RPF0247-Friday_QA
00:00:00.000 | If you're new to the Radical Personal Finance podcast, only been listening for a couple
00:00:05.920 | of weeks, you may be under the impression that this is an interview show.
00:00:10.520 | Well, today, I'm pleased to disabuse you of that notion because Friday Q&A is back.
00:00:28.440 | Welcome to the Radical Personal Finance podcast.
00:00:40.120 | My name is Joshua Sheets and I'm your host.
00:00:42.000 | Thank you so much for being with me.
00:00:43.520 | I'm back.
00:00:44.520 | I'm back.
00:00:45.520 | I'm back.
00:00:46.520 | I'm back.
00:00:47.520 | Sitting in front of a microphone, kind of off my game a little bit.
00:00:50.520 | Doesn't feel so smooth, but man, is it good to be back.
00:00:54.600 | Been too long.
00:00:55.600 | Too many interviews.
00:00:56.960 | Let's get to some Q&A.
00:00:59.640 | Let's get back to the show the way I've envisioned it.
00:01:02.280 | And I thank you for your patience.
00:01:10.400 | September was busy and challenging and stretching in many, many ways.
00:01:14.920 | One of the more challenging months of my life, but we're making progress.
00:01:18.760 | Got back safely from FinCon up in Charlotte and really been able to make a lot of progress
00:01:24.720 | around the house last couple of weeks.
00:01:26.720 | My little girl is doing a lot better, so that really makes a huge difference.
00:01:30.000 | I spend all day holding a crying little baby, and so we're thankful that she's doing better
00:01:35.480 | and things are looking up.
00:01:37.120 | Making a lot of progress on the show.
00:01:38.320 | Lots of changes around here.
00:01:39.840 | As you heard yesterday, we launched our first sponsor, YNAB.
00:01:43.080 | We're going to be launching a total of 10 sponsors over this month, and I'll talk a
00:01:47.880 | little bit about that, yes, in one of the questions today.
00:01:53.320 | I'll mention a few more details on the sponsorship program.
00:01:57.120 | But I want to thank you all for your patience over the last month.
00:01:59.760 | I have been making progress all around to be able to free things up, free up my schedule
00:02:05.480 | to really improve Radical Personal Finance and really deepen the content, keep it more
00:02:12.200 | varied and more interesting, and also flesh out some of the things that need to really
00:02:17.040 | be developed.
00:02:18.040 | Some of the courses I'm working on, I'm working on writing the book, getting that
00:02:22.320 | done here.
00:02:23.320 | So, lots of work all around, but today I am thrilled to get back to the podcast.
00:02:27.280 | I'm going to clear out the voicemail box today, and I've got a bunch of questions
00:02:32.680 | lined up.
00:02:33.680 | I think it looks like about six.
00:02:34.760 | These are going to be fairly simple, fairly light questions.
00:02:37.040 | No heavy financial planning lifting today.
00:02:39.200 | I wasn't able to get into that.
00:02:42.000 | I've got email boxes full of questions of your heavy financial questions, and maybe
00:02:46.480 | next week we'll try to dig into some of the real meat there.
00:02:50.400 | But you've got to ease me back in slowly, little by little.
00:02:53.880 | So today I'm going to do some fairly light questions.
00:02:58.400 | I also intend to be moving pretty fast today, and long-time listeners are rolling their
00:03:02.680 | eyes, but I really do mean it.
00:03:04.160 | I plan to move pretty fast.
00:03:05.560 | So let's see how we go.
00:03:07.240 | First question comes from Richard.
00:03:08.240 | Hi Josh, this is Richard.
00:03:09.680 | I really appreciate your podcast and I'm learning a lot from listening to it.
00:03:14.000 | My wife and I have local bank accounts that we pay our bills out of.
00:03:17.600 | We're thinking of setting up a joint account with an online bank that we pay all our bills
00:03:22.360 | out of, and I'm particularly interested if you have any recommendations in this area.
00:03:27.040 | I'm looking for a bank that might have features that allow rainy day funds to be set up so
00:03:32.180 | that a certain amount of money each month is set into a rainy day fund, or a refrigerator
00:03:36.800 | fund, or a new car fund, or a vacation fund, or a gift fund, or any other little accounts
00:03:42.080 | that we might set up to automatically save more money for future big expenses.
00:03:48.160 | Again, appreciate your show and I'm curious to know if you have any recommendations.
00:03:51.920 | Thanks.
00:03:52.920 | Richard, the name you're looking for is Capital1360.com.
00:03:55.960 | To the best of my knowledge, they are the powerhouse in this area.
00:04:01.320 | Capital1360.com.
00:04:02.320 | This used to be a pretty revolutionary concept, and I used to bank with an online bank called
00:04:09.120 | ING Direct.
00:04:10.960 | And ING Direct, they had a cute little orange branding and a cute little orange ball and
00:04:15.760 | all that.
00:04:16.760 | And they really pioneered this space by my memory.
00:04:19.760 | I'm sure there are competitors that were also involved, but they were the ones that seemed
00:04:23.760 | to be everywhere.
00:04:25.400 | And they really did a good job of establishing the online bank account with as many accounts
00:04:30.680 | as you want.
00:04:31.680 | So you could have 20, I think 25 accounts if memory serves correctly.
00:04:36.600 | And they really did a good job.
00:04:37.640 | And I used to bank with ING Direct.
00:04:39.080 | I banked with them.
00:04:40.080 | My wife banked with them.
00:04:41.080 | After we were married, I think we – yeah.
00:04:43.480 | After we were married, we still banked with them.
00:04:46.000 | But then they were acquired by Capital One, bought out.
00:04:49.200 | They changed their branding from ING Direct to Capital 1360.
00:04:53.400 | And so they're still a very large bank.
00:04:56.200 | They still do lots of business.
00:04:57.760 | All of those same features apply where you can set up as many accounts.
00:05:01.320 | There's no cost to them as possible.
00:05:03.360 | I don't bank with them anymore because I – and I closed my accounts after Capital
00:05:07.520 | One bought them because I didn't want to do business with Capital One.
00:05:09.960 | Generally, I'm not a fan of any of the large financial services companies in the United
00:05:14.440 | States.
00:05:15.440 | I can't stand any of the banks.
00:05:17.800 | And so I do my best not to work with them as much as I can avoid it.
00:05:21.880 | I don't like the stranglehold that they have over the political economy.
00:05:28.080 | I don't like how they basically control the government.
00:05:30.760 | I don't like a lot of their business practices.
00:05:32.880 | But that's just my own personal thing.
00:05:34.960 | That doesn't need to affect you.
00:05:36.280 | They do a perfectly fine job as far as customer service.
00:05:40.040 | I've never heard any major complaints.
00:05:43.560 | So Capital1360.com is the website that you want to do and check them out.
00:05:48.880 | I'm sure there are competitors.
00:05:50.160 | Just do an internet search and see what other competitors are.
00:05:55.680 | But they are definitely the big one in that space.
