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With no hidden fees and a 100% purchase guarantee, you can feel confident when you book your premium LA tickets with Sweet Hop. Visit suitehop.com today. 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 Josh Rasheeds, I'm your host and I am back, back from a very nice summer vacation. Back and ready to get to work. You know, for years I have believed in the Dan Sullivan model of time management for entrepreneurs. If you're unfamiliar with his concept and his teaching that he teaches, basically the idea is that entrepreneurs need to view themselves as, in a way, artists or performers, rather than as kind of line workers.

The traditional model from the industrial age of time management is that in order for you to maximize your productivity, you work, work, work, work, work, work, work, work, work, work, work, work, work and then finally when you're tired out and you're worn out, then you can deserve a vacation and so then you deserve that vacation.

You go and you take it, you rest, recharge a little bit from vacation and then you go ahead and get back to work. And that's the model that many of us are accustomed to simply because of what's normal. And even though we live in the information age, a lot of us still take a lot of our lifestyle from the industrial age.

But Dan Sullivan teaches that entrepreneurs, it doesn't work for entrepreneurs because being an entrepreneur is much more, your output and your productivity depend much more on your making the right decisions, depend much more on your emotional state, depend much more on your insight, etc. than it does on your kind of being at the machine, pushing the lever on a daily basis.

And that one of the best things that, one of the worst things that entrepreneurs do is work, work, work, work too much and that harms their results. One of the best things an entrepreneur can do is intentionally schedule times of rest and rejuvenation so that an entrepreneur is always functioning at his highest capacity where his brain is sharp, his ideas are sharp, his motivation is sharp, etc.

And I have believed that for a number of years but as is probably common to all of us, my practice of that has not been as excellent as I would like. And that's one of the things that I'm changing and seeking to do is to make that more of my practice, to more intentionally take time off, more intentionally take focused periods of rest and rejuvenation.

Because it really does make a big impact, even for me as someone who speaks for a living. I find that it's very difficult for me to create coherent and compelling podcasts or coherent and compelling course outlines, etc. if I'm not coming from a place of rest. And often it's during those times of rest and rejuvenation that everything gets crystallized for me.

I don't write, for example, podcast outlines. I don't write them generally very well sitting in front of the computer. I write them while standing in the shower or walking in the fields or something like that. And so I'm back. I'm back from a very nice and resting and rejuvenating summer vacation.

I've been off for about a month and have been not really connected at all, a little bit. I haven't been in a technological disconnected sense but I haven't really been doing any work. But I'm happy to be back and I have got a lot to talk about. Boy, nothing's gotten better in the last month, has it?

Nothing has really improved in the last month. And that's part of what I'll start by talking about today. Numbers this morning came out over 9% inflation rates in the United States, higher in other parts of the world. We continue to face major supply line disruptions, shortages in many places, increasing prices on all kinds of things.

People are hurting all around the world, all around the United States, all around the world, people are hurting. And unfortunately, I don't have any great news to say that I don't have any real reason to think that it's going to get better, at least in the short term. The issues that we are facing, I think, in many ways are the issues that we've been preparing to face for many years.

And while I wish it weren't the case, I wish it weren't true and I wish they weren't here, my logical brain tells me I don't see any solutions yet on the horizon as to how things are going to magically be better. And so my hope and my prayer and my desire for you is that you are not being hurt as significantly as so many of our fellow human beings all around the world are being hurt right now.

There is already, I mean, the problems that we're complaining about in the United States and in Europe and the Americas broadly, they are real and I think it's important not to minimize them. But they are not as life changing as some of the problems that so many of our fellow human beings are already facing all around the world.

In many parts of the world that are not commonly reported on the news, we have major famines already. There's people in my network who are dying of starvation and it's no laughing matter and I don't see an end in sight. So what I want to do in today's show is partly just talk.

I've struggled with where do I start? What do we talk about? So I'm just going to kind of shoot from the hip here and share with you some of the things that are happening, some of the things that I see as they relate to the global condition, geopolitics, what I'm expecting and preparing for over the next few years and what that means for finances.

This is not going to be a tight focused podcast on any one specific thing because there's really nothing new that can be said. That's as I've analyzed these things and thought about them and observed, the best takeaway that I come away with every time is something I've said here on the microphone so many times, which is simply that the basics work and the basics of personal finance matter more during the difficult times than they do in the non-difficult times.

And so I'm not here to say that there's anything new but just simply to talk about what to expect and hopefully to encourage you in the basics. I don't even know where to start. Honestly, I'm not even sure where to start. Right now, I think probably the place I need to start is certainly with inflation.

You can see in virtually all of the major economies around the world, we see the pressures of inflation. Now, the bad news is simply that we are not in normal inflationary times. My own metrics, these are not the metrics of an economist, so I'm going to define my terms.

I'm not an economist. I'm not going to make economic predictions and I'm not qualified to do that. But the terms I use is basically normal inflation is anywhere from zero to five percent per year of inflation rates broadly across an economy. That's basically, in my understanding, what most central bankers really shoot for, is that central bankers would really love to see a three percent inflation rate per year.

Under the prevailing monetary theory, the idea as I understand it is that this is the inflation rate that is ideal to maximize employment and to maximize economic productivity without getting into dangerous inflationary periods. So I define zero to five percent inflation as kind of normal inflation. Then we get into the world of mass inflation and mass inflation, as I use the term, would be somewhere between five to 15 percent per year of inflation.

There's no, that's an arbitrary number. So if an economy is experiencing a 20 percent inflation rate, I'm OK. That's a mass inflation as far as I'm concerned. But I just think of it in that like five to 15 percent per year. Beyond mass inflation is where you start to tip towards that word that we all don't quite know what it means, but it's really scary, called hyperinflation.

And so hyperinflation could really be anything from, I would say, a couple dozen percent, 20 percent. I don't think that I'd be pretty worried about using the term hyperinflation for 20 percent per year inflation. But I don't know another term to use. And so I think it could be used there.

Anything up to, you know, you can get hundreds of percent inflation per year, thousands or even a million percent inflation per year. There was a an article from Venezuela a couple of years ago that Venezuela had had a million percent inflation in the previous year. And so I my personal outlook that is on the record here in the podcast in the archives has been that I expect mass inflation in the United States where we are now.

But I don't personally expect hyperinflation or kind of the hardcore scenario. I think it's illuminating that the current inflation rates are basically the highest that the United States has experienced since the 1970s. And I think that the 1970s were a pretty good glimpse into the into in some ways what we are experiencing right now and or what we may experience in coming months and years in the United States, which is basically significant inflation rates, significant increases in cost and all of the knock on effects can lead to rationing, can lead to disruptions.

It leads to a very frustrated and volatile social climate where everyone knows that everything is harder, nothing is going well. Everyone is frustrated by that. And that leads to to social volatility, at least to political volatility, etc. But all things considered, I don't think that that goes into, I don't think it gets worse, worse from here to the point where we're shooting each other in the streets, or at least not in most of the Western nations that we're from.

So I hope that you'll hear anything that I have to say through that commentary. Well, I think it's, of course, possible, right, we can see that in any case that it's possible that things can go very bad very quickly and there's no reason to think that it couldn't happen here, wherever here happens to be for you.

Just that it's not there. I think there are good reasons to think that it's not likely. So we'll see. Hope that I'm not wrong about that. But the inflation costs are significant and different parts of the economy are being affected differently. And this is causing a significant, it's causing the effects of inflation to be felt differently by different people, depending on where each one is on the socioeconomic scale and depending on the lifestyle of each individual person.

Let me take a minute and go through the press release from July 13 from the Bureau of Labor Statistics in the United States. And I'll go through a few of the categories. So we have the non-seasonally adjusted inflation rate from June 2021 to June 2022 is for all items is 9.1%.

For food, 10.4% across the entire food category. Food at home, 12.2%. Food away from home, 7.7% increase over the last year or rate increase measuring over the last 12 months. Energy up 41% on a category. Fuel oil, 98% increase. All items less food and energy, 5.9%. We could go through some of the most hard hit ones.

Some of them, energy commodities, again, 50%. Used vehicles, 26% one year increase. Energy services, 11%. New vehicles, 10%. Tobacco, 8.5%, etc. And then those are the highest ones. So as always, one of the things that happens with inflation is simply that it hits certain sectors of the population harder than others.

So somebody who has a very tight budget, who drives a lot, which is very common in the United States. It's common that vehicle, because the United States is a very spread out country and it's a very vehicle intensive country. I think the biggest destabilizing factor is of course the food and the fuel.

Is that fuel affects Americans' budgets very significantly and it affects the lower earning Americans' budgets much more significantly than the higher earning Americans, the normal budget for higher earning. And for food as well. If you look across a population, those who don't earn very much money spend a very high percentage of their income on food and transportation and housing.

