RPF0262-Diversification_of_Income
00:00:00.000 | Dare to pursue your passion at Chico State.
00:00:03.620 | Voted one of the best value colleges in the country,
00:00:06.540 | California State University Chico offers a higher education
00:00:10.300 | that gets grads hired with a 100% job placement rate
00:00:13.740 | for many majors.
00:00:15.220 | Come pursue your passions beside like-minded peers
00:00:18.020 | and award-winning faculty and graduate on time and on budget.
00:00:22.380 | What you do today decides how you'll dare tomorrow.
00:00:26.140 | So click the banner to learn more.
00:00:29.020 | (upbeat music)
00:00:31.180 | - There's a real paradox that we've got to face
00:00:32.860 | with personal financial planning
00:00:34.240 | when it comes to our income and income sources.
00:00:37.140 | And the paradox is this, the more specialized you become,
00:00:41.100 | the higher the potential for higher income.
00:00:44.280 | However, the more specialized you become,
00:00:46.340 | the more vulnerable you are to changes
00:00:48.820 | in the market condition.
00:00:50.580 | So how do we balance the need for specialization
00:00:55.820 | for profit potential with the need for diversification
00:01:00.820 | for the purposes of developing safety?
00:01:02.780 | Today, my thoughts and suggestions for you.
00:01:07.260 | (upbeat music)
00:01:09.840 | Welcome to the Radical Personal Finance Podcast.
00:01:25.560 | My name is Joshua Sheets and I'm your host.
00:01:27.420 | Thank you for being with me today.
00:01:28.940 | This is the show where each and every day I work with you,
00:01:32.260 | virtually of course, to help you build and implement
00:01:36.340 | a plan for financial independence.
00:01:38.460 | And basically every day we wander around
00:01:40.940 | the same major themes, practically five of them.
00:01:44.100 | And today we talk about increasing income
00:01:46.460 | and avoiding catastrophe and how those integrate together.
00:01:50.060 | (upbeat music)
00:01:53.420 | (upbeat music)
00:01:55.660 | Today's show comes as the result of a question
00:01:59.220 | from one of the patrons of the show.
00:02:01.340 | At the highest level of patronage,
00:02:03.740 | the $200 a month level, one of the benefits of that level
00:02:06.900 | is that you get to request a show topic
00:02:08.980 | and I create it for you.
00:02:10.100 | And today's show is the result of a question
00:02:12.580 | from one of the patrons.
00:02:14.380 | The question came in in this format.
00:02:16.460 | So Joshua, how can I balance the risk and return profile
00:02:20.980 | of having one focused all in business?
00:02:24.200 | As an example, a financial advisor
00:02:26.760 | who's just trying to scale up with more clients
00:02:29.280 | versus having multiple,
00:02:31.020 | but perhaps not directly related businesses.
00:02:34.520 | Businesses that are diversified,
00:02:35.900 | but there's less ability to leverage knowledge
00:02:37.740 | and direct expertise across all activities.
00:02:40.520 | So that was the inspiration for today's show.
00:02:43.000 | I'm gonna expand it beyond the context of business
00:02:46.500 | because I think there are some principles
00:02:47.960 | that can be applied both in the context of business
00:02:51.160 | and in the context of employment.
00:02:53.580 | They're really simple.
00:02:54.920 | As an employee, you are the master of your own business.
00:02:57.640 | You are the president
00:02:59.880 | of your own personal services corporation,
00:03:02.280 | as I like to think about it.
00:03:03.840 | And your best client just simply happens
00:03:06.600 | to be whoever your employer is right now.
00:03:08.360 | I think that's a very useful way to think about your job.
00:03:11.680 | And I think that if you think about it in that context,
00:03:14.880 | then it makes the principles universally applicable.
00:03:18.560 | But the decisions that we face are really challenging.
00:03:22.960 | If you look at the world around,
00:03:24.080 | and here are just a few of my premises
00:03:25.860 | as part of our introduction,
00:03:27.240 | you I think will find that specialization
00:03:30.080 | is the key to wealth.
00:03:31.620 | This has been a long known economic concept
00:03:35.280 | and I guess probably popularized
00:03:37.020 | with the work of Adam Smith,
00:03:38.400 | 200 and what, almost 250 years ago.
00:03:41.420 | And that was the,
00:03:43.660 | he was one of the first people
00:03:46.820 | who remarked on the division of labor.
00:03:48.980 | His famous example, I think the pin factory
00:03:51.140 | and how if you made,
00:03:54.100 | if you brought the making of pins
00:03:56.100 | down to a specialized services,
00:03:59.380 | then you could produce many more pins
00:04:01.460 | than a master pin maker could do
00:04:04.000 | doing it all by themselves.
00:04:05.060 | And that has driven really in many ways
00:04:08.560 | the development of the free market economy
00:04:10.060 | in which we live.
00:04:11.460 | And the more specialized you are,
00:04:13.060 | the more productive you are able to be personally,
00:04:16.220 | also the more productive the economy is as a whole.
00:04:19.600 | And also because we often measure productivity
00:04:22.500 | in terms of financial benefit,
00:04:24.220 | the more money you're gonna make.
00:04:25.860 | But how do we balance that with the risk that comes in?
00:04:29.700 | Most of us would be dead if we destroyed
00:04:32.460 | the overall specialized,
00:04:35.740 | highly divided labor economy that we live in.
00:04:39.300 | If all of a sudden something happened
00:04:40.820 | that caused that division of labor economy to fall apart,
00:04:44.620 | most of us would be dead in a few months.
00:04:47.260 | We have no ability to create the,
00:04:49.920 | to create the needs that we live.
00:04:52.620 | How many of us could build our own modest shelter
00:04:56.100 | to live in overnight,
00:04:57.460 | let alone build a house that would keep our children warm
00:05:00.800 | and keep the rain off of our heads?
00:05:02.660 | How many of us could extract food out of the ground
00:05:05.540 | with any kind of sustainable regularity?
00:05:08.300 | It'd be very, very difficult.
00:05:09.660 | Thankfully, the economy in which we live is quite resilient.
00:05:13.980 | And somehow through the miracle of the free market,
00:05:17.580 | we don't go through many of the shortages and problems
00:05:21.260 | that many other people have gone through throughout history.
00:05:24.860 | But this is always a threat.
00:05:27.900 | Now, I'm not gonna dig into severe disaster planning.
00:05:30.700 | We're not gonna try to talk about the end of the world
00:05:32.300 | as we know it today,
00:05:33.140 | although that's certainly a worthy topic of conversation.
00:05:35.780 | But today we're just gonna keep it simple
00:05:37.400 | and talk about it in terms of the metrics of profit.
00:05:41.140 | How do we get through this?
00:05:43.940 | So specialization is the key to wealth.
