RPF0558-Friday_QA
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00:00:14.720 | It's Friday. Friday means live Q&A.
00:00:18.720 | [Music]
00:00:35.680 | Welcome to Radical Personal Finance, the show dedicated to providing you with the knowledge,
00:00:39.040 | skills, insight, and encouragement you need to live a rich and meaningful life now,
00:00:43.520 | while building a plan for financial freedom in 10 years or less. My name is Joshua. I am
00:00:47.920 | your host and it's Friday. That means live Q&A. That's where you get to call in and chat with me
00:00:53.600 | about anything you want and hopefully together we can come up with something useful for you to listen to.
00:00:59.920 | [Music]
00:01:07.760 | Each Friday, whenever I can arrange the technology, I do a live Q&A call with members of the audience.
00:01:12.800 | If you would like to get access to one of these calls, it's very simple. Just sign up to become
00:01:15.920 | a patron. You can do that at radicalpersonalfinance.com/patron. Usually these calls have
00:01:22.880 | anywhere from two to five callers. If you want to get your question in and have talk with me about
00:01:27.840 | something that's important to you, I don't know a better way for you to do it other than to call in
00:01:32.160 | to a Friday Q&A show. If you would like to do that, please consider joining as a patron. Go
00:01:36.560 | to radicalpersonalfinance.com/patron. That simply allows me to not have 100 callers, but just to
00:01:42.400 | have a few callers. That helps, I think, to have some really productive calls. From what I hear
00:01:47.440 | from you, you tell me that you like it. Since I love doing them and you like listening, I think
00:01:52.320 | it's a winning combination. We begin with Joel in Texas. Joel, welcome to the show. How can I serve
00:01:57.760 | you, sir? Hey, Josh. Hey, thanks so much for what you do, for sharing your journey with us, your
00:02:04.880 | insight. You're just doing awesome, man. Thank you. I wanted to just bounce off our financial
00:02:10.960 | situation, my wife and I, just the two of us, kind of give you an idea of our income, our spending,
00:02:16.480 | our assets, maybe get your impressions on that. Cool. Go for it. All right. Cool. We earn about
00:02:25.120 | $220,000 a year. I would like to slow down in three to five years, reach a point where we could
00:02:32.960 | maybe go part-time and have some more flexibility. Net worth is around $800,000 to $850,000 right now.
00:02:42.080 | We've got about $400,000 in mutual funds, about $400,000 in three, four different properties,
00:02:55.920 | and about $50,000 in cash. On a monthly basis, I could give you an idea of housing and taxes and
00:03:06.160 | other expenses and stuff, but just wanted to see how you could guide me. Okay. Well, what specifically
00:03:12.880 | are you working towards? Is there something specific that you're struggling with, or in general,
00:03:17.200 | what are your goals? Yeah. In general, trying to find the right mix between rental properties,
00:03:24.400 | which produce some income, other securities, just long-term 401(k) type stuff, and maybe have a
00:03:31.840 | number in mind on at what point we could slow down with accumulating and start expanding our
00:03:39.600 | interests, our time into other things besides just working full-time. Maybe even a quick check
00:03:46.640 | on some of the things that we spend money on month to month, just in general, like something
00:03:51.440 | that might be kind of unique as we really believe in giving, being generous with causes, with the
00:03:56.800 | church. That's a big part of what we do every month, but something that we've got to evaluate
00:04:01.360 | closely. And I think your perspective, you've helped me in the past, your perspective would
00:04:05.600 | be useful on that too. How old are you and your wife? Sure. We're both mid-40s. Okay. And you've
00:04:12.080 | said twice that your primary goal is to slow down a little bit. What does that mean to you?
00:04:20.000 | Sure. We both like our work. My wife does two different things on a part-time basis. I do one
00:04:25.920 | thing on a very full-time basis, full-time demanding corporate job. So instead of working
00:04:31.600 | 50 hours a week, it'd be great to be able to do that, half that much. So if you woke up and had
00:04:37.840 | a few million bucks in the bank, you would basically immediately quit your corporate job.
00:04:42.160 | What would you do then? I'd probably be an independent consultant in similar kinds of
00:04:48.960 | work, doing it more on my terms. Can you make any money doing that? Yeah, yeah, I think so. I mean,
00:04:56.880 | it might cut our income in half, but obviously we could still do pretty well. How much are you
00:05:03.040 | earning right now in salary? The main job is about a $200,000 salary, $205,000. Okay. And
00:05:13.520 | how much are your living expenses? Sure. In the range of $6,000 a month. Okay. So you're living
00:05:25.360 | on well under half your gross salary. And with regard to your rental portfolio, is that portfolio
00:05:31.760 | cashflow positive? Yes. We've got five rental units and they all make about $100 or $200 a
00:05:41.840 | month in that range. So you have currently about say $500 to $700 of monthly profit from the real
00:05:49.600 | estate. That does include, however, that you have mortgages on the properties and are those
00:05:54.000 | mortgages being paid down? Correct. Yeah. After mortgages and after...
00:06:00.000 | And this is another area where it's highly variable. The properties can take every extra
00:06:07.840 | dollar that they make if you're investing in them and building them up. But in general,
00:06:13.600 | I would say that we're making about $1,000 a month of rental income.
00:06:19.200 | What is the total gross value of the rental portfolio and how much debt is currently on it?
00:06:29.040 | The value of the rental portfolio gross is $525,000. And the debt on the rental portfolio is
00:06:41.360 | $250,000. And on the current repayment schedule, when will these properties be paid off?
00:06:54.000 | We just got started in the last several years. So they're all 26, 27 years out on 30 year fixed
00:07:01.440 | mortgages. Okay. So if you're living on $6,000 a month and that's your household living expenses,
00:07:08.720 | it sounds like your wife with her two part-time jobs, she's earning about $20,000 a year. Is
00:07:13.600 | that about right? Yeah, I may be a little low on that. It's probably more like 35.
00:07:19.760 | Okay. So if you're living on $6,000 a month and you have, let's say that from her income,
00:07:27.840 | let's say that she's earning $2,000 to $2,500 a month and you have $500 to $1,000 a month
00:07:33.520 | from your rental portfolio, then you basically have about half your expenses covered from your
00:07:41.360 | current sources of income. And you have enough savings that you could afford to make basically
00:07:46.160 | any kind of transition that you wanted to make. So I'm not sure, do you think of yourself as able
00:07:53.840 | to go now to make any changes now or do you feel like you're stuck in a job and you just got to
00:07:58.560 | keep going for another 30 years? And I was listening to a couple of your past shows and
00:08:06.000 | I think that's a common question is when do you know you're ready? Generally, I don't think we're
00:08:10.640 | at that point yet, but we'd like to be there in three years. Right. Well, I mean, for every person
00:08:17.600 | it's different. One person may have a corporate job that they find very deeply meaningful to them
00:08:25.120 | and has the benefit of earning quite a bit of money. It's very likely that you wouldn't be
00:08:29.600 | able to make up a $200,000 salary in a consulting business in a short period of time. That would be
00:08:36.480 | unusual. Unless you have unusual talents or you have an unusual marketing plan or you have
00:08:42.080 | some unusual expertise, it would be very rare to have somebody who in their mid-40s was able to
00:08:48.720 | leave a high-paying corporate job and move immediately into a consulting business and
00:08:53.440 | immediately replace their income. So I think there's absolutely value in simply saying,
00:08:59.440 | "Hey, this is the time at which we're trying to earn a lot of money and trying to
00:09:03.360 | save up as much as possible to be financially independent." So I'm not trying to convince you
00:09:08.640 | or anybody to unnecessarily walk away from a high-paying job. What I do want to persuade people
00:09:20.960 | and possibly you is approach that job with a good attitude, recognizing that you're working there
00:09:27.120 | because you're choosing to. And hopefully that could help to have a little bit more ownership
00:09:32.800 | of it. Now, I don't sense this with you, at least anything you've said. It sounds like you're pretty
00:09:36.560 | clear on that. But a lot of people work a job and they just feel like, "Well, I'm stuck. I'm
00:09:42.480 | hopeless. I can't get out." My point is, yes, absolutely you can. You have enough money. You
00:09:47.120 | could change. You could adjust. You could start a new business. You could move. You could move
00:09:50.640 | from one industry to another. Probably, Joel, in your case, have you thought of negotiating with
00:09:56.480 | your company at all and adjusting slightly so that you're able to slow down a little bit,
00:10:03.440 | perhaps in some of your responsibilities or in your position in your current company, in order to
00:10:08.480 | move towards the lifestyle that you want to live while also still saving aggressively?
