RPF0718-Friday_QA-Stock_Market_Volatility_For-Profit_Schools_Personal_Self-Confidence_HELOCs

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00:00:29.040 | Welcome to Radical Personal Finance. Today it's Friday, and today of course that means live Q&A.

00:00:38.080 | Welcome to Radical Personal Finance, a show dedicated to providing you with the knowledge,

00:00:58.080 | skills, insight, and encouragement you need to live a rich and meaningful life now,

00:01:02.400 | while building a plan for financial freedom in 10 years or less.

00:01:05.520 | My name is Joshua, I am your host, and today on the show we've got live Q&A.

00:01:09.040 | We've got our phone lines open here with, looks like, one, two, three, four, five callers.

00:01:13.760 | So let's go. Let's get to it. I love these Friday shows.

00:01:16.560 | First time recording live and broadcasting live on Facebook simultaneously.

00:01:27.120 | If you would ever like to join me for one of these live shows in the future,

00:01:29.760 | the call-in line is available to patrons of the show.

00:01:32.960 | If you'd like to sign up to support the show, you can do that on patreon.com/radicalpersonalfinance.

00:01:38.320 | patreon.com/radicalpersonalfinance, and that's where you can find all that information.

00:01:43.520 | But today we begin, let's see if I can make this work, everything work.

00:01:47.440 | We begin on the phone with, looks like, Lisa.

00:01:50.800 | Lisa, welcome to Radical Personal Finance. How are you?

00:01:56.800 | I am good. Thank you, Joshua. How are you?

00:01:59.360 | I am very well. How can I serve today, Lisa?

00:02:00.960 | I thought I was too, but I will go. So I've called in before and you were very helpful.

00:02:07.280 | Thank you. I enjoy your show. But with the volatility in the markets and

00:02:12.000 | with the COVID and everything else, previously I was looking into total stock index funds,

00:02:20.000 | but once again, I just saw a movie, The Big Short, and with all the volatility and the

00:02:24.720 | corruption and the recent pandemic, are total stock index funds even a safe bet these days?

00:02:30.960 | And if not, what is your recommendation? And I know that you don't hold that license anymore,

00:02:37.520 | but I value your opinion. And so I'm just wondering, in light with everything else

00:02:42.880 | that's going on, I know it's a good time to buy. However, the fact is they are.

00:02:46.880 | What is your opinion on that?

00:02:48.080 | Depends on what you mean by safe bet. There are a lot of ways to do that.

00:02:54.560 | When you think about risk in general and specifically what risk, there's so many

00:03:00.880 | different kinds of risks that you have to define what you mean by safe bet. So tell me specifically,

00:03:05.680 | what are your concerns about the stock market? What are you specifically concerned about?

00:03:12.320 | Well, for instance, I would only invest in something like a total stock index fund,

00:03:17.520 | like a VTI or something. But after seeing, once again, I'm not a weirdo, but I did watch again,

00:03:26.480 | Snowden and The Big Short and things like that. And it does bring light to the fact that we don't

00:03:31.440 | know really what's going on and buying into the stock market is like a crapshoot. That's why total

00:03:38.000 | stock index funds, in my opinion, are the best. And I also purchase, I buy green funds as well.

00:03:44.480 | But before I put money out there for VTI or anything else, whether it's Vanguard or

00:03:49.920 | other total stock index funds, I was just wondering what your opinion is on those because

00:03:54.800 | I guess my fears are stock market is basically the prices are, they're not real. I mean,

00:04:03.360 | they're real, but they're not. And I know you know what I mean by that.

00:04:07.360 | And so a total stock index fund, yes, it's less volatile because you get the best of the best,

00:04:14.400 | however, it's still the stock market. So the other options are, you know, people say

00:04:19.760 | Bitcoin. Well, you and I both know that's not going to happen. And gold and silver, you know,

00:04:26.400 | okay. But what other options are as safe, and I'm doing hand quotes in that, as a total stock index

00:04:34.560 | fund, meaning semi-conservative. - Well, so let me give you some ideas to think about and kind of

00:04:41.680 | just to talk through how I think about the subject. So first of all, there are tons of

00:04:47.920 | investment options available. Just yesterday, somebody offered me and asked me if I wanted to

00:04:53.120 | invest $625,000 in a short-term loan for a company that had sold millions and millions of dollars of

00:05:02.000 | face masks, millions of face masks to a government, and basically we could pick the terms. And so,

00:05:11.120 | you know, I didn't do the deal, but that's the kind of thing that really is available. Like,

00:05:16.800 | there are tons of options available for you in the marketplace if you're willing to,

00:05:21.120 | I guess, think creatively is a big thing. If you're willing to think creatively and consider

00:05:25.920 | what you'd like to invest in and then start talking with people about the different ideas

00:05:30.160 | that are available and the different things that can be done, there are tons and tons of

00:05:35.040 | investments available. Can you buy gold and silver? Sure. Can you buy Bitcoin? Sure.

00:05:38.960 | But those are by far from the only worthwhile investments. Now, let's begin with the risks

00:05:44.320 | of the stock market. Whenever you're working on and talking about risks, you have to identify

00:05:50.640 | what risks are we dealing with because there is nothing in life that is without risk. The stock

00:05:57.680 | market is filled with risk, but in some ways it's a lot safer with regard to risk than many other

00:06:04.800 | things. So, when you're talking about a widespread passive investment, like an index fund, like a

00:06:11.200 | total stock market index fund, what that represents, your shares of that mutual fund, what

00:06:18.480 | that represents is it represents thousands and thousands of companies. Thousands and thousands

00:06:27.280 | of companies. And those companies have active businesses that are profitable. Those companies

00:06:33.200 | have facilities and land that is all around the world. So, it's globally diversified. They have

00:06:40.000 | customers, they have brand equity, their customers like them. Whether it's everything from Coca-Cola

00:06:46.720 | that I drink Coca-Cola or I drink Pepsi or I use Thai detergent or I use Apple computers or I

00:06:53.200 | use Windows or whatever, the customers love them. The customers use their products every day.

00:06:58.800 | And then by virtue of having an active business, they can adjust to the current environment.

00:07:04.080 | If they're running out of money, they can build new products. If they are going unprofitable,

00:07:10.080 | they can fire employees, they can lay off staff, they can do whatever they need to do

00:07:14.480 | to start to build profits. And so, if you try to get me to believe that investing in the stock

00:07:24.160 | market is risky, I have a very hard time believing that. Now, what are the risks in the stock market?

00:07:32.160 | Well, the risk of the stock market is it's highly volatile. And I prefer to use the word volatility

00:07:38.880 | rather than risk because it's a specific form of volatility. The market is clearly incredibly

00:07:45.680 | volatile. Clearly, it goes up, it goes down. And it goes up and down with practically no idea from

00:07:53.120 | us of what it is on any particular day. And it's hard sometimes to figure out how to know what's

00:08:05.280 | even going on. I do not understand at this point in time, I do not understand the stock market.

00:08:09.360 | And I'm one who should understand it. I'm one who should understand why it's doing what it's doing,

00:08:14.000 | but it's not. Because basically, what you see when you look at market volatility, you see

00:08:19.040 | the expression of millions of people's individual decisions to buy, to sell, to

00:08:25.920 | you know, just, and it's hard to put all that together. So, the market is very volatile.

