2024-02-16_Friday

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00:00:32.160 | - Today on Radical Personal Finance, it's a live Q&A.

00:00:34.300 | (upbeat music)

00:00:36.880 | Welcome to Radical Personal Finance,

00:00:51.760 | a show dedicated to providing you with the knowledge,

00:00:53.360 | skills, insight, and encouragement you need

00:00:55.320 | to live a rich and meaningful life now

00:00:57.160 | while building a plan for financial freedom

00:00:58.560 | in 10 years or less.

00:01:00.120 | My name is Josh Rasheeds.

00:01:01.160 | Today is Friday, February 16, 2024.

00:01:05.560 | And on this Friday, after a multi-week hiatus,

00:01:08.740 | we do live Q&A.

00:01:10.200 | You call in, talk about anything you want,

00:01:12.180 | any questions, any topics, it's up to you.

00:01:15.000 | (upbeat music)

00:01:17.580 | If you don't know what to call in and talk about,

00:01:26.320 | well, welcome to my world.

00:01:27.260 | I actually really enjoy doing these Friday Q&A shows

00:01:29.280 | 'cause they're easy for me

00:01:30.120 | 'cause I don't have to pick the topic.

00:01:31.700 | (laughs)

00:01:32.960 | It's not hard for me to record podcasts.

00:01:35.280 | It's hard for me to choose the topics to record podcasts on

00:01:38.680 | because there's so many twists and turns.

00:01:40.840 | Oh, I could talk about this, but I could talk about that,

00:01:42.920 | or how much should I talk about it, et cetera.

00:01:44.960 | Showing up to Friday shows is easy

00:01:46.460 | because you have to do all that work.

00:01:47.840 | You have to decide what we talk about.

00:01:49.480 | If you would like to join me

00:01:50.320 | in one of these Friday Q&A shows,

00:01:51.400 | you could do that by becoming a patron of the show.

00:01:52.880 | Go to patreon.com/radicalpersonalfinance,

00:01:54.920 | patreon.com/radicalpersonalfinance.

00:01:57.820 | That will gain access for you to these Friday Q&A shows.

00:02:01.060 | I do that just to meter the amount of calls

00:02:02.700 | to an appropriate number

00:02:05.220 | so that we don't wind up with 25 callers on the line,

00:02:07.980 | et cetera, and it's something that I can't do.

00:02:10.300 | So please go to patreon.com/radicalpersonalfinance.

00:02:13.280 | We begin today with Dan in Colorado.

00:02:14.860 | Dan, welcome to the show.

00:02:15.700 | How can I serve you today, sir?

00:02:17.180 | - Hey, Joshua, thanks so much.

00:02:20.740 | I am 32 years old.

00:02:22.260 | I have a two-year-old and a seven-month-old.

00:02:24.380 | I currently work remotely,

00:02:25.880 | have a salary of about 150,000 with a 10 to 20% bonus.

00:02:30.080 | My wife works remotely part-time

00:02:33.920 | with a really flexible schedule,

00:02:35.160 | and then she takes care of the boys the rest of the time.

00:02:37.920 | We plan to move close to our family this spring,

00:02:40.800 | but my boss recently offered me a promotion

00:02:42.960 | that I would need to move to a different city for.

00:02:46.120 | It's a vice president, executive-level role

00:02:48.680 | that would roughly double my salary,

00:02:51.240 | come with a much larger bonus,

00:02:52.640 | and would also include some ownership in a company

00:02:54.980 | that is likely to IPO in the next year.

00:02:57.980 | - Awesome.

00:02:58.820 | - Thanks.

00:03:00.740 | We saved a lot of money in our 20s.

00:03:02.940 | Pretty comfortable.

00:03:04.300 | I also have a side business with a FinTech product

00:03:06.300 | that is about to hit the market,

00:03:07.540 | and I expect it to do really well.

00:03:09.820 | I really like the lifestyle of working remotely,

00:03:12.220 | but with the new job,

00:03:13.060 | I would need to go into the office two or three days a week.

00:03:15.820 | Not really a big deal.

00:03:17.060 | My initial thought, though, was to turn the position down

00:03:19.500 | so that we could still move kind of close to our family

00:03:21.220 | like we intended,

00:03:22.340 | but after sitting with it for a while,

00:03:24.320 | I'm kind of wondering if I'm crazy

00:03:25.920 | for not taking a role like this,

00:03:27.920 | especially since it's the first quarter of my career.

00:03:31.180 | Certainly be among the youngest VPs in the industry,

00:03:34.760 | and the title could lend some additional credibility

00:03:36.640 | to my side venture,

00:03:38.200 | and would absolutely make it easier

00:03:39.920 | to get another VP gig at any point in my life after this.

00:03:42.960 | So, three quick questions.

00:03:44.680 | Would I be crazy for not taking this if I decided not to,

00:03:49.440 | or would I be crazy for taking it?

00:03:51.400 | Either way, I guess.

00:03:52.820 | If I were to take the job for a year or two,

00:03:56.540 | just to get the street cred,

00:03:58.060 | and then would moving a two-year-old

00:04:02.340 | and a seven-month-old out and then back

00:04:05.380 | be an okay thing to do?

00:04:06.700 | I think it is,

00:04:07.580 | but it might be nice to hear somebody else say that.

00:04:10.500 | And then finally, if I were to negotiate a schedule

00:04:12.980 | where I could be in the new city for a month

00:04:15.700 | and then back home for one to two months,

00:04:17.780 | would moving my family back and forth that often

00:04:20.340 | for a couple of years be irresponsible in your opinion?

00:04:23.260 | - When you talk about moving your family

00:04:27.840 | to be back home or close to the rest of your family,

00:04:31.400 | specifically, which family members are you referring to?

00:04:35.640 | How many of them are there?

00:04:37.960 | And what does close mean?

00:04:39.680 | - Good question.

00:04:42.320 | Yeah, so it's basically everyone.

00:04:44.200 | It's both of our parents.

00:04:45.640 | So, all the grandparents,

00:04:47.760 | all of our siblings, and their children.

00:04:51.200 | And we would be within about two hours of them initially,

00:04:56.200 | 'cause we were gonna move to our vacation property

00:04:59.500 | for a year or two.

00:05:01.180 | We have a lot of projects going on out there.

00:05:02.300 | So, it'd be easily within a weekend drive,

00:05:04.940 | whereas we are not now.

00:05:06.760 | With about three to four years out

00:05:10.420 | when my older son starts kindergarten,

00:05:12.940 | we would move probably back into the same county.

00:05:17.100 | - Okay.

00:05:17.940 | First thing is, I don't know how to answer the question

00:05:22.380 | of living close to family

00:05:25.020 | in any kind of financial framework.

00:05:29.980 | And I don't know that I have any kind

00:05:32.040 | of broadly applicable framework.

00:05:34.540 | So, let me just kind of lay out a couple of thoughts

00:05:36.380 | to consider as we talk about it.

00:05:39.980 | First, let's acknowledge that moving close to family

00:05:46.380 | would ordinarily be considered by most people

00:05:49.580 | a positive thing to do,

00:05:51.900 | unless there's some kind of dysfunctional

00:05:54.580 | or toxic family, et cetera.

00:05:56.620 | Generally speaking, we appreciate that we want

00:05:59.260 | to be close to those that we're most dear to,

00:06:02.300 | that we love those who we're most dear to.

00:06:05.580 | And so, that generally, I think, is a positive thing.

00:06:08.860 | And the fact that all of your family is together

00:06:11.420 | in one place, meaning both sides of the family,

00:06:14.740 | across the board, that creates an enormous attraction

00:06:18.500 | because those relationships for you and for your wife

00:06:22.860 | and for your children, those relationships

00:06:24.500 | will be very productive and helpful,

00:06:26.640 | especially in these early years of you having some help,

00:06:30.780 | some relief, interactions, friends,

00:06:33.540 | people that you know well, et cetera.

00:06:36.380 | So, that's a positive, beneficial thing.

00:06:40.820 | I don't know that that is always

00:06:43.140 | the determining factor, though.

00:06:45.380 | I've wrestled with this a lot.

00:06:46.720 | I don't currently live close to my family,

00:06:49.380 | and I've repeatedly questioned my own motives

00:06:52.420 | 'cause I could live anywhere.

00:06:54.020 | And the question is, why don't I live close to my family?

00:06:58.740 | If I believe what I just said, which I do,

00:07:00.860 | that living near family is useful and helpful

00:07:03.220 | and productive, et cetera, then why don't I, myself,

00:07:06.620 | at this time, live close to my family?

00:07:08.460 | Part of it is that I did for a long time,

00:07:11.220 | and without getting into my story,

00:07:15.380 | just saying that I guess the reason

00:07:17.620 | is you need to have some kind of strong reason not to.

00:07:21.060 | And so, there can be many reasons,

00:07:22.900 | and no one is out here judging your decisions,

00:07:25.300 | but you'd wanna have some reason

00:07:26.700 | as to why you're not living close to family.

00:07:29.820 | And you have something of a reason,

00:07:32.060 | and that's what you're wrestling with.

00:07:33.940 | You didn't have a great alternative choice,

00:07:37.100 | and so the previous plan was move close to family.

00:07:39.180 | Now, all of a sudden, you've got a really strong job offer,

00:07:41.800 | can advance your career,

00:07:43.020 | could possibly be a shorter-term thing.

00:07:45.180 | Now you have a good, compelling reason

00:07:47.100 | to consider an alternative.

00:07:50.140 | And I'm not gonna be the guy to tell you

00:07:51.940 | what you should or shouldn't do,

00:07:53.660 | just that it's fine, I think, to consider it as you are.

00:07:58.260 | And at the end of the day,

00:08:00.020 | the basic thought that I have on that subject

00:08:02.380 | is that living close to family doesn't seem to me

00:08:06.660 | like a goal in and of itself

00:08:09.460 | that really should make the difference.

00:08:13.820 | And I've wrestled with this a lot with my own children,

00:08:16.100 | is that is my goal in raising children,

00:08:19.380 | is my goal to raise them so that they can live next to me

00:08:22.960 | for the rest of their life?

00:08:24.980 | And when I put it in kind of a blunt and crass way,

00:08:27.740 | I think most people would say,

00:08:28.700 | "Well, no, that's not my goal."

00:08:31.180 | So what is my goal?

00:08:32.500 | Well, I want to enjoy relationship with my children,

00:08:35.660 | but I also want my children to do something

00:08:37.700 | and to impact the world.

00:08:38.780 | We're here on mission.

00:08:39.620 | We've got a job to do.

00:08:41.180 | And so that's the standard

00:08:43.440 | that I'm gonna apply to my own children.

00:08:45.100 | I'm gonna say that I'm not bringing you into the world

00:08:47.580 | so that you can be my next-door neighbors

00:08:49.240 | as our highest and best goal.

00:08:51.180 | I'm bringing you into the world

00:08:52.700 | so that you can serve mankind

00:08:54.220 | so that we can transform the world.

00:08:56.300 | We're on a mission.

00:08:57.660 | And so to me, in that light,

00:09:00.200 | it seems perfectly reasonable for me to look forward

00:09:03.900 | to close relationships with my children,

00:09:06.900 | but I'm not gonna hold my children

00:09:08.900 | to some standard that exists in my mind

00:09:13.900 | that somehow the height of family goals and future

00:09:17.620 | is to be my next-door neighbor.

00:09:20.060 | That's not the goal.

00:09:21.640 | The goal is that you do something in the world

00:09:24.340 | and that you fulfill your purpose in the world.

00:09:26.180 | God put you here for a reason

00:09:27.580 | and you have a purpose, something to do,

00:09:29.780 | and I'm gonna support you in that.

00:09:31.140 | And if that means we can do that,

00:09:32.900 | being my next-door neighbor

00:09:33.980 | and laboring together in something, wonderful.

00:09:36.500 | And if that means that you're gonna go

00:09:37.660 | to the other side of the world

00:09:39.260 | and do something on the other side of the world,

00:09:40.920 | absolutely, I'm gonna support you.

00:09:42.220 | And we're gonna look to enjoy as much fellowship

00:09:44.940 | and relationship between us as we possibly can.

00:09:49.740 | That would be the first thing.

00:09:50.700 | The second thing is,

00:09:51.620 | do I need my family at this point in time?

00:09:54.060 | And so you got a wife with a two-year-old

00:09:55.940 | and a seven-month-old.

00:09:57.580 | Let's say you have another baby next year.

00:09:59.460 | All of a sudden, her life's pretty intense.

00:10:01.660 | And so there may be a phase of life

00:10:05.620 | in which she really needs some help.

00:10:07.500 | And maybe being near family

00:10:09.380 | could be a really important component of that.

00:10:11.860 | Or it might be the opposite.

00:10:13.460 | It might be that other things are better.

00:10:15.220 | So you should always look at your family,

00:10:16.500 | look at your wife, just ask,

00:10:17.500 | do we need our family's help at this point in time?

00:10:19.980 | But I don't think that the goal

00:10:21.140 | is to always be specifically there.

00:10:24.140 | That's not the life goal.

00:10:25.420 | And so if there's purpose

00:10:26.920 | in your making an alternative choice

00:10:29.140 | and one of the costs is going to be distance

00:10:31.820 | in your family relationships,

00:10:33.580 | to me, that seems an acceptable decision

00:10:36.260 | if that's what you decide.

00:10:37.820 | The reason I ask about distance is quite simply,

00:10:41.580 | I think there's an enormous difference

00:10:44.500 | in the lifestyle that you have

00:10:46.900 | if you're two hours away from family

00:10:49.220 | versus if you are 15 minutes away from family

00:10:52.980 | versus if you are three-minute walk away from family.

00:10:56.740 | And what I have experienced

00:10:59.140 | and observed from a lot of people

00:11:00.860 | is that the idea of being close to family

00:11:05.220 | actually, in reality, turns out to be,

00:11:08.100 | well, we see each other once a month.

00:11:10.620 | And you say, well, is this really the key?

00:11:13.340 | And then instead of actually doing something together,

00:11:16.460 | being intimately involved in one another's lives

00:11:19.260 | and pursuing similar goals,

00:11:21.100 | it often turns into, well, we watch the Super Bowl together

00:11:24.420 | and that's about it.

00:11:25.780 | And we have these superficial relationships

00:11:28.100 | and superficial contact.

00:11:29.700 | And so you should judge your family relationships

00:11:32.740 | and ask, is there going to be something

00:11:34.980 | where we're genuinely going to be working together

00:11:37.980 | in a close way,

00:11:39.420 | or are we just going to be living in the same town?

00:11:42.020 | And if you're two hours away,

00:11:43.940 | you're probably not seeing them weekly.

00:11:45.740 | If you are seeing them weekly,

00:11:46.900 | it's going to feel like a real burden

00:11:48.740 | and it's going to take real effort for you to say,

00:11:51.260 | on Saturday morning,

00:11:52.180 | we're going to drive over to the next town over.

00:11:53.940 | On Sunday morning, we're going to drive

00:11:54.980 | to the next two hours away.

00:11:56.580 | And that's something you're going to do

00:11:57.900 | once or twice a month.

00:11:59.220 | So now all of a sudden you're down quite a lot.

00:12:01.580 | And so in terms of strategy,

00:12:04.100 | my point is that if you can quite literally live

00:12:07.300 | walking distance to your parents

00:12:09.420 | so that your children can just run in

00:12:11.900 | and out of their house all the time,

00:12:13.500 | and anytime you need to step out,

00:12:15.300 | you can call them over to take care of the children.