00:05:46.620 | So I think about it as a paradox
00:05:48.260 | between specialization being the key to wealth
00:05:50.820 | and diversification being the key to safety.
00:05:53.600 | And safety is often the key to personal happiness,
00:05:59.260 | or at least resiliency can help you
00:06:01.220 | to get through more aspects of life.
00:06:04.660 | And I'm gonna share with you some ideas.
00:06:06.760 | Before I share those ideas with you though,
00:06:08.500 | I wanna cover our sponsors.
00:06:10.500 | Sponsor of the day number one
00:06:11.660 | is the YNAB budgeting software.
00:06:14.660 | YNAB is an acronym that stands for You Need a Budget.
00:06:18.420 | And the special thing about YNAB
00:06:19.820 | is that this was actually the number one
00:06:21.840 | most requested advertiser by you, the listening audience.
00:06:26.380 | Many episodes ago in the show,
00:06:27.680 | I put out a request and said,
00:06:28.660 | "I'm thinking about bringing on advertisers.
00:06:31.340 | And if you have a suggestion
00:06:33.020 | for who you'd like to see on the show, send me an email."
00:06:35.100 | That day I received multiple emails.
00:06:37.580 | Ultimately I received over a dozen emails
00:06:40.260 | from people saying, "You should get YNAB.
00:06:42.300 | I love YNAB.
00:06:43.120 | You should get YNAB.
00:06:44.040 | I love YNAB."
00:06:45.020 | So of course I reached out to YNAB
00:06:47.260 | and requested that we talk
00:06:49.700 | and we were able to arrange a business relationship
00:06:51.480 | and I brought them on the show as an advertiser.
00:06:54.620 | But YNAB is really a brilliant piece of software
00:06:56.900 | because it solves many of the budgeting problems
00:07:00.100 | that we face brilliantly.
00:07:02.340 | And it allows you to get control
00:07:04.260 | at the most basic, basic level.
00:07:07.940 | You will never achieve and maintain
00:07:10.340 | massive long-term wealth
00:07:13.220 | unless you are able to maintain control of your finances.
00:07:17.940 | But people often make a mistake and they say,
00:07:19.780 | "Well, if I have lots of money,
00:07:21.300 | then I'll learn how to manage it."
00:07:23.280 | Well, guess what?
00:07:24.120 | Some people blunder into lots of money,
00:07:26.420 | but because they don't know how to manage it,
00:07:27.940 | the money quickly flitters out of their life.
00:07:31.100 | And so the key is manage the money that you have
00:07:34.140 | and over time, you may have more to manage.
00:07:39.460 | If you are effective with managing the money that you have,
00:07:42.480 | over time, you'll have more to manage.
00:07:45.980 | And YNAB is a brilliantly useful tool.
00:07:48.700 | This is the tool that I use for all of my personal budgeting
00:07:50.760 | after trying it out again.
00:07:52.980 | And by the way, for the whole story on that,
00:07:54.380 | go listen to episode 246,
00:07:56.460 | was an interview with the founder, Jesse Mecham,
00:07:58.180 | and you can hear my long story with YNAB.
00:08:00.300 | But after trying it out again,
00:08:01.580 | I immediately saw the brilliance
00:08:03.080 | of their updated software solution
00:08:05.100 | and switched all of my personal and business accounting
00:08:07.820 | over to the YNAB platform, and I love it.
00:08:10.340 | So you can try it with a free 30-day trial
00:08:12.680 | at radicalpersonalfinance.com/ynab, Y-N-A-B.
00:08:17.060 | radicalpersonalfinance.com/ynab,
00:08:18.980 | you'll be able to download a free 30-day
00:08:21.340 | full-featured trial.
00:08:23.020 | You'll have access to the classes that they teach you.
00:08:25.040 | They have some really good classes and webinars
00:08:26.900 | where they teach you how to use it,
00:08:28.200 | how to manage the fundamentals of your budget,
00:08:30.540 | and download it free, try it for 30 days.
00:08:33.180 | If you don't like it, you don't have to buy it.
00:08:35.040 | If you do like it and you wanna buy it,
00:08:36.460 | it's very reasonably priced.
00:08:37.780 | I don't remember the exact number.
00:08:38.860 | I think it's somewhere in like the $60 range.
00:08:40.580 | But it's a great, great software package.
00:08:43.220 | I strongly recommend it.
00:08:44.340 | At least try the free version.
00:08:47.780 | And please use that tracking link
00:08:49.100 | so I get credit for your downloads.
00:08:50.300 | radicalpersonalfinance.com/ynab.
00:08:53.100 | Sponsor of the day number two is Paladin Registry,
00:08:55.540 | and I'm thrilled to bring you Paladin Registry
00:08:57.260 | because this was also a solution
00:08:59.460 | to the most requested problem on the show.
00:09:02.300 | Biggest question I get, Joshua,
00:09:03.820 | how can I find a great financial advisor?
00:09:06.020 | And my standard answer, I don't know.
00:09:08.700 | So I worked on that and worked on that for months,
00:09:10.420 | and ultimately the best solution I've been able
00:09:12.060 | to come up with so far at least has been Paladin Registry.
00:09:15.460 | Paladin Registry is a registry service
00:09:17.160 | and a vetting service for financial advisors.
00:09:20.060 | Their founder, Jack Waymire,
00:09:21.380 | was a former financial advisor himself,
00:09:23.580 | and he was frustrated with how hard it is
00:09:25.740 | to be confident of the character and integrity
00:09:28.180 | and skill and qualifications of a financial advisor.
00:09:31.020 | So he created this service called Paladin Registry.
00:09:33.720 | For details, listen to episode 248 of the show
00:09:36.780 | over an hour interview with Jack
00:09:38.460 | where we talk about the process
00:09:39.600 | of finding a financial advisor.
00:09:41.020 | We talk about how and why Paladin was created
00:09:43.580 | and what they do, how they vet their advisors,
00:09:46.220 | all of that stuff in detail in episode 248.
00:09:49.500 | And then if you'd like to consider interviewing
00:09:52.080 | some financial advisors in your area,
00:09:54.100 | go to radicalpersonalfinance.com/paladin, P-A-L-A-D-I-N.
00:09:59.100 | Radicalpersonalfinance.com/paladin.
00:10:01.480 | The way it works is that will take you through
00:10:02.900 | to a landing page.
00:10:04.040 | You'll put in your name, your phone number,
00:10:05.780 | your email address, and where you live,
00:10:09.580 | and your zip code, and then the amount of assets
00:10:12.120 | that you have that are under consideration.
00:10:14.460 | They'll use that information,
00:10:15.940 | and they will send you some information
00:10:18.280 | of some advisors that are close to your area
00:10:21.500 | that you can be able to use and speak to
00:10:24.660 | to see if those advisors might be good for you.
