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Ralph's. Fresh for everyone. Welcome to Radical Personal Finance, a show dedicated to providing you with the knowledge, skills, insight, and encouragement you need to live a rich and meaningful life now, while building a plan for financial freedom in 10 years or less. My name is Joshua. I am your host today.

It's Friday, September 1, 2023. And on this Friday, as we do every Friday, in which I can arrange the appropriate technology, we do live Q&A. If you'd like to gain access to one of these live Q&A shows, go to patreon.com/radicalpersonalfinance. Patreon.com/radicalpersonalfinance. That will gain access for you to one of these live shows.

We begin with Mike in Minnesota. Mike, welcome to the show. How can I serve you today? Hey, Joshua. You and I actually last spoke on April of 2022, and I was asking you about a plan for spending five months abroad with my wife, who's from South Africa. Awesome. So we've made that our goal.

I got a remote job and my wife tailored her business to the opportunity. So we'll actually be bringing two flights of wedding photographers from the US to a safari lodge for high-end niche wedding content. So I'm proud of her for planning this and putting it together. And I'm happy that we're making this goal a reality.

We'll leave in November. But that brings me to my question. I've never thought about health insurance while we're abroad. We've been over there at most for a month's stay at a time. And so I've always been insured through my workplace. You know, high deductible insurance. We're not at the doctors often.

But should I be considering health insurance while we're abroad? While you're abroad, are you abroad simply as a tourist living on a tourist visa or did you set up any kind of residential visa for where you are living? My wife is still a citizen in South Africa, and I will be there only on a tourist visa.

Okay. So ordinarily, if you're not there on a tourist, sorry, ordinarily as a tourist, most countries do not require you in practice to have health insurance. Even except, especially for kind of rich countries, people coming in on rich country passports. Many countries when establishing a residence permit do require you to have some form of health insurance.

So it doesn't sound like there's a requirement like that for your wife, but being a citizen. But a lot of times a condition, for example, in the European Union, a condition of maintaining your residency is for you to have active health insurance. So you don't have that. Now you have two basic options.

You could choose. So you have three options. Option number, four options. Let's go through them. Option number one is you could just skip having health insurance. And once you are out of the United States, once you are out of Australia, et cetera, then the idea of simply skipping having health insurance is a much more reasonable one than it is in the United States.

Because health care costs are so high in the United States, a lot of us live in fear of having some kind of medical event. But in most of the world, when you have a medical event, you can just go and pay for it. And it's not that big of a deal.

And so while I think certainly travelers, medical insurance is a good idea, and I think smart to have, I don't think much about it. I have a couple of ways that I handle my own stuff. But when I'm traveling, if I don't have insurance, it's not that big a deal because you just assume you're going to pay for it, especially for just kind of ordinary things.

You get in a car accident, et cetera, you're going to pay for it. Chances are that with most things, again, barring a massive heart attack or something like that, with most things, if you have ongoing medical care, you're going to want to be transported back to the United States.

And so you'll want to think about your setup in the United States and what's your plan. Thankfully, one nice thing is that when you go back to the United States after being abroad, you can usually go ahead and get back onto an Affordable Care Act plan on the health insurance exchange.

And so that's a good thing. So number one is you could just skip it. Number two is you can have coverage that works with simply your normal national policy. And so many kinds of health plans that are in the United States do provide international coverage or they do provide reimbursement or something like that.

So that's your second option. Your third option is if you want to buy a traveler's policy. There are a number of companies that sell health insurance to travelers, and that would be probably the best fit for you. And the nice thing is that if you don't need coverage, those are normally tiered at two different price points.

There's a policy that includes coverage in the United States, Canada, Australia, et cetera, and there's a policy that excludes coverage in the United States, Canada, Australia, et cetera. And so if you're planning to be in South Africa, your policy will give you coverage there, and you don't have to have the more expensive tier, and they're very inexpensive to get high levels of coverage.

And then your fourth thing would just be to buy a local insurance policy. And the big difference for Americans going abroad is often the prices are shockingly low. So you can probably buy just a local health insurance policy of some kind in South Africa, and I would guess that you'll be pleasantly surprised by the relatively low price of it compared to what you're accustomed to.