00:12:17.100 | And maybe you send your six-year-old over

00:12:19.500 | to work with grandpa on his math exercises, et cetera.

00:12:22.820 | That's a much more worthy being close to family

00:12:27.820 | than is being 20 minutes away or being two hours away.

00:12:31.260 | And so that's why I ask those questions.

00:12:34.620 | Now, to the specific things,

00:12:37.140 | are you crazy to take or to not take?

00:12:39.340 | No, I don't think you're crazy to take or to not take.

00:12:42.260 | You are young and your career

00:12:44.700 | is an enormous component of your life.

00:12:47.620 | And it is not wrong to prioritize career advancement.

00:12:51.380 | Career advancement and your accepting responsibility

00:12:55.980 | when it is offered to you,

00:12:58.100 | that is an important component

00:13:00.020 | of why you're here on this earth.

00:13:02.260 | Certainly the money and the additional financial power

00:13:06.860 | that you accumulate with higher salary

00:13:09.820 | and with more savings,

00:13:11.700 | that will be an important component of your work.

00:13:15.460 | But also just simply having more power

00:13:18.580 | and more status and authority in your company

00:13:21.740 | and in your career is an important thing for you to embrace,

00:13:24.460 | especially as young as you are.

00:13:27.020 | Because most careers properly managed

00:13:30.700 | work on a ratcheting mechanism,

00:13:33.260 | is that once you reach a certain status,

00:13:35.660 | a certain job description, I'm a vice president of XYZ,

00:13:39.260 | a certain salary, a certain type of work environment,

00:13:42.260 | then you're often not going to go beneath that.

00:13:45.580 | And for you to accomplish your purpose in life,

00:13:48.700 | as long as you don't feel like you're in the wrong career

00:13:51.460 | or the wrong business or something like that,

00:13:53.540 | you want to embrace responsibility

00:13:55.460 | whenever it's offered to you.

00:13:56.940 | And so I didn't have, years ago,

00:14:00.260 | this is a major change that I made in the last 10 years.

00:14:02.540 | Years ago, I thought that the point of working

00:14:04.860 | was to get financially independent so I could quit working.

00:14:08.180 | I now don't see it that way.

00:14:09.380 | And I think I was foolish and naive

00:14:10.820 | to formally even consider that as an appropriate scenario.

00:14:14.660 | Rather, you need to bear responsibility,

00:14:16.660 | and bearing responsibility in society

00:14:19.940 | and in your community and in your company, et cetera,

00:14:22.460 | is going to mean saying yes to additional responsibility

00:14:26.220 | when it's offered to you.

00:14:28.420 | And so your default answer to that should be yes.

00:14:31.140 | And it's only if there's a strong, compelling reason

00:14:34.620 | not to do that, as in, my wife is sick and dying

00:14:38.020 | and I've got to care for her,

00:14:39.100 | or my children are heading into a ditch

00:14:42.220 | and I got to rescue them,

00:14:43.540 | or my parents desperately need me, or something like that.

00:14:47.020 | Then the general default should be say yes

00:14:49.060 | to more responsibility because that will broaden your impact

00:14:53.340 | in your family, your community, and in the world around.

00:14:56.980 | And it's a good thing.

00:14:58.780 | Number two, if you work for one or two more years

00:15:00.940 | and then move, would that work?

00:15:03.060 | I think absolutely.

00:15:04.180 | Now, you should consider, of course,

00:15:06.020 | things like the age of your parents.

00:15:07.460 | Are your parents younger or older?

00:15:09.180 | We, none of us, know how long our parents would live.

00:15:11.260 | But if your parents are, say, 50 years old,

00:15:15.460 | and there's a decent chance

00:15:17.220 | that they're gonna have a long and healthy life,

00:15:18.940 | then now it's easier for you to stay away

00:15:22.260 | for another couple of years until you make this move.

00:15:25.020 | If your parents are 99 years old,

00:15:27.140 | well, and they don't know your children,

00:15:28.820 | then now there's more of a reason for you to move closer.

00:15:32.620 | But doing this for one or two more years,

00:15:34.500 | I think is absolutely, absolutely great.

00:15:38.100 | I don't think that there's any reason to give much thought

00:15:42.620 | to what children need in a specific location

00:15:46.900 | until you reach the early teenage years,

00:15:49.780 | something like 12 years old or so.

00:15:52.340 | And what I mean by that is that if you have a four-year-old

00:15:57.340 | and you move your four-year-old across the country,

00:15:59.980 | and your four-year-old's best friend

00:16:02.300 | that he played with every day becomes someone else,

00:16:05.860 | is that harmful to the child?

00:16:08.220 | I don't think so.

00:16:09.780 | And I don't think that you need to worry too much

00:16:11.780 | about really almost any of those things

00:16:14.300 | until you, again, reach those early teen years

00:16:16.980 | where a child is starting to develop

00:16:19.580 | an independent vision of life,

00:16:21.140 | of what his life is going to look like

00:16:23.500 | after he passes out of your immediate family.

00:16:27.460 | And that's where you wanna be thoughtful about,

00:16:29.420 | how can I help this child enhance his career?

00:16:33.540 | How can I help him pursue the path

00:16:35.460 | that's gonna be best for him?

00:16:36.940 | I need to be respectful of his wishes

00:16:39.300 | and his vision for his life, things like that,

00:16:42.220 | in addition to just what's best for the family.

00:16:44.940 | But up until that point,

00:16:46.180 | I think that you should just consider

00:16:47.660 | your family unit as a whole,

00:16:49.420 | and you don't need to worry too much

00:16:50.900 | about moving people around, et cetera.

00:16:53.740 | You can figure out the best circumstances

00:16:55.540 | in any particular schedule.

00:16:57.900 | And then number three, negotiating the schedule

00:17:00.100 | for one month here, one month there, et cetera.

00:17:02.620 | I don't know, you would have to test that out.

00:17:04.700 | What I would say is that it's probably more stressful

00:17:07.260 | on your family than it will be on you.

00:17:11.220 | You can come and go pretty easily,

00:17:13.300 | but unless you have a really great home in both places,

00:17:16.860 | then that's gonna be super stressful.

00:17:19.260 | So just as like a practical discussion of this,

00:17:23.320 | my wife and I, we've done quite a lot of traveling

00:17:26.940 | with young children.

00:17:28.220 | And generally speaking, my wife doesn't enjoy it,

00:17:31.100 | and I don't really enjoy it either,

00:17:32.580 | but a lot with young children.

00:17:34.340 | But the reason is that when you have one space

00:17:38.500 | that you know, you know what the risks are,

00:17:41.300 | you know what's there, you know what the toys are,

00:17:42.980 | you know where the boundaries are, et cetera,

00:17:44.860 | that makes your job as a parent of young children

00:17:47.180 | a lot easier.

00:17:48.780 | My wife didn't enjoy traveling around the country in an RV,

00:17:51.740 | because even though we had an RV,

00:17:53.580 | she didn't have any continuity

00:17:56.180 | between what was outside of the RV.

00:17:58.940 | So you can't just send the children off randomly

00:18:00.740 | to go ride their bikes,

00:18:02.700 | because you don't know what's out there.

00:18:03.940 | You have to go out and scout it for danger

00:18:05.780 | and try to figure out what's appropriate, what's here.

00:18:07.540 | So that just adds a lot of work

00:18:09.220 | to caring for little children.

00:18:10.860 | Whereas if you're in one place, one home,

00:18:13.300 | and we know where all the toys are,

00:18:15.740 | and the children have their own things,

00:18:17.600 | then they can be a little bit more independent,

00:18:19.260 | and that really reduces the burden on the parents

00:18:22.300 | when you are in one place.

00:18:24.820 | And so I'm skeptical that kind of flipping back and forth,

00:18:28.100 | unless you're going between two houses that you own,

00:18:30.620 | that you have a good infrastructure set up in both places,

00:18:33.580 | I'm skeptical of that being a productive lifestyle.

00:18:36.180 | - All right, perfect, man.

00:18:39.980 | Yeah, totally agree with all of that.

00:18:42.700 | And you always offer some new insight, too.

00:18:46.380 | So really appreciate it.

00:18:48.540 | - My pleasure.

00:18:49.500 | At its core, if we're gonna do anything,

00:18:52.380 | then we need to have a reason for doing it.

00:18:55.860 | And so being close to family

00:19:01.000 | needs to be part of the broader purpose,

00:19:03.720 | not the sole and exclusive thing,

00:19:06.320 | unless there's a clear,

00:19:07.320 | again, service-related focus to it.

00:19:10.840 | And I'll keep working on it.

00:19:12.400 | I reassess continually my own decisions, et cetera.

00:19:16.680 | But, and I'm not sure of these answers that I'm giving you.

00:19:20.840 | It's just the best that I've given you,

00:19:22.760 | and I've tried to explain it as clearly as I'm able.

00:19:26.100 | We move to Taylor in Alabama.

00:19:28.000 | Taylor, welcome to the show.

00:19:28.840 | How can I serve you today?

00:19:30.680 | - Hey, Joshua, thanks for taking my call.

00:19:33.040 | I wanted to see if you might have some thoughts

00:19:35.980 | about allowances for kids.

00:19:38.640 | And in particular, in my situation,

00:19:41.220 | I've got 13-year-old daughters, twins, seventh grade,

00:19:45.640 | and we've never given them an allowance before,

00:19:48.320 | but we're thinking that they're getting to an age

00:19:50.440 | where it might be nice for them

00:19:52.680 | to have to kind of budget their money a little bit

00:19:56.600 | and learn how to use a bank accountant.

00:20:00.200 | Perhaps a debit card, other things like that.

00:20:03.160 | And so I've looked into it a little bit.

00:20:04.920 | I've seen a lot of differing advice

00:20:06.680 | about the best way to structure it,

00:20:10.600 | the best mechanics of how to do it.

00:20:13.400 | I guess, first of all, do you think it's a good idea at all?

00:20:17.080 | But anyway, I figure you probably do have some ideas

00:20:19.480 | and wanted to see if you could share 'em.

00:20:21.360 | - Yeah, I'll make this fairly concise,

00:20:24.320 | 'cause I think it's relatively straightforward.

00:20:26.840 | To begin with, I was never given an allowance

00:20:29.540 | when I was young.

00:20:31.500 | And I think, I'd have to confirm this with my parents,

00:20:34.820 | but basically, I think my parents

00:20:37.960 | probably would have been sympathetic to the viewpoint

00:20:40.600 | of simply saying that if you give,

00:20:43.000 | we're not welfare, we're not giving out welfare here.

00:20:46.380 | I think Dave Ramsey at least used to say this.

00:20:48.960 | I would assume he still does,

00:20:49.960 | unless he's changed on something.

00:20:51.000 | But he'd say, I'm not giving out welfare to my children.

00:20:53.120 | So giving money to my children

00:20:54.760 | doesn't seem like the right pathway.

00:20:57.160 | And that's a common mindset,

00:20:59.740 | especially common in our US American culture,

00:21:02.260 | where we believe strongly in instilling a work ethic

00:21:05.660 | into our children and so we don't wanna give away free money.

00:21:10.660 | So that was my basic idea when I first had children.

00:21:16.060 | I then came to see the other side

00:21:19.500 | and I realized that if I don't give my children money,

00:21:24.960 | then they're not going to handle money

00:21:28.080 | until they can earn it for themselves.

00:21:30.940 | And I realized that if I want my children to manage money,

00:21:35.380 | they're going to need practice and skill in managing money.

00:21:39.460 | And so I decided that I would change

00:21:41.500 | and I decided that I would, in fact, give an allowance.

00:21:45.180 | And my reason for deciding to give my children an allowance

00:21:49.980 | is that I want them to have money

00:21:53.420 | that they have to decide what to do with

00:21:56.740 | so that they can experience the joys of having money,

00:22:01.080 | using money, spending money, et cetera.

00:22:03.480 | And I'm hoping that they will make lots and lots of mistakes

00:22:07.800 | with the handling of their money.

00:22:09.440 | And so I'm hoping that they'll blow their money

00:22:11.300 | on stupid things.

00:22:12.320 | I'm hoping that they'll waste it

00:22:13.560 | and feel the emotions of poorly considered purchases

00:22:17.320 | and things like that.

00:22:18.640 | And I want those lessons to happen early.

00:22:21.680 | I want them to happen at a young age, not till a later age.

00:22:25.740 | Because when we talk about blowing it,

00:22:27.640 | I want them to blow $2 on some worthless trinket

00:22:31.140 | and experience how it gets thrown away at it.

00:22:33.780 | I don't want them to wait and blow $2,000

00:22:35.860 | on a worthless trinket when they're teenagers.

00:22:38.260 | And so I realized that money management

00:22:41.780 | and the handling of money is a skill in and of itself

00:22:44.620 | that needs to be taught.

00:22:46.020 | And in order for it to be taught,

00:22:48.220 | and since the children are gonna be too young

00:22:50.160 | to handle money, they need to be able

00:22:53.520 | to have money flowing through their hands.

00:22:55.800 | Also, I want them to have money flowing through their hands

00:23:00.680 | over which they don't have full control.

00:23:04.000 | And so I think the downside is if we wait,

00:23:07.160 | let's say we wait until a child is 15

00:23:09.720 | and your daughter goes out and gets her first job at 15

00:23:12.560 | and she's got her paycheck

00:23:13.600 | and she brings home her paycheck and $400.

00:23:16.880 | And then you try to tell her what to do with it.

00:23:19.180 | Well, then there's a question is,

00:23:20.540 | do I have the right to tell her what to do with it?

00:23:22.780 | On the one hand, obviously, yes, she's a minor,

00:23:24.540 | you could tell her what to do with it,

00:23:25.540 | but we're respecting her person.

00:23:26.940 | She's a young adult, et cetera.

00:23:28.740 | And so we would be more thoughtful about,

00:23:31.120 | we would give advice, et cetera,

00:23:32.700 | but we would be more thoughtful.

00:23:34.900 | But if you start when she's five,

00:23:36.820 | then it's not such a big deal.

00:23:39.300 | And so what I have done is I have given my children

00:23:43.260 | an allowance and then required them to spend the money

00:23:48.260 | in the way that I say.

00:23:53.280 | And so I just split it into thirds

00:23:56.280 | and a third of the money we give away, they give away,

00:23:58.600 | excuse me, a third of the money they give away,

00:24:00.400 | I don't tell them who to give it to,

00:24:01.600 | I just tell them they gotta give it away.

00:24:03.280 | A third of the money goes into their investment fund.

00:24:06.400 | I don't tell them what that has to be invested in,

00:24:08.640 | I just tell them it has to be invested

00:24:10.000 | and I explain what that means.

00:24:11.600 | And then a third of the money goes into their spending fund.

00:24:14.380 | And then in their spending fund,

00:24:16.420 | that's where they naturally save.

00:24:18.080 | So we don't have a save jar.

00:24:20.380 | It bothers me that people say,

00:24:21.620 | oh, we're gonna save money,

00:24:22.620 | but they're saving money for accumulation.

00:24:24.340 | They're not saving money to grow it as a capital.

00:24:26.900 | So I allow them to experience accumulation

00:24:30.920 | in their spending funds so that they can have the skill

00:24:35.580 | of saving money for things,

00:24:37.300 | bigger purchases that they wanna make,

00:24:39.060 | but that's separate from investing.

00:24:40.940 | And then I look to try to have opportunities

00:24:43.860 | for that money to flow through their hands.

00:24:45.740 | So if we see somebody who needs money

00:24:48.260 | or we're aware of a need or something like that,

00:24:50.340 | then they can give it.

