also be preparing to exit as well?

01:23:17.240 | So it's kind of like having one foot in, one foot out in a productive way.

01:23:21.240 | Like do I think about ways that I can monetize this house if we have to physically leave?

01:23:28.240 | Do I think about a family member I could move in if I have to physically leave?

01:23:32.240 | And then on the flip side of that, I'll keep this brief.

01:23:36.240 | I have an option through my work for a work visa in another country.

01:23:42.240 | And then through marriage, I have a lifetime visa as well for a country in Southeast Asia.

01:23:50.240 | So neither of those countries are exactly what I had in mind of where I would want to live.

01:23:56.240 | But I don't know if I should be thinking by default, go to what's easiest or plan for something that's more ideal for me and my family.

01:24:06.240 | Interesting question. I'll give you some thoughts.

01:24:09.240 | Obviously, it's a bit of a roundabout question that's more of, okay, I'm thinking about this.

01:24:13.240 | Let's batter around some ideas.

01:24:15.240 | It's not a specific thing, which is going to make it hard to answer because it's all going to depend.

01:24:20.240 | It depends on your financial resources, on how much money you have.

01:24:23.240 | It depends on how you're making your living.

01:24:25.240 | It depends on how serious you are about moving, how significant the threat is.

01:24:29.240 | And so I'll just give you some ways to think about it.

01:24:34.240 | First, if you have a house that you like living in and you're in a place that you like,

01:24:39.240 | then I don't think you should walk away from that just because of some undefined and probably undefinable risk.

01:24:49.240 | When I created the course of how to survive and thrive during the coming economic crisis,

01:24:54.240 | I tried to emphasize the fact that there are a couple of different ways that you can prepare

01:25:00.240 | and that in the vast majority of crises, being prepared to stay at home is the best solution.

01:25:08.240 | I talked about how if you have money and you have savings, you can avoid most personal crises,

01:25:13.240 | the loss of your job.

01:25:14.240 | I talked about how if you make thoughtful decisions, you live in a safe part of the country,

01:25:21.240 | you live in a safe town, you live in a safe house, you live in a safe gated neighborhood.

01:25:25.240 | I mean, realistically, the chances of you facing some kind of violent event, et cetera,

01:25:30.240 | it's just extraordinarily low.

01:25:32.240 | And you can make your house very, very strong.

01:25:35.240 | You can add alternative energy.

01:25:38.240 | You can add water collection.

01:25:40.240 | You can add some rain barrels, have some water barrels, add some solar panels, a battery backup system, a generator.

01:25:47.240 | You can have some food.

01:25:48.240 | What more do you need?

01:25:50.240 | You can survive the vast majority of crises in that situation.

01:25:55.240 | And I tried very hard to emphasize how international relocation is not for all people.

01:26:01.240 | It's hard to relocate.

01:26:02.240 | I talked about how you fit into your culture at home better, where you speak the language,

01:26:07.240 | where you have all the necessary paperwork and documents, where you understand the job culture,

01:26:12.240 | you understand how to get a job, you fit in.

01:26:14.240 | Those things are very, very important.

01:26:16.240 | And so if you have a place that you live and you don't -- and there's no pressing reason for you to leave,

01:26:22.240 | I don't think you should leave just because of some random idea that somehow it might be better in another place.

01:26:28.240 | If you think it's actually better in another place and the ways and reasons it's better in another place are good for you,

01:26:35.240 | then go for it.

01:26:36.240 | But, you know, I feel better living outside the United States.

01:26:40.240 | I feel much freer living outside the United States.

01:26:42.240 | I like it better.

01:26:44.240 | That's not to say that I'll be out forever because there also comes with it a whole lot of costs.

01:26:48.240 | I was just in the United States for three weeks, and it was a very difficult thing because on the one hand,

01:26:53.240 | I don't like being there anymore.

01:26:55.240 | I don't fit in.

01:26:56.240 | I feel like an absolute stranger in terms of culturally.

01:26:59.240 | I don't have a group in the United States that matches me at any time.

01:27:03.240 | I look at the culture, and it's just going crazy.