00:05:59.640 | If that works for you, setting up all the different accounts and automating it, that
00:06:03.640 | can work well.
00:06:04.640 | I have done that.
00:06:05.640 | I do think – and in fact, I thought this was a good segue into sponsor of the day number
00:06:10.960 | one, which is YNAB, who we introduced yesterday.
00:06:13.160 | I do think that a system of managing one account and having something that's not separate
00:06:21.160 | bank accounts can be really, really good.
00:06:23.040 | So at this point, I used to do the – personally, I used to do the many, many accounts type
00:06:28.600 | of system.
00:06:29.600 | Now, I'm down to just two accounts, savings account and a checking account.
00:06:34.560 | And with YNAB, it makes it easy.
00:06:37.240 | I used to keep a spreadsheet as well.
00:06:38.600 | You can just keep a spreadsheet and say, "OK, if I've got – let's say I've
00:06:41.920 | got $5,000 in this account.
00:06:43.840 | Of the $5,000, how is it allocated?"
00:06:46.320 | Now that I'm using YNAB, I'm able to do the same thing.
00:06:48.480 | You can just simply budget the money into the account.
00:06:50.560 | So if you're saving for a new refrigerator, you can save for that consistently over time
00:06:54.920 | and you can set that aside.
00:06:56.080 | Now you know there's where the money is.
00:06:58.880 | And what the reason – the danger of just doing multiple accounts is that you might
00:07:02.680 | not have any kind of system of accounting.
00:07:05.400 | And the challenge is – from doing multiple accounts is doing bookkeeping.
00:07:11.240 | And so if it's just all for savings, then that works fine.
00:07:16.240 | But what I've done and what I've seen people do is using the different accounts to save
00:07:19.880 | for things like car insurance.
00:07:21.840 | Well, car insurance is not a big picture – excuse me, a big purchase.
00:07:25.880 | It's a budgeted item.
00:07:27.720 | And yes, it's simple enough to have a different account and put the money in every month so
00:07:33.720 | that you have it there after six months.
00:07:35.880 | But what happens is it's much harder to have any kind of system of reports where basically
00:07:41.040 | you're just looking at that account and saying, "Is there money there?"
00:07:43.840 | Because when you get into tracking six different bank accounts or eight different bank accounts,
00:07:47.120 | it's going to make it very challenging to manage all those transactions.
00:07:50.560 | And what happens if you're using Quicken or using a spreadsheet, you basically always
00:07:54.500 | are having balance transfers everywhere.
00:07:57.440 | So I don't think it's necessarily an optimal system.
00:08:00.800 | Although if it works for you, go with it.
00:08:02.880 | I used to do it and who knows?
00:08:05.480 | Maybe I'll do it again in five years and I'll switch everything up.
00:08:10.360 | But that's what I don't like about that approach is it's hard to track.
00:08:15.220 | So check out – if you haven't tried YNAB, you heard the interview yesterday.
00:08:19.400 | And again, they're sponsored the day, number one today.
00:08:22.000 | It's a budgeting software and it is absolutely the best budgeting software that I have ever
00:08:27.120 | found.
00:08:29.120 | And I think that each and every one – it's – at this point in time, every financial
00:08:34.760 | client that I work with from now going forward, the very first step is going to be budgeting
00:08:38.880 | because it allows you to proactively set that money aside and it simply solves your issue
00:08:44.840 | without having to have multiple accounts.
00:08:47.680 | So get a free copy, RadicalPersonalFinance.com/YNAB.
00:08:51.680 | YNAB stands for You Need a Budget.
00:08:53.520 | So it's Y-N-A-B.
00:08:55.680 | RadicalPersonalFinance.com/YNAB.
00:08:58.480 | You can download it, try it free for 30 days and if you like it, buy it.
00:09:03.640 | Next question comes from Rick.
00:09:05.280 | Kick it off, Rick.
00:09:07.280 | Hi, Joshua.
00:09:08.280 | This is Rick in California.
00:09:10.400 | In episode 204, you asked Todd if he knew of any insurance companies that do not pay
00:09:17.280 | a commission and there are at least two that I'm aware of.
00:09:22.560 | One is Ameritask Direct has a no-load life insurance as well as annuity product.
00:09:29.680 | And then also Tia Kref who I would say is probably the leader in that particular space
00:09:35.560 | also has a no-load life insurance solution.
00:09:38.760 | And I believe there's at least one or two others as well.
00:09:42.560 | You're right.
00:09:43.560 | There are definitely a few and far between.
00:09:45.200 | But I thought I'd pass that along.
00:09:46.840 | Take care.
00:09:47.840 | Rick, thanks for the tip.
00:09:49.400 | Tia Kref definitely is a unique scenario.
00:09:53.960 | They're a powerhouse and they have great life insurance products and they do a very good
00:09:59.640 | job.
00:10:00.640 | I guess I was aware of Tia Kref.
00:10:02.320 | I wasn't aware of Ameritask Direct.
00:10:04.880 | So I went and looked up their website.
00:10:06.720 | It's AmeritaskDirect.com if anyone else is interested.
00:10:10.720 | And yeah, their advertisement right here at the top of the page is Ameritask Advisor Services,
00:10:16.280 | the no-load insurance pioneer.
00:10:18.680 | So they're out there on the lonely vanguard of offering no-commission insurance products.
00:10:27.120 | And I think they're a good option.
00:10:28.120 | Again, I don't know anything about them.
00:10:30.520 | I'm only concerned with a company like this.
00:10:32.480 | I've never heard of them.
00:10:33.800 | And so the challenge is even for an advisor is you've got to make sure that your client
00:10:39.880 | is going to be served by the best product.
00:10:44.320 | And with insurance, there are very much economies of scale.
00:10:47.640 | There's very much financial strength.
00:10:50.480 | There's a place of financial strength that really matters.
00:10:55.000 | And so this would be my biggest concern.
00:10:56.680 | I don't believe personally – maybe I'll change my mind in the future – but I don't
00:10:59.720 | believe that the payment of a commission on a life insurance policy is the indicator of
00:11:07.280 | whether or not that policy was well-built.
00:11:10.640 | I think there's a lot more that matters in addition to the commission.
00:11:14.400 | So as an example, I just clicked over here to the ratings.
00:11:17.400 | And so Meritas, they advertise two ratings, one with AM Best for an A rating and then
00:11:23.040 | their Standard & Poor's rating with an A+ rating.
00:11:26.840 | Now the first concern is they don't subscribe to the other two of the ratings agencies,
00:11:30.720 | which are Fitch and Moody's.
00:11:33.760 | And there's nothing wrong with an A rating.
00:11:37.080 | But if you were to compare that, an A rating with AM Best is the third highest of the best
00:11:43.000 | ratings and an A+ with Standard & Poor's is the fifth highest of S&P's ratings.
00:11:48.760 | So compare that to some of the AAA-rated companies that are just AAA-rated across the board,
00:11:56.120 | Northwestern Mutual, New York Life, MassMutual.
