Live-Friday-QA-Call-In-Show-5285

00:00:00.000 | Okay, and today that means live Q&A

00:00:04.120 | Welcome to radical personal finance a show dedicated providing you with the knowledge skills insight and encouragement

00:00:26.840 | You need to live a rich and meaningful life now while building a plan for financial freedom in 10 years or less

00:00:32.740 | My name is Joshua. I am your host today is Friday and every Friday at least every Friday that it can arrange a proper internet signal

00:00:39.760 | We go live and today is no different live Q&A coming up in 15 seconds. I

00:00:53.440 | Do really love to do these Friday Q&A shows any day any time that I can actually work it out to

00:00:59.600 | Make it work then that's when I do so working out the details on how to do a live show

00:01:06.440 | What with Q&A with video live streaming on the internet on Facebook on YouTube

00:01:12.960 | YouTube and all over the place. That's today's challenge, but I think we got it worked out mark. You're up first

00:01:18.920 | Welcome to radical personal finance. How can I serve you today?

00:01:21.180 | Mark can you hear me?

00:01:23.180 | Okay, we are going to go to the backup plan here real quick hang on the phone lines

00:01:42.160 | We're gonna switch internet networks and see if we can fix the problem

00:01:47.440 | Just

00:01:49.440 | A minute here guys. Thanks on the live stream. We'll get this going in just a second here

00:01:56.960 | Just go into the backup network here, let's see if I can get my phones coming in

00:02:08.320 | Okay

00:02:10.320 | Let's try again mark, can you hear me mark? You're up. Can you hear me now?

00:02:37.400 | Mark you're up in first plate. Can you hear me now? I can't hear you

00:02:42.160 | All right

00:02:45.400 | Hold on a second mark. It looks like that's you over there. Try again

00:02:48.580 | Okay, can you hear me now now I can hear you somehow I had to go to the backup internet network

00:02:55.760 | And we're there but we're live now. Welcome mark. How can I serve you today, sir? Oh great. Excellent. I

00:03:03.040 | Have two questions for you. I have a house buying question and a side business

00:03:08.440 | Question for you. Okay, let's do it

00:03:11.240 | Do you care which ones first? Okay, so

00:03:14.340 | First is we're preparing to buy a house in roughly a year

00:03:18.800 | I spoke to you previously about this and so I'm trying to make sure my credit is in the right spot

00:03:23.160 | we are around 770 and the main reason is just our

00:03:27.720 | age of credit is too

00:03:31.320 | Frequent too young and so we just have to wait for that. But the secondary reason is our mix is

00:03:36.320 | Not mixed they just I've only ever had credit cards

00:03:40.720 | And so I was wondering or considering looking at taking out a quote-unquote credit building loan

00:03:46.240 | It would not put a hard inquiry on my credit report

00:03:50.880 | But instead would get reported as a loan essentially what the banks do is they give you a loan they put it in a

00:03:57.320 | Certificate of deposit then you quote-unquote pay it back until the loan matures

00:04:01.680 | And so it's a way to add in a little different kind of credit. Is that something you're familiar with?

00:04:07.040 | Do you recommend it doesn't make any difference. I know it's only 10% of the mix. Yes

00:04:11.200 | So yes, yes, and yes, it definitely is important to have a mixture of the different credit types

00:04:18.080 | and so if all you have is credit cards and you want to

00:04:23.760 | improve your credit score then you definitely want to start by going ahead and

00:04:27.440 | Moving in the direction of adding in but more of a diversity add in a car loan add in a bank loan add in some

00:04:34.200 | Kind of installment loan and that will improve your credit score

00:04:37.060 | Excellent that's good to know excellent that was quick the second question

00:04:45.080 | Have started a new venture

00:04:47.960 | Seen it the prepared expat

00:04:50.160 | and so I've

00:04:53.400 | I'm trying to develop it into a

00:04:55.880 | Kind of side business have a vision for where it goes and I'm debating whether to make it written form

00:05:02.200 | a podcast or both and I was wondering your advice on how to think through

00:05:09.680 | making that decision of medium

00:05:12.240 | Did you hear at the end of last Friday's Q&A where I talked about

00:05:19.960 | Kind of my new venture and I talked with a listener who was thinking about building some kind of local media platform to meet people

00:05:26.280 | Okay, so let me

00:05:36.200 | Because in the last Friday Q&A show I gave an

00:05:43.160 | in-depth overview for a listener who was trying to come up with an idea of how they could connect with their audience in in a

00:05:51.280 | How they could connect with their audience and build an overall platform that would help them to make connections

00:05:57.640 | And I talked about the media strategy. I talked about things. I regret personally with regard to

00:06:02.400 | Radical personal finance things I would do differently, but basically going forward if I were starting over again today going forward

00:06:10.440 | I would not focus on just one medium

00:06:13.440 | I would start with one and I would try to start with where I'm best but going forward

00:06:18.640 | I think it's best to focus on

00:06:20.640 | multiple media that's obviously more difficult because

00:06:23.960 | It's hard to do all things

00:06:26.280 | well

00:06:26.520 | and the skills you need to be a good writer are not necessarily the skills that you need to be a good podcaster and the

00:06:32.120 | Skills that need to be a good podcaster are definitely not the skills that you need to be a good video broadcaster

00:06:36.720 | They're both they're they're all very different. And so what you've got to do is you've got to develop the ability to

00:06:41.680 | work in the different media

00:06:44.640 | podcasts are

00:06:47.200 | Really good for building a close relationship with your listeners

00:06:51.160 | They're really hard to get found

00:06:55.280 | They're really hard for people to share them

00:06:58.280 | Because basically either you are a podcast listener or you're not a podcast listener

00:07:03.280 | And so people don't usually do a very good job of actually sharing whole episodes

00:07:07.240 | So if I were gonna do one or the other I wouldn't writing certainly is gonna be good

00:07:13.040 | The benefits of writing is much more shareable

00:07:15.040 | It's much more findable. The SEO is gonna be a lot better people can connect with the content

00:07:20.080 | They can look through it very quickly, which is gonna help you to attract a broader audience. So

00:07:24.320 | The podcast will go deeper, but I wouldn't just do one. I would do all of the above

00:07:30.240 | That's I think where we stand in May of 2020 is it's not sufficient to just do one thing

00:07:36.720 | You've got to do all of the above because that meets people in different places

00:07:40.520 | So to the extent that you're able I would choose where you want to start

00:07:44.880 | But my long-term plan would be to expand into all the different platforms and the different formats

00:07:49.680 | Okay, that's helpful

00:07:56.120 | Go back and listen to last week's Friday Q&A and I cover it in depth on that Friday Q&A of a lot of details

00:08:03.600 | of how you can

00:08:05.600 | You know build the different the different models and you can leverage what you're doing on different platforms

00:08:10.360 | But that would be where I would sent you

00:08:12.360 | Okay, that'd be great. I will go back make sure I get to that. Thank you

00:08:16.440 | Thank you mark and good luck with the new venture again

00:08:19.320 | Mark's venture is called the prepared expat so you can find him

00:08:23.240 | I know on Twitter if you want to find him there you can find the prepared expat and find his website

00:08:28.400 | He's been writing some interesting articles there. All right, let's go to James in Massachusetts James. You're up. Welcome to the show

00:08:33.600 | How can I serve you today, sir?

00:08:35.600 | Said a question about buying property at a good price. So

00:08:42.080 | My wife and I are considering buying

00:08:45.940 | property that we may or may want to you know, put a house on or just farm or homestead on and

00:08:52.840 | essentially, I'm trying to think holistically like

00:08:54.840 | I've heard you say that you are considering buying property if if

00:09:00.080 | Or properties if the opportunity presents itself with downturn with distressed properties and good prices

00:09:06.880 | What's your strategy for keeping an eye open? Are you looking for private sales? Are you looking at any specific?

00:09:13.560 | listing

00:09:15.760 | Companies or how do you even think about like trying to be ready for when the opportunity comes?

00:09:22.480 | And how do you even know when the opportunity comes? What kind of property are you interested in investing in?

00:09:28.040 | So

00:09:31.760 | We're mostly interested in buying

00:09:33.880 | Either a house on a little bit more acreage than we have now or just some acreage

00:09:39.720 | Do you have a specific geographic location chosen that you'd like to pursue

00:09:46.480 | New England. Okay, that's pretty broad anything more specific. Ah

00:09:52.640 | New Hampshire

00:09:54.280 | Okay. So I think the answer to your question of where to look is going to depend on

00:10:00.640 | What type of property you're dealing with?

00:10:03.520 | So for me if I'm interested in buying rental real estate

00:10:07.240 | My plan in buying that rental real estate is going to be to focus on the type of neighborhood that I want to buy

00:10:14.660 | the city that I want to buy in and the region that I want to buy in and so

00:10:20.920 | If you I'm laughing because as I'm recording this I've got Facebook comments coming in about my murdery eyes there was a

00:10:28.160 | listener

00:10:30.080 | There was a listener in the the Facebook group this last week that says I like Joshua's new video

00:10:34.620 | Feed but I can't handle it because evidently Joshua has murdery eyes

00:10:39.120 | Slightly murdery eyes, so I'll zoom in so you can see my my slightly murdery eyes

00:10:46.120 | Forgive me back to property. I'm still learning how to juggle all of these all of these interesting aspects

00:10:52.400 | So for me, my my plan is to buy

00:10:56.480 | single-family rental houses in specific cities region and towns

00:11:02.200 | And so I have a certain neighborhood type that I personally am looking for my neighborhood type

00:11:08.880 | What I've chosen is the best type of of property for me is to focus on

00:11:16.000 | Owners neighborhoods where there's more owners than renters on kind of older but not too old

00:11:21.480 | Properties kind of the night in South Florida the 1980s kind of style of construction

00:11:27.900 | 1980s 1990s and to find houses where there's no HOA

00:11:32.400 | Where you have three bedroom two bath two houses two car garage kind of just that middle

00:11:38.220 | Slightly under slightly over the middle range of property

00:11:43.600 | So there aren't a ton of neighborhoods that fit those markets

00:11:47.440 | So what I've done is I've identified the neighborhood and they just simply gotten on an MLS list

00:11:52.560 | So I can keep an eye on the MLS listings for those neighborhoods

00:11:56.080 | And then what I have done in the past is gone out walk the neighborhoods

00:12:00.240 | You can go walk the neighborhoods knock on doors find out if there's you know

00:12:03.840 | Anything for sale talk to the neighbors things like that

00:12:06.160 | But that's a very specific strategy based upon the kind of thing that you're looking for

00:12:10.240 | Now if you're looking for farmland and you say I'd like raw land

00:12:14.640 | That's maybe 50 to 100 acres. That's gonna be a totally different scenario in that case. I'd be on land watch

00:12:20.400 | I'd be driving around in the counties talking to people getting on some real estate agent lists

00:12:25.480 | Basically doing anything you can think of that's gonna lead to that property eventually coming to you

00:12:31.240 | But there's a dramatic difference between finding a single-family house between finding a condo for sale between finding

00:12:40.120 | You know a bunch of land and what I would say is the first thing you should do is

00:12:45.320 | Work out your strategy of what you want to do and then if necessary

00:12:49.680 | Talk to some real estate agents and say listen if you were looking for this kind of property, how would you find it?

