RPF-0024-Happiness__Money_Rising_US_Wages_Economic_Patriotism_Top_Jobs_in_Demand_Subprime_Bubble_in_Used_Cars_Unlimited_Kindle_for_10_a_Month_Habits_of_the_Wealthy

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00:00:15.200 | Radical Personal Finance episode 24. On today's show, a new Harvard paper on where people are

00:00:24.480 | the happiest and why that might be. Rankings of the most in-demand jobs and the states with the

00:00:31.040 | most jobs. The myth of economic patriotism. Habits of the wealthiest people. A Roth IRA horse race.

00:00:39.200 | And unlimited reading on your Amazon Kindle for $10 a month.

00:00:43.360 | [Music]

00:01:00.400 | Welcome to the Radical Personal Finance podcast for today, Monday, July 21, 2014. Thank you for

00:01:06.320 | being here. And today's show is going to be a bit of a variety show. Instead of my talking on for

00:01:11.280 | an hour about one topic, we're going to try to cover about 10. Probably in about an hour, but

00:01:15.600 | we'll see. I don't, I'm not known for being able to do hour-long shows. I hope you'll enjoy us today

00:01:22.000 | and stay with us. [Music]

00:01:33.520 | So with it being a beautiful new Monday today, I've got a listing of all of some of the articles

00:01:37.520 | that I have found over the past week. And as I've mentioned before, what I hope to do with the show

00:01:41.440 | is really bring a variety. And so in my mind, although I do enjoy in-depth financial planning

00:01:47.200 | topics, man, I can't handle that stuff every day. I would go nuts if I had to talk about tax planning

00:01:52.080 | and what was the one show I did last week on balance sheets, statements of financial condition.

00:01:56.320 | I would go nuts if I had to talk about that all day long. I don't enjoy it that much. I mean,

00:01:59.520 | I like it, but one or two days a week is great. And interviewing people is awesome, but I tell

00:02:04.080 | you it takes a lot of time to prepare for an interview to do it well. And so, and answering

00:02:08.640 | questions is great, but I don't want to do that every day. So in my mind, what I think would work

00:02:12.800 | really well for this show is what the routine that I'd like to get into is Mondays kind of do a

00:02:17.280 | variety show with various articles that are in the news, current commentary on news events,

00:02:22.080 | economic events, economic goings on, things like that. Tuesdays, you know, something like Tuesday,

00:02:27.360 | Wednesday, and Thursday do a couple of interviews, one or two interviews with somebody. And then the

00:02:32.000 | other day do an in-depth financial planning educational show. And then Fridays do listener Q&A.

00:02:38.000 | So that's kind of the, that's the plan that's in my head. So Monday today, we're going to talk

00:02:42.640 | about a number of interesting, interesting topics. And some, basically this is from some of my

00:02:48.400 | reading from the last week, some of the different articles that caught my eye and some of the

00:02:51.920 | different topics that I am interested in researching a little bit. We're going to lead off by talking

00:02:56.480 | about happiness. And as maybe you've picked up by now, I personally think that we should spend a

00:03:02.400 | lot more time focusing on things like happiness and contentment than just simply on the dollar

00:03:07.280 | figures. But yet dollar figures have a, an impact on happiness, clearly. So how do these work

00:03:14.880 | together? Well, let's start with a, a article here from Market Watch, and this is from July 18,

00:03:20.880 | 2014. All of the articles will be linked in the show notes. Feel free to check through.

00:03:25.280 | So headline is from Market Watch. New York City is the most unhappy city in America.

00:03:30.560 | And all you New Yorkers might be a little bit upset with me right now, but let's read it.

00:03:35.200 | Cheer up, Big Apple residents. New York City is the most unhappy city in America.

00:03:39.200 | That's according to data coming from a working paper by Harvard professor, Edward Glazer,

00:03:43.600 | Vancouver School of Economics professor, Joshua Gottlieb, and Harvard doctoral student,

00:03:48.960 | Oren Ziv. They use data collected in Centers for Disease Control and Prevention survey called the

00:03:53.600 | Behavioral Risk Factor Surveillance System, and then adjusted it for age, sex, race, income,

00:03:59.360 | and other factors. Such adjustments are important. Women, for instance, are happier than men. The

00:04:04.160 | married are happier than single or divorced respondents, and so on. By the way, don't rush

00:04:08.400 | past that. Women are happier than men. Married people are happier than single or divorced people.

00:04:13.440 | And there's good evidence for that as well. So as to why, we'll talk about that in a minute.

00:04:18.640 | In short, New Yorkers are unhappiest on an adjusted basis. But scoff at those adjustments

00:04:24.480 | as you like. They are still third most unhappy region of the areas where there are at least 200

00:04:29.280 | respondents out of 177 metro areas on an unadjusted basis. It'd be blithe to say those

00:04:36.000 | who work on Wall Street are scientifically miserable. But remember, money buys happiness,

00:04:40.720 | so probably not. The happiest five cities are all in Louisiana, with Lafayette taking the crown.

00:04:47.040 | Louisiana is also the happiest state. The unhappiest cities after New York City are St.

00:04:51.840 | Joseph, Missouri; South Bend, Indiana; Erie, Pennsylvania; and the Evansville, Indiana;

00:04:56.880 | Henderson, Kentucky area. So I thought this was an interesting article. And I personally would

00:05:02.400 | not have any interest in living in New York City. I can see why people might be unhappy there,

00:05:07.440 | but I think it's a fun place to visit. But hey, I say go for it. So I went and found the actual

00:05:12.400 | study. And the actual study is more interesting than the news article. It's a nice sensationalist

00:05:16.880 | article for Market Watch to post three paragraphs on. But the study was actually

00:05:23.760 | extremely interesting. And so you'll find it linked in the show notes. It's right available

00:05:29.600 | as a PDF on the Harvard.edu website. And I'm going to read from the abstract up front,

00:05:36.720 | and then also from the conclusion. So this is only a 30-page study plus appendices. And so it's

00:05:43.600 | entitled Unhappy Cities in the Abstract. There are persistent differences in self-reported

00:05:48.560 | subjective well-being across the United States. And in particular, the residents of declining

00:05:54.720 | cities report less happiness than other Americans. Although this unhappiness is at least as strong

00:06:00.400 | among new residents of such places as long-term residents, some people continue to move to these

00:06:05.600 | areas. These areas also seem to have been less happy historically during the era in which these

00:06:11.040 | now declining cities prospered. These patterns are compatible with the view that individuals do

00:06:16.320 | not aim to maximize self-reported well-being or happiness, and that subjective well-being is better

00:06:22.560 | viewed as only one part of the utility function. In the past, the residents of now declining places

00:06:28.320 | were compensated financially for their unhappiness. But it is less clear what draws migrants to these

00:06:33.760 | unhappy places today. So when I read this through this study, and again, it's pretty short, it's

00:06:37.920 | only about 30 pages, pretty easy to read, although it does put a bunch of interesting equations in

00:06:44.000 | here to prove their point with the statistics of the adjustments that they made. But when I read

00:06:48.160 | this, it was very interesting to just kind of look through the thinking of it, and to see some of the

00:06:52.480 | differences in thinking and some of the different theories that these psychology researchers have

00:06:58.720 | as far as what may be responsible for these effects. And I'll read the conclusion here,

00:07:04.720 | but in general, the conclusion of the paper was that we don't quite know. And I'm fascinated by

00:07:09.760 | happiness literature, by some of the books that have been written. I think to me, this is a far

00:07:14.240 | more important goal that should be right at the top of our financial planning goals and agenda,

00:07:21.200 | beyond just maximizing financial or material wealth. It should be maximizing happiness.

00:07:26.720 | And some of the strategies that we employ to reach that point may include financial wealth,

00:07:34.000 | and some of them may not. But it just seems like a far more rational strategy. So they go through

00:07:39.440 | and give some of the different ideas about the attributes, whether it's income level.

00:07:45.680 | But one thing that they do point out in here that I think was the most interesting to me

00:07:50.160 | is talking about how we generally are going to be compensated for a lower happiness factor.

00:07:58.000 | So they report that in New York City, as would be intuitive, that in New York City,

00:08:05.200 | the wages are higher, but the level of happiness is down. And so one of the hypotheses that they

00:08:11.840 | explore is, is it true that people have to be compensated for their happiness, for their

00:08:19.360 | diminished happiness? And I think this, to me, this strikes me as intuitively true,

00:08:23.840 | that if you're going to do a job that is miserable, you might as well get paid a lot for it.

00:08:28.720 | And you wouldn't be willing if you had two jobs, one was miserable and one was happy,

00:08:32.640 | and they offer the same market price, then it would be very important. I would just assume

00:08:38.160 | most people would go with a job that would make them happy. So where is that trade-off, however?

00:08:42.400 | How much unhappiness are you willing to take for the additional wages? Or how much additional wage

00:08:48.880 | do you demand for the unhappiness that you're going to experience? So I encourage you to read

00:08:53.760 | the, check out the study, I think you'd enjoy it. Let me just read the conclusion here,

00:08:56.720 | because I think this conclusion is also valuable. "In this paper, we have documented significant

00:09:02.800 | differences in self-reported well-being across American cities that persist, even when we

00:09:08.080 | control for endogenous and exogenous demographics." So endogenous coming from within,

00:09:12.240 | exogenous coming from without, without the system. "And even when we control for individual fixed

00:09:17.680 | effects, these facts are not reliably correlated with many area-level attributes, but they do seem

00:09:22.960 | to be connected with urban decline across at least three large data sets. We do not interpret this

00:09:28.800 | correlation as a suggestion that population decline causes unhappiness. Indeed, cities that

00:09:34.800 | have declined also seem to have been unhappy in the past, which suggests that a better interpretation

00:09:41.280 | might be these areas were always unhappy, and that was one reason why they declined.

00:09:46.720 | Differences in happiness and subjective well-being across space weakly support the view that the

00:09:51.920 | desire for happiness and life satisfaction do not uniquely drive human ambitions. If we choose only

00:09:58.240 | that which maximizes our happiness, then individuals would presumably move to happier places

00:10:03.920 | until the point where rising rents and congestion eliminated the joys of that locale. An alternative

00:10:10.400 | view is that humans are quite understandably willing to sacrifice both happiness and life

00:10:14.720 | satisfaction if the price is right. This viewpoint rationalizes the well-known tendency of parents to

00:10:21.440 | report lower levels of happiness and life satisfaction." And inserting a point there,

00:10:26.960 | they talk about that earlier in the study, that evidently young parents of young children and

00:10:31.200 | parents report lower satisfaction and happiness than do married people without children. However,

00:10:39.360 | that seems to be offset by the advantages of having progeny, being able to continue your

00:10:44.480 | lineage, and some of the other advantages. I don't buy that from me, but I do understand how that

00:10:50.000 | could be true across the board. I really enjoy my son and being a parent. I think it's one of the

00:10:56.800 | most fulfilling things that I can do, but not everyone has to agree with me. Continuing on,

00:11:03.440 | "This viewpoint rationalizes the well-known tendency of parents to report lower levels

00:11:07.200 | of happiness and life satisfaction. Indeed, the residents of unhappier metropolitan areas today

00:11:13.120 | do receive higher wages, presumably as compensation for their misery. Declining

00:11:19.120 | cities seem also to have been unhappy during the past, but in 1940, the cities that did decline

00:11:24.160 | earned outsized incomes and paid little in higher rents. The industrial cities of the Midwest may

00:11:29.520 | have reported lower happiness levels, but their residents were getting richer as a result.

