RPF0469-Friday

00:00:00.000 | Today's special Q&A episode of Radical Personal Finance is sponsored by HelloFresh.

00:00:05.480 | Visit HelloFresh.com and use the coupon code RPF30 to save $30 off of your order.

00:00:20.200 | Welcome to Radical Personal Finance, the show dedicated to providing you with the knowledge,

00:00:33.680 | skills, insight, and encouragement you need to live a rich and meaningful life now while

00:00:37.600 | building a plan for financial freedom in 10 years or less.

00:00:40.200 | My name is Joshua, and I am your host, and today's show is a Q&A show.

00:00:43.920 | The way these work is once a week at this point, doing my best to keep to a once a week

00:00:48.360 | schedule.

00:00:49.360 | Once a week, I open up the call phone line to patrons of the show, and you get to ask

00:00:53.920 | me anything, and then it goes out on the show.

00:01:02.240 | I enjoy doing these Q&A shows because it gives me a good amount of feedback, and it allows

00:01:05.440 | me to answer questions from the audience, which is really fun.

00:01:08.560 | It keeps the show topics varied and diverse, and it gives you a chance to ask your question

00:01:12.940 | or make your comment.

00:01:14.080 | You can say anything that you want.

00:01:16.000 | So I've got five callers waiting on the line right now.

00:01:18.040 | We're going to get right to it in just a second.

00:01:20.520 | Before we do, if you'd like to join a call like this, just sign up to become a patron

00:01:24.520 | of the show, RadicalPersonalFinance.com/patron, and access to these Q&A calls is one of your

00:01:31.160 | benefits, RadicalPersonalFinance.com/patron.

00:01:34.200 | First let's go to Matthew in Tennessee.

00:01:36.480 | Matthew, welcome to the show.

00:01:37.720 | Let me know what your question is, please.

00:01:39.720 | Good morning, Joshua.

00:01:41.440 | Thank you for taking my call today.

00:01:43.480 | My question revolves around the missing money concept.

00:01:49.120 | Have you helped clients find missing money using sites like literallymissingmoney.com?

00:01:55.820 | If you have, what's the process look like?

00:01:57.800 | Any helpful pointers?

00:01:59.320 | It always comes across as really scammy to me, but I could be wrong.

00:02:04.400 | I haven't used that website specifically, the missing money, but just from the name,

00:02:09.840 | I'm aware of how it works.

00:02:11.920 | In essence, there are government databases of unclaimed funds.

00:02:15.440 | Let's say, for example, that you had a life insurance policy and it died and they couldn't

00:02:20.760 | find – the insurance company couldn't find a beneficiary, et cetera.

00:02:23.800 | At some point in time, that may go and revert back and it needs to be published as available

00:02:29.360 | money.

00:02:30.360 | Or let's say there were a lawsuit settlement or somebody died.

00:02:35.040 | Your long-lost aunt and she died in test state with no next of kin.

00:02:40.480 | Then that money gets published and then I guess these websites access a public database

00:02:46.840 | in some way and allow you to find it and then file your claim on it.

00:02:50.400 | I've not used any of them.

00:02:51.640 | I don't know – I haven't heard of them being scams.

00:02:54.640 | I have found money and I forget the process.

00:02:57.440 | It was so many years ago that I found something that I was entitled to and I know I've had

00:03:01.280 | family members as well.

00:03:02.840 | If you put your name into some of the websites, it seems like oftentimes you can find $100

00:03:07.360 | or a couple of $100 that was missing somewhere.

00:03:10.840 | I don't know enough to say about scams or not scams.

00:03:13.800 | I think that it's a legitimate – it's certainly legitimate that there is missing

00:03:18.080 | money out there.

00:03:19.800 | But in terms of which website would be the best to use, I simply don't know.

00:03:23.640 | Have you actually tried filing?

00:03:24.960 | Are you showing up as having money missing in the database?

00:03:29.320 | No, I've not tried.

00:03:31.680 | I've actually went on their website and that's what's kind of throwing me off is

00:03:35.920 | that the websites are quite dated.

00:03:39.880 | And that's what was kind of pushing me back a little bit was that – I don't know

00:03:44.160 | if that's actually rational either to go onto a website and be like, "Oh, this looks

00:03:48.280 | nice and therefore I should trust it."

00:03:50.760 | But sometimes it does help.

00:03:53.480 | But no, I haven't tried it and I haven't – I was mainly asking the question which

00:03:58.200 | you answered in that is it legitimate and is it worth actually going through the time

00:04:04.640 | of –

00:04:05.640 | Well, I guess that's debatable depending on value.

00:04:09.840 | But I'm saying is it legitimate practically.

00:04:11.620 | I think it is legitimate and I don't know if you have to go through the website.

00:04:16.400 | I just did a quick DuckDuckGo search here and it looks like there – it goes through

00:04:20.840 | the National Association of Unclaimed Property Administrators.

00:04:25.440 | Has a website that you can use, search state by state.

00:04:28.880 | That seems to be probably a more officially endorsed website.

00:04:33.980 | So again, that's National Association of Unclaimed Property Administrators.

00:04:37.880 | But then it says that they endorse a free search database called Missing Money.

00:04:44.080 | So perhaps that is the best place to start.

00:04:46.760 | I don't know whether it would be possible to go directly through the government, through

00:04:51.640 | the local state government, et cetera.

00:04:54.160 | And I would be very, very cautious about giving information out anytime you're dealing with

00:04:58.000 | that.

00:04:59.140 | But I'm not immediately scared of it.

00:05:01.260 | Is it worth it for $100 or $200?

00:05:03.440 | I don't know.

00:05:04.520 | Probably not.

00:05:05.520 | Is it worth it for thousands if you could find thousands?

00:05:09.360 | Probably so.

00:05:10.360 | So if any other listeners have an idea of how this works or if you've gone through it,

00:05:15.720 | come by the show notes for today's episode and post that in the comments so we can benefit.

00:05:19.880 | Matthew, since I didn't have a good answer there, you want to ask another question?

00:05:23.680 | Matthew McQueen Sure.

00:05:25.480 | OK.

00:05:26.480 | So in your opinion, what's the distinct difference between the CFP education and the

00:05:32.880 | MSFS education?

00:05:36.280 | And I know that you'd mentioned it on the show before that your previous employer covered

00:05:41.920 | the cost for that MSFS.

00:05:43.720 | But actually going through the program, in your opinion, do you think it would have been

00:05:47.920 | worth shelling out the $20K that it costs for the program?

00:05:50.920 | So that's two different questions as far as the difference versus what it's worth.

00:05:57.120 | So here are the differences.

00:05:59.600 | First, the CFP designation is a professional designation.

00:06:06.840 | It's not a degree.

00:06:08.360 | It's a professional designation and it's granted by the CFP board, which is a private industry

00:06:14.480 | organization that simply exists to provide the CFP designation.

00:06:19.240 | And the steps to getting the CFP involve – I believe it's seven classes at this point,

00:06:23.840 | seven specifically focused on various aspects of financial planning classes and a comprehensive

00:06:29.060 | exam at the end of it.

00:06:32.280 | And then if you pass the requirements, there's also an experience requirement and a testing

00:06:38.640 | requirement.

00:06:39.760 | If you pass those requirements and you have – and you pay your fees every year, then

00:06:46.280 | you get to use the certified financial planning credential and designation.

00:06:51.200 | And it's certainly – at this point, I would say it has the highest brand awareness

00:06:54.440 | and the highest knowledge in terms of the consumer mind.

00:06:58.440 | And I think it's a good designation.

00:07:01.180 | The education to get there is relatively broad-based.

00:07:06.800 | The MSFS stands for Masters of Science in Financial Services.

00:07:10.960 | Basically it's more commonly known to be a master's degree in financial planning.

00:07:15.200 | And that is an official college degree that's going to be granted by an educational institution.

00:07:21.480 | So the process is much like any other master's degree.

00:07:25.640 | It's not based upon the specific CFP designation board.

00:07:30.240 | It's granted by the university.

00:07:32.640 | And the MSFS – my experience, I did my MSFS with the American College, which is a college

00:07:37.800 | of financial planning up in Bryn Mawr, Pennsylvania.

00:07:40.760 | And there – when they did – when we did the MSFS, it required a number of different

00:07:47.840 | courses and in different areas.

00:07:51.560 | And then some of them were self-study and some of them were study in person, some capstone

00:07:58.080 | courses that were all together in a seminar format.

00:08:02.460 | What I experienced with the MSFS is that it was much deeper in terms of deeper study in

00:08:07.680 | some specific areas.

00:08:08.880 | So for example, I remember that the coursework involved a deeper dive into retirement planning

00:08:14.380 | and into some of the modern science around retirement planning.

00:08:17.900 | And so it was much more about reading some of the papers and reading some of the new

00:08:22.640 | techniques that financial planners are using to try to solve the retirement problems.

00:08:28.200 | It was much more up-to-date and it was much deeper level rather than general broad understanding.

00:08:34.480 | In order to pass the CFP, you need to have a general broad understanding of rules and

00:08:39.640 | regulations.

00:08:40.880 | But the CFP is technique agnostic.

00:08:43.320 | So they wouldn't talk about, yes, you should use a buckets of money approach or you should

00:08:46.840 | use a safe money, risky money approach or they wouldn't get into that kind of approach.

00:08:51.360 | Whereas in the MSFS, that would be an example of the types of things that we studied.

00:08:55.520 | How much should – when doing a retirement distribution plan, how much money should you

00:08:59.520 | put in annuities versus just simply mutual funds, things like that.

00:09:06.240 | The MSFS, I'm actually lapsed on my CFP right now.

00:09:10.520 | I don't actually – even though I have all the credentials still hanging on my desk

00:09:16.240 | wall, I haven't paid them their fees this year and I lapsed on my CE.

00:09:20.400 | This is some of the kind of practical things.

00:09:22.880 | The CFP requires a certain number of continuing education credits every year.

00:09:26.760 | I can't remember if it's 20 or 30 hours and I got behind last year and I haven't

00:09:30.720 | caught up my CE yet.

00:09:32.360 | Then they also require a fee.

00:09:33.560 | So they require 360 bucks a year to be able to use the CFP designation and to display

00:09:40.640 | it.

00:09:41.640 | So currently, I don't call myself a certified financial planner because I lapsed with them

00:09:45.960 | and I'm not listed in the database anymore.

00:09:48.480 | On the flip side, the MSFS is just simply a college degree.

00:09:51.240 | So I still do use that designation because I have the degree and there are not ongoing

00:09:57.560 | continuing education credits required for it.

00:10:01.720 | Would I pay the 20 grand for the master's degree?

00:10:05.400 | It would depend on the circumstance that I'm in.

00:10:08.000 | In general, in a financial services productive capacity, very rarely will a client actually

00:10:17.080 | care about your academic certifications.

00:10:20.080 | What a client cares about is your knowledge and there's no reason to pay for academic

00:10:24.520 | certifications if you have the knowledge in terms of you can do it.

00:10:30.500 | Some of the most productive financial services people that I know have no financial planning

00:10:39.620 | designations of any kind but they're very, very productive and they can be very, very

00:10:43.260 | smart.

00:10:44.260 | Now, usually, the cost of actually getting into it does make it worth it and most of

00:10:49.180 | the time, the cost is relatively small.

00:10:51.740 | So if I were actively still in that business, yeah, I think I would probably consider it

00:10:56.340 | but I would do it slowly over time and I wouldn't fall into the trap of thinking that it was

00:11:00.980 | going to make a big, big difference.