00:11:58.960 | They probably, depending on what year, sometimes there's one of the four or two of the four
00:12:05.160 | for which they're not AAA across the board, the very highest with those three companies.
00:12:09.360 | But there's a very large difference in ratings.
00:12:12.680 | There's a good difference there in ratings.
00:12:14.880 | And the bigger ones, there's a massive difference in terms of the economy, the scale of the
00:12:20.880 | company.
00:12:21.880 | So if you were to compare the balance sheet of any of those companies to the balance sheet
00:12:25.040 | of Meritas as a life insurance company or if you were to compare the balance sheet of
00:12:29.720 | Meritas to a company like MetLife or Prudential, some of just these huge, huge companies, there's
00:12:36.240 | a massive difference of scale.
00:12:38.400 | And so whatever the insurance product is that you're buying, you've got to make sure that
00:12:42.280 | it's okay and that you're not losing something significant by playing with the small dog
00:12:48.480 | in the yard.
00:12:49.480 | A 10-year, 20-year term policy, it's no big deal.
00:12:54.320 | Anything else other than that, it might or might not be a big deal.
00:12:57.400 | So I don't buy the idea that commissions are the only thing, but I thank you for making
00:13:01.360 | us aware of it.
00:13:02.360 | So I appreciate you guys helping me to learn.
00:13:05.120 | Next question, Julian.
00:13:06.120 | Hey, Josh.
00:13:07.120 | This is Julian.
00:13:08.120 | Cheers from Chicago.
00:13:09.120 | I've been a big fan of the show since day one and a Patreon for as long as that's been
00:13:15.440 | possible.
00:13:16.440 | I really love the show and I really appreciate everything you do for the community and to
00:13:21.960 | advance the mission.
00:13:24.400 | Had a question about certifications.
00:13:26.800 | You don't have any certifications from the IMCA, either the CEMA certification or the
00:13:33.480 | CPWA certification.
00:13:37.840 | Definitely avoiding those certifications or never got around to it.
00:13:42.640 | What are your thoughts?
00:13:44.840 | Money Julian, didn't want to pay for them.
00:13:47.400 | It's as simple as that.
00:13:48.840 | So all of the financial planning designations and certifications that I've accumulated through
00:13:53.440 | the years with the exception of the CFP designation, which is administered by the CFP board, all
00:14:00.600 | of them come from a college called the American College.
00:14:06.240 | The American College is a college that is specifically exclusively focused on financial
00:14:10.880 | services education.
00:14:12.880 | But you need to understand the background of that college and the background of where
00:14:16.920 | their educational programs came from.
00:14:19.840 | Originally, I could be wrong on this, but I'm pretty confident about this.
00:14:24.920 | Originally, the American College started around a designation called the CLU, the Chartered
00:14:30.580 | Life Underwriter.
00:14:32.360 | That was where they made their mark.
00:14:33.600 | Solomon Huebner was one of the major people who was involved in building out the academic
00:14:39.400 | framework around insurance.
00:14:42.240 | In the early days of the life insurance industry, there wasn't a lot of great professional training.
00:14:46.960 | As the life insurance industry developed, as the products developed, then there was
00:14:50.680 | a need for more training.
00:14:52.760 | Solomon Huebner was one of the heroes of that business and they got involved in the educational
00:14:58.920 | business.
00:14:59.920 | The American College traditionally was built on that CLU designation and that was a designation
00:15:06.400 | exclusively for insurance agents.
00:15:09.960 | Now they went on and they developed other designations.
00:15:12.300 | They actually developed a more comprehensive financial planning designation called the
00:15:15.880 | CHFC, the Chartered Financial Consultant.
00:15:19.240 | But over time, the insurance companies grew to have a very close relationship with the
00:15:24.000 | American College and to this day, that still exists.
00:15:27.200 | If you were to look, for example, at the American College website, you'll see that all of their
00:15:31.240 | different schools within the college are sponsored by insurance companies.
00:15:38.240 | You've got the New York Life blah, blah, blah, the Met Life blah, blah, blah, the Northwestern
00:15:43.560 | Mutual blah, blah, blah, the different school that's sponsored by an insurance company.
00:15:48.720 | There's a very tight relationship there between the insurance companies and the American College.
00:15:53.960 | Merrill Lynch doesn't have a school named after them.
00:15:57.080 | They don't sponsor a center at the American College.
00:16:00.720 | Morgan Stanley doesn't sponsor a center at the American College.
00:16:04.160 | So the wealth management folks have other places of learning and part of that has been
00:16:08.480 | the CFP board but then other areas of specialty have emerged.
00:16:12.360 | Well, because I was working for Northwestern Mutual, Northwestern Mutual had a relationship
00:16:17.440 | with the American College where they would actually – as part of my contract, they
00:16:20.760 | would pay 100% of the cost of any credentials or designations that I chose to pursue through
00:16:28.240 | the American College and also with the CFP board.
00:16:33.240 | And so I just simply believed in maximizing my contract.
00:16:37.240 | Don't walk away from free money.
00:16:39.880 | Why walk away from – yeah, why walk away from free money?
00:16:44.040 | And so my responsibility was to pass the exams but I just lined them up and took them down
00:16:49.280 | in the most efficient and fastest way I could.
00:16:52.640 | But I did it where – in the place where Northwestern Mutual was paying the bill.
00:16:57.120 | And if I wanted to go and pursue a SEMA designation or CPWA, the wealth advisor, private wealth
00:17:04.920 | advisor designation, then that comes out of my pocket and I would have to pay for it.
00:17:10.520 | So I didn't see any reason to go and buy that stuff when I could – number one, I
00:17:15.080 | could get plenty of letters without paying for money and then I could just go get the
00:17:18.960 | education from reading the books and I didn't feel the need for – I mean I already have
00:17:24.080 | too many letters.
00:17:25.080 | I don't need any more of that.
00:17:26.080 | I can just read the books and I don't need to prove anything by having more letters.
00:17:29.720 | I don't need the CPWA to make people think I'm smart.
00:17:33.360 | They think I'm smart just with everything that's already there.
00:17:36.380 | So that was my efficient way of skinning the cat.
00:17:39.380 | But what I would say for you, number one, is are you paying for it or is somebody else?
00:17:44.740 | If you're paying for it, then you need to make sure that you're getting your bang
00:17:47.200 | for the buck.
00:17:48.400 | And so do you need it?
00:17:49.840 | Is it going to be helpful?
00:17:50.840 | Consumers – here's an example.
00:17:53.400 | Consumers don't have a clue what any of those designations mean.
00:17:56.200 | The only financial designation that I think has any clout with consumers is the CFP.
00:18:01.640 | CFP aggressively markets it and they've done a good job of raising their – raising
00:18:08.220 | the knowledge and benefit of it.
00:18:12.120 | So if you're going to pursue it, there's got to be a reason for it.
00:18:17.120 | Do you need the knowledge and is that an efficient way of capturing the knowledge?
00:18:20.520 | It might be.
00:18:21.680 | And then also if so, then choose the designation that's going to give you the most specific
00:18:25.920 | knowledge that's going to be helpful to you.
