2022-11-04_Friday

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

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

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

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

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

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

00:00:30.000 | Today on Radical Personal Finance is live Q&A.

00:00:49.000 | Welcome to Radical Personal Finance, the show dedicated to providing you with the knowledge, skills, insight,

00:00:53.000 | and encouragement you need to live a rich and meaningful life now

00:00:56.000 | while building a plan for financial freedom in 10 years or less.

00:00:59.000 | My name is Joshua Sheets. I'm your host. Today is Friday, November 4, 2022.

00:01:04.000 | And on this Friday, as we do any Friday where I can arrange the appropriate technology, we do live Q&A.

00:01:12.000 | [Music]

00:01:21.000 | This is your first Friday show. Welcome. I'm glad that you are here.

00:01:24.000 | Do you think it works just like Call & Talk Radio works or I guess used to work, does work?

00:01:28.000 | Interestingly, Call & Talk Radio, there is still some kind of like live interaction,

00:01:35.000 | but a lot of that happens on a local show.

00:01:40.000 | So if you have a local show where you just have a radio host who's going through and working with callers regularly,

00:01:46.000 | they still do that live interaction.

00:01:49.000 | But if you go to a larger show, if there are callers, obviously we know that talk radio show hosts have screened calls forever.

00:01:57.000 | But if you look at like Dave Ramsey, for example, right, here's a mega king of financial talk radio.

00:02:04.000 | None of his stuff is actually live anymore. He doesn't just take callers.

00:02:08.000 | What happens is people call in, they speak to a call screener.

00:02:11.000 | The call screener very carefully screens callers for interesting case, interesting facts,

00:02:19.000 | whatever it is that he's trying to accomplish with how he performs his radio show.

00:02:23.000 | He's trying to appeal to a certain demographic and so he screens calls based upon the content of the questions, etc.

00:02:29.000 | And then a time is assigned and then they'll deal with those often in advance.

00:02:36.000 | So I'm not saying he doesn't do live radio. And by the way, none of this is, I'm not saying any harm about it.

00:02:41.000 | I just thought you might be interested in knowing some of what I've learned being in this industry and going around and learning.

00:02:45.000 | I'm not saying there's anything wrong with this.

00:02:47.000 | He does still do live shows, but the calls are generally, for the vast majority of time, are generally pre-planned, pre-screened, pre-programmed.

00:02:56.000 | And then frequently he will record shows and then they'll be released as live and then you can do them afterwards, which I think is great.

00:03:03.000 | But I guess my only point was, number one, I thought you might enjoy knowing that.

00:03:07.000 | But if you want real call live radio where I don't screen the calls, you guys self-select.

00:03:13.000 | I hit go on the phone line and people show up. Then, of course, you need to be here at Radical Personal Finance.

00:03:19.000 | So let's begin with Andrew in Wisconsin. Let's see if you can stump me today.

00:03:23.000 | Andrew, welcome to the show. How are you today?

00:03:25.000 | Hey, Joshua. I'm doing well. How are you?

00:03:27.000 | Very well, sir.

00:03:29.000 | Good. Thank you for all your time today and all of your work.

00:03:33.000 | The situation is my wife and I, we live here in the U.S.

00:03:36.000 | We have no intention of immediately leaving, but we're trying to create a strategy of a backup residency in a location that's physically nearby

00:03:45.000 | and having a citizenship that we can travel around if that would ever become needed.

00:03:49.000 | We have a second meeting with our local Mexican consulate in a couple of weeks.

00:03:54.000 | This should check the box for the local residency permit in the country that we enjoy spending time in with no physical presence.

00:04:03.000 | Since we don't plan on going there right now, we can see ourselves living there in the future.

00:04:07.000 | My question revolves around obtaining a second citizenship.

00:04:11.000 | We've been trying to decide between purchasing a Caribbean CBI versus the Portugal Golden Visa, which could lead to the naturalization.

00:04:20.000 | Both would be beneficial during normal times, but where we're getting hung up is trying to decide which would be better during, say, another global pandemic

00:04:29.000 | when countries only let you in when you have a legal residency or citizenship in that particular location.

00:04:35.000 | The problem is that I don't see us spending time in, say, St. Lucia or Dominica during the next global pandemic, but I could see us living in the EU.

00:04:43.000 | Do you think it'd be best to obtain the CBI immediately since it's so quick and then go after a physical presence residency permit in Portugal

00:04:52.000 | if our plan would change and we do decide to live over there or just start working towards the Portugal citizenship

00:04:58.000 | just to have it since it's the more powerful one to begin with, the more powerful passport?

00:05:02.000 | I guess, am I overthinking this or what are some pros and cons that you see on either?

00:05:07.000 | Yeah, you're not overthinking it. It's an important question.

00:05:10.000 | At its core, it's going to come down to money and what percentage of your wealth is reflected in the straight up cost of purchasing a citizenship from one of the Caribbean nations

00:05:23.000 | versus purchasing the relevant real estate or making the relevant investment into Portugal to get the Golden Visa and how motivated you are to make this quick.

00:05:33.000 | Now, I can't, so let me give you my answer and then if you want to talk about cost, I can give some thoughts there, but it's famously very difficult for me to know exactly how to advise somebody.

00:05:45.000 | There are clear, I guess I'm dealing with it first. Let's deal with cost first.

00:05:49.000 | There are people to whom I would clearly say you should certainly not go and spend money on a citizenship.

00:05:55.000 | If somebody is completely broke and they just have no money at all, no assets, then citizenship by investment, it's hard to see how it makes any difference.

00:06:05.000 | And so for that person, I would say, hey, good planning is just make sure you keep your first primary citizenship passport up to date, keep it renewed regularly so you make sure things are in good shape.

00:06:15.000 | Don't get yourself crosswise with the laws of your own country. Grab a residency with something that you can qualify for if possible, but you need to focus on building your wealth first.

00:06:27.000 | On the other hand, if someone is mega wealthy, and I mean mega wealthy, then the answer is obviously, yeah, just go and stroke the check.

00:06:35.000 | You should just simply stroke the check, get it done, get it in hand and be done with it and move on with your life.

00:06:40.000 | Don't waste time going around trying to save a few shekels on driving all over the place, going somewhere once a year to try to do that.

00:06:49.000 | But stroking, it just depends on how difficult is it for you to stroke a $100,000 or depending on how many family members you're applying with, a $150,000 check.

00:06:58.000 | And is that going to set you back on any other goals?

00:07:01.000 | So let me answer your question with that in mind. You're going to have to judge that.

00:07:05.000 | And by the way, it's not even necessarily always a financial thing. A lot of it has to do with a motivating thing, and a lot of it will also determine where you are from in terms of your original primary citizenship.

00:07:15.000 | So I keep saying I'm going to go to, let's deal with money again.

00:07:18.000 | For an American, right, a US American who's in good standing with his country, who doesn't plan to go anywhere else, you can say, listen, this is a great citizenship.

00:07:29.000 | And it's probably not super motivating to say I have to have a second citizenship today.

00:07:35.000 | On the other hand, you could imagine if you were a Russian passport holder, a Russian citizen, and you're facing an imminent crisis where you might get sent off to war, you're called up in a draft, your passport has been declared persona non grata all over the world.

00:07:50.000 | And so all of a sudden now for you, even if you had a few hundred thousand dollars to your name, if you could, and by the way, you can't because the Caribbean nation shut them off, if you could stroke a check and have a valid second set of passports that gives you freedom of movement around the world, allows you to avoid an overbearing government, all of a sudden now it's much more valuable.

00:08:12.000 | And this is why it's so difficult for me to say what people should do with the money, because a lot of it comes down to your motivation.

00:08:19.000 | Most US Americans are not particularly motivated in the direction of a second citizenship, which is why I spend so much time talking about residencies and how I think it's a really good plan.

00:08:29.000 | But if you're actually genuinely motivated, I am, right, having watched the world, watching great nations change, watching how fast my own country has changed within my lifetime, I look at it and say, I don't know if I'm going to recognize my country five years from now, 10 years from now.

00:08:45.000 | I don't know.

00:08:46.000 | I don't know what they're going to do, what they're going to impose on me.

00:08:48.000 | I'm hoping nothing bad happens, but I don't want to be sitting around five years from now still waiting for three years of Portuguese bureaucracy.

00:08:57.000 | So if somebody can justify it to himself and if you're motivated, then to answer your first question clearly, I think you should go directly for citizenship by investment.

00:09:08.000 | Years ago, it was funny, interestingly, my friend Andrew Henderson, I was just interacting with him on Twitter, and he did a video on this very question based upon my Twitter interaction with him.

00:09:21.000 | And years ago, I used to think that the way to get second citizenships was basically to go and set up residency programs and put pieces in place and just set it all up and then give time.

00:09:35.000 | I didn't grow up wealthy and I'm not wealthy enough where I can just go around the world stroking checks for all of the citizenships that I'd like to have.

00:09:44.000 | And so it seemed like the smart path was to get a residency, either a residency I was actually going to use, go and live there, or a paper residency where I'm going to go through the formal process but not spend a lot of time there.

00:09:57.000 | And that would be the best way to go.

00:09:59.000 | And I think that is a good way to go. But over the years, as I've bounced around the world, you know, buying six plane tickets at a time, dealing with all of the hassle of taking my family here and there and everywhere and doing all this stuff, I have come to appreciate the ease and simplicity of simply having it done.

00:10:18.000 | And today, if I were going to go back and do it all over again, I can't say I wouldn't do what I've done because there was a very clear logic to it and I had a good plan and I've capitalized on it.

00:10:31.000 | But I would definitely move much, much higher the value of simply going, investing in a country and getting it done.

00:10:40.000 | And so with what you started with, saying I'm not motivated to leave the United States now, I'm not going to go and live abroad, it's just a time of preparation, I think the best solution is to simply go to one of the Caribbean nations, choose the one that's most appropriate for your situation based upon, you know, choosing among them.

00:10:59.000 | I think they're all excellent. And stroke the check and have it done.

00:11:03.000 | Then it's done, it's taken care of, everything is covered.

00:11:07.000 | Now, what about a global pandemic and how does that affect you?

00:11:11.000 | So first of all, these nations, I think, genuinely are in many cases a good place that you could go in a time of duress.

00:11:19.000 | They're small islands, I'm not into, you know, small island living myself, so I'm not saying they're perfect, but in terms of freedom, in terms of financial freedom, etc., I think they have a lot to offer.

00:11:30.000 | Also, remember that if you have a Caribbean citizenship by investment from any of those nations, they are all part of CARICOM, which is an alliance of Caribbean states.

00:11:43.000 | It's basically like a Caribbean version of the European Union.

00:11:46.000 | And so you have rights of entry and rights of residence in any of the nations that are part of CARICOM.

00:11:53.000 | Some of those nations are, most of those nations are island nations, but then there are some that are mainland, such as Belize.

00:12:00.000 | And so when you are, let's say that you go to St. Kitts and Nevis, right, the oldest and most venerable of the citizenship by investment programs.

00:12:06.000 | If you go to St. Kitts and Nevis and you become a St. Kitts and Nevis citizen, you have rights of residence and to live and to work, as long as you're a skilled worker, in St. Kitts and Nevis, but also in St. Lucia, also in Bahamas, also in Belize, also in Jamaica, etc.

00:12:21.000 | And so you get good access to a good number of countries.

00:12:25.000 | Many of these could be excellent in many different situations.

00:12:30.000 | The second thing I would say is it's not the quality of your passport that makes the difference for your access to a nation.

00:12:37.000 | It is whether or not you have a residence permit.

00:12:40.000 | And so what I would suggest, ignoring the money, I would say if you're going to get a citizenship by investment, what you do is you first get your Caribbean citizenship, and then that's the passport under which you establish your Mexican residency.

00:12:55.000 | And then that's the passport under which you establish your Portuguese Golden Visa residency.