Great. That's good info. I think I'll start in with option four as my first kind of discovery point, and I have a couple quotes for different travelers' policies, and that could be my backup. Awesome. Great. Well, enjoy your time. Good job for you. Congratulations on renegotiating your work arrangements on your wife for all of her hard work.

I hope that it's just a really great time for you to test it out and enjoy the lifestyle and have a wonderful five-month trip. Congratulations on taking action. Call me back in six months or a year and let us know a little bit of what you learned from the experience.

You bet. I plan to. Thank you, Josh. We go to Kearney in Ohio. Welcome to the show. How can I serve you today? Hi, Joshua. Can you hear me? Sounds good. Go ahead. So I'm a longtime listener. I've been listening as much as I can, as much as I could, since 2015.

You've had a large influence on my kind of unique financial journey. I have a question. I'd like to get your take on my plan to have a major career change. Okay. So currently, I am a public school teacher. This is my ninth year. I have decided that I want to make a career change to become a pilot.

My father has been a pilot for over 40 years. It's something that I always wanted to do, but when I was in high school, right around that time, the industry was kind of not doing so well after 9/11 and the recession. So, with seeing how it was going for my father at that time, I kind of wrote it off, but it was always something that I had wanted to do.

I also currently am a real estate agent along with teaching. And then, even another part of my situation that's unique is I am a very active cryptocurrency investor, which has changed my life in many ways. And I started an LLC about crypto education and even helping educate realtors as crypto is starting to impact the real estate transaction a little bit right now.

So, I've got a lot of things going on, but I'm interested in making this career change. I'm afraid to leave my efficient, comfortable life, but I just feel that I need to make a change. Got it. How old are you? I'm 32. So, you're super young. I was thinking you're 52 and I've got to worry about you going up against age 65, mandatory retirement and whatnot.

You've got plenty of time. Are you married? Do you have children? No and no. Okay. So, this is going to be easy. How's your financial situation? You have some savings, your crypto investments. Do you have some money saved and are you in a good financial position? Yes, I have.

Well, I mean, it depends. Crypto has shaken my world up with what I value, what I see as money and value. So, basically, I've got about $35,000 in a savings account. I've got $87,000 in state teachers retirement. I have about $35,000 in cryptocurrency, but that has been as high as over $100,000 in bull run.

And no debt? No debt. And you don't own a home? You're renting? I do. I have a one-bedroom apartment. I'm very minimalist. Great. Perfect. So, this sounds easy. Is there a specific question that you have or just wanting a little bit of encouragement on the path? Well, I think maybe just some encouragement on the path.

I guess my question is, how do I know if the risk is worth the reward to leave my comfortable lifestyle where I have things relatively under control, but I just feel kind of bored and unhappy with teaching? I'm a music teacher, and I got into education first by being a musician, but I decided to get a music education degree.

And then I ended up teaching, which was never my goal to begin with, but it was a nice career for about nine years. But to be honest, ever since the pandemic, things have just changed to the point that it has very little to do with teaching music, to be honest, the situation I'm in.

I'm just having this feeling that I need to make a change. But I guess I just wanted your take on the risk to reward aspect and how to be comfortable taking the plunge. So if you left your teaching job today, and you went and you spent a year becoming a pilot, and then you had a medical condition and you knew, "I could never be a pilot again.

There's no possible way I can make a career as a pilot work." Could you go back into teaching and get hired again? I believe I could. I wouldn't, I would not want to go back probably. I don't think, but I could if I had to. Okay. So to me, you have virtually no risk in doing this.

Now, is there a risk of your spending money on the training necessary to become a pilot, to get your license, to get hired? Yes. Is there a risk that you may not like the career? Absolutely. You might wind up with some regional carrier getting up at one o'clock in the morning, flying routes that no one else wants, etc.

But you're young and you're probably healthy, and otherwise you wouldn't be pursuing the job as a pilot. This is something that you want to do. You're clear that you want to do it. You have a family history, etc. So suck it up and do it. I would say the biggest thing for a 32-year-old man is just the risk of regret.

