2023-05-26_Friday

00:00:00.000 | With Kroger Brand products from Ralphs, you can make all your favorite things this holiday season.

00:00:05.240 | Because Kroger Brand's proven quality products come at exceptionally low prices.

00:00:09.920 | And with a money-back quality guarantee, every dish is sure to be a favorite.

00:00:14.760 | ♪ These are a few of my favorite things ♪

00:00:18.180 | Whether you shop delivery, pickup, or in-store, Kroger Brand has all your favorite things.

00:00:24.900 | Ralphs. Fresh for everyone.

00:00:30.360 | Welcome to Radical Personal Finance, a show dedicated to providing you with the knowledge, skills, insight, and encouragement you need to live a rich and meaningful life now,

00:00:37.100 | while building a plan for financial freedom in 10 years or less.

00:00:39.900 | My name is Joshua Sheets. I'm your host. Today is Friday, May 26, 2023.

00:00:44.600 | And on this Friday, as we do on any other Friday in which I can arrange the appropriate technology,

00:00:50.040 | we have a live Q&A show. You call in, talk about anything that you want, ask any questions, raise any topics,

00:00:55.820 | and we have a conversation. If you'd like to join me on one of these Friday Q&A shows, you can do that by becoming a patron of the show.

00:01:01.120 | Go to patreon.com/radicalpersonalfinance, patreon.com/radicalpersonalfinance,

00:01:06.460 | and sign up to support the show there, and you will gain access to these Friday Q&A shows.

00:01:11.200 | We begin with Annette in North Carolina. Annette, welcome to the show. How can I serve you today?

00:01:15.840 | Thank you, Joshua, for taking-- for answering these calls. I really appreciate it. I like this setup, too, anyway.

00:01:23.540 | I am calling about some tax strategies. I'm 68, and I teach, and I'm trying to figure out how to

00:01:31.720 | minimize my taxes or how to create a business with it.

00:01:36.420 | I have an LLC because I was a contract instructor, but they've made us W-2 employees.

00:01:44.700 | And I want to keep working, but I'm paying a lot of taxes. And, you know, they say, "Well, have more taken out."

00:01:51.200 | I'm doing that, but it's almost to the point where I'm going to just be working for free.

00:01:55.640 | Understood. What is your current income from your W-2 job?

00:02:00.240 | Well, I am retired, so I have a pension, and I'm doing Social Security.

00:02:07.020 | So my income is about-- with the part-time job, I teach one class online. That's all I do.

00:02:13.560 | So it's about $97,000.

00:02:16.060 | Okay, so your income from your W-2 job is $97,000. Is that correct?

00:02:21.600 | No, my W-2 from my job is about $14,000. And then I have a pension and Social Security all together.

00:02:30.040 | Okay, so $14,000 from the job. How much is your pension income?

00:02:33.880 | $55,000.

00:02:36.680 | And how much is your Social Security?

00:02:38.880 | $32,000.

00:02:41.260 | Okay. And in addition to that, do you have other sources of income from the business?

00:02:46.600 | Is the business profitable for you?

00:02:49.760 | I don't have a business. That's what I'm trying to--

00:02:51.600 | I understand.

00:02:52.600 | Okay, so you previously had an LLC, and you were previously--

00:02:57.840 | No, I still have the LLC, but I'm not able to use it because of the tax law in 2017.

00:03:06.440 | So it cut out a lot of those things that you could deduct.

00:03:10.280 | So I don't have those business-related expenses anymore.

00:03:15.960 | And so basically, because I'm a W-2 employee, you're no longer an independent contractor.

00:03:21.400 | Understood. Okay.

00:03:22.600 | For how much do you intend to teach for the foreseeable future,

00:03:28.000 | or do you intend to stop teaching at some point?

00:03:30.240 | Well, don't laugh. I think I'm only up to about 9 or 5 plus.

00:03:37.440 | Okay.

00:03:37.720 | And I like working, and I'm gifted.

00:03:40.880 | And so I will be teaching and doing other things.

00:03:42.960 | I want to create a course and use my teaching skills like that.

00:03:47.160 | I'm just trying to figure out some things.

00:03:49.760 | I was approached about teaching for a private school,

00:03:54.000 | but we figured it out.

00:03:55.280 | I mean, it amounted to about $12 an hour,

00:03:57.960 | because I would have to have so much taken out.

00:04:00.680 | Okay.

00:04:02.720 | So, by the way, I would never laugh,

00:04:06.000 | because one of my heroes is Dr. Leila Denmark.

00:04:10.920 | You ever heard of her from Atlanta, Georgia?

00:04:12.800 | I have not.

00:04:14.440 | Okay. So, Dr. Leila Denmark,

00:04:16.320 | she was a pediatrician from Atlanta, Georgia,

00:04:19.480 | and she worked as a pediatrician for almost 75 years.

00:04:25.040 | She retired at the age of 103 from active practice,

00:04:30.000 | and she lived till age 114.

00:04:32.880 | She was one of the first,

00:04:35.040 | I think she was one of the first women to graduate from medical school in the United States,

00:04:40.320 | and she had an incredible career, amazing woman.

00:04:43.600 | My wife was actually a patient of hers when she was a baby.

00:04:47.360 | My wife's mother took her to Georgia to consult with Dr. Denmark as a baby.

00:04:52.680 | And so, I'm never going to be the one who's going to laugh at you.

00:04:56.120 | I think that Dr. Denmark set the appropriate example for all of us

00:05:00.760 | of how to enjoy a career,

00:05:03.440 | how to bring meaning and purpose into the world.

00:05:05.720 | So, if you're looking for laughter, you're in the wrong place.

00:05:08.400 | (laughs)

00:05:10.400 | So, at the moment, you're planning to teach for the foreseeable future,

00:05:15.760 | and you have this income.

00:05:17.920 | What is your current living expenses?

00:05:21.800 | Um, very low, like, maybe $3,000.

00:05:30.000 | Do you have the option to suspend your pension payments?

00:05:34.680 | Any idea if you have that choice?

00:05:37.400 | I don't know. I might suspend the Social Security,

00:05:39.840 | but with the pandemic, you know, it had everybody kind of, you know.

00:05:44.440 | Yeah.

00:05:44.960 | Okay.

00:05:45.920 | So, let me give you the big picture,

00:05:47.560 | because the frustrating thing is there's not any great answer for you.

00:05:51.960 | The taxes that you pay are the taxes that you pay

00:05:54.880 | for the privilege of living in the United States and working in the United States.

00:05:59.480 | It just is what they charge you.

00:06:01.920 | And for living and working in the state that you live and work in.

00:06:05.240 | There's not a lot you can do in your current financial situation,

00:06:09.080 | but I'll tell you what you can do in just a moment.

00:06:12.000 | But just know that there's not a lot.

00:06:14.440 | And if you continue to teach, even if you are paying a significant amount of taxes,

00:06:20.120 | that could be a very smart thing for you to do,

00:06:23.560 | simply because you like to teach,

00:06:28.280 | and that's something that makes a difference in the world,

00:06:31.000 | and the burden might be the tax burden.

00:06:32.800 | So, let's walk through the different options that you face.

00:06:36.160 | When you are an employee, there are very few things that you can do

00:06:40.600 | to reduce your taxes owed, other than to fund retirement accounts.

00:06:47.200 | So, that should be your first thing, is you should fund a retirement account.

00:06:51.400 | Does your company offer you access to a 401k?

00:06:57.080 | Or a 403d?

00:06:59.840 | It does a 401k, but I think the fees are kind of high,

00:07:03.400 | the last time I checked on it.

00:07:04.720 | Okay. So, the fees might be high.

00:07:07.200 | They often are in teaching, especially in the 403b space,

00:07:10.760 | where they use tax-sheltered annuities that often have high fees.

00:07:13.800 | So, the fees might be high, but that's the first thing that you could do.

00:07:16.840 | If you don't need your income, if you are an active employee

00:07:20.080 | of a company that has a retirement plan, a 401k,

00:07:24.040 | then you can contribute up to all of your income into that 401k.

00:07:29.360 | And incidentally, you can continue to do this after the age of 70,

00:07:34.120 | what used to be 70 and a half, now it's 72.

00:07:36.080 | So, after the age of which you ordinarily start to receive

00:07:40.960 | required minimum distributions,

00:07:43.080 | as long as you are working at a company

00:07:45.200 | and you don't have more than a 5% ownership interest in that company,

00:07:49.560 | then you can defer your salary into a 401k.

00:07:53.560 | And that would be the first thing that I would do.

00:07:55.360 | So, sign up for your company's 401k plan

00:07:57.760 | and defer some or all of your income,

00:08:01.200 | your earned income, into that account.

00:08:04.280 | Other than the pension and Social Security income,

00:08:06.800 | do you have other retirement accounts, such as an IRA?

00:08:10.360 | No, I have a 401k with my pension job.

00:08:17.800 | So, an old 401k?

00:08:20.320 | Yes.

00:08:20.880 | Okay.

00:08:21.600 | What you can do is you can roll your old 401k over into your current 401k.

00:08:28.200 | You can do the same thing with old individual retirement accounts,

00:08:31.200 | if you had any of those.

00:08:32.560 | You can roll those into your current 401k.

00:08:35.560 | And then you can, as again, as long as you're employed by that company,

00:08:39.280 | you can continue to defer the required minimum distributions,

00:08:43.160 | continue to put money in there,

00:08:44.880 | and that will eliminate the taxes owed on that current income.

00:08:49.320 | So, that $14,000, if you defer all of it into the 401k,

00:08:54.040 | immediately goes away from your taxable income.

00:08:56.800 | You're still left with your pension and your Social Security,

00:08:59.680 | but at least the $14,000 wouldn't be taxed currently.

00:09:03.560 | Make sense?

00:09:05.200 | Right.

00:09:05.720 | Okay.

00:09:06.600 | Now, the second thing that you can do is maximize your deductions.

00:09:12.000 | So, things like charitable deductions.

00:09:14.360 | And so, if there's an organization that you want to support,

00:09:17.400 | or if you're doing something that could be structured as an organization,

00:09:21.640 | there's a lot of room, especially if you are a teacher

00:09:25.400 | and you want to work in some area of teaching.

00:09:28.880 | Then, if you want to give away some of the money, you could do that.

00:09:33.000 | So, you said, you made the statement, you said,

00:09:35.400 | "All my money is going to pay for,

00:09:37.920 | basically all my salary is going to pay for taxes."

00:09:39.960 | That's not true, because there is no 100% tax rate.

00:09:44.200 | The highest tax rate...

00:09:45.800 | It just feels like it's a lot.

00:09:47.800 | So, it's not true.

00:09:48.760 | Right.

00:09:49.520 | But, you could always just simply...

00:09:51.360 | One good way of getting rid of taxes

00:09:53.280 | and not giving it to the government is giving it away to charity.

00:09:56.200 | So, if there's a charity that you want to support

00:09:59.160 | and you don't want to pay the money in taxes because you don't need it,

00:10:01.720 | you can give as much money away to charity as you want.

00:10:05.320 | And if your itemized deductions, including your charitable giving,

00:10:10.000 | are larger than your standard deduction,

00:10:11.840 | and you take itemized deductions,

00:10:13.880 | then you can zero out your income taxes

00:10:15.880 | by giving all your money away to charity.

00:10:18.440 | So, if you needed zero dollars of income to live on,

00:10:23.960 | and you gave away the entirety of your income,

00:10:27.760 | then you would pay no income taxes.

00:10:29.880 | And the same thing can happen with regard to any portion of your income.

00:10:33.720 | So, that's something to keep in mind,

00:10:35.640 | because you sound like you have a desire to keep on working

00:10:39.360 | and being involved in areas of education.

00:10:41.680 | And so, it would be normal for someone in your situation

00:10:44.680 | to have contact with some organization or some individual

00:10:48.440 | that you think is doing good work.

00:10:50.080 | And you can support that organization or individual

00:10:52.880 | through charitable contributions,

00:10:54.760 | and you get a discount on those contributions.

00:10:59.040 | The third thing that you could...

00:11:01.160 | Go ahead.

00:11:02.160 | I think I thought of that because I'm single,

00:11:06.000 | and so basically you have to go over the $12,000.

00:11:10.400 | So, I figured for it to be beneficial,

00:11:13.360 | I would need to probably do about $17,000,

00:11:17.840 | so that you have 17 minus 12, which is about five.

00:11:21.160 | Right.

00:11:21.520 | I mean, that's what I figured.

00:11:22.720 | Right.

00:11:23.320 | So, you can sit down...

00:11:23.840 | Am I thinking correctly?

00:11:24.960 | Yes.

00:11:25.360 | Do you do your taxes yourself with a computer program, on paper,

00:11:28.480 | or do you work with an accountant?

00:11:30.720 | I've been doing it myself with H&R Block,

00:11:33.640 | but I'm going to a CPA and see what they know.

00:11:37.200 | I mean, I've been to a CPA before, but it's the same thing.

00:11:40.800 | Yeah.

00:11:41.280 | There's not a lot...

00:11:43.280 | So, the frustrating thing for employees,

00:11:45.720 | there's not a lot that you can do to reduce your taxes

00:11:48.040 | other than use retirement accounts.

00:11:50.080 | So, let's just be clear about that.

00:11:51.920 | There's no magic.

00:11:52.640 | I've spent 20 years searching for the magic

00:11:55.400 | of how to pay zero taxes.

00:11:57.360 | I've read all the books.

00:11:58.520 | I've done all the research.

00:11:59.640 | I've learned it all.

00:12:00.840 | And there is magic in some situations,

00:12:04.200 | and virtually none of those situations

00:12:06.640 | are going to apply to you personally

00:12:09.480 | based upon the facts that you said to me.

00:12:12.120 | So, there are magical options that can apply to other people,

00:12:17.120 | but from what you've described to me so far,

00:12:19.840 | there isn't going to be any magic

00:12:21.760 | that's going to apply to your situation

00:12:23.280 | other than these options that I'm going through with you.

00:12:26.680 | So, you can work...

00:12:27.960 | If you talk to the accountant, have the accountant show you,

00:12:32.680 | and you can say, "Let's pretend I give $20,000 to charity,"

00:12:35.600 | and then I go ahead and itemize my deductions

00:12:38.200 | because of this $20,000 to charity,

00:12:40.920 | what would my taxable burden be?

00:12:43.000 | And that's a pretty simple and easy answer to do it.

00:12:45.440 | If you have the H&R Block software from a previous year,

00:12:49.520 | or you just go in and meet with whoever did it,

00:12:51.640 | it's super easy to play with those numbers

00:12:53.960 | in a piece of tax software if you have access to that.

00:12:58.000 | What you said is the normal thing.

00:12:59.720 | Most people do not itemize deductions.

00:13:02.320 | And so, until your itemizable deductions

00:13:05.360 | exceed your standard deduction,

00:13:07.600 | that's the only place where this strategy comes into play.

00:13:10.560 | But if you wanted to give away $20,000 or $30,000 a year,

00:13:14.400 | you could do that,

00:13:15.400 | especially if your expenses are as low as you described,

00:13:18.000 | of about $3,000 per month,

00:13:19.760 | and your income, which is coming in from guaranteed sources,

00:13:23.360 | is as high as you described,

00:13:25.040 | then you could afford to go ahead

00:13:26.200 | and make charitable contributions.

00:13:27.960 | And if you put together...

00:13:29.680 | If you're giving enough money away,

00:13:31.760 | you can wipe out a good portion

00:13:33.360 | of your tax liability with that.

00:13:35.160 | - Right, okay.

00:13:37.680 | So, other than that, I would need to have a business,

00:13:39.720 | correct? - Correct.

00:13:40.560 | So, that's where we're going next,

00:13:41.600 | is, okay, if I have a business.

00:13:43.520 | Now, here's the problem with, quote-unquote,

00:13:45.880 | having a business.

00:13:48.320 | Could you, in theory, save some tax money

00:13:51.800 | by taking business deductions against your income?

00:13:56.800 | Maybe, but I'd be very surprised

00:14:00.160 | if you were the kind of lady who was gonna maximize that.

00:14:03.520 | So, if somebody is very, very motivated to save on taxes,

00:14:07.440 | and somebody starts a business

00:14:08.840 | that is a hobby kind of business,

00:14:10.920 | like, let's say I start a business taking stock photography,

00:14:15.120 | and my business idea is that I'm gonna travel the world

00:14:18.080 | taking stock photographs,

00:14:19.680 | and I'm gonna travel from my home business destinations,

00:14:22.600 | I'm gonna plan a trip to the Bahamas,

00:14:24.280 | I'm gonna go and I'm gonna stay at a hotel for one week,

00:14:27.640 | and the goal of this trip is to take photographs

00:14:31.320 | that I'm gonna then list on a stock photography website

00:14:34.120 | to create an ongoing residual income source for myself.

00:14:38.200 | Well, when you get into a situation like that,

00:14:40.540 | there's a lot of expenses that you can deduct,

00:14:43.400 | and there's no rule in the IRS tax code

00:14:45.600 | that you can't have fun while you're doing business.

00:14:48.160 | But for somebody who's teaching

00:14:50.820 | in a fairly conventional format, what can you do?

00:14:55.160 | You could deduct a computer, maybe a microphone,

00:14:58.520 | some sort of system like that.

00:15:00.680 | If you go to a lot of conferences or events,

00:15:03.240 | you might be able to bring some of those things in

00:15:05.640 | underneath your business activities, et cetera.

00:15:10.640 | But the teaching business is probably not designed

00:15:14.520 | to be a really fun business

00:15:16.240 | that can maximize your tax deductions.

00:15:18.320 | And so, while you could run a business,

00:15:21.080 | you're going to need to actually have a business motive.

00:15:24.920 | So there's no reason you cannot keep

00:15:27.360 | your current LLC, it's fine.

00:15:29.840 | There's no reason you can't simultaneously work

00:15:31.980 | for an employer and simultaneously run a business

00:15:36.800 | and use your business deductions through that.

00:15:39.120 | It's just that the business needs to have a business plan

00:15:42.640 | and it needs to be run in a business-like manner.

00:15:44.700 | You need to be able to demonstrate if you're audited

00:15:46.740 | that you're taking prudent decisions

00:15:49.040 | with a goal of making a profit.

00:15:51.160 | And as long as you have a goal of making a profit,

00:15:53.340 | if on occasion you have business losses,

00:15:55.720 | then those business losses can be used to offset

00:15:59.100 | and deduct against some of your other sources of income.

00:16:03.120 | The challenge is in order to do this legitimately,

00:16:06.400 | you have to do quite a bit of work.

00:16:08.160 | And in order to defend yourself in an audit,

00:16:10.880 | you need to keep quite a lot of paperwork.

00:16:13.280 | And I don't want to project upon you,

00:16:16.480 | but you've probably reached a point in your life

00:16:19.280 | at which you're not overly enthusiastic

00:16:22.080 | about doing all of that work, keeping all those records,

00:16:25.600 | going through all those hoops,

00:16:27.680 | just in order to save a few thousand dollars of tax money.

00:16:30.760 | You're probably at a point in your life

00:16:32.400 | in which that sounds like a big hassle.

00:16:34.580 | And just paying a couple thousand dollars

00:16:37.000 | is probably a simpler and easier solution.

00:16:39.120 | So it is an option that can be fruitful,

00:16:42.680 | but I'm guessing that it's not

00:16:43.860 | a really fruitful option for you.

00:16:45.520 | - Okay. - Okay.

00:16:48.360 | - All right, actually it's more than a couple,

00:16:51.560 | but anyway, I appreciate this.

00:16:54.120 | One last question. - I got one more.

00:16:55.240 | Yeah, before you go to your last question,

00:16:57.360 | before you go to the last question.

00:16:58.200 | - That's not on there, this is about you.

00:16:59.920 | Did you remember that podcast with the man

00:17:03.520 | that helped young guys in his community?

00:17:06.560 | It's a really old podcast.

00:17:07.880 | - I do, yes.

00:17:09.260 | - What number is that?

00:17:11.800 | - Just a moment and I will tell you.

00:17:13.620 | While I am looking that up,

00:17:16.720 | let me give you one more discussion though.

00:17:21.540 | - Okay.

00:17:22.380 | - I gotta give my brain a moment

00:17:24.820 | to come up with the name of the guy.

00:17:28.380 | The fourth option that you can consider

00:17:33.080 | that can save on your taxes

00:17:36.300 | would be to defer some of your income.

00:17:39.020 | So if I had caught you before you filed for Social Security,

00:17:43.860 | I would love for you to not be taking Social Security

00:17:50.200 | until at least the age of 70.

00:17:52.620 | I don't remember the rules on whether you can suspend it

00:17:55.420 | now that you have started it,

00:17:57.300 | but I would go to the Social Security office

00:18:00.020 | and I would ask them if you can suspend

00:18:02.780 | your Social Security payments.

00:18:05.100 | In addition, depending on what they tell you,

00:18:08.780 | you might also consider suspending your pension.

00:18:12.060 | But probably I don't, now that you've started it,

00:18:14.620 | I don't think they're gonna give you

00:18:15.740 | an option for suspension.

00:18:17.620 | So I don't remember the Social Security rules on this

00:18:20.140 | and I doubt your pension is going to allow you

00:18:22.080 | to suspend it.

00:18:23.180 | But if you could, there's no reason for you

00:18:26.380 | to take extra income from it

00:18:28.380 | that you're not required to take

00:18:30.380 | under things like required minimum distribution rules

00:18:33.500 | if you don't have a clear plan for the income.