00:12:55.000 | What list would you get on where would you look for it and then follow their advice for your local network network?

00:13:00.520 | That's what I would do

00:13:02.520 | Okay, cool, that's more or less what I was expecting I didn't know if there were any like

00:13:08.240 | Special sort of like hand-to-hand techniques that you would recommend

00:13:10.960 | But that I think going into the communities that I'm interested in and narrowing down makes a lot of sense

00:13:16.840 | So, all right. Thanks a lot. Yeah, my pleasure. I do think what you should do for whatever your

00:13:22.600 | Chosen area of focus is is look at the information that's publicly available

00:13:28.520 | Look for the properties that are listed on the MLS

00:13:31.840 | Look for the properties that are listed on land watch or on the internet on some random site

00:13:36.040 | But I think it's also worth it to go and get involved in the community and try to find you know

00:13:42.360 | Put shoe leather on sidewalk put rubber under the tires or I guess road under the rubber whatever

00:13:49.340 | Idiom we want to come up with but the idea is your best deals are probably not going to be advertised

00:13:57.760 | sometimes they are but

00:14:00.080 | most real estate investors have developed their own source of

00:14:05.440 | High quality property and they've figured out a way to gain access to that property before there's a lot of competition

00:14:12.520 | So to this day, there are lots of people who go out and knock on doors and it really is an effective technique

00:14:19.680 | So if there's knocking on doors if it's going to local

00:14:22.760 | Auctions if it's going to the sale barn if and talking to farmers and saying do you know anybody who's selling their property?

00:14:28.840 | All of those would be good strategies

00:14:30.720 | But but you do want to use the lists, but you want to find the properties that aren't on the list as well

00:14:35.600 | We go to Daniel Daniel. Welcome to the show. How can I serve you today, sir?

00:14:38.560 | Well, Joshua, can you hear me? Yes, sounds good, sir

00:14:43.080 | All right, so my question is concerning my parents right now they're in the early 50s

00:14:51.440 | Combined they earn

00:14:54.960 | More than 150 K a year

00:15:00.680 | They have one apartment in Eastern Europe and also one piece of land that's been laying vacant for over a decade

00:15:08.320 | So it's not for living it's for I guess

00:15:13.280 | Vacation homes, but they can't do anything with it at the moment

00:15:18.840 | and

00:15:21.520 | My question is basically they're not really financially

00:15:24.800 | educated they come from a

00:15:27.720 | Like communist background and the attitude is basically well, the money is here right now. That's good and

00:15:33.760 | We give we give handouts to the family back home even

00:15:39.440 | Even if the relatives have like failing businesses for years and the money is never coming back

00:15:46.520 | so they're quite generous in that way, but

00:15:49.800 | I'm just afraid they're not

00:15:52.600 | taking care of

00:15:54.520 | their next

00:15:56.640 | 10 20 years where they could like right now. They're in the best position. They're earning well

00:16:01.320 | But

00:16:05.000 | How should I approach that what I did so far is over like half a year

00:16:08.920 | I got them to go to a wealth center and make an appointment. They got some tips how to

00:16:14.120 | optimize their taxes and so on

00:16:17.320 | But I know that they could do much more

00:16:20.440 | But since it's coming from me like the Sun

00:16:24.960 | I can tell them really how to do I can just tell them hey

00:16:28.200 | Look into it

00:16:29.880 | There is much you can optimize because things are not going to stay the same and you are not going to earn

00:16:35.840 | This much money in a couple years. So now you have the chance to set yourself up

00:16:39.880 | for retirement and I'm not too sure

00:16:43.720 | in 10 years the world is going to be as rosy as it is right now and

00:16:48.400 | Maybe they expected I'm gonna be

00:16:51.960 | Like handing out things as well in 10 years. So this is kind of the situation. I don't know if that's enough for you

00:16:59.600 | to

00:17:01.280 | Make some comments or should I ask anymore? Do they have any kind of retirement plan a government pension a pension from their job?

00:17:08.720 | Not from the job but from the government, yes, do you have reason to think that that would be insufficient for them

00:17:19.800 | Yes, I'm just not trusting in that right yes

00:17:24.880 | How much money do you think they could save out of their income based upon their current lifestyle?

00:17:30.960 | From what I heard they could save my dad's salary which is more than 10k a month

00:17:40.040 | That's a lot. It could do that. They could they could do that

00:17:44.680 | They could live off the salary of my mom, which is half of that or less than half. All right

00:17:50.480 | But they're not doing it what are they doing with the money instead

00:17:56.760 | Just

00:18:02.640 | You know handouts or just putting it in the bank or

00:18:09.680 | Spending in the restaurants, they're not spending much. So they're thrifty and looking for cheap deals still like they did 15 20 years ago

00:18:17.080 | But there back then they

00:18:21.640 | were keeping book of everything they spent and

00:18:25.320 | Since they were earning much more they didn't do that anymore because well the money's here. So now we can just do whatever

00:18:34.200 | Well when you have somebody in a situation I think of it in a number of different different approaches so throughout human history

00:18:41.280 | What's the most common way that people have?

00:18:45.040 | Retired the most common way that people have retired throughout human history has always been based upon people. It's been based upon

00:18:52.320 | Living with your children. It's been based upon living with somebody in the community

00:18:57.160 | And so just because your parents are not skilled at saving money doesn't mean that they're destitute

00:19:02.440 | It doesn't mean that they are without options if they're building relationships in the community. They have friends

00:19:08.200 | They have a network of family

00:19:09.440 | That's been throughout the millennia the primary solution that most people have relied on for their retirement needs

00:19:15.360 | Now the second thing is they do have a government pension or a an employer pension or a government pension

00:19:21.720 | And so that's good because it gives them some basic level of support all around the world

00:19:26.760 | There are millions of people who without the government pension Social Security in the United States

00:19:32.640 | Whatever the version is within your local country

00:19:35.640 | Without that they would have no savings because they fundamentally not been trained to save money

00:19:41.680 | and so they're probably gonna be okay between their government pension and also you and

00:19:47.240 | Possibly other siblings that you might have you wouldn't let your parents, you know go homeless and starve on the street

00:19:53.120 | What you do see however is an opportunity that if they could learn some skills of financial management

00:19:57.600 | They could dramatically increase their opportunities

00:20:01.280 | They have the ability to save ten thousand dollars a month and with this ability to save ten thousand dollars a month

00:20:06.760 | They could become very very wealthy. So I would do a few things

00:20:11.840 | I think that that there are a number of things that you could do and

00:20:15.760 | To begin with what I would try to focus on is I would try to lay out for them

00:20:22.080 | What they could do and how they could genuinely

00:20:25.600 | massively increase their possibilities of

00:20:29.000 | Wealth if they actually invest it, so let's just assume that they're in their early 50s

00:20:34.520 | Let's just say 50 for the sake of easy math. Let's say they have 15 years of

00:20:39.200 | retirement and

00:20:41.720 | there could they could save ten thousand dollars of

00:20:44.840 | Pay did you say per month or per year?

00:20:51.080 | If they wanted to they could do it per month, okay, so what I would focus on

00:20:57.080 | Go ahead

00:21:00.480 | If they didn't didn't want to cut too dramatically

00:21:04.440 | 5k is reasonable. Let's say between 5 and 10. Okay, so let's say 5,000 because it's a little bit more

00:21:13.000 | Believable probably for them. So I would sit down and

00:21:17.280 | Running on a financial calculator right now five thousand dollars per month. So we do five thousand dollars

00:21:22.360 | per month 15 years and let's just say that they could earn, you know, six percent interest

00:21:29.360 | Starting with nothing at the end of 15 years if they could save five thousand dollars per month

00:21:35.360 | They could potentially have one million four hundred fifty four thousand dollars saved almost one and a half million dollars at six percent

00:21:43.680 | So to me, I would sit down with them and start by saying listen mom and dad

00:21:49.520 | I know that you grew up under communism. I know that you didn't start by focusing on

00:21:54.200 | money and investment, but there's tremendous opportunity here and yeah, you think that

00:22:00.880 | You couldn't build wealth

00:22:02.840 | But if you could save five thousand dollars per month and if you could invest it at six percent over the next 15 years

00:22:08.640 | You could become genuinely wealthy within the next 15 years

00:22:13.160 | You could become genuinely wealthy within that period of time, which would be really really remarkable

00:22:17.920 | So I would start by that and see if they're interested now

00:22:20.800 | What I think you need to be cautious of with someone like that is by making sure they choose an investment

00:22:28.480 | plan or an investment product that's going to be a good fit for them and

00:22:34.520 | Those of us who are more knowledge about investing often go to the products that we would choose

00:22:40.440 | Without realizing that these products or these plans are probably not right for them

00:22:45.000 | So for example, we'll often go to an aggressive stock portfolio and a lot of times when you're in a situation

00:22:50.000 | Like that for for your parents, they just they couldn't handle the volatility

00:22:54.680 | And so maybe you would go into some kind of term deposit and just get them invested into bank accounts

00:23:00.240 | Maybe you would go into some kind of bond portfolio what I would try to do

00:23:04.800 | Especially since they already know own some property

00:23:06.960 | I would try to get them to buy some more real estate if they bought a couple of simple flats in the middle of town

