The holidays start here at Ralph's with a variety of options to celebrate traditions old and new. Whether you're making a traditional roasted turkey or spicy turkey tacos, your go-to shrimp cocktail, or your first Cajun risotto, Ralph's has all the freshest ingredients to embrace your traditions. Ralph's. Fresh for Everyone.

We've locked in low prices to help you save big storewide. Look for the locked in low prices tags and enjoy extra savings throughout the store. Ralph's. Fresh for Everyone. It's Friday. Happy Friday, everybody. Today we do live Q&A. Welcome to Radical Personal Finance, a show dedicated to providing you with the knowledge, skills, insight, and encouragement you need to live a rich and meaningful life.

Now, while building a plan for financial freedom in 10 years or less. My name is Joshua Sheets. I am your host. Today is Friday. That means we do a live Q&A show. Open to the listeners of the show. Want to call in, talk about anything we want. I'm open to any questions.

Happy to answer personal questions. Happy to discuss the themes of the show. These shows are, as one well-known talk show host says, "Open line Friday." I hate to ever steal anybody else's stuff, but you know, it's hard to beat open line Friday, especially in this particular context. But here on Fridays, any time that I can arrange the appropriate technology for me to be able to record, I do a live Q&A show with listeners of the show.

If you would like to gain access to one of these live Q&A shows to talk to me, frankly, it's probably the best deal that you're ever going to get if you want to talk to me and talk about the particulars of your situation. You can do that by going to patreon.com/radicalpersonalfinance, patreon.com/radicalpersonalfinance, or just search "Patreon" for "Radical Personal Finance." Sign up to support the show there on Patreon, and that will, then you'll have access to the call information for these, so that you can call in and talk about whatever you want to talk about.

And I love doing them. You guys have great questions and really great conversations with, really, everything that we talk about. So I'm so glad that you are here, and I'm excited. I'm happy. We've got five callers on the line right now, so let's go. All right, I needed to stall for about six seconds, but Jeremy, you're on.

Jeremy, welcome to the show. How can I serve you today, sir? Hi, Joshua. After listening to some past episodes in which you discussed Bitcoin, I had a few questions on the topic. Okay. So I guess first, are you still a supporter of Bitcoin, and would you recommend it as a store of value or long-term investment in a diversified portfolio?

I— Second— Go ahead. Sorry. My wife and I are business owners. And I'm just wondering, if we're planning on offering Bitcoin as a payment option to our contractors, is the purchase of Bitcoin a deductible business expense? And my last question was, I'm wondering if you're familiar with the company BlockFi or similar companies.

BlockFi lets you deposit cryptocurrencies and pays you interest on the deposits. So the current rates right now, the current APY on Bitcoin balances is 6% and goes up to 8.5% for other cryptos. And the interest compounds and is paid in the cryptocurrency of your choosing. Just curious if you're familiar with services like that and if you would recommend them.

One of my goals for 2020 was to become a cryptocurrency expert. I'm not a cryptocurrency expert, and that particular goal was consumed by—was subsumed by other things that I was involved in. And so I am behind where I feel like I should be. And so you need to filter my answers through that lens that, okay, Joshua is probably more informed than the average person, but he is by no means an expert.

So the first—answer to your first question, do I support Bitcoin? The answer to the question first and foremost is yes, I support the concept of Bitcoin and the concept of cryptocurrency more than I ever have before in my life. I generally adhere from a monetary perspective. I generally adhere to the idea that people should be able to use any medium of exchange that they wish to use.

That would align with what's known as the Austrian school of economics. And so I think that you should be able to print your own money in your basement and that you should be able to use that for anybody who will accept what you choose to print or what you choose to create as money.

And so I would like to see a world in which we have lots and lots of competing currencies. At the moment, we've generally only had that among national governments. Now, it is possible, you see, that certain town will create a local town currency. It's not necessarily illegal for people to use something else as currency, but most of the competition among currencies has flown on a nation-state basis.

So you have the U.S. dollar competing against the British pound, competing against the Chinese yuan, competing against the Japanese yen, competing against the euro, competing against the Swiss franc. And these national currencies are controlled by the Federal Reserve Banks generally of those countries. And so I don't mind if a national government wants to create a currency.

I just wish that the rest of us had the opportunity to compete more with them. Now, over the years, this has been a big argument about, well, maybe we should change something. There's all the arguments about the Federal Reserve, et cetera. That system, as far as I can see, is not likely to change anytime soon.

And so what I do like is I like the idea of people being able to have other choices. But the other choices are quite limited. And the other choices that have traditionally held true have some significant problems. So, for example, I encourage, when practical and when possible, I personally encourage the use of gold and silver coins as a medium of exchange.

I own gold and silver coins. I would be happy to take gold and silver coins as payment. I'm happy to give gold and silver coins as payment, sort of, which I'll come back to in a moment. But that system really only works with a physical environment where, yes, I could go to my neighbor and we could exchange gold and silver coins for services offered.

But that, number one, nobody knows what they're worth. Nobody's really in tune with it. Nobody knows what to do with them when they get them. And so as much as those who are gold bugs and silver bugs would like to argue that they should be more universal, it just doesn't seem to me that we're going back to that physical world, which leaves us kind of in a quandary.

We need some kind of digital money, but yet the only real digital money that we can use is the money associated with a national government, such as the U.S. dollars. The vast majority of U.S. dollars are digital currency. They don't exist in any physical form, but they work really well.

And so you see that U.S. dollars fill that function. But over the past few years, I've grown really, really nervous about our reliance and dependency on one particular currency because of all of the gatekeepers. And so let's talk from a U.S. American perspective. The U.S. government has done a wonderful job of barring and of putting people – of putting massive obstruction up against people to use U.S.

dollars in a digital form without giving up their privacy and without giving up every detail of their life. So I had a tremendous problem recently opening a number of bank accounts that I needed, and I was turned down by three different banks in order to open a bank account simply because I have an unusual physical profile.

My physical profile doesn't look like most people's where I say, "Yes, I live at 123 Maple Street. Here's everything. My physical profile is different." And so I got turned down across the board. And that just showed me how reliant I am on the banking systems. And I've done international banking.

I've had trouble getting international bank accounts across the world. It just seems like if you want a bank account – and to be clear, I'm involved in nothing illegal. I do nothing illegal. I simply have a different profile than most people because of the way that I live my life and the way that I move around, et cetera.

I'm a U.S. citizen, born and raised. But yet because of my weird addresses and whatnot, it's a tremendous problem. And so even though my actual needs for the bank account were fairly straightforward, I had a very, very difficult time even getting a bank account. In addition, I had a very frustrating experience that having been approved for one bank account and then having that bank account denied for me later after the bank continued their process of due diligence and whatnot.

I failed some of their screens because I looked like an abnormal person. Now, obviously, there is a solution to this. I could move to 123 Maple Street in any town in the USA. I could align everything with that, and I could have a normal profile. And I've actually come to the point where I now recommend that to many people rather than some of the other services because it's very hard to do business in the modern world if you have any kind of unusual profile.

I could do that. But I've learned that this is really troubling. In addition, I've watched a number of areas that I care about go out of political favor. So, for example, over the last couple of years, just two – I'm sure that there are more, but I'll use three.

Okay? So there are three important examples. Number one would be the problem with people who are involved in the marijuana industry to get banking services. We in the United States have this very strange and difficult situation where people who are involved in the marijuana – so marijuana is still illegal at a federal level.

And yet there are many states, including the District of Columbia, right, there are many states who have legalized the use of marijuana, some under medical restriction, some with no restrictions at all, or some with – for recreational use but with amounts. And so you have people who are operating businesses who are involved in the local market.