00:10:28.420 | You don't have to hire them.
00:10:29.700 | I don't get paid any more or less
00:10:31.740 | if you hire them or don't hire them, so that's no problem.
00:10:34.500 | But at least start with interviewing them
00:10:36.260 | and see if some of them might be able to serve you.
00:10:38.820 | Let's dig into our major question now.
00:10:43.380 | Let's start with a simple example
00:10:44.780 | of the importance of specialization.
00:10:47.620 | And think of, simplistically, a young worker,
00:10:51.300 | fresh out of school, just entering into the labor market.
00:10:54.320 | Most young workers that are in this situation
00:10:57.220 | really don't have a lot of skills
00:10:59.000 | or areas of specialization.
00:11:01.380 | Perhaps if they've gone to some sort of university training
00:11:04.560 | or gone through some kind of training program,
00:11:06.500 | they might have more skills
00:11:07.900 | and more of a specialized market,
00:11:11.220 | and we'll get to that in a moment,
00:11:12.060 | but many of them don't.
00:11:14.640 | And so when you look at the labor market,
00:11:16.260 | that means they have a huge job market available to them.
00:11:19.900 | Non-specialized laborers have a massive job market,
00:11:24.900 | but they also have limited potential
00:11:28.860 | because you must be more specialized
00:11:33.260 | in order to earn a higher income.
00:11:36.220 | And this is a real challenge
00:11:39.360 | to manage from a career perspective.
00:11:40.900 | Think about the example of a restaurant worker.
00:11:43.500 | Let's say you get a job as a restaurant server.
00:11:45.500 | What's your risk if the restaurant that you're working for
00:11:48.860 | goes out of business?
00:11:49.940 | Well, it's very little.
00:11:51.420 | You can just go and find another restaurant
00:11:53.980 | and get another job,
00:11:54.820 | and there's restaurant jobs all over the place.
00:11:56.300 | Perhaps you might be subjective
00:11:58.020 | to the seasonality of employment demand.
00:12:01.820 | You might be subjected to changes in the local economy,
00:12:04.400 | a growing town, a shrinking town,
00:12:06.440 | but if you wanna work in a job as a restaurant server,
00:12:09.460 | you can pretty much work a job as a restaurant server.
00:12:12.220 | There is plenty of labor
00:12:13.540 | and there's plenty of jobs available.
00:12:16.020 | Now, you're not gonna make all that much money
00:12:18.420 | because there's plenty of labor
00:12:20.100 | and there's plenty of jobs available.
00:12:21.940 | And the job in and of itself is pretty basic.
00:12:24.380 | All my friends who've been servers
00:12:25.500 | like to tell me, "Joshua, you don't know how hard it is."
00:12:27.780 | I'm not saying it's not easy.
00:12:29.460 | I'm not saying it's not work, but it's pretty basic.
00:12:31.500 | It doesn't take a whole lot of training
00:12:32.900 | to figure out how to do the job.
00:12:34.500 | Well, what if you become a little bit more specialized?
00:12:37.020 | So instead of just becoming a generic restaurant worker,
00:12:39.340 | you perhaps get a job as a high-end steak restaurant
00:12:42.640 | that's known for a higher level of service.
00:12:46.140 | Well, now you're increasing your potential for income,
00:12:50.880 | but you're also increasing your risk
00:12:54.140 | because there aren't as many fine dining steakhouses
00:12:59.240 | in your town as there are restaurants.
00:13:01.140 | So if that's your area of specialty,
00:13:04.380 | you have a higher risk,
00:13:05.220 | but you also have a higher potential return for your work.
00:13:09.900 | So you gotta manage these two things together.
00:13:14.400 | You wanna go specialized because that's going to result
00:13:18.080 | in more income, but you also have to be careful
00:13:20.700 | because the more and more specialized you go,
00:13:23.300 | the smaller and smaller the market.
00:13:25.900 | It's the same whether it's selling the products
00:13:28.140 | of your business or selling your personal product
00:13:30.460 | of personal services to a company.
00:13:32.860 | I do not believe that there is one answer to this problem.
00:13:36.860 | Rather, I think the answer is to be aware of the risks
00:13:40.660 | that you face and how these things will change
00:13:43.400 | over your lifetime.
00:13:44.580 | If you're advising a young man or young woman,
00:13:47.060 | you would encourage them to become specialized.
00:13:50.660 | That's why we send people to school.
00:13:52.500 | We sell people to go get a college degree.
00:13:54.780 | What is that supposed to be doing?
00:13:55.960 | Well, it's supposed to be giving you a specialized knowledge
00:13:58.300 | or if you go to a trade school, what are you doing?
00:14:00.220 | Well, you're getting into a more specialized market.
00:14:03.060 | If you go and learn how to weld,
00:14:04.620 | now you have access to the welding market.
00:14:06.680 | And as a qualified, competent, perhaps certified welder,
00:14:10.500 | you're going to earn a higher wage
00:14:12.480 | than just a general assistant on a welding shop.
00:14:14.980 | But you're also exposing yourself to the risk.
00:14:18.600 | So early in the career, you wanna specialize,
00:14:20.720 | but you also wanna stay broad
00:14:22.300 | because you don't know what's the best area
00:14:24.180 | of specialization.
00:14:25.460 | And that's where diversification comes in.
00:14:27.540 | If somebody has a lot of experience
00:14:29.020 | in a lot of different fields, a lot of different industries,
00:14:31.140 | they're gonna have a better idea
00:14:32.940 | of where they should specialize.
00:14:34.700 | But at some point, you've gotta really commit.
00:14:37.040 | You gotta go all in and you've gotta get
00:14:39.380 | from the bottom of the stack to the top.
00:14:43.440 | This is where the Pareto principle comes in.
00:14:46.000 | The Pareto principle, also referred to
00:14:48.240 | as the 80/20 principle, for some reason
00:14:50.140 | that I don't know how to explain,
00:14:51.780 | seems to govern just about everything in life.
00:14:54.560 | It governs who has the wealth,
00:14:56.400 | it governs who earns the income,
00:14:58.280 | it governs who provides the results,
00:15:00.400 | and it should be governing your career pattern.
00:15:03.040 | But if you go out in just about any field,
00:15:04.800 | the history of it, if it's your first exposure,
00:15:07.580 | there was an Italian, as a legend goes,
00:15:09.880 | there was an Italian economist named Vilfredo Pareto
00:15:12.440 | who was out looking at his pea plants.
00:15:13.920 | And he started doing an analysis,
00:15:16.200 | because this is what Italian economists do
00:15:18.400 | when they're working in their garden
00:15:19.680 | is they start counting the peas.
00:15:21.200 | And he realized that 20% of his pea plants
00:15:23.640 | were producing 80% of the peas.