00:10:15.120 | Yeah. And that may be a future step in that three to five-year time frame is saying, "Okay,
00:10:22.560 | I need healthcare. I need some part-time work, but let's scale back a bit." And that would be a
00:10:27.440 | good spot to be three or five years from now. Okay. Well, from everything that you're telling
00:10:33.120 | me, you're well on the path to financial independence. You have all of the basic
00:10:36.720 | framework in place. I'm not sure how detailed your goals are. For example, I'm not sure how
00:10:42.240 | much you're planning to expand your real estate portfolio, what your target numbers are,
00:10:45.920 | how you're planning to pay down your debt, or whether you're going to keep it up, or how you're
00:10:50.560 | going to adjust these things. Do you have a specific question that you would like to hone me
00:10:55.040 | in on that I can provide some useful thoughts on? How about asset allocation? A general quick
00:11:04.880 | gauge on where a person at my level should be with that mix of cash or securities or property assets.
00:11:15.920 | Okay. So when you use the term asset allocation, how do you believe you should structure your money?
00:11:21.120 | In more than one place, for one. I mean, stock market, obviously, great long-term potential
00:11:30.960 | there, but we want to be aware of the risks with that. And so having, let's say, 400,000 there now,
00:11:39.440 | and some of that is highly volatile, let's say, my company stock, which is a part of that.
00:11:46.320 | So there's certain risks and things to be aware of there. Properties, slower growth,
00:11:53.600 | but totally different market sector and good for that reason. And then I feel like I'm a bit low
00:12:00.480 | on cash with around 60,000 out of that 860,000, but just your thoughts would be helpful there.
00:12:08.800 | So my gut would be that you're probably low on cash as well, especially given that you're
00:12:12.640 | managing a portfolio of five properties and your cash reserves will be partly for your own personal
00:12:20.400 | life, for your own personal emergency funds, personal expenses, personal something happens,
00:12:27.840 | you need it. It'll be for your own personal opportunities. If you see something you want
00:12:31.360 | to buy, you've wanted a boat for a long time, and now all of a sudden you came across a $70,000
00:12:35.920 | boat that's selling for 30,000 bucks, you need plenty of cash on hand. And then of course,
00:12:40.400 | a big risk that you have is managing the rental portfolios. So my gut would be that your cash is
00:12:46.000 | a little bit low, but there is no formula that I could come up with to give you. There's no
00:12:52.400 | specific number. There's no academic construct that I'm aware of that would answer that question.
00:12:57.040 | But it would just be my gut that your cash reserves are probably a little bit low,
00:13:02.000 | given the potential expenses of your real estate portfolio. If I woke up in your shoes,
00:13:08.400 | what I think I would do is I would just set aside the cash that the excess cash flow,
00:13:13.440 | the $1,000 a month, or however much it ends up being from the rental portfolio into a separate
00:13:19.040 | account. And I would just start to stockpile that cash until it built up. And you'll need to decide
00:13:27.120 | how much you want to expand your portfolio versus how much you'd like to lower debt.
00:13:33.360 | I think the best way to build a real estate portfolio is to design,
00:13:37.440 | just to think and consider how big you want that portfolio to be. That's going to come down to how
00:13:43.680 | much money do you need? How much time does it take you to manage a property? What's your span
00:13:49.200 | of control? How much could you actually accomplish with regard to your real estate activities?
00:13:56.560 | And so if you, let's just say very simply, let's say you say, I need $6,000 a month to live on.
00:14:01.760 | I really like this approach to planning because it makes sense. It's a simple approach. But let's
00:14:06.320 | say you say, I need $6,000 a month to live on. And I could expect with each of my rental houses,
00:14:11.040 | I could expect to earn $1,000 a month net of taxes and expenses. So if that were the case,
00:14:16.880 | then I would target and say, well, my goal is to have six rental houses. And each of them is going
00:14:24.720 | to provide for my living expenses. Now, as long as you additionally have other assets, which you do,
00:14:30.720 | you have additional stocks, et cetera, then that could be a really good goal to set for your
00:14:36.480 | portfolio. It's very doable. You haven't set a target of having 60 rental houses. Six is very
00:14:42.000 | doable. It's very reasonable. And it's very much within your ability to control, your ability to
00:14:48.720 | manage. You could probably easily manage more than that. But it's very much within your ability to
00:14:53.760 | manage as a part-time endeavor while you also then had a part-time consulting income.
00:14:59.600 | And so in terms of asset allocation, that's how I like to approach it is to say, here's the
00:15:06.400 | lifestyle that I need to provide for. Now, if you provide it with real estate, then you've got one
00:15:11.360 | set of income. Earlier in the call, you talked about multiple streams of income. The second goal
00:15:15.360 | I would say would be to say, OK, with my stocks, how do I provide $6,000 a month from my stock
00:15:20.160 | portfolio? And you can calculate that out a little bit and set yourself a target goal of providing
00:15:25.600 | for that. Now, obviously, it would be more than you need. And so you wouldn't make these targets
00:15:33.200 | if you were stuck somewhere. You could quit sooner than that. But then you could also come
00:15:38.720 | back and say, well, now with my consulting business, I want to build a consulting business
00:15:42.320 | that provides for my $6,000 a month. And so those would be simple examples of three very reasonable
00:15:49.040 | targets. The only one of those that would take longer would be you're building enough money to
00:15:55.920 | provide in the mutual funds. But if you just follow that pattern, break it down, $2,000, $2,000,
00:16:00.800 | $2,000, or however you decide to structure your income, that's first what I would look at.
00:16:05.520 | And so in your real estate portfolio, as you build it up, then you want to have a capital fund
00:16:11.520 | that's available for acquisition. So when you find a deal, you need to have cash to put in place.
00:16:17.520 | And then also that cash is available. And so if from time to time you start to build up that cash,
00:16:22.240 | you decide to go ahead and use it to pay down one of the properties or pay off one of the
00:16:26.480 | mortgages or refinance, et cetera, then you have that cash. So my gut would be that that would be
00:16:31.520 | a little bit low. The reason I asked you about asset allocation is this. I want to hear how
00:16:36.800 | you're thinking about it. There are two approaches. I divide the question of asset allocation into
00:16:41.840 | two approaches. The first approach is the academic approach. This is what you get when you go to
00:16:46.560 | your stock broker, your financial planner. They give you a set of questions to help you understand
00:16:52.960 | your investor risk profile. And then based upon those questions, they try to design for you an
00:16:58.320 | ideal portfolio. There's nothing wrong with this approach, but it's basically only applicable to
00:17:03.680 | a specific portfolio of assets. And that's where you look and say, how much of my money is invested
00:17:09.040 | in stocks? How much of my money is invested in bonds? Of my stock allocation, how much is
00:17:14.400 | applied to big companies, medium-sized companies, little companies, companies that are
00:17:18.240 | headquartered outside of the United States, companies inside the United States? How much
00:17:22.800 | is in real estate? How much is in bonds? How much is in precious metals or commodities, et cetera?
00:17:27.360 | I have no beef with modern portfolio theory as it's applied to asset allocation on a portfolio.