00:23:12.360 | In a good area in the town that they live. There's a decent chance that in most places in the world

00:23:18.880 | That's probably not a losing investment

00:23:21.160 | That's probably a place where they could break even and in time if they choose well and you guide them towards maybe like a city center

00:23:27.720 | apartment that could be the kind of

00:23:30.200 | investment that could pay income and the nice thing about real estate is

00:23:35.200 | It's it's more intuitive. I think for most investors where they don't have to worry about, you know

00:23:40.960 | Figuring out how to hold on through the difficult times

00:23:43.600 | They just spend the rent payments and so at five thousand dollars per month if they could say five to ten thousand dollars per month

00:23:49.600 | They could probably just pay cash for an apartment every you know year two years

00:23:53.440 | Depending on what market in Eastern Europe they're in or where you're living

00:23:56.880 | And I think that would be really appropriate. So I would probably try to go in that direction

00:24:02.760 | I would say mom dad look if you were to buy four or five apartments in

00:24:07.520 | You know the downtown area or help them choose a good neighborhood where they already live

00:24:14.920 | Figure out the prices of those apartments and then lay it out and show them if you could buy one apartment every other year and that

00:24:21.840 | apartment pays us maybe

00:24:23.840 | $800 a month or $1,000 a month or 15 whatever your market is

00:24:29.440 | That's a really good strong financial plan and they have enough money that they could do it

00:24:33.600 | So that's where I would go is I would try to keep it super simple save money in the bank buy paid-off apartments

00:24:39.440 | Something like that

00:24:41.640 | Okay, one thing that the apartment they bought they bought it for

00:24:45.560 | When they would go back to visit the family and I told him for like five years. Why don't you rent it out?

00:24:52.240 | It's not like 98% of the year. It's it's standing empty and

00:24:58.840 | The

00:25:00.400 | Aunt is living in the same house

00:25:02.080 | so she could take care of people going in or out or whatever if it's Airbnb, but

00:25:07.360 | They decided not to rent it out. So that's one thing that this like

00:25:12.840 | This left to understand that that's the one thing and the other

00:25:16.160 | That you talked about about choosing the right investment

00:25:20.040 | Maybe you could answer this as well

00:25:22.720 | Like they're Christian and my mom always says

00:25:28.320 | Making money with money is unethical. It's like usually it's against against the commandments and stuff like that

00:25:34.700 | I don't know if she really believes that or she just says that to not do the hard work of researching financial stuff

00:25:42.320 | But these are like also some mental blocks that they have against these things. So maybe you're taking that

00:25:50.320 | Do they invest in anything?

00:25:53.160 | They

00:25:57.640 | Invested in some

00:25:59.640 | Stocks at the peak of the tech bubble

00:26:03.000 | and

00:26:05.880 | That's break-even after 20 years

00:26:08.840 | So it was down for like two decades and they always joke about that a little bit, but it was not much

00:26:13.840 | he was not much and

00:26:16.320 | My dad chose some

00:26:19.440 | single biotech stocks

00:26:25.040 | But

00:26:26.360 | That's just random stuff. So they don't really know what they're doing

00:26:30.000 | And they burnt their fingers a couple times. So they're not really doing anything

00:26:36.000 | Yeah, that's fairly common with people who are not particularly

00:26:39.720 | experienced with

00:26:42.200 | Stock investing. What is the Christian tradition that they're a part of is there a denomination? Is there a tradition name of a church?

00:26:49.320 | Roman Catholic, okay Roman Catholic

00:26:54.320 | So

00:26:56.320 | There are that's probably a bigger question than we can tackle here because

00:27:02.680 | There are definitely

00:27:05.640 | religious

00:27:07.800 | Convictions that are going to affect somebody and you've got to

00:27:11.800 | Work within that now. There are almost two ways of working with that. The first way is you can say

00:27:19.760 | you have this conviction and

00:27:23.560 | It's wrong, right?

00:27:25.080 | So maybe if I had a different conviction and I'm sitting and talking with somebody and they say I'm Roman Catholic

00:27:31.960 | This is what I believe. This is what I believe the Bible teaches and I'm gonna I'm willing to use

00:27:36.600 | The authority of Scripture. Well, then I would go to Scripture and start talking through that of course

00:27:42.280 | Roman Catholic there would be the authority of Scripture and also the authority of

00:27:46.920 | The church tradition and the church teaching and so we would talk through that and and discuss it from a theological perspective and try to understand

00:27:54.320 | If there were a way that they could change their theology, maybe it's possible. Maybe it's not I have friends of mine who are

00:28:02.840 | Very fundamentalist and when for example, Jesus says do not lay up for yourselves treasures on earth

00:28:09.880 | They understand that to be a wooden Lee literal

00:28:14.880 | Fundamentalist command of Jesus and they are very diligent about not laying up for themselves treasures on earth

00:28:21.260 | They don't save money. They don't try to stack up wealth. I

00:28:24.640 | Respect that, you know, and so I don't try to change them

00:28:28.520 | I try to create a financial plan within that context and there you often go back to

00:28:34.400 | community the power of community because

00:28:37.280 | In those kinds of traditions what you have is you have a community that works together to support one another

00:28:44.480 | So it's not that people who understand that to be the the proper interpretation of the words of Christ

00:28:51.600 | It's not as though they just go and spend all their money

00:28:53.920 | What they do is they invest into the community and the community cares one for another and so there are ways to do it

00:28:59.920 | So that's the second way is that let's say that I'm not gonna change their theology

00:29:04.080 | I'm not gonna persuade them that you're wrong and I'm right or you just have a flawed understanding

00:29:09.480 | I would just try to understand the extent of what do you understand?

00:29:14.800 | The restrictions to be there's not a strong

00:29:17.880 | There's no that I'm aware of there's no official Roman Catholic teaching against investing. Okay now there are

00:29:26.320 | That's what it seems that they just use it as an excuse

00:29:31.560 | Not to look into it that that's my understanding of it. They're not really saying well

00:29:37.080 | This is a part of the scripture that tells it they're not praying every day

00:29:41.480 | So they just go to church once a week so that I think they're pretty educated

00:29:45.400 | And they would respond well if somebody laid out to them the numbers and all of that

00:29:51.920 | So I think that approach would work. Yeah, what I would do is I would try to find are you Roman Catholic yourself?

00:29:58.800 | Do you share that tradition? I grew I grew up like that, but it's more like a cultural thing

00:30:04.000 | I am another fundamentalist. Okay, so what I would do is I would try to find some Roman Catholic

00:30:12.040 | You know

00:30:13.560 | oriented

00:30:14.760 | Resources if somebody hasn't created it

00:30:17.280 | then I'm sure I have a listener that can and should but I'm sure somebody out there is

00:30:21.880 | Teaching about finance from a Roman Catholic perspective

00:30:25.760 | Who understands I'm not an expert on Roman Catholicism

00:30:29.400 | I'm not Roman Catholic and so but I'm sure there is somebody out there who's done that

00:30:33.520 | There are many Roman Catholic writers who would have written books on money

00:30:37.840 | and so I would try to find that understand a little bit about where they're coming from and then work within the constraints of their

00:30:44.640 | Doctrinal commitments, that's what I would do. But there's no that I'm aware of there's no

00:30:51.320 | strong Roman Catholic tradition or

00:30:54.120 | prohibition against

00:30:56.920 | Lending money the the comments on usury you can go back and and and look at it

00:31:02.440 | And and think about it, but I think probably there Gary North would be the best guy read his commentaries on usury

00:31:09.320 | If somebody is actually interested in the biblical approach and in dealing with the Old Testament laws on usury

00:31:17.840 | Gary North's

00:31:20.040 | Writings there would probably the best place to start

00:31:21.960 | But I would just try to understand what their constraints are and then try to build a financial plan that is sensitive to those constraints

00:31:27.800 | That may be term deposits in the bank

00:31:30.920 | For some people it may be just investing in other people and I think that that's a worthy thing to do

00:31:36.160 | I think there are a lot of 50 year olds that if a financial planner came to them and said

00:31:41.620 | What we're gonna do with your money is we're gonna use it and we're gonna open an orphanage and we're gonna invest your money

00:31:48.440 | into the orphanage and

00:31:50.320 | build a

00:31:51.840 | System of caring for the children who are fatherless here in our city

00:31:56.400 | as far as I'm concerned, that's a great retirement plan and

00:32:00.560 | The children in the community would be happy to provide for them on the other end of the day

00:32:04.720 | So those are my answers anything else Daniel?

00:32:07.640 | Yeah, I think that's a that's good, thank you very much thanks for the work you do my pleasure

00:32:15.280 | I appreciate it. All right, we go to

00:32:17.280 | Jason and Texas Jason. Welcome to the show. How can I serve you today, sir?

00:32:21.320 | My pleasure

00:32:29.840 | A quick question. I don't know if you've done a podcast

00:32:32.120 | Children's insurance or adding a rider to your current insurance for a newborn

00:32:39.000 | But we're expecting at first this fall and just wondering if you could expand on kind of your thoughts on

00:32:48.240 | Child insurance and what's he there?