00:15:26.240 | And 80% of the pea plants were producing 20%.
00:15:30.100 | Well, he extrapolated that
00:15:31.160 | and started measuring other markets.
00:15:32.520 | And today, this has been proven to be true
00:15:35.840 | in many industries.
00:15:37.240 | 20% of the world's population owns 80% of the wealth.
00:15:40.940 | 80% of the world's population owns 20% of the wealth.
00:15:43.760 | In any field, 20% of the field will earn 80% of the income.
00:15:47.400 | I used to measure this when I was in sales,
00:15:49.860 | I would look at the sales reports,
00:15:51.040 | and I would try to run through and figure out,
00:15:52.960 | is this true?
00:15:53.800 | Just with my own unscientific approach,
00:15:56.440 | and I found it was usually pretty right
00:15:59.100 | that about 20% of the salespeople at an insurance company
00:16:02.440 | produce 80% of the sales.
00:16:04.320 | So the key is, how do you go from the bottom 80%
00:16:07.320 | to the top 20%?
00:16:08.480 | Well, you're gonna get there with specialization.
00:16:11.040 | But once you do, you're gonna have more and more benefits,
00:16:13.440 | more and more rewards.
00:16:14.760 | Incidentally, the 80/20 rule is also applied
00:16:17.960 | at the higher levels.
00:16:18.800 | So the top 20% of the top 20% earn 80% of the income,
00:16:23.800 | or have 80% of the wealth of that top 20%.
00:16:27.880 | And then the top 20% of the top 20% have 80%
00:16:30.320 | of the top 20% of the wealth,
00:16:31.680 | and it goes on and on and on.
00:16:33.060 | I've done this, do this sometimes for fun
00:16:34.740 | when I read studies about income inequality
00:16:37.320 | and wealth inequality, and everyone's all upset about,
00:16:40.600 | everyone's all upset about who has all the money in society.
00:16:44.080 | And if you run the numbers, what you find, though,
00:16:45.980 | is you basically find a massive Pareto distribution.
00:16:48.900 | You always find the top 20% of the top 20%
00:16:52.720 | of the top 20% of the top 20% own 80% of the top,
00:16:56.680 | you know, 80% of the wealth.
00:16:57.720 | And it breaks down, I ran the numbers,
00:16:59.460 | I don't have them at my fingertips,
00:17:00.560 | but I read an article, it was about 1/10 of 1%
00:17:03.740 | of the world's population owns 50% of the wealth,
00:17:06.180 | something like that.
00:17:07.000 | I ran the numbers, and it was exactly what would be expected
00:17:08.900 | based upon a Pareto distribution.
00:17:11.760 | Now, why is that the case?
00:17:13.060 | I don't have a clue, it just is.
00:17:16.140 | And it's the same in every field,
00:17:19.700 | it's the same in every industry.
00:17:21.860 | And the useful thing for you is that you can apply
00:17:24.020 | this knowledge to your field and to your industry.
00:17:28.260 | But what you'll see is that if you wanna go
00:17:29.760 | from the bottom 80% to the top 20% of income earners,
00:17:32.600 | you're going to have to become more specialized.
00:17:35.520 | And if you wanna do it again,
00:17:37.740 | you're gonna have to become more specialized still.
00:17:40.700 | But what do we do with the risk that specialization brings?
00:17:46.720 | Let's talk for a moment the language of stock investing,
00:17:48.640 | 'cause that's where we usually are talking
00:17:50.120 | about diversification.
00:17:51.880 | And I can't prove this, I haven't seen studies on this.
00:17:55.160 | If anybody can prove or disprove this
00:17:57.120 | with any research material that you have found,
00:18:01.480 | feel free to comment on today's show notes
00:18:03.440 | and post links to articles proving or disproving this.
00:18:06.340 | But I would bet a good amount of money
00:18:08.640 | that if you went through and reviewed the portfolios
00:18:13.120 | of various investment managers,
00:18:14.760 | you would find that 20% of the stocks
00:18:17.200 | produce 80% of the results.
00:18:19.320 | And 20% of the top 20% produce 80% of those results.
00:18:26.120 | The way those numbers work out is that the top 4%
00:18:28.480 | would produce 64% of your results.
00:18:30.560 | And I bet it breaks down more and more and more.
00:18:32.920 | The place I've seen this most clearly
00:18:34.480 | is usually in venture capital,
00:18:36.320 | where they find a couple of unicorns,
00:18:38.640 | maybe one unicorn, one massive winner,
00:18:41.040 | and that makes up for a whole long string of losers.
00:18:44.180 | So why do we diversify?
00:18:45.520 | We diversify for safety.
00:18:47.620 | But what do we give up by diversifying a stock portfolio?
00:18:50.580 | We give up potential returns.
00:18:53.500 | Or probably said more precisely,
00:18:56.420 | we give up the opportunity for huge returns.
00:18:59.140 | Because there's always gonna be some money
00:19:00.640 | that we didn't put on the big bet.
00:19:03.080 | Now, look at the richest people in the world
00:19:05.220 | and show me one person who got there
00:19:07.120 | with a diversified portfolio.
00:19:09.440 | I've never seen him.
00:19:11.980 | I'm not aware and I couldn't cite,
00:19:14.200 | I would put money on the fact that he doesn't exist.
00:19:17.540 | Whether it's the Forbes 400
00:19:19.220 | or any list of the top rich people in the world,
00:19:22.340 | show me a person who got there with diversification
00:19:26.520 | and I'll do whatever the appropriate humble thing
00:19:30.160 | is to eat my words.
00:19:31.420 | I don't think they exist.
00:19:32.720 | Or at least they don't exist in the beginning.
00:19:34.580 | There might be people there who are diversified
00:19:37.520 | after they've gotten rich,
00:19:40.160 | but nobody gets rich with diversification.
00:19:42.580 | Look at the richest people in your town
00:19:44.120 | and show me one person who got there
00:19:45.680 | with diversification in their career.
00:19:48.340 | Doesn't exist.
00:19:49.620 | The rich people in your town got rich
00:19:51.280 | either because they had one business that became massive
00:19:55.280 | or because they became a highly paid professional
00:19:57.960 | in their career in an area of specialty
00:20:01.080 | that was valued in the marketplace.
00:20:02.840 | But should we then continue to bet it all on something?
00:20:07.840 | Well, maybe in the beginning
00:20:11.440 | if we can afford to lose it all
00:20:13.240 | or if we have a good enough backup plan
00:20:15.840 | to move to after we lose it all.
00:20:18.720 | But we've gotta pay attention
00:20:20.560 | to that diversification over time.
00:20:22.280 | And I'm convinced this is the way
00:20:26.840 | that we should be looking at it
00:20:28.440 | is let me specialize but also diversify
00:20:32.640 | for my specific risks.