00:13:00.000 | Because now, with those residencies tied to your passport, you now have access to Mexico or to the European Union as a resident.

00:13:11.000 | And with the exception of voting rights and with the exception of carrying a passport, it's the residency that gives you the access that you're looking for.

00:13:21.000 | So I don't think this is a problem in anything except a pandemic.

00:13:25.000 | I have thought and thought and thought.

00:13:27.000 | I guess a pandemic and war, right?

00:13:30.000 | If you're working with a nation that is allied with -- if the world is at war and you have a passport from an allied nation to somebody that is not acceptable to the place you're trying to go, that's also a problem.

00:13:42.000 | But the big one here is just simply a pandemic.

00:13:44.000 | There's really nothing else that I can come up with that would cause countries all around the world to close their borders except a global pandemic.

00:13:53.000 | And we've seen that.

00:13:54.000 | We've seen the playbook on that.

00:13:56.000 | And so a residency permit gets you in.

00:13:58.000 | And then even some of those nations that you talked about, they weren't closed the whole time.

00:14:03.000 | Mexico was open the entire pandemic.

00:14:05.000 | Portugal was under the EU rules, but there were ways to get around that.

00:14:10.000 | And so there were access points.

00:14:12.000 | So my point is I don't think you'll be happy -- if you go to Portugal and you establish a residence there under their Golden Visa scheme, first, you're coming out of pocket.

00:14:25.000 | You're coming out of pocket a huge amount of money to make an investment that you might not otherwise make.

00:14:30.000 | You don't have to buy real estate.

00:14:32.000 | Obviously, you can invest in a real estate syndication fund.

00:14:34.000 | You can invest in a business.

00:14:35.000 | There are other ways to do it.

00:14:36.000 | But you're coming out of pocket with a very large amount of money compared to the cost of a Caribbean citizenship.

00:14:41.000 | In addition, you are guaranteeing yourself the need to go and spend a couple weeks a year in Portugal in order for it to work.

00:14:50.000 | And what we don't know about the Portuguese Golden Visa scheme is if they will actually naturalize people in five years.

00:15:03.000 | The scheme is new enough that very few people were only -- I think -- I don't remember my dates exactly, but basically it's unknown.

00:15:12.000 | And this is the other problem is that many nations will give you a residence permit.

00:15:15.000 | But those same nations, when you go to apply for citizenship, have such ridiculous bureaucracy that you basically just never get approved and you never know why.

00:15:27.000 | So even if on paper you qualify -- the most obvious examples have been Paraguay and South America and Panama.

00:15:37.000 | Both of them have a clear path to citizenship in theory.

00:15:41.000 | You should be able to go there.

00:15:43.000 | You get your residency.

00:15:44.000 | You spend time there.

00:15:45.000 | And then you apply for naturalization.

00:15:47.000 | In practice, however, actually getting them to naturalize you is much more difficult.

00:15:52.000 | And so the thing that's great about the Caribbean citizenships is that you go into the process.

00:15:58.000 | You know the cost up front.

00:15:59.000 | It's one fixed cost.

00:16:01.000 | You don't have to wonder how many times do I have to go back and forth, how many weeks do I have to spend in country, etc.

00:16:07.000 | It's one fixed cost.

00:16:08.000 | You write the check.

00:16:10.000 | And three months, six months, however long it takes, you're done.

00:16:13.000 | You have your second citizenship.

00:16:15.000 | And then with that second citizenship, if you want to go on and enhance your plan because there's a particular country or a particular region that you're most attracted to, then you can use that citizenship to go and establish your residency.

00:16:27.000 | So I am firmly in favor of Caribbean citizenship by investment.

00:16:31.000 | And I think that they are probably the best, quickest way for most people to go and simply get it done and get their plan made.

00:16:42.000 | There's no question that there are some people who if you can't afford it, you got to go find another plan.

00:16:47.000 | But for those who can afford it, who are contemplating it, I'm an unabashed fan.

00:16:51.000 | And my final comment is this.

00:16:54.000 | Think of the comment I made about war.

00:16:56.000 | Many times people, when they go into the citizenship world, they're looking at something and saying, and especially this is common for those of us who come from nations that are large and generally perceived on a global basis as fairly prestigious, like the United States.

00:17:11.000 | When you come from a country like the United States and you consider the aspect of a passport such as St. Kitts and Nevis versus Portugal, there's no question that the Portuguese passport is a better passport as measured by access to countries on a visa-free basis.

00:17:33.000 | And it can feel more comfortable to say, OK, if I'm going to be traveling, I'm going to be traveling as a Portuguese person.

00:17:39.000 | The problem is you already have that with the United States.

00:17:45.000 | And so if you're going to diversify yourself, a lot of times get something that's truly genuinely different.

00:17:52.000 | Is it that different for you to be an American citizen versus a British citizen?

00:17:57.000 | Well, other than the fact that you can live in the United Kingdom versus living in the United States, they're very similar in the sense that they represent countries that are large, countries that are involved in global operations, countries that have massive tax collection departments, and countries that are meddling in politics all around the world.

00:18:19.000 | If you are from a nation that is very small, that is just guaranteed to be neutral, is not involved in wars, is not going to be allied with one or the other, that's actually a more valuable form of diversification.

00:18:35.000 | I think about this right now when I look at some of the laws that the United States has passed recently regarding simple ownership or investment into various cryptocurrencies and some of the things that they have made illegal for American citizens to do.

00:18:50.000 | This is the same playbook that if the United States continues down this path, this is the same kind of playbook that the European Union can put in place.

00:18:58.000 | But it's not the kind of playbook that St. Kitts and Nevis is ever going to be involved in.

00:19:02.000 | It's just not them, right? They don't do that. They're a tiny little Caribbean nation, they got a tiny budget, they're not going to go around the world and bother people.

00:19:09.000 | They just have a simple business proposition. You write a check for this amount of money, we'll make you a citizen of ours with all the rights and benefits and duties entailed with that, and you have the benefit of having a passport from our nation because of a citizenship.

00:19:22.000 | I am an unabashed fan of these programs and I think that they, for most people, will be – if the money makes sense in your financial picture, I think for most people they're probably the best starting point because it allows you to quickly solve over the course of say six months.

00:19:39.000 | It allows you to quickly solve those biggest, most difficult points of your international diversification plan in a way that – so it doesn't drag on for the next nine years while you're waiting on Portugal.

00:19:53.000 | And then if you need it, it's there and it's available to you.

00:19:56.000 | So I say go for the Caribbean citizenship and if later you want to do Portugal to give your children access to the EU or something like that, go for it.

00:20:05.000 | But it'll be less hassle and it's a more direct path for you to reach your goals of a second passport to simply sign the check and pay for it.

00:20:16.000 | Wow, wonderful. You've answered all my questions and thank you for your insight.

00:20:22.000 | Excellent, my pleasure.

00:20:23.000 | We move on to Kyle in Colorado.

00:20:27.000 | Kyle, welcome to the show. How can I serve you today?

00:20:29.000 | Hi, Joshua. Thanks for taking my call.

00:20:32.000 | I just want to let you know that we do appreciate that you take the calls live and that you have the knowledge and capability to actually do it.

00:20:40.000 | Good.

00:20:41.000 | I know that's got to be difficult.

00:20:42.000 | Yeah, so I've been working for a small RIA and decided that I want to start my own fee-only firm, Charges on AUM.

00:20:51.000 | I didn't do a lot of business development or client acquisition for the firm previously, but obviously that's going to be an important part of starting my own company.

00:20:59.000 | So I'm curious if you have any advice for how you would go about building a firm today.

00:21:03.000 | So the benefit of doing your own firm is that you have the option to generate your business however you want and within the relevant regulations.

00:21:15.000 | But running your own RIA gives you a maximum degree of latitude in that.

00:21:21.000 | So I'll tell you my personal story.

00:21:23.000 | As you know, years ago I worked for a large insurance company and financial services all integrated.

00:21:29.000 | So insurance leading and then investments added on.

00:21:35.000 | That company had an extremely effective way of building a business and that was based upon referred lead prospecting.

00:21:43.000 | That was the standard that was taught to everyone.

00:21:45.000 | It wasn't that some people couldn't do other things, but the standard was based upon referred lead prospecting.

00:21:51.000 | And I love that standard.

00:21:53.000 | I think it's wonderful.

00:21:54.000 | Today if I were starting a business over, I would go back.

00:21:57.000 | Excuse me, that was a wrong statement.

00:22:01.000 | Today if I were doing it over again, that would be a big component of what I do.

00:22:05.000 | But what that company absolutely forbade was any kind of public marketing.

00:22:13.000 | No podcasting, no your own website, no financial blogs, etc.

00:22:19.000 | It was not allowed.

00:22:21.000 | And I thought I could get them to change that.

00:22:23.000 | Now things have changed a little bit since I did it.

00:22:25.000 | But I thought, well, okay, maybe there's some ways this could happen.

00:22:29.000 | Because I was an aficionado and a consumer of personal finance media.

00:22:34.000 | And so I looked out and I saw that, hey, if I had a popular, and I read all these personal finance blogs,

00:22:41.000 | if I had a popular personal finance blog, then that would bring in tons of business.

00:22:45.000 | If I had a popular podcast, that could bring in tons of potential clients.

00:22:49.000 | And so I thought there was a way through it.

00:22:51.000 | The problem was, because the company was so large, their leadership has to protect the integrity of the company.

00:22:59.000 | And so the way they do that is by very, very tightly controlling their employees.

00:23:03.000 | And every public communication that an employee would make.

00:23:07.000 | So here's how it goes, right?

00:23:08.000 | If you work at a company like that.

00:23:12.000 | Let's say you get invited to be on your local news.

00:23:14.000 | And you're going to go and have a financial segment.

00:23:17.000 | You're going to be interviewed as a financial expert.

00:23:19.000 | You have to apply for and request permission from the lawyers before you accept it.

00:23:25.000 | Then once you do it, you basically have to script out what you're going to say.

00:23:29.000 | And then you do the segment.

00:23:31.000 | And you can't help it if it's live, right?

00:23:33.000 | So if it's live, then that's one thing.

00:23:36.000 | But if possible, they want it to be done in advance so that they can have it.

00:23:39.000 | And then you have to keep a copy of everything that you say in it.

00:23:42.000 | Now the actual legal rules regarding what a licensed financial advisor can say are pretty liberal.

00:23:49.000 | Basically, your big danger point is you don't want to get into making forward-looking statements.

00:23:56.000 | Or making in the sense of forward-looking statements, especially to the degree that they vary from industry norms.

00:24:04.000 | So if you go out and you say, "Invest in company X because it can grow by 50%," that's pretty dangerous.

00:24:11.000 | You want to be really careful about that.

00:24:12.000 | But if you say, "In general, the stock market has returned 10% over the long term," then you're within industry norms.

00:24:19.000 | And you're not saying it will do something.

00:24:21.000 | So basically, it's pretty common sense stuff.

00:24:24.000 | But the big companies have to protect their company.

00:24:27.000 | And so they're very, very tight in terms of what they allow you to do and what they don't allow you to do.

00:24:31.000 | So I was never able to-- I couldn't get them to let me do anything.

00:24:35.000 | That was then.

00:24:36.000 | Now today, I think that they have realized that, "All right, we could do something different."

00:24:42.000 | So today, there's more leniency applied.

00:24:45.000 | But there wasn't back then.

00:24:47.000 | So when I left that company, my primary business plan was this.

00:24:52.000 | I said, "What I'm going to do is I'm going to start a podcast and I'm going to start an RIA."

00:24:58.000 | And because I had understood from my research at the time was that if I start an RIA, then I will become my own chief compliance officer.

00:25:09.000 | And as my own chief compliance officer, I can decide what is right for my company to do in terms of marketing, et cetera.

00:25:15.000 | I don't have to sit around and wait for a team of lawyers to approve it.