They're operating businesses. They're not hiding in a back alley doing drug deals on the corner of street. They simply have a store there on the front – on Main Street in many cases where they're selling marijuana. But these businesses, because of the federal regulation of banks, they have a very difficult time getting any kind of banking services.

They have a difficult time setting up merchant payment accounts. They have a difficult time getting banking services. In most cases it's impossible. And so this creates a lot of trouble for them because even if they're selling their goods in physical cash, they still have to go and pay their suppliers usually in some kind of digital money.

And so that's one example. Another industry that really came under fire a few years ago – it's been quiet over the last couple of years – but really came into fire was the firearms industry. And there have been many, many firearms manufacturers and firearms component manufacturers who started to lose banking services.

Some of them lost loans and whatnot because of interacting with the banking – with the big banks. They decided, "Okay, we don't want to lend money anymore." But some of them actually lost banking services. And also they've had a lot of their ability to use various exchanges, public exchanges, limited by things like payment – forms of payment processes like PayPal.

"Can we list a product and to use PayPal as a form of money transfer?" Well, in some cases, no. A third example would be there have been a number of Christian ministries that I've watched over the last few years that have been delisted and disavowed by their payment processors because those Christian ministries got put on a blacklist.

A blacklist due to something that they believe, something they stand for. Often it has to do with the – what's the organization? Human Rights Watch, the SPLC, et cetera. So they get that blacklist. And so all of a sudden sometimes their banks don't want to do business with them, but more often it's the merchant processors.

They get delisted by Stripe. Stripe won't do business with them. Then PayPal won't do business with them. And so there have been a number of Christian ministries that were massively affected where they had supporters that were digitally transferring money to them, but now the supporters can't digitally transfer money.

And so they're reduced to simply sending physical paper checks through the mail, which of course they should be prepared for, right? They should prepare their supporters to do that. But we live in a world in which that makes a massive difference in your ability to collect money. So I'm not – this is one of those weird areas because I want to support the freedom of any business's right to discriminate as they choose.

I don't believe that PayPal should be forced to do business with gun people if they don't want to. I don't believe that Bank of America should be forced to do business with Christian ministries if they don't want to. So I believe in the right of discrimination by any person and any company for any reason that they want to, but it shows us the difficulty that we're in where there's not really a good alternative.

So if you find yourself in a position where you're being discriminated against by all of the people involved, especially due to federal legislation, then it's very difficult. It's hard to operate. And so what do we need? We desperately need a solution to this. We desperately need the ability to exchange value and to do it digitally in a world that is not chained to the limitations of gold coins and in a world that's not chained to the limitations of physical currency.

That's the other thing is I didn't used to really believe that there was a war on cash. I used to really think that, you know what, people have chosen of their own free will to move to digital money rather than to use physical currency. But over the last couple of years I've become persuaded from my own experimentation that there is a war on cash.

And you see this to some extent in the United States, but you see this massively on a global basis. There have been many places around the world that have made the use of normal amounts of cash and large amounts of cash illegal. And so you can go to places in Europe and if you go to Spain, and I can't remember what the number is, but if you're going to try to buy a car and you try to buy a $10,000 car, you can't do it.

India a couple of years ago phased out some of their larger bills. That was a very cash-heavy economy and it caused massive problems. The European Union has – the European Federal Reserve Bank has recently decided to stop listing the 500-euro note. What's always claimed about this? What's always claimed?

Oh, it's about drugs. It's about drugs. It's about drugs. And everybody seems to understand that, number one, the whole drug thing in the beginning, in my opinion, was a major mistake. In the beginning, it was a problem to be in the situation where people are putting themselves in an environment where we're going to have the drug war.

The drug war in the beginning was a major mistake. Now, many people believe that the drug war is a major mistake. And so many people have come to the position where they're no longer going to prosecute the drug war. They're going to put themselves in a situation where we're going to legalize drugs, right?

Oregon, in the United States, just recently legalized drugs of many kinds, including the so-called hard drugs. Okay, fine. But now we're still going to argue about the use of cash as funding crime and funding drugs as though that's the only thing. And you see that everybody seems to be accepting it.

Nobody seems to be standing up and saying, "We're going to do this any differently." So in this situation, to me, this is very concerning to me because it means that our options are genuinely becoming fewer and fewer. And so we need a solution. Ideologically, it seems to me that that solution should very clearly be some form of cryptocurrency.

So ideologically, I think more than ever before, I believe that this is what we need to be focused on. I believe that this is where we need to have our attention is in developing those cryptocurrencies because cryptocurrencies can solve and do solve some of these significant problems that we have.

And so we should be very focused on really developing cryptocurrencies, in my opinion. That's the ideological position. Now, technically speaking, where do I think we are in the process? Well, we're in the very, very early stages of it. Bitcoin has not been around very long, and today there are hundreds and hundreds and hundreds of competing currencies that all have different benefits and disadvantages for people.

And so I've reviewed the arguments. Previously on the show, I've said, "Well, Bitcoin has certain disadvantages." I've had listeners write to me and say, "Well, Joshua, here's what you don't understand. Here's why Bitcoin will actually be good in the long term." But there are lots of other competing currencies, and right now, as I see it, it's such an overwhelming marketplace, it's hard to give advice.

Today, it's still hard, relatively hard for many people to figure out how to go and get cryptocurrency. We're still beset by this tremendous problem of the instability of cryptocurrency. I am not confident buying significant amounts of Bitcoin because I'm not interested in Bitcoin as an investment. I'm interested in Bitcoin as a currency.

And so in time, will we have one currency that winds up being stable and others that are more speculative? I don't know, but I don't want – if I'm going to use currency, I don't want something that's going to go up and down. This is the major problem with things like silver and gold, you still see, is that why are people reluctant to part with their silver?

Why are people reluctant to part with their gold? I am, right? I don't like to spend it because I think, well, it might go up in value in the future. Whereas I'm not reluctant to part with currency, physical US dollars, because I know they're going down in value, so I might as well part with them or save them in some other form.

So to number one, I support it conceptually, but I'm not competent enough to talk through those other issues. And I've been trying to get there, but I haven't been able to do it yet. Number two, business owner as payment option deductible business expense. I don't know the technical answer or if there is any reason why there wouldn't based upon the way that the IRS has categorized cryptocurrencies.

But my instinct is that, yes, you can deduct your bitcoin as a payment just like anything else. The IRS doctrines regarding what is deductible and what are not are very, very consistent. For all of the wackiness that people allege to the tax code, a lot of it makes sense.

The IRS is fairly consistent with regard to doctrine. So to me, I would answer this question by saying, let's start with barter. When you engage in barter exchanges, the IRS considers that if you have a taxable profit, even if you don't have – sorry, if you have profit in the transaction, even if you don't have any money, the IRS considers that you're supposed to pay tax on the gain that you achieved in the barter transaction.

So just because you're paying with bitcoin, as I see it, that's no different than paying with US dollars. It's no different than paying with euros, et cetera. The question is what are your actual costs. So I think that would work totally fine and have no concerns there. If I were able to set up where I would take bitcoin and pay with bitcoin, then I would just simply account for it based upon the market price at the time of the transaction.

To the third question of BlockFi, I am not familiar with it. I don't have any comments on it. Sorry, just to go back to question two, let's say we purchased $5,000 of bitcoin to make payments. Would that initial purchase be a deductible business expense or only when there's transactions and then we would look at cost basis and things like that?

That's that question that I need to brush up on because a couple of years ago, the IRS came out with a formal clarification on how bitcoin was to be treated. And I'll look it up, but they didn't decide to treat it as money. So let's say that you were converting from US dollars into euros.

That's not a deductible expense. And so everyone was frustrated, and it's not straight in my head enough to clearly talk about it, but everyone was frustrated that bitcoin was going to be taxed as a capital gain asset, not as money. But OK, there was benefits to it. So my answer is no, I can't see why converting US dollars into bitcoin would be any kind of tax deductible exchange unless your business is specifically in the business of bitcoin.

