RPF0198-If_I_Won_The

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00:00:31.660 | On today's show, what would Joshua Sheets do if he won the lottery?

00:00:54.000 | Welcome to the Radical Personal Finance Podcast. My name is Joshua Sheets. This is episode

00:00:58.560 | 198. I'm your host. Thank you for being here. On today's show, I'm going to share with you

00:01:04.560 | my thoughts on winning the lottery. Hopefully, it'll inspire you to think about your own

00:01:09.880 | thoughts. I think this is a useful thought experiment. And the fun thing about being

00:01:14.420 | a podcast host is you get to hear my thought experiment. The inspiration for today's show

00:01:27.580 | comes from a listener named Micah, who sent me this email. He said, "So here's some fun

00:01:32.660 | questions for you." He says, "So this is a fun question that everyone loves to fantasize

00:01:36.460 | about. I hope it'll be fun for you to answer, but it could have a really boring answer,

00:01:40.440 | but I'm sure you'll surprise me somehow. Question, what would you do if you won the lottery?

00:01:47.100 | And then part B, as a financial planner, what advice would you give to a client who had

00:01:52.100 | won the lottery? What would be the most optimal tax strategy? Would you take the payments

00:01:56.340 | or the lump sum? Would the upfront tax hit be worth it for the long-term capital gains,

00:02:00.860 | et cetera?" So, Micah, it's a fun question, and I'm going to answer it in the same spirit

00:02:05.720 | that it was asked, in a fun way. But I'm also going to use it just to share about some

00:02:10.300 | things that I believe are important. As I thought through and prepared my notes in preparation

00:02:17.260 | for this show, it brought out some very important ideas that I think will benefit you at least

00:02:24.220 | to think about, which is why I'm sharing it, and I'll be doing it in detail. But I want

00:02:28.460 | to start with just an observation that, as far as I'm concerned, I've already won the

00:02:33.180 | lottery. And I think probably so have you. I've already won the lottery of life. If you

00:02:42.580 | think about how incredibly privileged we all are in so many ways, for me, number one, just

00:02:50.660 | to be born at the time that I was born. I was born in 1985. Just think of the incredible

00:02:56.300 | change that we're living through. Think about the time that, for example, just this business

00:03:02.820 | pursuit, which I'll talk about later in the show more, but just radical personal finance.

00:03:06.620 | It wasn't possible 30 years ago. And think about here I am hitting my stride as a young

00:03:11.660 | adult, and here I am able to use an incredible opportunity like this to communicate with

00:03:17.820 | so many people and hopefully be a source of encouragement to you, and you are to me. I

00:03:23.420 | won the lottery. I was born in the United States of America, probably the most prosperous

00:03:29.240 | nation in the history of the world. Opportunity is on every street corner and basically every

00:03:36.420 | side. I was born and raised in one of the most prosperous states in the country and

00:03:42.780 | one of the most beautiful areas. I live in a resort town that many people want to retire

00:03:49.060 | to and save for years to save their money and move to. I've been blessed with a lot

00:03:55.980 | of mental ability. I've been blessed with physical health. I'm able to learn quickly

00:04:02.780 | and easily. I don't struggle with academics. That makes my life much easier than many people.

00:04:10.220 | I don't really have any significant learning disabilities. I think I have a tiny bit of

00:04:16.320 | dyslexia, but it really is not the kind of thing that's even worth mentioning. So I'm

00:04:22.180 | able to tackle new things. I have health. I have energy. I was raised in probably one

00:04:28.020 | of the most amazing family environments that I can think of where I have two parents who

00:04:34.540 | are together and have been married for what, 50 years, 40 years, something like that. I

00:04:39.140 | was raised in a stable household. I have a bunch of brothers and sisters, which gives

00:04:42.960 | me an incredible opportunity. I was the youngest of seven kids, which opens up an incredible

00:04:48.740 | opportunity to learn. You can watch all of your brothers and sisters make all the mistakes.

00:04:53.700 | It's just one of the things I did as a kid is I told my parents, I said, "I'll just

00:04:56.820 | watch them do it, and I just won't make their same mistakes." So I've been incredibly

00:05:03.180 | blessed. I think probably just about all of you listening are the same way.

00:05:11.820 | Now, you might not have the list that I have, but you'll have your own list. And I wanted

00:05:20.900 | to start there because I believe it's a good way to frame this discussion. I'm going

00:05:28.220 | to answer this question in detail and in the spirit of fun of thinking, what would I actually

00:05:34.260 | do if I won the lottery? But the problem is if I think about it as a hypothetical situation,

00:05:41.540 | that I'm unlikely to actually do something with it. But I think I've already won the

00:05:47.060 | lottery, and so have you. And so what do we do with that? In today's show, I'm going

00:05:54.580 | to talk a lot about the responsibility that winning a lottery or something similar would

00:06:00.600 | bring to my life and to your life. But I'm going to emphasize the responsibility that

00:06:07.300 | we already have to do something with the things that we've been privileged and blessed to

00:06:14.380 | have.

00:06:16.500 | So with that framing up front, let's dig in. Quick note, today's show is going to

00:06:22.780 | be very personal to me, and it'll draw in some opinions that I hold and discussion of

00:06:30.460 | my own personal worldview, my own personal ideology. Anytime you don't want to hear

00:06:36.100 | what I think, there's a little button on your MP3 player that has two little arrows

00:06:40.100 | that point to the right. That's a fast-forward button. You can push it anytime you want.

00:06:46.180 | But the challenge of this question is it's specifically asking what I would do if I won

00:06:52.580 | the lottery. And so if you're talking about how I would spend money, that's necessarily

00:06:59.100 | going to expose all of my values. If I were to look at how you spend money, if I were

00:07:07.220 | to come into your life and pull open a list of all of the financial transactions of your

00:07:12.380 | life over the last year, if every single one were carefully recorded with enough detail

00:07:17.140 | that I could know what the transaction was, I wouldn't actually need to meet you to

00:07:23.100 | be able to form a probably pretty accurate concept of who you are. Because the way that

00:07:31.660 | we spend money will be a reflection of who we are as a person. Every transaction tells

00:07:37.580 | a story. So I know that some of you are annoyed when I talk about things like worldviews,

00:07:43.780 | and I get that. But in the way that I'm creating this show, I aspire to do a couple

00:07:48.820 | of things. Anytime I think something is neutral, morally neutral or ideologically neutral or

00:07:55.620 | politically neutral, I try to present it in a way that demonstrates that. But if something

00:08:00.100 | isn't neutral, then I try to fairly present multiple sides of the issue. And I'm certainly

00:08:03.980 | imperfect at actually doing it, but I do my best to present content in a way that it is

00:08:08.900 | fair, the best that I'm able to do.

00:08:11.340 | But the problem is that on many questions of money, there is no moral neutrality. Let's

00:08:16.940 | take a simple example from the political sphere. If we look at where a government spends the

00:08:21.260 | taxpayer's money, then we can get a clear idea of the moral constraints or moral objectives

00:08:29.780 | of that particular system of government. Some governments focus on building up their military

00:08:37.140 | strength. Some governments focus on building schools. Some give a certain amount of money

00:08:44.760 | to foreign aid. Some give a lot more money to foreign aid. Some governments focus on

00:08:50.020 | socialized systems of support for their citizens. All of these expenditures and budget items

00:08:57.340 | are driven by a system of morality. It's inescapable, and it's the same in all of our lives. Most

00:09:05.740 | of the dollars that we spend are going to be driven by our own system of values. And

00:09:10.900 | when you do a proper job with financial planning, you will fully integrate all of your values

00:09:17.740 | with all of your individual transaction decisions. We're whole people. We're not disconnected

00:09:23.900 | people.

00:09:25.300 | So I'm not going to lecture on a single thing to you today. Rather, I'm just going to simply

00:09:30.260 | share my thoughts on what I would do. And I'm not lecturing you on it, but I will do

00:09:35.480 | my best to kind of share with you why I think the way that I do. And I'm going to do so

00:09:39.420 | in answering three questions, three major sections. I'm going to give you my thoughts

00:09:42.740 | on lotteries and why I actually hate them the way that they're currently structured.

00:09:47.020 | Then what would I buy or what would I do if I won the lottery, and how would I actually

00:09:51.260 | invest the money?

00:09:53.100 | So the first part is going to be, again, specific to lotteries. I'm going to spend a little

00:09:57.580 | bit of time just simply sharing with you some of the underpinnings of my worldview and my

00:10:01.340 | personal experience, because money touches at the core of my entire understanding of

00:10:07.420 | life and it's been a major influence in my life. You don't get to the point where you

00:10:11.460 | work as a financial advisor and do a show talking about money every day if it's not

00:10:15.780 | something that's important to you.

00:10:17.860 | And then I'll go into some very specific discussion of what I would buy and how I would

00:10:22.100 | invest.

00:10:23.100 | But let's start with lotteries. I think this is a great question to think about. Super

00:10:27.740 | fun. And I've done this mental exercise many times and I had a lot of fun doing it again,

00:10:32.740 | just even in considering Micah's question.

00:10:36.860 | Just for fun, I put a $10 million number on the windfall to be able to answer. Obviously,

00:10:42.900 | winning a lottery could be winning $1,000 in some scratch-off game or it could be $200

00:10:48.020 | million in a lotto grand prize Powerball payout. I didn't choose those numbers because $1,000

00:10:57.500 | would be relatively non-impactful to my financial life. I mean, I'll cash the check if you

00:11:04.220 | send it to me but it's not going to substantially affect my goals or probably even yours.

00:11:10.500 | But on the other hand, $200 million would be utterly overwhelming to me to think about.

00:11:15.480 | It would completely shut down as the computer when you throw too much stuff at a computer

00:11:20.940 | system and it shuts down. It would be utterly overwhelming. I cannot even conceive of what

00:11:26.260 | I would do in that situation except sit down and cry at the enormous burden and responsibility

00:11:32.600 | of all that money.

00:11:33.900 | I'm not at the place in my own personal experience where I can even – other than

00:11:38.740 | in an intellectual sense on some technical financial planning topic where I don't have

00:11:42.580 | to deal with the emotion of it. I can't conceive of those numbers. But I think I can

00:11:47.580 | handle $10 million as far as a mindset. My experience in my own personal life makes that

00:11:55.820 | a number that I could actually feel and understand.

00:12:01.340 | So I've pegged this at $10 million. To make it easier on myself, I actually have mentally

00:12:06.020 | changed it from winning a lottery to having a rich aunt or uncle die unexpectedly and

00:12:11.760 | leave me the money. Lotteries cause me personal problems and it's not just because of the

00:12:16.020 | math involved of the very low likelihood of winning the jackpot. But it's primarily

00:12:23.140 | because of the element of chance and the way that the system is structured at least in

00:12:27.100 | the United States of America.

00:12:28.100 | I think I've actually bought at least two lottery tickets in my lifetime, maybe three

00:12:32.220 | or four. But I specifically remember two. One was when I was 18 or 19 years old and

00:12:37.700 | I had never played the lottery and I said, "This will be fun. I'm trying to rebel

00:12:40.860 | against what I've been taught." And so I went and bought some scratch off tickets

00:12:44.820 | and I scratched them off anxiously in the parking lot and felt like a total idiot because

00:12:48.380 | I'd wasted my money and I didn't win a thing.

00:12:50.800 | Another time I remember specifically I was out with some family members who were visiting

00:12:54.200 | from out of town to dinner and the jackpot was over $200 million. So they swung by Publix

00:12:59.120 | to grab some tickets just for fun. I bet many of you would do the same thing just for fun.

00:13:04.000 | You're not a habitual player but when the numbers get massive, you grab a ticket or

00:13:08.120 | two. So I tossed in my $3 and got a ticket. Then I felt like a total idiot when I went

00:13:11.920 | and checked the numbers and didn't win. I don't like wasting money.

00:13:15.800 | But on the flip side, I've actually made a lot of money on the lottery because the

00:13:19.560 | Florida lottery gave me a lot of money toward my college tuition through the Bright Future

00:13:24.640 | Scholarship is what it's called in our state. So I've come out way ahead. They have a

00:13:29.600 | system in the Florida lottery where if you have sufficient academic standing, you can

00:13:35.480 | have 100% of your tuition to a state-run school paid for specifically and I had that highest

00:13:43.000 | level. Now I went to a private school with a much higher tuition so it didn't cover

00:13:46.440 | 100% of my tuition but it was the equivalent of the state system.

00:13:51.920 | The problem is I'm absolutely opposed to lotteries the way that they're currently

00:13:56.540 | structured because of the political maneuvering. I have a series of arguments lined up that

00:14:03.800 | I'm going to share with you and you feel free to disagree with any of these arguments.

00:14:07.560 | They don't build on each other. They're all separate distinct arguments.

00:14:11.280 | But the first one is I don't like the government monopoly on lotteries that we have in the

00:14:15.720 | United States of America. I'm going to read to you a couple of articles on – some excerpts

00:14:22.120 | from some articles on the history of lotteries. But it's a fascinating history when you

00:14:26.120 | actually get into it, at least in the United States. The history of gambling in general

00:14:30.760 | is long and interesting but the history of lotteries specific is very interesting.

00:14:35.720 | There's a very long thread of tension between the need for certain people to raise money

00:14:44.360 | which is what lotteries are effective at and the moral opposition to them. This tension

00:14:51.800 | has been around for a very long time. They've gone in and out of favor over the centuries.

00:14:55.720 | In the beginning of the United States, at least the founding of the nation, lotteries

00:14:59.080 | were quite popular. Over time during the 1800s, there was a substantial uprising of social

00:15:06.240 | religious pressure that ultimately led to the outlaw of the lotteries.

00:15:11.120 | Reading from an article on the Priceonomics blog going over – which goes over the history

00:15:15.400 | of this, "In 1878, Louisiana ran the only legal lottery in the US. In the 1890s, national

00:15:22.480 | legislation prevented lotteries that crossed state borders and 35 states constitutionally

00:15:28.560 | banned lotteries. Legal lotteries took place only intermittently, although illegal ones

00:15:34.240 | still enjoyed popularity, until the Great Depression and World War II when the need

00:15:39.000 | for cash and stimulus overcame the reduced opposition to gambling and lotteries. In 1964,

00:15:45.040 | a referendum by New Hampshire voters legalized the lottery to close a state budget gap and

00:15:50.440 | to fund the school system. A majority of states eventually followed New Hampshire's example.

00:15:56.000 | It's a testament to the endurance of the opposition to gambling that no privately run

00:16:00.800 | lotteries exist."

00:16:02.400 | Now, the major problem with the system of lotteries is that in order to get past the

00:16:09.640 | overall social opposition to gambling, there needs to be some sweeter incentive, something

00:16:16.560 | to sweeten up the pot. So there needs to be something positive associated with it to make

00:16:22.120 | up for the moral evil and the negative impact on society that comes with gambling. "Politicians,

00:16:30.920 | voters and other actors have legitimized lotteries by linking them to activities of apple pie

00:16:36.360 | wholesomeness, funding education budgets, building libraries. One law during the Depression

00:16:42.200 | selectively allowed bingo at churches as donations to churches dried up."

00:16:47.800 | So you might ask the question, why is the state involved at all in a system of lotteries?

00:16:54.020 | And here I'm going to read an excerpt from an article from the Daily Beast by a professor

00:16:59.280 | of law at Yale University named Stephen Carter. "I'm not at the moment challenging the

00:17:05.920 | morality of gambling generally. Rather, I am fascinated by how different lotteries are

00:17:11.400 | from other functions that we generally agree the state should undertake. So for example,

00:17:16.400 | the state must famously provide for the common defense and protect the common environment.

00:17:21.420 | Because if those services were provided privately, there would be no way to keep those who did

00:17:25.360 | not pay their share from reaping the benefits. A government might provide a charitable service,

00:17:31.240 | food stamps for example, as a way of guaranteeing everyone a particular level of life's necessities.

00:17:36.680 | In other fields such as health insurance, those who believe that the government should

00:17:40.180 | provide it believe that the state will do a better job than private insurers. And whether

00:17:45.480 | they are right or wrong, they are at least offering an argument for not leaving the matter

00:17:49.320 | to the market. But with lotteries, as with other forms of gambling, no such argument

00:17:54.920 | exists. There is absolutely no reason to believe that the state can provide gambling services

00:18:00.160 | better than the private sector does. This is not a situation in which the government

00:18:04.360 | will return more value to consumers than the private market will, a claim often made for

00:18:09.400 | example by critics of for-profit health insurers. As a matter of fact, state-run lotteries return

00:18:15.140 | around 50% of revenues to winners. In other words, the expected value from a $1 bet is

00:18:21.120 | 50 cents. No casino could stay in business offering odds this poor, but the government

00:18:27.280 | manages it by prohibiting competition. Indeed, as William Norman Thompson points out in his

00:18:33.800 | History of Gambling, in the states where other forms of gambling are legal, the bettor's

00:18:39.000 | expected return is significantly higher than in the lottery, even when you factor taxes

00:18:46.280 | on the winnings. Most states do not tax winnings from their own lotteries. The federal government,

00:18:51.520 | of course, taxes it all. Overall, privately run gambling operations return something like

00:18:57.080 | 80% of bets in winning. In other words, from the point of view of the consumer, a state-run

00:19:01.920 | lottery is far worse than a private operation. There is absolutely no reason to believe that

00:19:07.320 | the state can provide gambling services better than the private sector does. There are other

00:19:12.440 | fields one might argue that the state should exit because the private sector could handle

00:19:16.320 | them better. For example, in the wake of stories about air traffic controllers falling asleep

00:19:20.920 | on the job, an increasing number of critics have suggested that the federal government

00:19:24.800 | runs the system quite badly, especially in comparison with the private companies that

00:19:28.840 | police the skies in so much of the West, notably Canada. But gambling is different. At least

00:19:34.640 | in the case of air traffic control, there are historical reasons to explain why we still

00:19:38.640 | have the cumbersome official bureaucracy in charge. In the case of gambling, the reason

00:19:43.920 | is a policy choice, and a simple one, raising revenue. Make no mistake, the state is here

00:19:50.160 | using its monopoly power to control businesses that others would happily provide. The success

00:19:55.760 | of Las Vegas and of the very online poker sites the government is busily shutting down

00:20:00.000 | are the evidence. Most states prohibit the running of any "game of chance" for profit.

