2021-03-05_Friday

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00:00:14.720 | It's Friday and on Fridays here at Radical Personal Finance we do live Q&A.

00:00:19.040 | [Music]

00:00:35.600 | Welcome to Radical Personal Finance, a show dedicated to providing you with the knowledge,

00:00:38.560 | skills, insight, and encouragement you need to live a rich and meaningful life now,

00:00:42.560 | while building a plan for financial freedom in 10 years or less.

00:00:45.920 | My name is Joshua and I am your host and today is Friday, May, March 5, 2021. Here on Fridays

00:00:52.960 | at Radical Personal Finance we do live Q&A every single Friday that we can do it anyway.

00:00:58.240 | [Music]

00:01:08.000 | These shows are basically live call and talk radio, so any Friday that I can arrange the

00:01:12.560 | technology to be able to record the call properly with the callers, I set it up. And if you would

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00:01:30.400 | shows. You can call in, talk about anything that you want to, ask me questions about your situation,

00:01:35.440 | argue with me about something that you want to, anything that you want to, I welcome those

00:01:39.680 | comments. Before we begin, two quick promotions. Remember that here in the month of March,

00:01:45.120 | I am running a special sale on my courses, which are going to be removed from the marketplace on

00:01:50.320 | March 31, 2021. Those are for sale right now with a 50% off coupon code. If you go to

00:01:55.680 | radicalpersonalfinance.com/store, you can buy any of my publicly available courses there and save

00:02:01.520 | 50% off of the retail price using the code "changingplatforms". I'm going to be removing

00:02:06.880 | those from the marketplace on March 31 so that I can move everything to a new technological platform.

00:02:12.240 | In addition, I am currently doing financial consulting up again as well through the end of

00:02:17.360 | March, through March 31. If you would like to save $100 off on a personal consulting call with me,

00:02:23.360 | if you listen to this Q&A show and you like the way that I approach financial consulting,

00:02:27.600 | I would invite you to go to radicalpersonalfinance.com/consult, radicalpersonalfinance.com/consult

00:02:33.360 | and sign up for a consulting call with me there. $100 off per hour is down to $300 per hour there,

00:02:39.360 | and that's only available through March 31. On March 31, I will be discontinuing that service

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00:02:49.920 | fall, but at least for now, that service is disappearing. So go and book there before March 31.

00:02:54.640 | We begin now with PL in Massachusetts. Welcome to the show. How can I serve you today?

00:03:01.280 | Hey, Joshua, how are you?

00:03:02.480 | Very well, sir. How are you?

00:03:03.520 | I'm good. I'm hoping you might be able to provide me the moral of this investing story.

00:03:11.120 | That's what I'm looking for.

00:03:12.240 | Okay.

00:03:12.740 | So the majority of my investments are either in retirement accounts through work,

00:03:21.680 | and I have a brokerage account as well. I have, and I'm going to give you just two specifics in

00:03:27.280 | the last year, and I'm curious to know what I should glean from this. I made one investment in

00:03:35.920 | one of the companies that came out with one of the COVID vaccines about a year ago. And after it went

00:03:41.840 | up a little bit, I sold it. And had I hold it to today, my initial investment would have

00:03:46.880 | approximately quadrupled. And this is also, I think, dumb luck, but I invested in a brokerage

00:03:54.800 | account. This is also, I think, dumb luck, but I invested in Novavax in 2016 when it was trading

00:04:00.720 | for a dollar a share. And I sold it a little while later for about even. And had I held on to that

00:04:07.360 | today, that would have been worth about half a million dollars. And I'm curious if there's any

00:04:15.360 | lessons to learn from this. Is this dumb luck? Is there some strategic way I can look at investing

00:04:21.520 | where I'll be able to realize bigger gains in these in the future? Or is this just gambling?

00:04:27.600 | What's your take? And I'm happy to answer or give you more info if it would be helpful.

00:04:34.560 | When you sold those investments, why did you sell?

00:04:37.600 | So one of them, the first one was Moderna. So I bought it when in the news they announced they

00:04:44.400 | were doing phase one trials of their vaccine. And I sold it. It went up, it was somewhere around 20

00:04:52.240 | or 30% in the course of like two days. And I said, "Geez, that looks pretty good. Who knows if this

00:05:01.600 | is even going to go anywhere. I'm satisfied with the return I've gotten." The other one I bought

00:05:09.280 | just based on reading something in the news about it. And I said, "Oh, geez." It had dropped by 50%

00:05:16.480 | because they had another vaccine they were trying to make for a respiratory illness that had...

00:05:21.520 | And it didn't work out in this trial in 2016 and the stock price dropped by 50%. And I read an

00:05:26.960 | article in the Wall Street Journal or something. I said, "Oh, geez, maybe they'll have better luck

00:05:30.640 | in the future." And then it kind of languished for six or nine months. And I said, "There's

00:05:35.040 | no reason to keep the money in this." And I just sold it. Do you regret selling?

00:05:39.600 | That one, no.

00:05:40.400 | Okay. Do you regret either of them?

00:05:42.320 | No, because I don't think there's any way to know what would have happened with any of this stuff.

00:05:46.960 | What did you do with the money when you sold it? Did you reinvest it? Did you make money with it

00:05:52.640 | with something else? The one from 2016 or 2017, these are both in a brokerage account. So

00:05:59.840 | I can't tell you exactly what I did with the money in 2017. I don't know if I moved it into

00:06:06.880 | something that I still hold or what, because it's sort of fungible in that account.

00:06:11.040 | I can tell you with the Moderna, I moved that and I've moved more of the money in that part

00:06:18.400 | of the brokerage account more into index and other mutual funds that I'm just going to hold.

00:06:23.040 | Right. Well, I think that I don't know what grand lesson there is. I'll tell you my opinions.

00:06:29.840 | For me as a non-professional investor, what I have come to believe is things that I've even

00:06:36.960 | spoken recently about on the show, in the normal shows. Number one, I want to make sure that I

00:06:42.080 | always have some money that I have set aside in advance for investments that might be more

00:06:49.280 | speculative in nature. Perhaps you're pursuing the strategy where you say, "I want the bulk of

00:06:54.240 | my investments in mutual funds. That way there's less individual stock volatility, but I recognize

00:07:01.360 | that I still want to have some money set aside to invest." Well, then make sure that you have

00:07:05.840 | money set aside and that you've thought in advance about how much you're willing to allocate to that.

00:07:11.120 | I've tried to defend the idea that I think it should be a big enough percentage to be meaningful

00:07:16.480 | if you win and a small enough percentage not to be completely destructive and catastrophic

00:07:23.840 | if you lose. When you're dealing in the world of pharma, I think that certainly is a high

00:07:29.040 | volatility marketplace. I used to go to roadshow meetings when I was single. I would go to – meaning

00:07:35.920 | that before I wanted to be home at night for dinner with my wife – I would go to these

00:07:39.920 | roadshow meetings all throughout South Florida where pharma companies and medical companies

00:07:45.600 | would come in and they were trying to gin up support for their stock. I quickly learned that

00:07:51.040 | I was just impressed at every single one of them. If I just went to the meeting, I just came out

00:07:55.360 | saying, "This company is going to be awesome. They're going to win big time and I wish I could

00:07:59.360 | put all my money with them." Then after meeting, after meeting, and company after company, I

00:08:03.040 | realized that I wasn't quite discriminating enough to be participating in that marketplace.

00:08:07.120 | Pharma is certainly very volatile. If a trial goes well, if a vaccine goes well, great. If it

00:08:16.160 | doesn't, it doesn't. But I would say first of all, have an amount. Number two, I think know why you

00:08:24.560 | sell when you sell. Know what you're going for. If you were just going for a 20% gain, great,

00:08:31.280 | if that's your trading strategy. I think that the most important thing is to have a personal

00:08:36.560 | investment strategy that you have decided makes sense for your personal temperament and your

00:08:43.040 | personal goals and not to just do it on an ad hoc basis. I'm not mad if someone makes some ad hoc

00:08:49.040 | investments. That's why I'm encouraging that we all have some money that's just our play money.

00:08:53.120 | The stock tip in the elevator kind of thing or the taxi driver. The taxi driver says, "Oh,

00:08:58.480 | you should invest in such and such." We don't know, but yeah, you know what? Why don't I just

00:09:02.160 | go ahead and put some money at it? I think that's fine. But the answer from the investing perspective

00:09:07.600 | is to have a strategy. I'm attracted to value investing as a strategy. It's one of the few

00:09:13.840 | things that makes sense to me based upon saying, "Here is what I think the actual value of this

00:09:20.560 | company is. If I can buy this company at a discount and I can see the long-term value,

00:09:26.320 | then I'm going to stick with it." And so you keep buying whenever it's discounted and you wait when

00:09:30.160 | it's not. I think that if you have a trading strategy, that's also fine. You say, "This is

00:09:35.600 | the trading strategy that I've developed based upon these cues or these market movements I'm

00:09:40.960 | going to get in and out." And you develop some rules for yourself. Otherwise, I would just say

00:09:47.440 | that in your financial planning, if it's not going to wipe you out on a certain stock, then it's fine

00:09:52.960 | to let it ride. And if you are happy with your decision that you made money, it's fine to let

00:09:56.960 | it go. I have gotten some things really wrong over the last few years. I guess a good example would

00:10:02.960 | be something like Tesla. I was never a believer in Tesla. If I had invested in Tesla a long time ago,

00:10:09.760 | then I would have sold long ago. I have been shocked at the performance in the marketplace.

00:10:17.120 | And so you have to just look at it and recognize that I could have been wrong. I could still be

00:10:23.360 | right and everyone else is wrong right now. And so my only way to protect myself is to do

00:10:28.000 | what is to follow my hunches in the things that I do am aware of, follow the things that I do

00:10:35.040 | believe in when I'm sure that, "Hey, this is a good investment," and then just protect myself

00:10:40.160 | from any kind of worst case scenario. Other than that, I would just say learn your own lessons,

00:10:46.480 | whatever your emotions were. If you're happy with yourself for selling out with a good profit,

00:10:52.480 | then don't be greedy. If you're upset with yourself for selling out early and saying,

00:10:56.960 | "Man, I could have gone more," then figure out how to arrange it so that next time you'll have

00:11:00.720 | the guts to stay with it longer. Sounds good.

