Today on Radical Personal Finance, live Q&A. Welcome to Radical Personal Finance, the 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 ten years or less. My name is Josh Rascheits, I'm your host and today we do live Q&A.

Call in, talk about anything that you like. If you're new to one of these Q&A shows, welcome. I am glad that you are here. Basically it's called Ask Joshua Anything or talk about anything that you want to talk about. These shows are available to patrons of the show. To do that, go to patreon.com/radicalpersonalfinance or just search Patreon for Radical Personal Finance.

Sign up to support the show there on Patreon and then you'll gain access to these Friday Q&A shows, which I record each week that I'm able to arrange the appropriate technology. Call in, ask about any questions you want, talk about anything that you want to talk about. Don't censor, don't block, etc.

But doing it through the Patreon page gives me a convenient way to just meter the flow just a little bit and make sure I don't have too many calls. We begin today with Tim. Tim, welcome to the show. How can I serve you today, sir? Can you hear me?

Sounds good. Good. I just changed jobs and I'm moving my retirement to what I think would be the best option, the pension versus a 401(k). I first wanted to know whether it's more valuable to move it to the 401(k) versus to an IRA. And then whether it's worth it to pull the funds out as an indirect 60-day rollover to leverage the market downturn or whether it's too high risk.

All right. So let's deal with the first one first because it's fairly simple and fairly straightforward. Generally speaking, when you leave an old company, generally speaking, you will want to move your money from the old 401(k) into a traditional IRA that you control in the open market. There is one exception to that, one reason not to.

Two reasons. Let me go with two, maybe three. We'll see when I get there and the answer whether it's two or three. But the primary reason why you choose to move your 401(k) from the old company into your own independently controlled traditional IRA is because you then open up the world of investing to work with any custodian and to work with basically any investment option that you are personally interested in.

This means that you can go to the best custodian out there. You're not limited to the custodian that previously had your funds. And it means that you can invest in anything that you can set up, even to the point of setting up a self-directed IRA, which would allow you to invest in all kinds of exotic assets, all kinds of interesting things.

Now, most people, of course, shouldn't do that. That'd be unwise for most people, but that's the reason why. This can sometimes, so the big benefit is investment flexibility. Sometimes you can also save a decent amount of money with costs. Some people have old 401(k)s that have fairly high embedded expenses.

And so by going to your own independent IRA, you can carefully reduce your costs. Why wouldn't you do that? Well, number one would be the big one is that in some states you will lose a significant amount of asset protection benefits on your funds by making that move. 401(k)s or any other type of qualified plans are exempt from the claims of creditors under federal bankruptcy laws.

That means that if someone sues you, unless it's a super creditor, such as the IRS or a divorcing spouse who can indeed access a 401(k), unless it's a super creditor, somebody who's suing you for money will not be able to attach or get your 401(k) money. In addition, a 401(k) is protected in bankruptcy court.

So if you're ever forced into bankruptcy, then the money that's in your 401(k) is protected under federal bankruptcy law. IRAs, however, are not qualified accounts. And because they are not qualified accounts, they are not governed by the same legislation that protects a 401(k). The taxation is not any different.

Qualified account does not mean that the taxation is any different. There are no tax consequences for doing the rollover. It's taxed identically. The key thing is simply that because they're not qualified accounts, you rely on state law to answer whether or not those assets are protected from creditors and whether or not those assets are protected in bankruptcy court.

Some states have applied the same level of protection to IRAs as exist in 401(k)s. So for example, I'm from the state of Florida. Florida has legislation stating IRAs, Roth IRAs, all of these are exempt accounts and protected from the claims of creditors, the same as a 401(k). However, there are many other states, I don't remember the exact number, but at least a third to a half of states in the United States that don't protect IRAs to the same degree which have minor exemptions for IRAs from the claims of creditors.

And so those states need to be careful. Now if you are living in a state where you get good protection from an IRA, I think it's a minor point and you should just go ahead and move it to an IRA. In addition, if you don't have any reason to think that this might be super important, meaning that you're not facing creditors, you're not facing an impending lawsuit, etc., then you would still want to, you would just go ahead and put it in an IRA because chances are it's not a necessary part of it.

However, if I were facing or knew that I could face some kind of adverse action in the future, either get sued, be forced into bankruptcy, etc., I myself would choose to make sure that I maintain the umbrella of the qualified account, the 401(k), as part of my overall asset protection scheme, especially if I wound up moving among states and thus being subject to different states' laws.

So I don't think it's a big deal for most people, but it is a big deal for the few people for whom it applies, which is why I'm always careful to mention it. The second reason why you wouldn't take your money out of the 401(k) would be if you have a superior option at that 401(k).

So contrary to what I said earlier about moving your money to an IRA and getting lower expenses, sometimes 401(k)s can be very, very inexpensive, depending on how we use it. For example, if you work for the government and you have access to the government plan, well, you get great funds at a great price, you get access to the guaranteed fund, you have wonderful options that you don't have in the private market.

Years ago I used to have a pension that was this way, and so I could roll it out, but if I rolled it out, I lost the ability to invest in the better funds that were available to me in my pension. In addition, sometimes you're working for a company that just has a wonderfully inexpensive 401(k) plan and it has just the options you need.

And so you want to keep an eye on expenses, you want to keep an eye on fund choice, etc., because sometimes you may have a fund choice that's been negotiated for you in the 401(k) and you can't beat it in the open market. For most people I think that's not true, but in some cases it is true.

And then the third reason, which I'll just mention in passing, is that if you are anticipating early retirement, you can actually, if you separate from service and you have money in a 401(k), you can withdraw your money without any tax penalties starting at the age of 55 rather than waiting for 59 and a half.

And at that point in time, so that gives you an extra 4 and a half years of no penalty to withdraw your funds. And so some are pursuing early retirement and that would be a good reason to keep your money at the 401(k) so that you can separate from service at 55, start making distributions and be able to continue on.

I guess one more point I would add actually would be sometimes a company will have a provision for a 401(k) loan. I'm struggling to remember, I don't think that would generally be allowed if you've separated from service. But another good reason to have your money in a 401(k) is that you can take a 401(k) loan under some plan documents whereas you can't generally take a loan against an IRA without doing the goofy 60-day rollover thing that we're about to talk about.

So those are my comments on reasons to consider keeping a 401(k). Most people go ahead and move it to an IRA but keep those reasons in mind. So hopefully I've explained that. Now explain to me your question about doing a 60-day rollover and how you're hoping to use it to save money.

Sure. So I have the ability to take the funds out of one account and then wait 60 days maximum to put them into the new retirement fund. And given the way that the market has been trending, I'm wondering whether it's even worth it to take the risk of say keeping it out there for 45 days and then putting it in the account and sort of sidestepping the losses that seem to be pretty apparent over the next month or two.

You think the market is going to go down in the next month or two? Yes. So I would just say to answer that question, you would need to disconnect the two issues. Number one, there are sometimes reasons to do the 60-day transfer. And basically the reason is if you need access to the money for a very short-term bridge loan of some kind, you can use a scheme where you close the money out of one account, take possession of the check from the investment company, use the money, and then before the 60-day period ends, get it into a second account.

It is risky, but there have been times, I've suggested it in a couple of situations, where you just need a source of bridge financing and you need quick access to money, you can use that law to your favor. It's risky, as I stated, it's risky, but that can in some cases be something that you want to do.

However, in the scenario you're proposing, I don't see any reason why you need to do that. If you want to make a market bet, just simply put the money into a cash account at whatever fund provider you're going to use and then sit back and make your market bet.

So if you believe that stocks are going to go down a month and a half from now, or for the next month or two, fine, just put the money into a cash account and don't take the risk of failing that transfer in time, such meaning that you have an unintended IRA distribution.

