2024-05-10_Friday_QA
00:00:00.000 | [music]
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00:00:28.980 | [music]
00:00:30.980 | Today on Radical Personal Finance, it's a live Q&A.
00:00:32.980 | [music]
00:00:48.980 | Welcome to Radical Personal Finance, a show dedicated to providing you with the knowledge,
00:00:52.040 | skills, insight, and encouragement you need to live a rich and meaningful life now, while
00:00:55.840 | building a plan for financial freedom in 10 years or less.
00:00:58.640 | My name is Joshua Sheets.
00:00:59.640 | I am your host.
00:01:00.640 | Today is Friday, May 10, 2024, and on this Friday, as I do on any Friday in which I can
00:01:07.760 | arrange the appropriate technology to record, we do live Q&A.
00:01:12.320 | You set the agenda for these shows.
00:01:13.640 | It's all up to you.
00:01:14.640 | [music]
00:01:21.920 | Here on Radical Personal Finance, Friday is open line Friday.
00:01:25.200 | You can call in, talk about anything that you want, raise any topic that you want, ask
00:01:28.680 | any questions that you want.
00:01:29.680 | It can be personal in nature.
00:01:30.680 | We can talk about your situation.
00:01:32.440 | It can be general in nature.
00:01:33.600 | We can talk about any theory, any philosophy that you have, any questions.
00:01:37.320 | You're welcome to raise any beefs you have with me, any points of disagreement.
00:01:40.840 | I enjoy that.
00:01:41.840 | I think that good interaction provides us with a good opportunity to get closer and
00:01:46.280 | closer to truth in our society, and so I love it when you guys do that.
00:01:49.720 | If you would like to join me for one of these Friday Q&A shows, you can do that by going
00:01:53.480 | to patreon.com/radicalpersonalfinance, patreon.com/radicalpersonalfinance, sign up, support the show on Patreon, and that will gain access
00:02:00.920 | for you to one of our Friday Q&A shows, and then you'll be able to join me next week.
00:02:06.080 | We begin today with Shaw in Ohio.
00:02:07.880 | Shaw, welcome to the show.
00:02:08.880 | How can I serve you today?
00:02:09.880 | Hey, Joshua.
00:02:10.880 | Thanks so much.
00:02:13.080 | I have two questions, if we can get to both, but one is more pressing.
00:02:17.480 | My wife and I recently welcomed our baby girl.
00:02:20.360 | Congratulations.
00:02:21.360 | Thank you.
00:02:22.360 | Thank you.
00:02:23.360 | The baby came early, so she came in 26 weeks, and we're dealing with some NICU stuff.
00:02:29.800 | Not the home birth that we were anticipating, but certainly grateful for the care that we're
00:02:34.680 | getting.
00:02:36.800 | One thing that has come up is that we were trying to avoid giving the baby a […] for
00:02:45.400 | various reasons.
00:02:46.400 | Hold on.
00:02:47.400 | Hang on just a moment.
00:02:48.400 | You broke up right when you were saying we're trying to avoid giving the baby a […] Hang
00:02:51.160 | on one second.
00:02:52.160 | Let's get synced up.
00:02:53.160 | You're trying to avoid.
00:02:54.360 | Hold on.
00:02:55.360 | Hold on.
00:02:56.360 | You're trying to avoid.
00:02:57.360 | Start from there, please.
00:02:59.560 | We were trying to avoid giving the baby a social security number, but through human
00:03:04.800 | error, the paperwork got filed, and the hospital admitted their error to us.
00:03:12.000 | My question is about these sorts of matters.
00:03:17.480 | There are various reasons to avoid having a social security number, but I don't know
00:03:22.480 | if you […] the number deleted or voided.
00:03:29.880 | Apparently, those could be options for us.
00:03:33.320 | We are aware that we could get passport information for the baby just using the birth certificate,
00:03:40.000 | and that was our intention originally.
00:03:42.120 | I don't know, from an international escape standpoint, if having a voided or deleted
00:03:47.200 | social security number shows up in a system in any way that would make a border crossing
00:03:52.420 | any more onerous than it needs to be.
00:03:55.880 | Wow.
00:03:58.680 | First of all, how's your baby doing?
00:04:01.600 | Is she recovering?
00:04:02.600 | Is she growing?
00:04:03.600 | Is everything on the right track?
00:04:06.320 | For the most part, yes.
00:04:07.320 | She was growing really well.
00:04:08.680 | It looks like she is dealing with a little bit of an infection, but she's responding
00:04:12.640 | to the treatment, and so, you know, continued prayers to God for God's grace and for the
00:04:19.680 | excellent medical staff and all of that sort of thing.
00:04:22.600 | I am enormous for all of the commentary and things that I have to say and try to encourage
00:04:28.600 | people and as you were undoubtedly hoping for a wonderful, easy, smooth, natural birth.
00:04:34.440 | I tell you what, we need to thank God continually for the miracle of cesarean delivery.
00:04:40.520 | We need to thank God continually for the doctors and the nurses and the technology that has
00:04:46.120 | been developed.
00:04:47.120 | The fact that you could have a baby at 26 weeks and the baby could generally be doing
00:04:51.320 | pretty well is absolutely amazing.
00:04:54.440 | With regard to social security, your specific question, the short answer is I don't really
00:04:59.680 | have any idea.
00:05:01.600 | I would love, let me answer your question first, and then I'd love you to tell me and
00:05:05.400 | the audience just a little bit more of what you are hoping to accomplish by the baby not
00:05:11.800 | having a social security number because that's not something I have talked about publicly,
00:05:16.800 | but I think it'd be interesting to hear your perspective.
00:05:19.300 | With regard to the question, I don't know the process of deleting it from the system.
00:05:24.800 | I have not been through that.
00:05:26.200 | I don't know how it's done.
00:05:27.560 | I don't know if it's done.
00:05:29.480 | I don't know any of those details.
00:05:31.800 | In terms of international border crossings, I don't think it would make any difference
00:05:36.800 | with regard to international border crossings whatsoever.
00:05:40.080 | I've never been asked for a social security number, and I'm not aware of any way that
00:05:45.440 | that particular number exists in any kind of international context.
00:05:52.500 | So if you are able to successfully suppress and delete the number from the social security
00:05:58.040 | system, and if subsequently you can have a passport issued for your daughter, I don't
00:06:05.160 | think you would have any problem from an international perspective.
00:06:09.160 | It's just not a number.
00:06:10.700 | It's purely a tax identification number that the United States uses to classify and to
00:06:16.160 | track people, and it's always used in domestic affairs, but I'm not aware of any use of it
00:06:22.600 | on an international basis.
00:06:24.560 | So that's the best I can give you, not having gone through the process and not having any
00:06:28.440 | more inside information.
00:06:30.440 | Tell us more, though, about what you've learned and what you were hoping to do in terms of
00:06:35.280 | avoiding the issuance of a social security number at all.
00:06:38.480 | Well, I have to admit I'm not entirely clear all of the reasons.