00:11:05.280 | All right. Well, good question and congratulations on your success. And I wish you to win some more

00:11:10.720 | really good wins. That would be really nice. All right. We go to Trey in Texas. Trey,

00:11:16.800 | welcome to the show. How can I serve you today, sir?

00:11:19.600 | All right. Thanks, Josh. So I, on your advice, took your advice late, but eventually did work

00:11:28.800 | myself into what looks like is going to be a long-term work from home situation. My wife got

00:11:36.480 | quarantined back over Thanksgiving and I just never went back to the office after that. And

00:11:43.520 | liking it, we have been on a path towards financial independence that was moderately

00:11:51.440 | aggressive, saving like 60 to 70% of our income. But luckily we have fairly good incomes and

00:11:59.440 | pretty cheap taste. So we still live a pretty good life on that.

00:12:02.480 | But since I started working from home, I kind of realized that I don't really hate my job,

00:12:10.480 | especially the way it is now working from home. I think I got about maybe 60%

00:12:17.360 | of the benefit of financial independence just by making that one change.

00:12:21.760 | And so now I've started to think, well, maybe I don't need to,

00:12:26.160 | maybe we could afford to even increase our lifestyle a little bit more now.

00:12:30.720 | Since my wife is also working towards a work from home position and we can enjoy more now

00:12:39.920 | and just get there a few years later. So the question is, one of the things I've been

00:12:46.000 | considering doing is my brother-in-law and my father-in-law and I all have a hunting lease

00:12:54.640 | in West Texas and it's fairly expensive. We spend about $3,000 a year a piece on it.

00:13:01.920 | And then have your consumables and that kind of thing. And so what we've always kicked the idea

00:13:07.760 | around, we've always kicked the idea around buying a smaller piece of property in West Texas

00:13:14.640 | on a really nice river that would be more of a year-round use type of thing that we would own.

00:13:18.560 | And I've kind of been a little bit bearish on that in the past because I was working so hard

00:13:27.840 | towards this financial independence goal. But now I'm thinking, if we all went together and bought a

00:13:33.440 | $500,000 to $700,000 piece of property that we can swim in the river on in the summertime and hunt

00:13:38.720 | in the fall and have a little ranch house on, maybe that's not such a bad idea if it cost me

00:13:44.720 | a few more years before I hit the "phi number". I just wanted to see if you thought that was

00:13:51.440 | reasonable or what kind of questions come to your mind about that. It certainly sounds reasonable.

00:13:59.280 | You're a thinking man, right? You're a thinking adult. You and your wife can look at your

00:14:04.160 | circumstances and at any point in time you can change your goals. So what you're describing is

00:14:10.000 | something like the process that I have gone through previously. I was working towards

00:14:16.000 | financial independence as quickly as possible, but then by adjusting the circumstances of my life,

00:14:23.680 | I realized that I didn't need to quit my job in order for me to accomplish my lifestyle goals.

00:14:29.600 | So at this point in time, I'm happily spending more money than I would otherwise, knowing that

00:14:36.320 | in the fullness of time I'll pivot and I'll eventually reach financial independence,

00:14:42.640 | but I don't want to scrimp and save and not take advantage of things at appropriate times

00:14:48.560 | just in order to reach some arbitrary financial independence number.

00:14:52.880 | So what I would say is don't make these decisions too quickly and don't be scared to just wait a

00:14:59.280 | little bit. I don't know how long you were working towards financial independence, but if you were

00:15:04.480 | working towards financial independence aggressively for a period of time and then now for some period

00:15:09.280 | of months you've been thinking, "You know what? This may not be my number one goal anymore."

00:15:14.560 | Then just give it a few more months, right? There's these kinds of things you can go slowly

00:15:19.200 | with and you can give time for your mind to adjust to it, and if you don't have to make any decision

00:15:23.920 | quickly, give it more time to see what you really want. Time usually does have a way of revealing

00:15:28.880 | the things that are most important to us. With regard to getting the hunting lease, I would say

00:15:35.440 | there are a couple levels that you should think about. The first thing is recognize that in what

00:15:41.040 | you're describing, if you go in together with your father-in-law and your brother-in-law on that

00:15:45.520 | piece of land, that is going to limit your options in terms of you having control of it.

00:15:51.040 | I think it could be a great thing to do. It's probably not. Your share of it would be what?

00:15:55.280 | $150,000-ish in that range? That's right.

00:15:59.040 | Okay. So $150,000, I would guess, based upon what you're describing about how you're saving money,

00:16:05.120 | is not going to be a huge percentage of your net worth. I don't see that as a problem for you to

00:16:10.400 | have $150,000 mixed up in a slightly illiquid investment. My concern with it is just simply

00:16:17.520 | that when you have to go into business with partners, that brings complications. And if

00:16:23.360 | those partners are family, that can also bring complications. And so don't expect, if you do

00:16:28.880 | spend the money on that, don't expect them to say all of a sudden, "Yeah, you know what? You do want

00:16:34.240 | to sell, so just go ahead and sell anytime." You're going into a joint ownership situation

00:16:39.040 | where you're going to have some partners involved, and that's going to limit your choices.

00:16:43.120 | Generally, when someone says, "Should I buy an asset, especially an asset that

00:16:47.840 | is the kind of thing that can usually be stable in value or appreciate,

00:16:55.040 | something like land or real estate, something that has a stronger value than a car or a TV,"

00:17:01.840 | it's not that dangerous to buy it because in most situations, if you don't want it anymore,

00:17:07.520 | you can just sell it. Now, you have to assess the liquidity of how quickly could I find a buyer,

00:17:12.960 | but most assets, you can find a buyer at some price. And so when you go into it, you just think,

00:17:18.320 | "Well, what's the worst that could happen?" Worst that could happen is I need to sell this house.

00:17:22.000 | If you go out and you buy a three-bedroom, two-family, three-bedroom, two-bath house

00:17:27.520 | in a suburban neighborhood, and all of a sudden you turn around and two months later, you decide

00:17:33.200 | you don't want it anymore, you could probably sell it for whatever you – about what you paid for it,

00:17:38.480 | probably, and then your basic costs are your commissions and closing costs and fees, and so

00:17:42.880 | you know your downside. And so when someone says, "Should I buy the thing?" I say, "Well,

00:17:47.040 | if it's a mistake, you could always sell it." In your situation, though, what I'm pointing out is

00:17:50.640 | it'll be a little bit complicated because of the friends and the family connections.

00:17:55.040 | Now, that could be also a better thing that you might go in thirds all across the board,

00:18:00.640 | but you should assess their willingness if you wanted to get out of the deal at some point,

00:18:04.800 | you should assess their willingness to buy you out and their ability to buy you out.

00:18:09.840 | The other thing I would consider with something like that is when is the best time for us to do

00:18:13.760 | it? When is the best time in terms of the family for us to have this? This is something that I

00:18:21.360 | am more and more aware of as I just think more freely about financial planning. Things like

00:18:28.320 | lake houses or hunting leases or vacation beachfront condos, there's a certain time in

00:18:36.960 | life in which those things are actually the most valuable, and it's probably now, not later.

00:18:41.680 | If I have a lake house, I don't want to have that lake house when my children are a year old,

00:18:48.320 | but when my children are seven, eight, ten, fifteen, those are the years at which I really

00:18:55.280 | want to own the lake house. And I've seen so many people who look forward to their retirement years

00:19:01.360 | when they're going to have so much money, and then they're going to buy the lake house,

00:19:04.480 | and they can hardly get their children to go and see them. I looked at a piece of property

00:19:09.440 | for a lady near where I live recently, and she was selling this beautiful, beautiful house,

00:19:17.360 | a big, big, beautiful mansion. She built it herself about 20 years ago.

00:19:23.920 | She probably has sunk, I don't know, she probably sunk somewhere between a million and a million

00:19:28.720 | and a half dollars into building it 20 years ago. The entire thing is a custom home. It's

00:19:33.840 | a beautiful mansion, five acres of land. It's just an amazing piece of property.

00:19:38.640 | I don't think you could build it today starting fresh for less than two million dollars,

00:19:43.360 | and she's selling it for $700,000. And I was probing her a little bit and asking her

00:19:50.720 | about the story and why she's selling it, and I'm looking at it, and I was thinking about buying it,

00:19:55.040 | and imagining it. But the thing that stood out to me the most interestingly was that she built

00:20:02.000 | this house for her children. Now her children are grown and grandchildren, but her children have all

00:20:07.360 | moved away. And even though she has this beautiful property, they're just not really interested in

00:20:11.360 | coming there. They just don't really want to come. And it didn't seem like there was any bad blood

00:20:15.840 | with their mom. It was just, "We don't really want to go down and hang out in the property

00:20:20.240 | with mom right now. We don't really want to spend the time. It just doesn't fit our schedule a

00:20:25.840 | little bit." So I think there's a time at which it's really worth it to sometimes even stretch

00:20:31.360 | financially or adjust things in order to get things at the proper time. So my comment to you is

00:20:36.720 | look at the time in your family and with your relationship with your brother-in-law and your

00:20:42.080 | father-in-law, and just ask yourself, "When is this lease going to be the most important?"

00:20:47.120 | If you have a good situation of just paying $3,000 a year to go to the lease that's out there,

00:20:52.880 | and there's nothing pressing as to why you need to own the land right now,

00:20:57.840 | wait another couple of years. However, if at this point in time with your family,

00:21:01.680 | etc., and their families, it would be really valuable to go ahead and start setting up the

00:21:06.560 | home place and having the house out there and building those memories for the family,

00:21:11.360 | then I would pull the trigger and do it. But it's based upon the timing and making sure that we own

00:21:15.760 | the asset that we want to own when it's most valuable to own.

