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00:00:29.800 | Today's live Q&A episode of Radical Personal Finance is sponsored by HelloFresh.

00:00:36.880 | Visit HelloFresh.com, enter the promo code RPF30 to save 30 bucks off your first week

00:00:42.680 | of deliveries when you subscribe.

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00:00:49.120 | Welcome to Radical Personal Finance, the show dedicated to providing you with the knowledge,

00:01:10.160 | skills, insight and encouragement you need to live a rich and meaningful life now while

00:01:13.800 | building a plan for financial freedom in 10 years or less.

00:01:16.600 | My name is Joshua and I am your host.

00:01:19.280 | On Fridays we do a live Q&A show.

00:01:21.440 | Stay tuned at the end of the show for a quick announcement on that.

00:01:24.720 | But on Fridays that's where we go to the phones and I answer your questions, do everything

00:01:28.480 | I can to go back and forth and provide a little bit of commentary and insight into your specific

00:01:34.040 | personal financial questions.

00:01:39.160 | These Friday Q&A shows are open exclusively to patrons of the show, people who voluntarily

00:01:44.120 | sign up to support me and support the work that I do financially because it's valuable

00:01:48.040 | to you and to your life.

00:01:49.520 | If you'd like to become a patron of the show, you can sign up for that at RadicalPersonalFinance.com/patron.

00:01:57.760 | Thank you to the about 250 of you who do that.

00:02:00.000 | I greatly appreciate your patronage and your support.

00:02:03.800 | It helps tremendously.

00:02:05.840 | And I have found that these Friday Q&A shows are fairly popular.

00:02:09.920 | But if you're not a patron of the show and you want to have access to a Friday Q&A show,

00:02:14.080 | please stay tuned and listen towards the end of the show and I'll share with you one short-term

00:02:20.000 | change that I am going to be making.

00:02:22.440 | So let's start off with Ken in Ohio.

00:02:24.400 | Welcome to Radical Personal Finance, Ken.

00:02:25.680 | How can I serve you today?

00:02:26.680 | Hey, Josh.

00:02:27.680 | Thanks for taking my call.

00:02:28.680 | I'm a long-time listener, first-time caller.

00:02:29.680 | I don't know if this is going to be too complex or not to go through, but I can't seem to

00:02:36.000 | find anybody that I trust more than you to answer this question, if that sounds right.

00:02:40.600 | Well, let's give it a shot.

00:02:42.440 | I'll tell you if I know something and I'll tell you if I don't, I promise.

00:02:47.040 | I'm pretty sure you're going to know the answer to this.

00:02:48.520 | So my financial advisor, he's advising me to transfer my emergency fund and additional

00:02:55.440 | savings I have for my upcoming girls going to college.

00:02:59.600 | They're going to be going to college in 2021, actually 2020, 2021.

00:03:04.400 | So I'm kind of planning ahead.

00:03:06.360 | And he thinks it's better for me to have all my savings, the cash that I have, all the

00:03:12.080 | stuff that I get penalized for in the FAFSA, to have it in a whole life account, cash value,

00:03:18.560 | whole life with paid up additions.

00:03:20.360 | And his concept is if you create this account, you can overfund the account and then use

00:03:26.000 | it kind of like a savings account that you can take and pull away money anytime you need

00:03:29.600 | it.

00:03:30.600 | So if you need to buy your new car because of the money you've saved up, you can just

00:03:33.960 | pull the money out of the account.

00:03:35.840 | It's safer than having a stock or a bond fund.

00:03:39.040 | It won't go against the FAFSA, so we would possibly be eligible for more funding when

00:03:44.080 | the kids get ready to go to college.

00:03:46.800 | I've got term life insurance, and that makes sense to me.

00:03:50.640 | This whole thing about cash value with paid up additions, I just can't wrap my head around

00:03:55.120 | it and I can't explain it to my 14-year-old.

00:03:57.640 | So I need somebody else to tell me whether or not this is a snake oil salesman trying

00:04:02.260 | to sell me something or if it's something that really would be a good benefit for me

00:04:07.680 | going forward.

00:04:08.680 | Well, you hit on one of my favorite rules of money management.

00:04:12.640 | If you can't explain something to your 14-year-old, you probably shouldn't do it.

00:04:17.520 | I actually think that's a legitimate great rule of thumb to stick with.

00:04:23.120 | You should be able to explain what you're doing with money to your 14-year-old.

00:04:28.520 | If you can, then it's probably a good idea and you understand it well enough to pursue

00:04:32.800 | it.

00:04:33.800 | But you should be very, very careful and very hesitant.

00:04:39.160 | So in your question, there are embedded two different approaches.

00:04:45.000 | One is technical and more of the financial product, kid the plan that you described,

00:04:50.640 | work the way that you're describing it.

00:04:52.640 | The second is more, how do I interact with this particular advisor?

00:04:57.560 | Are they giving me good advice, et cetera?

00:04:59.880 | Let me deal with the second one first just because I'm curious and because it'll be a

00:05:03.760 | little bit faster.

00:05:06.200 | Have you worked with this advisor in other things?

00:05:08.440 | What types of business do you have with this advisor and have you worked with them with

00:05:11.760 | other areas of planning as well?

00:05:14.920 | It's actually a new relationship that we just started.

00:05:17.120 | It's actually the company, I guess I probably shouldn't give the name of the company, but

00:05:22.200 | it's working to help set up the college and picking the right colleges for the girls and

00:05:29.240 | kind of giving us an ACT prep and just kind of working towards that.

00:05:34.200 | And he's kind of getting this whole package together to make the best plan going forward

00:05:38.440 | for our...basically for the next nine years, how do we prepare for college and while we're

00:05:42.960 | in college and then getting out of college.

00:05:44.840 | So it's a new relationship probably within the last two to three months.

00:05:50.200 | Everything else he said seems to be above board and I totally understand it.

00:05:53.440 | And this is the only one that just doesn't make sense.

00:05:56.080 | When he explains it to me, he makes me sound like this is the greatest thing since sliced

00:05:59.920 | bread and then I get home and I go, "Man, it doesn't make sense to me."

00:06:06.400 | Right.

00:06:07.400 | So this is really interesting because I had a couple of friends of mine who were working

00:06:11.680 | in this area.

00:06:12.680 | Let me describe the business model and see if this does fit.

00:06:15.960 | What I'm hearing is this person is not a traditional financial advisor, for example, with a brokerage

00:06:21.560 | firm, et cetera.

00:06:22.880 | They're a college advisor and you've contracted with him to provide advice for you on where

00:06:28.640 | to go to college, how to prepare your children for college.

00:06:32.460 | And as a component of that, he's talking with you about strategies of how to pay for college

00:06:37.480 | effectively.

00:06:38.480 | Is that right?

00:06:39.480 | Exactly.

00:06:40.480 | Good.

00:06:41.480 | Okay.

00:06:42.480 | So this is actually a business model that I actually was interested in because I think

00:06:46.200 | that this kind of service is a really unique offering in the financial advice.

00:06:52.640 | It's kind of – let's just lump it in under the financial advice space.

00:06:56.960 | It's unique because it's very specialized knowledge and it's uniquely valuable.

00:07:01.160 | I was actually attracted to the business model because it's such a marketable business model.

00:07:07.640 | Many aspects of financial advice, it's hard to know how to market a service proactively.

00:07:12.620 | But when you can proactively market to somebody like you who has children who are a few years

00:07:17.840 | away from college, it's really, really good.

00:07:19.320 | And I applaud you actually for working with somebody on this.

00:07:23.160 | There are a ton of planning opportunities that I've seen where advisors like this can

00:07:27.320 | help you to do good planning.

00:07:32.960 | It's going to make a big – can make a big difference in your life and in your children's

00:07:36.000 | life.

00:07:37.000 | So as this relates to finances, some of these firms – it's my understanding that some

00:07:41.360 | of them encourage their advisors to become licensed in life insurance to be able to implement

00:07:50.320 | what you are talking about and some of them don't.

00:07:53.000 | So from your understanding, this particular advisor doesn't represent any other financial

00:07:57.220 | products other than just these types of life insurance products designed to solve kind

00:08:03.040 | of this college need.

00:08:04.040 | Does that seem accurate?

00:08:05.040 | Yeah, to my knowledge, that sounds pretty accurate.

00:08:08.200 | OK, good.

00:08:09.240 | So that just helps me to understand what we're working with and I'll just tell you kind

00:08:12.440 | of the short answer.

00:08:13.800 | I don't think it's a scam.

00:08:16.200 | I don't think it's runaway.

00:08:18.960 | It's not something that I think is just an automatic, "Oh, we've got to run away

00:08:22.840 | from this," nor do I think that this is – I think you should always tread carefully.

00:08:28.600 | If you can't explain it to your 14-year-old, you shouldn't do it.

00:08:30.920 | I'll give you some more thoughts from my experience as well.

00:08:34.060 | But this is unique because this particular advisor does have competence and experience

00:08:40.220 | in this aspect of college financial aid planning and that's different than most of the

00:08:44.500 | times where I hear about the intense marketing of whole life insurance, which is usually

00:08:49.620 | from a bank on yourself or – that's the biggest brand name in the space, the bank

00:08:55.940 | on yourself advisors who are not just focused on college.

00:09:00.820 | Question, does this particular advisor – are they certified with any of the college-level

00:09:04.020 | college – I forget the name of it – with one of the college training certification

00:09:09.060 | designations?

00:09:10.060 | I don't know that.

00:09:12.060 | Look at their business card.

00:09:14.980 | Look at their website at some point and just check to see.