Those who earn a lot more don't generally spend a very high percentage of their income on food, fuel, and housing. And so these significant categories of food and fuel are really hurting a lot of people in a very, very deep way. And yet, if we look at the way that incomes are distributed across a population, because you always have 20% of the population earns 80% of the money and 80% of the population earns 20% of the money, right?

You have a normal standard Pareto principle, a Pareto distribution across virtually all categories, especially including income. Then you can see that if you have 80% of the population, certainly 20% of the money, and that 80% of the population is experiencing very high inflation to the categories that are a significant component of their normal monthly budget, that's a recipe for significant social unrest and very quick social change.

A lot of hurting people all around the country and all around the world. And then of course, what's the causal reason, right? You can argue about the causal reasons, it really doesn't matter, but we can see that the impact of these things are much more serious. I've been reading German news, been working on my German and so part of, we're doing a Sheetz family German project, trying to help the children learn German.

So as part of that, I read the news direct from Germany and in German every day using a translation software. And so I'm kind of clued in right now on the situation in Germany and it's tough right now with the shortages, the increasing costs, the major electricity costs. And it has the potential this winter to get very, very serious with energy rationing, very high prices, people quite literally may be very cold this winter across Germany and other parts of Europe due to the issues with the gas supply from Russia, etc.

So who knows, I don't want to make this show too timely in the sense that I don't want to comment too much on specific events, I want to keep this broad, but things are looking difficult on many of those factors. The good news is if you apply the basic principles that I seek to hammer on here on a regular basis, then hopefully you'll be fairly well protected against some of those things.

What are some of those basic principles? Number one, you always want to put your focus, and here we're just going down the Radical Personal Finance framework of wealth, you always want to put your focus on your income. If your income is low, then these issues of inflation hurt quite a lot.

If your income is higher, then they hurt less. And so you want to be focusing diligently on earning as much as you possibly can and on maximizing your income. And the audience of Radical Personal Finance here tends to skew to a very high income as compared to the broad scale.

And so I think that that's good and you want to keep on focusing on that. When you have times of disruption, disruption generally affects those who are ambitious and who are flexible less than it affects those who are really locked in. The best metaphor I can give for this is imagine, let's say you grew up in a Pennsylvania coal town.

There's a big difference between the economic situation that a guy who is say 50 years old who is a lifelong coal miner, who all of a sudden the whole coal industry just disappeared, of his options versus a guy who was 20 years younger and who was much more ambitious and who was heading for where the money was.

And so you want to always recognize that you always have the choice to go after something new or to increase your income in some way. And so sometimes that means taking on side work. Sometimes that means picking up extra hours or extra shifts. Sometimes it means doing the hard work to retrain, go after a new credential, a new skill, go into a new industry, go to a new place.

Remember that these factors, and let me pause for a quick thing. What I'm going to seek to do as always is to provide ideas and inspiration of how things can get better. I don't wish to be Mr. Doom and Gloom and talk about how bad things are without working on solutions.

I think that in every situation, no matter how bad your current situation is, you want to always be focused on searching for ways to make it better. That is a healthy and important life skill because if you're looking for ways to make your situation better, you may fail. But you're more likely to find ways not to fail than if you simply accept what is.

There's the old quote, I'm not great with reciting it as funny as the original people was, but basically, if somebody gives you a terminal diagnosis, then go find another doctor. If that doctor gives you a terminal diagnosis, go find a quack. And go find someone who's going to tell you what you want to hear and encourage you in a proper point.

Now, the reason that breaks down is that sometimes you need to know, hey, this is terminal. I need to put my affairs in order and you want to be realistic. So a proper balance of realism and optimism is important. But there were an optimistic mindset, a mindset of looking for solutions to my problems rather than simply sitting back and accepting that they're unchangeable and just griping and complaining about them.

It's much better to be the optimistic person who's searching for solutions. And in fact, that's one of the things that if you look throughout human history, I've been thinking a lot about kind of global geopolitical history. What you see is that when things get bad, people go looking for solutions.

And yet often you need to be at the early wave of going and looking for solutions. You have a famine in one land. Well, people pick up and they move. They move to another place where there is more food. You have a collapse in a certain country. People pick up and go to a country where there isn't a collapse.

And those who do usually face a very, very difficult time in making that transition. But once the transition is through, they're in a better place than if they just simply sat still and resigned themselves to their fate. The guy who said, "Hey, Pennsylvania coal industry is not looking so great.

I need to go to Atlanta and try for something new." Even if it took him a very difficult time period of years of difficulty and work, etc. At the end of it, he's got a solution that might work and probably would be better off than if he sat back and said, "I'm just going to settle for the collapse around me and do nothing." So I always want to be one to search for solutions and try to inspire you with ideas that can help you with solutions.

So the first thing you want to focus on is, how can I increase my income? Is there a way to increase income? And search for the best way to do it. The best ways being sometimes increasing the number of hours that you work, sometimes increasing the amount of work that you do per hour, sometimes increasing and doing more valuable work.

What you want to do is during times of economic crisis, you want to make sure that if at all possible you retain your job, or you retain your income, or you keep your business afloat. That should be your number one priority. Because if you have an income, yes, that income may be worth less and less because of inflation, but it's still better than no income.

Inflation hurts, but it hurts especially badly if you are unemployed. So focus on increasing your income. Number two is of course to look at expenses. And so ideally what you want to do if you're going to be building wealth is generally keep your expenses significantly below your overall level of potential spending.

And we see in difficult times that that works out better. So if we have a 9% inflation rate, and let's just say it was that you had a 10% increase in your cost of living. Well, again, if you have an annual income of $100,000, and you have annual expenses of $100,000, a 10% cost of living immediately starts to lead to you're going into debt.

And if not corrected quickly, that can lead to financial catastrophe. If on the other hand, you have $100,000 income, and you had a $60,000 annual expenses, a 10% increase in the level of your expenses increases your expenses to $66,000. Let's call it 70 among friends. You still have margin in your life.

You may not be getting as wealthy as you would like to be. You may not be saving as much as you formerly were, but you're not wiped out. And so that provides... So keeping your expenses significantly below your income always keeps you with wiggle room, with the ability to adjust.

And then exercising those muscles of frugality, understanding how to change categories in your spending when you want to, or when you need to, is also really, really important. You know, food, for example. We see by the Bureau of Labor Statistics data here that food at home has increased in the last year 10.4%.

But even though the category of food at home has increased by 10.4%, that doesn't mean that your type of food has... Your personal food costs have to have increased by 10.4% because you have the ability to make different choices. Now, this is what people naturally do. Steak gets more expensive, so they buy ground beef.

Ground beef gets more expensive, so they buy rice. But in most of the places where we live, food is widely available, and you may be able to adjust it. And adjusting the kind of food that you eat doesn't necessarily mean that you go hungry or that you have a nutritional deficit.

It can simply be an adjustment that you can make. And so with expenses, one of the skills that we always want to flex is simply, "Can I be happier or less?" So if you're not doing this already, right, I want you to imagine that things get worse. Maybe you don't need this now, but it's good to say, "How could I live on a grocery bill that was 30% less than what I'm doing right now?" For the vast majority of us, and I mean that, the vast majority of us, we could overnight, with good skill, cut our grocery bill in half without hurting as a family, without going physically hungry, without not having any nutrition, et cetera.

It's just that most of us make choices that are, we eat the things that we want to eat rather than the things that are good enough to fill our stomachs. And so practice those skills. And that's what, again, I feel silly giving this advice because you know this, it's something you already do.

But it's the same thing that we do in every category. And so we can often make choices that adjust and we can minimize our consumption in order to react to the marketplace around. There's a lot of people who, let's say it's the summer of boating, there's a lot of people who if going fishing, they would have gone 40 miles offshore, but with gas at the marina, right, we were just in the Keys a couple of weeks ago, with gas at the marina being six bucks a gallon, there's no reason to go 30 miles offshore chasing down the elusive, you know, mahi that you're chasing.

Why not just go out on the backside and go fishing in the flats or go near shore fishing or just putter out to the island and do less. And so we all have those choices. People are making these choices all across the country with minimizing road trips, high cost of fuel, let's stay closer to home, let's minimize the amount of money that we spend heading across the country.

And so, and again, I don't wanna sound tone deaf, right? Sometimes these are small adjustments that stinks that have to make them for many people, but these are small adjustments compared to people who may be very cold this winter. But we can make adjustments. Number three is to invest wisely.

And so investing wisely during times of economic uncertainty can often take on different, can look differently. Number one, in during times of economic uncertainty is where diversification comes in and plays a very, very valuable role in managing a portfolio. When things are going well, then sometimes diversification feels stupid.

When things are not going well is when diversification really protects you. So you wanna make sure that your investments are as well diversified as possible. You also want to be diligent about thinking about the term of investments broadly. And what I mean is in the United States, we have been trained by a financial industry that sells stocks to automatically think of buying stocks and mutual funds when we think of investing.