00:21:19.200 | Yeah, that's a great way to think about it. I appreciate that. Just to address a couple of

00:21:26.480 | your points, I think that I would not miss the money as far as the down payment. And

00:21:35.120 | we put a pretty big down payment down, so the monthly cost for split-through-a is pretty minimal.

00:21:42.160 | I think the biggest thing that would make me regret it would be the day after I sign the

00:21:49.360 | papers, there's the opportunity cost of a great investment that comes along.

00:21:52.800 | And I miss out on it because I put that $150,000 into this property. But it's probably going to be

00:22:03.200 | a thing that we go into planning to hold it probably our whole lives. It'd be a long-term

00:22:13.200 | sort of hold, will it to the children. My wife and brother-in-law would

00:22:18.080 | inherit it from, likely inherit it, I don't want to assume, but from their dad. And then there would

00:22:26.000 | just be two partners in it and probably give it to our kids. We are a little bit early in that

00:22:32.480 | timeframe you're describing. My brother-in-law has one child who's eight months old and we are

00:22:40.320 | expecting our first in August. But that being said, it doesn't mean the adults can't enjoy it

00:22:46.320 | in the meantime. And also it'd be useful. I even thought, especially if my wife ended up

00:22:52.400 | getting a work from home job, definitely want to try to find a place that has decent

00:22:57.520 | internet access and we can stay out there for a week at a time and work from there and play in

00:23:04.800 | the river and all that kind of stuff in the summertime. So that's kind of what I was thinking.

00:23:08.480 | Okay. Well, then here's my thought. As long as your father-in-law is not ailing or ill or

00:23:17.760 | something like that, you and your brother-in-law probably are a little bit early in the phase.

00:23:22.000 | You're at the point where you can still hunt on leased land just as well. So start looking at the

00:23:27.200 | property market. But if you're worried about being upset with yourself for spending the money on that

00:23:32.640 | when you could have bought a better investment, sit down and think creatively and try to figure

00:23:37.440 | out if there's a way that you can buy an investment that will pay for your consumption item.

00:23:43.360 | So maybe you peel off $200,000 and you go and buy a rental house that's going to create income for

00:23:51.200 | you near your current house and then just identify and say, "This rental house is going to pay the

00:23:56.000 | mortgage on the hunting lease." That way you're buying an asset that will pay for your consumption

00:24:01.200 | item. It's not always possible, but I think that it's more possible than people look at a lot of

00:24:06.880 | times. And so whenever you're going to buy a consumption item, just look and see, "Is there

00:24:11.920 | a way that I can use this? Is there a way that I can get an investment that's going to pay for

00:24:16.960 | my consumption item first?" That's what I would do. Okay. Very Robert Kiyosaki.

00:24:24.560 | Yeah, because it feels better. It feels good to know when you're out doing something. It feels

00:24:30.640 | good to know how something's getting paid for. If you go buy a ski boat and you recognize to

00:24:35.040 | yourself that, "Hey, this ski boat," and I don't even mind if you use debt. You go buy a ski boat

00:24:40.960 | and you finance the whole thing. But if you got a rental house, and I just use rental house because

00:24:44.960 | rents are easy to calculate. It can be dividends from a portfolio. It can be profits from a company.

00:24:49.440 | It can be whatever you look at. But if you just think in the back of your mind, "You know what?

00:24:54.000 | 634 Elmhurst Street is paying for this monthly boat payment for me." That feels really good to

00:24:59.600 | be out on the boat on the weekend knowing that 634 Elmhurst Avenue is paying for the boat.

00:25:04.960 | So if you've got the money and if you can make the financing work, just go ahead, take the money.

00:25:09.840 | And again, you got to do the math, but take the money. And instead of putting it directly into

00:25:14.560 | a consumption item, where then you have to keep on working and saving up money to be able to buy

00:25:20.480 | an investment then, buy the investment first and then use the income from the investment to pay for

00:25:26.640 | the consumption item. - Awesome. I like that idea. Thank you very much. - My pleasure. And I think

00:25:32.720 | also just with the age of the children, I think you probably... I don't think you'll miss anything

00:25:38.400 | if you buy it three years from now or five years from now than if you buy it today. You can still

00:25:42.800 | go hunting with your family and build those memories together right now and then just wait

00:25:48.320 | on the land until it really makes sense and you're sure it's a slam dunk option. And with that, we go

00:25:53.200 | now to... Let's go to David in Chicago. David, welcome. How can I serve you today, sir? - Hi,

00:25:58.880 | Joshua. I had a question about liability insurance, like umbrella policy while living offshore. So I

00:26:09.600 | know that's something that you recommend and most people highly recommend to hold a significant

00:26:15.280 | portion of insurance while living in the US. Now, I don't know if that was needed while living

00:26:22.480 | offshore, if that's a concern. And I know that you're currently living overseas. So I wanted

00:26:27.840 | to get your opinion and maybe what you're doing in that regards. - So if you lived offshore,

00:26:33.840 | would you keep owning property in the United States? - I would probably keep owning investments

00:26:42.160 | in the United States, but not like a home. - Okay. So I think then it just comes down to what's the

00:26:48.960 | appropriate insurance for the investment. So I'll walk you through my thinking on this to give you

00:26:54.480 | how I approach it. Number one, you are right that generally the advice in the United States,

00:27:01.600 | the advice of do I need liability insurance, the advice is always yes, buy liability insurance.

00:27:08.240 | And so you buy the liability insurance and it protects you from the litigious society that is

00:27:15.120 | the United States. As I've said many times, when I was sitting for the CFP exam, my instructor said,

00:27:21.920 | if there's ever an answer on the CFP exam that says, yes, buy an umbrella liability policy,

00:27:27.840 | it's always the right answer, just check it and move on, because it's always the right answer to

00:27:31.600 | buy an umbrella liability policy. Now, when you move outside of the United States, the legal

00:27:38.480 | framework changes dramatically. I'm not aware of any other country in the world that has such a

00:27:43.600 | litigious society as the United States. Now, it's a big world, 192 other sovereign nations that you

00:27:50.240 | can choose from, but in most places, the liability risks are not nearly so extreme as they are in the

00:27:57.200 | United States. So if you're physically absent from the United States, your personal liabilities

00:28:02.400 | will decline. Then you look at your business operations, depending on what your business

00:28:07.120 | operations are, if your business operations are outside the United States, your liability

00:28:11.040 | obligations will probably decline. The culture that's in the United States where a wealthy guy

00:28:16.960 | is just looking over his shoulder all the time wondering if somebody is looking to sue him,

00:28:21.120 | that's just not the case in much of the world. And depending on how you're structuring your

00:28:26.960 | travels and your affairs, you could lower those things significantly. So if you hold investments

00:28:33.760 | in the United States, and investments like stocks, those don't generate any liability.

00:28:39.600 | So if you've moved abroad and you've only kept your paper asset portfolio in the United States,

00:28:43.840 | well, that's not generating any liability. I'm happy now to diminish the liability insurance.

00:28:49.200 | If you continue to own something that does generate liability, such as a piece of real estate,

00:28:54.480 | then now, yes, you do need to keep protecting yourself against liability exposure, because

00:29:00.080 | you continue to have that risk of the liability created by owning a piece of rental property in

00:29:05.360 | the United States. That risk might be very different if you just switch to owning rental

00:29:09.600 | property in some other place. And so just keep that in the back of your mind that the cost of

00:29:13.360 | doing business in the United States is maintaining that liability insurance coverage. You could then

00:29:18.000 | finally just simply do an analysis of your assets and figure out how well protected your assets are.

00:29:24.240 | So if you had a million dollars of assets in the United States, but you had three or four million

00:29:30.240 | dollars elsewhere, and if you were physically located elsewhere, well, now I don't think you

00:29:35.520 | need to insure $5 million of assets in the United States. You're just going to want to do your best

00:29:41.200 | to contain the liability, whatever liability you're exposed to. You want to contain that as best as

00:29:47.120 | possible in the United States. You want to insure the equity that's exposed in the United States.

00:29:53.040 | And then I think beyond that, you don't quite need so much liability insurance. That's my answer.

00:29:58.400 | So I guess you're not concerned about, for example,

00:30:03.760 | traveling to Europe and getting in a car accident and getting sued somewhere in Europe,

00:30:14.240 | and then them trying to take your assets in the US is what I'm gathering?

00:30:20.240 | I'm not. Now, again, you should always recognize Joshua's not an attorney.

00:30:24.320 | Joshua's nothing. Joshua's a random guy on the internet, and you should ask the knowledgeable

00:30:28.480 | legal professionals and pay them the money to get their advice. But no, I'm not concerned about that,

00:30:32.720 | and there's a couple of reasons for it. Number one is you're going to maintain whatever the

00:30:38.160 | legally required coverages are when you're in Europe. So if you own a car in Europe,

00:30:45.360 | then you're going to have automobile insurance on that car according to European law and custom,

00:30:50.400 | just like when you own a car and have liability insurance on it in the United States. So you have

00:30:58.000 | protection there. If you're renting a car in Europe, you're going to have with your rental

00:31:02.560 | agreement some amount of liability insurance. You maybe have liability insurance with your credit

00:31:06.960 | card, and you should think about that. You always think about what potential liabilities am I

00:31:11.680 | creating for myself? But that said, if you are sued, and this is one of the reasons why

00:31:17.760 | the PT theory itself is such a powerful theory, just in the United States, let's talk about the

00:31:24.640 | United States. In the United States, the people who have the highest profile and who are the most

00:31:30.400 | likely to be the target of a lawsuit are those who have lots of assets and those who have lots

00:31:36.160 | of assets that have the potential to be attached by a court, by a judgment creditor. So if you have

00:31:42.880 | a million dollars in your checking account in the United States, you're a bigger target for somebody

00:31:48.880 | than if you have a million dollars in a 401k, because the 401k is going to be exempt from the

00:31:52.800 | claims of creditors, whereas the million dollars in your checking account is not.