00:09:18.980 | There is a – like a credential that's trying to be established in terms of this

00:09:24.460 | college planning and it would be good to see if the person has it.

00:09:29.460 | All right.

00:09:30.460 | I don't see that.

00:09:31.460 | I'm looking at the business card.

00:09:32.460 | I don't see that on there.

00:09:33.460 | I'm looking at the business card.

00:09:34.460 | I don't see that.

00:09:35.460 | So in short, it's not – I don't immediately run away but I also do tread cautiously.

00:09:42.980 | So what I'm understanding is this advisor has represented to you and said in a few years,

00:09:47.380 | you're going to be filling out the FAFSA and would it be accurate to say, OK, how much

00:09:52.580 | money do you keep in cash on hand that he's going to be worrying about?

00:09:56.420 | What kind of dollars are we talking about here?

00:09:57.940 | He wants to take over about $200,000 to start to do the – or actually to pay up and basically

00:10:04.420 | pay for the whole thing pretty much in one lump sum.

00:10:07.500 | And then we'd be funding it probably another $24,000 a year after that point going forward.

00:10:13.900 | So $200,000 and what he's saying is on the FAFSA, the – what is it?

00:10:19.860 | The Free Application for Federal Student Aid, if you list this $200,000 as a cash asset

00:10:26.260 | in the bank and you list it as an asset, that will affect your – that will affect your

00:10:31.620 | eligibility for – your children's eligibility for other financial aid.

00:10:36.220 | But if you hold this money within the context of life insurance policy, because it is not

00:10:41.300 | a listed asset on the FAFSA, it will save you – it will help your children to get

00:10:47.740 | qualified for more aid.

00:10:48.900 | Is that accurate?

00:10:49.900 | Michael Munger That's exactly where he's going with it,

00:10:51.900 | yes.

00:10:52.900 | I think that's accurate and I did a show – I'll try to find it in a moment for

00:10:55.780 | you on some of the other – on college planning that will give you some of the other categories

00:11:03.020 | that often aren't talked about.

00:11:06.100 | And I recommend to you that you go and you listen to that past show.

00:11:11.500 | So I just paused and looked for it.

00:11:13.860 | I think it may be episode 357 which was an interview with Brad Baldridge which was called

00:11:20.620 | Taming the High Cost of College, Understanding the Landscape of College Tuition, Financial

00:11:24.340 | Aid, Loans and Your Choices with Brad Baldridge.

00:11:27.720 | Episode 429 I discussed should I use whole life insurance as a college savings plan.

00:11:34.020 | So those would be a couple of episodes to look at.

00:11:37.140 | I've done some others on college as well.

00:11:39.820 | So the FAFSA – what this particular advisor is describing to you is not inaccurate.

00:11:47.940 | What they're describing is that you can use – that these assets are not reported.

00:11:55.340 | What's usually unsaid and what I would ask – what I would encourage you to kind of

00:11:59.140 | ask this advisor and see, are there other things other than life insurance which are

00:12:03.260 | also unreported?

00:12:04.940 | So for example, retirement assets, assets that you hold in a 401(k) plan or a 403(b)

00:12:12.420 | plan or just a simple IRA plan, these are also assets that are not reported on the FAFSA

00:12:17.900 | – I believe that home equity, equity that you have in your primary home, I believe that's

00:12:25.900 | not reported on your FAFSA.

00:12:29.100 | I think that there is a difference between the FAFSA here and the CSS financial aid profile

00:12:37.540 | that's used by some colleges and universities that can be reflected as well.

00:12:45.620 | Life insurance is one of those – life insurance is one of those assets as well.

00:12:50.460 | So the first thing that I would do if I were in your situation is go and download the FAFSA

00:12:55.500 | form and read it for yourself and read it and see all of the assets that are listed

00:13:00.700 | and think through the assets that are not listed.

00:13:03.220 | Because so often when you're trying to answer a financial question and say, "Should I

00:13:07.980 | do something or should I not do something?"

00:13:11.500 | The major thing that you face is the lack of the alternative choice, which the question

00:13:17.180 | you're asking me is, "Am I getting bad advice and am I getting screwed?"

00:13:19.820 | A lot of times the way that people get screwed is the alternative choice is omitted.

00:13:26.580 | Something is held as, "This is the only way for you to do what you're trying to

00:13:29.500 | do," and the reality is it's not the only way for you to do it.

00:13:33.180 | It is a way.

00:13:35.240 | And so you should know that yes, life insurance would have that effect, but there are other

00:13:40.060 | potential ways for you to do it as well.

00:13:42.900 | Are you tracking with me so far, Ken?

00:13:46.540 | Yeah, I'm tracking with you.

00:13:50.940 | We actually sat down, we talked through several of those things as far as alternate choices,

00:13:54.140 | and he also said that an annuity would be another one of those other things.

00:13:59.220 | The home equity, sometimes, sometimes not.

00:14:00.940 | It depends on which type of school it is, whether or not that's qualified.

00:14:04.860 | We've already been down the road of the retirement assets.

00:14:07.740 | I'm pretty much maxed out as far as what I can put there.

00:14:10.620 | So this is kind of my last peg that I can use, I think, on the other alternate choices.

00:14:18.140 | Good.

00:14:19.140 | Okay, so I'm becoming increasingly encouraged with the quality of the advice that you're

00:14:23.900 | receiving.

00:14:24.900 | That's a good sign, because if you're getting these choices, if they're doing this analysis,

00:14:28.820 | going over your options, these are signs of a competent advisor.

00:14:32.380 | So I'm increasingly encouraged.

00:14:34.140 | Now let's talk to your specific question about a life insurance policy.

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00:15:54.620 | On whose life is this advisor recommending to place the policy?

00:15:58.340 | Mine.

00:15:59.340 | Okay.

00:16:00.340 | Okay.

00:16:01.340 | And how much of a face amount of contract are they considering?

00:16:07.420 | There's two parts, or three parts to it.

00:16:09.140 | The first part is a 20-year term for $1 million, and then the cash value whole life would be

00:16:13.900 | $200,000, and then the paid-up additions would be up to $40,000 per year that you could add.

00:16:19.500 | Okay.

00:16:20.500 | And so the idea is that you could put $40,000 per year in for five years in order to get

00:16:26.060 | your $200,000 into the contract?

00:16:28.740 | Yeah.

00:16:29.740 | I don't know if it was for five years, but I thought it was more than that, actually.

00:16:36.100 | I thought it was $40,000 per year as long as I wanted to keep on adding it.

00:16:40.300 | But he said if you can't go over the $40,000 the way it was written, otherwise it'll turn

00:16:43.580 | into a modified endowment contract.

00:16:45.460 | Endowment contract.

00:16:46.460 | Modified endowment contract.

00:16:47.460 | Yes.

00:16:48.460 | Okay.

00:16:49.460 | So let me explain the basic.

00:16:51.000 | Do you understand the basic concept of how life insurance contracts work?

00:16:54.340 | They accumulate cash value.

00:16:56.020 | You could take loans against them, or you can distribute the proceeds, et cetera?

00:16:58.900 | Yeah, I've seen that.

00:16:59.900 | I've seen the charts where it usually takes about 10 years before you even break even

00:17:03.260 | on what you've put into it.

00:17:04.820 | That's right.

00:17:05.820 | And so is that the so-called break-even point?

00:17:09.060 | How many years is it on the contract that you've been illustrated?

00:17:12.820 | It depends on how much you put into it, but it's right around there.

00:17:14.940 | I think it was right around the 10-year part, because based on what I think one of your

00:17:20.420 | shows you talked about, the increase in net value, which was the non-guaranteed assumptions,

00:17:28.500 | but that's the column that you're obviously looking at.

00:17:30.980 | Well, you're definitely going to get this, even though it's not guaranteed.

00:17:34.460 | And what company is the illustration run with?

00:17:38.740 | Lafayette Life Insurance Company.

00:17:42.220 | I guess that's Western Southern.

00:17:45.020 | So there are a couple of companies, of which I believe Lafayette is one of them, that they

00:17:52.660 | kind of specialize in some of these types of contracts, that they'll work and they'll

00:17:56.780 | work with some of the options for these types of programs.

00:18:01.340 | I have not done the research on their illustrations or their – I haven't done the research

00:18:08.220 | and I've never purchased a policy from them nor have I ever sold a policy with them.

00:18:11.940 | So I can't speak personally to that.

00:18:16.100 | The basic design can work.

00:18:18.460 | And essentially, the contract that you're describing, where it has – internally to

00:18:23.460 | the contract, it has a million dollars of term insurance and $200,000 of whole life

00:18:27.140 | insurance.

00:18:28.140 | And then over time, will those paid-up additions convert some of the term insurance to whole

00:18:31.600 | life insurance?

00:18:32.600 | Is that the way that the contract works?

00:18:33.940 | Yeah.

00:18:34.940 | The way he explained it to me is the paid-up additions are in addition to – he says every

00:18:40.300 | time you put additions, once the whole life is fully funded, they actually build little

00:18:46.060 | Lego blocks for best term and you keep on adding those and there are like many whole

00:18:52.500 | life policies that keep on getting added on to the policy as it continues to grow, as

00:18:56.660 | you continue to do the paid-up additions above and beyond the $200,000.

00:19:01.620 | And those are the ones he's saying I can take out if I need to buy a new car or if

00:19:05.220 | I need to have my emergency fund because I need to replace my roof or something like

00:19:08.580 | that with those funds.

00:19:10.420 | So it's an accurate statement.

