It's Friday. Today, live Q&A. (upbeat music) 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, June 18, 2021. And today on the show, we do live Q&A. (upbeat music) These Friday call-in shows work just like any other call-in talk radio show that you have ever listened to, just a little bit less scratchiness in the background than you get on the AM dial.

But basically, you call in and we chat about anything that you wanna talk about. We talk about questions, comments, suggestions, anything that you want to discuss. If you'd like to join me on one of these Friday Q&A shows, you can join me by becoming a patron of the show.

Do that by going to patreon.com, search for Radical Personal Finance. You'll find the show there. Go to patreon.com/radicalpersonalfinance. Sign up to support the show there on Patreon, and that will give you access to these Friday Q&A shows. Broadcasting now from the beautiful sunshine state, state of Florida. This is my home state in these United States.

And we'll see, maybe towards the end of the show, at the moment I only have a few callers on the line, towards the end of the show, I'll talk to you about why I think that Florida is almost certainly one of the best states in the United States to live in, to work in, et cetera.

It's not perfect. I have a few things that I don't love about the state of Florida, but we'll save that segment for the end and see if I can persuade you that I think that Florida is one of the best places that you can possibly be. We begin, however, with Tyler, who is not in Florida.

At least I don't think you are, Tyler. Tyler, you're in California. Welcome to the show. How can I serve you today, sir? - So I have a question about Michael Burry. Michael Burry was one of the early predictors of the real estate financial crash, and recently he's been warning of another crash, this one involving crypto and the different meme stocks and everybody going crazy with that.

Personally, I've stayed out of that section, and just 'cause I'm unfamiliar with it, didn't want to get into the hype, but what's your opinion on, if you know anything about him, what's your opinion on the crash that he is predicting, and if there is a crash, what would be the strategy for somebody who is saving up money and could invest in that type of stuff once it does happen, if it happens?

- Yeah, for anyone who's not familiar with the name of Michael Burry, he reached fame more broadly, I would say, through Michael Lewis's book called The Big Short, and then the subsequent movie based upon that book. He was a very intelligent guy who unraveled, basically, as I understand the story, single-handedly, just sitting himself.

He saw the danger in the CDO marketplace back in the mid-2000s. He saw what was happening with all of the mortgage companies buying, packaging up, and then reselling as securities all of these really poorly underwritten loans. And so he bet extremely heavily against that marketplace and made a ghastly amount of money for himself and for the investors into his fund.

And that was where he came to public prominence. And so I was aware of some of his predictions. It was something kind of funky. He was talking on Twitter, as I understand the story, a few months back, talking about how there's gonna be a crash of the dollar, this, that, and the other thing, and then he wound up basically deactivating his Twitter account and somewhat disappearing.

I haven't heard yet this most recent thing that you're referring to, but I'm happy to answer the question just kind of with a more broad framework. Before I do that, do you have any more specifics, since I did not read his latest warnings, any more specifics on what specifically he said?

- Yes, so basically he's been shorting GameStop for a while now, heavily, because of everything that's been going on. And he's just saying with all the hype, speculation, and over-leverage of these giant hedge funds who are getting into crypto, getting into the, and everybody else is getting into it, that people are just getting over-leveraged and the same thing's kind of happening again.

- Okay, fair enough. So let's begin with people and their predictions. I respect Michael Burry and his intelligence and his thoughtfulness. I don't know of any reason why I wouldn't respect his intelligence. And when people make warnings, I try to listen carefully, especially if those people have previously made good bets and have been willing to put their money where their mouth is, as Michael Burry very famously did, because that demonstrates that they've got a good amount of skin in the game and they're ready to make something important happen.

And so I respect him greatly. That said, somebody's being right in the past doesn't necessarily make them more likely to be right or less likely to be right this time. And especially in the world of something like stock trading or investment markets, you can be an investor and you can see a situation in front of you.

You can study the situation. You can hit the situation exactly right, as Burry did, execute the perfect trade, and yet the next situation, the next trade is a fresh new set of circumstances, a fresh new set of facts. So just because somebody was right in the past doesn't necessarily mean that they're right this time.

You always have to look at what they're saying and take it on its face and study the evidence. I do think that we should give more weight to those who have been right in the past. But just because somebody was right in the past doesn't mean that they're right now, just because they have been right before.

Let me give a more human example to try to drive the point home. Let's say that your father encouraged you to go to college. And he said, "Son, if you go to college "and you get a college degree, "that will allow you to be more effective in the marketplace.

"You'll probably have a lower lifetime "level of unemployment. "I think it's a good idea for you to go "and get a college degree." So your dad was probably right about that. You went to college, got a college degree. Maybe you're very grateful that you did get a college degree because, hey, this degree has been useful and I'm likely, statistically, to have lower levels of lifetime unemployment than one of my friends who didn't get this particular college degree.

But then your father comes to you afresh and you're asking his advice on whether you should stay in your corporate job or whether you should leave and start a business. The fact that he was right about the college degree doesn't necessarily mean that he's right about the fact that you should stay in your corporate job.

It's a separate situation. And so what you have to do is not say, "Well, dad was right before, "so therefore dad is right this time." What you need to do is say, "Dad was right before "and I thought he had a good idea about that. "So let me understand what he's saying this time "and why he's saying what he's saying "and then judge for myself." Because dad could be right before and could be completely wrong now or he could be right now and right before or he could be wrong before and wrong now.