00:25:20.000 | And since I understood the rules and I felt like I could easily produce content and stay within those rules, then things were good.

00:25:28.000 | And that was what I chose to do because it would give me a wide degree of marketing latitude.

00:25:33.000 | And I believed there was an opportunity.

00:25:35.000 | Now, as it turns out, I wrote my ADV.

00:25:39.000 | I had started the process with the state of Florida.

00:25:42.000 | And basically, I was 80% of the way through the process and I realized, "You know what? I don't really care."

00:25:47.000 | I realized I didn't want to do financial planning for individuals anymore.

00:25:53.000 | That was not what I wanted to do.

00:25:54.000 | I didn't want to manage money.

00:25:55.000 | I never liked managing money and I didn't want to do financial planning for individuals.

00:25:59.000 | So I pulled the papers, canceled the application, and I never did establish the RIA.

00:26:05.000 | But that was why I went after it.

00:26:11.000 | And so if you look around the world today, you will see that once--and I'm sure this is what has attracted you even to the RIA model--is that if you establish your own RIA and you are your own chief compliance officer, now you can decide what activities are appropriate for you.

00:26:26.000 | So this allows you to access a much broader degree of marketing activities.

00:26:31.000 | Want to go ahead and set up a daily money minute on your local radio station? Go for it.

00:26:35.000 | Want to write a financial blog? Go for it.

00:26:37.000 | Want to create a YouTube channel and talk about money? Go for it.

00:26:40.000 | The whole world is available to you because you're the one who can decide what is appropriate for your company to do and not.

00:26:47.000 | And so now back to what does this actually mean?

00:26:53.000 | The challenge is that none of these things are a clear pathway to wealth or even to good marketing.

00:27:01.000 | These channels are all very crowded.

00:27:05.000 | Can your blog break through as the financial blog of 2023?

00:27:09.000 | Can your YouTube channel break through as the breakthrough channel of 2023?

00:27:14.000 | Maybe, maybe not.

00:27:16.000 | That depends on your concept, on your personality, etc.

00:27:19.000 | But I think the answer is you want to look for--when you think about--so when you think about marketing your firm, you have to ask yourself, "What kinds of clients do I want to serve and what is the best way to reach those clients?"

00:27:34.000 | And if you're consuming any business advice from the financial register investment advisory space, you're going to find, of course, that you need to have a clearly defined niche that you're going to target.

00:27:47.000 | And then you ask yourself, "Well, what would be the best way for me to target this particular niche, these particular types of clients that I want to work with?"

00:27:55.000 | So my point in answering your question is that as the owner of your own firm, you have a broad and a much broader ability to use effective marketing tools and techniques that are far beyond just picking up the phone and cold calling people or doing warm lead prospecting, etc.

00:28:16.000 | And so if that makes sense for your target customer base, then you can employ media effectively.

00:28:24.000 | And I think that ultimately is probably the best solution.

00:28:28.000 | If you look at some of the largest REA firms, you can build a good firm with the traditional methods that don't involve any kind of media.

00:28:40.000 | Word of mouth is still the most powerful marketing.

00:28:43.000 | And if you're tightly focused on a profitable niche of clients that you think you can give good advice to, then that will work well for you.

00:28:51.000 | But you can certainly enhance that with good media.

00:28:54.000 | And I think many of the largest firms, media is undoubtedly powerful, right?

00:28:59.000 | Rick Edelman became the behemoth that he is because of his media usage.

00:29:03.000 | So I've always been drawn in the direction of media, and that was what I saw the power of.

00:29:07.000 | Today, if I went back and did it all over again or started an REA, I would have been able to attract a lot of clients.

00:29:14.000 | But it's not an easy or predictable road because there's so much competition.

00:29:20.000 | So you mentioned a lot. So first of all, thank you.

00:29:23.000 | You mentioned a lot of ideas that are kind of like one to many, where you're giving away some free content and then trying to convert them.

00:29:31.000 | What about other types of marketing like physical advertising, postcards, things like that?

00:29:37.000 | Do you see any ROI with those?

00:29:39.000 | Who would you target as being an ideal, describe an ideal prospective client for your new firm or as best you see?

00:29:46.000 | Yeah. So I think my niche is going to be engineers and tech professionals who are too busy with their own jobs, are looking to retire early or have retired early.

00:29:59.000 | So I think that any niche can work.

00:30:05.000 | I'm not a big fan of that as a very productive niche for two reasons.

00:30:11.000 | Number one, I think engineers are very well suited to being DIY investors and planners.

00:30:18.000 | Engineers are very capable of doing the same basic functions that a financial planner can provide.

00:30:30.000 | And engineers often enjoy digging into that.

00:30:33.000 | This is why if you go to an early retirement forum somewhere, you'll find that it is full of engineers of various stripes because they dig into the numbers, they enjoy it.

00:30:42.000 | It's kind of a part of who they are.

00:30:44.000 | I think also that segment is likely to be much more cost sensitive than some other segments.

00:30:51.000 | And I think that segment is likely to be very difficult to work with over the long term because they're going to be continually cost sensitive.

00:30:59.000 | Engineers, as a stereotype, are going to be paying attention to the dollars and cents.

00:31:04.000 | They're going to be focusing on it very quickly.

00:31:06.000 | And when you're in a business where you're charging 1%, that's a drag on performance.

00:31:12.000 | An engineer is much more likely, I think, to say, "Hey, I can do this myself. Why do I need you at all?"

00:31:17.000 | And you're going to have to be continually justifying your fees.

00:31:20.000 | So I would never choose that as a segment for me.

00:31:23.000 | You may have something to go after because I don't think there are great clients to work with in that manner.

00:31:29.000 | Maybe wonderful clients.

00:31:31.000 | I frequently worked with engineers myself on the hourly basis.

00:31:34.000 | They want to talk to an expert about a specific problem and they're happy to pay for an hour.

00:31:39.000 | If you're going to pay a management fee, I think you're going to find this more difficult.

00:31:43.000 | And so I'd be cautious of that segment.

00:31:46.000 | Now to the marketing question.

00:31:49.000 | Can you imagine an engineer getting a postcard in the mail and saying, "Oh, you know what?

00:31:56.000 | Here's a postcard in the mail from my local financial planner. I should give him a call."

00:32:01.000 | Or a billboard or something. Can you imagine that?

00:32:04.000 | Yeah, it's a pretty obvious answer.

00:32:06.000 | I can't imagine that.

00:32:08.000 | So what I could imagine is I think that if you chose to pursue a segmented target of engineers in that way,

00:32:19.000 | then I could see that a really great way to do that would be a content strategy.

00:32:25.000 | I think an engineer is much more likely to be trolling around an early retirement forum.

00:32:31.000 | An engineer is much more likely if you have a very detailed, wonderful website giving all the tricks

00:32:36.000 | and techniques and whatnot of financial planning and you're very conversant in that,

00:32:41.000 | then I think you could bring real value in that space.

00:32:48.000 | But I think a content strategy would be much more effective for reaching an engineer than the other.

00:32:55.000 | So I think every niche that you go after is going to have its own natural marketing strategy.

00:33:03.000 | If you're going after NBA stars or people that are going into professional sports,

00:33:11.000 | that marketing strategy is unlikely to be public information.

00:33:16.000 | It's not going to be postcards. That's going to be a networking strategy and a word-of-mouth strategy.

00:33:21.000 | So I can't go through all the professions, but I think that when you look at things like postcard strategies,

00:33:31.000 | billboard strategies, free meal strategies, those generally are targeting ordinary middle-class people

00:33:41.000 | who have a $300,000 401(k) and you're hoping they can come in and roll it over to your firm.

00:33:47.000 | I think that those postcard strategies, by the way, work very well for companies who have a property and casualty insurance line.

00:33:57.000 | So your local state farm agent, your local all-state agent, et cetera, that works well,

00:34:01.000 | because people know they have to have car insurance and they want to reach out to somebody.

00:34:05.000 | Somebody's in my neighborhood. I've got an office I can go by. I can just get it all done in person.

00:34:09.000 | I don't want to deal with something online. That's where those things shine.

00:34:12.000 | But it's hard for me to imagine an RIA building anything on that kind of basis.

00:34:20.000 | Great. Thank you. I have a second unrelated question. Now, I'll wait till the end.

00:34:25.000 | Go ahead.

00:34:27.000 | So obviously, if I start my own firm, I'll have the option to adjust my income for the first year or two

00:34:34.000 | to basically be below the expanded Medicaid income limit or above it to get the ACA subsidies.

00:34:41.000 | And I know a lot of people intentionally generate income to get above that income limit for that and for the CHIP program.

00:34:51.000 | Do you have any experience or thoughts with having Medicaid or intentionally trying to get out of it?

00:34:57.000 | You mean, so you're wondering whether you should keep your income low enough that you can qualify for Medicaid

00:35:07.000 | or whether to raise it slightly? Is that the question?

00:35:11.000 | Whether to raise it slightly to get out of Medicaid, yeah.

00:35:15.000 | What do you mean get out of Medicaid? What's the benefit to being out of Medicaid?

00:35:20.000 | Well, so like, for example, in the state of Colorado, if your income is below a certain limit,

00:35:27.000 | you are not eligible for any of the ACA subsidies.

00:35:31.000 | So you want to keep your plan and get an ACA subsidy.

00:35:36.000 | You don't want to be stuck onto a Medicaid-only health insurance option.

00:35:41.000 | Well, so the question is, is that a good idea? Is Medicaid so bad, right?

00:35:48.000 | Having never had it before or worked with a lot of people who have, I just didn't know if you had any experience with that.

00:35:54.000 | I think I know how to adjust my income.

00:35:56.000 | Yeah, I guess the question would just be like, do you expect to need medical services?

00:36:00.000 | So I generally, being a healthy person and doing my best to maintain good health for me, my wife, my children,

00:36:10.000 | doing our best to be prudent and avoid whenever possible unnecessary risk, you know, bodily injury and harm, etc.,

00:36:19.000 | then I don't expect to have any significant medical expenses.

00:36:24.000 | So I don't, excuse me, let me rephrase that. I don't expect to have any significant medical care.

00:36:30.000 | I just, if I'm healthy and if my family is healthy and if we seek to avoid risk, I don't expect to need any medical care in terms of any acute care.

00:36:41.000 | I think it's a good idea to seek out good medical professionals for coaching, for advice, etc., but that's kind of a separate thing.

00:36:47.000 | And generally that stuff is almost never covered by insurance.

00:36:50.000 | So I don't expect to need medical care.

00:36:53.000 | If I need medical care, most of the things for which I would need medical care, I will usually just simply pay out of pocket.

00:37:01.000 | If my child falls out of a tree, breaks his arm, then I'll go to an urgent care place.

00:37:05.000 | I'll generally just simply pay for that.

00:37:09.000 | Most ordinary medical short-term things are just a matter of my paying for it.

00:37:15.000 | The place where things could change would be what if I had a major change, right?

00:37:19.000 | What if I experienced a sudden stroke or a heart attack or a cancer diagnosis, right?

00:37:24.000 | The big three or four things.

00:37:26.000 | Or what if I had a life-altering car accident?

00:37:29.000 | Well, then all of a sudden I'm smack dab in the middle of the medical system and it's going to be what does my insurance cover, etc.

00:37:37.000 | So I wouldn't, if this is a short-term thing, I wouldn't worry too much about it because unless you have, I think people,

00:37:45.000 | there's an element of responsibility where you want to be responsibility.

00:37:49.000 | But I believe that in the year 2022, some of us take on godlike responsibility when we're not God and we're not equipped for it.

00:37:58.000 | I don't think that I should go through, this is like when people talk about having health insurance.

00:38:03.000 | To me, I understand prudence.

00:38:05.000 | I encourage people to have health insurance.

00:38:07.000 | I think it's wise to have health insurance.