00:11:02.460 | The only place that certification makes a big, big difference formally in terms of the

00:11:06.500 | pay is for somebody whose pay is going to be a change based upon the academic degree.

00:11:11.660 | A lot of times, somebody – if they get an MBA or if they get a master's degree, then

00:11:15.340 | there's an automatic increase in pay of a certain amount and then you can run the analysis

00:11:20.780 | of it.

00:11:22.540 | Would I pay for it out of pocket?

00:11:24.540 | I don't know.

00:11:25.540 | I would probably lean towards doing it but it's so hard to say.

00:11:33.020 | It's not really going to make that big of a difference for somebody who's knowledgeable.

00:11:36.820 | The biggest thing where I think designations make the difference is they help transform

00:11:40.980 | the person's confidence and they help the person to learn more.

00:11:44.460 | There's good industry data to show that the people who are the most credentialed are often

00:11:47.500 | the most productive and I think the reason is because it builds confidence.

00:11:51.340 | I know for me, it helped me to build confidence to where I felt like I could actually give

00:11:57.140 | real tremendous financial planning value to somebody because I had the background academically.

00:12:03.620 | But I wouldn't focus on it first.

00:12:06.420 | If I were just getting started in the business, I would focus on production and then I would

00:12:10.220 | build up over time.

00:12:11.620 | I couldn't answer it beyond that.

00:12:14.340 | That answer the question enough, Matthew?

00:12:15.780 | Any follow-up clarification before I go on to the next caller?

00:12:18.180 | Matthew Fossum No, that absolutely does.

00:12:20.300 | I was just, yeah, that's exactly what I was thinking.

00:12:25.220 | I just was pretty much asking did the MSFS have any special sauce, but it kind of sounds

00:12:29.460 | like what you're paying for is the organization of the actual education and actually the follow-through

00:12:34.820 | to the different things that you have versus by getting the MSFS, that there probably was

00:12:40.740 | something inside of that that couldn't be obtained from an outside source.

00:12:46.060 | You can buy a whole lot of books for 20K, but I do appreciate your answer in that question.

00:12:52.420 | Thank you very much.

00:12:53.420 | It's the same exact question and problem that you face with any kind of college degree.

00:12:57.520 | You can – that favorite scene from Good Will Hunting where the guy is talking about

00:13:03.780 | you could have gotten – you got an education.

00:13:05.500 | You could have gotten for a couple hundred bucks in late fees at the local library.

00:13:08.820 | The knowledge is freely available.

00:13:10.760 | So in looking at – the access to the information is freely available.

00:13:15.620 | It's not hard to find good information at all.

00:13:19.900 | But the key is to go – is to start and look.

00:13:25.500 | Am I looking for the information that's applicable?

00:13:28.480 | In that case, going through a class is probably an inefficient way to learn when you're just

00:13:32.940 | simply looking for information on the case.

00:13:35.060 | Or are you looking for something that is going to have a broader benefit?

00:13:38.020 | A master's degree is going to open up opportunities for teaching and that was why I did it was

00:13:43.900 | because I didn't have to come out of pocket for it and I always thought it would be fun

00:13:47.000 | to be a college professor.

00:13:48.000 | I said, "Well, if I can get a master's degree without coming out of pocket for me,

00:13:51.580 | that opens up the opportunity for me to potentially be a college professor if I ever wanted to."

00:13:57.440 | So never know.

00:13:58.980 | There's no reason not to.

00:14:02.180 | All right.

00:14:03.180 | Jeff in New York, go ahead and let us know what your question is please.

00:14:06.260 | Hey, Joshua.

00:14:07.260 | First of all, just appreciate you taking my call and thanks for everything that you do.

00:14:12.180 | I found you about a year ago, just kind of mumbling through podcasts.

00:14:16.700 | And ever since I've been listening, definitely taking a closer look at the Phi community

00:14:23.340 | and kind of that side of things.

00:14:25.340 | So it's definitely been a great thing to have access to all that you're doing.

00:14:30.260 | So thanks very much for that.

00:14:32.660 | My question is just related to kind of general housing strategy.

00:14:36.940 | I'm currently trying to pay off some debts and my dad is actually in the process of building

00:14:42.540 | his retirement home, but he's not going to live there for about probably about a year

00:14:47.100 | or so.

00:14:48.100 | And he offered me the possibility to live there rent free probably for about six to

00:14:53.260 | 12 months.

00:14:55.300 | This would require a little bit of a commute on a daily basis, probably about an hour.

00:15:00.820 | I'm currently commuting really only about 30 minutes per se.

00:15:04.460 | I'm actually carless at the moment.

00:15:06.220 | It would also necessitate purchasing a car.

00:15:08.260 | So I was thinking probably, you know, three to 5,000 out of pocket, just pay cash for

00:15:12.100 | something to do that.

00:15:14.220 | So I'm currently paying about 1,200 in rent, depending on the month.

00:15:21.820 | So just kind of wanted to see if, you know, the outlay of maybe five grand for a car was

00:15:26.980 | worth in the grand scheme, you know, that just that savings of, you know, potentially

00:15:34.740 | living six to 12 months for a year rent free and having that extra to be able to throw

00:15:40.020 | at my debt.

00:15:41.020 | Are you single?

00:15:42.020 | I am, yes.

00:15:43.900 | How much debt do you have?

00:15:46.620 | About 35,000.

00:15:48.260 | And what's your income?

00:15:49.260 | 80,000.

00:15:50.260 | If you were to do this, do you think you could be out of debt in six to 12 months?

00:15:59.060 | I do.

00:16:00.180 | I'm currently kind of projecting probably about June of '18 I should be all done.

00:16:07.140 | So if I was there that minimum, probably six to 12 months, I think it could be the vehicle

00:16:12.620 | to make that happen.

00:16:14.220 | What type of work do you do?

00:16:16.500 | I'm in technology, like operations type stuff.

00:16:20.580 | So you don't, I mean, you don't use your car for work.

00:16:22.580 | You could drive a cheap car.

00:16:23.580 | It's not a big deal.

00:16:24.580 | You're not in the road.

00:16:25.580 | You don't have image to maintain, et cetera.

00:16:26.580 | No, definitely not.

00:16:27.580 | Not the lawyer doctor stigma.

00:16:30.820 | Great, great.

00:16:33.340 | It sounds pretty cool to me.

00:16:37.740 | I would probably pursue it.

00:16:39.980 | If you can do it on six to 12 months, to me it sounds really ideal in this context.

00:16:45.900 | It's probably of help to your dad to have the place looked after.

00:16:48.980 | Empty houses are not great things, period.

00:16:52.860 | And so it's probably of help to him.

00:16:54.500 | So you don't have to feel like a total freeloader.

00:16:56.940 | He wants to help you out during this phase.

00:16:59.380 | So it's a win for him that he gets to provide some help for you.

00:17:04.220 | So I see that as being good.

00:17:07.140 | An hour commute, to go from 30 minutes of a commute to a one hour commute for the short

00:17:11.900 | term, a year's time to me sounds pretty, it doesn't sound terrible.

00:17:17.060 | Obviously, shorter commutes are always, are often better and more valuable.

00:17:22.740 | But for you, you could put the time to good use.

00:17:25.180 | Many of ways to put the time to good use, and we're talking about a temporary time period,

00:17:30.060 | and it's a very direct path to saving $10,000 to $12,000 if we called it on the year timeline.

00:17:38.180 | And if you have the timeline to where that would work out with your income to be able

00:17:41.860 | to be debt free at the end of the year, I think that would be well worth pursuing.

00:17:45.860 | I would buy a cheap car, a little Toyota Corolla, a Honda Accord, Toyota Camry, something like

00:17:52.580 | that.

00:17:53.580 | I'd spend a couple thousand dollars.

00:17:54.940 | And the great thing about doing that, if you do that, is depending on what you need after

00:18:01.380 | you're done, if you buy an inexpensive car, you can sell it again if you want to go car

00:18:08.860 | free at the end of the year.

00:18:09.920 | You can sell it again and basically get all your money out of it and have a fine little

00:18:16.420 | commuter car.

00:18:17.580 | So I think I would, yeah, I would.

00:18:21.060 | I think that sounds like a really ideal scenario.

00:18:23.660 | Is there any reason why you don't think that would be a good idea?

00:18:26.860 | No, I think really the only thing would be the silly fear of missing out, I suppose.

00:18:33.060 | It's a little bit out in the sticks, so to say.

00:18:37.120 | But other than that, I think it's probably good to dig me out of the hole.

00:18:42.940 | And I think the other thing you hit on very well is the resale potential of the car.

00:18:49.100 | I was definitely thinking something like a Camry or an Accord.

00:18:52.020 | So to be able to get three quarters of what I paid for it out of it, I think, makes that

00:18:57.820 | outlay a little bit more reasonable in the situation.

00:19:02.700 | You got to compare it to what's the scenario that would be – what's a different scenario

00:19:07.980 | that you have.

00:19:08.980 | So right now you're spending $1,000 or $1,200 a month on rent and you're able to get by

00:19:12.720 | without a car.

00:19:14.060 | Well, could you spend – if you got a roommate, or could you find a place to rent a room and

00:19:18.260 | a house for $400 a month and get by without a car?

00:19:21.620 | If so, then you calculate what that would look like over the course of a year.

00:19:26.240 | But to go from what you're paying now to zero rent and I don't know – would your

00:19:31.720 | dad pay the – cover the utilities or would you need to pay for those as well?

00:19:35.740 | I think he was willing to do that, yes.

00:19:38.020 | So when you get rid of utilities, that could also be really compelling because $100 a month

00:19:45.180 | in electricity, things like that, you could probably get rid of your – any kind of internet

00:19:51.380 | needs.

00:19:52.380 | Just use your cell phone and tether when you need internet at home and you're going to

00:19:56.420 | be at work a lot of times.

00:19:57.940 | So you can get rid of any kind of cable or unless it comes in the house.

00:20:02.940 | You can cut your utility bills down hugely and so the savings here with having a hookup

00:20:09.740 | like a family connection could wind up in your benefit closer to say $1,300, maybe $1,400

00:20:16.340 | a month by the time you add up the coverage for utilities.

00:20:20.940 | So as a temporary thing, I think it helps your dad.

00:20:23.380 | It helps you as a temporary thing.

00:20:25.180 | I think it sounds like a great idea.

00:20:26.580 | Great.

00:20:27.580 | I appreciate the insight, Joshua.

00:20:30.420 | For sure.

00:20:31.420 | All right.

00:20:32.420 | Haleshia, we're going to come to you in just a moment.

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00:21:57.940 | Is that right?

00:21:58.940 | Yeah, that's correct.

00:21:59.940 | Yeah, she's tried a few of them.

00:22:00.940 | She likes HelloFresh.

00:22:01.940 | What does she like about it?

00:22:04.260 | What's her favorite thing?

00:22:05.260 | Is it like with my wife where she grabs the simplicity of it or what specifically does

00:22:12.540 | she like about it?

00:22:13.540 | I mean, everything is measured out and if you need an onion or a small onion, they give

00:22:19.460 | you one small onion or one little vial of olive oil or whatever.

00:22:23.780 | So it's kind of like having a little sous chef there that's already done all the work

00:22:27.620 | for you and you just kind of assemble everything.

00:22:30.980 | I think the biggest thing she likes though is that the recipes don't tend to repeat.

00:22:34.420 | I don't know if they repeat even in a year.