And so you can have somebody, for example, who makes very poor financial decisions and has no wealth, but then they come to you and they say, "You know, you probably shouldn't buy "this certain thing." And they could be totally right about that. So just because it's Michael Burry who is speaking doesn't make what he's saying correct.

Another example. I recently, when I was talking about cryptocurrency, I was talking about Charlie Munger and Warren Buffett's perspectives and opinions on Bitcoin. And so Charlie Munger very famously deeply dislikes Bitcoin. Does the fact that Charlie Munger has been, is the fact that he is an amazing investor with a tremendous track record, does that mean that he is right on Bitcoin?

It doesn't necessarily mean that he's right. What it means is you should listen to what he says carefully. So that's the first thing, is that when anybody smart says something, don't just think that just because he got the other trade right, he's right this time. All of us are flawed.

All of us are fallible. Okay, second big warning flash. Every single market will have a continual stream of people who say, "This market is a bubble. "This market is going to crash." I've personally been paying attention to this stuff for something like 20 years now, 15 to 20 years.

And I have for many years been attracted to the doomsayers, to those who say, "Everything is going to fall apart." When I was younger, I thought they were absolutely right. Today, I no longer think that because I've had enough time pass to say, "Look, these guys have been wrong for a long time." But they continue to make the same predictions.

They continue to just boldly say exactly the same thing. And this really bothers me because I wonder, number one, are they true believers that they genuinely have believed that they're right in predicting doom and gloom and the crash of this market for a very long time? Or are they just con artists who know that they can continue to say that the market's going to crash, and at some point, the market will crash because markets always crash.

Think back to 2020 and the market declines of 2020. It sure looked, during March, April of 2020, it sure looked that perhaps all of the bearers were right. It sure looked like they were right, like everything was going to come apart. I was distinctly nervous myself, very concerned about where certain things could go.

There was a very good chance, a very plausible scenario, in which you just saw widespread bankruptcies of major companies, widespread economic nightmares all across the board. We're very fortunate, extremely fortunate, that the coronavirus pandemic did not turn out to be worse than it was. It very easily could have had just simply double the rate of severe sickness and death very easily, and we would be in a totally different world today.

And so when you hear somebody saying there's going to be a crash, recognize that there's always somebody saying there's going to be a crash. And almost any market seems to defy that particular crash. So whether it's the stock market generally, I've known people since the 1990s who've said the stock market was a waste of time, but the stock market continues to head up.

Whether it's the US dollar, I've known people my entire lifetime who've been saying the US dollar is going to implode because we're printing too much money, and it's all debt, and it's all debt, and the dollar continues to march on. Whether it's Bitcoin, there have been people since Bitcoin was $50 a coin who've been saying this is overpriced, this is a nightmare, this is all going to collapse.

Latest iterations, things like NFTs, some of these other currencies, there's always going to be someone predicting them. So my answer is, number one, study the market and make your own personal bet based upon the information and the arguments that you see. Because at some point in time, you've got to actually put your money where your mouth is, and you've got to make your own bets.

Number two, engage in good personal financial planning so that you don't run the risk of getting wiped out because your bets were wrong. One of the things that makes me sad is in the modern world when we teach investing, we don't teach better insurance policies. A good professional investor will very frequently cover their positions.

And they'll buy insurance on any trade that they can possibly do. Now you and I might not be a sophisticated trader who's hedging our position on every single trade, but we can do that in our own personal finances fairly easily by choosing the amount of our wealth that we dedicate to a certain thing or by thinking through the scenarios personally.

So I don't believe, I want to hear what Michael Burry has to say, I respect him, but I want to recognize that he's just one guy. He's one guy who made a killer trade, but he's still just one guy. And that doesn't necessarily mean that he's right or wrong.

I want to hear his arguments and think for myself. Number two, I want to make my own predictions based upon where I think the world is going and what I think is happening. And then finally, I want to protect myself using just good basic personal financial planning so that I don't get overextended.

And I don't have to have an opinion on what Michael Burry says. I can wait and just simply let the marketplace prove him right or prove him wrong. That's my perspective, Tyler. What do you think? - Thank you, sir. Appreciate it. Yeah, it makes total sense. That's why I don't really like to get into these hype situations, but I see what he's saying to an extent.

I'm just gonna kind of protect myself and my family as much as I can. And I have another question later if you have time for me. Yes, go ahead. - Okay, I was listening to your Harrison, Hurricane Harris episode and the corn that you guys were talking about where it can feed people for weeks and weeks and weeks.

Because of the pandemic, I have that, when we went into the grocery store, all the food was gone. I'd never want that to happen again where we were just underprepared. And so we live in a one-bedroom apartment, obviously not a whole lot of room for stuff. So if I could get one food item that we can at least stock up on and be ready in case something like that happens, I would like to.

And so I was trying to find more detail on what kind of corn you guys were discussing and how to prepare it and keep it. Do you have any resources for that? - That was just, in that discussion, that was just standard feed corn. Do you have a tractor supply anywhere near your house?

- Yes. - So go to tractor supply, look for feed corn. They'll have a pallet of it somewhere. That's what stuff you guys put in their deer feeders to feed and you can just buy a 50-pound bag of feed corn and that's what it is. I'm not sure, however, if I only had a one-bedroom apartment, I'm not sure that I would start there.