The risk of regret is huge. And you've been a teacher for nine years. You know what's good about that. The nice thing about being a teacher is pretty much the job doesn't change much. Now, okay, maybe there were some changes from COVID, but the job is what it is, and it's not going to change, especially not in government schools, except very slowly.

So if you are a government school teacher today, and as long as you don't have any bad disciplinary record, etc., you could always come back and get it again. Now, you may or may not be able to get in the same school district, but teachers are in demand. Your pay, unless you're in downtown New York City or something like that, your pay is not great.

And so it should be relatively easy to do better. I would simply say that as one who is a little bit older than you are, but who bears the responsibility for a lot of other people, I would simply say to you that it will never be easier for you to pursue your dreams and follow your dreams than it is now.

And that's not to say – I always try to be careful saying that because I don't regret the decisions that I have made of embracing responsibility. If I had to do it all over again, I would do it in an instant. What I do regret is not chasing my dreams more enthusiastically when I was younger.

I fell prey too much to the idea of thinking, "Well, I've got to build something consistent. I have to systematically maintain a job, or I have to do something like that." You don't have to do any of those things. You can live your life the way you want. And while you should make thoughtful, informed decisions, there should be on your shoulders as a 32-year-old man, there should be this giant weight of, "I have to go for it.

I have to go for it. I have to go for it. I have to go in the direction of my dreams." If you are not enthusiastically pursuing whatever your personal dreams are as a man, it's very hard to look yourself in the mirror and be happy with the guy looking back in the glass.

And yet, if you are pursuing your goals enthusiastically as a man and you're really going for it, whether success or failure, the man in the glass looks back and says, "Absolutely. Well done. Keep up the good work." And so, as I see it, one of your primary objectives should be avoiding regret.

And in order to avoid regret, you have to go as enthusiastically as possible in the direction of your dreams. And so, you have clearly said, "There's something I want to do. This is something I want to do. I didn't waste any time digging into that further. You told me this is something I want to do.

We've established that you're not being irresponsible in doing it. So, as far as I'm concerned, get after it because it'll never be easier than it is now. And if successful, you want to be successful now." And that's the thing that is so frustrating. At 32 years old, for you to be sitting around and thinking about comfort is absurd, absolutely absurd.

If you're 92 years old and you want to think about comfort, great. I won't really accept it at 70, but I guess I'd probably accept it at 90. But at 32 years old, pursuing comfort or like, "Hey, this is confident and I know it," pursuing that pathway, that's destruction.

That is the thing that leads to mediocrity. It leads to unhappiness. It leads to just not being able to respect yourself. Again, I come back to the man in the glass. Obviously, I'm talking about the poem by using those words that I love so much. But at the end of the day, a huge portion of your self-respect as a man comes from your ability and willingness to establish the direction you want to go and then to follow through and go after it.

And though it leads to bankruptcy and financial ruin, etc., you'll arrive to the end of that path. And if you knew you were pursuing your goals, you knew you were pursuing your life vision, you'll be thrilled with your decisions. On the other hand, you could sit around in fat town for the next five years.

"I got a job. I know how to do it," etc. But at the end of five years, no matter though you're richer than you are now, you have a house, you have all the nice things, as a man, you're going to lose your self-respect. And that's a miserable place to be.

So I would go after it. Now, I'll pause here, but I'll give you a couple of tips. But I would go after it as enthusiastically and as quickly as possible because you want to get to a job that's paying you money for flying as quickly as possible so you can have the maximum amount of career time available in it knowing that you've got a hard deadline.

Being a pilot is not something that you can just sit around and wait till you're 55 and then I'll pursue my dream of being a commercial pilot. No, you've got a hard stop, mandatory retirement. So you've got to get after it now in order to reap the rewards of your proposed path.

Absolutely. Well, it's refreshing to hear everything you just said because, to be honest, I have teacher friends who are saying, "Whoa, that sounds too risky. You've got a good thing. You know how to come in here and do this." But I just know deep down I don't want to be like those people.