00:22:36.860 | So it kind of gets her to cook things she wouldn't normally cook and have the ability

00:22:40.820 | to cook so without some research online, it's a subscription service so it puts it all right

00:22:48.100 | there in front of you and it's ready to go.

00:22:50.020 | Yeah, it takes some of the planning and puts it back in your cell.

00:22:53.740 | Certainly not as cheap as what we do.

00:22:55.900 | You go to Costco and the restaurant supply store where we get most of our groceries.

00:23:00.060 | It's not as cheap but it still comes out to less than $10 a meal and when you've got someone

00:23:03.700 | else that can create the recipes for you, it's a really great in-between scenario.

00:23:08.700 | It's cheaper and more fun than dining out good quality food as well.

00:23:13.140 | So go to HelloFresh.com, sign up if you've never tried it.

00:23:15.660 | Try it out, a simple starter subscription, save $30 with the coupon code RPF30.

00:23:21.300 | Again that's $30 off your initial subscription with the coupon code RPF30 and then let me

00:23:27.500 | know how you like it.

00:23:28.980 | All right, Halesha, did I say it right?

00:23:31.060 | Halesha in Colorado, welcome to the show.

00:23:32.580 | Yes, thank you.

00:23:33.580 | I'm really excited to be here.

00:23:36.740 | Let us know what's on your mind and let's see how I can serve you today, please.

00:23:40.580 | My mom's pretty sick and she has some pretty hefty medical expenses coming up.

00:23:45.340 | I was wondering just from my financial standpoint on what I should really look into or there's

00:23:51.940 | some creative ways to finance this that maybe I haven't thought about.

00:23:55.540 | What kind of sick is she?

00:23:57.300 | Cancer sick.

00:23:59.860 | What's her medical prognosis?

00:24:00.860 | Probably going to die in the next year.

00:24:04.980 | And is she married?

00:24:07.540 | Yes.

00:24:09.020 | Okay.

00:24:10.660 | Financially what is your mom's financial situation?

00:24:13.820 | Not great.

00:24:15.820 | Deprived of my parents.

00:24:19.660 | Is she – as far as her – how old is she and what insurance coverage does she have?

00:24:25.500 | She is 67 and she has Medicare.

00:24:30.940 | Okay.

00:24:31.940 | So just base Medicare and no supplemental insurance?

00:24:35.380 | My understanding is yes.

00:24:37.380 | Okay.

00:24:38.380 | Do you feel that she is receiving through the Medicare system?

00:24:40.940 | Is she receiving the type of treatment that she needs or is there a need for her to get

00:24:45.860 | treatment that's not currently covered?

00:24:49.580 | I'm not really sure yet.

00:24:51.580 | All right.

00:24:52.580 | So, I'm sorry to hear she's doing so poorly.

00:24:56.980 | So there are a couple of different ways to answer it.

00:25:01.060 | Let's talk about kind of the most aggressive protective scenario.

00:25:06.980 | Your mom's husband, do they have assets together that they own together?

00:25:14.540 | Not really.

00:25:15.540 | Not at the moment.

00:25:16.540 | Okay.

00:25:17.540 | So basically I'm getting the impression they don't have a lot of money or a lot of assets.

00:25:20.380 | Is that right?

00:25:21.380 | That is correct.

00:25:22.820 | Okay.

00:25:23.820 | So – and then is he working right now?

00:25:26.700 | No.

00:25:27.700 | He's like 83.

00:25:28.700 | Okay.

00:25:29.700 | So he's caring for her.

00:25:30.700 | Are they their sources of income?

00:25:31.780 | Is it just basically Social Security or do they have any other types of pension arrangements

00:25:36.780 | established for themselves?

00:25:37.780 | I think there's a pension as well for my dad.

00:25:41.100 | Okay.

00:25:42.100 | So let's start with kind of the most aggressive financial planning scenario.

00:25:47.860 | Essentially there are two people that need to be cared for in this context.

00:25:54.980 | The number one most important is your mother and her medical care and her medical needs.

00:26:01.020 | So that is of primary importance and you've got to make sure that she gets the care.

00:26:05.140 | But you also have to make sure that your father is cared for as well.

00:26:11.860 | And because their finances are joined, there's – we have a duty of care for both of them

00:26:16.580 | and we have a financial duty of care for both of them as well.

00:26:19.860 | So as a simple example, let's say they had a million dollars in a bank account.

00:26:24.180 | If they were going to use all million dollars of that bank account on her medical care,

00:26:28.420 | that might be the right thing to do.

00:26:29.500 | But we have to recognize the fact that that will leave him destitute, financially destitute.

00:26:35.280 | Now in your situation, since your parents don't have significant assets, we're basically

00:26:41.560 | talking about income.

00:26:43.580 | So she's going to accrue – she hasn't already.

00:26:46.340 | She's probably going to accrue major medical bills that she doesn't have the money to

00:26:50.740 | pay.

00:26:51.780 | So the first thing is to approach this almost like you would approach bankruptcy planning

00:26:56.060 | and to say what sources of income do they have and how do we protect them?

00:27:00.140 | Social security income is protected from the claims of creditors and so can be pension

00:27:05.540 | income from the claims of creditors.

00:27:08.040 | So it's important that you sit down and if your dad is receiving a pension payment

00:27:12.260 | from a work pension, then you want to make sure that's segregated and that's not

00:27:19.020 | becoming a claim – that's not going into a joint account.

00:27:22.060 | I just want to start to provide some protection for that from the potential future claims

00:27:27.780 | of her creditors.

00:27:29.900 | As she accrues medical expenses, as she goes forward with her treatment and as she has

00:27:34.580 | the medical expenses, all of those medical expenses, you want to work to make sure that

00:27:40.140 | they all stay in her name and in her name alone.

00:27:43.340 | And what will happen is if she dies, say six months from now she dies and she owes $300,000

00:27:48.980 | of medical expenses, then her estate will stand good for her debts.

00:27:58.620 | But it's likely that she won't have much of an estate.

00:28:01.580 | So do your parents own a house together?

00:28:03.740 | Not at the moment, no.

00:28:06.060 | So they're renting.

00:28:07.060 | So basically anything that she owns will stand good for what she owes.

00:28:12.580 | So if she does have any personal assets or any financial assets, when she dies, if she

00:28:17.700 | dies prematurely, if she dies prematurely, then anything that she owns, her bank accounts

00:28:23.380 | and any personal property, things like that, would basically go to stand good for her debts.

00:28:28.380 | If she doesn't have a lot of money and if she doesn't have a lot of property, then

00:28:33.500 | the creditors will just simply not be paid because you are not going to inherit her debts.

00:28:39.160 | Your dad is not going to inherit her debts.

00:28:42.060 | So those medical expenses just simply won't be paid.

00:28:46.140 | So it's important to be defensive in your approach and it's important for you to be

00:28:50.100 | defensive in making sure that you don't sign up to become – that you don't agree to

00:28:58.660 | stand for the medical expenses and it's important that to the best degree possible that your

00:29:02.700 | dad not agree to be liable for any medical expenses.

00:29:06.340 | So that in a worst-case scenario, if she dies in the next six months from now or 12 months

00:29:10.980 | from now, that those medical expenses unfortunately simply won't be paid.

00:29:16.060 | What many people try to do is you want to obviously acknowledge the goodness of the

00:29:20.580 | people who are seeking to – providing medical care for her and who may never get paid.

00:29:28.780 | They know that that going in, they know that they may never get paid.

00:29:31.580 | So you obviously want to do anything you can to satisfy that moral obligation of the debt

00:29:36.180 | but you don't have to take on to yourself the financial obligation.

00:29:40.060 | That's the basic approach financially.

00:29:43.700 | Now the key thing is back to the care.

00:29:45.860 | What about the care?

00:29:47.140 | Oftentimes what you'll find, especially with Medicare, is there are some treatments

00:29:50.240 | that Medicare is going to cover and then there may be some things that Medicare isn't going

00:29:57.420 | to cover.

00:29:58.420 | So you've got to figure out how – if you're going to do something that the insurance doesn't

00:30:03.140 | pay for, how can you do that?

00:30:05.220 | How can it be paid for?

00:30:06.620 | How could you do it?

00:30:08.980 | Knowing clearly that your mom – that likely speaking, the people who are providing medical

00:30:17.540 | care for her are not going to be paid except what the insurance pays out and knowing that

00:30:21.740 | you're not going to inherit any of her debts, then you and the family members need to decide

00:30:27.260 | about the things that aren't covered by insurance that you can do.

00:30:31.900 | Oftentimes there will be ways for you to support and you can say, "Well, we'll pay for

00:30:35.700 | this other treatment over here or we'll negotiate for this experimental thing," et cetera,

00:30:41.780 | and you may choose to pay for that out of your own resources.

00:30:45.140 | But basically what I would do is just talk to everybody, make sure that everybody knows

00:30:49.140 | the situation, knows the circumstances, knows your mom's lack of financial resources, and

00:30:56.780 | talk to them.

00:30:57.780 | Make sure while you're going – meaning that oftentimes they may go ahead and agree

00:31:01.160 | to provide care even though they know that they're not going to get paid in the long

00:31:05.300 | run.

00:31:06.300 | Finally, make sure that her income is being used to meet her living expenses as best as

00:31:11.740 | possible.

00:31:12.780 | So prioritize the payment of her rent, the food, the things that she needs, not paying

00:31:18.900 | the medical expenses.

00:31:19.900 | Medical expenses are just going to have to pile up until they can be dealt with.

00:31:23.660 | Okay.

00:31:24.660 | Thank you.

00:31:25.660 | Any further clarifying?

00:31:27.260 | Is that a good start?

00:31:30.260 | I think it's a pretty good start.

00:31:32.940 | I didn't know that the debt wouldn't be transferred.

00:31:35.980 | Right, right.

00:31:36.980 | So that's really good to know because I think it's going to be pretty crushing.

00:31:42.580 | Yeah, it is.

00:31:43.580 | It always is.

00:31:44.580 | I mean it's not uncommon to have a million, a couple of million dollars of debt especially

00:31:47.580 | if there have been advanced treatments and things like that.

00:31:51.380 | So it is important that you know, yes, nobody will inherit your mom's debt.

00:31:56.540 | You will not inherit her debt.

00:31:58.620 | Your dad will not inherit her debt.

00:32:00.020 | Nobody will inherit her debt.

00:32:01.740 | So if she dies prematurely, she dies six months from now, nobody is going to be responsible

00:32:06.340 | for those payments.

00:32:10.900 | So nobody is going to be responsible for that.

00:32:12.580 | You're not going to get any of her assets because her estate, the assets of her estate

00:32:17.020 | need to be sold and disposed of to pay her creditors if she dies.

00:32:21.980 | But no one is going to inherit the debt.

00:32:24.180 | So let me just make a quick planning tip for those who are in a situation where the parents

00:32:29.160 | have more money.

00:32:31.040 | If you're in a situation like this and let's say mom and dad have – they own a house

00:32:35.820 | together and the house has $300,000 of equity and maybe mom has an IRA or a 401K account,

00:32:43.180 | things like that.

00:32:44.260 | This is where you need to sit down and do some good defensive planning, basically elder

00:32:50.800 | care planning or bankruptcy planning and you want to make sure that you don't drain the

00:32:55.900 | assets that are needed for the spouse in order to pay for the medical expenses.

00:33:00.160 | So if I have an IRA with a half a million dollars in it and I need medical care and

00:33:06.980 | I can't – my wife is depending on the $500,000 in my IRA for her retirement years.