Although, without question, that is one of the cheapest ways for you to just have a bunch of calories. I think the most important thing would be learn, with something like that. So let's pull back for a second, okay? If you have space and are committed to a program of long-term food storage, one of your cheapest ways that you can possibly do that for a very long period of time is to buy for yourself and put up the four basics, which are corn, beans, rice, and wheat.

Corn, beans, rice, and wheat. So somebody who is committed to personal preparedness will often just have giant stacks and stacks of buckets of corn, beans, rice, and wheat. I think that's great if you have the space to store that stuff and if you have the space to store it and the place to do it and the motivation to actually do it.

So what I would encourage you to start by is go get one bag and then figure out some ways to cook it. A lot of people have never cooked rice and beans from scratch, from dry beans, dry rice. Figure out how to cook rice and beans and make them interesting.

Figure out how to take a bucket of just raw wheat and turn it into something that's edible. Grab some corn and figure out how to use it. Stephen Harris has a lot of resources on that on his website, lots of recipes and things like that. So start with one before you do it.

I would personally focus on higher value foods that are compact and more easily divided into smaller places before I would go out and buy big bags of corn if I were living in a small apartment. So smaller packages, just five pound packages of rice, smaller canned foods, things like that.

Those are things that are more convenient to store. You can tuck them aside into little nooks and crannies, put them underneath the furniture, et cetera, put them in the cabinets and have huge amounts of food on hand without having to figure out what to do with 50 pound bags.

And then what I would do is have as part of kind of my last hour preparations. If you saw that something was happening, then I would have a plan to go and get some of that stuff. So if you know that Tractor Supply sells that kind of feed corn, and if you know that you always keep a few hundred dollars in cash on hand, if there's an event that's happening and you recognize that this could affect the food supply, then you know the first place I'm going is Tractor Supply with a few hundred dollars in cash and I'm gonna go ahead and load up the back of my car with feed corn and in that situation I'm gonna stack it up high.

But I wouldn't personally start with that with a one bedroom apartment. I would start by just a deeper pantry of smaller, more normal foods that you regularly eat that are shelf stable myself. - Wonderful, thank you sir, appreciate it. - My pleasure. Your big winner also on that subject is going to be pasta.

So pasta and tomato sauce, that kind of stuff stores really, really well. All right, we go to Peter in New York. Peter, welcome to the show. How can I serve you today, sir? - Hi Joshua, life insurance question for you. What's the best way to figure out how much life insurance you actually need?

- Do a needs analysis. So a needs analysis. - What's the easiest way to do that? - Well, let's do it right now, okay? First thing you do is you figure out how much, you calculate how much debt you would want to pay off from your life insurance policy if you died.

- So do you have any debt that you would want to have paid off for your family if you died? - Yes. - Okay, how much? - Let's say, let's use a round number, let's call it a million dollars. - Okay, so a million dollars of debt. The second thing is how much cash would you want to make sure that your family had?

Not income, we'll get to income in just a moment. But how much cash would you want to make sure that your family had in the bank to cover any kind of expenses, one-time expenses, lump sum expenses, funeral costs, emergency funds, things like that? - Let's say 100,000. - Okay, now then we look at income needs.

And there are usually two parts of income needs that a family wants. Number one is income for any kind of big picture expenses that are short in time. So for example, if you have children, a lot of times a father will say, right now my kid's in a private school, my kid's in fourth grade, I wanna make sure that he has enough money coming in to where he can stay in that private school from fourth grade through 12th grade, and I wanna make sure I cover college.

So do you have children, and are there any education expenses associated with children that you would wanna cover? - Not yet, but that's coming soon. - Okay, we'll come back to that in a moment then. And then the second thing is how much income would you want to provide for your wife and children to live on and for how long?

Any ideas? - Probably, let's pick a round number, let's say 250,000 a year for five years. - Okay, and then after five years, what would she do? - I would say flex the muscles, she's currently flexing more. - Okay. - And hopefully we've found someone else by then. - Understood, okay, so we'll come back to this in just a second, and then if you did have children, how much money would you wanna set aside for an educational fund?

- Oof, man, I'd probably just say, let's just say half a million per child, just 'cause who knows where that's going. - So $500,000 per child, and do you have any idea of how many children you hope to have? - Probably just one. - Okay, so if we total this up, we wanna pay off a million dollars in debt, we wanna have 100,000 of cash, that's 1.1 million, we wanna have $500,000 set aside for educational costs for one child, that brings us up to 1.6, and then we wanna have $250,000 of income for five years, that's a total of $1.25 million of cash.

I'm ignoring any kind of investment returns in this situation, just to make the math simple. So if we add 1.6 plus 1.25 million, we wind up with $2,850,000. So that's our total need, is just under three million, $2,850,000. Now, how much money is available, or investments is available now, that if you died, those things would be sold?

How much cash do you have, how much liquid investment money do you have, et cetera? - And retirement accounts as well? - Yes. - And house as well? - Yes. - That is about two million. - Okay, so if you have $2 million of stuff that you would want sold for your wife, et cetera, then you just take $2.85 million, subtract $2 million, and you wind up with a need of life insurance of basically $850,000, or a million dollars among friends.

Now, let me, first of all, how much do you earn per year right now? - About four. - 400,000? - Yep. - Okay, so that's probably a little bit light, and let me come back and put on kind of my life insurance advisor's hat. The process that we just used is a needs analysis.