00:38:09.000 | But I don't think that if you're a young, healthy 25-year-old that having and keeping health insurance should be your number one thing in life.

00:38:19.000 | We can't predict what's going to happen in the future.

00:38:22.000 | And if you don't have any indications that you've got a bad problem, then why sit around and make keeping health insurance your number one thing, right?

00:38:31.000 | Roll the dice, go for something.

00:38:32.000 | If you drop health insurance and you're uninsured, big deal.

00:38:35.000 | But have a plan so that if the worst case happens, then you're okay.

00:38:40.000 | So in Medicaid, what I would say is that my plan would be if I were on Medicaid and I had a life-altering thing, I'm going to get the best care I need, the best care I can.

00:38:51.000 | And I doubt that Medicaid is any worse or better than any other insurance for acute care.

00:38:56.000 | If I'm in a car accident, they're going to take me to the ER, and I don't think the ER surgeon is going to be asking what the billing department is going to deal with in terms of insurance.

00:39:06.000 | And then if you've got a path off of Medicaid, which you always do, right, if your income goes up and you can go on to an Affordable Care Act plan, then now you have a plan off of it.

00:39:15.000 | And I think one of the most interesting things that happened from a conniving planning perspective was they eliminated preexisting conditions.

00:39:23.000 | I was selling health insurance actively at the time when the Affordable Care Act was passed.

00:39:28.000 | I could not believe they were eliminating the preexisting conditions clause.

00:39:32.000 | And I thought, like, how can they do this?

00:39:35.000 | Because this fundamentally breaks the entire insurance marketplace.

00:39:38.000 | What it means is since they can't exempt preexisting conditions, then that means that you always have an on-ramp onto health insurance regardless of what has happened before.

00:39:50.000 | And this means that there's no longer any incentive for you to keep continuous coverage in order to protect yourself from a worst-case scenario.

00:40:00.000 | And so I need to do the product.

00:40:04.000 | I've been planning to create a product about how all of the--I have about six--sometimes I get consulting clients that call me up and they ask me how to handle health insurance if they're going off of an employer plan.

00:40:15.000 | And I have about a half a dozen really good strategies that I go over with people and I say, you know, do this, do this, here's what it is.

00:40:23.000 | But as a simple--like one of the simple examples is that if I--any person who is uninsured who wants to go on to an Affordable Care Act plan on the marketplace can go on to it during open enrollment.

00:40:37.000 | But then there are a number of triggering events that allow you access without open enrollment.

00:40:41.000 | And so one that I'm aware of, for example, I don't live in the United States.

00:40:45.000 | I don't maintain any U.S.-based health insurance.

00:40:47.000 | I have an international policy which has nothing to do with the United States, doesn't even cover me in the United States.

00:40:51.000 | But if I ever needed kind of top-class care, if I had one of those--if I had a stroke or cancer or something like that, my on-ramp is I move back to the United States and moving back to the United States is a qualifying event.

00:41:05.000 | I can immediately go on to an Affordable Care Act plan with whatever I choose with all of those plan benefits with no pre-existing conditions.

00:41:13.000 | And so I always have an on-ramp back into the American health insurance marketplace because I don't live in the United States.

00:41:19.000 | And so I would see the same thing for you is that if you had Medicaid and if you had one of those big events, right, you have a stroke or et cetera, then you can always on-ramp off of Medicaid onto the Affordable Care Act plan.

00:41:34.000 | So what's the point of trying to maintain an Affordable Care Act plan unless you have a particular need?

00:41:41.000 | Now, just for clarity, if you have a child who has an ongoing care need or you have some unique medical condition where you are continually reliant on medical services, then none of what I've just said applies.

00:41:56.000 | And you have to sit down and you say, "Well, based upon my unique need for ongoing medical services, then what's best for me?"

00:42:04.000 | So my comments only apply to the ordinary healthy person who isn't expecting to have significant costs, the kind of person who pays for most of his expenses, just pays for them.

00:42:17.000 | That's where my advice applies to.

00:42:21.000 | Okay, great. I will take a look at those qualifying events and thank you very much, Joshua, for your time.

00:42:26.000 | My pleasure. All right, we move on to Ryan in Florida. Ryan, welcome to the show. How can I serve you today?

00:42:32.000 | Yeah, hi, Joshua. Can you hear me okay?

00:42:34.000 | Sounds great.

00:42:35.000 | All right, great. So my question is surrounding trusts and wills and advance directives and things like that.

00:42:44.000 | I had initially reached out to a lawyer because I wanted to get started with a will.

00:42:51.000 | I have three kids. We're a young family. They're eight, six, and three.

00:42:57.000 | And we have assets that we want to protect.

00:43:00.000 | But also we want to have a plan in the event one or both of us were to die.

00:43:07.000 | And as I was explaining everything to her, she kind of directed us.

00:43:12.000 | She pointed us in the direction of a trust.

00:43:16.000 | And one of the questions that came up was a revocable living trust, marital versus survivorship.

00:43:24.000 | And I think I've heard you talk about these in the past, and I wondered if you had any insight or if you had any overarching thoughts on, I don't know, just ensuring that your survivors get your money when you die or that you're protected in the event of being sued or whatever.

00:43:46.000 | But particularly this marital versus survivorship question.

00:43:50.000 | What is your current net worth?

00:43:54.000 | It's probably a little over a million.

00:43:57.000 | Okay. So at a million, and over the million dollars, how much of that is in home equity and how much of that is in retirement accounts?

00:44:10.000 | I don't consider any of it home equity.

00:44:13.000 | So it's probably more than a million, I guess.

00:44:15.000 | And how much in retirement accounts?

00:44:20.000 | Probably about 400,000.

00:44:23.000 | Okay.

00:44:25.000 | Maybe five.

00:44:27.000 | All right. So let's define a couple of terms.

00:44:29.000 | First of all, generally speaking, and I'm going to give a little bit of advice here that will apply to other people, not just you, because I want listeners to be well informed.

00:44:40.000 | I don't think it's necessary for most people to have a will.

00:44:45.000 | In fact, you know, we could say it a little differently as a joke, simply that you already have a will, and that will is what's called the intestacy provisions of your state.

00:44:54.000 | So if you're living in the state of Florida, you can look up Florida intestacy provisions for those who die without a will.

00:44:59.000 | What are those provisions?

00:45:01.000 | And if you're happy with those provisions, you feel like, you know what, these are good enough, that's good.

00:45:06.000 | The other reason I don't think it's necessary that a lot of people have a will is simply that many of people's most valuable assets are not governed by the working of a will.

00:45:19.000 | The most important one being retirement accounts.

00:45:21.000 | Retirement accounts and insurance policies also are beneficiary -- they're assets that flow by beneficiary designation, not based upon the will.

00:45:31.000 | And so as an example, let's say that I'm married to my wife, let's say I have no children, and I would want my property if I died to go to my wife, and then to my parents.

00:45:44.000 | And let's assume that I have $300,000 in a 401(k), and we own a home together, my wife and I as joint ownership.

00:45:54.000 | Well, if I die, then if my wife is the beneficiary of my 401(k), then she'll get the money from that as a beneficiary, and if she's a joint owner of our home, then she'll automatically become full owner of the home.

00:46:08.000 | And so I don't need a will for that.

00:46:10.000 | The most important function for parents of a will is to identify your desired guardian for your children.

00:46:19.000 | And so that's the big one for parents, is you want to identify and establish a guardian.

00:46:25.000 | And so you'll want to do -- and you have to do that in a will.

00:46:29.000 | Now you can't guarantee, as I understand it, not being an attorney, it's my understanding that you can't guarantee that that will actually be the guardian of your family.

00:46:38.000 | A court could intervene if there were something that needed to.

00:46:42.000 | But there's a good chance in most healthy situations, most normal situations, that if you and your wife are out on date night and you get killed by a truck, then now your desired person will become the guardian of your child.

00:46:54.000 | So that to me is your most important thing that you're trying to accomplish.

00:47:00.000 | So if you're frustrated about trust, et cetera, just recognize I don't have to have a will except to have a guardian.

00:47:08.000 | And so I could just do a simple will, and as long as it were properly put into place, that could protect my children.

00:47:15.000 | Now, next, is there a place for a revocable living trust?

00:47:21.000 | Absolutely.

00:47:22.000 | A revocable living trust can be an extremely useful thing in financial planning.

00:47:28.000 | It will not provide any form of asset protection.

00:47:34.000 | I repeat, an ordinary standard revocable living trust will not provide any form of asset protection.

00:47:44.000 | You can build trusts that have asset protection benefits, but your standard ordinary everyday revocable living trust will not provide any form of asset protection.

00:47:57.000 | What a revocable living trust can provide is a measure of privacy over your affairs.

00:48:04.000 | So if you have a million dollars of assets and you die, then the executor of your estate will have to submit your will to the probate court, and all of your assets will become public.

00:48:21.000 | Whereas, if you have a million dollars of assets that you have transferred into a revocable living trust, and then if you die, all that happens is a new trustee is appointed, and the assets never go through probate, and so they can continue.

00:48:37.000 | So the big benefit of a revocable living trust is primarily privacy.

00:48:43.000 | Now, you can work with privacy in a couple different ways as well.

00:48:46.000 | There are benefits to it beyond that.

00:48:49.000 | You can have the—and here I have to be careful because there's so many variations of trust.

00:48:55.000 | But the point is that if you have all of your assets titled into a revocable living trust, then you can gain privacy from the probate court, and that's the big benefit.

00:49:03.000 | That and continuity, simplicity of continuity, not having to go to probate is the big benefit of a revocable living trust.

00:49:11.000 | Now, in most ordinary situations, meaning in what I hear, I mean middle class kind of common people, not derogatory, just ordinary job earners—sorry, job workers, wage earners, et cetera, the most important assets you have are usually your retirement accounts, and those don't ever get titled into a revocable living trust.

00:49:34.000 | So if you've got only, say, $200,000 or $300,000 of assets, money in a bank account, maybe a little business ownership, et cetera, that you own somewhere, then why go out and spend thousands of dollars on a trust that you don't need?

00:49:45.000 | On the other hand, if you've got $10 million of assets, you've got several companies, you've got bank accounts, you've got investments, real estate investments other than your own home, et cetera, et cetera, then now going ahead and having a revocable living trust as the umbrella corporation that holds everything is now really smart, and it's worth it for you to spend the money to setting that up.

00:50:12.000 | So that's where revocable living trusts really shine.

00:50:19.000 | For most people, my answer as to how to take care of things for your children and your assets for your children is that it's simpler for you to establish a testamentary trust.

00:50:34.000 | And what a testamentary trust is, it's a trust that is written out in your last will and testament, and when you die, that trust comes into being.

00:50:46.000 | But it doesn't exist before that.

00:50:49.000 | And so my preferred simple approach for most young people who are unlikely to die statistically and who are not doing kind of complex financial planning, young families, et cetera, is set up a will.

00:51:05.000 | And in that will, go ahead and write out a testamentary trust that would receive all of your assets for the benefit of your children.

00:51:14.000 | And in that trust, you can set up a -- you can set up a -- you can set up -- you, of course, identify guardians in your will, but you can set up a trustee and a successor trustee and co-trustees, et cetera, who would manage all the money for the benefit of your children.

00:51:33.000 | And then you have a trust, so the money's just not all wandering around without designation, but you don't have to deal with the hassle and the complexity of operating everything through a revocable living trust today.

00:51:47.000 | Now, I don't know where that crossover point is.

00:51:51.000 | I think that, you know, if you're -- with your $600,000 of assets, it feels a little bit light to me, but I can't defend that feeling.

00:52:02.000 | Like, it feels like, you know, just set up -- my instinct from what you've said, without probing further, my instinct is to say, set up a will, put a testamentary trust in your will, designate all of your accounts to that testamentary trust as the beneficiary, to your wife first and set up a -- you know, for her to you.