00:20:34.440 | And if you do both of those things,
00:20:37.040 | you can make a major difference over time.
00:20:40.200 | When I was a financial advisor,
00:20:42.580 | I was very uncomfortable with the idea
00:20:45.440 | of having all of my income tied to stocks.
00:20:48.560 | And so the way the financial advice business works
00:20:51.240 | is as you start to build a practice,
00:20:55.960 | you're gonna be earning fees
00:20:57.120 | off of your investment management revenues.
00:21:00.180 | And if your fees are tied to usually a percentage
00:21:03.680 | of the assets under management,
00:21:04.800 | let's just use 1% as a good generalization,
00:21:07.720 | what that means is your income is largely due
00:21:10.100 | to the value of the accounts.
00:21:12.080 | Well, if you go into a situation where all of a sudden
00:21:13.900 | the value of the accounts declines by 20 or 30%,
00:21:17.000 | which can happen in any random year in the stock market,
00:21:20.120 | that's gonna be a massive impact on your income.
00:21:24.960 | It's gonna cause a 20 or 30% direct decline in income,
00:21:29.160 | even if no clients leave, and it's probable
00:21:31.420 | that some clients are starting to start
00:21:32.760 | to get nervous in that situation.
00:21:35.160 | When I started in the financial advice business in 2008,
00:21:37.880 | I was surrounded by hurting financial advisors
00:21:40.840 | who were going through severe shortfalls
00:21:44.840 | because their income was down substantially.
00:21:46.920 | And I was surrounded by hurting mortgage brokers
00:21:49.160 | who were falling apart and losing everything.
00:21:51.780 | I was surrounded by hurting construction builders
00:21:54.120 | who had put it all on housing,
00:21:55.860 | and they had built spec houses,
00:21:58.000 | and they still own three of them,
00:21:59.080 | and the value was plummeting,
00:22:00.160 | and they'd spent all their money on boats,
00:22:02.040 | but their investments were all in real estate.
00:22:04.460 | And now the value of the real estate is going down.
00:22:06.840 | That was a formative thing for me where I said,
00:22:10.120 | I'm never gonna have all of my investments
00:22:15.320 | tied to this one thing.
00:22:17.360 | So I focused very heavily on specializing
00:22:20.520 | and going after the highest value activities
00:22:23.480 | and markets that I could go after,
00:22:25.600 | but I also always thought about how can I diversify?
00:22:29.280 | And I think that the financial advice business
00:22:32.280 | is a good metaphor, and you'll have to figure out
00:22:34.080 | how to apply it in your own world.
00:22:35.880 | But the specialty that I could go after was financial advice
00:22:40.580 | or the specialty I chose to go after.
00:22:42.640 | But I wanted to diversify my income,
00:22:44.380 | so I worked to have specialized clients,
00:22:47.720 | but to diversify income sources,
00:22:49.260 | have insurance revenues, have investment revenues,
00:22:51.720 | and then I worked to diversify my own portfolio.
00:22:54.640 | So that would mean diversify the portfolio
00:22:56.880 | within the standard asset classes,
00:22:58.760 | but for me at that time, I was looking to say,
00:23:01.240 | how can I diversify my own personal investments
00:23:04.240 | out of stocks?
00:23:05.440 | Because I don't wanna have all of my income
00:23:07.440 | and all of my investments tied to stocks.
00:23:09.280 | This is what's so deadly if you're not thinking
00:23:11.600 | in terms of diversification.
00:23:13.640 | If I, let's say I went through some,
00:23:16.200 | I was accused of some financial crime,
00:23:18.440 | and this financial crime was exposed
00:23:20.980 | right in a period of market turmoil,
00:23:22.600 | and now I lose my license, and I all of a sudden
00:23:25.480 | am facing the closure of my business,
00:23:27.800 | I lose all my clients, I lose all my revenue,
00:23:29.760 | and it's coming usually at a time
00:23:31.480 | when there was fraud in the marketplace.
00:23:32.880 | That's when people sue with financial advisors,
00:23:34.480 | when there's fraud in the marketplace.
00:23:36.080 | So the markets are down, they're all on a heap,
00:23:37.860 | and now all of my financial stability is not there.
00:23:41.760 | So for me as a financial advisor,
00:23:44.320 | I wanted to be very careful of having everything
00:23:46.320 | invested in stocks.
00:23:47.960 | And I think you can find the area
00:23:50.000 | that would be applicable to you.
00:23:52.120 | You can apply in any business the concepts
00:23:55.540 | of specialization and diversification simultaneously.
00:23:59.940 | To repeat for a moment from the financial advisor space,
00:24:03.440 | the specialty that you can go after
00:24:05.320 | in the financial advisor space
00:24:07.520 | that would be the wisest specialty
00:24:10.160 | is a specialty of client,
00:24:12.320 | working with one specific type of client.
00:24:15.080 | That allows you to develop your expertise
00:24:16.880 | and to be known as the go-to guy or the go-to gal
00:24:21.200 | for one specific market opportunity.
00:24:24.220 | As a specialist, you'll be sought out.
00:24:27.640 | And the more specialized you can go, the better.
00:24:32.180 | But within that specialty, you should look to diversify.
00:24:36.360 | For example, let's say that you are going to specialize
00:24:39.440 | in working with the financial needs of,
00:24:43.080 | I don't know, I'll pick on since Ben Carson
00:24:44.400 | is running for president, pediatric neurosurgeons.
00:24:47.260 | The pediatric neurosurgery community
00:24:49.500 | is a very small community.
00:24:51.240 | And so if that were your chosen specialty,
00:24:53.880 | you could develop a real area of expertise
00:24:56.700 | within that specialty to reach that community.
00:24:59.840 | But you could also diversify that
00:25:02.200 | by working with pediatric neurosurgeons
00:25:05.980 | all across the country.
00:25:07.500 | You could diversify by developing a practice
00:25:11.460 | that helped pediatric neurosurgeons
00:25:15.000 | with their investment needs,
00:25:16.580 | but also with their insurance needs,
00:25:18.200 | and also with their accounting needs,
00:25:19.760 | and also with their budgeting needs,
00:25:21.320 | and also with their kids' college needs.
00:25:24.260 | That way you're lowering the risk in your specialty
00:25:29.260 | by both building a stronger client relationship
00:25:33.400 | because you're working with them in more areas,
00:25:35.320 | and by leveraging multiple areas of income sources
00:25:39.080 | so that if a client leaves,
00:25:41.220 | or if the client's finances are dramatically affected,
00:25:44.380 | it's not all riding on one area.
00:25:47.480 | The thought process is what will create those strong results
00:25:50.760 | and start to build resilience in your career
00:25:52.820 | and resilience in your business.
