2022-10-21_Friday

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00:00:30.600 | Today on Radical Personal Finance is live Q&A.

00:00:48.800 | Welcome to Radical Personal Finance, the show dedicated to providing you with knowledge,

00:00:51.800 | skills, insight, and encouragement you need to live a rich and meaningful life now,

00:00:56.200 | while building a plan for financial freedom in 10 years or less.

00:00:59.000 | My name is Joshua Sheets. I am your host and today is Friday, October 21, 2022.

00:01:05.800 | And today, as we do every Friday, when I can arrange the appropriate technology to be in front of a microphone

00:01:10.800 | and an internet connection and all that, we record a live Q&A.

00:01:21.600 | These shows work like call and talk radio works.

00:01:24.000 | I guess it still works. I haven't listened to talk radio in years myself.

00:01:27.000 | It still works like that. You call in, talk about anything that you want.

00:01:30.800 | I hit record and then I publish it to the podcast feed an hour or so later.

00:01:35.000 | If you would like to gain access to one of these shows and gain access to the phone number to be able to call in,

00:01:38.800 | the way you do that is by becoming a patron of the show.

00:01:41.000 | Go to patreon.com/radicalpersonalfinance.

00:01:43.600 | Sign up to support the show there on Patreon and then you will receive the information,

00:01:47.400 | the recording time, and the phone number, etc.

00:01:50.800 | Today, let's go ahead and begin with Anthony in Virginia.

00:01:54.800 | Anthony, welcome to the show. How can I serve you today, sir?

00:01:58.400 | Hey, Joshua. Thanks for taking my call. I recently launched a financial coaching practice as sort of a passion project.

00:02:07.600 | I make a pretty good living as a principal business intelligence engineer in financial services.

00:02:13.800 | And based on my research, I think it's going to be a challenge to replace my income as a financial coach.

00:02:19.200 | But I do think it'll bring me fulfillment, some additional income, and potentially a second career when I retire from my nine to five.

00:02:26.400 | So my question is, what advice would you offer to make my financial coaching practice as successful as possible as a secondary source of income now,

00:02:36.800 | while eventually positioning myself for a second career if and when I'm able to retire early from my day job?

00:02:43.400 | What does success look like? I would say a relatively stable stream of, in the near term anyway,

00:02:58.400 | a relatively stable and predictable stream of clients and profitability,

00:03:04.000 | something that I would be able to put some money away in my set. I would call that success in the near term.

00:03:12.600 | Long term, I would like to come somewhere in the ballpark of at least coming close to maybe half of my income if I were to retire early.

00:03:23.600 | How much would half of your income be? About $100,000.

00:03:30.400 | OK. And what's your product? What are you selling to your coaching clients?

00:03:39.200 | So it's just one on one financial coaching, helping folks get out of debt, personal finance, education and literacy,

00:03:48.200 | premarital financial coaching, all the sort of some of the Ramsey principles.

00:03:55.600 | I did go through the financial coach master training program through him. I don't subscribe to everything that Dave promotes.

00:04:04.120 | But, you know, just general helping people become debt free, build and preserve wealth while they work towards financial freedom.

00:04:11.600 | What is the business model that he teaches at the moment for financial coaches?

00:04:19.880 | Right now, it's basically, you know, it's it's kind of an hourly, you know, a flat fee per hour.

00:04:29.360 | And I think, you know, you do you do your sort of discovery or complimentary consultation to determine if it's a good fit.

00:04:38.880 | And then you you kind of determine, OK, I think, you know, it would be we need to work together for three or six or nine sessions at a particular hourly rate.

00:04:52.400 | And what is your current hourly rate? Two hundred fifty. OK.

00:05:03.640 | What is if you were to describe to me the best coaching relationship that you've had thus far with a client,

00:05:13.040 | describe to me what that has looked like, who the client was, where the client came from.

00:05:18.760 | Cherry pick whoever jumps to mind as being the best thing so far and tell me a little bit about what that scenario was like for you.

00:05:29.880 | So it's a little early, so I don't have much of a pool to draw from, but I did meet with some folks that were approaching retirement.

00:05:41.120 | The husband, it was a couple, the husband was retired, the wife was still working.

00:05:45.440 | And, you know, they were sort of on different pages.

00:05:51.240 | Husband's primary concern was wealth preservation.

00:05:54.800 | The wife wanted to sort of, you know.

00:06:00.960 | To purchase a property and try to generate some income there.

00:06:05.360 | And so I think working through that call with them, I was sort of able to appeal to both of their objectives.

00:06:18.440 | But obviously, there were, you know, the income property was going to take some time and some sacrifice and the preservation.

00:06:28.080 | I think I, you know, I bonds with something that really appealed to him as a safe investment that he could park some money in for the near term and get a nice yield.

00:06:36.880 | I think overall, I would say the joy that I got out of that was providing some useful information that hadn't occurred to them previously.

00:06:46.560 | And how did you get in contact with them?

00:06:48.840 | Were they a personal friend or did they find out about you?

00:06:51.040 | How did that relationship develop?

00:06:52.880 | Yeah, it was a referral from a family member.

00:06:57.600 | Okay.

00:07:00.320 | So this is a hard question because I don't have a great answer that I think actually solves the problems that you're facing.

00:07:11.920 | I'm pretty bearish on the concept of financial coaching, especially if financial coaching means anything related to hourly work, providing hourly services for clients.

00:07:25.680 | I don't think it's a sustainable or profitable business model for really anyone to pursue with the exception of somebody for whom it's simply a hobby, an ad hoc.

00:07:39.280 | You're going to do appointments on an ad hoc basis here and there.

00:07:43.840 | But I don't think it's a sustainable business model that any professional, especially someone who's targeting making $100,000 a year, which is, of course, half of what you're making right now.

00:07:54.400 | I don't think it's a sustainable business model that really anybody should pursue.

00:07:57.920 | Let me describe why.

00:08:00.720 | Generally speaking, people who want financial advice can easily go out and get it.

00:08:08.800 | This world is not bereft of good financial advice.

00:08:13.920 | The library is full of high quality, very accurate, very well-written books on money, money management, etc.

00:08:22.480 | Every single financial question you want an answer to is available for free at your local library in some book.

00:08:30.160 | The internet is awash in useful financial blogs written by people who know their stuff and who write with passion and with zeal.

00:08:38.720 | They give specific answers to specific questions.

00:08:44.560 | Social media is full of experts who understand deeply their subjects, whether it's going on Twitter and following your favorite financial guru and being up to date with the Twitter advice on whatever area that you're interested in,

00:09:01.440 | or subscribing to somebody's substack that you find on Twitter, or getting into a community online.

00:09:10.400 | Reddit is full of communities. Facebook is full of groups.

00:09:14.480 | Discord is full of servers that are available with people who will give you good advice.

00:09:20.880 | If you want to deal with professionals, the world of financial professionals is absolutely full of good quality financial advisors, certified financial planners,

00:09:32.480 | chartered financial consultants, various financial advisors of all shapes and sorts.

00:09:37.840 | You go to your local bank and they have a financial advisor. You go see your insurance agent, he'll say your insurance and mutual funds.

00:09:43.680 | Everybody has access to information.

00:09:49.040 | If you want tax advice, there are lots of good consultants and accountants.

00:09:53.200 | So the world is not lacking good financial advice.

00:09:57.280 | For anybody who wants financial advice, the advice is freely available, both without cost and with cost.

00:10:06.640 | So why would somebody pick you?

00:10:09.680 | What specifically do you have to offer that other people don't have to offer?

00:10:16.640 | You don't need to answer that right now, but I want you to think about that.

00:10:19.680 | You've got to be very clear. Why would somebody pick you?

00:10:22.880 | Why would they find you? Why would they search you out?

00:10:26.000 | Given that financial advice is so freely available, and given that there are so many people who this is their profession,

00:10:33.360 | or they're working to try to give financial advice, why would anybody seek out you?

00:10:38.320 | And how would they find you would be the second thing.

00:10:41.040 | So when you first get started, there may be a few people in your network, in your circle of influence,

00:10:47.040 | that would reach out to you, but there's not going to be that many people,

00:10:52.720 | especially there's not going to be that many people that are looking for financial advice.

00:10:56.880 | So notice I'm making a distinction between those who are looking for financial advice

00:11:00.640 | and those who are not looking for financial advice.

00:11:03.200 | I believe that the best markets to profitably serve with financial advice

00:11:09.280 | are those who don't yet know that they're looking.

00:11:14.480 | It's not to say that they're not looking, right?

00:11:16.080 | Because if someone doesn't want any financial advice, then fine.

00:11:20.080 | But the best market to serve are those who don't yet know that they're looking for financial advice.

00:11:26.720 | So when I used to sell insurance early in my career,

00:11:32.320 | I kind of thought of it as basically the conversation went like this.

00:11:36.320 | I learned very quickly that those who wanted insurance policies had already gone and found them.

00:11:41.760 | And so they weren't awesome prospects.

00:11:45.120 | And in fact, it'll sound strange to you, but at least in my business model,

00:11:49.360 | this business model can work.

00:11:50.720 | The model of inbound leads of people looking for business,

00:11:53.600 | for insurance can be a very productive business.

00:11:57.920 | There are many people who have made a fortune building insurance agencies,

00:12:01.840 | and they have developed a source of inbound leads.

00:12:04.880 | But when I started insurance, I didn't have a source of inbound leads.

00:12:07.520 | And I quickly learned that I didn't enjoy working with people who were inbound leads.

00:12:11.920 | We would get calls in the office and they would, people would say,

00:12:14.080 | "Hey, you know, I'm interested in buying a life insurance policy."

00:12:16.320 | And those would get passed on to various ones of us in the office.

00:12:20.240 | And sometimes they were good, but usually the people who were doing that,

00:12:25.040 | they were more just price shopping.

00:12:27.040 | They were calling around to get a few quotes here and there,

00:12:30.240 | trying to figure out if there was something that they were missing.

00:12:33.120 | You could work with those people on occasion, but you were just one of many, right?

00:12:38.720 | You were one of 10 offices that they were calling.

00:12:41.440 | And usually they didn't want to hear why your more expensive policies

00:12:46.800 | were actually better for them and why they should find value in it, et cetera.

00:12:50.720 | And so what I preferred to do was basically jump out of the bushes at people and say,

00:12:54.320 | "Hey, you want to talk about your money?"

00:12:56.080 | And obviously it's a funny image to imagine myself jumping out of the bushes,

00:13:00.560 | but that's literally what I would do.

00:13:02.160 | I would jump out of the bushes at people on the phone.

00:13:04.400 | I used referred lead prospecting.

00:13:06.960 | I would call them up and I'd be like, "Hey, my name is Joshua.

00:13:09.440 | I'm a financial advisor.

00:13:10.880 | I was introduced to you by your friend, Anthony.

00:13:15.280 | And I wondered if you would like to get together.

00:13:18.080 | I want to share with you what I do in hopes I might be of service for you in the future."

00:13:20.960 | Right?