00:32:51.080 | I've covered it in the context of Q&A shows here and there. I'll do it briefly. I intend

00:32:57.960 | As soon as I can I intend to come out with a standalone course where I can teach through some of the details

00:33:04.320 | But I'll go ahead and give you a short answer here and I'm gonna mute you out Jason for a minute

00:33:09.540 | Just to keep the audio clear. So when it comes to children's life insurance, there are a few different reasons as to why

00:33:17.160 | People would want it. The first reason that some people think about is burial cost

00:33:22.680 | So I have a child the child dies and I need to provide for them. Well, I need money

00:33:27.800 | to be able to pay for a funeral to buy a casket and to go ahead and

00:33:31.920 | Pay for those costs. That's one thing another aspect would be maybe things like recognizing that I've

00:33:40.360 | You know, there would be hard for me to go to work

00:33:43.280 | If one of my children died, it's hard for me to imagine that I'd be here on the microphone the next day

00:33:47.720 | so maybe a time of

00:33:50.020 | Emotional adjustment for the family. There are other things that you can consider. So for example

00:33:57.680 | Some people would say if a child died then my financial expenses are based upon the investments

00:34:04.280 | That I have made into those children if I bought I paid for their early child education

00:34:11.240 | I've invested in their schooling. I've paid for private school for 12 years of private school and then I paid for college

00:34:17.660 | It wouldn't be unusual for a parent to have invested six figures or multiple six figures into their children

00:34:23.280 | And then all of a sudden that child dies. Well, that's a real loss

00:34:26.900 | Certainly an emotional loss, but there's also a real financial loss that's associated with that

00:34:32.720 | And so people might say I've lost the money. I need to be recouped for some of that

00:34:37.440 | in many cultures around the world children are a primary as we were talking about earlier children are a primary form of a retirement plan a

00:34:45.120 | Security plan for the parents you'll see this if you're coming from the United States where you most often see this is in Indian communities

00:34:53.000 | In the United States where it's like the mom and dad will pour out everything for their children

00:34:58.080 | They'll pay for everything get their parents their children to the best schools possible and then on the flip side

00:35:02.480 | They're expecting that their children will support them as they get older also very common in Latin communities

00:35:07.920 | So all of these have a financial cost that's associated with it that you're actually talking about the money

00:35:15.240 | Involved and so that's the first step of insurance now when it comes to these

00:35:22.000 | Almost nobody is really comfortable

00:35:24.000 | Dealing with some of these costs most people it's such an emotionally heavy issue that they think if my child died. I

00:35:31.280 | Appreciate that that might be important, but I'm not going to to want to profit off of that

00:35:37.440 | I'm not so bothered by the emotion of it. I don't have any emotional, you know fear of death

00:35:42.320 | It's a fact of life and I think it's important to point some of these things out now the burial cost to me seems not

00:35:49.560 | Particularly important at least for most of my clients and most of my listeners

00:35:55.920 | You know, it's not that much to bury somebody

00:35:58.440 | It costs a few thousand dollars to bury somebody and you can save the money so you can easily

00:36:03.000 | Self-insure through that an emotional adjustment same exact thing you can

00:36:07.760 | Self-insure it's not hard to self-insure through that as well

00:36:12.520 | if you have a three month emergency fund if you have a six month emergency fund and you can't work for a few months because

00:36:17.560 | You're grieving the loss of your child. Well, you can self-insure through that as well

00:36:21.640 | The financial investment side of it certainly is kind of more relevant

00:36:26.080 | I I think it's worth thinking about but I've almost never met a parent who is excited about talking to me about you know

00:36:33.200 | Recouping the financial investment on their child. So you there is it is valuable to have insurance on the child for those reasons

00:36:40.480 | But most people genuinely can self-insure. It's not that big of a of a financial commitment

00:36:47.380 | So insurance is not always the perfect fit for it. It's one of those optional fits

00:36:51.800 | And so the other thing is what about insurance for the benefit of the child?

00:36:57.160 | So do you want insurance for the child?

00:36:59.880 | So that in the future in case something happens with the child that they can

00:37:04.480 | That they can adjust that they can own their own insurance policy. Maybe they start working as a

00:37:09.120 | Excuse me, maybe they start working as a professional

00:37:15.880 | You know stunt pilot in their middle 20s. Well, they're gonna have a hard time getting life insurance

00:37:20.380 | So you need life insurance for that?

00:37:22.440 | Well when you start to do this analysis what you'll find is that different types of insurance policies are appropriate in different solutions

00:37:29.660 | So term life insurance if it were available would cover the burial cost term life insurance

00:37:36.000 | If it's available covers emotional adjustment and term life insurance if available covers the financial investment

00:37:41.880 | The problem is you can't buy term insurance

00:37:45.420 | You can't buy term for those who are less than 18 years old

00:37:49.940 | So I do think that term insurance makes a lot of sense

00:37:53.580 | If you have a child that you're sending off to college when I used to sell life insurance

00:37:57.220 | I had a couple of clients who they would be sending their child off to school

00:38:00.260 | they knew where they were getting set up for a

00:38:02.260 | $150,000 of cost or possibly in some cases

00:38:05.780 | $150,000 of debt and one of the things that we would do is we would buy a couple hundred thousand dollar term life insurance policy

00:38:11.980 | On the child when the child is getting ready to go off to school

00:38:14.620 | But the child has to be at least 18 years old if you want term life insurance for children

00:38:19.700 | Under 18, it's generally only available as a rider on another policy

00:38:26.280 | So this might be a group policy at your job where you can go into your job and you can add

00:38:31.260 | $5,000 or $10,000 of coverage there

00:38:34.340 | Sometimes it can be available as a rider on an individual term life insurance policy or as a rider if you have like all your

00:38:40.680 | auto insurance and home insurance and a little bit term life insurance with

00:38:43.340 | With a company sometimes they'll offer those kinds of riders, but it's not common when you get into real term life insurance

00:38:50.740 | If you got a two million dollar term life insurance policy with Guardian, they're not going to give you a term life insurance policy

00:38:56.120 | It just don't they don't write them for children under the age of 18 now when you get to insurance for the child

00:39:02.740 | That's when you move over into the world of whole life insurance and whole life insurance can also cover some of those same

00:39:10.620 | Those same needs so you can do whole life and use whole life insurance for the burial

00:39:16.460 | You can use whole life insurance for the emotional adjustment

00:39:20.660 | what you often can't use whole life insurance for because just too expensive is if you're gonna buy a lot of it for a

00:39:26.260 | Lot of it for the child. So what I recommend just to cut right to the actual recommendations for the vast majority of families

00:39:33.980 | What I recommend is if you have access to a term life insurance policy

00:39:39.300 | Then go ahead and put a rider on it. If they'll give you a rider then add a rider

00:39:44.020 | Rider is so cheap

00:39:46.020 | It's just not going to be a problem and that will cover the needs that you have

00:39:50.100 | For the burial fund and an emotional adjustment fund

00:39:54.220 | There's no reason not to go ahead and have a rider if you do need something where you're trying to have something more

00:40:00.300 | Permanent you're gonna wind up buying some kind of whole life insurance policy

00:40:04.760 | And I really do like as long as you have other savings other investments as well

00:40:10.060 | Where you're you're actually you're not just saying this is gonna be my ticket to wealth because it's not whole life insurance policies for children

00:40:17.020 | Do not perform well for cash value for the first 20 years. It's brutal in terms of the actual cash value

00:40:23.140 | They're much more they perform much worse than whole life insurance policies for adults do from the cash value perspective

00:40:28.660 | But what I do is for all of my children when they're two weeks old and I can get a policy

00:40:32.900 | I buy a small whole life insurance policy for them and

00:40:35.980 | What I do is I buy something, you know

00:40:39.280 | You can the the figures can vary if you have a million dollars of life insurance on you

00:40:44.320 | Then you might get you know

00:40:45.780 | 25k on the child on each of your children if you've got millions of dollars and you have a lot of income

00:40:51.320 | You know, you might get 100k something like that for each for your for your children

00:40:56.080 | But with those I buy traditional whole life insurance

00:40:59.420 | So it'll be in force forever. And what I do is I make sure that I add two important

00:41:05.640 | benefits to that policy

00:41:08.100 | The first benefit is an APB which is called an additional purchase benefit and what an additional purchase benefit allows is

00:41:15.820 | It allows the insured to buy more insurance at a certain age

00:41:19.780 | So for example with my children's policies at the age of 20 at the age of 23 26 29

00:41:25.780 | 32 35

00:41:28.540 | 38 and 41 they can buy additional amounts of insurance and I think I've got a hundred thousand dollars either a hundred thousand or a

00:41:35.380 | Hundred and fifty thousand dollar APB on those policies

00:41:37.780 | So that means that if my child turns 20 and maybe my child has some kind of disease

00:41:42.180 | That they can't get any life insurance. They could buy another hundred thousand dollars of whole life insurance

00:41:47.660 | It'll be expensive because it's whole life insurance, but it's better than nothing if they've developed some kind of disease more likely

00:41:53.220 | They may have started doing something that's risky

00:41:55.420 | So for example, I got a family member who's a pilot and started flying as a private pilot and became professional pilot

00:42:00.380 | That kind of thing gets you some big ratings a lot of times on life insurance

00:42:04.060 | And so the nice thing is that with an additional purchase benefit in this kind of insurance setup

00:42:08.400 | Then your child is protected where they always have the ability to buy more amounts of life insurance

00:42:14.180 | Caveat it is going to be whole life insurance

00:42:16.740 | You can't do this with term life insurance

00:42:18.540 | But that can still be work out really well for them to at least have some life insurance coverage

00:42:24.300 | the other thing that I always put on the policies is a

00:42:28.980 | disability waiver of premium and so what that means is if the child is

00:42:33.620 | disabled then

00:42:36.540 | You don't have to pay the premiums for them

00:42:39.160 | And so that's a big big deal because there are certain kinds of presumptive

00:42:42.980 | Disabilities that the child can get and if they're disabled you don't have to pay the premiums

00:42:46.900 | But with the premier companies the premium companies if the child is disabled

00:42:51.420 | They'll actually keep on there the additional purchase benefit and they'll let the child buy the bail pay for the additional purchase benefits when they come

00:42:57.780 | Available to them and so what I do is split the difference on these and I buy whole life insurance policies

00:43:03.980 | Relatively small for each of my children

00:43:06.100 | So that they have some insurance if they die. I've got some money to cover burial costs, etc

00:43:12.740 | I've got some cash value, but the cash value returns are really bad on these kinds of policies

00:43:18.020 | basically if it breaks even

00:43:21.300 | That's good in terms of over the course of 20 years something like that

00:43:24.700 | But they'll always have some insurance that's in force and with the additional purchase benefit

00:43:29.460 | I feel like that's a really huge benefit and help because it

00:43:33.860 | Allows me or my children to buy more insurance in the future. So that's kind of the the fast lesson on it Jason

00:43:41.380 | Nope hold on this Jason I unmuted the wrong person any follow-up questions Jason

00:43:48.820 | Oh

00:43:50.820 | One last one as far as

00:43:52.820 | life insurance on myself

00:43:55.660 | My wife will be quitting her job once we have kids

00:43:58.700 | And we'll have a household income about 100 K. I currently have 250

00:44:04.560 | On myself and 250 on my wife. Would you recommend upping that once we have a kid?

00:44:10.180 | Do you are you financially independent? Do you have millions of dollars in savings?