And yet there are many other ways of investing that can present themselves to you when you open your mindset up to the concept of thinking of investing broadly beyond simply stocks, bonds, and mutual funds. The example that I use to demonstrate this point is always the idea of buying in bulk, buying food, supplies, household goods, things like that in bulk.

If you travel the world and you go to many of the poorest parts of the world, you will see that at least every culture I've been to has some version of a local store or just a local retail store. In the Philippines, it might be a Sari Sari store or in Costa Rica, it's called a Pulperia or just some version of a local store.

It might be the 7-Eleven where you are. And if you go to very poor places in the world, you will see that people will work for the day and then they'll go to their local store and they'll buy small quantities of possessions. Really, one of the few places in the world that doesn't really exist is the United States.

Because of the high level of wealth in the United States and because of the car culture, the local stores, yeah, they've got Dollar Tree and those kinds of stores that do some of this, but that same kind of neighborhood shop doesn't really exist. But what happens all around the world is the shopkeeper will buy a medium-sized package of something and then will cut it down into very small packages.

And so you'll go and today you'll buy a baggie of rice and a chicken breast and then you take it home and cook it. But the cost there for that is very, very high on a unit basis. It's small in terms of the total cost outlay, but it's high on a unit basis.

So as somebody increases in wealth, one of the things that can happen is they have the opportunity to go from buying small portions to buying larger portions. And so somebody earns more money, now they can arrange transportation out of the neighborhood and they can go to the larger grocery store and they save money.

Maybe they arrange transportation and they have enough money, now they go to a big box store and buy large quantities of something. And this continues on up through the pricing factors. For individuals, it gets to the point of Costco or it gets to the point of someone saying, "I'll go ahead and have a couple of bulk oil tanks so that I can buy all of my oil two years in advance." And then it goes up to even a huge airline will make a bulk fuel purchase and purchase a year's worth of fuel contracts for its airplanes in advance.

And large companies will purchase large amounts of supplies. And so during times of inflation, we see that this strategy, however you can apply it to your personal categories of expenses, can be a very useful strategy. If you stocked up on food a year ago because you could afford to and you bought food that was shelf stable, well, there's a food at home category, a BLS statistics, there's a 12.2% increase or savings in your food category.

And if we look at things like, there's been significant increases in the prices of meat. If you went out and you bought a couple of extra freezers and you keep your freezers full of meat and you stocked up, right now you have about a 15% savings or equivalent investment return from having done that a year ago with a 15% increase in meat prices.

So pay attention to opportunities whenever you see those in your life. Moving on to number four in the framework of wealth is avoid catastrophe. Avoid catastrophe means take off your rose colored glasses and put on your blue glasses where you look at the world and you say, all right, what are all the bad things that could happen?

And how do I protect myself against those? And when I do this kind of analysis, I basically draw a line and I draw a line between normal approaches. So having health insurance, life insurance, disability income insurance, car insurance, homeowners insurance, et cetera. And then all of the basic, normal, everyday things of financial planning, having an emergency fund, those kinds of things.

And then I go to the extreme and I say, what is the extreme form of protection? If my entire industry got wiped out, what other skills do I have to rely upon? Where could I go for a job? Where could I move for a job if I needed to get a job?

Do I have enough food if there's actually not food in the grocery store? Do I have an alternative source of heat if I can't afford to pay the gas bill to keep my heat on this winter? What are my options? Do I have literally warm clothing? Do I have a tent that I could set up in my house to sleep in?

And again, I always wonder if I should even talk about those things in radical personal finance because my audience skews so wealthy, it's just probably not a concern. But if you look and you ask these questions, then you can find some of the solutions. There's a classic thing for heat.

I've been thinking about this because of the fuel situation, the fuel crisis, especially potential fuel crisis, depending on what happens with the gas pipelines in Germany. So if you look at old pictures, you will see the ways that historically people have handled this. In the modern world, where we have a gas heating system and we just reach out and turn the thermostat up and down, then we can enjoy having a nice warm house in the wintertime and the cost is generally fairly negligible for somebody who's normally employed and earning a reasonable wage.

But throughout history, it's not been that way. If you've ever heated a home with wood, then you would understand how much work is necessary to acquire wood. And if you were to go back a few hundred years, you find that even if you heated a home with wood, it was generally pretty inefficient to do that.

All right, the old idea of a cabin out in the countryside with a fireplace is an incredibly inefficient form of, an incredibly inefficient way of generating heat using a fireplace. And so the classic wood stove was a major innovation and helping there to be a more efficient use of wood and all of the ongoing innovations of better insulation, more efficient burns, etc.

So, but still, if you, and if you take the most efficient thing, right, a well-insulated house, a wonderful rocket mass heater in the house, very efficient burn, it's still really labor intensive for you to go out and gather wood to heat your home. And so you'd be crazy in a cold climate to plan to keep your home warm, excuse me, warm all day and all night by wood because it's a tremendous investment of energy.

And so people found solutions. You'll go back and you see the classic example of a nightcap and a nightgown. Why did, why do all the old pictures of Scrooge in a Charles Dickens book show him with a nightcap and a nightgown on? Because these are ways of keeping warm.

You have a warm cap and you have a long, warm robe to keep you warm. Then you get into your bed and what kind of bed is it? Well, it's a four poster bed or a cabinet bed where there's curtains around it. And so if you go look at old beds, especially in cold, sorry, in cold climates, you see that they were designed to basically be small tents.

And you would get into your bed, it would be a cabinet bed with doors of some kind or curtains. And this was a way of keeping yourself warm by needing to warm a smaller space with your body. Then of course you have blankets, et cetera. So you can go to just about any climate.

And if you go to bed with a nightcap and a nightgown and a nice bed that has thick curtains around it and lots of thick bedding and you put some hot water bottles in the bed, right? Another classic thing that has been used for millennia. Then you have the ability to stretch your heat out and to be comfortable.

So you can look at that and say, well, how could I do that in the modern age? Most of us don't want to live in a cabinet bed necessarily, but as part of the plan, right? A standard plan, if you have an emergency power outage and you have two weeks during an ice storm and you have to do without power for two weeks, then one of the most important things you can do is set up a tent in the living room, pile blankets on the tent, close the door, make one room the warm room and then pile everyone close together for body heat and try to maintain your body heat that way.

And so you can find versions of that that can work in the modern age. Poor people in cold climates historically, what happens in winter time? Well, they put up extra blankets and extra things on the windows to increase insulation. And so think about your situation and then think about how you can, if you're suffering from some major crisis, how can you avoid the catastrophe that may come if you can't afford your heating bill?

What do you need to do today to prepare for that? Avoiding catastrophe is, I think, it's obviously important. And you want to do it with both lenses. You want to do it with the normal financial lens and you want to do it with the non-financial lens. One of the things that I am continually, even more and more concerned about is the global disruptions due to major food shortages over the next year or two.

I've been worried about this for eight months, a year, something like that, really worried about it. Nothing has gotten better over the last month. It's only gotten worse. And at the moment, it's a major crisis. I was reading some of the UN reports from their, I can't remember the name of it, the Food Security Division.

And right now, there are regions of the world that are in famine. And there is a very good chance that will continue to spread. I hope that it's not as intense in the kinds of places where this podcast is listened to, which doesn't tend to be those countries. Much of the English-speaking world and many of the economies that we live in is not as affected.

But still, there are major, major red flags. And so I've been trying to figure out what does that mean for my family and stocking up on more food and trying to make sure that we have what we need for ourselves and to share with others who don't have what we have.

And I continue to be deeply, deeply concerned. So a word of the wise, I probably should speak even more sharply and notice I'm somewhat reserved in my comments. But I hope you can hear the concern that I have and that I feel and then take action as appropriate. I'll come back to that in just a moment because I do wanna talk kind of more broadly about the geopolitical situation.

But I'll come back. Let me finish off framework of wealth here. Then optimize lifestyle. Optimizing lifestyle is something that can always be done. And so usually when I talk about this, I say, listen, if you can earn $50,000 a year to job you love, and you can earn $50,000 a year to job you hate, just changing a job can make a big improvement in your lifestyle.

You can spend $4,000 a month living on a place that you love or you can spend $4,000 a month living in a place that you hate. And your choice of that will make a big difference in your lifestyle. And so you can optimize your lifestyle. What I would point out is you can optimize your lifestyle in good times and in bad times.

And sometimes I think you can do it more easily in bad times. Not that the actual lifestyle changes are difficult, right? Changing a house right now is not easy. Although that seems like it may have changed over the last month or so, perhaps. Some of the markets that have been so hot seem to be softening.

There seems to be a little bit more supply. We'll see. Especially with the increase in mortgage rates, maybe it is easier to change houses now. But fundamentally, the reason I say sometimes it's easier to optimize your lifestyle in bad times is that you get clear on basically what sucks about your life and what you want to change.