00:13:21.200 | That was basically a version of my phoning language.

00:13:23.680 | And half the time people would say, "Yes."

00:13:25.120 | Half the time people would say, "No."

00:13:26.560 | Half the time that people said, "Yes," I'd show up at their house.

00:13:29.200 | I'd start having a conversation.

00:13:30.880 | And what I could do with those people is I could often demonstrate to them that they

00:13:38.400 | didn't know it yet, but that they actually did want to talk about their money.

00:13:42.000 | They actually were looking for good financial advice.

00:13:44.640 | They weren't proactive enough to be the one down and saying, "I set a New Year's resolution

00:13:49.600 | that this year I'm going to get rich, so I'm going to go to the library and I'm going to

00:13:52.000 | read 20 books on finance."

00:13:53.360 | They were just sitting in their house, sitting in their office, going through life, planning

00:13:56.240 | their vacation, going to their kids' ball games, et cetera.

00:13:58.800 | But all of a sudden when somebody jumps out of the bushes and says, "Hey, do you want

00:14:01.360 | to talk about money?"

00:14:02.080 | They realize, "Yeah, I actually would like to talk about money."

00:14:05.280 | And so they talk about money.

00:14:06.560 | And then if you're a good financial advisor or a good financial coach, then you can start

00:14:11.600 | to talk and figure out, well, what aspect of your money would you like to talk about?

00:14:15.760 | And then you can start to coach them and lead them into that.

00:14:18.640 | Now, here is the challenge.

00:14:20.480 | Jumping out of the bushes at people and asking to talk about their money was something that

00:14:26.400 | I could afford to do because I sold insurance.

00:14:28.400 | And most people were underinsured.

00:14:30.880 | Or that was something I could afford to do because I managed investments.

00:14:35.520 | And many people had some investments, or at least at some point in time they might want

00:14:39.520 | to roll over 401(k) and I could afford to manage their investment portfolio.

00:14:45.520 | But when you jump out of the bushes at people and ask them to talk about money and then

00:14:49.680 | tell them that the hourly rate is 250 bucks an hour, all of a sudden very few people are

00:14:57.520 | smart enough to want to do that.

00:14:59.200 | There is a strange psychology difference among classes of people.

00:15:04.960 | The wealthy are accustomed to going and paying for good advice, good proactive advice.

00:15:10.800 | But most of the middle class is not.

00:15:13.520 | Most of the middle class does not want to go and pay for advice.

00:15:17.440 | If you doubt this, just think about how excited you feel to pick up the phone and go call

00:15:21.440 | a lawyer.

00:15:21.920 | Even when you know that you want one, et cetera, it's very difficult.

00:15:25.680 | And lawyers, they struggle.

00:15:27.600 | The thing that most lawyers don't enjoy is hourly billing.

00:15:30.320 | It's very difficult.

00:15:31.680 | It's a very difficult way to handle it.

00:15:33.680 | And so unless you have a source of high quality leads, then the whole hourly billing model

00:15:41.760 | is, I think, very, very difficult, especially if what you're delivering is simply coaching

00:15:46.720 | or advice.

00:15:47.520 | And there's no product sale that can be associated with that.

00:15:50.640 | If you could figure out some kind of product sale to help people justify spending money

00:15:56.560 | on your fees, I think it makes a much bigger difference.

00:16:01.440 | So an accountant says, OK, well, I can do your taxes for you.

00:16:05.920 | And so somebody might be willing to pay extra for advice to an accountant, but they're

00:16:09.840 | doing it in the context of the product sale of the tax return preparation or the company

00:16:17.360 | formation or whatever it happens to be.

00:16:19.280 | Similarly with other professionals, lawyers can sell a will or a set of estate documents,

00:16:25.200 | et cetera.

00:16:26.000 | But when you're just selling advice, that's hard to do.

00:16:29.200 | Now, that's triply hard to do when people are in debt or people are not in a great financial

00:16:34.400 | shape.

00:16:35.200 | So if you're going to charge hourly fees, you want people to feel confident that there's

00:16:40.320 | a dramatic payoff.

00:16:41.520 | And in order for there to be a dramatic payoff, you have to show them specifically how they're

00:16:49.040 | going to win.

00:16:49.760 | So, for example, I've said this publicly and I say this to you now.

00:16:54.480 | If I were going to go into an hourly consulting model that wasn't the little bit of consulting

00:16:59.200 | that I do on occasion connected to radical personal finance, which is different, and

00:17:03.040 | I'll explain why in a moment, I would do something like Social Security planning.

00:17:08.560 | Because I can deliver at the end of it a product that somebody can specifically say, oh, look,

00:17:16.640 | I went into Joshua.

00:17:18.000 | He showed me how if I do this, this, this, this, not only do I feel confident that I'm

00:17:21.840 | making the right decision as far as when I should take Social Security, but he taught

00:17:26.160 | me how to maximize my lifetime Social Security income.

00:17:29.680 | And that's really valuable for me.

00:17:31.440 | And so something where you can show a clear result is useful.

00:17:36.480 | This is where if you're going to do debt coaching, right, doing debt settlement where

00:17:39.840 | you can show debt negotiation, these guys can negotiate their fees because somebody

00:17:45.520 | walks away feeling like, well, I owed American Express $5,000, but this guy negotiated for

00:17:50.320 | me, now we only owe them $3,000.

00:17:52.320 | Therefore, it's worth the money that I paid him to help me in that process.

00:17:56.960 | So if you're going to bill people an hourly rate, you need to have some kind of clear

00:18:02.080 | deliverable that's more than just coaching in order for that business to flourish.

00:18:06.160 | Let's talk about financial planners for a moment.

00:18:07.760 | There has been a movement over the last few years into the world of fee-only or in some

00:18:15.680 | cases hourly-only financial planning advice.

00:18:19.520 | And this is a movement that I was attracted to myself for a significant amount of time

00:18:25.840 | because of what I perceived as the ethics of it.

00:18:29.040 | The financial advice business is a difficult business to navigate the ethics because there

00:18:33.760 | are so many different potential conflicts of interest, so many different things that

00:18:39.520 | could be where you can sell something that's not appropriate for somebody.

00:18:44.240 | And so the industry has tried to handle that by, well, a few people in the industry have

00:18:48.640 | tried to handle that by creating fee-only financial advisors, advisors who don't sell

00:18:53.920 | any commission-based products, and also to provide hourly financial planning services.

00:19:00.080 | And for years I listened to Clark Howard and I always loved how Clark Howard would promote

00:19:06.160 | these services.

00:19:07.360 | At the time, I don't know if he still does, but there was a big financial planning network

00:19:11.360 | called Garrett Planning Network where people would just do hourly planning.

00:19:15.200 | I don't know if he still promotes them or not, or even if they have other competitors

00:19:19.440 | that are not current on that.

00:19:20.880 | But I thought of it and I wanted to go and do that.

00:19:23.280 | But I later came to recognize, like, any financial planner who does this, and I'm talking here

00:19:29.520 | financial planners who have industry credentials, who have invested heavily into education,

00:19:36.400 | certification, et cetera, any financial planner who goes and does that, it's crazy to me

00:19:42.400 | that someone would go and work for the amount of money that they're making on an hourly

00:19:46.560 | basis when they could go and make five or ten times more in almost any other kind of

00:19:51.120 | business model.

00:19:52.400 | And so I'm not even convinced you're working with great financial planners, because I think

00:19:57.040 | of myself as having the same kind of altruistic heart that many people have, but I would not

00:20:02.640 | do that work.

00:20:03.680 | And it comes down to the hours, the number of hours that you can actually bill.

00:20:07.520 | You say, "Oh, well, if I could bill $250 an hour and I could do that 30 hours a week,

00:20:11.920 | I could make loads of money.

00:20:13.120 | It's work that I love to do and everything would be great."

00:20:15.440 | And the answer is, yes, it would be.

00:20:17.120 | But you will never fill 30 hours a week without a huge amount of other work to generate leads.

00:20:23.040 | So my first comment would be, if you just wanted to do hourly coaching or advice, you

00:20:30.640 | should go and find somebody who has a steady flow of leads, somebody like a Garrett Network

00:20:39.120 | or somebody where they have leads coming in so that you can just simply work with those

00:20:44.160 | who are ready to pay.

00:20:46.640 | Because if you don't have a source of leads, it's not going to work great.

00:20:52.720 | The second thing is, you may have to create it.

00:20:54.800 | And so that's where you move over into kind of what I do.

00:20:57.120 | On occasion, I offer hourly planning and I enjoy that.

00:21:00.000 | I really love it.

00:21:00.800 | I enjoy talking to people.

00:21:03.040 | I enjoy dealing with the intricacies of situations.

00:21:06.160 | And I really, really, I really enjoy those conversations.

00:21:09.680 | But even though Radical Personal Finance is one of the larger financial podcasts out there,

00:21:14.080 | I've been doing it for practically almost a decade, it's fairly well known, I don't

00:21:18.400 | have that many clients who want to actually come and do it.

00:21:21.600 | If I offered it all the time, if I offered it 50 weeks a year, I don't think I would

00:21:26.080 | fill, I mean, I don't know that I would fill 10 hours a week or 20 hours a week.

00:21:31.120 | And that's with a decade of lead time and a huge amount of content created, etc.

00:21:36.640 | So the concept of hourly coaching, I think, is a dead business model that is really not

00:21:44.320 | worth an intelligent man pursuing.

00:21:46.240 | If you want to provide coaching, then just do it when people offer it to you.

00:21:51.360 | But in terms of building a coaching business, you will have to go through too many leads

00:21:56.320 | and you'll spend so much time prospecting and working, etc.

00:22:00.080 | And then you barely profit at all based upon hourly fees.

00:22:05.120 | Now, let me flip it and say, what if you did want to do coaching?

00:22:08.320 | Well, I think that your best bet is one of two paths.

00:22:13.280 | Path number one is to go into the path, the traditional route of being a financial advisor.

00:22:18.720 | There's no reason why you couldn't yourself become a formal licensed financial advisor

00:22:25.360 | and sell some form of financial product.

00:22:28.160 | And you can help a lot more people by doing that because you can afford to do the business.

00:22:34.480 | The example I like to use is something as simple as term life insurance.

00:22:38.560 | So back to my little example, in the days when I sold life insurance, I would jump out

00:22:42.560 | of the bushes at somebody and say, "Hey, do you want to buy life insurance?"

00:22:45.440 | And basically, most people, most Americans are dramatically underinsured with regard

00:22:52.000 | to life insurance.

00:22:53.680 | And so if you jump out of the bushes at 10 people and you sit down and then those 10

00:22:57.600 | people agree to sit down with you, remember only half of them will, and then I'll give

00:23:00.880 | you the numbers, right?

00:23:01.520 | We just call it the 10-3-1.

00:23:02.560 | This is based upon this old financial insurance general agent called Al Granum.

00:23:07.600 | He wrote this book and trained a whole generation of advisors.

00:23:13.200 | I think they still use it.