00:52:20.000 | And then set the testamentary trust in your will as the contingent beneficiary.

00:52:28.000 | Then give it, you know, five more years, three more years, five more years.

00:52:33.000 | And you come back with two, $3 million net worth, something like that in five years, and now maybe it's worth going ahead, setting up the revocable living trust, dealing with the hassle of doing everything in the trust's name, et cetera.

00:52:45.000 | It's probably not a huge hassle, maybe I'm overthinking it, but my observation is that the value of a revocable living trust is offset by the hassle of doing everything in the trust.

00:53:02.000 | And if everything's not in the trust, then why did you set it up in the first place?

00:53:06.000 | So I could go either way in terms of you doing one or the other, but in general, my recommendation to people is that because of the hassle of running everything through a revocable living trust, if you don't expect to die, because then it's better just to avoid some of that and set up a testamentary trust.

00:53:25.000 | Now, when you get to 50, 60, 70, and you're getting closer to expecting to die, then yeah, go ahead and your affairs hopefully are more established, go ahead and put that in.

00:53:36.000 | Or if your assets get large enough to the point where it's really worth it to have a continuity of management or you really value the privacy benefits for some reason, then definitely go in the direction of the revocable living trust.

00:53:49.000 | Okay. Can you expand a little bit on what the, you mentioned the hassles of it. I have no experience obviously with the trust, so I don't even know what the hassles might be and if there's something I'm willing to deal with or not.

00:54:03.000 | Can you just give me a couple examples of what the hassles would be?

00:54:07.000 | So basically, it just means constantly doing paperwork and all the paperwork as a trustee of a trust. So you go to your bank and you title it instead of it being John Smith Bank Account, now it's the John Smith Revocable Trust.

00:54:22.000 | And so when you go into your bank, you have to bring in the trust documents and show that you have this.

00:54:26.000 | If you go to a real estate closing and it's going to be owned by the trust, then you have to bring the trustee documents and demonstrate that you have competence from the trust to do.

00:54:36.000 | I don't know, maybe I'm overstating the hassle factor. What I have found is I have found it deeply annoying to constantly even do business in company names.

00:54:46.000 | It's kind of the same thing with companies is that you have to constantly prove your identity in ways that when you do business as an individual, it's not necessary.

00:54:55.000 | So depending on – if your assets are not requiring constant movement, then it's just a one-time hassle factor to go through and retitle all of your accounts, retitle all of your assets.

00:55:09.000 | If your business or affairs involve you constantly buying and selling or things like that, then now it can be more difficult to constantly be doing business as a trust representative.

00:55:22.000 | I hope I didn't overstate the case of the hassle factor. You could say it's not a hassle to always carry around the paperwork.

00:55:31.000 | Well, that may be the case, but that's the basic hassle factor.

00:55:35.000 | Okay. Did you have any thoughts on the marital versus survivorship question?

00:55:40.000 | Go ahead and clarify the question. What was the attorney saying in terms of a marital trust for what benefit or a survivorship trust?

00:55:48.000 | What were the benefits either way?

00:55:51.000 | Well, I think she was saying that survivorship, all of the money would just simply go to the surviving spouse upon the death of the first spouse.

00:56:04.000 | And then the marital – I don't understand this clearly. That's why I wanted to get a second opinion on this.

00:56:11.000 | She was directing us toward marital, but I don't fully understand it. So that was why I called.

00:56:16.000 | If you don't understand it, then don't do it. Go back and ask more questions and make it clear.

00:56:22.000 | And kind of just a buddy encouragement, it is a financial professional's or a legal professional's job to make it clear to you.

00:56:33.000 | If a professional cannot make something clear to you, in my opinion, that's a huge red flag saying the professional is basically screwing you.

00:56:44.000 | Because it is a professional's job to make it clear.

00:56:48.000 | That doesn't mean that there's not going to be complicated language in a trust document.

00:56:52.000 | But it is a professional's job to be able to write on a single legal pad and explain what we're going to do.

00:56:59.000 | What we're going to do is draw a big circle. We're going to establish this trust.

00:57:03.000 | Into this trust, we're going to title your house, we're going to title your bank accounts, we're going to title your three investment houses, etc.

00:57:09.000 | And just boom, boom, boom.

00:57:11.000 | And so these terms of a marital trust versus – what was the other word you said?

00:57:15.000 | Survivorship.

00:57:17.000 | Okay, a survivorship trust. I don't know what they mean because they could mean various things.

00:57:24.000 | What I don't think she's talking about is the normal, ordinary use of these terms from an estate planning perspective.

00:57:31.000 | So often, for example, when we do estate planning, meaning that we're trying to minimize estate taxes,

00:57:43.000 | we'll set up a marital trust, which is a trust that has a goal of passing property to your married spouse that doesn't qualify for your own exemption.

00:57:53.000 | So you'll split your assets.

00:57:55.000 | If you've got $10 million of assets and you have a $5 million estate tax exemption, what you may do is, in some cases,

00:58:03.000 | when you die, you'll put $5 million over here into a trust for your beneficiaries,

00:58:09.000 | and then you'll have everything over and above that go to your spouse.

00:58:12.000 | And then your spouse will spend money, and then when your spouse dies, you'll have something that continues on from there.

00:58:16.000 | But I don't think any of that applies because you're not in that world yet.

00:58:20.000 | So a marital trust, I don't know what it is, and I don't know what a survivorship trust is.

00:58:26.000 | They're not terms that I can explain.

00:58:29.000 | I'm not an attorney, but I do have a decent amount of experience in this area.

00:58:33.000 | I don't know what they are, so I couldn't argue for one or the other.

00:58:36.000 | What I'm guessing is it may be something relating to a testamentary trust with survivorship.

00:58:44.000 | Maybe she's talking about either setting up a revocable living trust now that comes into being now and that you fund now,

00:58:50.000 | or she could be talking about a trust that is in your will.

00:58:54.000 | But I don't understand those terms enough to articulate benefits and disadvantages either way.

00:58:59.000 | Okay. All right. Fair enough. I appreciate the help.

00:59:03.000 | That's her job. All right. We move on to Ross in Texas.

00:59:07.000 | Ross, welcome to the show. How can I serve you today?

00:59:10.000 | Hey, Joshua. Thanks for taking me.

00:59:12.000 | I am heading to Mexico tomorrow. I'm moving there for a while.

00:59:15.000 | Awesome.

00:59:16.000 | My question is, how would you, with your experience learning multiple languages and teaching them to your kids,

00:59:23.000 | how would you start to approach language acquisition, knowing what you know now?

00:59:29.000 | And then related to that, what kind of goals do you set?

00:59:32.000 | For example, a certain amount of words that you need to learn or a certain grade on a language test, that type of thing.

00:59:39.000 | Just curious to hear how you approach that.

00:59:41.000 | Do you have any background with language learning at all?

00:59:44.000 | Have you ever studied a foreign language?

00:59:46.000 | Very basic. Yeah, very basic.

00:59:50.000 | And what was the foreign language that you previously studied to a basic level?

00:59:55.000 | I took Mandarin in high school and then learned Japanese a little bit while I was over there,

01:00:01.000 | and then done Duolingo for Spanish.

01:00:03.000 | Cool. Cool.

01:00:04.000 | Yeah. Never conversational by any means.

01:00:07.000 | Okay. Well, the good news is, compared to Mandarin and Japanese, Spanish is going to be a breeze,

01:00:13.000 | and you're going to have a great time.

01:00:16.000 | Mandarin and Japanese have such a high learning curve for various reasons

01:00:22.000 | that you're going to be shocked at how quickly you can acquire Spanish.

01:00:26.000 | So I'll give you my suggestions of what I would do.

01:00:29.000 | First, I would recognize that for you to learn Spanish to a basic, kind of intermediate, comfortable level is a 600-hour project.

01:00:41.000 | That's the data that comes from the Foreign Service Institute in the United States

01:00:45.000 | that has decades and decades of teaching English speakers foreign languages,

01:00:50.000 | and so it's a 600-hour project.

01:00:52.000 | And the reason I say that is you can now calculate how quickly you want to be what we're going to call fluent in Spanish.

01:01:01.000 | Do you want to be fluent in three months?

01:01:04.000 | Well, 600 hours divided by 90 days means 6.6 hours per day.

01:01:09.000 | If you could do 6.6 hours of language study in three months, then you'll be fluent.

01:01:15.000 | On the other hand, is it going to be two years?

01:01:17.000 | If you study an hour a day, then it's going to be about two years before you achieve anything resembling fluency.

01:01:24.000 | And while I believe there are good tools and tactics and techniques for acquiring languages efficiently,

01:01:32.000 | there is no question that language learning takes time.

01:01:37.000 | So I would encourage you to decide how quickly do you wish to be fluent,

01:01:41.000 | even to the point where quite literally two months from now, right,

01:01:45.000 | if you did two months, 60 hours, 10 hours a day,

01:01:48.000 | if you could do 10 hours of language exposure, then you're going to have great results.

01:01:56.000 | And can you do it?

01:01:58.000 | If you have the motivation, the personal motivation to acquire the language very quickly

01:02:04.000 | and the resources to be dedicated to it, then you can do it.

01:02:08.000 | I'll give an example here.

01:02:09.000 | One of the guys I have learned a lot from over the years is a linguist named Steve Kaufman.

01:02:16.000 | He is the founder of the app that I'll recommend in a moment called LingQ.

01:02:20.000 | He's an older guy now, which is really inspiring because he's learned 15 languages since he was 60 years old.

01:02:26.000 | But what's interesting is when he was younger, he was sent to by the Canadian government.

01:02:33.000 | He had a job to be a diplomat for the Canadian government.

01:02:37.000 | And at this time, this is back in the 1970s, when mainland China was just starting to open up

01:02:43.000 | and the Canadian government was going to open an outpost in China.

01:02:49.000 | So to prepare for that, they sent him to Hong Kong with the sole focus of learning Mandarin Chinese.

01:02:56.000 | And of course, that was not the easiest thing because Hong Kong is a Cantonese-speaking region.

01:03:01.000 | But nevertheless, that was the plan.

01:03:04.000 | And in about 8 to 10 months, I forget the exact number, but it was less than a year,

01:03:09.000 | it was about 8 to 10 months, he became fluent in Mandarin Chinese.

01:03:13.000 | Fluent defined and measured by being able to pass the highest level of fluency exams that he needed

01:03:18.000 | for his certification, doing various translation tasks, etc.

01:03:22.000 | The reason he became fluent in Mandarin Chinese, which is not a 600-hour language,

01:03:27.000 | but is a 2000-hour language or 2200-hour language,

01:03:31.000 | the reason he became fluent is that that was his only goal and his only task.

01:03:37.000 | So from morning till night, he was studying Chinese.

01:03:40.000 | And very, very quickly, he was able to become fluent in Mandarin Chinese.

01:03:44.000 | So you'll have to assess how much time you have and how much time you want to put into it.

01:03:50.000 | But that's the key, is to recognize, I need 600 hours to achieve intermediate fluency.

01:03:57.000 | And by intermediate fluency, let's define the term.

01:03:59.000 | This means able to be comfortable in virtually all ordinary circumstances,

01:04:04.000 | interacting with people in social environments, able to engage in complex conversations.

01:04:12.000 | You could sit down with anybody over a cold drink and engage in complex conversations.

01:04:19.000 | What you won't be is as perfectly erudite as you might like to be.

01:04:25.000 | You'll probably still be coming across many words if you're reading advanced novels.

01:04:30.000 | You'll still be learning many words.

01:04:32.000 | And you may have to prepare and practice a little bit if you're going to deliver a lecture

01:04:38.000 | in a college classroom on an advanced, sophisticated subject.

01:04:42.000 | But for the ordinary expat who wants to be able to be functioned fluidly in the Mexican culture,

01:04:49.000 | then this is your B2, C1 level on the European framework for languages is what we,

01:04:56.000 | is I think an ideal level to shoot for.