00:18:36.740 | And so you might as well just leave it in the account

00:18:39.460 | and then have it for the future

00:18:41.300 | when you might have more of a plan for it

00:18:43.480 | or have it for a time when you have the ability

00:18:49.780 | to leave it to beneficiaries or endow somebody

00:18:53.460 | that you want to endow.

00:18:56.720 | And I found it.

00:18:59.100 | So the episode that you're asking for is episode 398,

00:19:04.100 | titled-- - 398, thank you.

00:19:05.780 | - How to Invest in Your Local Community

00:19:07.580 | for Financial Profit and Community Gain,

00:19:10.160 | interview with businessman and investor Tim Yarborough.

00:19:12.940 | I should reach out to him and redo it

00:19:14.540 | because that was always one of the most interesting

00:19:17.740 | podcast episodes that I did.

00:19:20.780 | And I would love to get an update with him.

00:19:23.060 | So it's 398 with Tim Yarborough.

00:19:26.180 | - Thank you, yeah, it was good, thank you.

00:19:28.060 | - My pleasure, anything else?

00:19:29.460 | - I'm good, thank you so much.

00:19:31.940 | Have a good day. - My pleasure.

00:19:33.460 | All right, we go now to Pat in Idaho.

00:19:35.780 | Pat, welcome to the show.

00:19:36.620 | How can I serve you today?

00:19:37.980 | - Hi, I was wondering,

00:19:43.500 | I know you've lived in other countries before.

00:19:47.300 | And I was wondering how you would transfer your US dollar

00:19:52.300 | to that country.

00:19:53.900 | Like what is the most efficient way to do that?

00:19:56.620 | - Now for a limited time at Delamo Motorsports.

00:19:59.340 | Get financing as low as 1.99% for 36 months

00:20:03.020 | on Select 2023 Can-Am Maverick X3.

00:20:06.240 | Considering the Mavericks taking home trophies everywhere

00:20:08.900 | from King of the Hammers to Uncle Ned's Backcountry Rally,

00:20:12.340 | you're not going to find a better deal

00:20:14.260 | on front row seats to a championship winner.

00:20:17.180 | Don't lose out on your chance to get a Maverick X3.

00:20:20.300 | Visit Delamo Motorsports in Redondo Beach and get yours.

00:20:23.900 | Offer in soon, see dealer for details.

00:20:26.580 | - I would begin with the question,

00:20:28.780 | why do you want to transfer your US dollars to that country?

00:20:31.580 | So answer that question first.

00:20:33.480 | - Well, if I decided to live somewhere else, yeah.

00:20:38.100 | - Are you an American citizen?

00:20:44.320 | - I am.

00:20:45.160 | - Born and raised in the United States?

00:20:46.960 | - For the most part, yeah.

00:20:49.960 | - Okay, and is there any reason you think

00:20:52.880 | you would renounce your American citizenship?

00:20:55.420 | - I don't think so.

00:20:59.240 | - Okay, so if that's the case,

00:21:01.480 | I think that the strongest argument

00:21:04.280 | is actually simply in favor

00:21:06.520 | of your keeping your financial infrastructure.

00:21:09.720 | And this is actually a huge benefit

00:21:12.200 | of being an American.

00:21:14.560 | Most people, when they leave their home country,

00:21:17.720 | one reason they would leave their country

00:21:20.420 | would include severing their tax residency

00:21:23.600 | in their native country.

00:21:25.280 | So if you were Canadian, for example,

00:21:27.440 | and you were planning to move to Thailand,

00:21:30.760 | then generally speaking, most Canadians would want

00:21:34.560 | to end their tax obligations to the Canadian government

00:21:38.720 | by moving abroad.

00:21:40.000 | Now, the Canadians have some exceptions

00:21:41.920 | but often Canadians want to stay enrolled

00:21:44.000 | into the national healthcare system.

00:21:46.160 | And so they actually will work

00:21:48.000 | to maintain their presence in Canada,

00:21:49.920 | in some cases, in order to maintain their enrollment.

00:21:52.960 | But separate from that, from a financial perspective,

00:21:55.960 | since a Canadian can completely end his obligation

00:21:58.380 | to the Canadian government,

00:21:59.960 | then most Canadians want to end their tax residency

00:22:03.160 | if they leave and move abroad for good.

00:22:06.300 | Or another example, and this is Germans, Brits,

00:22:09.920 | really almost any country out there.

00:22:11.880 | So each country has a set of rules

00:22:14.040 | of how to end your tax residency.

00:22:16.560 | In some countries, it's simple,

00:22:18.100 | but in most of the advanced Western countries

00:22:20.920 | with big tax governments,

00:22:22.240 | where most of my listeners come from,

00:22:24.240 | those rules are pretty consistent in saying

00:22:27.600 | that you need to sever all of your permanent ties

00:22:30.440 | with the country.

00:22:31.680 | So the Canadian would sell his house,

00:22:34.360 | the Canadian would close his bank accounts,

00:22:37.560 | the Canadian would close his credit cards,

00:22:40.300 | the Canadian would, in many cases,

00:22:42.520 | surrender his driver's license.

00:22:44.480 | He wants to demonstrate to the government

00:22:47.200 | and the taxing authorities, hey, look, guys,

00:22:49.400 | I don't have any connection with you guys anymore.

00:22:52.180 | And by so doing, he can file his exit return

00:22:55.600 | and he can never again have to deal

00:22:58.040 | with the Canadian taxing authorities

00:22:59.640 | as long as he doesn't move back to Canada.

00:23:01.880 | For Americans, it's completely different.

00:23:05.560 | For Americans, you always have a tax relationship

00:23:10.080 | with the government because the government engages

00:23:14.320 | in citizenship-based taxation.

00:23:17.080 | Americans are taxed no matter where in the world they live.

00:23:21.760 | There are ways that you can eliminate the taxes

00:23:25.960 | that you owe primarily

00:23:28.040 | through the foreign earned income exclusion,

00:23:30.880 | which allows you to generate income outside of the country

00:23:34.320 | and up to a little bit, $120,000,

00:23:37.000 | I forget this year's number, but around that number,

00:23:40.000 | you can generate that income completely tax-free.

00:23:42.720 | And then your other sources of income are taxed

00:23:45.600 | based upon dividends, capital gains, et cetera.

00:23:48.200 | But the neat thing for Americans is simply

00:23:51.000 | that you don't have to end your relationship

00:23:54.120 | with the United States.

00:23:55.920 | So an American citizen who wants to move abroad

00:23:58.600 | could have a mansion in Miami,

00:24:02.120 | could have all of his bank accounts,

00:24:04.040 | all of his investment accounts,

00:24:05.500 | have everything in the United States.

00:24:08.000 | And if he qualifies for the foreign earned income exclusion,

00:24:11.480 | he will get the benefits of being abroad

00:24:14.680 | without severing all of his ties with the United States.

00:24:18.440 | Now, there is a minor quibble here I need to explain.

00:24:22.700 | In order to qualify for the foreign earned income exclusion,

00:24:25.200 | there are two tests.

00:24:26.840 | The first test is what's called a strict days test.

00:24:30.400 | And if you don't spend more than 30 days

00:24:33.920 | inside of the United States,

00:24:35.280 | meaning you spend at least 335 days

00:24:37.000 | outside of the United States,

00:24:38.720 | then you qualify for the foreign earned income exclusion

00:24:41.160 | regardless of your other activities.

00:24:43.320 | So an American digital nomad can put his backpack on his back,

00:24:48.000 | can head out of the country,

00:24:49.440 | and as long as he just doesn't spend time

00:24:51.320 | in the United States,

00:24:52.280 | he's gonna get the foreign earned income exclusion.

00:24:54.960 | There is a separate test

00:24:56.140 | for the foreign earned income exclusion

00:24:57.720 | that allows a little bit more time spent

00:24:59.520 | in the United States.

00:25:00.760 | And that's the center of life test.

00:25:02.440 | So if an American has his center of life in another place,

00:25:06.600 | let's say that that guy from Florida

00:25:09.000 | actually moved to the Bahamas,

00:25:11.480 | and he has a residency permit in the Bahamas,

00:25:13.840 | and he owns a house in the Bahamas,

00:25:16.080 | and that's clearly where he lives.

00:25:18.300 | Well, in that situation,

00:25:19.720 | he can actually go back to the United States

00:25:21.920 | and in theory spend more than 30 days.

00:25:24.840 | There's no hard limit on it,

00:25:26.240 | but possibly as much as even four months per year

00:25:28.800 | in the United States,

00:25:30.080 | as long as his genuine center of life

00:25:32.520 | is actually located outside the United States.

00:25:34.760 | And he still qualifies for the foreign earned

00:25:36.480 | income exclusion,

00:25:37.600 | thus allowing him to pay no taxes

00:25:39.900 | on his first $120,000 of income, no income taxes.

00:25:43.440 | And if he works for a foreign corporation,

00:25:45.520 | he can eliminate all of his employment taxes.

00:25:48.000 | But that American can keep all of his infrastructure

00:25:51.040 | in the United States.

00:25:52.120 | He can keep his bank accounts in the United States,

00:25:53.920 | he can keep his credit cards in the United States,

00:25:55.680 | he can keep his retirement accounts in the United States,

00:25:58.120 | he can get social security,

00:25:59.400 | he can be enrolled in Medicare,

00:26:01.040 | he can get his pension income,

00:26:02.360 | all of that stuff can stay in the United States.

00:26:04.520 | And it's immaterial from a tax perspective,

00:26:07.240 | it doesn't matter.

00:26:08.200 | And in fact, he could actually keep all of that,

00:26:11.720 | even if he renounced his citizenship.

00:26:13.320 | So Americans who actually go to the point

00:26:15.400 | of renouncing their citizenship,

00:26:16.880 | they're still eligible for social security payments,

00:26:20.000 | they can keep their credit cards,

00:26:21.640 | they can keep their 401ks, et cetera.

00:26:23.700 | The one distinction is they often

00:26:25.240 | are not gonna be able to get any Medicare care

00:26:26.720 | because that requires them to be in the United States.

00:26:28.800 | But in theory, they could in theory

00:26:30.360 | possibly work that out as well.

00:26:32.320 | So with the US government,

00:26:34.280 | there's no reason why,

00:26:36.240 | even if you leave the United States,

00:26:38.380 | you have to move all of your assets abroad.

00:26:41.960 | So now it comes down to a more careful question of,

00:26:44.640 | should I move my assets abroad?

00:26:46.840 | And if so, why should I?

00:26:49.200 | The United States has a world-class banking system.

00:26:53.320 | Notwithstanding all of the gurus on the internet

00:26:55.340 | who wanna say that the United States

00:26:56.680 | is the worst place in the world,

00:26:58.720 | the United States has a world-class banking system.

00:27:02.200 | It is a highly sought-after destination

00:27:04.760 | for many people outside of the United States

00:27:07.160 | to bank, to invest, et cetera.

00:27:09.720 | Investment products, world-class.

00:27:11.840 | Low expenses, great markets, everything is great.

00:27:14.700 | In fact, for foreign investors,

00:27:16.560 | investing in the United States is phenomenal

00:27:18.520 | because you can, depending on what form

00:27:21.240 | your income is received at,

00:27:22.280 | you can potentially make a lot of money

00:27:24.180 | completely income tax-free.

00:27:25.840 | That's for non-Americans.

00:27:27.920 | But the banking system is really good.

00:27:30.680 | The credit card system in the United States, second to none.

00:27:34.040 | The investment system in the United States, second to none

00:27:37.120 | for the kinds of products where it works.

00:27:39.560 | Not to say you might not make a fortune

00:27:41.520 | finding some little emerging economies,

00:27:44.080 | mutual fund in another place.

00:27:45.340 | There's all kinds of options,

00:27:46.460 | but the US system is not something to run from.

00:27:49.560 | And the US dollar is the global currency of choice.

00:27:54.500 | So if you're going to abandon

00:27:56.160 | one of the world's best banking systems,

00:27:59.520 | which you have easy access to,

00:28:01.520 | which you have established infrastructure in,

00:28:04.040 | you need to be intentionally going to something better.

00:28:07.700 | There are other excellent financial jurisdictions

00:28:12.320 | in the world, but you need to be going to one of those.

00:28:16.240 | And so you don't look at it and say,

00:28:18.560 | you know what, I'm gonna go to Mexico,

00:28:19.880 | so I'll just go ahead and move all my money

00:28:23.920 | from the United States to Mexico.

00:28:25.080 | You'd be an idiot to do that.

00:28:26.600 | If I moved to Mexico,

00:28:27.960 | I would keep every bit of my banking infrastructure

00:28:30.280 | in the United States.

00:28:31.240 | And if I ever opened even a single bank account in Mexico,

00:28:35.520 | I would open just one single checking account

00:28:38.480 | and just put a few thousand dollars in it

00:28:40.360 | because there's no need for it.

00:28:41.840 | In today's digitally connected world,

00:28:43.560 | when I travel the world,

00:28:44.940 | I use my American-based credit cards.

00:28:47.240 | I have zero transaction fees on them,

00:28:49.920 | no foreign transaction fees.

00:28:51.680 | I use several debit cards,

00:28:53.380 | but I get no foreign transaction fees

00:28:55.360 | and I get all of my ATM fees reimbursed around the world.

00:28:58.520 | So I don't move all of my money outside the United States

00:29:01.480 | just because I'm outside of the United States.

00:29:03.480 | And in fact, I keep the infrastructure in the United States

00:29:06.960 | because it's more convenient, it's better,

00:29:09.600 | keeps most of my money in the US dollar,

00:29:11.240 | which is where I want it.

00:29:12.920 | It allows me, and I want it there,

00:29:15.000 | and I just wanna deal with the currency conversion rate

00:29:18.960 | at most transactions because the US dollar

00:29:21.720 | is probably the better currency for me to hold long-term.

00:29:25.060 | Now, where this comes in is,

00:29:26.360 | let's say that you're gonna buy a house.

00:29:27.960 | So you're moving to a foreign country,

00:29:29.240 | you're gonna buy a house,

00:29:30.080 | and you're gonna spend $300,000

00:29:32.040 | on a house in another country.

00:29:34.780 | Well, that's where you need to start thinking more carefully

00:29:38.380 | about when am I going to exchange the money?

00:29:40.680 | And then depending on the specifics of the country

00:29:43.100 | that you're going to,

00:29:44.480 | there's going to be a clear answer to your question.

00:29:47.960 | It's not a matter of,

00:29:49.120 | well, let me just go to TransferWise and do it.

00:29:50.760 | That's an option, but it's more a matter of

00:29:52.920 | what country am I buying the house in,

00:29:55.000 | when do I need to open the bank account,

00:29:56.800 | let me go ahead and when's the right time to do it

00:29:59.180 | in advance so I can close on the house

00:30:00.820 | in the local currency, et cetera.

00:30:02.780 | But I would not encourage an American

00:30:05.020 | to go and move all of his assets abroad

00:30:08.780 | just because he himself is going abroad.

00:30:11.500 | In the fullness of time,

00:30:12.580 | let's just say that you move from the United States

00:30:14.820 | to Switzerland, right,

00:30:17.580 | to pick on a great banking jurisdiction,

00:30:19.240 | or the United Kingdom, great banking jurisdiction,

00:30:21.080 | or Singapore, great banking jurisdiction.

00:30:23.340 | So you've moved there.

00:30:24.700 | You've lived there for five years,

00:30:26.940 | eight years, 10 years.

00:30:28.640 | You don't ever have any plans

00:30:30.020 | of going back to the United States.

00:30:31.660 | Well then, at that point in time,

00:30:33.060 | I would still keep, generally,

00:30:34.900 | keep retirement accounts and things like that

00:30:36.580 | in the United States.

00:30:37.780 | But at that point in time,

00:30:39.220 | you would go ahead and start moving

00:30:41.140 | significant amounts of your assets

00:30:42.660 | to the foreign jurisdiction

00:30:44.860 | because you're living now in that foreign currency,

00:30:47.660 | and it doesn't make a ton of sense for you

00:30:49.420 | to have all of your money in dollars

00:30:51.760 | when in reality, you're living in the Singapore dollar,

00:30:54.420 | or you're living in the Swiss franc.

00:30:56.140 | But even there, I wouldn't move 100% of it.

00:30:58.020 | I would still keep all the bank accounts open.

00:30:59.740 | I would still keep all of the credit cards open.

00:31:02.420 | I would keep all of it open.

00:31:03.660 | I would just have 80% of my money abroad,

00:31:05.980 | and I would treat the accounts in the United States

00:31:08.780 | as my foreign asset diversification

00:31:12.100 | rather than my primary accounts.

00:31:13.860 | Does that make sense to you?

00:31:15.260 | - Yeah, it does.

00:31:17.900 | And speaking of the digital world,

00:31:20.940 | I was wondering if there would be a lot of friction

00:31:23.580 | to efficiency loss if you use crypto

00:31:27.900 | to convert your US dollar to,

00:31:31.580 | let's say, a different currency.

00:31:33.280 | Is that something that is practiced today?

00:31:36.980 | - Well, if you buy Bitcoin at 50,000

00:31:41.980 | and you sell it three months later at 30,000,

00:31:45.340 | that was a whole lot more expensive

00:31:47.020 | than foreign transaction fees.

00:31:49.240 | So you want to be very careful

00:31:51.300 | when you're thinking of buying an asset,

00:31:53.000 | just like if you buy gold coins

00:31:55.020 | and then you carry your money abroad

00:31:57.080 | with gold coins in your pocket

00:31:58.740 | and you have to sell it and pay a bunch of fees,

00:32:00.300 | that's very expensive.

00:32:02.260 | If we're talking about money in the bank,

00:32:04.020 | I would just simply search for simple

00:32:06.380 | foreign exchange transactions.

00:32:08.580 | And there would be a couple of ways that I would do it.

00:32:10.460 | Number one, depending on your level of wealth,

00:32:12.780 | you can't beat Revolut, for example, phenomenal.

00:32:16.500 | Revolut is one of the best

00:32:18.100 | modern banking products in the world.

00:32:21.960 | It's wonderful.

00:32:23.260 | So you can move your, with Revolut,

00:32:25.620 | you can have as many of all the different

00:32:28.180 | foreign currency accounts that they hold.

00:32:30.080 | They give you a great transfer rate on it.

00:32:32.860 | Really, really wonderful.

00:32:34.180 | And so for some thousands of dollars,

00:32:37.140 | I wouldn't trust my life savings to Revolut.

00:32:39.180 | I don't have any reason to know that they're bad.

00:32:41.180 | I'm not saying they are bad, but they're new

00:32:42.820 | and I don't trust new.

00:32:44.340 | I'm pretty skeptical of things

00:32:46.580 | until they've been proven for a very long time.

00:32:48.980 | So, but for day to day, for some thousands of dollars,

00:32:53.360 | something like Revolut is world-class

00:32:56.280 | because you can maintain both.

00:32:57.720 | So you get a Revolut account,

00:33:00.240 | you move $10,000 to your US dollar account with Revolut,

00:33:04.360 | then you go ahead and convert it into British pounds

00:33:07.300 | 'cause that's where you're gonna be living

00:33:08.720 | and you keep it there.

00:33:09.760 | And whenever you notice the rate is favorable,

00:33:12.860 | you go ahead and make your transfer and it's great.

00:33:16.040 | So that's great.

00:33:18.100 | There are transfer wise is very well known

00:33:20.600 | in the international foreign currency exchange places.

00:33:23.720 | And then let's say you can just do a wire.

00:33:25.520 | And so what I would encourage you is to start with,

00:33:28.240 | start by opening a bank account in your foreign bank.

00:33:31.520 | And if possible, don't commit yourself

00:33:34.400 | to transfer the money until you're ready.

00:33:36.960 | And so frequently what you can do,

00:33:38.700 | especially coming from the United States

00:33:40.200 | where you're banking in the dollar,

00:33:41.680 | is you can open a US dollar account at your foreign bank

00:33:45.400 | as well as a local currency account.

00:33:48.580 | And just go ahead and put your money

00:33:50.020 | into the US dollar account.

00:33:51.340 | And then when you are ready to buy the local currency,

00:33:55.500 | just do that conversion within the bank

00:33:57.740 | and you generally get a pretty favorable rate there.

00:34:00.180 | So don't go look for schemes like going through crypto

00:34:04.980 | or going through gold coins or anything like that,

00:34:07.580 | unless you actually need it.

00:34:09.380 | The only reason I would buy a cryptocurrency

00:34:12.100 | was because it's something that I am either speculating on

00:34:14.920 | and I believe that it's going to increase quickly

00:34:18.260 | or it's something that I want to hold long term.

00:34:21.820 | Because you have too much of a risk

00:34:23.780 | on the fluctuations in value that can immediately wipe out

00:34:27.240 | all of any possible savings in terms of fees.

00:34:30.480 | That help, Pat?

00:34:32.740 | - Yeah, yeah, that helps.

00:34:36.780 | Thank you for giving out some recommendations

00:34:41.340 | for converting currency from US

00:34:44.240 | to some other foreign currency.

00:34:46.580 | - Yeah, my pleasure.

00:34:48.480 | What I would say is go slow.

00:34:51.360 | There's no reason to make big decisions on stuff like this.

00:34:54.920 | Go and spend a couple years traveling

00:34:56.520 | outside the United States

00:34:57.860 | before you make any big infrastructure changes.

00:35:00.680 | Obviously, you'll get rid of your apartment

00:35:02.280 | or something like that, but just go slow.

00:35:04.960 | And then after a few years of traveling

00:35:08.120 | and spending time abroad,

00:35:09.480 | then most of the answers to these questions

00:35:11.280 | will be a lot more obvious to you.

00:35:13.500 | We'll go to Bob in Arkansas.