00:08:32.160 | Now, it does face significant risks. So, let's say that you did have a scenario where you were

00:08:37.760 | convinced that the market was going to, that overall, the economic situation was going to be

00:08:45.040 | really low, that things were, everything was going to be stuck, how it is that companies are not going

00:08:53.840 | to have any profits, that the economy is going to be in recession for many, many years, where you

00:09:00.000 | would expect then the stock market to be pretty low in terms of its overall performance. You would

00:09:05.840 | expect that it wouldn't perform. I'm going a little bit in circles, partly because it's a

00:09:12.480 | hard question, and partly because I'm broadcasting live at the moment, answering your question,

00:09:18.880 | trying to make an intelligent job of it, and then simultaneously handling multiple camera feeds,

00:09:22.880 | which is an interesting experience. No, no, it's not nothing about you. I'm just acknowledging out

00:09:28.240 | loud to the audience that's watching on Facebook and on YouTube and whatnot, that this is a new

00:09:32.960 | thing for me. I've got to build, you know, yesterday's show was all about the fact that

00:09:36.240 | I got to build these new skills, and one of it is, and that's what I'm doing. The point is that

00:09:41.600 | volatility is not the same as risk. So if you believe fundamentally in the promise of index

00:09:47.760 | funds, if you believe fundamentally in the promise of the US economy, if you believe fundamentally

00:09:52.000 | in those things, then you should invest and you should ignore the volatility. Now, that said,

00:09:56.800 | I'm going to do a show pretty soon on basically why I don't miss the stock market. And I will

00:10:04.560 | tell you this, that I have not missed. I sold out of the stock market a number of years ago,

00:10:09.200 | not out of a market timing or a prediction, but just out of frustration, annoyance, and offense

00:10:16.160 | at the general kind of stock market, the way that things are done. And I have not missed

00:10:24.240 | sitting on the sideline. I have not missed the volatility. I have enjoyed sitting back and just

00:10:31.440 | having stable money right now. And I'll try to articulate that in a future show where I'll say

00:10:36.400 | that for me personally, I think I'll probably own some stocks in the future, but it's hard for me to

00:10:43.280 | imagine ever going back into the market generally. What I have to admit and concede is what the

00:10:50.320 | market itself is really good at is the market is really, really good at giving you the ability to

00:11:01.680 | invest passively. And because the market is so efficient, as long as you can deal with the

00:11:07.120 | volatility, the US stock market is in some ways relatively low risk. For example, the risk of

00:11:12.320 | your being defrauded in the US stock market is relatively low. If I'd taken that deal that a

00:11:17.440 | friend of mine offered me yesterday to invest $625,000 in short-term loans to a company that

00:11:25.120 | was trying to do a deal with a national government, they'd already sold the contract. They just needed

00:11:30.800 | some bridge financing. If I had taken that deal, there's a very real possibility that that kind of

00:11:36.160 | deal could have resulted in my facing significant, I could have been defrauded. Because I don't know

00:11:42.880 | these guys. I don't know what's going on. Whereas when you're dealing with a big publicly traded

00:11:47.280 | company, it's a very different risk proposition. Go ahead. But the government is, as you know,

00:11:52.480 | is not honest either. We all know that. I just heard that somebody else tried to sell a bunch

00:12:00.000 | of masks and they were sold. And then I think Trump put the kibosh on it. So I mean, I'm sure

00:12:07.040 | that you saw that and you were hesitant. But anything with the word government in it, I'm

00:12:11.760 | hesitant on. But that's why when I say total stock index funds, even that earnings can be adjusted

00:12:21.520 | or depending on owners and companies, I don't really trust anything. I'm a little bit like you

00:12:26.480 | in that camp. But if I was going to do something, that's why I thought the total stock index fund

00:12:32.160 | is better than betting on certain stocks in individual just because, yeah, you know what I'm

00:12:38.160 | talking about. Yeah. And I'm not trying to tear that strategy apart. And that's why it's so hard,

00:12:42.400 | because we're trying to have about a five minute conversation or at this point in a 10 minute

00:12:46.560 | conversation on something that is really complex. What I just point out to you is that, yes,

00:12:56.320 | an index fund, a broad stock market index fund is going to be far safer than investing in individual

00:13:02.160 | stocks because your wipe out risk of any one company going bankrupt is extremely low. But

00:13:07.120 | by that regard, it's far safer. What I will say this is this. Since I don't sell stocks anymore,

00:13:14.240 | I used to sell stocks and I used to have thus a financial incentive to talk up the stock market.

00:13:22.000 | I still believe there's value in the stock market, but I'm not nearly as persuaded of the value for

00:13:27.680 | individuals as I was when I sold stocks professionally. Are they useful? Yes.

00:13:34.320 | My family members own stocks. I'm not trying to get my parents to sell their stocks.

00:13:39.440 | I'm not trying. I'm not on a crusade to get people to sell their stocks. But I am willing

00:13:43.520 | to say at this point for people who have an interest and who are willing to study and are

00:13:48.240 | willing to think and willing to work that there are probably other options available that are

00:13:53.760 | better. I've been working for the last few years on trying to figure those options out.

00:13:57.760 | I still haven't solved it perfectly, but I'm working on it. And so if you'll stay tuned to

00:14:05.360 | the show in the coming years, in the coming months, I'll try to keep on giving you some ideas

00:14:10.240 | that will help you to figure out how to make better decisions and how to provide options that

00:14:16.720 | are going to be more profitable, but satisfy that risk, that concern that you have. What I'll tell

00:14:22.800 | you is that if you are concerned, you should probably wait until you're really sold. I think

00:14:28.000 | that people get into the stock market far faster than they should, and they get out far slower than

00:14:32.720 | they should. We go to Drew in Missouri. Drew, welcome to the show. How can I serve you today,

00:14:36.800 | sir? Hey, Joshua. I've got a mix of a couple of your favorite topics today. Okay, let's go.

00:14:42.640 | Postmasters and confidence. Okay. So I've committed myself to, I've been to about 10

00:14:49.840 | postmaster meetings now. I just, yesterday after your Facebook, I signed up for the role of a

00:14:55.840 | speaking role. I guess it's the icebreaker speech and the pathways. But I'm just really almost kind

00:15:02.640 | of sick to my stomach. I'm actually much more nervous than my a hundred percent stock portfolio

00:15:06.720 | about speaking on Monday night. Did I, right? Is it hard to that sounds? Well, they actually say

00:15:13.840 | that a lot of people are more scared of public speaking than they are of death. I haven't,

00:15:21.680 | I haven't fact checked that statistic in a while, but if you're sick to your stomach,

00:15:25.360 | you should know that's normal. And I'll tell you that it doesn't, it, it, it, that'll never go away.

00:15:31.040 | Right now, as I mentioned on yesterday's show right now, I am live streaming the show on Facebook

00:15:38.240 | and live streaming and creating video content. And it makes me, I've, I've, I don't get very

00:15:45.120 | nervous when I'm speaking in front of a crowd these days, cause I've done a lot of it. I don't

00:15:49.040 | get nervous anymore speaking with a, in a, on the podcast just because I've done it for so long. So

00:15:55.520 | I don't actually get nervous in that, but I'm nervous as anything right now. When I went to hit,

00:16:00.720 | hit go live and I'm saying, okay, I got to perform in front of an audience.

00:16:04.720 | Um, that's all over the world where they can see me. I'm going to lose that, that mystique, that,

00:16:09.440 | that mystique of it just being my voice. They can see my, my DIY haircut. I cut my hair myself.

00:16:15.600 | They can see my big beard. That's not cool yet, but it's still bushy. Like it's, I got sick to my

00:16:20.960 | stomach, um, just before the show, um, right now, as I'm talking to you, I'm nervous. Um, my hands

00:16:26.400 | are shaking. My, my, my blood grows a little bit cold. And so that, but the point is that none of

00:16:31.520 | that matters. Um, because those are just emotions that I'm experiencing. Those are just physical

00:16:36.720 | reactions. And as I do it more and more, uh, I will go through that phase. And so if you're going

00:16:42.480 | for your first speech at Toastmasters, what you need to know is that every single person at

00:16:46.640 | Toastmasters has been through that same experience. Every single one of them, um, you know,

00:16:52.720 | had their knees knocking. And so the, the point of Toastmasters is to provide you with a friendly

00:16:59.600 | environment is to provide you with, uh, people who are going to support you, who are going to

00:17:03.920 | listen to you and you will find no more friendly environment. So even if you completely flub the

00:17:09.280 | entire thing, even if you put yourself in a situation where you, you, you freeze on the spot

00:17:15.600 | and you can't, um, you know, you can't do anything. They're going to say that's all right.

00:17:20.320 | Try again next time. And so you're in good company. What will happen is by the end, by the time you

00:17:24.160 | get to that 10th speech in your competent communicator workbook, when you get to that 10th

00:17:28.480 | speech, um, you'll still be nervous. There'll still be butterflies, but it won't be as paralyzing as

00:17:33.520 | it is right now. What you've got to commit to is no matter what, no matter how I feel, I'm going

00:17:37.920 | to do it. Um, and then that, that habit of doing something that invokes just tremendous fear in you

00:17:45.200 | will revolutionize your life over time. Awesome. That's funny to hear. Um, uh,

00:17:51.920 | one last thing. I'm also signed up to the word master role. Uh, I'll talk to your head.

00:17:56.320 | Do you have any words that you'd want to represent Monday? Oh, you mean you're going to, um,

00:18:02.160 | you're going to talk, you're going to bring the word of the day. Is that the key? Yes, exactly.

00:18:08.000 | Okay. So you need a word of the day. Is that, is that what you're asking? Yes. All right.