Let's use fuel as an example. Let's say that you've built a lifestyle that involves lots of driving and lots of commuting. There are lots of people that I have known around the United States, but there are many people who have built for themselves unconsciously a lifestyle that is very vehicle dependent.

They live in the suburbs far from their job. They don't really think about getting a job that's close to where they live. They drive a vehicle that is not particularly efficient in terms of fuel usage. And when gas is cheap, it's not really that big of a deal. This is traditionally an American thing because generally speaking, the United States, we have big distances, low fuel costs, and big vehicles.

Go in many other places in the world and you see that the fuel costs being much higher naturally leads people making different decisions. Live how you want to live, but I think it's silly to spend tons and tons of money paying for fuel to drive a vehicle that is inefficient and doesn't do the job if you can't comfortably afford it and it makes your life more heavy.

Let me rephrase. I think it's silly for you to spend lots of time working, especially if it's work that you don't really love and wouldn't do for free, just to feed a vehicle to maintain an inefficient lifestyle. And so sometimes one of the best things that a person in that situation can do is to move from the suburbs into the city, sell a car, and get into walking or biking distance from work or public transportation distance so they can eliminate a whole big category.

A guy who walks to work or who bicycles to work doesn't have the same pinch that the guy living out in the suburbs has with regard to fuel costs. But it's hard often to make that decision when everything's kind of working well. "Yeah, I live an hour from my job.

I don't love the commute, but no big deal. I live an hour and I got a big house and I got a big yard, et cetera." Well, now if that lifestyle isn't so comfortable, you can optimize lifestyle and move closer to your job so you have a lower fuel cost.

Or you can make some other change that's appropriate for you. Maybe your industry is really being hit hard by recession and it's really difficult, but you've always wanted to go to another industry. If your industry is doing well and you're earning well, it's hard to convince yourself that you should make a move because making that move, you're not sure that what you're going to is better and what you've got is pretty good.

And as human beings who fairly naturally assess risk, we look at that and say, "Yeah, this is pretty good. That might be better, but I'm not so sure." But during hard times where your industry starts to face difficulties, your company faces difficulties, then now you have extra motivation to go to something that's better.

So when you are in this place and in this way of thinking, remember to focus on optimization. And if there is a change in your life, a change of job, a change of career, a change of house, a change of car, a change of whatever, look at it as a way to say, "How can I go to something that's really, really great?

How can I optimize it?" And using the pain of the moment to move into that thing that is optimal is, as far as I can see, a really, really powerful strategy. It keeps you thinking in the right way. And you'll often make changes that you otherwise wouldn't make and enjoy the good things from it.

And sometimes, I guess, last comment on this is that recognize that when you can make a big lifestyle decision, sometimes you can put a whole bunch of things in order that you wouldn't otherwise. I use two examples to drive this home. And they're real examples, but here are two things to consider.

Number one, sometimes you need to downsize. And right now, there are probably many people who need to downsize. They have been living beyond their means and they need to downsize their lifestyle. But downsizing can be embarrassing. I always think of an example of a client that I had a number of years ago when I was a financial planner.

And this client, he had a big sales job, everything was going great. And then one day, he was eliminated from his job and got laid off. And he'd been living at his means and a little bit beyond, but he was stuck and he was struggling to get another job quickly.

And I remember just seeing the fear in his eyes of having to tell his children that he was gonna have to withdraw them from the local private school that they were enrolled in. Now, in his case, it went on fine. He was able to get another job. And as far as I can tell, I've lost contact with him.

But as far as I can tell, he's doing fine. But sometimes, if you have to look your children in the eye and say, "Children, I have to unenroll you from this school," that can be hard unless you have a good alternative. If the alternative is, "I have to unenroll you from this private school and we have to put you into local government school," which we don't think is a good fit, but that's all we can afford right now, then that's not so great.

But I've had other clients who have used it and said, "You know what? How can we accomplish our downsizing goals, but simultaneously make it a neat chance to have a positive thing?" So they took the children out of school, sold their house, bought an RV, moved into an RV, and spent a year doing the road schooling national park thing.

That's really exciting. By the way, I'm not recommending that in many cases because that can be financially... While it can be a way of saving money, it's not an obvious and clear-cut path to saving money. You got to be careful with that decision. But it's a way of saying, "How can we take this money that we don't have and substitute a better alternative?" And so let's embrace the change and then set ourselves up in a new situation and instead of it being going from a good thing to a bad thing, let's go from one good thing to a different good thing that also has these other features and attributes that we like.

Related to that, I always think of my Thailand example. There are people who have always dreamed of going and living on a beach somewhere. Well, one way to do that is to simply sell everything and move to Thailand. That's for many people or some other version of that, right?

Mexico, Thailand, Belize, whatever. That's often not a great solution, but for some people it can be. It can be a way of saying, "How can I trade in my $10,000 a month lifestyle for a $3,000 a month lifestyle and I'll use it as an opportunity to sell the house, take a bunch of profit from that, sell my car that is worth a lot of money right now because prices are up, and then go and take my savings and go to a low-cost living place, use that as a way to start my new business, get a new job, etc., and then stabilize and move into something else." So I hesitate to encourage too much the travel options, especially given my realistic experiences with travel, that it can be very, very difficult.

But it is the best solution that I see to say that sometimes you can make a change, even if it's downsizing your lifestyle to get back margin in your life, and it can be a positive thing all around. It doesn't have to be all negative and all deprivation, etc.

I want to pivot now, and this is why I didn't know exactly how to title this show because, of course, I could stretch this out into half a dozen episodes, but I'm going to continue and just make it a long episode that you can choose to listen to. I'm going to pivot now into talking about disaster predictions.

And such. I am deeply concerned, deeply, deeply concerned about many of these affairs and events that we've talked about. My biggest concerns are not currently hyperinflation or recession, etc. I think that I don't see any reason to not expect this mass inflationary environment to continue for a time. Maybe one of the central bankers can wave a magic wand and fix it.

I hope that they can. But I don't see any reason not to expect this to continue for a period of time and to have all of the associated pain. But even in terms of the geopolitical situation, the global trade, the transportation systems, the food availability, etc. I am deeply, deeply concerned.

Now, it's always hard for me to talk about that concern publicly for a few reasons. Number one, I've become fairly inured or to use a different word, I've become fairly inoculated against talking about disaster because during my entire lifetime, I've watched people make disaster predictions and consistently be wrong.

I first started getting clued into disaster predictions earliest I can remember was, I guess, two things. Number one, I remember I went with my parents to England when I was 12 years old and I started stumbling around English bookstores and I came across all these cool SAS survival manuals and I wound up buying three of them.

And I remember reading them on that trip and coming back and it inspired my interest in kind of wilderness survival from these cool SAS survival manuals that I found in the English bookstore. Then quickly following, I started to pay attention to Y2K. Now, I wasn't an adult during Y2K but I thought the magazines and the prepper magazines and survivalist magazines were cool and I would buy them and read them and loved all the cool Y2K preparations.

And then Y2K was a non-event and whether it was a non-event because it was never really a risk or whether it was a non-event because it was well, like people scrambled and protected the necessary infrastructure from is hard to say. But thankfully it was a non-event. And then I watched all of the egg on the face of all the people who had made these disastrous Y2K predictions because they didn't come true.

And then I got interested in, because I was aware of and paying attention to that sector of the marketplace, I got interested in the people who talked about the death of the dollar and the massive government overspending, etc. So I paid attention to it for, I've been aware of that marketplace since I was 12 years old.

During my lifetime, very few of those predictions have ever come true. Very few, almost none. Certainly most of the financial ones have never come true. The US government and many governments around the world have continued to borrow money. They've continued to, been business as normal. And it seems like there's virtually no limit.

Consumption, global consumption has increased. And my entire lifetime, nothing has ever come true. And so this has created for me a significant reservation to talk about disaster predictions and to be a doomer. Because I've observed over the years that those predictions didn't come true. Why not? And so the question is always, this is a hard question to answer with any kind of rigor, at least for me.

Did the prediction not come true because the analysis was flawed? Did the prediction not come true because some action was taken that was counter to it? Or did the prediction not come true because the timing was just wrong and somebody underestimated an effect? Let me give an example. I always, I often, for this, in this case, I think about the example in the Bible of the prophet Jonah.

To refresh your memory on the prophet Jonah, here's basically how the story goes. So there's this prophet of God named Jonah. And one day God speaks to the prophet Jonah. And he says to Jonah, "Jonah, I am going to destroy the city of Nineveh because they are a wicked and evil people and they deserve my judgment.

So I'm going to destroy them. But I want you to go and tell them to repent of their sins. I want you to go and wander through the streets and call them to repentance and say you are an evil and wicked people. You're gonna do that." Jonah says, "No, I'm not going." So he turns around and he runs from God.