00:31:55.680 | Now, if you have a million dollars in a checking account in Austria, but you have a car accident

00:32:03.360 | in the United States, you're going to have a lower profile and be a less tempting target for

00:32:09.280 | a lawsuit. And this is important to understand, that there's the level of legal risk, right?

00:32:14.560 | Remember, if you lose a lawsuit, you have to tell the judge about the assets that you own.

00:32:19.920 | And if you're there, the judge, you know, you're offshore planning, if the judge can throw you in

00:32:23.280 | jail and tell you cough up the million dollars in Austria to pay for this claim over here,

00:32:27.600 | great. You know, that's what he'll do. He'll throw you in jail and you'll sit in jail until

00:32:31.040 | you cough up the million dollars to pay the claim. But there's a whole lot of stuff that

00:32:35.120 | happens before that. And the first thing that happens when somebody comes to sue you is,

00:32:39.280 | there's an analysis of how strong the case is. And so, to be clear, don't do stupid things that

00:32:46.480 | are going to result in liability. Don't drive drunk. Don't drive recklessly. Take proper,

00:32:52.000 | prudent precautions to protect yourself just for your own moral good standing, right?

00:32:58.000 | But let's say that somebody comes and you've had a car accident in your car in the United States.

00:33:03.520 | If you are egregiously at fault, right, you were driving drunk, texting on your cell phone,

00:33:11.920 | you know, with 18 people in the car and you mowed over a crowd of children getting off a school bus,

00:33:19.440 | you're going to be sued into smithereens, as you should be, because of your egregious behavior.

00:33:25.680 | But if you just had a car accident where you weren't particularly at fault or it was one of

00:33:30.560 | those things is understandable, then the only person that's going to sue you in that situation

00:33:34.960 | is somebody who thinks that they can get a lot of money. And so they go and they try to take their

00:33:39.040 | court, their case to an attorney. Well, the attorney has to look at it and say, "Does this

00:33:43.680 | person have the money to pay me?" In which case they'd be willing to work. "Or am I going to take

00:33:48.640 | this on contingency?" And if the attorney is going to take it on contingency, the only reason they're

00:33:53.360 | going to take that case is, number one, they think they have a good enough case to win. And number

00:33:58.320 | two, they think you have assets that they can collect on. And so they're going to order an

00:34:02.160 | asset search on you. They're going to try to get some sense of your wealth. So if you were living

00:34:06.640 | in the United States and you had a million dollars in your bank account in Austria, then that lawyer

00:34:12.720 | is going to be far less likely to find the account in Austria to recognize that you have a high

00:34:18.480 | profile than if you had the million dollars sitting down at Bank of America in a checking account.

00:34:22.480 | So you have a lower profile, and thus there's a lower risk. And then secondly,

00:34:28.080 | if they actually win the lawsuit, it's going to be more difficult for them to exercise their

00:34:35.200 | judgment. Let's say that they go all the way through. The judge awards them their judgment,

00:34:39.360 | and they're now a judgment creditor. They force you to submit to a debtor exam, and they know you

00:34:45.440 | have the money. Well, a judge or a lawyer in Texas is going to have a very hard time going to Austria

00:34:57.120 | and enforcing the Austrian bank to disgorge the assets to the creditor without your permission,

00:35:09.760 | because the Austrian bank is not subject to US-American laws. Now, that's why I said,

00:35:15.200 | what will the judge do if you have a million dollars in Austria and you owe a million dollars

00:35:17.920 | in the United States? They'll put you in jail. They'll put you in jail, and then until you call

00:35:21.840 | your banker and you say, "Send me a million dollars," then you'll send the million dollars

00:35:25.520 | to the United States, where now the US courts have jurisdiction, and then they can force the

00:35:29.520 | bank to disgorge the money and pay off the creditor. So now let's flip it. Now, you're in

00:35:34.160 | Europe. Well, first of all, it's my understanding, although this is not actual knowledge that I have,

00:35:39.920 | it's just my impression and understanding. It's my understanding that the legal system in Europe

00:35:43.600 | is not like the United States. Most countries in the world do not have the same system where

00:35:48.400 | lawyers work on contingency. That's, again, my understanding. I could be mistaken, but that's

00:35:53.600 | what I think. And so that's one reason why you have far fewer lawsuits, because you have a legal

00:35:58.400 | system that doesn't allow a lawyer to just shop, to put up a billboard and say, "Injured in an

00:36:03.520 | accident, call us," and then they sort through the 10 different calls until they find the person with

00:36:08.160 | a good case and they find the plaintiff with a deep pocket – with the defendant, excuse me,

00:36:13.680 | the defendant with deep pockets. So if you're in Europe and now your assets are in the United

00:36:19.360 | States and you lose your case in Europe, what authority does the Austrian judge have over your

00:36:27.680 | assets in the United States? None. They have none. So they may have control over your body,

00:36:33.360 | right? They may have you physically locked in prison, in which case you've got a problem if

00:36:38.160 | you're physically locked in prison. But with regard to your assets, they don't have something

00:36:42.720 | available to you there – to them. And so the need for liability insurance is going to be lower in

00:36:50.720 | the scenario you're describing because of your offshore planning. I'm not saying you don't have

00:36:55.760 | any liability. I'm saying control your actions, be safe, be prudent, don't do stupid things that

00:37:00.880 | could lead to liability, fix up your properties, make sure that everything is done up to code,

00:37:04.880 | just follow the laws, and that goes a long way towards protecting you. But in the scenario

00:37:11.760 | you're describing, if you're offshore, then yes, you do have lower liability exposure,

00:37:16.800 | even with your assets being in the United States.

00:37:19.200 | And what if you travel to the United States for vacation and spend, let's say, a month,

00:37:27.440 | a year there, and all of your financial assets are in the US, would you then recommend to keep

00:37:34.320 | some type of liability insurance just for that time that someone is in the US?

00:37:39.280 | Well, it depends on what you're doing that's creating the liability.

00:37:41.600 | What are your actions and activities that are actually generating the liability?

00:37:46.080 | You're not generally liable. You don't have a lot of risk of liability walking down the street.

00:37:52.960 | But if while you're in the United States, you're renting a giant bulldozer and knocking over houses,

00:37:59.840 | well, now you're doing things that are generating more liability. So liability is not this scary

00:38:05.520 | thing that just always exists. It's based upon your actions. And so if you're a prudent person

00:38:11.760 | who understands the law and who understands the things that you're doing that would generate

00:38:15.600 | liability, and you manage your affairs in a way that minimizes the liability, I don't think you

00:38:21.360 | need to run out and buy an insurance policy all of a sudden just because you're in the United States.

00:38:25.200 | My question is, what are you doing that's generating liability for you or potential liability?

00:38:29.760 | Okay. Yeah, it would just be normal activities like driving and things like that.

00:38:36.160 | Right. So what you could do and what you would do is if you're concerned about driving,

00:38:40.800 | then you just go ahead and when you're driving, you make sure that you have

00:38:44.160 | an automobile insurance policy with high liability limits. And you might do that,

00:38:48.720 | right? You might have something, you know, I own a car in the United States.

00:38:52.800 | With my car insurance company, I put the car into storage. It's parked. It sits there. It has – it

00:38:59.600 | maintains its insurance coverage. But when I go back, I activate the insurance coverage because

00:39:05.280 | I'm taking the car out of storage. And then that's where I would go ahead and make sure I had ample

00:39:09.760 | liability coverage if I'm being exposed to liability because of driving. And so that would

00:39:16.960 | be a wise thing to do. And in that circumstance, if you knew that I no longer own a personal house

00:39:22.160 | and I no longer have a personal umbrella liability insurance policy, then you might go ahead and you

00:39:27.520 | might maximize your liability coverage for your car insurance up to a higher number, right? You

00:39:32.960 | might choose the $250,000 of coverage where previously you would have chosen $100,000 of

00:39:37.600 | liability coverage because of that. What I would say though is I think your better strategy is just

00:39:42.560 | minimize your liability exposure. So if you're going to be in the United States for a month,

00:39:47.680 | probably don't keep a car. Just rent a car when you come and then use the appropriate rental

00:39:52.080 | agency's coverages that cover you there or use a ride-sharing program or taxis so that you can

00:39:58.720 | just simply minimize your inherent liability. It's possible to live a very low liability lifestyle.

00:40:04.560 | Physical property, you know, raw land. If you were investing in raw land, you don't have a

00:40:10.400 | lot of liability exposure. You don't need to generally keep liability insurance on raw land.

00:40:15.440 | Go and make sure there's no open-topped wells or dangerous hazards that neighborhood children could

00:40:20.320 | fall in and get hurt. But you don't need to maintain a lot of liability insurance on raw land.

00:40:25.360 | With regard to your personal affairs, right, you could run a business. The business itself could

00:40:29.200 | have no employees. Employees generate liability. Contractors generally don't. So you might choose

00:40:34.560 | to work with contractors instead of employees. And then with your personal actions and activities,

00:40:39.520 | if you ride in airplanes and taxis and ride-sharing cars, etc., you're not doing things

00:40:45.520 | that are likely to harm other people such that they sue you. And it minimizes your overall

00:40:51.040 | liability risk just through your actions. >> Okay, great. Well, that was very useful.

00:40:56.240 | Thank you. >> Good. My pleasure. Good

00:40:57.760 | questions and interesting to—I always love to think about interesting international planning.

00:41:03.520 | All right, two callers remaining. We go to the great state of Pennsylvania. Welcome to the show.

00:41:07.120 | Joshua Hunt going to serve you today. >> Hey, Joshua, how are you?