00:23:14.160 | But the numbers that they use in the traditional life insurance sales role in the sales business

00:23:21.280 | is that if you get 1,000 referred leads, so introductions by a friend,

00:23:27.280 | 1,000 referred leads will turn into 500 appointments.

00:23:30.400 | 500 appointments will turn into 300 what they call a case open.

00:23:34.800 | 300 case opens means somebody needs something.

00:23:37.360 | They've expressed interest.

00:23:38.480 | You know what?

00:23:38.960 | I would like to buy another million dollars of life insurance.

00:23:41.040 | Or you know what?

00:23:41.840 | I've been thinking about long-term care insurance.

00:23:43.840 | Or you know what?

00:23:44.800 | I would like to open an IRA, et cetera.

00:23:46.560 | That's called an open case.

00:23:47.760 | They have an interest in something.

00:23:49.200 | There's some unsolved thing in their financial needs.

00:23:53.840 | Of those 300 people who have some kind of need, 100 of them will eventually buy from you.

00:24:01.520 | And then it's actually over a three-year period.

00:24:04.320 | 60 in the first 12 months, 30 in the second 12 months, and 10 in the third 12 months.

00:24:08.320 | And if somebody hasn't bought within 36 months, they never buy.

00:24:11.600 | And you just toss them out and move on.

00:24:14.080 | So those are the numbers.

00:24:15.360 | So a new life insurance agent, when I came in as a brand new life insurance agent,

00:24:20.080 | in the first year, we were taught to make contact with 1,400 referred leads.

00:24:27.200 | 1,400 referred leads.

00:24:30.160 | So in the first year, I was taught to collect 1,400 names.

00:24:35.200 | I started with friends, family, giving me referrals to people they liked,

00:24:39.040 | competent people who were making money, et cetera.

00:24:42.160 | 1,400.

00:24:43.520 | That turns into 600 appointments, which turns into--

00:24:47.040 | anyway, you can do the math.

00:24:49.760 | If we do it on 1,000, it turns into 30 to 50 pieces of business in your first year.

00:24:55.120 | Now, what is a piece of business?

00:24:57.440 | Let's talk about something as simple as a life insurance policy.

00:25:00.400 | If I go out and I meet with a father with a couple of children, 45 years old,

00:25:05.760 | there's a good chance that he would probably like to have another million dollars of life

00:25:09.520 | insurance, but he hasn't gotten around to it.

00:25:11.360 | Well, a million dollars of term life insurance, a 20-year level term policy for a 45-year-old,

00:25:16.240 | premiums on that might be, say, $1,000 a year.

00:25:19.120 | So $1,000 a year is a reasonable amount for a normal middle-aged 45-year-old to spend

00:25:25.440 | on a term life insurance policy.

00:25:27.840 | But if I successfully sell on the $1,000 policy, depending on the company, the commission rate

00:25:32.800 | on a $1,000-a-year term policy is somewhere between 50% and 100% of the first-year premium,

00:25:38.560 | usually around 60% to 80%, depending on the company.

00:25:41.600 | So my commission on that is going to be $500 to $1,000 for a simple 20-year-level term policy.

00:25:49.200 | So that is a lot—it is a lot easier for me to get paid by selling somebody a million-dollar

00:25:55.520 | term life insurance policy than it is for me to pay—charge hourly fees.

00:26:02.000 | The same guy who will pay $1,000 to buy some life insurance that he wants will very rarely

00:26:07.440 | go out and spend $250 an hour on advice.

00:26:12.000 | It just—they don't do it.

00:26:13.520 | People don't do it.

00:26:14.320 | They don't like paying for hourly advice.

00:26:16.720 | And so if you can sell something as simple as a life insurance policy, you can make vastly

00:26:21.680 | more money vastly quicker.

00:26:23.600 | Now, the key to remember is the $1,000-a-year premium of a life insurance policy is only

00:26:29.040 | the tip of the iceberg of the normal financial products that a family goes through.

00:26:34.080 | So you might need a term life insurance policy for dad, a term life insurance policy for

00:26:38.160 | mom.

00:26:38.400 | There might be policies on the children.

00:26:39.760 | There might be disability policy.

00:26:41.120 | There might be health insurance.

00:26:42.320 | There might be long-term care insurance.

00:26:44.320 | You go through all your insurances, right?

00:26:45.920 | Life, disability, health, et cetera.

00:26:47.920 | Go through them all.

00:26:48.960 | And often in a family, there may be three, four, five insurance policies that people

00:26:52.880 | are happy and excited to get.

00:26:55.680 | So even for middle-class families, with just term insurance, you can easily walk into a

00:27:01.280 | couple thousand dollars of commission.

00:27:03.200 | Now you walk into a family that's upwardly mobile and making genuine money.

00:27:07.440 | If there's a need for whole life insurance, all of a sudden now you go from $1,000-a-premium

00:27:11.440 | to $5,000-a-premium, $10,000-a-premium, and your commission rates jump accordingly.

00:27:15.920 | Commission rates on whole life insurance are lower usually than term insurance, but the

00:27:19.440 | premiums are so much higher that it makes sense.

00:27:21.760 | Then you have renewals.

00:27:23.040 | And so you start to have a whole flow of revenue that comes in year after year after year.

00:27:27.680 | Plus people buy more stuff over time.

00:27:30.320 | And so you might start working with a 35-year-old who has a certain set of needs, and then over

00:27:34.560 | time it grows and grows and grows.

00:27:36.240 | And then they just start going systematically through all the different products.

00:27:41.040 | You add investments onto that.

00:27:42.560 | And now you roll over a $300,000 401(k), and you roll over 10 years later a $500,000 401(k),

00:27:48.880 | and then dad dies, and you've got another million dollars added to it.

00:27:52.000 | Pretty soon you're managing $100 million of assets, and pretty soon your whole business

00:27:56.240 | looks very different.

00:27:57.440 | And so this is why the financial industry is the better industry with regard to cash

00:28:04.240 | flow, is there's much more opportunity to help people and to sell a lot more products

00:28:10.800 | that even when completely sold ethically, perfectly, et cetera, will make you vastly

00:28:16.080 | more money than $250 an hour.

00:28:23.120 | And people are much more accustomed to paying for that stuff than they are for hourly planning

00:28:27.680 | advice.

00:28:28.800 | So I think you can consider going down the route of being a traditional financial advisor,

00:28:33.840 | selling products.

00:28:34.840 | You can do it in whatever version of the business appeals to you.

00:28:37.840 | You can sell commission-based products.

00:28:39.280 | You can do insurance.

00:28:40.240 | You can do financial planning.

00:28:42.080 | You can do management, money management, et cetera.

00:28:44.800 | And when you have all those things in your back pocket, it enhances your credibility

00:28:51.920 | as an advisor.

00:28:53.280 | It allows you to access more people, and it allows you to make vastly more potential money

00:28:57.840 | than just doing hourly planning.

00:29:00.320 | If you don't want to go down the road of being a financial advisor, then I think you pivot

00:29:04.080 | and you go down the road of doing info products.

00:29:07.280 | So if you can sell some form of an info product, that can be a book that you've written, that

00:29:12.560 | can be a course that you deliver, and it can be literally a seminar that you teach once

00:29:19.200 | a month, it can be online products, the solving various things, or you provide some form of

00:29:28.400 | financial entertainment.

00:29:30.400 | Think about Grant.

00:29:33.840 | What's his name?

00:29:34.640 | The big YouTube guy.

00:29:36.480 | He provides incredible financial entertainment, and then he attracts a following, and that

00:29:41.600 | following just through ad revenue alone is a multi-million dollar business.

00:29:45.760 | I think those are the reasons you go in one of those two directions.

00:29:50.480 | If you do something like you sell a successful seminar, then now if you put 30 people in

00:29:57.360 | the room at $20 a ticket or $50 a ticket, now you can afford to go and do that work

00:30:03.280 | and you get access to vastly more people than you do from just the number of people that

00:30:12.240 | are willing to pay you an hourly fee.

00:30:13.840 | So there's a lengthy answer to say, I don't know how to tell you how to be successful

00:30:20.080 | in the business model that you're describing because I don't think it's fundamentally

00:30:23.680 | a successful business model, especially not for people who are in debt, especially not

00:30:29.040 | for debt coaching, et cetera.

00:30:30.800 | If Ramsey has figured out a trick or some best practices, not only I'd like to know

00:30:36.560 | those and you can tell me if I'm wrong and what you've learned in his certification

00:30:40.560 | course, but I have never come across a significantly successful person operating at a professional

00:30:48.080 | level who has done that.

00:30:49.120 | I've come across a number of people who really love getting out of debt and liked helping

00:30:52.800 | other people get out of debt, and they had three, four, five clients over the course

00:30:55.920 | of years.

00:30:56.480 | Okay, it was a fun hobby, but in order to make $100,000 a year on that, I don't know

00:31:00.720 | how to do that.

00:31:01.760 | So I don't think it's a great model.

00:31:04.240 | It's not something I would do.

00:31:05.760 | I would immediately turn around and just go open an insurance agency.

00:31:11.360 | I'm making a simple saying, literally selling term life insurance and make more than that

00:31:16.480 | and make it easier and make it better and help more people who you can afford to sit

00:31:22.160 | with because you can actually sell them a product where they will never pay you for

00:31:26.480 | time.

00:31:27.200 | And so I look at it and I say for anybody who wants good advice, it's already out there.

00:31:33.280 | And I'll make this simple comment.

00:31:36.800 | My consulting business, I never talk to broke people.

00:31:42.480 | On occasion, I have talked to a handful of young people getting started who are just

00:31:48.000 | doing it, and I work my tail off to try to give them as much value as possible.

00:31:52.480 | But the people who consult with me, 80% of them are, I mean, no, 90% of them are already

00:31:59.200 | millionaires.

00:31:59.840 | 50% of them are multi-millionaires because those are the kinds of people who are used

00:32:07.760 | to working, used to paying hourly fees.

00:32:10.960 | So if you want to do an hourly fee business, then I think you need to develop a very deep

00:32:16.240 | level of knowledge about something that's appealing to the wealthy because millionaires

00:32:20.480 | will be happy to pay you money.

00:32:22.320 | And so if you develop a real expertise in something like tax planning, business tax

00:32:28.240 | planning, I have a friend of mine who has been very successful with business coaching,

00:32:31.760 | right, profitability coaching for businesses.

00:32:34.000 | That's something you can sell at hourly fees.

00:32:36.960 | Internationalization has been a hot topic recently.

00:32:41.760 | Something that's going to appeal to at least millionaires, if not multi-millionaires,

00:32:46.400 | then I think you'll have a much more effective business than doing debt coaching or generic

00:32:50.880 | financial coaching.

00:32:52.080 | So there's my answer to your question.

00:32:53.280 | Yeah, thanks, Josh.

00:32:57.360 | I appreciate it.

00:32:58.000 | There was a kind of, you validated a lot of my concerns and certainly I have given significant

00:33:05.360 | thought to just becoming a financial planner.