00:44:14.860 | No, okay. So yes

00:44:18.620 | You can do a needs analysis and that's the proper way to do it you calculate how much money you would need if

00:44:25.180 | you

00:44:26.860 | Died how much debt you would want to pay off how much income your family would need and then you subtract all your assets that are

00:44:33.500 | Available. So the proper way to do it is to perform a proper needs analysis

00:44:37.980 | And this is life insurance 101 talk to any life insurance agent. They can do that for you

00:44:42.060 | What you will find out is it's gonna be somewhere between 10 to 20 times your annual income

00:44:47.940 | That's always where it is

00:44:49.860 | If you actually sit down with a hundred people with 98 of them

00:44:54.720 | It'll be somewhere between 10 to 20 times your life and you sorry your annual income

00:44:58.540 | so you'll be at somewhere between a million to two million dollars of total coverage for you and

00:45:04.220 | I would buy if your wife is going to be a stay-at-home mom. I would buy minimum half of that for her

00:45:10.820 | I would buy more if she's still working and she can qualify

00:45:14.460 | She won't be able to qualify as a stay-at-home mom for the same amount that you can qualify for

00:45:20.900 | So what you want to do is at an early age while she's still working and can financially qualify for more insurance

00:45:27.860 | Go ahead and get more

00:45:29.580 | so

00:45:30.180 | you know where you're gonna wind up when you do that needs analysis with an insurance agent is you're gonna wind up doing a

00:45:35.860 | million and a half on you and

00:45:38.380 | 750 or a million on her but the great thing is if you guys are relatively young non-smokers

00:45:43.540 | This is a total net cost with you know for you to have a million and a half is probably forty dollars a month for

00:45:48.700 | term life insurance and for her to have

00:45:50.860 | 750 is probably you know thirty dollars a month and by I'm not gonna explain it right now

00:45:56.180 | But by a type of life insurance called annual

00:46:00.140 | Renewable term life insurance do not buy level term life insurance when you're under the age of about 45

00:46:07.600 | So if you're in your 30s by annual renewable term life insurance and you can go and investigate that elsewhere

00:46:14.700 | My pleasure, all right, that was Jason I've got too many colors here. Let's go to

00:46:24.000 | The Florida Keys welcome to the show. How can I serve you today?

00:46:27.360 | Hey, good morning, Joshua John here. I'm gonna stick with the theme of this episode. It seems like real estate. I got a

00:46:36.660 | Decision to make and was looking for your insight. Okay

00:46:39.620 | So I'm currently active-duty military and I just received what will be my final set of orders

00:46:47.060 | Taking me back to New Orleans, Louisiana where I intend to retire

00:46:52.340 | I was there previously during my career and I already have

00:46:55.600 | one riddle rental property there in

00:46:58.720 | Louisiana so the decision is is now we're looking at

00:47:03.540 | The orders are three-year orders, but we know this is our long-term

00:47:06.760 | desired location to stay at

00:47:09.720 | So do we buy another three two for a second rental property?

00:47:14.000 | Or do we go and look to make the decision to buy that longer five to ten year?

00:47:19.480 | Forever home so to speak do you have children?

00:47:24.140 | One children one child and one on the way, okay, how old is your child that you have?

00:47:33.180 | She's three. Yeah, I

00:47:35.700 | Would buy a rental first I would buy a house

00:47:38.780 | That's a good rental with a three-year-old

00:47:40.780 | The good thing is she's kind of right at that cusp where you're gonna start to appreciate some of the amenities

00:47:46.620 | but I would I would buy the rental first and maybe even two over the next three years and

00:47:53.060 | Then and live in them, you know while you

00:47:56.820 | While you're while you're there live in them and then rent them out do the the nomad investing strategy read James Orr's book

00:48:03.100 | And kind of let that be your inspiration

00:48:05.480 | But I would do yeah, I would do the rentals first and then you know, if you have another child

00:48:11.120 | If you move into kind of the long-term

00:48:14.400 | House when you have a seven year old and a four year old that would be really ideal

00:48:20.480 | I would I would go ahead and build that rental property portfolio first and then

00:48:26.320 | Have that ticking away there before I move to the forever home because you guys are used to moving

00:48:31.820 | You know, you've got to move. You've got a three-year-old doesn't need that much space

00:48:36.120 | You're gonna have a baby doesn't need that much space if you'll stretch it out for another three years

00:48:41.000 | Purchase one or two rentals in the interim then you'll be much on a much higher

00:48:46.280 | Financial independence trajectory than you would be if you go ahead and move to the big house you get comfortable you start

00:48:53.360 | You know settling in doing that nesting thing defer it just a little bit till you have more houses and then go ahead and make

00:49:00.120 | That lifestyle upgrade. That's what I would do

00:49:02.120 | Sounds

00:49:04.520 | Sounds what we were thinking about doing and I appreciate your insight there Joshua

00:49:08.540 | Yeah, I think it's important to acknowledge that you don't want to live like a pauper forever. Your goal is not to

00:49:15.680 | Kind of always be stuck in this place where we're just gonna move and it's money money money money

00:49:21.680 | It's nice to set up that home base that nest that forever home

00:49:26.320 | Your wife is gonna be thrilled when you're done with the military

00:49:30.160 | She doesn't have to be a worry about moving too much two years from now

00:49:33.200 | But it's a lot nicer to do that if you've got a good solid financial base

00:49:39.040 | And so I would definitely just defer it a little tiny longer and you'll get more benefits out of it

00:49:46.520 | When you are settled what book I'd recommend if you haven't read it

00:49:51.360 | It's available free online, but search for James or and it's called Nomad real estate

00:49:58.320 | investing and

00:50:00.880 | He has that book available online for free

00:50:03.520 | but it's basically the strategy of buy a house move into it live there for a year or so and

00:50:08.560 | Then move out and do it again and you can do this with your VA loans

00:50:12.720 | There's a little bit of trickiness with regard to the technicalities of how many VA loans you're supposed to have you can investigate that

00:50:19.960 | But there are a lot of people who have used the VA loans

00:50:22.280 | purchased a large rental state port portfolio of multiple properties and it seems that

00:50:28.480 | It's something that they've been able to do. So that would be my approach

00:50:33.120 | All right. Let's go to

00:50:35.400 | Charleston, South Carolina. Welcome to the show. How can I serve you today?

00:50:38.000 | Hey Josh, my name is Steven. I was just tolerant actually on a

00:50:42.880 | Somewhat similar topic. I'm 27 years old got two kids and a wife and we live in Tennessee actually

00:50:48.600 | Okay, I'm joining the military in September as an officer and that will

00:50:53.480 | produce a significant increase in salary just because uh

00:50:57.560 | I've been I'm only just now getting into being physically

00:51:01.760 | physically

00:51:04.040 | responsible with my personal finances

00:51:06.040 | We have four goals to pay off student loans

00:51:08.520 | Adopt a child buy real estate back in Tennessee for when we get out of the military and begin savings

00:51:13.300 | how do I do you have any resources you would recommend for how I

00:51:17.320 | strategize accomplishing those goals

00:51:19.320 | Considering I'm gonna see a pay increase, but I also I'm just trying to figure out how to how to maneuver on that

00:51:25.480 | So well, the first thing I would do is save money. It's never a wrong thing to save money

00:51:30.200 | So that would be priority number one. I would live on the minimum that is

00:51:36.320 | Comfortable for your family and save the maximum amount of money now with regard to student loans

00:51:43.360 | I would think carefully through my overall strategy. Am I gonna pay them off?

00:51:48.360 | and is that gonna help me or is it more strategic for me to keep them and

00:51:54.600 | Invest the money as well. Should I pay off the debt or should I invest?

00:51:58.760 | I've got an entire episode on that just go back in the archives of radical personal finance and you'll find that episode and

00:52:04.360 | You can you can think through that but I would especially in an environment like now where they'll give you deferrals

00:52:11.480 | They'll freeze the interest etc. I would build up a big

00:52:14.520 | savings account and if you're gonna move in the direction of buying real estate then

00:52:22.080 | You know, I would

00:52:24.520 | This is probably going to be a good time to buy now with regard to having a child

00:52:30.160 | I would say this is time dependent not money dependent. So sorry with adopting a child so I

00:52:38.280 | Would not wait on the money to adopt a child if I knew I wanted to have a child

00:52:43.960 | We would adopt a child when the child is available when we see the opportunity and we say

00:52:50.480 | This is the child that we want to adopt. I would do it

00:52:53.160 | I think it's although I appreciate that it seems

00:52:57.000 | Sensible to try to wait on big life decisions until you've got the money thing all figured out

00:53:03.060 | You know, there's people who especially in the the fire community

00:53:05.960 | It's all about I'm gonna be financially independent by the time. I'm 30 and have children. I

00:53:10.520 | personally have come to the conclusion that

00:53:13.640 | Those things are life decisions that are more important than money. Do you need to be able to afford it?

00:53:20.960 | Yes, but a lot of times, you know

00:53:24.280 | If I didn't have the money and I felt the desire to adopt a child

00:53:27.120 | I would pursue the adoption and wait for the money to show up. Maybe I worked it. Maybe I did a deal

00:53:33.960 | Maybe friends and family donated money. Maybe I was able to find some discounts

00:53:38.680 | I just would not wait on money to get married would not wait on money to have children

00:53:43.760 | I would make those decisions because I felt the time was right and then I would make the money

00:53:48.800 | make sense over time so in my

00:53:53.260 | My order would be savings

00:53:56.120 | Because you can do that now

00:53:58.760 | Adoption would be whenever it's appropriate number three would be real estate

00:54:05.080 | when I find the deal and

00:54:07.680 | Then number four would be student loans. And if you're gonna be

00:54:12.360 | You know aggressive

00:54:16.080 | About building a real estate portfolio

00:54:19.120 | You have to do that when the property is available and when they're a good deal

00:54:23.600 | Now if you can pay off the student loans quickly and be debt-free that can go now it can go after savings

00:54:30.480 | It can go at anywhere along the line. That's the big question mark, but I don't that's how I would order them myself

00:54:37.160 | Yeah, no that totally makes sense I'm tracking with you it sounds like a

00:54:42.280 | It's almost more of a what are what are my personal?