01:27:06.240 | But I also have tons and tons of friends, and I understand it.

01:27:10.240 | And so I can pass along the cultural lessons to my children where they'll understand it, et cetera.

01:27:14.240 | And there are many things that are nice about it.

01:27:16.240 | And so it's not an easy decision, and I think that you would be foolish to just expect it to happen all of a sudden.

01:27:23.240 | So if you have a home base that you like, I say keep the home base.

01:27:27.240 | Now here's the thing about expatriation, either just temporarily or in general.

01:27:32.240 | So let's say that you needed to flee the United States for a couple of years.

01:27:36.240 | Why would you do that?

01:27:37.240 | What would be some examples?

01:27:38.240 | Well, maybe you got targeted with some -- you became persona non grata for some reason.

01:27:44.240 | A good example would be maybe you were Japanese during World War II, living in the United States.

01:27:49.240 | Well, I'd a whole lot rather have been a Japanese man who left the United States and moved to Canada or Mexico or France -- not France, Brazil, any place other than where the actual war was happening --

01:28:01.240 | than living in the United States and being locked up in some internment camp.

01:28:05.240 | So if I were Japanese and I knew that I'm being hunted because I'm ethnically Japanese, I would get out.

01:28:14.240 | And so those things can happen.

01:28:17.240 | But I talked in the course about something like hyperinflation.

01:28:20.240 | I don't think hyperinflation is probable.

01:28:22.240 | I really don't.

01:28:23.240 | I just think it's possible.

01:28:25.240 | But if hyperinflation happened or there were some absolute large-scale economic crisis -- again, I believe it's improbable but possible -- then you're better off to leave.

01:28:36.240 | And so leaving now just becomes a simpler solution.

01:28:39.240 | But that doesn't mean you have to get rid of your house.

01:28:41.240 | It doesn't mean you can't have all those things there.

01:28:43.240 | I think you're better off maintaining your base, your house where you have, and then if you want to establish a second base, go ahead and do it.

01:28:50.240 | And you can do it in a couple of ways.

01:28:52.240 | If you have the money, I think it makes a lot of sense to go ahead and set up a second place in a place that you like to be.

01:28:58.240 | I believe that you can do the nomad strategy like I talked about in the course, but I believe that the nomad strategy is a hard sell for most families.

01:29:06.240 | If I were living in the United States and I told my wife, "Hey, honey, listen, I've got this great idea.

01:29:12.240 | We're going to go and we're going to bounce around the world for the next couple of years, and we don't know where we're going to be.

01:29:18.240 | We're just going to bounce around and stay in Airbnbs and hotels and whatnot."

01:29:21.240 | She would look at me and she would raise an eyebrow and say, "Do you really think that's a good idea?"

01:29:26.240 | And my answer would be, "Maybe."

01:29:28.240 | But if we have another home, if we have a little apartment in another city that we like to go to or a vacation cabin or something like that, and she knows what's there,

01:29:36.240 | and I say, "Honey, listen, things are looking a little rough around here.

01:29:39.240 | I don't know what's going to happen.

01:29:40.240 | There might be some violence coming or there might be some significant thing happening.

01:29:44.240 | Let's go to our second home where we know where everything is, where we have everything set up, where we have all the documents and everything."

01:29:50.240 | Now she's going to say, "Okay, yeah, I can see that."

01:29:54.240 | And so that's what I've done and what I'm planning to do.

01:29:57.240 | If I move back to the United States, I would keep our second place where we've got residency paperwork, we've got driver's licenses, we've got a house, we've got everything needed.

01:30:04.240 | I'll just keep the second place.

01:30:06.240 | Now in that situation, the logistics of what you do with your home base, if you go to the second place, if you rent it out, put it on Airbnb,

01:30:11.240 | I think it makes sense to be prepared to do whatever, but you won't know until the actual circumstance presents itself.

01:30:18.240 | To your questions about paperwork, if you have a work visa in another country,

01:30:24.240 | and if that other country is not simply unlivable, I think it makes sense to start with the low-hanging fruit.