00:33:08.880 | My employer is willing to reimburse me for getting my master's in financial planning

00:33:13.360 | and pursuing a CFP is definitely something that I'm eventually going to look into.

00:33:19.360 | But yeah, this is all, I wish I had called you before I launched it, but I think this

00:33:27.600 | is all really helpful and I appreciate it.

00:33:29.200 | Good, good.

00:33:30.080 | I wish I had something more encouraging.

00:33:31.200 | I will say if you want to make a business in that line of work, then there are, these

00:33:36.320 | are good, I tried to give you some good ideas.

00:33:39.280 | I just don't think it works with generalized financial coaching and it doesn't work with

00:33:43.200 | debt coaching.

00:33:43.840 | You can't, people who are in debt, they don't need anything more than Dave Ramsey.

00:33:50.080 | I just always say, listen to Dave Ramsey, listen to him three hours a day and do what

00:33:54.400 | he says and let him do it.

00:33:56.000 | And notice the business model, right?

00:33:58.480 | What he has been able to do is do the info product model and that's why it works so

00:34:02.960 | well.

00:34:03.200 | So he can give, he can afford to give broke people advice because he can sell them many

00:34:09.600 | excellent products.

00:34:11.200 | And those products are advertising on a radio show, those products with a huge listenership,

00:34:15.840 | those products are, you know, courses, Financial Peace University and books, etc.

00:34:22.240 | So he can afford to work with broke people because he can sell them low priced products.

00:34:26.720 | And so you can potentially riff on that in some way, but that's not the hourly model.

00:34:32.560 | It doesn't work in the hourly model.

00:34:35.520 | And the last comment I would say is that if you, if I were looking to make $100,000 as

00:34:43.120 | a part-time retirement income of some kind, I believe it's a mistake to always go for

00:34:49.280 | the professional, the professional kinds of gigs.

00:34:52.720 | Those things are useful, right?

00:34:56.240 | You can be a consultant, you can do that stuff.

00:34:58.080 | But I think in many cases, just buying a business, even a very simple business, can provide you

00:35:05.200 | with that income and do it in a much more effective, more straightforward manner.

00:35:10.320 | I'm not suggesting this for you because I don't know anything about you, but I have

00:35:12.800 | a friend of mine who, a number of years ago, retired from his primary career, had enough

00:35:16.560 | money in retirement accounts to do well and went and bought a shaved ice business.

00:35:22.560 | And I always thought, you know what, it's an ideal thing for him.

00:35:25.280 | He works a couple days a week, doesn't need a huge amount of money from it, but it's profitable

00:35:29.360 | enough that he and his wife do it together.

00:35:32.080 | They enjoy the social aspect of it.

00:35:34.080 | It's a very simple business, and yet it can provide them with a lot of income that offsets

00:35:41.120 | and keeps them from needing to touch their retirement account.

00:35:43.360 | It gives them all of the benefits of being semi-retired.

00:35:46.720 | I've talked to people who work at fairs, right?

00:35:48.720 | They run a seasonal business where they have a food truck, and during the summer is when

00:35:53.840 | they work, and they earn a huge amount of money within a few months, and the rest of

00:35:57.440 | the year they're off.

00:35:58.480 | You can go all over the country and you can find people doing variations of this, kind

00:36:04.000 | of a traditional-looking business.

00:36:05.920 | And when you don't have to rely on it as the primary engine of your wealth building, then

00:36:13.360 | those kinds of businesses can be pretty attractive.

00:36:16.080 | There's a concept.

00:36:17.280 | I've had this in my list of shows, and I haven't done it yet.

00:36:20.960 | But I'd look at it and say, "If you can put together a few part-time..."

00:36:28.000 | So let me pause a second.

00:36:29.600 | A number of years ago, I was doing my intellectual wanderings that I do, and I came across a

00:36:35.840 | guy who was teaching people how to tie balloons.

00:36:38.080 | And balloon tying is one of the businesses that I keep on my list of things that are

00:36:43.600 | productive and profitable for teenagers to do as a business.

00:36:47.120 | And he was showing how somebody who practiced some balloon tying could go to a local fair,

00:36:52.640 | a local event, a street event, etc., and make hundreds of dollars for a couple of hours

00:36:58.880 | of work.

00:36:59.440 | And I don't think this is the greatest...

00:37:01.760 | It's not super exciting for me to do this.

00:37:04.160 | But for a 14-year-old or a 16-year-old to say, "Yeah, you can go to an event and you

00:37:09.040 | can tie balloons and you can potentially make hundreds of dollars."

00:37:12.560 | And then they were going in talking about how you can do a balloon business, doing balloon

00:37:15.760 | decorating.

00:37:16.800 | That's the kind of business where it's on an hourly basis, it's an extremely attractive

00:37:23.120 | business because you only work when you're making money.

00:37:26.080 | But it's not appropriate for most fathers who need to make a rent payment every month,

00:37:33.440 | who need to make enough to actually get free.

00:37:37.280 | But from a retirement perspective or a semi-retirement perspective, there are often many of these

00:37:42.720 | kinds of businesses where you can actually make a lot of money in a short number of hours,

00:37:49.280 | but the business is inherently constricted in the total hours available to it.

00:37:54.080 | So whether it's your Christmas tree business or your Christmas lights installation business

00:37:58.880 | or your fall decorating business or your fireworks business or your summertime fair concession

00:38:06.800 | cart business, many of those businesses can make tens of thousands of dollars in a fairly

00:38:11.280 | compressed period of time and they're much more profitable.

00:38:14.400 | And if anything like that appeals to you, then they're much more profitable, much more

00:38:18.800 | sure, much more understandable than the kinds of businesses that professionals are often

00:38:23.600 | attracted to.

00:38:24.320 | And so, again, not giving personal advice to you because I don't know if anything like

00:38:30.560 | that is interesting to you, but don't just think, "I have to go and start some form

00:38:35.280 | of financial business."

00:38:36.800 | Think, "If my goal is to make $100,000, what are some of the ways that I can make

00:38:43.280 | $100,000 in a way that's appropriate for my lifestyle?"

00:38:50.320 | And there are hundreds and hundreds and hundreds of businesses that can all deliver on that

00:38:55.280 | and deliver on it very quickly in a very confident and sure way and allow you to make your $100,000

00:39:02.240 | with 10 to 15, 20 hours a week in a very predictable way, which is not like the idea of being a

00:39:10.320 | business coach or, sorry, specifically a financial coach.

00:39:13.120 | Good enough?

00:39:14.720 | >>Joshua: Absolutely.

00:39:17.120 | Thank you, Josh.

00:39:17.680 | >>Andrew: My pleasure, Anthony.

00:39:18.880 | We go on to Andrew in Georgia.

00:39:22.080 | Andrew, welcome to the show.

00:39:22.960 | How can I serve you today?

00:39:23.840 | >>Andrew: Hey, Joshua.

00:39:26.160 | Thanks for taking my call.

00:39:27.120 | >>Joshua: My pleasure.

00:39:28.560 | Hey, my question is regarding some first steps of internationalization.

00:39:33.280 | I've got a trip to Canada coming up soon, and I've heard in the past you recommend Canada

00:39:39.200 | as a place where someone who is wanting to open an American, wanting to open a bank account

00:39:44.560 | in another country might start, but I really know nothing about the Canadian banking system

00:39:51.680 | or if that would still be something you would steer people towards in light of how the world

00:39:58.800 | has changed in the last six months.

00:40:00.160 | >>Andrew: Right, right.

00:40:01.520 | Sure, absolutely.

00:40:02.320 | Canada is attractive for a couple of things in the internationalization space, but most

00:40:11.040 | likely the only one that will be attractive to you is going to be banking.

00:40:15.120 | Canada is a very attractive permanent residency option and relatively fast path to citizenship

00:40:23.120 | option for people who are willing to move there and live there.

00:40:26.960 | If you can get a permanent residency permit in Canada, you can become a Canadian citizen

00:40:34.160 | in three years, and it's legitimately like you're actually going to become a Canadian

00:40:39.600 | citizen in three years as long as you are there and spend the time on the ground.

00:40:43.120 | So it's three years on the ground and then basically a year of passport processing is

00:40:47.760 | what they're doing right now.

00:40:48.640 | And so for those who want a second citizenship, Canada is very attractive.

00:40:54.800 | And it's also very attractive because their permanent residency program is very simple,

00:41:00.000 | clearly laid out and accessible for those who are willing to jump through the appropriate

00:41:07.360 | hoops and/or who have the appropriate qualifications.

00:41:10.800 | And so I mention this because, while I don't think this is going to apply to you, this

00:41:14.800 | does apply to many people.

00:41:15.840 | I recently was coaching some Filipino friends of mine who have been locked in the US immigration

00:41:20.640 | system for many years, and they've been in limbo with the US immigration system for six,

00:41:28.400 | seven years.

00:41:28.960 | I'm not going to beat on the US.

00:41:32.160 | Anyway, they've been in limbo for many years, and they're at the point where at any time

00:41:37.280 | they might lose status depending on what can happen with their jobs.

00:41:40.800 | So I was talking with them quite intensely.

00:41:42.880 | I said, "You need to go to Canada.

00:41:44.160 | Canada is your best option for you to go and get your residency permit and then have that

00:41:49.920 | as a backup option to go and be able to have a good economy that you can work in, et cetera."

00:41:55.360 | And so for anyone who's young, who's educated, who speaks English well or English and French

00:42:00.560 | well, et cetera, or is willing to become those things, Canada is a great immigration option.

00:42:06.320 | For most people like what I'm guessing you are, that's not something you're looking for.

00:42:12.800 | You're going to Canada for vacation.

00:42:14.000 | So what other internationalization options does Canada offer for you?

00:42:18.960 | I think the biggest one is banking, that Canada makes it relatively simple and easy for Americans

00:42:26.080 | to go and open a bank account there in a Canadian bank.

00:42:29.920 | I don't think this is a perfect or an ideal solution for several reasons.

00:42:35.120 | Number one, Canada depends heavily on the United States economically, et cetera, and

00:42:43.200 | is heavily influenced by the United States.

00:42:46.880 | The US-American and Canadian relationship is extremely close and they work a lot together.

00:42:55.280 | So if you're an internationally wanted terrorist in the United States, don't take your money

00:43:00.160 | to Canada and think that you're not getting there.

00:43:02.480 | All the information is exchanged.

00:43:04.640 | There's massive cross-border information sharing agreements, et cetera.

00:43:11.280 | When you go and open a Canadian account, you're not going to open a secret account.

00:43:14.160 | You're not going to open an account without your social security number on it.

00:43:16.640 | It's going to be everything right up the middle.

00:43:21.760 | Everything's going back to the US.

00:43:22.960 | It's not a secret banking haven of any kind.

00:43:26.320 | But what it does allow you to do is to have a bank account where you have another currency

00:43:31.760 | and where you have access to another currency.

00:43:34.560 | And so being able to drive there, relatively close for most Americans, there's really nowhere

00:43:39.360 | in the continental United States where you can't be in Canada in 24 hours or so at a

00:43:44.480 | maximum.