00:20:06.040 | These restrictions flowed originally from a concern about moral degeneracy, the fear

00:20:09.840 | that gambling could easily become all-consuming and destructive. Another concern was that

00:20:14.480 | con artists would find ways to fleece the unsuspecting by concealing the true odds of

00:20:19.360 | winning. Evidently, those concerns are unimportant once the profits begin flowing into government

00:20:24.520 | coffers. And make no mistake, profit is what the state is after. In his textbook Public

00:20:30.880 | Finance, a Contemporary Application of Theory to Policy, economist David N. Hyman puts it

00:20:36.020 | this way, "Lotteries are profit-making enterprises that most states run like any

00:20:40.880 | business, with heavy advertising and innovation in products that generate sales." The earliest

00:20:47.240 | American efforts at raising funds through lotteries failed largely because the public

00:20:51.000 | stayed away, often out of a sense of repugnance. The states that run lotteries today have learned

00:20:56.680 | the lesson, wearing away moral objections through a combination of heavy advertising

00:21:02.520 | and the trumpeting of huge jackpots by the complacent media. And if we really no longer

00:21:08.320 | believe that games of chance are immoral, there is no reason not to let the private

00:21:12.520 | sector run them, at better odds for the better. Now, it is true that we live in an era when

00:21:17.080 | the states need revenue desperately, but are lotteries really the best way to raise them?

00:21:22.080 | The regressive effects of the lottery has been documented so often that the argument

00:21:26.020 | has become ubiquitous, simply part of the background. Poor consumers spend a far higher

00:21:30.600 | proportion of their income on lottery tickets than wealthy consumers do. In other words,

00:21:35.600 | the states are raising revenue by tempting the worst off of their citizens to hand over

00:21:39.640 | their scarce dollars, playing a game with a ridiculously low return.

00:21:44.240 | That's the end of Carter's essay. Now, I'm not exactly sure of my own opinion on

00:21:52.400 | whether or not lotteries should be freely permitted to exist. I think one of two things.

00:21:59.120 | Either lotteries should be freely permitted to exist on a private basis, free and open

00:22:04.520 | to competition by anyone who wants to get involved, or they should be banned entirely,

00:22:11.880 | for everybody, based upon the moral objection and the impact on society. In general, I'm

00:22:19.280 | mostly inclined to the first opinion, to let them exist regardless. This is due to my strong

00:22:26.720 | libertarian bent, which is simply live and let live. You make up your own decisions.

00:22:31.860 | But I've been reconsidering my positions for the last six months to a year on the topic

00:22:38.140 | of legislating moral behavior and trying to figure out what makes sense because the reality

00:22:42.840 | is we do in fact legislate morality across the board. The majority of arguments regarding

00:22:49.520 | legislation are based on moral grounds, but the question is whose moral grounds and why?

00:22:54.920 | So I've been doing my best to, in my spare time, kind of systematically rethink my perceptions

00:23:01.720 | on that issue for quite a while. I'm not sure where I stand at this point. I have an

00:23:07.320 | unsettled feeling at the moment. Again, I've been thinking a lot about it, searching for

00:23:11.360 | the right perspective, and I'm not sure exactly what to conclude.

00:23:15.800 | But regardless, I don't think we should be running the system the way that we currently

00:23:20.120 | run it. Again, I could probably be argued in both of those directions. But to say that

00:23:26.680 | something is morally evil and its impact is negative on society and thus we're going

00:23:34.120 | to restrict it for everybody except the state to run and then in order for the state to

00:23:40.560 | run it effectively, we're going to sweeten the market by figuring out what are some good

00:23:44.480 | wholesome things to send the money to that are politically popular, that's not a good

00:23:50.600 | plan. I don't think that politicians should be

00:23:54.840 | buying their access to the market through a state-run monopoly and then just simply

00:23:58.680 | sending the money to education. That's how it works in my state and in most of the 50

00:24:03.160 | United States. Basically, we know that lotteries lead to moral decline and generally oppress

00:24:08.380 | the poor. So in order to make them palatable to the general public, we take some money

00:24:12.760 | out and send it to education. So here's the impact and here's my summary

00:24:18.520 | of how it winds up working in the long run. Again, feel free to disagree with me and form

00:24:22.680 | your own opinion. It's just mine. But lotteries are actually about the worst of the worst

00:24:27.020 | of the worst in terms of things that are wrong in our current society. Overwhelmingly, it's

00:24:32.240 | poor people who play lotteries at the highest levels. So lotteries effectively wind up being

00:24:37.780 | a tax on poor people. That tax is contrary to what is stated as being our overall policy

00:24:45.780 | of taxation in the United States. Supposedly, we believe as a nation in the concept of progressive

00:24:53.080 | taxation that the rich should pay more, a higher percentage of their income, than the

00:24:59.240 | poor. This tax is the opposite. It's regressive and the poor pay way more as a percentage

00:25:06.840 | of their income than the rich. Now, I'm not in favor of progressive or regressive

00:25:12.280 | taxation. I'm in favor of flat taxation. But I'm just pointing out this is the actual

00:25:16.480 | effect of the lottery. So we know this about lotteries and we feel pretty scummy about

00:25:21.000 | them. So we try to offset those feelings of guilt with a slick sales job using the topic

00:25:25.100 | of funding education. Most states have applied some or all of their profits from running

00:25:30.360 | a lottery to the state's educational programs in order to get it past the voters and in

00:25:34.480 | order to gain popular support. Basically, we say, "Well, we don't really like the

00:25:38.360 | lotteries. But as long as we can benefit society by funding education instead of just enriching

00:25:42.120 | the corporation in charge, we'll take it." And in theory, public schools and the concept

00:25:46.720 | of public education is sold as benefiting society with a special emphasis on benefiting

00:25:51.920 | the poor. Theoretically, it's a social public good. This fits into our US-American ethos

00:25:59.840 | of egalitarianism and equal access for all. After all, we know, well, the rich would send

00:26:05.400 | their kids to school but the poor would--they would all be uneducated misfits. So we're

00:26:08.680 | going to apply equal education for all. So we say that, "Well, we'll offset the oppression

00:26:13.300 | of the poor by offering funding for public schools and scholarships for college," and

00:26:17.640 | that's the sales pitch. So what's the problem? Well, number one, in my opinion, the primary

00:26:23.000 | function of public schooling in the United States is not the education and equipping

00:26:26.260 | of the individual person but rather the homogenization of society for easier governing and control

00:26:32.000 | and the babysitting of kids so that both parents can be involved in the labor force, thus keeping

00:26:36.720 | per capita labor costs low. Feel free to disagree with that. That's one of the less popular

00:26:41.880 | opinions that I have. So feel free to disagree but at least research the question a little

00:26:47.680 | bit and see if you can find any evidence in favor of that thesis. I find the historical

00:26:53.120 | evidence compelling and as I watch society at large, I find the current evidence compelling.

00:26:57.560 | But you have to judge for yourself. But that press to keep per capita labor costs low results

00:27:02.920 | in real damage to the poor. It really does. Now, ignore that argument because that one,

00:27:11.640 | again, is one of my wilder ones. Even if the purpose of school is all about the education

00:27:16.520 | and equipping of the individual, at least consider this, the results of academic achievement

00:27:21.800 | in literacy and numeracy in the United States are quite bad compared to what they could

00:27:26.960 | be. Many people seem to agree on that and different people suggest different solutions

00:27:32.000 | to that problem. Most of the solutions involve spending more money. The problem for me is

00:27:38.320 | I've never found any compelling evidence that spending more money solves the problem

00:27:42.480 | and improves the results. The only evidence I've seen of what makes the difference seems

00:27:47.580 | to be primarily parental involvement and maybe the impact of PE classes and physical movement

00:27:54.000 | during school. Now, if you have evidence in favor of anything else, I'd love to see it.

00:27:58.120 | I've never found it. Some of the most expensive public school districts in the country have

00:28:02.800 | the worst performance as measured by test scores. When you compare the fact that the

00:28:07.960 | average public school district in the United States of America spends $10,000 per year

00:28:13.200 | per child, that's the average, almost double that in some states, and gets, depending on

00:28:20.560 | the district, academic results that are mediocre to bad, and the average homeschool family

00:28:26.240 | spends $500 per year per student, and these students outperform the public school kids

00:28:31.000 | on every academic metric I've ever read about, we know the primary problem isn't lack of

00:28:36.800 | money. Now, that disparity in cost doesn't include the cost of the parent's time in

00:28:43.720 | home education in the $500 number, but it does include the cost of the teacher's time

00:28:48.080 | in the $10,000 number. So that is a flaw in that argument. But in 2015, in a world where

00:28:54.760 | once we get a child past those first few years of handholding to the point where they can

00:28:58.280 | use a computer effectively, then we can have essentially one world-class teacher teach

00:29:04.800 | a subject to millions of kids through a virtual connection. We can certainly at least improve

00:29:10.640 | the system a little bit, even if we had to redesign the system of teachers. At least,

00:29:16.520 | if nothing else, find out who the best math teacher is in the United States, give them

00:29:21.640 | an internet connection – it's already been done, it's free, it's called the Khan Academy

00:29:24.560 | – give them an internet connection, let them teach one lesson, and then take half

00:29:31.200 | the teachers and double the – turn them all into tutors so they have time just to

00:29:35.680 | tutor kids instead of teaching kids. Anyway, that's tough. But my point is more money

00:29:41.320 | simply does not equal a better education.

00:29:44.500 | So why doesn't – why don't simple changes get done? Well, politics and votes. Until

00:29:51.400 | the change is forced by the free market conditions, it's not going to get changed. Now, that

00:29:58.280 | change is coming. It's been building and building and building, and it's going to

00:30:00.840 | change massively in the next decade or two. Remember, in any compounding curve, at the

00:30:06.320 | beginning, the compounding effect that is measured and felt is tiny, and it's massive

00:30:11.960 | as it grows.

00:30:14.520 | Now the other problem with this line of thinking is remember that the academic metrics are

00:30:18.920 | actually horrible predictors of life success in almost every single way. They simply do

00:30:25.240 | not translate to real world results in any measurable way that I've ever been able

00:30:30.080 | to find evidence for. GPAs and test scores primarily predict the students who do well

00:30:37.760 | in the formal academic structure. Students with great GPAs and great test scores in high

00:30:42.920 | school are likely to do well in college, and those who have great GPAs and great test scores

00:30:48.240 | in college, undergraduate college, are likely to do well in graduate school. But once you

00:30:52.800 | get out of the academic environment, you don't find a reliable causal relationship between

00:30:59.440 | GPAs and test scores and financial income or life success. Test scores essentially predict

00:31:06.040 | excellent students. They don't necessarily predict successful people or even rich people.

00:31:13.040 | So even if we pour loads of money in, that doesn't necessarily impact the lifelong

00:31:19.080 | success of the student.

00:31:22.120 | Now next argument. Assume all of what I just said is wrong. Even if the purpose of public

00:31:28.640 | schools is the education and equipping of the student individually, and even if the

00:31:33.200 | current structure is the best way to achieve that purpose. The problem is the people who

00:31:39.480 | are most ill served by the current structure and the current system are the poor, and the

00:31:45.960 | people who are the most benefited by the current system are the mass affluent. And research

00:31:50.440 | the numbers here. The high school dropout rates for poor students are extremely high.

00:31:56.080 | The poorest 20% of students as measured by household income are five times more likely

00:32:01.960 | than the richest 20% of students to drop out of high school. Why? Well, usually there are

00:32:10.200 | three major reasons that are cited that are the primary contributing factors as to why

00:32:16.840 | students drop out of high school.

00:32:20.000 | Number one, lack of parent engagement. Number two, poor academic performance of the student.

00:32:28.280 | And number three, the family income needs. Now all of these statistics can be beat. It's

00:32:37.080 | been proven again and again that on an individual basis, they can be changed. When a teacher

00:32:42.960 | takes an interest in a child and really encourages them and inspires them and holds them accountable,

00:32:49.960 | those factors and those trends can be beat. But in general, students from poor families

00:32:57.680 | get worse results from the government school system than students of the mass affluent.

00:33:03.800 | Now who gets the benefits? What do many wise affluent parents do? Well, they carefully

00:33:08.520 | research school districts and they take advantage of the subsidized cost of schooling for their

00:33:13.880 | family's own economic benefit. Read Tom Stanley's research on the habits and practice of millionaires

00:33:21.120 | and you find this as a consistent theme throughout. Millionaires often search carefully and choose

00:33:27.820 | their homes carefully to be in an excellent school district so they don't have to pay

00:33:31.720 | for private school tuition. Now many affluent families still pay for private school tuition.

00:33:38.960 | If you're working in the glittering rich, you're very likely to be sending your child

00:33:43.760 | through the elite system of boarding schools or something like that. There's a big difference

00:33:49.000 | there, but I'm talking about the mass affluent. So what's the impact on students? Well, richer

00:33:55.320 | families are more likely to have engaged parents. Makes a big difference in their child's encouragement

00:34:04.280 | to finish schooling. Richer families are more likely to hold their students accountable

00:34:09.700 | for their academic performance. So the student has an incentive to increase their academic

00:34:15.460 | performance because among the rich, education is one of the most highly valued, one of the

00:34:21.840 | highest values. And richer families are less likely to have problems with their family

00:34:30.560 | income. Their family income needs are satisfied. So the students can afford to make the time

00:34:36.360 | to study and can afford to be focused exclusively or primarily on their academic achievement.

00:34:47.960 | So what we have is a system where the poor are playing the lottery, paying for the funding

00:34:54.200 | of schools and not benefiting from it on the back end. Now everything I just said is about

00:35:02.400 | primary and secondary schooling, but depending on the state's lottery system, some of that

00:35:07.240 | money goes into college education as well. And many of those things apply to college

00:35:14.400 | as well. Poor students are less likely to go to college and less likely to graduate

00:35:19.500 | from college and thus they're less likely to benefit from the lottery college education

00:35:25.360 | funding than are rich students. I got a lot of money from the Bright Futures program in

00:35:29.960 | my state, which is a lottery program. As I recall, probably something in total of $15,000

00:35:35.320 | to $20,000 over the four years of college tuition. That direct subsidy went into my

00:35:42.960 | pocket. Now my parents didn't contribute financially to my college education, so I

00:35:53.080 | was a pretty poor student all the way through. But I didn't necessarily qualify as a poor

00:35:57.420 | student the way that these things are measured. The problem is that college subsidy is in

00:36:02.160 | addition to all of the other money we spend on public colleges and universities, much

00:36:07.480 | of which is very bloated and wasted. And if it's not bloated and wasted, it's certainly

00:36:13.560 | at least out of date, where in, again, 2015, one professor can teach millions of people

00:36:18.480 | efficiently and many professors then could go on and provide the individual interaction

00:36:24.320 | in other ways.

00:36:27.740 | Now, one more very quick libertarian argument and then an argument that you'll agree with

00:36:33.480 | me regardless of your – probably regardless of your political background on the far spectrum

00:36:38.700 | from where I am. But the quick libertarian argument is this. Even if the purpose of public

00:36:43.480 | schools is the education and equipping of the student and even if the current structure

00:36:47.320 | is the best way to achieve that purpose and even if all students from all economic backgrounds

00:36:53.220 | were well-served by the school system, I think it's still a problem because it's a system

00:36:57.600 | that relies on theft to fund it. My children and their education is my responsibility,

00:37:05.640 | not yours.

00:37:08.500 | So basically what happens is we live in a system where I send the police to my neighbor's

00:37:13.080 | door who don't – they don't have any kids and the police stand there with a gun

00:37:17.000 | on their hip to enforce the tax that's extracted from my neighbor to pay for my kid's schooling.

00:37:23.200 | So I'm forcing my neighbor who doesn't have children to pay for their kid's schooling.

00:37:28.840 | As far as I'm concerned, that's theft. Now, why doesn't it change? Well, we've

00:37:33.120 | decided as a society collectively, theoretically, that it's a social good and my neighbor

00:37:38.820 | is benefited by my children not being total misfits and we think that's the best system

00:37:44.200 | that we have.

00:37:45.200 | But taking money from the poor with a lottery system and putting it into a system that's

00:37:50.200 | based upon theft is not a good system in my opinion. Theft from the rich is just as evil

00:37:56.920 | as theft from the poor regardless of what Robin Hood had to say about it. Now, the argument

00:38:04.480 | that – feel free to disagree with that one. That one is a very unusual and unpopular opinion

00:38:09.400 | in our modern society. But here is one that I think you will likely agree with.