You don't need to do the 60-day game in order for you to take action on your stock market prediction. The only piece that has me a little concerned about keeping the money out would be if you… I think there's something where they withhold a certain amount, like 20% of the total amount until the end of the year, so you need to front the cash to do something like that.

Correct. Correct. So the key is, it's always simpler just to do a custodian to custodian transfer. And simplicity is good. So I would encourage you, I don't see any reason in what you described why you should play the 60-day game or why you should take possession of the funds directly.

Open the new account with your investment provider, get the transfer instructions, then simply take those transfer instructions to the 401k custodian and have them do a direct custodian to custodian transfer. But simply direct that money into a cash account and then you can invest it when you believe that it's the right time to invest.

Okay. Okay. Well, incidentally, we're closing on a house in mid-July, so it is possible that we may or could actually use those funds. If that were to be the case, I mean, I think I talked to both the old retirement and the new and they said there's no time limit within what you need to make your transfer, that you can take them out at any time.

If I were to leverage those funds, is that something that you could actually use for that purpose? Could it be used? Yes. Do you need to use it? That would be my question. Why would you need to do that? What would you need the cash for in order to close on the house?

What do you need the money for? If something came up either with interest rates or where we just simply didn't have enough cash to close but could easily make that up in the following months. So yes, it is an option. I would rather you do a 401k loan, if you can do that after having separated from service, then do the 60-day rollover option.

Rollover, yes. If you need the money, then you can take the money out, you will have possession of it and if you can get it into the next plan before the 60-day expires, then there are no adverse tax effects. However, they are going to deduct the 20% taxes if you do that and so you have to plan that in as well and make up the taxes in order for you to meet the rollover.

So I would prefer you do a 401k loan if you can do that, but if you get down to the end of the day and we've got to close on this two weeks from now and I need an extra little bit of money and you can see that that could work, then yes, it is a nice option to have in your back pocket.

I would repeat, before I would do it, number one, I would do a personal loan from a friend or a relative. I would do a 0% credit card loan. I would exhaust almost every other form of financing before I would do this because number one, them withholding the taxes by taking the transfer directly to you is inconvenient and there is often a lot of risk that you don't get it done.

60 days sounds like a long time. 60 days is not really that long and so I would use myself every other form of financing that was available to me before I would do this one. I just think it's riskier and if you have a sizable 401k, it can be a significant penalty if you don't get it exactly right.

Okay. Makes sense? It all makes sense. Good stuff. Great questions. Wonderful. We move on to Adam. There we go. Adam, welcome to the show. How can I serve you today, sir? Hi, Josh. Thanks for taking the call. I'm a digital nomad, an American citizen, an EU citizen living in Europe, kind of down bouncing around and my girlfriend will soon be finishing school and joining me in the digital nomad life and I had a couple of questions about what might be the best way to set up her financial architecture.

I have myself set up but I kind of want to get her together. Her plan is when she finishes is to set up a freelance design business and essentially what we do is travel between different EU countries and never stay anywhere long enough to become a tax resident. She is a EU citizen as well or she will be in a few months.

She's from outside of Europe and is looking to sever her connections to her very tax unfriendly native land. She's kind of like a free agent and can set up shop wherever she wants. I guess my question is what would be the most advantageous way to set up a business inside of Europe?

A lot of people say Estonia or Malta. How should we approach this question? I guess if you need more information I can give you. I don't want to rant for too long. Which country is she a citizen of and which country is she moving from? She's moving from Argentina and she is going to be an Italian citizen but she has no meaningful connection to Italy aside from a grandparent which is how she got the passport.

You said she was trying to move out of her high tax country. Did you mean Argentina? Yeah. Okay. So this is good. So she is an Argentinian citizen. She's claiming Italian citizenship by descent and she's in that process and she's planning to join you in the European Union living a digital nomad lifestyle after she finishes her studies.

Correct. Correct. Okay. And the idea is she'll have the Italian passport but she has no bank accounts in Europe or anything so she can sort of pick her country where she wants to set up shop and we're just bouncing around the EU essentially. You are an American citizen and also an EU citizen.

So yeah. There's another wrinkle with me which is that I have a salaried position in the United Kingdom and I can't get out of that. I draw a salary there and then I use the tax credit to pay for my US taxes or to cover what would be my US tax obligation.

But I don't go to the UK. I just draw a salary there and have a checking account and that's really it for me there. Do you maintain your financial infrastructure in the United States? Correct. Yeah. I mean I contribute to a Roth every year. Essentially I use American credit cards because the remittance fee is less than the difference in the rewards that I get from my American credit card.

So everything for me runs through the US except for the UK checking account where I get my salary. Right. Okay. And so you don't have, although you, so you enter the European Union using your EU passport but you don't declare an EU tax residency currently. You just simply maintain your American tax residency and you float around.

Exactly. So this is one of those gray areas of international planning. And it's gray because there, it's a gray area which means that you can choose various ways to structure this. Let me think of how to begin. So first, the good news for your girlfriend. Let's just deal with her first.

The good news is this. If she leaves Argentina, I'm not familiar with what would be necessary of reporting for the Argentinian government to end things. But she should research what is necessary for the Argentinian government for her to say I'm leaving Argentina, I'm moving abroad, and I'm no longer going to be a resident or a tax resident of Argentina.

Given the fact that... So I can speak to that really quickly. Go ahead. Please, yeah, please do. Educate me. Yeah, yeah. So she's, you know, she's a few years younger than me. She's worked before but it was always informal, kind of under the table, you know, like Argentina or Italy is often the case.

Of course, of course. So I don't think she's formally paid taxes there. So the idea is I think she'll get her passport by the end of this year and would not begin working in Europe to avoid any entanglements with Argentina until January 1st, you know, the new calendar year which is also the new tax year for Argentina, and then just be free and clear and put that country in her rear view, you know, aside from visiting family once a year or whatever it is.

Right, good. So you're making the point that I was going to make is that if she's in university, there's a good chance she's not generating any meaningful income, she's not... she doesn't have a high target on her back. She can most likely just leave and, you know, renew her passport for convenience before she leaves, of course, get the maximum duration passport and she can just simply leave.

Regardless, though, many countries... So there are only some countries in the world that have a formal exit requirement. So a country like Canada has a formal exit requirement. If you want to leave, you need to file an exit tax return with the CRA, you need to end your ties with Canada, etc.

Argentina would be much less bureaucratic from that regard and fewer requirements for her. So when she finishes her studies, I would say most likely she can just simply finish her studies, take her diploma, get on an airplane and go wherever she wants. And of course, the Argentinian passport is a very useful passport, gives her...

it's a great... it's a very useful passport. So then, with regard to the Italian government, her claim to Italian citizenship does not in and of itself generate any liability with the Italian government or with the European Union generally. So the basic function is that that's just simply her claim by descent.

Now if she moved to Italy, she could become a tax resident, but you're seeking to avoid that. And the thing that you're doing right is what you want to do is you want to avoid tax residence. It's more about where you're not a tax resident than necessarily where you are a tax resident.

So this is where you have to be very careful, especially with several countries in the European Union. Several countries in the European Union are very well organized and they have rules and they will, if you spend substantial amounts of time in that country, they can and will say, "Listen, you're a tax resident." And so it's more a matter of not becoming a tax resident of a country that you don't want to be a tax resident of than it is of where specifically are you a tax resident.

So as an Italian, once she has her Italian passport, she could simply join you and of course she could join you on her Argentinian passport, but once she has her Italian passport, she could join you. And generally speaking, I don't think it's a big deal. As long as you're not, I don't think she needs to declare a tax residency in Europe necessarily, as long as she's not becoming a tax resident of any one particular country.

So she, because of the simplicity of having an EU passport, she doesn't have the same visa controls that others have, but you'll just want to make sure that you don't become a tax resident of any particular country in Europe. What's wrong with that plan? Well basically it's a matter of what infrastructure do I need?