00:43:44.960 | So to be able to drive there, drive across the border and open an account speaking English

00:43:50.640 | and everything looking and feeling very familiar is a really nice first step to getting your

00:43:57.040 | first bank account that's outside of your home country.

00:44:00.880 | And because you then have easy access to both US dollar accounts and to Canadian dollar

00:44:06.080 | accounts, I think you've started the groundwork towards being able to protect your money if

00:44:13.280 | you go into a significant inflationary period in your primary currency, if that's the US

00:44:18.720 | dollar.

00:44:19.520 | To be clear, I'm more bullish on the US dollar now than I ever was watching the collapse

00:44:24.560 | around the world.

00:44:25.200 | I think there's every reason to believe that the US dollar is and will remain for the

00:44:30.800 | foreseeable future the world's strongest currency.

00:44:33.680 | Everybody wants into dollars and because everybody wants into dollars, that makes the

00:44:37.520 | dollar strong.

00:44:38.640 | But I think it's stupid to not be diversified and to not have backup options.

00:44:42.480 | And Canada is one of the best options there.

00:44:44.400 | Again, emphasizing Canada is not in any way scary for English speaking Americans, right?

00:44:52.320 | It feels very comfortable.

00:44:54.000 | It feels very normal.

00:44:55.680 | And because it's so easy to access, where you drive across the border and you're there

00:45:00.640 | and it's done, it's a wonderful scenario.

00:45:03.760 | I don't think that Canada is not a place where I would choose to try to hold any significant

00:45:10.320 | money.

00:45:10.960 | I think they've shot themselves in the foot with their, obviously, their financial regulations,

00:45:16.800 | their taxes and such.

00:45:18.080 | I think that what Prime Minister Trudeau did during the trucker protests is unconscionable

00:45:25.040 | and they showed their hands very clearly of what they're willing to do.

00:45:28.240 | Invading bank accounts, shutting down accounts for people who had merely had affiliation,

00:45:35.360 | who'd broken no laws, but who'd had affiliation, passing this draconian emergencies act.

00:45:39.920 | They're still trying to work it out in the courts and the court actions.

00:45:43.600 | Anyway, it's just a nightmare.

00:45:44.960 | And so I would never keep any kind of serious money in Canada and I would never trust the

00:45:49.680 | Canadian government.

00:45:51.440 | But it is a fabulous option for banking.

00:45:54.720 | And so in order to open a Canadian bank account, you need to be able to get into Canada.

00:45:58.480 | You have to go physically in person.

00:45:59.920 | Basically, you just take your pick of the big banks and you take your passport along

00:46:04.640 | and say, "I'd like to open a bank account."

00:46:06.080 | And it's pretty much just like anything else.

00:46:08.160 | And it'll all work.

00:46:10.160 | They'll give you a debit card.

00:46:11.120 | You can use your debit card.

00:46:12.000 | You can transfer money in and out.

00:46:13.200 | It's pretty simple and great.

00:46:15.440 | I think the other big benefit of Canada is it's a really phenomenal safe haven.

00:46:21.280 | If you can go there in certain events.

00:46:24.480 | So what Canada has going for it is a huge land mass.

00:46:28.480 | They've got a very productive economy producing huge amounts of food, huge amounts of obviously

00:46:36.960 | timber, gas, oil, huge mining operations, et cetera.

00:46:43.760 | It's a natural resource haven.

00:46:45.280 | In the current world, I don't think you have to leave the United States for any of this

00:46:49.840 | stuff, but for many people, access to fresh water, huge fresh water reserves, beautiful,

00:46:56.000 | huge country, very, very lightly populated.

00:46:58.480 | It's very hard to see how Canada is not a useful safe haven.

00:47:03.520 | And so I think the other thing that you can do is you can have Canada in your backup plan

00:47:08.800 | as if I ever need to leave the United States and I needed to go to an English-speaking

00:47:12.640 | country where I can fit in, where I can understand the culture, et cetera.

00:47:17.520 | Again, if you're an internationally wanted terrorist and the marshals are looking after

00:47:20.320 | you, you're going to be arrested.

00:47:21.440 | Better to go to Mexico for that instead of Canada.

00:47:24.400 | And even Mexico is too close.

00:47:26.320 | But in terms of things like, again, hyperinflation or something like that, which I don't think

00:47:34.880 | is probable, but it is something that I think about planning for, Canada can work really

00:47:39.760 | well.

00:47:40.080 | And so what you'd like to have is you'd like to have expedited access to Canada in

00:47:44.480 | those situations.

00:47:46.320 | And so the other opportunity that you can do is you can use your trip to Canada as a

00:47:50.960 | chance for you to do a nexus, set up a nexus card for you.

00:47:58.560 | So quick rundown on trusted traveler programs.

00:48:02.800 | The United States has a number of what they call trusted traveler programs.

00:48:06.480 | The most well-known one is Global Entry.

00:48:09.360 | There's also Sentry with Mexico and there's Nexus with Canada.

00:48:14.800 | So when you have this program, what you do is you go to the US government, you take your

00:48:20.080 | passport and they do a background check on you.

00:48:22.800 | And then you go to an interview and they ask you questions, make sure you're not a

00:48:25.360 | terrorist or something like that.

00:48:26.720 | And then when you come into the United States, you get expedited access to the United States.

00:48:31.120 | So if you have a Global Entry card, you can usually skip all the lines and you can just

00:48:36.000 | pass right through.

00:48:36.800 | If you're for frequent travelers, this is a huge deal.

00:48:40.800 | I travel frequently in the United States with my family of six and frequently we come in

00:48:45.120 | on long international flights, tired.

00:48:47.520 | And again, I'm trying not to beat on the United States, but I look forward far less to going

00:48:53.200 | into the United States than almost any country.

00:48:55.840 | Frequently, not always, but very frequently, the lines are incredibly long.

00:49:00.080 | It's just a nightmare in many situations.

00:49:03.760 | I've stood with my children for two hours at the airports in Florida waiting to get

00:49:09.120 | into the country.

00:49:10.160 | With Global Entry, you can skip all that nonsense.

00:49:12.560 | You basically walk past all the lines, you walk up to the automated machines, they scan

00:49:16.560 | your face, they scan all your biometrics and you're in.

00:49:19.680 | And it really speeds things up and it makes international travel far less frustrating,

00:49:25.680 | especially when coming back into the United States.

00:49:28.000 | So why am I saying this?

00:49:30.640 | Well, Nexus is a special program that is a cooperation between the Canadian government

00:49:37.120 | and the U.S.

00:49:37.840 | American government.

00:49:39.200 | And what you do is you have an interview with the Border Patrol of both the United States

00:49:46.080 | and Canada.

00:49:46.880 | You have a background check conducted by the United States and by Canada.

00:49:53.200 | And so by having both of them, you then gain similar privileges in both countries.

00:49:58.960 | So you can, if you have a Nexus card, you have all of the benefits of Global Entry,

00:50:04.160 | which also includes TSA PreCheck in the United States, but you have the same benefits going

00:50:08.320 | into Canada.

00:50:08.880 | So you can go in and out of Canada using the automated machines.

00:50:11.520 | You have special lanes at all the land borders.

00:50:14.640 | You have a special, if you're crossing on water, you have a special number you can call.

00:50:28.800 | And so it just really expedites things.

00:50:31.680 | So if you ever had to flee to Canada from the United States, because I don't know, whatever

00:50:36.480 | situation that's the scenario, you can have a much quicker border crossing.

00:50:43.040 | And then the final comment I would make, because I don't like to let this secret out in public,

00:50:46.720 | but one of the cool things about Nexus is, so with Global Entry, if you have children,

00:50:51.040 | you have to get a Global Entry membership for each one of your children.

00:50:55.840 | And they have the same exact fees as parents, $100 and something every five years.

00:51:00.640 | And so again, family of six for me, that's 100 and whatever it is times six, it's a lot

00:51:05.360 | of money.

00:51:06.160 | Nexus, if both mom and dad have Nexus memberships, then the children can get Nexus as well.

00:51:11.760 | And the children don't get charged separately for Nexus.

00:51:14.800 | And so if you have a big family, the money saving route to maintaining Global Entry for

00:51:18.880 | your entire family is to have Nexus.

00:51:22.560 | And it'll save you a lot of money because your children are included under your membership.

00:51:26.000 | The downside with Nexus is you have to go, instead of being able to do your interview

00:51:31.840 | all across the United States, as is the case with Global Entry, you can only do your

00:51:36.000 | interview at one of the Canadian-American border stations.

00:51:40.720 | So either one of the physical borders on it or a place where both the Canadian and the

00:51:45.360 | Americans have border patrol officers, like Toronto Airport, et cetera.

00:51:51.120 | And so when you're going to Canada, that can be a convenient time, if you can work it out,

00:51:54.880 | to go for your interview.

00:51:56.000 | And hey, I'm crossing over.

00:51:57.360 | I'll go ahead and do the border-- I'll do my interview here at the border crossing.

00:52:02.240 | So those are my two comments that are probably applicable for you.

00:52:06.640 | Open a bank account, get a Nexus card, and then take your whole family.

00:52:10.240 | And while you're crossing the border, align your border crossing with your Nexus interview.

00:52:17.840 | And I think those are your two best opportunities.

00:52:19.600 | Well, great.

00:52:22.480 | That's some great info.

00:52:23.440 | Thank you, Joshua.

00:52:24.080 | My pleasure.

00:52:25.680 | All right, we'll move on to Jose in Colorado.

00:52:29.760 | Jose, welcome to the show.

00:52:30.560 | How can I serve you today?

00:52:32.400 | So yeah, good to speak with you again, Joshua.

00:52:35.680 | I've got a question about kind of short-term, I hope, tax planning.

00:52:41.040 | So I'm self-employed, and my income is quite variable.

00:52:49.680 | So the prior two years, I was in a relatively high tax bracket.

00:52:56.080 | So because of that, put retirement funds in traditional accounts.

00:53:01.760 | This year, our income will be in a relatively low tax bracket.

00:53:07.280 | And so I'm looking for just maybe some other ideas or strategies to think about besides

00:53:13.360 | the obvious, which is to put money in a Roth account this year.

00:53:19.840 | And I was wondering if there was anything else that you might have that I could think about.

00:53:23.920 | Well, that's the big one.

00:53:25.840 | So you can put money into a Roth, which is always a great move.

00:53:30.400 | You might consider Roth conversions.

00:53:34.400 | And with that, you'll need to go and look through the buckets and see how much

00:53:38.320 | of the Roth conversion bucket you can fill up and kind of what makes sense.

00:53:43.360 | So those are the two obvious ones.

00:53:48.640 | The other one is looking at charitable donations.

00:53:51.520 | I think things like grouping charitable donations into your low-income years can be helpful.

00:53:57.120 | So looking at itemizing versus non-itemizing.

00:54:01.280 | So think about in the years where your income is high, do you itemize your tax deductions,

00:54:06.080 | or do you take the standard deduction?