00:11:34.480 | As transportation technology freed industry from the Great Lakes and the coal mines, we should not

00:11:38.880 | be surprised that people left less pleasant locations, but there remains a puzzle. Today,

00:11:44.400 | the residents of cities that declined are not receiving higher wages, and they do not seem to

00:11:48.480 | be paying lower rents either. We leave the quest of understanding how this constitutes an equilibrium

00:11:53.920 | to future work." So the takeaway that I would take away, and that I would encourage you to consider,

00:11:59.440 | and I try to apply all these articles to, what can I as an individual do? Consider your personal

00:12:05.840 | happiness scale. I don't know necessarily how to measure that, but consider your personal

00:12:09.440 | happiness scale and consider, are you being compensated for any misery that you're choosing

00:12:14.560 | to go under? And so whether that's misery at a low state, so a long commute, whether that's misery at

00:12:20.960 | a more intense state, a very stressful job, but just ask yourself, are you being compensated for

00:12:25.920 | it? And figure out if you're being compensated on it. And you can always adjust. So don't worry

00:12:34.400 | about the population in general adjusting. If you live in a miserable city and you have a miserable

00:12:38.640 | job, change it. Like my little joke that I always understand is if you're a bum in Chicago or New

00:12:46.800 | York or one of these places where it's cold, why would you not go be a bum in Hawaii? Why would you

00:12:51.840 | not go be a bum in Florida? Even if you've got to walk there or hitchhike there or something,

00:12:55.520 | at least go where you're not cold every day. So we can all do the same thing. We can all do the

00:13:00.640 | same thing with ourselves. So this led me, this article led me to an interesting, I wanted to

00:13:06.160 | explore some of the other research that Harvard has done on happiness, and I came across something

00:13:10.560 | I had never read about, which was the Grant Study, which according to now my research is one of the

00:13:16.560 | longest running longitudinal studies of human development. The project began in 1938 and it

00:13:23.280 | has followed 268 Harvard undergraduate men for 75 years, measuring an astonishing range of

00:13:30.160 | psychological, anthropological, and physical traits, from personality type to IQ, drinking

00:13:36.240 | habits, family relationships to physical characteristics, in an effort to determine

00:13:41.120 | what factors contribute most strongly to human flourishing. And so there's this interesting study

00:13:46.720 | that I found, I actually discovered that in this study, John F. Kennedy, President John F. Kennedy

00:13:52.800 | was actually part of this original base of people that were being researched. And so a man named

00:14:00.240 | George Valand, as a Harvard psychiatrist, he directed the study from 1974 to 2004, and he's

00:14:07.120 | written various books about it. I'm going to read from one article here about some of the overview

00:14:13.840 | of his output, of his results, but I've added a couple of his books to my reading list. One of

00:14:19.840 | them is called Aging Well, Surprising Guideposts to a Happier Life from the Landmark Study of Adult

00:14:25.040 | Development. And the other one is actually I'm probably most interested in, it's called, well

00:14:30.320 | these are both well, these are both interesting. The other one is called Triumphs of Experience,

00:14:35.440 | the Men of the Harvard Grant Study. And there's some takeaways that I'm going to read from the

00:14:39.120 | synopsis of those books in just a moment. But here's a summary of the five outputs that George

00:14:46.480 | Valand talked about, five lessons from the Grant Study, and I'll read this from a Huffington Post

00:14:52.080 | article. So below, five lessons from the Grant Study to apply to your own pursuit of a happier

00:14:56.640 | and more meaningful life. Love is really all that matters. It may seem obvious, but that doesn't

00:15:03.040 | make it any less true. Love is key to a happy and fulfilling life. As Valand puts it, there are two

00:15:08.960 | pillars of happiness. "One is love," he writes, "the other is finding a way of coping with life

00:15:14.640 | that does not push love away." Valand has said the study's most important finding is that the only

00:15:21.200 | thing that matters in life is relationships. A man could have a successful career, money, and good

00:15:26.720 | physical health, but without supportive, loving relationships, he wouldn't be happy.

00:15:32.800 | Happiness is only the cart. Love is the horse. It's about more than money and power. The Grant

00:15:39.440 | Study's findings echoed those of other studies, that acquiring more money and power doesn't

00:15:44.800 | correlate to greater happiness. That's not to say money or traditional career success don't matter,

00:15:50.720 | but they're small parts of a much larger picture. And while they may loom large for us in the

00:15:55.600 | moment, they diminish in importance when viewed in the context of a full life. "We found that

00:16:01.920 | contentment in the late '70s was not even suggestively associated with parental social class

00:16:07.840 | or even the man's own income," says Valand. "In terms of achievement, the only thing that matters

00:16:12.720 | is that you be content at your work." Regardless of how we begin life, we can all become happier.

00:16:19.440 | A man named Godfrey Minot-Camille went into the Grant Study with fairly bleak prospects for life

00:16:24.800 | satisfaction. He had the lowest rating for future stability of all the subjects, and he had

00:16:29.760 | previously attempted suicide. But at the end of his life, he was one of the happiest. Why?

00:16:35.360 | As Valand explains, "He spent his life searching for love." Connection is crucial. "Joy is

00:16:43.920 | connection," Valand says. "The more areas in your life you can make connection, the better."

00:16:48.560 | The study found strong relationships to be far and away the strongest predictor of life satisfaction.

00:16:54.000 | And in terms of career satisfaction, too, feeling connected to one's work was far more important

00:16:58.960 | than making money or achieving traditional success. "The conclusion of the study, not in a medical but

00:17:04.960 | in a psychological sense, is that connection is the whole shooting match," says Valand.

00:17:09.360 | As life goes on, connections become even more important. The Grant Study provides strong

00:17:14.640 | support for the growing body of research that has linked social ties with longevity,

00:17:20.000 | lower stress levels, and improved overall well-being. Challenges and the perspective

00:17:26.000 | they give you can make you happier. "The journey from immaturity to maturity," says Valand,

00:17:32.080 | "is a sort of movement from narcissism to connection. And a big part of this shift has

00:17:37.120 | to do with the way we deal with challenges." Coping mechanisms, the capacity to make gold

00:17:43.520 | out of junk, as Valand puts it, have a significant effect on social support and overall well-being.

00:17:48.960 | The secret is replacing narcissism, a single-minded focus on one's own emotional

00:17:54.000 | oscillations and perceived problems, with mature coping defenses, Valand explains,

00:17:59.120 | citing Mother Teresa and Beethoven as examples. "Mother Teresa had a perfectly terrible childhood,

00:18:04.960 | and her inner spiritual life was very painful," says Valand, "but she had a highly successful

00:18:09.920 | life by caring about other people." Creative expression is another way to productively deal

00:18:15.200 | with challenges and achieve meaning and well-being. "The secret of Beethoven being able to cope with

00:18:20.320 | misery through his art was when he wrote Ode to Joy," says Valand. "Beethoven was able to make

00:18:26.160 | connection with his music." So I find that really interesting, a really interesting article, and

00:18:32.000 | just simply connecting that ultimately love and connections are incredibly important,

00:18:38.720 | incredibly important. And this is one of the things that I observe in my own life as a constant

00:18:43.440 | challenge and then in other people's lives as well, is there is a need for prioritizing

00:18:47.760 | financial achievement, there is a need to prioritizing financial steps, but if you do it

00:18:52.320 | to the exclusion of love, connections, relationships, and doing work that matters, it's very

00:18:58.080 | likely that it may not make you happy. And you see this a lot of times with the research that's done

00:19:03.280 | on lotto winners, you see this with the research that's done on trust fund kids, you see this,

00:19:09.840 | that achievement, that the need to do something, the need to work and to be productive,

00:19:17.600 | and the need to meet a challenge is directly related to your success. And so the idea that

00:19:28.800 | we're just going to walk away from work, the idea that we're going to walk away from challenge,

00:19:35.280 | and that we're just going to get to the point where life is hunky-dory and there's no need to,

00:19:38.880 | there's no need to work. I mean this is a real problem that we've got to be aware of.

00:19:45.920 | I've been reading the book called You're Not That Great by Daniel Crosby, and he goes into,

00:19:51.520 | I think I mentioned this on a previous show, he goes into in detail on the research on

00:19:56.160 | self-esteem and what he finds is that the biggest predict, one of the biggest predictors of people

00:20:00.480 | with self-esteem and success is not being told that you are just good at something,

00:20:04.800 | that you're skilled at something, but rather those who work have to work and have to work

00:20:09.600 | at achieving something. And so it's far more powerful to compliment your children on the

00:20:15.680 | work that they put into something rather than it is to tell them that they're just very good at it.

00:20:20.000 | And so I find it really interesting, I find it really interesting, the study, and I'm interested

00:20:25.920 | in reading a couple of these books about the Grant study. So also one thing I'm going to pull

00:20:30.960 | from the Wikipedia article in the Grant study, so he talks about alcoholism as a major problem,

00:20:35.840 | major cause of divorce, neuroses, and depression, and that follows alcohol abuse rather than

00:20:40.640 | preceding it. And alcoholism with the associated cigarette smoking is the single greatest

00:20:45.920 | contributor to people's early morbidity and death, which those are the same thing, so I don't know

00:20:50.640 | why they put both words in there. You can tell that Wikipedia contributor, morbidity means death.