00:06:44.960 | Some of this comes from being in various sort of freedom communities, where at times people
00:06:51.360 | even avoid having birth certificates for their kids.
00:06:53.920 | My best understanding about it is that perhaps it makes a difference if at some point in
00:07:00.080 | the future you are trying to renounce your citizenship, and it generally just kind of
00:07:07.680 | falls under the category of trying to provide as little data to a system that we feel is
00:07:14.640 | really corrupt and does not deserve our data and is not a good steward of our data.
00:07:21.760 | I would also mention we talked with our CPA, and our credit is minimal from the standpoint
00:07:36.080 | that some people have said you would need a social security number to claim your child
00:07:40.360 | as a dependent.
00:07:41.960 | But it's not clear that we would really be getting much financial benefit from doing
00:07:45.600 | that.
00:07:46.600 | Right.
00:07:47.600 | Let me just give you my thoughts.
00:07:49.840 | If you were calling me up and you were just asking me the question to say, "Hey, Joshua,
00:07:55.440 | should I get my child a social security number or not?"
00:07:58.440 | Let me just give you what I have thought about on that subject, and you can factor it in
00:08:02.920 | to any other research that you have done.
00:08:05.880 | When I had my first child, I hadn't really thought about this, and so I just went down
00:08:09.280 | kind of the standard route.
00:08:10.440 | I assumed that what you should do for children is get their social security numbers.
00:08:15.080 | I assumed that that was the right thing to do, and that was, of course, the normal path.
00:08:20.160 | As always, the normal path is always the easiest path.
00:08:23.780 | Then I started looking into it.
00:08:25.760 | I can't remember which child it was.
00:08:28.360 | I realized, "Oh, it is possible to not have a social security identification number for
00:08:33.600 | a child.
00:08:34.600 | It is possible."
00:08:36.600 | At the end of my inquiries some years ago, though, I came to the conclusion that it is
00:08:42.040 | possible, but it makes everything continually difficult.
00:08:47.200 | You need to be very committed to it in order for it to work.
00:08:52.640 | I respect any person who is so committed to his values and his ideology that he's willing
00:08:58.240 | to do extra work.
00:08:59.720 | You'll always find me a friend in your corner to say, "Good for you for doing it."
00:09:04.120 | It is important going in that you understand that it is challenging and difficult.
00:09:08.600 | I would love to see the entire use of the social security number disbanded.
00:09:14.920 | I think that would be in the spirit of what it means to be an American.
00:09:20.920 | Americans traditionally have famously been suspicious of any kind of national identification
00:09:26.320 | number.
00:09:27.320 | The social security number is a cultural aberration in the broad scale of history of the United
00:09:35.020 | States.
00:09:36.020 | It is a federally issued identification number that's done on a federal basis, that's used
00:09:40.860 | for tracking, that's used for all kinds of purposes.
00:09:44.260 | What I've noticed, however, over the years is that it was a backdoor program.
00:09:49.700 | My social security card says very clearly on it, "This document is not to be used for
00:09:55.600 | identification purposes.
00:09:56.920 | It's exclusively for basically interaction with the Social Security Administration."
00:10:01.500 | If my memory is correct, my children's cards, they've removed all of that.
00:10:05.740 | So all of the skepticism that Americans formerly had about the issuing of national identification
00:10:11.980 | numbers seems to have broadly disappeared.
00:10:14.900 | And now most people seem to be pretty accepting of national identification numbers.
00:10:20.260 | And the social security number itself is used as a form of identification that many people
00:10:26.200 | request.
00:10:27.200 | As you well know, you go to the doctor, you go to the dentist, you go to all kinds of
00:10:29.620 | places, they ask for your social security number.
00:10:33.280 | So from a freedom governmental perspective, my question is just, does it really matter?
00:10:39.220 | So, first of all, does it really matter?
00:10:41.700 | And number two, is it the most effective approach?
00:10:45.220 | So speaking to does it really matter?
00:10:47.780 | It might.
00:10:48.780 | And again, I'm firmly in favor of anybody who says, "This is my conviction and I'm going
00:10:52.100 | to follow through on it."
00:10:53.440 | It might ultimately matter, but I'm not convinced that it's going to be that big a deal in the
00:10:58.620 | fullness of time.
00:11:00.060 | Whether you're registered with a social security number or not, whether you're registered with
00:11:03.560 | a name or not, there's going to be some form of file or identification that's associated
00:11:10.280 | with you.
00:11:11.360 | And it's not that hard for an intrusive government to create some tracking mechanism.
00:11:16.840 | Now you can certainly make it a lot easier on them by giving them a social security number
00:11:20.920 | and registering everyone dually, but it's totally doable.
00:11:24.660 | And I think that we're probably with the continual collection of biometrics, we're probably...
00:11:32.200 | The nightmare dystopian scenario is that it's largely done based on biometrics rather than
00:11:38.040 | anything else.
00:11:39.700 | And any time you interact with the government, if you don't have the social security number,
00:11:44.540 | it makes your interactions more difficult and you could argue that it raises your profile.
00:11:49.040 | I tried to do a passport application for one of my children born abroad without the
00:11:54.600 | issuance of a social security number and I found it very difficult.
00:11:58.520 | And ultimately I wound up getting a social security number and registering on that basis.
00:12:04.800 | Now I wasn't committed, so it's possible that it could have been done by somebody who was
00:12:08.800 | more committed than I was, but I just found it very difficult and I think that it raises
00:12:13.160 | your profile.
00:12:14.360 | And with the advanced integration of biometrics, I think that that's probably a bigger concern
00:12:20.320 | than something like a social security number.
00:12:23.640 | From a day-to-day basis, I think that your child would face, not having a social security
00:12:30.320 | number, your child will face many, many challenges.
00:12:33.280 | Now if you could get a passport issued without a social security number, that would be helpful.
00:12:38.160 | I don't think you're gonna get a passport issued without a birth certificate, so that
00:12:41.800 | would seem to be extreme.
00:12:43.920 | And if you wanted to live the kind of lifestyle in which you were totally off the grid, living
00:12:51.240 | within the borders of the United States, but not engaging in kind of the normal things,
00:12:56.480 | flying, going abroad, then I think I would guess that you could do that.
00:13:00.560 | But I don't think you could do it without, I don't know that you could get a passport
00:13:05.160 | without a birth certificate.
00:13:06.640 | I think the biggest challenge you'll face is the new REAL ID requirements.
00:13:10.920 | I'm personally persuaded that, so if you look at the history of a national identification
00:13:16.520 | number, Americans voted against it time and time and time again.
00:13:21.120 | I'm convinced the REAL ID Act was basically a backdoor pathway to a national identification
00:13:27.880 | number, is that after failing many times at establishing a national database where each
00:13:33.160 | citizen of the United States is numbered and counted on a national basis, that the REAL
00:13:37.680 | ID was basically the way of getting at that.
00:13:40.380 | And I have not observed, since the implementation of REAL ID, I have not observed any cultural
00:13:45.780 | pushback against that.
00:13:47.200 | Most people don't seem to realize, they don't seem to care.