00:38:15.120 | So let me disagree with every one of my other arguments and you're very much in favor

00:38:20.240 | of promoting and sponsoring state-funded schooling. Well, what's the problem with the lottery?

00:38:29.840 | Costs are rising for many reasons, some structural, some non-structural. The government school

00:38:38.840 | system is a total disaster because the embedded structural costs are long-ranging and massive.

00:38:47.960 | But popular support goes down. People have a desire to see on a social basis education

00:38:58.080 | raised which is why the majority of politicians will say, "We've got to fund education.

00:39:02.720 | We've got to fund education." It's the last – it's the only state religion that

00:39:06.440 | we have in the United States of America is the concept of education. It's almost sacrosanct.

00:39:11.600 | It can't be touched. But the problem is the embedded costs continue to rise. Even

00:39:20.640 | though people give – and general – lip service to the idea, we all pretty much feel

00:39:26.520 | like we're being about taxed enough. So in an era of rising costs, the money has to

00:39:32.400 | come from somewhere. Because the politicians are loath to raise taxes in some states, what's

00:39:40.600 | happening is some states are steadily taking the lottery funds and replacing existing tax-based

00:39:48.600 | funds for education with those lottery funds. So instead of lottery money being additional

00:39:55.920 | funding, it's replacement funding. The money is not extra money. It's replacement money.

00:40:02.680 | That's a real problem. What happens is instead of coming together as a society collectively,

00:40:11.920 | forming the structure of a state and saying officially, "We officially want to have

00:40:16.920 | common schooling for all of our citizens so that the society in general is enhanced and

00:40:24.040 | we are all willing to pay for it, even those of us who don't have kids and who don't

00:40:29.000 | realize the direct benefit from this, and then we officially follow through to pay for

00:40:34.320 | it to realize our gains," what we actually do is we take the money from poor people with

00:40:44.160 | an indirect tax and replace the other directly taxed money with the indirectly taxed money

00:40:52.120 | so that we can spend the other directly taxed money on other stuff. It's a bait and switch.

00:40:59.520 | Which benefits who? The politicians in charge. It's a corrupt system. It's a corrupt system

00:41:08.400 | that is pervasive across our society. We promise benefits now without actually paying for them

00:41:16.160 | so that we can get the political popularity of the benefits while avoiding the political

00:41:21.320 | unpopularity of having to pay for them. We can argue about what we should or should not

00:41:26.400 | collectively do as a society, but if we argue and decide among ourselves collectively that

00:41:33.200 | we're going to provide a certain benefit, it's only right that it be paid for. For

00:41:43.080 | all those reasons, I have major issues with lotteries and the focus on education. I hope

00:41:50.000 | you'll think through some of those discussions and consider your own perspective. There's

00:41:55.160 | no broad-ranging political upswell of support to make any changes for lotteries, and I don't

00:42:02.120 | really expect there to be. This is a very quiet issue, which I never hear anybody talk

00:42:07.720 | about, but this is what's happening quietly in the background. So just consider it.

00:42:15.280 | Now my final argument on lotteries is very brief, but it's also very important. Ignore

00:42:21.160 | all the arguments related to education and just focus on this one. Winning the lottery

00:42:25.660 | is for the most part very bad for many winners. It has major ill effects in many of their

00:42:34.080 | lives and it's often a curse. Now it's not always. We love the stories of the people

00:42:39.520 | who are benefited from it, and many people are able to take the money and put it to excellent

00:42:45.600 | use. But in many people, it's a curse. I tried to research the statistics on this question,

00:42:53.520 | but they were too inconclusive officially for me to be comfortable citing any of them.

00:42:58.960 | There's a lot of misinformation on the topic. But it seems to me that at least more often

00:43:04.940 | than not, so I guess that would put it at a higher than 50% number, but I'll just say

00:43:09.760 | more often than not because I don't know the exact number. The effect on the lottery winner's

00:43:16.200 | life is negative because more often than not, the buyers of lottery tickets are poor and

00:43:23.720 | undisciplined with money already. Now again, many people play the lottery who are not poor,

00:43:30.840 | maybe even some of you who are listening. For some people, it's fun and it's not a

00:43:34.300 | substantial part of their income, and thus it has few ill effects. But a disproportionately

00:43:39.820 | high number of people who are poor play consistently. And here I'll cite a quote from a Wired

00:43:46.000 | article. "While approximately half of Americans buy at least one lottery ticket at some point,

00:43:53.180 | the vast majority of tickets are purchased by about 20% of the population." I'm interrupting

00:43:59.420 | the quote. That's about what you would expect, Pareto principle at work. These high frequency

00:44:04.780 | players tend to be poor and uneducated, which is why critics refer to lotteries as a regressive

00:44:10.060 | tax. In a 2006 survey, 30% of people without a high school degree said that playing the

00:44:17.000 | lottery was a wealth building strategy. On average, households that make less than $12,400

00:44:24.500 | a year spend 5% of their income on lotteries, a source of hope for just a few bucks a throw.

00:44:35.780 | Think about that number. On average, households that make less than $12,400 a year spend 5%

00:44:44.300 | of their income on lotteries. Now, if you make less than $12,000, if you make $12,400

00:44:52.180 | a year and you spend 5% of your income on a lottery, that comes out to be $620 per year.

00:45:02.620 | If you are making that tiny amount of money per year, $620 is a huge amount of money for

00:45:12.580 | you to be wasting. If you've listened to this show for any length of time, you should start

00:45:20.340 | to recognize that you have to behave very differently depending on where you are in

00:45:27.500 | your financial journey. The person earning $12,400 a year must take advantage of every

00:45:36.660 | single dollar and squeeze every bit of value out of it. And $620 per year is the price

00:45:45.040 | that you need to be investing into furthering your education, into investing in your own

00:45:52.740 | business, into any number of things that are better than a lottery. If you're making $100,000

00:46:00.980 | a year and just for fun when you're filling up your car with gas, you buy a couple of

00:46:03.980 | lottery tickets, it doesn't really matter. But that's not what happens. And that is a

00:46:10.380 | horrifyingly high number of dollars to be spending on an absolute waste, $620 per year.

00:46:19.820 | That's $51.67 per month in a budget with zero wiggle room.

00:46:30.200 | So when somebody's making decisions that poor and then they come into a lot of money all

00:46:36.140 | of a sudden, it quickly destroys their lives. And you have incredibly high incidence of

00:46:43.220 | divorce, depression, suicide, bankruptcy, etc. If people who already have a framework

00:46:53.140 | for wealth come into sudden money, then it just simply flows into their lives without

00:46:57.020 | a major disruption. It goes to the next goal on the list. And so therefore, again, some

00:47:04.740 | people do win the lottery who are already effective with money just because they play

00:47:09.700 | for fun. It's something that they enjoy in the same way that you might go on a cruise

00:47:13.620 | and decide to blow a thousand bucks on the blackjack tables. I wouldn't do it but it

00:47:18.900 | doesn't necessarily mean that you are I think financially responsible. I've blown my $50

00:47:24.660 | a couple of times on a blackjack table.

00:47:28.660 | The point is the scale matters. Just consider those things in your normal life. And again,

00:47:36.180 | I don't have any action steps with it but I do think those are at least compelling reasons.

00:47:41.500 | For all those reasons, I'm choosing to answer this question from the perspective of an unexpected

00:47:47.660 | rich relative dying and leaving me an unexpected inheritance rather than based on a lottery

00:47:52.900 | winning. Since I don't play the lottery, it's a little bit easier for me to consider that

00:47:57.700 | actually happening. So what would I actually do? What would I buy? What would I do with

00:48:02.500 | the money? How would I invest it?

00:48:04.700 | Well, again, we're going to be talking about something that's based upon values. It's a

00:48:11.460 | very personal question. In order for you to understand my answer to the question, you

00:48:17.740 | would need to understand a little bit about the framework of my worldview and especially

00:48:22.180 | a little bit of my personal history as it relates to money. And I'm going to share with

00:48:28.500 | you four important concepts behind my personal worldview and how I think about handling money

00:48:35.420 | that flows into my life. And those four concepts are number one, accountability. Am I accountable

00:48:40.940 | for how I spend money and if so, to whom? Number two, sovereignty. Who's in charge of

00:48:46.120 | how I spend my money? Number three, a concept of stewardship. And number four, a concept

00:48:52.380 | of faithfulness. And those last two are two concepts that are primarily specific to Christianity.

00:48:59.340 | And if you've gotten with me to this point in the show, thank you. I'm going to spend

00:49:02.580 | a little bit of time talking about Christianity and biblical teaching on money. If you're

00:49:07.920 | accustomed to tuning out religious discussions, feel free to skip it. I'll put a note in the

00:49:12.580 | show notes where I actually get to what I would invest in. But I will ask you to give

00:49:15.780 | this a shot, and especially if you are a secular person. And so as a bait for you, I'll give

00:49:23.620 | you a few tidbits in these next few ideas that you can use to catch out some of your

00:49:30.820 | Bible-thumping friends on some of their favorite Bible verses. And if you like to challenge

00:49:36.420 | people on their beliefs, as I do, and if you enjoy being challenged yourself, as I do,

00:49:41.000 | you might enjoy this. I hold to a biblical Christian worldview. And I'll define that

00:49:46.540 | a little bit for you, because every worldview has nuances. It's just because you give something

00:49:50.860 | a name doesn't necessarily mean you actually know what it is. But the impact of my life

00:49:58.660 | of this worldview on money is hard to overstate. One of the major reasons that I didn't become

00:50:04.460 | a Christian at an earlier age is that I didn't want somebody else to tell me what to do with

00:50:09.220 | my money. Because I was raised in an environment of family filled with Christians and an environment

00:50:17.020 | filled with Christians, I knew that was a major component of Christianity. And I never

00:50:23.820 | wanted someone to tell me what to do with my money. I wanted to be rich. I wanted a

00:50:28.340 | fancy lifestyle. I hated the idea, what I associated with Christianity, of being sent

00:50:35.380 | off into lifelong poverty, never able to spend money, never able to have fun, just never

00:50:42.740 | being able to do that. But I often wondered if what Christians said was true was actually

00:50:50.340 | true. Did people really change? Now, my own path into a relationship with God was a bit

00:50:58.060 | different, I think, than many people. It started to some degree intellectually. I started from

00:51:09.620 | the philosophical perspective of thinking, "Is there a God?" And that's why you'll

00:51:15.660 | notice the flavor of when I talk about this stuff, it's driven philosophically. That

00:51:20.540 | was because that was a meaningful way for me. So for me, it started intellectually.

00:51:24.700 | And then later I saw my own sinfulness. I didn't see the whole at the beginning. I

00:51:32.540 | only saw part of it. My major personal struggles with sin were sexual sin and pride. And I

00:51:39.460 | repented of those sins, but I didn't clearly see how much my love of money had affected

00:51:44.260 | my life or really even know how to repent of it at the beginning. And I was very grudging

00:51:51.860 | and very slow with regard to thinking about what to do with money. In other areas, I was

00:51:58.020 | much more willing to follow God's teachings, but not with money. I knew that if I were

00:52:05.460 | to become a Christian, this is what kept me away for so long, I was surrendering absolute

00:52:08.820 | control of my life. And that's a tough, tough decision to make, especially when you're

00:52:12.980 | young and capable and strong and self-sufficient, and especially when you love money. There's

00:52:21.260 | actually a Bible story about that. I won't go into that one. But I didn't know what

00:52:25.980 | to do with that. I knew that I had to surrender, so I very grudgingly surrendered, but it wasn't

00:52:32.020 | clear for me how to repent of that because it was pretty deep. Now, if I'd stolen money,

00:52:38.380 | it would have been simpler. Repentance would have meant confessing the sin and going back

00:52:41.880 | and making restitution to everyone from whom I'd stolen money. But how do you repent

00:52:46.860 | of a love of money? How do you make that right? I didn't really know what to do about it.

00:52:53.580 | And so I just simply had to kind of set those topics aside for a little while. But one of

00:52:57.700 | the things that I discovered in the last 10 years of my own personal relationship since

00:53:01.980 | I was born again was a dramatic change in my heart. I discovered that what Christians

00:53:06.960 | said was true was true, and that God really could change people. I didn't make these changes

00:53:14.420 | intentionally. I couldn't. I didn't have any ability to control personally my love of money,

00:53:21.260 | but little by little, these things changed. So what I'm going to share with you is a very

00:53:26.060 | hard fought struggle and journey in my life to this position. That's simply a way of saying,

00:53:36.660 | feel free to disagree with me because I understand the disagreement because I would have hated

00:53:40.660 | hearing these ideas in the past. I did hate that. But things have changed. And I am still

00:53:48.800 | very imperfect with knowing exactly what to do and seeing all the ways that it learns

00:53:54.240 | and works out. I'm learning and I'm growing, but I'm sure there are areas of fault and

00:53:58.440 | failure and there might even be some hypocrisy in some area of my life. I don't see it right

00:54:02.080 | now, but I might be blind to it. And I'm quite certain that some of the things that I currently

00:54:06.900 | think and believe are probably wrong. I joke with my wife that 50% of what I currently

00:54:10.960 | believe is wrong. The problem is I don't know which 50% it is. So thus we have one of the

00:54:15.420 | major joys of life to sort through our thinking and study and learn and grow.

00:54:19.800 | So one of the fundamental distinctions regarding life and money and different worldviews is

00:54:25.460 | the concept of accountability, accountability in general and accountability with regard

00:54:30.660 | to what we do with our money. If you won $10 million from a rich uncle or rich aunt, to

00:54:37.340 | whom are you accountable? Are you even accountable at all? Are you accountable to that uncle

00:54:45.400 | or aunt to use the money in a way that they would wish? If so, why? Or if not, why not?

00:54:58.260 | Are you accountable to society in general to use the money for some social purpose,

00:55:04.060 | social good? If so, why? If not, why not? Are you accountable to the state government

00:55:16.620 | to pay their share of tax on the money? If so, why? If not, why not? What if you inherited

00:55:28.780 | the money in secret? What if it's untraceable gold coins that are passed to you and handed

00:55:33.060 | to you? Are you still accountable to pay your share of the tax? Are you accountable to your

00:55:38.820 | spouse to share the money with them collectively? If so, why? And if not, why not? Are you accountable

00:55:48.580 | to your family to help your family members? Are you accountable to yourself? Are you accountable

00:55:56.620 | to God? Are we accountable for the things that we do, and if so, to whom? If you think

00:56:05.780 | about that question, you come up with many different answers. In the Christian worldview,

00:56:10.060 | you're accountable to God to use the money in the way that he would instruct. In a secular

00:56:14.160 | worldview, you're accountable primarily to yourself to make yourself happy. And secondarily,

00:56:21.020 | you might be accountable to society depending on which philosophical stream you are comfortable

00:56:26.340 | with. There's a vague secondary accountability to society in general.

00:56:31.180 | We all live within an environment of accountability, but we rarely consider the basis for it. So

00:56:38.340 | consider it. To whom are we accountable and why? To whom are you accountable in your job?

00:56:43.700 | To whom is the CEO of your company accountable to? To whom are the governing bodies accountable

00:56:48.580 | to? Where does our authority come from and why? I believe the answer to that question

00:56:54.860 | starts and flows out of Genesis 1, verses 1, which says, "In the beginning, God created

00:57:01.860 | the heavens and the earth." Now, I don't know if that's the most important statement

00:57:05.260 | in the Bible, but if it isn't, I don't know which statement would be more important

00:57:09.100 | because everything flows from that. And that's the reason why there's such a battle in

00:57:13.360 | our common cultures over the origin of man. God is creator or man is evolved accident,

00:57:19.340 | happenstance, because everything hinges on that question. If you remove the first few

00:57:23.340 | chapters from the Bible, the entire thing is incoherent and it falls completely apart.

00:57:27.900 | So I'm fascinated by that topic and I frankly think that each and every person should be

00:57:32.060 | fascinated by it because it fundamentally affects all of our life. And I'm not going

00:57:37.580 | to go too deeply into the discussion because if I do, I'll misrepresent the focus of

00:57:41.180 | the podcast. This show is not a bait and switch where I bait you in to talk about money, then

00:57:44.660 | switch it out and preach at you. But the show is also not a lie where I tell you that you

00:57:49.820 | can teach certain things about finance without being affected by worldview. So when I think

00:57:56.060 | about accountability, I think about accountability for life. That's even why I talk about – it's

00:58:02.020 | not a bait and switch. I'm accountable to you, the listening audience, to tell you what

00:58:07.260 | I'm going to do and then do it. I have a list of 16 statements that are very short,

00:58:13.700 | but to me they underpin this concept of accountability for life in general. But they also underpin

00:58:23.960 | an accountability for what we do with money. These things create a particularly thorny

00:58:30.860 | thing – thorny impact for people like me who are talking about money. But I think in

00:58:36.940 | terms of contrast, so consider these 16 statements and think about how they might apply to the

00:58:44.140 | question of accountability of life in general and to whom we're accountable for how we

00:58:47.420 | use money. Feel free to pick either side or anywhere in between.