And that's inventory, but I can't see how that would happen. So I would not try to deduct that myself based upon my impressions, but I could be mistaken on that. As always, it was all very helpful, so thank you. Yeah. So let's hear it. I've got the page right here.

So we're on irs.gov virtual currencies. We're going to skip what is virtual currency. We're going to go straight to the tax consequences. The sale or other exchange of virtual currencies or the use of virtual currencies to pay for goods or services or holding virtual currencies as an investment generally has tax consequences that could result in tax liability.

And so we've got IRS notice 2014-21, which basically says that how is virtual currency treated for federal tax purposes? Answer, for federal tax purposes, virtual currency is treated as property. General tax principles applicable to property transactions apply to transactions using virtual currency. Is virtual currency treated as currency? No.

Must a taxpayer who receives virtual currency as payment for goods or services include in computing gross income the fair market value of the virtual currency? Yes. What is the basis of virtual currency received as payment for goods or services? The basis is the fair market value of the virtual currency in U.S.

dollars as of the date of receipt. Does a taxpayer have gain or loss upon an exchange of virtual currency for other property? Yes. Does it talks about mining? Does virtual currency received by an independent contractor for performing services constitute self-employment income? Yes. And here is a person who in the course of trade or business makes a payment using virtual currency worth $600 or more to an independent contractor for performing services required to file an information return with the IRS?

Looks like the answer is yes. Payments of virtual currency required to be reported on Form 1099 should be reported using the fair market value of the virtual currency. Are payments made using virtual currency subject to backup withholding? Looks like yes. Well, sort of. I'm skipping that one. So the short answer is that you should read that IRS guidance letter 2014- sorry, IRS bulletin 2014-16 and consider how that would apply to those specific questions.

I do applaud you for this. I think that regardless of the tax implications, I think that you should go through, if you believe ideologically what I described about the value of virtual currency in our society, if you believe ideologically in that, that that makes sense to you as to why this is worthwhile, then you should go through the extra hassle of setting it up so that you can accept it so that it increases the use of the virtual currency.

Because that is the thing that those who are Bitcoin advocates need to do is we need to make it so that you can pay with Bitcoin in many, many places. And to the extent that that happens, to the extent that you can take your cell phone and you can go into restaurants, go into stores and just simply make a Bitcoin transfer right there, that is the best thing that I'm aware of to do right now that will advance the cause of cryptocurrency.

Hopefully allowing us now to have systems that aren't interfered with by the banks as intermediaries and that aren't interfered with by government regulation in the way that I described it. And I suppose the root of my confusion just comes from the fact that the IRS is treating it like property and not currency.

So if a business buys property that they're going to use to govern their transactions, that I thought might be a deductible expense. But I can dig more into the IRS document you referenced. That would be a good question I think for an accountant who's more qualified than I am.

So all right, I got nine more callers. I got to move a little faster. Carlos in Pennsylvania, welcome to the show. How can I serve you today? Hi, Joshua. My question is going to be around guaranteed income during early retirement. So the general question is, for somebody who's going to retire, let's say around 40, do you have any recommendation on some type of system to provide guaranteed income, kind of what a normal retiree would do with an annuity, but doing that at 40 changes things.

So I wanted to see if you had any ideas. What assets, what investments assets do you own or do you anticipate owning at 40? I'm going to have regular 401k IRA and then also just passable. With mutual funds in them. So you're going to own mutual funds as your investments.

Do you have any investment assets that aren't mutual funds? It's all in index funds, equities, bonds, and some in real assets, but everything in financial instruments. So REITs and gold ETFs, that kind of stuff. Yeah. I would probably give lower priority to that at 40. So here's the thing about guaranteed income.

Guaranteed income is a useful financial planning tool because it allows the individual person who's planning on it, it allows that person to sleep better at night. So I recommend regularly guaranteed income for somebody who's moving into retirement age because it allows the person to sleep well at night. They know, hey, no matter what, I have some money coming in.

Now, usually social security is often enough. Social security, perhaps with some annuity payments is enough. Maybe the person has a pension, but the entire goal is for the person to sleep well at night. And so I've used the example frequently when I was doing this for retirees. I would talk about and I would say, imagine two friends.

You've got Joe, who's a retired corporate executive who has $3 million in his 401k and he's taking money from that 401k. And he's 65 years old, he's taking money from the 401k and that's his exclusive source of income. And now all of a sudden we're in 2008 or in 2000 and what was it, 20 or in 2001.

Now we're in some kind of market situation like that. How well is Joe sleeping well at night? Whereas compare that to Tom. Tom is a retired firefighter and maybe his wife is a retired teacher and Tom doesn't have any money in a 401k, but he's got $8,000 a month coming in from his firefighter's pension.

How well was he sleeping at night in 2008 or 2020? Most people would say, "Oh, a lot better." And so that kind of sparks the reason why people want the guaranteed income. It makes them feel better to know they have an income. But at the end of the day, if we're going to back out and look at it, it's kind of a ruse.

It's not actually true from a technical standpoint, from a technical financial planning standpoint. First of all, the guaranteed income has its own set of risks. If Tom was, I can't remember my name, so if the retired firefighter was a retired firefighter from the state of Illinois, is his pension as secure as the $3 million in mutual funds of the retired executive?

It's a good question. The answer is it might be for today, but I'm not so sure about 15 years from now. So maybe the retired firefighter shouldn't be sleeping quite so well at night. Meanwhile, on the other hand, the retired executive, how much money does he actually have? If he's got $3 million in investments and he also has $300,000 in a bank account and he spends $65,000 a year, then he should be able to sleep pretty well through those circumstances because he doesn't need the money.

And so although I don't think it's wrong to talk to people about the value of guaranteed income, it makes people feel better at night and sleep well at night and thus it's right. You shouldn't always do what's the perfect thing to do from a technical financial planning standpoint. You should do what's the best thing to do for you based upon your life.

But when you move back to 40, now it becomes harder because what are your options for guaranteed income? You don't have any options for guaranteed income other than to go and buy an annuity. So you could go and buy an annuity, but I don't think I would do that.

I wouldn't do that at 40. I don't see any benefit to that because you're giving up a lot of potential upside just for some measure of guaranteed income. You could do things like buy a rental property. That's not guaranteed income. It is diversified, but it's not guaranteed. Tenants stop paying and sometimes laws are passed and you can't kick your tenants out.

So I would look at it and I would say the concept of guaranteed income is not as important for somebody who's 40 as it is for someone who's older. So we do still need to plan for cash flow, but if you've got $3 million in your 401(k)s and your IRAs and your investment accounts and you're going to be spending $50,000 a year, you're going to be totally fine even if there's fluctuations in the value.

And so what I would do in that situation is what I would advise for you to start with. Number one, I would stay invested and I wouldn't take a big chunk of money out to buy an annuity just to create guaranteed income. Number two, I would set enough money aside in cash in the bank that would help you to make sure that no matter what, I'm going to be good.

My number would be two to three years of expenses. I don't have a defense of that, a clear defense of it. But when you look at most crises and you imagine the world two to three years later, you can go and do the historic analysis, but it's almost impossible to imagine in our modern world that most crises don't dramatically change two or three years later.

So think to your working lifetime. Think back to 2001. You had the crisis of 2001. Two to three years later, it was 2003, 2004. A lot changed. 2008, 2008, 2011, a lot changed. 2020, well, we don't know where we're going to be in 2023, but I can guarantee you it's going to be a whole lot different than where we were in 2020.

So I would keep a couple years worth of cash on the backside. And then my backup plan would be if I'm 40 is simply this. If I need to go back to work, I can. If I need to figure out a way to create more income from my working, I can do that.