00:13:50.680 | Basically everybody has become REAL ID compliant.
00:13:53.880 | And if you look at kind of the broad acceptance of biometrics, it's pretty astonishing.
00:14:00.240 | Just as a sake of example, I always refuse biometrics when leaving the United States.
00:14:05.800 | The United States has now integrated an automated biometric camera-based system for leaving
00:14:12.060 | the United States on an airplane.
00:14:13.840 | You've seen this at the airport when you go to get on an airplane.
00:14:16.100 | I always refuse, and that refusal has been easier in the past.
00:14:21.220 | They specifically state, "Hey, you can refuse," and that refusal was easier in the past.
00:14:25.980 | This last time that I refused, I stood at the gate.
00:14:30.540 | I was the first one in line for boarding my flight with my wife and children, and I refused
00:14:35.940 | biometrics.
00:14:36.940 | Normally when you refuse biometrics, the airline staff comes over and threatens that they need
00:14:41.380 | to call Border Patrol and that they're going to send an agent over, and then you say, "Look,
00:14:45.140 | I'm a U.S. citizen," and frequently they check your passport, and you're through a couple
00:14:49.180 | minutes later.
00:14:50.180 | I stood there for 45 minutes with my wife and children right next to the line because
00:14:55.620 | they refused to let me board without sending a Border Patrol officer to manually inspect
00:15:03.260 | my passport so that we could board without biometric identification.
00:15:07.220 | I stood there, and they threatened in multiple ways.
00:15:10.300 | The airline agent said, "You're probably going to miss this flight because Border Patrol
00:15:13.940 | can't come very quickly, and we're not going to let you board unless you do that," and
00:15:17.060 | I said, "Listen, I was here at the very first.
00:15:18.860 | I'm on time.
00:15:19.860 | I don't know what my rights and rules are, but I'm here.
00:15:21.460 | I'm ready to go.
00:15:22.580 | I've got everything lined up.
00:15:23.860 | I'm simply refusing biometrics."
00:15:25.740 | We went back and forth.
00:15:26.780 | They called Border Patrol, went back and forth, looked at my passport.
00:15:29.540 | Finally, after 45 minutes of intimidation, they finally let me on the airplane.
00:15:33.220 | In the meantime, I got to sit there and watch the entire flight board, and I was the only
00:15:38.460 | one—I and my family—we were the only ones who refused biometrics.
00:15:45.020 | The counter-argument, someone would say, "Well, look, Border Patrol deletes the information
00:15:48.100 | very quickly for U.S. citizens and somewhat more slowly for non-U.S. citizens."
00:15:51.740 | All right, maybe all that's true.
00:15:53.660 | Maybe people have just accepted it, but it's pretty obvious to me that if we've got a plane
00:15:58.820 | of 150 people, and I'm the only one out of 150 people who refuses biometrics, it's pretty
00:16:05.620 | obvious to me that this perspective of opting out is not culturally possible.
00:16:14.580 | It's not culturally strong.
00:16:16.360 | Not many people are—I'm in a very, very small minority, and you, trying to avoid the
00:16:22.380 | issuance of a Social Security number for your child, you're in a very, very small minority.
00:16:26.900 | The question is, is this actually the best solution?
00:16:31.540 | I've pretty well decided that it doesn't make sense to try to live off the grid because
00:16:39.580 | it's not really doable.
00:16:42.260 | It's not really plausibly doable in today's world.
00:16:47.140 | When you do it, because you're so culturally out of place that you probably have a higher
00:16:52.220 | profile than if you don't do it.
00:16:55.940 | I have two arguments.
00:16:58.060 | Number one, that when more data is created, that doesn't necessarily mean that the individual
00:17:04.060 | risk is higher, because now there's so much data being created that more and more stuff
00:17:09.700 | can fall through the cracks.
00:17:12.420 | I don't know that just because they're collecting more data, just because people are all being
00:17:17.820 | issued with Social Security numbers basically automatically, I'm not sure that that's the
00:17:21.980 | great danger for freedom and liberty as some people think it is.
00:17:50.260 | But more importantly, I think that the best form of defense against this is not to try
00:18:04.820 | to be the individual going up against the government, but rather to go and get another
00:18:08.940 | government on your side and to get your governments going at each other.
00:18:12.860 | And so the problem, especially if you didn't have a birth certificate issued, is that you
00:18:17.540 | may be able to live in the United States, but you will never be able to get another
00:18:22.020 | citizenship without that birth certificate from the United States.
00:18:24.780 | You'll never be able to get a third citizenship, a fourth citizenship.
00:18:29.280 | You'll never be able to get multiple governments on your side.
00:18:32.340 | And I think that that's the reason I have emphasized so much what I've emphasized in
00:18:35.580 | international escape plan stuff, is that I'm pretty persuaded that governments do not respect
00:18:44.460 | citizens, they only respect other governments.
00:18:47.220 | And so the most important thing is to get other governments on your side, not to try
00:18:53.260 | to be the person going up against the government, especially when you're one out of 500, one
00:18:58.620 | out of 1,000 perhaps, maybe that's too much, maybe it's one out of 500 or one out of 300
00:19:04.680 | in terms of you against them.
00:19:06.980 | Because almost any kind of attack track that you take, almost any path of resistance that
00:19:14.780 | you take against tyranny, if you're one out of 100, then all of the fellow citizens are
00:19:21.100 | going to line up and do everything they can to help the government squash you.
00:19:25.460 | And so I just don't think – what I decided on is that that pathway of resistance, while
00:19:31.300 | I respect you and anyone else who does it for doing it, I don't think that pathway
00:19:36.700 | of resistance is the most fruitful, which is why I've not kind of encouraged it.
00:19:41.340 | So those are just some thoughts for you to think about.
00:19:44.100 | As I say, I don't know the answer to your specific question.
00:19:46.500 | Go ahead and give your thought, your response, and then go with your second question, please.
00:19:50.220 | Yeah.
00:19:51.220 | Thank you.
00:19:52.220 | I appreciate your thoughts.
00:19:53.220 | And it's a lot to think about.
00:19:55.420 | And I think I tend to agree with you.
00:19:58.060 | The second question was about a whole life insurance policy.
00:20:02.300 | And I think it probably would suit more of like a consultation call sometime.
00:20:08.520 | So the one question I have instead is, didn't you do a podcast about men's values, and
00:20:16.020 | is that still available?
00:20:17.020 | Is that something that's still out there?
00:20:22.460 | Was it with your father or with somebody in your family?
00:20:25.740 | Right.
00:20:26.740 | I did.
00:20:27.740 | Yes.
00:20:28.740 | Encouraging Christian Fathers is what that is called.
00:20:29.740 | It's a podcast that I did for quite a while with my own father.
00:20:33.860 | And I haven't updated it in several years, but I'm intending to update it again soon.
00:20:37.760 | But it's still available wherever you listen to podcasts.
00:20:39.860 | It's called Encouraging Christian Fathers.
00:20:41.420 | Great.
00:20:42.420 | I will check it out.
00:20:43.420 | All right.