00:19:11.660 | So let's just start with kind of the beginning.

00:19:14.100 | I'll try to explain simply how it works.

00:19:17.100 | You can purchase a life insurance contract in a one-time lump sum for the sake of simplicity.

00:19:24.460 | And let's say that you wanted to purchase a contract.

00:19:27.660 | You have $200,000 of cash and how old are you, Ken?

00:19:31.540 | Forty-five.

00:19:32.540 | Okay.

00:19:33.540 | So you're 45 years old.

00:19:34.540 | You're a 45-year-old male and you have $200,000 of cash.

00:19:38.020 | You could go to a life insurance company and say, "I would like to give you this $200,000

00:19:43.380 | and in exchange, I'd like for you to give me a life insurance policy and tell me how

00:19:47.460 | much money that would be – how much you'd be willing to insure my life for."

00:19:53.060 | Chances are – I'm hopeful I'm close on this, but they would give you a policy for

00:19:59.980 | let's say something like $400,000 of a lump sum contract.

00:20:05.020 | And in that context, they would actually guarantee you that you would have let's say something

00:20:09.980 | like $180,000 of guaranteed cash value right away.

00:20:15.620 | And so you can purchase this contract as a one-time payment for a one-time premium and

00:20:21.540 | you would get a high amount of life insurance death benefit and you would get some amount

00:20:25.940 | of cash value.

00:20:27.180 | Now in what's called single premium life, which is what I'm describing to you, the

00:20:30.380 | commissions are relatively small.

00:20:32.620 | And so the idea of losing say on a $200,000 lump sum, the idea of losing $15,000 or $20,000

00:20:38.900 | in expenses right off the bat would be about expected and that would be money that you

00:20:43.860 | would not have access to.

00:20:45.180 | So that's your immediate loss.

00:20:46.900 | So if you cashed out the policy, you bought the policy on day one and then you cashed

00:20:51.200 | out the policy on days – a week later, you would be out $20,000 out of pocket.

00:20:57.780 | On a policy like I'm describing, a single premium life, usually in say – depending

00:21:02.380 | on the rates that are credited to it, et cetera, usually in three or four years, you could

00:21:06.460 | be back in positive territory with regard to your – all of the money would be made

00:21:12.100 | back up.

00:21:13.100 | The commissions are paid.

00:21:14.100 | The policy inception costs are taken care of and you'd be back whole with your $200,000

00:21:19.700 | in cash value.

00:21:20.980 | And so you could do that to the point where you say, "OK.

00:21:24.300 | I've got – five years later, I've got $210,000 in this contract," and you continue

00:21:29.780 | to have your $400,000 or $500,000 of death benefit that is in force.

00:21:35.300 | And that's a pretty good deal.

00:21:36.300 | That's called single premium life insurance.

00:21:39.340 | And this describes conceptually how the policy works because it shows you that when you put

00:21:45.500 | a lot of money into a life insurance contract, there's going to be a whole lot of money

00:21:50.480 | in the contract.

00:21:52.420 | This is different than term insurance.

00:21:54.140 | With term insurance, you're just buying death benefit.

00:21:56.980 | And so your premium is very, very low because you're only buying death benefit and you're

00:22:01.020 | only buying it for a short period of time.

00:22:04.380 | With the – when you put a lot of money into a contract, a whole life insurance contract

00:22:08.860 | however, you wind up with a certain amount of money in the cash value.

00:22:14.140 | If you put a ton of money in, you wind up with a lot of money in the cash value because

00:22:17.300 | the risk for the insurance company is very, very low.

00:22:20.020 | So they have a high reserve in the contract.

00:22:22.100 | Now, the problem of course with single premium life insurance is you lose out on your advantageous

00:22:27.780 | distribution of the money on a tax-free basis by taking a policy loan.

00:22:33.660 | And that's what we're trying to avoid by having a contract and you immediately lose

00:22:38.820 | that with single premium life.

00:22:40.940 | So what he's describing to you is accurate.

00:22:43.300 | You do have a contract and when you put paid up additions into the contract, you're basically

00:22:47.460 | sending lots of extra money to the insurance company and saying, "Hey, here's some extra

00:22:51.500 | money for you to put into the contract."

00:22:53.660 | When you do it, the advantage is you can bypass some of the costs of the insurance and you

00:22:58.980 | can bypass some of the costs of things like commissions, which is the biggest cost on

00:23:04.860 | a life insurance contract.

00:23:06.520 | And so instead of a say 50 percent commission rate that gets paid out on a normal premium

00:23:10.780 | payment that you make into a life insurance contract, there's only a very tiny commission

00:23:14.460 | rate of maybe a couple percent that the agent receives on paid up additions.

00:23:18.780 | And so this makes a policy much more efficient and allows you to get a lot of money into

00:23:22.900 | the contract in the short term.

00:23:25.020 | So it is very conceivable that a well-designed policy where you put $40,000 into it for – I

00:23:33.300 | kind of can't imagine a contract of only $1.2 million, a face amount, would accept

00:23:38.460 | that money beyond a decade.

00:23:39.940 | He's probably got it timed to where it would mech out in a decade or so.

00:23:45.060 | But if you put $40,000 into a contract for a decade, it's very conceivable that at

00:23:49.420 | that point in time you could have $450,000 of cash value in it and you could have $1.2

00:23:56.100 | million, $1.5 million of death benefit.

00:23:59.700 | So that can work.

00:24:01.680 | Now the question is what can I do with the money?

00:24:04.780 | Make sense?

00:24:05.780 | Are we together so far?

00:24:06.780 | Okay.

00:24:07.780 | Yeah, yeah, definitely.

00:24:08.780 | So when you go to distribute the money from a life insurance contract, there are a couple

00:24:13.500 | of ways that you can do it.

00:24:15.300 | Either number one, you can cancel the contract.

00:24:17.260 | At any point in time with a whole life insurance contract, you can cancel it and you can just

00:24:22.060 | simply take the money.

00:24:23.340 | So you could walk away and let's say that for sake of comparison, let's say you've

00:24:28.660 | put in $400,000.

00:24:29.660 | That's called your basis.

00:24:31.220 | That's the total amount of the premiums that you've contributed to the contract.

00:24:34.500 | Let's say 10 years from now your policy is scheduled to have $475,000 of cash value.

00:24:41.660 | That's your cash value.

00:24:43.020 | And your death benefit at that point in time would be $1.3 million.

00:24:48.140 | So if you walk away from it, you'll receive back your $475,000 of cash value.

00:24:53.620 | You'll give up the death benefit.

00:24:55.660 | You'll receive your basis out tax-free.

00:24:59.460 | You would receive $400,000 of basis back tax-free and you would receive the balance of $75,000.

00:25:06.260 | You would receive that back as ordinary income and it would be taxed to you as ordinary income.

00:25:12.340 | So anytime you surrender a life insurance contract, that's the way that the money works.

00:25:16.260 | That's the way that the tax works.

00:25:17.540 | You understand that?

00:25:18.540 | Yep.

00:25:19.540 | Now, another option that you always have with a whole life insurance contract is to be able

00:25:24.140 | to take out a policy loan.

00:25:26.140 | And a policy loan, because it's a loan, it's an advance of the death benefit, a policy

00:25:33.020 | loan, as long as the policy stays in force, a policy loan can be received income tax-free.

00:25:39.540 | And the reason is that it's an advance of death benefit.

00:25:42.780 | Any life insurance contract, term insurance, whole life insurance, any contract of any

00:25:46.780 | kind, when a death benefit is paid out, will pay out that death benefit free of federal

00:25:52.300 | income taxes, free of any income taxes.

00:25:55.100 | So if you die and you have a $1.3 million policy in force, your family gets $1.3 million

00:25:59.900 | of cash.

00:26:00.900 | Now, let's say that on most policies, you can usually borrow out of a policy up to about

00:26:05.700 | 90% of the cash value.

00:26:08.160 | So if you had $475,000 of cash, you could take out a $400,000 loan against the contract.

00:26:15.980 | That loan, if you die, would be repaid by the policy.

00:26:20.500 | So instead of your family receiving $1.3 million for the death benefit, they'd receive $1.3

00:26:25.220 | million less, the $400,000 loan, they would receive a $900,000 check.

00:26:30.220 | You can take that loan out.

00:26:31.580 | It's not recognized as income.

00:26:33.360 | You can do anything that you want with it.

00:26:35.480 | You can spend it, you can use it to pay for your car, your college, all of those things.

00:26:41.560 | And you don't necessarily have to pay it back.

00:26:44.040 | As long as the policy stays in force, you don't have to pay it back.

00:26:46.500 | Now, here are the two things that happen to the money.

00:26:49.140 | You will pay an interest payment on the money.

00:26:52.580 | And the interest payment will vary depending on the company and depending on the way that

00:26:56.220 | you choose, whether you choose a steady interest rate or an adjustable interest rate.

00:27:00.780 | And so every year there will be an interest payment due on the $400,000.

00:27:05.480 | And the reason is this was a company asset, a reserve amount in a life insurance policy.

00:27:11.400 | But now they have loaned the money out.

00:27:13.820 | From the company's perspective, they loaned the money out.

00:27:16.400 | And so there needs to be a return.

00:27:19.360 | And then also depending on the company, however, if you're going to pay an interest payment,

00:27:25.120 | depending on the company, depending on the way that they recognize the loan on their

00:27:28.320 | books, they may also grant a dividend payment on that loan.

00:27:33.960 | So there will be a cost to the loan, but the net cost will probably be pretty small.