So if I'm going to go and start a business, where is that business going to be based? If you base the business in the European Union with some kind of formal structure, now that's going to start to create a tie. And you can choose a country that you're not a resident of, but is that really necessary?

And so, and then the other wrinkle is that increasingly the place where you need to declare tax residency is often now with banking. Banking has become so difficult to deal with in the modern world, and that's where, they say, where are you a tax resident of? And that's where it's convenient to be able to report, here's where I'm a tax resident.

So I could give some specific, I'm trying to think of how much to say here in a public format. I'll say this, so number one, make sure that you're not generating a claim to tax residency based upon your actions. So don't buy a car in Germany and spend nine months a year in Germany.

Make sure that if you pass through Germany, that you're genuinely passing through. There are a few problematic countries in the EU that you'll just want to be careful that you don't trigger those countries' problems. From what you're describing, if she were making quite a lot of money or had a large and established business, then I think there are several really good options in Europe for people who want to establish a formal tax residency so that they have the proper cover.

And that's important, I believe, for somebody who is, who has a substantial income or a substantial business. But I think from what you're describing, I'm imagining her doing kind of a digital nomad thing, starting a couple of businesses, maybe some of them hit, but I'm not imagining she's going to make $5 million this next year.

Do you think, am I right in my perception there? >>Toby: Yeah, yeah. >>Dave: Yeah. >>Toby: If I can interject for a second. So I myself, I've been doing the digital nomad thing in Europe. She studied in Europe, it's how we met each other, for about two and a half, three years now.

We're in like eight different countries and I've kind of gotten a pretty good grip on not becoming a tax resident wherever I go, follow the rules, make sure it's up to six months or up to three months, whatever. So I'm not so much worried about that aspect because she's kind of just happy to go and explore Europe with me.

The real question is, and the other sort of irony, I mean, we're going, we intend to get married at some point in the near future, the next year or two. And her income is less important. I will be sort of the breadwinner. So I'm just thinking of if she does have this freelance business, we don't know how big it will grow, right?

Or what it will look like, but we figure the money needs to go somewhere and we don't want to send it to Argentina, right? Given just what a nightmare that they are, right? >>Dave: Right, of course. >>Toby: To deal with. So it's just a matter for her of picking which country do you want to set up your bank account and register your business.

And the idea may possibly be to not even touch the money from her business because I believe in a country like Estonia, for my initial reason, for example, you don't have to pay tax from the business. >>Dave: Yeah. I wouldn't do, you're breaking up a little bit, so I'm just going to talk for a second while your phone reconnects.

I don't see any benefit in your case for Estonia. I would use the US. I think the US is perfect for this, especially with her not being an American. >>Toby: For her? >>Dave: Yeah, for her. Yeah. The US is perfect for this. So she can set up banking in the United States.

You'll have to be careful with what banks, but the United States is a world-class banking destination, very good banks. Of course, there are many other countries and not all, not, not, not, there's so many US people in the United States trying to go abroad. I think the United States is a great place for her to bank.

I think the United States is a great place for her to run her business. I think the United States is a great place for her to keep money. And so if she's looking for one simple solution, I think the United States can be a really, really good solution for her.

I think that from a business perspective, she may not need any kind of business, any kind of complex business structure, but a US single member LLC and owned by an offshore company gives her the ability to run all of her stuff in the United States, access US banking, access US merchant payment processing, et cetera, that won't generate any tax nexus for her with the US as long as she's thoughtful and careful.

Even she can invest in the United States, right? Non-US persons can invest in the US stock market. No, no taxes. And so I think the United States would be a good place for her to begin with that. Otherwise, while she's in Argentina, I think that there are some good options potentially in Uruguay that would go across the border there.

It's a standard destination. And if she needs to start, she should start while she has a simple story to tell, that I'm an Argentinian living in Argentina, et cetera. She should see if she can access that. And then, of course, as her wealth grows, she can access many of the banking options in Europe.

I think the big thing that you have to help her with is that even in your case, digital nomad, you need to have a clear story that makes sense where she has what phone number do I have, what address do I have, where do I receive mail, what's my story that I tell?

Because the world is not friendly to nomads who don't have a clear story, who don't have good contact information. And so I would begin now by just having her develop that and build that. But I think the United States should be your primary place to look first. >>Tom: Right.

And you're saying she could build that out in the US, for example. For example, use the American address that I still use of a relative or something like that for what she's doing, or a PO box. >>Aaron: Absolutely. >>Tom: Thanks. OK. So I'll look into that. I hadn't thought about the US.

I guess from what I had heard from talking to people in Europe, they said, well, if she has European clients, she may need to set up shop in Europe. But I'm not sure if that's correct or not. The follow-up question I have related to this is, when we do get married, the intention is to sort of merge our finances.

Are there issues for me, for example, as an American citizen, giving her a credit card on my account, like in her name, but through my account, even though she's not a US citizen? Are there any frictions or problems with integrating her into my financial life when it comes to that?

>>Aaron: If you're very, very wealthy and you're facing estate taxes, it is complicated to have an American married to a non-American, because you don't have an unlimited transfer of money between spouses for the purposes of estate tax planning. Assuming that you're not yet that wealthy, the answer is basically no.

And in fact, it opens up a significant number of benefits to you in your business endeavors. I of course would not, I myself would not base a marriage decision based upon the citizenship papers that someone does or doesn't hold, obviously. But as a planner, if you come to me and you say, "I'm an American who's not married to an American," it opens, I would encourage, and I like living outside the United States, right?

Because many people who marry an American, they would love to live in the United States because of the many lifestyle benefits. But if you are an American not married to an American, sorry, married to someone who's not an American, then I would beg you, don't just automatically go and create ties with the United States.

Because you can use your marriage, if you have your finances joined and you join your business efforts, you can use your marriage very efficiently. A couple of opportunities that opens up. Number one, an American who owns a business and who works for a company is liable to the US government on all of his income from around the world.

Now, of course, there are some useful tax exemptions for living outside the United States. You can lower your taxes substantially to the US by living outside of the US. But someone who's not an American can genuinely eliminate all of her taxes. I'll talk to your girlfriend. She can genuinely, legally eliminate all of her taxes and never create that tax nexus with the United States.

So the reason I'm suggesting that the United States be an option is simply that it sounds like she's going to take a little while to figure out how to make money with her business. However, if she is more established or if you become more established, you and she can build a large business.

And in that case, I would take it to one of the tax-free, the genuine tax-free jurisdictions. And so you can use the various tax havens of the world and you can legitimately set up a completely zero-tax lifestyle, even earning $100 million a year if the business fits that model where you don't generate local income tax requirements due to physical presence, etc.

So let's say that she sets up an online business making $100 million a year. She can go and she can take her business to Hong Kong, Dubai. She could take it to one of the Caribbean countries, but Hong Kong and Dubai both excellent. Let's say it was Hong Kong, right?

She's a Hong Kong corporation. She won't pay any taxes in Hong Kong. She can do her banking in Singapore. She can set up her tax residency if she needs to, which would be convenient. She can set it up easily. She can go to Greece, would be a good solution, or a zero-tax or a territorial tax jurisdiction.

And so you can set up a genuinely tax-free lifestyle and she can live that way as a non-American. You as an American, you do not pay tax on money that's transferred to you by your rich spouse because you're married. And so if she has a business that she earns lots of money, then she can earn the money.

The money can stay in a tax haven and you don't have to pay tax on the income simply because it's a spousal transfer. So that can help you both to enjoy a high marital lifestyle without your necessarily paying American taxes. That's something that's not open to those of us who are Americans married to Americans.

In addition, you can then ask... Go ahead. Oh, sorry. Just on this subject now, let's say we get married. I don't know, we'd probably do it in Europe or Argentina or something. When I'm filing my taxes, do I still file them as a single person or am I able to...

