RPF0554-How_to_Maintain_Financial_Peace_in_the_Midst_of_Turmoil
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00:00:29.960 | Welcome to Radical Personal Finance, the show dedicated to providing you with the knowledge,
00:00:36.240 | skills, insight and encouragement you need to live a rich and meaningful life now while
00:00:40.840 | building a plan for financial freedom in 10 years or less.
00:00:44.840 | My name is Josh when today I'm going to share with you on a topic that's near and
00:00:47.760 | dear to my heart, but I'm doing so not as a expert, but as an as a fellow traveler,
00:00:54.080 | as a fellow journeyer down this path, enjoying living my rich life now while working towards
00:01:00.440 | financial freedom and financial independence.
00:01:03.600 | And part of that comes with weathering life's storms.
00:01:07.080 | The latest storm is that this was the week that my family and I were going to be packing
00:01:11.040 | up and hitting the road in our RV.
00:01:13.040 | And that's been quite the challenge.
00:01:14.320 | We're already about three months behind our anticipated schedule.
00:01:17.840 | And then of course, it's challenging to move.
00:01:20.560 | Anytime you move, that's disruptive to your life.
00:01:24.000 | Just to pack things up and move from one house to another, that's challenging.
00:01:27.520 | Moving with little children is challenging.
00:01:29.240 | Moving from a house into an RV is challenging.
00:01:32.120 | And then moving while working to maintain a business and all of that is extra challenging.
00:01:37.360 | Well, that was compounded this weekend when my tow vehicle, my big diesel pickup truck
00:01:42.600 | that I bought to pull our travel trailer with was stolen and pretty beat up, pretty messed
00:01:48.840 | up by the thieves this weekend.
00:01:50.680 | The backstory is I had the truck in the shop for a few last minute fixes before heading
00:01:56.920 | out on the trip.
00:01:58.060 | One of which was to have the tinting repaired on the front two windows.
00:02:02.560 | Usually when you buy an older vehicle, yes, you can save a lot of money in depreciation,
00:02:06.000 | but you got a budget for fixing all the stuff that really should have been fixed previously.
00:02:10.000 | And one of those things was the tinting.
00:02:11.760 | Old, it was bubbled.
00:02:13.800 | And so of course, who wants to set out across the country when you can hardly see out your
00:02:18.480 | windows?
00:02:19.480 | It does you no good to be somewhere beautiful if you can't see it.
00:02:22.640 | So it was having the tinting replaced.
00:02:23.840 | Well, Monday morning came in and went to pick up the vehicle only to find out that it was
00:02:28.920 | gone.
00:02:29.960 | And it was stolen over the weekend from right out in front of the tint repair shop.
00:02:34.400 | On the truck, I have a big old or had, we'll get to that in a moment.
00:02:38.360 | I had a big old commercial truck topper, which gives me a lot of storage space in the actual
00:02:44.340 | bed of the pickup truck.
00:02:45.820 | And so because of that, they couldn't quite fit it in their shop.
00:02:48.260 | And so they left it out front and it was stolen over the weekend.
00:02:51.560 | So that started off Monday.
00:02:52.560 | And of course, what usually happens to me is I have very aggressive schedules.
00:02:57.720 | I have all kinds of things that I think I can get done.
00:03:00.920 | I've had to learn to moderate my mouth because usually I think I can do about five times
00:03:05.720 | more than I can do actually.
00:03:08.740 | And that's frustrating to me because doing what I say I'm going to do is important to
00:03:12.520 | me.
00:03:13.520 | And so I put myself in a bind where the creative effusive part of my personality wants to make
00:03:18.000 | all kinds of commitments, but I can't actually follow through.
00:03:21.240 | And then that causes me emotional turmoil to feel like I'm letting down on my commitments.
00:03:25.960 | And so I find that very challenging.
00:03:28.080 | Well, it was a busy week and then all of a sudden it's upset.
00:03:31.400 | We're now going to go meet the police and start to find and figure out what's going
00:03:35.720 | on.
00:03:36.720 | Well, we filed the police report and we immediately found out that the license plate had been
00:03:42.720 | run by some other police officers over the weekend.
00:03:45.600 | So after working with the police for a while and finishing the necessary reporting, decided
00:03:50.300 | to go around and try to look for it and see if it had been abandoned anywhere near.
00:03:54.900 | And so after driving around for a little while, we were able to actually find the pickup truck
00:03:58.080 | abandoned, but pretty much wrecked.
00:04:02.620 | Not totally wrecked.
00:04:03.620 | I haven't heard yet from the insurance adjuster.
00:04:05.920 | I doubt it'll be totaled, but pretty beat up.
00:04:10.240 | So for example, the topper was completely gone.
00:04:14.960 | What it looks like the thieves did is first they stole my pickup truck and then they used
00:04:20.640 | it to commit other crimes.