And so let's say that I've got two or three years worth of expenses and all of a sudden there's a massive market crash and I say, "I don't want to start selling assets in this situation. I'm just going to sit and hold." So I sit and hold for a year.

Now, I've gone from two years of living expenses in cash to one year of living expenses in cash. Now I look around and I start to get nervous because we're in the midst of a great depression, another great depression. I say, "I really don't want to sell my assets at these depressed prices.

I really don't want to." So what do I do? Well, I have a year to figure out how to create some sort of income. And so what would I do? Well, I would go and get a job, the kind of job that I would enjoy. I might go and become a substitute teacher.

I might go and start driving a bus. If I just wanted a simple job that I was able to do, I personally would keep a long list of backup plans of things that I could go and do. I'm obsessive about this. I want multiple careers of things that I could do.

So maybe you would say – let's use the driving example. You might keep a Class A commercial truck driver's license available just so that, "Hey, if I ever needed a job, I could go and get a job as a truck driver for a few months and make a little bit of money." Or maybe I would have a little business that I've always thought about doing that or have this little hobby.

Maybe I'll go ahead and start making bird cages and selling them and make a couple thousand dollars a month at the local market with these bird cages that I sell. I would also have other plans, and I think this is where early retirees have a major benefit over traditional retirees.

Most people who achieve early – the ability to retire early have achieved it by learning to be very creative and flexible with their expenses. The normal financial planning conversation between a financial planner and a 65-year-old retiring executive is that the retiring executive has substantial fixed expenses. He's got a $2,700 a month mortgage payment.

He's got $10,000 a year of property taxes. He's got club memberships of X number of dollars. He's got a lifestyle expense of a certain amount. He's usually living a bigger lifestyle. And so when you're in that situation, you look at it and say, "All right, your minimum budget is going to be $6,000 a month, and then we're going to take another $6,000 to $10,000 a month from your retirement portfolio, but we're going to cover the $6,000 a month with guaranteed income." So you've got $3,000 a month with Social Security, and we're going to put another $3,000 in place with an annuity.

That way you know if things get tough, you don't get kicked out of your house. If things get tough, you don't have to stop going to the club or whatever it is. Most people – and I would guess you probably in that – most people who are on track to retire at 40 are far more flexible with their expenses.

They're usually living on far less, and they're usually much more flexible. And so I would have a backup plan of something like this. Okay, I'm retiring at 40. I'm living in a house. Well, if I didn't want to sell investments, what would I do? I would rent out my house because that's most of my expenses, and I would move into my RV.

Or I would rent out my house, and I would go to Mexico, and I would work on an organic farm just for room and board. Or I would rent out my house, and I would go and get a job in a ski town doing seasonal employment. Or I would go work at Amazon during the Christmas rush.

And I would just have those kinds of plans because to me, it's simpler to do those things. They satisfy the need. You could get a job at 43 years old if you needed to and wanted to in order to stop taking assets. You could create a way to make some money on a business of yours of some kind.

And I'd much rather do that than give up a big chunk of potential wealth to go and buy an annuity at 40 years old. That's me. Yeah, I think that makes a lot of sense. I really like that advice. One of the reasons that I was – yeah, I'm definitely not going the annuity route.

I just wanted to see if there were any other tools out there because the other thing that interested me was in getting residency permits in other countries. As I'm sure you know, a lot of the requirements is you got to show some type of guaranteed income, whether it be $1,000 or $2,000 a month or so.

So I wasn't sure how I would be able to demonstrate that without some type of product like that. Yeah, the answer is you probably won't be able. If the country specifically requires you to have a guaranteed source of income for their pensionado visa or something like that, then no, you're going to need to demonstrate that.

But most countries will have a number of different options that you can choose from, including options of simply showing your wealth. And so that's something to look at on a country-by-country basis. And so maybe you say, "Okay, I really want to go to Belize and set up a residency program in Belize, but Belize requires me to have a guaranteed income." Okay, well, maybe you don't go to Belize.

Maybe you go to Mexico instead. Mexico has a beautiful Riviera Caribbean side just like Belize does. And so maybe you just go to Mexico instead and then you use the Mexican person of means visa, which you prove with net worth, not with income. There are plenty of options and most countries have many options.

If you're looking at a country for a residency program like that, then most countries will have other options. If not, then that would be the kind of thing where you could say, "Okay, I need this for this time." So what I would do in that situation, if I needed to prove that, I would first talk to a lawyer and understand what the government of the country I'm interested in is going to look at.

And then what you can do is just simply set up a shorter-term annuity, probably. So perhaps you look at it and say, "I'm going to be 40, so what I'm going to do is I'm going to purchase an annuity that makes payments for me for five years or for ten years.

And I'm going to take this sum of money, I'm going to put it into an annuity that gives me this sum of payments for this period of time that's going to be enough to satisfy the needs of this visa program, depending on the paperwork that you're collecting for that particular country's immigration program." That's a great idea.

Thanks a lot. I appreciate it. My pleasure. All right, we move on to – let's go to Jason in Ohio. Jason, welcome to the show. How can I serve you today? Hello. I am an engineer based in Ohio, and during this pandemic, I was able to transition to a fully remote working position.

And so I'm now basically location independent. What I'm looking to do is to travel to different states and stay for a month or two at a time. And I'm just really confused about how I will have to do my taxes in this situation. So as far as I understand, when you're working remotely, you're supposed to basically pay taxes to the state in which you are actually performing your work.

So I'm just curious if you have any insight, especially since you did your road trip thing, about how to file taxes and who I owe taxes to and how I set my location of residence and all that. Got it. Okay. Well, this is going to be one of those where I think you're going to have the technical answer to follow the clear and specific letter of every law.

And then you're going to have the practical answer, which is make a good faith effort to just do what is right based upon what you're thinking. So here would be what I think the letter of every law would be. The first thing is every state that you intend to spend time in, you will need to look at that state's legislation.

You'll need to do a search. So let's say you're going to go to Kentucky and spend a month in Kentucky. Then you look at it and say, "What does Kentucky require for me to – what does Kentucky say based upon my working in their state and the taxes that are going to be associated with that?" And Kentucky might say – well, Kentucky was a bad example because they don't have a personal level – no, it's Tennessee that doesn't.

Kentucky does have a personal income tax. So Kentucky might say, "Well, we consider somebody to be a resident of our state if they spend more than 183 days per year in our state." Well, that would be one thing. Or Kentucky might be very detailed and they might say, "Anybody who works in the state of Kentucky for any amount of time is going to be liable for taxes generated in this particular state." I don't know what each state says.

Every state is different and so you would have to do the looking for that state and then you would have to try to figure out, "Well, what does residency in that state mean?" I'll give you an example. California, probably, the letter of the law, California probably taxes any kind of work that is done in California and any kind of income that's generated in California.

So a number of years ago I went to a conference in California. I tried to avoid them but I went to it and while I was there I made business contacts with people in California. I recorded podcasts for Radical Personal Finance in California, which technically is a form of work that I've done in California.

I flew in. I was there for, I don't know, four days, five days, and then I flew out again. So the question is this, "Did I do work in California?" I don't know. As far as I'm concerned, the intent of the law is if I move to California and I get a job in California then that's when I would pay taxes.

Otherwise, I'm just passing through. So I didn't file a tax return with the state of California. If they need to come after me, they can come after me but I feel my conscience is clear. I'm following the intent of the law. So there's the letter of the law, which means search every state that you're going to spend time in.

Look to see what that state requires. And then I think there's the general intent of the law. And so in my opinion, if you're going to be traveling, you're going to be spending a month in Kentucky, a month in Florida, a month in Alabama, a month in Louisiana. You're just traveling through for a period of time.