00:35:15.060 | Bob, welcome to the show.

00:35:15.900 | How can I serve you today?

00:35:17.100 | - Really appreciate what you do.

00:35:21.040 | I found your podcast at the end of April

00:35:24.240 | via someone telling me about it

00:35:26.100 | and I have been voraciously consuming your past episodes

00:35:29.840 | and also just purchased your new course.

00:35:33.320 | - Wonderful.

00:35:34.160 | - So I have been a two is, thank you,

00:35:37.040 | but I have been a two is one, one is none

00:35:40.540 | since about March of 2011,

00:35:43.720 | but very new to realizing that,

00:35:47.600 | that also applies beyond the US.

00:35:50.800 | So I was working pretty hard on that in the US

00:35:53.800 | and various contingencies,

00:35:56.400 | but just hadn't broadened my aperture to look globally.

00:36:01.400 | And so I'm kind of looking for some guidance

00:36:04.740 | on other countries to look at.

00:36:07.500 | And just as context, I've been at this for about a year.

00:36:10.420 | I'm a slow reader and I was really busy up until recently.

00:36:13.520 | So I started with Costa Rica

00:36:14.880 | 'cause I'd heard great things about it.

00:36:16.920 | At the time I was living in Hawaii

00:36:18.480 | and I loved Hawaii other than the government and the people.

00:36:21.560 | And Costa Rica sounded like maybe Hawaii 50 years ago

00:36:25.500 | and put a lot of time and effort into researching it

00:36:28.600 | only to conclude somewhat recently

00:36:31.600 | that they're built on a socialist model

00:36:33.600 | and they're running out of other people's money.

00:36:36.440 | And I may be wrong in that conclusion

00:36:38.000 | and feel free to correct me if I am.

00:36:40.560 | So then I shifted to Panama

00:36:41.800 | and I put a lot of research into Panama.

00:36:44.040 | It sounds promising.

00:36:45.280 | I've got a trip scheduled in July

00:36:48.000 | to go check it out in person,

00:36:49.900 | but I have no idea for number three.

00:36:54.660 | And then also just other places I should be thinking about

00:36:58.240 | maybe even for place number two.

00:37:00.240 | - Okay.

00:37:01.840 | You said you got my course, you've gotten my newest,

00:37:04.080 | let me plug it, howtoretiresuccessfully.com.

00:37:06.400 | You were talking about my retirement course

00:37:08.160 | or my international skate playing course,

00:37:09.720 | which have you already purchased?

00:37:11.420 | - Your international escape course.

00:37:13.680 | - Perfect, okay.

00:37:14.520 | - The idea of two is one, one is none,

00:37:18.640 | but beyond just the US.

00:37:20.120 | - Right, okay.

00:37:21.040 | So my newest course is how to retire successfully

00:37:23.800 | and that's available for other listeners

00:37:25.720 | who are looking to talk about retirement,

00:37:27.320 | but that will not be talking about internationalization.

00:37:29.880 | For somebody who is interested in internationalization,

00:37:32.440 | there is no better resource that I can point you towards

00:37:35.340 | other than my international escape plan course,

00:37:37.680 | which other listeners can buy at internationalescapeplan.com

00:37:41.400 | because in that course, I lay out for you

00:37:44.400 | a thoughtful strategy of how to go about it.

00:37:49.000 | What I don't do in that course,

00:37:50.520 | and I intentionally because it changes so much,

00:37:52.640 | is I don't suggest any particular country.

00:37:55.600 | I suggest a phased approach to building a plan

00:37:59.800 | that can see you through virtually all bad scenarios

00:38:04.200 | that I can come up with

00:38:05.600 | by doing a little bit of prior planning.

00:38:07.720 | And I give a range of options,

00:38:09.840 | which range all the way from, you know,

00:38:12.620 | have a passport and a credit card

00:38:14.240 | and just go abroad as a tourist

00:38:16.040 | all the way to the hardcore phase four

00:38:18.960 | of moving abroad completely.

00:38:21.600 | So that's for the benefit of other listeners.

00:38:23.800 | Now, back to what you said, Bob,

00:38:25.600 | why do you think, so let me distinguish,

00:38:28.600 | there's a difference between having a backup plan,

00:38:30.960 | a plan B versus having a plan A,

00:38:34.980 | meaning there's one thing for you to say,

00:38:36.920 | I'm living in the United States,

00:38:38.080 | I'm gonna live in the United States,

00:38:39.080 | but I really like to have a Panama residence permit,

00:38:41.600 | so, you know, a bank account down there.

00:38:43.580 | So if I needed to go, at least I could go there

00:38:46.120 | versus I'm going to move abroad.

00:38:48.340 | Are you looking for a plan B or a plan A?

00:38:51.100 | - I'm probably somewhere in between at this point.

00:38:55.440 | So the more I see of the US,

00:38:58.880 | the less I wanna live here

00:39:00.200 | in terms of the direction the country's going.

00:39:04.360 | So initially I wanna find at least a plan B,

00:39:08.480 | then the goal is to begin spending

00:39:10.380 | at least part of the year there.

00:39:12.340 | And then if I like it enough,

00:39:14.060 | you know, that becomes plan A and the US becomes plan B.

00:39:17.100 | - Understood, all right.

00:39:18.680 | So I probably wind up discouraging about 80% of people

00:39:23.680 | who think they wanna move abroad from the United States,

00:39:28.480 | especially people who may be at your phase of life.

00:39:31.560 | You sound like an adult male

00:39:32.880 | who's been successful in life

00:39:34.640 | and thinking about what's next.

00:39:36.360 | You didn't talk about going abroad to get a job.

00:39:38.000 | Is that right?

00:39:38.840 | How old are you?

00:39:39.660 | - So I'm 56 and I'm not looking for a job.

00:39:43.560 | - Okay, so I would generally discourage most people

00:39:47.460 | in your demographic from trying to move abroad as a plan A

00:39:52.460 | because I think the most of the benefits

00:39:57.960 | that you're probably looking for are better achieved

00:40:01.940 | by moving somewhere else within the United States

00:40:05.320 | or by simply doing some traveling outside the United States

00:40:08.900 | versus relocating yourself.

00:40:11.840 | And this is unique to Americans.

00:40:14.360 | The advice is consistent with advice I give

00:40:17.280 | to citizens of other nations,

00:40:19.940 | but specifically to Americans, there's some distinctives.

00:40:24.940 | I kind of feel like if I do my job right,

00:40:28.040 | I work really hard to discourage people

00:40:30.240 | from permanently moving abroad

00:40:31.840 | with the idea that I'm just gonna move abroad

00:40:33.360 | and I'm gonna find a dream life in Costa Rica

00:40:36.120 | or Panama or wherever.

00:40:38.000 | If I work hard to discourage you from doing it

00:40:40.640 | and you ignore my advice and you do it anyway,

00:40:43.240 | then you're one of the perhaps 20% of people

00:40:45.560 | for whom that's the right decision.

00:40:47.320 | But with the other 80% who listen to my discouragement,

00:40:51.520 | I've helped you, I've saved you years of frustration

00:40:54.040 | and effort by kind of laying out the world realistically.

00:40:58.960 | - So let me give you,

00:41:00.840 | I will give you some countries to consider,

00:41:02.800 | but let me explain to you why that is.

00:41:05.740 | You sound like a freedom loving guy

00:41:08.440 | and you're a little frustrated about the big government

00:41:12.000 | and anti-state trends in the United States.

00:41:13.960 | Is that accurate to some degree?

00:41:15.940 | - I would say that's a vast understatement.

00:41:19.760 | - Okay, trying to be a little bit politically correct here

00:41:22.800 | and inclusive in my language.

00:41:25.840 | So here's the problem.

00:41:27.760 | Everything that annoys you about the United States

00:41:30.580 | is probably worse everywhere else.

00:41:32.500 | So in the United States, although right now,

00:41:37.360 | liberty loving people seem to be in retreat

00:41:40.920 | and there's a massive growth of nanny state government

00:41:43.880 | and intrusive big government, et cetera,

00:41:46.300 | you've got 150 million people that agree with you.

00:41:49.600 | 150 million people that think you're exactly right

00:41:53.160 | and who are pissed off at the current situation.

00:41:55.320 | Now you've got 150 million people who are opponents of yours

00:41:58.440 | and they happen to have the political power

00:42:00.640 | and there's who knows 50 million people in the middle

00:42:02.800 | that are the deciding vote.

00:42:05.160 | But you've got more allies in the United States

00:42:08.080 | than you will have in any country anywhere else in the world.

00:42:12.280 | And I have spent a lot of time traveling

00:42:14.720 | and looking for a place that's better.

00:42:16.880 | And I cannot find a place that is better on everything.

00:42:22.080 | For any specific issue, you can often find a place

00:42:26.240 | that is better for you on that issue.

00:42:29.460 | But in terms of the totality of the things

00:42:31.600 | that probably are important to you

00:42:33.320 | because of the kinds of things

00:42:34.480 | that are important to me as well,

00:42:36.480 | you're probably better off with a different region

00:42:39.440 | in the United States than you are going abroad.

00:42:42.820 | So I'll give an example.

00:42:43.880 | I like Panama.

00:42:44.800 | I think Panama has a lot to offer.

00:42:47.800 | I think that, in fact, right now I've been talking

00:42:51.400 | with Mikkel Thorup about advertising to my listeners

00:42:54.760 | a special event in Panama to go and do a week tour,

00:42:59.320 | a special tour for my listeners,

00:43:01.360 | limited number of people,

00:43:02.600 | and basically have a week tour of Panama

00:43:04.200 | and look at the options.

00:43:05.040 | 'Cause I think Panama is a great one-stop destination

00:43:08.040 | to set up a residency permit, set up a driver's license,

00:43:11.280 | set up a bank account, set up a home even.

00:43:13.560 | It's easy access.

00:43:14.580 | It's a great international hub.

00:43:15.840 | I think Panama has a lot to offer.

00:43:18.480 | If you were annoyed about COVID in the United States,

00:43:21.640 | Panama was 10 times worse.

00:43:24.120 | In Panama, you could only go out and go to the store one,

00:43:29.120 | was it one day a week?

00:43:30.800 | And it was separate days for each person of your family.

00:43:34.040 | And it was based upon the number of your cedula.

00:43:36.640 | And so you couldn't,

00:43:37.880 | it wasn't just that they closed the stores,

00:43:39.320 | it was that you weren't allowed to leave your house

00:43:42.220 | except one day a week.

00:43:44.120 | Now, Americans got all upset

00:43:46.960 | about the relatively mild lockdowns

00:43:51.160 | that various governments imposed, all upset.

00:43:55.760 | And Americans had the lightest lockdowns

00:43:58.000 | of almost any place in the world,

00:43:59.680 | except where culturally nobody cared, right?

00:44:02.000 | Some of the countries in Africa

00:44:02.960 | where they just never did anything

00:44:04.280 | and the government is not a large, strong, strong government.

00:44:07.420 | But I mean, Panama, Costa Rica,

00:44:10.920 | all these places had crazy requirements.

00:44:13.960 | And in the United States, things like masking,

00:44:16.520 | and I'm just making this as a general thing,

00:44:18.600 | masking in the United States ended a year and a half,

00:44:21.080 | two years before it ended anywhere else.

00:44:23.200 | If you had been in Panama in 2022, in fall of 2022,

00:44:28.200 | and you had the temerity to leave your condo

00:44:32.440 | and go into an elevator without a mask on,

00:44:35.200 | you're gonna be written up

00:44:36.080 | and have complaints by your neighbors

00:44:37.400 | because they're a big, they're just their culture.

00:44:40.680 | Now, on the flip side, there are a whole set of freedoms

00:44:44.120 | and things that you can get in Panama

00:44:45.640 | that you can't get in the United States.

00:44:47.480 | And so, Panama doesn't impose a ton of taxes.

00:44:51.880 | You can live in Panama very tax lightly.

00:44:56.000 | Panama is the world's, I think, second largest purveyor

00:44:59.160 | of, or second largest registry of foreign corporations.

00:45:03.480 | And so Panama is a wonderful place for certain things,

00:45:07.440 | but for a guy in your age and stage of life

00:45:09.880 | who's looking for a place where it's better,

00:45:11.960 | you may find it in Panama, but you're gonna,

00:45:13.880 | once you get there, you're gonna find a whole set of things

00:45:16.280 | that really annoy you that are better in the United States.

00:45:19.640 | And so, and people often don't appreciate that

00:45:23.640 | until they've actually gone abroad

00:45:25.080 | and spent enough time abroad.

00:45:26.960 | I myself didn't appreciate that until I had gone abroad

00:45:31.000 | and spent enough time abroad.

00:45:33.520 | And the reason I honed in on your age is this,

00:45:36.360 | assuming that you've been financially successful,

00:45:38.600 | unless you're starting a new business,

00:45:40.420 | unless you're something else that you're doing,

00:45:42.000 | if you just have assets and you're living on your assets

00:45:44.040 | and your investments and things like that,

00:45:47.000 | your tax situation doesn't improve.

00:45:49.960 | Your cost of living is probably not gonna change that much.

00:45:53.880 | If it goes down at all, it's only gonna go down

00:45:55.980 | in certain categories.

00:45:57.320 | And so many of the things that people were looking for

00:46:01.400 | by the idea of going abroad,

00:46:02.880 | I think are better served in the United States.

00:46:05.400 | And if you don't like the culture around you,

00:46:08.840 | you can choose a different region in the United States

00:46:11.320 | that offers what you have.

00:46:12.840 | So the reason I'm using COVID is it's recent in our memory.

00:46:15.200 | But if you think about COVID,

00:46:16.840 | your experience through the pandemic

00:46:19.440 | was drastically more impacted

00:46:22.480 | by who the governor of your state was

00:46:25.360 | or who the mayor of your city was

00:46:28.160 | than who the president of your country was.

00:46:30.760 | And so in some states,

00:46:32.360 | they were putting sand in skate parks.

00:46:34.400 | In other states, the governor said,

00:46:35.680 | "Yeah, we're not doing that here."

00:46:37.260 | And you had total freedom.

00:46:38.960 | And it was a state by state basis.

00:46:41.140 | But you can move among those states

00:46:42.720 | and you could probably find many, many more people

00:46:45.200 | who fit with you versus in another place,

00:46:48.860 | which brings me to the next thing.

00:46:50.360 | In terms of social life,

00:46:51.640 | one of the biggest impacts on your personal life

00:46:54.800 | and on your experience of life

00:46:57.560 | has more to do with the people that you spend time with

00:47:00.080 | and what you consume than anything that's real,

00:47:03.380 | anything that really impacts your life.

00:47:05.560 | And so the benefit of the United States

00:47:07.880 | is there's 100 million people that think like you.

00:47:10.360 | And you can find them

00:47:11.360 | and you can surround yourself with those people

00:47:13.320 | and you don't generally have to spend much time

00:47:15.640 | listening to the people that you disagree with.

00:47:18.080 | I myself live in a happy little bubble.

00:47:20.280 | I live in a community of people

00:47:21.900 | that pretty much think like I do.

00:47:24.320 | We're not group think,

00:47:25.520 | but we kind of share the same values.

00:47:27.400 | I have isolated myself and my family

00:47:30.100 | from a whole lot of the stuff that makes me mad.

00:47:32.560 | And it's gotten better.

00:47:34.280 | Now, of course, I don't live in the United States,

00:47:35.560 | but my point is I could do it in the United States

00:47:37.680 | and I could do it abroad.

00:47:39.060 | So it's a matter of, more a matter of what you consume

00:47:41.660 | versus than anything that's real and external.

00:47:46.660 | So where does a foreign country really come in?

00:47:50.160 | Well, if there's something that the country offers

00:47:52.880 | from a lifestyle that you really value

00:47:56.120 | and you can gain a lifestyle that you want in that country,

00:47:59.560 | then it makes a lot of sense.

00:48:01.040 | So if you really wanna be a surf bum, well, absolutely,

00:48:04.520 | but you could be a surf bum in Panama, in Costa Rica,

00:48:08.140 | in Nicaragua, and the government doesn't matter that much.

00:48:11.480 | It's a matter of finding the surfing community

00:48:13.480 | and being there.

00:48:16.040 | If you want the big city experience,

00:48:18.320 | or there's a certain thing,

00:48:19.320 | like again, certain financial regulation,

00:48:21.480 | or you wanna live in a zero tax place, okay,

00:48:24.460 | well, then you go to that place that's better on that issue.

00:48:27.280 | But in general, as far as the total package,

00:48:31.000 | I think that most Americans are excessively critical

00:48:35.380 | of their own nation, and they don't understand

00:48:39.360 | the many problems and issues that they'll face

00:48:41.440 | in another place.

00:48:42.340 | So what I would recommend is make a list

00:48:44.880 | of the specific issues that most annoy you,

00:48:48.440 | and then think about what countries might give you

00:48:51.460 | a better solution on those issues.

00:48:54.820 | And you may not need to just go abroad,

00:48:58.160 | but rather just spend some time in the countries

00:49:00.160 | that you like the most.

00:49:02.760 | So have you ever read, have you yet read,

00:49:04.800 | I know you're new to this internationalization stuff,

00:49:06.600 | but have you read any of the original stuff

00:49:09.200 | by the PT theorists, Peter, what did he publish?

00:49:14.200 | Peter Teradish or Grandpa, all the same guy.

00:49:17.520 | But have you ever read any of the original PT book?

00:49:20.080 | - I have not, I've never heard of that before.

00:49:23.640 | - Okay, have you ever heard of flag theory?

00:49:25.800 | - I've heard of it in terms of oil tankers.

00:49:31.440 | - Okay, similar concept, but for individuals.

00:49:34.040 | Let me give you a mini lesson.

00:49:35.120 | First of all, I gave a lesson in the course

00:49:37.160 | that you bought on flag theory.

00:49:38.760 | It's in, I forget which part it was,

00:49:40.960 | you may not have gotten to it,

00:49:42.020 | but I covered it carefully in the course.

00:49:43.960 | And so for the sake of listeners,

00:49:45.560 | now that I've introduced the topic,

00:49:46.680 | let me just cover it because this I think

00:49:48.820 | should be your first stop before you try

00:49:50.600 | to find one country.

00:49:52.280 | So it's commonly called a few things.

00:49:55.360 | Today it's most commonly called flag theory.

00:49:57.960 | Originally it was called PT theory,

00:50:00.660 | and PT was created to stand for,

00:50:05.660 | was created as a euphemism that people would apply

00:50:09.580 | to a bunch of different stuff.

00:50:11.340 | So PT would stand for perpetual traveler

00:50:14.260 | or permanent tourist, some variation of those things.

00:50:18.660 | And the basic idea, this was invented back in the '80s

00:50:22.260 | by a group of libertarians.

00:50:24.060 | The guy, I'm blanking on names,

00:50:27.000 | I hate it when I blank on names.

00:50:29.900 | The Schultz, the guy who wrote

00:50:31.820 | "How I Found Freedom in an Unfree World,"

00:50:34.300 | there were about four of them that were working together.

00:50:38.220 | W.G. Hill was the book, was the pen name

00:50:41.820 | that the original book was published under.

00:50:44.440 | So they created this idea,

00:50:47.460 | and there was a bunch of libertarian playboys

00:50:50.420 | that were looking around in the '80s and saying,

00:50:53.420 | the big government is growing all around the world,

00:50:55.460 | what do we do?

00:50:56.300 | How do we escape this?

00:50:58.420 | And so they started by going around the world

00:51:00.340 | and looking for better places.

00:51:02.220 | And eventually they came to realize

00:51:04.580 | that there is no one better place,

00:51:07.820 | but rather if we would choose a better place

00:51:10.620 | for each aspect of our lives, then we can do that.

00:51:15.380 | And so they created PT theory or flag theory.

00:51:19.820 | And Schultz, Howard or Harry, I can't remember his name,

00:51:22.860 | he was one of the original publishers on it.

00:51:25.460 | And at first it was three flag theory,

00:51:27.580 | later it became five flag theory,

00:51:29.180 | now there's sites and whatnot.

00:51:30.500 | You hear people talk about seven flag theory, et cetera.

00:51:33.140 | The basic idea is you disconnect

00:51:34.980 | the different parts of your life

00:51:36.260 | and you set them up individually.

00:51:39.260 | And stick with me because this is really important

00:51:41.500 | to my answering your question.

00:51:43.700 | First flag is usually a citizenship flag.

00:51:46.900 | So what country do I have my passport from?

00:51:49.640 | So do I have a passport from, in the perfect world,

00:51:53.140 | you wanna have a passport from a country

00:51:55.100 | or a citizenship from a country

00:51:56.820 | that's going to give you a powerful travel document

00:51:59.900 | so you can travel around the world fairly easily.

00:52:03.020 | You wanna have a country that's not gonna impose on you

00:52:05.400 | any onerous requirements, things like military service

00:52:09.360 | or taxes on money earned abroad, et cetera.

00:52:12.460 | And basically it's just gonna leave you alone,

00:52:14.460 | but you have your citizenship in that country.

00:52:16.780 | The second flag is your residence.

00:52:19.460 | So where is your legal residence?

00:52:22.160 | And ideally you'd like to have a legal residence

00:52:24.540 | in a country that will let you live there

00:52:26.700 | and that will give you all the documents that are necessary.

00:52:29.300 | Some people might need a tax residence certificate,

00:52:32.760 | some people might not,

00:52:33.660 | but basically a residence permit in that country,

00:52:36.220 | the ability to live there.

00:52:37.580 | And then ideally they're gonna leave you alone.

00:52:39.580 | You don't wanna have a country that's gonna tell you

00:52:41.740 | you can't homeschool your kids.