00:24:51.380 | They have money that's set aside in advance

00:24:53.420 | for giving away to other people.

00:24:55.500 | If they see a way to make money,

00:24:58.660 | then they have investment funds.

00:25:00.180 | And my goal is that my children get richer

00:25:04.820 | every single year of their life.

00:25:07.120 | Because what I tell them is that your investment capital

00:25:10.800 | is how you get richer,

00:25:12.900 | is you put money into your investment capital.

00:25:15.540 | As it grows, you start off with $10

00:25:17.660 | and you figure out, well, what can I buy and sell?

00:25:19.420 | So you go and you buy something for $10

00:25:22.660 | and you turn around and sell it for 20, okay.

00:25:24.960 | Then we take the profits and we split those profits

00:25:26.900 | a third, a third, a third.

00:25:27.920 | So a third gets given away,

00:25:30.000 | a third gets set aside for spending,

00:25:33.320 | and a third goes back into the investment capital.

00:25:36.060 | So then that investment capital should grow and grow,

00:25:38.480 | and it should be hundreds of dollars

00:25:40.740 | when a child is, say, under 10.

00:25:42.660 | It should be thousands of dollars

00:25:43.920 | when a child is in his or her teen age years,

00:25:46.500 | and it should be tens of thousands of dollars

00:25:48.320 | when a child is in his or her 20s.

00:25:50.420 | And we wanna train the idea

00:25:52.220 | of looking for opportunities to invest money.

00:25:54.320 | Like Jim Rohn said, you know,

00:25:55.780 | you should always have a bike to ride and a bike to rent.

00:25:58.740 | Two bikes, one to ride, one to rent.

00:26:00.580 | And so we wanna train children

00:26:02.400 | to look for opportunities to grow money,

00:26:04.500 | and we can't do that if investing

00:26:06.820 | is just something that they get tossed at them

00:26:09.840 | at 15 years old.

00:26:11.500 | It's a way of thinking that I think should be cultivated

00:26:13.880 | from, say, four or five on, on a continual basis.

00:26:18.880 | And then, so I believe in giving an allowance

00:26:22.760 | for that reason.

00:26:23.600 | Now, I don't think that an allowance

00:26:24.960 | should be a permanent thing,

00:26:26.480 | nor do I think it should be a particularly luxurious thing.

00:26:29.340 | But as a father, I find it a nice thing

00:26:31.840 | because it allows me to be more of a,

00:26:36.980 | a stick in the mud, in some cases,

00:26:40.720 | than I otherwise would be.

00:26:42.460 | 'Cause as a father,

00:26:43.300 | you wanna give your children great things, right?

00:26:44.680 | We spend lots of money on our children,

00:26:46.320 | and we derive a great deal of joy and pleasure

00:26:48.760 | on spending money on them.

00:26:50.300 | But if they don't have any money,

00:26:51.660 | then everything comes down to a decision of,

00:26:54.000 | am I gonna make you happy by buying this for you,

00:26:56.160 | or am I not gonna make you happy by buying this for you?

00:26:59.240 | So I find it really satisfying that my children have money,

00:27:03.200 | and I've given them a modest amount of money,

00:27:05.960 | and now they can go and do that.

00:27:07.700 | Hey, you wanna go and buy that dumb trinket over there?

00:27:10.300 | I don't have to sit here and decide,

00:27:12.020 | well, am I gonna hurt Johnny's future because I said no?

00:27:16.640 | Or fine, if you wanna buy it, you buy whatever you want.

00:27:19.420 | If you have enough money, you're welcome to buy it.

00:27:21.580 | And so I find it to be a useful parenting technique

00:27:24.220 | for me as well, to make sure that they have some money,

00:27:26.700 | 'cause then they have to go through those choices.

00:27:28.300 | And I always can get to choose more things that I give,

00:27:31.540 | et cetera, that's my prerogative as a parent.

00:27:34.020 | Now, continuing on, I think this should change

00:27:36.680 | as time goes on.

00:27:38.400 | I don't know, years ago, I thought,

00:27:40.680 | well, we should just end the allowance entirely

00:27:43.080 | at, say, 12 years old, 'cause after all, you can work now,

00:27:45.640 | you should make your own money.

00:27:47.080 | But then we move into, I think, a different expression.

00:27:50.000 | The same reason that we started the allowance

00:27:53.480 | in the first place, under my thinking,

00:27:55.280 | which is to have money flowing through your hands,

00:27:57.760 | is probably the same reason we should continue it.

00:28:01.280 | But there should be more demands placed upon it.

00:28:04.800 | And so I think part of training of a young adult

00:28:08.620 | needs to be to train a young adult to make proper decisions

00:28:12.420 | with the handling of money.

00:28:14.100 | And so I think that as a parent,

00:28:18.100 | let's say you have a 14-year-old or 15-year-old,

00:28:21.540 | there are certain things that you as a parent

00:28:23.340 | are obligated to do for your child.

00:28:26.480 | For example, you're obligated to feed your child,

00:28:28.780 | you're obligated to clothe your child.

00:28:30.860 | And so I think that those are things

00:28:34.080 | that you should decide your budget

00:28:36.220 | as to how much money you're going to spend on those things.

00:28:39.700 | And then ideally, you should transition

00:28:42.220 | the control of those things over to your child.

00:28:45.640 | And so your child should be responsible

00:28:48.020 | for purchasing her own clothing.

00:28:49.980 | You know, your annual clothing budget,

00:28:52.020 | we're gonna spend $200 a quarter

00:28:54.300 | or whatever your family's number is,

00:28:56.620 | this is gonna be your clothing budget,

00:28:58.620 | this is the amount of money,

00:28:59.820 | and you're required to clothe yourself.

00:29:01.820 | Now, you let her be the one who chooses

00:29:05.460 | where she gets the clothes.

00:29:06.780 | Does she go to the expensive place or the inexpensive place?

00:29:09.900 | And then what she wears, how many outfits she buys,

00:29:14.780 | or whatever the application of this.

00:29:17.180 | Obviously, you still have authority

00:29:19.220 | over her decisions on that.

00:29:22.220 | But in general, your goal is to teach her a model.

00:29:25.380 | You know, this is how a young lady dresses.

00:29:27.000 | These are the kinds of clothes that are appealing.

00:29:28.720 | These are the kinds of clothes that are becoming.

00:29:30.180 | These are the kinds of things you should do.

00:29:31.940 | Let me show you how to get a great value for them, et cetera.

00:29:35.260 | But she should have experience doing those things.

00:29:37.260 | And the money is, you're just changing

00:29:39.580 | the purchasing decisions out of your hands into her hands.

00:29:42.620 | And then secondarily is that you're,

00:29:45.220 | or I mean also, not in secondary priority,

00:29:49.340 | but also then, you're working hard to find opportunities

00:29:52.780 | for your child to earn his or her own money.

00:29:55.740 | And that's where the real money should come from,

00:29:58.840 | is it should still be,

00:29:59.920 | I think the allowance should be reasonably high enough

00:30:04.440 | that there's enough money for your child

00:30:06.240 | to buy the things that you can transition responsibility over

00:30:09.240 | for her to make the decisions on.

00:30:13.900 | But it should be a low enough amount

00:30:15.880 | that she's still excited to get a job.

00:30:17.920 | And when you get that first paycheck,

00:30:19.320 | it should be enough money lumped together

00:30:21.280 | that it's exciting.

00:30:22.480 | And those are the basic rules that I've come up with

00:30:25.240 | and the logic behind them.

00:30:27.120 | At its core, money management is a skill.

00:30:31.600 | It's not something that you're born with.

00:30:33.400 | It's not innate and natural.

00:30:35.600 | It's not like there's some people

00:30:36.860 | who are just naturally savers

00:30:38.440 | and some people who aren't.

00:30:39.720 | I deny that entirely.

00:30:41.920 | There may be people

00:30:42.760 | who have an environmental compulsion in a certain direction,

00:30:46.760 | but people who save money,

00:30:48.840 | save money because they've learned the skills

00:30:50.960 | of saving money and they have enough reasons to save money.

00:30:53.960 | People who don't save money don't save money

00:30:56.840 | because they don't have any reasons to save money

00:30:59.240 | and they haven't accumulated the skills of saving money.

00:31:01.840 | And so what we should do is focus on laying out

00:31:05.040 | a clear vision of the reasons and goals

00:31:07.840 | as to how money gets handled in a young man or woman's life

00:31:11.320 | and then help them practice the skills on a continual basis

00:31:14.960 | until they become really good with them.

00:31:16.840 | So I have changed.

00:31:18.180 | I now support an allowance for that reason

00:31:21.120 | with the caveats that we're not just trying

00:31:24.400 | to get people accustomed to free money,

00:31:26.800 | but we're trying to make money pass through their hands,

00:31:29.760 | recognizing that that's a component

00:31:31.360 | of our responsibility as parents.

00:31:33.180 | - That sounds really good.

00:31:36.080 | Those are sort of the ideas that I had in mind.

00:31:39.600 | Do you also have any thoughts about the mechanics of it?

00:31:42.320 | Do you use cash?

00:31:43.540 | Do you use a debit card

00:31:45.240 | with some sort of shared bank account with them?

00:31:47.560 | Or how do you do it?

00:31:48.560 | - I think in the beginning years, it should all be cash

00:31:51.280 | because it keeps it very simple.

00:31:53.560 | So my children have a spending bag.

00:31:56.520 | I use little money bags.

00:31:57.800 | And I have a big collection of them.

00:32:00.380 | They're all color-coded for each child.

00:32:02.320 | And so you have your giving bag,

00:32:04.080 | your saving bag, and your spending bag.

00:32:06.040 | When I started this plan, I was overly complicated,

00:32:11.100 | as is what, excuse me, as is my wont.

00:32:14.600 | And so I had a careful ledger of every dollar made

00:32:17.680 | in the investment return, et cetera, and that was too much.

00:32:21.000 | And so I don't think that there needs

00:32:23.220 | to be careful records kept on it in the beginning.

00:32:26.600 | But there should be then a transition

00:32:28.120 | over to careful record-keeping.

00:32:31.600 | And I think that cash has far more advantages

00:32:35.080 | than disadvantages.

00:32:36.700 | We're much too quick to search for an electronic solution

00:32:41.700 | to a problem that doesn't exist.

00:32:44.840 | And the vast majority of us, if we ran our lives

00:32:49.320 | quite literally with physical currency,

00:32:52.480 | we would all be richer and better off,

00:32:55.480 | even at our advanced, sophisticated stage of life.

00:32:59.160 | Now, I don't run my life entirely on physical currency.

00:33:01.720 | So I understand that there is important value

00:33:05.680 | in these other forms of money management.

00:33:10.660 | But they're all inferior to physical currency,

00:33:15.660 | especially for young people.

00:33:20.720 | Most of us have no basic concept

00:33:24.480 | of what digits feel like to spend.

00:33:28.300 | And our children definitely don't have it.

00:33:31.520 | And so if you and I, I routinely encourage people

00:33:36.520 | to use physical currency, and forgive the slightly roundabout,

00:33:40.140 | and it's important to make the point

00:33:41.080 | as to why I'm making the recommendation I am.

00:33:43.600 | I routinely encourage people to use physical currency

00:33:47.040 | because you feel what physical currency feels like.

00:33:50.600 | So let's say you're at an adult stage of life,

00:33:52.740 | and it's very normal for you to spend hundreds of dollars

00:33:56.680 | and thousands of dollars.

00:33:58.120 | It wouldn't be unusual for you

00:33:59.260 | to spend $1,000 on a weekend, right?

00:34:01.280 | You'll have a $700 Costco trip, and $150 dinner out,

00:34:05.280 | and I don't know, $100 gas bill, right?

00:34:07.120 | That would be a very reasonable weekend for most of us.

00:34:10.100 | If you make all those purchases with a card,

00:34:16.380 | and I ask you to estimate how much money you spent,

00:34:19.860 | let's say it's Tuesday,

00:34:21.680 | or even at the end of your Saturday or on Sunday,

00:34:24.320 | then you won't have much of a sense

00:34:26.380 | of exactly how much money you spent.

00:34:28.180 | It's too hard to keep track of.

00:34:29.700 | Our brains do not track digits.

00:34:32.220 | But if you routinely take out $1,000 or $2,000

00:34:36.500 | and $100 bills and you put them in your wallet,

00:34:38.900 | every bill has a feeling to you.

00:34:40.980 | And so if you know you've spent about half the stack,

00:34:44.400 | every time you hand over the seven $100 bills at Costco,

00:34:49.340 | you feel about what that's like,

00:34:50.980 | because five bills feels different from seven bills

00:34:53.660 | feels different from 10 bills.

00:34:55.540 | And so it's much easier to track.

00:34:57.920 | Now that's, you're in my situation

00:35:00.320 | after years of managing money,

00:35:02.120 | and most of us who are older,

00:35:03.620 | years of managing money in a non-digital context.

00:35:06.620 | So then we just assume that we have to train our children

00:35:09.500 | to manage digital money.

00:35:10.980 | And so the answer to that is give them a debit card.

00:35:13.220 | But they have the same problem.

00:35:14.700 | They don't have a feeling of what that feels like.

00:35:17.380 | And so I think it's perfectly reasonable

00:35:19.940 | to do all money management with currency

00:35:23.420 | until you get into the teenage years.

00:35:26.300 | And then you need to bring in additional skills.

00:35:31.840 | So then I think the idea should be,

00:35:34.880 | we should probably have multiple accounts.

00:35:36.880 | So I have not gotten to this stage yet.

00:35:38.680 | I've tested a few solutions.

00:35:40.040 | There are some financial,

00:35:41.760 | there are some financial companies

00:35:44.940 | that have products for this.

00:35:46.720 | I'm a big fan of Revolut.

00:35:48.080 | I think they've got a decent system for this.

00:35:51.300 | But I think it really can be, any bank can do it.

00:35:55.600 | But in essence, I think that we should

00:35:58.760 | simply teach our children to have multiple accounts.

00:36:01.240 | So we take the physical account structure

00:36:02.840 | that I have described,

00:36:04.680 | and we transfer the physical account structure

00:36:07.560 | into a bank account structure.

00:36:09.640 | So you should have three accounts.

00:36:11.480 | You should have a giving account,

00:36:13.420 | you should have a spending account,

00:36:15.760 | and you should have an investing account.

00:36:17.980 | And anytime you spend money,

00:36:19.880 | it should all be out of the spending account.

00:36:21.480 | Anytime you give money, you give out of the giving account.

00:36:24.160 | And then obviously investing, that never gets spent.

00:36:26.880 | It only gets invested, profits go back in,

00:36:28.960 | profits get split, et cetera.

00:36:30.640 | And so I think choosing some kind of debit card system

00:36:34.840 | that will work for you and give you

00:36:39.600 | that product for your child to split money into,

00:36:42.160 | I think is what you're looking for.

00:36:43.840 | Again, a lot of the,

00:36:46.460 | I wish I hadn't created a list of all the things.

00:36:49.200 | I'm sure most banks are looking for options.

00:36:52.400 | I'm a fan of Revolut, like I said,

00:36:54.820 | because it allows people to have a prepaid debit card

00:36:58.700 | that doesn't have, you don't overdraft,

00:37:02.300 | you don't incur fees, et cetera.

00:37:03.680 | You just look in the account, is there money there?

00:37:05.040 | I can spend it, if there's not, I don't.

00:37:06.680 | And that works really well.