01:30:30.240 | If you have a residency visa by virtue of marriage, I think it makes sense to go ahead and start with that low-hanging fruit.

01:30:37.240 | And I would check to see what the requirements are for maintaining those visas.

01:30:43.240 | So if you, every country is different.

01:30:46.240 | So for example, having a US green card, pretend that you were Mexican and you had a US green card or a US work permit of some kind.

01:30:56.240 | That's a very valuable thing to maintain because if something happens in the Mexican economy or maybe you're from the Philippines,

01:31:03.240 | and if something happens in the Philippines economy, the fact that you can just get on an airplane and fly to the United States and go and get a job because you have the work permit, that's really valuable.

01:31:14.240 | Well, it works exactly the same the other way around.

01:31:17.240 | If you are a US American but you maintain this other visa, then it makes a lot of sense to keep it and to work from there.

01:31:29.240 | It doesn't make sense to not start with the low-hanging fruit.

01:31:32.240 | What I would do is I'd keep the visa, keep the residency card.

01:31:35.240 | I would get a driver's license in that country so I had more forms of identification,

01:31:40.240 | and I had everything I needed in that situation.

01:31:44.240 | That would make a lot of sense.

01:31:45.240 | And then in addition, I would do that in the country where I had my marriage.

01:31:49.240 | And if we can keep the visa with a minimum amount of work, just a visit once a year, a visit every couple of years, to me that makes all the sense in the world as a backup option.

01:31:59.240 | It's low-hanging fruit.

01:32:00.240 | And I don't think you can have too many backup options if you can handle the cost and the difficulty of maintaining those things.

01:32:07.240 | Now, if, like the United States, they require a substantial presence over time to maintain the visa, the cost might be too high.

01:32:14.240 | Now you go to those third countries.

01:32:16.240 | Now you go to those other places and you start to look at what some of your other options are.

01:32:21.240 | But I would start with those and then go ahead and develop them as well.

01:32:26.240 | Last comment I would say on the US House.

01:32:30.240 | In the United States, one of the benefits of the US system, it's a drawback and benefit, right?

01:32:35.240 | There are many drawbacks to being a US American.

01:32:38.240 | One of the benefits to being a US American is that even if you do leave, the fact that you own a house in the United States doesn't matter.

01:32:46.240 | Even if you renounce your citizenship, the fact that you own a house in the United States doesn't matter.

01:32:51.240 | That's one of the unique things about the United States.

01:32:53.240 | Because in most countries, to become a tax non-resident, you have to sever your ties with that country in order to become a tax non-resident.

01:33:01.240 | But for US Americans, that's not the case.

01:33:04.240 | So you can keep your house in the United States.

01:33:06.240 | You can keep your bank accounts in the United States.

01:33:08.240 | You can keep your investments in the United States.

01:33:10.240 | And you can just simply leave.

01:33:12.240 | You can run everything from the United States.

01:33:14.240 | Some cases, it's a lot easier and has many, many benefits.

01:33:18.240 | When I travel around the world, I always just simply spend on my US-based credit cards.

01:33:23.240 | Why? I don't incur any foreign transaction charges.

01:33:26.240 | Keeps everything simple. Keeps everything clean.

01:33:28.240 | Doesn't matter. I don't save anything.

01:33:30.240 | If I were Canadian and I were trying to become tax non-resident of Canada and I were trying to move to the Bahamas or to Monaco or something like that, Dubai, and engage in tax savings, I wouldn't have all that stuff.

01:33:42.240 | I'd have to cancel all my credit cards. I'd cancel all my Canadian bank accounts.

01:33:44.240 | I'd fully disconnect and remove any of those links of connection with Canada.

01:33:49.240 | And so for US Americans, it's simpler where you don't have to commit to this all-or-nothing plan.

01:33:54.240 | Even if you did someday renounce citizenship, maybe your wife is a US citizen, but you decide, "You know what? I'm going to renounce citizenship because I'm this big crypto trader and we're going to live outside the United States, but I'm just going to renounce citizenship."

01:34:06.240 | Well, your wife can keep her citizenship.

01:34:08.240 | You visit the United States during the summertime.