00:20:44.420 | That's it.
00:20:45.420 | Thank you so much.
00:20:46.420 | Thanks.
00:20:47.420 | It was good to hear from you.
00:20:48.420 | And may you have strength and courage and wisdom as you continue to fight for your daughter's
00:20:51.620 | life.
00:20:52.620 | Jason in Kentucky.
00:20:53.620 | Welcome to the show.
00:20:54.620 | How can I serve you today?
00:20:55.620 | Hi, Joshua.
00:20:56.620 | Greetings.
00:20:57.620 | So we arrived at the family camp.
00:20:58.620 | Wonderful.
00:20:59.620 | And you asked me to call in with my question.
00:21:08.280 | Yes.
00:21:09.280 | So I got a chance today to do that.
00:21:12.980 | So kind of a spinning off of the first caller's concern about receiving a social security
00:21:17.960 | number at birth.
00:21:18.960 | So I'm actually calling about, you kind of surprised me a few episodes back about UTMA.
00:21:29.100 | And we started having this conversation about how I actually feel like UTMAs are, I think,
00:21:37.160 | just greatly overlooked, really undervalued.
00:21:40.080 | And that there is a lot that parents, if they're engaged in it, can do with the UTMA.
00:21:48.400 | And maybe for context for those who don't know, that being like a universal transfer
00:21:52.920 | to minors, where that account belongs to the child, but there needs to be a custodian who
00:21:59.460 | sees it as a parent who's legally kind of running that account, administering the account
00:22:04.840 | until the owner becomes a majority.
00:22:09.400 | And so, yeah, I wanted to make my case for why I am enthusiastic about it and kind of
00:22:17.600 | see what you think.
00:22:18.600 | I'm so glad that you called in.
00:22:19.600 | So let me just state what I have said previously for context.
00:22:22.840 | And then I want to hear your counter case.
00:22:25.360 | So the UTMA account, Uniform Transfer to Minors Act and UGMA accounts, is a custodial account
00:22:32.120 | that an individual can put money into for the benefit of a minor.
00:22:38.000 | And then that allows the minor to receive money.
00:22:41.600 | And there's generally no tax consequences to it.
00:22:43.680 | It just sits in the account for them until they are a legal adult, which is usually 18
00:22:49.160 | years old.
00:22:50.560 | And then at the age of 18, they now can use the money, they can do whatever they want
00:22:54.320 | with the money, and it's freely theirs.
00:22:56.960 | And what I stated, as far as my position, is that I'm skeptical of UTMA accounts.
00:23:02.520 | While I think I could design a circumstance in which I think they're the best they are,
00:23:07.320 | I could probably design something where they're useful, especially if we get into ownership
00:23:12.600 | rules and we have very specific needs from a tax and ownership perspective, then it could
00:23:19.800 | be useful.
00:23:20.800 | But my big concern is that it doesn't allow the giver of assets to control the money once
00:23:29.000 | the child is an adult.
00:23:31.400 | And so you've got a drug addict, loser son who turns 18 and all of a sudden has full
00:23:37.840 | control of the money, and he can do whatever he wants with it now, and it's enabling bad
00:23:42.160 | decisions.
00:23:44.440 | And the rebuttal that people usually give is, "Well, that's only if he knows about it."
00:23:48.320 | And my point is that you have a fiduciary duty to inform him about it, and so now you're
00:23:53.160 | creating a scenario in which the minor knows that, "I'm going to have access to money,"
00:23:57.840 | and you don't have the ability to pull it back.
00:23:59.960 | So that was the basic argument that I present generally when I'm asked about it, and now
00:24:04.160 | I want to hear your rebuttal.
00:24:05.640 | Tell us kind of what you love about the UTMA and why you think it's so useful.
00:24:09.920 | Yeah, and I agree that it's definitely a risk, and for that reason, I would discourage someone
00:24:22.720 | from having like $100,000 in the UTMA or some amount of money of substantial value because
00:24:30.160 | that risk is too great.
00:24:32.240 | But basically what I've done with our kids, I mentioned the social security number because
00:24:37.480 | as soon as they were born and we got the social security card in the mail, the first thing
00:24:42.440 | I did was open UTMA accounts for each of them and put in a little bit of money and bought
00:24:49.600 | a few stocks for them.
00:24:51.280 | And so they're one month old and can't talk, but they already own some assets.
00:24:57.440 | And for me, it's not about trying to pick the greatest stocks in the world or to make
00:25:04.440 | them millionaires before they actually do not want them to be millionaires before they
00:25:08.400 | turn 18, unless they earn it themselves, but it's just about kind of instilling the value
00:25:14.780 | of ownership and for them to, as they grow up and as they become capable of understanding
00:25:22.360 | a little bit of what does it mean to own something, what does it mean to, what do companies do?
00:25:30.120 | For example, if it could be an easy choice of things like gaming companies or things
00:25:36.720 | that kids are involved in, they engage with, that they can relate to it.
00:25:42.960 | And as they get older to kind of teach them, okay, here's what you own, here's what that
00:25:49.200 | does and what that means, and here's how that can benefit you in the future.
00:25:55.600 | And then, of course, especially when you get into those years, like around 10 to 12 years
00:26:02.320 | of age where they can start to, when they start to have interest and they start to emerge
00:26:07.240 | with their talent to say, okay, here's some funds that so far have just been invested
00:26:13.800 | in stocks and that's fine, but we can take this and I can help you as the responsible
00:26:20.640 | party and to say, what would you like to do, what are some things you could explore?
00:26:26.240 | And it might be spending it on a plane ticket to go to a certain country they would love
00:26:30.580 | to see, or it might be starting a business that might be, we'll see what it is as their
00:26:36.040 | interests emerge, but to kind of use it as something that's kind of like the opportunity
00:26:39.960 | file.
00:26:40.960 | And I envision something like between five to 10,000, as far as like a dollar amount
00:26:46.680 | in my head.
00:26:48.200 | And it's enough to do something really cool with, but it's not too much money.
00:26:54.960 | And then, and essentially the goal is to use it well before they reach age of majority.
00:27:01.400 | So we never worry about them being irresponsible with it, that then it gets used probably before
00:27:07.840 | they even start to drive, and so that's kind of the goal, the game plan.
00:27:15.080 | And that's kind of where I see the radical side of it, that it kind of becomes the opportunity
00:27:19.880 | file where I have a reason to teach them about those things because they have that.
00:27:24.440 | And it really is theirs, it legally is theirs, but then we can transform it into something
00:27:29.920 | even more valuable with those experiences they have, if it goes the way I envision it.
00:27:36.800 | So I'm curious what your thoughts are.
00:27:39.440 | I can see the argument, and I think it's a good one.
00:27:42.640 | And so the first distinction I would make is there's a couple reasons why the UTMA,
00:27:50.320 | in what you're describing, why the UTMA is an appropriate scenario.
00:27:56.560 | First, in what you're describing, you're not trying to accumulate significant assets.
00:28:03.720 | You're not trying to accumulate $150,000 for a college education and do that in a UTMA
00:28:10.080 | account.
