RPF0571-You_Dont_Have_to_Be_Smart_to_Become_Financially_Independent...But_You_Cant_Be_Stupid_pt._5_of_5
00:00:00.000 | Welcome to Radical Personal Finance, the show dedicated to providing you with the knowledge,
00:00:04.600 | skills, insight, and encouragement you need to live a rich and meaningful life now while
00:00:09.720 | building a plan for financial freedom in 10 years or less.
00:00:12.920 | My name is Joshua.
00:00:13.920 | I'm your host.
00:00:14.920 | And today we round out part five of our five-part series called "You Don't Have to Be Smart
00:00:19.720 | to Become Financially Independent, But You Can't Be Stupid."
00:00:23.520 | And the idea is this, I spend so much time talking about radical, hardcore ideas, very
00:00:31.520 | technical forms of analysis that I fear that you might have the impression that somehow
00:00:37.080 | you have to be smart to do this stuff.
00:00:40.920 | That's a mistake.
00:00:44.760 | There are so many ordinary people who have worked at ordinary jobs, but just worked hard
00:00:52.040 | at them, who have lived ordinary-looking lives, but have just reined their expenses in a little
00:00:57.400 | bit, who have invested in ordinary investment vehicles, but who have simply stayed the course
00:01:04.080 | and followed their strategies, who have protected themselves from catastrophe through very ordinary
00:01:09.920 | means of protection like emergency funds and insurance policies.
00:01:15.560 | And they've gotten rich.
00:01:20.860 | So I want to make sure that you don't think that you have to live in a van down by the
00:01:24.920 | river while you're starting up your next tech startup that's going to make you $10 million
00:01:30.360 | and invest all your money in the latest crypto offering in order for you to become rich.
00:01:36.360 | You don't.
00:01:39.800 | You just can't be stupid and make the stupid mistakes that so many people make.
00:01:44.080 | Today we talk about part five of my framework called "Optimize Lifestyle."
00:01:49.600 | Now optimize lifestyle is in a sense very simple.
00:01:52.360 | When I teach this, I teach it in the simple way to say, you can earn an income of $50,000
00:01:59.680 | per year at a job you like and at a job you don't like.
00:02:04.020 | And the net result on your life measured in financial terms is going to be the same.
00:02:09.120 | But the result in your life measured in lifestyle is going to be very different.
00:02:14.360 | So if you don't like your job, you don't have to be crazy smart and invent some brand new
00:02:20.320 | thing.
00:02:21.320 | Just go look for and get another job that you think you might like more and see if you
00:02:26.280 | like it better.
00:02:28.420 | If you don't like that one any better, you don't have to be all that smart, come up with
00:02:33.580 | some brand new approach.
00:02:35.680 | Just go and get another job that you think you might like better.
00:02:42.160 | It's very simple.
00:02:43.560 | What about expenses?
00:02:44.720 | Well, you can optimize the way that you spend your money.
00:02:48.760 | You can buy an ordinary house that you really like because it's close to your children's
00:02:55.240 | school, it's close to the local library, it's close to the stores, and it has a really beautiful
00:03:00.240 | view.
00:03:01.240 | Or you can buy a really ordinary house that you don't like because it has some problems
00:03:06.920 | that you don't like.
00:03:08.600 | Well, if you don't like your house, just sell it and go buy another one.
00:03:14.760 | If you don't like your car, just sell it and go get a different one.
00:03:19.760 | If you don't like where you live, just move and go live somewhere else and optimize those
00:03:26.240 | things.
00:03:27.720 | You don't need any super secret strategy.
00:03:31.360 | You just need to pay attention to those things that are working for you and do more of them.
00:03:36.360 | Pay attention to the things that are not working for you and change them.
00:03:40.320 | Finally, with investments, how can you optimize your investment portfolio?
00:03:45.920 | I want to encourage you, think broadly about it.
00:03:51.000 | I knew a guy one time who worked in my local coin shop and I would go in and talk to him.
00:03:57.960 | He worked in the local coin shop.
00:03:59.620 | He loved it.