This is the classic Jonah story. He runs from God and he goes in the exact opposite direction. So he gets on a ship and he's fleeing in the opposite direction. God says, "Whoa, no, you don't disobey me like that." So God raises up this great big storm. And Jonah knows the storm is for him.

The sailors are trying to figure out how they can survive the storm. And they're saying, "Cry out to your God." And Jonah says, "It's me. I'm the one who is guilty. And I've committed this great sin against God." I can't remember if they drew lots in that story or not.

But basically the sailors decide, "Okay, to save ourselves and our ship, we've got to throw Jonah overboard." So they heave Jonah over the side of the ship. The storm stops. God sends a big fish that swallows Jonah. Three days later, for what it's worth, I'm convinced that Jonah was dead for three days myself.

I think that the way that we teach children in Sunday school that Jonah was somehow alive in the belly of the fish for three days, I don't think it's borne out by the actual text itself. But that's kind of an interesting theological argument we could make. But three days later, Jonah repents of his sin.

Three days later, the fish spits Jonah out on the shore. Jonah repents of his sin towards God and says, "Okay, God, fine. I'll go to Nineveh." So he goes to Nineveh and he goes preaching through the street saying, "God has said I will destroy the people of Nineveh. And you all are very, very sinful." But what happens is that all of the leaders actually listened to Jonah.

And the whole population of the city of Nineveh, they listened to the prophet. And they say, "No, we are really sinful." They tear their clothes, repent in dust cloth and ashes. And God relents of his anger towards Nineveh and says, "Okay, you've repented. I'll give you another chance. I'm not going to destroy you." And so what's the best part of the book of Jonah is now Jonah is angry with God over his changed decision of not destroying the people of Nineveh.

And he says, "God, I knew you were going to do this. I knew you were going to do this. You said you were going to destroy the people, but I knew that if I went and preached to them, then you would relent because you're a kind and merciful God and you wouldn't destroy them." And so he goes out and sits underneath the bush and God deals with him.

And finally, Jonah realizes that he has to let God be God and that Jonah is not God. But when you think about the story, it presents this interesting set of philosophical questions. God said, "I will destroy the people of Nineveh, but I'm going to send my prophet to them." And then the people of Nineveh repent and God says, "Okay, because of your repentance, I will not destroy the people." So was God going to destroy them?

And then he knew that he wasn't going to happen. Was God actually not going to destroy them because he knew they were going to repent? Did the people's repentance cause the action or not? And it's an interesting set of questions. And so I apply the same thing to, you can take it to almost any question.

Okay, has this thing not come true? Did the city not get destroyed? Because there was never actually a risk of the city getting destroyed. God was just joking or he wasn't actually going to destroy the city. Or did the city not get destroyed because the people repented and then God changed his mind?

So applying that to that same kind of philosophical conundrum to a modern thing, is the US dollar still the world's most valuable reserve currency? Because there's no limit as to what the government can borrow and there's no limit to a fiat currency. Or is there actually a limit and we just haven't reached it yet?

Is it, how do you assess it? And it's difficult to know. And so I try to steer away from kind of hardcore negative decisions because I just don't want to have the egg on my face of having been the guy who's called for a global collapse every single year for the last 30 years.

And then eventually it comes true. Well, come on, right? You see that with some of the prognosticators in the space where it's like, okay, every year we call for a new recession every single year and the recession doesn't come. And then eventually it does come. And well, were they right?

Or were they just, that was their shtick and they got noticed because they called for a recession every year. The second reason that I am often uncomfortable with talking about crisis and such is that it fundamentally, it's very difficult to plan for crisis because it disrupts every other part of your life.

And I want to be the kind of person who presses forward to build the life of my dreams, the life of my family's dreams, build a community that's strong and presses forward for a better world. And so it's difficult to do that, right? It's hard to plan a summer vacation of your dreams when you just got laid off from your job.

And so you kind of have to put on either your rose colored glasses or your blue glasses. And it's hard to wear those hats simultaneously. For example, over the years I've watched people move out of the city, move to the country because they were convinced that the world was going to fall apart.

You could go back to the back to the landers of the 19, or the people who were fleeing from the prospect of nuclear war in the 1950s. You go to the back to the landers of the 1970s. You can go to all the Y2Kers of the 1990s. You can go to just at every stage along the way, there's people who have basically abandoned a positive viewpoint of life.

And they've said, everything's going to hell. And the only way that I can protect myself is to run to the woods. But then they run to the woods and everything doesn't necessarily go to hell. And so what's, did they make the right decision? Well, for some of them, probably so.

But I think for a lot of them, not so much. One of the things that really bothered me a number of years ago when I was thinking about these questions and kind of watching, and I do a lot of web stalking and listening to people and reading what people have is I found in the, I found there were three specific, I was, I have been interested for years in what's called the American Redoubt Movement.

And it's a term that was coined by James Wesley Rawls, who was a popular, he blogs at Survival Blog, has blogged there for years, wrote the popular Patriot series of novels. And he coined this term of the American Redoubt. Redoubt is a little used term that means basically a place of refuge, French word, place of refuge, place of fortress, place of retreat to a stronghold, to a refuge.

And what he did in his writings was he encouraged Christians and Jews to move from other parts of the United States to the upper inland Northwest, Montana, Wyoming, Idaho, and then eastern Washington and eastern Oregon. And he hoped to spark a passive relocation of conservative Christians and Jews to move to that region of the country in order to change the population so that there would be a stronghold of political conservatives, religious conservatives, et cetera, and that there would be increasing levels of community.

And I thought that was a cool idea. I've been interested in, I am still interested in the idea of basically people engaging in peaceful relocation as a way of changing things. You've got the Free State Project in New Hampshire. I was interested in the Free State Project in Wyoming and some of that.

Most of that stuff has pretty much fallen apart. It's not, I mean, it doesn't have any real significant impact as far as I can tell. But it's interesting to think about the possibilities of people just simply moving together in a concerted effort to work on it. If you're interested in an interesting novel on that topic, you can read Boston Tea Party's "Moulin La Baie," which is written basically about his annoyance with the fact that people moved to New Hampshire for the Free State Project in the US rather than Wyoming.

It's an interesting novel. So I followed it. But one of the things that I observed kind of by watching that movement is I found three prominent voices in that movement, three distinct individual voices, all of whom are media creators, all of whom are influencers in that space. And basically influencing people who are survivalist-minded to move to the country, specifically to move to that region of the country and set up a stronghold.

All three of them were men. All three of their wives divorced them because they didn't want to move to the country and live in the country and live in this, you know, a little bit of a rural area waiting for, you know, the next civil war. All three of them.

And when I looked at that, I thought like, this is so under-discussed. These risks are so under-appreciated. And I am not moving to the country if it means that, especially if, now here's where you have to be careful, right? If I were convinced that I had to move to the country to save my family, then whether my wife agreed it with me or not, I guess at some point you almost have to say like, I have to, but I'm not going to go if I can't convince her.

And if the end of the world isn't materializing, then I'm not going to lose my wife over something so silly as moving to the middle of nowhere for this danger that could occur. So bring it back to today. I think that you have to be very careful about embracing a prediction and saying this certain thing will happen and then making your life plan based upon this and then not having a plan if it actually doesn't happen.

I think here of the doomsday cults, people say, well, the end of the world is going to be on this certain day and everyone goes and sells all their stuff and racks up all kinds of credit card debt. And the end of the world doesn't come on that day.

And so this is why I've always loved Jack Spirico, the host of the Survival Podcast. He's been on the show. I've always loved his intro line where he says, teaching you to live a better life if things get bad or even if they don't. And I think that's what you should always, you should never settle for a plan that only works one-sided.

You should always settle, you should always make a plan that works on both sides. You should make a plan that works if everything goes bad and you should also make a plan that works if everything goes great. And so this is why for me, in my own planning, I'm a big fan of the plan B, meaning I want to have my primary plan B on everything going great, but I also want to have a plan B in case everything doesn't go great.

The problem is, how do you know when everything's not going great? How do you know when it's time to flee, right? How do you know when it's time to go to the airport or get in your car and go to your bug out location? How do you know? And I realized a couple years ago at the beginning of COVID how difficult it is to ever know that, is that the world doesn't work generally in terms of cataclysmic events.

Even when those cataclysmic events happen, I mean, just imagine this, for example, okay? Imagine that tomorrow, July 15, 2022, a nuclear device detonates in, it could be a major global city, but let's just say a major American city. What does that mean? Well, it would obviously be a huge deal, but it would be hard to know what to do with that.

Certainly there would be people that would be killed immediately. There would certainly be radioactive fallout, but even that, even if the worst case scenario suddenly came true, it's not like the whole country is wiped out. Rather, there's still hundreds and hundreds of wonderful cities that would be very little affected.