00:17:34.320 | So with regard to commentary on that, I would refer you to your stock broker. Just sit and talk
00:17:40.080 | with them. But with regard to your own personal life, I think the way to approach asset allocation
00:17:45.840 | is to start by saying, what am I trying to accomplish? And then make sure that you have
00:17:49.920 | the assets that are going to put you in a place where you're able to accomplish those goals.
00:17:54.080 | And that's where by taking ownership and control, you'll be able to allocate your assets in a way
00:17:59.920 | that cover your goals. So if you were going to leave and start a consulting business,
00:18:05.040 | then it would behoove you to have very stable assets so that you could draw on those assets
00:18:10.560 | if needed to provide for your family while you're building your business.
00:18:15.200 | But on the other hand, if you have a very high income and you have a good base of assets,
00:18:20.480 | then you can adjust your asset allocation in a different direction. And so that's where
00:18:24.880 | I would just encourage you to be confident in your skills as an investor and look at the specific
00:18:30.400 | needs that you're concerned about and then allocate your assets towards those goals and towards those
00:18:35.200 | concerns. That sounds good, Joshua. I appreciate the idea of the capital investment fund for the
00:18:44.560 | business to be able to finance the next purchase or refinance a mortgage or something like that.
00:18:49.360 | That's pretty much it. Just wanted to do kind of a quick financial checkup.
00:18:53.760 | Cool. Well, don't forget also, I don't know that we did a complete or a quick financial checkup,
00:19:00.160 | but remember the value of sitting down and checking through all your insurances,
00:19:04.800 | doing your risk management as well. But in general, the five points I teach, increase income,
00:19:10.560 | decrease expenses. Sounds like you're on track with those. Invest wisely. You're on track with
00:19:15.040 | those. So step four is avoid catastrophe. Work through any kind of catastrophic thinking. What
00:19:20.400 | would happen if a tornado blew through your house? Are you protected from that? What would happen if
00:19:24.640 | you lost your job? Are you protected from that? What would happen, insert any scenario you're
00:19:28.960 | concerned about global flu pandemic? What would happen in that case? And plan accordingly. And
00:19:33.680 | then number five is optimize lifestyle. So in the situation that you're in, if there's something you
00:19:38.960 | should behave as a rich man. So if there's something that's bothering you, if there's an
00:19:43.520 | employment agreement that you have in place, look to renegotiate it. And with slowing down,
00:19:49.360 | in terms of slowing down, recognize that that doesn't always mean that you have to leave your
00:19:57.120 | primary source of employment. And by the way, we didn't talk about charitable giving. So call in
00:20:01.840 | next week and let's talk about charitable giving. We go to Bill in New York. Bill, welcome to the
00:20:05.120 | show. How can I serve you, sir? - Thanks for taking my call, Joshua. How are you doing today?
00:20:09.760 | - Very well, sir. My pleasure. - So the reason I called in today is because
00:20:16.240 | I'm going to closing on a house in 13 days, which looks to be pretty sound. Obviously,
00:20:24.240 | anything can fall through. But I'm just kind of wondering what the next steps should be that I
00:20:30.640 | should be concerning myself with. - Is this a house that you're going to live in? - Yes. Well,
00:20:36.160 | it's a house that I'm going to live in as well as rent out. I plan on taking in a few roommates
00:20:41.280 | and kind of house hacking to try and get a little ahead financially.
00:20:46.400 | - Great. I love it. So what questions do you have? - Well, so just to give you a little background
00:20:55.520 | about my philosophy, I'm not a huge fan of the stock market for the main reasons that
00:21:02.400 | I don't have control over what those companies do, what their practices are, as well as how they
00:21:09.520 | choose to invest and prioritize ethically. So my plan long-term would be either real estate
00:21:18.000 | or a small business or some combination of the two. One book that left a huge impression on me
00:21:24.080 | was "The 10% Entrepreneur" by Patrick McGinnis, which I'm not sure if you're familiar with or not.
00:21:28.560 | But I kind of like that idea of being involved in a lot of small businesses, being involved in
00:21:35.840 | some rental properties. And essentially, I don't know how to...
00:21:42.240 | Or not that I don't know how, but I'm not sure what is the best way to prioritize
00:21:48.640 | those kinds of investments. - Well, you are not surprisingly
00:21:56.400 | echoing my own approach to life and kind of my own personal interest in investment plans.
00:22:04.480 | That's not surprising because we usually seem to bring to ourselves friends and fellow journey
00:22:12.160 | people that will reflect kind of what our own interests are. So I share your concern with
00:22:19.440 | many large public companies from an ethical perspective. I share that perspective that you
00:22:28.640 | have. How old are you? - I'm sorry, what was that? - How old are you? - I'm 25. - Okay. And is this
00:22:37.440 | house your first house? - It is, yes. - Are you single? - I am. - Okay. Is there any reason to
00:22:46.000 | expect that your singleness will change in the next handful of years? - Hopefully, but not at
00:22:53.040 | the moment. - Okay. So we're waiting on a prospective candidate. Okay. So I guess with regard to the
00:22:58.320 | house, I would say it sounds exciting. The approach that you're taking of purchasing a home to live in
00:23:04.320 | and then also rent out, I think is one of the best approaches, especially if you live in a place where
00:23:10.320 | you can expect a good flow of tenants or if you have the type of network where you can bring in
00:23:17.040 | roommates that would be suitable and compatible for you. That is a really, really excellent
00:23:22.000 | financial foundation to build from. Many young people lack the financial foundation to be able
00:23:30.560 | to purchase a house, either due to poor credit or no money or no steady job, etc. And if you have
00:23:37.360 | built those assets, you have established credit, you have a steady income, then you can go ahead
00:23:42.640 | and purchase a house and you can fill it with people that you would like to spend time with
00:23:47.040 | anyway, and it can work out very well financially for you. So absolutely, I think that's a wonderful
00:23:53.280 | place to start and a place to build from as a young man establishing the foundation of your
00:23:59.520 | financial empire. Real estate financing on a primary house is the easiest of almost any real
00:24:04.400 | estate financing, and it really can work well. And it's fun. It's nice to live with people that
00:24:09.600 | you like. It's a lot better than living alone. I don't understand why people want to live alone.
00:24:13.440 | It's way more fun to live with your friends. So I would say that's fantastic. Now, if this is your
00:24:21.840 | first time house, this is your first house, I would simply encourage you, set aside as much
00:24:27.360 | money as possible, because you're about to face a whole new rash of expenses that you haven't
00:24:34.000 | faced before. And you're aware of those things intellectually, but probably you haven't gone
00:24:39.920 | through them emotionally, but they'll come. Everything on a house breaks down, wears out.
00:24:44.320 | And so the equipment in the house was going to need to be replaced. And what very possibly your
00:24:50.080 | home inspector went through and said, "Oh, this is not a big deal." Well, three years from now,
00:24:53.440 | it's going to be a big deal, just because three years is going to pass. So set aside money. It
00:24:58.400 | also often takes quite a bit of money to go ahead and fix up the house and do whatever it is that
00:25:03.840 | you need to do. And those expenses are quick. I've talked to a lot of young people who've purchased
00:25:09.920 | their first house and going in, they didn't think it was a big deal that there were no
00:25:14.240 | window coverings. But then very quickly, they discovered that window coverings can be $8,000
00:25:20.320 | to purchase blinds all around to cover the windows. And yet, it's kind of got to be done
00:25:24.000 | to some extent. So just set aside money for that and then work hard to get good tenants.
00:25:29.360 | And I think that absolutely will work. Back to your goals of establishing yourself
00:25:34.400 | as an entrepreneur and an investor in various small businesses. Do you have any specific ideas
00:25:39.920 | right now? Or what's your work and how does that interface with this investment plan?
00:25:42.960 | >>James: So currently, I work for the government. I went to school for chemical engineering,
00:25:51.920 | and I got a job after school as an environmental engineer working for local government.