00:18:14.640 | Um, let's go with sanctimonious, sanctimonious. Um, there's your word of the day because I think

00:18:23.280 | it, it, it, um, uh, it applies in today's world. If we look up the definition of sanctimonious,

00:18:28.400 | I'm not sure if you're, uh, uh, familiar, but if we look up, um, sanctimonious,

00:18:32.880 | are you, do you know the word? Uh, no, but I'll be sure. So sanctimonious means behaving with

00:18:41.360 | sanctimony. That doesn't, um, that doesn't mean anything, but hypocritically pious or devout is

00:18:46.160 | the definition that pops up for me when I do a quick look, hypocritically pious or devout.

00:18:50.960 | And so when somebody, um, is just so kind of saccharine sweet, when somebody is so, um,

00:18:57.920 | hardcore in the fact that they're, um, you know, that they're, uh, Oh, well, they're just perfect,

00:19:03.520 | right? They don't have anything to, to applaud for. And I, I view that right now, when I look

00:19:07.600 | at all the debates, especially the political debates and whatnot, it's a useful word in

00:19:11.840 | today's word. So there's your word of the day. Sanctimonious. I'll follow up with you on Facebook.

00:19:18.080 | Yeah, that'd be great. Go for it. All right. We move now to Lucas in New Jersey, Lucas,

00:19:23.120 | welcome to the show. How can I serve you today? Hey, Joshua. Uh, I called him last week or two

00:19:29.200 | weeks ago, whatever the last one was, uh, about, uh, starting a childhood, uh, development school

00:19:36.240 | or, uh, Montessori school. And you had recommended that I go and look up, uh, Nick Kozel's manual,

00:19:42.800 | which I downloaded it. Um, uh, I went to Gary Norse website and you suggested and bought a copy.

00:19:49.920 | Uh, it's very long. So I got through probably the first 20 pages and, uh, spurred my interest. Um,

00:19:55.680 | but you would ask that I call back and we could talk a little bit more about the subject. So that's

00:20:00.960 | what I'm calling for today. Yeah. So, um, I'll tell you kind of, let's start with, uh, I'll give

00:20:06.960 | you some ideas that I've thought about, and this has been one of my genuine, um, backup plans that

00:20:13.200 | I've thought about as far as an interesting business that I would enjoy doing that I would

00:20:17.280 | think has real meaning. And that would be really, um, up my alley, uh, for me just as an individual.

00:20:24.000 | Um, the reason it's up my alley is because it combines profit, um, you know, potentially

00:20:30.080 | massive profit, um, with impact. Um, you know, when you think about the role of a teacher and

00:20:37.200 | you think about the, the ability that a teacher has to, to influence students, um, I mean,

00:20:46.240 | is there anything better? Is there anything more? And when I think about it, the re the way that I

00:20:50.320 | think about it is I start with even just like my thought as a father, right? I consider my work as

00:20:56.160 | a father to be my most valuable work. Um, I consider that to be probably the biggest part

00:21:03.520 | of my legacy. I'm optimistic that I'll be able to impact my friends. I'm optimistic. I'll be able to

00:21:09.840 | impact my family. I'm optimistic that I'll be able to impact your life as a listener positively in

00:21:15.600 | this context, but at the end of the day, the people that I'm going to have the most impact

00:21:20.400 | with are my children. And because I can impact them at such a young age, I can chart the course

00:21:27.120 | of their life. And if you think about that, that's why teachers are so important, which is why the

00:21:31.520 | choice of a teacher is so fundamentally important. One of the, the major issues that I have personally

00:21:38.800 | with government schooling is that you don't get a chance to choose your teachers in a government

00:21:43.440 | school. You are basically accidentally pushed into a place based purely on your geography.

00:21:50.320 | So you can choose what house you live in, what zip code you live in. Um, but if you,

00:21:56.080 | at the end of the day, you don't choose that teacher. You don't get to choose what that

00:22:00.960 | teacher stands for. You don't get to choose, um, the worldview of that teacher. You don't get to

00:22:05.200 | choose the education level, that teacher, you don't get to choose that. So if you want a little

00:22:09.040 | bit of freedom and a little bit control of your children, you have to move out of that system

00:22:12.320 | where it's forced upon you based upon where you ha you happen to live. And you have to move into a

00:22:17.360 | system and move into an environment where you can choose. And that's where private schools come in.

00:22:22.160 | So you can be private schools that could be home education. Those are fine. Um, I'm, I'm purely in

00:22:27.520 | public anyway. I'm purely an anti-government school person. Um, I'm pro any other solution

00:22:32.960 | that parents want to choose because they'll choose it intentionally. And so when you're choosing

00:22:37.200 | teachers for your children, you get to choose the philosophy of education that you, um, are

00:22:42.880 | interested in. You get to choose the, um, belief system of the people. Like, I think it's crazy

00:22:49.600 | why any Christian would send their child to a government school. I think it's crazy why any

00:22:53.760 | Muslim would send their child to a government school or why any Jew would send their child

00:22:56.880 | to a government school. Like you have this officially, um, secular system that is going

00:23:02.880 | to do nothing but work to undermine the religious beliefs that you have as a family. And you're

00:23:06.880 | going to send your child to that school and expect them to come out a good Muslim. Like,

00:23:10.320 | you're going to spend your child to that school and expect them to come out a, a faithful Orthodox

00:23:14.400 | Jew. Like it's crazy. And so, um, you can work in that environment and you, if you'll recruit

00:23:21.840 | other teachers that you're the one who chooses, then it's, then it opens up the doors to you.

00:23:26.400 | So now what about you as somebody who's seeking to, um, to market something in that space? Well,

00:23:32.640 | I'm going to assume that you have some ideas that you care about. You have a philosophy,

00:23:37.760 | a religion, a worldview, um, an educational, you know, uh, what do they call it? Just, uh, uh,

00:23:45.760 | like a system of, of, of development that you care about. And you think this is really going

00:23:50.400 | to work. This is going to work really well. And so the, you're going to say, um, how can I,

00:23:55.920 | um, how can I inculcate the Montessori educational philosophy? How can I help my

00:24:01.600 | child to explore the world around them? How can I help the child to learn in this, this very,

00:24:07.040 | uh, you know, simple way. That's, that's the kind of philosophy that you have the chance to promote.

00:24:13.040 | And maybe that's super, super influential on a child. So like the educational philosophy that

00:24:18.320 | we have found to be the most inspiring as a family is the educational philosophy of Charlotte Mason.

00:24:24.320 | Like we're really, I love Charlotte Mason's philosophy and we do kind of a quasi hybrid

00:24:29.120 | Charlotte Mason approach with our, with our children, but you can market a philosophy and

00:24:33.200 | you can adjust your children. Um, the classical schools do this really, really well. You can

00:24:37.600 | have an opportunity to, um, help the classical school in the classical tradition. You can have

00:24:42.080 | an opportunity to say, listen, we're going to, to inculcate this, um, uh, trivium into your child.

00:24:49.040 | And it's going to have all these benefits and you can market that really effectively.

00:24:52.240 | So, um, daycare, I think provides you with a really easy way into that. And if you follow

00:24:59.760 | an approach like Kozel writes about in his manual, where you, and basically for the uninitiated,

00:25:04.800 | the basic idea is that you go to churches, you, um, ask those churches, if you can use their

00:25:12.400 | facilities, their church buildings, their, um, you know, their fellowship hall or whatever they

00:25:16.720 | have, the stuff that's unused during the week, you go to those churches and you ask them, can I use,

00:25:21.440 | uh, your facilities and, and, and host a daycare for my children, for children in that. And then

00:25:26.400 | what you do in Kozel's approach, you provide daycare services, which are an increasing need

00:25:31.920 | when you have more and more dual income families, you provide daycare services, but then you bring

00:25:36.640 | into those daycare services, you start to add in additional levels of instruction. So you start to

00:25:41.120 | add in good amount of teaching and that starts to build the platform for your, um, your student base

00:25:47.680 | where they actually, the parents want that high level of education for the daycare. So you're not

00:25:53.120 | just competing with a daycare that's going to put the pop the kids in front of the TV all day,

00:25:56.160 | or just let them do nothing. You're starting that education. And in our current society,

00:26:00.480 | where education is basically thing number one for most people, that ability to, to educate a

00:26:06.000 | young child really will, will set you apart in the marketplace. And if you can prove your results,

00:26:11.680 | you can prove your ability to, um, to actually get results for the child, for the children.