00:27:40.680 | The net cost of this can often be as little as 2% or 3% by the time you take in the difference

00:27:47.040 | between the amount of interest payment that you're paying and the amount of interest that

00:27:51.120 | the company is crediting to you in the loan.

00:27:54.560 | It can be a very small number.

00:27:56.220 | So you can keep that loan on the policy for a very long period of time or for a short

00:28:00.640 | period of time.

00:28:03.180 | This is how people who represent life insurance as this particular financial tool, this is

00:28:08.760 | how they do it.

00:28:09.760 | And so they're saying, for example, bank on yourself very classically, pay yourself the

00:28:15.060 | interest on the money and you can take the money out and you can use it for things that

00:28:21.360 | you want to.

00:28:23.040 | And you'll receive the interest now in the context of your life insurance instead of

00:28:28.340 | paying it to a bank.

00:28:30.460 | As long as you have a large amount of money in the policy, this is my opinion, as long

00:28:36.680 | as you have a large amount of money in the policy and as long as you have a relatively

00:28:41.300 | low usage from the contract, the contract can stay healthy and the plan can work.

00:28:51.100 | Where I get nervous is if the plans are pushed to the extreme and you're taking out a $420,000

00:28:57.580 | loan on a $475,000 policy and you're taking it out without any plans of paying it back

00:29:03.340 | within a couple – within a few years.

00:29:05.820 | Then I think basically the contracts start to blow up.

00:29:10.220 | They start to get out of hand and they have to be managed carefully.

00:29:14.060 | So as with anything with life insurance, it's a crazy complicated idea, which is why you

00:29:19.460 | can't explain it to your 14-year-old, but that's fundamentally how it works.

00:29:24.460 | So that's probably the question.

00:29:28.060 | Since he's talking about these paid-up additions where I can continue to pay into the policy

00:29:32.140 | and then use that almost as a savings account, he was talking that, "Hey, you put in – this

00:29:37.660 | year you only have $5,000 to put in an addition.

00:29:39.980 | That's great.

00:29:40.980 | Next year you only have $1,000.

00:29:41.980 | The next year you have $10,000.

00:29:43.580 | And then the following year you need to pull money out."

00:29:45.420 | He goes, "That's fine.

00:29:46.420 | You can pull money out at any time and you'd never have to pay it back."

00:29:50.380 | Yeah.

00:29:51.380 | And so that's the kind of language that is often used that makes me nervous.

00:29:56.580 | And in a sense, it is technically correct.

00:30:00.420 | As long as the policy dividend rate is being paid out and it's substantial, as long as

00:30:06.260 | those interest payments are covered and as long as the policy stays in force, you don't

00:30:11.180 | technically ever have to pay the loan back.

00:30:14.500 | However, if something changes, if there are – there's a significant decrease in dividends

00:30:20.540 | or if you stop paying premiums or if interest rates – well, if interest rates rise, dividends

00:30:28.460 | would follow.

00:30:29.460 | But if there's a substantial change, then the policy can start to be – the policy

00:30:35.660 | can start to be on thin ice.

00:30:36.940 | I can't actually explain this verbally.

00:30:40.140 | If I had an insurance license, which I don't anymore, and if I were selling life insurance,

00:30:46.220 | which I don't, I would be sitting with you and I would show you and I would illustrate

00:30:49.940 | a couple of different scenarios.

00:30:51.580 | And here's why this is very important.

00:30:55.020 | Back in the '80s, a lot of life insurance policies were sold under very optimistic assumptions.

00:31:02.180 | And in the illustrations that you have seen, there will be some kind of assumption that

00:31:06.860 | has been made as far as what rate of return is this policy earning on its cash values.

00:31:14.020 | If that assumption turns out to be right, everything will function as has been illustrated

00:31:19.180 | to you.

00:31:20.260 | But if that assumption turns out to be wrong, then things will change.

00:31:25.640 | Life insurance illustrations are not guaranteed pro forma representations of how something

00:31:31.940 | will function.

00:31:33.320 | They are illustrations of how something would function under certain circumstances.

00:31:41.900 | So that's where it's impossible for someone like me to comment on it until or unless you

00:31:45.360 | see what the actual assumptions were.

00:31:46.780 | So back in the '80s, a lot of people were buying life insurance policies and the dividend

00:31:51.240 | rate that was being assigned as crediting to the policy might have been 12%, 13%, 14%,

00:32:04.780 | 15%, which is insanely high when compared to the historical return of life insurance.

00:32:12.640 | Remember always that life insurance, when the company is investing your premiums and

00:32:19.140 | you're using the life insurance policy that's drawn on the company's general portfolio,

00:32:24.420 | the vast majority of that portfolio is invested in fixed income securities, which are always

00:32:30.820 | going to have a lower rate of return than something like stocks.

00:32:36.900 | Life insurance companies have to invest their money very, very conservatively because they

00:32:41.500 | have major draws on the money, major potential draws on the money.

00:32:45.180 | They have to have the portfolio set to make big payments out when they pay out death benefits.

00:32:51.800 | So because of that, life insurance portfolios will generally perform more like a fixed income

00:32:58.100 | fund than they will like a stock fund in terms of long-term rates of return.

00:33:03.260 | And so many life insurance agents sold these policies and represented them at 12%, 13%,

00:33:08.780 | 14% interest rates.

00:33:10.240 | And then all throughout the '90s and then the 2000s, interest rates plummeted.

00:33:13.980 | And today, they've been historically low for historically long.

00:33:17.260 | Well, those policies started to blow up.

00:33:19.300 | And by blow up, I mean you needed to write big premium payments.

00:33:22.540 | A lot of them were sold using the terminology which is now banned in the industry called

00:33:26.420 | vanishing premium, where it was sold under the idea that you can purchase this contract,

00:33:31.420 | you can pay the premium, but then over time, you won't have to pay the premium anymore.

00:33:34.740 | The premium will vanish.

00:33:36.420 | And if everything had performed as it was illustrated, that would have worked.

00:33:40.540 | But because interest rates declined, that didn't work.

00:33:44.940 | Now, in today's world, it's much safer because the companies, generally, as long as it's

00:33:49.220 | an ethical company, they are going to make sure that those illustrations are run at something

00:33:54.500 | close to today's rates.

00:33:56.380 | And today's rates are historically low.

00:33:58.280 | And so it's unlikely to have those major changes in the policy.

00:34:04.040 | And so you're much safer with your illustration.

00:34:09.460 | And I've kind of gotten off in the ditch with my explanation.

00:34:11.620 | I forgot the question that you asked.

00:34:13.020 | Go ahead, Ken, with your response and follow-up question, please.

00:34:16.180 | No, you pretty much hit it.

00:34:19.580 | With the paid-up additions, being able to take the money back out, something you've

00:34:24.500 | been saving for a new car, whatever the case is, and not having to pay that loan back.

00:34:29.660 | And that's where reading some of the stuff online is just, I read about it imploding

00:34:33.740 | on itself because of the interest is going to the bank, not necessarily the interest

00:34:38.980 | paying back into your account on these loans.

00:34:43.100 | And that's where it kind of gets a little bit fuzzy for me as far as how I can, every

00:34:46.900 | year put in $40,000 up to that amount or whatever the case is, and then just take the money

00:34:51.620 | out and not have to worry about paying it back.

00:34:54.860 | That's kind of where the question came.

00:34:56.100 | Yeah.

00:34:57.100 | And so when I have looked at this issue, I have never personally become confident with

00:35:02.620 | this language of never paying it back.

00:35:05.220 | I hate to hear that because I feel like that's an overstatement of the circumstances.

00:35:11.820 | It's not that it couldn't technically happen.

00:35:15.380 | And here's again where we fail for lack of numbers, we fail for lack of an illustration

00:35:19.740 | program that we could actually run some scenarios on and demonstrate.

00:35:24.020 | It's not that I couldn't design a contract where I would never have to pay it back.

00:35:27.780 | For example, I own some whole life insurance policies, have some for me, for my wife, I

00:35:32.620 | have them for my children.

00:35:34.420 | I have cash value in those policies.

00:35:37.140 | I could take out a small portion of the cash value in one of my policies that's fairly

00:35:43.140 | mature.

00:35:44.140 | I could take it out, I could spend it on whatever I wanted to spend it on, and I could technically

00:35:48.260 | never have to pay it back.

00:35:50.220 | As long as I continue to pay my normal premium payments, I could never pay it back.

00:35:54.780 | That policy would accrue interest, that policy loan would accrue interest throughout my entire

00:35:58.900 | lifetime.

00:35:59.900 | Remember, of course, that I could only just pay the interest payment or I can have the

00:36:03.460 | policy itself, the cash value, pay the interest payment.

00:36:07.540 | And I could technically never pay it back.

00:36:10.660 | That doesn't mean that it's a good thing for me not to pay it back.

00:36:14.420 | And that's where this – the kind of the gap between advisors and consumers often comes

00:36:20.040 | into play.

00:36:21.860 | As an advisor, I would look at that and I would say, "Is this cheap money?"

00:36:26.740 | Because basically what a life insurance loan is, it's a personal loan that's secured

00:36:31.140 | by the collateral of a cash value life insurance policy, which is very, very safe collateral.

00:36:37.620 | And so I just look at that and I say, "Is this a good, cheap source of money?"

00:36:42.780 | Now what's very flexible about a life insurance policy and using cash value as collateral

00:36:48.620 | is I can always get the money right out of the contract.

00:36:51.800 | But I could also get money from other places.

00:36:53.980 | And so there have been times when I've done analysis on life insurance policies and working

00:36:57.580 | with people, sometimes your best bet is just to owe the money to the insurance company.