00:33:16.940 | If I'm undergoing a cancer diagnosis and cancer treatment, then it's very important

00:33:21.420 | that I not drain the IRA to pay the hospital bills because then what's my wife going

00:33:26.240 | to do when I die?

00:33:27.540 | It's much more important that I keep the money in the IRA.

00:33:30.600 | The IRA has protection from the claims of creditors.

00:33:33.740 | It is a bank – it's a judgment-proof asset.

00:33:36.900 | You cannot be – I can't be sued by the hospitals and then have access to the IRA

00:33:41.420 | and the IRA would pass to my wife by beneficiary designation.

00:33:45.380 | So we cannot spend the money in our IRA.

00:33:47.820 | I can make sure that that money is set aside for her at my death to make sure that she's

00:33:53.700 | covered for retirement and then if I die prematurely, then my estate will just simply not be able

00:34:00.540 | to pay the hospital bills.

00:34:02.220 | So you've got to be defensive there and make sure that the parties of all people are

00:34:07.580 | covered.

00:34:08.580 | You want to make sure the medical providers are paid for as much as money is available

00:34:13.840 | but you've got to make sure that all of the other parties that need to be protected

00:34:17.580 | are protected as well.

00:34:19.760 | So hopefully that helps.

00:34:20.760 | All right, John, you did my hello fresh ad for me.

00:34:23.820 | Now I'll answer your question.

00:34:24.820 | What's up?

00:34:25.820 | John R. Reilly: Yeah, no problem.

00:34:26.820 | Well, first I just wanted to say I appreciate all the advice you gave to Halesha.

00:34:31.820 | That's all good stuff to know and maybe the second caller wants to take some lessons from

00:34:38.780 | Halesha's situation and possibly move in this dad's house and then he might get another

00:34:45.520 | year or two of rent-free living with his dad after that.

00:34:49.180 | I know you've used up like 99% of your time with your in-person time with your parents

00:34:54.420 | after you leave high school.

00:34:55.420 | You might want to take advantage of that.

00:35:00.420 | But yeah, my question was pretty mundane after Halesha's situation but I was just kind of

00:35:07.860 | curious about during the last Q&A you had mentioned a couple tips on how you kind of

00:35:14.460 | digitized some receipts that had the heat ink on them and I've fallen trap to that,

00:35:19.700 | you know, saving receipts forever go back and they're invisible ink.

00:35:22.140 | It's like disappearing ink on them.

00:35:24.060 | And it kind of made me wonder about your system in general and overall about how and your

00:35:30.500 | decision process for which receipts and financial paperwork in general that you keep around

00:35:38.500 | just the whole finances of life and somewhat high level how you organize or how you decide

00:35:44.820 | maybe like a decision process for how you decide to keep certain things in certain ways.

00:35:48.780 | I have a couple apps that I use for scanning but they always seem to be in 10 different

00:35:54.660 | places, you know, just getting it all in one place and OCR and recoverable when you want

00:36:00.900 | to get a certain information would be interesting for me to hear.

00:36:05.220 | Sure.

00:36:06.220 | So let's start simple and here are the simplest ways to do it.

00:36:10.540 | Most people don't need anything fancy.

00:36:13.020 | They don't need anything digital.

00:36:14.700 | They just need a simple file folder and unfortunately many people, their lives are so disorganized

00:36:21.380 | they don't have a file folder.

00:36:23.140 | So the first thing that I recommend is anytime you have something or you buy something, just

00:36:29.460 | establish a standalone file folder.

00:36:32.340 | Depending on the type of thing that it's going to be, a simple manila folder can work well

00:36:37.100 | or oftentimes I like to use and I've acquired a bunch of them for free.

00:36:42.380 | I like to use these little basically like Tyvek envelopes that have a cover that you

00:36:48.460 | can wrap the little bungee cord around and that allows you to organize things that are

00:36:52.260 | related in a very simple way.

00:36:55.500 | But at least a file folder.

00:36:57.640 | So usually for most people, there are only a few things that need to be tracked.

00:37:01.700 | A simple example would be a car.

00:37:04.220 | If I buy a car, the first thing I do when I buy a car is I create a file folder for

00:37:08.260 | it and in that file folder, I keep anything related to that car.

00:37:13.940 | Initial, bill of sale, the title, initial paperwork, registration paperwork, copies

00:37:22.660 | of anything, copies of repair records, etc.

00:37:25.580 | If you just simply have one file folder that's immediately made out for that car, then you

00:37:31.300 | always have a place to put things and it's easy to take and to put things into it.

00:37:36.680 | Another thing that I do is I always keep a notebook with something and a simple notebook

00:37:42.060 | that I can write in.

00:37:44.060 | A simple pad or any kind of small notebook and keep a log.

00:37:47.980 | A log of the mileage, the log of the things that are done.

00:37:52.020 | So when I – a year ago, I bought a camper van and the first thing I did was I put a

00:37:55.500 | notebook in the camper van with a pen attached to it and I use that for keeping notes.

00:37:59.460 | When I take the car to the mechanic, then I write down what I did, what I fixed, etc.

00:38:04.960 | The mileage, the date, all of that.

00:38:08.180 | So I have all the information laid aside.

00:38:11.440 | By simply having a place to put it, that lowers the resistance that we have to keeping good

00:38:16.940 | records and there's no need for complex digital solutions.

00:38:21.740 | In general, you can just have a piece of paper, a notebook, etc.

00:38:25.220 | The issue that we mentioned with regard to the fading receipts is pretty rare with most

00:38:31.220 | things that are in use in life.

00:38:35.060 | Your mechanic generally is going to give you a printed paper printout from his accounting

00:38:39.820 | software and then there will be a heat receipt on the back of it that was just simply the

00:38:45.620 | credit card slip.

00:38:47.260 | So you can look at it and say, "Well, is this important?"

00:38:49.340 | Chances are it's probably not important.

00:38:52.460 | You can probably continue on and you'll have everything you need.

00:38:56.180 | If you do that with – same thing with your house.

00:38:59.140 | You put your title records all in one place and then if you have more, a lot of people

00:39:03.060 | will go ahead and create a binder for their home appliances, things like that.

00:39:09.980 | I try to save almost nothing that can be easily found online but I do try to save paperwork

00:39:15.860 | for things that can't be.

00:39:17.540 | So to me, the user manual is not nearly so important as the actual purchase confirmation

00:39:23.980 | so that I have the information.

00:39:26.160 | So low tech is perfectly fine and works really, really well.

00:39:30.780 | If you need to preserve the receipts, the simplest low tech way to do that is going

00:39:37.100 | to just be to copy them.

00:39:39.300 | I think in this context, a lot of times people have a copier at work.

00:39:45.500 | Certainly you don't want to run your own thousand booklet production job on your boss's

00:39:49.740 | time and paper but ask your boss and one or two receipts copied a month is probably not

00:39:54.980 | going to be a big deal or you can buy a home copy machine that's very inexpensive.

00:39:59.720 | That would be the most basic level and most people would be well served by simply having

00:40:04.320 | that done.

00:40:05.860 | Now you can go up from there and you mentioned you can use a scanning app and start to scan

00:40:10.860 | information.

00:40:11.860 | I've done that.

00:40:14.240 | And does it work?

00:40:15.240 | Yeah, I think it can work.

00:40:16.580 | You can set up an Evernote notebook or some non-Evernote equivalent.

00:40:21.380 | You can set up an Evernote notebook for your – the car, et cetera and then you can just

00:40:27.740 | simply scan each receipt.

00:40:29.820 | I have found that using the scanning app on the phone is good for every now and then but

00:40:35.100 | it's not good for consistent things.

00:40:37.860 | But if you only have a few pieces of property, et cetera, then I think using a scanning app

00:40:42.660 | can be fine.

00:40:44.020 | I think you should either choose to do all paper or in essence all digital and that lowers

00:40:49.780 | the resistance because I've found that having half and half didn't really work.

00:40:54.020 | At this point, I use actually a scanner and I use a pretty fancy scanner.

00:40:59.340 | The one that I use is – and it's expensive.

00:41:01.660 | It's 400-something bucks if you buy it new.

00:41:03.940 | But I use a scanner called a ScanSnap iX500 made by Fujitsu and it is probably the – it's

00:41:15.060 | a pretty Cadillac scanner that is appropriate for all kinds of different things.

00:41:21.020 | It's a duplex scanner which means it will scan front and back of any document simultaneously.

00:41:26.220 | It's very fast.

00:41:27.220 | I think it's rated for 25 pages a minute and it can be used to scan a variety of media.

00:41:35.460 | It can scan receipts.

00:41:36.820 | It can scan – it can scan receipts.

00:41:39.700 | It can scan papers.

00:41:40.940 | It can scan stacks of random things.

00:41:43.860 | And so what I have done is more and more, I've gone ahead and committed to doing things

00:41:49.620 | largely digital.

00:41:51.660 | And so I use it for records and I keep just a simple foldering system.

00:41:57.500 | I prefer not to back things up in the cloud for greater security.

00:42:02.140 | I have good backup systems that aren't – so I'm not worried about the cloud on the backup.

00:42:06.920 | So I just keep a foldering system and a file system in for each of my assets.

00:42:13.580 | So if there is a – if it's my car or if it's a house or something like that, I make

00:42:19.500 | a separate folder for it and then I scan all of the documents into it and I just simply

00:42:24.540 | – I don't worry too much about organization.

00:42:27.740 | In general, you can get so bogged down trying to organize something perfectly that there's

00:42:31.380 | no need for it.

00:42:32.420 | For the average car, if you have 20 or 30 files in a folder, you don't need to do

00:42:37.060 | any major organization.

00:42:38.260 | You can look through those and figure out when you replace the transmission fluid if

00:42:42.780 | you have to and it only takes a few minutes.

00:42:45.020 | So just simply setting up a simple file, simple foldering system.

00:42:49.180 | What I do is I just simply use a dated system.

00:42:52.620 | So for any file, I use a date system that will be sortable on date of year, month, day.

00:42:59.840 | So as I – if we record this in 2017, it would be 20170713 and then the name of what

00:43:10.620 | it was and a quick description in the title.

00:43:13.980 | The fancy scanner like the Fujitsu ScanSnap makes it so easy to scan these things, put

00:43:20.300 | the file name in, drop it into that, that it makes it super, super simple.

00:43:24.140 | So I love it and that's what I use.

00:43:27.020 | So I organize things around the asset.

00:43:28.900 | If it's a home purchase, just organize things there.

00:43:31.540 | Then if it's financial records, then that should be organized in the accounting software.

00:43:36.340 | Either use – I use YNAB for personal stuff.

00:43:40.260 | You can organize things effectively enough in YNAB.

00:43:42.540 | I use hashtags.

00:43:44.220 | So I have a Toyota Sienna minivan.

00:43:46.500 | So #ToyotaSienna, if anything is related to that.

00:43:50.900 | That makes it easily searchable.

00:43:52.740 | And then if it's more complex than that, then you can go ahead and use bookkeeping

00:43:57.300 | software.

00:43:58.300 | So something like QuickBooks makes it very simple for you to associate a scanned receipt

00:44:02.860 | with the actual file.

00:44:06.940 | I found that for me, I struggled with it being cheap for a long time of not wanting to get

00:44:11.780 | a scanner.

00:44:12.780 | Finally, I just said, "No, I've got to have a good scanner," and I use it for basically

00:44:17.260 | everything.

00:44:18.260 | I use my ScanSnap for – I scan all my books.