00:04:00.620 | He enjoyed working there.
00:04:02.040 | He was a real expert, especially in numismatic coins.
00:04:05.760 | I would go in and chat with him and we'd talk about different things.
00:04:09.280 | He provided great customer service on the job.
00:04:11.320 | He had a really rewarding type of work that he did.
00:04:14.680 | He enjoyed the industry.
00:04:15.720 | He liked selling coins.
00:04:17.920 | But on the side, he would spend all his time buying rare coins and putting together collections
00:04:23.360 | and then selling them as collections.
00:04:27.200 | For a guy like that, it would be crazy for him to make a primary source of his investment
00:04:33.720 | in stocks or even in real estate.
00:04:36.280 | He was not suitable for a real estate kind of approach, but he was very suitable for
00:04:42.520 | buying and investing in rare coins.
00:04:44.320 | He knew what he was doing.
00:04:49.320 | So if you want to invest and you have an interest in rare coins or whatever the appropriate
00:04:53.480 | version of that is, go for it.
00:04:58.560 | Another guy that I knew, I'm trying to use common man examples just as a common man example.
00:05:05.840 | Another guy that I knew, he always thought that he should put money in stocks, but what
00:05:11.200 | happened was he always wound up putting money in stocks and then he needed money and he
00:05:16.040 | would take the money out of his 401k and sell it.
00:05:18.000 | This happened again and again and again.
00:05:20.320 | I sat with him as a financial advisor and he expected me to say the same thing that
00:05:24.280 | every other financial advisor said, "You got to put your money in and leave it alone."
00:05:28.960 | Meanwhile, I look over in the corner of the room and there is a massive, massive gun cabinet
00:05:34.920 | sitting there.
00:05:37.000 | Now we got to talking and I am a very good listener.
00:05:41.280 | When people want to talk to me about all their guns, I think it's an interesting subject.
00:05:45.520 | And the tens of thousands of dollars that were there held in that gun cabinet, those
00:05:51.120 | tens of thousands of dollars kept on accumulating.
00:05:55.080 | All I did was say, "Listen, you've got this skill.
00:05:59.400 | You've got the money.
00:06:00.400 | You spend your time going to gun shows.
00:06:03.320 | Just focus on this as your investment approach, optimizing investments."
00:06:10.160 | And in those two cases, I used very tangible subjects.
00:06:13.680 | Some people are into cars, some people are into horses, some people are into horse trailers.
00:06:17.240 | I don't know.
00:06:18.240 | I'm using that.
00:06:19.240 | Some people are into crypto and they just love crypto.
00:06:23.600 | Well, put your money where your mouth is and focus and be willing to focus on investing
00:06:29.120 | in what you know and in what you love and what you care about so that you can reap some
00:06:35.040 | reward from your investments.
00:06:36.600 | It's not just numbers on a paper of what the US stock market is doing.
00:06:42.320 | My point with these examples is you can get a lot of life satisfaction from your investments.
00:06:51.480 | My friend who did coins, he loved it.
00:06:54.840 | He was at the coin show anyway and he was really good at putting together collections
00:06:59.740 | and selling them for way more than he had in them.
00:07:02.360 | It took him a long time.
00:07:03.520 | It took him years to put them together, but he loved the process and he was doing it anyway.
00:07:09.640 | My friend who did the guns, he did a little bit of gunsmithing on the side, built some
00:07:14.560 | rifles and sold them, helped some friends build some rifles, bought things cheap, sold
00:07:19.720 | them, traded, did all this stuff.
00:07:22.120 | Loved it.
00:07:23.120 | He was doing it anyway.
00:07:25.120 | And he couldn't hold on to $10,000 in his 401k because he could sure hold on to $10,000
00:07:35.240 | in a gun because he didn't want to part with it.
00:07:37.880 | At some point in time, obviously, you got to part with the thing, but hopefully my examples
00:07:43.600 | ring true for you.
00:07:44.960 | You can optimize how you earn your income.
00:07:46.920 | You can optimize how you spend your money.