00:52:43.560 | You don't wanna have a country that's gonna tax you

00:52:45.500 | on income that's earned abroad, things like that.

00:52:48.700 | The third flag is your banking situation.

00:52:54.260 | So which you would like a country that serves for you

00:52:57.620 | to store your assets in.

00:52:59.300 | Ideally this would be a country

00:53:00.580 | that has a really great financial system,

00:53:02.980 | a country that provides you with a good solid place

00:53:06.900 | to invest your money.

00:53:08.140 | Ideally this would be a country that doesn't impose taxes

00:53:11.540 | on non-residents so your money can grow without any tax.

00:53:15.460 | Ideally this would be a country

00:53:16.700 | that has favorable asset protection laws,

00:53:18.860 | gives you good privacy around your money, et cetera.

00:53:21.760 | Your fourth flag is going to be your business haven,

00:53:25.360 | your business jurisdiction.

00:53:27.120 | So here you want a country

00:53:28.620 | through which you can operate your business.

00:53:31.040 | A country that ideally is going to have

00:53:34.280 | a regularized business environment

00:53:36.980 | so you can do things like in the modern world,

00:53:39.380 | have good merchant processing accounts,

00:53:41.560 | access to PayPal, access to Stripe,

00:53:43.500 | access to merchant processing accounts,

00:53:45.440 | access to good business banking

00:53:47.160 | so that you can conduct your business

00:53:49.600 | easily in the modern world.

00:53:51.100 | But ideally this would be a country

00:53:52.460 | that's not going to impose taxes on you

00:53:54.280 | if you don't live there,

00:53:55.120 | that's going to just let you there.

00:53:56.200 | Or if those taxes are imposed, they're going to be modest.

00:53:58.840 | Ideally this would be a country that has good laws

00:54:01.240 | that protect you as a business owner

00:54:02.840 | from fraudulent lawsuits, good privacy laws, et cetera.

00:54:06.100 | Then your fifth flag is what they used to call

00:54:09.340 | your playgrounds.

00:54:10.440 | And the playground is the place that you spend time

00:54:13.640 | that offers you the lifestyle that you want.

00:54:16.080 | And so for those Libertine playboys,

00:54:20.120 | it was what countries, if I want to do drugs,

00:54:22.480 | what countries in the world can I do drugs

00:54:24.420 | and not worry about being arrested?

00:54:28.540 | If I want to hire prostitutes,

00:54:30.280 | what countries in the world can I hire prostitutes in?

00:54:32.480 | If I want to drive my car at 150 miles an hour,

00:54:35.580 | where can I drive my car at 150 miles an hour

00:54:38.120 | without being arrested?

00:54:41.800 | And basically for every lifestyle desire

00:54:45.640 | or for every vice, there's a place in the world

00:54:48.120 | that you can go where not only is that behavior accepted,

00:54:52.520 | but in some cases it's celebrated.

00:54:54.680 | And so you love to gamble,

00:54:56.280 | well go to a place where gambling is celebrated.

00:54:58.260 | Or you love to shop,

00:54:59.440 | go to a place where shopping is celebrated.

00:55:01.680 | But go to those places as a tourist

00:55:03.720 | and spend time in the places that you want to be.

00:55:06.240 | And so I like to use Europe as an example.

00:55:08.560 | If you, many people want to be a citizen

00:55:10.600 | of the European Union and live in the European Union,

00:55:13.080 | that's fine, but I think it's a lot better.

00:55:15.200 | Go to Europe as a tourist, spend three months there,

00:55:17.600 | buy what you want to buy.

00:55:18.800 | And when you're on your way out in the airport,

00:55:20.380 | you can get all of your VAT tax refunded to you

00:55:22.880 | as a tourist for whatever you bought.

00:55:24.500 | And so you can enjoy the European lifestyle,

00:55:26.940 | but you don't have to pay European taxes on anything.

00:55:29.640 | You know, no European income taxes,

00:55:32.060 | no European socialized medicine taxes,

00:55:34.840 | no European VAT taxes.

00:55:36.780 | It's basically all refunded to you on your way out

00:55:39.240 | as long as you come in as a tourist.

00:55:41.760 | So when I was an aspiring libertarian

00:55:44.040 | who was annoyed with the anti-liberty direction

00:55:48.040 | of my native country,

00:55:49.520 | and I came across that theory many years ago,

00:55:51.720 | I said, "This is probably the best way

00:55:55.520 | "that a liberty lover could actually live freely

00:55:59.120 | "in an unfree world."

00:56:00.680 | And so I started testing it.

00:56:01.960 | And I'll tell you that it is actually the best way

00:56:04.240 | I've ever come up with if you care about liberty intensely.

00:56:08.080 | Now, it's not the perfect lifestyle for a lot of people.

00:56:10.560 | So it often involves a lot of movement

00:56:12.440 | and a lot of people don't wanna move.

00:56:14.120 | Some guys really enjoy the idea

00:56:16.000 | of going to four countries a year

00:56:18.220 | for three months in each country.

00:56:20.080 | You could do it more, you could do it with two,

00:56:22.120 | but that's about the minimum number of places

00:56:23.960 | you're gonna need to spend time.

00:56:25.760 | Two places a year.

00:56:26.680 | Three is better, four can be great.

00:56:29.440 | So, and that's not gonna work for a lot of lifestyles.

00:56:32.420 | But if it does work for a lot of lifestyles,

00:56:34.740 | then you can use that model and lens

00:56:37.900 | to consider all the different countries of the world

00:56:40.360 | and think about the things that you most like.

00:56:43.320 | Now, it's harder for Americans to follow this model

00:56:46.400 | because of citizenship-based taxation

00:56:49.200 | and because of the deep connection

00:56:51.000 | that most of us have to our natal country.

00:56:53.680 | And so Americans are, it's very, very hard for us

00:56:57.760 | to consider just not doing business

00:56:59.840 | with the United States anymore.

00:57:00.960 | And I don't think it's necessary,

00:57:02.080 | as you heard from the previous caller.

00:57:03.980 | But what is necessary is not to go out

00:57:06.280 | looking for the place that is better,

00:57:08.640 | but looking for the place that is better

00:57:10.480 | on this particular aspect, this particular thing

00:57:13.860 | that I'm trying to change about my life.

00:57:15.800 | And then just go and enjoy that place.

00:57:18.560 | And in the course that you have,

00:57:20.080 | International Escape Plan, by talking about that,

00:57:23.360 | I talk about how this is, how you can apply this.

00:57:28.360 | And you don't need to search for the world's best place.

00:57:31.800 | You're searching for a place that is good enough

00:57:34.360 | or the best on this particular thing.

00:57:37.000 | So an example with Panama, right?

00:57:39.080 | What is great about Panama?

00:57:41.240 | Well, what's great about Panama

00:57:42.560 | is they have a simple to establish residency program

00:57:46.280 | that has very straightforward.

00:57:48.200 | You can come in, you can gain a legal residency permit,

00:57:51.920 | and they have a minimum amount

00:57:53.960 | of physical presence requirements.

00:57:56.840 | So you don't have to go there

00:57:58.000 | and spend six months a year there like you do in Canada.

00:58:00.720 | So Panama is a great option for that part of it.

00:58:04.480 | Now, do you want to live in Panama?

00:58:06.660 | You might, but you would have to check that out

00:58:08.540 | and go and spend some time testing it.

00:58:10.580 | But you don't need to decide that that's the place

00:58:12.960 | that you're gonna go and spend all your time.

00:58:15.560 | You talked about Costa Rica.

00:58:16.960 | Costa Rica has great things and it has bad things.

00:58:20.280 | One of the things that's great about Costa Rica

00:58:22.720 | is it can be a very welcoming place,

00:58:25.120 | especially to foreigners.

00:58:26.600 | It has interesting flora and fauna, et cetera.

00:58:29.760 | What's not great about Costa Rica?

00:58:31.560 | Setting up a residency permit in Costa Rica

00:58:33.440 | is crazy expensive.

00:58:34.920 | And one of the conditions of setting up a residency permit

00:58:38.300 | is that, let me be careful with that crazy expensive,

00:58:41.340 | it's more expensive than many other places.

00:58:42.980 | And one of the things that gets most retirees

00:58:45.500 | they don't realize is a condition of maintaining residency

00:58:49.320 | is you have to maintain contributions

00:58:51.340 | to the social healthcare system

00:58:52.940 | that you're probably never in your life gonna use.

00:58:55.180 | And so that adds hundreds of dollars a month

00:58:57.220 | to maintain this thing.

00:58:58.340 | In addition, you're not gonna get,

00:59:00.500 | the shopping is hard, it's expensive.

00:59:03.460 | It's just nothing like some of the benefits

00:59:05.160 | that you get in other places.

00:59:06.240 | And so Costa Rica can be great,

00:59:08.420 | but you can access that without ever becoming a resident

00:59:11.140 | and go and spend a couple of months there,

00:59:12.860 | get a little beach place if that's what you like

00:59:14.780 | and enjoy that, but you don't have to move all your life

00:59:17.100 | and infrastructure there.

00:59:18.180 | So forgive the long windedness of my answer,

00:59:21.540 | but if you understand that, then it can be annoying

00:59:25.040 | because I'm not telling you a country,

00:59:27.560 | but I'm telling, in fact, if you just want one country,

00:59:30.080 | I'm telling you it's the United States.

00:59:31.920 | That's where you're gonna find probably most

00:59:34.120 | of what you're looking for.

00:59:35.560 | But what you can do is create some of those backup plans

00:59:40.360 | and start testing them out.

00:59:42.160 | And then if you find that you enjoy those backup plans,

00:59:45.660 | then, and you like spending time,

00:59:47.700 | then move more of your life abroad.

00:59:50.200 | But if I'm counseling a guy like you,

00:59:52.440 | I would encourage you to do that slowly

00:59:54.880 | and strongly encourage you

00:59:58.800 | that you will make far more progress

01:00:01.360 | on enjoying a free lifestyle.

01:00:03.500 | If you turn off the TV, you turn off your Twitter account,

01:00:06.640 | you turn off all that stuff,

01:00:08.020 | you practice a lifestyle of digital minimalism,

01:00:10.600 | you surround yourself with community of people

01:00:13.520 | that are like-minded to you,

01:00:15.040 | and you pick one or two issues that you care about

01:00:18.320 | that you might be able to affect in your local area,

01:00:21.000 | and you spend your time working on a couple of those issues

01:00:24.380 | rather than trying to go to another country

01:00:26.800 | thinking that it's gonna solve your problems.

01:00:29.060 | - So question for you in terms of localism within Panama,

01:00:37.720 | in the COVID example that you picked,

01:00:40.020 | I have no interest whatsoever in being in a city

01:00:43.140 | like Panama City, I'm much more interested

01:00:45.640 | in the rural parts.

01:00:47.240 | Do you have, do you believe that the same COVID hysteria

01:00:52.000 | prevailed in rural Panama that you described earlier?

01:00:56.440 | - Now for a limited time at Del Amo Motorsports.

01:00:59.160 | Get financing as low as 1.99% for 36 months

01:01:02.840 | on Select 2023 Can-Am Maverick X3.

01:01:06.040 | Considering the Mavericks taking home trophies everywhere

01:01:08.720 | from King of the Hammers to Uncle Ned's Backcountry Rally,

01:01:12.160 | you're not going to find a better deal

01:01:14.040 | on front row seats to a championship winner.

01:01:16.960 | Don't lose out on your chance to get a Maverick X3.

01:01:20.080 | Visit Del Amo Motorsports in Redondo Beach and get yours.

01:01:23.680 | Offer in soon, see dealer for details.

01:01:26.920 | - Yes and no.

01:01:28.440 | So you have a striking, so yes, the same COVID stuff

01:01:32.800 | applied in the rural areas because the national government

01:01:36.040 | imposed the requirements.

01:01:38.420 | The culture was very different in terms of the culture

01:01:43.120 | in the big city versus the culture on the beach.

01:01:45.680 | Anytime you go to a more rural environment

01:01:48.880 | or kind of the beach town vibe, things like that,

01:01:52.880 | you automatically get a much more lax culture.

01:01:56.360 | You automatically get a much more,

01:01:58.640 | just again, much more relaxed culture.

01:02:01.720 | So the laws were still there, they were just less enforced.

01:02:04.480 | But the biggest difference is going to be

01:02:06.920 | the difference between you and your American identity.

01:02:11.240 | That means your general built-in rebelliousness,

01:02:15.440 | your general basic annoyance with being told what to do.

01:02:20.440 | That's not the Panamanian culture.

01:02:22.280 | Panamanian culture has its own wonderful features,

01:02:25.880 | but they don't have a rebellious culture.

01:02:28.400 | They're not founded in that.

01:02:30.120 | That's not taught to them from their youth.

01:02:33.200 | And so yes, you're gonna have more lax enforcement,

01:02:37.140 | and some people like that.

01:02:40.500 | Again, there's lovely areas of Panama.

01:02:42.880 | You can go to a huge expat hub would be David

01:02:45.560 | in that area where it's highland, it's very cool,

01:02:49.140 | it's wonderful, there's tons of expats there.

01:02:51.500 | But then you get into just the question,

01:02:53.040 | and by the way, these are things to be aware of,

01:02:55.240 | and you won't know until you go and spend time there

01:02:57.500 | and see what you like.

01:02:58.960 | But one of the things is do you want conveniences?

01:03:02.720 | David is not a convenient place to live.

01:03:04.960 | You don't have Amazon shipping everything

01:03:07.400 | you could possibly imagine right to your door.

01:03:09.840 | For one guy, that's a benefit,

01:03:11.640 | meaning I can get away from this consumerist lifestyle,

01:03:14.600 | I can live a simpler lifestyle,

01:03:16.000 | I have my buddies, my friends, we live in a simple place,

01:03:18.760 | we live a simple life, and it's great.

01:03:20.560 | For another guy who needs those conveniences,

01:03:22.740 | it's a massive downside.

01:03:25.340 | So you will have to be the one to do that

01:03:29.660 | based upon experimenting.

01:03:31.260 | And my answer to your question thing

01:03:33.820 | is go and check out the places that you're interested in,

01:03:37.820 | and then see if you like them.

01:03:39.300 | And you'll know within a month or two

01:03:41.220 | kind of the general vibe that you get,

01:03:43.220 | and there's no reason to go and do any formalities

01:03:47.060 | with the government, just go and do tourist runs,

01:03:48.860 | do visa runs for a time,

01:03:50.840 | rent an apartment for a few months,

01:03:52.720 | for six months, a year,

01:03:54.160 | see if you like spending your time.

01:03:55.960 | And the people who are the best candidates

01:04:00.960 | for genuinely moving abroad and being somewhere else

01:04:04.340 | are those who find a local community

01:04:06.600 | and a local culture that they really enjoy

01:04:09.680 | and really fit in with.

01:04:11.800 | But I think my hard-won experience from my own testing

01:04:16.520 | and a lot of consulting on this subject

01:04:18.900 | is that Americans significantly overestimate

01:04:23.900 | the problems within the United States,

01:04:26.320 | and they underestimate the problems abroad,

01:04:28.680 | and they get there, and after the emotions settle, et cetera,

01:04:31.760 | they realize, you know what,

01:04:33.480 | it was actually really good in the United States.

01:04:36.360 | And because the United States is so huge and so diverse,

01:04:39.440 | you can find any climate, any landscape,

01:04:41.900 | any community, any culture, et cetera,

01:04:45.340 | then you'll have an easier time of it

01:04:48.120 | relocating within the United States

01:04:50.280 | versus relocating permanently abroad.

01:04:53.040 | Now, quickly to cover my tracks,

01:04:55.300 | like in that course that I gave,

01:04:56.960 | I gave a long list of here are some things

01:04:58.900 | where I would be out of the United States in an instant.

01:05:01.640 | So I think that everyone should have a backup plan,

01:05:06.400 | because one thing I learned is once,

01:05:09.640 | and this was a huge deal for me,

01:05:11.720 | I have been in your emotional state.

01:05:14.920 | My current sanguinity comes from the fact that

01:05:19.920 | I don't need to be a US citizen,

01:05:22.900 | I don't need to live in the United States,

01:05:24.600 | I don't need to have any money in the United States,

01:05:26.600 | I could spend the rest of my life and never go back.

01:05:29.480 | And I've spent the last four years abroad,

01:05:32.440 | and so now my appreciation of the country

01:05:34.760 | has grown increasingly.

01:05:36.640 | And knowing that I don't have to be there

01:05:39.760 | makes me appreciate it for what it is,

01:05:42.380 | with all of its benefits and flaws,

01:05:45.420 | and be much more relaxed about it.

01:05:47.320 | So if you haven't put in place any of the steps

01:05:50.080 | and you're new to this,

01:05:51.280 | then I encourage you put in place the basic steps

01:05:53.840 | little by little,

01:05:54.920 | but don't bite off the whole thing

01:05:58.720 | until you've spent some time testing it out.

01:06:00.920 | - Well, appreciate that.

01:06:06.360 | I guess one other variable I'll throw in there

01:06:08.480 | is I somewhat recently retired from the army,

01:06:12.260 | and the person I'm with and I were not co-located

01:06:17.260 | for 23 years together.

01:06:19.840 | So we essentially have two houses worth of stuff.

01:06:23.300 | So that stuff is gonna have to go somewhere,

01:06:27.320 | or I could just sit there and I can pay a lot per month

01:06:31.280 | to just let it sit in storage.

01:06:33.360 | So in many ways, it behooves us to figure out,

01:06:36.020 | place B perhaps more quickly than the average person,

01:06:41.780 | just because we have a significant cost

01:06:43.960 | if we don't take a plan B.

01:06:45.640 | Any thoughts on that?

01:06:48.240 | - Yeah, it's a false choice.

01:06:50.880 | So with the stuff,

01:06:52.540 | you make your own assessment of the stuff,

01:06:55.720 | meaning that we all accumulate junk.

01:06:58.020 | And there's a difference between a guy

01:06:59.340 | who's got a machine shop that he works in all the time.

01:07:03.040 | Like he needs a place for his tools

01:07:04.600 | versus a guy who's just accumulated

01:07:06.040 | a bunch of random furniture, random stuff.

01:07:08.120 | So it's not one or the other.

01:07:10.680 | You can downsize from the two houses

01:07:13.260 | into one house in the United States,

01:07:14.860 | and you can just get rid of 80% of the stuff

01:07:16.620 | that's in house B and move the 20% to house A,

01:07:19.660 | getting rid of 50% with what's in house A,

01:07:21.580 | and you can have a better lifestyle on the other side.

01:07:25.100 | I love international living.

01:07:27.700 | I love it.

01:07:28.700 | I enjoy so many things about it.

01:07:31.300 | One of my favorite times in my life was recently,

01:07:36.300 | couple years ago, I guess technically

01:07:39.380 | I still own some cars, but I didn't have,

01:07:41.400 | anyway, the cars were all, other people had them.

01:07:43.960 | I had no cars that I was, although I owned them,

01:07:46.380 | other people were all driving my cars.

01:07:48.840 | So I didn't have to deal with them on a day-to-day basis.

01:07:51.080 | I had a small storage unit with some personal effects

01:07:53.960 | that was just a tiny little storage unit.

01:07:56.040 | And I was just living in hotels, Airbnb's,

01:07:59.540 | just moving around the world with a couple of,

01:08:01.880 | with my wife and children,

01:08:04.080 | but with just a tiny underseat bag.

01:08:06.160 | So we could get on any airplane flight, any train.

01:08:08.200 | I loved it.

01:08:09.040 | And so my, what reason I'm saying that is,

01:08:12.400 | you can do the stuff that you're trying to do

01:08:14.500 | and you can get rid of the stuff.

01:08:15.900 | So your mindset of thinking that you,

01:08:18.300 | thinking traditionally of,

01:08:20.980 | I have a house in the United States.

01:08:22.980 | I need to find, I'm annoyed by the United States

01:08:25.340 | and I need to find another country where things are better.

01:08:28.060 | What country should I move to?

01:08:29.660 | And then thinking, I'm gonna move to that country.

01:08:32.340 | I'm gonna get a shipping container.

01:08:33.560 | I'm gonna load everything up

01:08:34.480 | and I'm gonna move all my stuff to that country.

01:08:36.500 | I think that's a mistake.

01:08:37.860 | It's a huge amount of costs,

01:08:39.240 | it's a huge amount of investment

01:08:40.440 | and it's a dumb plan to start with.

01:08:42.660 | So what I would say is,

01:08:44.520 | is your partner still in the army

01:08:46.700 | or is your partner also retired at this point?

01:08:49.000 | - She's retired.

01:08:51.400 | - Okay, so what I would do is,

01:08:54.220 | first get rid of one of the houses,

01:08:55.800 | choose the house that you like more

01:08:58.000 | and get rid of--

01:08:58.840 | - We only have one house.

01:08:59.940 | - Okay.

01:09:01.200 | So where's all the stuff is in two locations?

01:09:02.040 | - We have two houses worth of stuff and only one house.

01:09:04.160 | - Okay, so go through and get rid of half of the stuff.

01:09:07.660 | Like there's just no reason--

01:09:08.500 | - I can't, it's not in my possession.

01:09:10.300 | In other words, other than just telling the army

01:09:12.400 | to send it to a dump.

01:09:13.500 | - Okay, so the army has your stuff stored

01:09:17.200 | and the army will ship it to wherever you tell them

01:09:19.180 | to ship it, is that right?

01:09:20.480 | - Correct, or they will continue to hold it

01:09:24.000 | at a certain number of thousand dollars per month.