00:37:02.780 | Sometimes your best bet is to go down to the local credit union, take out a personal loan

00:37:09.060 | there, and then pledge some of the collateral – pledge the life insurance contract as

00:37:13.660 | collateral to them and sometimes you'll get a better deal.

00:37:17.300 | So this is where I think the bank on yourself and the kind of the sales language that you're

00:37:22.740 | hearing I think is a little bit overstated.

00:37:24.860 | Not that it's completely wrong, not that it's technically wrong, just that it's

00:37:28.820 | exaggerated beyond my personal comfort level.

00:37:32.020 | So I would ask – here's how you solve it, kind of to get practical and try to help

00:37:37.900 | you with your practical question.

00:37:39.980 | I would ask this particular consultant to model and illustrate for you a couple of things.

00:37:46.060 | Have him illustrate for you – in the illustration software we're doing – have him illustrate

00:37:50.820 | the scenario on – let me pause for a moment.

00:37:59.020 | When you do an illustration, the illustration software will demonstrate the premium payment

00:38:03.220 | that you're making into the contract and it will demonstrate the cash value that's

00:38:07.860 | projected in the contract, the death benefit that's projected in the contract, and the

00:38:13.100 | amount of any policy loans that you project in the contract.

00:38:17.900 | So I wouldn't expect you – if you did purchase this particular contract and you

00:38:21.580 | put $40,000 per year into the contract, you wouldn't do that for the rest of your life,

00:38:25.860 | right?

00:38:26.860 | No.

00:38:27.860 | In fact, to add one more little wrinkle into all of this, my goal is to retire in 10 years.

00:38:35.540 | So the money that I'd be putting into here is kind of like my bridge loan is, but the

00:38:40.340 | way I'm kind of thinking in my head, I can't get at my 401(k) or IRA until I'm 59 and

00:38:46.220 | a half, so if I want to retire at 55, I need to find a way to get from 55 to 59 and a half.

00:38:51.260 | So that's kind of where I'm trying to plan for that gap right now, and that's

00:38:55.940 | where this money would be.

00:38:57.140 | So my thought would be in 10 years, I'd want to start pulling money out for living

00:39:01.260 | expenses because this would get me to 59 and a half when I could start pulling out of my

00:39:05.220 | other retirement account, if that makes sense.

00:39:07.140 | Yeah, I would be nervous about that.

00:39:08.580 | If I were an advisor and you were telling me that, I would not want you to do that because

00:39:13.780 | a life insurance contract is not productive enough for you to pay that out short term.

00:39:22.660 | Remember this, so the only benefit you – so the big benefit that you get with life insurance,

00:39:27.300 | and we're kind of conflating many conversations here by talking about college, but the big

00:39:32.220 | – in your case, one of the potential benefits that you're hoping for with a life insurance

00:39:36.160 | contract is the fact that these assets are not required to be listed as use assets on

00:39:42.020 | the FAFSA.

00:39:43.340 | What is a benefit?

00:39:44.340 | I don't know what the impact of that would be on your children's eligibility for student

00:39:50.420 | aid.

00:39:51.420 | That's this advisor's job to tell you, is this important or not.

00:39:53.860 | I mean, with your overall financial profile, is this even relevant or is this not relevant?

00:39:58.820 | So that's their job to calculate that.

00:40:00.500 | It's beyond my expertise.

00:40:02.300 | But the other benefit of life insurance, the major benefit is the value of having the money

00:40:08.660 | and the value of the deferred tax on the growth.

00:40:11.740 | You could also say, well, it's a safe asset and things like that.

00:40:15.260 | But there are lots of safe assets that you can buy and for a short term – on a short

00:40:18.860 | term period, you can put the money in plenty of safe assets.

00:40:22.300 | Other example would be creditor protection.

00:40:23.700 | Yes, it's creditor protection, but that – unless you tell me there's a big concern

00:40:27.020 | for you, let's ignore some of those.

00:40:28.940 | The big benefit you're saying is, well, I want my money to grow.

00:40:31.740 | Here's the problem.

00:40:33.280 | Life insurance contracts, whole life insurance contracts do not work well for short term

00:40:37.560 | financial needs.

00:40:39.220 | The reason is, one, they have too many expenses that are front-loaded.

00:40:43.820 | There are too many costs up front to work for short term needs.

00:40:47.940 | So for 10-year dollars, for 20-year dollars, 20-year dollars would be the minimum dollars,

00:40:52.980 | the minimum time horizon that I'd ever want to be pulling out of a life insurance contract.

00:40:56.900 | For 20-year dollars, I want other – I want CD ladders.

00:41:00.260 | I want shorter term things that are more liquid.

00:41:04.660 | Now 30-year dollars, 40-year dollars, 50-year dollars, these are great dollars for a life

00:41:08.940 | insurance contract.

00:41:10.260 | But 10-year dollars are not good dollars for a life insurance contract because there's

00:41:14.100 | not enough time for the contract to make up for its heavy establishment costs.

00:41:19.020 | There's too many expenses up front.

00:41:21.020 | Just like – think of it like buying a house.

00:41:23.260 | Very few people can successfully wheel and deal and sell out of their house every five

00:41:27.140 | to ten years and make money.

00:41:28.420 | There are too many costs to realtors' commissions, fixing it up, buying new curtains, repainting,

00:41:34.140 | replacing stuff.

00:41:35.140 | Like it just doesn't work for most people.

00:41:36.580 | Life insurance contracts are the same thing.

00:41:38.500 | The second reason is there's not enough time for there to be any substantial growth

00:41:41.900 | in money such that the tax savings are actually worth anything.

00:41:45.740 | If you put in $40,000 per year and ten years from now you have $475,000, all you've effectively

00:41:52.540 | done is given yourself the ability to defer the tax on the $75,000 of growth.

00:41:59.180 | Big deal.

00:42:00.180 | Like that's really not all that useful.

00:42:01.900 | So for this, for what you're describing, I don't like it.

00:42:04.900 | I don't think it's a good solution for your bridge money, not unless the policy were

00:42:09.460 | put in place 20 years ago.

00:42:11.500 | Now my policies, which were all put in place when I'm much younger than you, my policies

00:42:16.580 | could work really well as bridge contracts, as bridge policies.

00:42:21.260 | Because if I were in your solution and I started the policies earlier, 55 years old, and now

00:42:25.900 | I'm in a situation where I'm trying to retire at 55, I'll have plenty of cash value.

00:42:32.260 | And then in that situation, I can easily use those policies.

00:42:35.420 | I can do loans out of the contracts, which I pay in later with other funds if I take

00:42:40.340 | them out without penalties, et cetera, and they're really, really useful.

00:42:43.260 | So I love whole life insurance contracts.

00:42:44.940 | I think they're valuable components of the whole.

00:42:48.860 | But they don't generally work as like the catch-all, end-all, be-all.

00:42:52.860 | They work as one asset among many that have unique advantages that can – unique attributes

00:42:59.260 | that fit well in an overall portfolio.

00:43:01.700 | Wow, that's awesome.

00:43:04.260 | That's exactly what I was hoping to hear from you, is that every time I kind of sat

00:43:10.500 | down to look through this, it just kind of got overwhelming as I'm trying to put all

00:43:13.220 | these pieces together and nobody was clear enough to give me that picture.

00:43:16.900 | So I really appreciate your insight into this.

00:43:18.660 | Thank you so much.

00:43:19.660 | Yeah, you're welcome.

00:43:20.660 | And then back to you, I want to give you kind of your action step, what you should do with

00:43:23.740 | this advisor, OK?

00:43:24.820 | I think you're getting decent advice.

00:43:27.500 | I don't know this particular advisor's amount of experience, but I haven't yet heard any

00:43:32.060 | danger science that would say, "Let me run for the hills screaming."

00:43:35.500 | I think you're getting decent advice, a little bit of exaggeration perhaps, but I mean that's

00:43:42.700 | not red flags.

00:43:44.060 | It's kind of like the real estate agent saying, "You're going to love the house."

00:43:46.740 | Well, the real estate agent doesn't know if you're going to love the house or not.

00:43:49.580 | Now here's how you can try to make a good decision.

00:43:55.300 | Take a scenario that you think is practical for how you actually want to use the policy

00:44:02.140 | and run that.

00:44:03.140 | So for example, you're not going to put $40,000 of premiums into the policy for 30 more years.

00:44:08.640 | You're planning to retire in 10 years.

00:44:10.660 | So start by saying, "Here's what I want you to illustrate for me.

00:44:15.000 | Let's put $40,000 into the contract for 10 years.

00:44:19.780 | Then let's put $0 because you don't want to be putting money into a life insurance contract

00:44:24.060 | when you're retired.

00:44:25.540 | So put $0 for the rest of my life."

00:44:28.420 | Now this is simple to run with illustration software.

00:44:30.720 | They can show you $40,000 in for 10 years and $0 for the rest of your life.

00:44:35.700 | Then you can look at those numbers.

00:44:37.780 | Then think about when you'd want to take money out.

00:44:41.380 | Let's say that – have them illustrate my bridge money.

00:44:45.540 | Show me how much money I could take out of the contract for 10 years between 55 and 65

00:44:51.540 | or show me how I would take the money out for my kid's college.

00:44:56.380 | If you're trying to hide this $200,000 inside the contract over the next four years, five

00:45:00.700 | years before you have to fill out the FAFSA, that's reasonable.

00:45:04.180 | Then illustrate the distribution from the contract for those years of college.