00:28:11.080 | And so if we compare the UTMA against something like a 529 account, if somebody's goal is
00:28:16.320 | to accumulate a six-figure sum for the child's future benefit, I would say a 529 account
00:28:23.800 | is usually going to be a superior choice because what it allows the parent to do is to retain
00:28:32.920 | control over the money, and it is tax-advantaged.
00:28:37.480 | One of the downsides of the UTMA account is it's subject to the kiddie tax.
00:28:41.760 | So any taxable earnings in the account are taxed, the first, what is it, $2,500, I think?
00:28:49.640 | First $2,500 go to the child and normally would have a 0% tax rate.
00:28:56.840 | But beyond $2,500 of taxable income in the account, unearned income, that's taxed at
00:29:03.120 | the parent's marginal tax bracket.
00:29:06.740 | So due to the kiddie tax rules, that's why UTMA accounts are not appropriate tax shelters
00:29:10.800 | for wealthy parents who are trying to transfer assets to their child to get them out of the
00:29:15.160 | parent's taxable assets to lower the tax rate.
00:29:19.200 | You can't because the assets are going to be taxed at the parent's highest marginal
00:29:23.520 | rate.
00:29:24.520 | I would argue that at least be the child's money that's paying the tax, but anyway, ignore
00:29:28.640 | that.
00:29:29.640 | So for significant funds, for a six-figure sum, a 529 account would be generally a superior
00:29:36.000 | account.
00:29:37.000 | Then the other account that we would usually look to would be something like a Roth account.
00:29:42.440 | And so a Roth account could accomplish a similar benefit of a sense of ownership and a similar
00:29:51.200 | benefit to a sense of ownership, but the Roth account requires earned income in order to
00:29:55.440 | start.
00:29:56.440 | And you're not going to be generating absent baby modeling, genuine baby modeling.
00:30:00.960 | You're not generating earned income for a one-year-old.
00:30:03.820 | So the Roth account really can't be started until a later time in the child's name.
00:30:09.440 | So you're not getting those same benefits.
00:30:11.360 | Plus the downside of a Roth account is you're teaching the child that this is for your retirement
00:30:16.200 | and you're not getting any of those current benefits of, "Hey, I'm really into gaming
00:30:20.520 | right now, so I'm going to buy these game stocks and I'm going to spend the money on
00:30:24.000 | a really great trip abroad."
00:30:26.600 | You can do all of that with a UTMA account when the child is a minor, but you can't do
00:30:31.560 | that with a Roth IRA because it's a retirement account that's generally seen for retirement.
00:30:37.720 | And then the other important thing is that you're not just doing this with physical money
00:30:42.000 | or with a simple – you're not doing this with physical money or physical assets.
00:30:47.920 | You're trying to establish the ownership of securities.
00:30:50.800 | And so if you're going to establish ownership of securities, you need an actual legal title
00:30:54.840 | to put on the account, unlike just money that can be earned from flipping bicycles and selling
00:30:59.920 | lemonade and those kinds of things.
00:31:01.920 | And then finally, you're trying to genuinely instill a sense of ownership and you're trying
00:31:05.640 | to say, "This is your money.
00:31:07.480 | I may have seeded the account for you, but this is your money.
00:31:11.180 | This is your money that you control.
00:31:13.520 | I'm just the custodian on it, but you're the one who makes the decisions and you can gain
00:31:17.880 | access to this money.
00:31:19.200 | And so if you can invest effectively and grow the balance, you can go ahead and use this
00:31:24.120 | money.
00:31:25.120 | This is your money and you can do whatever you want with it, but – and it's legally
00:31:28.240 | your money, genuinely legally your money, but it's not constrained in a retirement account
00:31:33.440 | and it's available to you without any restrictions.
00:31:36.920 | So I think that with that line of thinking, I believe you're absolutely correct.
00:31:40.160 | The UTMA account is your superior option for that.
00:31:43.440 | Yeah.
00:31:44.440 | I especially think about some of these founders and people have been really – you think
00:31:49.240 | about almost anybody, like a Bill Gates type of person who sees jobs, a lot of their skills
00:31:54.680 | emerged in teenagehood.
00:31:55.680 | I think that's probably true for a lot of regular folks too, and so that's kind of
00:32:02.800 | a – when I think about generational planning, that's kind of what I have in my head, empowering
00:32:08.560 | that to some degree.
00:32:09.560 | Right.
00:32:10.680 | Or maybe using it for a Roth IRA, if they want to do that.
00:32:13.680 | Totally.
00:32:14.680 | Totally.
00:32:15.680 | And what I'm emphasizing, and I think you're agreeing with, is this is being used as a
00:32:20.400 | training tool, not as a financial, exclusively financial tool.
00:32:27.000 | So we're not trying to reduce taxes.
00:32:29.600 | We're not trying to move assets, move ownership.
00:32:32.220 | We're trying to use the laws that exist to establish ownership for a minor so that he
00:32:38.400 | can trade stocks or some variation of that and know that it's his money that he has
00:32:46.440 | full control over, that he gets full access to prior to 18 with your approval, and full
00:32:52.200 | access to whether he has your approval or not after the age of 18.
00:32:56.040 | And it's not primarily a tax tool.
00:32:59.100 | It's a training tool investing into the child's sense of ownership so that he'll take interest
00:33:04.100 | in the companies that he interacts with.
00:33:06.280 | Yeah.
00:33:07.280 | Yeah.
00:33:08.280 | Yeah.
00:33:09.280 | You're exactly right.
00:33:10.280 | Yeah.
00:33:11.280 | Yeah.
00:33:12.280 | All right.
00:33:13.280 | You've persuaded me.
00:33:14.280 | I agree.
00:33:15.280 | I think that your use case is ideal, and I agree.
00:33:16.640 | I think that...
00:33:17.880 | Look out for Asian majority, be careful with that.
00:33:21.880 | Right.
00:33:22.880 | Right.
00:33:23.880 | I think that what's evident to me from talking it through with you is that my brain automatically
00:33:27.840 | reverts to large numbers.
00:33:30.860 | And I need to be careful when I'm answering a question about a UTMA account, I need to
00:33:34.640 | be careful to specify what amount of money are we talking about here?
00:33:39.920 | Because when someone says, "I want to set aside money for my child," I'm automatically
00:33:45.760 | mentally interpreting that to mean, "I want to set aside $100,000 to $250,000 for a child's
00:33:52.120 | education."
00:33:53.800 | And I'm saying, "Well, this is an inferior option when compared to a 529 account, or
00:34:00.160 | a Roth IRA account for the long-term, this is an inferior option for that."
00:34:04.720 | But what I should do is I should be more careful to say, "What amount of money are we talking
00:34:09.160 | about and what's the goal?"
00:34:10.520 | Because the two factors that you've described of, "Hey, we're talking $3,000 or $9,000,
00:34:16.320 | whatever it grows to, we're talking modest amounts, and we want the child to have the
00:34:20.800 | confidence of ownership, and we just need some way of titling the account so that he
00:34:26.040 | can actually buy and sell and trade and do all that stuff on a brokerage account or other
00:34:30.720 | exchange in some way," then I think that that makes absolute sense.