01:04:59.000 | So point number one, advice number one.

01:05:01.000 | Ask yourself, how quickly do I want it?

01:05:03.000 | And how can I start tracking the hours?

01:05:06.000 | What I do is I use a time tracking app on my phone and watch.

01:05:11.000 | And then I just actually track the amount of time that I'm putting into language study.

01:05:15.000 | And so that way I know, hey, I'm at 100 hours, well I should have minimal expectations.

01:05:19.000 | I'm at 400 hours and you'll see the difference between those numbers.

01:05:24.000 | Number two, in order for you to reach 600 hours,

01:05:29.000 | you will need to find some kind of language activity that you can do.

01:05:34.000 | And that language activity needs to be a balance of productive and effective,

01:05:40.000 | but doable and enjoyable.

01:05:42.000 | So because we need to put something in for 600 hours,

01:05:45.000 | if I gave you a task, a language task that was exceedingly difficult,

01:05:51.000 | that you just had no joy in doing,

01:05:54.000 | then quickly we would destroy your motivation to the point where you're just not going to do it.

01:06:01.000 | And so it doesn't matter how effective the task is,

01:06:04.000 | you're not motivated to do it and you certainly can't get 600 hours in.

01:06:07.000 | On the other hand, if I give you a task that may not be the most efficient

01:06:12.000 | or the perfect way of acquiring a language,

01:06:15.000 | but it's something you genuinely enjoy,

01:06:17.000 | or at least you can do without feeling like, I can't do this anymore,

01:06:21.000 | then we've got a winner.

01:06:22.000 | And we can get you to the 600 hours and you'll get great results.

01:06:25.000 | Does that make sense?

01:06:27.000 | So, go ahead. I saw you unmute yourself. Go ahead.

01:06:31.000 | Yeah, I was just going to say, absolutely, that's exactly the type of answer I was looking for.

01:06:35.000 | Okay.

01:06:36.000 | So what you should do then is you should ask yourself,

01:06:39.000 | what kinds of language activities are likely to be effective for me?

01:06:46.000 | If you're a very extroverted guy and maybe you love to date,

01:06:51.000 | there are guys out there who their entire language learning apparatus is set with,

01:06:59.000 | I learned a couple hundred words and I go out on blind dates on Tinder with Mexican girls.

01:07:05.000 | And we kind of struggle back and forth and they pick up their Spanish in that way.

01:07:09.000 | On the other hand, if you're an introverted guy and you don't want to go out there and bumble along,

01:07:13.000 | then doing intensive language study in your room by yourself is going to be a good factor.

01:07:19.000 | If you're a reader in English,

01:07:21.000 | then reading in Spanish is probably going to be a really great way for you to acquire a language.

01:07:27.000 | On the other hand, if you never read a book in English,

01:07:29.000 | then having a language practice of reading a book in Spanish is probably not going to work.

01:07:36.000 | But maybe watching movies in Spanish with subtitles is a really great language activity.

01:07:41.000 | You might be the kind of guy who does really well in a classroom environment,

01:07:45.000 | both with kind of a structured curriculum and the discipline of showing up to class.

01:07:51.000 | And in that situation, the first thing you should do is sign up for a Spanish class.

01:07:55.000 | On the other hand, you might be a motivated self-studier, an autodidact,

01:08:01.000 | and you realize that I just don't like wasting time in class waiting for other people,

01:08:05.000 | and so I'm going to study on my own.

01:08:07.000 | And so you think about your personality and recognize,

01:08:11.000 | I need to get 600 hours of exposure to the language.

01:08:14.000 | So what activities am I most likely to enjoy as I'm working my way through the 600 hours?

01:08:20.000 | And then try to do that.

01:08:21.000 | You can do 600 hours in a classroom.

01:08:23.000 | You can do 600 hours sitting at home watching Netflix.

01:08:26.000 | You've just got to get to 600 hours.

01:08:28.000 | The third basic concept is the idea of comprehensible input.

01:08:34.000 | And basically, to simplify this,

01:08:37.000 | comprehensible input has been made very, very popular by a linguistic professor named Steve Krashen.

01:08:47.000 | I always have to go back and forth between Steve Kaufman and Steve Krashen.

01:08:49.000 | Steve Krashen, Professor Stephen Krashen from a university in California,

01:08:53.000 | I think University of California, Berkeley maybe.

01:08:56.000 | And he has basically this concept of comprehensible input.

01:09:00.000 | And the idea is that if you are exposed to language that you can understand,

01:09:09.000 | your brain will acquire the language.

01:09:13.000 | Human brains are language machines.

01:09:16.000 | We are people of the word, right?

01:09:18.000 | We are people of words.

01:09:21.000 | So our brains are uniquely wired for language acquisition.

01:09:25.000 | The key is simply that we need to be exposed to language input that we can understand.

01:09:32.000 | So in the beginning, this language input that you can understand has to be very simple.

01:09:38.000 | As your comprehension increases, then you can be exposed to increasingly complex texts.

01:09:48.000 | The way that we handle this for children is we make language understandable by context and by repetition.

01:09:56.000 | And so that context can be the way that we talk to our baby when we're changing his diaper,

01:10:00.000 | the way that we talk when he's walking across the floor.

01:10:03.000 | He starts to understand very quickly the difference between praise and criticism.

01:10:11.000 | If we reach out to a toddler, in a two-year-old, I do this thing when I'm talking about this in person, right?

01:10:18.000 | If I say to you, if I'm holding a cold bottle of beer in my hand, and I reach out to you and I say, "Quiero una cerveza,"

01:10:27.000 | even if I string all the words together, the fact that I'm reaching out to you with a cold bottle of beer

01:10:34.000 | and kind of offering it to you, and I say, "Quiero una cerveza,"

01:10:38.000 | then you don't need to know that what I've actually done is I've asked you a question like,

01:10:44.000 | "Usted quiere una cerveza?"

01:10:47.000 | I just said, "Quiero una cerveza," like, "Do you want a beer?"

01:10:50.000 | You're understanding it by context that I'm reaching it out to you.

01:10:53.000 | So as adults, we can use tools to make language accessible.

01:10:59.000 | Some of those tools are context.

01:11:01.000 | Some of those tools are pictures.

01:11:03.000 | Some of those tools can be video, right?

01:11:06.000 | You can watch a Spanish movie, and you may not understand many of the words,

01:11:09.000 | but because of the seeing what's going on, you'll have some context.

01:11:13.000 | One of those great tools is translation.

01:11:15.000 | So studying word cards and learning words with translation is, I think, a phenomenal starting point of tools,

01:11:23.000 | and that's the--so all of those are useful tools.

01:11:28.000 | But you basically need to get language to be understandable,

01:11:31.000 | and then as you progress in your language studies, you can understand more and more,

01:11:35.000 | and so you keep being exposed to comprehensible input.

01:11:38.000 | In the beginning stages, I think the most important thing for you to learn

01:11:44.000 | or for you to do is to focus on input, and input meaning audio input,

01:11:49.000 | things that you can understand sort of, that you like to listen to.

01:11:53.000 | That can include things that you watch, movies that you watch or videos that you watch,

01:11:57.000 | things that you can understand with whatever tools you're using

01:12:01.000 | and that you like to be attracted to, and/or reading,

01:12:04.000 | so reading things that you're interested in and using tools to make that reading more accessible to you.

01:12:09.000 | So always remember, I just need stuff that I can understand, and I need input.

01:12:13.000 | If you want to go for output in the beginning, so talking and writing, then it doesn't hurt.

01:12:19.000 | It's a useful form of exercise.

01:12:21.000 | I don't think it's very efficient for me. I don't enjoy it.

01:12:24.000 | I like to reach a good, solid middle level in a language before I worry about output,

01:12:30.000 | but your mileage may vary.

01:12:32.000 | There's no question that some forms of output are useful language tools.

01:12:37.000 | If you want the science of the best way to go,

01:12:44.000 | the guy who I think is the best on this is a professor named Professor Paul Nation.

01:12:50.000 | And Professor Paul Nation is a professor of linguistics at a university in New Zealand.

01:12:57.000 | I'm not sure which.

01:12:59.000 | And he for years has researched and talked about how to learn a language.

01:13:04.000 | And if you go to YouTube and you search Paul Nation, or if you go to his website,

01:13:09.000 | you'll find he has various resources available.

01:13:14.000 | And he has a paper called something like--let's see if I can find it real quick here--

01:13:21.000 | "What Do You Need to Know to Learn a Foreign Language?"

01:13:23.000 | And so if you just search Paul Nation, "What Do You Need to Know to Learn a Foreign Language?"

01:13:28.000 | you can find a PDF of his paper.

01:13:30.000 | And it will go through and give you an overall approach of how to learn a foreign language.

01:13:35.000 | And it's an excellent paper, and it will give you a good overview of the academic perspective.

01:13:42.000 | I've never found an academic resource that was available to a layperson

01:13:45.000 | that does a better job of explaining how to develop these different kinds of fluency.

01:13:51.000 | In terms of tools, what I would do is I would start by grabbing a pre-prepared deck of Word flashcards.

01:13:59.000 | If you like paper ones, I think the paper ones are great.

01:14:03.000 | Go on Amazon, search for a thousand Spanish words, and just grab a deck of vocabulary cards.

01:14:08.000 | You can use a spaced repetition system online, and that will work excellently.

01:14:14.000 | So if you grab kind of a beginner Spanish level Anki deck or something like that,

01:14:19.000 | that's a great system as well, and for many people a better scenario.

01:14:23.000 | You basically, in my opinion, should kind of brute force your first thousand words

01:14:28.000 | just through memorizing the words.

01:14:30.000 | The second specific tool that I love is I love a tool called LingQ.

01:14:36.000 | L-I-N-G-Q.com.

01:14:39.000 | And this for me was the game changer of my language acquisition.

01:14:44.000 | Because what it allows me to do is it allows me to get exposed to content that I enjoy being exposed to,

01:14:53.000 | and to do it, and it becomes comprehensible through the use of translation.

01:14:59.000 | One of the keys to comprehensible input is that if possible, you want to have very compelling comprehensible input.

01:15:07.000 | If input is compelling, then it makes it even easier to absorb and to learn the language.

01:15:12.000 | So what is compelling input?

01:15:14.000 | Well, it's anything that's compelling for you, but this is hard for beginning language learners to go.

01:15:20.000 | Your first 50 hours or so are probably not going to be super interesting stuff

01:15:24.000 | because you're dealing with basic dialogues, basic words, etc.

01:15:28.000 | And so what I like, if I could only choose one tool, the only tool I need is LingQ.

01:15:34.000 | And in LingQ, there are a series of beginner courses, and I work my way through those beginner courses.

01:15:41.000 | So I use what are called the LingQ mini stories.

01:15:43.000 | They're these little stories that are three or four minutes long.

01:15:47.000 | I listen to the stories. I use the functionality to translate the stories.

01:15:52.000 | I listen to them again and again and again, and because they're stories and they're really well designed for repetition,

01:15:56.000 | they're really, really good.

01:15:58.000 | So if you only did one thing, then I would sign up for LingQ, and I would go through, as a beginning resource,

01:16:04.000 | I would go through their mini stories course.

01:16:07.000 | They have a bunch of other kind of beginner level stuff in there,

01:16:10.000 | and very quickly you can get to, again, maybe 20, 30 hours, something like that, of that kind of content.

01:16:18.000 | You can quickly get to more interesting content.

01:16:21.000 | If you read at all, I think reading is your fastest and most effective way to acquire a language,

01:16:31.000 | especially the Spanish language, that has a perfect representation of the spoken word to the written word.

01:16:39.000 | Spanish is one of the easiest languages in the world to learn because there are no complicated phonetics.

01:16:45.000 | There are no complicated spellings. Everything is very straightforward.

01:16:48.000 | You have five vowel sounds, a, e, i, e, o, u.