00:45:09.380 | I want to pay $15,000 or $20,000 from the contract for this six to eight-year span of

00:45:15.940 | my children in college.

00:45:17.580 | Then show me what happens with the contract.

00:45:19.860 | Then show me putting the money back in.

00:45:22.300 | They'll show you with the loans.

00:45:23.740 | Now look down towards the end of your life and have them illustrate the full policy term

00:45:28.260 | out to age 120.

00:45:30.020 | You'll start to see how those loan balances accrue and how the interest accrues.

00:45:35.300 | You'll start to see – because what can sometimes happen is all of a sudden now at age 83, the

00:45:40.820 | contract is saying, "Hey, we want a premium payment of $82,000."

00:45:46.540 | Well, that's what I mean when I say the policy is blowing up.

00:45:51.700 | Have the advisor illustrate a few different scenarios for you and I think you'll start

00:45:55.340 | to feel more comfortable with kind of how it works.

00:45:58.540 | Then ask yourself the question and say, "Does this work for me?"

00:46:03.460 | Perfect.

00:46:04.460 | Okay.

00:46:05.460 | Yeah, I like that.

00:46:07.460 | Yeah.

00:46:08.460 | I'm not running screaming for the hills, but I'm also being very careful.

00:46:11.820 | We're talking big money and you don't want to make a mistake here because the cost of

00:46:16.180 | making a mistake is there.

00:46:17.460 | So don't do it until or unless you can explain it to your 14-year-old and get other counsel.

00:46:23.900 | When you're buying a life insurance contract, get a second opinion.

00:46:27.580 | Find another agent from another company nearby.

00:46:30.500 | Say, "Here's what I'm thinking about doing," and have another agent show you what they

00:46:34.860 | can do and use the value of the market and good competition.

00:46:38.300 | Well, Nassar, you mentioned wanting to make it from 55 to – or wanting to bridge from

00:46:43.740 | 55 to 65.

00:46:45.300 | Do you work at a company that you have a 401(k) plan with?

00:46:48.020 | Yeah.

00:46:49.020 | You're familiar with the rule on a 401(k) plan that if you leave the company you're

00:46:52.380 | working at with a 401(k) at 55, you can do so without paying penalty on your distributions

00:46:57.520 | from the 401(k) account?

00:46:59.900 | Yeah.

00:47:00.900 | Maybe not.

00:47:01.900 | So I knew if you left the company, then you would normally switch that over to – into

00:47:07.420 | an IRA.

00:47:08.420 | You wouldn't necessarily keep it at the company, correct?

00:47:10.420 | Yes, except in your situation, you should not move to an IRA.

00:47:14.840 | So if you are working at a company and you have a 401(k) with that company, with the

00:47:21.060 | company that you're working with, if you retire at 55, anywhere from 55 to 59, if you

00:47:28.620 | retire at 55 and if you're still working for that company, then you can make a withdrawal

00:47:35.060 | from the 401(k) plan and you won't pay any early retirement penalties, even if you're

00:47:40.380 | before 59 and a half.

00:47:42.800 | So that is really important for you to notice, to pay attention to, because with bridge money,

00:47:48.860 | what you're probably talking about is how do I get money out of all these accounts without

00:47:52.020 | paying penalties.

00:47:53.020 | You're not talking to me about how do I pay for it, right?

00:47:56.020 | Right.

00:47:57.020 | So the first thing that you should be aware of is if you're planning on retiring at

00:48:00.660 | 55, you can do a withdrawal from your 401(k) as long as that's the company that you are

00:48:07.420 | retiring from.

00:48:09.060 | And of course it will be income and you'll pay taxes on the money, but you're not going

00:48:13.700 | to be paying the 10% penalty tax.

00:48:17.660 | And that is – that's really valuable for you.

00:48:22.820 | And the other thing is the planning opportunity for you is I am 98% sure that there shouldn't

00:48:31.100 | be any reason why you can't – yeah, I'm 99% sure that there's no reason why you couldn't

00:48:37.900 | put IRA money into the 401(k).

00:48:41.220 | And what I mean is if you have IRA money that's in a separate IRA from an old company and

00:48:48.780 | you could go ahead and move it over today into your company 401(k) and then that money

00:48:54.020 | would be available to you during that window between 55 and 59.5, that now you could get

00:48:59.980 | it out penalty-free.

00:49:02.060 | And so that's really important for you to be aware of.

00:49:05.860 | The second thing to be aware of, even if you do have to pay early retirement penalties,

00:49:11.260 | it's still better for you to use retirement accounts and just pay the penalties.

00:49:16.380 | I did an episode on this and this was something that was new for me.

00:49:23.900 | It's episode 314 called How You Can Get More Money for Early Retirement by Using an

00:49:30.700 | IRA or 401(k) Even If You Have to Pay the 10% Penalty.

00:49:35.380 | And in essence, what I demonstrated on that episode, thanks to a listener who demonstrated

00:49:40.620 | it to me, is I proved that even if you have to pay the 10% penalty, you're still better

00:49:46.420 | off putting money in the IRA or the 401(k) and just paying the penalty than you are using

00:49:51.920 | an after-tax investment account.

00:49:53.980 | Now that's assuming of course that you can still contribute.

00:49:57.740 | So if you're maxing everything out, of course you'd have to use an after-tax option then.

00:50:02.580 | But even if you wanted to retire at 55, you're still better off just paying the penalty than

00:50:07.900 | not choosing to put it into a retirement account.

00:50:10.700 | Okay.

00:50:11.700 | Now, when you're talking about taking it from the 401(k) after 55, retiring from that company,

00:50:18.340 | is there a required minimum distribution?

00:50:20.100 | There's nothing that you have to set up saying, "Okay, every year I'm going to take this amount."

00:50:23.020 | You could actually just take a little bit or you can change the amounts you'd withdraw

00:50:26.820 | at that point from 55, 56, 57 type of deal, right?

00:50:29.980 | Yeah.

00:50:30.980 | There's no required minimum distributions from a 401(k) account until age 70 and a half.

00:50:35.380 | So you can choose at any point in time how much money you need.

00:50:40.820 | So you can start off and take a little bit and you could take a little bit more.

00:50:44.620 | The key is just simply that if it's a plan that you – it's easy.

00:50:48.760 | If you are leaving a company and this is your employer right before retiring and you're

00:50:53.460 | taking money from that 401(k) plan, you avoid the penalty tax and you can pick how much

00:50:58.220 | you take out.

00:50:59.220 | So this is probably a silly question, but you said right before you retire.

00:51:02.260 | What is the official definition of retiring, just the last company you worked at before

00:51:05.380 | you quit?

00:51:06.380 | Good question because I never actually – I'm only aware of the rule academically.

00:51:11.740 | I've never actually filled out the paperwork for somebody.

00:51:15.380 | Yes, I would say it's probably just whatever company you're working with right before

00:51:26.420 | you quit.

00:51:27.420 | Again, I've never filled out the paperwork, so I don't know exactly kind of how that

00:51:33.780 | is demonstrated, but you should be able to find that pretty simply.

00:51:39.300 | Okay.

00:51:40.300 | Wow.

00:51:41.300 | Worth your time today?

00:51:44.300 | Oh, my gosh.

00:51:45.300 | Are you kidding me?

00:51:46.300 | This is just – this is priceless.

00:51:48.020 | Now you've given me a lot of homework to do.

00:51:50.820 | And that's what I need.

00:51:51.820 | I need to have some direction which way to go.

00:51:53.140 | So you've given me all that and a box of chocolate.

00:51:56.060 | So I really do appreciate your help on this.

00:51:58.820 | On IRS.gov, if I can remember, I will put here – I'll try to put – remember to

00:52:03.900 | put a link in the show notes.

00:52:11.140 | But on IRS.gov, they have an article called "Retirement Topics, Exceptions to Tax on

00:52:19.500 | Early Distributions."

00:52:21.780 | And what you want is called the "Separation from Service Exception."

00:52:28.260 | So it's "The employee separates from service during or after the year the employee reaches

00:52:33.140 | age 55 or age 50 for public safety employees of a state or political subdivision of a state

00:52:39.380 | in a governmental-defined benefit plan."

00:52:41.940 | And so that's the separation from service.

00:52:43.820 | I don't know what the paperwork looks like, but it should be very simple for you to find

00:52:48.380 | that and just calculate however much money you need in that 401(k) to get you through.

00:52:54.740 | And then with that as well, if you had another side business that you're running, would

00:52:58.860 | that get in the way because you're making income in another business even though maybe

00:53:02.100 | that separate business that you're running doesn't have a 401(k) set up?

00:53:05.420 | Would that kind of conflict with that?

00:53:06.940 | I don't think it would conflict with that because we're just talking about here taking

00:53:10.820 | distributions from a plan and we're just talking about the benefits.

00:53:15.080 | So as long as you're just taking standard distributions, what the IRS calls "regular

00:53:18.920 | withdrawals" from the account, as long as you're just taking regular withdrawals from

00:53:22.240 | the account, it doesn't matter that you have other income.

00:53:25.920 | It's just simply the income from there and being able to avoid the 10% penalty.

00:53:31.460 | So cool.

00:53:32.460 | Thank you for calling in, Ken.

00:53:33.460 | I appreciate it.

00:53:34.460 | Let's go on.

00:53:35.460 | I've got one more caller on the line.

00:53:36.460 | Oops, I just muted this caller.

00:53:38.400 | Let's try again.

00:53:39.600 | Welcome to Radical Personal Finance.

00:53:40.600 | How can I serve you today?

