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RPF0333-QA


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00:00:00.000 | Today on Radical Personal Finance, we do a Q&A show.
00:00:03.560 | I have four questions lined up.
00:00:05.620 | How do we handle lots of expected and encouraged – wink, wink, by your superior – job obligations
00:00:14.080 | that are expensive and that cut into our savings rate?
00:00:18.560 | Question number two, I am trying to figure out a way to pay for my wife's graduate
00:00:23.920 | school.
00:00:24.920 | Should we take out student loans or should we take a loan against our TSP?
00:00:28.880 | Question number three is I'm in the middle of school looking to possibly start a business
00:00:34.560 | but I'm concerned about the impact of that on my schooling and my career.
00:00:38.100 | Question number four, how do I take and turn a 16-week paternity leave into something that
00:00:43.120 | will help me generate much more additional cash flow?
00:00:49.800 | Welcome to the Radical Personal Finance podcast.
00:01:04.400 | My name is Joshua Sheets and I'm your host.
00:01:06.120 | Thank you for being with me.
00:01:07.120 | Q&A show, that's where I do my best to try to help you with some thoughts.
00:01:13.800 | I try to choose questions that are applicable across the board.
00:01:17.200 | Of course, you have to be the judge of the usefulness but take some of these ideas and
00:01:21.720 | figure out if you can apply them to your situation even today.
00:01:34.360 | I have a mondo queue of questions that came in from the audience.
00:01:39.080 | After I had messed up the email system and then got it fixed, I wound up with a huge,
00:01:42.840 | huge, huge deluge of emails which thank you to all of you who have emailed me.
00:01:48.080 | But I wound up with a huge deluge of emails and a lot of them had great questions, many
00:01:51.680 | of them from – that I thought would be applicable and useful and interesting to talk through
00:01:56.040 | on the show.
00:01:57.040 | So today, that's what we do.
00:01:59.600 | Let's get right to – well, before I get right to the question from Stephen, the first
00:02:02.480 | question, sponsor of today's show is Paladin Registry.
00:02:06.040 | If you need a financial advisor, the best place for you to start your search is at RadicalPersonalFinance.com/Paladin.
00:02:12.000 | We get asked a lot, "Joshua, how do I find a great financial advisor?"
00:02:14.400 | It's tough.
00:02:15.400 | My main purpose here with Radical Personal Finance is to give you knowledge, insight
00:02:19.240 | and frankly just equip you a little bit better, give you some defensive skills against the
00:02:25.920 | financial advice industry.
00:02:27.640 | But at the end of the day, when you need specific advice, you can't have an email sit in Joshua's
00:02:31.400 | list here for six months before he responds to it.
00:02:33.960 | You need an actual advisor and a good way is to find that person is to go to RadicalPersonalFinance.com/Paladin.
00:02:40.960 | It's a registry service.
00:02:42.320 | Jack Waymire, the founder of Paladin, was a financial advisor himself and said we need
00:02:46.640 | to have somebody who's carefully vetting financial advisors, not just the licensing
00:02:51.160 | people who are giving the most basic of exams to people.
00:02:55.800 | We need to know who is somebody's – how do we – we need to have somebody look through
00:03:00.520 | the disciplinary records and look through their experience and their qualifications.
00:03:04.720 | So if you're looking for an advisor, go to RadicalPersonalFinance.com/Paladin, P-A-L-A-D-I-N.
00:03:10.000 | That will forward you through to a landing page where you put in your name, your address,
00:03:15.320 | your phone number, and the amount of assets that you have.
00:03:18.400 | Then Paladin will take that and they will match that up with a couple of advisors that
00:03:21.620 | are in your area and they will put you in touch with them and you can interview them
00:03:25.160 | and see if they might be a good fit for you.
00:03:27.160 | I can't promise that you're going to find a financial advisor that works for you.
00:03:31.640 | It's got to be a very personal specific fit.
00:03:35.120 | But it's at least a good place to start.
00:03:37.500 | Start your search at RadicalPersonalFinance.com/Paladin.
00:03:40.480 | First question comes in from Steven.
00:03:41.800 | Steven says, "Joshua, thank you very much for the work that you put – I mean thank
00:03:45.080 | you first and foremost for the work you put out for us.