00:25:54.620 | I used financial advisor examples here
00:25:56.380 | because many of the listeners are financial advisors,
00:25:59.180 | and this particular question came from someone
00:26:01.540 | who is a financial advisor and who is facing this problem.
00:26:04.860 | In a moment, I'll go on to other areas,
00:26:07.100 | but what would be a mistake as a financial advisor
00:26:09.940 | is to try to diversify across all markets
00:26:13.520 | where you don't have the ability to capitalize.
00:26:15.980 | So that's why you need a specialty,
00:26:17.820 | you need an area of expertise,
00:26:19.060 | you need a real specialty,
00:26:21.060 | and then you diversify within that.
00:26:23.540 | Now, there comes a stage in, I think, all of our lives
00:26:27.300 | at which we've built our fortunes,
00:26:29.980 | we've started to make a substantial gain,
00:26:32.800 | and we wanna be careful about how far we go with that.
00:26:37.740 | The best example that comes to mind is that dentist
00:26:40.920 | that caused an international, I guess, furor some months ago
00:26:45.180 | when he killed the lion over in Africa,
00:26:47.460 | and everyone's all upset at him.
00:26:48.660 | So the day before the news story,
00:26:51.160 | he has an active, thriving practice,
00:26:54.000 | and he has loads of happy customers,
00:26:56.860 | he's obviously making plenty of money,
00:26:58.380 | he's traveling around the world hunting
00:27:00.080 | and earning lots of money,
00:27:02.620 | has lots of customers,
00:27:03.580 | and he may have had a very diversified business.
00:27:06.400 | He may have helped clients in different areas,
00:27:08.300 | he may have had clients from various walks of life,
00:27:11.420 | so he had a diversified business.
00:27:13.500 | But he'd built his fortune.
00:27:14.820 | And here's the problem, his business was utterly destroyed
00:27:19.580 | after everyone starts getting mad at him
00:27:21.180 | for killing the lion.
00:27:22.220 | Destroyed overnight, utterly destroyed.
00:27:26.540 | So in that context, what was his backup plan?
00:27:32.100 | I hope he had one, I don't have any idea if he did or not,
00:27:34.180 | but what was his backup plan?
00:27:36.100 | And this, in the world that we live in,
00:27:37.780 | is probably just an incredibly important thing
00:27:40.140 | for all of us to consider.
00:27:41.500 | Another example that comes to mind was that lady
00:27:44.060 | who was a marketing executive and posted a tweet
00:27:48.980 | about something about going to Africa
00:27:51.140 | and hope I don't get AIDS.
00:27:52.940 | And there was the whole furor that happened on Twitter
00:27:56.920 | that resulted by the time she landed
00:27:58.660 | in the airport in Africa, she was fired from her job,
00:28:02.300 | and basically half the internet world
00:28:04.580 | knows about her and hated her.
00:28:06.460 | How do you recover from that?
00:28:07.860 | You've got to have some fallback plans.
00:28:10.700 | And so I look at it and I say, go back to your goals.
00:28:14.540 | What's the appropriate level of safety for you?
00:28:18.460 | What's the minimum level?
00:28:20.460 | And work to secure that so that no matter what happens,
00:28:23.180 | you can move on to the next thing.
00:28:25.060 | This is where being debt-free is so powerful,
00:28:27.720 | because if you're debt-free,
00:28:29.700 | you don't put yourself at the risk of wipeout risk.
00:28:33.580 | Do you get slower results?
00:28:35.380 | Probably, but you avoid wipeout risk.
00:28:38.060 | And at the end of the day, that is the bigger risk.
00:28:42.300 | You can't spend, if you've got a billion dollars,
00:28:45.180 | you're never gonna spend it all.
00:28:46.980 | If you've got a million, you might spend it all,
00:28:49.340 | but most people who are millionaires
00:28:50.680 | aren't going to be able to.
00:28:53.060 | So the key is set some minimum level
00:28:55.380 | and then ratchet up, protect.
00:28:57.020 | Set and protect.
00:28:58.620 | So with that dentist, I hope that he was
00:29:01.060 | taking some of his income, and in addition to spending it,
00:29:03.120 | he was diversifying out.
00:29:04.940 | Diversifying into an intelligently built
00:29:06.720 | investment portfolio,
00:29:08.040 | diversifying into other businesses perhaps,
00:29:11.460 | diversifying with regard to other interests.
00:29:14.380 | And hopefully he was keeping a strong network of some kind
00:29:18.700 | so that he could have other fallback plans.
00:29:21.620 | I use those two examples because they're vivid examples
00:29:23.920 | that most of you should be familiar with.
00:29:25.820 | And I think they're worth paying attention to.
00:29:28.180 | At any point in time in today's world,
00:29:30.420 | you anger the wrong person
00:29:31.900 | and they can destroy your primary business.
00:29:36.340 | So we need that fallback plan.
00:29:38.500 | Gotta build the primary business.
00:29:40.580 | Generally, people who are out to destroy
00:29:44.820 | don't go after people who are broke
00:29:46.740 | and bankrupt and living on the street.
00:29:48.880 | But once you've built it,
00:29:51.020 | you've gotta diversify and protect.
00:29:52.820 | Let me share with you a couple of ideas
00:29:55.520 | of some other alternative characteristics,
00:29:57.380 | and I'll just show you how I would see these things
00:29:59.420 | applying in different areas.
00:30:01.340 | Let's assume that you've built a career for yourself,
00:30:03.780 | working in a job in an industry
00:30:06.560 | that is prone to ups and downs.
00:30:09.120 | I was really struggling to come up with an industry
00:30:11.260 | to use as an example that would be widely understood.
00:30:14.840 | The best I came up with was actually the military.
00:30:17.860 | So consider for a moment the area of specialization
00:30:21.640 | within joining the military.
00:30:22.880 | Let's talk about the US military.
00:30:24.680 | If you can join the US Army or the US Navy as a grunt
00:30:28.140 | and you're just a basic low-level employee,
00:30:32.260 | well, what do you do to increase your income?
00:30:35.140 | First thing you do is you increase your income
00:30:37.360 | by moving up in ranks.
00:30:39.140 | So that's where specialization comes in.
00:30:42.000 | More work is required,
00:30:43.700 | but it also comes with more income potential.
00:30:46.840 | Not a huge income potential,
00:30:48.060 | but there is more income potential.
00:30:49.960 | What is the other area and way
00:30:51.740 | in which you specialize in the military?
00:30:53.540 | It would be specialization of area of focus.
00:30:56.140 | So if you go from being an Army infantry person
00:31:00.160 | to a Navy SEAL or a Green Beret
00:31:04.160 | or one of the special forces,
00:31:05.740 | you're automatically becoming more specialized.
00:31:08.220 | You're gonna develop along the way certain skills
00:31:10.800 | that will lead to your differentiation.