00:58:52.020 | Number one, if you believe in biblical creation, the idea that God created the heavens and

00:58:57.660 | the earth, then you believe in a father God who is personal. If you believe in secular

00:59:04.820 | evolution, then you tend towards the concept of mother nature, which is a mythical cultural

00:59:11.740 | construct, a concept. If you believe in biblical creation, then you believe that this universe

00:59:17.860 | was the result of a personal choice. If you believe in secular evolution, then you argue

00:59:24.740 | that it was a random impersonal chance that has a profound impact on money. If you believe

00:59:31.540 | in biblical creation, then you believe there was a designed purpose for life. Under secular

00:59:38.060 | evolution, there's a random pattern. If you believe in biblical creation, the universe

00:59:44.820 | is a supernatural production. In evolution, it's a natural process. If you believe in

00:59:52.260 | biblical creation, the whole universe is an open situation, open to personal intervention

00:59:59.460 | by both God and man. In evolution, we have nature as a closed system that operates itself.

01:00:08.700 | If you believe in biblical creation, we have the concept of providence, that God cares

01:00:13.880 | for his creation and provides for it and looks after it. With evolution, we have coincidence.

01:00:20.740 | If anything good happens, it is merely the result of chance. If you believe in biblical

01:00:27.080 | creation, then we accept that God is free to make something and to make man in his image.

01:00:33.500 | If we accept evolution, we're left with a view that man is free to make God in whatever

01:00:39.120 | image he chooses out of his imagination. If you believe in biblical creation, God is Lord.

01:00:49.720 | Under evolution, man is Lord. If you believe in biblical creation, we are under divine

01:00:57.440 | authority. But if there is no God, we are autonomous as humans and can decide things

01:01:03.600 | for ourselves. If we accept God as creator, we accept that there are absolute standards

01:01:09.920 | of right and wrong. But with secular evolution, we have relative situations. With God's

01:01:19.480 | creation, we talk of duty and responsibility. With evolution, we talk of demands and rights.

01:01:30.160 | Under God, we have an infinite dependence. We become his little children in biblical

01:01:37.160 | words and speak to the heavenly Father. With evolution, we are proud of our independence

01:01:44.640 | and we speak of coming of age and of no longer needing God. According to the Bible, man is

01:01:52.000 | a fallen creature. According to evolution, man is rising and progressing all the time.

01:02:00.020 | In the Bible, we have salvation for the weak. In evolutionary philosophy, we have the survival

01:02:06.300 | of the strong. The Bible teaches that you are powerful when you do what is right. Evolutionary

01:02:14.440 | philosophy leads to a might is right outlook. And here's the key. The Bible says that faith,

01:02:24.640 | hope, and love are the three main virtues in life. Secular evolution says that you should

01:02:30.640 | indulge yourself and look after number one. Now, if you think through that list or if

01:02:38.680 | you can bear to listen through it again, each of those I've specifically chosen because

01:02:43.880 | it has an impact on money. The challenge is that either of those positions requires faith.

01:02:52.160 | It's kind of interesting. The Bible never proves God's existence. It assumes it. And

01:02:57.920 | secular humanists can't disprove God. They assume non-existence. So either way, you're

01:03:03.120 | left with faith. And I love to study what Christians call apologetics. And I love to

01:03:08.880 | have personal conversations with people about the subject. I love the intellectual arguments

01:03:13.680 | for and against the existence of God. But the problem is that this is the wrong format

01:03:18.080 | for that. But either way, you make an assumption and then you build on that assumption. The

01:03:26.440 | Bible itself says in the book of Hebrews says, "Whoever comes to God must first believe that

01:03:30.240 | he exists and that he rewards those who diligently search for him." And I found that to be true.

01:03:38.120 | Now, the major impact of these perspectives is the concept of accountability. And so for

01:03:44.280 | me, I believe that I'm accountable to God for everything I do, for all of my actions,

01:03:50.680 | for everything in my life. I'm accountable to please God in all things. And that includes

01:03:57.440 | how I use the money that I control. I'll use the term "his money," which I'll come to in

01:04:03.000 | a moment. If I were a secular humanist, then I would believe that I'm accountable to myself

01:04:07.780 | and to please myself. As a Christian, I'm commanded to live with the focus on the next

01:04:14.720 | life, not this life. If I were a secular humanist, I would live with the focus on this life,

01:04:23.440 | not the next life. As a Christian, I'm commanded to live with the focus on doing what is right.

01:04:32.560 | As a humanist, I would live with the focus of gratifying my desires and attaining personal

01:04:37.400 | happiness. So for me, if I won $10 million in a lottery, I'm accountable to God for how

01:04:49.600 | I handle the money. Now, I'm also accountable for how I handle every dollar that flows through

01:04:54.640 | my hands today. So then the natural next question would be, "Okay, if I'm accountable for something,

01:05:00.280 | then what's the basis upon which I'm held accountable? What's the standard by which

01:05:03.880 | I'm going to be judged? What am I being held accountable to?" And that's why we need some

01:05:10.880 | sort of instruction. I take that instruction from the Bible.

01:05:15.360 | Now, interestingly, the Bible has a lot to say about money. Here's a statistic that will

01:05:19.320 | surprise many people. It certainly surprised me when I first learned it years ago. I think

01:05:23.240 | it was from a Crown Financial textbook. There are approximately 500 verses in the Bible

01:05:29.840 | on prayer. There are fewer than 500 verses in the Bible on faith, but there are more

01:05:39.240 | than 2,350 verses on how to handle money. The Bible has a lot to say about money and

01:05:48.520 | it will impact every part of a Christian's life. I'm not going to take the time to go

01:05:52.700 | into a defense of why I give the Bible any authority. It's an important discussion, but

01:05:56.800 | I'll leave that up to you to research and consider it. I've talked about it in previous

01:06:00.160 | shows. But don't assume it. It's an incredibly important question.

01:06:05.840 | But for me, I use the Bible as the basis of this worldview, and I believe that it contains

01:06:12.920 | the revealed words of God and is absolutely relevant to our modern situation, especially

01:06:17.320 | to what I should do with money each and every single day. Even though much of it is over

01:06:21.200 | 2,000 years old, some of it 4,000 years old, that statement is utterly maddening to many

01:06:27.120 | people for many reasons. Because if I were to make that claim about almost any other

01:06:31.300 | book or any other subject, I'd be laughed out of just about any conversation. Imagine

01:06:35.880 | for a moment my making a claim that a 2,000-year-old math book is perfectly relevant and adequate

01:06:42.640 | for today's world, or that a 2,000-year-old physics textbook is the latest and greatest,

01:06:48.200 | how absurd that claim would be. And yet, that's what the Bible claims for itself, and ultimately,

01:06:54.600 | I believe it proves it.

01:06:57.200 | Now, if I assume the authority of Scripture and I wish to apply what it says to do about

01:07:01.920 | money, does that make it easy to know what to do in every situation? Not the least little

01:07:07.880 | bit. Because first, much of it was written thousands of years ago. They didn't have

01:07:14.840 | IRAs 3,000 years ago. But more importantly, you've got to build these things together

01:07:24.600 | in a coherent fashion. I'll link to a PDF outlining the verses in the Bible that discuss

01:07:30.640 | money if any of you are interested in actually looking at it. But please, don't just take

01:07:35.880 | a verse individually and try to build on it without understanding the overall framework

01:07:40.280 | for each statement and verse. That ends in disaster. In the same way that perhaps an

01:07:46.200 | example would be that just because you have the U.S. Constitution written out doesn't

01:07:50.760 | mean that there's no question as to interpretation and application. In the same way, just because

01:07:56.640 | you have the Bible written out, even if you assume what I assume, which many people don't,

01:07:59.960 | it doesn't mean that you don't have to work out your interpretation of what it says.

01:08:04.520 | And even if you believe, as I do, that the Bible is divinely inspired but the U.S. Constitution

01:08:09.200 | is not, then it still doesn't mean that just because it's divinely inspired that it's easy

01:08:12.880 | to figure out in certain circumstances. And there are many reasons for this, and I'll

01:08:17.520 | just share a few examples that might be interesting to you. One of the biggest reasons is to recognize

01:08:25.840 | that the Bible is not really one book. In many ways, it's actually a library of books,

01:08:31.760 | all of which have their own impact and their own purpose. There are books of history, and

01:08:35.840 | this is what a lot of people, often who haven't dug into it a little bit, don't perceive.

01:08:42.760 | There are books of history, there are books of stories, there are books of prophecy, there

01:08:47.120 | are books of law, books of poetry, books of proverbs, which are simply collections of

01:08:53.060 | wise sayings, books of instruction, personal letters, there's songbooks and hymnbooks,

01:08:59.680 | there's even blueprints with careful measurements and census reports of censuses of a population.

01:09:06.200 | There are at least two books in the Bible that don't say a thing about God, not one

01:09:10.080 | word. There's an entire book in the Bible that's all about the young love of a man and

01:09:14.760 | a woman and their sexual relationship as young lovers. It's quite scandalous, actually, for

01:09:21.600 | young boys and girls who read through their Bibles. I used to love reading through the

01:09:24.620 | scandalous parts of the Bible while sitting in church service as a boy. There's a verse

01:09:28.280 | in the Bible that's very explicit in its description of masturbation, and you can feel

01:09:32.520 | like quite the naughty little boy sitting in church, in a church meeting, reading about

01:09:37.120 | that. Or quite explicit of discussions of just crazy stories. There's all kinds of

01:09:45.000 | crazy stories. There's a girl in the Bible named Jail who kills a guy named Sisera by

01:09:49.060 | driving a tent peg through his skull while he was sleeping. Sisera had been in a battle

01:09:54.540 | and they were being attacked and overrun, and he ran away on foot trying to find a place

01:09:57.760 | that he could hide, and he asked this girl to hide him in her tent, and he was exhausted

01:10:02.200 | from fighting all day. He fell asleep and she came in with a hammer and a tent peg and

01:10:07.040 | pounded the tent peg through his skull. Crazy. There's a story of a guy named Ehud who is

01:10:14.560 | a left-handed military guy, and he straps a sword to his right leg, and he went in to

01:10:21.400 | see the king. And so most people were right-handed, so they would usually just check the left

01:10:26.040 | leg for weapons to see if he had a hidden sword. So he straps his sword to his right

01:10:30.640 | leg, a short 18-inch sword, and he smuggles it into a private meeting with the king, and

01:10:35.680 | then in the middle of the meeting, pulls out a sword and plunges it into the king's belly.

01:10:41.240 | And those are just two interesting stories that I love. I love that the Bible never shrinks

01:10:47.800 | back from accurately depicting accounts, and it always shows the whole person and exposes

01:10:52.340 | the good and the evil honestly and accurately, and it shows a person's strengths and weaknesses.

01:10:58.440 | And it's incredible when you get into it. There's stories of mass killings and stories

01:11:02.520 | of rape and incest and seduction and betrayal and stories of heroism and villainy and justice

01:11:08.360 | and injustice and good and evil, and some parts are inspiring and uplifting and others

01:11:12.880 | are downright depressing. And when you think about why certain books were included that

01:11:20.320 | were included, then you have to ask why were others excluded that were excluded? There

01:11:23.840 | are other ancient books of history that are true and accurate but aren't in there. I'll

01:11:28.960 | tempt you with that question and let you work on the answer. But you have to approach all

01:11:32.680 | these texts carefully, because they all have different reasons for being written and different

01:11:39.200 | reasons for being included. I can't make a philosophy about killing people by driving

01:11:45.140 | tent pegs through their skull just because it's included in the Bible. So in the same

01:11:51.440 | way that there are various schools of thoughts of how to apply the content of the US Constitution

01:11:56.240 | written over 200 years ago to the common day in a very different world, there are schools

01:12:00.520 | of thought that range widely on how to apply thousands of year old documents to a modern

01:12:06.480 | world. And you'll have to search it out. It's not an easy thing to do.

01:12:14.680 | It's – I'll give you just one example of the challenge of interpreting scripture.

01:12:19.880 | In my household, we have breakfast together every morning and after breakfast, we read

01:12:23.760 | from the Bible. And this morning, I was reading – we were reading the book of Luke and I

01:12:27.000 | read this passage and I think this is the first time I've ever read a Bible passage

01:12:30.100 | on the show, but I think it's appropriate here. It's just a funny, fun little story

01:12:33.400 | and it's from a modern translation. And you ask yourself what this means. So here's

01:12:38.720 | the passage from the book of Luke. "Jesus told this story to his disciples. There was

01:12:43.320 | a certain rich man who had a manager handling his affairs. One day a report came that the

01:12:48.440 | manager was wasting his employer's money. So the employer called him in and said, 'What's

01:12:53.480 | this I hear about you? Get your report in order because you are going to be fired.'

01:12:59.340 | The manager thought to himself, 'Now what? My boss has fired me. I don't have the strength

01:13:04.640 | to dig ditches and I'm too proud to beg. Ah, I know how to ensure that I'll have

01:13:09.800 | plenty of friends who will give me a home when I'm fired.' So he invited each person

01:13:14.040 | who owed money to his employer to come and discuss the situation. He asked the first

01:13:18.600 | one, 'How much do you owe him?' The man replied, 'I owe him 800 gallons of olive

01:13:23.040 | oil.' So the manager told him, 'Take the bill and quickly change it to 400 gallons.'

01:13:28.480 | 'And how much do you owe my employer?' he asked the next man. 'I owe him a thousand

01:13:32.600 | bushels of wheat,' was the reply. 'Here,' the manager said, 'take the bill and change

01:13:36.640 | it to 800 bushels.' The rich man had to admire the dishonest rascal for being so shrewd.

01:13:44.400 | And it is true that the children of this world are more shrewd in dealing with the world

01:13:47.680 | around them than are the children of light. Here's the lesson. Use your worldly resources

01:13:53.520 | to benefit others and make friends. Then, when your earthly possessions are gone, they

01:13:58.480 | will welcome you to an eternal home. If you are faithful in little things, you will be

01:14:03.960 | faithful in large ones. But if you are dishonest in little things, you won't be honest with

01:14:08.580 | greater responsibilities. And if you are untrustworthy about worldly wealth, who will trust you with

01:14:15.040 | the true riches of heaven? And if you are not faithful with other people's things,

01:14:19.520 | why should you be trusted with things of your own? No one can serve two masters, for you

01:14:25.040 | will hate one and love the other. You will be devoted to one and despise the other. You

01:14:29.160 | cannot serve both God and money." That's one of my favorite stories from the Bible,

01:14:36.680 | just 'cause I love the way that this particular translation puts it. The rich man had to admire

01:14:42.600 | the dishonest rascal for being so shrewd. But the question is, okay, what do I do with

01:14:47.760 | that? What was Jesus trying to teach? And that's your homework, and my homework.

01:14:56.200 | Now my purpose here has been to establish the concept of accountability. I start from

01:15:03.280 | the perspective that I am accountable for how I live my life in every way, and I'm accountable

01:15:08.580 | for all of my actions, all of my words, how I spend my time, and how I spend my money.

01:15:15.600 | I would point out to you that our society also, to some degree, holds people accountable

01:15:22.960 | for how we live our lives, how we spend our time, how we spend our money. And what we're

01:15:29.080 | held accountable to changes. The question is, on what basis do we hold one another accountable?

01:15:36.680 | The next concept you need to understand is the question of sovereignty. The question

01:15:43.920 | of sovereignty is essentially, who's in charge here? And obviously there are various responses

01:15:49.720 | depending on worldview. I believe the correct one is that God is in charge. He is fully

01:15:55.320 | sovereign. He is in control and in charge. Now, as I shared earlier, I hated that when

01:16:00.960 | I was younger. In fact, it was the number one thing that kept me from being a Christian

01:16:04.360 | for the first 20 years of my life. I wanted to be sovereign over my life. I didn't want

01:16:08.200 | to cede my sovereignty to another person. I knew that was what God required, and I was

01:16:12.680 | always scared of what that might mean. I was scared of what God might make me do. After

01:16:18.040 | all, sin is fun, and I wanted to have my fun. Sin is a lot of fun for a time, and I did.

01:16:26.400 | But ultimately though, I surrendered my sovereignty and my life changed dramatically. Now, if

01:16:32.760 | God is sovereign, then you have to ask the question which many people don't ask, "How

01:16:37.640 | do I reconcile the situation that I face in my life? To what extent is God sovereign?

01:16:45.480 | Do I sit back and pray, or do I get up and work, or do I do both of those things?" If

01:16:53.240 | God is sovereign and in control, then what do I do with the situation I'm in? If I'm

01:16:57.280 | poor, why? If I'm rich, why? That's not strictly limited to money. The classic version

01:17:04.980 | of this question is something that keeps many, many people from a belief in God. The philosophers

01:17:10.920 | call it theodicy, or you could just simply refer to it as they call the problem of evil,

01:17:16.440 | which is in short, if there's a good God who's all powerful, why would he permit evil

01:17:21.060 | in the world? That's a bedrock of many philosophical debates about the existence of God. And more

01:17:27.680 | importantly, it's a bedrock of many non-philosophers, normal peoples, their objection to God. If

01:17:33.800 | God's good, how could he allow my mother to die, or my Uncle Joe to get cancer, or

01:17:38.040 | me to get raped, or my child to be disabled, etc. But the corollary is, "Wait a second,

01:17:44.680 | why would God allow us to be poor?" Or even stated differently, "Why would God make

01:17:50.440 | us poor?" Now, many people ask that question, but they don't ask the other question, "Why

01:17:56.160 | would God allow us to be rich, or make us rich?" That's an important question. Again,

01:18:03.320 | I'll challenge you with it. The Bible teaches the sovereignty of God in my current circumstances.