00:41:11.680 | >> Well, sir, how are you? >>

00:41:14.680 | Doing well. Thank you. Hey, I just recently joined your Radicals. But before I get to my question,

00:41:18.720 | I wanted to say thanks for your tip on pursuing a second passport. I went and realized, hey,

00:41:26.560 | my mom was born in Northern Ireland in 1955, and I did some research and applied, and my passport,

00:41:34.160 | my second passport for UK is on its way. >> Congratulations.

00:41:37.440 | >> That's kind of cool. Yeah, low cost of—not everybody has that ability, but if you have a

00:41:43.040 | relative who was born in another country, I mean, that's an easy way to get in. So—

00:41:47.360 | >> Awesome. What do you think you'll wind up using your second passport for yourself, personally?

00:41:51.200 | >> I don't know. I think just freedom of movement within Europe once—to travel once everything

00:41:59.120 | opens back up. Maybe trying to find a low cost of living area that's safe and that I have access to

00:42:09.680 | now. Not totally sure. It's just kind of a contingency plan for now.

00:42:14.240 | >> Yeah, it feels good to have it. And yeah, just even just the ability to go to Europe for

00:42:18.960 | extended vacations and not be limited to the 90 out of 180 day restriction for the Schengen area,

00:42:25.440 | Schengen zone, for example, is a nice thing. It makes it so that if you want to rent a house in

00:42:30.400 | the south of France for four or five months in the summer, you don't have to worry about

00:42:33.520 | your 90 day restriction. So that's great. Go ahead with your question.

00:42:36.320 | >> Exactly. So I'm coming up on a big life decision. Me and my wife are getting ready

00:42:43.120 | to leave our W2 jobs in the next few months. I'm separating from DOD, and she is ready to

00:42:49.840 | start out on her own. She wants to prepare meals for people like for athletes for CrossFit.

00:42:59.440 | She's already starting personal training online with a niche, very niche area. She is a citizen

00:43:07.920 | of India but has been living in the U.S. and has found a lot of women, Indian women are wanting to

00:43:15.520 | work out but are afraid to go to CrossFit courses or all this. So she has started up a training site

00:43:22.240 | and has been making a little bit of side income on that. She's ready to quit her nine to five W2

00:43:28.640 | job. I'm ready to go out on our own. We have 10 rental properties we accumulated over the last

00:43:34.080 | five years, and we're going to start a property management business, I think. So we have plenty

00:43:40.640 | of money in the bank. We're about $200,000 liquid in our savings account. We have passive income of

00:43:48.480 | around $3,000. We have not inflated our cost of living ourselves since our poor 20s, and we can

00:43:56.640 | live off of $2,500, $3,000 a month in the U.S. Our ultimate dream is to be able to go to India.

00:44:03.840 | Her parents are getting a little older, but they have a nice house we could stay at and

00:44:07.600 | maybe stay there three months, six months at a time, and just live off of our proceeds of

00:44:12.720 | our rental income. That would probably be around three to five years in our timeline.

00:44:18.400 | So I'm just, you know, wanting some outside thoughts, maybe some focus,

00:44:24.960 | ideas that maybe I'm missing or gaps I'm not thinking about as we go forward.

00:44:35.200 | Nothing glaring stands out to me other than just a big, hearty congratulations.

00:44:39.920 | Sounds awesome as far as, you know, what you've done and what you're doing.

00:44:43.200 | And all I can do really is to answer your question, just kind of walk you through a couple

00:44:50.560 | of things for you to think about. So first of all, if you're able to live on $2,500 to $3,000 a month,

00:44:56.960 | and you have $3,000 a month of passive income coming in right now just simply from your

00:45:01.520 | property portfolio, then that's awesome. Then everything that you earn on top of that is going

00:45:06.960 | to be extra that can be used to pay down the mortgages if you're trying to reduce your debt,

00:45:11.920 | or just simply be stockpiled for other further investments in the future.

00:45:16.080 | And so you've achieved financial independence. Congratulations. That's really, really awesome.

00:45:20.400 | I think the property management business is a really great way to maximize what you're doing

00:45:26.080 | and to gain exposure and a little bit more cash flow with your freed up time. I think that's

00:45:30.720 | awesome. As far as going to India, if you like the idea of going back and forth and spending time

00:45:35.520 | there, I think it's a tremendous thing to do and really worth doing from a lifestyle perspective,

00:45:41.440 | being able to be closer to her parents, spend time with them. And it can be a good motivating

00:45:47.840 | factor for you to streamline your personal business. Once you have achieved a basic level

00:45:53.600 | of financial stability and freedom, then I think your next area of planning is to build your life

00:46:00.640 | style freedom, to streamline your business. You can optimize the profitability of a business.

00:46:05.760 | And in addition to that, you can optimize the efficiency of a business. And so having a goal

00:46:12.640 | such as we want to go and spend four months a year in India with her parents would be a wonderful

00:46:19.280 | way of making sure that you've automated and put in place good processes for the management of your

00:46:26.480 | personal rental properties and then for your clients' properties as well. And so I think that

00:46:30.480 | can be a useful thing. There's not going to be, from a financial perspective, there's not going

00:46:35.760 | to be any tax savings for you of spending time abroad or of your wife, especially not with three

00:46:40.480 | or four months a year with your rental properties anyway. With her income, her business, if her

00:46:46.080 | business continues to be successful, then there are some ways that using India as a foundation

00:46:55.120 | could be helpful. What I would say to me would be the biggest opportunity is have her keep building

00:47:02.960 | on her interest in the Indian, with the Indian culture. That if she's found this niche in the

00:47:09.440 | United States, then of course, exploit that as much as possible. There are many, many, many

00:47:15.360 | Indian women in Canada and in the United States who would probably like her content.

00:47:22.000 | But in addition to that, recognize that India is a far bigger market. And so if what she's doing in

00:47:28.480 | the United States is helpful and is successful, then look to see if there's some way that using

00:47:36.160 | her knowledge of the Indian culture, that she could leverage that even within the Indian nation

00:47:41.520 | itself. Because it's a vastly larger, three, four times bigger than, three times bigger than the

00:47:46.960 | United States market. And so if she had or could develop some kind of concept that was successful,

00:47:54.240 | even in the Indian marketplace, that could be a very big financial opportunity.

00:47:58.000 | Got it. Yeah, I hadn't thought of that. Yeah, the cost of living is substantially lower,

00:48:05.600 | as most Asian nations are in India. So, but yeah, I can bring that up. We'll look into that for

00:48:11.840 | sure. I guess I wouldn't worry about the cost of living for you guys too much. You have enough

00:48:18.240 | income to cover your expenses in the way that you're doing it right now. And I would expect

00:48:22.960 | that with your newfound time to invest into your business, you should very quickly be making

00:48:28.720 | significant money. Even if it's $3,000 a month from hers and $3,000 a month from your property

00:48:34.160 | business. Now you're back at a situation where you have plenty of income. I don't think that

00:48:39.520 | your goal should just be to live in the lowest cost place. I think your goal should be to maximize

00:48:44.000 | your lifestyle and to spend time with her parents and to develop a life that you guys really enjoy.

00:48:50.720 | You've worked hard to get to this point. So build a life you really enjoy. What I would try to do

00:48:55.840 | is not focus at this point on, see, here's the risk, right? You're coming from the perspective

00:49:03.600 | of we have saved very carefully. We have managed our affairs very carefully. We've kept our

00:49:08.880 | standard of living in terms of expenses lower than many of our peers in order to achieve financial

00:49:15.200 | independence. And you've done that. Now you can continue to live that way and that's fine. What

00:49:20.880 | I would say though is your opportunity is use your newfound stability and financial freedom

00:49:27.600 | to now focus on things that are going to be bigger wins long term. So look for opportunities that are

00:49:36.640 | going to be significant winners. So let's use your wife's businesses for an example.

00:49:43.200 | To the extent that she's doing hourly personal training where somebody is, even if it's virtual,

00:49:50.240 | she is constrained in a one-to-one model where she's using her muscles to create income. And

00:49:54.960 | that's the lowest standard of, that's the lowest value activity that she can do. It's not to say

00:50:00.400 | that she can't enjoy making some money that way, but it's the lowest value activity that she can

00:50:04.320 | do. She might make, I don't know, a high paid personal trainer might make $100, $150 an hour.

00:50:11.440 | I don't know all of it, but that would be my guesses that maybe you would have a celebrity

00:50:17.920 | trainer that would be able to make more, but she's going to be limited at that number. The market

00:50:22.400 | itself is going to constrain it. And so if she develops a specialized niche, then yes, she can

00:50:28.320 | charge a higher amount, but the market itself is going to be constrained again, perhaps at that

00:50:32.400 | $100 per hour number. With a food delivery business, to the extent that she is personally

00:50:38.320 | creating the food, cooking the food, packing it, packaging it up, and then delivering it to her

00:50:43.680 | customers on the agreed upon schedule, that's also going to be a constrained activity because she's

00:50:49.280 | using her muscles to create income. Now she can move up the value ladder, right? She can start to

00:50:56.080 | hire employees. She can hire trainers. She could find other very fit Indian women who would like

00:51:02.800 | to work with Indian women and she can move up. But the real magic goes if she can go into a business

00:51:10.320 | where her work and her profit are unconstrained, where she's disconnected from the one-to-one model

00:51:17.040 | and she's on the one-to-many model and where she can take advantage of the power of leverage,

00:51:21.440 | especially through digitalization. So if she can say – if she can prove out the concept of

00:51:28.320 | creating Indian-inspired meals that fit the macros of people – of Indian people who want to be fit

00:51:37.840 | or of just people who like Indian food, right? I'd sign up any day for Indian food delivery that

00:51:44.080 | fits all my macros. But she can prove that concept and now she can create an educational course,

00:51:50.800 | write a book, create a course teaching other women who want to build this kind of cooking

00:51:56.400 | business from home how to market it, how to develop their marketplace, etc. Now that moves

00:52:02.240 | up to a much higher value add. That's in the communication strategy where she's making – where

00:52:08.000 | she's able to make a lot more money. If she develops a compelling public presence – and I

00:52:14.800 | have no idea what the opportunity would be in the Indian marketplace – but if she can move into a

00:52:18.400 | situation where she develops something that's useful to a broader number of people and she can

00:52:26.320 | digitize it where her time and her muscles are no longer the constraining factor, then there's a

00:52:30.400 | much bigger opportunity. If she creates a membership organization where she teaches people for $100 a

00:52:38.960 | month how to create a personal meal delivery service in their hometown with Indian-inspired

00:52:45.280 | flavors and she's the one who creates the recipes or she hires chefs who create the recipes,

00:52:49.680 | she figures out all the macros and all someone has to do is pay her $100 per month in order for her

00:52:56.000 | to get the monthly recipes that are changing and the macro calculations and all of the paperwork

00:53:02.080 | and all the literature. Well, now at $100 a month, if she just gets a thousand women across

00:53:07.920 | the United States and Canada and in India or around the world that sign up for her, now she's

00:53:12.400 | got a $100,000 a month business. And so that's what you need to do is not just keep – you've

00:53:20.000 | bought a financial foundation of freedom through what you've done. Now invest into those things

00:53:25.760 | that are going to have more potential. And then even if they don't make any money now, that's fine.