01:09:26.560 | - All right.

01:09:27.400 | How much is the value, the dollar value today of,

01:09:32.120 | just a guess, of all the stuff

01:09:33.700 | that the army is currently holding for you?

01:09:36.160 | If you had to buy it all again,

01:09:37.280 | how much would it cost you?

01:09:38.640 | - Well, and it also has things like pictures

01:09:42.520 | and things that are not replaceable.

01:09:44.760 | - Understood.

01:09:45.600 | - So that's just the other piece of it.

01:09:47.080 | But I mean, if it all disappeared tomorrow, I'd be fine.

01:09:52.560 | I mean, that's the reality that I think you're getting at

01:09:55.280 | is if it all burned up in the storage places that it is,

01:10:00.280 | my life would go on just fine.

01:10:02.040 | - Right, okay.

01:10:03.200 | So then we have personal mementos and personal effects.

01:10:06.400 | That's not gonna be more than, in the end,

01:10:08.600 | a couple of Rubbermaid totes worth

01:10:11.780 | by the time you get it all sorted through.

01:10:13.720 | And the rest of it is just miscellaneous stuff,

01:10:17.000 | some toys, some hobby stuff, some furniture, utensils,

01:10:21.240 | all the normal stuff of living.

01:10:23.120 | So what I would encourage you to do,

01:10:24.920 | and I'm speaking very broadly,

01:10:27.560 | of course, here in a generalized context,

01:10:29.760 | and I'm gonna move on here

01:10:31.240 | 'cause I got three other callers waiting,

01:10:32.680 | but what I would encourage you to do

01:10:34.520 | is have the army ship all the stuff to your house.

01:10:37.520 | Host, pull out all of the personal mementos

01:10:40.240 | and all of those things, all the personal papers,

01:10:43.200 | all the personal mementos, all the personal books,

01:10:45.320 | things like that.

01:10:46.520 | You know you don't need the furniture, et cetera.

01:10:48.800 | So just post an ad online and sell the furniture.

01:10:53.200 | Sell it cheap, collect the $4,000 that you have for it,

01:10:57.200 | or whatever that is.

01:10:58.680 | All the stuff, the dishes and clothes and things like that,

01:11:02.680 | just get rid of all that stuff.

01:11:04.560 | Then set yourself a one-month project

01:11:07.560 | to store digital copies and organize your personal effects.

01:11:12.560 | And I think if you set it as a one-month project,

01:11:14.960 | you're gonna be working hard for a month,

01:11:17.960 | but you can get it done in a month.

01:11:19.500 | So with your pictures and things like that,

01:11:23.040 | you can digitize those pretty easily.

01:11:25.200 | So what I did when I was going through this

01:11:27.520 | was I bought a good quality duplex scanner.

01:11:31.060 | The specific one that I have is called a ScanSnap iX500.

01:11:36.000 | I don't know if that's still the best scanner or not.

01:11:37.880 | It was at the time, it's a $500 scanner.

01:11:40.520 | So go and do a little research,

01:11:41.700 | get yourself a good quality duplex scanner.

01:11:44.700 | What a duplex scanner is, it's a device

01:11:47.160 | that as you feed things through it,

01:11:50.560 | it will scan both sides of the paper automatically,

01:11:55.560 | and it'll do about 30 pages a minute.

01:11:57.880 | So just about as fast as a good quality copy machine

01:12:02.180 | can spit out copies, it's pretty fast.

01:12:04.500 | 30 pages a minute is pretty quick.

01:12:06.420 | And so what you can do is you can get all your papers,

01:12:09.080 | everything like that, lined up,

01:12:11.740 | and just go boom, boom, boom, boom, boom, boom, boom,

01:12:13.880 | and you can get scans of all of that.

01:12:15.340 | And it can do mixed media, it can scan pictures.

01:12:18.060 | Those fast scans are not gonna be

01:12:20.460 | archival quality of pictures,

01:12:22.460 | but that would be something

01:12:23.480 | so that you have a digital backup.

01:12:25.600 | And I'm not encouraging you to get rid

01:12:27.340 | of all of the pictures.

01:12:29.380 | But with all the pictures,

01:12:30.800 | buy a whole set of giant set of matching photo albums,

01:12:34.540 | put all of the pictures and albums

01:12:36.140 | so that they'll be stored,

01:12:37.460 | put them in big rubber made totes

01:12:39.780 | that are gonna be really heavy,

01:12:41.720 | but that are gonna be simple to store

01:12:43.220 | and keep things out of it,

01:12:45.220 | keep them clean and protected, et cetera,

01:12:48.300 | and then find a place to store that stuff.

01:12:50.320 | So all your personal stuff.

01:12:51.820 | If you have a huge book collection,

01:12:53.780 | this is work, but what I did

01:12:55.680 | was I scanned my entire library.

01:12:57.980 | That's a big project.

01:12:59.460 | It might be premature.

01:13:00.780 | Books are easy to store.

01:13:02.700 | They go in books pretty well.

01:13:03.780 | But what I did was I did destructive scanning.

01:13:05.840 | I whacked off the spines of all my books.

01:13:07.760 | I passed them through the duplex scanner

01:13:09.740 | and I digitized the entire library

01:13:11.420 | so it's on my computer.

01:13:13.780 | If you need help, just go to the internet

01:13:15.420 | about living a paperless life

01:13:17.080 | and all this stuff and it's out there.

01:13:18.940 | There are services that you can hire

01:13:20.500 | if you wanna spend money

01:13:21.460 | where they'll professionally scan all your photos,

01:13:24.160 | provide everything to you digitally.

01:13:26.460 | Then all that stuff, put it away.

01:13:28.980 | And then if you have very valuable personal mementos,

01:13:32.060 | things that really matter,

01:13:34.500 | maximum maybe two storage totes of that stuff.

01:13:37.900 | Your mother's favorite thing and the other thing.

01:13:40.900 | Just pack that stuff out.

01:13:42.780 | Rent out your house.

01:13:43.780 | Rent out your primary house.

01:13:45.700 | Find a friend, someone at church

01:13:47.480 | or someone in the army who's retiring

01:13:49.620 | who needs a year to land somewhere.

01:13:51.860 | Rent out your primary house

01:13:53.720 | so that the house is occupied and taken care of.

01:13:56.760 | Don't rent it on the open market.

01:13:58.440 | Find someone who would be trustworthy

01:14:00.600 | who just needs a place to live

01:14:02.240 | so it covers the housing expenses.

01:14:04.400 | Load up some suitcases and go travel the world for a year.

01:14:07.340 | Spend a year on the road

01:14:08.760 | traveling to all the different places

01:14:10.320 | that you think could be interesting.

01:14:11.480 | Go spend a month in Panama.

01:14:12.800 | Spend a month in Costa Rica.

01:14:15.080 | Spend a month in Colombia.

01:14:16.480 | Spend a month in Argentina.

01:14:17.760 | Hop on an airplane, go to Europe.

01:14:19.920 | Travel around Europe.

01:14:20.960 | Go to Eastern Europe.

01:14:21.960 | Go to Western Europe.

01:14:23.080 | Pop through Turkey.

01:14:24.520 | Get on an airplane, go to Asia.

01:14:26.380 | Spend some time traveling for a year or two.

01:14:28.960 | And while you're on that trip,

01:14:30.360 | make careful notes of the things that you like

01:14:33.800 | and the things that you don't like.

01:14:35.240 | And on that trip, spend time with expats,

01:14:37.920 | people who have moved there

01:14:39.200 | and immigrated to those countries,

01:14:40.960 | and find out what they like

01:14:42.520 | and what they don't like about the places where they are.

01:14:46.240 | And then see what resonates with you

01:14:48.880 | and see what your experiences are.

01:14:50.680 | What can happen for you on that trip

01:14:52.680 | is as long as you will stop browsing Twitter

01:14:54.600 | and stop following the news,

01:14:56.200 | is you'll forget about most of what's happening

01:14:58.360 | in the United States,

01:14:59.600 | and you can just be immersed

01:15:02.980 | into a new and very present life.

01:15:05.320 | And your income should handle that.

01:15:06.820 | Your finances should handle that,

01:15:08.000 | especially if you have whatever expenses you have covered,

01:15:10.360 | and you spend a month or two stocking stuff away.

01:15:13.480 | And you'll come back,

01:15:14.880 | and you'll have so much more clarity

01:15:17.880 | on your life after that experience.

01:15:20.960 | You'll have clarity on what you missed

01:15:22.600 | about the United States,

01:15:23.560 | and you'll have clarity on regions

01:15:24.920 | that you wanna explore more.

01:15:26.440 | And then if at that point in time,

01:15:27.720 | you realize, you know what, we really enjoy Turkey,

01:15:30.400 | or we really like Colombia,

01:15:32.440 | or we really enjoy France, or something like that,

01:15:36.240 | then you can go ahead and go farther

01:15:38.880 | and go ahead, rent an apartment,

01:15:40.480 | ship a pallet of stuff in from the United States

01:15:42.840 | that you want, and do that.

01:15:45.360 | But one of the best things you can do

01:15:47.400 | is free yourself from the physical possessions.

01:15:51.240 | And when you realize how free you can be,

01:15:53.840 | it'll add to your sense of mental freedom,

01:15:56.160 | political freedom, et cetera,

01:15:57.920 | by recognizing I'm not tied down in this one place.

01:16:01.500 | I don't have to be here,

01:16:02.680 | and I don't have to find kind of the world's perfect place.

01:16:07.400 | It doesn't exist.

01:16:08.680 | I don't think it exists.

01:16:09.760 | There are different places

01:16:10.720 | that are good for different people.

01:16:12.240 | But on the whole, you can be very free

01:16:15.600 | if you have the legal background

01:16:17.120 | that I described with flag theory,

01:16:18.880 | and you can be very mentally free

01:16:21.480 | if you focus on what you want in your life,

01:16:23.920 | and you focus on ignoring a lot of the stuff

01:16:26.960 | that you don't want in your life.

01:16:28.840 | - Thank you very much for your time,

01:16:33.120 | and I apologize for confusing your courses.

01:16:34.960 | As I think about it,

01:16:36.240 | I was listening to an older podcast where you announced it,

01:16:38.920 | 'cause I've been listening to your new ones,

01:16:41.120 | and your old ones intermixed.

01:16:42.600 | - There we go, all good.

01:16:43.440 | - So apologies for that, that will mix up.

01:16:45.360 | - All good, my pleasure.

01:16:46.760 | Check back in in a couple months.

01:16:48.000 | I'd love to hear from you in a couple months

01:16:49.160 | on a Friday call and see how things are going

01:16:51.240 | and see what of this advice has worked and what doesn't.

01:16:53.680 | Sam in Chicago, welcome to the show.

01:16:55.480 | How can I serve you today?

01:16:56.780 | - Hey, Joshua, thanks for taking my call.

01:17:00.480 | - My pleasure.

01:17:01.920 | - I was thinking recently about putting together

01:17:06.480 | a digital library, just a personal digital library.

01:17:09.700 | I've heard you talk about Caliber for like your eBooks,

01:17:15.240 | but I'm also looking at wanting to archive

01:17:18.800 | a lot of the paid subscriptions that I have,

01:17:22.400 | like premium podcasts and audio books,

01:17:26.000 | and even things like your courses that you have.

01:17:30.000 | So like a lot of your older courses

01:17:33.880 | are no longer available to be purchased.

01:17:38.880 | And I'm just thinking about having an offline private

01:17:44.720 | library, so I'd like to get your thoughts about that,

01:17:47.920 | to what extent you have locally saved content.

01:17:52.920 | And after you go through that,

01:17:57.720 | I'd also like to get your thoughts on,

01:17:59.680 | once you have something like that,

01:18:01.560 | it could be a pretty valuable asset.

01:18:04.180 | So how do you think about sharing that

01:18:07.840 | with your family, your community,

01:18:10.080 | and sort of along those lines?

01:18:15.080 | - Yeah, it's a big question.

01:18:17.080 | Let me give you a fairly brief answer.

01:18:19.240 | And by the way, your call was intelligible,

01:18:21.720 | but the audio quality wasn't great.

01:18:23.040 | It was, it seems like a slow connection.

01:18:24.740 | So, oops, wrong button.

01:18:26.740 | Is there anything you can do to improve that

01:18:28.640 | while I give you an answer?

01:18:30.240 | So you can do it, and there's plenty of advice out there.

01:18:36.360 | I'm not the world's best guy.

01:18:39.360 | And here's why.

01:18:41.080 | Over the years, I've been interested in so much stuff,

01:18:43.680 | and I consume so much information,

01:18:45.800 | and I've tried to archive it all and collect it all,

01:18:48.880 | and it creates just this giant issue.

01:18:51.720 | It's so hard to manage.

01:18:54.040 | And you say, what for?

01:18:55.440 | And I think of it as one of those things that,

01:18:59.120 | if I put, am I really gonna access this stuff again?

01:19:02.540 | And at the moment, I have largely chosen

01:19:06.520 | to simply trust my brain.

01:19:08.240 | My brain can usually give me the answer,

01:19:10.400 | and in the times when it can't,

01:19:12.040 | with the power of modern search engines, et cetera,

01:19:16.600 | I can usually get close enough to my answer.

01:19:18.720 | So earlier in the call, somebody told me,

01:19:21.960 | or somebody asked me the question of what episode was it.

01:19:24.840 | I couldn't remember what the episode was called.

01:19:26.760 | I couldn't remember the guy's name.

01:19:28.600 | It took me a couple minutes to think of it

01:19:30.360 | and go and search for it.

01:19:31.500 | But at the end of the day,

01:19:32.640 | it's a lot easier for me to do that

01:19:35.440 | versus taking all of my podcasts,

01:19:37.760 | having all of them transcribed,

01:19:39.440 | and trying to create this comprehensive thing.

01:19:42.080 | And so I think there's value in just letting stuff go.

01:19:45.080 | And there's value in not trying to keep everything

01:19:48.360 | that you're trying to keep,

01:19:49.240 | but just letting stuff go so that you can

01:19:52.800 | systematically move on to what's new and what's better.

01:19:56.920 | I do like to have stuff stored, but creating a huge thing.

01:20:01.920 | I remember a few years ago, I bought a new computer.

01:20:05.240 | I got a new personal brain software system

01:20:09.280 | that I was convinced was gonna be

01:20:10.520 | the world's greatest thing.

01:20:11.440 | I started filling it up, and it's like, why?

01:20:13.960 | Why am I doing this?

01:20:14.880 | Is this really how I wanna spend my time,

01:20:17.440 | or can I just trust myself to learn what I need to know?

01:20:20.680 | Even when things are really valuable,

01:20:22.440 | let's say that my courses that you've bought

01:20:24.960 | are the most valuable things in the world,

01:20:26.760 | and you learn so much.

01:20:28.560 | Realistically, and by the way, of course,

01:20:30.480 | that's exactly what they were.

01:20:32.960 | But realistically, things hit you at a certain time.

01:20:36.080 | A piece of information hits you,

01:20:38.320 | and either you do something about it

01:20:39.800 | or you don't do something about it.

01:20:41.360 | And if you do something about it,

01:20:43.080 | you got most of the value from the piece of education,

01:20:45.980 | and you're probably not gonna go through it three times.

01:20:49.800 | I'd like to believe that all my stuff

01:20:51.320 | was worth going through two times,

01:20:52.640 | but realistically, you're not gonna go through something

01:20:55.440 | three times, you're gonna grab what's appropriate.

01:20:57.720 | And so in the information age,

01:21:00.080 | when the sheer volume and quantity of information

01:21:02.600 | is increasing so much, we have to develop

01:21:06.400 | and implement careful filters

01:21:08.520 | on the information that we consume.

01:21:10.880 | And my filter is action.

01:21:13.160 | So I believe in just-in-time learning,

01:21:17.360 | not for children, et cetera,

01:21:19.360 | but I've had to adjust my own learning style.

01:21:22.360 | When I was younger, it always served me well to,

01:21:25.940 | it always served me well to learn everything,

01:21:28.840 | about everything, and try to know everything.

01:21:30.760 | But it can result in too much learning

01:21:33.320 | and not enough action.

01:21:34.760 | And so over the past years,

01:21:35.960 | I've really tried to discipline myself

01:21:38.760 | to do just-in-time learning,

01:21:40.840 | and to learn towards a specific goal

01:21:43.400 | when there's something that I,

01:21:44.880 | when I can know and articulate the problem.

01:21:47.400 | And there's a good chance that a lot of the stuff

01:21:49.120 | that you're archiving and holding onto,

01:21:51.360 | you're not gonna be able to have that there forever.

01:21:55.320 | So with regard to library management,

01:21:58.320 | I digitized my entire library

01:22:01.120 | because I wanted to go and travel.

01:22:03.960 | And I did that.

01:22:05.440 | I have since repurchased a lot of other books,

01:22:08.240 | and in hindsight, I would probably keep more books,

01:22:13.240 | just because books are relatively,

01:22:15.520 | they're not super inconvenient to have.

01:22:17.280 | You can put them in boxes and stick them away somewhere

01:22:20.360 | if you don't have shelf space.

01:22:22.200 | So I would just, and what I've learned is just,

01:22:26.960 | I guess I've become less concerned

01:22:29.400 | with trying to create complete archives of everything.

01:22:32.360 | I do have a hard drive that is full of stuff.

01:22:35.080 | And so if you could do that,

01:22:36.920 | my courses, I've always tried to make it

01:22:38.440 | so my students can just download it.

01:22:40.280 | I don't talk a lot about that,

01:22:42.120 | but it's always there that you can download it, my stuff.

01:22:44.800 | I don't put rights management and encryption

01:22:47.160 | and anything on it.

01:22:48.000 | Mostly, I always provide the files

01:22:50.240 | so it can be downloaded to your personal archives.

01:22:52.520 | So if my platforms disappear, you have that.

01:22:55.480 | And I think because of the inexpensiveness of storage,

01:23:00.480 | that it's simple to do.

01:23:01.760 | And obviously, digital storage is not such a big deal,

01:23:07.200 | but I think it does still weigh us down,

01:23:09.160 | just like physical storage.

01:23:10.280 | I have a friend of mine who was a massive DVD collector.

01:23:13.360 | And this guy, a single guy, lots of money,

01:23:15.280 | his entire house is a four-bedroom house

01:23:17.280 | that's entirely devoted to his stuff.

01:23:19.520 | And over the years, he just bought so many DVDs,

01:23:21.840 | and I find his collections oppressive.

01:23:24.480 | And I'm like, dude, why do you need all this?

01:23:26.320 | Now, of course, I'm a millennial,

01:23:27.680 | and just watch it or skip it.

01:23:31.200 | But I guess what I'm saying is,

01:23:32.440 | a lot of it doesn't need to be stored.

01:23:34.120 | If you are gonna store it, what do you need?

01:23:36.400 | Well, I think the answers to it

01:23:39.280 | is you would create a RAID configuration of redundant disks.

01:23:44.280 | I can't remember all of the data on this.

01:23:47.440 | I looked into this deeply sometime back,

01:23:49.200 | but I decided not to do it.

01:23:50.400 | But you create a RAID system.

01:23:52.120 | There's software that does it,

01:23:53.160 | so you have multiple large hard drives

01:23:54.840 | that are put together.

01:23:55.680 | There's mirrored backups, et cetera.

01:23:58.400 | You can create a Plex server

01:24:00.120 | that has all of your media on it,

01:24:02.320 | and you can put that into a system

01:24:06.320 | that is indeed quite valuable.

01:24:08.520 | I have a friend of mine that has a huge,

01:24:13.320 | he is one of these pack rats, of good information.

01:24:16.800 | I'm not accusing him of being a hoarder,

01:24:18.160 | like of good information.

01:24:20.200 | He has something like 14 terabytes of information

01:24:23.280 | stored on a device, and it's in a Pelican case, et cetera.

01:24:27.760 | And I have considered making him a five-figure offer

01:24:32.000 | to purchase it because a lot of his information

01:24:35.000 | is technical stuff, et cetera.

01:24:38.260 | And there is huge value in it.

01:24:42.640 | So if you do it, go and look for an array.

01:24:46.000 | I wish I remembered all the software

01:24:48.640 | off the top of my head.

01:24:49.520 | I could get you that at some point.

01:24:50.880 | But you would create an actual storage system,

01:24:54.240 | and you would do it in a very disciplined way,

01:24:56.660 | and it's going to be a significant amount of time.

01:24:59.420 | So I guess I'm hedging my bets and kind of quibbling here,

01:25:03.480 | but on the one hand, move lightly through life.

01:25:07.120 | You didn't come into the world with anything.

01:25:08.520 | You're not taking anything of the world out of it.

01:25:10.480 | Most of what you need to know is in your own brain.

01:25:12.760 | Don't burden yourself down with trying

01:25:14.340 | to archive everything when you're probably

01:25:15.960 | not gonna use it.

01:25:16.800 | A lot of my stuff may be obsolete three years from now,

01:25:19.000 | as well as everything else that you did.

01:25:20.640 | And so the costs, especially, one more comment.

01:25:23.740 | I have found, I used to obsess about this stuff

01:25:27.440 | because I wanted to be good with money.

01:25:29.480 | I wanted to be frugal.

01:25:30.320 | I didn't want to go and purchase another copy

01:25:32.740 | of a book that I already owned, et cetera.

01:25:35.200 | But as you move through life,

01:25:36.680 | your financial condition improves

01:25:38.680 | if you're focusing on the right stuff

01:25:39.960 | to the point where it really doesn't matter.

01:25:41.560 | So I've repurchased certain books multiple times.

01:25:44.520 | I had a physical copy of it.