Or should I say that I'm in my American taxes, that is? Does the US recognize my marriage if it's outside of the US? The US does recognize your marriage if it's outside of the United States. The tax filing designation that you choose, you don't owe... I'm trying to remember if you have to file as single if you're married or if you have to file as married filing separately or if you have to file as single.

I would assume, although I haven't done it myself being married to an American, I would assume that you would just simply file married filing separately. But the point is that your wife, if she does not become a US person, meaning she doesn't become a US green card holder or other permanent...

She doesn't become a permanent resident, she doesn't become a US citizen and/or she doesn't become a US person for tax purposes, triggering something like the substantial presence test or getting some kind of residency visa in the United States that would subject her to taxes or creating some kind of tax nexus with the United States.

If she doesn't become a US person, then no, there's no requirement that she file or report any of her income to the United States. She doesn't automatically have a tax agreement with the United States simply by being married to an American, nor do you have to report her income as a non-American on your American tax return.

You simply need to continue to file tax returns for your income personally. Got it, got it. The last question, a real quick one, is just... I'm going to Google all this, of course, do my own research, but I don't know if you have a book or blog recommendation for setting up a business in the US if you're not a citizen or any particular further reading recommendations you might have on this subject.

You'll find plenty with a web search. That's what the whole industry in the United States does. Whether it's a big corporation or whether it's a small, there's plenty of options available and there's plenty of business agents that will help with those details. If you're outside the United States, no doubt you get served ads all the time for companies that offer to help you set up an international tax ID number, an ITIN.

There's plenty of information available. I don't have a specific book, but there's plenty of information available. I would say that you can do it, you can figure it out yourself. It's pretty simple, it's totally legal. The US does very well at this. The other thing I was going to point out really quickly is that it's also beneficial to you being married to a non-American because if your assets grow, there are some really cool things you can do in the world of international trusts that Americans cannot participate in.

Because Americans have to report and pay taxes on any trusts that they are trustees of or that they control around the world, then for most Americans, there's no tax benefits for doing international trust planning. But if you have a non-American spouse, then you can use international trusts to hold your assets.

So a non-American spouse or family member can be the trustee on those accounts, and then the Americans then only have to pay tax on income that they receive from the trust. So the point is, it's actually a pretty big benefit to mixing those two together if you don't want to live in the United States, meaning that you can use the American and the non-American status to your advantage.

>> Steve: Oh, this is great. The only hard part is going to be making a hundred million dollars. >> Josh: Exactly. >> Steve: This all sounds excellent. So once we get to that part, maybe I'll call you back. Well, I think maybe at that point I won't need the Patreon.

I'll hire some spouse employers. >> Josh: Exactly. >> Steve: Until then, I appreciate it, Josh. Thanks so much. >> Josh: My pleasure. All right, we move on to, let's go to 219 Area Code. Oh, I already got you. That was Tim. Sorry, Tim, I forgot to hang up on you.

Let's go to, it was Trey. Trey, welcome to the show. How can I serve you today? Trey, you're up. >> Trey: Sorry about that, Josh. Hey, I wanted to ask. So we, my wife is a professional and has devoted a lot of time to her schooling. We got one kid who is just about to turn a year old, but she's not really ready to, you know, stay home.

She doesn't really want to do that yet, if at all. But what we are doing is I got a remote job and she also, it looks like she's about to get a remote job where she can have basically the same position that she has right now, which she loves doing, loves the job.

But yeah, so it's going to open up a lot more opportunity for us. The thing that I was wondering though is obviously, you know, two professionals working at home doesn't mean that you don't need childcare. >> Josh: Of course not. >> Trey: Especially with a one year old. And so I was kind of, since this is radical personal finance, I had kind of a radical idea, especially for somebody who's not really wealthy.

I wanted to know if you had any knowledge about the use of au pairs. It's kind of like live in help so that, you know, we'd still be at the house and we could check in with them all the time, but they would have a designated sort of caregiver during the day.

>> Josh Yeah. Yeah, it's a, it's a, it's a wonderful thing to do. And so if both you and your wife are generating income, then you should certainly be able to afford it. I think it's one of the best things that you can do. I think that the reason is that you, so let me back up.

In a perfect world, what would we do? In a perfect world, we would have with children, especially babies, which is what you have, we would have one on one attention all the time so that there is a loving adult who's there for the child at all times. That would be a perfect world.

And then expanding from that, we would recognize that there are benefits to having, there are benefits to having social contact, right, child playing with others, having friends, etc. And so it wouldn't always be just a child and an adult, but it would be a child with friends. And then usually the most important relationship to nurture is generally going to be between the mother and the baby.

And then also the father and the baby. So clearly the mother's bond is more important at an early age, especially for a baby. A baby and a mother have a very close connection that goes beyond even, I mean, it includes just tremendous levels of personal biology, right? The mother literally, after bearing a child, carries the baby's blood in her, it's my understanding, for the rest of her life.

A mother's body responds to the baby's needs. For example, a breastfeeding mother will, a mother's body will change the makeup and the chemical composition of the breast milk in response to what the baby's body needs. The smell of the baby invokes a response in the mother that affects her body to change breast milk.

And so a breastfed baby is something that obviously you need the mother to do. Now going back off of that, if we say this is not the choice that seems appropriate for us right now, then we say how can we get as close to that as is possible and can we bring in other benefits?

So let's say that your wife died and you were left with a child and your wife was dead. Well, if that happened to me, I would want my children to have the same close relationship of care and so of course I would want to provide that. If I couldn't provide that, then I would look and say how could I hire someone to provide that?

So if you think about wealthy families throughout history, how have they done this? Well traditionally it's with a governess. You have a governess. And so you have a full-time employee who cares for your child or for your children. And when you think about British literature and the British culture, this is a very, very common thing.

You have a mother that they have plenty of money. The mother doesn't want to be kind of a full-time on-demand mother all the time. She has other things that she's doing and so she has a governess. You go to a very wealthy family in the United States, generally you'll see that they have some kind of live-in servant who cares for the children, who provides for the children, etc.

and the mother and father are not involved in that daily activity. So the benefits of this are that you get a much closer relationship with the child with a loving adult and you get the child's needs met. So why don't people do that in every situation? Well, it's obvious that because of the high cost of maintaining a one-on-one relationship, then it's just not feasible for anybody except those who are genuinely wealthy.

So thus you have the emergence of daycare. Daycare is a special—it takes advantage of the division of labor. It says, "How can we find a caregiver who can provide good care for children, but how can we get the ratio up high enough that this can be feasible for most people?" If you recognize that the amount—so let's say you have a mother and a father who are working and earning a median wage each of them.

Well, it doesn't make any sense for a mother and a father to each earn a median wage. Let's say it's $55,000 a year. So you have a household income of $110,000. It doesn't make any sense for the mother and the father to keep going and earning that $55,000 per year pre-tax if they have to turn around and make a $55,000 non-tax-advantaged expense on paying someone else a salary to care for their child.

It just doesn't make a lot of sense, which is why, in addition to all of the personal reasons, from a financial perspective, you say, "Okay, well, mother will stay home. Sometimes father will stay home, and we'll take care of the children." So a daycare seeks to expand that. And so you can have different levels, right?

If you've looked, I'm sure you have, looked at daycare, you'll have very expensive daycare, you'll have very inexpensive daycare. What are the factors? Well, one factor is the child's, the class size to adult supervisor. If you have 30 children and to one adult, you clearly can get the cost down, but now you wonder, "Can the care be provided be as good as I want?" It's better to have five children to one adult, generally speaking, than 30 to one.

Another thing can be facilities. Is there a better facility? Well, that has to be paid for. Other things would include, are there other opportunities, right? Maybe I want to enroll my child in a Chinese daycare because now my child can learn Chinese from an infant. That's a great, great reason to use a Chinese daycare instead of providing your own English-speaking au pair.