00:37:07.680 | And by the way, to be clear,

00:37:09.040 | generally the child only needs one debit card

00:37:11.640 | for her spending account, that's it.

00:37:13.940 | And she needs some way to keep track of it.

00:37:16.120 | And so if it's attached to a phone app,

00:37:18.000 | if she has a phone, that's an ideal thing as well.

00:37:20.620 | This is where I see enormous value

00:37:23.160 | in teaching all the old skills

00:37:24.560 | of checkbook balancing, et cetera.

00:37:26.560 | I think it's really great to have those records, et cetera,

00:37:29.940 | but I also acknowledge the fact that nobody does it.

00:37:32.460 | And so those are some of those skills

00:37:34.340 | that are probably gonna go by the wayside.

00:37:36.180 | But that's my answer, is three different accounts,

00:37:40.020 | one with a debit card for spending,

00:37:41.860 | making sure that there's an easy way to check the balance,

00:37:44.480 | to see if there's money in the account, things like that.

00:37:46.980 | - That sounds great.

00:37:49.380 | I really, really appreciate it.

00:37:51.020 | - My pleasure.

00:37:52.020 | All right, we move on to Garth was next.

00:37:55.980 | Garth in Minnesota, welcome to the show.

00:37:57.220 | How can I serve you today?

00:37:58.520 | - Hey, Joshua, my wife and I are in our mid forties.

00:38:03.620 | We have two kids that are in their tween years.

00:38:07.080 | And in the past few years, our income,

00:38:09.680 | our net worth have ramped up quite a bit.

00:38:12.520 | Careers have grown and it's unlocking more options,

00:38:16.000 | I think, than we would have anticipated

00:38:18.280 | maybe five, 10 years ago.

00:38:20.400 | And as our kids are getting a little older,

00:38:22.560 | I'm starting to think more and more

00:38:23.720 | about like the next stages of life.

00:38:26.140 | And my wife has always preferred

00:38:28.100 | to be a little bit more spontaneous.

00:38:30.720 | We've been really focused on, we both work full time,

00:38:33.080 | focusing on raising our children and thinking and planning

00:38:36.440 | in terms of the coming months

00:38:38.120 | and what needs to get done today.

00:38:40.000 | And maybe it's a midlife thing,

00:38:42.600 | but as my perspective is changing,

00:38:47.600 | and I'm trying to think more longer term

00:38:52.320 | about money, career, and us building

00:38:55.120 | the next stage of our life together.

00:38:57.060 | And again, I think she's really kind of,

00:39:00.560 | you know, she thinks in terms of more of that spontaneous,

00:39:04.080 | which provides a nice balance in our relationship.

00:39:06.600 | But I'd love to get kind of your perspective on that, right?

00:39:10.880 | I'd love to be able to unlock that power

00:39:13.080 | of long-term goal setting and move in a direction together,

00:39:15.600 | but I don't know.

00:39:18.360 | Hopefully that's enough to riff on for you.

00:39:20.800 | - I think what you're, so it sounds like,

00:39:23.840 | at first I thought you were going to kind of,

00:39:25.120 | how does this relate to children?

00:39:26.320 | But that's not the question you're asking.

00:39:27.720 | You're primarily saying, you know,

00:39:29.920 | how do we build a vision for our life in the coming decades,

00:39:34.400 | given that we're likely to be wealthier

00:39:37.040 | than we ever imagined, is that right?

00:39:38.940 | - Yeah, that's exactly it.

00:39:42.000 | - Okay.

00:39:42.840 | As you stated, it's a wide question,

00:39:47.240 | but I'll give you my best shot.

00:39:49.400 | First, it's perfectly fine to focus

00:39:52.560 | on short and medium-term goals.

00:39:56.520 | And there is, you are in a stage of life

00:40:00.160 | that is only going to be here for a short period of time.

00:40:05.120 | And if you need to set aside the long-term goal planning

00:40:08.840 | to really focus on this stage,

00:40:10.880 | I think that is perfectly reasonable and appropriate.

00:40:16.080 | I think a lot about time-bound goals

00:40:18.840 | versus money-bound goals.

00:40:20.960 | And right now you have some very intensely time-bound goals.

00:40:25.960 | You have two twin children that are with you,

00:40:31.840 | and most of your experiences of long-term of life,

00:40:37.040 | most of the positive experiences

00:40:42.000 | that you're looking forward to in your life,

00:40:44.960 | and most of the negative experiences

00:40:46.920 | that could destroy your life,

00:40:48.960 | will be dependent upon the success of your children

00:40:53.760 | and your relationship,

00:40:56.040 | the quality of your relationship with your children.

00:40:59.800 | When I say success, let me define the context

00:41:02.000 | I'm saying that.

00:41:03.680 | If you have a child who becomes a drug addict

00:41:08.680 | and bears you a grandchild while a drug addict,

00:41:13.440 | and now you have to raise your grandchild

00:41:17.320 | while your daughter is off in the streets

00:41:19.640 | or your son is off shooting up people in the hood

00:41:23.360 | or something like that,

00:41:24.960 | the coming decades of your life

00:41:26.520 | are going to be extraordinarily painful.

00:41:29.160 | On the other hand, if your children do well in school,

00:41:33.280 | they have a good sense of who they are,

00:41:35.560 | they know what they like, what they don't like,

00:41:38.200 | they have a good sense of kind of the kinds of lifestyles

00:41:41.760 | that would be a good fit for them.

00:41:43.400 | If they proceed smoothly through the stages of life,

00:41:46.140 | they become competent and mature adults,

00:41:49.300 | they attract a high quality husband or a high quality wife,

00:41:54.300 | they get married, they have children,

00:41:59.600 | they have a satisfying life

00:42:01.280 | full of rich family relationships, et cetera,

00:42:04.160 | and they live stable, productive lives,

00:42:07.120 | then you can look forward to enormous amounts of pleasure

00:42:10.840 | for the coming decades.

00:42:11.960 | Pleasure in watching your children thrive and succeed,

00:42:14.920 | watching them experience all of the joys of young adulthood

00:42:18.520 | and passing through the stages,

00:42:19.920 | watching them bear grandchildren,

00:42:22.480 | raise grandchildren, et cetera,

00:42:24.400 | that's gonna be an enormous source of pleasure,

00:42:26.760 | and you will wind up like many grandparents

00:42:30.240 | moving across the country,

00:42:31.360 | so you can be close to your grandchildren, et cetera.

00:42:34.560 | And so to the extent that there's anything

00:42:37.640 | that you could do to determine the pathway of your children,

00:42:42.640 | whether they were on the pathway of success

00:42:46.520 | or the pathway of failure as human beings,

00:42:49.560 | that, then you should do those things.

00:42:52.240 | And yet, there's a very, a relatively narrow window

00:42:57.000 | in which you can do those things,

00:42:59.000 | because you are launching your children into independence

00:43:04.000 | over, let's say, the next five to seven years,

00:43:07.520 | depending on the specific ages

00:43:09.760 | and each individual child's process of maturity.

00:43:14.240 | So for you to be intensely focused on this

00:43:17.400 | over the course of these five years

00:43:20.240 | is a perfectly adequate thing to focus on,

00:43:24.260 | because that's what's gonna set the course

00:43:25.920 | for the next 50 years of your life.

00:43:28.200 | And so if 80% of your attention is on that

00:43:31.880 | and 20% is on the 50-year vision,

00:43:34.240 | then that's not wrong as a result.

00:43:38.000 | Now, what will happen is that as your children

00:43:41.840 | move from tweens to upper high school students

00:43:46.280 | and ultimately college students,

00:43:48.080 | you'll have naturally a lot more time available to you

00:43:52.840 | to think about those 50-year goals,

00:43:54.560 | just due to the natural process of independence.

00:43:58.640 | But don't think that it's more important

00:44:01.200 | to focus on the 50-year goals.

00:44:03.280 | To the neglect of your work right now, it's not.

00:44:06.760 | It's your work right now that's gonna make a big difference.

00:44:10.020 | Now, what is an enormous danger to be guarded against

00:44:14.440 | of where you are right now?

00:44:17.720 | Well, I think a danger is that your identity

00:44:21.560 | as husband and wife doesn't exist.

00:44:25.560 | Instead, your identity is father and mother.

00:44:28.440 | And so then if we think forward to a period of time,

00:44:33.360 | just a few short years from now, when you're empty nesters,

00:44:36.120 | if you wake up and you don't know your wife

00:44:38.680 | and you don't know anything about her goals

00:44:41.440 | and dreams for the future

00:44:42.520 | and her ambition for the future, et cetera,

00:44:45.200 | then you're doomed.

00:44:46.300 | And there's divorce court,

00:44:47.960 | you know, in some worst-case scenarios, waiting for you.

00:44:51.480 | And it's not necessary.

00:44:52.680 | So you do need to give attention

00:44:54.360 | to those long-term goals and dreams.

00:44:56.880 | But I just wanna, I'm just acknowledging

00:44:59.160 | that it may be a modest amount of attention.

00:45:02.240 | What I would say is the most important thing

00:45:04.360 | is for you and your wife to spend time together

00:45:07.240 | as husband and wife and to really make a priority of it.

00:45:11.360 | So having tweens is different

00:45:12.800 | than having very young children.

00:45:14.840 | You know, I just took my wife away

00:45:17.540 | for a short getaway for Valentine's Day.

00:45:20.940 | And, you know, when we're in baby mode as we are right now,

00:45:24.400 | we still have a baby with us,

00:45:25.720 | but I've gotta find multiple families

00:45:28.060 | to have multiple people who can take all the children

00:45:30.800 | 'cause there's tons of children and they're all young.

00:45:33.320 | And so it's a lot of work.

00:45:36.480 | As you pass into the teenage years,

00:45:37.960 | it's relatively easy for you and your wife to get away.

00:45:40.400 | And so get away, get away for a weekend every quarter

00:45:43.080 | and just the two of you.

00:45:44.560 | And just talk about and think about what is in the future.

00:45:47.520 | And you need to make certain

00:45:49.240 | that you really understand her and her ambitions

00:45:52.840 | and what she's going to,

00:45:55.240 | what are the kinds of things

00:45:57.120 | that she wants more of in her life.

00:45:59.680 | The fact that she is more serendipitous in nature

00:46:03.360 | and more willing to accept what comes

00:46:06.120 | doesn't absolve you of your responsibility to plan

00:46:09.320 | for her to have all the things that she's serendipitous,

00:46:11.480 | gonna be serendipitously happy about.

00:46:13.600 | And so in some ways, what you're describing

00:46:15.680 | is a function of my own relationship with my wife.

00:46:18.520 | I'm the long-term thinker.

00:46:20.360 | Here's the plan.

00:46:21.360 | Here's the, okay, with this decade,

00:46:23.080 | it's gonna be this strategy.

00:46:24.280 | The following decade is gonna be these things.

00:46:26.200 | Here's what we're gonna do.

00:46:27.040 | Here's what we're gonna do, et cetera.

00:46:28.460 | But I still need to make sure that I know her

00:46:31.160 | because the fact that her way of planning

00:46:33.960 | is different than mine

00:46:35.120 | and her way of envisioning the future is different than mine

00:46:38.200 | doesn't make it more or less valid.

00:46:40.080 | And so I have to get out of her vision

00:46:42.400 | and I have to make certain

00:46:43.720 | that our family plan accounts for that.

00:46:46.160 | It counts for her to achieve those things.

00:46:48.680 | And that just comes with knowing your wife

00:46:51.440 | in an intimate way.

00:46:53.080 | And then talking to her in a context

00:46:57.420 | that is going to suss out what she's into.

00:47:02.420 | And so here's where I think

00:47:03.840 | some good goal-setting questions are important.

00:47:06.760 | And then just taking them and doing this as a couple.

00:47:09.720 | You go to a nice resort once a quarter,

00:47:13.160 | once every six months or whatever, get away.

00:47:15.080 | And don't pack your schedule full of activities,

00:47:17.920 | but spend some time talking about it

00:47:19.400 | and make the lists, right?

00:47:20.280 | Here are 30 things I wanna do, 30 things I wanna be,

00:47:22.440 | 30 things I wanna have before I die.

00:47:25.120 | Go through, envision,

00:47:26.680 | okay, if we could do anything in the world,

00:47:28.440 | what would it look like?

00:47:29.440 | What would we do if we knew

00:47:32.080 | there was no possibility of failure?

00:47:33.520 | All the many dozens of great goal-setting questions

00:47:36.040 | and visioning exercises.

00:47:37.720 | Do those exercises and look for the themes

00:47:39.800 | and then start to schedule those things in intentionally.

00:47:43.080 | And recognize that your lives will be very different

00:47:47.820 | as you launch your children than they are now.

00:47:50.020 | And anything out more?

00:47:54.440 | I mean, I guess that's a starting point.

00:47:56.480 | Is that directionally helpful in any way?

00:47:58.540 | - Yeah, absolutely.

00:48:01.000 | And I logged you a non-specific question

00:48:04.280 | and I think you hit on all the key points

00:48:06.120 | I was hoping you would riff on.

00:48:07.800 | And I guess more than anything,

00:48:09.400 | it's a function of, hey,

00:48:11.280 | if we're following the 80/20 framework

00:48:13.440 | that you looked at and making sure that

00:48:15.720 | we're focused on that,

00:48:17.820 | that's, I think, some really sage advice

00:48:19.940 | and probably what I needed to hear on the call today.

00:48:22.260 | So thank you, Joshua.

00:48:23.300 | - My pleasure.

00:48:24.140 | It does really matter and you won't regret.

00:48:27.660 | If you spend more money now with your tweens,

00:48:30.580 | if you build more intimacy of relationship with them,

00:48:33.980 | et cetera, I think that,

00:48:35.780 | and by the way, you don't have to spend money,

00:48:37.660 | but my point is that if you're thinking about,

00:48:39.700 | well, should we get richer ourselves

00:48:41.180 | or should we really do this dream thing

00:48:44.540 | that we've wanted to do with our children?

00:48:45.780 | Take six months off and backpack Europe or whatever.

00:48:49.500 | You are in a very precious period of time

00:48:51.940 | where in terms of investing into relationship,

00:48:55.820 | there's going to be,

00:48:57.820 | there's just a very narrow window

00:49:00.140 | where your children are old enough

00:49:01.820 | to basically interact with you as adults,

00:49:04.340 | but they are not yet transitioning to full independence

00:49:08.080 | to where they are legal adults and et cetera.

00:49:10.780 | And I think that's a really satisfying phase of life

00:49:14.580 | where you can have enormous amounts of input

00:49:17.580 | into your children's lives,

00:49:19.740 | and also, but yet interact with them as adults.

00:49:24.740 | 'Cause when you've got a 20 year old who's telling you,

00:49:30.300 | your daughter's telling you what she's thinking about,

00:49:33.260 | et cetera, you're not gonna be interfering in her life.

00:49:35.940 | You're not gonna be directing her life

00:49:37.700 | like you do when she's 13.

00:49:39.620 | You're gonna be listening.

00:49:40.460 | You're gonna be coaching.

00:49:41.820 | You're gonna be asking good questions,

00:49:43.780 | but you're not gonna be telling her what to do.

00:49:45.180 | She's 20 years old.

00:49:46.900 | But when she's 13, you're spending,

00:49:49.020 | you're able to direct her in a better way.

00:49:51.780 | And so anything you can do to really engage in relationship

00:49:55.300 | and help your children at this stage

00:49:57.860 | should be the 80% of your activities.

00:50:02.860 | I guess there's just one more thing.