00:54:07.520 | In the years where your income is low, do you itemize or take the standard deduction?

00:54:11.120 | So I mentioned charitable donations.

00:54:12.800 | You tie 10% of your income, then maybe you tie 10% of your income,

00:54:20.560 | but you make the contribution every other year in order to maximize

00:54:23.680 | your itemized deductions in that year.

00:54:25.520 | Think about any kinds of aid programs that are helpful to you.

00:54:32.240 | If you have children in college, things like doing the FAFSA,

00:54:35.280 | doing the free application for federal student aid.

00:54:38.720 | Doing that when your income is low is a big, big deal with regard

00:54:41.680 | to your expected family contribution.

00:54:43.840 | And so that can be useful.

00:54:45.840 | If there are any kind of aid programs, sometimes you can get maybe the health

00:54:50.240 | insurance, right?

00:54:50.800 | If you can get the Obamacare rebate on your health insurance because your income is low

00:54:54.880 | in those years, that can be really helpful.

00:54:56.800 | Basically, any program that's designed to help low-income people, when your income is low,

00:55:03.440 | look at that program and say, "How can I access this program?"

00:55:06.240 | Off the top of my head, nothing else immediately occurs to me,

00:55:10.800 | but those are the things to consider.

00:55:16.000 | And then also, of course, timing your deductions, right?

00:55:20.240 | If you're self-employed.

00:55:21.920 | And so what you always want to think about, remember that with...

00:55:25.920 | So back to tax planning 101, okay?

00:55:29.120 | We talk about income shifting strategies, income conversion strategies, and income timing

00:55:34.000 | strategies.

00:55:34.480 | All tax planning strategies fit into those three buckets.

00:55:37.200 | And so here we're talking about a timing strategy.

00:55:39.520 | When do you recognize income and when do you not recognize income?

00:55:42.000 | So your income is compressed into high-earning years and low-earning years.

00:55:45.680 | But remember that timing strategies, as well as conversion and shifting strategies,

00:55:50.240 | also apply to deductions to offset your income.

00:55:53.280 | And so if you look at your expenses, then ask yourself, "When is it better for me to

00:55:58.400 | make large expenses?

00:55:59.520 | Is it better in a high-income year or a low-income year?"

00:56:02.400 | Sometimes you can make a large expense in a low-income year, and if you can recognize

00:56:08.320 | that expense, it can shoot your income down to nothing, to zero.

00:56:11.760 | And all of a sudden, all of those...

00:56:13.920 | The Roth fill-up buckets and everything, now your buckets are huge.

00:56:16.640 | Now, with your income being at zero, you can save thousands and thousands of dollars by

00:56:22.320 | having full rebates on your health insurance if you have a plan from the exchange, etc.

00:56:30.640 | And so basically, that's the strategy, is when is it best for me to recognize deductions

00:56:36.800 | and when is it best for me to recognize income?

00:56:39.200 | And can I get a big enough swing in those things to make a big difference?

00:56:46.320 | A guy who makes $90,000 one year and $100,000 the next year and $80,000 the third year,

00:56:50.800 | big deal, right?

00:56:52.000 | There's not a lot there.

00:56:53.120 | But a guy who makes $200,000 one year, then $20,000 the second year, and then $200,000

00:57:00.000 | the third year, now all of a sudden, the whole situation is different and all those planning

00:57:04.800 | ideas become much more relevant.

00:57:08.720 | Yeah, and the latter example is kind of where we are.

00:57:13.200 | I love it.

00:57:14.900 | I love it.

00:57:16.000 | I can't tell you specifically, but go through your accounting, go through your books, your

00:57:22.960 | records, etc.

00:57:24.240 | And then just basically ask yourself, is there anything related to this that would be better

00:57:30.560 | or worse based upon my income, high income, low income, etc.

00:57:36.400 | And then research each of those categories yourself.

00:57:41.120 | I mean, frankly, the best plan is just to make a hobby of each one of your categories.

00:57:46.400 | So you go through your business and you take each of the categories, start with the biggest

00:57:50.000 | and ask yourself, OK, I'm going to read about and research the rules related to this particular

00:57:54.480 | category.

00:57:55.120 | And are there any special credits or rebates or things?

00:57:57.840 | And again, it's hard for me because there's so many different small things that are not

00:58:04.080 | relevant to most people.

00:58:05.040 | But maybe I'm going to buy an electric vehicle and I can get the electric vehicle tax credit

00:58:11.040 | if my income is below this.

00:58:12.480 | And so when my income is below this, I'm going to buy the electric vehicle.

00:58:15.280 | Or maybe in my business, there's a research and development credit that I can take, but

00:58:19.120 | I can only take it if it meets this.

00:58:20.480 | And so can I adjust my income on paper to fit these facts?

00:58:25.200 | And you've got to go through each category one by one, learn about it, and figure out

00:58:28.560 | which planning ideas apply most to you.

00:58:30.320 | OK, awesome.

00:58:33.680 | Well, I will work hard for the next last eight weeks of the year, whatever we have left.

00:58:38.720 | Good.

00:58:39.220 | Thank you for calling in.

00:58:41.680 | We go now to, it says, Al Obaidi in Kentucky.

00:58:46.320 | Welcome.

00:58:46.640 | How can I serve you today?

00:58:47.520 | Hi, Josh, can you hear me?

00:58:50.400 | Yeah, sounds good.

00:58:51.040 | Hi, this is Mo.

00:58:53.280 | I'm actually in Dallas, Texas.

00:58:54.640 | Still got my old number.

00:58:55.600 | Welcome.

00:58:56.100 | Thank you.

00:58:57.760 | I've actually talked to you somewhat recently with my wife, but I had a question and I figured

00:59:02.640 | I'd catch you here.

00:59:03.360 | So I am considering jumping into a franchise opportunity.

00:59:11.040 | And I wanted to pick your brain about that.

00:59:13.600 | I don't know if you have any general advice, horror stories, warning.

00:59:17.040 | Basically, the situation is my parents recently retired, moved down here to be closer to us.

00:59:23.840 | Me and my wife work full time, busy jobs.

00:59:27.040 | We have two young kids, but my dad is sort of a lifelong workaholic.

00:59:33.360 | And I thought it might be a nice opportunity to say, OK, let's do this together as a project

00:59:39.920 | where, you know, for me, it's kind of an investment for him.

00:59:43.360 | It gives him something to do and some side income, which they pretty much need.

00:59:47.920 | And so I'd let him basically run the show and be the general manager, be basically my

00:59:53.360 | money and the investment into the project.

00:59:55.920 | So any general advice there?

00:59:57.760 | Well, I think that if you're going to start a business as a way of supporting a family

01:00:03.600 | member, that a franchise business is the ideal way to go, because a good franchise is going

01:00:08.960 | to come with all of the manuals of operation and that's going to tell him what to do to

01:00:14.480 | be successful.

01:00:15.200 | Before I go any farther, are you willing to share what general nature of the franchise

01:00:20.400 | or what what you're looking at, what specific opportunities you're looking at or what the

01:00:23.680 | industry is?

01:00:25.600 | Yeah, so generally I'm looking at restaurants right now just because that's what I'm familiar

01:00:29.600 | with.

01:00:29.840 | I've looked into a little bit into other things like, you know, UPS store and other

01:00:35.040 | things like that.

01:00:35.680 | But mostly the most obvious one to me was French restaurant chains.

01:00:41.120 | OK, so restaurants are interesting because they're interesting subcategories.

01:00:48.640 | So let's start from the beginning.

01:00:49.920 | I love franchises myself as a way of building wealth.

01:00:54.960 | I think that franchise operations can allow good business people to be freed from the

01:01:01.280 | idea of thinking they need a good business idea.

01:01:04.000 | In hindsight, when I think back to myself at 18 years old, 20 years old, 22 years old,

01:01:09.920 | I thought in order to start a business, I needed to have a business idea.

01:01:13.920 | And I thought to myself, I don't have a good business idea.

01:01:16.160 | I'm not I'm not a creative thinker.

01:01:18.160 | I don't know specifically what that one thing that if I did it, it would be it would be

01:01:22.880 | the thing.

01:01:23.680 | And I thought you had to come up with a new business idea.

01:01:26.080 | It wasn't until I was in my 30s where I just dawned on me how stupid I had been, how

01:01:31.280 | stupid I had been thinking that the secret to business success was having a new and

01:01:36.720 | innovative idea rather than just taking the business and making it.

01:01:40.640 | The other thing I learned along the way is that if you want to be a businessman and you

01:01:48.080 | want to have all the benefits of a business, a franchise is a good franchise is one of

01:01:54.320 | the most reliable ways of doing it because it's so scalable.

01:01:57.920 | And so you can scale your way quickly through the different levels to get to a very large

01:02:03.360 | business very, very quickly.

01:02:04.960 | And there are many benefits to good franchises.

01:02:09.040 | And so today, knowing what I now know, if I went broke and if I didn't go back to being

01:02:16.240 | a financial advisor, et cetera, for all the reasons I talked about earlier in the show,

01:02:20.000 | I would choose a franchise model because it would free me from the idea that I've got

01:02:27.440 | to invent this thing myself.

01:02:29.440 | And it can really be almost any good franchise.

01:02:33.040 | Over the years when I was a financial advisor, I had the privilege to work with some guys

01:02:38.000 | who were franchisors in restaurants and worked a guy who had a bunch of McDonald's, something

01:02:44.000 | like 15, 20 locations.

01:02:45.600 | I forget exactly now, but it was certainly double digit locations.

01:02:50.640 | I met a guy a couple of years ago that I really enjoyed talking with.

01:02:55.200 | He had 55 Little Caesars franchises and 20 Jimmy John's, something like that.

01:03:02.240 | And I've met these business guys and they've got 5, 10, 15, 20 operations, some cases much

01:03:09.360 | bigger.

01:03:10.000 | But there's a real sweet spot with a franchise, a profitable, productive franchise with

01:03:15.680 | somewhere, I don't know, I'm making the number up, but maybe a dozen, right?

01:03:18.960 | Somewhere in there where you've got enough locations, where you've got big scales of

01:03:23.600 | management expertise, et cetera, among them.

01:03:27.600 | It's big enough to make a real difference and you can easily make seven figures, not

01:03:32.160 | easily, excuse me, strike easily.

01:03:33.760 | You can make seven figures, eight figures from these kinds of opportunities.

01:03:38.800 | So I love the idea of franchise, the concept of franchises.

01:03:43.520 | And I think it's fantastic.

01:03:45.040 | And what I've learned over the years, and I think the other key to why I think of franchise,

01:03:49.600 | and this came from myself working for something like eight days in a Papa John's.

01:03:54.400 | I became a Papa John's pizza delivery driver.

01:04:00.560 | And I did it because there was a time where I just needed some money and I thought I'd

01:04:05.040 | heard you could make 20 bucks an hour doing it.

01:04:06.880 | All I needed was 20 bucks an hour.

01:04:08.160 | I needed a dead end job that would give me 20 bucks an hour for a few months.