But when you put this all down, if you have money, I think a lot of times you're going to wind up in the situation where you say, "I'd like to have somebody in my home so that way it's not like my children are away from my home." Obviously, even with recent events, that can inspire certain levels of concern to know that your children are in another place that may not be as safe as your home.

In my home means I can supervise, even if it's out the window from the work office that we built in the backyard, at least I can supervise, I can see, I can build more contact with my family because my children are at home. So I can be there for breakfast, lunch, and dinner.

They can nap in their own beds. With the exception of social contact, playmates, etc., and with the exception of some special education that you can provide, certainly you want your children cared for in your home by a full-time caregiver during the hours that you are needed for work. And I think it's a great idea.

And so back to the au pair, yes, you can hire from all around the world, you can hire au pair. Au pair is just the normal kind of European word for nanny, basically. And you can hire people from around the world. There are plenty of job boards. I've looked at them.

I've looked at them primarily for the purposes of language acquisition to say, "If I'm going to hire an au pair or a nanny and I want someone to care for that, well, if I'm going to teach my children English, I'd just as soon have a Spanish-speaking au pair or nanny or a French-speaking au pair or nanny, etc." So I've looked at it a lot from that perspective.

And I think that if you can do it and if you have the house space where it works, where you can have a live-in house help, I think it's a wonderful thing to do. And it will give you the opportunity for you and your wife to maintain your jobs, your income, and yet have the highest level of confidence that you're providing, the very best childcare that you can.

And I think there are good arguments being made that in some cases, children are actually better with that. Right? If mom and dad—this is the argument many people make about childcare generally, and I think in some cases it is true—that if mom and dad are fresh, if mom and dad aren't all the time providing for all of the daily needs, then they can have a better, or at least different and sometimes just happier relationship with their children where they're less worn out, they're less frazzled from providing for those basic needs.

And so it's a little longer than I intended, but yeah, I think it's great and worth pursuing. >>Trevor: Great. Yeah, I'm glad you said that. I wonder, from my preliminary research, we can absolutely afford it, but I kind of was looking at it as a way to try to get the best of both worlds.

Like I said, my wife really enjoys her career. She spent a lot of time in education and in the health pursuit. And I'm just trying to do what's best for everybody. >>Steve: Of course. I think it is absolutely an excellent option. And you're kind of caught in a situation like that, right?

As a husband, if your wife says, "This is something that's important to me. I really enjoy my career. It's something that is an important part of my life. I want to keep it. And I don't want to take the sacrifices that are required for me to walk away from a career to provide childcare." And then you look at your own career, you look at your own things, and you say, "This is important to me, and I don't want to walk away from this to provide childcare." And if there's no way that you can make those two things work together, you're going to need some help with childcare.

And so in that situation, I think that absolutely the best thing to do in the early years is to provide as close to a full-time parent experience as you can. And having either very close help of a regular babysitter who's a trusted nanny who's there every single day, or having a live-in nanny au pair servant is the best way to do it.

And I would just say that go ahead and use it as an opportunity to look for ways to help your children. So, like, for example, I wouldn't—unless there was somebody that you just loved, loved, loved, because they were a wonderful childcare provider, I would not necessarily look for an English speaker.

I would look for someone who speaks another language. Why not? I would look for somebody who has skills that are going to add to the family. I have a maid who comes to my house right now five days a week. She cleans, she does some of the cooking, she helps with some childcare, and it really does add a lot.

And so it allows me to help, it allows me to make sure that my family has—that we have what we need. My wife is less burdened because she's freed up from a lot of those other things that freeze her to focus on higher-level activities. That frees her up and keeps her from being stressed out and tired with all of the—with work, etc.

And it—but yet allows me to feel really confident because my children are still in a totally safe, totally cared-for environment where they're in my home, right? They're on my property. I know where they are. I'm not worried about the influences that they're under. They're not—they didn't just get stuck in a daycare where they flip on the TV and just watch movies all day.

I can provide the very best of both worlds because I have the financial resources, and you do too. So it's a wonderful decision. And if it works out for the wife and if you can find someone excellent, I think it's great. All right. Thanks so much, Joshua. And it's interesting that you brought up the language thing too because that had crossed my mind.

I thought, "Well, maybe we can get even more out of this than just some help." So I appreciate your insight. Right. And I think there are, depending—so depending on the rates, there are very highly qualified people who aren't just bodies. So let's say that you were—I don't know your financial condition, but let's say you're making $50 million a year.

You wouldn't just go and hire some 18-year-old girl. You would go and you would hire a very highly qualified, very competent governess for your home. And so we might joke at Mary Poppins movies or—but that's what you're looking for. You're looking for a very highly qualified professional, professional childcare provider, somebody who is going to provide the environment for your child.

And so what I would say is in the beginning, you're looking for, of course, childcare. Childcare is a special skill that some people are really skilled at. Some people are really good at. And those people have the ability to provide—they're patient. They're good at working with babies, good at working with children.

And I would look for people who are going to do what you want done for your children. If I'm hiring an au pair, right, during those hours, we're not going to just put on cartoons and play it for the children. We're going to be reading to the children. We're going to be playing with the children.

And this is so important in the baby years because in those first few years, that's where you're having vocabulary development. That's where you're having kind of worldview shaping, etc. As your child grows older, if you continue with this, then I think that's where you can start to bring in specialized tutors.

And so I've said this before when talking about homeschooling, but if I come to a place where I can't run my business effectively with homeschooling, if my wife can't pursue her lifestyle with homeschooling, I'll bring in a professional tutor. I'll bring in somebody who is responsible and tutors my children in our home.

And I'm always going to look at the options that are available, right? Once you get to school age, now all of a sudden you have a much bigger world that's tailored where you can use the division of labor and the benefits of that to give the best things to your child.

But even in those early years, look for somebody with capacity, look for somebody with professional qualifications. And look for something excellent. Make it something really, really positive and good in your family. Great. Will do. And just selfishly, the thing that I would be most excited about is my day is pretty flexible.

So I love it when he's at the house, even if I'm working, because I can just go check in and I can't really do that at daycare. And especially if you have a, so I'll just, I'll finish with this, like, here's how my day works right now and how I'm currently dealing with these things.

I work from home. I work a pretty good, healthy work week. Most of my work, though, doesn't necessarily require perfect silence and very little of it is scheduled. I work hard to keep my schedule free of, I don't like appointments on my schedule. So I have a good bit of flexibility.

So I get up in the morning. I usually will work early in the morning. I read a lot early in the morning. My children wake up. I usually am up about by five. Children wake up five thirty to six. They play a little bit while I read. They play.

And then we have breakfast. So I breakfast with them. Then I go and I work in, it's on our property, but I work in an outbuilding where I have an office and I go out and I start working. Right now, my eldest son does homeschool. And so from eight to twelve, he's in my office at a desk right next to mine.

That's been hard because it's impacted my day, but it's something that's important to me. He can't focus when I'm doing, when I'm making calls or when I'm doing things. And so I have to be careful not to schedule anything that's going to require me to make noise during that time.

But I get to homeschool him. And then my other children are at the house with my wife and with our nanny housekeeper as well. And then I go home for lunch. I walk across the yard. I'm there. I have lunch and then I go back to work and I work in the afternoon.

In the afternoon, I can usually see the children playing outside. They're playing in the grass. I can see them. Sometimes you hear them in the microphone. That's often when I record. And then in the evening, I walk home and I'm there for dinner at 530 and I'm with them for the evening.

And so my wife doesn't have her own independent income generating career that she pursues, but she could be doing the same thing and we could be getting good results. So it is a really gratifying lifestyle. And then if you have the flexibility to do that, it's really great. I love it.

So as someone who is doing that right now, I strongly encourage you. I think it's a great option and a really wonderful way for you to make sure that you and your wife can maintain the careers that you have while also providing a very, very high level of care for your children, which is awesome.