00:50:04.820 | I really think that,

00:50:06.200 | I'm blanking on the name of the book.

00:50:09.860 | I think if you haven't read it,

00:50:11.580 | you should read Gabor Mate's book on,

00:50:15.820 | find the title here real quick,

00:50:17.380 | called "Hold On To Your Kids".

00:50:22.380 | I think that's a really valuable book,

00:50:24.940 | a really valuable parenting book.

00:50:26.820 | And basically, my two sentence summary of it

00:50:30.980 | is that you should be very intentional

00:50:34.580 | about keeping your children connected to you as a father

00:50:38.860 | and to your wife as a mother,

00:50:40.980 | rather than forcing your children onto their peers

00:50:45.660 | as a primary source of direction in the culture.

00:50:50.260 | And Mate makes the point in that book

00:50:53.420 | about the novelty that is modern youth culture.

00:50:58.420 | And I realize this is a big blind spot for me as a parent,

00:51:02.780 | is that I've always believed that we should help children

00:51:06.660 | to develop independence at an early age.

00:51:09.820 | It's my basic belief that we should,

00:51:12.340 | kind of like they used to do,

00:51:14.420 | our vision should be that by 13 or 14 or 15,

00:51:18.220 | that our children are fully independent adults.

00:51:20.740 | Now, obviously, they're not gonna be

00:51:21.940 | fully independent adults,

00:51:23.100 | but you're dealing with an adult at that point in time

00:51:25.540 | that in all historical cultures

00:51:27.700 | has been considered an adult.

00:51:29.000 | So we shouldn't aim for 18,

00:51:30.820 | we should aim for 13 as the age at which to produce adults.

00:51:34.100 | With various modifications of that

00:51:37.300 | due to the reality of the fact

00:51:38.420 | that they're not legal adults,

00:51:39.900 | and that we're not trying to force them into a path,

00:51:43.300 | you don't want your 13 year old getting married,

00:51:46.860 | but your ambition is not to extend childhood.

00:51:51.500 | However, what I realized when I read Mate's book

00:51:54.260 | was that it's very easy to,

00:51:59.260 | if you have a mindset of independence,

00:52:01.620 | it's very easy to force your children

00:52:03.980 | to go out into their peer culture

00:52:06.140 | and to attach to their peer culture

00:52:08.380 | instead of being attached to their family

00:52:10.020 | and in their community.

00:52:11.300 | And we don't want that because the peer culture is toxic.

00:52:14.700 | What we want is them to have great

00:52:17.100 | and fulfilling relationships with peers,

00:52:19.260 | but not to look to their peers for wisdom and for direction,

00:52:23.700 | but we want them to be very consciously attached

00:52:26.140 | to us as parents, to our community that we're in

00:52:29.780 | across the generations.

00:52:31.860 | And so check that out and think about

00:52:33.420 | how you can apply anything

00:52:34.740 | that is relevant from that as well.

00:52:36.820 | All right, we go to the great state of Ontario.

00:52:38.340 | Welcome to the show, how can I serve you today?

00:52:40.420 | - Oh, Joshua, thank you so much

00:52:43.900 | for those last couple of answers, they were excellent.

00:52:47.220 | - My pleasure, thank you very much.

00:52:48.980 | - So my basic question is to do with

00:52:54.540 | real estate versus Bitcoin.

00:52:57.220 | So I'll give you a quick background.

00:52:59.820 | I have some real estate properties

00:53:01.340 | I purchased about 20 years ago

00:53:03.180 | in a fairly depressed market,

00:53:04.460 | which sat quite still for about 15 years.

00:53:06.540 | And then approximately five years ago,

00:53:08.100 | things turned around here as they did in so many places.

00:53:11.300 | We're about four times our purchase price now.

00:53:15.100 | And basically they've cashflowed all the way along,

00:53:18.580 | they're still doing fine.

00:53:20.100 | However, I'm thinking in terms of the,

00:53:22.860 | sort of that four X that happened,

00:53:24.900 | that is unlikely to happen again at that class.

00:53:28.700 | So I'm just trying to consider if I should

00:53:31.180 | divest myself of some portion of the properties

00:53:33.980 | and consider other asset classes.

00:53:37.700 | To give some context, I'm not like new to Bitcoin,

00:53:41.020 | I would say about 18% of my net worth is there.

00:53:46.020 | And so I've been investing in that since about 2017.

00:53:51.100 | So I've weathered the highs and lows of it

00:53:53.420 | and I'm not afraid of it,

00:53:54.940 | but I just, you've always given great advice

00:53:57.660 | in these kinds of scenarios, so I thought I'd ask.

00:53:59.860 | - Yeah, so let's break the decision apart.

00:54:05.060 | I'm not gonna give you,

00:54:06.340 | and obviously I'm not gonna tell you what to do.

00:54:08.580 | - I'm not looking for your specific advice on them,

00:54:10.380 | but yeah, how to think about that.

00:54:12.740 | - But we can break it apart

00:54:13.820 | and we can kind of make good strategic decision-making,

00:54:16.620 | I think, if we break it apart.

00:54:17.700 | So first, recognize that the decision

00:54:20.420 | that you have in front of you

00:54:21.860 | is not either Ontario real estate or Bitcoin.

00:54:27.420 | And forgive me, the next caller is from Oregon

00:54:29.460 | and I misread on my screen, Ontario versus Oregon,

00:54:31.900 | ON versus OR, but we're talking about Ontario here.

00:54:35.060 | So the decision is not Ontario Canada real estate

00:54:38.900 | or Bitcoin, but there are a variety

00:54:42.580 | of other options available.

00:54:44.220 | So the first decision is,

00:54:45.940 | should I sell my Ontario real estate

00:54:49.300 | that has been good to me, I made a lot of money,

00:54:51.300 | or should I not sell my Ontario real estate

00:54:54.220 | that has made a good amount of money?

00:54:56.980 | So let's start with that.

00:54:57.900 | Let me just simplify it to that.

00:55:00.060 | If you were starting over today with the amount of,

00:55:02.660 | and are we talking half a million dollars,

00:55:05.620 | a million dollars, basically just big picture,

00:55:07.300 | how much money are we talking about

00:55:08.300 | that you're considering making a change with?

00:55:10.540 | - It could be, yeah, we'll go with half of it.

00:55:14.540 | - Okay, so if you had a half a million dollars of cash

00:55:17.300 | sitting in the bank account,

00:55:18.700 | would you purchase Ontario real estate today

00:55:22.020 | on February 16, 2024?

00:55:24.220 | - No.

00:55:26.100 | - Okay, so then the answer is you should sell it.

00:55:28.780 | Because even if you just took the money

00:55:31.740 | and you put it in the bank,

00:55:33.180 | you wouldn't purchase it again, so you should sell it.

00:55:37.020 | That was a very different decision

00:55:38.460 | than previous when you bought it,

00:55:40.180 | and you've had a forex return, et cetera.

00:55:42.780 | So you should sell the real estate

00:55:45.820 | and you should get out of it

00:55:48.460 | for I think the reasons that were obvious

00:55:50.740 | in the quickness of your answer.

00:55:51.860 | And I would generally affirm that.

00:55:53.420 | It seems that to me that real estate in Canada

00:55:56.540 | doesn't have, I don't wanna get,

00:55:59.180 | I'm not out trying to buy real estate in Canada

00:56:03.140 | with what I see today.

00:56:04.340 | But you know the market and you were confident in that.

00:56:08.380 | So you should sell the real estate in Canada.

00:56:10.740 | Now, what should you do with the money?

00:56:13.020 | Well, I don't know.

00:56:14.500 | And if you don't know, then that is a perfectly,

00:56:17.940 | it's perfectly reasonable just to put the money in the bank

00:56:20.060 | and sit tight and wait until you do know.

00:56:23.620 | But one option that you have

00:56:26.540 | is to put the money into Bitcoin

00:56:29.380 | or put some money into Bitcoin.

00:56:31.620 | So now tell me why you would buy Bitcoin

00:56:35.980 | and what you would hope that Bitcoin

00:56:38.340 | can do for you in your life.

00:56:40.380 | - All right.

00:56:43.980 | I can resell it, I like that.

00:56:47.140 | So it's interesting because I first started selling

00:56:52.180 | I first started thinking about this with Bitcoin

00:56:53.980 | at a significantly lower value than it is today.

00:56:57.940 | So I have become overwhelmingly convinced

00:57:03.820 | that it's not going to zero.

00:57:10.980 | It's not going to zero

00:57:14.380 | and the money continues to flow into it.

00:57:16.540 | And I only see one direction it can go.

00:57:21.340 | So it seems to me like it is,

00:57:23.300 | I believe it to be currently undervalued.

00:57:26.860 | And I am enjoying all the purchases I've ever made of it,

00:57:33.100 | including ones that I'm currently in the red on.

00:57:48.740 | It's not like they've increased my personal security

00:57:51.700 | and happiness.

00:57:52.540 | - Okay.

00:57:56.540 | All right.

00:57:59.140 | So it sounds to me then like you should buy some Bitcoin.

00:58:03.660 | So how much Bitcoin do you think you should buy?

00:58:08.180 | How much do you want to own and why?

00:58:11.180 | - I don't have that answer.

00:58:16.380 | I don't know.

00:58:19.540 | - And that's the hardest question, right?

00:58:22.660 | Because you could have conviction

00:58:24.180 | about an investment thesis.

00:58:26.460 | In your case, you believe that this is an asset class.

00:58:29.540 | It's not going to zero.

00:58:30.580 | It probably has good room to run

00:58:32.660 | and from your perspective.

00:58:34.740 | So you have the idea that I want to go after this

00:58:38.300 | with some of my money,

00:58:39.260 | but how do we figure out how to do it?

00:58:41.100 | And that's the hardest question.

00:58:43.740 | So what I would say is the framework

00:58:47.020 | without getting into all the personal details

00:58:49.020 | of your affairs is to think about

00:58:52.500 | what would happen if there were big wins

00:58:54.420 | and what would happen if there were big losses.

00:58:56.780 | So there are two basic models

00:58:59.180 | that I think can make a lot of sense.

00:59:01.180 | First of all, is you can just simply have

00:59:04.260 | a simple, strong asset allocation model.

00:59:08.140 | And the model doesn't have to be something

00:59:11.460 | that you necessarily have to defend to someone else.

00:59:14.780 | It just needs to be something that makes sense to you.

00:59:17.540 | So here would be an example of something

00:59:20.140 | that I think would make sense

00:59:23.260 | in terms of somebody who had that perspective,

00:59:25.300 | two examples.

00:59:26.740 | So the first example would be somebody who says,

00:59:29.220 | you know what, this is very common in personal finance.

00:59:32.020 | This would be the most, of all the things I'm going to say,

00:59:35.060 | this is the most conventional

00:59:36.820 | where you're sitting down with most financial advisors.

00:59:39.020 | They wouldn't say you're stupid if you said this.

00:59:41.340 | So if you said, you know what?

00:59:42.700 | I'm going to, with my investment capital,

00:59:44.980 | I'm not going to include my personal residence or et cetera,

00:59:47.620 | but with my investment capital,

00:59:49.300 | I'm going to keep 80% of my investment capital

00:59:51.980 | into mutual funds.

00:59:53.740 | I'm going to take 20% of my capital

00:59:56.620 | and not put it in mutual funds.

00:59:58.500 | Of that 20%, I'm going to put 5% in physical gold

01:00:03.500 | and I'm going to put 5% in Bitcoin

01:00:08.020 | and as insurance policies against crazy stuff happening

01:00:11.300 | with the bulk of my investment account

01:00:14.100 | and I'm going to keep 10% for my stock trading account

01:00:18.620 | where I'm going to trade stocks and derivatives.

01:00:21.820 | So that would be, nobody would argue with that.

01:00:24.260 | They would say, okay, well, you know,

01:00:25.380 | you've got 80% of your money in good, safe mutual funds

01:00:28.420 | and stocks, et cetera.

01:00:30.300 | We know that those have a pretty decent history.

01:00:33.220 | We think that they'll probably be okay in the future

01:00:35.780 | and you've got 5% investment funds.

01:00:38.140 | That would be a reasonable thing.

01:00:40.060 | Now, this would not be normal,

01:00:41.380 | but this would also be still in the realm

01:00:43.180 | of kind of not crazy thinking.

01:00:45.980 | Would be, if you said something like, you know what?

01:00:48.260 | I don't know what's going to happen

01:00:49.460 | and so I just want to own all the asset classes.

01:00:51.780 | So I'm going to put 20% of my money in stocks.

01:00:55.740 | I'm going to put 20% of my money in gold.

01:00:58.380 | I'm going to put 20% of my money into Bitcoin.

01:01:01.100 | I'm going to put 20% of my money in real estate

01:01:02.740 | and I'm going to put 20% of my money in long-term bonds.

01:01:06.060 | And that would be a model that is kind of interesting

01:01:09.140 | is that we've got quite a lot of exposure

01:01:11.340 | to different asset classes.

01:01:12.820 | We could backtest that.

01:01:13.980 | It's kind of interesting when you do it,

01:01:15.220 | but it's still kind of a spread it around type of scenario.

01:01:19.780 | So you could come up with some version of that

01:01:22.300 | that's going to feel good to you.

01:01:24.220 | And it's probably more,

01:01:26.700 | what I'm guessing would be your number

01:01:28.060 | would be more than 1% and less than 90%

01:01:30.580 | in terms of the amount of money

01:01:32.460 | that you're going to invest in Bitcoin.

01:01:34.220 | And you don't have to have a great logical argument

01:01:36.860 | for this necessarily.

01:01:38.180 | If you just instinctively know that my number is 20%

01:01:41.460 | or 10% or 5% and that's the amount of money

01:01:44.620 | I want to have in this asset class,

01:01:46.020 | that's a reasonable way to go about it.

01:01:48.100 | Even if you can't justify it,

01:01:50.420 | that kind of initial reaction that you have

01:01:53.300 | to me throwing out some numbers, pay attention to that.

01:01:56.340 | The second thing would be to analyze it

01:01:59.060 | based upon kind of potential.

01:02:01.780 | And so the best I've come up with,

01:02:04.100 | if we're speculating on something,

01:02:07.780 | then my rules of speculation are these.

01:02:11.380 | Your speculation needs to be big enough to make a difference

01:02:15.420 | if it wins big and small enough not to wipe you out

01:02:19.380 | if it completely loses.

01:02:21.500 | So let's put a little texture on this.

01:02:24.300 | What do you think is the absolute maximum thing

01:02:28.860 | that could happen to the value of Bitcoin?

01:02:36.620 | - I don't, I mean, it depends on the timeline.

01:02:41.580 | I mean, if it's 10 years, then I don't see it, yeah.

01:02:46.580 | It's a lot.

01:02:48.540 | - Okay, so as--

01:02:50.660 | - Too many people try to put a number on it

01:02:52.140 | and they're so wildly divergent.

01:02:54.500 | - All right, so let's just make some things up.

01:02:56.700 | So as we talk today, Bitcoin is trading

01:03:01.100 | for something like 50,

01:03:03.660 | just a little less than 52,000 US dollar tokens

01:03:06.940 | to each Bitcoin token in the current market, okay?

01:03:10.500 | So let's say that the value of Bitcoin tokens

01:03:14.700 | compared to US dollar tokens,

01:03:16.900 | let's say that the ratio between those doubled.

01:03:20.860 | And then you were trading with Bitcoin

01:03:25.580 | at 100,000 US dollar tokens as compared to today, right?

01:03:29.180 | That'd be pretty amazing investment performance, right?