00:26:18.880 | Um, it's, it's really remarkable. Um, as far as a sales process, if you can, if you can keep your

00:26:24.480 | costs low by using church property at a less expensive rate, and you can keep the quality high,

00:26:30.640 | you can build a big business. Now, what can that lead into? I think that naturally leads into,

00:26:35.760 | um, giving parents an opportunity for the next level of schooling. What I would love to do

00:26:40.480 | myself, and I don't know, and this is what I was talking about. I don't know if the market actually

00:26:44.480 | exists for this. You would have to test it. I've never tested it in the actual marketplace,

00:26:48.880 | but what I would love to do is I would love to provide a place of education and supervision,

00:26:56.240 | um, for parents, but without the full requirements of school. And so, um, the thing that I've thought

00:27:05.520 | about is how could I bring together home education and homeschooling parents, but provide a neutral

00:27:11.840 | place where children can have, um, supervision, a little bit of tutoring, uh, a little bit of

00:27:18.240 | basically, um, help without necessarily having the need for, um, for certification and accreditation,

00:27:26.720 | et cetera. And to me, that would seem to be a really good model. Let's say that you had a

00:27:31.280 | stimulating environment that you could find, might be a big house, um, but you could set up

00:27:35.840 | students and a place for students to work. And you could arrange a deal with the parents to say,

00:27:40.880 | you're the teacher, you're in charge of the homeschool environment. We're just here to

00:27:44.800 | facilitate it. We're just here to help you, but you're the teacher and you're in charge of it.

00:27:48.400 | But we know that you need to go to work. We know that you're a single parent. We know that you

00:27:51.680 | can't stay home all day and take care of, of your children. And so what we'll do is we'll give the

00:27:56.720 | facilities, we'll give you the environment. And in this environment, you'll be able to then, um,

00:28:01.480 | you'll be able to, uh, get a great education for your child. And what I would do is I would leverage,

00:28:07.680 | um, workbooks. I would leverage online education and I would try to market that like middle tier

00:28:13.440 | space because I know a lot of families who would love to homeschool. They don't mind taking on the

00:28:18.240 | official responsibility of the homeschooling. And by the way, this can be, you could, you could

00:28:22.720 | actually help them there. So you could provide, um, you could keep the records for them. They're

00:28:27.200 | the homeschooler. You're just an assistant tutor. Basically you keep all the records for them. So at

00:28:31.440 | the end of the year, when they're sitting down with the accredited teacher to fulfill their,

00:28:34.640 | their requirements with the government, you have the records. They can easily pass that. You're

00:28:38.720 | supervising the children, you're tutoring them, but you're not taking on the role of a teacher.

00:28:43.120 | I would market that like crazy because I think that's fundamentally good for the student.

00:28:46.960 | I would have an age integrated environment, a safe environment. We'd have a zero tolerance policy on

00:28:51.840 | anything, any kind of bullying on anything. It would just be very easy because we don't have the

00:28:55.760 | same problems that a school has. It'd be very easy to keep the bad kids out and get them somewhere

00:29:00.640 | else so we can have a really healthy environment. We could do it in a very casual learning

00:29:05.440 | environment. Again, a big giant house would be great. We could integrate fun. We could integrate

00:29:11.280 | exercise. We can integrate the child being able to work at a desk, the child being able to work

00:29:15.920 | outside, sitting under a tree. We could integrate the food, all that stuff really inexpensively,

00:29:21.600 | but by avoiding the need for the accreditation, we could keep the whole thing really lean and mean

00:29:26.560 | and just encourage student directed education with parental supervision that we're just there

00:29:32.960 | as tutors and the parent is responsible. That's the idea that I've had. I think there's so many

00:29:38.640 | people who are attracted to homeschooling, but who can't handle the logistics of it. They need

00:29:42.960 | to work. They're a single parent. They have to work during the day. They don't have the energy

00:29:46.720 | to do it at night. I think you could do something with a tuition of some thousands of dollars per

00:29:51.280 | year for those services and have it be really, really effective and also really profitable.

00:29:56.880 | I haven't looked into the law on that, but that was my idea that I was referencing. I'd love to

00:30:01.120 | see some people trying that and seeing if that could work on a commercial basis.

00:30:05.520 | Yeah, that sounds really attractive. I really like the idea of being more of a facilitator

00:30:15.040 | for people who want that difference in education for their children. Then maybe combining it with

00:30:20.720 | some type of worker space where you can actually develop skills that could be valuable in the

00:30:25.760 | marketplace as children grow. I guess just in summary, I've been at least nudged in terms of

00:30:35.120 | convincing of homeschooling since your Seven Rings of Liberty series. That's a pretty attractive

00:30:41.600 | option. I appreciate you sharing. I think with that, what I would do and how I would handle it

00:30:47.200 | would just be I would emphasize. Here's what I would lean on as my sales pitch. This would appeal

00:30:55.360 | to people who are inclined in the direction of home education. It would not appeal to people

00:31:00.160 | who are not inclined in that direction. The number one thing that I would lean on would be

00:31:05.680 | parent-directed. I would host seminars for the parents. I would say, "Let's talk about philosophy

00:31:14.000 | and we'll help you integrate any philosophy that you want." Now, some of the philosophies do require

00:31:19.200 | a specialized teacher. If you're going to do modus ori or something like that, they're going

00:31:22.720 | to say, "Well, we want somebody who's trained in the modus ori method." I would encourage my

00:31:27.440 | parents that we'll help you with any philosophy that you want. We'll talk about it. That would

00:31:31.520 | be the first thing. I would let the parents choose the curriculum. I would say, "We'll support any

00:31:36.480 | curriculum choice that you want." If you want your child to go through, I don't know, Liberty

00:31:41.280 | University homeschooling or a BECA homeschooling, a BECA classroom, we'll provide a safe environment

00:31:46.800 | while you're at work. We'll provide an environment. Your child can sit in front of the screen and your

00:31:52.320 | child can take the lessons from the tutor. If you want to do, I like the Ron Paul curriculum that

00:31:58.640 | Gary North facilitated with Ron Paul. The Ron Paul curriculum would be a great thing for people to do.

00:32:06.400 | You could easily market that and say, "All the teachers, all the lessons are here, right here

00:32:11.120 | online. All of the child's work is being performed, and we'll grade the weekly essay, or we'll make

00:32:16.160 | sure it's sent home to the child." I would allow total freedom with curriculum. You want to have

00:32:20.720 | a Muslim curriculum? Great. You want to have a Christian curriculum? Great. I think there would

00:32:24.720 | be naturally that those religious groupings, Jewish schools are a really natural place for

00:32:31.120 | there to be ideology familiarity, but it doesn't have to be. Someone can say, "We're going to

00:32:36.240 | have an entirely secular school," because there's tons and tons of secular homeschoolers out there,

00:32:41.120 | that because there's such a broad influence of Christianity in the homeschool community,

00:32:45.040 | they would love to have environments where they could come together and have a totally

00:32:48.880 | kind of secular grouping of people. You could allow the parents to choose whatever curriculum

00:32:53.920 | they wanted. Number three thing is that you could really, what I would sell is I would sell

00:33:00.320 | student-directed learning. The idea here is by helping the student to take charge of themselves,

00:33:09.920 | by telling the student that, "Listen, our job is as proctors or facilitators. We're here to

00:33:14.160 | keep you accountable. You've got to do these things. Here's your checklist, but we're not

00:33:17.360 | going to hover over you and make you switch on this 50-minute schedule. We're going to allow you

00:33:22.640 | and keep you in a place where you're the one who has to teach yourself." I love the philosophy.

00:33:29.360 | I always found Art Robinson's work to be really influential. He was a homeschooler.

00:33:35.360 | His family sells a, it's outdated now, but they sell a homeschool curriculum. I think it's

00:33:42.160 | robinsoncurriculum.com. Robinson was in a situation where he was a research scientist.

00:33:48.800 | He and his wife were both research scientists, PhD research scientists. They had six children.

00:33:53.600 | They wanted to homeschool. They were ideologically committed to homeschooling,

00:33:56.800 | but she died unexpectedly when their sixth baby was a child. It was some crazy illness that killed

00:34:03.040 | her in about two or three days. Here he was as a full-time research scientist with six children,

00:34:08.240 | ideologically committed to home education, trying to figure out, "How on earth do I do this?"

00:34:12.480 | What he settled on was basically that he was going to facilitate a schoolroom environment,

00:34:18.000 | a quiet environment for his children to study, but he was going to require them to teach themselves.

00:34:23.120 | He refused to teach them math. He required them to teach themselves math through the use of a

00:34:27.840 | textbook. The educational credentials that his children went on to achieve are simply incredible

00:34:34.480 | in terms of their ability to function in an academic environment. They taught themselves.