01:18:08.480 | He's in control. The Bible does not teach deism. Deism is a belief that there is a God,

01:18:16.320 | or at least there was a God, who created the world, but that God does not intervene with

01:18:22.160 | the functioning of the natural world, but rather allows it to function according to

01:18:25.520 | the laws of nature. Deism is extremely common in our world today, and in my opinion, it's

01:18:31.600 | probably the most common spiritual viewpoint, especially among success writers, success

01:18:38.280 | coaches, success personalities, people who talk about money. I often observe this in

01:18:42.920 | reading about money, in reading books, personal finance books. The writers will often offer

01:18:48.680 | a nod to the existence of God, or at least to some sort of non-material spiritual entity,

01:18:56.120 | but they pull back from discussing the actual involvement of God in our actual circumstances

01:19:01.440 | of life. Why? Well, probably many reasons, but primarily it's super tough to talk about

01:19:09.840 | God's involvement without alienating a substantial portion of your audience. Obviously, there

01:19:16.000 | are many perspectives. There are many different human philosophies that will majorly affect

01:19:22.480 | your view of money, whether you're atheism, agnosticism, animism, polytheism, dualism,

01:19:28.480 | monotheism, deism, theism, existentialism, humanism, rationalism, materialism, mysticism,

01:19:34.560 | monism, pantheism, panantheism. There's just a few, but each of those viewpoints will

01:19:40.000 | dramatically affect your viewpoint on life in general and on money in specific. But even

01:19:43.720 | if you were, let's say that you were going to come from the perspective of what I do

01:19:49.620 | as far as a Christian, and I believe the Bible teaches triune theism. God is three in one

01:19:55.560 | and is creator and controller of the universe, which means God not only created the world

01:19:59.840 | but is also currently in control of everything. Different people will take that and they will

01:20:05.400 | start to apply different teachings from at the far end, come and give to God and God

01:20:10.640 | will make you rich, to at the other end, God says give everything away and be poor, give

01:20:16.200 | everything away. So I don't fault most speakers and success gurus from shying away from the

01:20:23.560 | topic. I face this challenge each and every day and I often want to run from it. How on

01:20:29.040 | earth, I ask myself, how on earth do you speak to a general audience filled with people from

01:20:33.080 | many philosophical backgrounds and teach truth without causing intentional offense? I'm

01:20:39.520 | not sure I do it well at all. I really don't think I do. I'm learning and I'm working

01:20:43.440 | at it. And more importantly, how do you integrate the idea of God being in control over my situation?

01:20:53.440 | My specific situation? And then figuring out what my proper response would be to that situation.

01:21:04.960 | I won't try to answer that question for you. It's not an easy question in any way, shape,

01:21:11.320 | or form. If God is in control over my situation, my specific situation, then what is my proper

01:21:19.600 | response to the circumstances that I currently face? Now for me, the reason why that question

01:21:29.160 | of sovereignty is so important is this. I don't believe in chance. The discussion of

01:21:38.280 | the idea of chance or luck is a real challenge for Christians, but for me I don't believe

01:21:44.960 | in chance or luck. And so if I inherited $10 million, or even if I won it in a lottery,

01:21:50.320 | I would have to believe that God is sovereign and there's a purpose for it. There's a reason

01:21:56.480 | for it. And I'm responsible for it. Now here's where I give you one of my favorite

01:22:05.080 | tidbits that I think you'll enjoy regardless of your own personal background, and this

01:22:08.600 | is what I promised for you as your tidbit if you've gotten, if you're a secular person,

01:22:13.760 | if you've gotten through to this point with all of my Bible quoting, here's your ammo

01:22:19.440 | that you'll enjoy in a conversation with a Christian at some point.

01:22:23.360 | Christians have a penchant for certain Bible verses, and some verses are common to many

01:22:28.000 | people. Christians like to have their favorite verse. I don't have a problem with that. I

01:22:32.360 | have a few that I find particularly comforting to my situation, but I enjoy a few of them.

01:22:36.640 | But there are two in particular that often stand out. If you were to poll a group of

01:22:40.800 | Christians, and many people who would affiliate and self-identify as Christians are kind of

01:22:46.400 | nominal Christians, have a general idea of belief in God, and if you ask for a Bible

01:22:52.280 | verse and ask them for their favorite verse, I believe two of these verses would rise to

01:22:57.880 | the top. One is a verse that is in Jeremiah 29 11, is the scripture reference for it,

01:23:05.320 | where it says, "For I know the plans I have for you, declares the Lord, plans to prosper

01:23:09.820 | you and not to harm you, plans to give you a hope and a future." That's a very popular

01:23:17.000 | verse. The second verse is a passage in Philippians 4 4 13, which says, "I can do all things

01:23:26.200 | through Christ who strengthens me." That was probably the more famous one.

01:23:31.600 | Now the challenge is many Christians are simply not very rigorous in understanding their own

01:23:35.000 | faith, and it's a real tragedy that has wide-ranging repercussions in our lives. And

01:23:40.060 | many Christians especially are not rigorous in their understanding of the interpretation

01:23:44.440 | and application of scripture. So if you want to challenge a Christian a bit, here's what

01:23:48.640 | you can do. Ask them what their favorite verse is, and ask them, maybe they'll say it's

01:23:53.600 | Philippians 4 13, and ask them to quote it and quote it for them, "I can do all things

01:23:58.960 | through Christ who strengthens me." And ask them what are some of the things that they

01:24:02.880 | can do with Christ that they can't do without Christ, and see what they say.

01:24:09.160 | Now usually you'll hear many things. My answer to that question in the past might have been

01:24:13.800 | something like, "Well, I can honor my boss and obey my boss with a good attitude at my

01:24:17.560 | job," or, "I can take a hard final exam and do well on it," or, "I can go through

01:24:23.520 | the death of a close friend." And that answer that I would have given in the past is to

01:24:30.440 | my own shame. Because although those things may be true, and it's possible that that Bible

01:24:36.040 | verse could be a comfort to me, that's not what the Bible verse is talking about. That

01:24:42.840 | verse is talking about money. Specifically, how to live on your income. And I'll read

01:24:51.680 | it to you in context, choosing a slightly different translation than what I just quoted,

01:24:57.800 | but in context, a guy named Paul is writing this passage and he says, "How I praise the

01:25:03.140 | Lord that you are concerned about me again. I know you have not always been concerned

01:25:07.680 | for me, but you didn't have the chance to help me. Not that I was ever in need, for

01:25:11.360 | I have learned how to be content with whatever I have. I know how to live on almost nothing

01:25:18.640 | or with everything. I have learned the secret of living in every situation, whether it is

01:25:24.760 | with a full stomach or empty, with plenty or little, for I can do everything through

01:25:32.120 | Christ who gives me strength. Even so, you've done well to share with me in my present difficulty."

01:25:38.520 | He's talking about money and specifically how to live on your income. How to be content

01:25:49.560 | with a full stomach or an empty and with plenty or with little. Now, if you're a Christian

01:25:54.120 | and I've caught you out a bit with your understanding of that verse, don't be too ashamed. I was

01:25:57.280 | there myself in the past and I was thoroughly embarrassed by my lack of rigor in going through

01:26:02.160 | and understanding that passage. And if you're not a Christian, enjoy the ammunition to catch

01:26:06.040 | out your friends. That's my present to you. I won't even comment on Jeremiah 29 11, except

01:26:10.880 | to challenge you that if you've ever claimed that verse for your so-called life verse,

01:26:14.800 | read the entire book of Jeremiah and the 29 chapters before that, before you claim that.

01:26:20.280 | And I'll challenge that. But my reason that I bring that up is for two reasons. God knows

01:26:26.240 | what I need and when I need it. And that passage goes on to discuss the economy of Christians,

01:26:31.720 | which is based on shareling liberally with those in need. That's an interesting integration

01:26:37.280 | to a system of money. And that's where I live. If I have need, I'm confident that my needs

01:26:45.880 | will be met. So you say, "How do you teach that?" Well, that's where you'd have to kind

01:26:55.120 | of discern your audience a little bit, which is why I don't generally go into those things

01:26:58.800 | on the podcast. But it has major impact. The other impact of that is that I can actually

01:27:08.220 | know God in whatever my circumstances, and I can be faithful when I have a lot and when

01:27:12.440 | I have a little. And so there are reasons for the circumstances that I face. And God

01:27:20.000 | is sovereign, and that discussion of God's sovereignty establishes the idea that God

01:27:24.400 | has a reason for the circumstances that I face. There's a reason for $10 million, and

01:27:30.320 | there's a reason for $10.

01:27:33.760 | So the next natural question is, what is my responsibility in this deal? In my mind, there

01:27:39.280 | are two important things, stewardship and faithfulness. And these are kind of funny

01:27:45.320 | words. Stewardship is largely a lost concept in modern culture. Probably the best example

01:27:52.800 | would be a financial advisor's stewardship over their client's assets. If you are a

01:27:58.400 | financial advisor and you're a steward over your client's assets, then those assets need

01:28:02.520 | to be expended and invested in line with the master, the client, the master's goals.

01:28:09.040 | Historically, wealth was physical. So you needed a steward to handle your affairs. If

01:28:15.040 | you were going to take a trip, you couldn't just jump on an airplane and drive to the

01:28:18.200 | other side of the world and open up your Vanguard account and click, click, click through the

01:28:21.400 | internet browser, manage all of your portfolio. It was physical. It was houses and farms and

01:28:29.720 | vineyards, and physical forms of wealth, gold, silver. So the Bible is replete with stories

01:28:39.480 | about masters and stewards. And the master entrusts money to a steward and goes on a

01:28:45.080 | trip. Then when the master returns, he demands an accounting of the steward's actions. There

01:28:50.560 | are many, many, many stories on that theme.

01:28:55.240 | If you are vaguely familiar with Christian teaching, you would think of something like

01:28:58.920 | the parable of the talents. These stories teach that that is the Christian situation.

01:29:05.720 | The master is away on a trip and we are here on this earth as stewards of the master's

01:29:11.720 | resources. And one day, the master will return and demand an accounting from us. So the major

01:29:18.920 | life challenge of the Christian standard is this. Nothing is mine. Nothing belongs to

01:29:26.400 | me. Because when you become a Christian, you become a slave to God. So that means that

01:29:37.720 | it's not my money, it's not my time, it's not my talents, not my abilities, it's not

01:29:43.440 | my life, it's not even my physical life. When you become a follower of Christ, one

01:29:50.240 | of the prerequisites for that being a true statement is the acknowledgement of a total

01:29:54.600 | transference of sovereignty, a laying down of your own life, an entry into a form of

01:30:02.960 | slavery. And that's a major change. Most of us have lived our lives in a way that doesn't

01:30:10.120 | acknowledge the sovereignty of another. We are sovereign over our own lives and that's

01:30:13.880 | how I used to live.

01:30:15.960 | And interestingly, this isn't actually true. We're not actually sovereign over our own

01:30:20.680 | lives in fullness, even though we live as though it is true. It's not actually true

01:30:24.120 | because there are always events that are outside all of our control. As your homeowner's

01:30:27.920 | insurance policy says, "Some things are an act of God." But when you acknowledge,

01:30:33.440 | when you become a Christian and you acknowledge another's sovereignty over your life, then

01:30:39.600 | you're recognizing something that's true in a measure and then you're now living in

01:30:45.040 | accordance with it. And any time you can live in harmony with God's law, you can experience

01:30:50.680 | the blessings of it. The Bible says in the book of Psalms and the book of Proverbs that

01:30:57.120 | the fear of God is the beginning of wisdom. It's almost the right ordering of your life.

01:31:02.000 | So I view money in this way. I'm simply a steward of the money. It's not mine. And

01:31:07.480 | that's an extremely unusual viewpoint in the modern world because we're trained to

01:31:10.540 | think of money as mine. It's mine to do what I want with. It's mine to enjoy how

01:31:14.080 | I like. But it's not. It's not for me. I'm a steward. It's not mine. Now, don't

01:31:21.200 | for an instant think that I'm a perfect steward. I'm not. I'm learning and I hope

01:31:24.560 | I'm increasing in my faithfulness. But if you think about the concept of stewardship,

01:31:28.640 | it brings in a balance and a tension because a steward should be using the master's resources

01:31:34.040 | to achieve the master's goals. So then you have to ask, "What's the first question?

01:31:38.280 | What are the master's goals?" And here's the tension. One of the master's goals is

01:31:42.880 | that the steward is being cared for. It's important that a steward of a household be

01:31:46.920 | provided for. If you were left in charge of somebody's estate, you need a bedroom to

01:31:51.040 | stay in and you need clothes to wear. So the steward of a household needs to be cared for.

01:31:57.760 | Otherwise, there are many problems that could happen. You could even say that it would probably

01:32:02.160 | be the joy of the master for the steward to be well cared for and well provided for. You

01:32:08.920 | should want this for all of the people that you do business with. I want the vendors with

01:32:14.280 | whom I'm doing business or the business partners, I want them to be making very nice

01:32:19.120 | profits so they'll stay in business. You want your employees to be very well paid so

01:32:24.480 | that they're happy and content. I'm actually very leery myself of free software and free

01:32:29.760 | products without a business model behind them because I know they're unlikely to be well

01:32:33.880 | supported and are likely to disappear. That's why every business needs a sound business

01:32:39.240 | model. That's why many of you send me emails from time to time and say, "Joshua, what's

01:32:43.920 | your business model?" because you like the show and you want it to be here. Without a

01:32:46.800 | business model, it's not going to be here. I'm working on that. Details coming soon.

01:32:51.600 | But you don't want the steward to be taken care of more than the master. You don't want

01:32:56.000 | the steward's goals to take a higher priority than the master's goals. So consider the anger

01:33:02.620 | that you would rightly feel toward a financial advisor who is doing better than the client.

01:33:07.680 | The financial advisor is taking all the money and the client's not getting any of it. You

01:33:11.880 | would be rightly justified in your anger. So that tension is healthy as far as, well,

01:33:20.300 | what are the master's goals and how much is too much for the steward to be cared for?

01:33:26.840 | Now I can't answer the question of, for you, what are the master's goals? It's a big question.

01:33:33.820 | But I'll answer in a moment the ones that I feel are important for me to be involved

01:33:37.260 | with. So that concept of stewardship radically changes the discussion of money, which brings

01:33:44.720 | us to the final point that I need to discuss of worldview that you need to understand,

01:33:50.500 | and that's the concept of faithfulness. I must be faithful in all things at all times.

01:33:59.180 | This is one of the overarching teachings of Scripture. It's that I must be faithful exactly

01:34:04.600 | where I am. It's an unusual word or character quality in our modern world. We don't talk

01:34:09.940 | much about concepts of virtue or character qualities. But consider if that character

01:34:16.040 | quality or that virtue of faithfulness might not be something that you value. Would you

01:34:21.520 | like a faithful spouse? Would you enjoy having a faithful employee? Do you want to have a

01:34:31.320 | faithful brother or sister or faithful parent? Do you value a faithful friend? Would it be

01:34:40.800 | a joy to work with a faithful business partner? Do you want a faithful child? That's what's

01:34:48.640 | taught to Christians. What's taught is no matter your circumstances, you must be faithful.

01:34:57.720 | You must be faithful to God in every circumstance, both in the visible common things and in the

01:35:03.680 | hidden secret things. You must be faithful to your employer in the things that are seen,

01:35:09.240 | but also in what is unseen. You don't steal the stapler just because no one knows it's

01:35:16.080 | gone. You must be faithful to your employer. In biblical times, human slavery was common.

01:35:22.440 | In fact, throughout the Bible, the people of God actually went in and out of slavery

01:35:26.200 | multiple times with multiple masters. But slaves were always commanded to be faithful

01:35:31.040 | to their masters, regardless of circumstance. And the responsibility went the other way

01:35:35.960 | too. Masters of slaves were commanded to be faithful to their slaves and to treat them

01:35:39.680 | with dignity and respect and fairness. In the same way, employers are commanded to be

01:35:45.480 | just. Rulers of government are commanded to rule with fairness. Husbands and wives are

01:35:52.560 | commanded to be faithful to one another. Children are commanded to be faithful and obedient

01:35:56.200 | to their parents. It's across the board. So why should I even bother with that? Why

01:36:00.760 | should I even bother to be faithful? Well, there's many reasons. One, it's honoring

01:36:04.440 | to God and He will repay you according to your works. Again and again and again throughout

01:36:10.880 | the Bible, there are examples after examples after examples of faithfulness and faithlessness

01:36:15.960 | and the ensuing results. One of my favorites is a guy named Joseph, and what's amazing,

01:36:21.960 | almost a third of the book of Genesis is devoted to his story. If you're not familiar with

01:36:25.600 | the story, Joseph was sold into slavery by his own brothers because he was jealous, they

01:36:30.840 | were jealous of him. But as a slave, he was faithful to his master, a man named Potiphar,

01:36:36.920 | who was the captain of Pharaoh's guard, kind of in charge of the elite special forces of

01:36:43.080 | his day. But even though he was a slave and he was sold into slavery, he was faithful

01:36:49.280 | and he was raised from the lowest place of a common slave and he was put in charge as

01:36:54.040 | the chief steward of Potiphar's house. He was in many ways the second in command and

01:37:00.340 | nothing was done in that estate without his approval. And the Bible says that Potiphar's

01:37:06.200 | household was blessed because of Joseph's service. He experienced great gain and financial

01:37:13.200 | increase. Now, what's amazing, Joseph was faithful to his master, Potiphar, even when

01:37:19.560 | Potiphar's wife wanted to have sex with him. He was good looking and she advanced upon

01:37:23.640 | him and was entreating or rather commanding him to have sex with her and he ran away.