00:53:41.600 | Let's try again.

00:53:46.720 | Welcome to Radical Personal Finance.

00:53:47.720 | Hi, Jayeshwar.

00:53:48.720 | Hi, welcome.

00:53:49.720 | Hi, Jayeshwar.

00:53:50.720 | My name is Ram.

00:53:51.720 | Actually, I have one quick question.

00:53:52.720 | Can I go ahead?

00:53:53.720 | Yes, please.

00:53:54.720 | Go ahead.

00:53:55.720 | Yeah.

00:53:56.720 | So I have around the 200K between my rollover 401(k) spouse IRA, Roth IRA, and my non-retirement

00:54:10.840 | accounts.

00:54:11.840 | So right now, these accounts are between the Wealthfront, Betterment, and Personal Capital.

00:54:22.080 | So actually, I mean, after observing, I mean, since two, three years, I'm just observing

00:54:26.760 | kind of returns and how they're managing my accounts and all those things.

00:54:30.800 | But finally, at this point in time, I'm seriously thinking moving all these accounts into Personal

00:54:35.800 | Capital for a couple of reasons.

00:54:39.640 | The first reason would be, like, I want to keep all my money with one investment firm.

00:54:45.800 | That way, they will apply the same strategy across the board.

00:54:48.880 | And also, if my account total worth is, like, more than 200K, I think they have a special

00:54:56.640 | treatment, wherein they're going to buy my individual stocks and some kind of ETFs, mix

00:55:03.680 | and match both.

00:55:04.680 | I know, I mean, the investment management fee is a little bit high, because I'm in my

00:55:09.120 | day work.

00:55:10.120 | I'm a little busy.

00:55:11.120 | I don't think I can follow all those things.

00:55:12.600 | And then I can spend a lot of time on this rebalancing and all those things.

00:55:16.720 | So what do you suggest?

00:55:18.480 | I mean, is it worth moving all these accounts into one Personal Capital account?

00:55:25.480 | I mean, not one account, multiple accounts, but under the same management.

00:55:29.160 | So do you have any specific suggestions?

00:55:32.800 | I'm a little confused there.

00:55:36.080 | So speaking conceptually, there is generally, in my opinion, no reason to keep money with

00:55:44.200 | different money managers, unless the different money managers are pursuing some unique, dramatic

00:55:55.680 | investment idea.

00:55:57.080 | Let's say you have $200,000, and you want $50,000 to be invested into speculative mining

00:56:07.040 | stocks.

00:56:08.040 | Well, there you'd have to find, who am I going to invest that speculative $50,000 with?

00:56:12.640 | And you'd put your other $150,000 with another manager.

00:56:16.600 | But as far as describing wealth front betterment Personal Capital, these are all basically

00:56:22.320 | mainstream financial approach with a slight technological twist.

00:56:28.960 | There's not any, in my opinion, there's not any major difference between these.

00:56:32.320 | All are pursuing the same fundamental approach.

00:56:36.720 | And so as long as in this situation, I see no benefit to having multiple advisors and

00:56:42.780 | only cost.

00:56:44.040 | The key is to recognize that when you're hiring an investment manager, the amount of money

00:56:48.540 | that you have with the manager matters.

00:56:50.780 | And it matters because it buys you lower fees.

00:56:54.520 | That's what you're describing when you talk about Personal Capital will give you a lower

00:56:58.780 | fee.

00:56:59.780 | This is called a breakpoint in the business.

00:57:02.440 | You have lower fees, that's in your best interest, that gives you, that saves you money.

00:57:08.540 | And it also, frankly, allows you to get better service.

00:57:11.160 | Now most of these are automated or semi-automated versions.

00:57:15.080 | But if you have a lot of money, you want to have it in one place because you get better

00:57:18.160 | service.

00:57:19.200 | Better to be a big fish and get big fish service than to have all your money spread out and

00:57:24.320 | get little fish service everywhere.

00:57:26.040 | Okay.

00:57:27.040 | That makes sense.

00:57:29.040 | And a similar line, because when I do my own R&D, especially average account size with

00:57:37.200 | Betterment and Bellfront is around 30, 40K.

00:57:40.440 | And when I did my own research with Personal Capital, I think the average account size

00:57:45.520 | would be around 100, 150, 200K.

00:57:48.620 | So because most of the clients under Personal Capital is around average network would be

00:57:55.040 | average account size would be around 200, 300.

00:57:57.920 | So I think my, as far as my requirements, that is one of the key decisions why I'm moving

00:58:03.240 | towards this.

00:58:04.240 | I mean, I know you are not going to say that don't go or go, but at least that's my driving

00:58:08.840 | factor.

00:58:09.840 | And when it comes to the fees wise, I know I'm sure Bellfront and Betterment are charging

00:58:14.360 | very less, but Personal Capital is charging little high, like 0.8 or something for my

00:58:18.680 | money.

00:58:19.680 | But somehow I'm convinced I think it's okay because they have some, like, you know, they

00:58:26.480 | have bigger size accounts.

00:58:28.920 | There they can perform, I mean, there they can show a lot of expertise, their expertise

00:58:34.360 | to manage my account.

00:58:35.360 | Yeah.

00:58:36.360 | I don't see any problem with what you're saying.

00:58:38.760 | You've done your research.

00:58:39.900 | You've thought through the approach.

00:58:42.080 | The key is just simply for you to know what you're buying and what you're paying.

00:58:46.400 | As long as you know what you're buying and what you're paying, I'm happy.

00:58:49.560 | And you will be a better investor by choosing somebody carefully that you feel confident

00:58:55.960 | that you like their strategy, you like their service, you like their offerings.

00:58:59.640 | You'll be a better investor because you'll be confident in the decision that you're making.

00:59:03.720 | And then that confidence in your decision will allow you to basically stick with it

00:59:08.920 | through, to stick with it through the tough times.

00:59:14.520 | I personally, my philosophy, the reason why I'm not weighing in and saying you have to

00:59:18.840 | choose this over another, I think it matters as far as your choice here matters.

00:59:23.760 | But it's not, doesn't matter nearly so much as all the other important stuff like, am

00:59:28.680 | I saving money?

00:59:29.720 | You're doing that.

00:59:30.720 | Do I actually have investments?

00:59:31.720 | You're doing that.

00:59:33.200 | Things like, am I actually investing?

00:59:34.640 | You know, the actual type of account, your actual asset allocation with any of these

00:59:38.560 | companies will drive your, will drive your returns far more than which company it happens

00:59:46.480 | to be.

00:59:47.560 | And then you sticking with it, you the investor sticking with the strategy through the crash

00:59:52.200 | that's coming and through the boom that's coming, that will make a big difference.

00:59:56.160 | So you sound like you're well educated on it.

00:59:58.160 | I'm very happy with whatever decision you make.

01:00:01.800 | But my concern was only with management fees.

01:00:04.280 | So with respect to these three, personal capital management fees, 0.89, and with respect to

01:00:10.360 | betterment and welfare, it is 0.25, 0.25.

01:00:13.720 | I mean, that's where I was a little reluctant to move to the personal capital, but you know,

01:00:20.600 | you see what I'm saying?

01:00:22.120 | I mean, everywhere, whatever research that I did, make sure the fees should be low because

01:00:26.360 | it's going to be longterm.

01:00:27.360 | It's going to be really add a good value to your account.

01:00:31.240 | Make sure the fees are as much as possible low and all right.

01:00:35.200 | So yeah, that's where a little confusion I have.

01:00:40.480 | Do you believe that based upon what personal capital is offering to you, what they're saying,

01:00:47.120 | them saying, "Hey, listen, we're going to do these things for you.

01:00:50.400 | And here's the benefits you get with investing for us."

01:00:53.240 | Do you believe that the benefits are there, that the benefits that they're offering are

01:00:59.600 | sufficient and you're willing to pay an extra 64 basis points for that service?

01:01:06.000 | Yeah.

01:01:08.000 | I mean, actually, pretty much whatever other services that they're providing outside investment

01:01:14.120 | management, I don't think a person like me, that is a really value added, right?

01:01:19.160 | Because I'm always, I'm doing my own R&D and I'm following you and listening to all your

01:01:24.680 | podcasts and pretty much whatever they're offering, already I know.

01:01:28.400 | I mean, I'm not going any other things what they're offering.

01:01:32.120 | I'm interested only in investment management because I don't have much time to think about

01:01:36.880 | it.

01:01:37.880 | And as you said, like in the panic times, how to manage and to take care of all those

01:01:42.480 | things, I need some help.

01:01:44.000 | But rest of the things like how to save, how to invest and rest of all things, pretty much

01:01:49.120 | everything you are covering.

01:01:50.120 | And I'm pretty much following every episode of you, right?

01:01:54.840 | Through podcast.

01:01:55.840 | So I don't think they're providing any other value other than this particular item.

01:02:03.320 | So I need to be careful.

01:02:05.240 | I have to be careful legally because I am not a financial advisor.

01:02:09.200 | I cannot advise you to buy or to sell securities.

01:02:12.960 | And that's why people like me always have to be careful.

01:02:16.120 | I can't tell you choose this company, don't choose that company.

01:02:19.680 | I don't know enough about you even to do it.

01:02:22.000 | But here's how you need to approach it.

01:02:24.440 | Number one, you've listened to me enough to kind of handle all the other stuff.

01:02:28.440 | So now when you're at the stage of saying, I need to choose an investment manager, by

01:02:35.480 | what makes sense to you, if you were only focused on the lowest fees possible, which

01:02:42.600 | some people are, then all three of these options are still going to be slightly more expensive

01:02:48.600 | than what you could go and find a broad market index fund from.