01:25:45.800 | Yep, that physical copy is gone, or I have it scanned,

01:25:48.940 | but I'll go ahead and I'll grab it on Kindle,

01:25:50.680 | I'll grab it on iBooks or whatever it is.

01:25:53.720 | I'll grab the audio book, and it doesn't matter

01:25:55.520 | because if something is really valuable,

01:25:57.360 | so what if I pay $80 for four copies of it?

01:26:00.240 | It might not be the most efficient thing,

01:26:01.780 | but I'm only doing that when there's 800

01:26:03.920 | or $8,000 ideas in there that I need at a certain time.

01:26:07.120 | And so most of that stuff has become,

01:26:10.440 | not a rounding error, I don't want to sound arrogant,

01:26:12.760 | but it's just not a big factor to my finances.

01:26:15.920 | So if I've got premium stuff that has DRM on it,

01:26:18.520 | no big deal, I'll just rebuy it somewhere else.

01:26:20.360 | So those are my thoughts.

01:26:23.800 | - All right, quick follow-up.

01:26:26.360 | So how's my audio?

01:26:29.600 | - Better now, thank you, you fixed it.

01:26:31.240 | - Okay, awesome.

01:26:33.200 | So if I could get you to touch on sort of your view

01:26:37.720 | on sharing content as a content creator,

01:26:42.860 | if I were to have a library like your friend here with,

01:26:46.680 | I could see gathering upwards of 10 to $20,000

01:26:51.160 | worth of paid content.

01:26:53.480 | And how would you view offering that as a service?

01:26:56.840 | So like, let's see, Herbology, Srinivasan,

01:27:00.720 | has a book called "The Network State"

01:27:02.640 | and he talks about, are you familiar with that?

01:27:05.080 | - I haven't read it, no.

01:27:06.480 | Or I, sorry, actually, hold on, sorry, forget.

01:27:10.400 | I have a copy of it, I am familiar with his project,

01:27:12.920 | I have a copy of it in my files that I have not read.

01:27:16.600 | So there we go.

01:27:17.680 | - Okay, so it's kind of like having groups of communities

01:27:22.680 | that are connected online that would act sort of as entities

01:27:28.040 | or like a state would.

01:27:29.580 | And so in something like that,

01:27:30.840 | you could have something like a van life community

01:27:34.880 | where they're all connected by their hobby of van lifing,

01:27:39.880 | but there could be certain perks and stuff associated

01:27:43.280 | with being a member of the van life state.

01:27:46.640 | And one of the perks could be being a member

01:27:49.360 | of a massive library that's greater than any one

01:27:53.400 | of the people could come up with on their own,

01:27:56.440 | but it could be sort of a public resource.

01:27:58.760 | What would your thoughts be if, let's say you found out

01:28:02.720 | that like all of your back catalog of courses

01:28:06.560 | were in something like that too,

01:28:08.320 | not freely distributed on the internet,

01:28:11.040 | but in a private library that was shared?

01:28:13.880 | - Yeah, that's an interesting question.

01:28:16.400 | So first, let's begin with the legal perspective.

01:28:21.560 | What you are describing is illegal under US American law.

01:28:26.440 | I am pretty skeptical that American copyright law

01:28:31.440 | should be how it is.

01:28:34.700 | I'm pretty skeptical of it.

01:28:35.920 | I don't go deep into it.

01:28:37.000 | I don't have a thesis ready to present on it,

01:28:40.360 | but I don't think that current copyright law,

01:28:45.000 | the way that it's applied in the United States

01:28:47.120 | is the way that it should be.

01:28:48.640 | I am opposed to it.

01:28:50.000 | So if all the copyright laws were disbanded

01:28:52.700 | or if they were severely modified,

01:28:55.360 | I've never dug deeply into the history

01:28:57.600 | of how Disney screwed up copyright law, et cetera,

01:29:01.180 | but I think there's enough smoke there for me to think.

01:29:03.840 | I'm of the opinion that there's fire there,

01:29:05.880 | but I've never dug into it myself.

01:29:07.640 | But I've read enough essays basically against

01:29:10.720 | the concept of modern copyright law

01:29:12.840 | for me to be convinced that it probably

01:29:14.960 | should be thrown out.

01:29:16.800 | With regard, I myself, I try to be careful

01:29:21.720 | 'cause I don't wanna get in illegal hot water,

01:29:23.240 | but I take liberties on occasion with copyright law.

01:29:27.520 | I've read far too long of passages from books

01:29:31.640 | and things like that.

01:29:32.680 | And what I always try, the way I myself manage that

01:29:35.620 | is I always try to think of what I think

01:29:40.120 | the intent of the author would be.

01:29:42.600 | And I think that, so if I read,

01:29:46.960 | what would be an example?

01:29:47.800 | I read extensive portions from "Climbing Parnassus"

01:29:51.960 | some months back.

01:29:53.560 | Here's a book that I clearly took great liberties

01:29:56.860 | with the copyright.

01:29:58.440 | But as I look at it, the book was old,

01:30:01.520 | 10 years old or something like that.

01:30:03.280 | The book is not a big bestseller or a big seller.

01:30:06.200 | There's virtually no appeal for these ideas

01:30:09.760 | in the modern era.

01:30:11.020 | And so as I see it, I'm trying to spread the author's ideas.

01:30:17.120 | The author isn't making, it's not a latest greatest thriller

01:30:20.720 | where the author's making millions on it.

01:30:22.240 | The author wrote the book out of a passion for ideas.

01:30:26.200 | And the author is trying to spread these ideas.

01:30:28.500 | And I'm trying to serve the author in spreading the ideas.

01:30:32.720 | And so of the tens of thousands of people

01:30:35.440 | who listened to some portion of my reading

01:30:38.880 | that those excerpts that I did,

01:30:42.400 | there are, I'm sure there were hundreds of people

01:30:46.880 | who said, you know what, this really resonates with me

01:30:49.360 | and went and bought the book.

01:30:50.680 | And then there were thousands of people

01:30:52.200 | who never bought the book, listened to it,

01:30:54.800 | and the ideas impacted them,

01:30:56.200 | but they never would have read it in the first place.

01:30:57.760 | And so I don't think the author was harmed in any way

01:31:00.520 | by my reading extensive portions of his ideas in public.

01:31:05.520 | I think the author was helped because the ideas are advanced

01:31:08.960 | and I would bet that if he were answering the question,

01:31:11.440 | he would say, yeah, I'm glad that you did it.

01:31:13.280 | And I didn't ask him.

01:31:14.360 | And if he wrote to me and said, Joshua,

01:31:16.240 | please take this down, I'd be off immediately.

01:31:18.440 | So back to my stuff, I kind of think of it the same way.

01:31:21.900 | I don't worry too much about piracy

01:31:23.840 | 'cause pirates are losers.

01:31:25.160 | Like people who go out and don't pay for stuff,

01:31:29.380 | they don't amount to anything, they're just losers.

01:31:32.760 | And I have no interest in, if they get onto my content

01:31:35.600 | or they take a course of mine,

01:31:36.720 | maybe they won't do that anymore.

01:31:38.460 | But I mean, they're just pitiful people

01:31:40.040 | who don't pay for stuff.

01:31:41.880 | They're losers, they're not able to be successful.

01:31:45.440 | It's a terrible mindset.

01:31:48.180 | The idea of not paying people for their contributions

01:31:52.240 | in some way is, again, it's a loser mindset.

01:31:57.600 | But those people who don't pay for my stuff,

01:32:00.360 | who find it some, I would guess that some of my stuff

01:32:03.340 | is out there on some torrent site, et cetera,

01:32:06.100 | 'cause everything is out there.

01:32:07.660 | But I don't worry about it for a couple of reasons.

01:32:10.080 | Again, the people who do that and don't find a way

01:32:12.940 | to find the current stuff, they're losers.

01:32:16.760 | And I figure, hey, if they take my stuff,

01:32:18.720 | maybe it'll help them something.

01:32:19.740 | And at some point, they'll come back

01:32:20.940 | and it'll all work out, they'll pay me at some point.

01:32:24.060 | And more importantly, they can't keep up.

01:32:27.100 | And so I can produce new, better content

01:32:31.240 | far faster than anyone can rip it off.

01:32:34.060 | And they can't keep up with me,

01:32:37.280 | they can't keep up with my brain

01:32:38.600 | and with my learning and my ability, et cetera.

01:32:40.700 | And if I released a course three years ago

01:32:43.260 | and I took it off the market,

01:32:44.820 | well, the reason I did it is because the current one

01:32:47.080 | is way better and I've made it better.

01:32:48.540 | And the most valuable thing that somebody has

01:32:52.860 | in their life is time, not money.

01:32:55.180 | And so when I was young, I consumed lots of,

01:33:00.180 | I had lots of bootleg stuff.

01:33:03.340 | I grew up in the era of Napster and whatnot.

01:33:05.960 | But I guess I still probably have a lot of those files,

01:33:09.160 | but I have gone on to spend thousands and thousands

01:33:11.900 | of dollars with the people who impressed me the most.

01:33:14.780 | And so if I went through the names,

01:33:18.660 | it doesn't, these are just digital files

01:33:20.940 | that got passed around and I didn't stay a loser

01:33:23.700 | who just tried to get free information.

01:33:25.460 | I used the free information that I got.

01:33:27.900 | And then I wound up paying those people thousands of dollars

01:33:30.900 | and purchasing their other stuff.

01:33:32.140 | And I'm loyal customers of many people.

01:33:33.960 | So I don't myself worry about it.

01:33:35.960 | I wouldn't care much.

01:33:37.600 | I would just, I don't, I'm not interested

01:33:40.580 | in spending my time trying to argue

01:33:44.860 | over pedantic stuff like that.

01:33:48.360 | I'm interested in going on building,

01:33:50.100 | getting better, bigger, et cetera.

01:33:51.660 | And so I don't have strong opinions on it

01:33:53.500 | beyond what I've described.

01:33:54.860 | - Well, that was very helpful.

01:33:57.860 | Thank you.

01:33:58.700 | - Yeah, my pleasure.

01:33:59.520 | Anything else?

01:34:00.360 | - I think that'll do it.

01:34:02.460 | I'll probably call back.

01:34:03.280 | - Yeah, love to speak to you again.

01:34:04.940 | And I should spend more time digging

01:34:08.220 | into the copyright arguments and whatever

01:34:09.860 | and to be able to prepare,

01:34:11.300 | to have a coherent argument on it,

01:34:12.980 | but I've never, I just haven't gotten around to it.

01:34:15.340 | Go to the great state of Pennsylvania.

01:34:16.460 | Welcome to the show.

01:34:17.300 | How can I serve you today?

01:34:18.300 | - Hey, I am a Pennsylvania area code,

01:34:21.820 | but I am actually in the great state of Washington.

01:34:24.580 | - Even a better state.

01:34:25.980 | Pennsylvania is for losers.

01:34:27.180 | Great state of Washington.

01:34:28.180 | That's where it's at.

01:34:29.220 | - I love them both.

01:34:32.340 | So I'm gonna take this into a slightly different direction.

01:34:35.920 | And I don't know if you've spoken on this before,

01:34:37.900 | but sometimes you say, ask me anything.

01:34:39.380 | So I'm going there.

01:34:40.900 | This is about family and about keeping my siblings together.

01:34:46.740 | I have two brothers and we are very strongly loyal

01:34:51.320 | to one another.

01:34:52.500 | And now we are facing that time in life

01:34:55.260 | when our parents are needing some help and are aging.

01:35:00.260 | And so, there are some things coming up

01:35:04.640 | for people that are difficult.

01:35:06.140 | And I just wanted a little bit of advice from you.

01:35:09.500 | So specifically what's happening, mom and dad are aging.

01:35:13.240 | Mom probably needs to go into assisted living

01:35:18.340 | and dad is mostly fine.

01:35:21.100 | He'll be fine and that's good.

01:35:24.160 | I'm trying to get my brothers over the denial of mom is,

01:35:27.660 | mom is just fine.

01:35:28.560 | She's not fine.

01:35:29.400 | She's had some strokes.

01:35:30.780 | She has some areas of fine and then some confusion.

01:35:34.480 | And they don't really want to hear any facts from me.

01:35:38.040 | There's a dynamic there where my success

01:35:41.680 | makes me untrustworthy to them.

01:35:44.880 | It's a white collar, blue collar thing.

01:35:46.960 | So there is a dynamic there.

01:35:48.380 | And I've learned that it's better for me

01:35:50.360 | not to try to be expert at anything when I'm with them.

01:35:53.460 | So, or even nudge toward expertise.

01:35:58.000 | Hey, go look at these resources, not good.

01:36:00.440 | So what I said to them was, hey, let's get an attorney.

01:36:04.500 | I'll pay for an hour and let's just ask them questions

01:36:07.180 | to see what can happen, which I think is good.

01:36:10.260 | In response to that, one of my brothers

01:36:12.640 | is a little bit concerned about retirement.

01:36:15.340 | He thinks he's gonna do some things with real estate.

01:36:17.260 | I think he's gonna be fantastic.

01:36:19.220 | I think it's a great thing.

01:36:21.820 | But what he did was talk to dad

01:36:25.060 | and got dad to change the will

01:36:26.980 | and put the house in his name only,

01:36:29.420 | instead of split between the three siblings,

01:36:32.700 | which was a backhanded move.

01:36:35.020 | He kind of did it in a bad way,

01:36:36.780 | telling dad he loves the house,

01:36:39.020 | but really he just wants to rent the house.

01:36:41.400 | So I feel like that's like a little bit of a red flag.

01:36:45.660 | And then he talked about maybe having dad

01:36:48.140 | transferred into his name to save on taxes.

01:36:51.380 | Well, that can't happen.

01:36:53.780 | And I talked to dad and the reason is

01:36:55.660 | 'cause dad needs to live there

01:36:57.020 | and it's not gonna be a lot of taxes.

01:36:59.020 | We're not in a position to have to worry

01:37:02.300 | about that amount of taxes and all that.

01:37:05.040 | And what if we transferred into his name

01:37:10.420 | and he died to rent the house,

01:37:13.020 | or he gets into a terrible accident

01:37:15.820 | and needs a lot of healthcare

01:37:17.420 | and has to sell his assets,

01:37:18.780 | then where does dad live?

01:37:19.780 | Like it's a whole,

01:37:21.060 | and there's not gonna be a house anyway.

01:37:22.740 | Probably dad is so healthy,

01:37:24.920 | if he drops dead, there will be a house.

01:37:27.060 | If he has any end of life care,

01:37:28.820 | that house is gonna pay for it.

01:37:30.820 | So I briefly talked to dad and gave him,

01:37:34.140 | I'm dad's advisor.

01:37:35.340 | First I said, "Dad, am I still your advisor?

01:37:37.100 | "I know that was the legal agreement

01:37:39.140 | "that you asked me to be,"

01:37:40.620 | and all of the things in his,

01:37:44.380 | for healthcare, which I've had to do a couple of times

01:37:46.680 | and other things,

01:37:47.520 | and he said, "Yes."

01:37:49.660 | And I said, "Well, I just wanted to let you know,

01:37:52.200 | "like I know you wanted to give Joe the house."

01:37:54.940 | And he said, "Yeah."

01:37:55.780 | He got real fired up.

01:37:57.180 | And I said, "That's good.

01:37:58.520 | "I understand, but also maybe don't do,"

01:38:03.180 | and I explained a couple of things

01:38:05.100 | about my concerns about why he should

01:38:06.940 | keep the house in his name for now.

01:38:09.140 | So dad's on board with that.

01:38:12.860 | I'm left with the situation

01:38:15.300 | where my brother,

01:38:18.080 | my brother, I don't know what he's gonna do next,

01:38:20.400 | who he's gonna convince of what,

01:38:21.760 | and I wanna bring him,

01:38:23.360 | and he is an ethical person.

01:38:25.400 | I think he is making a mistake right now.

01:38:28.160 | I think he might be getting some bad advice

01:38:30.200 | from a friend who I haven't met, but I intend to meet.

01:38:33.500 | And, oh, my earbud is going,

01:38:39.720 | so I'm changing earbuds, sorry.

01:38:41.480 | - All good.

01:38:42.840 | - Sorry, sorry.

01:38:44.320 | My earbud, my earbud.

01:38:45.660 | - I know what it's like.

01:38:46.500 | They run out.

01:38:47.320 | My count is two hours and 45 minutes.

01:38:49.840 | That's how long mine lasts.

01:38:51.000 | So if you're, we're at an hour and 40 minutes

01:38:54.060 | into this call, you've been waiting on hold,

01:38:56.180 | so it's understandable.

01:38:57.320 | No problem.

01:38:58.160 | (laughing)

01:38:58.980 | - So that's fine.

01:38:59.820 | So what I'm trying to do,

01:39:03.220 | so I got the name of a great lawyer,

01:39:05.460 | and I told the same brother, I said,

01:39:07.080 | "You know, I feel like you will be head of household one day.

01:39:10.520 | "I want you to think of yourself as a leader of a family

01:39:13.020 | "because when the next generation,

01:39:15.260 | "my kids and our other brother's kids,

01:39:17.300 | "as they grow, he's probably,

01:39:19.460 | "he's been in a physical labor job.

01:39:21.800 | "He's always been physically fit.

01:39:23.880 | "He may live the longest, most likely."

01:39:26.100 | So I'm trying to build him up

01:39:28.340 | into what I see as his potential as leader

01:39:31.620 | and try to steer him toward good decisions.

01:39:34.260 | That to me is the real value here.

01:39:37.660 | My daughter is great.

01:39:39.440 | She makes great decisions.

01:39:40.740 | She could guide the family if I passed

01:39:42.900 | or something like that,

01:39:43.940 | but also I'd love to keep everybody together

01:39:46.740 | and keep everybody whole.

01:39:48.620 | So I got the name of a great lawyer from a friend that helped

01:39:52.740 | and he said, "Oh, I called that lawyer

01:39:54.440 | "and never called me back,

01:39:55.740 | "but I have a lawyer from my friend."

01:39:57.860 | So I think it's a friend advising him

01:39:59.500 | to do a little underhanded thing.

01:40:01.300 | So is it really a lawyer?

01:40:02.660 | Is it, I don't know.

01:40:04.860 | So I said, "Okay, let's do that."

01:40:08.040 | Make the call, get the call set up.

01:40:11.040 | So I'm putting it in his bucket to do that,

01:40:15.200 | but time is marching on.

01:40:16.460 | So I may have to take another path myself

01:40:20.100 | to get mom in good shape.

01:40:22.240 | But I still wanna keep this whole thing whole.

01:40:25.280 | And so then he said to me,

01:40:28.020 | "Hey, Meg, do you have dad's will, this, this, this,

01:40:33.020 | "like the advanced directive,

01:40:35.040 | "like all the different things?"

01:40:36.360 | And I do, and I'm dad's designated person.

01:40:39.900 | Our other brother is mom's designated person.

01:40:42.140 | And we all agreed we would work together

01:40:44.340 | to make decisions and to keep everything well.

01:40:48.460 | And we have a process for that

01:40:50.080 | where whoever's in charge makes the final decision.

01:40:52.440 | And we all support that person

01:40:55.820 | 'cause mostly worried about my baby brother with mom

01:40:59.300 | having like guilt feelings or something,

01:41:01.300 | if he should make a decision

01:41:02.860 | or having concern that others in the family

01:41:05.980 | may give him grief, and we're gonna stand next to him

01:41:09.060 | no matter what he makes the decision.

01:41:11.140 | We'll do legwork if he needs it, but we'll stand with him.

01:41:14.180 | But you see, like there's this whole dynamic.

01:41:17.540 | And I think to myself,

01:41:18.860 | Joshua is gonna have a really great perspective on this,

01:41:21.460 | but I don't know if he's been there yet in life

01:41:23.580 | to think it through.

01:41:24.820 | So it's, yeah, okay.

01:41:26.260 | - Yeah, one of the benefits of working in this stuff

01:41:29.580 | is you accumulate experience.

01:41:31.620 | When you work in an industry, you accumulate industry far,

01:41:34.980 | you accumulate experience far beyond your years.

01:41:38.460 | You could be a 25-year-old,

01:41:40.380 | you could be a 25-year-old attorney,

01:41:42.460 | but if you've worked in divorces,

01:41:44.660 | you have an 80-year-old life experience

01:41:47.820 | in terms of relationships and relationship dynamics.

01:41:52.620 | And that's what has helped me so much

01:41:54.540 | is working in this, in addition to some personal experience.

01:41:58.180 | So first, I have some more questions I wanna ask,

01:42:02.100 | but I wanna just make one thing really clear.

01:42:04.720 | So let's assume the best about your brother,

01:42:06.940 | meaning he's a man of integrity, ethics, et cetera.

01:42:09.940 | He's doing stupid stuff

01:42:11.820 | because the idea that any father

01:42:16.460 | should ever transfer a house into his son's name

01:42:20.500 | while the father is living is dumb from a tax perspective,

01:42:24.620 | from a legal perspective, et cetera.

01:42:26.620 | The only reason I could ever think why you would do that

01:42:29.940 | would either be some kind of scheme

01:42:32.100 | to lower the parents' assets for Medicaid planning, et cetera,

01:42:37.100 | and that's a dumb way to go about it.

01:42:39.080 | You're not doing proper Medicaid planning in that scenario.

01:42:42.160 | Or it's some kind of fraudulent desire

01:42:44.760 | to basically steal a house from your parents.

01:42:47.500 | From a legal and tax perspective,

01:42:49.920 | the most important thing for your father to do

01:42:52.020 | with something like a house,

01:42:53.240 | even if he wants to completely inherit that particular son,

01:42:56.960 | is for him to own the house until he dies.