01:37:29.320 | He ran out of the house naked, leaving her holding his clothes. And so immediately she

01:37:33.480 | got angry at him for disobeying her orders and she accused him of attempted rape and

01:37:39.040 | falsely accused him of attempted rape. So Potiphar, the dude in charge, gets home and

01:37:44.280 | he hears the accusation and the story from his wife and he throws Joseph, the slave,

01:37:48.800 | in prison. So Joseph was enslaved unjustly and then he was imprisoned unjustly. He acted

01:37:59.640 | righteously and was imprisoned because he acted righteously. But even though he was

01:38:07.120 | imprisoned unjustly, he's faithful in prison and over time he's promoted to be in charge

01:38:12.840 | over the whole prison, even to the point where the free man, who was the keeper of the prison,

01:38:18.700 | just didn't even bother to pay attention to anything that Joseph was in charge of. He

01:38:22.000 | just went about his own life and dealt with a few things that he was caring for because

01:38:25.360 | he knew that Joseph would handle it. So he's in charge of the entire prison as a prisoner.

01:38:29.520 | Now over time, through a series of circumstances, the opportunity comes that he has an audience

01:38:36.600 | with Pharaoh to interpret a dream that Pharaoh has and Pharaoh winds up taking him out of

01:38:41.680 | prison and promoting him to be second in command over all of Egypt, second only to Pharaoh.

01:38:48.680 | And miraculously, because of his installation as second in command, he's able to save not

01:38:53.500 | only the nation of Egypt from famine, but even his entire family. It's an incredible

01:38:57.760 | story. Joseph is the only person I'm aware of in the Old Testament who's presented as

01:39:02.620 | a man of total integrity, where we're only told about his strengths. Everyone else, we

01:39:07.880 | see their strengths and their weaknesses, their successes and their failures, but with

01:39:11.660 | Joseph it's only integrity and strength. Or if we talk about faithlessness and the

01:39:19.540 | compensation and rewards of faithlessness, one of my favorite stories would be Jacob,

01:39:24.500 | Joseph's father. And so Jacob, he's a conniving cheat from the beginning of his life. He's

01:39:32.020 | a conniving cheat and he's born. He has a twin brother named Esau, and later on as adults

01:39:37.260 | he cheats his own brother out of his brother's inheritance, his brother's portion of the

01:39:41.580 | inheritance, in exchange for a meal. And then later in life, in cahoots with his mother,

01:39:46.540 | he cheats his own father out of giving the patriarchal blessing to Esau, and he cheats

01:39:52.980 | his father out of the blessing by wearing animal skin, so he's furry, so he smells like

01:39:59.480 | his brother, who's a bit of an outdoor roustabout. And then in fear of his life from his brother,

01:40:07.020 | who's much stronger and much more vigorous, he runs away from his brother and he flees

01:40:12.020 | to a relative's house, to his uncle's house. But one of my favorite stories, he gets his

01:40:17.060 | due in return. Probably the funniest verse in the Bible surrounds his marriage. His uncle

01:40:23.500 | is a guy named Laban, and his uncle has two daughters. He has a pretty daughter named

01:40:26.780 | Rachel and a not so pretty daughter named Leah. And so Jacob wants to marry Rachel,

01:40:32.100 | and so he makes a deal with his uncle to work for his uncle for seven years, hard labor

01:40:37.580 | in exchange for Rachel's hand in marriage. So after seven years, they have the wedding

01:40:42.900 | ceremony and presumably he drinks a lot, and it's a big feast, and presumably he drinks

01:40:47.980 | a lot, and then he goes into the tent with his wife for the wedding night. One of the

01:40:53.020 | funnier verses in the Bible says, "And then in the morning, behold, it was Leah." His

01:41:02.780 | uncle swapped in the not so pretty wife for the pretty wife. So that's a rough way to

01:41:09.260 | start your marriage, finding yourself married to the wrong woman and finding yourself cheated

01:41:13.080 | out of access to the pretty sister. Now, anyway, I'll leave it there, and if you're interested,

01:41:17.700 | go find the rest of the story. It's quite good. If you do read it, you might ask yourself

01:41:21.180 | a challenging question about marriage. If you're of the mind to account for a quick

01:41:26.300 | and easy divorce, then why didn't Jacob simply divorce Leah immediately and marry Rachel?

01:41:30.860 | After all, he was completely tricked. So consider that. But then again, if you're familiar with

01:41:35.580 | the passage and what happens after the story, you should immediately argue back with me

01:41:38.740 | and say, "Oh yeah? Well then why was Jacob permitted later to go ahead and marry the

01:41:41.640 | pretty one and have a polygamous marriage?" And I would say, "Touché," and we'll save

01:41:45.740 | that important and interesting discussion for a different format than a personal finance

01:41:49.820 | podcast. Back to money. There are other reasons to be faithful. It's an example to men and

01:41:55.060 | women around. It may even result in increased personal gain. The Bible says if you're faithful

01:42:01.220 | in little things, you'll be faithful in large ones. But if you're dishonest in little things,

01:42:04.900 | you won't be honest with greater responsibility. And if you're untrustworthy about worldly

01:42:09.420 | wealth, who's going to trust you the true riches of heaven? And if you're not faithful

01:42:13.340 | with other people's things, why should you be trusted with the things of your own? So

01:42:17.780 | I must be faithful with how I handle money because it's a test of how I handle more

01:42:22.700 | important things.

01:42:25.940 | Now with that as background of my worldview, my answers as to what I would do if I unexpectedly

01:42:35.340 | received a $10 million windfall will make a little bit more sense to you. If I received

01:42:41.460 | that unexpected windfall, I would be sure that there is a very important reason or perhaps

01:42:46.500 | many very important reasons for me to receive it. And I'd hit my knees at the weight of

01:42:53.220 | that responsibility, praying that I would have the ability to be faithful with it and

01:42:56.860 | not give in to temptation to turn aside. Because when you view money in the way that I do,

01:43:02.660 | you might quickly recognize the tremendous responsibility that comes in with money. To

01:43:08.100 | whom much is given, much is required. And I've already been given much. And thus, much

01:43:15.220 | is already required of me. But at least my experience so far has been incremental, little

01:43:20.460 | things at a time, able to grow in responsibility step by step by step. But to all of a sudden

01:43:25.340 | receive a ton of money all at once would be a massive responsibility. There's a proverb

01:43:31.500 | that says, "Give me neither poverty nor riches. Give me just enough to satisfy my

01:43:36.220 | needs. For if I grow rich, I may deny you and say, 'Who is the Lord?' And if I am

01:43:40.580 | too poor, I may steal and thus insult God's holy name." So the first thing I would do

01:43:47.100 | would be to try to understand what is the purpose of the money. Maybe there's some

01:43:50.700 | monster financial need that's going to present itself and the money just needs to go right

01:43:55.000 | through me. Maybe it's 10 million to me and all of a sudden, boom, there's a need

01:43:58.600 | for 10 million dollars and it all needs to be given away. I don't know. The hypotheticals

01:44:04.300 | are always dangerous because they remove God's sovereignty from the situation. When we get

01:44:10.140 | into if this, then that, we're often constructing life scenarios in which we don't actually

01:44:14.300 | know facts. It's one thing to have a discussion about something that has actually happened,

01:44:19.380 | but it's tough to know the reasons behind hypothetical situations. So that's one of

01:44:23.220 | the whole dangers of even my answering it, but I'm going to take the bait and answer

01:44:26.100 | in specifics.

01:44:27.100 | So specifically my approach though, assuming that there's not some massive need right

01:44:31.860 | in front of me that I quickly become aware of that I need to give the money to. Again,

01:44:36.340 | there's a need for 10 million dollars and I just sense, "Okay, I need to give the

01:44:39.300 | money to that." Then I would be just simply integrating the money into the normal flow

01:44:44.140 | of my life with my current financial priorities. Here's specifically what I would do. I

01:44:52.300 | think I'd probably set aside maybe two to three million dollars of the 10 million dollars

01:44:56.280 | for my needs and the needs of my family. I think that's a number that would very well

01:45:01.300 | provide for exactly what we need in comfort.

01:45:05.900 | I would first pay off my mortgage. I owe about $160,000 on my mortgage. With numbers that

01:45:10.860 | big, the theoretical financial benefit from having a low rate fixed interest mortgage

01:45:16.820 | payment as compared to the emotional peace of mind for my family is utterly meaningless.

01:45:25.380 | In my current scenario, the financial benefit of having that mortgage is very meaningful.

01:45:31.940 | But with 10 million dollars in the bank, it wouldn't be at all meaningful. So I'd

01:45:35.820 | just be mortgage free in very short order and enjoy the emotional peace of mind that

01:45:41.300 | comes from that.

01:45:43.280 | There are a few things I would buy. I would buy some stand-up paddle boards, believe it

01:45:47.700 | or not. It costs me like, I don't know, about $1,400 or so. Stand-up paddle boards

01:45:52.780 | have been on my list for a very, very long time. I've been waiting to get some for

01:45:56.340 | like three or four years. I just haven't been able to justify the price. They're

01:46:01.260 | super in demand and the prices haven't come down like I thought they would. The toughest

01:46:05.700 | thing about them is that I'm a big guy and so the extra big ones, I need a big one,

01:46:09.620 | are extra expensive. So I'd get a big one for me and a little one for my wife.

01:46:13.540 | I think a stand-up paddle board is actually my ideal version of a boat. I don't really

01:46:18.620 | want the hassle of owning an actual boat, especially not at my current life stage. It's

01:46:23.180 | a major pain and especially if it's just a part-time hobby, it's a major pain. But

01:46:28.020 | it's super nice where I live to be able to get out on the water on a Friday evening

01:46:31.140 | with my family and stand-up paddle boards would be ideal for that type of family outing,

01:46:34.900 | especially where I live. That or a canoe can also work, something like that. You put a

01:46:40.340 | cooler on there and a couple of chairs and you paddle over to a little island somewhere,

01:46:44.820 | a little sandy island on the beach or something like that and have a nice little picnic on

01:46:48.580 | the beach. There's no hassle. There's no motors that you have to maintain. There's

01:46:53.780 | no stickers that you have to buy. It's just a lot easier and it gets you out on the water

01:46:57.980 | and it gives a good source of exercise, kind of stacking the benefits together.

01:47:02.420 | Maybe later in life, I want a boat when my kids are older and they can enjoy it with

01:47:05.180 | me but I just don't see it right now. I just assume if I want to go fishing, I just

01:47:09.060 | assume charter a big boat and do the fishing party instead of having the hassle of owning

01:47:12.940 | a boat. Incidentally, if any of you have any ideas for how to get a good deal on stand-up

01:47:17.020 | paddle board, let me know because I've been looking for a long time and I've never

01:47:19.820 | been able to find a deal. So that's the first thing on my buy list.

01:47:23.820 | The second thing, I've only got three things by the way. The second thing is I buy one

01:47:26.980 | of those nice big fancy iMacs for my wife and a big fancy Mac laptop for me. I'd like

01:47:31.500 | my wife to have one just so she can do her artsy stuff. We have a perfectly powerful

01:47:36.460 | older Windows desktop that she uses but something about having all the fancy creative stuff

01:47:41.140 | on the Apple that integrated together would be fun to have. She likes making picture books

01:47:46.180 | and things like that. I think she'd enjoy having it all integrated. If I all of a sudden

01:47:51.380 | received that kind of windfall, it would make me happy to give her one. I get a fancy laptop

01:47:56.300 | for me. My current laptop works fine but it's kind of slow. I've just never been able

01:47:59.860 | to justify the expense of Apple products. I've just never been able to justify them.

01:48:05.620 | But with $10 million in the bank, I think I'd go ahead and splurge.

01:48:08.620 | Then finally, I'd buy an RV and I'd probably buy a fancier one than otherwise I would.

01:48:13.460 | I don't know. Maybe I'd spend $150,000 on a nice diesel pusher or $100,000. I don't

01:48:18.220 | know. I've wanted an RV for a long time and I love to drive and I love road trips. One

01:48:22.700 | of the major reasons that I built Radical Personal Finance in the way that I did is

01:48:25.820 | so that it could fund a lifestyle regardless of where I live. An RV is an ideal way to

01:48:31.820 | do that for me. So I guess I'd spend like $260,000 of it on those things, paying off

01:48:37.300 | the mortgage and those fun little toys.

01:48:40.700 | More importantly, I'd set up an income plan. I'd set up an income plan for my family's

01:48:45.500 | financial needs. It would look something like this. I think I'd buy on the order of about

01:48:50.860 | five rental houses plus one for every child. So today, that would be seven. We have two

01:48:55.820 | kids and five rental houses plus one for each child. I'd pay cash and I'd just have the

01:49:01.260 | rental money as a backup financial independence plan. I'd follow John Schaub's plan for that.

01:49:06.260 | I'd buy some single family, three two houses, carefully chosen, not in necessarily the rental

01:49:11.180 | market. So let's just say in my market they cost $200,000 each and there's seven of them.

01:49:15.700 | That'd be about a million four. That's basically the backup in case my business fails. That's

01:49:20.980 | more than enough money to live on.

01:49:23.140 | Conservatively, I would net in my rental market, conservatively net after expenses, $1,200

01:49:30.820 | a month. So $1,200 a month times five, that's $6,000 a month plus one for each child. It

01:49:37.740 | would give me a ton of wiggle room. That's far more money than I need, especially right

01:49:40.460 | now. Who knows? Maybe later as my family grows, we'll need more. I don't know. But it's more

01:49:44.340 | than I need now.

01:49:45.860 | The idea behind the one house per child is a dream of mine. I'd love to help each of

01:49:50.580 | my kids buy a house by the time they're in about their 20s or so. I'm super inspired

01:49:55.740 | by Steve Maxwell's story with his kids that I interviewed on the show, how his kids bought

01:50:01.700 | their houses debt free by the time they were in their 20s. If possible, I'd love to, in

01:50:06.220 | addition to that, be able to give my kids a house. So do something like help them to

01:50:11.300 | live in one and rent the other, something like that.

01:50:14.580 | Now that's just a dream. I don't know if it'll happen. A lot will depend on what actually

01:50:18.940 | happens over the next 15 years. A lot of things could change. But if I could train my children

01:50:24.400 | and help them to develop their character so that they would be able to handle a large

01:50:29.080 | gift of money or a large gift of property, I think that would be ideal.

01:50:34.460 | For me, I'm very attracted to the idea of real estate because I can use it for multiple

01:50:39.740 | benefits. And specifically with regard to kids, I can use it to teach them about investing.

01:50:46.380 | And I also like the fact that it's a lot of hard work. And so this would give me an opportunity

01:50:50.700 | to put my children to work in a tangible, real, meaningful way.

01:50:55.180 | The problem with using stock analysis as a basis of teaching about investing, and I plan

01:50:59.020 | to do that a little bit, but the problems that I see with that is it's tough to do effectively,

01:51:04.300 | especially in the public markets. It's very intellectual and it's not tangible. So if

01:51:11.860 | I have an eight-year-old, how many eight-year-olds are going to want to sit down and be intrigued

01:51:17.300 | by the sticker prices of stocks? Now, if I do have an eight-year-old who seems inclined

01:51:21.180 | in that direction, then I'm open to doing that. But that seems rare to me. Warren Buffett

01:51:25.860 | was that way, but I ain't Buffett and I'd be surprised if my kids were either.

01:51:30.460 | But we could do something like drive around and look at houses together. And then I can

01:51:33.620 | have them research market values and we can look through and try to run a spreadsheet

01:51:38.020 | and see what would be the rents be. And they can get on the phone and call around for rental

01:51:41.900 | rates and we can go to the closing together and then we can go and mow the lawns together.

01:51:46.260 | And so that gives me an opportunity to teach them and train them through productive, meaningful

01:51:50.660 | work. And I really like that aspect of the need for work. We can go and we can paint

01:51:55.140 | together and that builds the opportunity for us to be together, but also for them to have

01:51:59.420 | an outlet for energy and to be able to see the direct monetary impact of work.

01:52:06.140 | So my hope would be that if I can train those skills, that those skills would go with them

01:52:11.140 | throughout their life. I'd set aside, I don't know, $150,000 in cash reserves for

01:52:18.420 | the household. That'd be several years of living expenses in case of disaster. I'd

01:52:23.300 | put $50,000 in cash and stick $100,000, maybe some life insurance policies or something

01:52:29.140 | like that. I'd buy $150,000 of something like gold coins and store them abroad in case

01:52:35.900 | they're ever needed to start my life over again in a different place. And that would

01:52:39.500 | use up somewhere around $2 million-ish of the money. And that would provide for my first

01:52:45.100 | responsibility which is the living needs of my family.

01:52:49.420 | Now, the reason I'm answering in this segmented way is because of the idea of the windfall.

01:52:54.500 | This is my plan as far as I'm doing it, but right now the two and I'm about to go

01:52:58.100 | over the $8 million now, they're all integrated. And so I'm just working my way down the

01:53:03.560 | next goals. But in my mind, if I came into that amount of cash, the $2 million would

01:53:09.220 | take care of my needs to provide for my family and kind of make that financial independence

01:53:12.580 | plan with excess.

01:53:14.380 | Now, that leaves me with say $8 million-ish to work with for investing and massive growth.