I would have no concerns whatsoever about needing to pay taxes to those states, needing to file tax returns. In that situation, I would just – if you're going to keep your address in Ohio, I would just keep it in Ohio and I would just say I'm traveling through. And on a state-by-state basis, I can't imagine anybody, even the most committed of tax commissioners for that state, I really can't imagine anybody who would have a problem with that.

Okay. So I've got a little bit of a follow-up then. So obviously, Ohio has state income tax. There are states, obviously, that don't. Is it a reasonable approach to try to establish residency in a state without income tax and benefit from it that way? And then also, I'm curious about establishing residency in a state that does not have income tax for international travel purposes.

So I'm curious to hear your thoughts on those two things. So the answer to that depends on how much money you're making, if it's worth it. If your Ohio tax bill on an annual basis is $615 and everything is in your Ohio name and your Ohio address and whatnot, then it's not worth it to save $615.

It's a hassle to just change a whole bunch of stuff and it's not worth it. The next thing you would look at is, well, where am I actually going to live? If I own a house in Ohio and all my stuff is in Ohio, I'm just going to be traveling, then it's hard to make the argument with a straight face that you don't live in Ohio.

That's where your house is and that's where you spend a lot of time. You just happen to be traveling for three or four years. Now, if when you leave, you're going to go and actually travel full-time, you're not going to own a house. You're going to live in your RV or live in your car or live in hotel rooms and going to be traveling full-time.

Well, now it does matter quite a bit. And so you need to look at the actual facts. In most of these planning circumstances, the key is what are the actual facts? Where do you live? And you want to answer that question honestly to yourself. And then what you do, don't play around with the details.

So don't play around with trying to make it seem like you don't live there, but you actually do. Just don't live there. Just actually genuinely don't live there and then you've solved the vast majority of your problems. So you look at that. And then the next thing you need to think about is if I move my residency, will that cause me problems with my employer?

This is, I think, the biggest risk for a lot of people. You may have achieved permission to be able to work remotely for now, but will your company – did your company actually give you permission to live somewhere other than Ohio? Did your company actually give you permission to live internationally?

Or do they just say you can work at home and they think you're sitting there in Cleveland? So if my company has just said work from home, I wouldn't want to put my job in risk by updating my address with human resources and saying, "Well, now I live in Texas and here's my escapees Texas address that you need to put on my paycheck." I wouldn't raise those flags.

As long as you've thought about those practical things, the answer to the tax question is yes. You can move your state. You can move your state of residence from Ohio to any other state, including a no income tax state. If that won't – if that saves you a significant amount of money on income taxes and if you're genuinely not going to be living in Ohio, then I think yes, you should do that.

And if you're going to go abroad and consider living outside the United States for your own personal reasons, possibly even including some measure of tax savings, then I think that it's worth it to go ahead and move your residence to another state as well. So I would. If I were in your shoes, if I'm going to spend more time out of Ohio, I just need to go back and visit Ohio every now and then, I would do that as long as it wouldn't cause me trouble with my job.

Great. Yeah. So my residence currently is in Ohio. I don't own property. My address for HR purposes is my parents' house. So I think I will look into establishing residency elsewhere. Thanks for your help. My pleasure. And enjoy. It's something that is fun and that I have enjoyed and I think a lot of people should certainly consider.

James in Connecticut, welcome to the show. How can I serve you today, sir? Hi. There are two things I'd like to get your feedback on. The first is I have a desire to have a very simple cash flow. My outlook on personal finance is kind of to keep it simple.

But I'm wondering if in my effort to have a fortress balance sheet, if I perhaps missed something obvious that's really important to support my goals of number one, investing in my children's education and their learning projects. They're young now, single digits. And then number two, cash flow in college.

Those are the two high-level goals I have. And my simple cash flow right now for debt, it's credit cards that are paid on a monthly basis and mortgage. And then from a savings standpoint, there's personal savings and 401(k) retirement. That's about it. That's our very simple monthly cash flow.

I'm 40. And we also have in the spirit of preparing for uncertainty, we have the food, cash, passports, various insurance, life insurance, umbrella. So, you know, at a high level, wondering if I'm, you know, gee, missing something obvious there. And then number two, kind of related, thinking about investing in my children's learning projects and their education, there's a number of really exciting things that I would like to do with them as they get older in the spirit of, you know, educating them.

And specifically, businesses would be interested to get your feedback on maybe the best way to go about getting them into a business, helping them have the experience of creating, running, and selling a business. Because one of our micro goals there is for each of them to do that two times before they go off to college.

Nice. I like it. So, short answer is no. If you want simplicity, what you're describing is simple. And I can't see any reason why you would need to do something complex to achieve your first goal of investing in your children. If you are investing in your children by buying them books, you would simply charge those books to your credit card.

And at the end of the month, you would pay off your credit card debt just like you're already accustomed to. If your way of investing into your children is to hire them a particular tutor or coach or pay for gymnastics lessons, you would just simply charge that to your credit card.

If your way of investing into your children is to enroll them into a summer camp or hire a special tutor that would provide them with extra instruction in a unique area of interest or passion or skill that they have, then I don't see why that would have to affect your cash flow.

I think the cash flow is probably more to your college question. And so, what I am understanding you to be asking is should I set up other accounts and things like that. My answer is no. What you're doing is probably fine. And the fact that you're investing in your children at an early age rather than at a later age is what I do and what I recommend.

I think that if you have to choose between investing in your children when they're young or saving for college, you'll get a far greater return on your money by investing in your children when they're young. So, if you can spend $100 a month on books for your children to read and fill your house with books or you can put $100 a month in a 529 account, my answer is don't put the money in the 529 account.

Spend the $100 a month on books. And I think that there are only marginal benefits to saving in specific college-focused accounts. There are some benefits, but they're marginal for most people. And so, if your financial plan involves I'm going to pay down my mortgage and by the time my eldest child is 18 years old, my mortgage is going to be paid off, thus freeing up $1,400 a month of cash flow that I could now use to spend for college tuition if I want to, I think that's a reasonable plan.

With regard to business, yes, I think that that's an ideal way to do it. The only thing that's a little bit difficult for me to know how to answer is create, run, and sell, the last one, the last part of it. Sell a business is difficult. Some businesses can be sold very easily.

Many businesses, though, especially the kinds of businesses that would be most appropriate for and most easily done by a child would just simply not be sellable businesses. Although, maybe there could be some assets that they could create by thinking of that. When I think about this, I do have a lot of ideas, but what I think, and I've got a list of those ideas, and at some point I'm going to create a new product on this particular thing of teaching children about money.

And part of that is going to be managing money, but a lot of it is going to be about earning money. But I'll use some examples that I've previously talked about publicly. I have encouraged my children to start a bread business. Now, don't think that that's anything more than them just simply making a few loaves of bread and then selling them on Sunday at a church meeting to anybody who wants to buy bread.

But it's very effective. My eldest is seven. A couple years ago I bought him a cookbook put out by the pantry people, the great America's Test Kitchen. It was an America's Test Kitchen cookbook for children. I handed him the cookbook and I said, "Do all the recipes in here.

All the instructions are here." And so he's, little by little, worked his way through the cookbook. But they have a really simple and easy banana bread in there, and a recipe. And so I bought him the stuff and I said, "Make some loaves of banana bread and then take them to a church meeting on Sunday and sell them." And so I had him go and create some loaves of bread.

Some were just straight banana bread. Some were banana bread with walnuts. Some were banana bread with walnuts and chocolate chips. And then he stood in the church building lobby with a box saying, "Here, would anybody like to buy banana bread?" And I forget how much he paid for it, but a child can easily sell that for five bucks a piece.

And in this case, I covered all the cost of the ingredients, and so there's five bucks per piece. And so things like that, for a child who is seven years old, there's hardly anything that you can do that's as profitable as that. A child could easily make, doing that, could easily make $30 or $40 a week, $20 a week, $30 a week, $40 a week.