00:18:28.040 | And then make sure you're choosing the designation that's going to be helpful in your field.
00:18:33.140 | So that answer should emerge fairly naturally.
00:18:38.040 | But simple answer was I never bought any of that stuff.
00:18:40.560 | It was all part of the contract and the contract covers stuff from the American College.
00:18:44.200 | It didn't cover stuff – it didn't cover the other designations.
00:18:47.760 | So cool question.
00:18:49.160 | Next question comes from Ty.
00:18:50.680 | How's it going, Joshua?
00:18:53.920 | My name is Ty Walters and I have a blog at SustainableLifeFitness.com.
00:18:58.400 | I'm also a fan of the Survival Podcast with Jack Spierko.
00:19:03.040 | So kudos.
00:19:04.040 | I'm working towards financial independence and I believe that for me and my business
00:19:08.800 | model that podcasting is one of the best avenues to pursue.
00:19:12.600 | I also believe in the quantity model of podcasting of producing a near daily show to finance
00:19:19.800 | my efforts.
00:19:20.800 | You've mentioned in previous episodes that although you receive above average participation
00:19:27.360 | in your Patreon program that you still remain doubtful as to the effectiveness to finance
00:19:33.320 | your efforts.
00:19:35.000 | In episode 166, you talked about the advantages of hosting a daily show in regards to the
00:19:40.080 | CPM model or cost per advertisers that will pay you for 1,000 listeners.
00:19:45.520 | Based on your current statistics, you estimated that if you produced four shows a month, you
00:19:50.240 | could produce roughly $1,000 per month of revenue.
00:19:53.360 | But if you produced 20 shows per month that you could generate over $5,000 per month which
00:19:59.000 | is substantially different.
00:20:01.420 | My question is this, taking your listener feedback and earning potential into account,
00:20:07.500 | if you were to start from scratch, would you still produce a daily show?
00:20:13.080 | Thanks Joshua and I look forward to your thoughts.
00:20:15.320 | Ty, that's a hard question to answer because with my business plan, if I were going to
00:20:22.760 | start from scratch, yes, I would still produce a daily show.
00:20:26.340 | But remember that the money aspect as far as advertisers is only one component of the
00:20:33.760 | show.
00:20:34.760 | Rather, I was focused aggressively on trying to say how can I create content so that people
00:20:41.800 | will be aware of me because I didn't have any other platform to stand on.
00:20:46.240 | I didn't have any name recognition.
00:20:47.960 | I didn't have anything out there.
00:20:49.800 | So my strategy, if you go back and you obviously listen to that show, but my strategy was to
00:20:55.160 | say there's a need here that's not being fed with useful, in-depth, comprehensive financial
00:21:03.000 | content.
00:21:04.000 | I see that that's not being met and so I think that I'm uniquely qualified to meet that need
00:21:10.080 | and I need to get as much of it out there as quickly as possible in order to hit that
00:21:17.680 | need.
00:21:18.880 | And so I also recognize that if the more breadth, the more different topics I could create shows
00:21:24.920 | on, that would allow me to build a broader net and so meeting that need but also kind
00:21:31.640 | of bringing more people into the fold.
00:21:33.480 | And so recognize that it wasn't a matter of the daily aspect of it.
00:21:39.860 | It was a matter of me recognizing the broad, just the need that was there.
00:21:45.880 | And I think if you look at any podcast that's been effective in its growth, it's not so
00:21:51.800 | much the format.
00:21:53.240 | It's not daily or not daily.
00:21:55.440 | It's that there's a hunger for interesting, unique information.
00:22:00.440 | So the good example would be, you mentioned Jack Spirico and his show, The Survival Podcast.
00:22:06.600 | What makes his show unique is not the daily nature of it.
00:22:09.760 | I think daily might contribute to it and he's in a good habit with his show creation but
00:22:15.760 | it's not the fact that he does a show every day.
00:22:18.880 | It's the fact that he has an ability to think about a topic, survivalism, in a much more
00:22:25.000 | interesting way than most people.
00:22:27.360 | Most people that talk about survivalism, basically they're saying there's going to be an EMP
00:22:33.440 | flare and it's going to be the end of the world as we know it.
00:22:35.280 | We got to head for the hills and so what we need to do is every day we need to focus on
00:22:39.300 | packing a bug out bag.
00:22:41.600 | And so they get obsessed with the nitty gritty of a bug out bag.
00:22:46.360 | Well guess what?
00:22:47.360 | There's a ton of mess out there that are on that.
00:22:48.360 | It doesn't matter whether they're daily or not.
00:22:50.560 | At some point in time you've heard enough about the newest lightweight tent that you
00:22:54.360 | can use to pack up in your bag.
00:22:56.440 | Now I enjoy going on YouTube and watching their YouTube channels from time to time but
00:23:00.040 | you can't take that kind of thing every day and you certainly can't build it for an hour
00:23:04.920 | a day.
00:23:06.040 | But what Jack does on his show is very different.
00:23:09.520 | He doesn't talk about any of that standard stuff.
00:23:12.660 | He talks about interesting concepts.
00:23:15.720 | He talks about lifestyle.
00:23:17.680 | He talks about things that are integrated.
00:23:20.480 | And so he – yeah, survivalism is kind of the hook that gets a certain type of person
00:23:27.440 | in.
00:23:28.440 | But once they're there, they stick around because the content is so interesting and
00:23:33.080 | varied and useful.
00:23:36.480 | And that's what I do with Radical Personal Finance as well.
00:23:39.360 | I talk about finance but I try to think of ways that are really practical to integrate
00:23:43.480 | it and make it applicable to situations.
00:23:46.600 | And so I think that's one of the major things as to why the show has grown effectively.
00:23:53.080 | So my challenge to you would not be to say, "Should I record a show every day or should
00:23:58.820 | I record a show once a week?"
00:24:00.840 | My challenge to you would be to say, "Do you have the breadth of information or the
00:24:07.360 | breadth of ideas that you could create that much content and effectively serve your audience?"
00:24:14.520 | It's okay if you don't.
00:24:18.320 | There are many excellent shows that are going to be very, very focused on niche topics.
00:24:23.560 | I listen to some podcasts that are very, very focused on niche topics.
00:24:27.240 | I'm intentionally pursuing a different strategy than most people and I don't recommend my
00:24:30.800 | strategy.
00:24:31.800 | It's just what I think fits my abilities and what I think fits the market need that's
00:24:37.360 | out there.
00:24:38.520 | But if I sign up for – let me give you an example.
00:24:42.240 | So I've been listening to a public speaking podcast recently.
00:24:45.240 | I'm working hard to build the back end of my business.
00:24:48.100 | One of those components is public speaking.
00:24:50.680 | I don't want to listen to this public – I'm tuned into this podcast because I care about
00:24:55.280 | that one specific subject, public speaking.
00:25:00.120 | And so the type of content that I'm getting there, I would be really annoyed with that
00:25:03.960 | show if they went into all these different areas.