01:03:32.620 | - Yeah. - All right.

01:03:33.700 | Let's say that it quadrupled

01:03:35.540 | and we were talking about 400,000 US dollar tokens

01:03:39.980 | for every one Bitcoin token.

01:03:41.820 | So that would be amazing, right, amazing.

01:03:44.900 | And a lot harder to see how it quadruples

01:03:47.100 | than where we went from a dollar to whatever, 40,000.

01:03:52.100 | But it would be amazing if it 4X'd.

01:03:54.900 | So you just figure out whatever you think

01:03:56.820 | is the most optimistic thing that could happen.

01:04:01.260 | Now let's assume that you invested 50,000 US dollars

01:04:05.860 | into Bitcoin at today's prices.

01:04:09.820 | And then it quadrupled in value

01:04:12.300 | from 50,000 US dollars to 200,000 US dollars.

01:04:17.300 | Would that make any meaningful difference

01:04:19.180 | in your financial life?

01:04:20.420 | - I mean, yes, it would.

01:04:25.540 | But at the same time, it would just sit there

01:04:27.660 | because outside of that,

01:04:29.500 | there's still lots of liquidity available.

01:04:32.100 | So it would just, I guess, be a number.

01:04:34.980 | - Right, I think it would probably be largely a number

01:04:37.900 | because there's, from what you described,

01:04:40.700 | if you got half a million dollars of real estate,

01:04:42.620 | I don't think having an extra $200,000 sitting here

01:04:45.220 | and not sitting here is gonna make much of a difference

01:04:47.140 | in your case.

01:04:48.060 | Now, I made up the numbers,

01:04:49.300 | so you feel free to judge for yourself.

01:04:51.060 | But you wouldn't quit working today

01:04:52.780 | because now you're independent for the rest of your life.

01:04:55.700 | It would just be a little bit more money

01:04:57.660 | than what you have right now.

01:04:59.780 | But now on the flip side,

01:05:00.820 | let's say that your $50,000 that you invested today

01:05:03.860 | went to zero.

01:05:05.220 | Would that make any meaningful difference in your life?

01:05:09.560 | - I mean, it wouldn't be any fun,

01:05:14.900 | but no, it would not end anything.

01:05:18.060 | - Right, and so you see the point that I'm driving at

01:05:21.540 | is that if you really believe in the Bitcoin thesis,

01:05:24.740 | the idea that Bitcoin is gonna increase in value,

01:05:28.180 | and you wanna speculate on that,

01:05:30.220 | then you need to speculate with enough money

01:05:32.380 | so that whatever your biggest winning opportunity is

01:05:36.820 | that you believe could happen,

01:05:38.460 | that that would make a meaningful difference in your life.

01:05:42.140 | But you don't wanna speculate with so much money

01:05:44.360 | that whatever you think is the worst case scenario

01:05:47.060 | would wipe you out.

01:05:48.720 | That's the idea that I'm driving at.

01:05:50.660 | And so if you think about those two extremes,

01:05:54.340 | there's probably some amount,

01:05:55.780 | and those numbers will vary based upon

01:05:58.140 | where you are in life.

01:05:59.260 | And so let's use,

01:06:00.660 | I have a lot of Bitcoin millionaires in my audience.

01:06:04.540 | Here's what has happened with many of them.

01:06:07.720 | Many of them saw the Bitcoin thesis early on,

01:06:11.900 | and they believed in it.

01:06:13.640 | They were often young,

01:06:14.820 | and they often didn't have a lot of money,

01:06:17.260 | but they took everything that they had,

01:06:19.620 | and they put it into Bitcoin.

01:06:21.300 | And so there are lots of people out there

01:06:23.580 | who are working a job as a waiter

01:06:26.980 | and putting every dollar they earned,

01:06:29.140 | sleeping on an air mattress in a friend's living room,

01:06:31.860 | putting every dollar they earned into Bitcoin

01:06:34.140 | because they really believed in it.

01:06:36.080 | So that kind of speculation

01:06:38.060 | for somebody who's, say, 23 years old,

01:06:41.580 | for a 23-year-old who's gained $50,000 of life savings

01:06:45.860 | to put all of it into Bitcoin and every dollar beside,

01:06:49.860 | for that 23-year-old to get wiped out,

01:06:51.540 | that's not that big of a deal

01:06:53.100 | because there's not a big crash in lifestyle

01:06:56.060 | that if things get wiped out,

01:06:58.620 | okay, I get another job and I start again.

01:07:00.780 | And so that guy could put 100% of his money into Bitcoin

01:07:05.780 | because he really believed in the long-term outcome,

01:07:08.940 | and he, yeah, losing his life savings was no fun,

01:07:12.740 | but he was depending on his job primarily

01:07:15.180 | as a pathway through that.

01:07:16.660 | After all, there's lots of 23-year-olds

01:07:18.720 | who don't have any money,

01:07:19.860 | and they just depend upon their job.

01:07:21.780 | Now, compare that with, you know,

01:07:24.460 | I've got a client of mine who's a physician,

01:07:26.900 | and he sold his practice.

01:07:28.700 | And I forget the exact number,

01:07:30.300 | but it was a 10-figure payday after taxes,

01:07:33.020 | a 10-figure payout after taxes.

01:07:35.940 | He's in his early 40s,

01:07:37.300 | and he's still making money as a physician, et cetera,

01:07:41.900 | but he basically was set up for the rest of his life

01:07:45.540 | based upon his lifestyle if he wanted to be.

01:07:47.820 | So imagine you're in your early 40s,

01:07:49.820 | or it's actually, yeah, maybe younger,

01:07:51.620 | anyway, about 40 or so,

01:07:53.140 | and you've got a 10-figure payday after taxes.

01:07:57.500 | Do you really wanna take your 10-figure payday

01:08:00.100 | and put it all in Bitcoin

01:08:01.260 | because Bitcoin's going to the moon?

01:08:04.340 | That would be an enormous price tag if Bitcoin disappeared.

01:08:08.380 | And so you would be much more thoughtful about how much,

01:08:13.380 | and you might actually wager significant amounts of money

01:08:18.380 | on your bet, you might invest seven figures,

01:08:22.060 | but you need to make certain your goal is not,

01:08:25.460 | there's not gonna be a big difference in your life

01:08:27.500 | between a $12 million net worth

01:08:30.420 | and a $30 million net worth.

01:08:31.980 | There's not that much there.

01:08:34.280 | There could be a difference between 12 million

01:08:36.040 | and 120 million, sure, okay, fine,

01:08:38.820 | but the difference of you going

01:08:40.200 | from a $12 million lifestyle to a $2 million lifestyle,

01:08:45.200 | because you risked it all on Bitcoin,

01:08:47.900 | that's enormously costly.

01:08:49.660 | So my point is you're basically playing a game

01:08:51.940 | with your speculation of best case scenario,

01:08:54.980 | worst case scenario, where I'm at in life,

01:08:57.580 | cost of a loss, time that I have to make up for it,

01:09:01.700 | how much income do I have, what percentage of my net worth,

01:09:04.460 | and that's a very personalized game

01:09:06.080 | that I couldn't answer for you,

01:09:07.300 | but I think that's a decent model to begin with

01:09:10.540 | to figure out how much money you're gonna speculate with.

01:09:13.380 | - That framework is exactly the type of answer

01:09:17.420 | I was looking for from you

01:09:18.260 | just to help think this through better.

01:09:20.300 | I appreciate that.

01:09:21.140 | And also, the last couple of answers on parenting,

01:09:24.340 | always appreciated your parenting,

01:09:26.100 | your podcast that was Radical Fatherhood,

01:09:30.340 | Radical something, anyway, that was very helpful to me.

01:09:33.860 | We've got a bunch of kids

01:09:35.260 | that have appreciated your advice on that over the years.

01:09:39.940 | - Good, thank you so much. - Thank you.

01:09:41.420 | - My pleasure, my pleasure.

01:09:42.620 | All right, we move on.

01:09:43.780 | Now we go to Oregon.

01:09:45.180 | Oregon, you're gonna wrap us up today.

01:09:46.300 | Welcome to the show, how can I serve you today?

01:09:48.420 | - Hey there, I just wanted to say

01:09:50.860 | I really wish I could come to your family camp,

01:09:54.540 | so I'm a little irritated I can't go.

01:09:55.820 | I hope you do it some other year, first of all.

01:09:58.420 | Sounds a lot of fun.

01:09:59.460 | - Absolutely.

01:10:00.300 | - Yeah, and then two questions.

01:10:03.900 | First one's really short, is you had an episode

01:10:06.580 | where you kind of did some self-talk.

01:10:08.040 | You told us your kind of rhythm in the morning

01:10:11.220 | where we talked to yourself.

01:10:12.540 | So I was wondering if you still do that, one,

01:10:15.200 | and if you could tell me which episode that is

01:10:17.380 | 'cause I have looked and looked and cannot find it.

01:10:19.700 | (laughing)

01:10:21.140 | - Sure, sure.

01:10:21.980 | So by the way, for the uninitiated,

01:10:23.420 | I meant to do an ad for this earlier,

01:10:25.700 | but I am hosting in April, the middle of April,

01:10:28.900 | just the weekend before Tax Day,

01:10:30.820 | am hosting Radical Family Camp in Indiana.

01:10:34.380 | You can find details at RadicalFamilyCamp.com

01:10:36.620 | and at the end of the episode I'll say more about that.

01:10:39.100 | The initial sale tickets are more than half sold out now,

01:10:42.140 | so RadicalFamilyCamp.com if you're interested

01:10:44.340 | in coming and spending a weekend with me

01:10:45.640 | and other listeners.

01:10:46.960 | So the self-talk, I learned that years ago

01:10:50.340 | primarily from Zig Ziglar.

01:10:52.860 | In the early days of podcasting,

01:10:57.900 | one of the first podcasts I was,

01:11:01.100 | Apple Podcasts had almost nothing

01:11:03.260 | and I was working a job where I could listen to stuff

01:11:07.180 | while I was working and I didn't have much to listen to.

01:11:09.920 | This was, I guess when I was, I don't remember.

01:11:12.020 | It was in college, early years of college.

01:11:14.060 | And so I would load up iTunes

01:11:16.060 | and I was looking for podcasts.

01:11:17.380 | And at the time, Zig Ziglar's company

01:11:20.460 | had his stuff going out as podcasts.

01:11:22.340 | I listened to all his podcast episodes.

01:11:24.140 | Then I started listening to the,

01:11:27.580 | then I started listening to the,

01:11:30.900 | I bought his, started buying his CDs of his courses.

01:11:34.420 | You know, I would listen to them driving to work

01:11:35.700 | every morning and I just found them

01:11:37.020 | to be incredibly insightful and incredibly,

01:11:40.420 | incredibly useful.

01:11:42.700 | And what the basic idea behind

01:11:47.700 | Ziglar's version of affirmations,

01:11:50.340 | which was again, 1980s, '90s kind of stuff

01:11:54.900 | where personal development had not gotten

01:11:57.460 | as popularly known as today

01:11:59.140 | and affirmations were still going,

01:12:01.020 | was that he used his affirmations

01:12:03.380 | and talked about character qualities.

01:12:05.460 | And the point that he made that rocked my world

01:12:08.340 | as a young man was he pointed out

01:12:10.060 | that character qualities are all skills,

01:12:13.780 | that they are not innate attributes.

01:12:16.660 | You're not born honest or born dishonest.

01:12:20.460 | Rather, honesty is something that you exercise

01:12:23.700 | and you can become increasingly honest

01:12:26.180 | or increasingly dishonest based upon the,

01:12:30.580 | based upon the way that you live

01:12:32.300 | and the way that you act.

01:12:33.780 | And things like discipline, you're not,

01:12:36.140 | you don't come out of your mother's womb

01:12:37.780 | and the doctor holds you up and says,

01:12:40.140 | "Hey, here's a disciplined boy."

01:12:42.220 | You know, it's discipline is something that is developed.

01:12:45.140 | So if you're a disciplined person

01:12:46.220 | or you're focused or you're compassionate

01:12:48.300 | or you're respectful or you're kind,

01:12:50.500 | you know, kindness is not an innate attribute.

01:12:52.740 | And that rocked my world.

01:12:54.060 | It started a process of self-development

01:12:56.780 | that continues to this day

01:12:58.660 | with even just a lot of my recent interests.

01:13:02.940 | I've recently been really into "Peak" by Anders Ericsson,

01:13:06.540 | his insight into genius.

01:13:08.580 | I read "Talent is Overrated" by Jeff Colvin,

01:13:11.420 | his research into kind of synthesizing the field.

01:13:14.580 | I'm reading "Range" at the moment.

01:13:16.980 | And basically, these books and this concept

01:13:21.820 | for me has been an enormous mindset shift

01:13:24.580 | because I grew up thinking

01:13:26.900 | that all of these things were innate,

01:13:29.140 | that either you had them or you didn't have them.

01:13:31.380 | I thought that character qualities

01:13:34.180 | were either things that you were born with

01:13:36.340 | or weren't born with,

01:13:37.540 | just like I thought that innate ability and talent

01:13:41.180 | and genius was something that you're either born with

01:13:44.300 | or you're not born with.

01:13:45.620 | I distinctly remember an experience I had

01:13:49.300 | when I was in college, sorry, in high school,

01:13:52.420 | where I had a friend of mine,

01:13:55.660 | we were signing up for our classes

01:13:56.900 | and choosing our electives,

01:13:58.340 | and a friend of mine signed up for an art class.

01:14:00.860 | And I thought, oh, that's pretty cool.

01:14:02.700 | And I thought, wouldn't that be fun to take an art class?

01:14:05.140 | But I can't draw, I'm not artistic.

01:14:07.860 | And it never dawned on me as a high school student,

01:14:11.380 | it never even occurred to me

01:14:13.220 | that artistic ability is something that can be developed.

01:14:17.980 | I never imagined that it could be taught.

01:14:20.220 | I just assumed and thought that you either are an artist

01:14:24.140 | or you're not an artist,

01:14:25.420 | and you're born an artist with artistic skill or you're not.

01:14:28.220 | And I knew I didn't have it,

01:14:29.540 | so therefore there's no point in taking an art class.

01:14:32.180 | It sounds stupid when you say it out loud,

01:14:35.180 | but I distinctly recall having that experience

01:14:38.540 | and thinking, oh, bummer,

01:14:39.460 | wouldn't it be neat to be good at art?

01:14:40.740 | And I never thought I should sign up for the class.

01:14:43.700 | And it continues to this day

01:14:45.020 | what I've realized is that a lot of us think the same way.

01:14:47.540 | We think that these things are fixed.

01:14:50.220 | And all of the research that I can find

01:14:52.860 | indicates that all of these things

01:14:57.000 | that we think in some cases are innate,

01:14:59.580 | they're not in any way innate.

01:15:01.180 | They are talent.

01:15:03.780 | Let me continue on this theme.

01:15:05.060 | Sorry, they're developed.

01:15:06.220 | Let me continue for a moment.

01:15:07.100 | I'm gonna come back and tell you

01:15:07.940 | where to find these affirmations and go over them with you.

01:15:09.860 | But it's important to understand the basis of them

01:15:13.740 | as I see them as being useful.

01:15:16.100 | The most interesting book to me that I read

01:15:20.320 | was Anders Erikson's book called "Peak."

01:15:22.540 | And in this book, Erikson,

01:15:25.060 | who dedicated his entire career

01:15:27.420 | to studying the genius performers of the world,

01:15:32.080 | he came away and wrote this book at the end of his career.