01:02:52.400 | I mean Vanguard has index funds that I think are down and have 13, 15, 20 basis points

01:03:00.120 | of cost.

01:03:01.200 | So that's cheaper than 13 basis points is half the cost of 25 basis points that you're

01:03:07.320 | describing.

01:03:09.640 | So you could get cheaper.

01:03:11.820 | But I'm not convinced that you should always go for cheaper.

01:03:15.720 | I think that there is tremendous value with certain approaches to financial management.

01:03:23.440 | I believe that there is value there.

01:03:25.960 | So you've got to look and say, do I, as an individual investor, am I going to get enough

01:03:32.040 | value from this particular company here?

01:03:40.520 | Now I don't know whether these companies, with their algorithms and the automated management,

01:03:45.320 | et cetera, I don't know whether some of these companies can actually deliver on some of

01:03:53.080 | the tweaks that they're offering.

01:03:54.380 | I simply don't know that.

01:03:55.980 | But you've got to answer it subjectively.

01:03:58.680 | You've got to look at it and say, do I get enough value out of this?

01:04:02.840 | And here's the thing.

01:04:03.840 | You're not stuck.

01:04:04.840 | You can leave anytime you want.

01:04:06.680 | So you're not going to be stuck in it.

01:04:10.420 | You're going to have options.

01:04:11.720 | Any of them are fine as far as I'm concerned.

01:04:14.320 | And yes, you should pick, especially now that you've had experience with those three, you

01:04:20.360 | should pick whichever one you like the most and aggregate your money there.

01:04:25.240 | Any other questions, Ram, before I close out the Q&A call today?

01:04:27.640 | That's all for today.

01:04:29.640 | But I was expecting a nice podcast from you about when to go with the investment management

01:04:35.640 | firm, like when a fund reached 100K or 200K.

01:04:41.000 | So that's the right time to go to a management company or whatever it is.

01:04:45.480 | I mean, don't go.

01:04:47.320 | At least due diligence.

01:04:48.600 | I think I was expecting some kind of podcast around that area.

01:04:52.520 | I don't think you have in the past.

01:04:54.240 | So I'm just giving my two cents.

01:04:55.920 | Yeah.

01:04:56.920 | Well, let me answer the question because it's a fair question.

01:04:58.900 | And I think I like to answer questions like that and take them head on.

01:05:04.080 | I'll think about that in terms of could I design some useful approach.

01:05:11.120 | But I frankly don't know if there is an answer to that.

01:05:14.720 | I really don't.

01:05:16.760 | Because I am deeply conflicted over this question of investment management.

01:05:23.840 | And I'm deeply conflicted because the data and my experience in the business are actually

01:05:31.820 | in conflict.

01:05:33.440 | So the data seems very, very clear in terms of choosing investment management.

01:05:41.240 | The data seems clear that you want to deeply focus in on fees and expenses and lower fees

01:05:47.660 | and expenses as much as possible.

01:05:50.160 | When you are simply measuring things like funds, like mutual funds, there is a very

01:05:56.280 | compelling academic case that you should just simply focus in deeply on fees.

01:06:02.020 | And so in that case, I can't argue that.

01:06:05.760 | I don't have any data that would say, well, this is definitely the wrong thing.

01:06:12.020 | But there is, I'm convinced, a huge value that an investment manager provides for their

01:06:20.640 | clients and a personal financial advisor provides.

01:06:25.320 | And I used to charge 100 to 150 basis points.

01:06:30.520 | And small clients is up to 170 basis points of management fees on money when I used to

01:06:35.640 | manage money.

01:06:36.880 | And I don't feel bad about that because I'm convinced I delivered in excess of that value.

01:06:42.400 | I'm convinced I could deliver far in excess of 100 or 150 basis points of value.

01:06:48.500 | But I couldn't necessarily prove it to you.

01:06:50.460 | And so I try not to make statements of things that I can't prove.

01:06:53.780 | But I try to demonstrate those things.

01:06:56.700 | And so the challenge is, how do I discriminate among advisors and advisory firms?

01:07:02.600 | Some financial advisory firms sell things they can't deliver on.

01:07:06.380 | They sell overperformance.

01:07:08.540 | They sell outperformance in certain areas.

01:07:10.260 | And I just don't see how some advisors can deliver what they sell.

01:07:15.060 | However, there are other advisors who I think can deliver what they sell.

01:07:19.180 | And so I don't know the answers.

01:07:21.660 | We live in a time of historic change in the financial markets.

01:07:26.600 | Investors are being pressed on fees in every which way.

01:07:29.260 | And I think it's wonderful.

01:07:30.580 | I love the impact that Jack Bogle, founder of Vanguard, has had on the industry.

01:07:36.380 | He has revolutionized the industry.

01:07:38.900 | And the market has been running to Vanguard in ways in a historic way.

01:07:47.660 | He has won.

01:07:49.620 | And I love that because you see the power of the free market at work.

01:07:52.660 | No government entity – I'll give a short political rant.

01:07:56.060 | No government entity came in and said, "We're going to establish the fees.

01:07:59.340 | If they did that, we would all be paying 400 basis points a year."

01:08:02.300 | It was competition where he came in, Bogle came in, and he said, "We're going to

01:08:06.740 | change this."

01:08:07.740 | And this is changing and revolutionizing the industry.

01:08:09.780 | The major press of tech, Betterment, Wealthfront, personal capital, they're disrupting the

01:08:14.820 | industry.

01:08:15.820 | And it's great.

01:08:17.100 | But it's not everything.

01:08:20.040 | And I guess the other thing – the other reason I'm kind of quiet on some of that

01:08:22.860 | subject is the farther away I have gotten from the world of money management, the more

01:08:28.820 | – hear me rightly – the more silly I think that world is.

01:08:33.940 | It doesn't affect the average person nearly as much as good career decisions, nearly as

01:08:40.100 | much as good decisions on housing, on vehicles.

01:08:43.280 | And I just – I really want to focus on the things that make the difference, not the kind

01:08:46.640 | of the minor things that may or may not make a difference for a tiny subset of the population.

01:08:50.740 | So that's why I haven't focused on it.

01:08:52.820 | Yes, I completely understand that, Joshua.

01:08:55.140 | I really like the answer.

01:08:56.540 | I'm happy for it.

01:08:57.540 | I completely, 100 percent agree with you.

01:09:00.540 | Awesome.

01:09:01.540 | Well, Ram, thank you for calling in.

01:09:03.100 | I'm really glad that you are here listening to the show.

01:09:06.460 | I love it.

01:09:07.460 | And it especially encourages me when you say, "I've listened to the other episodes,

01:09:10.060 | I've listened to past episodes, and I'm putting things into practice."

01:09:14.700 | And hey, man, you got 200 grand.

01:09:16.100 | That puts you in the top – let me not get the decile wrong.

01:09:20.460 | That puts you in the top – probably the top quartile of the American population, which

01:09:26.820 | puts you in the top, what, 5 percent of the world probably with that amount of wealth?

01:09:30.260 | And you're just getting started.

01:09:31.260 | I can hear it in your voice.

01:09:33.260 | Thank you all so much for listening to today's show.

01:09:35.340 | One announcement as we go.

01:09:37.020 | I love doing these Q&A shows and I've tried to keep them exclusively for patrons because

01:09:43.420 | – well, I've just found that to be a good way for me to moderate the number of callers.

01:09:47.700 | So I've tried to do that, but I enjoy doing them.

01:09:51.140 | And so what I've decided is next week, next week I've decided to do some Q&A shows.

01:09:57.420 | Just one week.

01:09:58.420 | I'm not doing it because I really want to keep this as a valuable benefit for the patrons.

01:10:01.980 | I need the patrons to sign up and for you to sign up and again, allows me to moderate

01:10:08.020 | the number of people.

01:10:09.020 | But if you're not a patron of the show and you'd like to call up and ask me any question,

01:10:12.940 | financial planning question, a personal question, anything you want, I'd love to do that.

01:10:17.180 | So next week I am going to open up the phone lines and I am going to do – at the moment

01:10:22.620 | I'm planning to do at least four, maybe five shows with details on where you can call

01:10:28.820 | in and it'll be a live show just like the one that you have just heard.

01:10:32.780 | And this will be open publicly, publicly available.

01:10:36.020 | So I'm going to publish in the show notes for today's show, I will publish a link

01:10:39.960 | with information with the time and the phone number for you to call in.

01:10:43.260 | You'll have to call in during the specific time that I'm recording and the phone number,

01:10:47.660 | all those information will be in the description for today's show.

01:10:52.380 | So if you'd like to call into a Q&A show next week, I'm going to do a special series

01:10:55.340 | and it's almost celebratory as well as we come up on the 500th episode, a special series

01:11:00.260 | of Q&A shows and I'd love to have you participate.

01:11:02.820 | So check the description if you're listening on your phone, just look in the description

01:11:06.460 | right on your phone or you can come by RadicalPersonalFinance.com and you can look at the description for

01:11:11.220 | today's show and you'll find that information.

01:11:13.460 | In the meantime, if you would like to support me and have access for sure, guaranteed access

01:11:17.180 | to a show with extensive amount of time with me like these two callers today, come on by

01:11:21.860 | and become a patron, RadicalPersonalFinance.com/patron.

01:11:27.660 | And remember, 30 bucks off at HelloFresh.com and a promo code RPF30, save 30 bucks on a

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01:11:36.900 | This show is part of the Radical Life Media network of podcasts and resources.

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