And it's hard to see why a seven-year-old needs more than $20 or $30, $40 a week. That's a powerful way of making money. But that's not a business that's going to grow. Now, if my son were 13 and he were a very skilled baker, would I encourage him to take it bigger?

Yeah. I'd encourage him to get regular customers. I'd encourage him to canvas the neighborhood and see who wants to buy it, to buy from him regularly. And things could grow. If I had a child who was a very good cook, I would encourage him to do something better, maybe bigger.

Maybe we would go ahead and start setting up, we would buy a table at the local green market and sell foods at the local green market. Maybe we would set up some kind of food truck or portable thing and we would start going and doing barbecue at weekend events, weekend fairs.

And so things can get bigger. Most of the time you're not dealing with anything that would sell. You're dealing with those kinds of service businesses. And so I think one big benefit for a child, though, is not to get too focused on any one thing, but to have exposure to a variety of different industries, different types of jobs, different types of businesses.

So in my mindset with a young, you know, my eldest is seven, I'm looking at it and saying, I'm not going to try to say I have to tell my seven-year-old, you have to do this for the next ten years to build a big business so you're rich at 17.

I just want him to get a taste of a lot of different things that he can do, a lot of different ways that he could go. And I want him to have some useful skills that he could use on the side if he ever needed to, even just for cash money.

I'll give you one other example, something like doing balloon animals. Balloon animals, somebody with the ability and skills of doing balloon animals can make a lot of money just going to things like fairs and performing at fairs and special events. I think that's the kind of thing that if you have your child develop the skill of doing balloon animals, there are people who, adults who make a full-time living doing balloon creations and selling $40,000 worth of balloons to decorate for conferences.

I wouldn't push them in that direction, but as far as a little skill that can be done, if they have the ability to go to a street fair, a 4th of July fair or a Labor Day thing or a special street fair in town, a special kids event for the local Italian heritage thing, and they can just walk around the streets and make a few hundred bucks of pocket money, that compared to what most teenagers are doing is a very, very profitable use of their time.

And there are dozens and dozens and dozens of those kinds of things that I would look at. Now, I've got some other businesses that I think would kind of work in terms of things you could sell, but I want to keep a little bit of that private until I put that into my information product that I'm going to develop on this.

So I just wouldn't worry too much about the selling the business unless they were interested in a kind of business that that actually fit for. I think there's more value in just teaching them to create it and then run it. And I believe that those are actually the fundamental skills of an entrepreneur.

An entrepreneur who's really good figures out how to move fast, and they have an idea, and they say, "Hey, here's an idea for a business," and they make it, and they make it fast. They don't make it awesome. They make it fast. And then they take it to the market and see what happens.

And so to me, far more important than selling a business is the skill of knowing that I can create businesses fast and that it doesn't take that much to do it. Want to do balloon animals? Great. Let's go to YouTube, buy some balloons, figure out where to get some stuff, practice, and then next weekend I'm going out.

So what if I only know three animals? That's okay. That's enough. People will buy the three animals, and I'll make $100. I don't need to engage in this long-run thing of I'm going to go print business cards and do all this stuff that people do. Get money in by creating a business and do it fast.

That to me is a more important lesson than learning how to sell a business. Yeah, good feedback, good examples. I think that makes sense, and I expect you're right. As you try different things and as you see what really interests them, then you can scale that up and almost use a build-a-bling-block approach.

Yeah, I think so. So good for you, in my opinion. Good for you for staying and doing what you're doing to help them, because to me, if you can do that, then the whole college thing really just becomes so much simpler. Matt in Virginia, welcome to the show. How can I serve you today, Matt?

Hey, thank you so much for all you do. I love how deliberate you are with all of your thought processes, and I've recommended you to several friends. I've got a quick question for you. Have you ever considered biblically responsible investing, and if so, what was the conclusion that you came to?

Yes, I have considered it, and I personally believe that it is very important to pursue biblically responsible investing for those who are going to commit their lives to living in a pattern that would please God, based upon what is revealed in Scripture. Usually when people use the words "biblically responsible investing," though, they're often referring to a mutual fund family or something like that that is trying to commercialize it.

I don't push this publicly, because I believe that this is an area of conscience, not an area where I would seek to control someone else. But a number of years ago, I sold out of large mass market – I don't own index funds. I sold out of all of my large mass market mutual funds that I used to own and that I used to sell for a living for a couple of reasons, but a primary one was based upon an ethical dilemma.

Many of these companies are involved in businesses that I don't believe are honoring to God, and many of these companies are involved in corporate practices that I don't believe are honoring to God. And it became difficult for me to imagine myself standing in front of Jesus Christ and Him asking me for an account of how I've lived my life and how I've invested the money that He entrusted to me, and then for me to say to Him, "Look, Lord, I invested this money.

I got 8%, and I invested it into this business that was over here systematically working to dismantle Your kingdom and putting all of its corporate energy into dismantling Your kingdom and producing these products that don't help people, that don't serve society, that don't express love of neighbor, but are rather designed to kill people, to harm people, to destroy people's souls." I came to the point where I couldn't do that anymore.

Now, replacing that has been far more difficult than I ever imagined it was going to be, which is another reason why, although I'm happy to admit it to anybody who asks, it's really hard to say, "Hey, here's what you should do." And I think that this is one of the plights of Christians in 2020, as Christians try to figure out, "What do I do?" So let me sketch out what I understand to be kind of the cultural arc.

The United States was founded in an environment that was suffused with Christian thought. Even the most skeptical of the early Christian framers, even the most skeptical of those framers had all of their thinking shaped by Christian thought. And so Christians in the United States for the last 200 and something years have had a pretty easy go of it.

Now, there has never been an extraordinarily high identification of Christian identity or of churchgoing, et cetera, in the American culture. But for the majority of the American experience, the culture shapers were at least nominally Christian. The mainstream denominations of mainstream Protestantism were very influential, Catholicism very influential in other places, evangelical Christianity very influential in some regions.

And so even today, atheists are wildly underrepresented in political circles. But what's happened most keenly in the last 40 to 50 years has been that Christianity has lost its cultural power in the United States. And so if you were to go back to 50, 60 years ago, then entertainment was not – it may not have been explicitly Christian, but it wasn't intentionally offensive to Christians.

Because an entertainment offering wouldn't have succeeded if it were explicitly offensive to Christians. What has happened, though, is that situation has dramatically changed. And while the United States of America is still intensely a Christian nation related to the population statistics, the cultural shapers, the cultural influences are no longer Christian.

And so what's happened is that many Christians in the United States find themselves in a – looking at the world from a minority mindset. They're not a minority from a demographic standpoint, but they are a minority in certain places, most importantly in the cultural spheres and then increasingly in the political spheres.

And so what this is forcing on American Christians, as I see it, is it's forcing American Christians to go through and deal with things that they've never dealt with, think about things that they've never thought about, and wrestle with things ethically that they've never had to wrestle with. Thirty years ago, if you were going to say, "What is Christian investing in the United States?" You would have had to say, "Well, should I invest in a company that is involved in war machines?

Should I invest in Northrop Grumman that's making all of these big planes that are being sold to the military? Should I invest in an arms manufacturer? Should I invest in an alcohol manufacturer? Should I invest in a tobacco company?" And so those things were in some ways simpler. Today, though, now Christians have to not only deal with those very important issues, they also now have to deal with corporate identity.

And they didn't used to have to look at Coca-Cola and say, "Okay, Coca-Cola makes soft drinks, and let's just assume people like drinking soft drinks." But Coca-Cola is not specifically trying to create advertising on a global basis that is fundamentally different than my beliefs. Well, now you do, and that's every company in the Fortune 500, practically speaking.