01:16:51.000 | I can give you a five-minute lesson on reading Spanish, and you can read Spanish for the rest of your life.

01:16:55.000 | You may not understand it, but you'll read it, and you'll do it well.

01:16:58.000 | I can't do that with Japanese if I've got to go and teach you the, you know, the shiragama or whatever they're called,

01:17:02.000 | or Chinese, et cetera, where you have a lot of--

01:17:04.000 | Three alphabets.

01:17:05.000 | Yeah, you have three alphabets in Japanese, or we've got to go through and memorize all the Chinese characters.

01:17:11.000 | So Spanish is super easy.

01:17:13.000 | So the other comment is that from an efficiency perspective, in the beginning stage of language learning,

01:17:19.000 | your goal is to get exposed to as many words as possible.

01:17:23.000 | And I don't even think it matters that you try to remember the words.

01:17:26.000 | The goal is just to expose yourself to the words.

01:17:29.000 | Your brain will have a number of exposures that it needs to remember the word.

01:17:35.000 | Maybe it's 12.

01:17:36.000 | There's no research number that I know.

01:17:39.000 | Maybe it's somewhere between 10 and 20.

01:17:41.000 | Once you're exposed to the word "cerveza" between 10 and 20 times, you're going to remember it.

01:17:45.000 | You probably already know that Spanish word because it's one you've been exposed to in time,

01:17:49.000 | but the same thing happens with every other word.

01:17:51.000 | "Agua," "cerveza," "caballo," all these words that you know because you've heard them in the past and been exposed to them.

01:17:57.000 | Now in terms of exposure, here are my metrics that I've learned.

01:18:02.000 | When I read in a foreign language, if I can get to the point where I can read something with a narrator at normal language speed,

01:18:12.000 | meaning an audiobook or something like that, most audiobook narrators read at a rate of 8,000 words per hour.

01:18:19.000 | That's my calculation.

01:18:22.000 | That is twice the word density as I can get from movie watching.

01:18:27.000 | So when I watch a movie, that can be a very enjoyable form of exposure, but all else being equal,

01:18:33.000 | I'm getting half the word exposure as reading.

01:18:37.000 | And then I can go, once my reading fluency speed is beyond the natural rate of human speech,

01:18:46.000 | now my word exposure just increases.

01:18:49.000 | What I've observed coaching my children in their language acquisition is that my students reach a point where up until I give them beginner materials,

01:18:59.000 | until they're reading okay, then I bring in an audiobook narrator and I have them read audiobooks with narration.

01:19:07.000 | And then they reach a point in time where they become frustrated with having to be slowed down by the audiobook narration.

01:19:13.000 | So now we can get up to 10,000, 12,000 words per hour.

01:19:17.000 | They're going to learn a lot more words through reading than any other input.

01:19:20.000 | So if you like reading or if you can discipline yourself to like reading, I think that's the most efficient way to get exposed.

01:19:27.000 | And then you want to also add to that good audio content, podcasts, movies, etc., so that you can develop your ear for the different accents.

01:19:37.000 | The great thing is the Mexican accent is a wonderfully easy, of course there are many Mexican accents,

01:19:41.000 | but the standard Mexican accent is very easy to get used to, vastly easier than the Dominican accent or the Cuban accent, etc.

01:19:50.000 | Final comments would be if you also want something else, I have had good success with something like an Ossie Mill course.

01:20:00.000 | So if you want to grab yourself an Ossie Mill course or any other structured course,

01:20:05.000 | if you're the kind of guy who works well with a book, a teach-yourself book or an Ossie Mill book or a living language book,

01:20:11.000 | just going through those or Pimsleur, an audio course, basically pick any one or two courses and work your way through.

01:20:18.000 | And what I have found, many language learners advise picking one course and going through it.

01:20:25.000 | I don't enjoy that because then I have to exercise discipline to keep myself focused.

01:20:30.000 | What I have found I like is I like variety, and so I'll pick a couple different courses and just kind of work my way through them,

01:20:35.000 | and that is helpful as well.

01:20:38.000 | So I think I covered the important points there.

01:20:42.000 | The key is exposure, the key is finding an activity that you like that will get you to 600 hours,

01:20:48.000 | and then finding some tools that work for you.

01:20:51.000 | Now, what I finally comment with, I would encourage you to go and join the Learn Spanish subreddit.

01:20:57.000 | There's a subreddit for every language and it's one of the best places.

01:21:02.000 | There are also some great formats.

01:21:05.000 | I really love Graded Readers, if you can have access to Graded Readers.

01:21:08.000 | Those are wonderful, so you can find tons of Graded Readers if you're willing to spend the money.

01:21:15.000 | There are several big Graded Reader platforms available.

01:21:19.000 | Olly Richards' stuff is great.

01:21:23.000 | Basically, you can't go wrong with materials, and what I usually find is that I'll invest in 5, 10 different things,

01:21:32.000 | and then you just kind of see what sticks, and if something doesn't stick now, just go on to something that does stick,

01:21:37.000 | and you come back and do something else.

01:21:40.000 | Final resource that I really love is there is a YouTube channel called Ayon Academy, A-Y-A-N, Ayon Academy,

01:21:52.000 | and what they're doing on this YouTube channel is they are using some of the older textbooks that were created for language learners,

01:22:03.000 | using the so-called natural method, and I'll skip the lecture on that,

01:22:08.000 | but basically the idea is learning Spanish in Spanish from the very beginning,

01:22:12.000 | but they've taken some of these old textbooks and they've added a narrator,

01:22:18.000 | and they have people working their way through them.

01:22:21.000 | So I would go on YouTube, search for Ayon Academy Spanish, go through a couple of their early lessons,

01:22:28.000 | and then if you want, you can sign up for their Patreon and you get all the audio and you can go through the books.

01:22:33.000 | They have a couple of Spanish books that are really good as well.

01:22:37.000 | So I think we used those really effectively with German in our homeschool, and they were big winners.

01:22:43.000 | But the big important points is what I said, finding some form of language exposure that you like

01:22:53.000 | so that you can get your way through the hours necessary and finding material that you can understand and that pulls you in.

01:23:01.000 | Whatever that is for you, that's what you need.

01:23:04.000 | Awesome. Thank you so much, Joshua. That's really – I got a lot of tabs pulled up here.

01:23:10.000 | I was Googling things and downloading that PDF as you were talking.

01:23:14.000 | You previously exposed me to Xiaoma in New York City, and I've been watching his stuff too.

01:23:20.000 | He's fantastic.

01:23:22.000 | Yeah, learning Korean in 24 hours and stuff like that.

01:23:25.000 | And if you –

01:23:26.000 | Yeah, that's all very useful, and I probably will call back in future weeks with more expat questions.

01:23:32.000 | Go for it. Go for it. I think you're going to – where in Mexico are you headed?

01:23:36.000 | Mexico City.

01:23:37.000 | Great. And do you have a job, or are you just going to try it out? What's taking you there?

01:23:43.000 | Yeah, so that was one of my other questions, but I'll save it for another week.

01:23:47.000 | I'm quitting my W-2, and then I'll be working on a contract basis.

01:23:53.000 | So a question around taxes there and stuff for another time.

01:23:57.000 | Okay. Yeah, save it for another time.

01:23:59.000 | Mexico City is – just be prepared. It's huge.

01:24:02.000 | Yeah.

01:24:03.000 | It's an interesting place. I don't love it myself because I don't – I'm not really a mega city guy,

01:24:09.000 | but it is no question is a huge place.

01:24:12.000 | It's got lovely neighborhoods and cultural events, et cetera.

01:24:16.000 | So my only comment is don't get involved in drugs or gangs.

01:24:19.000 | I don't worry too much about Mexican violence because it's all associated with drugs or gangs.

01:24:24.000 | But don't buy drugs. Don't do drugs. Don't sell drugs.

01:24:27.000 | Don't get involved because there are real dangers if you get involved with drugs or gangs.

01:24:30.000 | But as long as you stay away from drugs and gangs, then you're good to go.

01:24:35.000 | Exactly. I appreciate that advice.

01:24:37.000 | All right. Call back in the future. I'd love to hear back from you.

01:24:40.000 | And we go now to Jordan in New York.

01:24:43.000 | Jordan, welcome to the show. How can I serve you today?

01:24:45.000 | Hey, thanks. I have listened to you for probably the last year and a half and really enjoyed it.

01:24:51.000 | I'm a new patron, but glad to talk to you today.

01:24:53.000 | Thank you.

01:24:54.000 | I was hoping you could help me think through a couple of things in terms of my career.

01:24:59.000 | I am 37 and married. My wife's just a little bit younger than I am.

01:25:04.000 | We are we have no kids now, but we're trying to have a kid.

01:25:09.000 | We're both healthy and we do expect some possible complications in the pregnancy.

01:25:14.000 | But otherwise, we're healthy. I'm a software developer.

01:25:17.000 | Currently, I teach software engineering, making one hundred and forty five thousand a year.

01:25:23.000 | And as far as sort of what to do next, I have three things in mind and I'm trying to decide.

01:25:30.000 | So first, I could go get a job as a as an actual engineer instead of a teacher and probably bring my salary up to maybe one eighty five to 15 somewhere, somewhere in there.

01:25:41.000 | In the course of my teaching, I started an application where I track new software developers and it's been very successful at the school I work for.

01:25:50.000 | I. I went to them and told them that they needed to relinquish any rights to it if they wanted to keep using it.

01:25:56.000 | So I have a contract that says that I, I own all of that software that I've developed.

01:26:00.000 | So I'm interested in pursuing that as a business. And then the third thing is I've had pretty good success for the last four or five years buying properties outside of New York City and renovating them, mostly homes and small apartment buildings.

01:26:11.000 | So I've got a small portfolio of three of those. I've got people that are always happy to lend me money at a good rate to do more of that.

01:26:18.000 | And so now I'm just trying to decide which of those things to do next.

01:26:23.000 | When you look at those options. So I understand that you're hoping to have children, but I don't think that that should be a very significant component of your decision tree at this point in time.

01:26:40.000 | Number one, you're not currently expecting a child. So get back to me when your wife's actually pregnant. Also, if you're expecting complications or you're concerned about potential complications, get back to me when you've reached, you know, 25 weeks or something like that.

01:26:59.000 | Because for all we know, getting to 25 weeks in a pregnancy might be three years away. If your wife, if you conceived today and she had a miscarriage, well, you're six months away from getting to even, you know, 12 weeks on, etc.

01:27:13.000 | So, and then finally, number three is that babies are not that disruptive to your life. They're disruptive to mama's life big time, but they're not going to be that disruptive to your life.

01:27:26.000 | And babies are pretty easy to deal with once you get a couple months of experience, right?

01:27:33.000 | It's going to feel super intimidating the first time around. It's like, "Oh, we got a new baby. I don't know." It'll be really intimidating for your wife, you know, and she's going to take her a few months to kind of find her groove and build some confidence as a mother, etc.

01:27:45.000 | But in terms of disruption to your life and your lifestyle, babies are easy. Babies don't need to go to school. Babies don't need to, you know, be in a certain place. You don't have to make any big decisions. They're just babies.

01:27:56.000 | And that basically continues for, you know, the first, I mean, there are ranges, right? But you don't need to worry from zero to five. Your child can be anywhere, do anything. It just doesn't really matter.

01:28:11.000 | Five to ten, your child can probably still be anywhere, do anything. You start to get to ten and you reach those times where you realize adolescence is right around the corner.

01:28:22.000 | What exposure does my child need, etc. So the point is that you have at least several years at which other than if you have costs associated with pregnancy or fertility treatments or anything like that, that's a financial factor.

01:28:39.000 | There's some planning involved in terms of where do you want to be to give birth. If your wife is maintaining her career, then that's hard to figure out sometimes. But in terms of from your perspective, I don't think that children need to be a major factor in any of this at this point in time.