You simply say, here's what I would want to do, here's what I would want to provide if I died for my family, and then here's what assets we have available. And those are the numbers that you can pull apart. So if you wanna pay off a million dollars in debt and have those other numbers, $250,000 for five years, there you go, it's $2.85 million.

Now, if you want to allocate all of the cash, like for example, does paying off the debt, does that reflect paying off your personal mortgage? And then all of a sudden, your wife's gonna sell the house, what's she gonna do then? Well, then you have to think those things through, talk them through with her, see how much she needs, et cetera.

But let's say that you said, okay, retirement accounts, I wanna make sure that the retirement accounts are still there for her retirement, I wanna make sure that the house is still there for her to live in, and then now, if I provide $250,000 for five years, it feels a little bit better.

And then, so maybe the number is three million. So let me ask you a question, okay? Let's say that you died, sorry, let's say that your wife died, and you have a son, and you're not working. Would you feel economically secure with the numbers that you went over? Would you feel economically secure in that scenario, if your wife were the one who died, and she had a million dollars of life insurance, and then you sold all these assets?

- And I stopped working. - Right. - I think, yeah, yeah, I think I would, actually. - Okay, so if you would, then that may be close to the right number. Now, the big kind of blind spots for many men come into these things. The first thing is, how long do you want the income for your wife?

What I would do is I would try to model the income for her entire lifetime. Now, you and she might be different, right? She might be making a lot of money, et cetera. There's always variations, and this is probably not the forum to do it. But what I try to encourage husbands to do is to make sure that their wife has more income for a longer period of time, especially as that relates to having children, right?

My wife is very smart, okay? She's a hard worker, she's very good with money. She will, if I die and I leave her a penny, she'll pinch the penny, right? She's good at that. The question is this, right? We have a certain lifestyle that we have dreamed of, a way of living, a type of lifestyle that we wanna give to our children.

And so I wanna make sure that if I'm dead, she can still accomplish that goal regardless of whether I'm here or not, right? I don't want her to have to worry, okay, for example, we plan to homeschool our children. I don't know how long, maybe all the way through their primary and secondary education, I don't know.

But I don't want her to ever come to a school year and feel like, you know what, we have to go and put, I have to put my children into a government school because otherwise we're not gonna have any money. That's just unacceptable to me. I wanna make sure that she has enough money that she can continue to raise our children in the way that she wants to be.

If I'm dead and gone, I hope that my wife would remarry. I would love it if she would find another husband who she can live happily for the rest of her lifetime with. I'd be thrilled to hear that. However, I don't want her to be thinking about going and marrying someone else for his money.

I want her to know that she's taken care of regardless of what happens and if she wants to marry someone else because he's a good fit for her or not, then that's ideal. And so these numbers, in my opinion, you're probably a lot below where what would be actually be necessary for your wife to live at your custom lifestyle.

Now you can play with the numbers just doing the needs analysis. How much of a lump sum do I need to pay off debt? How much lump sum of cash? And then how much income and for how long? And then you just simply back those numbers up to a present value analysis.

But for a guy making $400,000 a year to have a million dollars of life insurance, especially when, you know, unless you're sick and have a heart attack or something, you could probably buy a million dollars of life insurance for something like, I don't know, 40 or 50 bucks a month, seems a little silly to me to not have more of it.

And so usually when you do this analysis and you really think it through and you run the numbers, usually, unless you're already financially independent, you usually wind up with somewhere around 10 to 20 times your income of life insurance. Now, if you have not yet accumulated any assets because you're just getting started, that number is often 20 times, right?

I'll frequently work with, you know, a young doctor just out of residency, making his first time 400,000. Well, in his situation, you know, having $6 million of life insurance is not in any way excessive because what he's protecting is the value of his income for his wife and children for a very long period of time.

If you have some assets, then you start to become self-insured. And that sounds like where you are, right? Where you're somewhere on the way to being self-insured. And then once you become self-insured, of course, you don't need life insurance. But when I look at it and you look at the cost of a term life insurance policy, which is just usually quite negligible, then you wind up recognizing that this is probably some of the best money that I can spend just to have a cheap term life insurance policy in force.

- Okay, sounds good. - Let me do a quick-- - Should the term-- - Yeah, go ahead. - Which I was just gonna say, should the term reflect the time that you want the income replacement in this type of analysis, or are they unrelated? - Yes and no. So how old are you now?

- Ballpark, more or less. - Early 40s. - Okay, and are you healthy and do you smoke cigarettes? - I'm healthy, I don't smoke. - And you live in the state of New York, is that right? - Yep. - All right, so let's do a 40-year-old male in the state of New York.

I'm gonna do an insurance quote here for you. And let's do a 10-year term, a 15-year term, and a 20-year term, okay? And let's run this for $4 million of death benefit, okay, 10 times your income. No riders, and let's run it at preferred best non-tobacco, the very best rating that you're gonna get, okay?

And I'll give you some premiums here. So to your term question, so here, for $4 million of 10-year level term insurance for preferred non-tobacco, here's principal insurance company, $1,065 a year for $4 million of coverage. Protective, $1,186 per year. Lincoln, $1,264 per year. Nationwide, $1,395 per year. Equitable, $1,595.

US Life, $1,628. John Hancock, $1,800 a year. Banner, $1,800 a year. Prudential, $2,165. So depending on the health rating, you could get a thousand, for between $1,000 and $2,000 per year in premiums, you could get $4 million of term life insurance in force for the next 10 years. Does that seem like a lot of money to you?