00:44:22.780 | For example, when I read a book, I like to read books in paper and mark them up.

00:44:26.140 | But then at the end of it, I destroy them.

00:44:27.580 | I pull the bindings apart, toss them in the ScanSnap.

00:44:30.220 | In probably about 10 minutes, I can scan the book.

00:44:32.460 | That way I have a permanent digital archive of it.

00:44:34.460 | I don't have to keep the paper version of it.

00:44:38.140 | I have a permanent digital archive that contains all my notes, all of my emphasis, et cetera.

00:44:42.060 | It does color.

00:44:43.060 | It does black and white.

00:44:44.060 | So I find it really useful for that.

00:44:46.460 | And then also records.

00:44:47.500 | You can just put stacks of records together and do it.

00:44:50.120 | So I have found that having a good scanner has been well worth it for me to simplify

00:44:55.340 | things.

00:44:56.340 | So one of those systems can be created, and I think those are just – that's how I do

00:45:00.340 | it, and those are my simple ideas for it.

00:45:02.220 | How do you do it, John?

00:45:03.580 | And what ideas do you have?

00:45:04.580 | John Cramer No, I appreciate that.

00:45:05.580 | Those are all good ideas.

00:45:06.580 | I think you've kind of helped me isolate – what my problem is, it's a balance between paper

00:45:14.420 | and tech and then a balance between asset filing versus sort of like a time – you

00:45:22.180 | said you primarily keep it by asset, and then within that asset, you have kind of a dated

00:45:28.380 | structure.

00:45:29.380 | I kind of tend to go all or nothing one way or the other.

00:45:33.740 | So right now I'm in this in-between stage where I'm trying to digitize everything,

00:45:38.140 | scanning in religiously as I get the item, and then I put it into a – just every six

00:45:44.660 | months I start a new folder and put everything I purchase, all receipts, all records, whatever,

00:45:49.460 | into that linearly.

00:45:50.460 | They might get mixed up again, but you can sort through them.

00:45:54.820 | And then what I've been doing on the digital side is just hoping it has OCR and you can

00:45:59.900 | search for it that way, but OCR isn't perfect, and even things you're trying to remember

00:46:06.460 | that thing that you're trying to search, maybe it's not really listed that way on a receipt

00:46:11.900 | or a paperwork.

00:46:12.900 | And I've been getting by pretty decently with that, but overall it's just – it's kind

00:46:17.660 | of disconnected.

00:46:18.660 | And to your point about the car stuff, I think that's one of my major pain points is there's

00:46:24.740 | a separation between when I do the thing to the car and type a little email to myself

00:46:29.860 | to send it to myself, and then later I have to take that email and put it into my online

00:46:34.700 | spreadsheet where I keep track of all that stuff.

00:46:38.340 | And that little disconnect is a big problem, because sometimes it doesn't happen or it

00:46:41.580 | happens very late or I don't get all the notes in.

00:46:44.060 | So just having a little tablet in each vehicle and going kind of low-tech on that I think

00:46:49.980 | is a – I think that's a good idea.

00:46:54.380 | It keeps it where it needs to be.

00:46:56.020 | You generally don't need that information when you're away from your car.

00:46:59.900 | And even if you are away from your car, you're usually not that far away from your car if

00:47:02.900 | you're doing this other work at home and trying to do planning.

00:47:06.340 | So I think that'll help a lot, just with a simple notebook.

00:47:09.780 | Low-tech on that will help.

00:47:11.020 | So –

00:47:12.020 | Yeah, for the uninitiated, OCR stands for optical character recognition, and it's the

00:47:16.380 | function that allows you to scan a document or take a picture of it and have the computer

00:47:22.460 | translate that image into textual recognition.

00:47:26.100 | This is what most – many of us use Evernote in some capacity.

00:47:28.620 | This is what Evernote does.

00:47:29.980 | When you take a picture of a paper and it says on it "radical personal finance,"

00:47:33.420 | it allows you to come back later and search your database for "radical" and find those

00:47:38.500 | instances of it.

00:47:40.020 | My experience, John, having – being the master of creating complex systems and then

00:47:44.600 | watching them fail, I have learned that it's simple – it's important not to kind of

00:47:51.280 | overstress.

00:47:52.280 | As a simple example, I don't save receipts for anything except business expenses.

00:47:58.680 | I don't save them.

00:48:00.040 | What am I going to need a receipt for on something?

00:48:02.480 | Or possibly a big ticket item certainly is a reason to do it.

00:48:07.680 | But I don't need to save my receipts from the grocery store.

00:48:09.720 | I don't need to save any of those things.

00:48:11.640 | All I need there is to know basically how much am I spending on a monthly basis on food.

00:48:17.200 | And so as long as I have some record of that and I do, either checkbook register or program

00:48:22.640 | like you need a budget, radicalpersonalfinance.com/ynab, radicalpersonalfinance.com/ynab, you need a

00:48:27.880 | budget.

00:48:28.880 | As long as I'm using something like that, then I have the category that I need.

00:48:33.640 | And so simple is important.

00:48:35.780 | Before you design a system for something, it's most important just to eliminate steps

00:48:40.000 | and say, "Am I ever going to need this?"

00:48:41.720 | And in general, I found that as long as I get rid of stuff and I simplify, I don't

00:48:45.640 | need to save all these emails.

00:48:46.720 | I don't need to save all of these receipts.

00:48:48.040 | I don't need to save all these records.

00:48:50.120 | I'm probably never going to need it.

00:48:52.240 | And if I ever did need it to save on $100, well, $100 was the price I paid for having

00:48:56.980 | a simpler life.

00:48:58.840 | Similar things like saving boxes for – I bought a new monitor for my computer.

00:49:02.760 | Well, I'm not going to save the box for it just in case I ever need it.

00:49:06.240 | If I ever need it, it just – it adds too much complexity.

00:49:10.440 | So one or the other, either paper or digital works really well.

00:49:14.960 | And if you're digital, then you have the tools.

00:49:16.800 | So if you have a scanner, then that makes the tool simple enough and then you had to

00:49:20.160 | create the setup, set up the filing system, figure out where is it going to be stored,

00:49:24.400 | how is the data going to be encrypted so it's protected, and how is it going to be backed

00:49:27.840 | up.

00:49:28.840 | You've got to set that up and then follow through across the board.

00:49:31.600 | But in general, for most people, it's not that big a deal.

00:49:34.720 | If you just had a file folder for your house that you put everything – a receipt in for

00:49:38.800 | everything in your house, chances are you'd have most of the info needed.

00:49:43.200 | And then if you ever need to go back through and look at housing expenses, you just pull

00:49:46.800 | up that category in your accounting software and you cross-reference it and you can come

00:49:50.600 | close enough to solve the records needs.

00:49:56.640 | I do – I would say this.

00:49:58.160 | I struggled for years with trying to use the phone as a scanner.

00:50:01.800 | I was an early adopter.

00:50:02.800 | I always used the JotNot scanning app.

00:50:05.720 | JotNot Pro is what I used.

00:50:07.080 | It worked great on my phone for years with my iPhone.

00:50:11.040 | But it is nothing like having an actual scanner.

00:50:14.640 | And today, if I had the choice, I'd get the cheapest smartphone or get a dumb phone

00:50:20.480 | and get a scanner rather than trying to integrate it into the phone.

00:50:25.280 | Scanning with a phone is so frustrating to do because of all the problems with now how

00:50:30.000 | do I get the document onto the hard drive, how do I name it, et cetera.

00:50:33.680 | So I highly recommend pick up a good quick duplex scanner and it's worth it.

00:50:39.040 | That's a good tip.

00:50:41.000 | Thank you.

00:50:42.000 | I appreciate that.

00:50:43.000 | For sure.

00:50:44.000 | Someday I should probably do more and try to organize the system better.

00:50:47.240 | But that's what I do.

00:50:48.240 | All right.

00:50:49.240 | Finally, Andy, you're up.

00:50:51.040 | Welcome to the show.

00:50:52.040 | Let me know your question, please.

00:50:53.040 | Hi, Joshua.

00:50:54.040 | I just wanted to maybe kind of get a little more detail on some of the things you've said

00:50:59.360 | about insurance purchasing in the past and then your opinion on whether there is any

00:51:07.000 | value in what that is of having a local agent versus not having a local agent.

00:51:10.840 | Okay.

00:51:11.840 | Tell me more.

00:51:12.840 | So specifically with the agent thing, I don't want to be necessarily asking brand recommendations.

00:51:19.440 | I'll try not to say brands unless you want me to.

00:51:22.280 | But I've always had car insurance, home insurance, all that through a local agent, you know,

00:51:29.320 | a person that I knew that I went in and I sat down and talked with.

00:51:33.240 | And I've never used any of my insurance, but I've always been happy with the agents.

00:51:37.920 | They seem knowledgeable and helpful and willing to go over things with me.

00:51:42.680 | And I've recently compared just car insurance with some of the online you can buy, you know,

00:51:49.560 | direct online.

00:51:50.560 | And I could save a couple hundred dollars just on car insurance, you know, and not counting

00:51:55.080 | homeowners and all the other things I have insurance on.

00:51:58.440 | And one of my big hangups on that is the idea of leaving a local agent and not having that

00:52:04.360 | person I could go talk to.

00:52:05.360 | And just wondered if, in your opinion, there's value to that or, you know, kind of what your

00:52:11.320 | thoughts on that.

00:52:12.320 | Yeah.

00:52:13.320 | All right.

00:52:14.320 | So I understand more.

00:52:15.320 | So I think the value is good.

00:52:16.320 | So it's going to depend on the type of insurance.

00:52:18.680 | Let's start with property and casualty insurance, car insurance, homeowners insurance, et cetera.

00:52:24.480 | I think there is value in a local agent if you can find one that meets your needs and

00:52:30.020 | does a good job.

00:52:31.440 | I think there's also value sometimes in working with companies that don't have local agents.

00:52:36.080 | And I don't know of a grand way to understand the difference.

00:52:40.040 | My experience was I grew up – my dad was always a USAA member.

00:52:43.480 | And USAA is an insurance company that only does business with military personnel.

00:52:48.680 | And they have a significant degree of brand loyalty because in most things they've done

00:52:53.240 | a good job.

00:52:54.420 | And then – so I just got – I got my car insurance with USAA because I was on my dad's

00:52:58.920 | policy for years and I got my own.

00:53:00.440 | I was like, "Well, I'll just stick with USAA."

00:53:03.400 | And so it wasn't – in general, if my dad had done his business with a local state farm

00:53:09.200 | agent, then I probably would have just gone with the local state farm agent just like

00:53:12.520 | many people do.

00:53:14.480 | And most of us, that's the biggest influence.

00:53:17.640 | I was always comfortable not having somebody local because I just grew up never having

00:53:21.800 | someone local.

00:53:22.920 | Same thing with local banking.

00:53:24.440 | I've never banked with a local bank.

00:53:26.600 | I've had a count here and there.

00:53:28.400 | But as far as primary banking, I've never had a bank that I could walk into and work

00:53:31.960 | with a banker.

00:53:33.640 | And so I'm – but I'm a point – I'm at a generational approach where I'm comfortable

00:53:39.760 | not having that.

00:53:42.000 | I think the first thing that matters is whenever possible to work with a company that's going

00:53:47.840 | to be excellent for the type of insurance that you're looking for.

00:53:51.100 | So in property and casualty insurance, there are two mutual insurance companies that have

00:53:55.800 | often had good ranks.