00:25:08.320 | That would not fit that need.
00:25:10.240 | So that podcast creator doesn't need to create a daily show.
00:25:12.760 | They just need to create – they do a weekly show, which is fine, or it can even be a biweekly
00:25:16.240 | show, but make it the best information on public speaking and keep it laser focused
00:25:20.760 | on public speaking.
00:25:21.760 | Let me give you an example.
00:25:23.160 | Compare my show to a show like David Stein's, Money for the Rest of Us.
00:25:27.320 | I was just talking with David when we were up at FinCon.
00:25:29.440 | We were talking about him.
00:25:30.520 | His show is doing awesome.
00:25:32.500 | He is consistently in the top 10 in iTunes.
00:25:35.160 | He is consistently doing his show.
00:25:39.040 | Audience size is about triple the size of this audience right now.
00:25:42.120 | He is just doing an incredible job, but he's laser focused on his topics.
00:25:47.280 | He is honed in and he produces more – I think he does more than – I can't remember
00:25:52.720 | what his publishing schedule is, but he produces a number of shows, but he's laser focused
00:25:57.620 | on one specific topic and he's very effective at it and it works really, really well.
00:26:04.720 | I would be bored stiff trying to create that kind of show.
00:26:10.360 | I would be driven mad by trying to do that.
00:26:13.120 | That's not me.
00:26:14.120 | I don't want to actually do that.
00:26:16.360 | That's why I only do technical financial planning on this show once a week.
00:26:21.680 | I don't want to talk about it more than that.
00:26:23.160 | I get really bored.
00:26:24.480 | I like all the rest of this stuff that I talk about.
00:26:27.320 | So a lot of people will skip my show and go to David's show.
00:26:30.360 | If they just want laser focused investment advice, they should go listen to David's
00:26:34.280 | show.
00:26:35.280 | The people that are going to stick around in my show are going to be interested in more
00:26:39.340 | of these different topics.
00:26:44.760 | So look at your business and ask yourself, "What do you actually want to create and
00:26:51.420 | why are you actually creating it?"
00:26:53.240 | That would be the key.
00:26:54.640 | Final comment for you, podcasting as a business is a terrible business.
00:27:02.280 | Podcasting as a platform to support your business, I am convinced can be an amazing business.
00:27:09.560 | So that is the model that I am pursuing.
00:27:13.320 | Let me just amplify so that you know.
00:27:15.960 | So Patreon ads, so recognize this.
00:27:20.120 | The median podcast downloads, 50% of podcasts that are out there have fewer than 160 downloads
00:27:27.040 | per episode.
00:27:28.880 | 50% of podcasts that exist have fewer than 160 downloads per episode.
00:27:36.240 | The top 10% of podcasts have 4,412 downloads per episode.
00:27:47.000 | Top 5% is 11,565 downloads per episode.
00:27:51.000 | Top 1% is 51,282 downloads per episode.
00:27:55.240 | So you've got to get up to 5,000 downloads per episode to be in the top 9.2% of all podcast
00:28:04.440 | listenership audiences.
00:28:07.400 | That's basically where radical personal finance is at this point in time.
00:28:11.200 | So if you look at that, recognize the fact that – run the numbers on that from an advertising
00:28:17.320 | perspective on everything that I told you in that other episode.
00:28:20.760 | Look at the numbers of the Patreon supporters.
00:28:23.400 | I'm so incredibly grateful to the Patreon supporters of this show because without them,
00:28:33.560 | everything has been built on that.
00:28:34.560 | I've done that intentionally to align my interests in the best direction.
00:28:40.960 | But just recognize the fact that you've got to be in the top 10% and even there, you
00:28:45.280 | really can't make a living on podcasting.
00:28:49.200 | Now if you get in the top 1%, 50,000 downloads per episode, you're in one of these comedy
00:28:55.080 | podcasts or things like that, yes, you can make a living on ads.
00:28:59.120 | So my challenge to you with just what I perceive from taking a quick look at your site, build
00:29:05.280 | your business, the backend business, and use podcasting as a gateway to that business rather
00:29:12.360 | than trying to build your business on podcasting.
00:29:15.400 | I think it's a much safer bet.
00:29:18.480 | Just the other thing finally I would say, recognize that to do a daily show is an absolutely
00:29:23.880 | exhausting amount of work.
00:29:27.400 | It's absolutely exhausting.
00:29:29.040 | As I record these words right now, it is 1.33 a.m. on – this is – well, it's Friday
00:29:34.520 | night, Saturday morning now.
00:29:35.520 | It's 1.33 a.m. and I'm recording my Friday show.
00:29:39.560 | It won't be published till Saturday.
00:29:42.240 | It's an exhausting amount of work and I could never have done a daily podcast the way that
00:29:48.480 | I did it if I had been working a full-time job.
00:29:53.600 | I did a daily podcast because that was the other thing.
00:29:56.760 | As I gave myself one year and I said, "I've got to pour everything on as hard as I can
00:30:03.600 | in order to make this work."
00:30:04.600 | So hopefully those are just some ideas that are useful.
00:30:07.640 | Build your backend business and then use your podcast as leverage as part of your total
00:30:13.960 | overall business.
00:30:16.160 | But it's a bad idea, a bad business move to try to build everything on the backs of
00:30:21.040 | a podcast.
00:30:22.040 | I'm not even – I built it on the back of a podcast but now I'm working on the backend
00:30:27.720 | business.
00:30:28.720 | I'm working on developing the products and the services and the things that are going
00:30:32.200 | to effectively serve my audience with the specific answers that they need.
00:30:37.880 | So Ty, I hope that is useful to you.
00:30:41.720 | Two more questions.
00:30:43.120 | Before I get to the last two questions though, let me take care of sponsor of the day number
00:30:46.880 | two.
00:30:47.880 | Sponsor of the day number two today is Audible.
00:30:51.760 | If you're not listening to audiobooks, number one, you should be.
00:30:56.520 | If you want to be sold on that, I'll sell you on that in episode 219.
00:31:00.600 | Go back and listen to episode 219 of the show which was Hacking Audiobooks and the Audiobook
00:31:05.600 | Marketplace.
00:31:06.600 | You'll hear all the reasons why I think that you should make regular audiobook listening
00:31:12.020 | part of your learning strategy.
00:31:15.400 | But today, I just want to give you two interesting Audible book recommendations that many of
00:31:19.440 | you might enjoy.
00:31:21.280 | So you all know with my strategy, I like to bring together Audible as my paid audiobook
00:31:27.200 | subscriptions with the other audiobook subscription services that I use, Scribd, Hoopla, and Overdrive
00:31:33.920 | that are cheaper or free.
00:31:35.520 | Scribd is $9 a month.
00:31:36.880 | Hoopla and Overdrive are free.
00:31:38.880 | Audible is $15 a month.
00:31:39.880 | So why do I pay $15 a month?
00:31:41.760 | Well, it's because I get books on Audible that I can't get in those other places for
00:31:46.240 | free.