00:04:22.800 | The police had other crimes, other attempted theft of vehicles and some other things where
00:04:30.060 | my vehicle was visible at the scene, which that's of course not a great feeling.
00:04:36.480 | And in addition to that, they somehow, somewhere, our bet is they tried to use the truck to
00:04:43.840 | ram into an ATM.
00:04:46.560 | Basically they took my pickup truck and they drove it into something crazy hard in the
00:04:51.960 | back end.
00:04:53.320 | So hard that the trailer hitch, which of course I need, was completely destroyed, completely
00:04:58.520 | bent down about a foot and a half.
00:05:00.840 | The tailgate of the truck is missing and the whole big giant commercial truck cap that
00:05:05.720 | I had on the back of it is entirely gone.
00:05:08.520 | Still haven't found it.
00:05:09.520 | I looked around to try to see if I could salvage it, but still haven't been able to find it.
00:05:13.800 | And then of course, then the truck is totally scraped up and just a bunch of cosmetic damage.
00:05:19.600 | So that was my week today.
00:05:22.680 | And that was yesterday and that started off Monday morning.
00:05:26.960 | A busy week of activities, far more than I can ever actually accomplish, all of a sudden
00:05:32.400 | supplanted by something that is more high profile.
00:05:36.280 | And of course, everything is dependent upon our date that this week we're planning to
00:05:39.680 | hit the road and now that truck is not going to be ready on time.
00:05:45.520 | So still working through to see whether it gets fixed, working with the insurance company
00:05:50.320 | and I don't know the end solution yet.
00:05:53.960 | But of course that's disruptive.
00:05:56.040 | Life is disrupted.
00:05:57.040 | When your stuff gets stolen and you have to then figure out, "Well now, what do I do?"
00:06:04.200 | When your stuff is stolen and destroyed by other people, then your life gets disrupted.
00:06:08.800 | And it can be a big financial impact.
00:06:11.120 | So I thought today I'd like to share with you how some of the things that I've learned
00:06:14.880 | over the years to do and that I have done, which helped me to maintain really a sense
00:06:19.940 | of peace through the whole thing.
00:06:21.800 | A peaceful attitude and to enjoy financial peace, even through all the midst of turmoil.
00:06:28.520 | Now I will share with you up front that peace and a peaceful life is very important to me.
00:06:37.520 | It may not be important to you.
00:06:40.160 | Many people don't seem to care about living a peaceful life.
00:06:44.520 | But that's really what I want.
00:06:46.800 | I want to live a peaceful life.
00:06:48.000 | I'd like to just be left alone to just live.
00:06:51.840 | That's very important to me.
00:06:53.280 | I want a minimum of interference from other people.
00:06:55.600 | I want a minimum of interference from circumstances and I don't want a life that is rocked with
00:07:00.760 | drama.
00:07:01.760 | I want to live a very low drama lifestyle.
00:07:05.720 | Some people seem to thrive on drama.
00:07:08.380 | That's about the only way that I can make sense of the lives that some people live.
00:07:13.100 | Some people thrive on adventure.
00:07:14.940 | But for me a high priority is peace, calm.
00:07:22.740 | I work well from a place of peace and I want to develop more and more of a peaceful personality,
00:07:30.080 | a peaceful lifestyle as time goes on.
00:07:32.520 | That's a high priority for me.
00:07:36.040 | And so that's reflected in my personality and in my decisions and the decisions that
00:07:39.760 | I have made.
00:07:41.280 | Because you'll hear in a moment some of the decisions that I've made and that I encourage
00:07:44.840 | you to at least consider.
00:07:47.640 | And some of those decisions may be at odds with your desire for drama or your desire
00:07:53.440 | for a sense of adrenaline coming from your finances.
00:07:57.020 | Some people love to live so close to the edge that it's a constant drama to check their
00:08:02.520 | phone and see if their last check bounced.
00:08:05.140 | They love to not know what the next phone call is going to be, but I don't.
00:08:10.220 | So here are some strategies that I've put in place over the years that have helped me
00:08:14.420 | to really have, even in the midst of all of the unexpected excitement, to have a peaceful
00:08:20.460 | attitude about it and to continue forward.
00:08:23.620 | There are five total.
00:08:24.820 | Number one, recognize it's only money.
00:08:29.500 | This is sometimes hard to actually apply, but here is a maxim by which I that I seek
00:08:34.980 | to live out.
00:08:37.420 | If all I have are money problems, frankly, I don't really have any problems.
00:08:43.620 | I try to be a bit empathetic when saying something like that to people who are right at the edge.
00:08:49.940 | But really, truly, if you only have money problems, you really don't have many problems.
00:09:01.140 | When you compare money problems to some of the other problems of life, matters of life
00:09:07.540 | and death, matters of war and peace, matters of emotional turmoil, money problems, they're
00:09:18.100 | not that big of a deal.
00:09:20.540 | Money problems can be solved.