01:04:12.240 | And so I went and got a job as a Papa John's pizza delivery driver.

01:04:15.440 | And I went and did it.

01:04:18.080 | And I was amazed.

01:04:20.080 | I went into the training and I loved the experience.

01:04:23.360 | I'm so glad that I did it.

01:04:24.400 | I wish I'd done it earlier because it taught me an important lesson.

01:04:27.200 | So here was the lesson.

01:04:28.480 | I went and I sat down.

01:04:29.360 | And the first thing you do if you become a pizza delivery driver is they give you a training

01:04:35.120 | course.

01:04:35.680 | The training course is on video.

01:04:36.800 | They sit you down at a computer and you watch the video and they tell you everything you're

01:04:39.520 | supposed to do.

01:04:40.480 | And it's not a lot.

01:04:41.280 | It's just 30, 45 minutes, 60 minutes, something like that.

01:04:45.200 | But the thing I specifically remember about the Papa John's training is there's a system

01:04:50.000 | where as a pizza delivery driver, every time you're in the restaurant and you're going

01:04:54.480 | out the door, you always are supposed to announce out loud what you are doing.

01:05:03.040 | Or you're announced that you're leaving with the order and you're supposed to verbally

01:05:06.880 | announce how many sodas and how many desserts you have.

01:05:11.360 | And so you're going out the door, I can't remember what you say, but two Coca-Colas,

01:05:16.800 | one Cinnabons or whatever their desserts were.

01:05:19.440 | And as a businessman, I thought to myself immediately, I was like, that is perfect,

01:05:23.920 | right?

01:05:24.240 | Because that's where all the margin is in restaurants or in anything like that.

01:05:27.040 | All your profit comes from the margin.

01:05:30.080 | Your profit comes from the soda sales and restaurants, its alcohol sales, its dessert,

01:05:34.720 | et cetera.

01:05:35.280 | It's all the marginal stuff.

01:05:36.720 | You don't make a ton of money on your major project.

01:05:38.880 | You have very thin margins there, but your real money comes from the add-ons.

01:05:43.440 | If you're already delivering pizza and you can add two sodas and a dessert to it, it's

01:05:48.400 | much more profitable than it is if you don't have that stuff.

01:05:51.840 | And so here's a system that some very smart guy has sat down and built that is reminding

01:05:57.600 | the restaurant of this all the way through.

01:05:59.760 | And so I got my first order and I'm doing what I've told in the training.

01:06:04.560 | I'm going out the door to deliver my pizzas and I announce it the way I'm told in the

01:06:09.120 | training and the manager says, "Oh, no, you don't have to do that.

01:06:11.520 | We don't do that here."

01:06:12.320 | I thought to myself, but this is brilliant.

01:06:16.480 | This is a fantastic thing.

01:06:17.840 | This should be done every time.

01:06:19.360 | And of course, with peer pressure, I never again announced it.

01:06:22.880 | And so here's this manager of a Papa John's who's making, I don't know what they're

01:06:27.280 | making, but not a ton, but just a part-time manager who's squelching and destroying one

01:06:33.520 | component of this brilliant business system with a simple comment to all of her drivers

01:06:38.320 | saying, "We don't do that here."

01:06:40.080 | And I used to have more examples of this, but with the training and whatnot, I would

01:06:46.160 | watch the business and I would think, "This is amazing."

01:06:48.720 | And at the end of a week, I found out, first of all, that I couldn't make $20 an hour

01:06:52.240 | delivering pizzas.

01:06:53.120 | It was a fun experience.

01:06:54.480 | I really am glad I did it, but it wasn't a profitable experience.

01:06:58.240 | But at the end of the week, I became convinced.

01:07:00.960 | I said, "Anybody who came into Papa to that thing," and I'm not picking up a Papa

01:07:05.360 | John's, it just happened to be that, "Anybody who came into Papa John's and who did the

01:07:09.520 | work over a period of months, first of all, you could become manager, any young person

01:07:15.120 | could become manager or old person could become manager by just being a good worker.

01:07:18.960 | Didn't take that much.

01:07:20.000 | And being okay at handling people, helping people get along, et cetera.

01:07:23.760 | The level is so low to be promoted to be a manager.

01:07:26.880 | I said, "Anybody who bought a Papa John's franchise and just made sure that what's in

01:07:32.720 | the manual was actually done could probably improve that profitability 20, 30%.

01:07:36.960 | And I have a couple of clients, I've worked with people who've done franchises, kind of

01:07:42.320 | the same thing is just take the manual and do what the manual says and you'll improve

01:07:46.160 | the profitability massively."

01:07:48.080 | So I'm a big fan of franchises.

01:07:50.800 | Now, for your father specifically, that could provide some opportunity.

01:07:55.040 | Now, I would doubt that he's, maybe he is, but he's probably not, if he's retiring, he's

01:08:00.160 | probably not thinking about how do I go and start with one location and quickly get up

01:08:03.840 | to 20.

01:08:04.560 | But maybe he is.

01:08:05.440 | Let's not sell him short.

01:08:07.200 | If he's a workaholic, then probably one of the best things that could happen would be

01:08:11.520 | to give him a vision and say, "We're going to start with one location and we may grow

01:08:15.600 | this thing to a dozen locations.

01:08:17.040 | And dad, you can turn this thing from six figures of profit to seven figures of profit

01:08:21.040 | and that's your five, ten year job and business and I'll support you with the money."

01:08:26.400 | But that could be a really great thing for him, a really enjoyable thing for him to do

01:08:31.760 | and give him a real passionate, something that he could be very passionate about and

01:08:36.000 | involved in, in this second half of his life.

01:08:38.960 | But I think more importantly, all those lessons that I learned about franchises, I think could

01:08:44.480 | be helpful to him.

01:08:45.840 | Because if you could say, "Here's a manual.

01:08:49.840 | It's going to tell you what to do.

01:08:51.440 | Here's the operations manual, etc.

01:08:53.600 | Your job is just to make sure it gets done."

01:08:56.080 | Then he's probably very mature and competent and able to make sure that the stuff gets

01:09:02.800 | done.

01:09:03.440 | And you could run a very tight ship, a very well run location for him.

01:09:12.160 | My caution would be simply, you would need to choose a franchise or business model that

01:09:17.200 | is well suited to the type of environment that you want.

01:09:22.720 | So a Subway franchise is going to be very different as a restaurant, is going to be

01:09:27.920 | very different than a dine-in restaurant where you have just a very different management

01:09:32.480 | needs, etc.

01:09:34.240 | And maybe your father isn't that interested in working with 50 employees right now.

01:09:40.880 | So you just want to make sure that whatever one you choose is appropriate.

01:09:44.160 | But I love it.

01:09:44.720 | I love it.

01:09:45.120 | And I think that as long as you've done your due diligence and it seems like all the

01:09:49.280 | market conditions work, I think it could be a great way.

01:09:51.520 | And I think it could be a great way to give him—I'm emphasizing this because, as you

01:09:56.400 | know, I'm not a huge fan of retirement per se.

01:09:59.200 | It can be a great way to give him a gift to say, "Here's something that you can have

01:10:04.000 | control and management over, make it grow, unconstrained by reporting to a boss.

01:10:09.920 | It can be profitable enough and work to where it gives you enough flexibility.

01:10:14.400 | So if you want to have long lunches every day, you can have long lunches every day.

01:10:18.160 | But yet it still allows him to feel engaged in the economy, in society, and not be sitting

01:10:23.520 | around retired, stuck in a recliner somewhere watching CNN.

01:10:26.400 | >> Steven That's great.

01:10:29.920 | I mean, I love hearing that.

01:10:32.240 | I think it gives me some reassurance.

01:10:33.920 | On the topic of choosing the right franchise, so, you know, I've been really mostly looking

01:10:39.520 | at things that I feel like I could feel good about supporting and being an owner of.

01:10:44.320 | So in restaurants and looking at, you know, healthy food options and things like that.

01:10:48.000 | >> Mike Right.

01:10:48.320 | >> Steven Do you think that's kind of a dumb thing to do and just say, "Forget that.

01:10:52.640 | Just do whatever.

01:10:53.440 | Go get a McDonald's because that's what's going to make more money"?

01:10:55.520 | I mean, how do you feel about that?

01:10:56.800 | >> Mike Well, I don't think go get a McDonald's because you have a massive difference in

01:11:00.880 | initiation and complexity.

01:11:02.960 | I mean, you're seven figures out of pocket for a McDonald's license.

01:11:07.920 | And so that's a big bet to make on something that that's a big check to write for just

01:11:16.240 | a franchise fee.

01:11:17.360 | And then that's plus all of the other costs of the building, the location, the equipment,

01:11:22.480 | etc.

01:11:23.440 | And so it's a multi-seven.

01:11:25.920 | Opening a McDonald's is a multi-seven figure deal.

01:11:28.720 | And I don't, unless you're really committed, that's just a lot of, those are big checks

01:11:35.280 | to write.

01:11:36.080 | And also very complex business.

01:11:39.200 | So again, back to the size of it, I don't know how many employees the average McDonald's

01:11:45.040 | has, but it's a whole lot more than the average single unit subway or some other kind of small

01:11:51.200 | place, a frozen yogurt franchise or something like that.

01:11:55.120 | If you look around and you see, I mean, use the frozen yogurt kiosk things, right?

01:12:02.480 | You have probably eight employees, 10 employees, 15 maybe.

01:12:07.440 | That's very different than 60, 80, etc.

01:12:09.680 | And so I'm just imagining a retired guy may not want to deal with 60 people.

01:12:15.360 | And so it might be much more reasonable to start with something that doesn't have a huge

01:12:18.640 | time interest, a huge number of employees.

01:12:22.960 | As far as the healthfulness of it, that's a hard question to answer.

01:12:27.280 | Number one, I think there is a, so obviously in the United States, you have huge problems

01:12:33.760 | with obesity and unhealthy eating.

01:12:36.160 | But at its core, there's not a lot of agreement about what is the definition of unhealthy.

01:12:43.760 | And most places have healthy and unhealthy options.

01:12:48.960 | And I don't think that you're ethically driven.

01:12:53.760 | That's a hard moral and ethical question to say is like, is my offering you something

01:12:59.440 | that is sweet or that has saturated fat or whatever?

01:13:05.120 | Is that something that is, am I harming you by doing that?

01:13:10.000 | I think most people in the world eat at McDonald's on occasion.

01:13:15.920 | Most of even the biggest health nuts in the world probably have things on occasion that

01:13:19.920 | aren't particularly healthy.

01:13:21.840 | And so to me, it seems like a big burden to take on to say that I can't offer people things

01:13:31.440 | that are unhealthy or I've broken a moral code.

01:13:33.920 | That's a big moral burden to take on.

01:13:35.760 | So I would say go with what's proven.

01:13:40.400 | And I think even when it comes to food, like let's use ice cream, for example.

01:13:44.640 | Let's say you were thinking about opening a self-serve, you know, Fro-Utopia or whatever

01:13:50.560 | their competitors are, a self-serve frozen yogurt ice cream with lots of great toppings.