00:25:59.920 | And that job is fantastic in terms of its flexibility and in terms of the benefits that
00:26:08.240 | are offered. It gives me a lot of opportunity to invest time in other endeavors. I'm just not sure
00:26:16.720 | where to direct my energy and my money. I have a lot of interests, various different interests.
00:26:24.480 | And I don't know if you could kind of talk me through philosophically how to determine
00:26:33.040 | what kind of direction to go with that. Do you know what I'm saying?
00:26:42.880 | >>Adam: Yeah, it's a big question. So it's a huge question. And I think it's a normal question.
00:26:48.880 | Most people don't have the question that you're asking. Because if you, many people,
00:26:55.680 | so the standard investment advice is take your money and purchase mutual funds with it.
00:26:59.920 | And that's reasonable advice. But if you are making a personal choice to eschew that path
00:27:06.480 | and to choose to invest your money into something that is closer to you, that you have the
00:27:12.560 | opportunity to control more, all of a sudden you face huge challenges. Because that path is not
00:27:18.720 | well trod by people who are writing books. That path is not well trod by people who are selling
00:27:25.440 | you products. It's a very different path. I have explored this path pretty extensively. And I've
00:27:32.560 | come to the conclusion that there are essentially two very different groups of people. There is a
00:27:37.680 | group of people who relies primarily on the mainstream financial products that are available
00:27:43.840 | for them. And they function very well in that market. They use their 401(k) or their 403(b)
00:27:52.960 | at their job. They purchase mutual funds. They purchase stocks. They use traditional bank
00:28:00.240 | mortgages to buy houses. They purchase vehicles. They finance their cars, their boats, their RVs
00:28:07.760 | through their local credit union and through their bank. And they're very comfortable with that. And
00:28:11.520 | that financial system works really, really well. It functions and it's effective. But there seems
00:28:18.000 | to be, in my experience, almost an entirely different world of finance. And it's populated
00:28:23.760 | by people who really are harder to find. But these are people who lend their money out privately.
00:28:29.120 | These are people who fund small enterprises. These are people who do all kinds of business deals,
00:28:35.040 | all kinds of real estate deals. But they do them with alternative forms of financing,
00:28:39.360 | private money, consortiums of investors, et cetera. But it's been very hard for me to find
00:28:45.840 | anybody teaching that publicly or anybody who really is a part of that who sat down
00:28:50.720 | and written books on it. And I'm convinced it exists because I've talked to all kinds of people
00:28:55.840 | who are in it. But I don't know how to organize that information. I don't know how to even lay
00:29:00.000 | out here's what the strategies are. I don't even know how to discuss those things. But I've seen
00:29:05.360 | all kinds of people who have built, again, interesting businesses, who invest in other
00:29:10.080 | people's businesses. And it's just beyond my – but I can't find a lot of written, published
00:29:16.000 | work on it. Here's what I'm doing and what I would recommend that you do. First, in looking – so,
00:29:23.600 | before I give you my advice, if you were to summarize the 10% solution,
00:29:27.120 | the book that impressed you by Patrick McGinnis, what would be your summary of his book in about
00:29:32.880 | one minute or less? >> My summary would be that 10% of your time and 10% of your money should be
00:29:40.480 | going into personal small business endeavors to diversify income streams. >> Okay. So,
00:29:47.040 | with the other 90% of money, is he saying 10% of your income or 10% of your savings?
00:29:54.000 | >> He's saying 10% of your income as well as 10% of your time.
00:29:57.760 | >> Okay. So, I think that that's totally reasonable. And what I've observed is usually
00:30:04.560 | when you have questions about this, it's because you don't know what to specifically do. And the
00:30:10.160 | only advice I know to do is to say, "Just wait and look." So, just like real estate, if you – just
00:30:16.720 | like buying a house, if you know that you'd like to buy a house and you're thinking about buying a
00:30:22.320 | house, what do you do? Well, you save money, you wait until the time is right, and you look. You
00:30:28.640 | look at the market to see what's available to you. You look at the market to see what you might like
00:30:34.400 | to buy. And then when you're ready, it seems really right. It seems like, "Oh, here's the
00:30:39.440 | house. This fits what I'm looking for, and I have the money." So, with private business investment,
00:30:44.560 | I don't know anything else to do other than to say, "If you don't know what you're interested in,
00:30:49.120 | just wait and look." And then when it appears, you'll recognize it. Somebody will come across
00:30:55.200 | with a great business idea, or somebody will have a product idea, or you'll see somebody doing
00:31:00.000 | something in one town and you think, "I could do that in my town." Or you'll come across somebody
00:31:04.320 | who is building something and you say, "I'd like to work with you. I'd like to partner with you
00:31:08.880 | in some way." But I don't know what that is today, and you don't either. But the two things that you
00:31:13.680 | will be interested to have, that you'll want to have, is money and interest and knowledge.
00:31:19.120 | So, if you... That was three. Actually, if you just work on that and you talk to people,
00:31:24.480 | you explore ideas, and you stockpile your money, you won't regret that. And you can't predict when
00:31:30.480 | the opportunity is going to come along, but it will come along. And if you're working to be ready
00:31:35.360 | for when it comes along, you'll recognize it when you see it. I feel like that's really kind of
00:31:39.280 | mealy-mouthed, not specific advice, but it's the best I've got.
00:31:44.240 | So, can I ask, how was it that you determined that the proper path for you is radical personal
00:31:52.240 | finance? Do you have other ideas that you thought of pursuing, or was this the main focus for you?
00:31:58.720 | Were there any ideas that you were considering and then threw it to the side? Because one of my
00:32:04.160 | issues is that I have several ideas, and I don't know how to prioritize those and which one of
00:32:11.360 | those to kind of jump into first and test out and see if that will work.
00:32:15.920 | I have a long list of ideas, both business ideas and job ideas, and just frankly, lifestyle ideas
00:32:25.120 | that I have. Most of them are on paper with just a physical written list. Some of them are just
00:32:33.360 | things I'm aware of or interests that I know that I have. And those ideas are different.
00:32:38.960 | And so, I'll explain when I started radical personal finance why I chose that particular
00:32:44.240 | idea. But my ideas vary. I'll give you one from my list. I joke with my wife that if we go broke,
00:32:52.720 | there's no chance in the world you're going to get me back into corporate America.
00:32:56.800 | I'll go and open a hot dog stand before I go back into corporate America,
00:33:01.280 | in the sense that for me, big corporate world, I am not interested. I think for some personality
00:33:08.640 | types, it has a lot of advantages. And there have been plenty of days when I have wished to go and
00:33:13.440 | get a job. But for my personality type, I find it very stifling. I find it very constraining.
00:33:22.320 | And I don't wish to engage with corporate America. So, I would rather have a hot dog stand
00:33:30.000 | and live on the income from that hot dog stand than I would go back into corporate America.
00:33:39.520 | And just to continue with the serious but slightly probably amusing ideas, I keep my eyes open
00:33:46.080 | constantly for jobs that would give me a degree of independence and a relatively stable source of
00:33:57.280 | revenue, while also allowing me to pursue a big, to use the lingo, a big moonshot idea,
00:34:05.440 | or a big business idea, or a big investment plan that would require my time.
00:34:10.320 | Now, in choosing what you're going to do, I think you have to do an analysis of what you bring to
00:34:16.080 | the table. And what capital do you have to offer? So, if you're very young, and you don't have a
00:34:22.560 | lot of money, the capital that you probably have the most of is time. And time capital is extremely
00:34:28.480 | valuable. If you have time capital, you can really build, you can start a lot of businesses
00:34:35.120 | with just simply a lot of time. You also have money as a capital. And as I grow older, and as
00:34:41.920 | I save and earn more money, and earn more and save more, then I increasingly have more money.