00:54:45.640 | priorities

00:54:48.400 | rather than you know and

00:54:50.920 | Having savings helps to accomplish a lot of those so right

00:54:54.040 | Great. Well, thank you very much. Good my pleasure. All right, we're gonna go a little bit faster. I've got, Indiana

00:55:00.080 | Minnesota and Texas and then maybe back to Daniel. Nope, Daniel. We're done, Indiana. Welcome to the show. How can I serve you today?

00:55:07.240 | I am a doctor looking to join a new group

00:55:12.960 | They currently offer a 401k but no match on it and I was talking to him about that

00:55:18.760 | They would like to offer a match to the doctors. I think it'd be too expensive to offer the match to everyone

00:55:25.200 | Is there a way to?

00:55:27.840 | Set up your 401k so that you can offer a match to certain positions. They're not others. No

00:55:34.960 | No, there's not. Okay

00:55:38.160 | Well that somebody in the Facebook group had mentioned something about setting up an affiliated services group. Is that something you're familiar with?

00:55:47.080 | Wait, essentially get the regret

00:55:49.080 | the idea being of an affiliated services group the idea is

00:55:54.440 | that if you set up a separate company that is focused on

00:55:59.640 | You know that employs the doctors but then a different company that employs the staff is that the idea

00:56:07.260 | That's my understanding of it. Yes

00:56:10.640 | So is it technically possible? I would say most likely

00:56:15.640 | It is technically Paula possible. But the important thing is to

00:56:20.480 | Understand that there's still restrictions. So if you have companies that have common ownership, so let's say that I own a

00:56:28.960 | Company called company a and my wife and I are the sole employees of company a we pay ourselves

00:56:36.360 | $200,000 per year and then I also own and my wife and I own company B and in company B

00:56:42.460 | We have five low-level staff that all get paid

00:56:45.500 | $20,000 per year. Well in that situation

00:56:48.420 | we

00:56:50.720 | When we look at it in that situation

00:56:52.720 | We're not going to be able to just set up a 401k in company a but not in company B because the companies have common

00:57:00.460 | Ownership, so could you set up some kind of affiliated services group where there was just an employment in that separate?

00:57:08.340 | Company and there were different ownership than the low-level group

00:57:12.880 | Yes

00:57:13.560 | but you're gonna need to talk to a specialist who will follow the rules very carefully because the number one thing that's

00:57:21.520 | important to the government with regard to 401k plans is

00:57:24.640 | nondiscrimination they do not want

00:57:28.200 | 401ks used to set up extra special benefits for

00:57:35.440 | high-level highly compensated employees to the

00:57:38.620 | detriment of the low-level staff and so that's the

00:57:42.480 | That's the doctrine that is hammered through every single part of the code in

00:57:48.760 | Every qualified plan be it a 401k or some other qualified plan

00:57:53.080 | You cannot discriminate in favor of highly compensated employees and key key owners. So

00:58:01.060 | Is as long as you study those laws it is theoretically possible to set up multiple companies and do that

00:58:06.940 | my answer to you is it's probably not going to be worth it and

00:58:10.500 | You need to know that you better button it up

00:58:14.440 | exactly in the right way because if you don't you're dealing in an area that that they're very serious about and so

00:58:22.860 | You're gonna need professional advice. You need to make sure that you have all of the all of the T's crossed and the eyes dotted

00:58:30.220 | Okay

00:58:32.220 | Thank you that I will anything else

00:58:36.300 | I've got a separate question. Go ahead. It's completely unrelated if you've got time go ahead

00:58:42.780 | So my wife and I are expecting our first child in December

00:58:49.840 | you know, I've really appreciated a lot of your philosophies on child raising and you've kind of expanded a lot of

00:58:57.660 | You know what I think about as possible new children give me recommendations on resources for a new parent

00:59:04.160 | She read classes

00:59:06.160 | anything like that

00:59:07.780 | But you think a new parent should be looking into

00:59:10.300 | So I would say the first thing is

00:59:14.060 | With regard to having a new child is going to be to think about the birth of the child

00:59:20.340 | I've got a lot about the child, but what I'll do for the sake of

00:59:24.140 | the

00:59:26.780 | What I'll do for the sake of the this Q&A show is I'll focus on the birth and I'll just kind of give you my

00:59:32.480 | standard new father speech

00:59:34.580 | Hey

00:59:36.220 | Congratulations, you're expecting a baby now

00:59:38.580 | Let's talk about some things that you need to know and the things that you need to consider just purely from my experience

00:59:45.160 | You're a doctor. I'm not but I'll give you some things from my experience. What I would say is your first priority

00:59:52.060 | with regard to your

00:59:56.420 | with regard to your new child is

00:59:58.420 | certainly to have a

01:00:00.540 | Safe birth of your child, but to work with your wife with a goal of having a healthy

01:00:07.040 | enjoyable safe

01:00:10.340 | natural childbirth and

01:00:12.660 | That's one of the most important things that you can do for the child

01:00:17.220 | one of the most important things that you can do for your wife one of the most important things that you can do for

01:00:21.780 | Your family and there are a lot of things that you can do to work towards those goals

01:00:26.220 | but in order for you to do them

01:00:28.220 | I think you're gonna have to what I've learned is you got to be a little bit countercultural because in the West we have a

01:00:34.980 | strange view of

01:00:37.100 | Childbirth that childbirth is somehow a medical emergency and a medical event and therefore

01:00:43.100 | We need tons and tons of medical intervention

01:00:45.820 | The first thing that I would do if I were you is apply your medical knowledge and study

01:00:51.460 | Childbirth and study kind of the different trends kind of the classic place to start

01:00:56.460 | Would be there's an older documentary that I forget the name of the lady that that did it

01:01:02.340 | But I think it's usually the place that I encourage people start the business of being born is a good documentary to start with

01:01:08.980 | There are a bunch of books that are good

01:01:11.140 | There's a book called the business of baby that might be interesting to you. And so you want to consider carefully

01:01:17.380 | the childbirth process

01:01:20.620 | Basically, my summary statement is childbirth does not have to be difficult childbirth does not have to be painful

01:01:26.700 | Childbirth does not have to be a horrific experience in

01:01:30.020 | Most women's lives there are some women who do have significant medical conditions, etc

01:01:36.460 | And so of course that's unique where you need medical intervention

01:01:39.300 | But I'd encourage you and your wife to to really become educated and really become knowledgeable

01:01:44.300 | About the process of childbirth so that you can understand

01:01:49.900 | Kind of what you want and talk to her and think about what does she want? What kind of birth?

01:01:56.180 | Experience does she want your three basic options that you're gonna think about is do we want a hospital birth?

01:02:03.140 | I would guess that that's probably almost an automatic thing for you being a physician

01:02:09.140 | But I don't think that it necessarily should be I think you should consider other options

01:02:12.900 | there are birth center births all around the United States and then of course you could do a home birth and

01:02:19.500 | So each of them has a different advantages and different disadvantages

01:02:23.420 | What I would tell you is I'm convinced personally that a lot of times having a hospital birth

01:02:29.980 | increases the risk of birth for the mother and the father because it takes what can be a really rich and and

01:02:38.900 | Wonderful experience for the mother and father and it turns it into a very medical event

01:02:45.120 | Now we chose with our first baby that we were gonna have a birth center birth

01:02:49.140 | We didn't wind up making it out of the house

01:02:51.960 | I wound up delivering the baby at home because when it was time to go the baby was already there and I've gone on and

01:02:57.840 | I've delivered all four of my babies at home with a midwife assistant now

01:03:02.580 | We had low low risk birth. We everything we looked great. But what we found through that experience is

01:03:08.420 | that for us our

01:03:11.740 | Experience and our memories of childbirth are some of the most intimate really just wonderful

01:03:17.780 | rewarding

01:03:20.820 | Experiments experiences that we ever had and

01:03:23.620 | We did something that I would commend to you. There are a number of different childbirth methodologies that you can look into

01:03:31.020 | We did something called hypnobirthing

01:03:33.620 | Which is weird and crunchy

01:03:36.140 | But we really enjoyed it in terms of and and got good results from it in terms of the childbirth and basically

01:03:42.380 | Hypnobirthing is all about how can you learn about childbirth to the point where you can?

01:03:47.420 | minimize and to some extent even eliminate the pain of childbirth and

01:03:52.140 | So by having a child at home or in a birth center where it's a non-medical environment

01:03:57.820 | What I think that has helped is it made the the entire birth experience into an intimate and enjoyable?

01:04:05.420 | Just experience rather than in a medical event and what what what my wife found is that she found herself much

01:04:13.180 | feeling much safer and much more relaxed than if she were in a birthing suite at a hospital with

01:04:20.740 | Nurses and doctors coming in and stuff strapped to her stomach and the fluorescent lights, etc

01:04:25.540 | Now in most modern birthing hospitals

01:04:27.820 | What they've done is they've they've stripped out all the old-fashioned birthing suites and they brought in more of a home like environment

01:04:34.340 | And I think that can be a great great solution, but I would really encourage you to consider kind of some other solution

01:04:41.020 | We never had the confidence to have a home birth with our first baby

01:04:44.100 | We wanted to have a birth center birth and we chose a birth center that was very near the hospital so that if there were

01:04:48.420 | complications we could go ahead and transfer to the hospital and have the appropriate medical intervention, but

01:04:53.540 | Our experience has been that having a child with the use of a midwife rather than a physician

01:05:01.060 | Sorry rather than just an obstetrician just lent

01:05:04.380 | immeasurably to a far better

01:05:07.260 | Experience because the midwives have so much more experience birthing a baby. It just completely transformed everything and from a financial perspective

01:05:14.940 | While none of us would ever start with saying I'm gonna think about the money

01:05:21.180 | I think it's also foolish to ignore the money

01:05:23.540 | And so anything you can do to minimize the risk of having a $30,000 c-section

01:05:28.660 | Which then generally turns into if you have more than one child multiple c-sections down the road

01:05:34.300 | It's well worth the investment spending the money spending the time and really thinking carefully about it

01:05:41.980 | And so what I'd recommend to you is don't don't just assume because you are a physician that you know

01:05:48.340 | I don't know what your specialty is

01:05:49.620 | But don't assume anything about childbirth and really dig into it and work with your wife