And so Christians haven't yet developed a new way of thinking through this. And this shouldn't be too much of a surprise, right? You could imagine this—let's go back to another example. If you were to go back to an era like in the 1970s, when Roe v. Wade was passed in the United States, at that time there was a very limited opposition among American Christians to abortion.

It was very limited. It wasn't non-existent, but it was very limited. Why? Well, it was because Christians had not really thought through the issues. They had not thought through them in detail. They had not looked through them. They had not developed robust philosophy around the issue, and they had not come to accept them in the way that they should have.

They were caught blind—kind of blinded to it. Well, fast forward to 2020, and what you see is that over the last 40 years that has dramatically changed, where the entire landscape now on that particular moral question, ethical question, is utterly and completely transformed. The Christians thought through the issues.

They argued through them. They wrote through them. They developed lines of ethical and moral reasoning, and then over the course of the last 40 years, that has been systematically taught and established in Christian communities to where there's a very broad consensus on what is an appropriate way to reason through that.

Where that has not happened is in this area of what we're talking about with finances. It's not happened where people have gone and said this. If you go into the average church and ask the average pastor, "Well, Pastor, talk to me about biblically responsible investing," very few of them can do it.

And I used to work—I used to have pastors as clients, and there's very little difference between pastoral funds, you know, the way that the pastor's retirement accounts are invested versus other places. So what's happened in the last few years, though, is that Christians are starting to wake up. They're starting to pay attention.

You see this with arguments over—you see this with arguments over buying. What companies do you support? What companies do you boycott? You see this over—it will be, in the next decade, it will be an area of trying to say, "Well, how do we invest our money?" And I think that you're going to see some of these Christian investment companies that are clearly and publicly saying, "We do work in this certain way.

We do this—we do work in this certain way, and we offer these certain products." And I think you're going to see that start to become bigger and bigger to where 10 years from now, in the same way as an example of what happened with abortion, you'll see in Christian circles 10 years from now a much greater awareness of this conversation.

But it hasn't happened yet. So I think expect it to happen, and I think this is happening in a number of different spheres as Christians in the United States try to deal with what is it—how do you live when you've lost your cultural power? How do you stay faithful when you move from a place of dominant majority to a place of—not a minority, but a place of a less dominant group?

I don't know exactly what words to use, but how do you live faithfully in that circumstance? And other cultures from other places in the world, they've already walked through that, right? They have many lessons to share with American Christians. At the moment, on this particular issue, there's not a lot of developed thought.

There aren't a lot of developed solutions, and it's a real area where you're going to see massive change in the next decade or two, in my opinion. All right. Well, thanks. I certainly appreciate that. You know, just a quick Google search, I can pull up like Timothy Funds and Ave Maria is a Catholic fund, and there seem to be some others that might align.

I don't know if you've ever done that or come to a conclusion that maybe these semi-mainstream but Christian-leaning organizations would scratch that itch for you or not. But I'll continue to look at it. Thank you. I'm not opposed to any of these. I've thought about interviewing them. My always fear is my brain works comprehensively, and so I almost feel like if I'm going to go out and I'm going to invite somebody from the Timothy Funds here, well, I can't do that unfairly.

I need to go and invite all eight companies that are doing this, and I need to interview all, and I've got to do this exhaustive due diligence, and it makes me – and because I know that that's going to be 200 hours of work for me, I kind of shy away from it.

And so what I could do and should do is probably provide more cursory discussion as a way of exposing people to it, but I often – I shy from that. I think that these funds are a very good solution, and I think that if you find – because investing outside of the mainstream context, when most of our money is held in qualified accounts, our 401(k)s, et cetera, the vast majority of people can't, won't, and shouldn't just take that out and say, "Well, that's it.

I'm going to go and do something else." They can't, won't, and shouldn't do that, and so a solution where you have a quality company that says, "This is what we personally believe is, and here are the funds that we offer, and here are the ethical things that we want to do, and so we'll help invest in those companies," I think that that's something that should grow, can grow, and that you should consider.

And so you can research those companies, and if one of them speaks to you as far as, "This is a company that I agree," then you should go with that. Now, the interesting question that I'll leave you with that I don't know the answer to is I often ask myself this.

Should a biblically responsible investing fund outperform or underperform its peers? And that to me is a very interesting question. On the one hand, you would make the argument and say, "Well, it may underperform its peers." The first challenge will be that I'm going to be moving to an active management scenario, so this fund is going to have more expenses, and this fund is choosing from the same publicly traded companies generally that many other funds are.

So I'm automatically moving myself into a more expensive proposition, and so there's going to be some kind of underperformance. But the bigger question is, what has God ordained in the universe with regard to the long-term success of companies that behave in certain ways? And has God actually ordained that in the end the wicked will triumph, or has God ordained that the righteous will triumph?

And I think a lot about that. I think it's a really fascinating thing to think about. And if there is somebody who is doing research, doing a theology degree, or writing a paper, this would be a very interesting scenario that I would love to see more analysis done on.

And I think it would be really interesting to have somebody put themselves in a scenario of, "What do we see over the long term in terms of actual Christian...what companies do?" I teach my children, even as Psalms chapter 1 does. My children, I have them memorize Psalms chapter 1.

And so if you think about what Psalms 1 says, it's hard for me to quote sometimes when I have to address it. Let me just read it to you. So think about what this says in a financial standpoint. Here we go. "Blessed is the man who walks not in the counsel of the wicked, nor stands in the way of sinners, nor sits in the seat of scoffers.

But his delight is in the law of the Lord, and on his law he meditates day and night. He is like a tree planted by streams of water, that yields its fruits in its season, and its leaf does not wither. In all that he does, he prospers. The wicked are not so, but are like chaff that the wind drives away.

Therefore the wicked will not stand in the judgment, nor sinners in the congregation of the righteous. For the Lord knows the way of the righteous, but the way of the wicked will perish." And that's just the tip of the iceberg. But if we believe that God has said that those who are righteous, those who meditate on the law of the Lord, and what I think is rather obvious in that context, to apply the law of the Lord, that they will prosper.

They are like a tree planted by streams of water, that yields its fruit in its season, and its leaf does not wither. In all that those people do, in all that he does, he prospers. The wicked are not so, but are like chaff that the wind drives away. So is there a higher overperformance in time of investing in a company that is engaging in righteous commerce, rather than unrighteous commerce?

In a company that treats people properly, and appropriately versus improperly. And to me, that is a fascinating thing to look at, that I would love to study more in the long term. So, may you find good solutions in the days to come. All right, move to Trey in Texas.

Trey, welcome to the show. How can I serve you today, sir? Hey Joshua, thanks for taking the call. I wanted to ask you, I've got some savings set aside to purchase property with in the future, probably in the next three to five years, and I was happy with just keeping it in cash.

It's about $200,000, and I'm adding about $6,000 or $7,000 a month. But, when I run the numbers, if I'm going to buy something in five years, say three to five years, it would be nice to have a little bit of growth on that cash, as opposed to eroding with inflation.

So, I wondered if you had any ideas for where to park that kind of money short term. It's okay if I want to buy something in three years, and I end up having to wait five, because the market's down or something. I thought about using a target retirement fund for 2025, so that it would kind of have that appropriate mix.

But, I wanted to hear what you thought. Yeah, I think there's four things that you would consider. Number one would be a savings account. Number two would be CDs or a CD ladder. Number three would be a money market account, or number four would be T-bills. You could set up an account, when you start to get up in those numbers, you could set up an account with Treasury Direct and just invest directly into T-bills.

I think all four of those would be appropriate solutions. If you're in the five-year timeline, then I don't think, generally speaking, I don't think safely you can look at other kinds of investments. And so, I would just simply eat the opportunity cost of an investment in favor of being ready to go, when I see the type of property that I look at, that I'm ready for.