00:31:14.420 | These aren't always measured with money
00:31:16.120 | in the military world, but they might be.
00:31:19.040 | But the basic skill, the most famous these days,
00:31:21.640 | it gets to get all the press, is the Navy SEALs.
00:31:23.300 | What's the basic skill of a Navy SEAL?
00:31:25.040 | Killing people effectively.
00:31:26.840 | So that's a very, very highly specialized skill,
00:31:29.920 | and some of the guys in that world
00:31:31.820 | are the best in the world at it.
00:31:33.500 | But it's also a skill for which
00:31:34.940 | there aren't that many employers.
00:31:37.200 | The life and the career prospects
00:31:41.160 | of somebody who is going out of being in the Navy SEALs
00:31:45.740 | or the Green Berets or some type of specialized option
00:31:49.440 | like that is very limited.
00:31:51.020 | The market for people with highly skilled
00:31:54.300 | in killing people is limited.
00:31:55.580 | You can go join a special military contracting company
00:32:00.080 | or go be a soldier for hire somewhere.
00:32:03.160 | That's possible.
00:32:04.460 | Or you wind up in other areas of law enforcement,
00:32:06.500 | other areas of protection careers,
00:32:10.020 | bodyguards, that type of thing.
00:32:11.580 | That's where those skills are relatable.
00:32:13.980 | But ultimately, the specialization leads to risk,
00:32:18.100 | and it leads to a very small market for services.
00:32:20.340 | And once you leave the SEALs,
00:32:21.700 | there aren't gonna be that many other jobs
00:32:23.440 | that are ever gonna match the excitement
00:32:26.980 | of being in the SEALs.
00:32:30.860 | But what do you do from a career perspective?
00:32:33.140 | Well, if you analyze and you look,
00:32:35.340 | in order to achieve specialization,
00:32:37.880 | you've also built diversified skills along the way.
00:32:41.580 | So that's where you see people, I see all the time,
00:32:44.660 | the Navy SEAL guide to leadership,
00:32:46.500 | or the Navy SEAL guide to physical fitness,
00:32:48.740 | or blah, blah, blah.
00:32:49.800 | It's taking some area of diversification
00:32:52.740 | and then offering it as a more highly specialized area.
00:32:56.740 | All of us have the opportunity to do that.
00:33:00.060 | And that's where, along the way, as you're a specialist,
00:33:04.260 | you should also be diversified and be a generalist.
00:33:07.260 | You should be widely reading, widely knowledgeable,
00:33:10.580 | and then looking for those skills that translate over.
00:33:14.860 | For me, one of the skills that I learned,
00:33:17.460 | and one of the primary reasons why, years ago,
00:33:19.740 | I joined Northwestern Mutuals, I wanted to learn to sell.
00:33:22.400 | I had the narrow skill set of financial knowledge,
00:33:24.400 | and I knew I could learn that,
00:33:25.520 | but I wanted the broad skill set of selling.
00:33:27.840 | Once you've learned the skill of selling in one field,
00:33:30.480 | that should be more translatable over to another field.
00:33:34.360 | So along the way, pay attention to the principles
00:33:36.660 | that are universally applicable.
00:33:39.400 | In conclusion, I believe the answer to this paradox
00:33:42.100 | is to do both, and simply primarily to be aware
00:33:46.440 | of both truths within the context
00:33:49.180 | of your own personal situation.
00:33:51.460 | Recognize that what I'm sharing today is a crossover
00:33:56.460 | between points number one and four
00:33:59.540 | of my framework for wealth.
00:34:01.460 | So point one is increase income.
00:34:03.180 | Point four, excuse me, point five,
00:34:05.080 | yeah, point four is avoid catastrophe.
00:34:07.380 | And so at every stage along the way,
00:34:09.540 | you can be holding these things practically together
00:34:13.140 | and saying, how do I increase income?
00:34:15.260 | But also, what exposure does that open up for me?
00:34:18.340 | What risk does that take for me?
00:34:20.540 | How do I avoid catastrophe?
00:34:22.340 | In your specialized scenario,
00:34:24.300 | in your specialized situation,
00:34:26.340 | there is an answer that can handle
00:34:28.660 | both of these things together.
00:34:30.320 | If you are a pediatric neurosurgeon,
00:34:32.460 | you have a very specialized skill set,
00:34:35.420 | and you avoid catastrophe by purchasing
00:34:39.520 | excellent disability insurance coverage
00:34:41.140 | so that if you lose the use of your hands,
00:34:42.780 | you're protected there for at least
00:34:44.720 | some of your income with disability insurance.
00:34:46.940 | You also keep it and maintain it
00:34:48.840 | by being broadly read within your field
00:34:50.540 | so that if you had to pass from pediatric neurosurgery
00:34:54.200 | into another area of neurosurgery, you could do that.
00:34:56.460 | Or if you could no longer be a surgeon,
00:34:57.860 | you could move to another area of research.
00:35:00.020 | Then you manage your risk
00:35:04.160 | by diversifying yourself personally.
00:35:06.580 | If you are a pharmaceutical sales rep
00:35:09.060 | and you have an inside knowledge
00:35:11.260 | of investing in pharmaceutical companies,
00:35:13.720 | that can be leveraged to build wealth to a certain point.
00:35:16.980 | But then at some point in time,
00:35:18.080 | you better get some of that money
00:35:19.260 | out of the pharmaceutical stocks
00:35:21.060 | and slide it aside into another area that's not connected.
00:35:24.340 | Because if all of a sudden there is a giant scandal
00:35:28.280 | about pharmaceutical sales reps
00:35:29.980 | or pharmaceutical companies lying to the public
00:35:32.020 | and lying to the FDA about their research,
00:35:35.020 | well, the stocks drop and your job goes.
00:35:37.060 | And now you're doomed.
00:35:40.160 | So leverage it while you are building,
00:35:43.100 | but then diversify.
00:35:44.620 | And I think that's an ebb and flow
00:35:45.940 | that can be maintained throughout life
00:35:47.640 | in an appropriate scale.
00:35:49.100 | You've got to build a fortune.
00:35:50.380 | And if you've got time
00:35:51.420 | and you can afford to take some wipeout risk, go for it.
00:35:54.860 | At this stage of my life,
00:35:55.740 | I'm pretty comfortable with some measure of wipeout risk.
00:35:59.860 | That was why I launched Radical Personal Finance.
00:36:01.960 | If this business blows up and falls apart,
00:36:04.580 | well, it'd be a bummer, but I've learned a lot.
00:36:08.420 | I've built a diversity of contacts around the world.
00:36:11.720 | I built a diversity and strengthened my own personal brand.
00:36:15.420 | And so if this particular iteration
00:36:17.360 | of the business falls apart, it's no problem.