00:09:24.640 | No matter how deeply in debt you are, you can always get out.
00:09:30.540 | You can get out by working your way out.
00:09:32.220 | You can get out by starting another business.
00:09:33.940 | You can get out by declaring bankruptcy and starting over.
00:09:37.780 | You can always get out.
00:09:39.940 | No matter how deep in the hole you are and what a disaster your unemployment is, you
00:09:43.980 | can get another job.
00:09:46.140 | No matter if you're losing your house, you can find another one.
00:09:49.820 | It's only money.
00:09:50.820 | There's a sense in which that's true.
00:09:52.940 | Now, of course, I affirm that money is important, but it's important to maintain that perspective.
00:09:57.860 | It's only money.
00:10:00.280 | It's not a matter of life and death.
00:10:03.700 | I've matured a lot in the last decade or so because when I was younger, I didn't have
00:10:08.020 | that perspective.
00:10:10.080 | But I first became a financial planner in 2008, and I had the unique privilege of watching
00:10:17.340 | a number of people who had been very successful lose it all and start over.
00:10:24.120 | And today I know a number of them that walked through bankruptcy, their real estate empires
00:10:28.140 | collapsed, their businesses fell apart.
00:10:30.560 | They walked through bankruptcy, they started again, and they're doing just fine.
00:10:36.680 | It's only money.
00:10:39.000 | So here's what I say.
00:10:41.620 | If I can write a check smaller than $10,000 and solve my problem, it's not worth worrying
00:10:48.160 | about.
00:10:49.160 | If I have to write a check bigger than $10,000, but I can still write a check and solve my
00:10:52.720 | problem, okay.
00:10:54.360 | It's more serious, but still, it's not life and death.
00:10:59.680 | So number one, I always begin with that perspective.
00:11:04.480 | Number two, I always just start by recognizing I'm going to be okay.
00:11:12.360 | Now here are some strategies that I have put in place that have convinced me that I'm going
00:11:17.960 | to be okay.
00:11:19.160 | First, I know by proof and by testing that I'm okay with very little.
00:11:27.720 | Of equal importance, I know by proof and testing that my wife is okay with very little.
00:11:35.500 | We have had very few financial resources.
00:11:41.440 | I've made big business mistakes, big investment mistakes.
00:11:46.640 | So we've had very limited resources.
00:11:49.980 | And we've proven to one another that in the midst of turmoil, in the midst of problems,
00:11:55.800 | neither of us is going to freak out and start swiping credit cards.
00:12:01.880 | We're going to be okay.
00:12:04.280 | I've also systematically tested my limits over the years to recognize that I'm really
00:12:10.000 | okay with very little.
00:12:13.200 | I've driven very humble vehicles.
00:12:16.000 | I've lived in very humble places.
00:12:19.040 | I have tested a form of asceticism, seeking to say, "How comfortable can I be with very
00:12:26.920 | little?"
00:12:29.480 | I like to do this just simply with camping.
00:12:31.160 | I think it's good for children, for example.
00:12:33.080 | Go camping and go car camping, but then sometimes just put stuff in a backpack and go way out.
00:12:38.780 | And you can learn that you can be okay with very little.
00:12:42.040 | So I know I'm going to be okay.
00:12:45.840 | I've also seen the lifestyles that so many people live and I can find ways to make them
00:12:50.640 | adventurous.
00:12:52.240 | I read books on how to live as a hobo.
00:12:54.800 | I've often thought, "If I lost it all and I were just a bum living under a bridge, I'd
00:13:00.640 | be a happy bum."
00:13:02.280 | I talk to homeless people all the time.
00:13:03.680 | I could be a happy bum.
00:13:05.560 | There are so many resources available today if you're a homeless bum living under a bridge.
00:13:11.560 | I could do well.
00:13:13.860 | With the entertainment that's accessible to you, for $30 a month that you can get panhandling,
00:13:18.920 | you buy a $50 smartphone and pay $30 a month and you have virtually unlimited data access,
00:13:24.960 | you can have the world's entertainment as a bum living under a bridge.
00:13:29.180 | One time when I was in college, I was curious what it was like to be a panhandler.
00:13:35.280 | And so a buddy of mine, we went out and we panhandled for an afternoon.
00:13:39.040 | We wrote signs and I forget the exact syntax we used on the sign, but it was something
00:13:45.940 | like "Need money for college" because we were both in college.
00:13:50.180 | We wrote something honest.
00:13:51.380 | We didn't say we were broke.
00:13:52.580 | We didn't say we were desperate.
00:13:54.300 | We just wrote, "Need money for college."
00:13:56.660 | And then we went and stood by the side of the road.
00:13:59.540 | We panhandled for an afternoon.
00:14:01.980 | It was one of the most unique experiences I've ever had.
00:14:05.460 | It really impacted me.