00:20:55.520 | Financial success, however, here's the point I want to make, financial success depends on

00:20:59.760 | warmth of relationships and above a certain level, not on intelligence. So this is interesting,

00:21:06.960 | those who scored highest on measurements of warm relationships earned an average of $141,000 a

00:21:13.440 | year more at their peak salaries, usually between ages 55 and 60. And there was no significant

00:21:20.000 | difference in maximum income earned by men with IQs in the 110 to 115 range and men with IQs

00:21:27.440 | higher than 150. To me, this is a major takeaway, and we're going to go right next after this into

00:21:33.360 | some jobs discussions and some articles that I found on employment figures. But the ability to

00:21:38.240 | be socially competent, the ability to develop and maintain good relationships is a major,

00:21:43.520 | major contributing factor to success in life, including financial success. I remember reading

00:21:49.280 | a book, I think it was popular in the 80s or 90s, I don't remember, but it's called Emotional

00:21:53.280 | Intelligence. And it was talking about how one of the greatest predictors of people's success in

00:21:59.360 | life was their emotional intelligence, their ability to empathize with other people. And to

00:22:03.760 | me, this makes intuitive sense. I don't remember the research that was done in that book as far as

00:22:08.560 | from a statistical basis. But to me, this makes intuitive sense. Because in work, in life, and in

00:22:15.600 | relationships, everything that we do is based upon our work with others. And everything that we do,

00:22:20.720 | we have to interact with human beings. And so the people who are the most effective and the most

00:22:25.440 | skilled at interacting with other human beings and leading them and inspiring them, whether this is

00:22:30.880 | in a marriage, interacting with your spouse and inspiring that person to continue to love you,

00:22:35.840 | to inspiring that person to continue to work with you towards the achievement of common goals,

00:22:40.800 | whether this is in companies, whether this is in communication. If we can't inspire other people

00:22:46.880 | and really have positive relationships, it's very difficult to understand how to make a lot of

00:22:59.600 | money. So if you're not making very much, if you're struggling with your income, consider more

00:23:06.640 | or in addition to learning technical skills, spend some time considering developing and

00:23:12.320 | practicing social skills. The good thing is the social skills are learned. And a lot of times,

00:23:18.320 | if our parents were very skilled socially, the ability to maintain healthy relationships,

00:23:24.480 | that can be a major benefit for us. And then we can intuitively just pass that along.

00:23:31.200 | Now, one other thing I want to point out from this research by

00:23:33.760 | Valen, or excuse me, Valen, George Valen from this book, looking from his book called Aging

00:23:40.160 | Well, the Surprising Guideposts to a Happier Life from the Landmark Study of Adult Development.

00:23:45.280 | So this is an interesting, this seems like an interesting book to me. And in the Amazon

00:23:51.120 | review, the editorial review here, one of the things that I thought that was really, really key,

00:23:56.240 | and again, this is primarily interviews with people in their 70s and their 80s.

00:24:01.760 | And I love talking to old people because I figure you're talking with old people,

00:24:05.680 | you're going to get a bit of a perspective into the things you should pay attention to when you

00:24:09.040 | knew. And I've read various of these books. There's lots of them out there, but this one's

00:24:12.160 | interesting to me. One paragraph here. We also learn what makes old age vital and interesting.

00:24:18.080 | Valen discusses the important adult developmental tasks such as identity, intimacy, and generativity

00:24:26.080 | giving to the next generation and provides important clues to a healthy, meaningful,

00:24:31.520 | satisfying old age. Health in old age, we learn, is not predicted by low cholesterol or ancestral

00:24:38.480 | longevity, but by factors such as a stable marriage, adaptive coping style, which is the

00:24:44.480 | ability to make lemonade out of life's lemons, and regular exercise. Valen is empathetic and

00:24:51.200 | sometimes surprisingly poetic. Owning an old brain, you see, is rather like owning an old car.

00:24:57.120 | Careful driving and maintenance are everything. So to me, this is a fascinating point, just in

00:25:02.880 | this summary, is that health is predicted not by low cholesterol, but by factors such as a

00:25:07.760 | stable marriage, adaptive coping style, and regular exercise. So I struggle with the exercise

00:25:13.680 | bit. I'm trying to transform that habit, but I've never found exercise that I've enjoyed and

00:25:17.760 | really working hard to figure out how to incentivize myself to make that a lifelong habit,

00:25:22.080 | because whether it's from preventing Alzheimer's disease or aging effectively or just maintaining

00:25:27.680 | physical health, that's always been a struggle for me. So I'm working on that one. The adaptive

00:25:31.920 | coping style I see is really valuable. It is also the importance, the ability to say, no matter what

00:25:36.960 | the challenge is going to be okay. And I think we can really do a lot with that with good financial

00:25:41.760 | planning. By always having a backup plan and by really developing a good financial plan,

00:25:45.760 | we can have backup plans. And then by not overstressing ourselves. So for example,

00:25:50.080 | maybe not staying out of debt, not going deeply into debt to fund a business venture, where the

00:25:55.280 | pain of failure can be more than the pain of success. Maybe better to avoid some of those

00:25:59.600 | difficult situations, but yet still realizing and doing it in an intelligent way, like I talk about,

00:26:04.240 | do it in an intelligent way, so that if all goes wrong, life does not end at bankruptcy. Life does

00:26:09.200 | not end at credit card debt. It continues going on. And then also factors such as a stable marriage.

00:26:14.480 | So having a stable marriage. I'll tell you the number one biggest financial mistake that I see

00:26:19.280 | in financial planning work, getting divorced. So if we can avoid that and build a stable marriage

00:26:24.320 | over time, this can make a dramatic difference in our personal happiness and well-being.

00:26:30.480 | And I'm using his book here as evidence towards my hypothesis and also towards our financial

00:26:38.960 | well-being. It is very expensive and a major problem of getting divorced. Both because,

00:26:43.760 | in general, divorce will split up assets, but it also just divides the economies of scale.

00:26:48.720 | So two people living and working together have major economies of scale that are not available

00:26:54.560 | to one person on their own. So just simply consider that in your own financial planning

00:26:59.120 | and make sure that you are giving time and attention. Like I talk about with alternative

00:27:04.480 | investments, it may be a better investment to take a weekend, hire a babysitter for the kids,

00:27:09.920 | and go to a marriage retreat or a marriage seminar with your spouse. That may be a better

00:27:15.200 | investment than putting money into your IRA. Not saying it always is, but maybe better than putting

00:27:20.080 | money in your IRA. So consider that and consider giving yourself permission to spend on those

00:27:24.080 | things. Investing in a gym membership likely would be a better investment than putting money

00:27:29.600 | into the IRA. I remember there's a famous quote by Richard Branson talking about how exercise gives

00:27:35.120 | him a couple of additional hours of productivity every day. And I personally struggle with this

00:27:39.840 | one because I hate to spend money on a gym. I hate to spend that money, but yet I don't seem

00:27:45.520 | to have the internal discipline and motivation to force myself to daily be active without it.

00:27:52.320 | So I kind of have to justify it saying this is an investment. By investing in my health,

00:27:58.080 | that will pay off major dividends. That will pay off major dividends. All right, moving on to

00:28:02.880 | job numbers. So I find the job numbers interesting. And so in job numbers, we're going to read here

00:28:09.680 | from a Yahoo Finance article from this morning, July 21 at 10 a.m. So this is NABE survey points

00:28:16.800 | to rising U.S. wage pressures. And this is a Reuters story. And I'm going to read a couple

00:28:21.600 | paragraphs here. Washington, Reuters. The share of U.S. companies raising wages more than doubled

00:28:27.360 | in three months to July from a year ago, a survey showed on Monday suggesting a faster pace of wage

00:28:33.280 | growth. The National Association for Business Economics, NABE, latest business conditions

00:28:38.320 | survey found that 43 percent of the 79 economists who participated said their firms had increased

00:28:44.800 | wages. That compared to only 19 percent last year and marked that compared to only 19 percent last

00:28:53.120 | year and marked an increase from 35 percent in the three months to April. That was confusing.

00:28:57.600 | Quote, for the third survey in a row, an increasing share of panelists reported rising wage costs last

00:29:02.880 | quarter, said NABE President Jack Kleinheinz, who was also chief economist at the National

00:29:07.760 | Retail Federation. It was the first time since October 2012 that no respondents reported declining

00:29:14.000 | wages at their firms. The economists represented a broad spectrum of businesses, including goods

00:29:19.200 | producing, transportation, finance and services industries. Forty percent of the firms employ

00:29:24.080 | more than 1,000 people. So I'm going to skip some of the paragraphs here and skip to the end here.

00:29:28.240 | One last paragraph. It says, while the share of businesses reporting that they could not find

00:29:34.320 | qualified workers slipped three-tenths of a percentage point to 22 percent,

00:29:38.880 | skills shortages remained the dominant theme. I want to focus on that. There is very much

00:29:47.040 | a supply and demand relationship with employment. So assume you ignore everything I say with

00:29:51.680 | entrepreneurship and you want to stay in the world of employment. Absolutely nothing wrong

00:29:57.600 | with that if that's the path that you choose. But consider this paragraph. Skills shortages

00:30:04.080 | remained the dominant theme. In every study and everything I read about employment, I find this.

00:30:09.280 | Right now, people say, "Well, there's high unemployment." But the thing is that there's not.

00:30:14.320 | But it depends on the segment. So anytime you read articles and say, "Well, there's massive

00:30:19.280 | unemployment. Look, the economy is terrible." There are businesses and there are industries

00:30:23.200 | in which jobs are booming that are absolutely just taking off in an incredible way. But then

00:30:29.120 | there are industries and businesses where there is nothing, where there are no financial prospects.

00:30:34.000 | And the key is that it is -- here's one thing I'd like to share. If you've never hired somebody,

00:30:39.040 | I would encourage you to figure out how to start a business and get yourself in the position of

00:30:42.080 | hiring someone. And then even if you choose to never be an entrepreneur again, and you want to

00:30:46.480 | be in a situation where you just simply work for other people, you will have an opportunity then

00:30:51.040 | to appreciate how challenging it is to find good help and how challenging it is to find someone

00:30:56.960 | who is able to help you with what you need. And hiring people is one of the most difficult

00:31:01.680 | things that employers do. Employers want employees, but they want skilled employees.

00:31:07.440 | And so your job prospects do not come from how great your resume is, unless your resume is

00:31:13.120 | reflecting skills. They don't come from how good at interviewing you are, unless your interview

00:31:18.160 | is conveying skills. So spend less time on here's how to interview, although I think that's probably

00:31:23.600 | one important piece, and spend more time developing skills. And a lot of times we have this

00:31:28.960 | the other way around. We say, "Well, I'm going to demand more from an employer. I'm going to go out,

00:31:32.240 | I'm going to ask for more, and then I'm going to go ahead and develop the skills." Why don't you

00:31:36.320 | start by developing the skills first? And skill acquisition can be done at a very cheap price in

00:31:42.320 | today's world. So if you find yourself in a difficult financial position, spend some time

00:31:47.360 | thinking about what would be your ideal job, ideal business, ideal industry, and then figure out,

00:31:53.200 | "What do I need to do to develop skills? What do I need to do to develop skills in an area that is

00:32:00.080 | in demand?" So one article I want to reference here, this is from Clark Howard's blog, and his

00:32:06.640 | is called "Top 10 Jobs in Demand Right Now," and this was posted July 9th, so a couple weeks ago,

00:32:11.600 | by Clark Howard. "We're in an age when there's real disconnect between skill sets and job

00:32:16.240 | openings. That's created a lot of demand in some high-paying fields. Many of the job openings that

00:32:22.960 | are going unfilled require you to go back to school to get more education. STEM jobs, which

00:32:29.600 | involves the field of science, technology, engineering, or math, are particularly hot

00:32:35.760 | right now. Here's a partial list of the kinds of jobs that are available along with average starting

00:32:41.840 | salary. Top 10 jobs with lots of openings and great starting salaries. Petroleum engineers start

00:32:47.520 | at $85,000. Senior landmen start at $55,000. Software engineers start at $60,000. Electrical

00:32:55.600 | engineers start at $60,000. Mechanical engineers start at $55,000. Software developers start at

00:33:01.840 | $55,000. Financial analysts start at $50,000. Communication coordinators start at $35,000.