00:34:48.960 | And so that allows me to invest into markets that I can use the money to gain an advantage over other
00:34:57.440 | of my competitors who don't have as much money. And so that's really valuable.
00:35:01.360 | And then the third form of capital is, of course, some form of intellectual capital,
00:35:05.280 | inside knowledge or experience, something like that. And those are just three forms of capital.
00:35:10.160 | There are many others, but three forms of capital that I think are really, really useful. So,
00:35:14.320 | if you analyze that, and you understand, okay, here's how I'm going to deploy those forms of
00:35:18.000 | capital, then you could start to look at business opportunities. So, I keep simple ideas, and I'm
00:35:23.600 | aware, I try to analyze what are my personal tendencies. I don't want to go into corporate
00:35:28.720 | America, I'd go start a hot dog stand. But frankly, I don't know how to build a great hot dog stand.
00:35:33.600 | It's just kind of a joke. But there are jobs that I come across all the time that I think,
00:35:37.680 | oh, I could do that really well. I recently mentioned on the show that I was so impressed
00:35:41.920 | by speaking to one of my listeners who had begun a business where her entire business is cleaning up
00:35:49.280 | dog waste from people's yards. And I thought, what a perfect job for me. Not in the sense that it's
00:35:55.600 | particularly emotionally satisfying, but it's a market that has a very decent income potential.
00:36:03.520 | I could use it to support my family. It's not intellectually demanding, so it would be a break
00:36:08.640 | from something that is intellectually demanding. And it would give me a tremendous amount of time
00:36:12.880 | to think or to read or to listen to something, listen to books, et cetera, while I was serving
00:36:18.720 | my clients that I think would be really, really interesting for me. And it's something that has,
00:36:24.400 | is very, it's a very independent business. I don't have to work with a lot of people,
00:36:29.200 | I don't have to do a lot of employees, but the earning potential is very good.
00:36:32.480 | So, when I heard her describe that, I instantly put that on my list. Now, the reason I put it on
00:36:37.120 | my list is because I would be able to do a job like that without being committed 60 hours a week.
00:36:43.680 | It would be enough to pay my bills to live on, while I then devoted all of the rest of my time
00:36:49.680 | to working on a business idea, developing an investment idea, or what is my bent is to develop
00:36:56.000 | some form of intellectual property. So, whether that's writing books on something or developing
00:37:02.480 | some kind of intellectual property, that's where one of my core skill sets is, is developing
00:37:06.560 | intellectual property. And so, if I can use my time and my expertise, my knowledge, my intellectual
00:37:14.160 | capital, I can combine time and intellectual capital to develop intellectual property,
00:37:19.920 | and that intellectual property is something that I can then sell, and it will create for me a stream
00:37:25.920 | of royalties throughout my lifetime. I view that as dividends. And for me, that particular approach
00:37:31.440 | to investing is very attractive. It's far more attractive than almost any other thing based upon
00:37:37.120 | my personality. But that's one of my, that's just an example of how I approach it. I look at a lot
00:37:44.480 | of other businesses though, and I look at businesses that are more physical, physical local
00:37:49.840 | service businesses. I have contact with a lot of entrepreneurs. I always try to talk to entrepreneurs,
00:37:55.360 | and I look at most blue collar type businesses or many types of blue collar franchise businesses,
00:38:02.720 | and I look at them, and it seems to me that the competition in many of those is so weak
00:38:08.240 | that for somebody who simply was willing to come along and engage with that business and actually
00:38:15.760 | just follow the manual, the income potential is huge. I have a client of mine who owns
00:38:24.080 | a franchise business in the automotive servicing, in the automotive servicing industry,
00:38:29.120 | and I've worked with him extensively. And as I talk to him about his experience in his business,
00:38:34.080 | more and more I see that if I went broke, I would go along and I would, and I look at a franchise
00:38:39.600 | like his, and I just see all it requires is somebody to actually be intelligent enough to
00:38:44.480 | roll up their sleeves, move in, and to actually follow the book. But very few people are willing
00:38:49.040 | to do it. And the competition in many of those types of businesses is not the cream of the crop.
00:38:54.320 | The smart people usually go to law school, to dental school, to medical school, et cetera.
00:38:58.960 | And so that's a, I don't know how to make millions there. You just make it with your labor.
00:39:04.080 | But if you go into something where your competition is not, where they're not
00:39:08.000 | doctors, lawyers, et cetera, they're not getting the highest SAT scores, there are a lot of
00:39:13.920 | businesses that you can work with, and most of those can be great investments.
00:39:17.920 | So I don't want to keep, I feel like I've rambled just a tiny bit, but to say that
00:39:22.320 | the way that I look at it is to say, what do I have to offer and what do I want to do?
00:39:27.520 | Now, to answer your kind of prompt where you said, what led you to radical personal finance?
00:39:32.560 | For me, it was a unique phase in my life where I realized that I had developed significant
00:39:38.640 | intellectual capital, significant ability, skill, analysis in the market, et cetera,
00:39:44.720 | to where I had the knowledge necessary to be able to effectively compete in this market.
00:39:51.600 | I was moderately dissatisfied with the structure of my previous job, and frankly, I was bored.
00:39:57.440 | It was, I found it, I didn't find it particularly gratifying to have the same conversation over and
00:40:05.440 | over again. I feel like that conversation was super important, but I wanted to continually branch
00:40:09.760 | out into something new, something different, and it wasn't a good fit for me. And so my,
00:40:14.720 | and then I, the thing that pushed me over the edge though, I had decided, okay, well,
00:40:19.040 | I'll do this for about 20 years. I set out a 20-year timeline. I will build a very profitable
00:40:24.400 | business, and I built an investment plan for myself on the back end that I say, I'll take
00:40:28.880 | all this money, I'll live in this manner, and I'll invest the money to where I'll be financially
00:40:32.480 | independent in 10 to 20 years, and then I'll close the business or just put it on autopilot,
00:40:37.520 | and then I'll move on to something else. But what pushed me over the edge was looking at
00:40:41.280 | market timing. I was watching the market for online financial information, and as a long-time
00:40:47.040 | consumer of the personal finance blogosphere, I had seen the growth in blogs, but I had tried
00:40:52.720 | multiple times to write blogs, and I couldn't find, I didn't find my voice, and I didn't press
00:40:57.200 | through to find it. So, but in looking at podcasting, I was seeing an upturn in podcasting,
00:41:03.680 | and the specific market change that came was podcasting became untethered. Prior, a couple
00:41:10.560 | years, I can't remember the exact year, but podcasting has been around for a very long time,
00:41:16.000 | but formerly you had to download the podcast to your computer, you had to plug in your mp3 player
00:41:21.760 | and sync it in order to have access to your podcasts. But a couple years before I started
00:41:25.760 | Radical Personal Finance, Apple came out with support for untethered podcasts so that you could
00:41:32.000 | just simply subscribe on your phone, and automatically your phone would use the data to
00:41:36.240 | download the podcast. And I identified that, in my opinion, in my analysis, that was a market
00:41:41.360 | inflection. Because once that happened, it became so easy to search for and listen to new podcasts,
00:41:47.600 | and I couldn't understand why anybody who was aware of that would ever go on and listen to
00:41:51.760 | terrestrial radio. And I couldn't figure out how to get a start in radio, but I knew I could get a
00:41:57.440 | start in podcasting. And so it was a gamble that I thought would work out really well. It was a
00:42:03.920 | marrying of what I hoped would be unique intellectual property, my unique ability,
00:42:10.400 | and a particular time in technology. And I was watching it change, and when I started to do it,
00:42:22.320 | I couldn't find any good podcasts, and I said, "This is a niche that I think really can be filled."