00:34:39.280 | It's one of the things that's really important to me is that the younger years, I want to help my

00:34:43.760 | children. I want to help them to learn to read, but once they can read, I refuse to teach my

00:34:49.040 | children. I want them to learn how to access information from books, because if you can give

00:34:54.080 | the child that skill and you can say, "I will not teach you that, but I will teach you how you can

00:35:00.480 | teach yourself," then that's the key question that I think can really make all the difference

00:35:07.120 | in the world. Lucas, I would explore something like that. The cool thing about it is, in my

00:35:12.000 | opinion, you can explore that in a really low-cost way that could start very organically. That can

00:35:18.880 | be a great family business that you start in a home, a large house, and then it could expand,

00:35:23.520 | and you could eventually grow it to be dozens. Then you can have multiple houses. There's a

00:35:29.040 | bunch of ways it can do it, but that's what I would love to see somebody explore and see if

00:35:32.880 | there's more opportunities. Anything else, Lucas? No, I think I have enough research I need to do

00:35:39.840 | to fill a couple more of these sessions. Thank you very much, Jeffrey.

00:35:42.400 | Go for it. It's interesting because I think there are opportunities. What I see, especially in the

00:35:46.560 | wake of what's happening right now, especially as we look and say as coronavirus is changing and

00:35:52.480 | everybody's homeschooling, I think there's tons of room in the marketplace for lots of people to

00:35:58.560 | explore new options. All right, Sean in Illinois, welcome to the show. How can I serve you today,

00:36:02.960 | sir? Hey, Joshua. Thanks for having me.

00:36:06.160 | I think, at least for me, I have a lot more time on my hands these days, and I'm sitting in front

00:36:13.120 | of a stack of money books and at a certain point I'm just looking for something else to learn about.

00:36:17.600 | Just wondered if you had a suggestion as the next subject to pick up if I was just interested in

00:36:23.280 | something that wasn't money or the coronavirus or the political winds of the day. What are your

00:36:29.280 | goals? Good question. I think I'm increasingly keen to learn to do, looking to do things with

00:36:40.480 | my hands. The idea of just some small garden. I live in an apartment in Chicago, so it's hard to

00:36:46.080 | have a full garden, but something with planters and just starting to learn rudimentary things

00:36:50.800 | about seeds and soil, just something to do with my hands during this time. I think trying to stay

00:36:56.560 | away from wealth cold, and that's something I've probably focused on. Health is probably part of

00:37:02.320 | that as well. I thought about picking up a book on intermittent fasting. I know that you've done

00:37:07.280 | some work with the ketogenic diet and probably the relationship with my soon-to-be wife. Read a lot

00:37:16.800 | about relationships, both with regards to money and just how to communicate more effectively.

00:37:23.280 | So I think that those are all excellent. And the answer to it, so money books, let's talk first

00:37:30.480 | about money books. Most money books are basically the same. They basically have the same ideas. They

00:37:36.080 | have the same basic advice. You should save some money, depending on whether you're reading at the

00:37:41.200 | consumer level, where they say, "All right, go ahead and open an IRA. Here's what an IRA is,

00:37:50.240 | or here's what a Roth IRA is." They're basically all the same, just a slightly different branding.

00:37:54.080 | And so once you've read a handful of consumer-level money books, you don't need to read

00:38:00.400 | anymore. There are different approaches. Maybe there's a book on getting out of debt that's

00:38:05.520 | going to help you because you're in debt. Well, then you need that book focused on getting out of

00:38:08.560 | debt. And then maybe there's a book on early retirement, financial independence, the FIRE

00:38:15.840 | movement. Maybe that's what you do. But once you've read a few mainstream books, you really

00:38:20.880 | don't need that many more. What you need is you need to specialize. And so with regard to money,

00:38:26.400 | what I say is that you break things down based upon my framework for wealth. So by way of reminder,

00:38:32.160 | years ago, I wrote the framework for wealth, and this is what I use to organize everything on.

00:38:37.760 | There are a total of five things you can do with your money, and it takes 10 words. Number one is

00:38:43.760 | increase income. All else being equal, the higher your income, the more money you're going to have.

00:38:48.960 | Number two is decrease expenses. All else being equal, the lower your expenses, the more money

00:38:54.800 | that you're going to have. Number three, invest wisely. All else being equal, the better your

00:38:59.200 | investment rate of return, the more money you're going to have. Number four is avoid catastrophe.

00:39:03.840 | So as long as you avoid the big risks, that will insulate you in difficult times. And then number

00:39:09.040 | five, optimize lifestyle. You want to optimize how you earn your income. You want to optimize

00:39:13.120 | how you spend money, and you want to optimize how you invest. But within those, there is an infinite

00:39:19.680 | variety of ways that you can adjust. And what you need to do is you then need to say, "Okay,

00:39:26.720 | I've read a few books on money. Where is my biggest strength, and where is my biggest weakness?"

00:39:32.000 | So an example would be, let's say that you recognize that... Let me ask you, how much money

00:39:36.800 | do you earn? About 130 a year. All right. So with 130 a year, you have a good, strong,

00:39:46.400 | kind of upper middle class income. So how much money do you spend per year?

00:39:52.320 | About 40. Okay. So with $40,000 of expenses, you are in a situation where you have a very

00:40:01.280 | good savings rate. We've got to factor in your taxes, but you're probably at about a 50% savings

00:40:05.520 | rate, depending on how we include your taxes and your expenses, which is awesome. Now, what kinds

00:40:10.320 | of things are you investing in? I am primarily invested in the stock market, and I have one

00:40:18.800 | rental property looking to expand that. Okay. That being the portfolio. Okay. All right. So

00:40:24.800 | in that situation, the stock market is an interesting area of focus, but it's probably

00:40:29.760 | not nearly as much of a priority as your rental market. I think, especially given the timing of

00:40:35.440 | when we're doing this show, that there's going to be a lot of opportunities in the rental market in

00:40:39.520 | the coming years. And so what I would do is I would go through what I've just did with you,

00:40:44.160 | as I went through an analysis. If you were making $30,000 a year, I would say that bar none,

00:40:49.040 | your highest priority in life should be to figure out how to make more money.

00:40:52.560 | Because at $30,000 a year, you can't get rich, or at least it's going to take you a very long time.

00:40:58.400 | But with $130,000, you can live well and you can save a lot of money. The next thing I did was

00:41:03.200 | your expenses. If you told me my expenses are $100,000 a year, then I would have said your

00:41:07.360 | most profitable focus right now is to figure out how to decrease expenses. How can you go from

00:41:11.280 | $100,000 of expenses to $50,000 of expenses without giving up lifestyle? Because if you're

00:41:15.920 | spending that much and you're not saving a lot, then you're just wasting time, but you're doing

00:41:22.640 | great on that. So now it would go to rate of return, because your rate of return is now going

00:41:28.240 | to be your limiting factor. If you're just getting stock market returns, you bought an index fund,

00:41:33.040 | you're getting stock market returns, it's going to take you a really long time to get rich at 6%,

00:41:37.680 | or 7%, or 8% per year. Is it possible? Yes. And are you turbocharging based upon having a high

00:41:44.240 | savings rate? Yes. But now your biggest weakness is your investment rate of return. And so you've

00:41:49.280 | got to figure out how do I go from 6% rates of return to 20% rates of return? Sean, have you

00:41:54.480 | ever done the math on what a 20% rate of return for your portfolio would do versus a 6%?

00:41:59.120 | Sean O'Toole

00:42:01.680 | I've done the math on 6% and 8%, and I know that that impact is huge. So I can't imagine what 20%

00:42:07.200 | would be. All right, so let's do the math. You're investing, how old are you, Sean?

00:42:10.480 | 28. All right. So you're investing, you're 28 years old. Okay. Let's assume a 40 year

00:42:18.320 | time horizon, because it's going to make impressive numbers for the radio. Right. So

00:42:22.000 | we're going to do a 40 year time horizon. Just a second. Let me get my calculator going here. Okay.

00:42:33.120 | All right. So 40 years, let's clear this, 40 years, and you're investing $40,000 per year.

00:42:40.080 | So let's do that as our $40,000 payments. Let's start with $0. Well, actually, how much money do

00:42:46.000 | you have in your investments right now? Sean O'Toole

00:42:50.000 | About, call it 100 in the property and 100 in the market.