00:03:47.580 | You not only inform your listeners but also serve as a more articulate mouthpiece for
00:03:50.940 | many of the ideas that we as your listeners may share but we don't – but do not possess
00:03:56.020 | the necessary way with words to properly convey to others.
00:03:59.080 | I have on many occasions simply linked someone to one of your podcasts as my retort to a
00:04:03.320 | particular argument, almost always bringing them to my or our point of view in the subject
00:04:07.720 | matter.
00:04:08.720 | I write to you in need of advice.
00:04:10.320 | I myself am a somewhat mustachian.
00:04:12.440 | Sorry, coined a term for your financial independence followers and I'll refer to myself as that
00:04:16.600 | instead."
00:04:18.400 | We should come up with a term.
00:04:22.480 | Pete "Mr. Money" Mustache has built a huge community for himself but I try very
00:04:26.160 | hard not to poach off of the work that other people do.
00:04:29.320 | I try to just do my own thing and let other people do their thing.
00:04:33.260 | So I don't have any – I like mustachians.
00:04:36.480 | No problem with it.
00:04:37.480 | But we should come up with a term.
00:04:38.480 | If you have a great term, let me know.
00:04:40.800 | Comment on today's show or tweet it to me or something and let me know what we should
00:04:44.720 | do.
00:04:45.720 | Best I come up with is radical something or other.
00:04:48.120 | That seems to be the term that I've coined for myself.
00:04:51.640 | So I myself am somewhat of a mustachian having always been a spend-conscious, simple living
00:04:56.600 | investor.
00:04:57.600 | I actually came across this whole financial independence early retirement movement by
00:05:00.880 | accident and upon having become enchanted by the concept, I made the concerted decision
00:05:05.960 | to start saving 50% of my net pay.
00:05:09.760 | Much to my surprise, upon looking at the numbers, I realized that I was already doing so.
00:05:15.140 | In actuality, I was saving 52% of my net pay.
00:05:18.800 | Now for the kicker.
00:05:19.880 | As mentioned earlier, I am in the military.
00:05:22.720 | More precisely, I am a senior military officer.
00:05:26.040 | With this role has come much pride, commitment, and honor.
00:05:29.040 | Unfortunately, it has also come with additional expenses.
00:05:32.840 | There are certain social and professional obligations that come with the territory of
00:05:37.340 | senior leadership, many of which carry a hefty price tag.
00:05:41.040 | Formal events, special uniforms, forced outings, i.e. golf, I disdain golf, and mandatory socializing.
00:05:47.960 | It has even been suggested to me by superiors that I should look into moving to a pricier
00:05:52.480 | area farther from base to be amongst my peer group.
00:05:56.860 | Much of this is fine and dandy, save for the fact that it's having a negative effect
00:06:00.480 | on my savings rate.
00:06:01.960 | To be honest, most of the commando fun, as we call it, is not at all how I would spend
00:06:13.880 | my time were it not in the interest of networking and being part of the team.
00:06:18.600 | How do you suggest I manage my personal belief system and desired spending habits with the
00:06:22.920 | necessity to not commit professional suicide by ostracizing myself from my more spendy
00:06:28.000 | peers?
00:06:29.000 | Thanks again.
00:06:30.000 | Where to start?
00:06:31.000 | Steve, that's a good question because it's a question that we all face.
00:06:37.040 | We all face it to a different degree and depending on our industry, it looks different, but it's
00:06:42.200 | something that we all face.
00:06:44.480 | With your role in the military, it might come with formal events and special uniforms and
00:06:49.000 | forced outings and mandatory socializing.
00:06:52.480 | When I was working as a financial advisor, it came with the expectation that you wear
00:06:56.680 | suits to work every day and that you drive a BMW or that you – what else?
00:07:05.840 | Friday night happy hour that you kicked in when you went to all the charity events that
00:07:10.280 | you got invited to, et cetera, and you buy at the silent auction and those kinds of things.
00:07:14.760 | For other people, it's just maybe even as simple as going out to the lunch with your
00:07:20.640 | coworkers or going to the expensive coffee place, those types of things.
00:07:25.840 | So we all face this to some degree.
00:07:28.400 | When you're in a culture that doesn't praise thrift or frugality as anything that's
00:07:35.440 | really worth admiring, you're going to stand out and that's obviously the situation that
00:07:40.480 | you find yourself in.