00:34:35.440 | And I need to be careful that I don't automatically just substitute six-figure sums when somebody
00:34:41.880 | may not be intending that.
00:34:43.440 | Yeah.
00:34:44.440 | And that's kind of what surprised me a little bit, yeah, that makes a lot of sense.
00:34:50.360 | So, it's good to reconcile our definition of terms, right?
00:34:57.560 | Yeah, absolutely.
00:34:58.560 | Well, awesome.
00:34:59.560 | I love that you called in.
00:35:00.560 | Anything else you want to cover, Jason, before I go on to the next caller?
00:35:02.800 | That's everything for today.
00:35:04.960 | Awesome.
00:35:05.960 | Well, I thank you again for coming to the family camp.
00:35:07.720 | I loved interacting with you there, and look forward to connecting with you again soon.
00:35:12.120 | It's great to be able to put names to faces, to voices on the phone.
00:35:16.680 | Lauren in Illinois.
00:35:17.680 | Welcome to the show.
00:35:18.680 | How can I serve you today, Lauren?
00:35:19.680 | Hi, Joshua.
00:35:20.680 | Thanks for taking my call.
00:35:21.680 | My pleasure.
00:35:22.680 | Well, first, I wanted to just share an impact that your podcast has had on me.
00:35:29.520 | I was just looking it up, and you released the Friday Q&A last year, March 6, 2023, about
00:35:38.440 | birth tourism, and you talked a lot about just the physical explanation of birthing
00:35:47.560 | and utilizing midwives and just different, you know, you just explained very well what
00:35:55.360 | the process of birthing was like, and it got me thinking, and I actually got pregnant later
00:36:01.320 | on last year and ended up giving birth at a birthing center with midwives.
00:36:07.600 | It was, like, the most beautiful experience, and I just wanted to say thank you, because
00:36:12.520 | I don't think I would have gone down the route that I did.
00:36:15.320 | I probably would have entertained using midwives, but would have probably done so in a more
00:36:19.520 | clinical setting, like at a hospital or something like that, and instead I went with a birthing
00:36:24.040 | center that had a lot less intervention, and it was just, it was amazing, and I wanted
00:36:28.960 | to share it because I know that positive birth stories are few and far between when it comes
00:36:35.160 | to media.
00:36:36.160 | Yes.
00:36:37.160 | Because the media likes to share the scary stuff, all the unknowns, and I think, especially
00:36:42.520 | as a first-time mom going into it, there were a lot of unknowns, but having gone through
00:36:48.440 | it now, it was just, like, the most beautiful experience, and I know that it was the case
00:36:53.280 | because there were less interventions, there was just, you know, there were medical professionals
00:36:58.920 | involved, but they were there to do it in the most natural route possible, and I was
00:37:04.600 | just so thankful for it.
00:37:05.600 | So I wanted to share that with you first.
00:37:06.600 | I am thrilled that you...
00:37:07.600 | Are you ready for some hot stuff?
00:37:08.600 | Oh yeah.
00:37:09.600 | The WNBA is back on ION.
00:37:10.600 | The action is on Friday night.
00:37:11.600 | Fakes the pass and scores.
00:37:12.600 | The spotlight is on the players.
00:37:13.600 | Back to back buckets.
00:37:14.600 | A bona fide star.
00:37:15.600 | And the crowd is on edge.
00:37:16.600 | This game is on fire.
00:37:17.600 | You can't ask for more than that.
00:37:18.600 | The WNBA is on Friday night, starting May 17th.
00:37:19.600 | Find out more at WNBA.com.
00:37:20.120 | First of all, you've shared that, and that you've had that experience, and I love hearing
00:37:44.560 | just a few murmurs in the background of your little baby, and it makes all the difference
00:37:49.520 | in the world.
00:37:50.520 | So I'll just comment on what you said, just to say thank you for that.
00:37:56.200 | And it's important, because one of my goals, one of my current life goals, is to do anything
00:38:04.940 | possible to equip mothers and fathers to have as many children as they want to have.
00:38:13.160 | And I think that that's something that we can change, especially if we approach it holistically.
00:38:18.740 | And while it's not particularly common for a financial planner to talk about birthing,
00:38:23.300 | I think that there's some things, some of the reasons I do it is because I think there's
00:38:27.800 | some things that we can improve about it.
00:38:31.000 | And our culture has always, not always, but our culture has isolated birthing, and it
00:38:36.920 | has created fear in the hearts of women and prospective mothers all across the culture.
00:38:49.100 | And I'm convinced that that's largely a psychiatric condition that is unnecessary.
00:38:55.300 | It doesn't have to be that way.
00:38:57.740 | And if you listen to experienced midwives who have crossed the globe, there are cultures
00:39:03.820 | in which giving birth is just perceived as totally normal, generally considered to be
00:39:09.180 | broadly painless, straightforward, all of that.
00:39:12.820 | And so I think that we want to hold two things really carefully.
00:39:16.100 | We want to hold that birthing is a normal and natural process.
00:39:19.980 | Being pregnant is not a disease.
00:39:22.220 | And then simultaneously, even as with the first caller, before you jumped on, simultaneously
00:39:27.340 | recognize that we need to be grateful for the incredible medical technology that we
00:39:32.220 | have that saves the lives of countless mothers and babies all in.
00:39:36.980 | And before you jumped on, the first caller, they had been planning on the birth of their
00:39:40.980 | first baby and planning for a natural birth, and the baby came at 26 weeks.
00:39:46.140 | And the baby's in the NICU, she's doing okay, but she came at 26 weeks.
00:39:49.420 | And so I love that we have both of these calls on here because both of them are important.
00:39:54.160 | We want to have good medical supervision.
00:39:57.340 | We want to have good, modern, informed, highly qualified medical care.
00:40:04.180 | And we want to do it in a human context that recognizes that the needs of the mother are
00:40:08.900 | really, really important.
00:40:11.060 | And as you are describing from the words that if a mother's birthing experience, especially
00:40:17.500 | her first baby, if a mother's first baby birthing experience can be a beautiful, treasured
00:40:26.820 | memory for her, it transforms her initial days with her new baby, and it transforms
00:40:36.420 | the family's experience of childbirth in an enormous way based upon that first initial
00:40:44.380 | experience being beautiful.
00:40:46.820 | And there are being something that's treasured.
00:40:49.440 | And that's what I try to encourage people, like for my wife and me, probably our most
00:40:53.920 | intimate moments together as a couple have been the births of our five children, because
00:41:03.820 | they were beautiful and it was just us.
00:41:05.920 | It's an intense emotional experience that is beautiful and rewarding.
00:41:10.580 | And so I wouldn't trade that for, unless it was necessary for the medical needs of a child
00:41:18.660 | or my wife, I wouldn't trade that for anything.
00:41:22.180 | And yet those outcomes are much more probable when you're in an environment where that's
00:41:27.700 | seen as a goal that's worthy of care to be held alongside proper medical care.