01:34:11.240 | You go to your nice house that you guys enjoy, spend a few months there in the summertime, and then leave again.

01:34:15.240 | And so you don't have to get rid of all your infrastructure, which I think is an advantage of being US American.

01:34:21.240 | So those are some thoughts to think about.

01:34:24.240 | My advice is simply go slow. Take it easy.

01:34:27.240 | Think about the things that concern you, but don't be catastrophic.

01:34:32.240 | I am prepared in many ways for a hardcore situation, and I like the idea of being prepared for hardcore situations.

01:34:42.240 | But we have to be rational and recognize that the chances of the hardcore situations happening are very low, very, very low.

01:34:52.240 | And so don't make a giant mistake along the way just because you're worried about a hardcore situation.

01:34:59.240 | A few years ago, I dug really deeply into the US American Prepper culture and the American Redoubt movement popularized by James Leslie Rawls.

01:35:12.240 | And it was a movement trying to get people to move from conservative, kind of Christian patriot types, trying to get those people to move from big cities to rural areas,

01:35:21.240 | and trying to get people to move to the upper inland Northwest.

01:35:24.240 | And I guess it is a movement, not was, but is, in Wyoming, Montana, Idaho, eastern Oregon, and eastern Washington.

01:35:31.240 | And I think that the idea of relocation is a fascinating idea culturally.

01:35:38.240 | It's a very good way, a very interesting strategy even politically.

01:35:45.240 | You have the classic Boston Tea Party book, what was it called, the novel that he wrote, Molon Labe, Kenneth W. Roy's Boston Tea Party,

01:36:04.240 | the novel he wrote about the Free State Wyoming Project, it's an interesting novel, and talked about relocation.

01:36:09.240 | But along the way, in studying it, one of the things that grew to concern me significantly was I found three very prominent leaders in that movement, that relocation movement.

01:36:22.240 | All three of whom were very convinced that the United States was going to utterly collapse, and that the cities were going to become unlivable,

01:36:30.240 | the whole country was going to erupt into violence, and the worst economic crisis, etc.

01:36:34.240 | And so all three of them moved from urban areas to rural areas.

01:36:41.240 | But these three leaders, at different times and for different reasons certainly, all three of them, their wives divorced them.

01:36:49.240 | And in my listening, of course I'm listening from far away, I never spoke to any of them personally,

01:36:58.240 | but it seemed obvious that a significant portion of their wives' complaints against them had to do with their excessive emphasis on doom and gloom,

01:37:08.240 | that everything was going to fall apart, and moving to a place they didn't want to live.

01:37:12.240 | And as far as I'm concerned, that's a horrible price to pay, far too high of a price to pay, to say to your wife,

01:37:20.240 | "Okay, well, I'm so sure that everything's going to fall apart, that we're going to move out to the middle of the country,

01:37:25.240 | and I don't care if that makes you happy or not."

01:37:29.240 | That's unreasonable, that's not how a husband should treat his wife.

01:37:33.240 | So I say that to say, "Be rational, be thoughtful."

01:37:37.240 | And while I think you can navigate that, recognize that these worst-case scenarios are unlikely.

01:37:45.240 | So don't freak out about it, take whatever appropriate actions you think are appropriate for you and your family,

01:37:53.240 | but don't lose sight of the longer term.

01:37:56.240 | I can't remember if I said it a minute ago, James had to bail in the middle of the call, and no big deal, no problem.

01:38:01.240 | So that wraps it up. That wraps up today's Q&A call.

01:38:05.240 | Interesting set of questions today.

01:38:07.240 | And so what I say, just in closing, is thank you for calling in.

01:38:10.240 | I really enjoyed handling these questions. I love doing these shows.

01:38:13.240 | I know that you guys enjoy the variety of topics as well.

01:38:16.240 | So please, I would love to have you join me next week.

01:38:19.240 | Just go to Patreon and search for Radical Personal Finance, and I'll be with you next week.

01:38:24.240 | Thank you so much.

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01:38:55.740 | [MUSIC PLAYING]

2021-01-15_Friday_QA