All right. Thanks for walking me through your day. That's pretty much what I had envisioned too. It's as cool as it's cool. It's what I dreamed years ago and I'm very fortunate to have been able to do it. Mike in Colorado, welcome to the show. How can I serve you today?

Mike in Colorado, you're up. Going once. I'll come back to you in a few minutes, Mike. Let's go to Austin in Louisiana. Austin, welcome to the show. How can I serve you today? Hey Joshua. First, I guess I wanted to give a little bit of a testimonial. Then I had a question.

I just wanted to, I had a really good experience last year. I was actually able to acquire a rental property using some of the lessons that I learned in your credit card course. And so now I'm at the point where I've actually renovated that property and it's time for me to pull my capital out to go on to some new projects.

I was wondering if you had any thoughts in terms of putting a line of credit on that property versus doing a cash out refinance for somebody that's looking to get, I guess take on more leveraged debt to grow their portfolio. You had preference for one or the other. In that situation, it primarily depends on the terms.

So it's very much going to depend upon what kind of terms can you get for the financing of the property. Terms of the interest rate, terms of costs of loan inception, closing costs, and then whether, and then what you think you'll be doing on an ongoing basis. So a line of credit is best used as a form of flexible financing.

You can increase the balance, you can decrease the balance, and it's just a wonderful flexible tool. Generally going to be, I want to be very careful because I don't have current numbers or even what's been offered to you, but you're going to pay lower terms and you can put it in, take it out anytime.

There's a minor risk with a line of credit that they can reduce your credit line. On property this happens less, but you know, like I talked about in the credit card course, if you have high credit card balances, then your credit card issuers can turn around and reduce your available credit at any time.

And they can do that on a line of credit as well. This caused a lot of people tremendous heartbreak in 2008 when their lines of credit were reduced massively and they were planning to depend on them. So if you do a cash out refi, you avoid that. Cash out refi, the problem is what am I going to do with the money?

And do I really want this and do I want it at the terms? And so I don't have a strong preference for one or the other. I would just say that it should be fairly evident once you think about what you want to use the money on and once you review the terms of the loan offers that are being made to you.

Okay. I guess what I'm looking at is I'm kind of looking to double down on my portfolio. I've scaled up to three rental houses in the last year and a half. So I'm looking to as quickly as I can, you know, scale that up to about six or seven units over the next year to year and a half.

Right. That's kind of what I'm looking at. So I'm looking to deploy all the capital that I would be able to get out of the unit. So how much will they loan you on a cash out refi? So I've got all said and done, I'm into the property for about 60 and it'll probably appraise for approximately 120 and they're going to give me 75%.

And have you gotten an offer of how much of a line of credit they'll give you either without that loan or with a line of credit on top of the first mortgage? So I've just looked at doing a line of credit on the appraised value of the house since I own the home free and clear at this point.

So it's the same terms. Well basically they're still willing to give 75% of the appraised value. The big difference being obviously the cash out refi is a 30 year term and the line of credit is a five year term. So I think in that situation, I won't say obvious, but I would think very strongly the weight would be to do a traditional cash out refi because number one, you'll be able to lock in your terms, you'll have a known sum of money that you can use, you'll lock in your terms and you'll have a very long amortization period at what's probably going to be a favorable interest rate.

Obviously we don't know what will happen with interest rates, but the interest rate on your line of credit will probably be a floating interest rate, whereas whatever they offer you on this particular 30 year mortgage will be fixed. If rates go down, you can refinance and you can reduce your costs.

If rates go up, you've fixed it and you've stretched out your repayment period to the longest period possible, which keeps you in the maximum margin of safety. So I think from what you're describing, I would do a cash out refi to lock those terms in so that I can make maximum use of the money, I can predict my cash flow needs in the future and I can continue to grow my portfolio aggressively.

Awesome. I appreciate the perspective. My pleasure. All right, we move on to Mark. Mark welcome to the show. How can I serve you today? Hi Joshua. Thank you for taking my call. I'm considering a career change into the financial services industry and I've interviewed with a firm and I'm also going to be meeting with another one in the near future.

And I'm just trying to get your input as to what I should be looking for to kind of compare the two and see overall which would be a better fit. So the first thing I would say is probably you shouldn't be doing two interviews, you should probably be doing 10.

And the reason I say that is remember this, the financial services industry, and of course that's a big term, but if you are looking for some kind of sales role, some kind of producer role, something where you're going to go out and get customers, which encompasses a wide swath of the financial services industry that includes insurance agents, that includes financial advisors, if you're doing something where you're going to be going getting customers, remember that this is something that all of the companies are recruiting for actively.

Now not all firms have as big of a recruiting budget as others, but they're recruiting actively. And so it's less a matter of there's a limited number of jobs and too many candidates and so I just got to get my foot in the door and it's much more a matter of there are plenty of jobs and they're trying to pull the best candidates to them.

And so one of the best things you can do is before you're actually committed or entrenched in any company is go around and interview widely. And so usually I give the advice to make a list of all of the different types of financial services positions that you know of that either you may or may not be interested in and then go and interview for those.

So for example, I would interview with a life insurance company, I would interview, and I would even do this, I would interview with a big name brand life insurance company and I would find a local independent life insurance agent and interview. I would interview with a property and casualty insurance company, I would interview with a big name brand property and casualty insurance company and with a local independent PNC company.

I would interview with a big traditional wire house financial planning firm and I would interview with a smaller more local boutique financial planning firm. I would interview with anybody and I would probably, depending on the direction, I would try to find various flavors of those companies. And so if you go around and you interview, then each one of them will make you a different kind of offer.

Say here are the kinds of packages that we offer and you'll find out, hey, company A offers a salary of zero dollars but they predict their normal earnings are X. Or company B, they'll give me a salary of $85,000 but then they'll pay me this. And so you get an idea of what their options are.

And then my question, my secret question, which I'll give you here, is simply this. What I love to do is ask people, okay, if you weren't with this company, what would you do? If you weren't with this, if you weren't, you know, dear Mr. Property and Casualty Agent, you're running here this big firm, you're making $700,000 a year but if you weren't with this company, what would you do?

And get an idea of what people say. And then use that for your second round and go and pursue interviews with those companies and try to find out what the options are. So that's my first piece of advice, not having heard anything about the two particular options you are, is that you can probably answer this by interviewing more widely.

And I think that interviewing widely is something that people don't do enough of. And there's no reason not to. Okay. Yeah, I appreciate that input. As a follow-up, you know, we may potentially be heading into a recession. What are your thoughts about transitioning into financial services industry during a potential recession?

I don't know if you worked during the '08, '09 recession. I began my career in financial services in the fall of 2008. I was laid off from my job in about May or June, I think it was May of 2008. I spent several months goofing around. I went and took a trip across the United States.

I traveled a good bit. And I came back and I started getting serious about job hunting after about three months or so. I signed my contract in the financial services industry. I would guess something like September or October of 2008. Started my licensing and doing my classes, etc. I remember vividly, because I was driving to Miami every day to go to my insurance license class to get my life health and annuities license.

And I remember vividly listening to NPR. I would listen every day to NPR and to All Things Considered and also the Marketplace. I remember driving up every day from Miami to West Palm Beach listening to Marketplace every day on NPR with them talking about the bailout package. This was TARP and whatnot.

So then that was my first month in the business was immediately following that. But I learned from it. My entire career was built in a frame of declining interest rates on fixed income investments, which is inconvenient when you sell life insurance because life insurance, whole life insurance with cash values is connected to fixed income rates.

And so every single year the dividend rate, the dividend crediting rate on life insurance policies was going down. And then we had a great run in the stock market for a time, but various levels of uncertainty. So all that to say though that I've been there, done it. And in hindsight, I would do it again.