01:05:53.660 | You got plenty of time and figure out with her. What is going to

01:05:59.140 | What is going to lead her to have the best experience I give you two more pieces of advice one mental and one physical

01:06:06.380 | with

01:06:08.420 | most women

01:06:09.620 | Especially first-time mothers the prospect of giving fear unless they've worked

01:06:13.460 | Sorry, the prospect of giving birth for the first time can be a very fearful experience

01:06:17.780 | I don't know how many birds you attended as part of your training and how many births you've been at

01:06:22.980 | But for the average new father and the average new mother they've never been to a single childbirth in their life

01:06:28.580 | And so all of their impression of childbirth comes from TV

01:06:32.800 | It comes from some mother, you know splayed out on a gurney in a bright fluorescent hospital room with her legs

01:06:39.660 | Splayed open a bunch of strangers in the room screaming your head off

01:06:42.740 | Like that's the basic picture that most new fathers and mothers have childbirth, which is a ridiculous picture

01:06:48.700 | but all that does is build fear and so one of the things that is

01:06:52.580 | Extraordinarily valuable is if you can help to build a plan that helps your wife release all of the fear that she has

01:06:59.440 | Associated with childbirth then it can help her to feel much more confident and when she feels much more confident

01:07:04.980 | Then the whole experience can go much better now

01:07:07.420 | Some of that is going to be related to understanding the process of childbirth

01:07:11.060 | So for example, one of the things that we were taught when we had our first child that dramatically transformed

01:07:17.020 | Our experience and also dramatically transformed has transformed the experience of other people

01:07:22.060 | I've shared this with is just physically understanding what happens with the process of birth

01:07:25.940 | So most women don't have any understanding of what a contraction is. They just feel like a contraction is this stunning?

01:07:32.980 | Bit of pain where all of a sudden they just can't control it and they've got to go through all this pain

01:07:38.260 | But a contraction is simply the natural process

01:07:42.420 | Where the muscles of the uterus press the baby down through the birth path until it's born and it's a natural process

01:07:48.820 | whereby the cervix thins and open so the baby can pass through the birth path and yet it's a physical event and so

01:07:56.420 | When we understood that it was a muscular event

01:07:59.180 | where you had

01:08:01.220 | you know the muscles of the uterus that that are kind of

01:08:03.740 | Crosshatch against each other and one pulls one way and one pulls the other way and that gentle process over time

01:08:09.060 | Presses the baby's head against the cervix and then in time the baby passes through it

01:08:13.340 | Transformed it because what we did was we started associating

01:08:16.700 | Contractions with a workout we started associating the physical pain of

01:08:22.380 | Contractions with the kind of physical pain that you have going into the gym

01:08:26.060 | So if you go into the gym and you're in there pumping iron and you're doing you know squats or you're doing chest presses

01:08:31.460 | Or benching and all of a sudden your muscles are screaming in pain

01:08:36.460 | You understand that this really hurts

01:08:39.380 | But it's not this

01:08:41.940 | emotional overwhelming thing that you just can't handle and and the secret solution to

01:08:46.180 | The the pain and your quadriceps from your squats is to stick a needle in your pen in your your quads and get rid of

01:08:52.060 | The pain you understand this is muscular pain that comes for a purpose

01:08:55.580 | and so once we started comparing the experience of contractions to

01:09:01.700 | Something like a really intense really difficult workout. It changed the emotional experience

01:09:07.060 | for my wife and

01:09:09.620 | Allowed her to use some of the tools and skills to manage the pain and not be

01:09:14.740 | Emotionally debilitated by it feeling like she had to have a needle stuck in her spine

01:09:18.980 | To somehow, you know get through it and so little things like that

01:09:23.480 | I found when I've talked to other

01:09:25.480 | Expectant mothers and fathers and explained it and they come back later and said that was so valuable

01:09:29.980 | Another simple thing that we did was and this was part of the hypnobirthing curriculum if you choose to go through that

01:09:35.820 | but we did this kind of fear release exercise where I had my wife write down all of the things that she was scared about and

01:09:43.020 | Then we made a plan for them. So I'm of course sharing intimate details, but it's not I don't think it's it's a bad thing here

01:09:50.860 | But like my wife was scared of being pressured. She hates to be pressured or to be

01:09:57.620 | You know hurried she despises being hurried

01:10:00.500 | And so she didn't want to feel any pressure about the baby coming especially on the due date

01:10:07.260 | So to speak the natural range when a baby is expected is a four-week range

01:10:13.400 | It's anywhere from 38 to 42 weeks. That's normal. That's the normal normal range. And of course, it's different for us first time

01:10:19.480 | Childbirth versus a later childbirth, but what happens for a lot of mothers is they say hey

01:10:26.060 | My baby is due on June 1st and all of a sudden on June 1st all their friends start saying is the baby here

01:10:31.260 | Is the baby here then on June 2nd is the baby here and her mother-in-law says hey, is there any is there any news?

01:10:35.740 | Is there any news and then by June 7th?

01:10:37.740 | The poor mom is so freaked out by everyone saying where's the baby and what's wrong?

01:10:42.340 | And is everything okay that she can hardly relax and and enjoy things when the reality is

01:10:46.780 | The normal expected path time is anywhere from a 15 to June 15

01:10:51.200 | And as long as you're getting appropriate medical care through that period

01:10:54.400 | The baby's being monitored making sure the baby's okay. Everything's okay. That's normal

01:10:59.460 | and so

01:11:00.420 | Once I understood that that was one of my wife's fears we did some some stuff that just to get rid of it

01:11:05.180 | And so for example when we are expecting a child

01:11:08.060 | We don't tell anybody the expected due date of the child

01:11:12.180 | We just don't tell anybody the only person that needs to know is her me and the midwife and our backup doctor, right?

01:11:18.420 | That's it beyond that. Nobody else has any need to know

01:11:21.860 | So if the baby's expected due date is June 15, we say sometime in June or July

01:11:26.380 | Then you buy yourself lots of time and is that a little bit annoying?

01:11:30.080 | It is but it it was one of things that just completely released my wife from all of the the mental

01:11:37.260 | Kind of fear and stress of the the event now there are other things as well

01:11:41.760 | So just what I would encourage you is work with your wife to help her to understand

01:11:46.360 | What she's afraid of and then when you release those things then it dramatically improves

01:11:52.460 | the probability of having a comfortable healthy safe natural childbirth if you talk to start talking to doulas and midwives and they start telling

01:12:01.180 | you about some of the things where the woman is is in labor and

01:12:04.120 | Everything is advancing and all of a sudden it just stops. It's not

01:12:07.540 | Always and then I would now I'm not a pediatrician. I'm not a obstetrician. I'm not a midwife

01:12:13.940 | I don't know but I would say it's probably from listening to them

01:12:17.620 | It's probably a majority of the time something in the brain something mental

01:12:21.800 | where the woman is scared about something or there's a problem in a relationship and then the and it's and then the

01:12:28.880 | childbirth process doesn't advance appropriately and so

01:12:33.540 | Playing the mental game is super super important and whatever

01:12:37.800 | Situation is gonna make your wife feel totally confident totally at rest

01:12:42.500 | That's where you need to be and that's where you need to focus

01:12:44.840 | Focus your time and attention last thing. I am convinced that one of the important things to do during the process of

01:12:53.440 | childbirth is to

01:12:56.080 | Make sure that she gets regular chiropractic adjustments, especially that her pelvis is not twisted

01:13:01.600 | So I'll show on the video, but if you imagine that this is if you hold up

01:13:06.300 | If you hold up your hands in front of you and you make a V with your hands and you look through them

01:13:11.240 | This is the bones of your wife's pelvis

01:13:14.000 | And so if you tilt that and you just push one hand forward and one hand back

01:13:17.900 | What you see is that it makes a dramatically the dramatic difference in the amount of space that's available for the baby's head and body

01:13:25.440 | To pass through when the baby's head is passing through her pelvis on the birth path

01:13:29.360 | and so one of the things that we've always worked really hard at is making sure that my wife receives regular chiropractic adjustments during

01:13:38.940 | Pregnancy, especially if she's carrying that weight, especially if it's pushing lots of pressure on her bones

01:13:44.000 | And that's been one of the many things that we've done to try to focus on having

01:13:49.040 | really

01:13:51.400 | successful simple smooth childbirth

01:13:53.700 | Experiences you can't I'm convinced. Of course, you can't guarantee anything. Every woman's body is different

01:14:00.360 | There are many things that can happen that are out of our control

01:14:03.240 | But we've always just worked and worked and worked and worked for months just really diligently to make sure that we've done

01:14:09.880 | Everything possible to prepare for a really comfortable safe childbirth and thus far we've had four really awesome

01:14:16.660 | Comfortable safe childbirths last thing and Joshua's kind of standard new father speech

01:14:20.600 | You will spend a lot of time preparing for the childbirth

01:14:27.220 | The thing that I wish someone had told me before we had our first child was it's not all done after the birth

01:14:34.740 | The first few days in the first couple weeks of a new baby, especially the first baby are really really tough

01:14:42.920 | And so we were very prepared for childbirth

01:14:46.160 | What we were not prepared for was how difficult those first few days were going to be how difficult breastfeeding was going to be

01:14:52.360 | How difficult just settling into the baby was going to be

01:14:56.260 | We weren't prepared for that now second time third time fourth time around things were a lot better

01:15:00.120 | but

01:15:02.960 | Don't think that it's all over with the birth focus on the birth and focus on the new mom and making sure that you've got

01:15:08.620 | Lots of help and support and care for her and then

01:15:11.400 | After your baby is a few months old, then you can start thinking about all the other stuff all of the child raising stuff

01:15:17.620 | But that stuff there's plenty of time right now focus on the childbirth and those first couple of weeks

01:15:23.080 | It's a really special awesome time as a four-time father who has delivered all of his own babies. I

01:15:29.040 | Recommend to you and that's one of the last things I would say to you is that get in there and

01:15:34.020 | Receive your own babies. It's a it's a really

01:15:37.340 | empowering experience

01:15:39.980 | For a father. I remember after our first baby was born. I

01:15:43.120 | Felt like the king of the world. I felt like I

01:15:46.640 | Don't know how to describe it. I just felt like the king of the world. I felt like the most