So pay attention to what you have said. Pay attention to what you've said. And then listen to me as I share that poem I was alluding to. When you get what you want in your struggle for self and the world makes you king for a day, just go to the mirror and look at yourself and see what that man has to say.

For it isn't your father or mother or wife whose judgment upon you must pass. The fellow whose verdict counts the most in your life is the one staring back from the glass. Some people may think you a straight shooting chum and call you a wonderful guy. But the guy in the glass says you're only a bum if you can't look him straight in the eye.

He's the fellow to please, never mind all the rest, for he's with you clear up to the end. And you've passed your most dangerous, difficult test if the man in the glass is your friend. You may fool the whole world down the pathway of years and get pats on the back as you pass.

But your final reward will be heartaches and tears if you've cheated the man in the glass. That's what counts. Doesn't matter what anyone else believes in you. Doesn't matter what anyone else says. Who cares? What matters is that you know the direction that you want to go. And at 32 years old, it's much easier for you to be confident in your self-knowledge than it was at 19.

So make a fresh decision and go after it. And then I would just say in conclusion, be smart about it. So if I were in your shoes, yeah, keep a one-bedroom apartment. Get your rent as cheaply as possible. Go to the school that's going to get you the fastest, you know, get you on the flight line the fastest possible.

You have money saved and so you should spend that money to get good flying training, a good school that's going to move you quickly through the necessary certifications. You're going to burn quite a lot of money on this, but that's what you should do. And you're getting a job as a pilot is going to be a lot cheaper than, you know, getting a college degree would cost you.

And yet it will come with a lot more benefit. So go after it and go after it fast. We go to the state of Washington. Welcome to the show. How can I serve you today? Washington State, 360 area code. Come back to you. We go on to Billings, Montana.

Welcome to the show. How can I serve you today? Hey, Joshua. I had a question. My wife and I are fairly confident that we are going to hire an in-home nanny for child care instead of looking at daycare or looking at my wife leaving her job. But just was curious briefly what considerations you suggest to make that decision.

I think the bigger question is how do you pay taxes and report income if you hire an in-home nanny? It seems like it's more involved than just independent contractor. I'm just curious if that's something I could do myself or if it's better to have software or a payroll company to help manage that.

Okay. Good questions. I have never hired a full-time nanny. I have at various times in the past for a while I had a full-time housekeeper that came every day. That was a good fit for us that it provided the help that my wife needed with the house, et cetera.

I had a part-time nanny come for a time, et cetera. But at the end of the day, my wife just decided she's like I don't want people in the house. And so she got rid of the housekeeper, got rid of the nanny. And so I got someone that comes one day a week for a few hours, but that's it because my wife didn't like people in the house.

So I say that to say that go for what you think is right, but just recognize that things can change. I thought, man, my wife's going to love me for hiring her a housekeeper and she's going to be an easy street. I thought she was going to love it.

Well, it turns out that she didn't love it. She would sing songs about no housekeeper, yay. So things can change. I would say that you have a lot of options. Let's begin with a thoughtful approach of what are you actually looking for in a nanny. How old are your children?

Right now we just have one and she's five and a half months. Okay. And what kind of nanny do you think you would be looking for? We know someone from our church that's a young woman, she's like 21, that is interested. So we're thinking about doing that. And then I guess one caveat, we're probably not going to be doing that full time.

My wife and I both work from home, so it's just something to help for a handful of hours a day to be able to focus on work, to get things done. And we'll obviously still be spending a bit of time with our daughter. Right. I think that's an ideal way to set it up.

If you and your wife both work from home and you recognize that we want to keep our income, keep our business going, we need a little bit of help, having someone come in your home I think is the best way to do that. And on a part-time basis, you and your wife can work around the edges, that's great.

I think someone from church is perfect. So just a matter of coming to an approach to the wages that are appropriate and setting that up. But getting it set up is key. And the nice thing about somebody from church is that you can give this person kind of a vision of how you want the time spent.