The thing I've often wondered, which is what you're dealing with right now. In hindsight, I came to view getting laid off as a blessing because I realized that if I had waited until I was ready, I had been planning to leave the job that I got laid off of, I was planning to leave at the end of the year in January of 2009 and go do something else.

I didn't like the job, didn't want to do it anymore. But in hindsight, I don't know if I would have had the courage to go in January of 2009 because I would have told myself, oh, there's a recession on, jobs are tight, there's too many unemployed people, blah, blah, blah.

And so I think that it was a blessing in disguise. I think you can build a career in financial services in any market. And there are a couple of important reasons for you to understand why. Number one, generally in financial services, you are generally serving the wealthy. And I believe that serving the wealthy is one of the best things that you can do to be protected against market swings in the economy.

People who are wealthy are not affected in a significant way by short-term fluctuations in the economy large. Obviously, there are industries that are affected. If your entire NFT portfolio fell apart or all of your crypto portfolio completely collapsed in the last month, you may have had a US dollar token value of $60 million and now you're down to $10.

Well, that's going to affect a lot of people. But generally speaking, it's just not that big of a deal for the wealthy to go through fluctuations. And so if you're serving the wealthy, the wealthy aren't like, okay, so stock market went down 20%. Big deal, right? It's just not that big of a deal when you're wealthy.

It seems like a big deal to a lot of people, but it's not that big of a deal. And so wealthy people always have money. And they're always willing to listen to people who will help them make money. And so while you might have fewer clients to some degree, it's just not that big of a deal.

Number two is if the industry that you're choosing has some kind of opportunity. And let me, because I got to carve this out here. In some roles in the financial services industry, you will exclusively serve the wealthy. So as an example would be, let's say that you're going to try to build a money management business and your account minimums that are set by your firm are a million dollars.

Well, the guy with a million dollars, if his account value goes down, because there's a recession on and he goes down to 800,000, you could probably still prospect him. And there's plenty of other guys with an account value of 1.3 million where their account went down. It's just not that big of a deal.

We're not dealing with people who have $20,000 in a Roth IRA if you have million dollar minimums. People with million dollars in their accounts, it's just not going to make that big of a difference in the short term. On the other hand, there are certain expressions of the financial services industry where you sell more products.

Right? So when I started, I sold life insurance. I sold life insurance, disability insurance, long term care insurance. Well, a recession is not bad for that business in any way, shape or form. Are there people who have, who are losing their jobs? Of course there are. But the number of people who are losing their jobs is a few percent of the economy.

Right? So let me give you some numbers to put this into context. There are a few percent of the potential prospects and targets out there. So let's say that unemployment goes up by 2%. When I was selling life insurance agents, not agents, when I was selling life insurance, we had a pretty intense model.

So I would see on average about 15 people a week. Higher if I could manage it, lower was bad, but 15 people a week. So that means that over the course, if I'm doing 15 people a week, in order for me to see 100 people and offer to sell them life insurance, it takes me 6.67 weeks.

That means that over the course of 6.67 weeks, almost, let's call it 7 weeks, there are 2 fewer people who can buy life insurance from me out of 100 versus before the recession. And what's more important is that I always have the choice to just weed those people out.

So if I get to someone's kitchen table or they walk in the office and they're totally broke and have no money and they don't have a job because they got laid off in the recession and everything is collapsing, if I can't help them, then I say, "I'm sorry, I can't help you.

I used to carry around Dave Ramsey books. Here, read Dave Ramsey's book. He can help you. I can't, but call me when, I'll call you next year." And so the point is it just doesn't matter. 2% increase in unemployment doesn't matter. And then if you start to work in the groups that most of the time we work in as people in the financial services industry, it's just not effective the same way.

If your normal client is an attorney, maybe a mid-level attorney, and that's your starting client that you're trying to work with or a business owner, just most of the time, these professions are insulated from those economic worries. So what are the industries you got to be careful of? Well, let's say the mortgage industry.

Right now the mortgage industry is falling apart because there's been massive business done by all kinds of companies due to just a continual flow of refinancing leads. But if you're either in that now people can't refinance and save a bunch of money, so you're reliant on new mortgage inception in order to sell to, or if you have a business serving mortgage brokers, now you've got real trouble right now.

So if you're in the financial service industry in an area where that is facing the general public, then something like a recession can really pull you apart. But in most cases, it just doesn't really matter because it's just a couple people who can't buy something from you that could before, and you can control that.

You can quickly weed that out with activity, with your own hustle. There's plenty of money, there's plenty of people, there's plenty of people that need help, there's plenty of people that their business went broke and they want to buy more life insurance because now they don't have as much money as they did.

There's plenty of people who hate their financial advisor who just lost 30% and they want to try someone new. I just don't think it matters. Okay. Well, thank you. I appreciate your input and I'm looking forward to seeing how things play out. Anything else? No, I think that's it.

Appreciate it. And we go to Bradley in California. Bradley, welcome to the show. How can I serve you today, sir? Hey, Joshua. I'm calling because I've been making some considerations about changing my career path and there's a really small startup that I've been interested in working with for about the last three years now.

And they've been interested in taking me on to do sales for them and possibly some coaching. The problem is essentially to bring me on, I would first need to bring them sales so they can't offer me any kind of salary or anything without first bringing them sales to prove that it's going to be viable for them.

And I'm really confident that this is going to be a successful growing business and it has been for the last few years. Just not enough to expand their staff. But to do that, I wouldn't be provided any leads or any marketing. So essentially I have to be sales marketing all in one.

Now again, I do believe in the business and I'm just wondering if it's crazy for me to go out and try to do my own marketing and try and spend my own money to bring business into a company that I don't even work for. Right. Do you have any experience in sales or marketing?

I do. Not in marketing, but in sales, yes. So you have gone out, found customers, sold those customers and consummated transactions and you've done it for more than a short period of time. Only for about three years, but enough to where I feel confident in it. And I have brought them some business already, but that's more through my personal network.

But I am confident that this is a product or really it's a service that I could sell. Yes. Is there a way that you could test this on the side while keeping your current job? Yes, there is. Then I would do that. I don't see any downside. If you have some experience in sales, you know how to pick up the phone and go and see someone and sell them the thing that you have to sell them.

That's important. If you believe in the product, that's important. And if you have the ability to test it in some way without jumping full on and burning bridges at your current opportunity, then the only downside would be what you said about the need to spend money or the idea of spending money.

And so we could talk about that separately. So setting aside the issue of how much money you would invest into this opportunity, what's the downside to testing it on the side until you feel confident enough to take the jump? Well, I guess I should say I did test that for a while.

There was a way for me to try to bring in sales without paid marketing and I did test that. But it didn't prove as fruitful as I thought it might be. And I guess the downside of doing that was that was very, because it was all very, you know, it wasn't passive marketing where people were coming to me.

I was going out. It was very active and that took a lot of time away from my family, my primary job. Of course. Okay. So then it sounds like the key question is actually the money. Would it be crazy for me to spend money out of my own pocket to try to test to see if this other thing would work given that I'm spending money out of my own pocket for a company that hasn't actually even hired me?

Is that the question? Yes. Okay. How much money would you need to invest in order for you to feel like you had done some amount of marketing to prove the concept? Right? How much are we talking? I don't think it would be substantial. I think, you know, even something simple like a Google AdWords campaign, maybe somewhere between five to $10,000.

Okay. Nothing, but not going to break me by any means. And how much are you earning right now? A hundred thousand plus bonuses. So five to $10,000 is something like five to 10% of your annual income, a little bit less if we include bonuses. How much is your current net worth?

$150,000. $150,000. So this is five to 10% also of your, or less, sorry, five to 7% of your net worth. Okay. And if you invested this money, what's your guess? Notice I said guess. What's your guess of how much that could generate? If it were successful, what's your guess of how much it could generate for you in terms of commissions?