00:31:47.240 | So if I can find them on the library for free, I'll do that.
00:31:50.360 | But I can't find a lot of the books that I need and want to read.
00:31:54.200 | So lately, I've been reading a lot in the area of monetary history.
00:31:58.640 | This is one of the themes I've really been wanting to dig into.
00:32:01.120 | I want to talk about money.
00:32:02.120 | I want to talk about monetary history.
00:32:03.360 | I want to talk about some of these things from a macroeconomic perspective because there's
00:32:07.760 | a lot of stuff out there.
00:32:10.200 | But frankly, I often feel a little bit unsure of am I even prepared to talk about that.
00:32:16.160 | Do I even know what I'm talking about?
00:32:18.320 | And so I've been reading through and I picked out a trilogy and I finished two of them.
00:32:22.680 | But I thought it would be interesting.
00:32:24.080 | So here are the two recommendations.
00:32:27.000 | The first one is good.
00:32:28.000 | The second one is better.
00:32:29.000 | But the first one is a book called Coined by Kabir Sehgal.
00:32:33.400 | And I actually just saw him speak at FinCon.
00:32:35.440 | He was one of the keynote speakers and he wrote this book called Coined.
00:32:38.240 | It goes through the history of money.
00:32:40.680 | It's an excellent book.
00:32:42.800 | Different and I actually preferred it was a book – is a book called Money, an unauthorized
00:32:48.240 | biography by an author named Felix Martin.
00:32:51.600 | This book is awesome.
00:32:52.600 | If you only read one of them, the third trilogy was William Gravener's book Debt, the First
00:32:57.560 | 5,000 Years.
00:32:58.560 | I haven't read that one yet.
00:33:00.040 | But this book is awesome.
00:33:01.840 | I listened to both of these while I was working on my house.
00:33:04.440 | I was painting, getting the house ready to list on the market, doing things like that.
00:33:09.240 | I was able to listen to these and I consumed I think nine books that week while I was working
00:33:14.320 | on house stuff.
00:33:15.460 | So if you listen to my show while you're out working on a house, good for you and make
00:33:18.800 | sure that you house painters and house construction people should be the most – you should be
00:33:24.360 | the most knowledgeable and learned people just simply through listening to audio books.
00:33:31.480 | So the book that I would recommend for you, listen to a book called Money, an Unauthorized
00:33:35.960 | Biography by Felix Martin.
00:33:37.400 | It goes through all the details of how money came to be and most importantly, it goes through
00:33:44.200 | how banking systems have grown and been created over time.
00:33:49.480 | And it's really, really fascinating because he explains clearly the question that I've
00:33:53.680 | had which is, okay, there's different banking systems.
00:33:57.400 | There's hard money.
00:33:58.400 | There's soft money.
00:33:59.400 | I personally like think, wow, the hard money stuff makes a lot of sense.
00:34:03.320 | The reason I started reading these books is because I couldn't argue for the Federal
00:34:08.160 | Reserve System.
00:34:09.160 | I couldn't argue for the soft money approach.
00:34:13.480 | And what – personally, the way I try to approach an argument is I try to say, let
00:34:17.680 | me figure out how to argue my opponent's position better and see if it defeats my arguments.
00:34:23.560 | And then if my arguments stand up to it, then it works out.
00:34:25.680 | So that was why I bought these books.
00:34:27.000 | So check out Audible.
00:34:29.040 | If you go to RadicalAudioBooks.com, you can get a free audio book download of your choice
00:34:34.180 | if you haven't signed up for a membership before.
00:34:36.080 | Sign up for a trial membership.
00:34:37.080 | You can get a free audio book and make it money, an unauthorized biography.
00:34:40.920 | All right.
00:34:41.920 | Two more questions.
00:34:42.920 | Let's get to it.
00:34:44.600 | Question here from David.
00:34:45.960 | Hey, Joshua.
00:34:46.960 | My name is David.
00:34:47.960 | I'm a teacher from Chicago.
00:34:50.500 | Thank you so much.
00:34:51.500 | I've been a long-time listener and this is actually my first time calling.
00:34:54.040 | I have two questions.
00:34:56.160 | Next year, I have gained a new position in a very lucrative district and I will be paid
00:35:01.760 | considerably more.
00:35:03.400 | I have the option of being able to max out my 403(b) for the first time.
00:35:07.920 | However, I'm also trying to save for a down payment.
00:35:11.000 | So my question is if I'm looking at a horizon of four years to save 20% for my down payment,
00:35:19.720 | should I cut that in half and put my priority toward a down payment or should I put my focus
00:35:28.240 | on maxing out my 403(b) to take advantage of the long-term compounding?
00:35:33.260 | My second question is even though I'm 31 years old, I am hoping to start my master's degree
00:35:38.120 | here in about two years.
00:35:40.360 | So my other question is should I open a 509 for myself, therein allowing me to sock some
00:35:49.680 | money away and take advantage of my tax leveraging even more?
00:35:55.840 | Any thoughts on that would be much appreciated.
00:35:57.720 | Thanks.
00:35:58.720 | David, congratulations, dude, on making some money and moving to a much more lucrative
00:36:01.680 | district.
00:36:02.680 | Good for you.
00:36:03.680 | So question number one, should I put money in the 403(b) or should I prioritize saving
00:36:07.880 | for the down payment?
00:36:10.160 | Here's my answer.
00:36:12.000 | The question properly framed is should I invest money for my future or should I save money
00:36:20.420 | for my consumption?
00:36:24.720 | Recognize that at its base.
00:36:26.580 | The down payment is a consumption item.
00:36:28.720 | I'm assuming that you're wanting to buy a house for yourself or to house you and your
00:36:33.480 | family.
00:36:34.480 | You want to buy and own a house to live in.
00:36:36.360 | That's a consumption item.
00:36:38.280 | Putting money into the 403(b) assuming that you're investing it into the 403(b) is an
00:36:42.640 | investment.
00:36:43.960 | So you're building capital to pay your expenses from.
00:36:49.460 | If that's accurate, then I personally would rather prioritize the investment rather than
00:36:59.000 | the consumption.
00:37:00.440 | If your goal or my goal, I can't remember whether I was talking to you or me, if the
00:37:04.640 | goal is to be wealthy, then I want to prioritize the investment and not the consumption.
00:37:11.800 | Run the math and ask yourself what the net effect on your wealth will be of four years
00:37:16.920 | of maximized 403(b) contributions versus having money for a down payment.
00:37:23.920 | Now what about buying the house?
00:37:25.520 | Well, that's the problem is that life's not all about getting as rich as possible.
00:37:30.480 | And so if you do want to buy a house, then you're going to have to buy the house at some
00:37:33.680 | point.
00:37:34.680 | But fundamentally recognize your question is investment versus consumption.
00:37:39.320 | When should you make the consumption decision?
00:37:40.960 | I don't know.
00:37:42.520 | That's your decision.
00:37:43.760 | And if you know that you're going to consume the money, then yes, you've got to plan for
00:37:47.680 | it.