I think the biggest challenge in hiring a nanny, as with hiring any employee, is you're having an idea of what is it that I expect from you. And so if you hire a "professional nanny," well, that nanny is going to have certain expectations. If you just hire somebody random that doesn't know what to do, they don't know how to productively use the child's time.

And so you want to make good use of the child's time, and so you have to lay out what is expected. And at five and a half months, it's pretty simple, basically sit and play on the floor and snuggle and take walks in the sunshine and sing songs, read books, et cetera.

But over the next couple of years, you want to make sure that the highest level of care is happening. So think about that, and that's why you hire a nanny to come into your home rather than just going to a daycare, et cetera, where you can't supervise it. So think about that.

And from the tax perspective, it's super simple. You go to irs.gov, and there is an entire section called "Hiring Household Employees." So go to irs.gov, open up "Hiring Household Employees." You do not need any -- you don't need to set anything up. There's a standard way to do it.

You'll have an employer identification number. You'll just simply file taxes for your household employees. I think there's a standalone -- I've forgotten. I think there's just a standalone schedule for that that is super simple to set up. And you'll just hire -- you'll just -- what schedule is it?

I have to look it up. You'll simply file that particular schedule for your household help, and then your nanny will report employees. You'll pay Social Security and Medicare and Medicaid taxes for her, and it's very, very simple. And it is important to do that because otherwise you'll run for office 15 years from now, and somebody will investigate your past and find out you had this nanny for 10 years, and you'll never file taxes, and you'll have a disaster on your hands.

But it's super simple. Go to the irs.gov and search "household employee." All the instructions are right there. >> Awesome. Thank you so much. I appreciate it. >> My pleasure, and congratulations on the birth of your baby. Back to Washington. Are you there this time, Washington? >> Yes, I am here now.

>> Go ahead. How can I serve you today? >> So question -- thank you. My brother and I have been asked to be trustees of a special needs trust to a gal who's older than I am, and we don't know exactly what else is involved in that, and the parents of this gal also don't know exactly what's involved.

So we're kind of just trusting the lawyer who sets it up. What are things we need to be thinking through and talking through, and any advice on that? >> Why did they choose you? >> So they don't have any young friends. They were good friends of our grandparents, and they know our family, and they value our values.

They have similar outlook. So we're kind of the youngest people they trust. >> I see. Okay. Well, I think you definitely should do it. Being a trustee is much more a matter of your personal confidence, meaning you're being just a normal person of integrity than it is any technical knowledge.

And so if this is someone that you know, they know you, that they're looking for someone who's trustworthy, that's fine. You don't need -- it's not a -- there is a fiduciary duty that you have to the beneficiary of your trust, of the trust. So it is a -- it's not a completely free engagement, but the fiduciary duty is for you to simply always act in the best interest of the beneficiary.

And in so doing, you have the ability to hire any professional, to retain any external counsel that you need at any point along the way. So I would say that it's an honor to be chosen as a trustee, and I don't think it's an excessive burden as long as this is someone that you care about.

And it's a great honor to be able to be there to defend the needs of this person, this lady, who needs you as her advocate. And basically, in my words, the job of a trustee is to make sure that the interests of the beneficiary are defended. Now, in terms of the technical stuff, you'll begin with getting a copy of the trust and reading it.

And don't be intimidated by that. It's relatively straightforward for you to read legal documents. Just ask for a copy of the trust and read it. And the copy of the trust will lay out most of the information that you need. And that is the document that is going to bind you based upon your activities.

The second step after getting a copy of the trust and reading it is you should go to NOLO.com, N-O-L-O, and you should purchase their book called "The Trustee's Legal Companion." Spend $40 and grab a copy of "The Trustee's Legal Companion." NOLO is a self-help legal publisher. They are always my first stop for legal questions, financial questions, et cetera.

And you can begin there. They also have several articles on their website. And they're a trusted publisher where I would start with. So they have an article called "Special Needs Trusts, the Trustee's Job." They also have an article called "Should You Serve as Trustee of a Trust?" So go to NOLO.com and just search "trustee" or "how to be a trustee." Get a copy of "The Trustee's Legal Companion" and read some of their articles, and that will get you started.