00:42:26.560 | And so that was why I pulled the trigger when I did. But I couldn't have predicted that. I don't
00:42:30.400 | know that you could predict it. In hindsight, I believe I was right. My analysis was, by my
00:42:35.760 | accounting, it was sound, and the market has continued as I thought it would. Now, time will
00:42:42.720 | tell where radical personal finance goes, but that was why I pulled the trigger. So I don't know how
00:42:47.280 | you can anticipate that or predict that, but I do know that you can work hard to be ready for it.
00:42:52.720 | And if you're ready for it, when you see a change in a market that you're interested in,
00:42:57.520 | then you can go ahead, pull the trigger, and make your move.
00:43:00.800 | That makes a lot of sense. My follow-up question, I guess, would be,
00:43:12.080 | how do you know if that window of opportunity has kind of passed you by? Is there a...
00:43:20.560 | Like, one thing that I'm thinking of in particular is that I have thought about
00:43:27.200 | getting into podcasting. Not that I have any particular expertise in any specific area, but
00:43:34.400 | I have an interest in a lot of areas that I feel are somewhat underserved.
00:43:44.400 | And I guess, how do you know if... Or is it just a gamble? Is it just a, "I'm just going to try
00:43:55.840 | this and see if it works," or is there a way to tell that kind of that opportunity has passed?
00:44:02.880 | Well, in a sense, the obvious answer is no. There's no way to tell. And that's what you,
00:44:07.440 | as an entrepreneur, you have to... That's the risk you take. There is a very significant risk
00:44:15.840 | that radical personal finance will wind up failing. And as an entrepreneur, you got to be okay with
00:44:20.880 | that. You got to recognize that, "Hey, this thing may not work." But I'm not going to be bothered
00:44:25.680 | by that because... Well, from the beginning, I decided that if I try it and it fails,
00:44:33.360 | I'll be much happier having done that than having not tried it and never knowing.
00:44:38.240 | And so I could easily today go back to the financial planning world. I could easily obtain
00:44:42.880 | a new position. And I would make up, knowing what I now know, having the experience that I now have,
00:44:48.640 | I would make up in a year what previously took four. So I am confident that I could go and do
00:44:54.000 | that. So I like to avoid the risk of catastrophic failure, but you can't be sure that anything will
00:44:59.360 | fail. Now, how do you know? Well, that's where you get into the world of analysis. And you're
00:45:06.560 | going to have to just educate yourself and clarify what it is that you're trying to do,
00:45:14.240 | and then to see if you believe in it enough to try. And there's no guarantee that you're right,
00:45:20.320 | but there's a good chance that you are. And when you have the guts to say, "Okay, I'm willing to
00:45:26.800 | put my time into this. I'm willing to stake myself on this," then go for it. But I like the 10%
00:45:32.160 | solution. Don't burn all your bridges. Do it just a little bit. Now, are you specifically, do you
00:45:36.400 | want my comment on podcasting specifically? Is it too late to build a good podcast? Is that what
00:45:40.080 | you want me to respond to? - No, no, no. But I guess where I'm coming from is the fact that
00:45:47.040 | I have a few different ideas, and I'm trying to determine which one of those to pursue and which
00:45:56.080 | one of those to invest my time in. And that's the challenge. It's not like I have this one idea that
00:46:07.280 | I think the time is perfect for. It's that I have four or five or six different ideas, and I'm
00:46:13.760 | saying, "Okay, well, this one, the timing seems right, but I don't know if I'm quite as passionate
00:46:20.400 | about this other one where the timing doesn't seem right," and trying to weigh all those different
00:46:24.640 | factors and determine which of those should I really put my bet on first. And that's not an
00:46:35.600 | easy question to answer. I don't expect a neat, tidy answer on that one. But it's just something
00:46:42.400 | that I'm struggling with at the moment and trying to figure out where I should be investing my time
00:46:47.840 | and my money. - Right. Here's my answer, and I'll give you this as just my closing
00:46:54.880 | answer to that question, because it's a good question and it's not an easy one.
00:46:58.080 | But here's my answer to it that I hope will help you. A good idea is pretty much worthless.
00:47:08.160 | I've become convinced of that. A number of years ago, I read a book called Execution,
00:47:13.360 | and the author's main point, or what I remember is the author's main point, what impacted me about
00:47:17.280 | the book was the idea that basically it all comes down to execution. And if you look at somebody who
00:47:23.920 | is successful, especially as an entrepreneur, if you look at somebody who's effective and
00:47:29.520 | successful, it very, very rarely comes down to them having a good idea. And it very much
00:47:38.960 | comes down to their ability to actually execute on the idea that they had. There are lots of people
00:47:45.120 | with all kinds of good ideas who never do anything with them or who try to do something with them
00:47:50.880 | and who can't accomplish them. But it all comes down to your ability to execute. I used to be
00:47:56.720 | scared that if I told other people my ideas, then they would steal them and run with them. And now,
00:48:01.280 | as I've grown and I'm gaining more experience, I've become completely unafraid of that.
00:48:07.120 | In podcasting, I try to help any financial, any podcaster or any financial podcaster,
00:48:13.200 | I give away everything I know, because I have zero fear of an idea doing anything for somebody.
00:48:20.800 | Rather, I know that only a very small portion of people will actually succeed because a very
00:48:25.680 | small portion of people will actually execute on it. So here's how I would advise you. First,
00:48:32.480 | make a list of your ideas, but recognize, and this will be easier a decade from now,
00:48:36.400 | but recognize that there's a good chance that those ideas that you have now are not going to
00:48:41.520 | be the same ideas that you're excited about five years from now or 10 years from now. But make a
00:48:45.840 | list of them and try to make your list of ideas as extensive as you can. And then put it away for a
00:48:51.680 | little while, come back to it and see, are you still excited about any of them? Do you still have
00:48:57.120 | something that connects you with an idea so that you'd be willing to push through the hard times
00:49:02.560 | to make that idea work? If you do, then just pick one and go for it. And if you pick one and you go
00:49:09.440 | for it, you'll start to put in place the structure that gives you something to work on. And you'll
00:49:14.160 | start learning the lessons that I think can only be learned by actually rolling up your sleeves and
00:49:18.080 | getting to work. And you might find that that idea, you can turn it into a winner. You might
00:49:24.000 | find that that idea is a loser. But even if that idea is a loser, the experience that you gain
00:49:29.920 | working on it will help you to go down the list, take the next idea, and with that next idea,
00:49:35.600 | then you'll be able to work on that one. Most entrepreneurs have a string of businesses,
00:49:41.200 | especially businesses that have failed before they got to their winning idea. And I don't know
00:49:45.840 | of any way to short circuit the process. I think the best thing to do is to just pick one, start
00:49:50.480 | working on it, work on it in 10% of your time. That sounds wonderful to me. Work on it with 10%
00:49:55.600 | of your income. I love it. And keep yourself from catastrophic failure while you're developing it.
00:50:00.480 | Kevin in Colorado, welcome, sir. You will be our final caller of the day. How can I serve you?
00:50:04.640 | Thanks for taking my call, Joshua. And thanks for being unique.
00:50:10.560 | It's my pleasure.
00:50:11.200 | Yeah. So my question for you today is, how do you manage to balance your family and life,
00:50:21.920 | family life and work life? How do you maintain productivity while you are traveling?
00:50:27.440 | I really wish you weren't asking me this today. I wish you would wait six months and ask me then,
00:50:36.640 | because it is my biggest concern about traveling. And I have some ideas, but I would love for you
00:50:43.920 | to call back in six months and let's see if my ideas were right. Let's see if my analysis was
00:50:48.080 | right. Before I answer, are you currently traveling? Are you thinking about traveling?