01:15:34.660 | And as I understand his thesis,

01:15:36.860 | basically says that all genius level performance

01:15:41.860 | is attributable to two functions.

01:15:45.500 | Number one is proper training and practice techniques.

01:15:50.500 | He has developed a term

01:15:54.020 | of what he calls deliberate practice,

01:15:56.020 | which means something very specific.

01:15:58.140 | It's a type of coached practice

01:16:03.000 | in a chosen field or discipline

01:16:06.660 | that causes you to get better

01:16:10.060 | because you're working continually

01:16:12.060 | on the things that you're not good at.

01:16:14.220 | And this could be contrasted

01:16:15.620 | with what could be called naive practice.

01:16:18.040 | The idea is that sometimes people think,

01:16:20.140 | well, if I just do something more,

01:16:22.100 | if I do something more frequently,

01:16:23.540 | then I'll get better at it.

01:16:25.540 | But this turns out not to be the case,

01:16:27.860 | and that's what we call naive practice.

01:16:29.260 | So a good example would be driving.

01:16:30.940 | You may drive over the next five years, if you're an adult,

01:16:34.020 | you may drive, say, 1,000 hours.

01:16:36.060 | But at the end of those 1,000 hours,

01:16:38.060 | you're unlikely to be in any way

01:16:40.780 | a better driver than you are today.

01:16:43.260 | And in fact, you're probably going to be a worse driver

01:16:45.900 | than you are today because there's some amount of entropy

01:16:48.940 | that's happening in your skills

01:16:50.500 | from when you were more focused.

01:16:52.060 | And so what they've shown is that in many fields,

01:16:55.260 | even fields with experience, for example, medicine,

01:16:58.460 | that if you're a physician

01:17:00.580 | and you've just been practicing medicine for a long time,

01:17:03.780 | you're actually not any more likely

01:17:06.560 | to give better medical advice

01:17:08.220 | than somebody who's been practicing medicine

01:17:09.960 | for a very short period of time,

01:17:12.020 | unless you have been engaging

01:17:13.960 | in very focused personal development and deliberate practice.

01:17:18.780 | Just doing more of a thing doesn't make you better at it.

01:17:23.580 | You have to engage in deliberate practice

01:17:26.420 | where you are intentionally choosing to get better.

01:17:30.060 | Usually this is going to be,

01:17:31.140 | you're being coached to get better,

01:17:33.300 | or you're coaching yourself to get better.

01:17:35.000 | You are specifically focusing on specific skills

01:17:39.340 | that relate to the field that you're trying to improve in.

01:17:42.080 | So that's number one is deliberate practice.

01:17:44.060 | Number two is just enough time.

01:17:46.300 | And so if you engage in deliberate practice

01:17:49.100 | for a sufficient amount of time,

01:17:51.100 | that accounts for all world-class performers,

01:17:54.620 | for all genius, at least according to Erickson.

01:17:58.040 | And he has made a personal study

01:17:59.520 | of studying all of the child prodigies

01:18:01.420 | and all of the savants and all the hard cases, et cetera,

01:18:04.580 | and that's his conclusion.

01:18:05.900 | And I find, you know, I don't have any reason to doubt him.

01:18:08.680 | He's the expert, I'm not.

01:18:10.260 | And so what's fascinating about that is,

01:18:14.620 | I find it a very freeing concept,

01:18:16.780 | is that I can be a world-class performer

01:18:20.420 | in anything that I choose to focus on

01:18:24.100 | if I'm willing to engage,

01:18:26.380 | if I'm willing and motivated to engage in deliberate practice

01:18:30.500 | for a sufficient period of time

01:18:32.940 | as is necessary for each field.

01:18:34.860 | In some fields, if I didn't begin as a child,

01:18:37.580 | I probably will never achieve that genius level.

01:18:39.940 | In other fields, I may be able to,

01:18:42.140 | but it comes down to me and what I do.

01:18:44.440 | And so art is no different, that artistic skills,

01:18:47.460 | even artistic art savants and children

01:18:50.380 | who just, you know, create beautiful pictures

01:18:52.660 | at eight years old and things like that.

01:18:54.660 | They're not born with an art gene.

01:18:56.300 | There's no evidence of artistic genes.

01:18:59.020 | It's not innate, it's based upon environment,

01:19:02.580 | environmental cues, practice, good coaching,

01:19:05.500 | and enough time to develop those skills.

01:19:07.420 | Even, you know, Mozart, young child prodigies, all included.

01:19:11.100 | Even things that are fixed.

01:19:13.620 | So for example, Anderson talks about things like IQ.

01:19:16.660 | IQ is a really fascinating thing

01:19:18.340 | because it seems to be broadly heritable and broadly fixed.

01:19:22.860 | It doesn't seem to be,

01:19:24.700 | it's not like we have a long list of things

01:19:27.380 | that dramatically affect IQ.

01:19:30.140 | There's some things, but it doesn't, dramatic effects.

01:19:34.260 | But even IQ, that thing that we can measure, sort of,

01:19:37.900 | that has some reflection of innate ability,

01:19:40.680 | doesn't turn out to be particularly important

01:19:43.300 | in the development or expression

01:19:45.260 | of genius-level performance in any field of human endeavor.

01:19:48.580 | Erickson talks about chess players,

01:19:51.460 | and he indicates that they did a very careful study

01:19:53.820 | of IQ test performance among chess players.

01:19:58.660 | And what they found is that IQ seemed to give

01:20:03.020 | chess players a slight advantage

01:20:06.220 | in the early stages of learning chess.

01:20:08.580 | So chess players with a higher measured IQ

01:20:11.040 | than other chess players with a lower measured IQ

01:20:14.140 | seem to learn and grasp the basic concepts

01:20:17.220 | of chess more quickly.

01:20:19.300 | But that difference very quickly disappeared.

01:20:23.180 | And at the highest level of chess grandmasters,

01:20:26.460 | chess grandmasters don't show any higher level of IQ

01:20:31.460 | than is expected based upon the general population.

01:20:35.260 | And they don't, their performance doesn't seem

01:20:38.100 | to be driven by IQ in any way.

01:20:41.500 | And so really it does come down to practice

01:20:44.700 | and development of oneself.

01:20:47.260 | Now, back to affirmations.

01:20:49.240 | When Ziegler convinced me of the fact that skills,

01:20:54.260 | that character qualities are skills,

01:20:57.980 | then that concept convinced me of the value of affirmations.

01:21:02.980 | Because I've never liked or been in any way comfortable

01:21:08.100 | with the woo-woo side of kind of personal development.

01:21:11.680 | Because the woo-woo side is,

01:21:15.240 | again, it's just something that,

01:21:20.460 | you know, it's like look in the mirror and say I'm rich.

01:21:24.420 | In reality, I know I'm broke.

01:21:26.060 | To me, how do you ever do that?

01:21:28.240 | You're lying to yourself.

01:21:29.380 | Start by telling the truth.

01:21:30.480 | I'd rather just look in the mirror and say I'm broke

01:21:32.340 | and I don't wanna be than, you know, I'm rich, et cetera.

01:21:35.700 | But based upon being convinced of those attributes

01:21:40.700 | being genuine skills, then I realized

01:21:46.580 | that if I affirm these skills to myself,

01:21:50.140 | then that may have some valuable effect.

01:21:53.220 | That may help me to do better

01:21:56.460 | and to be able to develop these things.

01:22:00.740 | And then I can focus on different skills

01:22:03.340 | at different parts of my day and in my life

01:22:07.060 | and I can develop them.

01:22:09.060 | I don't know how to say it any differently than that.

01:22:11.940 | So that was where it was.

01:22:12.900 | So if you wanna find the affirmation,

01:22:14.340 | just search Zig Ziglar Affirmations and you'll find,

01:22:17.080 | you can find a PDF of the card

01:22:18.580 | that he would send out with his stuff.

01:22:20.380 | And then what I will do is I will play for you

01:22:24.540 | the audio here of the morning affirmations that I use.

01:22:29.100 | And I'll play it for you here.

01:22:30.900 | I think, let's see if this will work while I'm recording.

01:22:33.780 | Stand by a moment.

01:22:36.120 | All right, so that's not gonna work

01:22:44.780 | based upon how I have the computer set up for today.

01:22:47.340 | So I'll just read these to you.

01:22:49.700 | And what I did was I just found some music

01:22:52.400 | and recorded them, recorded them.

01:22:54.280 | But here they are, the text of them.

01:22:56.500 | And as I say these, I'll read them a little bit slowly,

01:22:58.980 | but I just want you to recognize that these things are,

01:23:03.840 | these things are, just recognize that these are skills

01:23:08.620 | that you can grow in.

01:23:09.460 | So here's how I say them.

01:23:10.620 | I, Joshua Sheets, am a child of the King,

01:23:15.140 | living in the will of God,

01:23:17.260 | and I can do all things through Christ

01:23:18.900 | who gives me strength.

01:23:20.820 | I claim the following attributes

01:23:22.260 | because I have the mind of Christ.

01:23:24.260 | I am a confidant of God.

01:23:25.540 | And by the way, I have scriptures that I use for these

01:23:27.620 | to convince myself of these things biblically.

01:23:30.260 | And although I am weak in many of these qualities,

01:23:32.540 | I am specifically told to let the weak say I am strong.

01:23:37.500 | So I am strong.

01:23:39.980 | By claiming, developing, and using these biblical qualities,

01:23:42.940 | I will become the person God created me to be,

01:23:45.540 | and I will glorify God and benefit mankind.

01:23:49.820 | I, Joshua Sheets, am an honest, intelligent,

01:23:54.380 | organized, responsible, committed, teachable person

01:23:58.700 | who is sober, loyal, and who clearly understands

01:24:02.620 | that regardless of who signs my paycheck,

01:24:05.020 | I am self-employed.

01:24:06.700 | I am an optimistic, punctual, enthusiastic,

01:24:09.940 | goal-setting, smart-working, self-starter

01:24:12.900 | who is a disciplined, focused, dependable,

01:24:16.380 | persistent, positive thinker with great self-control,

01:24:19.900 | and I am an energetic and diligent team player

01:24:23.460 | and hard worker who appreciates the opportunity

01:24:26.420 | my company and the free enterprise system offer me.

01:24:30.340 | I am thrifty with my resources,

01:24:32.380 | and I apply common sense to my daily tasks.

01:24:35.380 | I take honest pride in my competence, appearance,

01:24:38.780 | and manners, and am motivated to be and do my best

01:24:42.500 | so that my healthy self-image will remain on solid ground.

01:24:46.700 | These are the qualities which enable me to manage myself

01:24:49.940 | and help give me employment security

01:24:52.320 | in a no-job security world.

01:24:55.140 | I, Joshua Sheets, am a compassionate, respectful,

01:24:59.380 | encourager who is a considerate, generous,

01:25:03.620 | gentle, patient, caring, sensitive, personable,

01:25:08.620 | attentive, fun-loving person.

01:25:11.820 | I am a supportive, giving and forgiving,

01:25:16.340 | clean, kind, unselfish, affectionate, loving,

01:25:21.060 | family-oriented man, and I am a sincere

01:25:24.180 | and open-minded good listener

01:25:26.220 | and a good finder who is trustworthy.

01:25:29.340 | These are the qualities which enable me

01:25:30.860 | to build good relationships.

01:25:33.220 | I, Joshua Sheets, am a person of integrity

01:25:35.700 | with the faith and wisdom to know what I should do

01:25:38.940 | and the courage and conviction to follow through.

01:25:42.260 | I have the vision to manage myself and to lead others.

01:25:45.740 | I am authoritative, confident, and humbly grateful

01:25:49.980 | for the opportunity life offers me.

01:25:52.220 | I am fair, flexible, resourceful,

01:25:55.900 | creative, knowledgeable, decisive,

01:25:59.180 | and an extra miler with a servant's attitude

01:26:01.660 | who communicates well with others.

01:26:03.860 | I am a consistent, pragmatic teacher with character,

01:26:08.260 | and I have a finely-tuned sense of humor.

01:26:11.380 | I am an honorable person

01:26:13.140 | and I'm balanced in my personal, family, and business life,

01:26:17.140 | and I have a passion for being, doing,

01:26:19.860 | and learning more today so I can be, do,

01:26:23.700 | and have more tomorrow.

01:26:26.260 | These are the qualities of the winner I was born to be,

01:26:30.260 | and I am fully committed to developing

01:26:32.620 | these marvelous qualities with which I have been entrusted.

01:26:37.300 | And then you can go into either the morning version

01:26:40.460 | or the daytime version, et cetera.

01:26:44.300 | But the last sentence that I like

01:26:45.860 | from the nighttime version is,

01:26:47.580 | recognizing, claiming, and developing these qualities,

01:26:50.620 | which I already have, gives me a legitimate chance

01:26:53.900 | to be happier, healthier, more prosperous, more secure,

01:26:57.780 | have more friends, greater peace of mind,

01:27:00.300 | better family relationships, and legitimate hope

01:27:03.340 | that the future will be even better.

01:27:05.980 | So you can find the text of that.

01:27:07.260 | As I said, go online, search Zig Ziglar Affirmations,

01:27:09.980 | and you'll find it.

01:27:11.020 | But that's the basis of it.

01:27:13.060 | And I wish that I did this every day,

01:27:18.060 | but since I am honest, I cannot say that.

01:27:21.820 | What I can say is that every time I engage

01:27:24.660 | in this practice, I feel better.

01:27:27.180 | And as is common, when we do something that works,

01:27:31.020 | then we, because it works, we usually stop doing it,

01:27:34.500 | and it's frustrating about that.

01:27:36.860 | And so what I will do is I tend to do it in phases, though,

01:27:40.020 | is that I listen to the recording,

01:27:42.540 | usually when I make my coffee,

01:27:44.140 | I have the little recording that I made

01:27:45.780 | with some dramatic movie score music, et cetera,

01:27:48.180 | of my voice reading it to myself.

01:27:49.940 | I put my earbuds in while I wait for the water to heat,

01:27:53.060 | and I listen to that in the morning, and I like it,

01:27:55.820 | because it just causes me to want to,

01:27:58.220 | it makes me stand up straighter,

01:28:00.260 | 'cause I recognize, yes, I am those things.

01:28:02.780 | Those things do describe me.

01:28:05.700 | They do describe me in a measure,

01:28:07.180 | and I want them to describe me more and more.

01:28:09.740 | And what usually happens is, as I'm reading the list

01:28:13.060 | or listening to the list, et cetera,

01:28:15.080 | I'll find something where there's

01:28:16.220 | a little twinge of conscience.

01:28:18.340 | And for example, as I go through this now,

01:28:21.940 | and I say it's disciplined, right?

01:28:23.260 | Well, am I disciplined to do this thing

01:28:25.900 | that I'm telling you about

01:28:26.900 | that has been a good factor of my life?

01:28:28.780 | Well, no, and I haven't been super disciplined,

01:28:32.660 | but even as I'm recording this,

01:28:34.300 | then I sit up a little bit straighter, my chest goes up.

01:28:36.900 | No, I'm gonna express discipline,

01:28:38.940 | I'm gonna cultivate discipline,

01:28:40.060 | and I'm gonna do this more frequently,

01:28:41.280 | 'cause it's a healthy thing.

01:28:42.700 | And then you recognize times when I wasn't compassionate,

01:28:46.020 | or I was unkind to someone, and it tweaks your conscience,

01:28:49.860 | and you can go and apologize or fix something.

01:28:51.640 | But I think it's a very healthy habit.