00:53:32.640 | I mean, the business that I just described is eminently achievable. If she has customers

00:53:37.440 | that are paying her money for her to make food and deliver it to them,

00:53:41.120 | and if she can just simply teach someone else how to do that, someone else who would like to be able

00:53:46.080 | to work from home and make their kitchen. I mean, I'd love it if my – I would buy that for my 15

00:53:50.800 | year old son or daughter and I'd be like, "Hey, you're 15 years old. Here's this lady who for a

00:53:56.240 | measly $100 a month will give you a fresh set of Indian meals every month that you can cook.

00:54:00.880 | The instructions on how to do them will teach you how to do the marketing and you can go out and

00:54:05.200 | start up a business that's going to make you three or four or $5,000 a month just by finding people

00:54:09.760 | in the local area who want to buy Indian food that fits their macros." It's a totally doable thing

00:54:14.720 | and that's a $100,000 a month business for her. So look for those big opportunities and take your

00:54:19.280 | time and your energy and look for those opportunities. Yes, sir. That's an awesome idea.

00:54:25.680 | Yeah, we'll start documenting and trying to figure out how we're going to do that. So.

00:54:31.760 | Cool. It's not easy. It's not easy. I warn you. It's not at all easy, but it can make a big

00:54:37.280 | difference and it can very much be worth it in the long run. And now to round out our show,

00:54:42.000 | we've got a couple other callers drop off, but we go to Luke in Miami. Welcome to the show. How can

00:54:45.760 | I serve you today, sir? Hi, Joshua. Thanks so much. I wanted to ask a few different questions

00:54:53.520 | about disability insurance after listening to all your episodes on disability insurance and

00:55:01.360 | questions in Colin's meeting. So I have a number of questions. I don't know. We may not be able to

00:55:06.880 | get through them all, but the first one is just about how a plan to change jobs might impact

00:55:15.360 | being able to qualify for disability insurance. So, you know, you gave the example of if you,

00:55:22.320 | if you started a new job the day after you sign up for disability insurance, of course, that would,

00:55:29.120 | that would look very bad. But is there a general timeframe that the insurance companies have in

00:55:36.720 | mind if they're going to ask you, do you have a plan to change a job? Does it have to be a specific

00:55:42.560 | plan? Does it, is it only if you change industries or, you know, what is the, what is the context

00:55:48.720 | around that? Okay. So first it depends on the insurance policy. The first thing that you want

00:55:53.760 | to make sure of is that you're actually buying what's called a guaranteed renewable insurance

00:55:59.280 | policy. A guaranteed renewable policy means that as long as you pay the premiums, the insurance

00:56:05.200 | company has to keep renewing the policy. That's the key. We'll come to the definition of disability

00:56:10.960 | in a minute, but with regard to the job change, although it makes for a funny joke, right? So

00:56:16.240 | when I used to sell disability insurance, I would always use this language. I'd be sitting in some

00:56:20.560 | lawyer's office and I would tell the lawyer and I was like, listen, this policy is a guaranteed

00:56:24.800 | renewable disability insurance policy, which means Mr. Lawyer, that if you buy this now at a 5A,

00:56:31.360 | you know, industry classification where your insurance policy is super, super cheap,

00:56:35.840 | you buy this policy today. And then a year from now, you, you leave your cushy, safe lawyer job

00:56:42.160 | and you go and you start working as a roofer. If you fall off the roof and you're disabled from

00:56:47.040 | roofing, because we were dealing there with a type of an own occupation disability insurance

00:56:52.240 | definition of disability. And I would say, so if you fall off your roof and you're disabled from

00:56:56.320 | being a roofer, you're still covered. Now, every word that I just said was absolutely true.

00:57:01.680 | And in all of my years selling disability insurance, I never once had a lawyer who left

00:57:06.720 | the legal field to go and become a roofer. So it's just basically a non-issue. Most of the times,

00:57:13.200 | if you do change jobs, you're changing from one job to another, and you're usually staying within

00:57:18.400 | the same job classification. So if you're a 4A or a 5A, you're, you know, you're, you work in an

00:57:23.760 | office, you're a roofer or you're, or you're a 2A or whatever it is, generally when people change

00:57:28.640 | jobs, they generally stay within the same industry and thus the similar industry classification.

00:57:34.640 | Now, if you change jobs and you went to a safer industry classification, right? You went from

00:57:39.680 | a 4A to a 5A because you went from being an insurance agent to being a lawyer, then you

00:57:46.960 | could just simply apply for an updated policy and try to get your industry classification improved.

00:57:51.600 | It's only if you're going to change jobs from a job that is safer and thus has a lower risk

00:57:56.560 | of disability to a job that is less safe where this is even a factor. And most of the time,

00:58:01.360 | it's just not a factor. Next, it all comes down to just what is actually true. So if I today,

00:58:08.800 | buy a disability insurance policy and I have no intention of changing jobs, but then six months

00:58:15.200 | from now or six days from now, somebody makes me a job offer that I can't refuse and I go and take

00:58:20.480 | it, then I haven't done anything wrong. As long as I did not misrepresent myself on the application,

00:58:28.720 | I'm fine. And I've done nothing wrong by changing after the fact. It all comes down to what's the

00:58:34.240 | representation on the application. What do I actually say and what's actually true? So a better

00:58:40.960 | example, I think, would be this rather than changing jobs. I have always thought that someday

00:58:47.120 | it would be fun to learn to fly an airplane. Someday. Okay. That's a common thing. I think a

00:58:52.000 | lot of people would say it'd be fun to fly an airplane. I've always thought it'd be fun to fly

00:58:54.800 | an airplane, but I have zero plans whatsoever to go and learn to fly an airplane today. I have

00:59:01.440 | never signed up for a flight school. I don't have any plans, et cetera. So I could apply for

00:59:04.960 | disability insurance policy today. And when we come to the aviation section, I would say, no,

00:59:09.200 | I don't have a pilot's license and I don't have any plans to do one. Now, if tomorrow I win the

00:59:13.280 | lottery and then I decide, hey, that's it. I'm going to go and learn to fly an airplane. I'm

00:59:17.840 | going to buy a Learjet and I'm going to learn to fly it. Well, that would dramatically change,

00:59:22.080 | but I still have not committed fraud because at the time of application, I've not made a

00:59:26.880 | misrepresentation. Third level is that this stuff generally only comes into play if there's actually

00:59:33.760 | an incident. So I could today know that I've signed up for flying classes next week. And then

00:59:43.280 | I could today go and get a disability insurance policy and I could commit fraud on the application

00:59:48.720 | by misrepresenting my aviation history and my aviation intentions. That's fraud. I could keep

00:59:56.160 | that policy for 20 years. And if I never get disabled, it'll probably never matter. It'll

01:00:03.520 | never come out. Nothing ever happens. It's only at the time of disability that I have a problem.

01:00:08.800 | So do, so hear me loud and clear, do not commit fraud on insurance applications,

01:00:14.320 | but it's just generally not that a factor, generally speaking. So what you should do

01:00:19.440 | is just simply talk to the insurance agent with the company that you're, that you're considering,

01:00:24.560 | ask them for a copy of the application, turn to the, read through the questions on the application,

01:00:30.320 | look at the questions and see how they ask the questions and what they ask. And then you'll

01:00:35.040 | know what they're going to ask and you'll know what you need to answer to. And so,

01:00:38.400 | and then just answer those questions truthfully with whatever the circumstances are. If you do

01:00:43.600 | that, everything is fine. Okay. Yeah, that makes sense. And that, and that is, that is one of the

01:00:53.360 | the concerns that I have is wanting to make sure that, you know, I don't end up, I don't end up

01:00:58.480 | paying a policy for decades and thinking I'm fine and then trying to use it because I need it. And

01:01:05.760 | then finding out that the, you know, the impression that I gave was not, is not considered true.

01:01:13.120 | Right. So, so that, but that makes sense in terms of just, just reading the questions, I guess.

01:01:22.160 | Hold on a second. You started to break up right when you said, I guess, hold on, hold on,

01:01:30.240 | please repeat. You said, I guess, and then, and then your connection cut out. So please repeat.

01:01:33.440 | Sure. In terms of finding an insurance company, I think you said that you can't give specific

01:01:41.840 | recommendations, but it would just be looking for, looking for, I guess, local offices. So I can talk

01:01:51.520 | to someone in person? No, not with disability insurance. With disability insurance, and I don't

01:01:56.960 | mind talking about companies, it just annoys me that they don't pay me. And since I don't have an

01:02:00.240 | insurance license, so many times I think about, I should just go get insurance licenses and just

01:02:04.480 | start selling insurance again. And I may do it. I've actually talked to friends of mine who

01:02:09.680 | have insurance brokerages and about signing up as a, as a marketing agent for them, just so I could,

01:02:17.040 | so I could recommend specific companies, but I don't mind talking about names. It's just,

01:02:21.120 | that's the only reason why I'm often hesitant. So first of all, with disability insurance,

01:02:26.160 | it's a unique product and most people, I don't, I never understood why. I always,

01:02:31.760 | I love selling disability insurance. I believe that it was the most important,

01:02:35.120 | the most important policy for someone to own. I dropped off. Oh, well, we'll just finish it out.