So when you think about it, it becomes maddening to figure out how would you even apply, how would you figure out what to do? Because life change happens so suddenly, sorry, excuse me, I meant the exact opposite, forgive me. Life changes happen fairly gradually and then you kind of get used to a new normal and you say, "Ah, it's not so bad." It wasn't so long ago that we were talking here on the show, well, what would you do if Russia invades Ukraine?

Well, they're not going to invade. Yeah, they are. No, they're not. Then Russia invades Ukraine. Well, now pretty much we've all gotten comfortable with the idea that Russia has invaded Ukraine and not at top of the news much in most cases. And so we kind of adjust quickly. And so my point is I hesitate to predict bad situations because I worry with, am I really certain in what would really happen?

And am I really going to commit myself to bad situation? Just before I recorded this podcast, I was in the kitchen with my wife and we're talking about it. I was saying like, "I don't know how to analyze this. I got to make a podcast. I just don't know how to talk about this in the right way because you get it wrong and it all goes, somebody makes the wrong decision." So I'm often cautious.

The third thing is personal to me and not personal to others. But I was realizing this. I've been reading Peter Zyhan's new book, came out a few weeks ago, called "The End of the World is Just the Beginning, Mapping the Collapse of Globalization." Sorry, yeah, "Mapping the Collapse of Globalization." It's a very compelling book.

I think it's on the New York Times bestseller list right now. And I started reading it the day it came out. And in going through it, and I will probably do more content on it in the future, kind of a book review and book study, because I think it's important to factor some of what he comes to.

And it's affirmed some of the conclusions that I've come to independently of the book. But one of the things that he quoted in that book, and let me give you the thesis of the book. The thesis of the book by Zyhan, and for context, Zyhan is a geopolitical analyst, and he has written a series of books.

One is called "The Accidental Superpower," and basically plotting what's happened in geopolitics. And then this book is him saying, "Going forward, what has happening?" And his basic thesis is this. At the end, as I understand it, I haven't finished the whole book yet, as I understand his thesis is this.

At the end of World War II, the United States basically made an agreement with the world and said, "We're not going to, you know, we've engaged in this huge military action, we've won these wars, we're not going to occupy all these countries. We're not going to, there's no better way to say it, we're not going to occupy all these countries." Which is often normal when a country, you know, attacks and then loses, is the victor occupies the country.

We're going to, in essence, withdraw. But what we are going to do is we are going to establish a new order, a new world order of basically American security being provided to the world. And a lot of this comes out of the Bretton Woods Agreement, where the United States says, "Okay, we're going to make sure that the world is at peace." And then going forward over the decades, especially with the rise of the Soviet Union, they said, "If you will be on our side against the Soviet Union during the Cold War, if you'll be on our side, we'll basically guarantee the security of the world." And so, in essence, since World War II, the United States has policed the world, policed especially the world's oceans.

They have kept the world's oceans free of attack, free of violence, with a few limited exceptions of localized piracy along the coast of Africa, etc. Basically, security has not been an issue on the high seas since the United States instituted the new world order that was instituted post-World War II.

And the United States basically said, "We're going to keep all of the conflicts tamped down as much as possible." So, from time to time, that has resulted in unfortunate military actions and bombings in Kosovo and invasion of Iraq and Afghanistan and whatnot. But basically, the United States said, "We're going to keep everyone from fighting with each other, at least on too big of a scale." But what Zayin's opinion is, is simply that the United States is no longer committed to that policy.

And for reasons that I can't yet figure out, I think it may be in one of his other books, and I need to go back and find if he's written about it, but his basic opinion is the United States is retrenching. The United States is pulling back from that position.

And because the United States is pulling back from that position, the future is much less certain, because that global sense of security and safety is not going to be guaranteed by the United States. There's very little political will in the United States for global military action. Everyone's pretty much tired of wars.

No one really cares much anymore. The average American just says, "Why are we there? Let them fight it out. We don't care." And so, if that's the case, then what happens? And so, Zayin goes in that book, he goes through all the risks and outlines what are some of the potential impacts.

But he makes several statements in the book about where we are and what we have lived through over the last few decades. Let me read you a brief quote. And he starts his book with a detailed discussion of demographics, which was fairly shocking to me, because I thought I was clued in on the question of demographics and the demographic collapse and the population collapse that we're facing on a global basis.

And yet, his numbers blew me out of the water, and I haven't found any error in his numbers yet. But again, that at least will be for a different show. But in the commenting on demographics, he indicates... Let's go ahead and read these two pages. "Between roughly 1980 and 2015, all the world's internationally wired systems fell into one of two broad buckets.

In bucket number one were those countries relatively early in their demographic transitions. Mortality was rapidly falling and lifespans were rapidly expanding, but the drop in birth rates had not yet led to catastrophic reductions in the number of young workers. These countries were ravenous and not just for food. Most of the spending a person does occurs between the ages of 15 and 45.

That's the life window when people are buying cars and homes and raising children and seeking higher education. Such consumption-led activity is what drives an economy forward, and this bucket of countries had consumption to spare. The countries in bucket number two were further along. Mortality was still falling and lifespans were still expanding, but the pace had slowed.

After all, these countries had generally begun their industrialization a few decades earlier, but the drops in their birth rates had also begun earlier and the dearth of children in their demographic profiles was becoming obvious. Priorities changed. Fewer children meant fewer resources needed to be expended upon child rearing and education, while more could be splashed out on cars and condos.

Older populations had accrued more capital, enabling more money to be saved and invested. These aging societies did not become less dynamic, but instead more so, because they were able to develop and implement technologies at a more rapid pace. Productivity surged while the products became more sophisticated. What these countries lacked was enough young people to consume what they produced.

In this, the Americans accidentally provided the solution. Not only was a central tenet of the order that the American market would be open to all, but also the American security commitment to holding up the world's collective civilizational ceiling meant that these older demographics, these export-led economies, could access consumer markets the world over.

Consumption-led and export-led systems were not simply in approximate balance. The Americans' seeing to the world's security concerns enabled a truly globalized world to not only emerge, but thrive. But there is nothing about it that was normal. Globalization was always dependent upon the Americans' commitment to the global order, and that order hasn't served Americans' strategic interests since the Berlin Wall fell in 1989.

Without the Americans riding herd on everyone, it is only a matter of time before something in East Asia, or the Middle East, or the Russian periphery, like, I don't know, say, a war, breaks the global system beyond repair, assuming that the Americans don't do it themselves. But even if the Americans choose to continue holding up the world's collective civilization, civilizational ceiling, there was nothing about the heyday of globalization that is sustainable.

The halcyon days of 1980 to 2015 are over. The collapse in birth rates that began across the developed world in the 1960s and across the developing world in the 1990s now has decades of steam behind it. And in a later passage, after talking more extensively about individual countries, et cetera, he closes the chapter with this.

He says, "There are a few bright spots in this deepening gloom, but only a few. A precious few countries have maintained a high degree of development while simultaneously avoiding a collapse in birth rates. It is a painfully short list. The United States, France, Argentina, Sweden, and New Zealand. And that's it.

Even if politics aligned, even if everyone's hearts were in the right place, even if all the Americans and French and Argentines and Swedes and Kiwis wanted to put the rest of the world's needs in front of their own, the sheer scale of humanity's demographic turning means all of them combined would not comprise nearly enough of a foundation to support a new global system.

By most measures, most notably in education, wealth, and health, globalization has been great, but it was never going to last. What you and your parents, and in some cases, grandparents, assumed as the normal, good, and right way of living, that is the past seven decades or so, is a historic anomaly for the human condition, both in strategic and demographic terms.

The period of 1980 to 2015 in particular has simply been a unique, isolated, blessed moment in time, a moment that has ended, a moment that will certainly not come again in our lifetimes. And that isn't even the bad news. So we'll save the rest of his catastrophic predictions for a different conversation.

I have some differences of opinion of him, but I just hope he's wrong. But the point is that period, 1980 to 2015, or say 1980 to 2020, or say 1985 to, or 1990 to 2022. And I think you see the cracks, especially in the wake of the last two years with COVID.

You see the cracks of the world that has always been normal. The problem I face is that my entire lived experience, the only time I have been on this globe, has been during that period, that period that he refers to as the Halcyon days of 1980 to 2015. So my entire lifespan, everything has always gotten better on every single, on almost every single metric.

And if you look at the world, you can find very, very good, very, very good reasons to believe that everything is always getting better. I'm a big fan of Matt Ridley's book, "The Rational Optimist." And basically the point of Ridley's work is everything is getting better, right? And here's why, and here's why you should ignore the doom and gloom, etc.

So the problem is, if I look at history, my entire lifespan and all of my personal experience has been in conflict with history. That during all of the recorded history that we have, the normal course of the world has been periods of growth and decline. The normal course of the world has been times when empires have expanded and when empires have been wiped out.