00:14:07.500 | I got to understand what it was like to be the guy standing on the corner.
00:14:11.540 | And we did it almost as a lark.
00:14:14.460 | We were wearing normal clothes, probably flip-flops and khaki shorts or something like that, but
00:14:19.780 | just watching people avoid us, watching some people read the sign, enjoying the laugh that
00:14:24.180 | people would have as they gave us money.
00:14:25.860 | I couldn't recite accurately the amount of money that we were given with our afternoon
00:14:32.300 | of panhandling.
00:14:33.820 | But it was not insubstantial.
00:14:37.660 | And so if I were forced to panhandle, I wouldn't go and do it in a serious way.
00:14:42.660 | I would go and work instead.
00:14:44.140 | But the point is, it's not that bad.
00:14:47.540 | I encourage you, take advantage of these opportunities and test yourself.
00:14:52.180 | Do something that makes you uncomfortable and see if you're okay with it.
00:14:58.460 | Walk a mile in another man's moccasins.
00:15:03.500 | It would really help you.
00:15:06.980 | It helps you to understand people and to empathize in a way that perhaps you would find difficult
00:15:12.940 | in another context.
00:15:15.120 | So whatever you're scared of, go and try it.
00:15:18.540 | And you'll be the one who will gain the most.
00:15:20.860 | I had a unique experience also when I was in college.
00:15:24.060 | I traveled to Egypt with some classmates.
00:15:28.100 | And this was a few years after 9/11.
00:15:32.500 | And we're coming back from Egypt and I had a few weeks of beard on my face.
00:15:37.580 | And I thought it would be interesting to see what it would be like to be perceived as a
00:15:42.060 | Muslim traveling into the United States.
00:15:44.300 | And we were traveling through New York City.
00:15:46.460 | So on the trip back from Cairo back to Florida, passing through New York City, I wore a complete
00:15:52.660 | galabeya.
00:15:53.660 | I wore the Egyptian robe.
00:15:56.020 | I had a beard and I wore a turban the whole time.
00:16:00.840 | So I looked pretty authentically basically Egyptian Muslim traveling into the United
00:16:06.300 | States.
00:16:07.300 | So I went through airport security.
00:16:08.740 | I watched everybody's eyes and I experienced what it was like to be profiled as a Muslim
00:16:15.380 | walking onto an airplane.
00:16:17.180 | And it was fascinating getting onto an airplane in New York City, wearing a long robe and
00:16:22.740 | a turban, walking down.
00:16:24.300 | My seat was at the back of the airplane and walking down the aisle, experiencing everybody
00:16:30.380 | looking at me, it impacted me, changed my perspective.
00:16:34.300 | Those are just a few stories from my life in the past.
00:16:36.340 | But the point of these stories is to say that over time you can cultivate an understanding
00:16:42.680 | that I'm okay with very little.
00:16:47.360 | You can practice, if you usually stay at the five-star hotel, sometimes go and stay at
00:16:51.460 | the $10 a night hostel.
00:16:53.940 | So you can find out that in traveling I don't only have to stay at the five-star hotel.
00:17:00.780 | Build that resilience in yourself and it can help your self-confidence.
00:17:06.260 | I also have a clear worldview that shapes my acknowledgement that I'm okay with very
00:17:14.060 | little.
00:17:15.620 | The Christian religion, which I'm a part of, doesn't teach that money is the number
00:17:22.340 | one goal of life.
00:17:26.580 | The US American religion often does, but the Christian religion often doesn't hold that.
00:17:32.020 | It doesn't teach that money is unimportant, but that it is put into its proper place.
00:17:35.900 | And perhaps in this context, the most important passage that personally shapes my attitude
00:17:42.380 | comes from the first book of Timothy.
00:17:44.780 | The writer says, "But godliness with contentment is great gain.
00:17:50.820 | For we brought nothing into the world and we cannot take anything out of the world.
00:17:54.420 | But if we have food and clothing, with these we will be content.
00:17:59.380 | But those who desire to be rich fall into temptation, into a snare, into many senseless
00:18:04.860 | and harmful desires that plunge people into ruin and destruction.
00:18:09.280 | For the love of money is a root of all kinds of evils.
00:18:12.760 | It is through this craving that some have wandered away from the faith and pierced themselves
00:18:17.360 | with many pangs.
00:18:19.100 | But as for you, O man of God, flee these things.
00:18:22.440 | Pursue righteousness, godliness, faith, love, steadfastness, and gentleness."
00:18:30.360 | So when comparing a financial problem to gaining a sense of its importance, the question I
00:18:37.960 | always say is, "Is it going to affect my food and clothing?
00:18:41.040 | Because with food and clothing I can be content, and you can as well.
00:18:46.200 | With food and clothing, I have enough.
00:18:50.160 | I know people all around the world who don't have enough food and don't have enough clothing,
00:18:53.320 | but we who live in wealthy societies, we have more food and more clothing than we can handle.