01:15:52.600 | extraordinarily

01:15:54.040 | Accomplished and successful man in the universe and it was a really special experience for us. So there's Joshua's standard speech

01:16:01.680 | consider those things work them out do your research and

01:16:05.440 | Figure out what's going to make for the best

01:16:09.080 | Experience for both of you and you really can in a majority of cases

01:16:14.840 | Transform something that some people fear some people dread into some of the richest

01:16:22.480 | closest

01:16:24.160 | Experiences that you and your wife can experience together

01:16:26.160 | Approach

01:16:37.200 | She's really not on board with that so, you know, so we follow what she wants obviously, but yeah

01:16:49.120 | Good things to look into at the business being born hitting a birthing looking at some of these other options that are out there

01:16:54.680 | So I'll definitely go dive on to her and let her look at some the other stuff

01:17:00.200 | I love birth tourism birth tourism is awesome. I

01:17:03.920 | Cannot imagine how we ever could have done it with our first child. I've talked to parents who've done it

01:17:11.280 | There it's amazing

01:17:13.800 | But I would not even as much as I like birth tourism when I think back to what it was like for the first baby

01:17:19.760 | I

01:17:20.720 | Wouldn't want to be anywhere except home. I want to be at home

01:17:23.760 | I'd want to be at home where our family can be there our friends

01:17:28.360 | to me, I think that's just more valuable than a passport, so

01:17:33.960 | Whatever is gonna make her comfortable is is where you got to focus but do the research and

01:17:42.960 | I'm convinced that you'll find the right solution. All right, I am going to go rapid-fire here. Let's see

01:17:50.120 | Cory in Minnesota, I'm gonna answer your question in two minutes or less if it's worse than that

01:17:55.160 | If it's bigger than that, then we're gonna move it to next week's to go fast

01:17:57.600 | Go ahead Cory

01:18:03.960 | All right, Cory is right there, oh Cory is that we just came back Cory go ahead I can't hear you go ahead

01:18:12.800 | I

01:18:14.800 | Yes, go fast with your question, please

01:18:17.760 | $80,000 in sort of cash

01:18:25.600 | emergency fund maybe

01:18:28.280 | possibly some of it for real estate at some point, but I'm currently sitting in

01:18:33.000 | Partially checking account partially like high interest

01:18:37.120 | High interest 1.5% you know online savings account this morning. I

01:18:41.880 | heard on your last

01:18:44.000 | year your last show talked a little bit about

01:18:46.720 | emergency funds with credit cards and life insurance and things like that just thoughts on kind of where to keep that money and

01:18:54.400 | How to structure that I have a podcast episode in the history of radical personal finance

01:19:03.160 | Standby and I will tell you

01:19:06.400 | What number but it's called where should you keep your emergency fund and that will answer?

01:19:13.920 | The question so stay on the line

01:19:16.480 | What I'm gonna do is I'm gonna take the next question and at the end of the show

01:19:19.520 | I will mention the answer to that question, but go listen

01:19:23.020 | I'll tell you the show number and go listen to that show good out of Pennsylvania. Welcome to the show

01:19:27.940 | How can I serve you today, please?

01:19:32.720 | Pennsylvania

01:19:34.720 | Go ahead

01:19:37.960 | You talk every now again

01:19:41.040 | Are they baking the list

01:19:47.280 | You know

01:19:54.440 | Yes, here's what I'm envisioning a little kid a very very young four two and one right now

01:20:01.980 | and I would like to

01:20:04.340 | Teach them life lessons through running into their own business teach them just what it looks like

01:20:10.700 | and

01:20:12.700 | also, I would kind of like to

01:20:15.020 | to find a way at an early age to

01:20:19.100 | through a family business

01:20:21.980 | Business or whatnot to have them have some earned income so I could start teaching them

01:20:27.820 | You know money skills and investing and even having the ability to open a Roth IRA for the while they're under 10

01:20:34.560 | What just is appealing to me? So I just kind of wanted to ask you from a I mean

01:20:40.920 | We have some things that we do. We're not really bakers. I do beekeeping

01:20:44.140 | So we make and sell

01:20:46.980 | High products generally that's honey and lip balm and things like that. So

01:20:52.340 | Just kind of your thoughts from a from a structure standpoint and knowing the age of my kids

01:20:57.980 | What would it look like do you think or how do you handle that?

01:21:00.380 | to get your kids involved in a way that is then

01:21:03.800 | business lessons life lessons money lessons, but also

01:21:07.300 | Also the potential of saying hey, this is earned income

01:21:12.780 | file a tax return kitty tax and

01:21:15.700 | Then have the ability to convert that into long-term savings for them

01:21:21.560 | It's

01:21:23.040 | Important to me. I think it is well worth doing

01:21:26.560 | I've got a lot of ideas on it the short version that I would encourage you is

01:21:31.480 | Start by thinking about the kind of business that would be fun to do

01:21:37.800 | That would also be profitable and that would build in just some

01:21:43.300 | Pathways where the children can genuinely be involved

01:21:47.440 | and what I'll say is call in next week and

01:21:50.520 | Remind me at the beginning of next week's Q&A and I'll try to put you in the first spot and we'll try to

01:21:55.760 | Flesh out some ideas that would be useful specifically for you deal

01:22:00.040 | All right, Texas you're on how can I serve you

01:22:06.440 | Hey Joshua, this is Trey I'll go quick

01:22:12.240 | I'm interested in possibly converting my regular w-2 job as a director of financial operations at a health system to

01:22:19.560 | Maybe a

01:22:22.640 | Per diem consulting arrangement where I'd have most of my same duties, but just have more time off

01:22:28.960 | And I thought that you might have mentioned

01:22:32.280 | some benefits tax-wise and being self-employed versus

01:22:37.560 | Receiving a w-2 I can get on my wife's insurance. So my employer would be saving my benefits cost

01:22:42.880 | I'm just trying to work out a way where I can have more days off during my not busy season

01:22:48.960 | which is the non budgeting strategic plan time and

01:22:51.720 | Not cost my employer much more because I'd want to probably hire an analyst at a lower rate

01:22:58.160 | To do the more day-to-day things that I'm doing not during that business

01:23:01.520 | It's a good question

01:23:04.360 | the first thing to think about is the actual lifestyle benefits and

01:23:07.520 | Things like having more flexibility with your schedule can be reasons in and of themselves

01:23:14.760 | Why you would want to do this even if the tax stuff is a wash

01:23:19.160 | When it comes to tax savings, there are two basic components. The first is possible savings on

01:23:26.360 | employment taxes and

01:23:28.880 | The second is other tax deductions. Is there something that you would be able to deduct as an

01:23:36.160 | individual business owner rather than

01:23:38.920 | You're being an employee

01:23:42.120 | I'm gonna give you the fast version

01:23:44.440 | You need to make more money and a substantially more money as a contractor

01:23:49.560 | Then as a w-2 employee for it to be worth it

01:23:53.600 | but if you can and especially if you can move to setting up an s an s corporation, then you have the

01:24:01.120 | option and

01:24:03.360 | possibility of paying some of your income out of your company as dividends rather than wages and

01:24:10.640 | If you can do that, you can possibly save your employment taxes, which would be fifteen point three percent

01:24:19.080 | But currently your employers paying seven point six five percent. You're paying seven point six five percent

01:24:24.720 | So you could possibly have some savings there

01:24:28.640 | In addition, there are some businesses that would fit well to significant tax deductions

01:24:35.200 | So for example, maybe you could go ahead and genuinely set up a legit home office

01:24:40.400 | Maybe you could go ahead and start driving your old beat-up car the and take a 60 cent per mile

01:24:47.040 | Deduction on business miles that creates thousands and thousands and thousands of dollars of phantom deductions

01:24:52.080 | Maybe there are things you could do travel you could take or expenses for equipment or gear that as an employee

01:24:58.800 | You can't deduct but you can deduct if you're a contractor

01:25:04.360 | But at the end of the day

01:25:06.080 | You need to make sure that you're gonna get a better lifestyle benefit and you need to make sure

01:25:10.800 | That you're gonna get a decent amount more money

01:25:14.800 | so what I would say is call in next week and let's talk about the

01:25:19.280 | specifics of

01:25:20.320 | Your job and once again, like I said the previous guy

01:25:22.840 | Tell me when I start and I'll put you up in the number one slot next week

01:25:26.280 | All right, I'd love to do that, thank you so much good stuff. Thank you all for calling in for today's

01:25:33.680 | episode what I want to close with is the thing that I mentioned as far as the

01:25:40.840 | Episode of where to keep your emergency fund is episode 481 of radical personal finance from September 12

01:25:47.820 | 2017 it's called where should I keep my emergency fund and it's an in-depth detailed discussion of

01:25:55.880 | The answers to that question of where you should keep your emergency fund

01:25:59.520 | So I would commend that episode to you if you're interested in the question

01:26:02.700 | Thank you for listening to today's show

01:26:04.280 | If you would like to call in to next week on the show join at patreon.com slash radical personal finance again

01:26:11.680 | That is patreon.com slash radical personal finance

01:26:16.520 | And if you sign up to become a patron of the show there at patreon.com slash radical personal finance

01:26:22.920 | Then you will gain access to these weekly Q&A shows and hopefully I can speak with you next week

01:26:30.440 | Thank you all for calling in and there was one comment

01:26:33.880 | I wanted to add that I added on this screen as we go from one of the live watchers here on

01:26:40.200 | Facebook

01:26:42.800 | Watcher says Steve to Steven earlier question joining the military gives you a number of monetary advantages that most civilians aren't aware of

01:26:50.520 | Look into the SCRA and MLA

01:26:54.200 | Specifically off the top of my head the military will give you allowance to offset the cost

01:26:58.480 | Along with paid time off for you and the adopted child reddit has a decent subreddit called our slash military finance is a good place

01:27:06.080 | To start Doug Nordman through the bogal heads has a good book. He wrote to get you started financially with your career

01:27:10.800 | Definitely read Doug's book. I should have recommended that myself

01:27:13.000 | Doug's a good friend and he does a great job

01:27:15.880 | There are a number of personal finance bloggers that are exclusively focused on the military market

01:27:21.800 | And if I were in the military, I would read every blog post and every book that any of those guys had written

01:27:26.400 | That's it for today's show. Thank you all for being here and I'll be back with you very soon

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