00:53:56.920 | One was USAA.

00:53:58.360 | Another that's often been leading is a company called Amica Mutual.

00:54:02.700 | They often are well-ranked in terms of their customer service.

00:54:06.080 | And when it comes to actually filing a claim, I've seen personally with my experience

00:54:10.640 | with USAA on car insurance claims how nice it is to work with a company that just seems

00:54:16.300 | to want to do the right thing and care for their policy owners.

00:54:19.840 | I'm biased whenever possible to work with a mutual insurance company as compared to

00:54:25.640 | a stock insurance company because I have had experience formerly working with Northwestern

00:54:31.240 | Mutual that there's just – the culture was different, that there was more of a sense

00:54:34.680 | of camaraderie.

00:54:35.840 | So I'd rather bank with a credit union than with a profit-seeking bank.

00:54:39.040 | I'd rather have my insurance with a mutual insurance company than with a stock insurance

00:54:43.360 | company.

00:54:44.360 | So to me, that's where I start.

00:54:47.040 | The problem is what do you do if insurance is not available?

00:54:51.520 | When I owned a home a few years ago, USAA does not write coverage for houses in Florida

00:54:59.560 | because of the – just the hurricane situation.

00:55:03.480 | The whole Florida homeowners insurance market is a disaster.

00:55:09.240 | It's been – it's a disaster.

00:55:12.360 | The government regulators have screwed the whole thing up by – and destroyed free market

00:55:19.520 | competition.

00:55:20.520 | So basically we have the state-run option and we have a few startup local insurance

00:55:24.440 | companies that basically cancel your policy every year and you shop for insurance every

00:55:28.000 | year or two.

00:55:29.160 | So in that context, I had no idea where to start and I called company after company that

00:55:33.240 | was national.

00:55:34.240 | No, sorry.

00:55:35.240 | We don't do business in Florida.

00:55:36.240 | The only thing I had to do – the only place I had to start was to work with a local agent

00:55:40.640 | because there was value in that specialized localized knowledge.

00:55:45.080 | So in that case, the specialized localized local knowledge trumped the value of any particular

00:55:50.340 | brand name and I worked with these no-name insurance companies that I had never heard

00:55:55.240 | of that were local that I had no confidence in from a customer service representative

00:56:00.600 | but I was required to have insurance and that was – they were the only people that could

00:56:05.080 | offer it.

00:56:06.260 | So it's very subjective.

00:56:09.360 | I think you are better served by working with an agent.

00:56:12.560 | Here's how the insurance works.

00:56:14.040 | A lot of times you can buy insurance directly from the national company or you can work

00:56:19.920 | with somebody locally who can write it with the national company and your actual premium

00:56:23.920 | payment is going to be identical between those two.

00:56:26.760 | But if you work with somebody local, you're going to have somebody who can sit down and

00:56:31.240 | integrate your coverage and who can review them.

00:56:33.960 | And as your financial situation is more complex, that's more and more valuable.

00:56:38.820 | You want to make sure that your liability limitations on your car insurance are properly

00:56:43.600 | aligned with your homeowner's insurance and you want your umbrella liability policy

00:56:48.680 | to go right on top of those so you don't have any gaps.

00:56:51.680 | You're not going to get that with a customer service rep just on the phone.

00:56:55.580 | So if you can work with somebody locally that's going to be knowledgeable, why not?

00:57:00.640 | I'd rather do that.

00:57:02.520 | The other thing – comment I've made was something like life insurance.

00:57:06.080 | Same thing applies with life insurance.

00:57:07.840 | If you work with a local agent, you're going to pay exactly the same premium as working

00:57:13.000 | with somebody that you find on the internet.

00:57:15.480 | Banner Life Insurance Company charges the same premium to a 45-year-old male non-tobacco

00:57:20.920 | of somebody who buys it through a website, lifeinsurance.com or whatever the website

00:57:25.000 | of the day is versus somebody who works with the local insurance agent.

00:57:29.000 | It's just a matter of who gets the commission, the life insurance agent locally or the website.

00:57:37.280 | Well, after spending years writing life insurance, if your premium is going to be for your term

00:57:42.040 | insurance is going to be $600 a year, my commission from Banner Insurance is going to be $500

00:57:49.160 | to sit down with you.

00:57:50.160 | I'll come and sit down with you for a couple of hours and work with you in exchange for

00:57:55.000 | earning a $500 commission and I'll give you good advice on your life insurance program

00:57:59.640 | and we'll help you figure it out.

00:58:00.640 | It's going to be a lot less frustrating than a national website.

00:58:04.000 | So I think there is value in working with a local agent.

00:58:07.920 | There is value in working with somebody who's an expert in your area and a newly trained

00:58:12.640 | customer service rep is generally not going to be able to provide the same service as

00:58:16.960 | somebody you can sit down in their office with, especially if someone's a member of

00:58:20.960 | the community, a long-term member of the community.

00:58:23.440 | But it's good to keep those people honest and it's good to price things yourself.

00:58:28.000 | So if you go online and you do a pricing and you price things out and you quote your insurance

00:58:32.080 | with Geico, go down to your local agent and say, "Hey, I quoted it with Geico.

00:58:35.320 | What can you do?"

00:58:36.360 | My experience has been I've never was in a situation when I was a local insurance agent.

00:58:42.120 | I was never in a situation where I was ever scared of an online quote because they didn't

00:58:47.680 | have anything that I don't have.

00:58:50.000 | They didn't have anything, any access to somebody that I didn't have.

00:58:54.280 | And even if I was going to be a little bit more, I knew why it was going to be a little

00:59:00.080 | bit more and I could just say, "Hey, here's why this company that I'm recommending is

00:59:03.320 | a little bit more and that's – and here's why I would recommend it."

00:59:07.260 | I don't try to buy the cheapest insurance I can get.

00:59:10.400 | Not that I'm opposed to it, it doesn't matter.

00:59:13.600 | But when you need insurance payment on something like your house or your car, you don't want

00:59:18.480 | to get into a fight with the insurance company.

00:59:20.280 | You want your claim paid.

00:59:22.080 | And a lot of times that's going to have to do with the quality of the company.

00:59:24.960 | All right.

00:59:26.400 | That's really helpful.

00:59:28.400 | I think that basically answers that part of my question and I think you were hinting at

00:59:36.480 | kind of the second part.

00:59:38.800 | So I've always worked with basically a company representative of a specific company, such

00:59:45.360 | and such insurance company office.

00:59:47.760 | Am I correct that there are also insurance agents out there that are more like – I

00:59:54.760 | don't know if freelancer is the right term, but I could go to and they could say, "Well,

00:59:58.640 | independent, yes.

00:59:59.640 | Here's the rate you can get from this company and that company and because you're such

01:00:03.280 | and such, this company would be better for you.

01:00:06.680 | Is that an option and is that a better option in your opinion?"

01:00:10.880 | So I think the reason people have these questions like you is because you probably feel a personal

01:00:16.720 | loyalty to the person that you're working with and you don't want to appear like you're

01:00:21.760 | being disloyal by talking about quotes and things like that.

01:00:25.320 | I always have that personal hesitation.

01:00:31.000 | I don't want to disappoint my friends.

01:00:33.720 | I don't want to cause problems for the people that I'm working with.

01:00:37.480 | But I would encourage you that this person is a professional and they work for you.

01:00:41.200 | So ask the questions.

01:00:42.520 | There's no reason why you can't ask a question.

01:00:46.440 | From having come from the sales world and insurance sales, I always knew that if I was

01:00:51.440 | going to lose a case or if I were going to lose a customer, I wanted to know why because

01:00:56.280 | probably I know more about it than my customer did.

01:00:59.160 | But I would be so frustrated if somebody – you get a replacement notice if someone is replacing

01:01:02.760 | your policy in life insurance and similar things I'm sure with property and casualty

01:01:08.000 | insurance.

01:01:09.000 | I would always be frustrated if I saw – look, I placed so-and-so with a good company and

01:01:12.640 | I look down and I get a replacement notice for the policy that I sold them that was appropriate

01:01:16.560 | to them and now we're going with a piece of junk company that's $5 a month cheaper.

01:01:22.760 | I can sell somebody on why the $5 a month is more valuable and be right about it.

01:01:29.260 | So I think you should always talk with the people that you're working with and tell

01:01:32.620 | them what you're doing.

01:01:34.060 | Tell them, "Oh, I'm quoting – if you're working with a local legacy company where

01:01:38.740 | their agent is a captive agent," here's the terminology, called a captive agent where

01:01:42.500 | they can only write business with that specific company.

01:01:45.880 | Tell them, "Hey, I'm quoting my insurance around.

01:01:48.220 | I've gotten quotes from so-and-so.

01:01:50.660 | Why should I stay with you?"

01:01:52.040 | Just ask them the question.

01:01:54.140 | They're professionals.

01:01:55.140 | They can handle it.

01:01:56.140 | They're big boys and girls.

01:01:57.140 | They can handle it.

01:01:59.020 | It's always a good idea to collect quotes.

01:02:01.900 | It's always a good idea to talk to an independent agent and inquire with a local company and

01:02:07.900 | say, "Hey, can we quote a few different companies?"

01:02:11.100 | It's always a good idea.

01:02:12.540 | The trick is in order to make it worthwhile, go back to the professionals that you're

01:02:17.940 | working with.

01:02:19.060 | Tell them your competitive quote because often there are a lot of unethical people who will

01:02:25.860 | quote something but they're quoted under different terms.

01:02:28.460 | Let's take this example.

01:02:29.460 | You come in and your legacy company that you're with right now, you have a million dollars

01:02:33.700 | of liability coverage but you go online and they quote you at $100,000 of liability coverage.

01:02:38.980 | Well, of course your policy is cheaper.

01:02:41.300 | It's cheaper because it has different terms and there's almost no insurance, especially

01:02:45.500 | property and casualty and many kinds of life insurance, disability insurance, et cetera.

01:02:51.420 | You can't compare it one to another.

01:02:53.860 | About the only thing you can do that is compare it with a straight 20-year term life insurance

01:02:57.140 | policy.

01:02:58.140 | You can't quote on price.

01:02:59.500 | Everything else is based on features and the agent needs to see the quote.

01:03:03.020 | So go and get the quotes.

01:03:04.340 | Get it from the legacy company where you have a good relationship with.

01:03:07.140 | Get it from the independent company where they're quoting with a couple of people and

01:03:10.780 | then compare them one another.

01:03:11.900 | Show each other the quotes and ask them, "Why should I stick with it?"

01:03:14.900 | Then be open to their answer.

01:03:16.820 | Cheaper is not always better.

01:03:18.120 | You often get what you pay for in most things, including in insurance coverage.

01:03:22.620 | Okay.

01:03:23.620 | So, yeah, that makes a lot of sense.

01:03:27.900 | I guess what you're saying earlier when you're talking about the local agent versus the website,

01:03:32.540 | I guess my thought had been when you go with a company that is largely web-based and doesn't

01:03:38.140 | have local offices, the fact that there is two or three people sitting in a building

01:03:43.140 | 40 hours a week would be a big reason why online company A could be cheaper than brick

01:03:51.900 | and mortar company B. Would it be reasonable to expect that that's true or not?

01:03:58.340 | I think absolutely.

01:03:59.340 | There are a lot of companies that have made their business working online and because

01:04:03.420 | it's cheaper, they can offer cheaper policies.

01:04:06.340 | But this very much depends on the type of insurance and on what's available.