00:18:58.360 | We spend all of our time talking about how we can get rid of all of our clothing and
00:19:02.040 | live with just the bare minimum.
00:19:04.320 | It's rather remarkable how far we have come in terms of the wealth of a society.
00:19:11.440 | And so you can cultivate contentment as a virtue, and then from a place of contentment,
00:19:19.000 | you can enjoy the full riches of life.
00:19:23.160 | So that's number two.
00:19:24.160 | I'm going to be okay.
00:19:25.160 | I'm okay with very little.
00:19:27.000 | Food, clothing, that's enough.
00:19:31.200 | That's enough.
00:19:33.200 | Nothing more is extra.
00:19:34.480 | I'm going to enjoy more, but food and clothing is enough.
00:19:42.480 | Number three, always live within, and preferably below, perhaps even far below, your means.
00:19:49.680 | The times that I have been most stressed have been caused by my own hand, because I didn't
00:19:56.760 | discipline my desires, rather I indulged them and lived beyond my means.
00:20:04.680 | So by developing discipline and by living within means and below them, or even far below,
00:20:12.800 | the impact of harm and problems, like your truck getting messed up or your house burning
00:20:18.960 | down, those things can be of much less impact.
00:20:25.360 | So live within and preferably below your means.
00:20:30.920 | It was ironic, because on Saturday evening, which was the time at which my truck was being
00:20:39.160 | stolen, my wife and I were talking about some other RVers that we knew, and we were admiring
00:20:45.960 | their very beautiful RV that they had bought for their family.
00:20:51.440 | Now, I don't know anything about their financial situation.
00:20:55.800 | I know nothing, so I'm merely speculating, but I'm aware of enough clues, due to experience
00:21:05.400 | as a financial planner, to think that they probably are not multimillionaires at this
00:21:11.120 | point in time.
00:21:12.920 | And they were looking in, bought a beautiful RV, and I just thought to myself, they were
00:21:18.120 | going full-time on the road, and I thought, "That would be so stressful, so stressful
00:21:22.760 | to make big decisions, to buy big fancy things when you haven't tested it."
00:21:29.600 | Maybe a year from now, two years from now, I doubt I'll still be RVing, but if I am,
00:21:34.520 | maybe I'll buy a big fancy beautiful rig.
00:21:37.000 | But I'm not going to make big financial commitments when I have little actual knowledge.
00:21:45.040 | And I'm not going to make big financial commitments that would impact other aspects of my money,
00:21:50.600 | of my wealth.
00:21:52.900 | So by restricting yourself to lower cost, more frugal options, you buy freedom.
00:22:03.200 | Remember, if you look at people, and you study the psychology and the behavior of why certain
00:22:08.480 | people behave as they do, the people who drive a cheaper car and also have money, because
00:22:19.840 | many people drive cheap cars because that's all they have, but somebody who drives a cheaper
00:22:23.720 | car and has money, they don't do it because they don't like the fancier car.
00:22:34.600 | They do it because they like something else more than they like the fancier car.
00:22:40.800 | My case, that's freedom and independence.
00:22:43.880 | So I'd rather have a not very fancy truck.
00:22:46.440 | I'd rather have a not very fancy trailer because what that means to me is more freedom, more
00:22:53.520 | independence now and 30 years from now, more peace, more rest.
00:23:02.320 | I don't have to worry about my children destroying a brand new truck.
00:23:08.000 | We're going to learn to be good stewards of whatever we have.
00:23:10.480 | That's important.
00:23:11.480 | I don't want them destroying any truck, but I don't have to freak out if it gets scratched
00:23:16.200 | or hit, et cetera.
00:23:18.640 | So I value that freedom, that simplicity.
00:23:22.440 | And I think it's proven out in terms of when the truck falls, when the truck gets stolen,
00:23:28.960 | it's going to be okay.
00:23:33.160 | It's going to be fine because the truck should be, as compared to your total wealth or my
00:23:40.960 | total wealth, it should be a very small figure, generally speaking.
00:23:48.520 | Your house, if it burns down, that house should represent something significantly less than
00:23:57.520 | all of your wealth.
00:24:00.080 | I don't know what that right number is.
00:24:02.120 | I don't know of any way you could make an actual numerical formula.
00:24:05.200 | So just giving you a gut sense, a gut feeling here.
00:24:08.880 | But a wealthy person who lives in a $10 million house or a $100 million house, you can usually
00:24:15.080 | be pretty confident that their total wealth is not $10 million or $100 million.
00:24:21.580 | They may live in a $100 million house, but they probably have several hundreds of millions
00:24:27.200 | elsewhere.
00:24:29.320 | But what's strange is it's not unusual to find somebody who lives in a $250,000 house
00:24:35.800 | whose total net wealth is tied up in that house.
00:24:40.800 | That's very normal.
00:24:42.680 | It's also very broke.