01:13:56.160 | To me, when I think about that, I don't know of anybody who would say that ice cream is

01:14:04.320 | healthy for you.

01:14:05.280 | It's not.

01:14:05.780 | It's clearly junk food.

01:14:08.240 | It's clearly not healthy.

01:14:09.760 | But is the environment related to ice cream healthy, right?

01:14:14.720 | If I take my children and we go to the local mall and we ride the carousel and we're spending

01:14:19.200 | time, we go and get ice cream as a treat, that's one of the things.

01:14:22.480 | Like I don't buy ice cream in the house generally.

01:14:24.960 | I feel guilty because there's a little ice cream in the freezer right now that somebody

01:14:28.480 | brought over as a gift and it's still in the freezer.

01:14:30.400 | But I try to keep that stuff out of the house.

01:14:32.960 | And so I go out in order to have ice cream so that it's kind of a fun thing to do rather

01:14:39.120 | than in our house where we're going to eat too much of it.

01:14:41.600 | And so you could make the argument, the moral argument, even with the least healthy of options,

01:14:48.160 | that you're facilitating something that is actually very healthy.

01:14:51.200 | You're serving Joshua, who doesn't keep ice cream in his house, a chance to go out,

01:14:55.440 | have a little treat, a sugary treat with his children and have time together.

01:14:59.760 | And so on most of those issues, I think that it's hard to know exactly where…

01:15:06.880 | You're going to have to go with your gut, right?

01:15:09.600 | If you don't want to open a bar, don't open a bar.

01:15:12.400 | But I wouldn't judge you if you had a restaurant that served some unhealthy food.

01:15:19.200 | I think the more interesting thing would just be to say, where are the trends going?

01:15:23.120 | So what works now and where are the trends going?

01:15:27.360 | I don't know that you would experiment with it as a father, but…

01:15:30.880 | Sorry, with your father.

01:15:32.560 | But if I were opening a restaurant franchise, you look at some of the success of some of

01:15:37.440 | the big franchises.

01:15:38.480 | What's the big hamburger place that took everyone?

01:15:40.320 | Shake Shack was huge.

01:15:41.920 | I love Five Guys.

01:15:44.720 | When I go to the United States, I go to Five Guys because it's just something that is

01:15:49.120 | only available in the US.

01:15:50.320 | If somebody opened a restaurant, a franchise where they cooked their fries in lard, that's

01:15:57.600 | a selling point today because it's so different than vegetable oils and things like that.

01:16:02.240 | So I'll stop because the short answer is I wouldn't judge you for it.

01:16:06.000 | I think you're just going to have to go with your gut.

01:16:07.200 | What are you proud of being associated with?

01:16:09.600 | And if you're not proud of being associated with it, then don't do it.

01:16:12.000 | Yeah, that makes sense.

01:16:14.560 | Yeah, all right.

01:16:16.480 | I mean, that's what we're looking at, different options, salad chains, places like that.

01:16:21.200 | And I'm also looking at… the location we're looking at is closer to his home and

01:16:27.440 | they have all the fast food places, but what's going to come up consistently is we need something

01:16:32.640 | here that's healthy options.

01:16:34.000 | And so that's sort of what drove this process in the first place.

01:16:37.200 | Right.

01:16:37.840 | I think a salad chain would be great because if it's depending on which one you choose,

01:16:42.800 | there are a couple of salad chains.

01:16:44.880 | When I go to the United States, there are a couple that I go to and I know of.

01:16:50.320 | I'm through a secondhand connection connected to one local that started in South Florida

01:16:55.680 | and the growth was huge of it.

01:16:58.160 | And so if you see an opportunity and it's not saturated, absolutely, because the food

01:17:03.600 | was so good and it's so different, it's such a better option than all the big well-known

01:17:09.280 | fast food ones, then go for it.

01:17:10.960 | And it could be an awesome business move.

01:17:13.360 | Yeah, awesome.

01:17:15.680 | Thank you.

01:17:16.180 | Do you have time for another question?

01:17:20.080 | Go ahead.

01:17:20.800 | You're going to round out our show today.

01:17:21.920 | Great.

01:17:23.520 | No, it's an unrelated topic, but I've really enjoyed listening to your car buying process

01:17:30.080 | and the different episodes you had for that.

01:17:31.760 | I was waiting to see if there was going to be an episode coming out in relation to car

01:17:36.240 | leases.

01:17:36.740 | My wife and I are looking to replace our car and we used to always consistently get two-year-old

01:17:45.040 | used cars and then just kind of stay with those for a while.

01:17:48.160 | But now that interest rates are high, used car prices are very high as well, I've been

01:17:54.320 | seriously considering just putting her on a lease and doing it through her business.

01:17:57.600 | Any input on that?

01:17:59.840 | Yeah.

01:18:00.560 | Knowing a little bit of the background of you, I would say yes, just lease her a car

01:18:05.760 | and put it on her business.

01:18:06.720 | But it's not because I'm saying that's the smartest financial move.

01:18:11.600 | I'm saying that you're in a situation where it doesn't matter.

01:18:14.560 | Just lease the car.

01:18:15.840 | The reason to lease a car, in my opinion, is primarily that you want to drive a new car

01:18:23.040 | and you don't want to deal with the hassle.

01:18:26.320 | Sorry, you want to continually drive a new car and you don't want to deal with the hassle

01:18:32.400 | of buying and selling and buying and selling and buying and selling.

01:18:35.680 | And so if you want to continually drive a new car, then leasing a car is the easiest,

01:18:43.520 | simplest way to do it.

01:18:45.920 | As long as you don't drive a huge amount where you're not going to do 40,000 miles a year

01:18:51.120 | and not be able to do it.

01:18:52.480 | And yeah, just lease a car because it's simple.

01:18:55.920 | You acknowledge to yourself that I'm operating this vehicle in the most expensive way possible

01:19:04.160 | and then acknowledge to yourself that I'm doing that because I enjoy and want the experience

01:19:09.920 | of driving a new car all the time.

01:19:12.640 | And I simply don't...

01:19:14.560 | And as long as that's a reasonable part of your budget, then to me, that's the obvious

01:19:19.920 | thing to do.

01:19:20.480 | That's the obvious solution because it's simple.

01:19:23.280 | You go into the dealership, you choose a car, you sign your lease, you drive the car for

01:19:27.520 | two years, three years, whatever you arrange.

01:19:30.240 | At the end of three years, you take it back, you turn it in, and then you grab your new

01:19:34.960 | car.

01:19:35.520 | Now, there are some details that you should be prudent with regard to going through the

01:19:40.240 | lease carefully and making sure you do that well.

01:19:42.720 | And I am planning to release a standalone episode on that.

01:19:46.400 | When you're negotiating a lease, how do you be prudent?

01:19:49.440 | But at the end of the day, you're going to be fine doing that.

01:19:52.800 | And it's just not a relevant expense in your financial life at this point in time.

01:19:57.520 | - Yeah, awesome.

01:19:59.360 | - Do it and enjoy.

01:20:00.320 | - Okay, well, thank you.

01:20:01.040 | - Yeah, what kind of car does she want?

01:20:03.840 | - Oh, man, she'll probably stick with like a BMW, like SUV mom car.

01:20:10.320 | - Yeah, those are so nice.

01:20:11.680 | It's such a fun...

01:20:14.320 | You have the comfort of an SUV where it's big, it's comfortable.

01:20:22.000 | My wife likes to be high up.

01:20:23.680 | She doesn't like to be down in a little car.

01:20:25.600 | And yet you get the sportiness, the powerful engine, the good road handling.

01:20:30.080 | They're safe.

01:20:31.040 | They're fun.

01:20:31.520 | I think it's wonderful.

01:20:32.640 | So enjoy, go for it.

01:20:34.560 | You've worked hard and saved hard and et cetera.

01:20:37.520 | The point of money, money is not meant to be hoarded forever.

01:20:40.480 | Money is meant to be spent on ways that make your life better.

01:20:43.680 | So I would bet this is probably one for you.

01:20:46.480 | All right.

01:20:47.680 | - You're right.

01:20:48.320 | Thank you, Joshua.

01:20:49.040 | - My pleasure.

01:20:50.080 | And with that, we round out today's show.

01:20:52.880 | Let me just see if I have any closing comments.

01:20:55.520 | I live streamed today's show on YouTube.

01:20:58.000 | Which by the way, I'm doing...

01:20:59.600 | Let me not say anything.

01:21:01.360 | I live streamed today's show on YouTube.

01:21:03.120 | So question comes in on YouTube.

01:21:05.200 | Let me answer this as we go.

01:21:06.960 | The question is, I make $57,000 a year.

01:21:09.680 | I'm thinking about buying an AMG Mercedes, which would cost $55,000.

01:21:12.800 | Can I afford this?

01:21:14.560 | The answer is, can you afford it?

01:21:16.640 | Absolutely not.

01:21:17.840 | Unless you've got a million bucks or a couple million bucks in the bank.

01:21:20.400 | Go to Radical Personal Finance, the podcast.

01:21:22.720 | Go to RadicalPersonalFinance.com.

01:21:24.160 | Go back in the podcast and listen to the series that I recently did on car buying.

01:21:32.160 | And go to how expensive of a car you should buy.

01:21:36.880 | And the answer is, if you're in the wealth building phase,

01:21:39.360 | then you should limit the total value of your vehicles, of your household,

01:21:47.680 | to about 10 to as high as 50% of your annual income.

01:21:52.960 | So if you make $57,000 per year, your ideal budget for a car is $5,700.

01:22:01.200 | If for reasons that are genuinely important, you need to go as high as 50% of your income,

01:22:09.280 | then yeah, you can go ahead and go up to as high as, in your case, that would be $27,000.

01:22:16.000 | So your budget for a vehicle should be as close to $5,700 as possible.

01:22:21.760 | So maybe something in that $7,000 to $10,000 range.

01:22:24.640 | You can find any car in the world, except an AMG Mercedes,

01:22:28.640 | which would be foolish for you to buy in that range.

01:22:30.800 | Then once you get rich, then you can go ahead and do something else.

01:22:34.720 | Notice my previous caller is rich because he's worked very hard, made a lot of money,

01:22:40.480 | does well.

01:22:42.160 | And so that was why my advice to him was very different.

01:22:44.320 | Better to be rich and then buy cars from your wealth,

01:22:49.920 | knowing that you can drive the fanciest and newest thing without it

01:22:53.200 | harming your wealth building at all than being car poor.

01:22:55.920 | If you want to join me on next week's call, go to patreon.com/radicalpersonalfinance.

01:22:59.600 | Patreon.com/radicalpersonalfinance.

01:23:01.440 | Sign up to support the show there, and I would love to speak with you then.

01:23:05.440 | Have a great day.

01:23:06.160 | The holidays start here at Ralph's with a variety of options to celebrate traditions old and new.

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01:23:19.760 | Ralph's has all the freshest ingredients to embrace your traditions.

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