01:04:10.500 | I'll give you an example.

01:04:12.500 | I bought a motorhome a year or two ago.

01:04:14.860 | I've since sold it this year and I needed insurance for it.

01:04:18.220 | Well, I paid cash for it and I didn't care about having the value of it covered.

01:04:23.100 | I just wanted some strict liability insurance that would allow me to drive it legally.

01:04:27.780 | But all I cared about was inexpensive liability insurance.

01:04:31.540 | I didn't need big coverages, et cetera.

01:04:33.620 | I just needed inexpensive liability insurance so that I could drive the thing on the road

01:04:36.780 | legally.

01:04:37.780 | I quoted it with USAA and my premiums came out to like $60, $70 a month that they quoted

01:04:43.580 | for my motorhome.

01:04:46.540 | Progressive is well-known for having some of the cheapest insurance coverage for RVs.

01:04:51.980 | So I quoted it with Progressive and they gave me just simple liability insurance for $12

01:04:57.060 | a month.

01:04:58.060 | So I was able to have the coverage for $12 a month.

01:05:01.060 | Well, I couldn't see any reason or benefit why I wouldn't just go with the cheapest place

01:05:04.860 | in that one because I wanted something that was very simple and I wanted something – I

01:05:08.660 | was just going for strict liability coverage.

01:05:12.460 | So in that case, Progressive was a company that they're known for providing cheap RV

01:05:18.300 | insurance.

01:05:19.300 | That's a segment of the market that they've gone after.

01:05:21.340 | So you want to work with them for RV insurance.

01:05:26.060 | That's very different than something else.

01:05:29.580 | Insurance companies all have a different market segment where they want to be competitive.

01:05:33.540 | Another example, I'm just using companies that I know where I can speak to because of

01:05:37.820 | personal experience.

01:05:40.140 | There are – like USAA does homeowners insurance in some places but there are certain kinds

01:05:43.980 | of houses that USAA doesn't want to have and sometimes they want high-end houses.

01:05:49.000 | Sometimes they want low-end houses.

01:05:50.740 | So each company with something that's peculiar to a property in casualty, each company will

01:05:56.660 | choose this is the type of person that we want as an insured and they'll often price

01:06:01.260 | their policies out of the market for someone else.

01:06:05.060 | So that's where you need an expert if possible who can look and say, "Do you fall into

01:06:09.380 | one of these situations or are you buying a commodity product?"

01:06:13.380 | And there's no general way to answer it other than research.

01:06:18.500 | There are only specific ways of application.

01:06:21.400 | One more example to build my point.

01:06:24.380 | I mentioned a moment ago that about the closest thing that comes to a commodity product is

01:06:29.260 | term life insurance, simple level term life insurance.

01:06:32.540 | In many ways, a 10-year level term life insurance company from company A is the same as company

01:06:37.380 | B is the same as company C.

01:06:39.140 | There are a few differences but it's as close to a commodity as you can get in the

01:06:42.740 | life insurance business.

01:06:44.580 | That applies if you're healthy and you don't smoke.

01:06:48.420 | But it doesn't apply if you smoke cigars.

01:06:51.840 | If you smoke cigars, you immediately go into a question, "Well, how many cigars do you

01:06:54.900 | smoke?"

01:06:55.900 | And there are some companies where if you smoke over a certain number of cigars, they're

01:06:59.100 | going to give you tobacco rates.

01:07:00.660 | There are other companies where you can smoke an unlimited number of cigars but as long

01:07:04.180 | as you don't smoke cigarettes, you can get non-tobacco rates.

01:07:06.860 | And so it's only going to be an experienced life insurance agent who's going to know that

01:07:11.340 | answer and you can't know it as a consumer by reading a website.

01:07:15.460 | The teaser website at lifeinsurance.com is going to say, "A 45-year-old healthy male

01:07:22.940 | can get insurance for $15 a month."

01:07:25.560 | But it's only the agent who's going to know, "Well, how many cigars do you smoke?"

01:07:30.940 | In that case, I need to put you over here with Prudential because they're cheaper.

01:07:35.780 | They're not $15 a month.

01:07:37.740 | It's going to be $17 a month but it's non-tobacco rates.

01:07:40.400 | If we applied with the company that you saw the advertisement for, it'd be $30 a month.

01:07:45.380 | Same thing with anytime there's health risks.

01:07:48.380 | Every company has something that they've chosen.

01:07:50.580 | So if somebody has a history of heart disease or history of cancer or they've had certain

01:07:54.060 | medical conditions or they have diabetes or hypertension, that's where the expert pays

01:07:58.260 | off.

01:07:59.260 | So I don't know how to define that for the layperson in advance and say, "Always use

01:08:03.780 | online or always use local."

01:08:06.460 | I do know that you should try both or all and constantly shop your coverages but tell

01:08:13.160 | the professionals what you're doing and let them work to earn your business.

01:08:17.660 | Okay.

01:08:18.660 | That's really helpful.

01:08:20.340 | So I think the advice I'm hearing is just, you know, if I'm looking to understand whether

01:08:26.340 | I'm getting good value and whether there's better value to be had, maybe get a few online

01:08:30.980 | quotes for especially things like auto insurance that are heavy online and then try to find

01:08:36.820 | a independent insurance agent in my area and just go to them and get a couple quotes from

01:08:42.820 | them and then take that back and compare with the legacy agent that I've been working with.

01:08:48.420 | Is that a good summary of your advice?

01:08:51.100 | Right.

01:08:52.100 | Don't discount somebody from a large company.

01:08:54.620 | Don't discount them for two reasons.

01:08:56.780 | One, they have experience.

01:08:58.620 | They know what they're doing.

01:08:59.620 | There's a reason the company is large.

01:09:02.380 | They probably provide a good product at a good rate.

01:09:05.020 | They can't make it if they don't provide decent rates.

01:09:08.820 | Now, you may not be in their target demographic so you might have an expensive policy from

01:09:12.900 | that company but there's probably a reason why they're big and they're well-known.

01:09:16.780 | Number two is just because an agent has a certain name of a company on their business

01:09:22.260 | card doesn't mean they don't have access to other companies.

01:09:25.860 | As an example, when I was a Northwestern Mutual agent, my business card said Northwestern

01:09:29.740 | Mutual but I was licensed with and appointed with 30 or 40 different life insurance companies

01:09:35.540 | and I could write business with any of those companies.

01:09:38.100 | So it wasn't only Northwestern Mutual.

01:09:40.940 | I could write a banner policy.

01:09:42.180 | I could write a prudential policy.

01:09:43.340 | I could write MetLife and often did.

01:09:46.180 | So sometimes you may not know that just because the person's business card that may or may

01:09:51.620 | not captive, the word captive agent means different things in different contexts.

01:09:57.680 | So that would be my answer.

01:09:59.980 | All right.

01:10:01.260 | Last question, Matthew.

01:10:02.420 | You said that I'm going to come back to you and give you a chance to ask one more question.

01:10:06.300 | Before you said you wanted to talk about books.

01:10:08.460 | So the question you said you were going to ask me before I hit record was what three

01:10:12.820 | books would I take to – is this the Desert Island scenario?

01:10:17.580 | Is that the question that you wanted to ask?

01:10:21.580 | Absolutely.

01:10:22.580 | Yeah.

01:10:23.580 | It's kind of a fun question to end on.

01:10:25.700 | If you could only have three books to read for the rest of your life, which three would

01:10:29.680 | you choose and why?

01:10:30.980 | Okay.

01:10:31.980 | So first, what would you pick?

01:10:33.780 | Because I got to think for a moment.

01:10:36.380 | Do you have your answer figured out?

01:10:38.180 | Oh, that's a great question.

01:10:41.820 | Wow.

01:10:42.820 | That's tough.

01:10:44.860 | So I guess to frame it a little bit better would be in our current society because obviously

01:10:51.500 | if I were on a desert island, then I would want books applicable to that scenario to

01:10:55.660 | teach me how to live on a desert island.

01:10:57.580 | So let's just say in our current scenario and in our current culture, given everything,

01:11:03.380 | if I can only have three books – let's see here.

01:11:07.260 | All right.

01:11:08.260 | So I'll take it because I've been kind of – I've been pondering it and if you

01:11:12.780 | have any ideas, you want to add in a moment.

01:11:15.100 | So it's an interesting question and it's fun to talk about.

01:11:19.980 | And of course in a way, I would say I don't know.

01:11:22.660 | But I'm going to picture this as I fell off of an airplane into the desert island

01:11:27.060 | scenario.

01:11:28.140 | Because just for the constraint of it, here's conceptually what I would answer.

01:11:33.700 | You need to have an idea of – we need to have something that would be helpful in the

01:11:39.060 | context of culture.

01:11:42.080 | How do you establish and build culture?

01:11:44.180 | You need to have something that would be helpful in terms of practical living.

01:11:49.260 | How do we keep ourselves alive?

01:11:51.260 | And we need to have something that would be helpful in the context of science and how

01:11:55.060 | do we approach – what's the basic outline of scientific knowledge?

01:12:02.220 | What is the bare minimum?

01:12:05.220 | The first thing I think would be necessary in the desert island scenario is we would

01:12:09.180 | need a practical book on living.

01:12:12.140 | And so there are some very practical books on certain kinds of technology.

01:12:17.380 | How do you preserve food?

01:12:18.500 | How do you build shelter?

01:12:19.660 | How do you do these things?

01:12:23.020 | Back to Basics, there's a book I've – I've had various editions over the years.

01:12:27.420 | But there's a well-known book.

01:12:28.420 | It's like Back to Basics.

01:12:29.420 | I used to love reading it when I was a kid.

01:12:30.820 | It's the kind of book that you need that gives you the practical instruction and the

01:12:35.260 | practical outline of where did you come – of what did you – it gives you the – again,

01:12:44.580 | practical structure and outline of how to preserve food, how to build a shelter, how

01:12:48.220 | to get water, things like that.

01:12:51.780 | That would be the first basic approach.

01:12:53.580 | The second book that we would need would be something about like basic scientific knowledge.

01:13:00.260 | I have no idea what basic text would serve there.

01:13:04.980 | But we would need something that would try to bring together a record of mathematics

01:13:10.700 | and basic scientific knowledge in some way.

01:13:13.820 | I've never seen kind of that type of book.

01:13:16.620 | But it would be interesting to stumble across it in some way.

01:13:20.700 | The third one would be culture.

01:13:21.700 | What do you build a culture on?

01:13:23.580 | Because obviously, if we're stuck somewhere, then we're going to build a culture.

01:13:27.660 | And so with that, rather obviously, I would insert the 66 books of the Protestant Bible.

01:13:35.820 | The reason there is because you have history.

01:13:37.900 | Where did we come from?

01:13:38.900 | Why are we here?

01:13:39.900 | What's the meaning of this whole thing?

01:13:41.940 | That's what that answers.

01:13:43.380 | And then also the cultural construct.

01:13:45.940 | The early Puritan settlers to the United States of America used explicitly the Mosaic Law

01:13:52.820 | as their outline for their law and their tradition.

01:13:56.660 | And that has produced – that fundamental foundation has produced the wealthiest, most

01:14:03.420 | successful culture in the history of the world.

01:14:06.100 | And so I'd want to build again on that foundation to understand the outline and understand that

01:14:10.940 | the precepts of where we come from, where are we going, and how do we organize a society

01:14:17.180 | because that is the fundamental conflict in the world today.