Well, I don't know because I guess, you know, that commission rate has been established because this is all very new to them. But I do know, you know, for every one client I bring on, that's going to bring them somewhere between $1,500 to $3,500 of revenue. And you know, not a very time intensive or resource intensive business.

So the margins are pretty big. So I would say pretty good on each client that I would be able to attract. Now how much I can get from this kind of marketing, I really don't know. But even a couple clients would be enough for me to make it well worth my time and to recoup my whole investment.

Right. So and let's say that your dream scenario, let's say that everything was successful, the marketing was successful, and you just, this thing went amazingly well and you said I'm all in, you went all in, you went and worked with the company. Give me a guess of a dream scenario of how much you could earn as a full time sales and marketing guy with this company.

I have no doubt that even, you know, bringing in, that was even getting like 10 clients per month, which is very doable and they can easily handle right now. It could be a couple hundred thousand dollars per year or more. So as far as I'm concerned, this is a risk that is very much within your, within the kind of thing that you should do.

This is five to ten thousand dollars. If, if you could test it successfully on five to ten thousand dollars, this is a modest amount of money compared to both your income and your net worth. As you said, it's not nothing, but it's a pretty modest amount of money. And if on the other side of it, you think that, that potentially there's a business where I could be making a couple hundred thousand dollars a year, then it seems like the kind of thing that is definitely worth testing.

If I gave you the offer and I said, listen, if you'll give me today ten thousand dollars, then in say 18 months, I could give you, I could double your income. Instead of you making a hundred grand, you could make 200 grand. That sounds like a pretty good offer, right?

It certainly does. Yeah. So if I, if I could say, invest into me as a career coach, or I'm going to be a personal style coach, I'm going to train you on how, I'm going to be your personal advisor in some manner and you invest at ten thousand dollars into me.

And then at the light at the other end of the tunnel was, hey, we could potentially double your income. That just seems like a pretty good bet to make. And so I think it's, it's not, it's not your life savings. It's a, it's a modest portion. So I would just sketch out, okay, how is it going to feel if I lose ten thousand dollars and I don't sell anything?

How would that feel? And get clear on that. Then once that's clear, then I would go back and I would say, how can I mitigate the risk? And so here are just two ideas, both of them fairly obvious. Idea number one is make sure that in your purchasing of the marketing and whatnot, you go slow and you make sure your funnels are working before you really go in and invest big time into it.

That's the first thing. Then idea number two is I would go back to the company and say, tell you what, I'll put in five grand, you put in five grand. That way we have a full budget and we know we can test it. I'll put in five grand of my own money.

That's how much I believe in it. You put in five grand from the company money. You match me dollar for dollar and then let's test these ideas that I have for marketing and sales and then see how it goes. I would think that the company could put up a few thousand dollars, right?

>> Steven: Certainly, yeah. >> Tom: If they have a service that's generating that amount of revenue, even if they aren't willing to hire somebody at a hundred thousand dollars a year to work for them, I would think they could pretty easily write a check for five grand to do it.

I would think that would be a good test for you to say, are they actually going to treat me fair? I can imagine and envision a good high quality startup that the founders are just overwhelmed, they can't hire anyone, they're not good at managing. I can imagine them not wanting to hire somebody and make an actual job offer, actual employees, etc.

I can't imagine them coming along and saying, "We're not willing to pay five grand to somebody who's already sent business our way and somebody who's willing to put up five grand of his own money for an opportunity that's actually not even sketched out in detail yet." I can't imagine them not being willing to do that.

I think that you could get them to put in five grand, you risk five grand, and I think it's a great bet to make. I don't know why I'm so hesitant about it. Have you ever done anything like that? Have you ever just taken a risk on yourself and your abilities?

No, I think maybe I've taken more risk on my traditional 9-5 career path, moving companies and industries and things like that. This is just a little bit outside the purview of what I've done, but I don't know, the upside is too hard to ignore. I'm firmly convicted that this is a great business.

They have a great business. I believe in what they do. I'm 110% in with it and I know if we can get in front of people that it's going to succeed. At least that's what I've made up my mind. Of course, I can't know for sure, but I am very convicted that it has as good of a chance as anything.

Yeah. So from listening to you, without knowing anything about the business, I think you need to do it. Because one of the things that, the reason I ask the question is, have you done this before? What I have observed and learned from my own mistakes, the times that I've been far too hesitant is that being willing to take a risk on yourself and invest in yourself is a skill set that has to be honed.

I spent too much of my life not doing it because I wasn't taught to do it. I wasn't trained to do it and I didn't understand my mistake. If you aren't in that accustomed to believing in yourself and following your hunches, following your own convictions, that's something that has to be gotten rid of.

And so if it costs you five grand and it just lights on fire and makes you nothing, but you have actually done something that you believed in and I heard what you said, that you believe in this, then I believe for your own self-respect, you need to do it.

Just to say, I believe in this. Because there's too many opportunities that if we don't cultivate that habit, that skill of believing in ourselves, believing in our own discernment, our own judgment and being willing to take action on it, no matter how many wonderful opportunities come along, we'll miss them all because we won't ever believe in ourselves.

But on the flip side, if we cultivate and we believe in ourselves and we say, I see this, I'm going to do this thing, even if it turns out to fail, that's the basic skill that we have to do in order to succeed. And so I would rather you take this action, lose five grand.

Six months from now, you find something else. Take action, lose five grand. Six months from now, do something else. Take action, lose 10 grand. But then the fourth time around or maybe the 40th time around, the taking action is where you hit something that flows, that works. And so I believe this is a skill that you need to practice and prove to yourself that I'm going to be willing to believe.

And if this is the opportunity that's in front of you, you believe it. And having one of the old sales sayings, that sales is a transfer of belief. I think that if you believe in the product, you'll be able to transfer that belief to other people. And I don't think you're going to lose money and I think you should do it for your own self-respect.

If you believe in something, you've got to put your money where your mouth is, just for your own self-respect as a man. It's funny that you say that because I think what's been gnawing away at me for I guess this entire time I've been considering it is not the fear of missing out whatever potential money I'm going to make.

It's really been more about violating my own principles of not going after what I really want. Right. Right. Well, thank you, Joshua. I really appreciate it. My pleasure. And with that, we end today's Q&A call. It's a good note to end on. I'm not going to repeat the lesson I just shared there or tried to emphasize, but I would say that that is worthy of reflection.

For me, it's been a big growth thing is that as I have started to believe in myself and then to take action on my convictions, even when I have been wrong, I have just been proud of myself and I've recognized that it changed me to actually believe in my convictions.

I want that for you. I want that for all of us. I think we're better served as a people who knows how to believe in ourselves and how to press forward and take action when we're uncertain. If you look at every great success story, you will find that time at which a man or a woman had to step up and say, "Yes, I'm going to make this bet.

I'm going to take this risk. I'm going to take my shot," whatever it is. And if you get knocked down, it's okay. That's why I love so much the Man in the Arena poem that when you recognize that character trait and you see it lacking in yourself and you start taking action on it, all of a sudden, it just changes how you see other people and you don't see people who are failures.

I lost so many opportunities in too much of my life, but some of my life, thinking, "Oh, if other people will see me do something and I fail, then they'll see me as a failure." And I don't see people who fail as failures anymore. As I have been more diligent and consistent about taking action on my beliefs, then I've come to admire and respect people who take action on their beliefs.

We can't guarantee success. We can try to control for it. We can try to control risk. We cannot guarantee success, but what we can do is we can, on a steady basis, we can focus ourselves on taking shots. Take enough shots, you hit some balls. Thank you for listening to today's show.

Remember that I am running a summer sale on consulting. Go to consultwithjoshua.com, consultwithjoshua.com. If you would like to book me for a private consulting appointment at a substantially reduced rate, consultwithjoshua.com, and I'll be back with you very soon. Thanks for listening. I'm John Furrier. I'll see you next time.

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