- No. - All right. So 20-year term, 20-year term. - I mean, the pay outside, the premiums are low. - Exactly. - The premiums are ideal for the amount of coverage. - Right, okay, so you can get 20-year term, right? And I ran you as a 40-year old, probably a little bit early, I just ran it as a 40-years old.

A 40-year old non-tobacco, super preferred for 20-year level term with principal, you're at $2,134 a year. Equitable, $2,155. Protective, $2,214. Lincoln, $2,500. Nationwide, $3,000. So between $2,000 to $3,000 a year, you can get $4 million of 20-year level term coverage. So when I look at that, I mean, I've done this so many times over the year, I mean, for a guy making $400,000 a year, if I give you the offer and I say, "Listen, you write me a check for $2,000 a year, "if you die in the next 20 years," I stroke your wife a check for $4 million, "if you don't die and we're at $2,000 a year, "max out-of-pocket is every year you're at 2,000, "so 10 years you paid me 20 grand, "20 years you paid me 40 grand." Is that a bad bet to make?

Is that gonna wreck your world? - Oh no, absolutely. I've spent more money on much dumber things. - Right, right. And so I always just start there. So I like having a lot of life insurance. It makes me feel good when I'm doing something dumb. It makes me feel good when I'm in an airplane bouncing up and down.

And even though I know everything about aeronautical science and know I'm pretty safe, I still feel good knowing, all right, if this plane goes down, at least my wife doesn't have to worry about money. So the amount of time that you have term insurance in force should go for the amount of time that you're really gonna need it.

In your situation, I'd be okay, based upon what I'm, you've got $2 million in the bank and in cash and investments, et cetera. Even 10-year term would probably be fine because chances are, if you still need term insurance after 10 years, you could still get it. It's probably not a risk.

You're probably gonna be in the point where you could easily consider yourself self-insured within 10 years based upon the trajectory you're on. And so if you just went with the cheapest, a 10-year term product, that would be fine. What I might do in a situation like yours, if I were an insurance agent, is I would do a ladder.

I would do $2 million of 10-year level term. And then I would do maybe a million dollars of 15-year level term and a million dollars of 20-year level term. And that would take you to basically retirement age with somewhere between a million and two million, depending on how we split those policies up.

It'll cover you big time for the next 10 years where you're gonna be working a lot, making a lot, and it'll allow you to see where you are 10 years from now in terms of your wealth. And so I would kinda do some kind of ladder approach. - Awesome, appreciate the advice.

- Last point, how much life insurance does your wife have? (silence) - About half a million, if I'm not mistaken. - Okay, so I'd love to see you have about half as much, if possible, does she earn income to your household? - Yes. - Okay, so if she earns income, if she makes a lot of money, then you need more.

Okay, but if she doesn't earn any income, I'd love to see her have at least half of what you have. And here is why, all right. As a high-income male, you would imagine that, okay, if my wife died, I'm still gonna have my career. And I think that's probably true.

I'm the one who generates the income into our household. The problem goes back to this. My wife and I, we have four children. We have certain dreams, certain lifestyle about how we want to live. If my wife died, could I keep working? I could, right? But I would have a hard time doing the exact same thing and raising our children the way that we wanna raise them.

And so it's very hard for me to imagine, hey, you know, guys, mom died, and now I'm gonna keep on working 50 or 60 hours a week, and you're just gonna sit over here in the corner and take care of yourself. I'm not gonna go put 'em in a government school.

Am I gonna hire a nanny? Maybe, but I would much rather not have money be the thing that keeps me going, 'cause I'm not going to work on Monday with the same level of energy enthusiasm that I went to work last Monday if my wife dies. So it's very important that even if you do earn a lot of money, that you make sure that you still have a large amount of life insurance coverage on your wife, so that if she dies, you can still build the kind of family life that you guys have dreamed of building.

- Sounds great, thanks so much. - All right, my pleasure. I guess I just don't see, when we're talking about those numbers, I just don't see why people wouldn't have a lot of term life insurance, unless it's just a principle thing, but when you actually quote life insurance. Now, if a guy can't get super preferred non-tobacco and he gets table three tobacco rates, then all of this changes.

All of a sudden, it's hard to say, yeah, you should spend $15,000 a year to buy $4 million a year of coverage that you don't need, but that's probably not the situation that we're in there. Let me finish up today's show. We're at 35 minutes and I'm gonna just switch now to let's talk about the state of Florida.

So my family and I, we've been traveling a lot. As you know, we got rid of our house and we have become perpetual travelers now again, nomads living out of a handful of suitcases, kind of bouncing around the world. In March, we were in Mexico, excuse me, in April, we were in Mexico, in May, we were in Costa Rica, here in June, we are in Florida, back in the United States.

And I've talked quite a bit about expatriating from the United States, leaving the United States, and it's always interesting to me to come back. So let me just share a couple of ideas about the United States and about Florida in particular. Having been gone from the United States for almost three years at this point, I am much more at peace with the United States than I was back then.

The reason that I'm at peace is that I'm no longer reliant on one country. What made me incredibly nervous a few years ago was when I woke up and I realized that my future and my children's future was entirely connected to one country. It was reflected to, connected to a very good country in many ways, the greatest empire in the world at present, right, the only empire in the world at present, with tremendous benefits, tremendous opportunities, tremendous blessings, et cetera, but one country.