00:24:47.280 | So keep the stuff.
00:24:49.680 | Don't diversify your money.
00:24:51.020 | Don't let all your money be tied up in a single thing.
00:24:53.560 | Because that way if your truck is stolen or your house burns down or your vacation cottage
00:24:57.280 | is ransacked or whatever the case is, it's not a wipeout blow.
00:25:04.320 | Keep it low.
00:25:06.040 | Don't allow yourself to have all your money tied up in one thing that can be destroyed.
00:25:11.360 | Live within your means, preferably well below your means.
00:25:14.880 | The only reason I would hedge here is there are people who, for example, using the RV
00:25:20.280 | example, because that's the stage I'm at, there are people who are looking and saying,
00:25:24.400 | "I don't have a lot of money, but I'm going to trade in my rent for this motorhome."
00:25:29.480 | I understand that, but it's still a dangerous place to be and you should work as quickly
00:25:33.760 | as possible to make sure that that motorhome is only a small portion of your total wealth.
00:25:41.080 | Buy right.
00:25:42.440 | Go slow.
00:25:43.600 | Be careful.
00:25:46.080 | One of the big benefits of living below your means is you can always get out with a minimum
00:25:51.120 | of stress.
00:25:53.320 | If you get in and you find out, "Hey, I don't like this," two months from now I may be speaking
00:25:57.820 | to you in front of a microphone saying, "Not for us."
00:26:01.120 | In that situation, put stuff up for sale.
00:26:05.860 | Should be able to get most of my money out of it.
00:26:07.420 | Put stuff up for sale.
00:26:09.220 | Move on.
00:26:10.220 | That's number three.
00:26:11.220 | Live within and below your means.
00:26:12.460 | Number four, maintain spending flexibility.
00:26:15.940 | Most financial problems can be solved fairly quickly if you have spending flexibility.
00:26:24.220 | The challenge is many of us commit our budgets far in advance.
00:26:34.060 | By committing our budgets far in advance, we don't have a lot of flexibility.
00:26:39.820 | I've encouraged in various occasions that you do a mental game.
00:26:47.420 | Consider the fact that you and perhaps your spouse, both of you just lost your job.
00:26:53.800 | If you had to cut your lifestyle to the bone, go as deep as you could, how would that impact
00:27:04.460 | you?
00:27:05.460 | What would you do?
00:27:06.460 | How could you cut?
00:27:13.200 | If you could cut really low, you've got a lot of flexibility.
00:27:16.580 | Just because you could cut doesn't mean you have to cut, but the knowledge that you could
00:27:22.500 | cut can help you to get through most problems.
00:27:27.460 | If you have a car breakdown and you cut other expenses dramatically and then you then come
00:27:35.460 | back and increase your expenses after you replenish your emergency fund, that's a much
00:27:42.760 | less stressful way to do it than to all of a sudden now have to pay back a loan to the
00:27:48.740 | mechanic or the car place.
00:27:53.500 | In any expense, you can't avoid all expenses.
00:27:56.260 | If you have rent, you can't avoid paying that rent, but hopefully that rent is as low as
00:28:00.940 | you can reasonably make happen as compared to your income.
00:28:05.220 | But many other expenses can actually be canceled in an extreme situation.
00:28:14.340 | I'm allergic to contracts.
00:28:17.220 | The reason I'm allergic to contracts is because I've been burned.
00:28:21.740 | I usually find that I'd rather pay a little bit more if I had to in order to avoid a contract
00:28:31.220 | than to be in a place of a contract.
00:28:35.160 | You can't avoid contracts everywhere, but wherever you can, I encourage you to avoid
00:28:39.980 | them.
00:28:42.900 | Perhaps I'm uniquely sensitive to this because so much of my personal income has been highly
00:28:48.580 | fluctuating for the last decade.
00:28:51.300 | There have been times when I made a ton of money and there have been times when all the
00:28:54.940 | money that I made just flowed right out and I made no money.
00:28:58.620 | One of the unique attributes of the financial planning business is called chargebacks or
00:29:03.280 | I've forgotten the word of what it is, basically the equivalent of a chargeback where let's
00:29:10.000 | say that you sell an insurance policy and you get paid your commission.
00:29:13.520 | Well, you get paid your commission up front usually.
00:29:17.120 | And then all of a sudden, your client that loved the insurance policy they bought, four
00:29:22.720 | months in decides they're going to cancel it.
00:29:25.640 | Well, they cancel it and all of a sudden, two-thirds of your commission is charged back
00:29:31.560 | to you and you go into the negative.
00:29:35.880 | And until you have a big enough stable form of income, in the financial world with financial
00:29:42.640 | product sales and financial planning, you can basically never trust that you're going
00:29:46.100 | to get paid next month because you don't know what's going to happen.
00:29:51.160 | There may be times and there were times when I would write 10 insurance policies during
00:29:57.080 | a pay period.