01:53:22.540 | And I feel a responsibility for all of the $10 million to grow it and multiply it. But

01:53:28.780 | in my mind, I would mentally kind of segregate it and focus on investing the $8 million.

01:53:35.960 | My first investment would be in radical personal finance. And I did do some things that I've

01:53:40.320 | not done because I bootstrapped it. I would hire some staff to help me with the business

01:53:44.480 | and I would immediately delegate a lot of the busy work that I've currently been doing.

01:53:50.160 | I bootstrapped the thing so far and I've done most of the work myself with a little

01:53:53.280 | bit of help here and there.

01:53:55.080 | The challenge is that I'm not spending all of my time in the areas where I'm best in

01:53:59.640 | the world. Rather, I'm spending some of my time where I'm best in the world and

01:54:03.800 | sometimes in – some of the time in other areas. So ultimately, over time, I need to

01:54:08.600 | transition to spending all of my time at what I'm best in the world at and hire everything

01:54:12.440 | else done.

01:54:13.760 | But the challenge for an entrepreneur, especially one who's bootstrapping their business,

01:54:17.040 | is when do I do that? And I've made the mistake of – in past businesses of doing

01:54:23.200 | it too soon, just kind of being committed to the philosophy without actually practically

01:54:28.400 | looking at my situation and saying, "Well, I'm going to go ahead and do it here."

01:54:33.240 | And I may be making the mistake of doing it too late right now. I don't know. I'll

01:54:36.800 | look back and know in the future.

01:54:38.760 | But if I had that kind of windfall, I'd make some quick changes and I'd bring in

01:54:42.040 | a little bit of help. I don't need much. I'd hire some marketing help, a little

01:54:44.920 | bit of help on the website. I'd hire some stuff done like transcribing shows that has

01:54:49.160 | a high cost and I think it has a low return, but it might have some marginal impact. I'd

01:54:55.040 | probably hire some professional writing help to help me with some projects.

01:54:58.080 | But for me, Radical Personal Finance is a tremendously important project. It's a business,

01:55:03.840 | but it's also something that's impactful. I use the word "calling." I know it can

01:55:11.080 | make an impact. I get the emails that prove to me that it makes an impact. But it also

01:55:15.780 | can make a very healthy profit. I haven't done a hugely perfect job of maximizing profit,

01:55:21.480 | but I am committed to doing so and changes on that coming in the future.

01:55:24.760 | But I would probably pull back on the amount of content that I create. So far, I've

01:55:29.600 | made a tactical decision to make one of my unique selling propositions the sheer amount

01:55:36.000 | and depth of content that I create. But if I were all of a sudden charged with – and

01:55:41.800 | that's a good decision at this point in my life because one of my major assets is

01:55:45.520 | this business. But if all of a sudden I were charged with managing the $8 million, I'd

01:55:49.800 | have a ton of work – or the $10 million total. I'd have a ton of work to do to effectively

01:55:53.960 | invest that money and to effectively grow it, effectively give it, etc. I would need

01:55:58.880 | to have a major upgrade of my skills.

01:56:02.920 | I would transition radical personal finance probably away from the CFP-type conversations

01:56:08.640 | that I often have and into a deeper level business podcast. Now, that might be a tactical

01:56:13.800 | mistake in terms of the audience size, but it would be a strategic decision because it

01:56:19.320 | would help me to develop my skills of business oversight and supervision, which are skills

01:56:23.620 | that I need to develop. I'm actually going there with my content in the future. It's

01:56:27.200 | part of the strategic plan. You just haven't seen it on the show yet.

01:56:30.360 | Next, I would focus on investing in private businesses and enterprises that systematically

01:56:37.120 | invest in and help people. You'll notice so far in one of my investments a conspicuous

01:56:43.960 | absence of publicly traded securities. That's a bit unusual for a former stockbroker. I'm

01:56:51.280 | not committed to not investing in stocks. I'm still willing to do it even though at

01:56:56.440 | the moment I haven't currently done it. But the thing I've realized is that only a few

01:57:01.360 | of my goals are effectively accomplished through investing in large publicly traded companies.

01:57:09.680 | That's not to say that your goals are not effectively served. Simply that my goals are

01:57:16.480 | not as effectively served with that course of investing as other courses of investing.

01:57:23.320 | Here would be an example to illustrate. Let's say that I find a good publicly traded company

01:57:28.000 | that I want to invest in. Let's just say Coca-Cola for example. I don't really have any beef

01:57:32.480 | with Coca-Cola. I could probably find something to have a beef with them if I try, but I don't

01:57:37.840 | want to try. I prefer not to have too many battles going on at any one time. So I buy

01:57:45.120 | some shares of Coca-Cola stock. Well run company, blue chip. What do I get in exchange for owning

01:57:53.400 | my shares of Coca-Cola Corporation? Well, I get dividends and potential stock growth.

01:58:02.080 | At my current scale of net worth or even with a scale of net worth of $8 million, what impact

01:58:07.280 | would I have on Coca-Cola? None at all. Zero impact. So the money has one single benefit.

01:58:18.560 | I get a little bit of growth and a few dollars of dividends per share. What does that do

01:58:23.060 | for me? Well, it enriches me a little bit and allows me to have other people running

01:58:29.500 | a company that I own and paying me money. So let's say I see a homeless guy or a homeless

01:58:36.960 | gal on the side of the street. Well, I'm getting off of I-95. What can I do to help

01:58:40.320 | them in that situation? Well, basically I can toss them a few bucks. Does that help?

01:58:46.400 | Eh, maybe. I would say big maybe. But flip it around and let's say that instead of purchasing

01:58:54.360 | shares of Coca-Cola stock, I have a rental house. Well, now I can offer that homeless

01:59:01.520 | guy or gal a day's work with a lawnmower chopping down weeds. I can feed them a good

01:59:09.840 | lunch and make sure they're well-fed. I can pay them well for their work and I can

01:59:13.280 | give them the opportunity to earn their wages with dignity instead of begging on the side

01:59:18.500 | of the street. I can get involved in their life a little bit. I can learn about them

01:59:23.120 | as a person and maybe I have additional opportunities that will be able to help them with more work.

01:59:31.480 | Then, I might be able to give them some but at least then I've offered the opportunity

01:59:38.760 | for them to work. And their work will help me. It will help my profit on my house and

01:59:46.560 | my investment. But it gives me an additional benefit of being able to provide work to help

01:59:52.200 | them. Now, of course, these aren't exactly apples to apples. Of course, I could offer

01:59:58.280 | to that homeless guy or gal to come and paint my house, my personal house and I could still

02:00:03.240 | invest in Coca-Cola stock. But my point is that if I have opportunities of business using

02:00:09.480 | rental – a rental house as a mini little business that requires work, then I can have

02:00:15.600 | an impact on my community. Now, remember of course that that comes with a trade-off. If

02:00:21.080 | my goal were simply to pack up my stuff and go sail the world for a few years, then perhaps

02:00:26.560 | the publicly traded stocks are the better move. They're less work, less hassle, greater

02:00:32.080 | safety, things like that. If I can just put all my money in Coca-Cola stock and spend

02:00:38.720 | my dividends, those dividends will spend in every port in the world. I don't have to

02:00:42.880 | worry about my house burning down or a thief breaking in or a tenant falling through the

02:00:48.720 | floor or any of that stuff. But those aren't necessarily my goals for my life, at least

02:00:52.680 | not right now. They may be for yours. So for me, what I'm looking for is multiple benefits

02:00:58.880 | from my investments, not just money. I'm looking to – to use the permaculture phrase

02:01:05.480 | – stack my functions. I would have to make a very serious and diligent study of opportunities,

02:01:15.740 | business opportunities where capital is the constraining factor to business and investment

02:01:20.920 | entry. This is a very important point. If I had an $8 million portfolio to invest, I

02:01:28.040 | would have a very different approach to my investing than I currently do in my current

02:01:33.080 | lifestyle. Right now at the beginning phase of my life, I don't have a lot of financial

02:01:37.680 | capital. So I'm looking for investment opportunities where sweat equity is valuable.

02:01:43.440 | Example, what does radical personal finance cost? A couple thousand bucks of equipment,

02:01:49.000 | a few hundred bucks a month of fees, of hosting fees and things like that, and thousands of

02:01:54.320 | hours of hard work. But what's the return on investment? Well, right now with nothing

02:02:04.000 | more than the Patreon campaign, I have about $1,900 a month of gross revenue into radical

02:02:11.140 | personal finance. That's just Patreon. That's going to change. That number has been remarkably

02:02:16.160 | stable. Now let's say I pull off $400 a month of

02:02:20.000 | direct costs of running the show and also the Patreon fees that they pull out of your

02:02:23.560 | contributions. Let's just say that I net $1,500 per month. Let's say that's stable

02:02:29.440 | and it doesn't grow. $1,500 a month times 12 equals $18,000 per year of profit from

02:02:37.560 | a business that has been a huge amount of work on my part but not really that big of

02:02:43.640 | a financial outlay. Compare that to say Coca-Cola. What's their

02:02:49.400 | dividend yield right now? Like 3%-ish or McDonald's, what, 3.5%? You can fact check me on that

02:02:54.400 | stuff, but I should be pretty close. If I were going to create $18,000 of annual profit

02:03:00.400 | from a 3% dividend rate stock, I would need a portfolio of $600,000 of capital. Take $18,000

02:03:07.920 | divided by .03 and you wind up with a number of $600,000 of capital. That's a bunch of

02:03:14.720 | money. But if I had a $600,000 portfolio of Coca-Cola stock, that's about what I would

02:03:19.640 | net as far as dividends, 3% annual profit. So in this way of thinking, of comparison,

02:03:28.240 | I've invested a year of my life and built a $600,000 asset. So even though my actual

02:03:37.240 | earned income for the past year of my life has been quite low, the payoff from my time

02:03:42.960 | on paper, at least in my own mental order of priority, is pretty massive.

02:03:51.560 | Now they're not truly comparable because the Coca-Cola dividend would actually be passive

02:03:56.920 | and radical personal finance is the exact opposite of passive income. I spent a lot

02:04:02.360 | of time working on it and that's what you're paying for. But the point I'm bringing here

02:04:07.160 | is I'm focusing on where the constraint on investment is not a financial constraint,

02:04:14.600 | but rather a skill constraint and a quality of product constraint and a time constraint.

02:04:19.760 | At this stage of my life, I have a little bit of financial capital to invest and my

02:04:24.280 | investment goal is location independent income and to be earned in a way of a lifestyle that

02:04:31.520 | I enjoy. I have a lot of human capital that I can invest. So I've chosen a business that

02:04:37.140 | has a very low barrier to entry on the financial capital side, but a high barrier of entry

02:04:42.060 | on the human capital side. Starting a podcast is easy and cheap in financial terms. You

02:04:47.560 | can do it with your phone. You don't even need anything else. I can do the whole thing

02:04:50.920 | with an iPhone. But creating a great podcast is hard and expensive in human capital terms.

02:04:59.920 | So I've chosen the market where I believe I can compete the most effectively and I'm

02:05:06.120 | doing the best I can and I'm growing and I'm learning and I'm competing semi-effectively

02:05:12.120 | because I have lots of competitors, but I can make up with human skill, my background,

02:05:18.520 | my knowledge and developing my abilities, I can compensate.

02:05:23.120 | Now if I had an investment portfolio of $8 million, that would be a very different equation

02:05:27.380 | because now I have money to invest and I would need to massively adjust the scale of my investments

02:05:33.320 | to be appropriate to my net worth. It's tough to invest $8 million into a podcast.

02:05:40.560 | Where on earth would you spend the money? I don't know. Maybe I could invest $10,000

02:05:43.840 | or $20,000 effectively. Maybe more if I started hiring full-time staff, but frankly, I don't

02:05:49.720 | have a clue where I would spend $100,000 effectively in this business and get any meaningful rate

02:05:56.100 | of return. The constraint is not financial capital.

02:06:01.040 | But there are a bunch of markets that I would need to pivot to where I would be looking

02:06:06.320 | at investing and I would have an advantage based upon the financial capital. On that

02:06:13.800 | basis, I would be an accredited investor. So that means a bunch of the rest of the people

02:06:18.600 | are locked out because they're not accredited investors. So some of the juicy investments

02:06:22.680 | are set up for me. That's how the accredited investor system works.

02:06:26.480 | In some ways, I would actually be a big gun in some markets, but I would have an ideal

02:06:32.120 | scenario because I don't have the flip side. I don't have Warren Buffett's problem of figuring

02:06:35.940 | out where on earth do I invest a billion dollars. That's tough. That's why his returns are steadily

02:06:43.760 | decreasing and he says it explicitly. How do you invest billions and billions of dollars?

02:06:49.240 | It's hard. So I would just need to find and figure out where could I put $8 million to

02:06:56.120 | work in an area where my own personal strengths give me a competitive advantage and where

02:07:01.920 | I can get the maximum return on investment both in financial benefit and other lifestyle

02:07:08.400 | benefits. Frankly, I'm not sure what that is. I'm not there. So I haven't spent a lot

02:07:13.680 | of time thinking about it for myself. If you're there, you need to think about it.

02:07:18.960 | The challenge is that when I was a financial advisor, the automatic answer was, well, mutual

02:07:23.360 | funds. The investors that you work with as a financial advisor, at least the type of

02:07:27.680 | structure that I was in, are looking for mutual funds or looking for stocks or something like

02:07:32.120 | that. But you reach a point and there's a difference in investment perspective. If you've

02:07:36.680 | got the $8 million, you've probably spent a lot of time thinking about this.

02:07:40.760 | So for me, I don't know. I might buy a McDonald's franchise. I might buy a hotel. I might buy

02:07:44.680 | a bunch of farmland. I might become a real estate developer. I might buy and run a grass-fed

02:07:49.700 | cattle ranch. I might develop an eco-village somewhere in the world. I might build some

02:07:53.760 | of my sustainable, cheap housing ideas. I might start a coffee shop or a restaurant.

02:07:58.440 | I don't know. When I'm there, I'll let you know what I'm doing. But I really don't know.

02:08:02.480 | But I would take it very seriously and I'd look for the markets where I can invest with

02:08:05.800 | a competitive edge and I could meet multiple goals. I want a unique and lasting competitive

02:08:10.160 | advantage. I want a business that is morally upright and honorable. That business must

02:08:15.260 | bring value to society. It must not be a leech on society. I want control of the enterprise.

02:08:21.280 | I have such oddball priorities compared to many people. It is very difficult for me to

02:08:24.960 | consider how I'd have a business partner with the same priorities. So I would need control

02:08:28.920 | of the enterprise. I want a business that serves people and improves the communities

02:08:33.240 | where it's located. My highest priority is people, which I'll come to in a moment.

02:08:37.080 | I want a business that I'm excited to be involved with. I want to be on the cutting edge of

02:08:40.240 | something. I want to be proud of the impact that my companies make on the world, whatever

02:08:44.520 | that company is and whatever those impacts are. For me, this is a big deal because the

02:08:49.320 | number one thing that leads to entrepreneurial and business success is the amount of time

02:08:53.600 | spent selling. I can't sell something I'm not excited about. So I've got to be proud

02:09:02.160 | and excited of it.

02:09:04.520 | Overall, the major theme of my business and investing pursuits both now and in the future

02:09:11.700 | is this. I want to invest in people. As a Christian, I'm instructed, which is why I

02:09:18.440 | spent so much time on the worldview, as a Christian, I'm instructed to not worry about

02:09:22.920 | the treasures of this world, but rather to worry about the treasures in the next world.

02:09:30.480 | Jesus commanded his disciples in this way. He said, "Don't store up treasures here on

02:09:33.560 | earth where moths eat them and rust destroys them and where thieves break in and steal.

02:09:38.760 | Store your treasures in heaven where moths and rust cannot destroy and thieves do not

02:09:43.840 | break in and steal. Wherever your treasure is, there the desires of your heart will also

02:09:49.760 | be."

02:09:50.760 | So the question is, how do you actually do that? There are a few ways, but today I'm

02:09:56.920 | just going to share with you the way that is most meaningful to me right now, and I'd

02:10:00.160 | encourage you to study and think out some of the other ways. But in this context, the

02:10:05.040 | number one way to store your treasures in heaven is to invest in people's lives. What's

02:10:12.360 | the same between heaven and earth and what's different? Well, there are many things that

02:10:20.040 | are different, but what's the same is, among others things, but two things just that are

02:10:24.520 | specific to this discussion, what's the same between heaven and earth is the presence of

02:10:28.980 | God and the presence of people. God is in both places and people are in both places,

02:10:35.680 | whole people. So as a Christian, my focus is on serving, helping, ministering to, and

02:10:43.760 | loving people. In the Bible, there's a story about when the religious teachers of the law

02:10:49.260 | at that time were testing Jesus, they were testing him on his interpretation and understanding

02:10:54.760 | of law. There's a version of this story in the book of Mark and there's a different version

02:10:59.100 | in the book of Luke. They're slightly different, but they have a common theme. And the religious

02:11:03.400 | teachers asked Jesus, they said, "What's the most important commandment?" Or in the

02:11:08.520 | version in Luke, the man asks, "What must I do to inherit eternal life?" And Jesus responds,

02:11:12.680 | he says, "Love the Lord your God with all your heart, with all your soul, with all your

02:11:17.640 | mind, and with all your strength, and love your neighbor as yourself." Love the Lord

02:11:26.360 | your God with all your heart, with all your soul, with all your mind, and with all your

02:11:29.320 | strength, and love your neighbor as yourself. And I believe that's how we invest in people.