The normal course of the world has been new cities planted, new cities demolished. The entire course of history has resulted in expansions in food supply and then major famine. And it's those negative times that disrupt things dramatically, that change generations, that change everything, right? My grandfather grew up during the Great Depression and as all people, or excuse me, was a young man during the Great Depression.

And so as all people, he was shaped by his era and I have been shaped by my era. And so it makes it very difficult for me to articulate and believe that anything can get worse. If I were, you know, just simply a month ago, if I were saying that people in Germany may not be able to keep their houses warm this winter, that would sound like crazy talk a month ago.

And yet today, those are newspaper headlines and a very active thing, that there's energy rationing in Germany. Like that's a big deal. It's a huge deal. And yet we adapt to it. So I share all that to say that I struggle with making negative predictions, but never in my life have I felt it more important to come on and say, "Friends, I'm concerned.

"I'm concerned about many of these issues. "And I think that there are very good reasons "to think that they're going to continue "to be difficult for us." And I think we saw the cracks of that. And we saw the cracks in globalization with the coronavirus pandemic. And we continue to see the effects of that.

And those effects are being felt differently in different parts of the world. In the United States, they're not that bad. Everyone I know in every industry talks about the shortages that they're facing. And that's something that's new. But at its core, you still have a mostly functional society. There are many other regions of the world where right now people are literally starving.

And while I don't think that, I again think that the United States would be quite insulated from many of those things and many other places in the world where I have a listening audience will also be insulated. I believe that this is a good time to be concerned. So if there's something in your financial life or in your personal life and your personal situation that is out of whack, you have basically a golden summer here to be working on it.

Because six months from now, there are big storm clouds out there. So that's what I'm doing right now. I had a nice vacation. I enjoyed my time. And I'm seeking very diligently to make hay while the sun shines, to steal the old axiom. That if things are going well for you, double down.

If you have an income, double down. Work as hard as you can to see to your own success and to the success of those around you. If you can cut back your expenses and increase your reserves a little bit, this is a great time to do that. If you are not well positioned for something, this is a great time to position your family better.

Don't be lazy right now. Be working. Because this is a good time to be working. Because while I think that, I hope that the world is, I believe that the world is going to be much better and a much better place 10 years from now, over the coming months, there are a lot of headwinds.

And so please be prudent in all of your preparations. When I think about preparing, I think about it in basically two buckets with part one and part two and two A and B. So part one is mainstream financial planning. I've already gone over that. Do all the stuff that you know to do.

If you're in debt, get out of debt. If your debt is in risky debts, move it to safer debts. If you can renegotiate, renegotiate. If you don't have an emergency fund, save an emergency fund. If you're not well employed, seek out a better job. If you're living beyond your means, stop.

So all of, if you don't have insurance, get insurance. If you don't have, you know, if you're not, if you haven't taken squared away, all the stuff that your financial advisor would tell you, do that. Part two is, what if there are disruptions in the financial system? And so I think of that in two basic phases.

Number, for phase A, is how do I make sure that I stockpile the things that I need? If my business depends upon something that depends upon supply lines, if I can still get it, try to get it. If there's, if I don't have food in the pantry at home, stock food.

If I don't have, you know, a car that's functional, go ahead and get a car that's going to work for a while. So basically preparedness, you know, thinking through, what do you do? By the way, I should put this, I'll go ahead and, I should put this in the feed of the classic, how do you do this?

Classic, how do you prepare for inflation? Basically you buy all the stuff that you think you're going to need for the rest of your life. That's the way to prepare for inflation. The best way, it's called the alpha strategy. Then part two B is, how do I have a plan to go from where it's bad to a place where it is potentially better?

And so this involves a lot of my global relocation stuff, right? I have internationalescapeplan.com. And basically what you see right now is that there are countries of the world right now where food is in very short supply. And there are countries where food is abundant. And so most of the people who live in the places where food is in short supply don't have the ability to relocate.

But if you do, then one of the best things you could do is go where the food is. And so having in place an international plan to go from one country to another country is a really important scenario. Check out my course, internationalescapeplan.com. Make sure that you have passports for your family.

Make sure you have an idea of where you would go. I think in many cases for Americans, there's every reason to believe that the United States is going to be the best positioned place as compared to other people. I don't live in the United States at present, but I keep my go bag ready with our US passports, and I'm very grateful to have them and a plan to go to the United States if where I'm living it got bad.

So in many cases, I think having a plan to go to the United States could be a very, very important back up plan for you. And I talk about that in my course, getting squared away, right? If you don't have a visa to go to the United States, now's the time to get a visa as a visitor.

If you don't have easy access, now's the time to get that stuff squared away because the US is the most difficult place to visit as a visitor, as a tourist, and as a traveler. The immigration system is one of the world's most difficult. So at least having the ability to visit and getting your visitor visas and whatnot squared away would be an important point.

And then of course, the bulk of my audience in the United States. Just because the United States is positioned very well doesn't mean that there can't be reasons why other places are better. And so the same thing, having a plan to go to another place is also very important and very prudent.

At its core, none of what I have said today is anything fundamentally new. Since the very first step, since the very first handful of episodes of Radical Personal Finance, these are things that I have been discussing. And at that time, I had a rough outline of these ideas. And today I have a very clear outline of these ideas.

And in essence, what I'm seeking to do, in hopefully a useful way, is simply to articulate my thinking on this, to be faithful, to share my concerns with you while also sharing the best solutions that I have. And the way that I've tried to resolve these conflicts, back to those three conflicts, is I want to focus first on imagining clearly the life that I want to live in all of its splendor and glory.

And I want to work and spend 80% of my time working on that. I also want to put on my doom and gloom glasses regularly. And I want to make a plan to say, "How can I protect myself if my life doesn't go well?" And I want to spend 20% of my time working on that.

And so I want to continue to keep, as best possible, 80% of my time and focus and attention on the good things. And I feel like I've even recently, too much negative, you know, too much doom and gloom stuff. I don't want to be the doom and gloom guy.

But we do need to spend time preparing for it. Because I think there are good reasons, while I hope that Ridley is right, and I hope that Zyhan is wrong, there's a good chance that it's a combination. So I'll give you just three people. We'll call this the Ridley model, the Friedman model, and the Zyhan model.

So here they are. Ridley, Matt Ridley, he's the author of an excellent book, "The Rational Optimist, How Prosperity Evolves." And Ridley basically has the thesis that, yeah, we're all going to die. And he basically has the thesis that everything in the past was bad and everything in the future is good.

And it's going to be wonderful. The second model, what I'll call the Friedman model, is a book that I read, I guess a couple of years ago. It's called "The Storm Before the Calm." And Friedman model says, the 2020s in the United States, and on a global basis, but he was focused a lot on the United States in that book.

The 2020s in the United States is going to be a very, very volatile and disruptive decade. And it's going to be a lot of trouble, but it's going to, the changes that happen, and he's big on his models. The things that are happening in the United States are temporary, right?

So maybe it's 10 to 15 years of disruption and unrest, et cetera. But then it's going to set the stage for the next great prosperous boom, the next great tremendous growth period. So we'll call that the Friedman model. Then the Zaihan model is that this is the end of the world as we know it, and everything in the future is going to be, this is the peak of human civilization.

And we have no model to think that this globalized world that we've lived in for the last 30 to 40 years has been the peak. It is without historical antecedent, without historical model. And there is every reason as he goes on in exhaustive detail to believe that it will not continue for the future.

Now, he doesn't know what the next model would be, right? Maybe 20 years from now, we'll have created a new model that will work. And again, I'm not clear on, I have some questions on his analysis, but we'll just call those the three models. The Ridley model, the Friedman model, and the Zaihan model.

In the Ridley model, meaning, hey, the world is great, and everything's going to get better. You and I still face individual personal risks that need to be protected for. And so we need to be prudent and spend 20% of our time preparing for things that could go wrong. We buy life insurance, we have emergency funds, we have a water filter, we have an extra source of heat in case we have an ice storm that knocks out the power.

Or, you know, I grew up in Florida. We have a generator and an air conditioner so we can at least air condition one of the rooms after the power goes out. So we can all sleep well at night. So if Ridley is right, we should still spend 80% of our time focusing on the good, and 20% of our time preparing insurance for the future.

What about the Friedman model? Well, in the Friedman model, we face a difficult coming decade, decade and a half, something like that under his analysis, which I see no reason to doubt. I think it's good. So if you prepare for a difficult next decade, that's not the end of the world.

I still think you should spend 80% of your time focusing on the optimistic model and 20% focusing on the small things, or sorry, on defense. And the reason is, any kind of broad scale analysis, and it's important that you recognize this, any kind of broad scale analysis doesn't necessarily individually apply to the individual.

So let's say we look back at COVID. We could say, well, COVID was a really bad time. It was a really bad, it was a global pandemic. It was really bad for everyone, but it wasn't really bad for everyone. COVID was pretty bad for most people, but there were some people that made tremendous progress in their lives during COVID.