00:29:58.960 | And then in the next pay period, a giant one was canceled and all the commissions disappeared
00:30:04.840 | from the other nine because the giant one was charged back.
00:30:09.120 | So that may have made me uniquely allergic to contracts, but I found it to be very helpful.
00:30:16.280 | In thinking about RV lifestyle, I read several books from people who were teaching others
00:30:21.560 | how to travel full-time and live in an RV on social security, very small payments, $600
00:30:27.600 | a month, et cetera.
00:30:29.560 | And one of the unique benefits of RV living is the flexibility.
00:30:35.100 | If you have a lot of money, you can put a lot of fuel in your gas tank and you can go
00:30:38.640 | far.
00:30:39.640 | If you don't have a lot of money, you can park and wait until you have more.
00:30:44.680 | If you have a lot of money, you can stay in fancy parks.
00:30:47.840 | If you don't have a lot of money, you can stay in a Walmart parking lot.
00:30:52.440 | And so RVers have the unique ability of being able to expand their lifestyle and contract
00:30:56.640 | it as needed.
00:30:58.300 | So when you read about these RVers who are living on $800 a month, $1,000 a month, $1,200
00:31:03.240 | a month of social security, you see that when their engine blows up, they can recover from
00:31:08.200 | that.
00:31:09.200 | Because then for the next few months until they've replenished their emergency funds,
00:31:12.760 | they live super cheap.
00:31:16.240 | You can apply that whether you live in an RV or not.
00:31:19.760 | Maintain spending flexibility.
00:31:22.320 | Avoid debt.
00:31:23.480 | Avoid contracts.
00:31:24.760 | Keep a creative mind.
00:31:26.580 | Think about how you can solve problems with less money.
00:31:30.120 | And be humble.
00:31:32.020 | Be willing to be humble.
00:31:34.480 | And number five, insure well.
00:31:38.480 | Insure well.
00:31:41.040 | Insurance is wonderful.
00:31:45.480 | It's one of, in my opinion, one of the most marvelous inventions that we've come up with.
00:31:50.420 | Insurance is wonderful.
00:31:52.720 | It can take what could otherwise be a disaster, a major setback, and turn it into a simple
00:32:01.080 | speed bump.
00:32:08.600 | If you first do these other things, then you can afford the insurance payments.
00:32:15.640 | And that financial tool will help to smooth so many things out in life that you don't
00:32:23.160 | experience the lows.
00:32:28.080 | So many people will go and they'll buy something like an expensive RV, but because the payments
00:32:33.800 | are so high, they don't insure it very well.
00:32:39.000 | And then something catastrophic happens, and they're left making payments on a vehicle
00:32:46.320 | that was destroyed.
00:32:48.560 | If you buy a cheaper RV, or a cheaper car, or a cheaper house, or a cheaper motorcycle,
00:32:53.760 | or whatever, and you insure it well, you can afford it.
00:33:00.000 | Then if you have a total loss, it's not a huge problem.
00:33:05.360 | That's thankfully the case with even the truck that I have.
00:33:09.280 | It's well insured.
00:33:11.440 | And so because it's well insured, I'm covered.
00:33:15.880 | We'll work things out with a quality insurance company.
00:33:19.240 | We'll make a fair deal, and either we'll fix the truck, or I'll buy another one.
00:33:26.520 | So insure well.
00:33:28.640 | If there's something that would keep you up at night because you can't afford to lose
00:33:32.080 | it, insure it.
00:33:36.160 | Or if you're going into circumstances that you're not quite sure about, check into insurance.
00:33:44.240 | If you're going to go traveling and you want to wear your fancy ring, insure it.
00:33:47.240 | Just insure it for a year.
00:33:49.080 | That way if it gets stolen, it'll be restored to you.
00:33:52.920 | If you have some valuable stuff in your house, insure it.
00:33:57.680 | If you have a vehicle, insure it.
00:34:02.240 | Many times we sit down and we try to figure out what's the cheapest thing that I can get.
00:34:08.440 | I've done that.
00:34:09.440 | I do the calculations.
00:34:10.720 | For example, with vehicle insurance, generally I want to have vehicles that if they were
00:34:15.520 | totally destroyed, it's not that big of a deal, I'll just buy another one.
00:34:20.120 | And so usually buying liability only insurance can often make sense, especially if you're
00:34:25.960 | dealing with less costly vehicles.
00:34:29.200 | But price it the other way and then ask yourself, assume it was a total loss.
00:34:34.400 | Would I be freaked out?
00:34:36.800 | Would I be losing sleep?
00:34:39.200 | If the answer's yes, insure it.
00:34:44.080 | Insure well.
00:34:46.240 | Think if you build these things over time, you can build a lifestyle of financial peace.
00:34:51.880 | You can enjoy that financial peace and I'm convinced that that financial peace will improve
00:34:58.560 | many other areas of your life.