00:37:48.680 | So two years, four years, I don't have any way to answer that question.
00:37:52.280 | I will tell you that I learned a number of lessons in purchasing my house and I'm hoping
00:38:01.720 | that it gets sold.
00:38:03.240 | It's currently under contract as of yesterday.
00:38:05.120 | It's under contract and theoretically this closing is scheduled for the end of the month.
00:38:10.440 | We'll see if the deal holds up.
00:38:11.960 | So far everything looks good.
00:38:13.280 | And then after the house sells, I will come back and I'll share a report.
00:38:17.760 | But a little teaser here.
00:38:20.040 | When I bought my house, I put 20% down.
00:38:22.680 | And up until actually doing that, I would always have encouraged people to put 20% down.
00:38:29.400 | And this is the standard financial advice.
00:38:31.640 | It's advice I have given many times.
00:38:34.200 | It's advice I would have given and it's advice that I took myself.
00:38:38.200 | The idea behind the 20% down payment is a couple of things.
00:38:40.680 | Number one, it indicates that having a 20% down payment indicates that you've saved some
00:38:46.960 | money over time.
00:38:48.000 | So you're not buying at the limit of your ability.
00:38:51.680 | You're not strapped for cash and just clawing and scraping to get a house.
00:38:58.280 | No, you have some cash and you've been planning for something for a while.
00:39:01.840 | So that's good.
00:39:03.320 | Number two, it gets you the most favorable financing rates.
00:39:07.440 | It gets you conventional mortgage rates.
00:39:10.120 | It's going to be very low.
00:39:11.160 | It allows you – the big one is it allows you to avoid PMI, private mortgage insurance.
00:39:16.480 | So that saves you money and that can be a substantial cost depending on the actual numbers
00:39:20.600 | involved.
00:39:21.880 | So it can be a good decision.
00:39:24.620 | And that was always the advice I gave.
00:39:26.600 | Put 20% down.
00:39:27.600 | My wife and I, we worked hard to put 20% down on our house.
00:39:32.200 | Here's what I learned through hard experience.
00:39:38.400 | Having a house 20% paid off is absolutely useless to me for my lifestyle.
00:39:49.840 | What I mean is that having a house that's 100% paid off, free and clear, that is incredibly
00:39:55.080 | useful to me because if I own my house and I don't owe any mortgage payments, that
00:40:00.560 | puts a dramatic decrease in my need for cash flow.
00:40:05.640 | But having the house 20% paid off, what does it matter?
00:40:08.000 | I still have a mortgage payment.
00:40:10.160 | And that was the challenge that I was personally facing a year ago realizing this in the hard
00:40:15.960 | one way is, "Wait a second.
00:40:18.360 | This sucks.
00:40:19.360 | I've got to make a mortgage payment every month and I don't have access to this cash
00:40:22.900 | that's in my house and I didn't want to go and take out a home equity line of credit."
00:40:27.040 | So I took all my money and I took it out of the bank account and I put it into a house.
00:40:30.880 | But I still had to make a mortgage payment.
00:40:32.480 | So now I've got the house but now I've got the debt and I've lost all my money because
00:40:36.080 | it's all in the house.
00:40:38.000 | That doesn't work so well.
00:40:39.520 | So what I determined for me is that I said, "In the future, one of the major changes
00:40:44.940 | I will make is I will put either the bare minimum down.
00:40:48.880 | If I ever buy a house again," which I probably will, "I will either put the bare minimum
00:40:53.220 | down or I'll just pay cash because everything in the middle is basically no man's land."
00:41:03.220 | Now that's kind of unusual advice.
00:41:04.740 | Now here's why that advice is bad advice in the broad marketplace.
00:41:08.900 | Most people aren't able to save money.
00:41:12.220 | And if they have – let's say your down payment is $50,000.
00:41:15.220 | If you got $50,000 in a checking account, most people will spend it.
00:41:19.180 | But if you're talking about investment, you're saying, "Should I invest this money or should
00:41:22.380 | I even just keep it in savings or should I put it into the house?"
00:41:25.960 | You are safer if you have the money in cash simply because what would you – okay, you
00:41:32.220 | lose your job.
00:41:33.220 | Would you rather have a house that's 20% paid off and no money to make your mortgage
00:41:38.620 | payments that you still owe or rather have a house that's 3% paid off?
00:41:41.940 | You have a 97% mortgage balance and $50,000 in the bank.
00:41:45.100 | I'll take the $50,000 in the bank.
00:41:47.300 | It's a safer position.
00:41:48.980 | I've got a buffer there.
00:41:51.020 | So the key caveat is you can't spend the money.
00:41:54.980 | But if you are a savior, if you're a disciplined savior, if you're an investor, then I'd
00:42:00.220 | keep the money.
00:42:01.220 | That's what I intend to do if I buy a house again is again, I'll either put the bare
00:42:05.620 | minimum down on it or I will and keep my money liquid, keep my money available to me, keep
00:42:11.660 | my money as a buffer, keep my money available to invest in businesses, keep my money available
00:42:16.780 | to buy rental houses or I'll just pay cash for the house which thus eliminates the mortgage
00:42:20.820 | payment which is really useful.
00:42:22.780 | So hopefully that's even useful to you as well.
00:42:26.780 | So my point in all of that is that if you did prioritize putting money into your retirement
00:42:32.720 | account over the next few years and if you did buy a house under something like an FHA
00:42:37.740 | loan where you're putting a much smaller down payment on down, I wouldn't fault you for
00:42:44.460 | that.
00:42:45.460 | That's what I would do if I were in your shoes.
00:42:48.900 | So hopefully that's useful.
00:42:49.900 | If you were saving money for a rental property, that was the only other aspect of the question
00:42:54.860 | that I would mention to you.
00:42:55.860 | If you were actually – if you met down payment on a rental property, skip the 403(b), put
00:43:00.260 | the down payment on a rental property, well-managed and effectively done, you should have far
00:43:03.980 | higher returns and I would do that.
00:43:05.940 | Another question, should I open a 529 plan for myself if I'm saving for a master's
00:43:09.580 | degree?
00:43:10.580 | Let's see.
00:43:11.580 | So you live in the state of Illinois.
00:43:12.580 | Illinois allows a $10,000 in state income tax deduction for 529 plan contributions for
00:43:20.300 | a single person, $20,000 for a joint per beneficiary.
00:43:26.020 | So the answer is yes.
00:43:27.300 | If you are going to spend the money on a master's degree and if you're going to finance it yourself,
00:43:31.020 | toss the money in through a 529, channel it through there and save a little bit of your
00:43:35.260 | state income taxes.
00:43:36.260 | That's my answer.
00:43:37.260 | The last question comes from Kyle.
00:43:39.060 | Hi, Josh.
00:43:40.460 | This is Kyle.
00:43:41.460 | I have basically a three-part question for you and they're not really related to each
00:43:47.580 | other but I was hoping you can bang all of them out.
00:43:50.980 | First question is, what are your thoughts on leveraged index funds and also momentum
00:43:57.780 | funds, volatility funds?