01:02:41.600 | So you can listen later, Luke. I believe that it was the most important policy for someone to own.

01:02:47.120 | And so they should focus on, on getting it quickly, but still insurance, a lot of insurance

01:02:52.400 | agents don't, don't do it. They don't, they don't buy it. They don't cover it. So you can't just go

01:02:57.040 | to any insurance agent and expect to do well. The second thing is disability insurance is complex.

01:03:03.360 | It's much more complex than life insurance. And because of its complexity, you need to make sure

01:03:08.560 | that you make good choices. And so it pays to work with a specialist. Now this is very,

01:03:15.360 | very relevant in some professions. So if you're a physician, for example, or some other specialized,

01:03:21.840 | have some other kind of specialized industry, you need to work with somebody that understands it.

01:03:26.400 | There are often specialists that work with a certain marketplace. So every doctor gets called

01:03:32.000 | by tons of insurance agents who work with other doctors. That's common. And so you don't just go

01:03:38.320 | and find an insurance agent. You go to there. The other thing that you do is you find an insurance

01:03:42.560 | company. If you don't have that, or you're not some specialty occupation, like a chiropractor

01:03:46.880 | or something, you find an insurance company that provides disability insurance that also provides

01:03:51.520 | training. And so I think the big mutual companies are the place to start. The New York Life's,

01:03:56.880 | the Northwestern Mutual, the Mass Mutual, et cetera. I'm biased, right? I used to work for

01:04:01.360 | Northwestern Mutual, so I'm biased in that direction. But from all of my experience as

01:04:05.840 | an insurance agent, and even after it, I still think it makes sense. So look for one of those

01:04:11.040 | big old mutual insurance companies that sells insurance as their primary business. Call them up.

01:04:16.640 | What I say to do is call them up, talk to the local managing director, say, "Hey, listen, I need

01:04:22.240 | to buy a policy. I found you in the phone book. Could you make me a referral to somebody who

01:04:27.440 | could specialize in disability insurance?" And there are often disability insurance specialists

01:04:31.760 | or some agent that does a lot of work in that way, and they'll often just send you to their

01:04:36.000 | agent that does that kind of work. So that's how I would do it. I know you dropped off, Luke,

01:04:40.800 | but I think you're back now. I know you missed a little bit of that, but my answer is go to a

01:04:45.920 | company that sells disability insurance and where they train people to do it. Don't just go to any

01:04:49.760 | random insurance agency. Are you back, Luke? >> Sure. Okay. That's great. Yes. Can you hear

01:04:59.600 | me? >> Yep. Sounds good. Any other follow-up

01:05:01.680 | questions? >> You can hear me? Okay.

01:05:06.400 | Yes. In terms of -- so since I'm young now and there isn't -- I have the fewest possible things

01:05:16.400 | wrong with me at this time, I figure I want to get as good of a policy as I can get right now,

01:05:21.600 | but I'm wondering to what degree can that be changed later other than reduce -- I think you

01:05:30.640 | said you can reduce the benefit amount, but can you add and remove riders? Does that require --

01:05:36.720 | in some cases, does that require the policy to be scrapped and rewritten?

01:05:40.320 | >> Yeah. So these are great questions that you're asking, and they're questions that

01:05:45.920 | will be easily answered by a competent insurance agent. So I'll answer them for you now,

01:05:50.560 | but just know this is what you hire an insurance agent for is to answer the questions, and they

01:05:54.800 | should be able to explain them to you. So when you go to apply for disability income insurance,

01:05:59.760 | they're going to calculate the amount of benefit they're willing to offer you

01:06:04.000 | based upon your current income. Let's say you make $10,000 a month. They'll say $10,000 a month,

01:06:09.200 | we're willing to issue you a policy for $6,350 a month of benefit. They'll never give you 100%

01:06:15.040 | of benefit, and as your income goes up, the percentage that they'll cover will go lower,

01:06:19.440 | but they'll tell you the number based upon their financial underwriting. You can submit if you

01:06:23.760 | have other sources of income, depending on what those sources of income are. They may or may not

01:06:28.000 | be covered by the insurance agency, and so if you have a question on what they'll offer you,

01:06:36.160 | you can talk to an insurance agent and do what's called a conditional application or conditional

01:06:40.480 | underwriting. For example, if you're questioning how much they'll actually offer you, you can do

01:06:45.600 | it from, you can submit your financial statements for a quote. Now most of the time this is simple,

01:06:51.600 | right? If you have a salary, it's very simple. The insurance agent will do the calculation based

01:06:54.960 | upon using the company's software. If you have other sources of income, you have real estate

01:06:58.960 | income, etc., or other investments, then you can go ahead and submit a balance sheet and an income

01:07:04.160 | statement to the underwriter, and the underwriter will tell you how much they're willing to approve

01:07:08.640 | you for. But let's say they come to you and they say, "Hey, you're making $10,000 a month,

01:07:12.480 | we'll give you $6,500 a month of benefit." So in that situation where they're giving you $6,500

01:07:17.600 | a month, they won't increase it in the future without more underwriting, but you can put on

01:07:24.320 | a certain number of riders. So most insurance companies, these pretty much all work the same.

01:07:30.000 | The first thing is that you can add a rider onto the policy that will allow it to increase with

01:07:36.240 | inflation on a predetermined schedule. Sometimes it's just a flat 3%, sometimes it's going to be

01:07:42.560 | based upon a CPI offshoot. And you know, "Hey, this is a consumer price index increased by a

01:07:48.400 | certain amount, so we'll increase your benefit." You'll pay a little bit extra for the rider,

01:07:52.480 | but what it means is that on the one-year policy anniversary, they will tell you, "Hey, by the way,

01:07:57.760 | we're offering you 3% more insurance. So now instead of $6,500 a month, we'll give you $6,695

01:08:04.800 | per month." You can often choose that benefit. When I used to sell them, I don't know what they

01:08:10.400 | are now, but when I used to sell them, it was either 3% or 6% per year that you could choose,

01:08:14.240 | and that was called an indexed income benefit. So that would allow your policy to increase

01:08:19.200 | by a certain amount, your policy amount to increase every year on a stated percentage.

01:08:23.760 | The other thing that you can do is you can purchase an additional purchase benefit.

01:08:27.680 | So an additional purchase benefit allows you to get additional insurance in the future with no

01:08:34.400 | health or occupation or avocation underwriting, but with financial underwriting. So this would

01:08:41.840 | be where if you were, you know, let's say I'm sitting in your office and you're making $10,000

01:08:46.000 | a month and you're a promising young litigator, and you're looking and saying, "Well, listen,

01:08:51.600 | Josh, $6,500 is nice, but I want $15,000 a month, and I know that your income is going to increase

01:08:58.160 | quickly," then I would go ahead and I would recommend to you an additional purchase benefit.

01:09:02.880 | So you pay an extra cost to buy that additional purchase benefit. And then in the future,

01:09:07.840 | as your income increases, you can regularly do financial underwriting and they'll issue

01:09:12.800 | you more insurance without any more health underwriting. So now if you've gone from $10,000

01:09:17.760 | a month to now, you know, three years in, you're at $30,000 a month, then you can increase your

01:09:22.160 | benefits and you'll be able to go up to, you know, $10,000 a month or $15,000 a month, wherever you

01:09:27.760 | wind up with the maximum benefit. That additional purchase benefit that you purchase will be a ratio

01:09:34.000 | based upon the size of the policy that you buy now, and then based upon what you think you're

01:09:41.680 | going to need. So if you buy $6,500 a month now, you could probably buy another $6,500 a month of

01:09:46.880 | additional purchase benefit, or you might talk to the insurance agent and say, "Man, that's really

01:09:51.040 | expensive. I'm not going to pay, you know, $87 a month just for the future thing. Let me just go

01:09:56.000 | ahead and buy two or $3,000." And then they'll do the additional, they'll do the financial underwriting,

01:10:01.040 | and then in the future, as your income goes up, they'll give you the additional amounts of

01:10:04.160 | insurance. So those are the two ways that it goes. One rider is a rider that automatically increases

01:10:08.880 | your monthly benefit before disability. Remember, this is different than having an inflation benefit

01:10:15.280 | on your actual benefit after disability, but one is an automatic increase based upon a stated

01:10:21.680 | percentage. The other is an additional purchase benefit that allows you to buy more insurance when

01:10:25.760 | your income increases in the future. >> Great. Okay. And I really appreciate you answering

01:10:35.600 | that, even as you say. Probably an agent will either talk me through all the details for that

01:10:41.680 | particular company. That's very helpful. Could I ask one more? >> Yep. Go ahead.