00:41:35.700 | And midwives are highly trained.
00:41:37.180 | They're highly trained to what to watch out for.
00:41:39.140 | They're there to do a job, and that frees you in order to focus on the experience and
00:41:44.140 | you can have great outcomes.
00:41:45.420 | And so I want to increase birth rates in the world.
00:41:49.380 | And there's a good friend of mine that I just consider as almost a perfect foil to this,
00:41:56.340 | that good friend of mine, both he and she wanted to have lots of babies.
00:42:01.700 | And they got married, they had their first baby.
00:42:04.280 | They always thought they would have lots and lots of children.
00:42:07.140 | Her pregnancy was so difficult.
00:42:09.540 | She was so enormously sick.
00:42:11.720 | And then the childbirth experience was so brutal for her that they said, "That's it.
00:42:16.980 | We're done.
00:42:17.980 | One child and done."
00:42:18.980 | And I don't think in her case that there's any...
00:42:23.480 | I'm not arguing that anything could have been done differently in her case that would have
00:42:27.980 | made it different.
00:42:28.980 | So that's not what I'm saying.
00:42:30.220 | I'm using it as an example to say that if mothers can have birthing experiences that
00:42:36.180 | are gentle and that are warm and that are fulfilling and that are intimate and that
00:42:41.260 | create precious memories while they do the hard work of birthing the baby, then it can
00:42:47.860 | completely transform their attitudes towards motherhood, our societies, we can do it better.
00:42:55.900 | And we can do it better while holding on to the twin necessaries of a world-class experience
00:43:05.540 | for the mother and for the baby and for the father, as well as proper up-to-date medical
00:43:10.660 | care.
00:43:11.660 | So that's why I care about it.
00:43:12.660 | And it thrills my heart to no end to hear your story.
00:43:14.900 | Thank you.
00:43:15.900 | Yeah, of course.
00:43:17.460 | And thank you for sharing all that.
00:43:18.660 | And I totally agree.
00:43:19.660 | And we'll just call out for the other listeners.
00:43:21.740 | One of the things that we look for in our medical care was that our midwives...
00:43:27.340 | My husband's perspective was that he was, of course, most worried about me and wanted
00:43:31.540 | to be comfortable that I could get the appropriate medical care as needed.
00:43:36.420 | And so one of the things that comforted him was our birthing center had done test drills
00:43:40.980 | to the hospital.
00:43:41.980 | It was six minutes door to door.
00:43:45.100 | There were certain birth situations in which they would not deliver, but they had practicing
00:43:49.220 | rights at a local hospital.
00:43:50.620 | So if necessary, they could be our medical care at the hospital.
00:43:56.700 | And we would also have all the other equipment and doctors around that were necessary.
00:44:02.500 | So that was super helpful.
00:44:04.300 | And then I'll call out with regards to the increasing birth rate.
00:44:09.020 | One of the comments my husband made when we were younger was just that he wanted to have
00:44:12.740 | three children and his reason being was that it was above the national average.
00:44:17.420 | And I just kind of discounted that at the time.
00:44:19.580 | But through listening to your podcast, I've actually bought into it and seen that perspective
00:44:25.140 | a little bit more and have truly considered it also in addition to having a very positive
00:44:29.780 | birth experience.
00:44:30.780 | Good.
00:44:31.780 | Take them one at a time, one at a time, and then work it out between you guys.
00:44:34.820 | But that's amazing.
00:44:35.820 | Exactly.
00:44:36.820 | How else can I serve you today?
00:44:37.820 | So I did have a financial question, and this is pretty laughable, but I interviewed for
00:44:45.300 | a position two weeks postpartum.
00:44:48.740 | You are a warrior, warrior through and through.
00:44:54.820 | It was definitely a God thing, and I got a job offer, have accepted it.
00:45:02.300 | And so we're going to be moving to Florida.
00:45:05.700 | I currently live in Texas with my husband and our now six-week-old.
00:45:11.100 | And we are considering whether or not we should sell our house or rent it out.
00:45:17.340 | And I just wanted to get some thoughts and your perspective on it.
00:45:20.900 | So the reason why we're considering renting the house out is we have a really fantastic
00:45:26.940 | interest rate on our mortgage.
00:45:28.340 | We went into it, we got a 15-year mortgage.
00:45:31.980 | This is back in 2017, and we've paid off a decent chunk, I think, like 40% of the mortgage
00:45:39.700 | is paid off, or 40% of the house value when we bought it was paid off.
00:45:45.060 | So we have 11 more years on it.
00:45:48.660 | I'm sorry, we refinanced, so that wouldn't make sense unless I told you that we refinanced.
00:45:54.180 | But we have 11 more years on our mortgage, 60% more to pay off.
00:46:00.420 | Considering renting it out, it is a large house.
00:46:03.960 | We bought a forever home and expected to stay here and be in it for a while, so it's quite
00:46:09.980 | large.
00:46:10.980 | We'd have to rent it out for a lot of money because it's a six-bedroom home.
00:46:14.060 | We would probably need to rent it out for at least $4,500 to break even.
00:46:18.700 | We're looking at, I think the ideal number would be $6,000 versus selling our home and
00:46:25.700 | then either renting or buying in the market in Florida.
00:46:30.540 | And of course, we have a really high interest rate that we'd be picking up, so probably
00:46:35.420 | in the 7% range.
00:46:36.420 | So I just wanted to get your thoughts and things to consider.
00:46:40.100 | We've done a lot of math and spreadsheets and all the things behind it, and we can make
00:46:45.220 | a case based off of assumptions towards either.
00:46:48.180 | Okay.
00:46:49.180 | So just to clarify, given your expected income in Florida, given the costs of buying a house
00:46:54.340 | that's appropriate for you, you think that you could afford to keep the house in Texas,
00:46:59.580 | rent it out and simultaneously purchase another house to live in in Florida, is that right?
00:47:04.540 | Yeah.
00:47:05.540 | Okay.
00:47:06.540 | Well, then if that's the case, then it's fairly simple and straightforward.
00:47:11.900 | And it comes down to how your experience is as a landlord of the benefits as compared
00:47:24.700 | to the frustration and difficulty and how much you bristle at the extra work.
00:47:31.660 | The more property that you own and control, the more potential wealth you have in the
00:47:38.940 | long run based upon increases in property value and based upon the fact that your tenant
00:47:45.900 | can pay off your mortgage for you.
00:47:48.200 | So from a purely financial perspective, everyone who wants to be rich should go out as quickly
00:47:56.340 | as possible, purchase as much property as you can finance, get people in place to pay
00:48:03.280 | off your mortgages for you, and then sit back and hold that for a very long time.
00:48:09.140 | The fastest way to become a millionaire in the United States with real estate is just
00:48:13.540 | go borrow a million dollars and get your tenants to pay it off for you.
00:48:17.380 | And so that's what you would do if you go ahead and purchase an additional home in Florida
00:48:23.380 | for you to live in and keep your Texas property.
00:48:26.340 | And that is that you're always going to be better off because of owning more property.