01:28:53.140 | And then the final thing is, I'm making that right now,

01:28:56.140 | I'm planning to give my children,

01:28:59.220 | well, I can get it done, 'cause it's a long list,

01:29:00.700 | but I'm making books for my children,

01:29:02.500 | and I'm gonna teach this affirmation to my children.

01:29:05.220 | So I'm using AI to make inspirational,

01:29:10.220 | forward-looking pictures of these things.

01:29:13.460 | And then I've created a set of text

01:29:16.300 | that's associated with each of these character qualities.

01:29:18.740 | And this is kind of a component

01:29:20.400 | of my character education with my children,

01:29:23.820 | is I'm gonna give them all a printed photo book

01:29:26.620 | that have the AI images.

01:29:27.640 | They love it when I make AI images for them.

01:29:29.220 | So AI images of each of my children,

01:29:33.840 | forward, expressing these qualities.

01:29:35.740 | And I believe that this is something that we need to do

01:29:38.700 | as part of our education, the same way that,

01:29:42.020 | so character education is important for us,

01:29:44.580 | and it's also important for our children.

01:29:46.220 | And so that begins by identifying character qualities.

01:29:50.260 | And I've got a collection of about a half a dozen books

01:29:52.860 | that we go through that discuss different character qualities.

01:29:56.540 | So integrity, what does that mean?

01:29:58.140 | Responsibility, what is that?

01:30:00.020 | And my ambition and my hope is that I can set them

01:30:02.780 | on a stronger foundation by being intimately aware

01:30:07.780 | of the definition of these qualities,

01:30:11.180 | the fact that they have them,

01:30:13.140 | and the fact that they need to be developed.

01:30:15.700 | And then I try to supplement that

01:30:17.980 | with lots of literature, et cetera, to reinforce that.

01:30:20.580 | But that's the affirmations, that's how I use them.

01:30:25.080 | Yes, I do them, not as much as I should.

01:30:28.020 | Not as much as I will, based upon your reminding me

01:30:31.460 | of the importance of them, et cetera.

01:30:33.820 | - Well, I'm looking forward to stealing a lot of that,

01:30:38.540 | and I'm inspired with my family as well

01:30:40.500 | to try to figure out how to implement that,

01:30:42.500 | just not for me, but also for my family.

01:30:45.800 | I don't know if you have time for another question,

01:30:47.340 | but it was totally different on--

01:30:48.820 | - Sure, go ahead.

01:30:49.660 | - You know, is Texas gonna secede?

01:30:52.860 | What do you think of the odds of that?

01:30:53.940 | And do you think there are, it's a good plan B potential,

01:30:57.500 | and if so, how might we do that beforehand?

01:31:01.100 | Maybe like buying a piece of property,

01:31:03.500 | do you think that might help with the residency

01:31:04.880 | at some point down the line?

01:31:06.820 | Or what are your thoughts on that?

01:31:08.180 | Because you're one of the only people,

01:31:09.820 | weird enough that I respect,

01:31:11.140 | that might actually have an opinion on this matter.

01:31:13.300 | - Yeah, it's a fun question.

01:31:15.980 | So, buying a piece of property,

01:31:18.540 | if you could do it, and it were a small,

01:31:21.580 | modest part of your life and your component,

01:31:24.860 | then absolutely, I would say, go for it.

01:31:27.580 | Because after all, isn't it fun

01:31:30.460 | to have a little flag planted in a place

01:31:33.040 | that you appreciate or that you are interested in, et cetera?

01:31:37.300 | I think what would be a more practical thing

01:31:39.940 | than necessarily buying property

01:31:42.860 | is to change, if it were appropriate,

01:31:47.340 | and again, you can't commit fraud,

01:31:50.400 | but Texas is one of the states that allows nomad residency.

01:31:55.200 | And so, you can be a resident of the state of Texas,

01:31:57.960 | if you were deeply convinced of the thesis

01:32:01.140 | that you're describing, that Texas may secede,

01:32:03.240 | and I wanna have a flag planted there,

01:32:07.720 | then you can be a resident of the state of Texas,

01:32:09.940 | with a Texas driver's license,

01:32:11.280 | a Texas mailing address, et cetera,

01:32:13.280 | even if you don't spend all of your time in Texas.

01:32:16.720 | There are a few things to be careful of.

01:32:19.520 | That's not a system that should be abused.

01:32:21.720 | So, if you live in Minnesota

01:32:23.840 | and that's where you are all the time,

01:32:25.160 | then obviously, you need to,

01:32:26.920 | then you're probably gonna,

01:32:29.440 | a lot of your stuff is gonna reflect that.

01:32:32.080 | But Texas is a state that would be relatively easy

01:32:34.880 | for many people to place a flag in.

01:32:37.240 | Again, as I said, you could be a resident

01:32:38.680 | of the state of Texas, formally, officially,

01:32:40.840 | legally with the court system, et cetera.

01:32:43.000 | You would just need to make sure

01:32:44.100 | that you weren't violating any local laws

01:32:45.700 | of where you spent more time

01:32:46.840 | if you weren't spending time in Texas.

01:32:48.720 | I think the future of Texas is very strong.

01:32:51.000 | It just seems that Texas has a great structure.

01:32:56.640 | I listened to Peter Zeihan's analysis of it,

01:33:00.440 | and he goes on and on about Texas, the future of Texas,

01:33:04.180 | and I can't argue with his comments.

01:33:05.800 | I think he's correct.

01:33:07.060 | I've said to various people, I was like,

01:33:09.800 | hey, you probably ought to move to Texas

01:33:11.600 | and get potentially involved

01:33:14.360 | into the future growth of Texas.

01:33:18.120 | The Texas Triangle is powerfully enormous growth potential,

01:33:23.120 | and the integration of Texas with Mexico,

01:33:27.280 | enormous potential, et cetera.

01:33:29.320 | So I think Texas has a very strong economic future.

01:33:32.680 | I don't think there's any chance of Texas seceding,

01:33:36.320 | and it's not that technically they couldn't

01:33:38.960 | in the sense that all the arguments for Texas secession,

01:33:41.600 | and look, we've got, we're a,

01:33:44.160 | oh, what do they call the state?

01:33:46.040 | What's the name they use for the Republic of Texas, I guess?

01:33:50.360 | Is that the name that they call Texas?

01:33:53.880 | - I'm sorry, go ahead, what was that?

01:33:55.360 | - Sorry, what is the thing that Texans call themselves?

01:33:57.800 | Like, we're not a republic,

01:33:59.200 | but they don't call themselves a state.

01:34:02.160 | They call themselves something else.

01:34:03.920 | Anyway, it doesn't matter.

01:34:04.760 | - Oh, yeah, I think it's the Republic of Texas,

01:34:06.640 | I don't think.

01:34:08.260 | - So in their state constitution,

01:34:10.160 | we've got the Republic of Texas, et cetera,

01:34:12.760 | and we're the Republic of Texas,

01:34:17.440 | we've got an independent power grid,

01:34:18.640 | we're one of the few people that could secede.

01:34:20.640 | So could they do it?

01:34:22.320 | Yeah, probably so.

01:34:23.480 | My answer on that is quite simply

01:34:27.320 | that I think the entire idea of a state

01:34:31.280 | being able to secede from the United States federal entity

01:34:36.280 | was decided in the Civil War,

01:34:38.980 | and I'm no Civil War historian,

01:34:40.880 | but as far as I can tell,

01:34:43.200 | the actions of the South to secede from the Union

01:34:46.520 | were entirely legal.

01:34:48.520 | I can't see any law that they broke

01:34:50.720 | by seceding from the South.

01:34:52.960 | As distasteful as it is to talk about slavery

01:34:57.000 | and all of the issues associated with it,

01:34:59.480 | as far as I can tell from a strict legal perspective,

01:35:03.280 | it seems persuasive to me that the South

01:35:06.120 | and the Southern states were able, legally speaking,

01:35:09.200 | to secede from the Union.

01:35:11.480 | And Abraham Lincoln, as much as we wish to lionize him

01:35:15.520 | for his anti-slavery work,

01:35:18.720 | Abraham Lincoln broke enormous swaths of law and precedent

01:35:23.720 | in order to prosecute the war against the South.

01:35:27.340 | And the war happened,

01:35:29.040 | and I think that was where it was settled,

01:35:32.240 | is that the official stance of the United States

01:35:36.200 | is basically once you're in, you ain't getting out.

01:35:39.560 | Now, I'm just shooting from the hip.

01:35:42.600 | Imagine we're having a cold drink together,

01:35:44.280 | that's what I would say.

01:35:45.760 | Maybe someone could convince me of that,

01:35:48.220 | but when I think about the clear legal arguments

01:35:51.460 | that the Southern states had for the Confederacy,

01:35:54.760 | when I think about what the process they did,

01:35:58.880 | they did secede from the Union

01:36:00.640 | to establish the Confederate States of America, et cetera,

01:36:04.080 | and then how that war was ultimately prosecuted,

01:36:08.680 | then I think the same basic thing that happened then

01:36:12.560 | would happen again.

01:36:13.960 | And so, as I understand the history of the Civil War,

01:36:18.040 | an enormous component of the Civil War was around tariffs

01:36:23.040 | and around, basically, economic policies

01:36:29.600 | of keeping the country integrated.

01:36:32.280 | A significant component of it

01:36:34.080 | was also the arguments over slavery,

01:36:37.160 | but it wasn't exclusively over slavery,

01:36:39.880 | and it wasn't exclusively over economics and tariffs

01:36:43.640 | and who had the right to collect taxes.

01:36:50.800 | When I was in high school,

01:36:51.800 | I wrote a paper for a history class

01:36:54.780 | in which I argued that the Civil War was not about slavery,

01:36:58.300 | not about ending slavery.

01:36:59.640 | And in that paper, I quoted all of President Lincoln's

01:37:03.680 | addresses in which he said,

01:37:05.240 | "I'm not interested in ending slavery."

01:37:08.900 | I now believe that I was wrong in high school, I was naive,

01:37:12.000 | and that Lincoln was engaging in political convenience

01:37:15.880 | by not fully stating publicly his ambition to end slavery,

01:37:20.880 | but simply keeping that in reserve

01:37:25.040 | as trying to basically say one thing.

01:37:28.800 | Basically the same thing Barack Obama did

01:37:30.920 | around the concept of homosexual marriage, et cetera.

01:37:33.560 | I'm gonna say one thing, do another, et cetera,

01:37:35.480 | no difference.

01:37:36.320 | So I think Lincoln did the same thing.

01:37:37.760 | But those issues were related.

01:37:39.880 | And so if Texas seceded,

01:37:42.320 | what would be the justification for that secession?

01:37:44.960 | So there would have to be a lot of change

01:37:48.680 | that would happen in order for that kind of thing

01:37:50.720 | to be supported more broadly.

01:37:51.980 | Now, I was encouraged to see that,

01:37:54.500 | was it like 20 states, 22 states or something like that,

01:37:57.340 | signed the letter about the recent scuffle at the border,

01:38:01.680 | and that a lot of other state governors

01:38:04.000 | were willing to put their names down.

01:38:05.320 | And so I think that there is enough of a pressure

01:38:10.320 | that I think the actions of the federal government

01:38:13.120 | may be somewhat limited because of some of this pressure.

01:38:16.280 | So I expect some kind of significant political change.

01:38:20.800 | And I think that this is much more,

01:38:23.080 | I'm pretty persuaded of the thesis

01:38:26.720 | that the current scenario in the United States,

01:38:29.880 | the frustration, the vitriol, the arguing, the fighting,

01:38:33.280 | is more of a turning of the age

01:38:36.360 | than it is of any specific thing.

01:38:39.400 | And I first became persuaded of that by reading George,

01:38:44.400 | the geopolitical, George Friedman's book

01:38:51.400 | called "The Storm Before the Calm."

01:38:53.480 | And he talked about the cyclical nature

01:38:55.440 | and the two trends in the United States

01:38:57.360 | that are converging on the 2020s

01:38:58.960 | and why he predicted years ago

01:39:00.960 | the 2020s were gonna be hugely,

01:39:02.860 | hugely frustrating and filled with anger and vitriol,

01:39:09.080 | et cetera, but it was gonna lead

01:39:10.920 | to a complete transformation of the political system

01:39:13.440 | and of the economic system in the United States.

01:39:15.840 | And then finally, a listener convinced me,

01:39:18.520 | and I'm halfway through the recent book,

01:39:21.400 | "The Fourth Turning is Here,"

01:39:22.680 | and I find his arguments persuasive

01:39:25.580 | of the cyclical nature of the seculum

01:39:28.920 | in "The Fourth Turning" arguments.

01:39:30.120 | I never read the original one, and I knew that I should,

01:39:32.640 | but I just got annoyed by everyone

01:39:34.040 | who went on and on about "The Fourth Turning,"

01:39:35.520 | and so I'd never read the book

01:39:36.600 | 'cause I just got annoyed by the people

01:39:37.840 | who promoted the book.

01:39:39.000 | So I'm reading "The Fourth Turning is Here,"

01:39:40.360 | and it seems persuasive to me.

01:39:42.680 | So I think that we're just in kind of

01:39:45.400 | a fairly intense period in the 2020s,

01:39:48.800 | and that intensity is gonna lead

01:39:51.480 | to a transformation of the political system,

01:39:54.360 | a transformation of the economic system,

01:39:56.360 | and we're gonna emerge in the 2030s, mid-2030s,

01:39:59.040 | something like that, with a new and unrecognizable system

01:40:02.840 | because that's what happened about four or five times before

01:40:06.000 | in the American system.

01:40:08.080 | And I see good historical evidence for that

01:40:11.920 | that goes a lot farther than expecting a civil war.

01:40:16.080 | So those are my thoughts.

01:40:17.160 | Who knows, we'll sit back and watch and see what happens.

01:40:20.060 | - Thank you very much, love hearing it.

01:40:24.640 | - My pleasure, and thank you for the good questions.

01:40:28.920 | As we close, I think it was that caller who mentioned

01:40:32.000 | that I am indeed hosting a Radical Family Camp.

01:40:35.160 | If you are interested in that,

01:40:36.280 | check out the previous show that I just did,

01:40:39.080 | the one right before this show in the podcast feed.

01:40:42.080 | You can find all of the details on that,

01:40:43.640 | and if you'd like to sign up for that,

01:40:44.640 | go to www.radicalfamilycamp.com.

01:40:47.520 | Move soon, again, the early bird sale tickets

01:40:50.320 | are more than half sold out.

01:40:52.320 | So go to radicalfamilycamp.com.

01:40:54.580 | Basically, the short version is that

01:40:56.280 | we're gonna have a great three-day camp together,

01:40:59.920 | financial conversations, lifestyle conversations,

01:41:03.160 | camp activities for you, for your children, et cetera,

01:41:05.440 | and just hanging out.

01:41:06.360 | So I'll be there with my wife and all of our children,

01:41:09.160 | and very excited to start moving our relationship

01:41:12.260 | out of the digital world and into the physical world.

01:41:14.120 | We can argue about the next civil war

01:41:16.240 | and the causes of the last one, et cetera,

01:41:18.440 | around a campfire.

01:41:19.300 | I look forward to that conversation

01:41:21.200 | and hearing your input on that.

01:41:22.960 | Also, if you would like to join me on next week's show,

01:41:25.000 | go to www.patreon.com/radicalpersonalfinance,

01:41:27.600 | www.patreon.com/radicalpersonalfinance.

01:41:30.040 | Sign up there and you'll gain access to next week's show.

2024-02-16_Friday_QA