00:43:59.100 | Do you think that's a good idea?
00:44:01.380 | I mean, I know the volatility would be higher but if it's following the index, shouldn't
00:44:07.580 | that juice up your returns over the long run?
00:44:11.260 | Second question is, what are your thoughts on instead of buying, say, a total market
00:44:17.240 | index or even just the S&P 500, what are your thoughts on buying all the sector funds that
00:44:24.140 | make up the S&P 500, materials, utilities, financials, etc. in equal amounts?
00:44:32.900 | That way it's more equally weighted and then I can also take advantage of the lows and
00:44:37.420 | highs of each sector.
00:44:39.340 | I think utilities are down this year so now I can invest more in that specific sector
00:44:45.000 | to try to take advantage of the lows and the highs.
00:44:48.800 | What are your thoughts on that?
00:44:50.340 | Third question is, do you have any thoughts or do you know of any historical data on when
00:44:56.860 | the stock market always goes down or up in terms of major events such as presidential
00:45:03.620 | elections, certain holidays, things like that.
00:45:07.980 | I didn't know if there was any consistent data that showed certain sways in the market
00:45:13.420 | in one way or direction during those times.
00:45:15.900 | Thanks so much, Josh.
00:45:16.900 | Feel free to answer all those or just one or two of them.
00:45:20.380 | But I'd love to hear your advice.
00:45:21.820 | Thanks so much.
00:45:22.820 | I'll answer all of them and I'll do it with quick hits because – well, partly because
00:45:28.660 | it's 1.49 a.m. and I want to go to bed.
00:45:31.860 | But also I just think – I'll just give some quick answers here and I think it'll
00:45:34.740 | be – I'll just try to share some thoughts.
00:45:38.500 | But some of these trading strategies are – it's my weakest area of knowledge.
00:45:43.220 | It's where I – I try not to say something stupid.
00:45:48.580 | So number one, leveraged index funds.
00:45:50.620 | I think they would make sense as a hedging strategy of some kind.
00:45:54.340 | That's the only way that I could see owning them myself.
00:45:58.900 | If you are trying to say I'm trying to hedge the bulk of my portfolio from some certain
00:46:03.620 | move and you are developing a trading strategy with a leveraged index fund as a hedge, that
00:46:11.900 | makes sense.
00:46:12.900 | But if I was owning it and saying I'm going to buy this and own this, I wouldn't do
00:46:17.020 | it.
00:46:18.020 | I just don't see – I wouldn't do it.
00:46:22.700 | Number two, thoughts on buying the sector funds in equal amounts.
00:46:26.060 | I don't have a clue on that one.
00:46:27.660 | I kind of see what you're going towards.
00:46:30.060 | But I would say test it or get in one of the trading forums and see if you can find some
00:46:36.180 | people who are more attuned to that side of the market who can share those thoughts with
00:46:40.380 | you.
00:46:41.380 | Final though, this was the one I did want to talk about, thoughts on when the stock
00:46:44.100 | market always goes up or always goes down on major events.
00:46:47.500 | I don't think they exist.
00:46:48.500 | If they do exist, you're too late to the party.
00:46:51.980 | I look at this and I used to get excited by hearing about the dogs of the Dow or getting
00:46:57.540 | hearing about the – well, in the fall, this always happens or in the summer, this happens,
00:47:01.900 | blah, blah, blah.
00:47:02.900 | I've never seen any proof that any of those things are predictable.
00:47:07.420 | What happens is you got so many people looking for that, that once you find a pattern, it's
00:47:11.940 | too late.
00:47:13.420 | So if you do find a pattern, don't tell anybody because if you find a pattern, you
00:47:19.580 | don't do it.
00:47:20.580 | So I've just never seen any indication that those things are reliable or at least reliable
00:47:25.600 | enough to be traded upon.
00:47:28.220 | Is it possible that on a holiday weekend, a certain thing always happens?
00:47:31.740 | Well, it's possible and you'll hear the commentators talk about it.
00:47:35.100 | But I've never seen any compelling evidence that would indicate that it's something
00:47:41.700 | that could be acted upon, known in advance and acted upon.
00:47:45.580 | So one thing to look through a data set and be able to say, "Oh, look.
00:47:48.900 | Hey, here's what happened in these certain things in the past."
00:47:51.860 | It's another thing to find something that you are able to actually put a trade in place
00:47:57.060 | on because of that.
00:47:58.940 | If you can't find the trade, then what's the point of the data?
00:48:02.300 | The data just shows here's what happened in the last 70 years, but now we figured out
00:48:08.100 | that that's what happened and so now we've ironed out that inefficiency in the market.
00:48:14.260 | So that would be my commentary on it.
00:48:16.180 | I would love to be wrong.
00:48:17.540 | I wanted to play your question.
00:48:19.120 | So if anybody else knows of any data or articles, come by the show notes for today's show and
00:48:24.980 | comment so that Kyle can get some of that information.
00:48:28.580 | But Kyle, I'm sorry, I don't have much more for you, but hopefully it's at least something.
00:48:34.140 | It's a start.
00:48:35.540 | So thank you all so much for listening.
00:48:37.180 | I feel like my timing was a little bit off today.
00:48:38.820 | Hope you enjoyed the show.
00:48:39.820 | I missed these shows and I really wanted to get back to it.
00:48:44.860 | They're hard for me because, well, they're hard.
00:48:47.700 | They take a long time to prepare, but I really wanted to get back to it.
00:48:50.580 | So if my timing was off, forgive me.
00:48:52.380 | I will keep working hard to do better.
00:48:56.740 | Make sure you check out our sponsor for today.
00:48:58.500 | Number one, you need a budget.
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00:49:00.780 | Find that link at radicalpersonalfinance.com/ynab.
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00:49:25.260 | Number two, if you would like to listen to a cool audiobook and check it out on Audible,
00:49:30.660 | it's not on any of the free places, listen to Money, an unauthorized biography.
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00:49:37.860 | Set up a free trial account and you can download that.
00:49:40.020 | Finally, I want to thank each and every one of you who's supporting the show on Patreon.
00:49:44.420 | Big press in September was to bring it up to 250 total patrons.
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00:49:57.180 | I want to thank you guys.
00:49:58.300 | I hope that earlier when I was responding to the question about podcasting business
00:50:03.740 | models, I just wanted you guys to know, I hope I wasn't sliding.
00:50:07.500 | I kind of felt after the fact maybe I was sliding.
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00:50:23.460 | That's what allows me to keep doing the show as much as I'm doing it.
00:50:26.620 | That's why I'm working hard on it.
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00:50:30.500 | If you'd like to just support the show directly, please patronize one of the advertisers or
00:50:34.860 | patronize me directly.
00:50:36.940 | That means all the world to me.
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00:50:45.820 | Thank you all so much for listening.
00:50:46.820 | I will be back with you soon.
00:50:49.460 | Comment on today's notes if you think I was wrong, if you liked it.
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00:50:54.580 | Cheers.
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