01:10:46.960 | >> Is there any point in, for the health part of the underwriting, is there any point in waiting

01:11:02.720 | to make minor health changes, or is it really just based on existing conditions and your general

01:11:12.400 | health status? >> My answer is no. There's no point in waiting to change some kind of health

01:11:17.760 | condition. If you're overweight or you have a certain health condition, get the insurance now

01:11:24.320 | if you need it. So we're assuming that you need the insurance, or we're assuming that you want

01:11:27.840 | the insurance. So let me explain what will happen. First of all, people often overestimate the impact

01:11:34.160 | of a certain condition, and the impact of a condition is different based upon the kind of

01:11:39.040 | insurance policy that you are applying for. For example, I'm overweight, right? I've always been

01:11:44.640 | overweight, but even though I was overweight when I bought all kinds of insurance, I always got the

01:11:51.280 | very highest health ratings because every other test, you know, my blood pressure, my cholesterol,

01:11:57.360 | all of my tests, my family history, everything was always perfect. And so being overweight was,

01:12:03.920 | yes, it was a mark that the underwriter would consider, but because everything else came out,

01:12:08.960 | I don't have any statistical higher risk of, or I don't have a significantly higher risk of

01:12:13.600 | morbidity because I'm overweight. Now, that's different with every condition, and you have to

01:12:18.560 | recognize that your risks of morbidity are different than your risks of mortality. Morbidity

01:12:23.920 | is for disability insurance, risk of being disabled. Mortality is risk of dying for life

01:12:28.400 | insurance. And so if you need or want the insurance, get it. Now, let's assume that you

01:12:33.040 | have a health condition. It doesn't, first of all, it's not going to hurt you to declare the

01:12:37.840 | health condition. That's one thing that people usually look for. In theory, you could, you know,

01:12:44.320 | conceal something, right? You could fly to Malaysia for all your health care and then, you know, get

01:12:49.280 | some conditions, you know, cleared away and then go back to the United States and then say, "No,

01:12:54.000 | I haven't been to any doctor. Is the insurance company going to find out?" I don't see how they

01:12:57.120 | would, but you wouldn't take that. You wouldn't do that, of course, but like in theory, you could.

01:13:02.400 | But in general, it's just not that big a deal. Most of the time, any health things that you're

01:13:07.440 | worried about are already there in your health information. Now, when you apply for the insurance,

01:13:13.280 | your doctor's records will be entered into the Medical Information Bureau, which is a sharing

01:13:18.000 | of health information among insurance companies and a sharing of your application for insurance.

01:13:24.720 | So, don't think that you can apply to Company A, they rate you or deny you coverage, and then you

01:13:30.880 | can just go six months later to Company B and not tell them about a doctor. They're going to look

01:13:35.120 | you up in the Medical Information Bureau, they're going to find the information, and then with that

01:13:40.160 | information, they're going to know that you applied with Company A six months previous.

01:13:45.680 | However, the information that the underwriter is going to depend on is already there in your

01:13:50.640 | medical records, and so they're all going to be submitted anyway. It's not really any problem

01:13:54.720 | to submit them now. If you have a condition that's improving, that's fine, although usually,

01:13:59.840 | they want to see things that are stable. So, what you can do is when you do the underwriting for the

01:14:05.200 | policy, the underwriter will look at it, and if you have a negative health event, the underwriter

01:14:10.000 | will look at it and will say, "Listen, we're going to give you a rating," and they'll either offer

01:14:16.080 | you reconsideration or not offer you reconsideration. And in disability insurance, they'll

01:14:21.200 | do three things. Well, two things with a variation. Thing number one is they may give you a rating.

01:14:27.040 | So, they'll say, "Hey, listen, we're not going to give you our very cheapest tier. We'll give you

01:14:30.960 | our second cheapest tier because of this condition," and it's going to be either permanent or it's

01:14:36.480 | going to be for a certain amount of time. The second thing that they'll do is they might give

01:14:41.440 | you an exclusion. So, maybe you had carpal tunnel syndrome because you typed too much.

01:14:46.960 | They'll say to you, "We'll give you coverage for any disability except a disability that's related

01:14:54.000 | to this previous condition, the fact that you had carpal tunnel syndrome. We won't pay a claim

01:14:58.640 | if you're disabled due to this carpal tunnel syndrome." Now, if they give you a rating or

01:15:03.840 | if they give you an exclusion rider, it's called an exclusion rider. If they either give you a

01:15:08.400 | rating or an exclusion rider, that rating or rider might be permanent for the life of the policy or

01:15:14.720 | it might be conditional that they can drop it off after two years. So, you might have a condition

01:15:19.360 | that you've been working on with your doctor. They'll say, "Listen, we're going to give you

01:15:22.880 | a rating for two years, but in two years, we're willing to give you reconsideration, and all you

01:15:28.080 | need to do at that point in time is get your updated medical records, send us your medical

01:15:33.280 | records after two years, and then if your condition has improved, we're willing to drop this exclusion

01:15:38.880 | rider or we're willing to change this rating based upon an improving condition." Or if it's something

01:15:44.400 | more serious, then they won't give you that. They'll just say that here's the policy. You can

01:15:48.320 | always go and apply for a new policy in the future. So, let's say that they said we're rating you

01:15:54.080 | into the third classification, the third premium category based upon these conditions that you're

01:15:59.440 | facing, and it's permanent. Well, if three years from now you've lost 200 pounds, you've fixed your

01:16:05.360 | A1C problem with your diabetes, your heart is in better condition, everything is good, you can just

01:16:10.960 | go into that same company or another company and apply for a new policy, and they'll underwrite

01:16:16.240 | it based upon the new conditions at that point in time. So, in summary, it never makes sense to wait

01:16:22.640 | on health conditions if you don't have the insurance that you need. And in fact, it's the

01:16:28.080 | opposite. If you have a health condition that's actually going to wind up with a rating or a rider

01:16:33.680 | or something like that, you want to get the insurance now, get it in force in case things get

01:16:38.560 | worse. Because in my experience, a lot of times things get worse, right? Fat people get fatter,

01:16:43.120 | sick people get sicker. And so, things do get worse, and so you get it now. Now, if things get

01:16:47.760 | better, then you just go and apply again for a new policy two years from now, but at least you have

01:16:52.480 | the insurance. The only time at which it makes sense to wait on something is if you already have

01:16:57.520 | the coverage that you need and you're improving something so that you can replace that coverage

01:17:03.600 | in the future. Then, of course, yes, you wait until you've solved the problem, but that's only

01:17:08.320 | if you already have the coverage that you need. >> All right, that's great. And so, when I apply,

01:17:19.840 | all of my current medical records, from immunizations to the doctor's notes, are going

01:17:25.600 | to be put in a data exchange for the insurance industry? >> Yes. >>

01:17:31.720 | Sounds like a great plan for data security. All right. Well, thank you so much, Joshua,

01:17:40.880 | for all your answers. >> My pleasure. No, that is one of the things that is frustrating about

01:17:46.560 | the insurance industry, and it's the Medical Information Bureau. You can go and read about

01:17:51.280 | what they do share. They don't share, in my knowledge, "No, I need to go back and refresh

01:17:54.880 | this. I should pull up the Medical Information Bureau on Wikipedia and look just to see what

01:18:00.560 | they actually do share," which I will do as we speak, just to make sure, see what the Wikipedia

01:18:09.520 | article is on it here. But, okay, it doesn't say in that exactly what they share. But yes,

01:18:15.840 | in what they do, okay, here we go. "Medical Information Bureau's database does not contain

01:18:20.800 | actual medical records, and information is gathered from an underwriting investigation

01:18:26.800 | that may include information from the questionnaire, blah, blah, blah." So what

01:18:30.640 | they do is it records the information of what is done. So, "Medical Information Bureau's

01:18:40.320 | underwriting services are used by the members to assess an individual's risk and eligibility

01:18:44.960 | during the underwriting of life, health, disability income, critical illness, and

01:18:48.400 | long-term care insurance policies. These services alert underwriters to errors, omissions,

01:18:53.760 | or misrepresentations made on insurance applications." And so they don't have all

01:18:59.360 | of the doctor's records there in a central database. They have the codes that say, "Hey,

01:19:04.240 | so-and-so applied to us for information, and we issued him a policy, or we didn't issue him a

01:19:09.680 | policy, and here, you know, you should be aware that this guy is flagged as having had some

01:19:15.120 | potential issues." So that is the challenge, you know. If you're going to get the insurance,

01:19:19.360 | you're going to disclose to them the information, and it is a breach of data. So you're going to

01:19:23.920 | want to have the insurance. No requirement to have it, but if you want it, you're going to

01:19:27.680 | play by their rules, and you're going to give them the information. So that wraps up our Friday Q&A

01:19:33.600 | show for today. A great bunch of questions. A great mixture there. I would just say in closing,

01:19:38.960 | remember that I'm running 50% off sale. Go to radicalpersonalfinance.com/store. Use the coupon

01:19:43.760 | code "changingplatforms" to save 50% on all of my courses. That must be done by the end of this

01:19:49.920 | month, because at the end of this month, those courses will be taken off the market, never to

01:19:54.160 | be seen again. I'm not taking them off because the information is bad or out of date. The information

01:19:58.560 | is great, and it's fully up to date. I'm just simply updating them with newer visuals, better,

01:20:04.400 | more fancier audio, sorry, fancier video, etc., and they're going to be coming out at a much

01:20:09.920 | higher price point. So it's a great deal, and I recommend you go to that. In addition, if you

01:20:15.600 | would like to, if you like the way I answer questions on these, I intend for a time to

01:20:19.840 | continue this Patreon system that I use for the Friday Q&A shows. But if you'd like to talk to

01:20:25.680 | me personally about your situation, get my personal insight, you can do that up until the end of this

01:20:29.440 | month as well. After March 31, I'm no longer going to be providing those hourly consulting services.

01:20:34.640 | Why, you ask? Well, just think about what I said to the caller who talked about businesses.

01:20:41.920 | I like some aspects of the one-to-one business. I enjoy serving people the way that I have over

01:20:48.320 | the past year, but I made a lot more money when I sold insurance policies with an hour consultation

01:20:53.360 | than just simply with a straight hourly rate. And so I'm very focused on the one-to-many business

01:20:58.640 | model just for my own financial well-being. So it'll never be as cheap as it is right now.

01:21:03.520 | Those services are discounted by 25% down to $300 an hour as well. You can find that

01:21:07.600 | at radicalpersonalfinance.com/consult, radicalpersonalfinance.com/consult,

01:21:12.240 | or radicalpersonalfinance.com/store. Thank you for your patience with my very loud dogs. I'm sure

01:21:18.400 | that we're being attacked somehow. Someone at the gate, someone wanting to get in and murder all of

01:21:23.600 | us. But thank you for your patience with those canine mongrels. With Kroger brand products from

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2021-03-05_Friday_QA