00:36:20.100 | I can leverage that into multiple other related businesses.
00:36:23.300 | So I'm willing to take the wipeout risk
00:36:25.860 | on this particular business
00:36:26.980 | because I'm diversified on the back end.
00:36:29.100 | And realistically, I'm young enough.
00:36:30.780 | I have enough other fallback skills.
00:36:32.420 | I could go out and get a job
00:36:33.500 | in the financial planning business pretty easily
00:36:35.740 | and have a very healthy multiple six-figure income
00:36:39.100 | that would provide for the needs of my family.
00:36:41.420 | But I'm also gonna manage the risk
00:36:43.420 | by not putting myself in a situation
00:36:45.140 | where it's gonna bring too much undue stress on my family
00:36:47.880 | where I run the risk of my kids not being fed
00:36:51.060 | or my wife being frustrated and leaving me.
00:36:54.120 | So I've gotta manage it along the way.
00:36:56.020 | You're gonna have to figure out what it is for you,
00:36:59.660 | but I think you can put both of these things together
00:37:02.100 | and use this as a creative journaling exercise.
00:37:05.020 | On the one hand, look for how to become
00:37:07.600 | more and more specialized in your field
00:37:09.820 | because that's where the money comes every single time.
00:37:13.540 | And then also ask yourself, what major risks do I face
00:37:18.900 | and how can I mitigate those risks?
00:37:21.420 | Be creative with the answer.
00:37:23.260 | The answer might be an insurance policy.
00:37:25.260 | It might be a savings account.
00:37:27.060 | It might be a completely diversified
00:37:29.220 | and unrelated career fallback plan
00:37:30.900 | that you're building on the side.
00:37:33.220 | But the thought process will lead you
00:37:35.940 | to identifying the opportunities and the risks for you.
00:37:40.060 | Along the way, track the skills that you have
00:37:42.740 | and make sure that those skills
00:37:44.580 | are transitioned to something else.
00:37:47.260 | To wrap up with a quick point on the initial question
00:37:50.060 | with something I think is very relevant.
00:37:52.460 | If you're just managing multiple businesses,
00:37:56.780 | unless there's a common thread that you can identify,
00:37:59.260 | you're not gonna be good at any of them.
00:38:01.420 | But if there is a common thread,
00:38:04.340 | you'll be able to leverage that common thread.
00:38:08.300 | And that's what you should be looking for.
00:38:10.180 | Not unrelated businesses, but diversified businesses
00:38:14.820 | where there's a common expertise of some sort.
00:38:17.640 | That's it for today's show.
00:38:19.900 | Thank you all for listening.
00:38:21.340 | I hope this content is useful to you.
00:38:23.200 | I would love to hear your thoughts and feedback.
00:38:25.940 | If you agree with something I said
00:38:27.420 | or disagree with something I said today,
00:38:29.260 | I'd be happy to hear from you.
00:38:30.300 | Come to the show page for today's show
00:38:32.660 | at radicalpersonalfinance.com
00:38:34.180 | and let me know.
00:38:35.380 | If you have interesting articles to share,
00:38:37.820 | I don't mention this every day,
00:38:39.100 | but I do love to be proven wrong.
00:38:40.540 | So I welcome you to show me where I'm wrong.
00:38:44.220 | So that way I can learn
00:38:45.060 | and that way I can give better information.
00:38:46.980 | So don't feel like this is the kind of show
00:38:48.460 | where your opinions are unwelcome.
00:38:50.500 | I welcome them.
00:38:51.360 | I learn from every single one of them.
00:38:53.640 | Thank you all for listening to today's show.
00:38:56.060 | If you've enjoyed and appreciated the content,
00:38:58.460 | remember to use our sponsors for today,
00:39:01.180 | Paladin Registry if you're searching for a financial advisor
00:39:03.420 | or if you'd like to talk to some financial advisors
00:39:05.220 | to see if they could help you,
00:39:06.420 | radicalpersonalfinance.com/paladin.
00:39:08.500 | Also the YNAB budgeting software,
00:39:11.820 | radicalpersonalfinance.com/ynab.
00:39:15.020 | But in addition to that,
00:39:16.120 | if you'd like to support the show directly
00:39:17.500 | and take some money out of your pocket
00:39:19.180 | and put it directly into my pocket
00:39:20.500 | as a way of saying thank you
00:39:22.380 | with certificates of appreciation with,
00:39:24.540 | well, digital certificates of appreciation,
00:39:26.980 | I would hugely appreciate that.
00:39:28.420 | You can find the details of that
00:39:29.420 | at radicalpersonalfinance.com/patron,
00:39:32.300 | radicalpersonalfinance.com/patron.
00:39:34.500 | If you would like to get in at the highest level of patronage
00:39:37.000 | where I do shows on the topic of your choice,
00:39:39.420 | such as I have done today,
00:39:41.500 | you can also find out how to do that
00:39:42.820 | at radicalpersonalfinance.com/patron.
00:39:45.940 | So you'll be able to find that.
00:39:47.260 | We've also had some interesting discussions about that.
00:39:50.060 | For you to choose a show
00:39:52.140 | that comes in at the $200 a month level.
00:39:54.420 | We've also had some interesting discussions
00:39:56.000 | about this topic within our Facebook group,
00:39:57.660 | the Irregulars group.
00:39:58.860 | So if you'd like to gain access to a community of people
00:40:01.120 | much smarter than me,
00:40:02.720 | you can sign up at the $25 a month level
00:40:05.180 | at radicalpersonalfinance.com/patron
00:40:07.500 | and you'll gain access to our Facebook group.
00:40:09.420 | In addition, though, a buck a month is huge.
00:40:11.380 | Five bucks a month is also helpful.
00:40:13.580 | Thank you all, each and every one of you
00:40:15.100 | who support the show directly.
00:40:16.300 | It means the world to me
00:40:17.500 | and I hope that you're getting good value for your money.
00:40:20.660 | That's it for today.
00:40:21.540 | I'll be back with you soon.
00:40:22.780 | (upbeat music)
00:40:25.360 | (upbeat music)
00:40:27.940 | - Are you ready to make your next pro basketball,
00:40:37.820 | football, hockey, concert or live event unforgettable?
00:40:41.020 | Let Sweet Hop take your game to the next level.
00:40:43.700 | Sweet Hop is an online marketplace
00:40:45.620 | curating the best premium tickets at stadiums,
00:40:48.140 | arenas and amphitheaters nationwide.
00:40:50.420 | Sweet Hop's online marketplace
00:40:52.260 | makes it easy to browse and book the best seats
00:40:54.980 | with no hidden fees and a 100% purchase guarantee.
00:40:58.140 | You can feel confident
00:40:59.220 | when you book your premium LA tickets with Sweet Hop.
00:41:02.060 | Visit suitehop.com today.