But, I would probably do with $200,000, I would probably do some form of CD ladder and try to stretch some of those CDs out to a little bit longer term to get a little bit more return. But, we're living in a world where it's hard to get return on cash, and there's not a great solution that I know of.

Gotcha. Yeah, that's helpful. So, I had one other question, sort of related. All of our retirement savings, which is about another couple hundred grand, in index funds, and they're all S&P 500. And I just wanted to know what you thought about, I've heard people saying that the S&P 500 is a little bit overbought, most index funds are a little overbought.

I started looking at the PE ratio of the funds I'm in, and they're like in the 30s. So, do you think index funds, I know we just talked about biblically responsible investing, but I've got a lot of index funds right now and I haven't even started to grapple with what you guys are just talking about.

Do you think that they're still a reasonable place to park money financially? It comes down to what's the alternative, right? If you sold the index funds, what would you invest in? Yeah, it probably had to be an actively managed mutual fund of some kind. So, we're all stuck in this world where when you try to, and that's always where you have to look at.

Even when you're hearing a commentator say, "Well, the PE ratio is out of whack." The answer is, the question is, "Okay, well what do I invest in instead?" I certainly have concerns about the value of stocks. I certainly have concerns about the value of real estate. We all do, right?

Anytime you have your money invested, you're going to have concerns about something. And here's where I look at. What should be the proper price to earnings ratio of an investment? Now, some people answer that, "Well, it should be X number." And I think it's worthwhile to consider those things.

Historical analysis is important to keep in mind where you look and say, "Oh look, the price to earnings ratio is different on a historical basis than this." But on the flip side, you look at it and say, "Well, how do we know what the absolute number should be?" We're not dealing here in a world of mathematical precision where we know exactly what it should be.

And I think that if you look at index funds, for example, what do you see? Well, I think, and I would love it if I had some numbers at my fingertips to prove this. This is my impression, but not backed up by individual data. So maybe I'm wrong, but this is my impression.

I think today you have far more people participating in stock investing than ever before in American history and in global history. Never before has stock investing been so widely available to people, and never before in history has there been a scenario in which so many people were participating. If you go back historically, go back, I don't know, 50 years, 100 years, only the very rich actually owned stocks.

Stocks were a rich man's game. The average person never owned a stock. They would buy a house. They would own a piece of land. If there was any kind of long-term investments, usually that would be where you used to have guaranteed benefit pension funds managed by professional investors. But the average person didn't own stocks at all.

Whereas today, the average person does own stocks through their 401(k), through some form generally of a mutual fund. And so this is making, as I see it, this is fundamentally new. This is fundamentally new in terms of the impact on the average person. You have now more people who are not professional investors buying and selling based upon their own reasons.

Everything from people buying and selling individual stocks from their smartphone app to buying and selling in their 401(k). Stocks and the stock market is a much bigger impact on the society at large. People, a politician, needs the stock market to be high because then that makes people feel wealthy.

And when people feel wealthy because their 401(k) values are high, then all of a sudden now they go out and they spend money confidently. And the spending money becomes a fulfilling prophecy because in a consumer-oriented culture now, profits go up and then stock prices are high. I mean, it goes on and on and on.

And so my point with that example is that I believe that we're in a new era where it's valuable to look at historic considerations. But just because you tell me the historic price-to-earnings ratio was X and the current price-to-earnings ratio is Y, I'm not convinced that that tells me all that much without some other story, without some other philosophy, some other theory to persuade me.

So since I don't know how to resolve that, I come down to what can I do. And for most of us, the stock market is probably the best investment that we have. Why? Well, you have profitable companies that are professionally managed that are making money. You have a very efficient, high-quality market in the United States market with pretty decent transparency, pretty decent regulation.

You have professional investors scrutinizing the market at all times. You have companies that are working very, very hard to make money. It's hard to believe that the average person could do any better with their money than simply trusting it to that highly productive market. But I don't know of any professional investor, though, who believes that the market returns in the next couple of decades are going to be as high as the market returns in the last couple of decades because of some of these other pressures that we're talking about.

So I would not encourage someone to take their money out of the market to sell their index funds unless they have a better option. If you have a better option, better option could be I want to pay off my high-interest credit card debt. Better option could be my neighbor's dad died, and I have the chance to buy this property at a 40% discount, and I think that this side of town is growing because I think this is a really good scenario.

Better option is I've been looking at the markets in Southeast Asia, and I think that there's so much growth potential there that I've connected with a local person who's going to hook me up and we're going to start buying Southeast Asian. I don't know, right? But if you have a better option, then certainly you should do that.

And I am not at all married to the concept of buying index funds, but you have to have something that you think is better. Otherwise, stay put. Got it. Thank you very much. My pleasure. All right, we move on to--we've got $3 left. We'll move on to Alex in Massachusetts.

Alex, welcome to the show. How can I serve you today? Hey there, Joshua. Great to talk with you. Yeah, I have a question about podcasting, actually. Okay, let's do it. All right, so as an experienced financial podcaster for several years-- so I'm a podcaster as well in the financial space-- and I'm just wondering, you know, over the years you've shared, some of the lessons you've learned about your show and your platform and talking about the things that you do, do you have any advice or insights regarding--you know, things just seem to be changing really quickly.

Do you see any trends or predictions in the coming years as far as, like, creating media, specifically in the finance and investing realm, and how to connect with others through that medium? I do. Speaking kind of just rapid fire with a few big ones. Number one, if I were starting over again today, I would not do exclusively podcasting.

I think that if you have the ability to do podcasting, then that's good, but I would not do exclusively podcasting. I think that video is growing far faster than podcasting, both from the perspective of social reasons in terms of, you know, what people do and what they like, and I think number two, even just with regard to the technology platforms.

Right now, if you start a podcast today, an audio podcast exclusively in 2020, who's promoting you? Well, you've got Spotify, iHeartRadio, you've got Apple Podcasts, but people aren't generally promoting you in those bases. You can be listed there, but if you start video, and now all of a sudden you've got Facebook pushing your video, you've got YouTube pushing your video and recommending it, you're going to get a lot more recommendation.

So I think that video is a more powerful platform right now than podcasting is. Video also has the potential to make big progress, to go viral. The downside of podcasting, I've never had one of my podcast episodes go viral, never once, and it's easy to imagine why. You say, or the previous caller was very kind and said, "Hey, I've recommended your podcast to other people," which I greatly appreciate.

That's how most people find out about radical personal finance. But when somebody does that, how do you do it? Well, if you share a link on Twitter or you share a link on Facebook and say, "Here's Joshua's podcast," and right now as things stand, we're an hour and 23 minutes in, and you're just like, "Man, this is the best podcast in the world," nobody clicks on that link on Facebook and gets an hour and 23 minutes in, and all of a sudden it's like, "Wow, this podcast really is great." No, no, it doesn't happen.

If it's more than 20 seconds in, it doesn't work. And so I try to keep the show fast, and my intro is on most days 12 seconds. But still, it doesn't happen. And so podcasts don't go viral. You don't get any of that Internet juice to help something go viral.

So it's hard to grow a podcast for that reason. The kind of people who--let's say that Trey, again, the previous caller, is recommending my show. He needs to have somebody who is a podcast listener, who has time to listen to podcasts, who's interested in finances, and then that person, if they find my show, there's a high proportion of people who fit that demographic who love my show.

But that's a small subset of the total number of people that are out there. And so if I were starting over in 2020, I would not do exclusively audio podcasting. Where audio podcasting massively outshines any other format is the amount of connection, the deep level of connection that you have with your listeners.

It massively outshines any other format with regard to the amount of information that you can convey to somebody in a very efficient way with the level that you can teach. And so I love audio podcasting, but with regard to growth,