And I was sitting, I sit and look at long-term trends, and I look at things like we'd mentioned before about the national debt and things like that, and I just sat and said, it makes no sense to me that my children should be indentured servants to the future of the greatest debtor nation in the history of the world.

Now, will that debt turn out to be a problem in the long run or not? I don't know, but I think there are good reasons to think that it could be a problem, and if it were a problem, why on earth should my children be burdened with that? There are a number of escape hatches, right?

I don't really think that our children are gonna ever pay back any kind of national debt. I think they'll default on the debt, and they'll just move on with life. And I don't, I'm not a catastrophist. I don't think it's gonna be a bad thing. Defaulting on debt is not necessarily a bad thing.

But I realize this incredible vulnerability. I realize that I and my children are vulnerable, and so for the last three years, I've worked hard to eliminate that vulnerability to the point now where I could divorce myself from the United States if I wanted to, and fully divorce, leave, never come back.

And that feels really good to know that I have that option. That feels really, really good. Along the way, I've become more peaceful because of knowing that I have that option. And so now it's easier for me to come back to the United States and just let some of the stuff go by and come to appreciate so many things about this country.

Things that a few years ago, because I was so personally, emotionally kind of tied up in knots, I couldn't see as honestly and objectively as I would have liked. But now that my personal emotions have been relieved, that I know I don't have to be here anymore, then you come to appreciate a lot of things about this country.

And I'll share some of those because I want you to appreciate things about where you may live, wherever that happens to be. And so I'll just share some of those things, speaking generally. Financially, the United States is one of the best and easiest places in the world that you can live if you want to get ahead.

This is so underappreciated, in my opinion. I have lived internationally, I live internationally, I travel internationally. I'm interested in the international living approach, right? Where people think about a certain country, a certain place that they can go and where they can live better on less. But having been to most of those places, I am convinced that if I were a retiree living on a very modest social security income, there is no place in the world that I would rather be than the United States of America.

I do not see it in any place that I have traveled, including Mexico, other places that retirees enjoy being, places in Latin America, Dominican Republic, and things like that. I just do not see a better lifestyle on less than in the United States of America. If I had to live on $1,000 a month, I would not want to be in Mexico.

I would want to be in the United States of America. Now, there are a couple of categories that are very difficult to save money on in the US. One category is housing. But I think that you can save money on housing with more of a creative, strategic approach and by relocation.

There are areas, right, if I were gonna live in Manhattan on $1,000 a month, I wouldn't want to do it. I wouldn't do it. In Miami, I wouldn't do it. But there are all kinds of places all across the United States that have very low costs of housing. Just like there are in other countries, there are places in the United States that have low costs.

And so even if you have a very modest amount of money available to spend on rent, you can find options all across the country if you're willing to relocate. And it's a lot easier to relocate from the downtown city to a small country town two hours outside of the city than it is to relocate from the downtown city in the United States to the rural city in Ecuador.

It's just a lot easier to do, a lot cheaper to get back and forth, a lot easier to relocate, a lot easier to check things out, et cetera. In addition, what people are doing right now in the United States is they're solving the housing kind of question with more of a creative approach, right?

They're living in a van or in a camper, something like that. And I'm convinced that living in a van is probably a better lifestyle than living in cheap housing in Ecuador or living in cheap housing in Mexico. You can go and you can put up a shack in many places in the world.

The shack that you cannot build in the United States because of building codes, but you still would be better off with a nice RV or even just a modest RV than you are living in that shack in terms of an adjustment. So think carefully about the location and recognize that if housing is expensive where you live in the United States, you don't necessarily have to go to another country because housing is often more expensive in other countries, at least for the kind of housing that you're accustomed to.

The United States, building supplies are relatively inexpensive. There are all kinds of things that you can do. And then of course you can live in a more interesting and kind of creative approach. Again, RVs are very popular for this. There are also lots of ways that you can cut your housing costs, right?

You could become a caretaker for somebody of a property. You can manage an apartment. There's lots of ways that you can cut that. So while housing costs are often high in the United States, you can adjust them by location and it's easier for you to move from New York or from Pennsylvania to Mississippi than it is for you to move from New York or Pennsylvania to Mexico.

The second big cost that is high in the United States is healthcare expenses. Healthcare expenses are high in the United States. And so this is where when people are really satisfied with their international relocation, I often hear them talk about healthcare. They talk about how, look, I can afford to live in Ecuador.

I can afford to live in Mexico because of the low cost of healthcare. And I think that's entirely valid. If you are facing some kind of personal situation where that specifically can be adjusted by healthcare, by living in another country, then that's worth considering. There are a couple of caveats, however.

The first thing is recognize you don't necessarily have to move somewhere full-time in order to get the benefits, the lower cost of healthcare. I had some dental work done when I was in Costa Rica. Costa Rica is a very popular dental tourism destination. And so if you have thousands of dollars of dental work done, go ahead and grab yourself a plane ticket to Costa Rica and have some dental work done in Costa Rica instead of necessarily in the United States.

You can do medical tourism in Mexico without living there full-time, without relocating full-time. For someone who does have a chronic condition, something for which just one-time medical tourism isn't necessarily the best solution, I think you should be very thoughtful and just make sure that you understand what you're getting into.