01:43:00.000 | And if he owns the house until he dies,

01:43:03.120 | then the house as capital gains property

01:43:05.520 | will receive a step up in tax basis,

01:43:08.140 | and the son will receive the house completely tax-free.

01:43:12.980 | Or alternatively, if he's trying to give the money

01:43:16.300 | to his son, don't give the house,

01:43:18.620 | sell the house and give the money.

01:43:20.540 | And so even if he sold the house and give the money,

01:43:23.940 | that itself would be a superior structure

01:43:26.340 | from a tax perspective.

01:43:27.420 | Now, there are potentially a couple of facts

01:43:30.040 | I didn't investigate.

01:43:30.880 | I'm not gonna investigate all the details.

01:43:32.180 | Maybe your father just owned this house.

01:43:33.440 | Maybe it has a high tax base, et cetera.

01:43:35.280 | There could be a few things,

01:43:36.300 | but your brother is doing stuff that's actually dumb.

01:43:39.080 | Like the idea of somebody writing,

01:43:42.280 | first, let me do a bit more fact finding.

01:43:44.640 | Has your father and mother lived in this house

01:43:46.580 | for a significant amount of time?

01:43:47.720 | Thus, they probably have a significant amount

01:43:49.560 | of gain in the house?

01:43:50.640 | - Yeah, well, it's their second house.

01:43:55.120 | Mom and Dad kind of live in different houses,

01:43:57.360 | but honestly, it's in central Pennsylvania.

01:44:00.900 | Dad bought the house for $12,000

01:44:03.580 | and now it might be worth $60,000.

01:44:07.260 | So we stand to gain hundreds of dollars

01:44:10.500 | if we go back. - I understand.

01:44:11.740 | - You know what I mean.

01:44:12.900 | - So I guess the point is that if your dad bought the house

01:44:15.780 | for $12,000 and it's today worth $60,000,

01:44:20.220 | if your dad signs over the house to his son,

01:44:25.940 | his son inherits a $48,000 of taxable income

01:44:29.720 | upon which he owes taxes.

01:44:31.040 | Now, obviously the numbers here we're talking about

01:44:32.800 | are modest, it doesn't really matter,

01:44:34.780 | but your son would have to wind up owing a tax bill

01:44:37.040 | of $15,000 that he otherwise wouldn't owe

01:44:41.220 | if he would do something smarter.

01:44:43.280 | So what could be done?

01:44:44.960 | Dad can sell the house,

01:44:46.940 | Dad will then get $60,000 for it,

01:44:49.680 | Dad will get the money tax-free

01:44:51.100 | because he's lived in the house,

01:44:52.540 | and then Dad can give the son $60,000 and he can go,

01:44:56.180 | or Dad can will the house to the son,

01:44:58.880 | and then Dad dies and son receives the house,

01:45:02.580 | sells it for $60,000 and gets $60,000 tax-free.

01:45:06.020 | So clearly the numbers are modest,

01:45:08.400 | but people go out all the time trying to do smart stuff

01:45:11.800 | that they think is smart,

01:45:13.040 | and due to their general ignorance,

01:45:14.500 | they don't understand that this isn't

01:45:16.060 | the smartest thing to do.

01:45:17.660 | So just, he needs to be super careful

01:45:20.820 | because if his friend is giving him advice,

01:45:22.520 | his friend is not giving him great advice.

01:45:24.560 | So those are the technical tax details

01:45:27.240 | on that one particular thing that you described

01:45:29.320 | that may be useful to you at some point.

01:45:31.080 | Now, let's move to the general perspective.

01:45:33.760 | I wouldn't confront your brother with that information.

01:45:36.340 | If he winds up running into it,

01:45:37.980 | or if you can discuss it in a very casual way

01:45:41.400 | that he discovers his error, fine,

01:45:43.240 | but people don't like to be told they're wrong,

01:45:45.800 | and they especially don't wanna be told they're wrong

01:45:47.800 | by their fancy-pants sister who makes all this money

01:45:50.460 | and has this white-collar job, et cetera,

01:45:52.480 | and who they have conflict with.

01:45:54.160 | And so that's clearly something you need to be careful of.

01:45:57.500 | And you're doing really smart stuff, I think,

01:46:00.280 | as a woman, and trying to push your brothers,

01:46:03.640 | trying to honor them, trying to raise them up.

01:46:05.840 | Like, this is smart move on your behalf

01:46:08.880 | in terms of how to encourage them.

01:46:12.080 | Couple of big-picture things.

01:46:13.160 | First of all, is your family,

01:46:15.340 | are the relationship dynamics in your family

01:46:17.400 | capable of sustaining a peaceful family meeting

01:46:21.100 | with three children and your father together

01:46:23.460 | in one room at the same time?

01:46:24.940 | - I mean, it's possible, but it's also possible

01:46:29.260 | that it could go sideways.

01:46:30.660 | And the other thing is they both have,

01:46:33.180 | my baby brother has a wife,

01:46:34.980 | and my younger brother has a fiance

01:46:37.140 | who'll get married this year.

01:46:38.580 | And they have opinions,

01:46:41.020 | but they're not necessarily based on fact.

01:46:43.700 | Like, they're based on emotion,

01:46:46.300 | and they want to be heard.

01:46:47.980 | So we had a third brother, and when he passed away,

01:46:52.120 | I did the project, let's call it the project management

01:46:55.660 | of the funeral for everybody.

01:46:57.900 | I came back, I did all the project management,

01:46:59.340 | and I brought all the decisions to the family to say,

01:47:01.820 | what decision would you like to make?

01:47:04.300 | I did the legwork, here are our options,

01:47:06.060 | what decision would you like to make?

01:47:07.300 | And it so ired everyone that they had

01:47:10.780 | a little discussion with me about, I have to be in charge.

01:47:13.960 | So I said to them, no, I don't have to be in charge.

01:47:16.500 | I loved Tom, and I did the right thing here,

01:47:20.720 | but I don't need to even be at the funeral.

01:47:23.000 | I'm happy to let you all do all of the legwork

01:47:25.840 | and make all of the decisions,

01:47:27.100 | and I will attend or not attend,

01:47:29.320 | and I can be released from this.

01:47:31.960 | And they were terrified.

01:47:34.120 | So they said, oh, no, no, no, you keep going as you are.

01:47:37.920 | So I started making inroads with having them understand

01:47:41.960 | that I'm really not trying to be in charge of anything.

01:47:43.920 | I am the worker and benefiting from all of my labor.

01:47:48.500 | But we did have one meeting with the women involved,

01:47:53.360 | and they're wonderful, lovely people,

01:47:55.360 | and I love them dearly, but there was no, it was chaos.

01:47:59.760 | There was no one single topic of discussion.

01:48:04.180 | There was no result from anything.

01:48:06.760 | It was just a lot of people talking at each other

01:48:09.360 | around all kinds of topics.

01:48:11.200 | And that is a therapy session.

01:48:15.880 | That is not a decision body.

01:48:19.000 | So I'm afraid that that kind of a thing

01:48:21.160 | could happen again too,

01:48:23.080 | where people don't have a lot of experience

01:48:26.500 | in collaborating with other people and understanding,

01:48:30.560 | okay, I'm only gonna talk if I have something to add.

01:48:33.800 | I'm gonna give a thumbs up or a thumbs down.

01:48:36.240 | I'm gonna state my case if it's different.

01:48:38.960 | None of that is happening at all.

01:48:41.920 | So it could go well or it could go poorly.

01:48:45.840 | I don't know.

01:48:47.680 | I might have to, I might be able to enlist

01:48:49.760 | one of my sisters-in-law to be a mediator

01:48:53.680 | if I can get some time with her and lay it out,

01:48:56.320 | but I don't know if that will work or not.

01:48:58.760 | I don't know.

01:48:59.600 | - Yeah, and you definitely face--

01:49:01.280 | - If I can get one of them on board.

01:49:02.920 | - Yeah.

01:49:04.120 | From what you've already described,

01:49:05.560 | you face a danger of building resentment

01:49:09.160 | for your own personal effectiveness and efficiency.

01:49:12.320 | And there's already some feelings

01:49:15.640 | based upon what you described.

01:49:17.000 | And so you face the danger of increasing that.

01:49:20.040 | What is the current net worth of your parents?

01:49:22.840 | Big picture, just big picture.

01:49:24.000 | What would you guess is the current net worth

01:49:25.200 | of your parents?

01:49:26.040 | - I would guess it's probably $80,000 or 100,000,

01:49:32.160 | very little.

01:49:33.680 | They have the other house.

01:49:35.080 | They, something terrible happened and they lost it

01:49:39.160 | and then they bought it back.

01:49:40.360 | And I think that, and it just, stupidity reigns.

01:49:44.880 | I think that there's probably very little,

01:49:47.080 | very, very little, if even that much, I don't know.

01:49:52.240 | - Got it.

01:49:53.080 | - 50,000 in the one house, maybe a couple thousand

01:49:55.400 | in the other, maybe nothing, I don't know.

01:49:57.120 | - Okay, as far as your personal financial situation is,

01:50:02.880 | if you received a one third share of $100,000,

01:50:06.720 | would that change your life in any way, meaningfully?

01:50:10.480 | - No, and you know what?

01:50:11.320 | I would give it up in a heartbeat.

01:50:12.920 | The only, right now, the reason I'm working

01:50:15.000 | is to help my niece and nephew get to college.

01:50:17.200 | - Of course.

01:50:18.040 | - That's my dream for them.

01:50:19.080 | - Okay.

01:50:19.920 | - So, if I don't get the money, I don't care.

01:50:22.240 | - With regard to your two--

01:50:23.080 | - I would give, yes.

01:50:25.520 | - With regard to your two brothers,

01:50:26.840 | would it change either of their lives?

01:50:29.000 | - Yeah, I feel like it would help,

01:50:32.520 | like the one who wants to do some real estate investing,

01:50:35.080 | I think it would help him start with that,

01:50:38.840 | get some property started, and the other one,

01:50:41.640 | I think it would change his life.

01:50:43.160 | Maybe he would do something with his family,

01:50:45.160 | like, I don't know, remodel his kitchen

01:50:48.200 | or something like that, or maybe he has

01:50:50.200 | some other dream involved, but I think it could,

01:50:53.120 | I think it would be something that would

01:50:55.720 | impact them very positively.

01:50:57.760 | - Okay, so I just want to get clarity,

01:51:00.680 | 'cause it's one thing if somebody has $100,000 estate,

01:51:03.440 | it's another thing if somebody has $100 million estate.

01:51:06.160 | And so, with $100,000 estate, and with the fact

01:51:08.720 | that it's not gonna change your life,

01:51:11.080 | then we don't need to worry too much

01:51:12.800 | about nickels and dimes, we need to worry

01:51:15.240 | about maintaining relationships,

01:51:17.320 | and I don't think you should just

01:51:19.080 | walk away from inheritance.

01:51:20.380 | If you want to receive an inheritance

01:51:21.640 | and give it away, that's fine, but be careful

01:51:24.000 | of just saying, like, I don't want the inheritance,

01:51:25.800 | 'cause that could grow more resentment.

01:51:28.040 | - No, I agree.

01:51:28.880 | - Right, so I think--

01:51:29.720 | - I agree.

01:51:30.560 | - You should receive that.

01:51:31.400 | - 100% agree.

01:51:32.220 | (laughing)

01:51:33.060 | - Yeah, it took me a little while to get there,

01:51:35.400 | but probably from listening to you,

01:51:36.880 | my brain got there, it's like, wait a minute,

01:51:38.440 | what I really care about is, I really do want

01:51:41.160 | that blessing from my father, and then

01:51:44.040 | if I could bless somebody else and say,

01:51:45.920 | you know what, I'm giving it to you,

01:51:47.440 | that is more honest, yeah.

01:51:49.640 | - Right, and that's something that you could do separately.

01:51:51.920 | So, it's nice to know that the money

01:51:55.040 | is immaterial to your life, but you shouldn't

01:51:57.560 | volunteer that the money is immaterial to your life,

01:52:00.080 | or say to them, oh, I don't need any inheritance.

01:52:02.160 | It's just a starting point for me

01:52:03.640 | to understand what we're working with.

01:52:04.840 | Now, number two, let's divide the issues

01:52:07.240 | into two separate things.

01:52:08.520 | So, there's financial, and then there is care

01:52:12.800 | of mom and dad, and if I were approaching

01:52:17.000 | the situation, I would try to get buy-in

01:52:19.600 | on a few basic principles, and what I want

01:52:23.000 | to get buy-in on is the idea that as the children

01:52:29.600 | of our parents, our duty is to care for them,

01:52:34.600 | and our responsibility and our corporate desire

01:52:39.720 | is to see to it that in their final years,

01:52:43.280 | they are well cared for, that they are well cared for.

01:52:48.280 | Just leave it there, and make sure

01:52:50.760 | that everyone agrees on that, and I think

01:52:52.880 | from what you're describing, everyone would agree.

01:52:54.680 | Now, there's a lot of talking about what that means,

01:52:57.320 | but then if you can get buy-in on that fact,

01:52:59.960 | that our duty as children for our parents

01:53:02.480 | is to care for them, and to make sure

01:53:04.840 | that they are provided for and cared for

01:53:07.880 | to the best of our ability in their final years,

01:53:11.560 | and we agree on that, then we can move on

01:53:13.800 | to say, do we also agree that the first resources

01:53:18.480 | that should be used for that are their money,

01:53:21.120 | that this is their money, they have given us money before,

01:53:25.200 | they can do whatever they want with their money,

01:53:27.560 | but this is their money that needs

01:53:29.400 | to be provided for their care, and so here's where

01:53:33.920 | I think most normal people who are not,

01:53:37.160 | most normal ethical people would agree with that,

01:53:40.760 | that the first purpose of our money

01:53:42.800 | is to care for ourselves. - That's so good.

01:53:45.680 | Yeah, because my brother, the same brother,

01:53:47.640 | has this idea that we could get mom into a place

01:53:51.520 | and then each chip in a couple hundred bucks a month,

01:53:54.200 | and it covers her, which is just like, it's cute,

01:53:59.040 | but it's not reality, I mean, even if she's probably

01:54:03.440 | gonna be a Medicaid case, and even if that's the case,

01:54:06.000 | even if we did chip in a couple hundred dollars a month now,

01:54:08.760 | she has had strokes, she's gonna need memory care,

01:54:11.760 | and so it goes up to 8,000, 10,000,

01:54:14.160 | friends of mine are looking at $16,000 a month

01:54:16.880 | here out in Seattle area, but for mom,

01:54:22.640 | it might not get that high, but $5,000 or $8,000 a month

01:54:26.160 | is certainly more than we're gonna be able to do

01:54:28.880 | splitting among the three of us.

01:54:30.800 | So we really do need to think, so my brother has some

01:54:34.360 | of these ideas that are just not well-formed

01:54:38.880 | or not well-informed, which is why I wanna get

01:54:41.520 | the right attorney to say, by the way,

01:54:46.040 | the way it really works is, you know.

01:54:49.040 | I've tried to get into visit places,

01:54:50.960 | I told him a place that she would really love to go,

01:54:54.160 | where her mother was, and I said, "Why don't we,"

01:54:56.480 | I said, "I'm gonna visit there," and he's like,

01:54:57.940 | "No, no, no, I'll set up the visit."

01:54:59.360 | I'm like, "Great, you set up a visit.

01:55:01.480 | "I don't even have to be there, I can be, you know,

01:55:04.640 | "I can be Zoomed in if I'm not in the same state."

01:55:08.120 | - Right, right.

01:55:08.960 | - So I'm trying to get them to understand that,

01:55:10.480 | but I think that's a key point.

01:55:12.400 | Their money should be used for that first,

01:55:14.800 | and that's probably a key point we need to establish

01:55:17.200 | with the attorneys, because if we,

01:55:19.160 | I already have heard that if, say he did sell the house

01:55:23.920 | or give the house away, and then within five years,

01:55:26.400 | needed to go into assisted living himself,

01:55:31.400 | if it's a Medicaid case, then that's,

01:55:34.060 | within five years, they look back five years,

01:55:36.320 | and that something bad happens.

01:55:38.260 | I don't know exactly what, but you can't just,

01:55:40.520 | you can't just give your house to the kid and say,

01:55:42.920 | "Hey, state, pay for me."

01:55:44.320 | You know, you really have to use your assets.

01:55:46.360 | - Exactly, it's fraud, it's fraud.

01:55:48.880 | They will claw back the money,

01:55:50.320 | and they will require you to pay the money

01:55:53.400 | that was given away within the last five years.

01:55:56.400 | So it's fraud.

01:55:57.680 | - Okay, and that's what I'm worried about with my brother.

01:56:00.680 | - Exactly.

01:56:01.520 | - And that's what I'm worried about with my brother.

01:56:02.700 | Yeah, that he's gonna get himself in like this bad situation

01:56:07.240 | that now we have, you know, that he's not really foreseeing.

01:56:11.920 | - Right, and again, I would say that

01:56:13.920 | from what you described about,

01:56:15.040 | "Oh, dad can give me the house," he's acting ignorantly.

01:56:19.080 | He doesn't have the confidence, the education,

01:56:22.840 | the experience, et cetera, to know the facts.

01:56:24.920 | He doesn't know how to consult professional advisors

01:56:27.720 | or sources of self-help information,

01:56:30.780 | and he doesn't have the capacity or the experience

01:56:34.120 | to understand all of what he doesn't know.

01:56:36.680 | This is the biggest flaw of ignorance in anything,

01:56:41.560 | especially in finances, is that you don't know

01:56:44.240 | what you don't know, and therefore,

01:56:45.480 | you don't know the questions to ask.

01:56:47.360 | And this is always, this is the key with ignorance

01:56:51.840 | in any field is that we don't know,

01:56:54.040 | if we're not experts in the field,

01:56:55.280 | we don't know what we don't know,

01:56:56.480 | and we don't know what to ask,

01:56:57.800 | so therefore, we make decisions based on limited information

01:57:01.240 | and often, if we had more comprehensive information,

01:57:03.560 | we would make better decisions.

01:57:05.120 | And so that's kind of the challenge that he's facing.

01:57:08.240 | So let me move quickly.

01:57:09.840 | Number one, I would encourage you

01:57:11.520 | to establish with your brothers,

01:57:14.280 | and again, this is one of those things

01:57:16.080 | where this probably doesn't start with your dad,

01:57:18.360 | but if you can talk about it with them

01:57:20.920 | and if you can sustain a healthy conversation,

01:57:22.880 | I would try to get buy-in on a couple of things.

01:57:25.120 | Number one, do we all agree that our priority

01:57:28.320 | as sons and a daughter of our parents whom we love

01:57:31.840 | and we're good, honest people who love our parents

01:57:34.960 | and wanna work together, that our priority

01:57:37.240 | is to do what's best for mom and dad?

01:57:39.820 | Yes, of course, we wanna do what's best for mom and dad.

01:57:42.920 | Everyone agrees to that.

01:57:44.080 | And then do we also agree that mom and dad's assets

01:57:48.160 | should primarily be used to do what's best for them?

01:57:52.000 | And we're all hoping that when they die,

01:57:54.240 | we get a million dollars, but until that happens,

01:57:59.240 | we're going to make sure that all of mom and dad's assets

01:58:02.960 | are used to do what's best for mom and dad

01:58:06.040 | and to provide for them what they need.

01:58:08.240 | And I can't imagine any reasonable moral person

01:58:13.240 | disagreeing with that.

01:58:16.720 | It may be through with gnashing of teeth, right?

01:58:19.600 | I may just be drowning in debt as a son

01:58:21.900 | and desperately need money, but I'm at least gonna

01:58:25.000 | acknowledge that what I've said is correct.

01:58:29.280 | Then the next thing to do is to create

01:58:32.640 | some very simple data points.

01:58:35.120 | And so what you can do is if you have access

01:58:38.220 | to your parents' affairs, you need to create

01:58:40.400 | a current balance sheet, very simple, right?

01:58:42.740 | Here's their house, it's house number one

01:58:44.360 | is worth $80,000, house number two is worth whatever.

01:58:47.320 | You need to create a simple statement of affairs

01:58:49.840 | to understand where they are, and you need to create

01:58:52.440 | a simple understanding of what their income is.

01:58:54.960 | So they have social security, if they have

01:58:56.720 | any other sources of income, they need to be understood

01:58:58.800 | what they are.

01:58:59.800 | And so because what happens in these family situations

01:59:03.000 | is often there's not even understanding of the actual facts

01:59:06.600 | because as children, we're all busy,

01:59:08.880 | none of us really wanna get involved

01:59:10.240 | with our parents' lives, we all have our own concerns,

01:59:13.080 | et cetera, and so if you can create a simple balance sheet

01:59:15.880 | of here's the assets that mom and dad have,

01:59:17.960 | here's the debts that mom and dad have,

01:59:19.960 | here's the income that mom and dad have,

01:59:21.760 | and here are their expenses, then at least we can start

01:59:24.940 | from the same place.

01:59:27.000 | And what, and your father also, again,

01:59:31.760 | I don't wanna, people sometimes just through

01:59:34.200 | no fault of their own, but they don't,

01:59:35.520 | they're not rational.

01:59:36.800 | So the idea that a guy with $100,000 net worth

01:59:40.360 | can give away his house when his wife

01:59:43.200 | is heading into memory care, and when he himself

01:59:46.580 | is strong and vigorous and likely to live

01:59:48.800 | for another 20 years, this is crazy.