00:50:54.000 | You know, so my wife and I love to travel. And we have a lot more flexibility now
00:51:03.600 | with self-employment. And we've taken some short trips. We have two young boys as well,
00:51:10.160 | one-year-old and two-year-old. We've taken some short trips and I have found it almost impossible
00:51:17.280 | to be productive with work-related activities while I am in Mexico or in Puerto Rico or
00:51:27.120 | something like that. And so I actually wanted to ask you while you were early on the trip,
00:51:32.880 | before you get everything all smoothed out, and I can call back again in six months, but I figure
00:51:37.040 | the first couple of months are probably the most difficult. And I actually promised my wife,
00:51:45.680 | who doesn't like cold winters, I promised her that next winter we would spend at least two months
00:51:51.920 | somewhere warm. And so I wanted to ask you early in your trip before you figured it out,
00:51:56.960 | because I won't have a long time to figure it out next winter.
00:52:00.800 | Well, it's a good question and I am happy to answer it now with the caveat that anybody who's
00:52:06.320 | listening to me should know that I am just figuring it out. My biggest concern and my
00:52:12.160 | wife's biggest concern about our current traveling plans are my ability to work. And it is a very
00:52:20.160 | significant concern, especially given the stage of life that we are in. We have basic, well,
00:52:28.080 | my wife and I, we have five dependents. We have three children and two dogs, and our children are
00:52:33.520 | all very young, so they are all very dependent. And that's tough. It's really, really tough,
00:52:40.560 | because you can't just say to your teenage children or your older children, "Go and play."
00:52:46.000 | Well, you can say, "Go and play," but then three minutes later, they come right back and they want
00:52:49.760 | you to see what they've played with for the last three minutes. And so it's really, really
00:52:54.960 | challenging. And it's also challenging in the context of travel, especially for what I do with
00:53:02.080 | trying to have some kind of quiet environment where I can focus and having some kind of quiet
00:53:07.120 | environment where I can actually work and create useful audio. So here are a few things that I have
00:53:16.240 | learned. First, I have, over the last year, actually built some new habits of learning how
00:53:25.520 | to work in other locations. So one of the big challenges of my business has been having a quiet
00:53:33.280 | recording environment. I really try to keep my children and my dogs out of the background audio.
00:53:38.480 | Now, some people like it, and it's, "Okay, this is great. This is Joshua in his spare bedroom,"
00:53:42.320 | because it's always been Joshua in his spare bedroom. But it is really tough to listen to
00:53:48.720 | that stuff. And over the last couple of years, my house has become much noisier, and my ability to
00:53:54.320 | control that noise was diminished. The apartment that we were living in before we moved into our
00:53:59.120 | travel trailer was great in the first time that we were there because our children were small,
00:54:05.120 | but my office was actually the room through which my children would pass to go outside.
00:54:10.240 | And it became increasingly difficult for me to actually work there. And unfortunately, I just...
00:54:16.880 | So that brings back to, "Well, why not just get an office?" Well, that's fine, but I haven't
00:54:22.640 | particularly wanted many of the offices, and I didn't see the point of getting an office,
00:54:26.960 | especially since I knew that a lot of things were going to change. So over the last year,
00:54:32.240 | I've built the habit many times of working under a pine tree, or I work in all kinds of weird
00:54:38.000 | locations. And I try to do that so that I can get quiet recording. The recent course that I have
00:54:44.000 | been teaching on career and income planning was entirely recorded from underneath a pine tree.
00:54:49.760 | And somebody who is listening very closely with their earbuds or noise-canceling headphones can
00:54:56.560 | from time to time hear an airplane going overhead or birds in the background, etc., because I
00:55:00.960 | recorded that under a pine tree. So that has helped me to have confidence in the fact that
00:55:06.240 | I can do work effectively from various locations. At the moment, I'm literally recording this show
00:55:13.200 | from a college campus in the Midwestern United States using a conference room that is unused
00:55:19.200 | by a friend of mine who works here on the college. And it's the middle of summer here on Friday
00:55:23.120 | afternoon, and so I've been able to sit here at the conference room. But last week's show was
00:55:28.240 | recorded at a rest area on the side of the road. And so I expect this to be the norm of my life
00:55:33.120 | going forward for the next months is that I'll be in diverse locations. So I have the equipment
00:55:40.000 | to work, which is relatively simple. I've moved entirely to a mobile recording setup. I've done
00:55:47.280 | a lot of that over the years, and I guess I'll skip that because that's probably only relevant
00:55:52.800 | to somebody who's interested in recording audio. The big thing that I have found tough, Kevin,
00:55:58.400 | is being focused when I actually do sit down to work. In an office, you often go through a time
00:56:05.760 | period of, "Okay, I'm going to sit down on my computer. I'm going to get my coffee. I'm going
00:56:09.520 | to boot up. Let me see what's happening on whatever your favorite time-wasting websites are," etc.
00:56:14.720 | And that doesn't work when traveling because you may not have the infrastructure. You need
00:56:19.760 | to be more organized. And what I find actually the hardest about working and about radical
00:56:24.720 | personal finance in general is knowing what to do. Many days, I don't know what to do
00:56:30.080 | because I've never done this before, and I know very few people who have.
00:56:34.480 | And so I just don't know what to do. And that's really hard because if you don't know what to do,
00:56:40.800 | then it's hard to do it. And it's a very serious, legitimate problem. Today, I sat down at my desk
00:56:49.120 | and at this conference table that I'm sitting at, and I knew I was going to record my Q&A call.
00:56:54.640 | I had a consulting call earlier. And beyond that, I don't know what to do. I have hundreds
00:56:59.680 | of unanswered emails. I have planning for a personal life that's undone. I have a long to-do
00:57:04.720 | list. I have major projects that I'm behind on, and it's hard to know what do I do, where do I
00:57:09.680 | focus. And I say that to say what I'm learning and what I have learned is if I don't have my
00:57:16.480 | to-do list planned in advance before I open my computer, before I sit down, then it's not going
00:57:22.000 | to work. And so I need to know what I'm going to do, which comes down to having some kind of
00:57:25.920 | schedule and having some kind of committed outputs. What's the date at which I'm going to have this
00:57:32.720 | thing done, and what does done look like? And that's where I'm trying to work out. And so to
00:57:41.200 | have a schedule of here are my outputs so that you know when you're done. Because with most
00:57:46.560 | businesses, especially businesses like mine, it's impossible to ever finish. You never finish. You
00:57:51.760 | just simply quit. And that's really hard because I used to like to finish things, but I don't finish
00:57:57.280 | anything anymore. I just quit. I just hit publish. I just do it and turn off my computer and go on.
00:58:03.280 | And so, and especially when you're traveling, you have to. The other tip that I have is to,
00:58:09.280 | well, with regard to working, get clear on what you need internet for and what you don't need
00:58:13.680 | internet for, because that can be a challenge. So knowing the things that you can do in a different
00:58:19.440 | context. So going back now to David Allen's getting things done philosophy, you need to have
00:58:24.560 | a context for your work. So you have at internet and you have at computer and you have at pine tree,
00:58:31.120 | whatever it is that you can do. And knowing those things that you can do when you can do them,
00:58:36.320 | so that you are prepared in your different circumstances, because there are times at
00:58:39.840 | which you sit down and you're on an airplane or you're sitting in a lobby or you're waiting
00:58:44.480 | somewhere or wherever you are, you need to know which list to go to at that moment. So being
00:58:50.480 | organized with those things. I have struggled with that the last couple of weeks. I'm fixing it
00:58:55.280 | because the next couple of weeks need to change. So I've identified that as a problem. The next
00:59:01.120 | thing with regard to traveling, I think comes down to having a schedule and specifically moving slow.