00:33:08.560 | Marketing coordinators start at $35,000. Certified public accountants start at $45,000.

00:33:15.360 | Continuing education is core to our future as a nation. You've got to morph yourself over time to

00:33:20.400 | fit the job market as it changes over time. That's key to our future, now and tomorrow.

00:33:26.320 | Other top careers in demand might surprise you. If you're looking for work and you don't want to go

00:33:31.520 | back to a traditional four-year college, there's one industry you might want to consider with

00:33:35.680 | average pay around $50,000. It's trucking. Now, I know truckers themselves will tell you theirs

00:33:41.520 | isn't a field you should enter into lightly. But if you're unemployed or involuntarily working

00:33:46.000 | part-time, you might want to give this a second look. Trucking companies are so short of workers

00:33:50.880 | to drive loads that they're having to turn away business, according to the Wall Street Journal.

00:33:55.360 | You may have heard deliveries have been late because of this. Just-in-time delivery for

00:33:59.680 | factories will be the next domino to fall. Factories that run on lean inventories with

00:34:04.160 | just hours of parts in stock have long relied on trucks to be their warehouse. But if the current

00:34:09.520 | vacancies in trucking continue, those factories are going to need inventory on hand and will find

00:34:14.960 | themselves in a real bind. Maybe trucking is not what you're interested in, but there are

00:34:19.920 | opportunities out there and it is possible to find some careers in demand that might be a better fit.

00:34:24.720 | One of the best ideas is to move to where the work is. America's heartland is rolling in jobs and

00:34:30.640 | riches. Our nation's heartland is derisively labeled "flyover country" by media types in New

00:34:36.480 | York and Los Angeles. But the nation's breadbasket is actually overflowing with bread, according to

00:34:41.280 | recent data from the Bureau of Economic Analysis. Per capita income is up roughly 4% over the last

00:34:46.880 | four years for the 50-plus million who live in the heartland. This is a reversal of a long-standing

00:34:52.640 | trend where wealth flowed to coastal metropolises like New York and Los Angeles. USA Today reports

00:35:00.480 | America's midsection is doing just fine. For example, North Dakota has high-paying jobs in

00:35:05.840 | the booming energy industry going unfilled and there is a severe shortage of housing for workers.

00:35:11.120 | Just to give you an idea, I've heard anecdotally and read reports that jobs at McDonald's start at

00:35:17.360 | $17 an hour in some locales in North Dakota. That right there gives you an idea of prevailing wages

00:35:23.440 | in other sectors of the economy. So North Dakota and its heartland neighbors offer an opportunity

00:35:28.160 | that so many have overlooked. Sully County in South Dakota was singled out as another place

00:35:32.800 | that experienced per capita income growth of 70% over the course of the last four years.

00:35:38.000 | Of course, living and working in these places comes with a sacrifice involving the severe winters.

00:35:43.360 | You've got to be a hardy sort to deal with it, to be sure. But the idea is we've always been a

00:35:47.920 | people to migrate where the opportunity is. A lot of us couldn't move because of the housing

00:35:52.320 | lock during the recession. Yet today we have fewer people upside down in their homes. So we are in a

00:35:57.520 | time when most of us, if we choose, can be on the move. Now you may not be of a mind to pick up and

00:36:02.800 | relocate. Though if having more opportunity for yourself, your future, or your family is top

00:36:07.360 | priority, then being on the move is something you might want to at least consider. So I think Clark

00:36:12.640 | did a great job with this article and I really respect him. He's one of my favorite commentators.

00:36:19.280 | He does a good job with his show and I would encourage you to listen to it. I think you would

00:36:22.160 | enjoy it. He does a really good job with the constraints that are on him as far as producing

00:36:26.320 | a popular entertainment show. And he's authentic and sincere in my opinion. So he does a good job.

00:36:32.160 | So I want to tie these articles together and talk about how all of these things can connect.

00:36:38.080 | And here's why. Anytime you look at a massive across the board analysis, it's going to show

00:36:47.280 | an average. But you are not average. You can do something different. You have the choice.

00:36:53.760 | So I don't have any plan that's going to fix all of the economic problems of the world,

00:36:57.840 | but we could design dozens and dozens and dozens of potential plans to fix all of your economic

00:37:03.280 | problems or all of my economic problems. Now everything comes with choices and trade-offs.

00:37:07.760 | There's an opportunity cost to every single course of action that we pursue. Some courses

00:37:13.120 | of action we may be willing to accept those opportunity costs. Some courses of action we

00:37:17.360 | may not be willing to accept those opportunity costs. And it will be different for each of us.

00:37:21.440 | But I'll give you an example of one example that I heard. I was in a cigar shop maybe seven or eight

00:37:26.320 | years ago. I enjoy hanging out if you're not a cigar smoker. I enjoy hanging out in cigar shops

00:37:31.840 | because you got nice couches. You got leather couches. You can sit and you can just chat with

00:37:36.560 | people on an ongoing period of time. I tell my wife it's the last remaining bastion of manliness,

00:37:41.120 | that and the barbershop if you get a good male-oriented barbershop if you're a guy.

00:37:46.640 | So I'm in this cigar shop and I was in there and it was a morning on something like a midweekday

00:37:51.680 | morning. And I was in there because I was avoiding work that I needed to be doing. I was avoiding

00:37:55.680 | the difficult work of picking up the phone and calling prospects and clients for

00:37:59.680 | my financial planning business. So I was avoiding that and wasting time. And I'm sitting there

00:38:05.680 | talking to this guy who was clearly financially independent. He was wealthy and he was just

00:38:10.480 | sitting there enjoying a cigar. And he was a neat guy. I don't remember what his name was.

00:38:15.280 | A real big black guy. Just a real neat guy. And we talked for quite a while. And he was telling

00:38:20.480 | me about his experience. And he was talking about his experience of trucking. And I asked him how

00:38:29.600 | he built his wealth. And he said, "Well, I was flat on my back and I went and I got a trucking job.

00:38:34.160 | And I didn't have a place to live. I lived in my truck. And then I sold that one. I bought a truck

00:38:38.080 | of my own and I built a trucking company up. And I built this trucking company and I built it to,

00:38:42.160 | I don't remember how many trucks he had, but he had a couple dozen trucks. And then I sold it and

00:38:45.680 | I retired." And we were talking. He was just sharing some of his business lessons. And an

00:38:50.320 | awesome, awesome experience. Real big guy. Never had any formal business training or never had any

00:39:00.640 | formal education. But he had figured out this path to allow him to achieve what he was looking to

00:39:06.480 | achieve. And so when I read stories like this, my mind kind of bursts with ideas that could be put

00:39:12.240 | in place. So let's say that you wanted to, let's say that you read this job. Let's just go based

00:39:16.480 | upon Clark Howard's article. And hear me out. I'm not saying what you should do. You got to design

00:39:20.320 | what you should do. I wouldn't follow necessarily all these plans I'm about to spit out. But here's

00:39:24.000 | how I could see these things coordinated. So you want one of these top 10 jobs. You're unemployed.

00:39:29.040 | You're unemployed and don't have any money. You're totally broke. You are mid-career, you're midlife

00:39:34.560 | or something like that. You're unemployed and don't have any money. And you would like to call

00:39:38.000 | a financial planner, but you don't have any ideas about how things could go better. You don't have

00:39:41.520 | any marketable skills. You don't have any ability. You don't have any marketable skills. All right.

00:39:45.920 | So you read this list of top 10 jobs and you just pick one. And it says, "Software developers start

00:39:50.000 | at $55,000." And I'm picking that because it's a little bit easier. I've never been an electrical

00:39:56.080 | engineer. But any of these, you could do these with any of these. So you say, "Here's a top 10

00:40:00.000 | job with lots of openings and a great starting salaries. But I don't have any skills." Well,

00:40:04.320 | what I could do is I could become a trucker. So you could say, "I could become a trucker

00:40:08.320 | and I'm going to go and do that. And I should, whether it takes me a couple of

00:40:12.480 | weekends to learn how to drive a big rig. And I know this is a challenging field,

00:40:16.720 | but I don't want to do it forever, but I'm going to do it for a period of time. So I'm going to

00:40:20.080 | learn how to drive a big rig. And I'm going to take a long haul over the road trucking job."

00:40:23.920 | Well, so you go and shoot, maybe you have to put the money on a credit card to go to school and go

00:40:29.200 | to your trucking school and get your class A trucking license. Then you sell your stuff and

00:40:34.000 | you move into the truck. Now, is this something fun that you should do forever? No, but I can

00:40:37.840 | make a way to make it fun. So first of all, if you're willing to just be on the road full time,

00:40:42.480 | you could probably afford to work for someone who has a nice truck where they've got a big

00:40:46.240 | sleeper in it or get your own that's a nice truck that has a big sleeper in it. So you basically

00:40:52.480 | have a small RV that you're living in. Truckers are mandated only a certain number of hours that

00:40:58.000 | you have to drive every day. So I love going to truck stops with my wife and I travel. And you'll

00:41:03.040 | see the truckers are always in there on their rest. They're sitting there watching TV. They're

00:41:06.240 | sitting there reading newspapers. Now, I know not all of them, but I watch a lot of them standing

00:41:10.160 | out in the parking lot talking to each other. I see a lot of people really just wasting time.