01:59:51.160 | Like, no, you need this $100,000,

01:59:53.920 | and it needs to be in the bank so that you have some money

01:59:56.280 | to buy the things that you need.

01:59:58.800 | And to me, it will be obvious that if you put that

02:00:01.680 | on paper, you'll understand that no significant changes

02:00:05.680 | should happen here financially.

02:00:07.720 | No big gifts should be made, no anything should be made.

02:00:10.600 | And the reason you need to communicate on paper

02:00:12.520 | is to get aligned with the other brother, if necessary.

02:00:16.680 | Just with the facts, not--

02:00:17.840 | - Oh yeah, he's a little bit upset that he was

02:00:20.720 | like kind of pushed out, and he's like,

02:00:22.320 | well, nobody asked me about the house,

02:00:24.140 | and that, you know, and the other brother was like,

02:00:27.320 | oh, well, and my dad was like, I just started.

02:00:30.000 | So we will unravel that in time.

02:00:33.700 | I feel like that's a comma, not a period.

02:00:35.640 | - Okay, do you have, how do you and your brothers

02:00:38.600 | communicate, do you have a group text message,

02:00:41.840 | you know, a WhatsApp group?

02:00:43.320 | What do you have, a group text message?

02:00:44.520 | - We have group text, and yep, and then I,

02:00:46.960 | and they're in Pennsylvania, so I visit Pennsylvania,

02:00:50.560 | I also have a daughter in Pennsylvania,

02:00:51.480 | so I visit Pennsylvania every couple months,

02:00:54.400 | and we sometimes talk on the phone.

02:00:56.840 | And I also individually talk to each of them in email.

02:01:00.000 | I have a lot of communication.

02:01:01.480 | - Good, wonderful, okay.

02:01:02.320 | - And with their wives and with their kids,

02:01:03.880 | like I keep it all going.

02:01:05.200 | - Good, so you might consider, you might consider,

02:01:08.320 | with your group text, you might consider

02:01:09.960 | creating a group text with you, your brothers,

02:01:12.560 | and their wives.

02:01:14.000 | You don't need the kids involved,

02:01:16.320 | just you, the brothers, and their wives,

02:01:18.000 | so that everyone's on the same page.

02:01:19.280 | And having their wives in the group, I think,

02:01:23.740 | can be helpful to minimize some of that

02:01:26.040 | brothers against a sister dynamic.

02:01:28.360 | It's important to have women and men

02:01:30.280 | fully informed of all the facts, et cetera,

02:01:32.520 | so they can talk about it with their spouses, et cetera.

02:01:34.880 | Moving quickly, the next thing I would say

02:01:36.560 | is you need to get a clear understanding

02:01:39.440 | of what is likely to happen with mom

02:01:42.720 | and what is likely to happen with dad.

02:01:45.360 | So if you have, have you already had a professional review

02:01:49.460 | by a medical professional of your mom,

02:01:51.640 | a report made by a professional, an assessment?

02:01:55.080 | - No, but she's clearly in need of help.

02:01:58.400 | Like, this is pretty clear, yeah.

02:02:00.560 | - So it's clear to you,

02:02:01.780 | but it's not clear to your brothers, right?

02:02:04.480 | - Right, right.

02:02:05.320 | - Okay, so you need to commission an assessment,

02:02:07.920 | a formalized assessment, by a consultant, an expert,

02:02:11.320 | a doctor, a memory care, I'm not sure,

02:02:13.240 | I don't remember the name to use,

02:02:14.420 | but somebody, have them assess your mother,

02:02:18.360 | create the medical assessment,

02:02:20.120 | and have the medical professional

02:02:21.760 | create a recommended care plan for her.

02:02:24.940 | - Okay.

02:02:25.780 | - And you need to know that as a starting point.

02:02:28.220 | And that needs to be an actual document,

02:02:31.140 | 'cause then now you and your brothers

02:02:32.620 | have something to talk about.

02:02:34.040 | If you just give your opinion,

02:02:35.940 | and your brother's a blue collar worker,

02:02:37.760 | and he sees your mom once every four weeks,

02:02:39.620 | and like, well, mom doesn't seem that bad,

02:02:41.340 | but when you're there with your mom,

02:02:42.860 | you're there with her for four weeks,

02:02:44.080 | and you understand all that's happening,

02:02:46.040 | you need a professional medical opinion

02:02:48.060 | that you can then take it off of you,

02:02:50.180 | and you can discuss what the medical advisor says.

02:02:52.760 | And that would be the first thing I would do.

02:02:55.820 | And then you need to understand what,

02:02:58.900 | so based on that medical opinion,

02:03:00.940 | let's assume that your mother is heading

02:03:02.420 | for a memory care unit.

02:03:04.900 | The next, well, before we go to the memory care unit,

02:03:07.460 | you need to ask yourself and talk about,

02:03:09.940 | is there a way that we could provide care for mom?

02:03:13.340 | And, 'cause this may be something that you could do.

02:03:16.580 | So your brother, for example,

02:03:18.260 | especially the brother who wants to have the house,

02:03:20.460 | it may be the case that he and his wife

02:03:22.720 | could provide a high level of good care

02:03:25.760 | for your mother and your father,

02:03:27.200 | and maybe he would want to do that.

02:03:29.040 | On the other hand, maybe they have no space,

02:03:30.600 | no desire, can't do that, et cetera.

02:03:32.740 | So I don't, you know, we don't,

02:03:34.720 | none of us wanna institutionalize our parents,

02:03:36.960 | and that should be the last resort,

02:03:39.760 | although it can be a very necessary step

02:03:42.040 | with a severe case of dementia or Alzheimer's.

02:03:45.680 | So you need to understand the options

02:03:48.720 | and talk about them as based upon the professional report.

02:03:52.320 | Then with those options, then your next task

02:03:55.460 | is to bring in professional knowledge

02:03:58.220 | of the state of Pennsylvania

02:04:00.280 | with your state's Medicaid laws

02:04:02.420 | and what paths are available.

02:04:05.300 | So I would hire a Medicaid attorney,

02:04:07.700 | an elder law attorney in the state of Pennsylvania.

02:04:10.300 | I would describe your parent's situation.

02:04:12.700 | That's where you put down the balance sheet.

02:04:14.180 | Here's whose name is on the house.

02:04:15.620 | Here's the thing, here's whose name is on the bank accounts,

02:04:17.960 | et cetera.

02:04:18.800 | What are our options under the Medicaid laws of Pennsylvania?

02:04:23.280 | Very clearly, your mother is a candidate for Medicaid,

02:04:27.320 | and that will happen either by spending down

02:04:30.320 | all of their assets, and your father will be left

02:04:33.000 | with his social security payment,

02:04:34.640 | and the assets will be spent down to pay for her care

02:04:37.080 | in the memory unit if that's where things go,

02:04:39.400 | or there may be an ability for you to set aside

02:04:42.600 | and separate the assets so that he has the house

02:04:45.700 | that he can live in.

02:04:46.540 | I don't know Medicaid law in Pennsylvania,

02:04:49.420 | but normally he would be able to retain a house

02:04:51.440 | that he lives in, and normally there would be able

02:04:54.180 | to be an allowance for his personal effects, et cetera,

02:04:56.700 | and then your mother would qualify for Medicaid.

02:04:58.820 | And then your next step after that is to figure out

02:05:01.520 | can we actually get care in our state

02:05:04.820 | under the Medicaid program?

02:05:06.340 | Just because there's an ability for the program

02:05:08.580 | to pay for it doesn't mean you can actually get care.

02:05:10.980 | Lots of people who are fully qualified for Medicaid,

02:05:13.240 | they can't actually get the care that they need.

02:05:15.160 | And so you'll want to explore the options.

02:05:17.920 | Medicaid in some cases does provide in-home care.

02:05:21.360 | And so if you can get some kind of in-home care

02:05:24.520 | that is sufficient for your mother's needs

02:05:26.920 | so that she can stay home with her husband,

02:05:28.680 | that would be great.

02:05:29.880 | If you can't get in-home care, understand the facilities,

02:05:32.200 | et cetera, all the stuff that you're doing.

02:05:33.800 | So that would be the process that I would go down,

02:05:37.160 | and I think that where you can serve your brothers

02:05:41.580 | will be for you to be really good at what you are good at,

02:05:45.700 | of presenting the data, the research

02:05:49.380 | that you're skilled at collecting,

02:05:51.660 | and then trying to bring it to a family meeting

02:05:54.300 | of what do you all think would be best for mom and dad,

02:05:56.860 | and trying to get agreement

02:05:58.040 | on these basic foundational issues.

02:06:00.220 | And if we're dealing with normal, ethical people,

02:06:03.760 | then the answers will emerge pretty obviously

02:06:07.540 | from that data that you've collected

02:06:09.340 | with the professional assessment,

02:06:11.460 | with the Medicaid lawyer's advice,

02:06:14.500 | with the actual statement of accounts,

02:06:16.100 | the actual assets and income of your parents, et cetera.

02:06:18.860 | The decisions should emerge.

02:06:21.340 | The right answer should emerge from that data.

02:06:23.640 | - Totally makes sense.

02:06:25.700 | Yeah, totally makes sense.

02:06:26.540 | And even if they are good, rational people,

02:06:28.540 | we're dealing with emotions here

02:06:30.740 | that come up in difficult times.

02:06:32.740 | So having all that rationality

02:06:35.000 | and having the women involved too, the wives,

02:06:37.120 | I think that will help as well.

02:06:38.560 | 'Cause even if people fly off the handle initially

02:06:40.840 | or have opinions or something,

02:06:42.540 | cooler heads will prevail in time,

02:06:46.020 | maybe the next day or something like that.

02:06:48.080 | And I think it's a fantastic thing

02:06:52.400 | 'cause one of the wives, her mother,

02:06:54.200 | will probably be in a similar situation in not too long.

02:06:57.520 | And if I can present a way that, like a path,

02:07:01.040 | here's what I did, can we do the same thing for your mom?

02:07:04.160 | To get her set up well,

02:07:07.160 | I think that would go over well as well.

02:07:09.220 | That might be my angle to get her to,

02:07:12.360 | not necessarily agree with me,

02:07:13.720 | but think clearly of her own right

02:07:16.920 | and come up with her own assessment.

02:07:19.120 | 'Cause honestly, she's great in difficult situations too,

02:07:23.360 | I've noticed.

02:07:25.680 | So she has a lot of common sense.

02:07:28.040 | - If my wife's hand touches my arm

02:07:30.060 | in the middle of a discussion,

02:07:31.500 | there is a deep volume behind that simple touch.

02:07:35.000 | So I think it would be wise for you

02:07:36.920 | to bring everyone together in those conversations.

02:07:40.080 | - Yeah, it's such great advice.

02:07:42.560 | Thank you so much.

02:07:43.840 | Just really appreciate this.

02:07:45.680 | - My pleasure.

02:07:46.520 | - There's not a lot of people to talk with about this.

02:07:48.240 | - No, there's not, there's not.

02:07:50.120 | But I think that you're doing the right stuff

02:07:51.620 | and I hope that those steps will help you.

02:07:53.720 | I think the most important thing

02:07:55.000 | is just for you to be careful.

02:07:56.520 | I was gonna ask you, and I'm gonna move on here,

02:07:59.540 | I was gonna ask about who's older, et cetera,

02:08:01.840 | but there's no question that

02:08:03.700 | when you get into a situation like this,

02:08:05.840 | the tensions between brothers and sisters

02:08:08.200 | and the resentment about miss successful

02:08:10.560 | and male and female dynamics, all those things can be there.

02:08:13.940 | But if we begin by believing the best,

02:08:16.560 | we all love each other, we all love mom and dad,

02:08:18.400 | we want the best, and we commit to articulating

02:08:22.320 | what that would look like,

02:08:23.720 | then we can work systematically

02:08:25.200 | through the specific decisions.

02:08:28.700 | - Peter in New York, thank you for your patience, sir.

02:08:31.400 | You are up and you are the final one today.

02:08:33.680 | How can I serve you today, sir?

02:08:36.120 | - I'll try to make it quick.

02:08:38.240 | I think I got ripped off by someone offering

02:08:42.640 | a online service and should I try to sue this person

02:08:47.640 | to get my money back or is there anything else

02:08:50.800 | that I need to take stock of in a situation like this?

02:08:53.760 | - How much money?

02:08:54.600 | - 750 bucks.

02:08:57.720 | - Can you do a charge back on a credit card?

02:08:59.920 | - I think it's been so long that I don't know.

02:09:04.400 | I'm not sure what the time limit is on that

02:09:06.880 | 'cause the payment was made about 18 months ago.

02:09:09.880 | - So I don't know, but I would start

02:09:11.700 | with a charge back attempt.

02:09:13.260 | That would be the first thing.

02:09:15.000 | And then are they communicating with you at all?

02:09:18.320 | - Periodically, yes.

02:09:20.640 | That's what's sort of frustrating is it was this service

02:09:23.800 | that I just don't think got off the ground.

02:09:25.800 | I don't think it was a straight up scam,

02:09:27.800 | but it's one of these, hey, we're having cash flow problems,

02:09:31.000 | I'll get back to you.

02:09:31.820 | So it's intermittent, but yeah, it's one of those,

02:09:36.820 | the person hasn't totally ghosted,

02:09:39.600 | but quasi-responsive, I guess is how I would say it.

02:09:43.400 | - I guess, I mean, in theory, so number one,

02:09:46.600 | try a charge back on your credit card.

02:09:48.760 | That would be number one.

02:09:50.520 | I've never actually looked into how long ago

02:09:52.920 | you can do that.

02:09:54.960 | So I don't know what those laws are,

02:09:56.600 | and I'm ignorant to that.

02:09:59.320 | I should go and study that a little bit.

02:10:01.320 | But I would start with a charge back on the credit card.

02:10:04.080 | Obviously, I would talk to them,

02:10:05.560 | and I would ask them for a refund.

02:10:07.900 | I would ask them for a partial refund

02:10:09.640 | if they won't give you a full refund.

02:10:11.520 | And so if there's some kind of scenario

02:10:13.160 | where they delivered 20% of the value

02:10:15.000 | that they were expecting, listen, guys,

02:10:16.760 | could you refund $400 of it or something like that?

02:10:19.320 | That's reasonable.

02:10:21.360 | Being in the position of selling stuff online,

02:10:25.860 | the thing I want is I want happy customers.

02:10:30.960 | And to me, having some guy's money

02:10:35.880 | that doesn't like me and doesn't like my stuff

02:10:40.560 | is not worth it if it means that the guy

02:10:43.800 | could go and write a nasty review

02:10:45.640 | or publish a website or something about me.

02:10:48.320 | I don't go and look for that stuff.

02:10:49.960 | I hope that there's nothing out there.

02:10:52.200 | I've never kept someone's money who wanted it back.

02:10:57.200 | I've never, 'cause I just don't want,

02:10:58.720 | I don't want it on my conscience, first of all.

02:11:00.880 | It's just a man, and I don't want it on the internet.

02:11:02.320 | I don't want people writing nasty stuff about me

02:11:05.080 | and saying, well, I didn't get this.

02:11:07.000 | And so whenever anyone has ever asked me

02:11:08.680 | and expressed any form of dissatisfaction,

02:11:11.120 | I've immediately refunded their money

02:11:13.260 | or immediately made it right in some way.

02:11:16.480 | And so now if this guy has sold something

02:11:20.480 | that he can't deliver on, and he has cashflow issues,

02:11:24.740 | he may wanna do that, but the money may be gone and spent.

02:11:27.860 | And yes, could you sue him and whatnot?

02:11:30.860 | Yeah, you could.

02:11:31.700 | I wouldn't waste my time with $750,

02:11:34.680 | because here's the way I look at it.

02:11:37.280 | If it's $750 and $750 is a big deal for you

02:11:41.300 | because you're poor and broke, and I know you're not,

02:11:43.100 | but if you're poor and broke,

02:11:44.700 | then you don't have time to mess around

02:11:46.740 | with trying to get $750 from somebody.

02:11:48.740 | You need to go and make money.

02:11:50.060 | And if you're rich and successful, it's $750.

02:11:53.460 | Screw it and move on, and just next time,

02:11:55.820 | think of a different solution.

02:11:57.860 | I would never bother with trying to go with $750.

02:12:01.500 | I would never bother trying to go and do that.

02:12:02.880 | Maybe you write a review, write a review,

02:12:05.300 | make a report with Better Business Bureau,

02:12:06.980 | something like that, put a review on his Google reviews

02:12:10.020 | or on his Facebook reviews, et cetera.

02:12:11.860 | Provide enough detail so that it's there

02:12:14.860 | to warn other people of the bad service,

02:12:19.860 | but that's as far as I would go.

02:12:23.320 | - Okay, that sounds good.

02:12:25.980 | I'm gonna try to charge back.

02:12:27.140 | That's interesting.

02:12:27.980 | I'll see what the deal is with that.

02:12:28.800 | - Yeah, and then I think, I don't have much to add.

02:12:31.380 | I just wanna clarify.

02:12:32.580 | On the reviews, I think any normal,

02:12:35.140 | rational, experienced person understands

02:12:37.660 | that we can't make everyone happy.

02:12:39.900 | And so, when I see five-star reviews,

02:12:44.180 | one-star reviews, et cetera, we can't make everyone happy.

02:12:47.340 | And so, I will do business with people

02:12:49.340 | who have unhappy customers because people don't like us.

02:12:53.380 | We screw stuff up.

02:12:55.240 | But if in your review, there is an allegation of fraud,

02:12:59.000 | then that is really important.

02:13:00.980 | So I always pay careful attention

02:13:02.460 | to the way that reviews are written.

02:13:04.380 | So if you can provide an accurate assessment,

02:13:07.060 | and then if you can just make sure

02:13:08.860 | that you have whatever history or records

02:13:11.220 | that you have to protect yourself.

02:13:12.780 | If somebody comes after you and sues you for libel,

02:13:15.280 | I don't think that, there's no way

02:13:16.860 | in the legal system to do that.

02:13:17.960 | But just to know that you have support for it,

02:13:20.540 | if you write an accurate review,

02:13:22.100 | I think that's the way that you can do it.

02:13:23.400 | Write off the $750, take it as a business loss.

02:13:26.000 | And I'm serious, it's totally a loss.

02:13:32.220 | And take it as a loss, and then do your service

02:13:34.660 | to the community by leaving an honest review

02:13:36.720 | in some format where it can be there as a warning

02:13:39.060 | to other potential buyers in the future.

02:13:41.400 | - I will do that, sounds great.

02:13:44.660 | - Great, anything else?

02:13:45.860 | - Nope, have a great weekend.

02:13:47.740 | - Thank you so much.

02:13:48.700 | And with that, we conclude our show for today,

02:13:51.580 | Mammoth Show today, but I haven't been able

02:13:53.260 | to do Q&A shows the last couple weeks,

02:13:54.620 | so I'm glad to do it.

02:13:55.860 | I wanna thank you for listening,

02:13:57.580 | thank you for being here.

02:13:58.900 | If you would like to ask me one of these questions,

02:14:00.820 | I tell you what, all my listeners got some free advice.

02:14:04.020 | (laughing)

02:14:05.380 | Some of these calls and whatnot were pretty long

02:14:08.040 | and pretty extensive.

02:14:08.880 | Usually, I've had to charge people a lot of money,

02:14:10.240 | but I keep telling people,

02:14:11.200 | if you want a cheap way to talk to Joshua,

02:14:13.520 | just call in for a Friday Q&A show,

02:14:15.520 | 'cause it gives me content, allows me to teach others,

02:14:17.500 | and everybody benefits from it.

02:14:19.080 | Thank you for listening.

02:14:19.920 | Remember that for four more days,

02:14:22.520 | you can enroll in my newest course,

02:14:24.120 | which is How to Retire Successfully.

02:14:26.160 | You can do that at howtoretiresuccessfully.com,

02:14:28.680 | howtoretiresuccessfully.com, four more days.

02:14:31.920 | At the moment, I haven't reached my number,

02:14:33.960 | so registration is still open.

02:14:36.180 | In addition to that, you heard me mention

02:14:39.340 | the International Escape Plan course.

02:14:41.040 | Internationalescapeplan.com is available to you,

02:14:43.400 | internationalescapeplan.com.

02:14:45.760 | With regard to Bitcoin, I had a caller that talked about,

02:14:48.040 | should I put money into Bitcoin

02:14:50.160 | as a way of moving to a foreign currency?

02:14:51.700 | You heard that my advice was no,

02:14:54.440 | but I do still think you should own Bitcoin.

02:14:56.200 | And if you'd like to own Bitcoin privately,

02:14:58.320 | go to bitcoinprivacycourse.com, bitcoinprivacycourse.com.

02:15:02.960 | If you'd like to be on next week's Q&A show,

02:15:05.200 | patreon.com/radicalpersonalfinance.

02:15:08.280 | Have a great weekend.

02:15:09.880 | - The holidays start here at Ralph's

02:15:11.640 | with a variety of options

02:15:12.960 | to celebrate traditions old and new.

02:15:15.320 | Whether you're making a traditional roasted turkey

02:15:17.840 | or spicy turkey tacos, your go-to shrimp cocktail,

02:15:21.480 | or your first Cajun risotto,

02:15:23.360 | Ralph's has all the freshest ingredients

02:15:25.820 | to embrace your traditions.

02:15:27.400 | Ralph's, fresh for everyone.

02:15:29.680 | - Choose from a great selection of digital coupons

02:15:31.960 | and use them up to five times in one transaction.

02:15:34.560 | Check our app for details.

02:15:36.120 | Ralph's, fresh for everyone.

02:15:38.320 | (upbeat music)

2023-05-26_Friday_QA