00:07:41.480 | We all have to figure out how to – we all have to figure out what to – how to deal
00:07:47.600 | with these things.
00:07:48.600 | Now, frankly, it's – your email is a little bit offensive to me in the sense that military
00:07:54.720 | personnel – I always think that a military personnel is – this should be where you're
00:07:59.640 | basically given everything.
00:08:00.640 | If I were to go in the military, the expectation that I would have is considering the contract
00:08:04.400 | that you make where you basically surrender all control of your life, you have no say
00:08:09.040 | in where you go, what you do, and your life is on the line.
00:08:15.040 | You shouldn't – you should basically have things taken care of.
00:08:18.440 | That's the history of military service.
00:08:20.040 | So if I went in the military, one of the reasons – major reasons financially speaking would
00:08:24.360 | be that I would expect to have my housing provided and to get my stipend and just have
00:08:28.360 | these things taken care of.
00:08:29.800 | Now, you're obviously not – you're a senior officer.
00:08:33.640 | So things change in a senior officer and it does look like a much more political system.
00:08:37.800 | It does look much more like other organizations.
00:08:41.100 | But it's just a little bit annoying that you have to deal with these things.
00:08:46.000 | I won't go into that subject anymore but I understand the frustration.
00:08:52.480 | In some ways though, your decision is the same as the rest of us.
00:08:56.400 | You have to decide how committed you are to your goal of saving money and how committed
00:09:00.920 | you are to your career and to what extent these things are actually in conflict.
00:09:06.240 | Every career comes with costs and it's important to make an accurate accounting for those costs.
00:09:13.840 | So in your case, the costs of your career are largely those things that I just mentioned.
00:09:19.440 | When you're in the military, they own you.
00:09:22.140 | You have no say over where you go and what you do.
00:09:24.360 | It doesn't matter.
00:09:26.800 | You are at – you serve at the pleasure of the – what was I – I guess the president.
00:09:31.200 | You serve at the pleasure of your commanding officers.
00:09:33.780 | So you don't have – that's one of the major costs.
00:09:37.480 | Now these other things also obviously have a cost and you've got to weigh them.
00:09:41.400 | It can be easy I think to lose sight of the actual costs when you are recently excited
00:09:51.560 | about a new goal.
00:09:54.080 | So something like a dress uniform for dress events.
00:09:58.400 | My guess is that this is a one-time expense and I'm sure the uniform is expensive but
00:10:04.840 | you probably have some sort of uniform allowance that can help offset some of it.
00:10:09.000 | Even if you don't, it's a one-time deal.
00:10:12.480 | The corresponding cost of this would be in the non-military civilian world would be that
00:10:18.640 | at a certain level as an executive, you need to own a tuxedo and you just need to own a
00:10:25.120 | tuxedo because you're expected to go to the charity events and represent the company
00:10:28.520 | at the gala, etc.
00:10:30.140 | And there's going to be a cost for that and that's not going to be reimbursed.
00:10:33.260 | You are a senior military officer.
00:10:35.300 | Thus, you're going to be expected to attend these formal functions and you're going
00:10:42.380 | to need to be dressed appropriately.
00:10:44.740 | If you are a senior corporate representative, you have the same responsibility.
00:10:52.060 | You have exactly the same responsibility and that just is one of the things that comes
00:10:55.700 | with the territory.
00:10:56.700 | Now, don't get too worried about it.
00:10:58.780 | It's a one-time cost.
00:10:59.780 | You can care for a uniform and you can wear it for the rest of your life.
00:11:04.180 | So although it might be a big – or at least the rest of your career.
00:11:07.460 | Although it might be a big expense one time, it's not that big of an expense.
00:11:12.260 | Now that's different than say getting in with the local once a week golf outing where
00:11:19.820 | now you're going to be paying range fees.
00:11:21.340 | You're going to be paying those things on a continual basis and golf is going to be
00:11:24.900 | bracketed by lunch and it's going to be bracketed by drinks after the golf game, et
00:11:29.260 | cetera.
00:11:30.260 | Well, now you're signing up for not just a one-time expense but for many, many expenses
00:11:35.260 | over time.
00:11:36.500 | Those are two very different things.
00:11:38.260 | And so don't get too excited about the prospect of saving all my money such that you major
00:11:44.660 | on the minors.
00:11:45.660 | [END]
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