00:41:13.920 | Now, everyone has the... I'm not mad at people for wasting time. That's fine. But think about

00:41:17.840 | the time that you have available when you live in your house and you work in your house and you're

00:41:21.840 | on the road. With the world of podcasting, with the world of the internet, with the world of

00:41:26.560 | YouTube, with the world of iTunes University, with the world of massive open online coursework,

00:41:32.000 | or in the world of Stanford where they have unlimited employment opportunities, unlimited

00:41:38.720 | classes distributed for free online. Why don't you turn your drive time into learning time,

00:41:42.960 | listening to podcasts, learning about coding, listening to classes, and do your best to listen

00:41:46.960 | to the non-technical stuff while you are driving. And then when you're parked and on your rest time,

00:41:51.920 | take your rest time and take your time relaxing. But when you're parked, when you're off duty,

00:41:56.240 | then you have the ability to do the technical coursework. Take your computer, learn online,

00:42:02.560 | develop the ability or the skill to become a CPA. Study for the CPA exam. Develop the skill. And so

00:42:07.760 | with the CPA, I think you have to have a college degree. So maybe you need to go and get a study

00:42:11.360 | online college degree from an inexpensive provider. And then you can sit for the CPA exam

00:42:18.640 | and study that while you are trucking across the country. Live in your truck, save 90% of your

00:42:23.360 | income. If you're feeling deprived because you're living in a truck, then take some of the money

00:42:27.600 | that instead of spending it on rent in an apartment that you're never in, take some of the money and

00:42:32.160 | spend it on going to fun resort places and hanging out in fancy hotels while you're on your weekends

00:42:40.800 | off or whatever it is that you have. So this is something that husbands and wives could do.

00:42:45.680 | I bet it's something that could be done with kids, although that would not be my first thing. It may

00:42:48.960 | be easier for a single person. I've heard of long haul trucking teams of couples that in their 50s

00:42:54.880 | or 60s didn't have any money. And they said, well, let's go get paid to go see the world,

00:42:57.760 | see the country from the interstate and save almost 100% of their income. And by not having

00:43:03.760 | to support the lifestyle at home, you can save almost 100% of your income and build up a financial

00:43:08.080 | nest egg and have an incredible start to life. So this is just one example. I don't know if that's

00:43:14.000 | right. I've never been a trucker. I'm sure it's a difficult job. I know it is. I know you spend a

00:43:17.920 | lot of hours. But it's the type of thing where you could apply a couple of these things to your

00:43:23.440 | situation. You could go be a trucker up in North and South Dakota. You can go up there. You can

00:43:27.360 | bank that money. You can buy a cheap camper and go and work at McDonald's up in South Dakota or

00:43:34.320 | North Dakota, make 17 bucks an hour, save the money, and build your education. So you can do

00:43:39.200 | these kinds of things. You can exploit the inefficiencies that exist in this market.

00:43:45.360 | And you could get your education needs that you need to go into one of these higher demand jobs.

00:43:49.600 | And over a period of time, three, four, five years, I don't know, you could build a plan that works.

00:43:54.480 | So that would just be an example of how when I read these articles, I say, "Well, yes, there are

00:43:58.080 | these large overall systemic problems, but yet there's a lot that can be done to exploit your

00:44:07.840 | own situation and to build in your own advantages." Look for an area where you can exploit an

00:44:12.560 | inefficiency in the marketplace to build a better plan for yourself. And that would be one example

00:44:18.000 | that I thought of when thinking about these jobs. Also, as Clark pointed out in his article, don't

00:44:21.600 | be scared to move. If you are willing to move, don't be scared to change jobs, change industries,

00:44:27.520 | if that's something that you can do and are willing to do. A lighter note here,

00:44:33.120 | Amazon officially announces the Kindle Unlimited, offering endless reading and listening for $9.99

00:44:38.240 | a month. So I thought this was a cool announcement that I found last week, that Amazon is offering

00:44:43.280 | over 600,000 books for free reading on the Kindle and Kindle enabled devices, as well as thousands

00:44:48.480 | of audio books from Audible. So I thought this was pretty cool. And it's a neat development in

00:44:53.920 | that marketplace. And if you're living in a truck and working in a truck, then you might be in a

00:44:58.080 | good position where you are able to exploit this. And for $10 a month, you've got an unlimited

00:45:03.120 | library without having to go to an actual physical library. So consider this. Now, I found one article

00:45:10.480 | by Jonathan Ping over at My Money Blog, and he had checked out his article. It's called Kindle

00:45:16.160 | Unlimited Review, Personal Finance and Investing Books. So the claim is that they claim over 600,000

00:45:23.040 | titles, Amazon does, in their library. All of that number is padded by a lot of little-known

00:45:27.280 | self-published e-books. Thousands of those books come with free audio book versions. You can read

00:45:32.720 | unlimited books, maximum 10 out at once, and on any Kindle app. It's a library card with 24/7

00:45:37.840 | instant availability. But how well-stocked is this virtual library? So he made a listing of his

00:45:42.880 | personal finance books that he takes out. So he's got a list here of William Bernstein's

00:45:51.200 | recommended reading list for young investors, and Millionaire Next Door, not available on this right

00:45:55.760 | now. Common Sense on Mutual Funds, no. Devil Take the Hindmost, no. Great Depression, no.

00:46:01.200 | Your Money and Your Brain, no. How a Second Grader Beats Wall Street, no. All About Asset

00:46:05.680 | Allocation, no. Flash Boys, yes. Pound Foolish, no. Think Like a Freak, no. Capital in the 21st

00:46:11.680 | Century, yes. Thinking Fast and Slow, no. And then his five personal favorite financial books,

00:46:16.480 | Your Money or Your Life, Work Less, Live More, The Richest Man in Babylon, The Four Pillars of

00:46:20.240 | Investing in a Random Walk Down Wall Street, no. So sounds like if you're interested in the personal

00:46:25.120 | finance space, this probably isn't going to work right yet. But I would say this is just the start,

00:46:29.600 | and this is going to be an amazing development over time, where when Amazon is offering this for

00:46:35.040 | Kindle, that there's an opportunity to do that. And there's an amazing opportunity here to,

00:46:40.160 | on a very low price, get unlimited access to books. And that's going to be a really great

00:46:45.360 | development in the market. And I'm sure that the access to the personal and finance sections will

00:46:51.280 | change over time. And so I'm sure that this is a good development. I'm pretty excited about it.

00:46:55.120 | Check it out. See if it will serve you, and see if it's something that you can implement in your

00:46:59.280 | own life. Next story here is from Yahoo Finance, and the title is called The Myth of Economic

00:47:06.320 | Patriotism. And the byline here is July 17. And I thought this was a fun article. I'm going to

00:47:11.920 | point it out to you, because I thought it was a good illustration of how no matter what the

00:47:17.760 | political situation is, you will always have companies that can work around it and work

00:47:22.800 | through it, and they will make decisions that are in the best interest of their owners. So I am a

00:47:28.240 | political pessimist with any ability to change things politically. But I do think that as people,

00:47:34.080 | as politicians, do stupid things, pass more legislation, take more money, you will always

00:47:39.200 | have people making decisions. And people are going to make decisions. And there's a point in time

00:47:45.440 | at which we'll all say, "Okay, that's enough." Now, this is why you've seen, in reality, very

00:47:54.880 | little change in individual income tax rates over the last several decades, is that there's been

00:48:01.040 | very little change for the middle class. Because, it's my opinion, I'm speculating, but I think the

00:48:06.080 | politicians understand and realize that if you increase taxes significantly on the middle class,

00:48:13.120 | you upset the apple cart. And so they can increase taxes on the highest income earners,

00:48:18.080 | but if they increase them across the board, they're going to have a problem. So I don't expect

00:48:21.920 | major changes in tax policy to change just simply because of this reality. And here would be some

00:48:26.560 | evidence that I would employ to do it. Which, by the way, one of my little asides, I don't

00:48:31.360 | understand why they wouldn't just... It seems smart to me, why don't we just scrap the income tax or

00:48:37.680 | switch to a completely different version? Because wealthy people get wealthy by looking for

00:48:43.440 | opportunities and things that they can exploit. That's one of the things that you got to do. You

00:48:46.960 | got to look for an inefficiency. And wealthy people are willing to pay for good advice. So

00:48:51.280 | they're willing to pay guys like me or guys much smarter than me. I'm not that smart. There's guys

00:48:56.240 | a lot smarter than me to sit around and read the tax code to find the loophole that they can

00:49:00.720 | exploit. That was how 401ks came out. There was a pension consultant, I think his name was Jack

00:49:06.400 | Benna or something like that, who was sitting there reading the... He was a pension consultant.

00:49:10.480 | He's sitting there reading the tax code and he says, "Wait a second, I can do this." And a major

00:49:14.400 | change happens. So wealthy people are willing to pay people for advice. So I'm going to try to give

00:49:18.800 | you the advice for free, but let's read this article. "CEOs get paid very well to deal with

00:49:23.120 | every challenge that pops up. Now there's a new one. Proving they practice 'economic patriotism.'

00:49:29.440 | This new form of patriotism has become an issue now that several big US companies have decided

00:49:35.440 | to relocate their headquarters to other countries in order to lower their tax bill. These so-called

00:49:40.960 | tax inversions require a merger with a foreign company. A strategy big firms such as AbbVie,

00:49:47.040 | Milan, Walgreen, Medtronic, Chiquita Brands, and others have been pursuing. Since the US

00:49:53.040 | corporate tax rate is one of the highest in the developed world, moving overseas can save a bundle

00:49:58.080 | of money. Reforming and simplifying the US tax code might solve the problem, except a fitful

00:50:03.040 | Congress obsessed with political spitball fights is unlikely to take that up anytime soon. In a July

00:50:08.640 | 15 letter to congressional leaders pleading for some kind of action, Treasury Secretary Jack Lew

00:50:13.840 | proclaimed, "What we need as a nation is a new sense of economic patriotism where we all rise or

00:50:20.080 | fall together." Some tax inverters are more susceptible to charges of sedition than others.

00:50:25.760 | Since Walgreen, Milan, and AbbVie are in the healthcare business, for instance,

00:50:30.000 | they earn considerable revenue from taxpayer-funded programs such as Medicaid and Medicare.

00:50:34.320 | So they're seeking to slash their own obligations to Uncle Sam while benefiting directly from the

00:50:38.640 | payments of others, a contrast the New York Times described as "morally disconcerting."

00:50:44.240 | While other patriotic calls have unified the nation, however, Lew's plea for economic patriotism

00:50:49.200 | has provoked political opponents. In a rebuttal to Lew's letter, the conservative editorial page of

00:50:54.000 | the Wall Street Journal characterized the letter as a political stunt while declaring that "Mr.

00:50:59.200 | Lew doesn't know much about economics. Mr. Lew's letter shows that the White House now wants to

00:51:03.840 | exploit the inversion flurry as an election year opportunity to demagogue business." Political

00:51:10.240 | infighting over the mercenary behavior of corporate America raises an intriguing new question. What is

00:51:15.920 | economic patriotism anyway? Lew, in his "rise or fall" remark, seems to suggest U.S. companies

00:51:22.160 | ought to align themselves with the fortunes of the American middle class and go down with the

00:51:26.560 | ship if that's where the middle class is heading. But Lew, who was a senior Citigroup executive

00:51:31.280 | from 2006 through 2009, surely knows that is not how public companies operate. The main job of a

00:51:37.680 | CEO is to optimize the return to shareholders, period. It's nice when that primary mission

00:51:42.720 | coincides with feel-good national policies, but when it doesn't, shareholders come first. And

00:51:48.080 | with nearly half of all revenue for American big firms coming from foreign sales, it's imperative

00:51:53.120 | for those firms to remain competitive against rivals in other nations that face a lower tax

00:51:58.240 | burden and are eager to exploit any cost advantage they can. I'm going to pause here. Notice two

00:52:04.000 | things from one of this. First of all, it says that a CEO's major job, major goal, is to optimize

00:52:09.200 | the return to shareholders. I like that definition of return, because return leaves it open to

00:52:15.520 | describe it in financial return, return on capital, return on equity, or it also opens it up to

00:52:21.280 | describe it in other return. And so a share, depending on how the company is structured,

00:52:25.600 | that opens up for companies to maximize their return to their shareholders based upon other

00:52:30.400 | non-financial aspects. So you'll see this is a big move right now that's happening in companies.