01:28:56.000 | Yeah, that makes sense. Okay. So now then you can just simply use your mindset of what's best for me right now and what will be best for me in 15 years. And so that's where I think children can play in, right? If you say what kind of lifestyle do I want 15 years from now, that's a motivating factor.

01:29:17.000 | The obvious difference that I would see between one, two, and three is that number one, choice number one for you to be an engineer, that's going to come with a specific time requirement. Choices two and three don't come with a time requirement.

01:29:34.000 | Now, assuming that you are planning to work, I don't care about the time requirement in terms of the time. But what I do care about it is in terms of the compounding effect of it. When you are required to work for time, your income will never grow exponentially because the limiting factor is your time.

01:29:56.000 | Whereas if you are not working for time, your income can grow exponentially. So the software business has the advantage of if there are clients for it, and if you can put it up on a platform where it's available for sale, it doesn't matter whether you sell 10 units of software or 10,000 units of software.

01:30:17.000 | Your time is not connected to the results. You have to maintain the code base or whatever is necessary for the actual product. But in terms of the exponential potential of the product, your work ideally, I need to be careful of customer service work, etc. But you can hire a lot of that stuff done.

01:30:40.000 | Your time involvement will not be materially different if you sell 10 units of software versus 10,000 units of software. And so that alone means that financially, the software business has far more upside than number one.

01:30:57.000 | Because if you take a job as an engineer, your job is going to require you, okay, here are your 50 hours a week and you know what's taken with it. Now number three is similar to number two in the line that your results are not time-driven.

01:31:12.000 | Although there is probably more of a connection, right? Let's say you had all the money in the world, maybe you could close, you could search out, find appropriate properties, maybe you could close two deals a month, right? In a perfect world with all the money in the world and a perfect lead flow, etc.

01:31:29.000 | So you're not going to be able to go from two to 20, but still, if you could close two deals a month, that'd be pretty huge. You're going to face more problems there related to the market. Deal flow is going to be your biggest constraint. You've demonstrated your ability.

01:31:45.000 | And so access to financial capital will be a constraint, but probably your biggest constraint would be deal flow. Because when you go from casually looking for a couple of properties here and there and picking up two or three of them to saying, I'd like to pick up 10 of them, well, where am I going to source 10 deals? Are they even available right now in terms of the market cycle? Does the numbers work, etc?

01:32:08.000 | And so my first point would be that choice number one is very different from two and three.

01:32:14.000 | What immediately struck me was if you can work out something where two and three both work together, those could be really good complementary features.

01:32:27.000 | Because if you could, depending on the time requirements from you, if you could run a software business that is buttressed by the fact that you also have real estate interests, then the software business can percolate along naturally.

01:32:43.000 | And you may have a fairly niche specialty product and it may just take time for it to be established in the marketplace. Or you may never sell 10,000 units of it.

01:32:54.000 | And then the property buying is that property can work really well when there's deals.

01:32:59.000 | And so if you have the ability to switch back and forth between those, it could keep you interested in both of them and they could work effectively together.

01:33:07.000 | The reason I would say for you to consider keeping a job is either that the job is not getting in the way of your other opportunities, or if you need the money from the job to successfully execute the other opportunities.

01:33:25.000 | So otherwise, the job will quickly become an impediment to your long-term wealth building because it requires your time and your physical presence.

01:33:35.000 | Yeah, that all makes sense. That sort of brings me to where I am, where I'm feeling like I make, I know I grew up pretty poor, so what I make now feels like I'm a king.

01:33:47.000 | Plus I've got at least some rental income on top of that, which all feels great.

01:33:53.000 | So I have a hard time letting go of my job or even thinking about going part, I could probably go part-time, maybe a quarter time or something like that, which would free up a lot more time for my software development business.

01:34:04.000 | And then just the, I don't know, the short-term lack of income. I agree with everything you said. The short-term lack of income is like, makes me clench up a little bit.

01:34:13.000 | And maybe it should, right? We haven't talked about how much money you've saved, we haven't talked about your expenses, etc.

01:34:19.000 | And so you might need to go through and say, "Hey, the fact that I don't really want to do this means, what could I do?"

01:34:25.000 | Maybe we could cut our expenses, maybe I could just set aside more of a stash so I'd feel really comfortable with it. You can assess those things.

01:34:32.000 | My point is, the framework to make, the lens that I think is most powerful or the mental model that is the most applicable to this kind of decision has to do with opportunity cost.

01:34:43.000 | And so, if I'm projecting on you a little bit, but probably accurate, you can protest if you don't like it.

01:34:49.000 | But right now, if you weren't working a job right now, you might be, you know, sitting at the beach.

01:34:56.000 | So clearly, working at the job and earning money and building your professional skills, etc. is the best solution.

01:35:04.000 | Now, if the job is keeping you from developing a software business that actually has much higher potential, I don't know if it does, I'm just assuming that you're thinking about it because it probably does, you see more potential for it.

01:35:16.000 | So, if the job is getting in your way and you're saying, "Man, if I could just take, you know, 160 hours this month and instead of having to go into the office and deal with these bozos on their project, I could sit at home and I could get my own project, then I could get this thing in saleable shape, I could sell 10,000 units at X dollars and I could make, you know, 2 million dollars."

01:35:34.000 | Well, clearly then the job is a hindrance.

01:35:36.000 | And so, you dump the job because it is a, you dump the job because it's a hindrance to the software business.

01:35:43.000 | Or, similarly, if the job is a hindrance to your real estate, you're like, "I've got three properties I found in Tulsa, but I can't fly to Tulsa and go to work as well, so I'm going to go to Tulsa."

01:35:53.000 | So, what are you giving up?

01:35:56.000 | Now, opportunity cost is also an appropriate framework for what you mentioned with hoping to have children.

01:36:03.000 | Today, you have no risk in life.

01:36:06.000 | You said your wife is earning an income as well, right?

01:36:09.000 | Yeah, it's significantly less, but yes.

01:36:12.000 | Okay, could you live on her income?

01:36:15.000 | Between her income and the rental income, we could probably live a bit more modest than we do now, but otherwise reasonably comfortable, yeah.

01:36:22.000 | Okay. So, unless there's some reason why living, you know, to that level of modesty is a really bad thing, then you really have no danger.

01:36:31.000 | Because your wife is employed right now, assuming she intends at least to be employed until she has a baby, then you've got a year's runway, maybe less, but just imagine that you've got at least a year that you could go on.

01:36:48.000 | You have zero risk to going now.

01:36:51.000 | But what I want to do is I want to scare you for a moment.

01:36:54.000 | I want you to fast forward seven years.

01:36:57.000 | And your risk could change completely, and this is what so many men face.

01:37:02.000 | Your wife gets pregnant.

01:37:03.000 | She has a baby.

01:37:04.000 | She wants to be a stay-at-home mom.

01:37:06.000 | You want to support her in that.

01:37:07.000 | Great. Well, there goes her income.

01:37:09.000 | Now you're the sole breadwinner.

01:37:10.000 | Well, that's no problem.

01:37:11.000 | You've got some money.

01:37:12.000 | But all of a sudden now, the cost of living modestly feels much more acute than it did when it was just the two of you.

01:37:20.000 | Right now, the cost of living modestly might mean, well, let's go get cheese and wine from the grocery store and have a picnic in the park instead of going to a fancy restaurant.

01:37:27.000 | Whereas down the road, seven years, et cetera, the cost of living modestly is, yeah, I can't enroll my child in the school that I really want him to be in, or I can't do the opportunities that I really want.

01:37:38.000 | And it feels painful because there's more people hurting, and you feel like you're sacrificing.

01:37:43.000 | So the time to be aggressive, aggressive, aggressive with your career, with your investments, with et cetera, is when you're young because the risk of failure is very low.

01:37:54.000 | If you fail at, like, let's say that you want to start the software business, and you take the next year, and you quit your job, and you go, and you work at the software business.

01:38:05.000 | And let's assume it's a complete and total failure.

01:38:08.000 | Well, big deal.

01:38:09.000 | You go get an engineering job.

01:38:11.000 | And you increase $185,000.

01:38:13.000 | You had a year of living modestly, and you and your wife learned to enjoy cheese and wine in the park instead of a $300 a night at a restaurant.

01:38:20.000 | Big deal.

01:38:22.000 | So this is the time to go after it because the upside potential in terms of how it changes your life if you genuinely get a successful business or you genuinely get a successful property business going, et cetera, that is transformative.

01:38:38.000 | The job is not transformative now.

01:38:41.000 | Maybe it was before.

01:38:42.000 | If you grew up humble at Humble Origins, like, yeah, I'm making $145,000.

01:38:45.000 | Great.

01:38:46.000 | That's awesome.

01:38:47.000 | And you needed that.

01:38:48.000 | You need that, and you needed that.

01:38:50.000 | And making $145,000 is better than making zero.

01:38:53.000 | But if you have a desire to do more and you see a pathway that could succeed, then your biggest enemy is going to be time.

01:39:03.000 | And especially related to the natural family cycle, the time to strike is now because the engineering jobs are always going to be there.

01:39:12.000 | Engineers are not going out of business.

01:39:14.000 | And so as long as you keep your skills current, et cetera, make sure you're employable, you always have a backup plan.

01:39:21.000 | But life gets much more complicated five years from now, 10 years from now, whereas today dealing with that stuff is pretty simple.

01:39:30.000 | The only caveat I give to young men when I'm talking about this is a lot of times young men don't have the discipline to make use of this.

01:39:36.000 | I think of it myself.

01:39:38.000 | When I was early on, one of my biggest financial mistakes when I was younger was that I hired an-- I was in the insurance business at the time.

01:39:47.000 | I hired an assistant.

01:39:49.000 | And the idea was that my assistant was going to do more work, which was going to free me up to work more.

01:39:53.000 | But I was young and stupid, and I just stopped working.

01:39:56.000 | And I started hanging out and goofing off.

01:39:58.000 | I didn't do anything super destructive.

01:39:59.000 | I just didn't work.

01:40:00.000 | And so it wound up costing me everything.

01:40:03.000 | So a 20-year-old guy, if I'm talking to a 20-year-old guy, I'm like, dude, keep your full-time job and do another 50 hours a week on your businesses.

01:40:10.000 | But at 37, I'm assuming you have the character and the perspective and the sagacity of age to be able to say, no, if I'm going to walk away from a job for any reason, then I'm going to really put in the time on something else.

01:40:23.000 | And I'm going to watch my results and be careful about it because the goal is not to end up in the poorhouse.

01:40:28.000 | But it's easier now than it will be at 47.

01:40:32.000 | That all makes sense.

01:40:33.000 | I appreciate it.

01:40:34.000 | That all makes complete sense.

01:40:36.000 | Great.

01:40:37.000 | That sounds great.

01:40:38.000 | Anything else?

01:40:39.000 | No, no.

01:40:40.000 | I hope I'll call back another day.

01:40:42.000 | I have lots more things I'd love to discuss with you, but that's all for today.

01:40:45.000 | I would love to speak to you next week.

01:40:46.000 | And that would be fun.

01:40:49.000 | All right.

01:40:50.000 | And with that, we wrap up today's Q&A.

01:40:52.000 | Let me think of my closing announcements.

01:40:54.000 | Great show.

01:40:55.000 | What a great set of questions and topics, et cetera.

01:41:00.000 | I really enjoyed that today.

01:41:02.000 | Hope you enjoyed it as well.

01:41:03.000 | As we close, I guess I'll just say, be with me next week.

01:41:07.000 | Go to patreon.com/radicalpersonalfinance.

01:41:09.000 | Join me next week on the Q&A show, patreon.com/radicalpersonalfinance.

01:41:12.000 | I would love to speak with you then.

01:41:14.000 | Have a great weekend, everybody.

01:41:15.000 | [MUSIC PLAYING]

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2022-11-04_Friday_QA