00:42:54.560 | All right. So let's call it $200,000 of present value. This is just, of course,

00:42:58.080 | rough math. I just want to impress upon you how valuable this is. All right. So we've got

00:43:02.240 | $200,000 of present value. We've got 40 years and we're going to invest $40,000 per year

00:43:10.320 | as our contributions. And we're going to get 6% in a stock market index fund.

00:43:16.160 | Well, at the end of 40 years, under those scenarios, you would have $8.2 million,

00:43:19.600 | $8,247,622. Right. So $8.2 million. That's good. Right. There's nothing wrong with that. That's

00:43:27.840 | really, that's really helpful. Okay. But what if you could move that to 20%? The number now would

00:43:35.200 | be $587 million. Let me redo that because I hit a button and let me just make sure that I did that

00:43:39.920 | right. Okay. Cause that sounds a little bit too high. Let's see if I can redo this. Just a moment.

00:43:47.440 | Okay. So 40 years.

00:43:53.840 | I'm nervous doing performative math. I hate doing math live. 20% per year, $40,000 going in and

00:44:02.160 | starting with $200,000 to begin with. All right. Yep. $587 million. So the difference between

00:44:09.360 | 20% and 6% is $580 million. Now, am I predicting that you can make 20% every single year for the

00:44:21.840 | next 40 years? I'm not. No, I'm not. I'm just doing math to show how big of a deal this is.

00:44:28.560 | What I am saying is that if you could study the market and you could study your opportunities for

00:44:34.480 | investment and you could move from 6% to 10%, let's just do that. Okay. Let me, let me redo

00:44:40.320 | this. Okay. So 10% as our interest rate, 10% is $26 million. So if you can go from 6% per year to

00:44:49.600 | 10% per year, that's a difference between $8 million 40 years from now to $26 million 40

00:44:55.120 | years from now at 12% per year, it is. I messed it up. Anyway, it's more. And so the point is

00:45:04.000 | that your best area of focus, now that you've solved the income thing, and now that you've

00:45:08.400 | solved the expenses, your next area of focus needs to be, how do I increase my rate of return?

00:45:13.360 | How do I go from six to 10? How do I go from 10 to 15? How do I go from 15 to 20?

00:45:17.920 | Now, I think that this is very doable. I don't think that you can do this every year for the

00:45:23.120 | rest of your life, because if you've got a $500 million portfolio, it's really hard to invest

00:45:28.880 | $500 million at 20%. But I think you could definitely invest a few hundred thousand dollars

00:45:33.680 | at 20%. I think that you can skirt around the edges and I think that you can find some investment

00:45:38.880 | strategies. So if you want to do that in the real estate market, right, go and start talking to real

00:45:43.200 | estate investors and work on your real estate strategies, read real estate books. If you want

00:45:47.120 | to do it in the stock market, try to figure out, is there a stock strategy that I'm really interested

00:45:51.440 | in that I'm willing to put in the time to develop? But whatever you can do to increase your

00:45:56.400 | investment return, that's going to be your most profitable area for your personal focus.

00:46:00.640 | Okay. And that's what you read.

00:46:05.120 | Okay. Thank you for the commentary.

00:46:09.360 | Yep. My pleasure. The other stuff is also good, Sean. I'm not saying, obviously, reading about

00:46:16.720 | relationships and all that, that's obviously valuable. And you should do that. Reading about

00:46:22.960 | relationships is going to be really useful for you. But what you want to do is you want to,

00:46:27.360 | I answered the financial question. Don't just read money books. Once you've read five of them,

00:46:33.920 | skip money books for a while, unless it's a narrowing in, a drilling down on something.

00:46:38.160 | How can I triple my income? How can I 10x my income? How can I live on $10,000 a year? But I

00:46:43.520 | think for you specifically, you're in this scenario of needing to work on investments.

00:46:47.920 | Matilda in Florida, welcome to the show. How can I serve you today, Matilda?

00:46:50.640 | Hi, Joshua. I'm new to your show, so thank you for having me.

00:46:57.200 | My pleasure.

00:46:58.240 | My question is, let's see. So my income is not as high, kind of bouncing off from your previous

00:47:06.080 | conversation. I make about $50,000 a year and I own my own property right now. My mortgage is very

00:47:14.320 | small. It's about $450 a month. So I'm trying to get a homemaking line of credit in order to

00:47:22.960 | pretty much bank on the money until prices drop. And my question is, if I do that, first of all,

00:47:32.400 | the line of credit I can pull money from, I know that at any time, but the bank can take that away

00:47:37.120 | from me at any time as well. So do I take the money out? And if I do, how do I make up the

00:47:45.440 | difference between the 3% interest that I'm being charged and the payment that I'm making every

00:47:52.080 | month?

00:47:52.480 | Why do you want to take out a home equity line of credit? What are you going to do with it?

00:47:54.880 | Reinvest it for another property.

00:47:59.680 | Okay. So into a rental property.

00:48:01.280 | Correct.

00:48:02.800 | Okay. If you sold the house, how much is it worth?

00:48:05.280 | $450,000.

00:48:08.400 | And what's the current mortgage balance?

00:48:11.520 | About $50,000.

00:48:14.960 | And what's the current interest rate on the mortgage?

00:48:17.200 | 4%.

00:48:19.280 | All right. Do you have other savings, other cash savings?

00:48:24.400 | Yes.

00:48:24.880 | How much?

00:48:25.280 | About $50,000.

00:48:27.680 | All right. And do you have other credit card debt or other debt?

00:48:31.200 | No debt except for a vehicle.

00:48:34.640 | Okay. And how much is the vehicle worth if you sold it?

00:48:36.720 | 20 grand.

00:48:40.400 | And how much is the loan on it?

00:48:41.760 | $370 a month.

00:48:45.520 | How much is the loan balance?

00:48:46.880 | Oh, balance. $21,000, $22,000.

00:48:52.240 | Okay. And do you have any other investment assets? Do you have any other rental properties? Do you

00:48:57.440 | have any other 401ks?

00:48:58.640 | Yes. So if I were to put all of the investments together from 401k and IRA would be another

00:49:07.120 | maybe 50 or 60,000.

00:49:08.720 | And do you have any other debts?

00:49:10.000 | No.

00:49:12.160 | And how much is your annual income at the moment?

00:49:14.320 | 50 grand.

00:49:16.480 | $50,000.

00:49:17.120 | Okay. So your question, your idea is I should take out, I have $100,000 of potential equity

00:49:25.760 | available in my house that I could use it for a down payment on a rental house. Is that

00:49:29.920 | the basic idea?

00:49:30.640 | Correct.

00:49:32.480 | Okay. And so what's your question?

00:49:33.760 | So my question is, does it make sense for me to take out the HomeMade Free Line of Credit

00:49:40.160 | that's available, but to already like take the cash out completely and then keep that

00:49:46.000 | in like a savings account? Because if it just sits available, I wouldn't know exactly the

00:49:51.680 | timing of the market dropping and them allowing me to take the money out.

00:49:56.880 | So it's like the risk versus...

00:49:58.800 | Right. Right. So does it make sense? Yes, if you're going to invest the money and if

00:50:03.360 | you can be disciplined. Your big risks are number one, your personal discipline. The

00:50:09.840 | reason most people get really hurt by doing a cash out refinance or by taking out a Home

00:50:15.280 | Equity Line of Credit is they take out the money and then they go and spend it on a

00:50:19.200 | consumption item. They spend it on fixing up their kitchen. They spend it on a fancy

00:50:24.720 | trip. And because of that, they don't wind up actually investing the money. And so they

00:50:29.520 | had some equity, they had some savings, but then they wind up using it up on consumption.

00:50:37.840 | So you have to ask yourself, honestly, am I in a good situation where I'm going to not

00:50:42.400 | use the money? Am I a person of discipline? Am I able to resist the siren song of a fancy

00:50:49.120 | your car or a fancy vacation or something like that? If you are, then yes, it does make

00:50:54.560 | sense to use some of it for investment. The second risk is, of course, that what do you

00:51:00.320 | invest it in? Do you have the ability to find something that's going to be a better investment?

00:51:07.440 | Does something emerge? And at this point, you don't know. So if you're going in that

00:51:14.880 | direction and you're studying it diligently, you're studying the local rental market,

00:51:18.160 | you're planning ahead, you're saying, I'm really going to invest into, I'm really going

00:51:24.400 | to do this, then yes, I think it does make sense to prepare for it. So is there a cost?

00:51:30.560 | Yes. What was the homemaker line of credit interest that you got quoted?

00:51:32.880 | A three and a quarter.

00:51:35.440 | Okay. So that's basically negligible for a while. I mean, if you recognize how that we're

00:51:42.480 | talking fairly short term, let's say that you take out, I don't know, how much will

00:51:46.320 | they give you? $80,000?