There were people that lost weight 'cause they started running every day. There were people that started new businesses. They stayed home and learned how to code. There were people that started homeschooling their children and found a wonderful new thing. There were people who their business grew massively because they were able to access people in a new way.

There were always people who found solutions in the middle of the problems. So in the Friedman model, you still wanna be focused on the positive, but you still needed that defensive management. On the Zaihan model, even if he's right and everything is bad for the global, we're living in a world of deglobalization going forward, and that leads to all kinds of disruptions.

That may be true on a macro level where historians will write back and will comment on the era and talk about what happened on the macro level. But for the individual who's aware, who's clued in, the individual will still face plenty of opportunity. There will always be opportunity for individuals who have a broad appreciation of what's happening in their world and who are looking for opportunity in it.

People will innovate. Entrepreneurs will bring new solutions. They'll bring new approaches. There's a reason why we have the axiom that there's a silver lining to every cloud. I can look back now at COVID and I can see many good things that have come out of COVID, many good things.

The most relevant one here, at the beginning of COVID, I recorded an episode, said your biggest opportunity is to get to remote working. Many of you have said you've got it from remote work, from COVID, and it's wonderful. It gives you the opportunity to live wherever you want to live and it's an amazing life improvement for many people.

So COVID wasn't all bad. It made remote working totally normal to where the point being that my children will always be able to access a global marketplace in virtually any career and do it virtually. And they don't have to go through silly, you know, how to work from home things that I was interested in back before, around the turn of the century.

Other things that came from it, right? There's been basically, I think, a doubling of homeschoolers in the United States. That fills me with, that is to me, my biggest thing. There's biggest good that came out of COVID. There's been a major change in the schooling system in the United States over the last two years.

And I think a big influence was that so many schools sent their children home to do remote learning. And this has had massive effects in the education marketplace in the United States. It's led to many parents seeing how we could take this on various levels, how at a waste of time, a lot of their children were being subjected to in their schooling.

It has led to many parents being aware of some of the crazy stuff that was being taught to their children. There's a brand new bill passed, a school choice bill passed, and I think it was Arizona. That is a huge deal that conservatives have been fighting for for many, many years.

And I think that probably largely came out of COVID. The amount of engagement and involvement with parents in the school system right now is higher than at least I'm ever aware of it being. And then what we see right now with even a doubling of homeschoolers, that fills me with joy because I think that that is the key to creating a new generation of bright, intelligent, engaged, smart learners who can chart out new and innovative solutions for the problems that we'll face as a society in the future.

And where there's a doubling of homeschoolers, there'll be a doubling again. And if we got to, I mean, already with the relatively low numbers of home-educated students we've had, it's had a major impact on the society. If we got to say 5% of students in the United States being educated in homeschools, in addition to the wonderful private schools that are out there and the new models that people are seeking to point out, that is an incredibly bright lining for the future of our youngest generation.

And so there are many reasons to be positive about the future. Realism, I think, would say that I don't know the future and none of those guys know the future. All three of them are smarter than I am. And so I fall back on what I believe is the core principle.

Spend most of your time focusing on a life, on a world that is better, and then spend a good amount of time putting in place a good and robust backup system. Do it financially, good cash reserves, insurance. Do it physically, good physical preparations, stockpiling the things that are necessary for your family and your lifestyle, and doing it with a relocation plan.

That's the best that I can come up with that is practical and reasonable in terms of the costs and the investment, et cetera. Now, there are big questions that I haven't covered. So for example, what about my investments? And that is the hardest question that I simply don't know the answer to.

What happens in the future to my stocks, to my mutual funds? Nobody knows. Nobody knows. And again, we hear we can read analysts and we can find very smart analysts that all give compelling answers for all of those things. I was gonna make this a separate show. Maybe I will.

Let me just give you about a few minutes on this topic. What about my investments? What if I'm trying to live on the investments from my portfolio and this is my income? What do I do? Well, here I think while there may be many and almost certainly will be many economic challenges, I don't see at its core why there is any kind of collapse event in financial markets.

At its core, if we think about what a market is like, it's a company. What do stocks represent? They're shares in a company. And so will companies make as much money in the future as they do today? Well, some will, some won't. Will companies be impacted by, let's say, Zahana's right, and we're living in a less globalized world.

Will companies be impacted? Absolutely they will. But does that mean that they'll collapse? No, they'll find new ways. Certain markets will be disrupted. One of the things that's so interesting, he makes the point about how the global insurance-- what was the triggering event? The global shipping insurance market would almost collapse because of basically one event.

So many markets will be disrupted, but I don't see any reason to change the fundamentals. I'm not calling to say, sell all your stocks and buy gold. But by the same token, I think good, prudent diversification strategies hold true. You want to live in a place that gives you a good lifestyle.

You want to-- especially as your wealth increases, you want to be prudent, and you want to eliminate debt so that you can still live in that place with moderate expenses. Beating the market is not an intelligent financial goal. Providing yourself with what you need and your family needs is an intelligent financial goal.

So the basics of personal finance-- buying a house, paying it off-- that still works. I think stocks, mutual funds still fundamentally work. And I think that there's good reasons to think that basing most of your investments in the United States is the strongest investment markets in the world. I was going to talk, and if I do it, I'll save it for a different show.

But one of the things that I have been very clued in on over the last three years of my being outside of the United States is I now appreciate the United States much more than I ever did. And most of my issues with the United States have been-- many of them have been resolved.

And I think that it's an error to discount the United States too much. I think that every American should have money in another country, in other currencies. But I think that every non-American should have money in the United States, in the United States stock market. And that in the future, there's good reasons to believe that the United States will continue to be powerful, will continue to be a leader, will continue to have some of the best companies in the world, and will respond to the market conditions.

And I think what I would point out is that you should then continue to diversify your own approach. The guy who's got $3 million in stocks and, say, a half a dozen rental houses probably has a smarter plan than the guy who's got $4 million in stocks and no rental houses.

I wouldn't worry if I had $4 million in stocks and no rental houses, but you'll probably sleep better at night if you've got some physical property, some physical property, some physical assets, some to match your financial assets. And then you want to make sure, again, that you have all of those basic preparations of things that your family would need.

And so as I've come to it, right, this is the classics throughout human civilization, my financial goals. I want to have a nice farm that is in a safe part of the world that my family loves to go to. I myself don't want to be a farmer on a daily basis, but I want to have a nice farm.

And I want to have people who work on the farm and take care of it for me. And that's part of our family's portfolio of retreats. And so we have a good foundation for a family property that can continue through generations. Match that up. The reason I refer to a farm is you always want food security.

At its core, you want to have a safe piece of land in a safe place in the world where you have food, you have water, you have shelter. You have those basic things of human existence to gather your family together in a time of crisis. I want to have a business.

I want to have a family business that provides us with significant amounts of income, that provides us with interesting work so that we can contribute to the society around us, that provides us with the opportunity to give opportunity to our children, to our children's children, to our extended family, et cetera.

When societies break down, family is always becomes more and more important. In the United States, those of us from an American culture, we've enjoyed such an open society that has helped many of us to feel part of the dominant culture. And that has meant that we have relied less on family and on relationships than many other cultures.

If the US society faces significant challenges, then we will naturally do what societies always do, which is to rely back upon family, extended family, and people within our local community, affinity groups, social groups, et cetera. And so simply having that, building the classics, it doesn't sound much different in 2022 in terms of the normal ambitions of a normal guy like me.

The ambitions in 2022 are not that much different than they were in 1922 than they were in 1822. We may be able to get around the world a little bit more. We may have a little bit more information, but at its core, the basic needs of humankind haven't changed much.

Roof over our heads, food on the dinner table, being surrounded by loved ones who are flourishing, our family tree growing, et cetera. These are the common things. And these things, regardless of what the future holds, be it a future of abundance and prosperity, or be it a future of difficulty and scarcity, these things are eminently achievable by diligent people who focus and who work and who make a plan and accomplish it.

So there is a fairly large and lengthy welcome back from vacation show for you. I honestly don't even know what the title of this show, but I hope you have enjoyed it. And I hope that it helps you. Just watching things, I wanted to respond. And I try to not talk too much about the news of the day, but I think these news items of these days need to be addressed.

So thank you so much. As I go, I will plug the international escape course that I mentioned, internationalescapeplan.com. I don't regret-- while I think there's a good chance I'll wind up moving back to the United States in the coming years for some of even these geopolitical factors, I am so grateful for what I have done.

Because today, I can move back to the United States with a free and open heart, knowing that I'm not stuck there like I was a few years ago. And so if you're interested in how to make a plan to unstick yourself from any country, whether you're from Pakistan or from the United States, whether you're from Argentina or from Germany, to unstick yourself from any country, go to internationalescapeplan.com.

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