00:52:34.560 | The second thing, however, here is notice that these statistics. With nearly half of all revenue

00:52:44.080 | for America's big firms coming from foreign sales, it's imperative for those firms to remain

00:52:50.320 | competitive against rivals in other nations that face a lower tax burden and are eager to exploit

00:52:56.400 | any cost advantage they can. One of the things I see, one of the major mistakes that I see people

00:53:01.520 | make when it comes to investing is that they focus on the politics or the market, not the

00:53:08.960 | companies. They're focusing on the society, the country, not the companies. That would be the

00:53:13.520 | best way to say it. They focus on the countries and not the companies. Half of all revenue for

00:53:17.680 | America's largest companies comes from other countries. So right there, no matter how great

00:53:22.320 | or bad America's prospects, people say, "Why is it that we have certain prospects and certain

00:53:27.040 | economic situations in the United States of America, and why do these numbers not seem to

00:53:30.880 | be reflected in the financial performance of large American firms?" Because half of all revenue comes

00:53:35.920 | from foreign sales from outside the country. The second thing is no matter how onerous the

00:53:40.400 | country, there's going to be, no matter how onerous the restrictions and regulations,

00:53:46.160 | a good CEO and a good board of directors is going to be protecting their country's interests.

00:53:50.960 | And so if Walgreens can merge with another carrier and move abroad, then they can cut their tax rate

00:53:57.600 | for their shareholders. It doesn't matter where their shareholders are. And so I love this

00:54:01.440 | development. I think this is awesome because it brings in the idea of international competition.

00:54:05.600 | One of my favorite countries in the world, or I guess it's technically a special administrative

00:54:10.240 | region now, I guess we can still call it a country, is Hong Kong. And so in China, you can

00:54:13.280 | go to Hong Kong and you can just see that it's one of the most alive, bustling, busiest places in the

00:54:18.400 | world. And they are competing with each other. You've got Singapore and Hong Kong competing.

00:54:22.320 | They compete in different things. You've got all of the international stock exchanges. You've got

00:54:27.360 | all these international stock exchanges competing with one another where you don't just have the

00:54:31.040 | New York Stock Exchange. New York Stock Exchange is owned by, who is it? Is it London? Anyway,

00:54:38.400 | they're owned by an international company now. I don't remember the name of the company. So

00:54:42.560 | this is a major - I love this development. I bring on the competition because the only thing

00:54:48.960 | that's going to affect the politicians, that's going to move the politicians' hands to change

00:54:55.120 | things is competition. This is the same thing that's happening in states is that you have

00:54:58.640 | different states. And I'm skipping here the ranking in US states article, all included in

00:55:03.360 | the show notes, but just talking about the joblessness in states. And so ranking US states

00:55:08.960 | by job creation in the past five years. And so this ability to compete among states leads to

00:55:15.280 | some states having an extremely healthy job market. And finally, when people are just lingering and

00:55:20.720 | languishing in a place with no job market, why is it that Detroit has gone from a population of

00:55:27.120 | 1.8 million people to 700,000, I think is the latest number that I remember. 1.8 million to

00:55:32.960 | 700,000 because of the changes of there's no jobs. And so now these people move to Texas,

00:55:38.800 | they move to Florida, they move to other states that have - what is the state here that has the

00:55:42.880 | highest job rates? North Dakota, they moved to North Dakota. North Dakota is a 2.7% unemployment

00:55:50.800 | rate, whereas Mississippi and Rhode Island have 7.9% unemployment rates. And so now you figure

00:55:56.160 | out what is it that North Dakota is doing to compete and Michigan versus North Dakota,

00:56:00.160 | is there a dramatic difference in the climate? I don't know, I never lived in either place,

00:56:03.280 | but I would get - they both have snow. That's all I know for Florida. So this is awesome. I love

00:56:09.600 | this development because this will force people to compete. So if you want hedge - I mean,

00:56:15.280 | there's white hedge funds are based down in the - what's the name of that island down in -

00:56:22.520 | anyway, that island - it's not the Virgin Islands. It's not Barbados. Anyway, that island down in

00:56:29.280 | the Caribbean here that is where many of the big hedge funds are based. The Caymans, that's what it

00:56:35.200 | is, the Caymans. So the Cayman Islands, many hedge funds are based in the Cayman Islands and they're

00:56:39.440 | going to be based in another place where they're able to compete more effectively. And so I think

00:56:46.960 | this is fantastic. One - let me finish this out because there's a couple interesting - there's

00:56:52.720 | a couple interesting - a couple interesting more points that I want to believe. Corporate behavior

00:56:59.360 | obviously affects a company's image which can in turn affect profitability. But a company taking

00:57:04.160 | perfectly legal steps to minimize its tax bill isn't likely to generate enough outrage to impact

00:57:09.040 | its bottom line. This is why you see - this is why you see people - my commentary - this is why you

00:57:14.000 | see the politician - you see Jack Lew trying to talk about economic patriotism. Americans are

00:57:20.000 | ambivalent about taxes at best and they tend to believe the government is a voracious money eater

00:57:24.240 | that wastes a lot of the tax revenue it brings in anyway. So even if U.S. consumers are uncomfortable

00:57:29.040 | with the idea of companies dodging taxes, they're not likely to resort to boycotts or other measures

00:57:33.680 | typically reserved for firms caught discriminating, trashing natural resources, or blatantly cheating.

00:57:39.200 | If there are any economic traitors in this story, it's in fact it's not U.S. companies but the

00:57:43.280 | politicians who have left them with a booby-trapped tax code that creates powerful incentives to pay

00:57:48.080 | taxes someplace else. Republicans and Democrats agree the tax code has become a porous mess,

00:57:53.440 | riddled with loopholes only high-priced tax experts can comprehend. President Obama wants to fix it,

00:57:58.560 | but hasn't pressed for tax reform because other priorities seem to have a better chance of getting

00:58:02.720 | somewhere. Republicans want to fix the tax code too, but are waiting for some future date at which

00:58:07.200 | they hope to have more leverage in Congress and a better chance of enacting the tax changes they

00:58:11.440 | prefer. Believe that one when I see it. Businesses meanwhile must pay taxes in real time and can't

00:58:16.560 | wait for theoretical reforms from a legislative body with a response time of a decade or two,

00:58:21.600 | so business leaders are doing what's pragmatic, even if it's objectionable, maintaining their

00:58:26.160 | edge through whatever legal means are available. So this might be a reasonable way to define

00:58:30.720 | economic patriotism. Pay what you owe and nothing more, while funding other ways to show support for

00:58:35.760 | your nation and your country folk. If you're a business person who profits by operating in

00:58:40.000 | America, set up mentoring programs to help young people get ahead or go out of your way to hire

00:58:44.320 | the underprivileged or find some other way to give back. If you're a corporation, abide by the

00:58:49.280 | letter of the law, be honest with your shareholders about how you're making your money, and accept the

00:58:53.440 | consequences if American customers punish you for expediency. And if you're an ordinary voter,

00:58:58.000 | you can show your economic patriotism by demanding the government adopt policies that make America

00:59:02.320 | indisputably the best place to start and run a business, instead of a winded giant that seems

00:59:07.840 | unable to keep up with the rest of the world. So I would say if you're an ordinary voter,

00:59:13.920 | just simply defund the whole system the best you can by listening to my show. And that will,

00:59:18.720 | money talks to politicians, money talks. So I commend that article to you. I just read you the

00:59:24.080 | whole thing. But I think it's an interesting, and I commend you to say if you want to have

00:59:28.080 | patriotism and in some other form, fine, go with it. But I suggest you follow these other people's

00:59:33.600 | advice, or I suggest that you follow these other businesses and business leaders

00:59:42.000 | path and avoid as many of these taxes as possible, because that will pay, that will work. In today's

00:59:47.520 | world, when a company can be headquartered anywhere in the world, whether they want to

00:59:50.800 | be headquartered in the Middle East, in Dubai, whether they want to in Hong Kong,

00:59:55.760 | and there's very little difference. And now you have more and more people willing to move there,

01:00:00.320 | willing to pick up their belongings and go there and still be connected. You're going to have more

01:00:06.320 | and more and more of this. A couple more articles here. New York Times article from, called In a

01:00:12.720 | Subprime Bubble for Used Cars, Borrowers Pay Sky-High Rates. This is a lengthy article. I'm

01:00:17.360 | not going to read much from it, but I commend it to you to consider. And this is an interesting

01:00:21.920 | trend to watch, and it breaks my heart. But basically the idea is that there is a huge

01:00:26.880 | American movement, a surge in subprime lending for used cars. And so people who don't have much

01:00:35.360 | money and have poor credit history are taking out loans for themselves and buying cars. And the big

01:00:45.120 | one that bugs me about this one, and by the way, I don't know how you define huge. In 2006, there's

01:00:51.040 | a chart here. In 2006, 36% of loans, 36% of new auto loans were for subprime borrowers. In 2009,

01:01:00.400 | that had decreased to 20%. So it's steadily down. And then it increased from 2009 to 2013,

01:01:06.320 | up to 20. Now it's up to 27%. So there's been a seven, an increase from 20% to 27% of new auto

01:01:13.280 | loans are to subprime borrowers. So is this a huge increase? I don't know. I don't know the

01:01:17.920 | history of this. I haven't researched it to know whether this is a normal trend moving around the

01:01:22.080 | mean, or is this a statistically important trend. But the key thing here is this, this bar, this

01:01:29.040 | one bothers me. It's so heartbreaking to see people deeply in debt to buy cars that they,

01:01:35.200 | deeply in debt to buy cars that they can't afford. They don't have the money to pay for them. They

01:01:40.400 | go deeply in debt, then their cars get repossessed, and they wind up paying much, much more money.

01:01:44.880 | And we've got to stop this trend by changing the education, where instead of it being, let me go,

01:01:56.960 | now you have, in many ways, you do need to have a car and a car is a valuable,

01:02:01.200 | valuable asset to be able to get to work, especially if you're in a low, low income

01:02:06.160 | situation. We got to change this trend. And we got to stop people putting money into these junkie

01:02:11.600 | cars, which destroy their value, and they're heavily financed. I mean, it's, it's horrible.