00:35:02.480 | I've very rarely seen a marriage relationship that was difficult.
00:35:07.640 | I've rarely seen such a relationship improved by financial turmoil.
00:35:13.880 | I've very rarely seen children who are going through difficult experiences in life, who
00:35:22.200 | are really struggling in something health-wise, physically, psychologically.
00:35:28.120 | I've very rarely seen those children have that experience improved by financial turmoil
00:35:36.240 | in their family.
00:35:39.840 | I've very rarely seen somebody whose personal life was difficult.
00:35:44.360 | They were experiencing depression.
00:35:46.720 | They were struggling with confidence or struggling with a health issue.
00:35:51.040 | I have very rarely seen that circumstance improved by financial turmoil and catastrophe.
00:36:03.320 | If you say that's too obvious, well, consider again.
00:36:10.480 | You can't guarantee that you never face financial turmoil.
00:36:13.580 | You can't guarantee that you don't experience total loss, but you can protect against so
00:36:19.600 | many things and you can protect against the most likely ones.
00:36:26.080 | So those are my five tips for you.
00:36:27.640 | It's been quite the adventure.
00:36:28.640 | We'll be on the road just as soon as we can.
00:36:30.400 | But one more comment.
00:36:34.360 | One of the things I've also learned to do is to make fewer commitments.
00:36:38.640 | We have intentionally not established a firm calendar schedule of all the places we're
00:36:44.480 | going to be because I knew there are too many things outside of my control.
00:36:48.160 | I couldn't be there.
00:36:49.160 | I can't plan that far ahead.
00:36:51.280 | I can't say six months from now I'm going to be in California on this date for this
00:36:54.360 | particular event with my listening audience.
00:36:58.740 | And so even just in your own lifestyle, if you can pull back on some of those things,
00:37:02.920 | then you can deal with the bumps in the roads that come along.
00:37:07.580 | That's enough for today.
00:37:08.580 | Number one, it's only money.
00:37:09.580 | It's not life or death.
00:37:10.580 | If you have money problems, they're problems, especially if they're over $10,000, they're
00:37:14.840 | problems, but you can solve them.
00:37:18.180 | Money problems in the grand scheme of things are not such a big deal compared to some other
00:37:22.920 | problems that you might have.
00:37:24.800 | Number two, I'm going to be okay.
00:37:27.240 | You're going to be okay.
00:37:28.240 | And I'm going to be okay because I'm okay with very little.
00:37:33.200 | Cultivate contentment.
00:37:35.320 | Food and clothing?
00:37:36.760 | I'm set.
00:37:38.680 | Beyond that, everything extra, it's just extra.
00:37:43.440 | Number three, live within and preferably below your means.
00:37:48.120 | If you do that, you may trade in the fanciest rig.
00:37:53.000 | You may trade in the most beautiful house on the block.
00:37:57.360 | What you gain is peace.
00:38:00.400 | If you value peace, give it a shot.
00:38:05.320 | Don't view yourself as being deprived because you have a simpler home or a smaller car.
00:38:12.240 | You're not deprived.
00:38:14.360 | You're blessed.
00:38:15.360 | You're in peace instead of a fancier thing.
00:38:21.440 | Number four, seek to maintain spending flexibility.
00:38:27.720 | Develop your allergies towards contracts, towards fixed payments.
00:38:32.800 | Develop your allergy towards debt, towards things that will take away your flexibility,
00:38:40.120 | lock you in.
00:38:42.700 | Number five, insure well.
00:38:44.880 | If there's something that would keep you up at night, if you lost it, if it just disappeared,
00:38:49.720 | insure it and insure it well.
00:38:52.160 | Cost a little bit of money up front, but if you don't have it, well, it's not the end
00:38:58.960 | of the world.
00:38:59.960 | Whereas, if you lose the thing, you'll be happy that you insured well.
00:39:03.600 | I'll be back with you soon.
00:39:05.920 | Over the next week or two, just a closing note, I very much have wanted to...
00:39:13.680 | You've noticed that the schedule at Radical Personal Finance has been up and down, just
00:39:17.080 | doing the very best that I can.
00:39:18.600 | My hope is that most of my...
00:39:21.000 | As soon as we get out of here, I'll be able to stick to a more regular release of shows,
00:39:28.560 | more regular structuring.
00:39:29.560 | I've got all kinds of things I want to do.
00:39:32.000 | I'm just doing the very best that I can and I'm thankful for you for sticking with me
00:39:35.560 | through this time of transition and I'm excited to come and see you out on the road.
00:39:40.120 | If you've written to me, if you've invited me to come visit you, please know I have every
00:39:43.960 | one of those.
00:39:44.960 | I've just replied to almost none of those.
00:39:47.280 | So when I can, I will respond.
00:39:50.560 | Thank you all so much for listening and I'll be back with you soon.
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