00:59:07.840 | So if you've tried to work while you're on vacation, you are on a short trip, it didn't work,
00:59:14.880 | but it probably didn't work, not because it couldn't work, but it didn't work because there's
00:59:19.440 | just not enough time. And I think it takes time. It's taking me some time, taking my family some
00:59:25.520 | time to get out of vacation mindset. From what I've learned from many people who've done this,
00:59:31.680 | if you go from going, when you go on vacation, you're accustomed to having a big difference
00:59:37.600 | between the structure of your home when you're home versus when you're on vacation. You may run
00:59:42.480 | a very orderly home when you're at home. You have regular meal times, you have regular work times,
00:59:49.280 | you have regular activities, regular bedtimes, regular wake up times. And that's how my wife
00:59:54.800 | and I, that's how we run our home, is we keep it very structured. And especially with little ones,
00:59:59.280 | to get anything done, it has to be structured. So we try to keep it very structured and very
01:00:03.280 | consistent. But when you're traveling, usually on vacation, that often changes. You have a leisurely
01:00:09.600 | morning, you change, do different activities that take certain energy out of your life.
01:00:13.760 | And in a two-week vacation, you can't, it's hard to sit down and actually get anything done.
01:00:21.440 | But what we're trying to focus on is the fact that we're traveling, not vacationing. And so
01:00:24.960 | that's been, the last couple of weeks have been a disaster with regard to my actually doing work.
01:00:29.120 | Frankly, the last month and a half has been a disaster because of all the complications of
01:00:33.200 | leaving. I had it all sketched out so I would be able to consistently produce work, but it all fell
01:00:39.760 | apart because the circumstances just totally fell apart. But we were planning on a very leisurely
01:00:46.160 | travel schedule. Our intention was to leave March 1, and we were going to meander around the Southern
01:00:50.880 | United States and meander up to the North. That was our goal. And so we set a goal. We said,
01:00:55.120 | we're going to stay three or four nights in each place that we are as a minimum so that we can have
01:00:59.280 | a day of sightseeing, a day of work, and a day of settling in. And that was the plan. And then we're
01:01:04.800 | going to travel more than a couple hundred miles in a day. Well, here we are much of the way across
01:01:10.640 | the country, and we've totally abandoned that because our schedule kept getting pushed back,
01:01:14.720 | back, back, back. And our RV travel season went from a nice leisurely multiple months to a very
01:01:20.800 | compressed few months. And so I have done very little productive work over the last few weeks
01:01:25.680 | because just of settling into the new life. We're almost to the point where it's cool enough that we
01:01:30.480 | can now abandon this frenetic pace and move slowly. And so in moving slowly, I think we intend
01:01:38.800 | to set up, here are the days that are working, and those work days are run just like our days
01:01:44.400 | were when we were in a fixed house. I get up and go to work at a certain time. My wife,
01:01:49.680 | uh, uh, works with the children on a specific schedule. She does her normal school activities
01:01:55.360 | on a specific schedule. And we're not sightseeing. We're just happen to be living in an RV in a
01:02:00.720 | picturesque location. And, and so we're, we're this coming week, that's where we're going to
01:02:06.240 | this week so that I can get more work done. And then my last two tips are these. Um, I think you
01:02:11.360 | gotta have work that you care about, uh, work that matters to you. That's what often pulls me back
01:02:17.840 | is I find that I care about my work and I want to produce the work that, that matters. Uh, and then
01:02:24.640 | the last, so that's helpful. If you don't have work that matters, I think it's hard because we
01:02:28.880 | need a beautiful location. It's easier to say, well, let's go swimming instead of doing the work.
01:02:33.360 | And then the final thing is just, I'm telling myself just to be patient and recognize that
01:02:38.720 | things will change and you need time to work into it. Uh, we have been so tired the last month
01:02:45.440 | that I've been sleeping in. And so instead of getting up at my normal early time so that I can
01:02:50.320 | work before my children wake up, we've just been exhausted and, and the whole morning schedule has
01:02:54.960 | fallen apart. And I think just being okay with that and saying, well, we, this is what we signed
01:02:59.280 | up for. It's okay. It's going to change. That's where we're at. So those are some of the things
01:03:03.200 | that I'm learning. I think that it's possible. I think it's doable. I don't think it's possible
01:03:07.120 | to move quickly or to travel hard and do work, but I do think it's possible to travel slowly
01:03:13.920 | and do work. So those are my thoughts. Any follow up, Kevin, or is that about what you expected?
01:03:19.200 | That's yeah, no, that's definitely the info that I was hoping to hear. Um, and I would,
01:03:26.720 | I definitely like to hear an update when you are, um, further into your vacation or excuse me,
01:03:31.680 | into your traveling. Thank you. Exactly. When you, uh, when you have some, some procedures kind
01:03:38.480 | of nailed down. So yeah, just one last thing I wanted to, uh, to say is that I just wanted to
01:03:42.880 | give you an open invite to Denver, Colorado. Oh, thank you very much. I appreciate that.
01:03:47.440 | You know, and finally, I guess I would just say with regard to what you talked about,
01:03:52.560 | I mean, going down to Mexico and whatnot, I guess the last thing I forgot to say would be,
01:03:57.280 | I have learned that having a fixed office is far more valuable than I ever thought it was.
01:04:04.240 | I have missed so many days of work by just weird circumstances. And I didn't use to value
01:04:11.920 | an office. I used to think, Oh, I can work from anywhere, but I have come to the conclusion that
01:04:17.200 | I was wrong. And having a fixed circumstance, fixed location with fixed expectations is really
01:04:24.080 | important for productivity. Cause I've lost so many days of work. When I went to my preferred
01:04:28.800 | working location, I had a bunch of them that I've worked from, Oh, but this one's not available
01:04:32.720 | today, or the internet's not working, or all of a sudden it's raining or this it's brutal.
01:04:38.400 | So I've come to appreciate the value of an office. And whenever we, uh, this state season of life,
01:04:43.760 | I will set up offices that will work for us at this point. And then whenever we, um, whenever
01:04:49.520 | we land, I will definitely have a fixed office away from my children. So they're not so loud.
01:04:55.360 | So I can actually do work, but in the meantime, hopefully you get to enjoy the, the, the fun of
01:05:00.320 | the journey and from time to time, I'll share with you where I am and you can listen hard in
01:05:03.600 | the background to see what noises are in the background, what screaming children or what
01:05:07.840 | birds chirping, et cetera. It is interesting though. I do love it. And I will say,
01:05:12.640 | I sound a little bit, probably sounded a little bit negative about working remotely
01:05:17.200 | because it's just, it has been super stressful the last few weeks on the road. And the last
01:05:23.360 | month and a half, it's been, it's been, it's been tough, but, uh, it's also really cool, uh,
01:05:31.760 | where I'm sitting right now, looking out over a beautiful college campus. And, um, I mean,
01:05:37.760 | it's really cool. It's very rewarding to be able to do this. And to think that when you think about
01:05:43.120 | so many of our ancestors who, who earned their living in so many unagreeable ways, uh, to think
01:05:51.040 | that I can earn my living in such an agreeable way, I'm extremely blessed. And I have you to
01:05:55.760 | thank for that you to think, uh, I spent some time apologizing on last week's show kind of obliquely,
01:06:02.720 | but it's because I know that I haven't given you my best. Oh, I haven't given you the best that I'm
01:06:08.480 | capable of in the last month and a couple of months. Um, I've given you the best I was capable
01:06:13.840 | of at the time, but I haven't given you the best that I was capable of. And you know, I was, I was
01:06:19.600 | reading some iTunes reviews and some of the comments, a bunch of negative reviews came in
01:06:24.960 | and, uh, I was reading them and the hard part about it was I couldn't argue with them. They
01:06:29.520 | were absolutely true. Uh, they were true because I've just done the best I could. But with all the
01:06:33.840 | circumstances, I did the best I could. Wasn't what I think was the best. So if you've stuck with me,
01:06:39.360 | um, thank you for your patience. Uh, since you have stuck with me, I should say, thank you for
01:06:43.520 | your patience and I will continue to deliver the best that I'm capable of, but it'll be better in
01:06:50.400 | the future. Thank you for listening. Happy weekend to you all. I'll be back with you next week.
01:06:53.920 | RadicalPersonalFinance.com/patron if you would like to sign up and join on next week's show.
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