01:02:15.600 | It's, it's, it's absolutely horrible. That's why I hope people will listen to my show. And I hope

01:02:20.400 | that people will listen to my show and gain some knowledge on this. If you have an opportunity to

01:02:25.760 | help somebody, I've done some financial planning over the years with people, minimum wage earners

01:02:30.000 | and a very low income bracket. And the thing that I see just that breaks my heart is when they buy,

01:02:35.440 | buy cars, and you get into a situation where you bought a car on credit. And because you bought it

01:02:40.640 | on credit, the car depreciates to such a point where you're upside down in it substantially,

01:02:45.120 | where you owe more than it's worth. And then because you can't scrape to any cash, and you

01:02:48.880 | need a car, this is endless, this is horrible trap that you get into. You can't scrape together any

01:02:53.840 | cash because you need a car, and you don't have any cash. And so you have to make your monthly

01:02:59.360 | payments. Because let's say that you bought the car for $15,000. And it's actually worth you,

01:03:03.760 | but you paid retail price for it, you financed it, and you have $300 a month monthly payments,

01:03:08.000 | but the car is only worth $10,000, maybe, depending on what you do. So, but you still need a car. So

01:03:14.160 | to get rid of the car would require you to come up with $5,000 to fund yourself getting out of the

01:03:19.360 | car. Plus, at least what, a couple thousand bucks for a new car, for another car, even if you could

01:03:24.320 | pay cash. And for someone in a minimum wage situation, for someone in a low, low income,

01:03:29.440 | low asset situation, for poor person, for broke person, to finance to get out, you need seven or

01:03:35.360 | 8,000 bucks of cash. So and it's just not possible. So it's easier to deal with the pain of the $300

01:03:40.880 | a month payment, even though or the $400 a month payment, I did a plan one time for somebody tried

01:03:46.400 | to help and they wouldn't take my advice. So I wasn't able to help them. But I mean, the car

01:03:50.080 | payment was 50% of their of their income. And so do your best if you have an opportunity to help

01:03:56.320 | somebody with if you have an opportunity to help somebody in a situation to avoid the mistake in

01:04:01.040 | the first place, or to extend you know, a loan to get them out of it in some way. If there's someone

01:04:05.520 | that you know, try to help someone that's caught in this situation. And I really want to help us

01:04:10.080 | educate the American public so we can avoid this, this trap. And it's interesting thing in here

01:04:15.200 | about hedge funds are looking, there was one investment firm, I don't remember the name here,

01:04:19.360 | I think it was a hedge fund that was investing in these notes, and they're securitizing the notes

01:04:23.440 | and and buying the buying the securitized notes. So as a way of trying to get additional as a way

01:04:28.960 | of trying to get additional return in today's market. So I thought it was an interesting article,

01:04:32.400 | I commend it to you. Next last two articles, and then we are done for the day. I want to commend

01:04:38.000 | my friend Brandon over at the mad scientist. Well, I want to commend him for two things. The

01:04:42.880 | article that he wrote this week that caught my eye, it's called the Roth IRA horse race, but he's

01:04:47.200 | finished up his degree. And he is finishing out working on his on his financial plan of his his

01:04:55.040 | early and financial independence plan. And so I want to commend him for that he's been doing an

01:04:58.720 | awesome job. Check out his podcast if you're interested in some interviews with people

01:05:02.880 | who have pursued the financial independence path. And it's a really, really neat, really,

01:05:07.440 | really neat thing. But he wrote an article this week, called the Roth IRA horse race. And I hadn't

01:05:11.840 | is a strategy I've never thought about. And I want to thank him for doing that. I'd never thought of

01:05:15.680 | this, I think is an interesting strategy. Basically, the idea of a Roth IRA horse race and

01:05:19.920 | who this will be most helpful to is Brandon is his plans are built around earning a high income

01:05:26.480 | at a period of time and then quitting working. And then in quitting working because your income is

01:05:30.560 | low, adjusting your retirement account balances in such a way that you that you can convert your

01:05:38.000 | retirement accounts without because your income is so low, you don't pay any taxes. That's my

01:05:41.920 | simple answer. So these strategies that he's working on are really great strategies, but

01:05:46.640 | they're really great. They're going to be most applicable. If you are planning a plan, you're

01:05:50.880 | planning something where you're going to be working and then you're going to be quitting

01:05:53.120 | working, they will not work if you plan to continue working over time, or if you don't see

01:05:57.520 | yourself or if you're in a higher income, and you're not and you're going to be always earning

01:06:00.640 | a higher income. But that's not his plan. So his plan is he's working and then done. So he's using

01:06:06.320 | IRAs. And basically, the idea is to invest your money into a 401k plan and an IRA, not paying any

01:06:12.800 | income tax on the money. And then once you quit working, because your earned income is so low,

01:06:18.000 | then to go ahead and start a plan of converting the money out of the IRA and converting the money

01:06:22.560 | out of the traditional 401k into a Roth IRA, but only converting as much as you can convert to stay

01:06:28.560 | in a 0% tax bracket. And then after doing the Roth IRA conversion, then building it up where after

01:06:34.640 | five years in the Roth IRA, you go ahead and distribute it out prior to 59 and a half in order

01:06:41.040 | to cover your expenses. So it's a neat strategy. And I would commend to you his guinea pig series

01:06:46.560 | that he has on his blog, where he has written some software and he's illustrating how the

01:06:51.440 | implementation of these strategies can really do a good job to reduce the tax burden and help you to

01:06:57.280 | be financially independent at a much earlier age. But one of his ideas here is his Roth IRA

01:07:01.440 | horse race. And so basically the idea is, let's say that every year you can convert from an IRA

01:07:07.600 | into a Roth IRA, and then you can recharacterize that conversion back if you want to undo it. So

01:07:14.560 | you would recharacterize it before the time that you file your taxes. And so the idea is that,

01:07:20.080 | let's say that you have a portfolio, you have a stock portfolio and a bond portfolio. And so you

01:07:25.280 | go ahead and convert in a year. You can pick up $10,000 of income to do a completely income tax

01:07:31.760 | free conversion for his simple numbers. And then you would convert $10,000 of your stock fund from

01:07:40.160 | a traditional IRA into a Roth account. And then in a separate account, you would convert $10,000

01:07:44.400 | of your bond fund into a separate Roth IRA. And then keep the fund separate to make it easier to

01:07:50.720 | recharacterize it back if you need to. So then let's, assuming that the market moves in one

01:07:55.520 | direction or the other, if at the end of the year, reading from his article here, your stock account

01:07:59.920 | has increased in value from $10,000 to $18,000, and your bond account has decreased in value from

01:08:05.040 | $10,000 to $6,000, then what you would do is you would just undo the recharacterization on the bond

01:08:11.760 | portfolio, and you would keep the stock portfolio. So this allows you to keep all $18,000 of the

01:08:17.600 | funds converted for the price of only $10,000. But if you had converted your entire portfolio,

01:08:22.800 | and you were maintaining a 50/50 split between your Roth, excuse me, between your stocks and

01:08:28.080 | your bonds, you'd only have a $12,000 in the Roth. So you got some free money in there by playing

01:08:33.920 | with your asset classes and doing the conversion. And then he goes through and talks about what if

01:08:37.600 | it did the other way, what if you had a decreased amount across the board, and how to undo those

01:08:42.880 | recharacterizations. I think it's awesome. Brandon, if you're listening, I don't see any

01:08:47.920 | problem in this. I think this is great. Except, man, how are you going to find a broker that will

01:08:52.080 | do this for you? I guess he's a Vanguardist. Maybe Vanguard will do it and make it simple.

01:08:56.560 | That would be my only thing is that it's a bit of a hassle, and you're going to have to find a

01:08:59.760 | broker that's willing to deal with you for these small accounts and to deal with you to do these

01:09:04.640 | conversions and these recharacterizations. And I would imagine that you get that. Again, I haven't

01:09:10.240 | worked with Vanguard in a while. Maybe they'll do this for you. But I think it's a cool idea.

01:09:14.640 | And I love that these little tricks that he's working on exist. So if you're interested in

01:09:19.360 | this kind of thing, go over and check out his Roth IRA horse race article and read some of his

01:09:24.560 | other articles on tax avoidance. He's doing a really brilliant job of developing some of the

01:09:30.000 | strategies and tools that you can implement in the scenario that I described of working for a

01:09:35.760 | period of time, saving aggressively and then quitting and using retirement accounts to avoid

01:09:40.640 | the taxes to really amp up your returns overall. Last article here is from a site. I'm going to

01:09:50.320 | put an infographic in on the site. It's from a site called Visual Capitalist, and this is entitled

01:09:55.920 | The Habits of the Wealthiest People. Now, this is based upon a book that I saw first a year or so

01:10:02.320 | ago. The author, I'd love to read his book. I haven't read it. He was a financial planner. Let's

01:10:07.760 | see here. He was a financial planner that wrote a book on, interviewed a bunch of rich people and a

01:10:13.760 | bunch of poor people, and he was trying to figure out what worked and what didn't. And so he wrote

01:10:17.600 | this book on the habits of the wealthy. Thomas Corley and his study of the daily habits of 233

01:10:23.520 | wealthy and 128 poor people. He gained a lot of notoriety when he got featured on the Dave Ramsey

01:10:30.480 | show, which was awesome for him because this fits in very well with what Dave Ramsey teaches

01:10:35.840 | on his show, is that wealth comes as a result of habits. And so he got featured on that show,

01:10:40.240 | and it really, really was a huge boon to him as far as his book sales. I haven't read his book

01:10:44.480 | yet. I would like to, and I'd like to interview him. I'm interested to know if this is actually

01:10:48.640 | statistically accurate. My statistical knowledge is limited to the point where I don't know if

01:10:55.760 | this is statistically accurate or not, but I do think it's an interesting, it's intuitively accurate

01:11:01.120 | based upon my experience, but that doesn't make it correct. So he's talking about what is the

01:11:05.040 | wealthy and what do wealthy people and what do poor people do. And I think I stole this from

01:11:09.280 | Dave Ramsey. He says that if you do what wealthy people do, you get wealthy, and if you do what

01:11:12.880 | poor people do, you get poor. And I think that's awesome. I think it's true. I would take a little

01:11:18.400 | bit wider than what Dave says, but hey, good for him. He can do it. He's got a much bigger footprint,

01:11:23.120 | and so he's got more experience than I do working with his wealthy friends. So maybe he's 100%

01:11:29.200 | right and I'm wrong. But first of all, how do they define wealthy in this study? Wealthy is defined

01:11:34.960 | as earning at least $160,000 annually and holding at least $3.2 million in assets, and then poor is

01:11:41.680 | defined as an income under $30,000 per year and less than $5,000 in assets. And so some of the

01:11:48.240 | habits of the rich, I'm just going to cherry pick a few here. They have a routine. So 81% of the

01:11:53.040 | rich versus 9% of the poor maintain a to-do list. 44% of the rich versus 3% of the poor wake up

01:11:58.960 | three plus hours before work. 63% of the rich versus 5% of the poor listen to audiobooks during

01:12:04.720 | their commute. I'm going to hope that they'll start listening to my show because it's free and

01:12:08.080 | they can just stream it online and hopefully we can help some people that are poor to get wealthy.