00:51:48.240 | No, a little bit less than that. Probably, I'm thinking about 65 based on my income and

00:51:54.400 | my debt.

00:51:55.040 | Okay. So your maximum cost on $65,000 is going to be three and a, your maximum cost is going

00:52:03.200 | to be about $2,100. So when you're in a situation like you are, where you've got

00:52:13.440 | $65,000, they charge you three and a quarter, your annual cost on that is going to be $2,100

00:52:18.480 | of interest. So the question is, is it worth it to me to pay $2,100 for the opportunity

00:52:26.320 | to have this money, given that the market may go down, they may shrink my home equity

00:52:30.480 | line of credit, et cetera. I don't know the answer to that. I would think about doing

00:52:34.320 | it if it were me and I were really serious about investing, I probably would do it.

00:52:39.440 | The second thing that you should think about is just simply refinancing. You should just

00:52:43.200 | talk to a traditional mortgage broker and think about just simply refinancing your mortgage

00:52:46.800 | as a basic mortgage. And then that might give you more money cheaper and be simpler than

00:52:54.080 | the home equity line of credit possibly. But would I do it conceptually? Yeah, I would

00:52:57.920 | if I were serious about investing.

00:52:59.040 | The only reason why I was thinking the line of credit is because of the liquidity factor

00:53:07.280 | of doing, instead of doing a cash out rate by having the funds available. So if there

00:53:12.880 | is an investment opportunity to buy a property, I can get it cash versus being able to get

00:53:22.640 | a mortgage at a later time. So that was pretty much my risk on having to get a mortgage in

00:53:29.280 | the future versus buying something with a line of credit and purchasing it with a better

00:53:34.000 | deal. Does that make sense?

00:53:38.640 | Not really. I think that either one could be fine. But I think the home equity line

00:53:44.560 | of credit is more flexible. The whole point is just simply how can I get some money out

00:53:48.960 | of the house that I could use for a down payment on the property? That's the basic point,

00:53:52.720 | right? Yeah. Okay. So I don't see that it matters. It's just a matter of getting a quote.

00:53:58.000 | I would talk to a mortgage broker, find out the cost of refinancing, how much fees do

00:54:02.000 | they want to charge, what interest rate, and then find out the fees on the home equity

00:54:05.200 | line of credit. The home equity line of credit would be more convenient because you could

00:54:09.200 | put money in and out. So I don't know the answer. I would just get some quotes from

00:54:15.680 | the mortgage broker and go from there.

00:54:16.880 | Great. Thank you so much.

00:54:19.760 | My pleasure. All right. We go now to, looks like James. Is that you, James? Welcome to

00:54:25.040 | the show. I'm going to serve you today, sir.

00:54:26.240 | Hi, Josh. I'm going to keep this quick. I got to hop off for another call. But my main

00:54:31.520 | question is, so a bit of background. So my wife and I did a pretty good job of following

00:54:38.320 | your prepping advice from your course, How to Survive and Thrive in the Coming Economic

00:54:43.760 | Collapse, well before this COVID thing started. We got our emergency savings out to maybe

00:54:52.000 | like six to eight months. And we both are still working remotely, fortunately. We lost

00:54:58.640 | our daycare, as with a lot of parents. So we're struggling to keep up with that. My

00:55:05.040 | question philosophically for you is, my wife and I make approximately the same amount of

00:55:11.280 | money. Each of us are about 80k a year. Hers is the one with, her job is the one with the

00:55:18.000 | healthcare. And my job is a startup. And so I have a bit more room to increase my income.

00:55:28.080 | But there's obviously more instability. And so we've sort of been talking about like,

00:55:32.400 | how nice it would be if one of us wasn't working, my wife would like to not work. But

00:55:37.360 | right now, with the economic climate, keeping in mind what you always say, keep your income

00:55:44.960 | as high as possible. Just kind of like, just weighing on my mind about whether I should be

00:55:50.560 | thinking about getting her, my wife staying home with my son full time. Or whether we should just

00:55:59.040 | stay on the path we're at now, keep saving money and be in a better position when this all blows

00:56:03.680 | over. I'm going to leave it with you. Oh, I'm sorry. My son's 2.5 years old.

00:56:08.960 | One child?

00:56:09.520 | Yes.

00:56:10.960 | Do you hope to have more children in the future?

00:56:12.560 | We don't plan on it.

00:56:15.280 | Okay. I know you got to go.

00:56:20.640 | I got a couple more minutes.

00:56:23.200 | Hang up when you need to. I guess I would just say that it's going to come down to

00:56:27.680 | what's your vision? I'm convinced it's not a financial question. I'm convinced it's an

00:56:32.400 | ideological question. If I were in your shoes, what would we do? We've got a two and a half

00:56:37.440 | year old, the two and a half year old, that is the most important time in our child's life

00:56:42.000 | for him to have parental input. And so we would probably go to...

00:56:48.240 | My wife would quit her job, at least for this period of time.

00:56:54.480 | Just because to me, that's the best investment we can make. And especially if I've got more

00:57:01.840 | opportunities to make more money because I'm in a startup, if I'm competent as an individual,

00:57:06.160 | I'm have a lot of potential in my income, I can quickly make up the difference in income.

00:57:11.840 | I can double my income within a few years and the money can always be replaced, but the time cannot.

00:57:17.760 | And so right in that precious, really crucial time of two and a half to four or five years old,

00:57:23.360 | I think that's really, really valuable time. But that's an ideological question. It's not

00:57:28.000 | a financial question. I think the answer is just simply, you've got to think about

00:57:33.120 | your specific ideology, what you and your wife, what your dreams are for your family,

00:57:40.560 | and then ask yourself what the price of those dreams is. And I can't answer that.

00:57:44.320 | All I know is that it's not a financial question. It's an ideological question.

00:57:47.360 | I just want to follow up and say that my wife and I have been switching off during the day.

00:57:53.120 | We both work from home and caring for our son exclusively, not multitasking,

00:57:57.520 | just spending time with him and spend unbelievable. It makes us want homeschooling so much more or

00:58:04.640 | something like that. And we're trying to figure out how to make it work now. And I just really

00:58:08.720 | wanted to air that out and sort of get some advice. Thank you.

00:58:11.680 | Yeah, my pleasure. I know you got to go, so I'll mute you out here so you can go. But

00:58:15.840 | I would focus on just saying kind of what's sustainable. Because it might be sustainable

00:58:20.720 | for you to keep doing what you're doing. If she can make 80 grand and you can make 80 grand and

00:58:24.960 | you can pass off childcare back and forth while you're working, or maybe if you can hire a nanny

00:58:29.440 | who comes into your home, a part-time nanny. We have a nanny right now, which helps out.

00:58:34.320 | It allows me to work more during the day and it allows my wife to care for, do homeschooling

00:58:38.640 | and whatnot. So if you can hire a nanny who comes into your home, that's an ideal mixture, I think.

00:58:45.440 | If you can find, there are also then think about what you want as far as schooling,

00:58:50.400 | but you could do some kind of co-op, you could do some kind of sharing. There's lots of ways to do

00:58:55.680 | it. It doesn't have to be all of us all the time or partway. It's just a matter of what are the

00:59:02.880 | options. And so if you have flexible jobs, I don't see why in a flexible job scenario,

00:59:08.480 | why you can't do a combination of those things.

00:59:13.680 | I guess I would just point out that it's an ideological decision based upon your vision

00:59:24.000 | for your family and not a financial decision. My wife and I have a clear vision for our family.

00:59:31.120 | I've had a clear vision of how I wanted my family life to be structured for a very long time. I

00:59:36.160 | never even considered the money. It was just never even a consideration because it was an

00:59:41.040 | ideological commitment. And because of that lifestyle that I want, I want the lifestyle

00:59:47.680 | of flexibility. I want the lifestyle of that. And because I have a business that can generate

00:59:53.040 | enough money to make that doable, that just was never really a calculation. So those are my

01:00:00.720 | thoughts. I think you think about your vision and then you go from there. Matt in California.

01:00:06.080 | Oh Matt, hold on. You said you didn't have a question and yet here you are hanging out

01:00:09.760 | on my phone call. You better go with a question or have some topic of conversation.