01:14:21.340 | Once you have the basic needs of life established, once you have the basic – you have some

01:14:26.780 | shelter and you have some fire and you have some water to drink and some food to eat,

01:14:34.620 | then as human beings, we immediately start building civilization.

01:14:37.180 | We immediately start building culture.

01:14:39.460 | And so I'd want to understand what was it that has led to the most incredibly successful

01:14:47.060 | cultures in the history of the world because there have been thousands of different cultures

01:14:50.940 | that have developed but not all of them have survived and not all cultures are the same.

01:14:56.020 | And so those would be the three books.

01:14:57.580 | I would choose a basic book on an outline of kind of how to live.

01:15:01.820 | I thought about adding to this like a book on architecture.

01:15:04.260 | I have some books.

01:15:05.260 | What's the guy's name?

01:15:06.260 | I can't remember his name.

01:15:07.580 | But I read this really interesting architecture guy who wrote these books not on the actual

01:15:13.540 | engineering or the design but more on the fundamental design and he talked about the

01:15:17.500 | design principles of architecture as applied to different climates.

01:15:20.500 | I can't remember the name right now.

01:15:22.540 | I was trying to come up with it.

01:15:25.980 | But those would be kind of the things is we need – how do we live and how do we stay

01:15:29.820 | alive?

01:15:30.820 | We need – what basic knowledge do we need to build on, the mathematical and scientific

01:15:36.180 | precepts for us to be able to construct engineering projects and have them not fall down?

01:15:42.620 | And then how do we build culture and civilization?

01:15:45.660 | Where do we come from?

01:15:46.660 | Where are we going and how do we build a strong culture with a moral fabric that's going

01:15:53.700 | to last the test of time?

01:15:54.940 | Because obviously if we wound up on this desert island, we probably failed.

01:15:59.140 | So that's my answer.

01:16:00.620 | Very good.

01:16:01.620 | Very good.

01:16:02.620 | I will have to think about in that exact kind of that brainstorming session to see what

01:16:11.160 | I guess I would choose for the three books as well.

01:16:13.400 | That's an interesting outlook.

01:16:16.500 | One would go as far as saying that maybe you've actually thought about that before the question

01:16:20.280 | was raised today.

01:16:21.280 | I have because I've thought about it a lot for a couple of reasons.

01:16:26.980 | Number one, because I'm a strong advocate of home education for children, I've thought

01:16:34.860 | a lot about what do we need to teach our children in order for them to be successful in the

01:16:39.820 | future.

01:16:41.260 | And in one way, this is probably the thing that I have most benefited from in thinking

01:16:45.460 | about home education and in considering how home education can be applied.

01:16:51.020 | I've benefited from recognizing the fact that I have got to be responsible to know

01:16:56.100 | what my children need to know.

01:16:57.460 | And that's caused me to question my own education.

01:17:00.060 | If we just ship our kids off to a school that somebody else has designed, then as parents,

01:17:06.300 | we never think about what my children – we often don't think so much about what my

01:17:10.780 | children need to know.

01:17:12.060 | It's kind of just handed to us.

01:17:13.620 | Well, here's the curriculum that you need and so go for it.

01:17:20.980 | This is what you need.

01:17:21.980 | Well, it's not so simple when you're going to take care of your own education, your own

01:17:28.020 | children's education.

01:17:29.780 | So I've really benefited from thinking about education and it's made me think what are

01:17:35.620 | the fundamental principles that my children need to know.

01:17:39.300 | I'm convinced that it's absolutely impossible for me to teach my children the specific facts

01:17:47.220 | that are going to see them through the coming decades.

01:17:51.660 | Actually, almost all the facts supposedly – and I'm putting facts in air quotes

01:17:56.420 | – almost all the facts that I was taught in school, I've since debunked or we've

01:18:02.180 | since gone on with deeper knowledge.

01:18:04.780 | If the atom was the smallest particle, some of us were taught this is the smallest particle

01:18:09.540 | of the cell.

01:18:10.540 | What is it now?

01:18:11.540 | It's like a cork or something.

01:18:12.540 | All of a sudden, no, wait a second.

01:18:13.540 | The cell goes smaller or there's this number of periodic elements but all of a sudden,

01:18:18.500 | it goes deeper.

01:18:19.500 | That's been pretty stable.

01:18:21.260 | Those aren't good examples.

01:18:23.180 | But most of the facts that I was taught about history, Columbus sailed the ocean blue in

01:18:27.140 | 1492.

01:18:28.140 | Well, maybe he did and he had a huge impact but he was by no means the first European

01:18:34.820 | visitor to the United States and he didn't discover America in that context.

01:18:40.420 | That was a very surface shallow thing that I was taught.

01:18:44.480 | So I've come to the conclusion that you can't really teach facts to children effectively

01:18:50.320 | enough where it's going to last them.

01:18:51.940 | What we need to do is teach principles and teach an approach.

01:18:55.220 | So there, by teaching my children orderly thinking or teaching them how to be disciplined

01:19:01.460 | people and disciplined researchers or teaching them how to approach problems or how to understand

01:19:06.420 | philosophy or how to trace a thread through, then it causes me to think about things at

01:19:12.500 | a deeper level.

01:19:13.500 | So I've thought a lot about it there as I've tried to identify what do my children need

01:19:17.100 | to know to be successful in the world of 2050.

01:19:20.980 | The other thing that I've thought a lot about is one of my major concerns.

01:19:24.620 | I look at the US American society and in many ways, all I see is a society that's in collapse

01:19:33.460 | and I don't know the timing on it nor do I know what the impact of it looks like.

01:19:38.380 | But it's very hard to escape the indicators of collapse.

01:19:43.500 | The US American empire has turned its attention inward.

01:19:47.620 | We've put up walls around the country to try to keep people out.

01:19:50.460 | That's a sign of an empire in decline rather than a sign of an empire in expansion.

01:19:55.980 | There's some significant financial constraints that are affecting the country and the culture

01:20:08.020 | and those will have significant impacts and I'm convinced they'll have impacts in my lifetime.

01:20:14.700 | When I look at the underlying social fabric and the unrest that exists, there's a very

01:20:21.900 | small segment of the US American culture that's doing well, but I would say a majority of

01:20:27.300 | the US American culture is sick, I find it fundamentally sick.

01:20:30.820 | I read the most impactful book I read in January was Charles Murray's book, Coming Apart, and

01:20:36.620 | it kind of really opened my eyes to the measurable sociological collapse happening in our society

01:20:43.260 | today.

01:20:44.260 | And so I've thought a lot about, "OK, what does that look like?"

01:20:45.660 | Because I don't personally see a scenario where – I don't think people are shooting

01:20:50.860 | each other in the streets.

01:20:51.860 | We're not going back to the Middle Ages and electricity is not going to go anywhere.

01:20:57.320 | But in terms of what is that?

01:20:58.780 | And so I've kind of really approached it as a research project to say, "Well, what

01:21:03.180 | got us here?

01:21:05.340 | Am I committing a Golden Age fallacy and just think that, well, life was better before but

01:21:10.020 | now it's not?

01:21:11.340 | Or are there legitimate, objectively measurable things that I can look at and I can identify

01:21:16.940 | that are markers of success and markers of progress?

01:21:19.820 | Where did we come from?

01:21:20.820 | What was the path that got us here?

01:21:21.820 | And then what are the philosophies that are warring in today's world?"

01:21:26.780 | Because religion and philosophy leads the culture.

01:21:29.860 | So what are the religious presuppositions of the culture?

01:21:32.900 | What's happening philosophically that's leading people to the actual actions of their

01:21:37.620 | daily life?

01:21:39.200 | And so in thinking about that, it's caused me to do a lot of thinking about culture because

01:21:43.900 | how do you change it?

01:21:44.900 | I'm very concerned about how do we adjust and change culture, not on a macro scale.

01:21:49.980 | I can't do anything about a broad scale.

01:21:51.840 | But at the margin, how can I make a little bit of an impact in my children's lives and

01:21:55.580 | in my family's lives and in my neighbor's lives and in my community?

01:21:58.860 | How can I adjust and get off the crazy train and stay on the train that leads to prosperity

01:22:05.460 | and stability of society?

01:22:07.060 | So you got me going.

01:22:09.060 | I didn't mean to go into all that.

01:22:10.380 | But yes, I have thought a little bit about it.

01:22:12.380 | No, that's great.

01:22:13.540 | And to be honest, I can't speak for the entire RPF audience, but that seems like a great

01:22:21.620 | future outline for a particular show and get into specific examples.

01:22:26.420 | And I think that would be really interesting to kind of hear the deeper impact in that

01:22:32.820 | in the specific examples.

01:22:34.060 | Now, here's the short version because I can't do it in terms of the 30-minute version.

01:22:41.180 | But here's the short version.

01:22:44.000 | If you and your personal life are stable and you have a stable life and a stable outline

01:22:51.540 | of the world and you have a stable framework and you understand the things that are objectively

01:22:55.900 | true and the things that are not objectively true, and it all starts with us as individuals

01:23:00.620 | and you can never ask a sick person to try to help.

01:23:05.020 | You can't ask a sick person to help a community, but it starts with us as individuals.

01:23:09.260 | And then you build that from that stability into a stable family and a husband and a wife

01:23:14.340 | that are locked together and who are individually stable and who have a marriage that's stable

01:23:19.900 | based upon something that lasts.

01:23:22.220 | That's an impossible unit to separate.

01:23:24.740 | And as society disintegrates, whenever the family unit of a husband and wife gets split

01:23:30.580 | apart it leads to a slowly unfolding society that reflects onto children, that reflects

01:23:36.120 | onto the broader community.

01:23:37.700 | But it has nothing to do with going out and forcing anyone else to do what they can do.

01:23:42.300 | You can't do it.

01:23:43.300 | You just see the reflection of that.

01:23:44.920 | You can only start with you as an individual.

01:23:47.740 | And I think this is where so many people get kind of the approach wrong is they just start

01:23:51.540 | with trying to say, "Well, how can I go and affect those 152 million people out there?"

01:23:56.140 | You can't do it.

01:23:57.140 | There's no way to do it.

01:23:58.140 | The only way you can do it there is with the imposition of statist force and you come and

01:24:03.420 | you try to force people, but that either winds up in begrudging obeisance or revolution,

01:24:10.020 | at the worst case.

01:24:12.820 | So the things that we talk about every day have an impact on the culture.

01:24:17.460 | And you and I, each of us, has a ripple effect on the people around us.

01:24:20.900 | So I don't know.

01:24:23.020 | It's too big of a question and there's so many unknowns.

01:24:26.820 | I don't feel confident publicly going farther than that.

01:24:29.660 | But I do know that as each of us individually engages in the proper stewardship of our own

01:24:35.740 | life, it has a ripple effect.

01:24:37.820 | Thank you so much for listening to today's show.

01:24:39.060 | If you'd like to join in a future Q&A call, please become a patron of the show, radicalpersonalfinance.com/patron.

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01:24:47.940 | In addition to that, remember today's advertiser, HelloFresh.

01:24:50.500 | Go to HelloFresh.com.

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01:25:01.180 | I'll be back with you as soon as I can.

01:25:04.980 | I know the shows have been short, but I'm doing the best I can.

01:25:09.060 | So we'll just leave it at that today.

01:25:10.220 | Doing the best I can.

01:25:11.220 | I'll be back with you soon.

01:25:12.220 | Thanks for listening.

01:25:16.180 | This show is part of the Radical Life Media network of podcasts and resources.

01:25:21.800 | Find out more at RadicalLifeMedia.com.

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