Very rarely do I hear of an international expat who is satisfied with the local healthcare system that's specifically government-run. You can go to Russia and you can sign up and become a part of the National Healthcare Service, but very rarely does somebody want to use that. And so your money can go farther in a private hospital, get a higher standard of care.

Took my children for a doctor visit in Costa Rica and just to get a checkup and whatnot. You sit there, it's wonderful, right? You sit and talk to the doctor for an hour. It's a totally different scenario and you can easily afford it, right? You're not worried about the cost.

It's just a totally different thing. So those are good, but you have to count in the cost then of the private healthcare options. So that is a really good reason to move abroad. I think another good reason to move abroad is if you want to get better care for a chronic condition, things like in-home healthcare.

I've spoken to people all around the world and for example, one big problem in the United States is how do I provide care for my aging mother, my aging father? Oftentimes to have a 24/7 private duty nurse, that's certainly a six-figure sum, perhaps as much as 130, $150,000 a year for high-quality care.

Well, you can have a very high-quality, 24/7 nursing relationship for your aging parents in Mexico for a third of that cost and really do better. So this is something that is well worth paying careful attention to if you're in those situations. Beyond that though, I find that a lot of the cost, beyond those two things, I find a lot of the costs of living abroad are simply higher and most US Americans do not understand how good they have it in the United States.

Almost everything you can possibly buy is cheaper in the United States than almost anywhere else in the world. Even the good stuff, even the higher-quality products, et cetera. The big-ticket items in the United States are cheaper than almost anywhere else, cars for example. In the United States, you have such a massive new car marketplace that people are frequently buying new cars, they're buying good cars.

Because of that massive new car marketplace, the used marketplace is extraordinarily robust. Anybody who wants to go out and buy a high-quality family minivan, you can do that with 4,000 bucks. 4,000 bucks, you can find a six-year-old or eight-year-old, Toyota Sienna, Honda Odyssey, something like that, which can last you for years.

It's reliable, it's safe, it's economical, it's just a wonderful vehicle and it costs practically nothing compared to the costs in many other places. The United States has very low import taxes, so the actual cost of a vehicle is low compared to the import taxes in other places. So you have this robust new car marketplace that is more robust than most places and that leads to an incredibly robust used car marketplace.

For household goods, appliances, you know, in the United States, it's common that when you rent an apartment, it comes with the appliances built in. That's not common in many places in the world. Many places in the world, you rent an apartment and you have to then go and buy all the appliances.

And so where do you get a bunch of high-quality used appliances? Well, in the United States, they're very readily available. There's tons of good used ones available because there's tons of new ones available that are cheap. And so just everything is cheap. In the United States, you have a tremendous library system, all kinds of free books, free computer access, free movies, free music, everything is available for free.

And so with that internet connection, those DVD collections, et cetera, you can have entertainment that's very inexpensive. There are some places in the United States that are unsafe, but in general, you can live most places without worrying too much about security concerns. That's a tremendous benefit because in some other places, it's not that way.

You're gonna wind up having to incur the cost of living in some places in a gated neighborhood or in a place with community levels of security. That's not necessary in the United States. Cost of cell phone plans, cost of cell phones, right? You can go on OfferUp and grab yourself a very good cell phone for cheap.

That marketplace doesn't exist in some other places. And so just on down the list, even food. Now, food is kind of an interesting variation. Calories, you can buy calories in the United States cheaper than almost anywhere else in the world. You have subsidized bulk food. So if you wanna buy wheat and corn, et cetera, I mean, it's just so insanely cheap to buy a bag of flour.

Specialty foods in the United States certainly cost more, but it's relatively easy for you to adjust them and to get them where they're not even available in many places in the world. So I don't plan to move back to the United States right now, but I wanna point out to you just for the sake of honesty that if you're just pining to go away for some other reason, recognize that it probably is pretty good where you are in the United States.

You can probably live cheaper here than virtually anywhere else that I know of, especially if you know the systems. I've spent a lot of time over the last few years going through government offices and doing this and doing that and going through all these different procedures and whatnot. This stuff is so time-consuming.

It is so time-consuming and expensive. And then I came back and one of the things I've done here in Florida was renew my driver's license. I couldn't renew it online at this point, so I had to renew it in person. And with the exception of the fact that because of COVID, I had to get an appointment for it, it was just in and out and it cost me 60 bucks, right?

Done. It was much more efficient than many other places that I have been involved in this kind of bureaucratic approach. So I wanna encourage you that the United States really is a very good place to live and you can live here cheaper than almost anywhere else. Also in terms of business opportunities and opportunities for work, you can make money here in ways that you cannot in other places.

There is plenty of employment opportunities available for you in the United States. And that's why so many people who are underemployed all around the world want to move to the United States because of employment opportunities. It's just a tremendously powerful and robust market with so much diversity and so much strength.

There are options all across the country. I'm reminded also of that while I think that Americans' confidence and personal freedom is highly overrated, there are indeed significant levels of personal freedom that are useful. And so whether it's medical freedom, educational freedom, personal freedom, there are high levels of personal freedom that you see.

Now that's been tested a lot during the pandemic of the last year, been really tested. And in some places, people failed the test. In some places, they passed the test, but that's been really, really good. Let me talk now about the state of Florida. When you look across the United States, there are, of course, many different regions that you can choose from.

The reason why most of us live where we live is gonna be because, number one, that's where our family is from, those that we love and we wanna be around them with very good reason. Number two, it's going to be because that's where we earn money. That's where our economic opportunities are.