00:48:33.160 | Let's say the house in Texas is $400,000 and the house in Florida is $600,000.
00:48:40.000 | So if you own both of those and you have a million dollars worth of property and the
00:48:44.160 | property increases in value by 10%, there's an increase in your net worth of $100,000
00:48:51.120 | as compared to if you only own a $600,000 house in Florida and there's an increase in
00:48:55.800 | your net worth of $60,000.
00:48:58.720 | So conceptually, for those who want to build wealth quickly, you should set a goal of purchasing
00:49:06.060 | as much property as possible, as quickly as possible, and then fill that property with
00:49:11.320 | tenants and setting those tenants up to pay off your property for you.
00:49:15.200 | I've talked about this in doing it in a strategic way.
00:49:18.880 | So let's say that you're very strategic about building wealth with real estate.
00:49:23.160 | What would you do?
00:49:24.160 | Well, at 18 years old, you would go out, you would have a job, you would be financeable,
00:49:28.560 | and you would go and purchase a house.
00:49:32.860 | You would fill the house with tenants, roommates, to pay your mortgage payment.
00:49:37.880 | You would repeat it at 20, and you would fill the house with roommates to pay your mortgage
00:49:41.160 | tenant.
00:49:42.160 | So now you've moved on to the second house.
00:49:44.200 | You would repeat it at 23.
00:49:45.680 | You go and buy a house.
00:49:46.680 | This time you go ahead and live in it for a year yourself.
00:49:49.760 | Your first two houses are rented out to multiple tenants, college students.
00:49:53.520 | Then your third house, you put another tenant in it.
00:49:55.720 | And by 25, if you could own five houses, that'd be amazing.
00:49:59.040 | Then you go ahead and move into your forever house, and you just make sure that those tenants
00:50:03.640 | are continually paying down your mortgages for you until all the houses are own debt
00:50:06.920 | free and you're a multimillionaire with real estate.
00:50:10.360 | That's a perfectly viable plan.
00:50:12.160 | All right.
00:50:13.160 | So now that we've extolled the virtues of the plan, what is the downside?
00:50:16.400 | Well, the downside is simply that it takes work to deal with houses.
00:50:21.400 | It takes work to deal with tenants, and that work is not always fun or even palatable for
00:50:28.680 | many people.
00:50:30.280 | Many people don't want to deal with it.
00:50:32.800 | They don't want to deal with dealing with tenants.
00:50:35.800 | They don't want to deal with fixing the house up when the previous tenant trashes the kitchen
00:50:40.600 | and fixing all the stuff.
00:50:42.600 | Now you might have a big advantage that if you could rent this house fairly easily, you
00:50:48.720 | would be dealing with a higher end tenant, and that may be an advantage for you that
00:50:53.560 | perhaps that tenant is better.
00:50:55.120 | I don't know.
00:50:56.200 | The point is simply that real estate tenants are not time free.
00:50:59.800 | So if you can do it and you're willing to do it, or you can try it and see what your
00:51:04.200 | experience is, then it's probably better for you to keep both houses and try it.
00:51:10.800 | If you find that it's not working for you, you don't like managing the tenants, or this
00:51:17.240 | house just doesn't rent well, you have so many vacancies that you can never recoup your
00:51:22.080 | money, or it's going to sink you financially because of those vacancies, then you would
00:51:26.600 | say, "You know what?
00:51:27.600 | I need to go ahead and not pursue this path anymore."
00:51:31.240 | But basically as I see it, it's as simple as that.
00:51:33.880 | All the rest of the stuff with interest rates and expected returns and all of that, it's
00:51:38.840 | all interesting and it could be factored in, but at its core, I think those two things
00:51:45.600 | I've said, the pro and the con, cover 80% of the decision.
00:51:51.280 | The pro is if you want to build wealth, a good way to build wealth is to acquire as
00:51:56.840 | much property as you can finance, and then make your tenants pay it off for you.
00:52:01.400 | And the con is it's not time free, and it could sink you financially if you don't have
00:52:06.360 | enough margin.
00:52:07.520 | It does take time and energy to deal with tenants, and it's got to be worth it to you
00:52:11.200 | in the long run to put that time and energy in.
00:52:13.640 | But if you're willing to do it, and you find that, "Hey, we can rent this house okay.
00:52:16.520 | We can get good tenants.
00:52:17.520 | It's not vacant too much," then yeah, you're better off keeping both houses as far as I'm
00:52:20.920 | concerned.
00:52:21.920 | Alright.
00:52:22.920 | Awesome.
00:52:23.920 | I really appreciate that.
00:52:24.920 | Yeah.
00:52:25.920 | Definitely a lot of things to consider.
00:52:26.920 | Right.
00:52:27.920 | It's the challenge of whether or not the vacancies will be the make or break of the decision.
00:52:33.560 | But one of the things I had shared with my husband is at least trying to rent is not
00:52:39.200 | a permanent decision versus selling that's very permanent, "We're never going to get
00:52:43.200 | this house back," so something to continue to discuss and consider.
00:52:48.560 | And I think that if the money works based upon your income, your savings, and all that
00:52:52.320 | stuff for you to keep both houses, I think it'll be a nice thing for you to have too
00:52:55.880 | as a backup plan.
00:52:57.340 | You may get to Florida, this job is great for the first six months, and then it just
00:53:00.800 | isn't great after that.
00:53:02.440 | And so being able to turn around and go back to the house that you know you love, the forever
00:53:05.880 | home that you have in Texas, that could be a great nice thing to have available to you
00:53:11.200 | as an option as well.
00:53:13.080 | And the good thing is that both of these areas are in high growth areas, good economic growth,
00:53:18.600 | good reasons to expect that real estate is good, good reasons to expect that you'd be
00:53:22.920 | able to find tenants who want to rent the property, and it's just going to come down
00:53:26.520 | to does this property rent easily enough that we can find tenants that we don't have too
00:53:32.000 | many vacancies.
00:53:33.000 | And I don't know, right?
00:53:34.680 | Higher end, I mean $6,000 a month is not super high end but it's certainly high end.
00:53:41.400 | It could be, it can be better and it can be worse depending on what the local market provides
00:53:46.220 | and what the competition is.
00:53:47.440 | So try it out, see what see what happens.
00:53:49.720 | Thanks, I'll report back.
00:53:53.000 | I love that you do.
00:53:54.000 | Thank you so much.
00:53:55.920 | And with that, we conclude our Friday Q&A show.
00:53:58.760 | Thank you guys very much for listening.
00:54:00.560 | I love that you love it when you guys call in and update us on situations.
00:54:04.520 | So we had, I think, two callers there that talking about past commentary and I love it.
00:54:09.400 | If you'd like to join me on one of these shows next week, you can do that by going
00:54:12.440 | to patreon.com/radicalpersonalfinance, support the show on Patreon, and that will gain access
00:54:16.680 | for you to one of these Friday Q&A shows.
00:54:18.840 | I look forward to speaking to you very soon.
00:54:47.720 | Bye.
00:54:57.200 | you