00:07:48.600 | You can optimize how you invest.
00:07:50.640 | You can optimize the house that you live in, the car that you drive, where you live, the
00:07:53.960 | state you live in, the country you live in.
00:07:57.440 | Just don't be stupid about it.
00:08:00.600 | On every one of those things, there is a level of stupidity.
00:08:07.280 | For example, I said, you can live in a, if you don't like your house, move to another
00:08:10.160 | house.
00:08:11.160 | Well, remember, move to another house doesn't automatically mean move to the $10 million
00:08:15.880 | penthouse condo, unless you got the, actually got the money to pay for it.
00:08:21.100 | But you can optimize these things.
00:08:23.440 | The cool thing about optimization is it frequently leads to greater success.
00:08:27.040 | If you choose a job that's well suited for you, then it'll be easier for you to work
00:08:32.680 | longer hours in it, work harder at it, and grow in it over the long term.
00:08:39.440 | You'll accrue more and more unique inside knowledge, unique skill that will help you
00:08:44.240 | earn more and more and more money.
00:08:46.440 | It starts with choosing the right job for you, and then you just simply follow it through.
00:08:52.580 | The cool thing about optimizing where you live is if you live in a state that you like,
00:08:56.600 | in a country that you care about, in a town that you've chosen, in a house that works
00:09:00.820 | well for you and is important to you, then it's a lot easier for you to stay in that
00:09:06.100 | house for many, many decades.
00:09:08.760 | If you'll just stay in the house for many, many decades, your expenses will be so low
00:09:12.500 | that it's hard for you not to buy a few more houses and rent them out, because what else
00:09:16.160 | are you going to do with the money that's piling up in your checking account?
00:09:20.200 | If you'll choose investments that you care about, that are optimized for you, then you'll
00:09:24.800 | wind up having inside knowledge on that market, and you'll be able to exert inside knowledge
00:09:29.940 | on that market in order to earn above average rates of return, and that earning of above
00:09:34.460 | average rates of return will keep you growing your investment portfolio.
00:09:39.820 | Because you're investing in something that you're interested in and you care about, you'll
00:09:44.020 | automatically see the opportunities that are right for you.
00:09:48.180 | It's not complicated.
00:09:51.740 | You don't have to actually be all that smart to become financially independent, but you
00:10:00.740 | can't be stupid.
00:10:05.700 | I hope this series has been helpful to you.
00:10:08.020 | I hope that when I dig into weird stuff, I hope you just listen to it and say, "If it's
00:10:13.460 | right for you, it's fine to be weird, but just say, 'How can I apply that a little bit?'"
00:10:19.180 | Recognize that I don't think everybody needs to go to the hardcore extreme, but you can
00:10:23.660 | still become financially independent if you'll take a few strategies here and there and apply
00:10:28.020 | them to your life.
00:10:31.460 | Thank you for listening.
00:10:32.460 | You've honored me with your time and attention, and I'm grateful for that.
00:10:36.660 | And I hope that I've effectively served you today with some ideas and strategies and tactics
00:10:41.480 | and techniques and tools that will help move you towards your goals.
00:10:46.220 | Before you go, three simple requests.
00:10:48.660 | One, if there's an idea that's been helpful to you in today's show, make a plan to take
00:10:54.340 | action on it.
00:10:56.380 | Listening does lead to learning, but learning in and of itself doesn't automatically lead
00:11:01.780 | to a life change.
00:11:04.120 | It's action that leads to a life change.
00:11:08.100 | So take action.
00:11:09.820 | Two, take something that was helpful to you in today's show and share it with somebody
00:11:15.420 | that you care about.
00:11:16.980 | I'm depending on you to be a co-laborer with me in helping me to propagate the message
00:11:24.180 | that I'm seeking to share.
00:11:26.660 | That helps the person that you are engaging with, and it also helps you because teaching
00:11:32.500 | others is one of the most effective ways for you to learn and for you to cement your learning.
00:11:39.380 | Three, if there's an idea that's been specifically helpful to you, and if you're gaining financial
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