02:11:34.280 | If we love God with all our heart, all our soul, all our mind, and all our strength,

02:11:38.360 | it will lead us to care about what he cares about and to act on it. And what does God

02:11:42.200 | care about? The kingdom of God. What makes up that kingdom? People. You don't have to

02:11:48.560 | wait for $10 million to invest in people. I'll share with you, you know what the height

02:11:54.200 | of religious expression is for me, one of the holiest things I do? Washing the dishes.

02:12:00.360 | It's one of the most spiritual things I can do. Why? Because it's one way of loving my

02:12:06.160 | life. What does it cost me? Time and focus. You know what another one of the most holy

02:12:13.920 | things I do is as a Christian? Going to work to provide for my family. It's the zenith

02:12:19.240 | of spirituality. I believe you store up treasures in heaven by loving and caring for people.

02:12:27.840 | That starts with your spouse and continues with your children. I forgot to mention this

02:12:32.040 | earlier, but I think one of the things that we would do if we had a $10 million windfall

02:12:36.160 | is we'd probably adopt some children. I'm so burdened by the situation facing children

02:12:41.360 | in our society. I feel like we're living in a veritable holocaust, but it's hidden from

02:12:45.560 | day to day life. If you look at the numbers, Hitler killed perhaps 6 million Jews, or if

02:12:52.080 | you include the additional 5 million non-Jewish victims of his work, you find a total of 11

02:12:58.360 | million people-ish died. In the United States alone, we kill over a million babies a year.

02:13:04.640 | Since 1973, in the US alone, we've killed over 53 million babies. On a global basis,

02:13:12.240 | the conservative estimates are about 40 million babies per year. I don't know about you, but

02:13:20.760 | that burdens me so much because I often wonder what would I have done if I were living in

02:13:25.120 | Austria or Germany 75 years ago? Would I have cared enough about people to do something

02:13:31.800 | about the murder being committed every day? Would I have just gone along in quiet comfort,

02:13:40.920 | living my life and grandly pleasing myself without a care in the world? I often ask myself

02:13:49.240 | this question. I say, "Can a person who opposes abortion ethically do so if they're not willing

02:13:55.960 | to invite the unwanted baby into their home?" My wife and I talk about that. So far, we

02:14:04.600 | haven't sensed that the time is right for us to do that just because of the strain that

02:14:08.440 | it would bring in our family at the moment, but I wouldn't be surprised if it were in

02:14:12.280 | the future. The challenge with adoption is that it's a major financial commitment up

02:14:15.760 | front based upon the way that our society handles it. It's different from having your

02:14:21.400 | own babies biologically, so it requires a very different type of financial planning,

02:14:26.200 | but it's also a financial commitment ongoing. Especially as your family grows, it brings

02:14:31.000 | additional expenses to support your spouse. So there's a major financial component to

02:14:37.400 | it. Anyway, I got off track. My point is investing in people, it starts with your spouse. It

02:14:42.480 | continues with your children. It continues with investing in your closest neighbor, whoever

02:14:47.800 | that is, and then proceeds from there to society at large and across the globe. It goes through

02:14:53.160 | whatever doors are open to you. Now, there are many other ways to store up

02:14:57.440 | treasures in heaven. I'm just sharing what is meaningful to me at the moment. For you,

02:15:00.560 | it may be different, but that's one of the major themes. Those are some of the ideas

02:15:10.040 | that I have about what I would do with the money.

02:15:13.000 | Now, I've ignored a bunch of important topics. This show is already a beast, already very

02:15:16.760 | long, and some of you will astutely observe that I've actually completely skipped talking

02:15:20.160 | about giving, which is one of the most important things to consider and frankly is the place

02:15:24.200 | to start with all money. Although sometimes I use the phrasing of the concept of pay yourself

02:15:29.120 | first, I really don't like it because I think that giving should always be done first. I

02:15:33.000 | like to think of the concept of pay yourself second after you give, but I've avoided the

02:15:36.440 | discussion here partly because I have some unorthodox views on it, which I don't want

02:15:40.400 | to go into today, and partly because I wouldn't have any idea of how to actually give away

02:15:44.040 | a million dollars well or two million dollars well. I don't know. We'll discuss that sometime

02:15:49.040 | in the future, but giving money away well is a tough thing to do. So just for now, consider

02:15:52.840 | it rolled up into investing. For me, investing doesn't all have to do with a financial return.

02:15:58.960 | But these are my answers. It's the best answer that I have for the question of what I would

02:16:02.880 | do if I won the lottery. But in thinking about the question for a few weeks now in preparation

02:16:08.200 | for this show, I've come to the conclusion that it really wouldn't change much in my

02:16:12.040 | life. It would just bring a ton of responsibility that frankly I'm not sure that I'm ready for.

02:16:18.160 | I mean, certain aspects would be fine. I'd like to have an RV and if I won the lottery,

02:16:23.800 | I'd probably buy a big fancy diesel coach instead of the more modest used class C RV

02:16:29.440 | that I'd otherwise choose. I don't know. But I still think I'll wind up getting the

02:16:33.280 | RV at some point because it'll serve a purpose in my family and it'll serve a need at a

02:16:36.760 | time. I might trot right out and buy those paddleboards quicker if I won the lottery,

02:16:42.360 | but I don't really need them. I mean, I've sat on them for four years just kind of watching

02:16:45.880 | and waiting for a deal. My son isn't old enough to care about paddleboards. We just sit and

02:16:50.160 | play in the lagoon at this point. That's more fun for him than being on the surfboard.

02:16:56.400 | The beginning I started with saying I've been blessed with a great life already. I truly

02:16:59.400 | have. I've enjoyed some incredible peak experiences. I've traveled the world and dined on the best

02:17:06.520 | food that money can buy and had some of the most incredible experiences. I've seen some

02:17:11.200 | of the wonders of the world. I've been so fortunate. And I dare say that you have too.

02:17:18.600 | If you haven't, you can have all those things without the need to win the lottery. Although

02:17:23.640 | thinking about the lottery is a useful mental exercise to understand what the inner desires

02:17:30.000 | of your heart are, don't put your hopes or your dreams on winning the lottery. It might

02:17:35.080 | bless you and give you an opportunity to bless others, but it'll also bring a tremendous

02:17:39.560 | burden and responsibility into your life and it could even destroy your life if you aren't

02:17:43.920 | careful. We live in one of the most incredible times of human history. Think about this.

02:17:48.640 | You can get onto an airplane and in a few hours be on a different continent. Imagine

02:17:55.000 | that. Every single one of you could take a European vacation this summer if you wanted

02:17:59.920 | to. It's a few hundred bucks for a plane ticket. I don't know, $800 depending on where you're

02:18:05.880 | going. You could go see the Duomo and the Pantheon and the Parthenon and the Sistine

02:18:12.600 | Chapel and David and the Eiffel Tower and the Tower of London. If you saved for a few

02:18:18.040 | months and focused on it, every single one of you listening could do it. Think about

02:18:23.920 | how luxuriously you and I already live. Every single one of us can have the best bed that

02:18:29.720 | money could buy, the most beautiful bedroom, the most beautiful living room, the most beautiful

02:18:34.760 | kitchen that money can have. All it takes is a comfortable mattress and the right linens

02:18:39.120 | and a few coats of paint and some well-lit artwork. If you won the lottery, would you

02:18:44.400 | really buy a 15-bedroom mansion? How many bedrooms do you need? You can only sleep in

02:18:49.280 | one at a time. Think about how luxurious your transportation already is. I just bought a

02:18:57.600 | $500 car and that car is an absolute marvel. It's a 1998 Toyota Corolla. It takes me down

02:19:03.880 | the road at 70 miles an hour in padded, air-conditioned comfort. It's smooth. It's quiet. It's comfortable.

02:19:12.760 | I can drive over 30 miles on a single gallon of fuel and I can spend my time in the car

02:19:17.520 | listening to discussions with the smartest people in the world for free through a podcast.

02:19:23.440 | How amazing is that?

02:19:25.280 | Now most of you have cars that are a bit fancier than that. I have a fancier car too and I'll

02:19:29.760 | probably have fancier cars in the future. But does it really make that big of a difference?

02:19:35.040 | I've driven my share of $100,000 cars. Unless you're at the track, you can hardly get things

02:19:39.680 | out of third gear before you're stuck behind some – I don't know, some other – someone

02:19:45.800 | else.

02:19:46.800 | What about your food? All of us have enough to eat. Most of us have more than we need.

02:19:51.080 | You can have the best food in the world, every single one of you and me. If it's a few

02:19:56.240 | hundred dollars to do so, just cancel your cable bill for a few months and schedule the

02:20:00.080 | fancy dinner at Chateau – whatever. Chateau Jean-Paul. I don't know what the fancy names

02:20:08.480 | are. But frankly, it's not that much. I have a brother of mine – and you don't

02:20:11.680 | even have to spend that much to get great food. I have a brother of mine who's a foodie

02:20:14.320 | and he laughs at me. But I really enjoy silly cheap things like pot stickers from TGI Fridays

02:20:19.800 | or a barbecue sandwich from Sonny's. Now I like the foodie stuff as well.

02:20:24.980 | Recently a new friend of mine who's listened to the show invited us over for dinner and

02:20:27.660 | served us this amazing pineapple bacon guacamole and homemade prosciutto as an appetizer. It

02:20:32.720 | was incredible, total foodie and totally delicious. You can learn to make that with a few minutes

02:20:37.440 | of free instruction on YouTube. Isn't that incredible?

02:20:40.240 | What about wine? One of my favorites, believe it or not, is a box of Merlot from the Total

02:20:43.940 | Wine and More that I walk to from my house. That box of wine has four bottles in it and

02:20:48.400 | I can get it on sale for $12 a box. That's $3 a bottle and it's really, really good.

02:20:54.440 | Is it the best in the world? I'm sure it's not. But who defines best? Once you get free

02:20:59.880 | of the need to impress people by how much money you spend, you can just simply drink

02:21:03.280 | what you like. And the limit of my appreciation is usually defined by my palate, not by my

02:21:08.540 | pocketbook. Now those are all consumption items, but they don't cost much. They bring

02:21:15.460 | a little bit of joy, but not the most joy. And how many people do you know that have

02:21:24.720 | all of those things and more and don't have peace? That don't really seem to get joy from

02:21:34.040 | those things? You know what brings the most joy? Peace with God changes everything. And

02:21:45.080 | giving and serving and loving. How much does it cost you to sit down and have a cup of

02:21:53.920 | tea with your spouse every night? Try it. Turn the TV off and put the kids to bed and

02:22:00.520 | just sit and talk. Just work to understand her. And I say her because usually we as husbands

02:22:08.360 | are the worst with this. Just try to understand your spouse, him or her, and love them. How

02:22:18.800 | much does it cost to arrange to meet your friends at the park and play a game of ultimate

02:22:24.080 | Frisbee together, and yet how fun is it? How much does it cost to volunteer your time and

02:22:30.580 | your talents to help someone move or to help your neighbor put up their Christmas lights

02:22:36.600 | or to start a community garden or to adopt a child or open an orphanage? I have zero

02:22:47.080 | desire to be Bill Gates. Can you imagine the difficulties that man faces every day? Again,

02:22:52.160 | he has to figure out how to effectively give away billions of dollars. He has to worry

02:22:55.320 | about his kids getting kidnapped. Most important, he has to figure out how to keep his kids

02:23:00.000 | grounded from a young age. So pray for him when you think of it. He's got a tremendous

02:23:03.320 | responsibility. But the things of consumption are not meaningful in the long run. And some

02:23:11.960 | of the most important things and valuable things we do are wrapped up in serving. And

02:23:18.480 | serving costs little to no money but has profound benefits.

02:23:24.880 | The interesting thing is that the psychologists have proven the value of this again and again

02:23:27.920 | and again. So you can do what I do, which is simply follow what was written down thousands

02:23:33.040 | of years ago and has been proved again and again and again and again and again and again

02:23:37.040 | as being true, called the Bible, or you can go and read the latest psychological research

02:23:41.660 | and integrate that. That's good too. But recognize that the deeper, more valuable things

02:23:49.360 | of life are generally not what is advertised on TV or what is caught up in the insert of

02:23:57.240 | a fashion magazine. Don't worry too much about winning the lottery. Worry about developing

02:24:04.840 | the skills and the character and the capacity to be able to handle that much money and not

02:24:09.960 | let it destroy your life. That way, you'll win either way.

02:24:17.320 | The purpose of becoming financially independent is not necessarily so that you are financially

02:24:22.080 | independent, although I'm looking forward to that day myself, but rather so that you

02:24:27.920 | can become the kind of person who is financially independent. And once you've achieved that

02:24:34.520 | character, financial independence will just be the starting place. If you have the capacity

02:24:41.520 | and the skills and the character to handle the money, then you'll be able to handle it

02:24:47.480 | without destroying your life. If you don't have that, then the money that you have is

02:24:53.480 | probably destroying your life and the other money is going to destroy your life too. Focus

02:25:00.800 | on winning either way. How? Well, in the words of a famous theologian named John Wesley,

02:25:07.080 | "Earn all you can, give all you can, save all you can." Although I don't think that's

02:25:12.400 | a perfectly accurate statement, I think it's probably the pithiest statement. Certainly,

02:25:20.980 | he wraps up more truth in 16 words than – excuse me, 12 words than I can in a couple hours,

02:25:29.600 | but I hope this has been useful.

02:25:32.160 | Hope this show has been useful to you. I know there's a lot here and I know my way of answering

02:25:36.320 | these questions goes against the grain of how many people would approach it, but when

02:25:40.600 | you see life as integrated as I do, you can't disconnect the answers. Your life goals will

02:25:46.480 | inform your investing strategy and your perspective on money will inform the rest of your life.

02:25:52.800 | I actually explicitly or specifically ignore the second part of the question from Mike

02:25:57.640 | about the specifics of how to take the payments and etc. because the annoyingly consistent

02:26:02.440 | answer from me would be, "Well, it depends. It depends on your goals." I don't play

02:26:06.240 | the lottery so I wouldn't have those options, but I've shared with you what I would do

02:26:09.220 | and for me, I would take the lump sum because I would want to have control over it to invest

02:26:13.400 | it the way that I do if I won the lottery, but I don't. So the lump sum would be – that

02:26:18.600 | was why I went at all that whole thing.

02:26:19.800 | But if I had a client approach me for financial advice, the first thing we would do would

02:26:23.080 | be to have a discussion about their goals, their values, their worldview, what they're

02:26:26.440 | trying to accomplish and if their goals were consumption, then my advice would be, "Well,

02:26:32.000 | you better take the payments and not the lump sum because that way you'll be able to assure

02:26:35.320 | your income to fund your lifestyle without going broke." But if their goals were different,

02:26:44.320 | then the answer would be different and you've got to work through and sort through what

02:26:50.360 | the goals are, what the worldview is and then you'll clearly be able at that point in

02:26:53.840 | time to be able to see how to apply it.

02:26:59.440 | So I hope this has been helpful to you. I thank you so much for listening. I thank each

02:27:04.000 | and every one of you for allowing me to be here every day, hopefully encouraging you

02:27:10.720 | and inspiring you and helping you. That's my hope and I thank you for so many of you

02:27:16.720 | who support the show. That's what gives me the monetary ability to actually do this.

02:27:23.160 | If you'd like to help support the show, you can go to RadicalPersonalFinance.com/patron.

02:27:27.240 | We are exclusively listener-funded directly from that. I'm going to be making some changes

02:27:31.400 | on that in the future just to be able to support my family a little bit better, which is a

02:27:37.280 | satisfaction of those goals. But I would invite you, if this has been helpful to you, please

02:27:41.160 | go to RadicalPersonalFinance.com/patron and become a supporting patron of the show. Thank

02:27:46.160 | you all so much for listening. Be back with you soon.

02:27:47.800 | Thank you for listening to today's show. Please subscribe to the podcast with our free

02:27:57.960 | mobile app so you don't miss a single episode. Just search the App Store on your device for

02:28:03.280 | Radical Personal Finance and you'll find our free app. If you have received value from

02:28:08.160 | the content of this show, please consider becoming a patron. Your financial support

02:28:12.280 | is how I pay the bills for the show and how I plan to grow our content. You can support

02:28:16.680 | the show with as little as a dollar a month or as much as you feel the content is worth.

02:28:21.560 | Details are at RadicalPersonalFinance.com/patron. If you'd like to contact me personally, my

02:28:27.680 | email address is Joshua@RadicalPersonalFinance.com or connect with the show on Twitter @RadicalPF

02:28:34.440 | and at Facebook.com/RadicalPersonalFinance. This show is intended to provide entertainment,

02:28:40.400 | education, and financial enlightenment, but your situation is unique and I cannot deliver

02:28:46.600 | any actionable advice without knowing anything about you. Please, develop a team of professional

02:28:52.800 | advisors who you find to be caring, competent, and trustworthy, and consult them because

02:28:59.480 | they are the ones who can understand your specific needs, your specific goals, and provide

02:29:04.960 | specific answers to your questions. I've done my absolute best to be clear and accurate

02:29:10.280 | in today's show, but I'm one person and I make mistakes. If you spot a mistake in something

02:29:15.440 | I've said, please come by the show page and comment so we can all learn together. Until

02:29:20.600 | tomorrow, thanks for being here.

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