01:00:12.720 | Well, Matt's playing quiet. All right. That is it for the callers. And look at that. I did that

01:00:23.280 | in an hour. I'm going live on Facebook here today. And so as a special bonus, try to get you

01:00:29.040 | guys to come watch my live streams, which you can do at facebook.com/radicalpersonalfinance. Find

01:00:34.080 | the Facebook page. I would love for you guys to join me there and watch these live streams. So

01:00:41.760 | I'll answer a couple of questions from Facebook that are coming in as well. Usually these Q&A

01:00:47.120 | shows are for patrons, but I'll answer some questions and hopefully incentivize you to come

01:00:51.520 | on over and join me there. Adam says, "Hi Joshua, if you have time today, would you give us your

01:00:58.560 | thoughts and strategies for staying productive while working from home? I'm sure many in the

01:01:03.120 | audience are new to the virtual work environment." Well, I'll tell you yes, but the answer is it

01:01:12.720 | depends on what facilities you actually have. So the first thing is, and also what your scenarios

01:01:21.840 | are. I've worked from home. My dad worked from home before. It was cool a long time ago. And so

01:01:28.880 | I think one of the most valuable things is do you simply have a place that you can work? Sorry for

01:01:34.800 | the siren guys. I'll record over it because I got no choice. Do you have a place that you can work?

01:01:41.920 | If you've got five children, six and under, and you're trying to work in your home office that's

01:01:48.240 | at your living room, that's going to be really tough. And so the first thing is you have to

01:01:52.480 | think about what place do I have to work? Where can I actually go and do the work? If you have

01:01:58.400 | a home office, then that's really valuable. Or do you have a corner of the bedroom? But at the end

01:02:02.320 | of the day, you cannot work and supervise children. If you're a couple and both of you work from home,

01:02:09.280 | then I don't see that you really have any problem. You just put your laptops on the kitchen table

01:02:12.640 | and you work there. But if you have children, that's a really tough scenario. So my tips are,

01:02:19.600 | number one, is I make sure that I have a quiet place to work. I will often leave the house

01:02:23.440 | because at this point in time, I have four children, six and under. It's very noisy. And

01:02:31.440 | so I will often leave the house and I'll work in a lot of different places. Over the last few years,

01:02:37.200 | I've worked on picnic tables. Even when we had a house, at one point my house, my office,

01:02:42.160 | I had an office, but I didn't have good sound insulation. I moved into the master bedroom closet

01:02:46.800 | because I had a bunch of clothes in there. I put a desk in there and that gave me enough sound

01:02:50.640 | insulation to work. Now, of course, my work is unique because I'm creating audio. And so I do

01:02:55.360 | my best to make that high quality. I have gone and worked in a parking lot. I actually did that

01:03:01.600 | for some of my courses have been recorded in a parking lot at a local park. And what I would do

01:03:07.120 | is I set up a mobile office that I really didn't need anything except, I didn't even need an

01:03:13.360 | internet connection. I just needed a computer. And so I would take a deep cycle battery with me

01:03:16.960 | and have an inverter. And I would set up a deep cycle battery, grab, or I would just use the

01:03:22.400 | battery on my car too with an inverter. And so I would use that to power my stuff. I would set up,

01:03:27.360 | I would carry a table with me that I carried a plastic folding table. And I would set up a

01:03:35.120 | plastic folding table, set up my laptop. I would set up a soundboard. I would set up microphones

01:03:40.000 | and I would power everything from my car battery with an inverter, or sometimes I would carry an

01:03:43.520 | external battery along with me as well. And so a lot of my courses have been recorded in a parking

01:03:49.520 | lot under a tree. So that's one thing that I have done with internet access. If you have a high data

01:03:56.480 | plan and you don't need to do a ton of live video or streaming video, you can get away with tethering

01:04:03.520 | a phone. I've done that a lot of times. I traveled for six months around the United States and I did

01:04:08.160 | all my work tethered from a cell phone. So I just have a cell phone, computer and my audio stuff and

01:04:13.200 | my audio gear. And as long as you've got a decent connection on your cell phone, that can work as

01:04:18.160 | well. So all that to say that a lot of times my strategy is to leave home. And I think that that's

01:04:23.920 | important with children. I simply can get far more work done outside of the home. Now, if I'm

01:04:29.920 | working on quiet stuff, then I also, then I will work in, or sorry, if I'm working on places where

01:04:34.160 | the noise is not going to bother me, where the noise is not going to destroy my, my audio,

01:04:38.480 | destroy my, my course, et cetera, that I'm building, then I will work from home. And I do,

01:04:42.880 | I do prefer to be at home. It's so nice to just be able to come and go from your home office.

01:04:46.720 | I love to be there with my children. I really like that. But my strategy is it, my strategies

01:04:52.560 | have been to, to develop a mobile office for the live watchers here. I'll pop up the,

01:04:58.080 | the screen that shows you my, my office. If you look at my office my office is totally,

01:05:03.040 | is totally mobile, totally virtual. And so I have, you know, my gear that I use, I have a,

01:05:10.400 | I have a couple of laptops. I have an audio recorder that's mobile and I can set the whole

01:05:15.600 | thing up anywhere in the world. And so the whole thing goes in a backpack. And for me, that has

01:05:19.520 | been an important strategy with regard to my, my travel schedule, just simply to be able to do

01:05:26.000 | my work from anywhere in the world that I travel with a backpack. But long winded way of saying

01:05:30.960 | that the answer is I don't really work from home a lot of times just because I just because it's,

01:05:39.440 | it's too loud. All right. Bill says Joshua just started doing the carnivore diet. How's it been

01:05:44.640 | going for you? Any updates for us for us on that? I went off the carnivore diet for a while because

01:05:52.480 | I was curious to see if I could go to some normal way of eating and see if that would help me to be

01:05:59.040 | not fat. I went on the carnivore diet strict for a while, lost a bunch of weight. And I was curious,

01:06:06.400 | is there some way that I can go back to a more normal style of eating? Because I, I didn't

01:06:11.680 | experience any dramatic improvement in my health by eating only meat. Some people do, but some

01:06:15.760 | people vegetables seem to make them sick, but not me. I like vegetables. I'm good at eating them.

01:06:21.040 | I like all the food. And so I wondered, is there a way that I could go back to some normal eating?

01:06:25.600 | And I was curious based upon if I just simply don't have a good reference point, because I

01:06:30.800 | should be able to eat using a normal, varied quote unquote healthy diet. Like I should be able to

01:06:37.440 | eat that kind of diet and not be fat. And so maybe I'm just used to eating like a fat man, and I just

01:06:43.520 | eat too much food. And so maybe what I need to do is just do a really careful counting of stuff.

01:06:49.920 | So I got a food scale and I started eating kind of normal food, a mixture of meat, vegetables,

01:06:57.040 | carbohydrates, all the food, but I counted every calorie and counted all the macronutrients.

01:07:01.120 | And what I did find is that I did indeed have, I did indeed have kind of a misplaced judgment of

01:07:10.160 | what's normal. That I ate more, it was easy for me to eat way more calories than I should have.

01:07:16.240 | And so the calorie thesis, I think made sense. I found that it was easy for me, relatively easy

01:07:21.040 | for me to eat 3,500 or 4,000 calories in a day. And if I'm maintaining a sedentary lifestyle,

01:07:26.320 | that's just too much. And so I did find out based upon that experiment that I was getting fatter

01:07:33.840 | based upon eating too much food. So in theory, I could reduce my food intake and not gain weight,

01:07:42.720 | but I couldn't figure out how to lose weight because if I dropped the calories down and I

01:07:46.960 | ate meat and vegetables and carbohydrates and I dropped the calories down, I just wound up

01:07:52.560 | still hungry all the time and kind of miserable. I didn't enjoy it. It wasn't satiating.

01:07:57.280 | And so I gained weight again. I gained another 15 pounds. And so I just found that's not working for

01:08:06.720 | me and I still want to lose about 50 pounds. And so I went back to kind of low carbing, just eating

01:08:13.920 | kind of more ketogenic with vegetables. And then I found that also it was just frustrating to keep

01:08:19.200 | going. So I went back to carnivore. And so I don't think I'll go strict carnivore. I don't think that

01:08:24.880 | I'll go strict carnivore for very long or necessarily forever, but I do find it really

01:08:29.760 | useful. It's so simple. So carnivore plus fasting is good. What I'm doing right now is eating

01:08:36.320 | one meal every two days and eating a carnivore and the weight goes off very quickly under that.

01:08:40.240 | So it's a combination of fasting, carnivore, low carb, et cetera. That's it for today's show. Thank

01:08:46.480 | you all for listening. If you would like to join the Q and a show next week, sign up as a patron.

01:08:51.120 | You can do that at radical at patrion.com/radical personal finance. I'd love to have you join us on

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