And these are really good reasons to live where you live. But when you wanna look for a good mixture of freedoms, of costs, et cetera, I think Florida offers a tremendous value proposition. It really does. And so you really should seriously consider Florida as an option for you if you're thinking about relocating.

Florida is not the best in everything, but it's very good in many things. So I care a lot about your freedom, your personal freedom, and your financial freedom. Florida is pretty good on the majority of laws that are gonna affect your personal freedoms. Things that are important to me, things like home education laws, they're not onerous.

Things like child-related laws, they're not onerous. Things like gun laws, they're not bad, they're pretty good. Overall, you can pretty well be left alone in Florida. In terms of the costs, the costs of Florida, no state income taxes, we all know that. No really just overbearing government costs, for example, we don't have the California Franchise Tax Board, et cetera.

It's pretty cheap to start a business, maintain an LLC, et cetera, in the country. Most of the costs of things like registering a vehicle, et cetera, are pretty modest. Things that are high in Florida, property taxes can be high, especially in the more built-up areas. If you're in Dade County, Broward County, Palm Beach County, to some extent in Orlando, Tampa, Jacksonville, property taxes are not low.

That's how the state and the local governments fund themselves. But they're not, I don't think, crazy. I often will hear, talk to people in the Northeast, talk about their property taxes, and they're much higher than they are in Florida. So they're not low in Florida, but they are low in other places.

And so you can be in other places. Right now, I'm in Central Florida, looking out at one of the lakes in Central Florida, and the property taxes on this house that I'm staying in are just extremely modest, even though I've got a lake view right outside the window. So a lot of these costs really are pretty modest.

Florida is a wonderful place for wealthy people. Again, you have a cultural respect for wealth and a desire to attract wealth. It's built into the culture. It's built into the government infrastructure. You have the no state income tax, and that is very deeply entwined in the Florida culture. I don't see that changing any time soon, because Floridians are used to it, and they're not gonna stand for it.

You have the very good asset protection coverages, right? Complete exemption of your house, right? You can live in a $50 million house on Palm Beach Island or Jupiter Island. It's completely protected. And then that extends to 401ks, of course, on the federal regulation level, but then IRAs, Roth IRAs, 529s, cash value life insurance policies, annuities, et cetera, that are protected from the claims of creditors.

There's lots of very good, very robust asset protection laws. And so on the whole, I think from the legal framework, Florida is very, very good. Do other states have something to offer? Does Texas have a lot to offer? I think absolutely. Does Wyoming have a lot to offer? Without question.

But what Florida has that a lot of those other places don't have is a much more interesting culture, cultural variety. If you wanna live the flashy downtown lifestyle, you'll be so comfortable in Miami. If you want to live the kind of hometown redneck lifestyle and go gator hunting and fishing every day, you'll love Belle Glade or Cluiston.

If you wanna live the laid back, white sandy beaches lifestyle, but in the city, you'll love Tampa, Clearwater. If you want the laid back old Florida, Apalachicola will treat you so well, or Tallahassee, or something that's like that. If you want kind of the interesting built up city, you've got Jacksonville.

I mean, if you want theme parks, you wanna go to Orlando. If you want beautiful rolling, like things that remind you of the rolling hills of Kentucky and horse farms, you've got, what's the town south of Gainesville, where you just have this incredible equestrian lifestyle. So there are options, even up to North Florida, if you want more cool, if you don't like the weather, right, you don't want the heat and the humidity.

That is the downside of Florida, the heat and the humidity during the summer. Well, you can't get away from the heat and humidity in North Florida, but you can get more of the cold inland scenario up in North Central Florida. So it's a huge state. The Keys has a totally different lifestyle to offer.

So the more time I've spent traveling around the United States, looking at these options, more time I spend traveling around the world, more impressed I am with my home state. And I really think it is well worth your consideration if you're thinking about relocating somewhere. Florida is extremely well connected, right?

If you do business in the Americas, I think South Florida is a tremendous place to be based. You have connections in Miami and Fort Lauderdale. In Miami and Fort Lauderdale, you have two massive international airports that reach the world very, very easily. Palm Beach International is good for US connections as well.

But with Miami and Fort Lauderdale, you've got connections to every Caribbean island, every Central and South American country for cheap, right? For cheap. We flew from Costa Rica to Fort Lauderdale on Spirit Airlines, one of the low budget airlines for 100 and something dollars a ticket. That's phenomenal to have one-way tickets back and forth to Central America.

South America is cheap, well connected all through South America. Obviously you can hit Europe directly. I'll be flying out of Miami directly into Paris in a few weeks. And so on Air France, it's well connected to Europe. And so it's pretty well connected in yet most of the countries within striking distance.

You can fly to, there've been times in the past, I flew to New York in the morning one time and flew back in the evening. So if you've got business in the Northeast, you can genuinely make it a day trip on one of the commuter flights. It's really, really very good.

You can fly directly from Palm Beach to JFK. Small airport, fast to get in and out. Don't have to arrive at the airport too much in advance. It's just a really convenient place to go. So I don't have any agenda other than just to share with you what I observe and try to be honest.

I think that sometimes people are so gung ho on getting out of the United States that they don't honestly appreciate the things about the United States. And so I feel like that kind of honesty should be represented. Thank you so much for listening to today's podcast. I will be back with you very soon.

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