01:12:13.520 | 79% of the rich versus 16% of the poor network five plus hours or more each month. That one is

01:12:19.680 | easy to jump on from the perspective of ability if you talk to a minimum wage person and say,

01:12:25.200 | "Well, the person's working all the time." It's probably true. It's very challenging situations,

01:12:30.240 | but that's an interesting one. And then 88% of the rich versus 2% of the poor read 30 plus minutes

01:12:35.360 | or more each day. 86% of the rich versus 26% of the poor love to read. I thought that was

01:12:41.840 | interesting. These are interesting statistics. And what it sees at times ties together the theme

01:12:46.240 | of the show is that skills and knowledge lead to earning ability. So if you want to have earning

01:12:51.120 | ability and wealth, don't focus on first saying, "Well, how can I go out and get these? How can I

01:12:57.600 | go out and find the job?" Focus on building the skills and then find the job that is appropriate

01:13:02.080 | for that. Rich are healthy. They exercise aerobically four days a week. And 76% of the

01:13:08.480 | wealthy exercise aerobically and 23% of the poor. That one's interesting. And then the junk food

01:13:13.520 | calories, the poor have a higher consumption of junk food calories versus the wealthy. Although

01:13:20.400 | visually on the infographic, it's not that similar. The television habits, big difference in television

01:13:26.640 | habits. And this is the one where I'm glad that he has television habits on here versus time reading

01:13:33.520 | and networking. Because the complaint that would be made by people who are advocates for minimum

01:13:38.400 | wage laws and things like that is, "Look, it's not possible to work at minimum wage down at your

01:13:42.560 | local fast food restaurant and have enough time after supporting your family to read, to learn

01:13:48.480 | these things." Well, it looks like here it was 24% of the poor, excuse me, looks like about 65% of

01:13:57.680 | the wealthy versus 24% of the poor watch one or less hour of TV every day. So 65% of the wealthy

01:14:05.440 | watch less than one hour of TV, whereas only 24% of the poor watch less than one hour of TV. 76%

01:14:11.680 | of the poor watch reality TV versus this looks like 5% or 10% watch wealthy TV. And then goal

01:14:18.560 | setting. 67% of the rich write down their goals, 17% of the poor versus 17% of the poor. 80% of

01:14:25.680 | the rich focus on accomplishing a specific goal versus 12% of the poor. 86% of the rich believe

01:14:30.480 | in lifelong educational and self-improvement versus 5% of the poor. 84% of the rich believe

01:14:35.520 | good habits create opportunity versus 4% of the poor. And 76% of the rich believe bad habits have

01:14:42.000 | a negative impact versus 9% of the poor. And then he goes through some other numbers here. So I

01:14:47.200 | commend this infographic to you. I think it's well done. And I would like to read this book and

01:14:50.720 | report back to you on the future. It's one of those things that seems intuitively true. I question

01:14:56.080 | a little bit if it's statistically accurate with a sample set of 233 wealthy and 128 poor people.

01:15:01.280 | And I don't know what his methodology was. That would be kind of the weak point. I'd love to see

01:15:05.360 | someone, I don't know, I'd check it out. And if any of you statisticians would have any knowledge

01:15:10.080 | on whether it's accurate or not, I would love to know that. So that's it for today's show,

01:15:15.440 | except I'm going to wrap up with a poem. And this is a poem that I first read a couple months

01:15:20.480 | ago when I was reading a blog called The Rebel Heart. And The Rebel Heart was a blog that was a

01:15:28.320 | name of a sailboat for this young couple that had worked really hard and had bought a sailboat. And

01:15:34.640 | they'd bought a sailboat and they were planning to save all their money and they were planning

01:15:40.720 | to sail around the world for basically the indefinite future. And they were doing in the

01:15:46.400 | middle of their Pacific crossing. In the middle of the Pacific crossing, they ran into substantial

01:15:50.480 | problems with a big storm and the big thing with their baby being sick. And they were way offshore

01:15:56.880 | and they had a sick baby and they weren't able to finish their voyage. And they wound up having

01:16:00.160 | to be rescued at sea. They had to scuttle their boat. And basically, it's a really inspiring and

01:16:05.520 | it's both inspiring and a just difficult story to kind of think about starting all over again.

01:16:14.080 | So check out their blog. I'll put a link in the show notes. I think it's therebelheart.com. And

01:16:18.000 | then I think the husband's name is Eric and the wife's name is Charlotte. And I think they do it.

01:16:23.280 | I've enjoyed reading some of their articles over the years. But he posted a link to a poem and I

01:16:27.520 | hadn't read it. And I read it a month or two ago, I think when he posted it. And I've just been

01:16:32.400 | thinking about it, referred to it a few times and I'd like to leave it with you today. And the poem

01:16:36.160 | is called If by Rudyard Kipling. And to me, it just ties together this show, at least for today,

01:16:42.480 | and kind of what's on my mind. Meaning that there are many things that can happen. And you can choose

01:16:48.480 | your response to them. And I'm inspired by how this man is having to rebuild his dream with nothing.

01:16:54.480 | Lost all of their physical possessions were on the boat. So all their physical possessions,

01:16:59.120 | their major investment into the boat to provide for their living situation, now that's gone. I

01:17:05.120 | hope they still have some other money saved that they were planning to have as well. But basically,

01:17:09.200 | starting over with nothing. But starting over and rebuilding again with nothing except the family,

01:17:14.480 | the love, and the love of his family, his children, thankfully everyone survived,

01:17:20.160 | and the skills and knowledge that he's developed. And there's no doubt in my mind that this family

01:17:25.280 | will be able to hit their dreams and goals again. And there's no doubt in my mind that they will be

01:17:29.680 | able to do so faster than they did the first time based upon their past knowledge. And I think they

01:17:36.080 | will enjoy the process getting there. But let me read this poem and with this will be done.

01:17:39.200 | If by Rudyard Kipling. If you can keep your head when all about you are losing theirs and blaming

01:17:46.320 | it on you. If you can trust yourself when all men doubt you, but make allowance for their doubting

01:17:52.400 | too. If you can wait and not be tired by waiting, or being lied about don't deal in lies, or being

01:17:59.840 | hated don't give way to hating, and yet don't look too good nor talk too wise. If you can dream and

01:18:07.680 | not make dreams your master. If you can think and not make thoughts your aim. If you can meet

01:18:13.120 | with triumph and disaster and treat those two imposters just the same. If you can bear to hear

01:18:19.760 | the truth you've spoken, twisted by knaves to make a trap for fools, or watch the things you gave

01:18:25.760 | your life to broken and stoop and build them up with worn out tools. If you can make one heap of

01:18:32.960 | all your winnings and risk it on one turn of pitch and toss, and lose and start again at your beginnings

01:18:39.840 | and never breathe a word about your loss. If you can force your heart and nerve and sinew to serve

01:18:46.480 | your turn long after they are gone, and so hold on when there is nothing in you except the will

01:18:53.680 | which says to them hold on. If you can talk with crowds and keep your virtue, or walk with kings

01:19:01.440 | nor lose the common touch. If neither foes nor loving friends can hurt you. If all men count

01:19:08.000 | with you but none too much. If you can fill the unforgiving minute with 60 seconds worth of distance

01:19:15.200 | run, yours is the earth and everything that's in it, and which is more you'll be a man my son.

01:19:22.960 | As we begin our week here on a Monday, I hope that you would be able to implement the words of

01:19:32.720 | that poem and some of the ideas that we've talked about. And I hope that each day of this week that

01:19:37.000 | you will be able to enjoy the love of your family and of your friends, that you will be able to

01:19:42.680 | enhance your own happiness, that you will make measurable progress towards your goals. I heard a

01:19:47.920 | definition years ago that happiness is the progressive realization of a worthy ideal. I

01:19:52.240 | can't remember who that originated with, but I hope you'll make measurable progress towards your

01:19:55.840 | goals, and I hope that some of the ideas that I've shared today have been helpful for you in some way.

01:20:00.480 | That's it for today's show for Monday, July 21, 2014. All of the resources for today are at

01:20:08.200 | radicalpersonalfinance.com/24. Tomorrow I will be bringing you an interview with Jacob Lund Fisker,

01:20:14.680 | author of the early retirement extreme, the book and the blog. We recorded that on Saturday, and I

01:20:20.680 | will be actually traveling for the next couple of days. That will be released on Tuesday. On

01:20:24.080 | Wednesday, I plan to bring you another show. This one is going to be on the statement of cash flows,

01:20:29.320 | like we did the statement of financial condition last week, and talk about how powerful the

01:20:33.680 | statement of cash flows is once you actually understand it and understand how it works. Not

01:20:37.880 | sure what's coming on Thursday and Friday. Oh, Friday will be a Q&A show. I'm trying to get

01:20:41.680 | speak pipes set up so you can call in some questions. I haven't gotten the chance to do

01:20:45.280 | that. I will be traveling later today, so maybe tomorrow I will be able to get that going for you.

01:20:49.120 | I hope this show was helpful for you. Thank you for those of you who have been leaving reviews.

01:20:53.360 | Please consider, if you haven't, just that's what I ask of you. If this information has been at all

01:20:57.760 | helpful, I would be indebted to you if you would leave a review for us on iTunes and subscribe.

01:21:02.800 | Subscribe and leave a review on iTunes. That will help us to get into the new and noteworthy

01:21:06.680 | section of the business section, which would be awesome. We're featured there in the investing

01:21:11.240 | section, and I hope that will help spread the rational message of the Radical Personal Finance

01:21:16.440 | Podcast, which is a rational approach to financial planning and goal setting and goal achievement.

01:21:22.280 | May you have an awesome week. Talk to you soon.

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01:22:17.420 | If you can fill the unforgiving minute with 60 seconds worth of distance run,

01:22:22.740 | yours is the earth and everything that's in it.

01:22:25.900 | And, which is more, you'll be a man, my son.

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RPF-0024-Happiness__Money_Rising_US_Wages_Economic_Patriotism_Top_Jobs_in_Demand_Subprime_Bubble_in_Used_Cars_Unlimited_Kindle_for_10_a_Month_Habits_of_the_Wealthy_Etc