And then recognize that as you review what the trust has, you know, as you look at what assets the trust has, what investments it has, how those are measured, you'll want to just look at that and get a sense of it. There's a big difference in running a trust with a couple hundred thousand dollars in it versus millions of dollars.

And so you'll just want to dig into what the trust is doing. And if necessary, again, it's hard to do this with a small trust, but the trust money -- the trust assets are available for you to hire the necessary help to do a good job. And so if you get in over your head and you feel like, you know, I need some advice, then you can hire somebody to help you.

You can hire a financial planner. You can hire an investment counselor to review the investments of the trust. You can hire relevant professionals. All of those things are available to you as the trustee so that you can make sure that what the trust is doing is really going to fulfill the long-term vision.

So I would just begin with Nolo. Read that book, and that's your best starting point. Very helpful. Thank you. My pleasure. Now for a limited time at Del Amo Motorsports. Get financing as low as 1.99% for 36 months on Select 2023 Can-Am Maverick X3. Considering the Mavericks taking home trophies everywhere from King of the Hammers to Uncle Ned's Backcountry Rally, you're not going to find a better deal on front row seats to a championship winner.

Don't lose out on your chance to get a Maverick X3. Visit Del Amo Motorsports in Redondo Beach and get yours. Offer in soon. See dealer for details. We move on to the state of Missouri. Welcome to the show. How can I serve you today? Hi, Josh. Can you hear me okay?

Sounds good. Go ahead. I was fortunate enough to receive restricted stock units from my employer as part of my compensation. And the first of several vesting dates is coming up. I'm wondering how I should think through when to sell and what to do. There's two decisions I have to make with every vesting date.

The first is I can choose for the company to withhold some of the vested stock as the cover of the taxes. The other option is I can give them cash and then such that I can then receive all the vested stock instead. And then the second question or decision I have to make is when to sell.

I don't know if I should think about this as what you do if you come about a large sum of money or think about this like a retired person would as part of something as part of his or her portfolio. I know that if I were to ask eight out of ten personal finance people out there on the Internet, eight out of ten would say sell it all and buy index funds.

But I'm hoping for a more nuanced answer. You know, I am a little embarrassed by that observation of the personal finance industry, but at least it's probably progress. You know, if we went back 50 years, we owe just such a debt of gratitude to Jack Bogle and the index revolution because the average person is probably way better off with that advice.

But it does raise my contrarian hackles a little bit. Come on guys, let's think about this a little bit more. But I'm glad. I am very glad that that's the standard option now versus some of the nightmares that people have gone through over the decades prior to the indexing revolution.

How much is your total stock ownership when it all fully vests and how much is maturing now as compared to the total in dollar numbers? So it's about over three years. The first year is very little as it stands right now based on the stock price. I think it'll be about five grand first year, five grand the second year and then about 75 grand the last year.

So your total amount that you expect in current valuation is about $85,000 and 5,000 of that is becoming available now. Is that right? Yes. Okay. And your annual income and your net worth is how much? Me and my wife's is about $250,000 and currently it's $650,000-ish. My contribution to my income as it stands right now is about $150,000.

And is this a company that you think has a future? Like is there a good growth case for the stock here? I would say so. I would put it as more of the cyclical stock part of the market. But I think it definitely has potential over the next two to three years.

Okay. Well, I would say in terms of frameworks for answering this, my preferred framework would just simply to be to say that this is a minor, a relatively minor amount of money as compared to your income and as compared to your net worth. So why not take a risk?

When you look at the stories of people who build wealth, in most cases the way that people become wealthy is not slow and steady index fund investing over decades. That pathway is perfectly doable, but you're already doing it. In most cases, people that become wealthy, especially those that become wealthy at an early enough age to fully enjoy and embrace the experience and live a great lifestyle, they do so because of an ownership interest in a business of some kind or a deal, something that works really, really well.

Something that works really, really well. And there's a book, I forget the author of it, I read it seven or eight years ago, it's called You Only Have to Be Right Once. And it was a story of the Silicon Valley tech billionaires. And the point is that you only have to be right once.

And what's interesting about that is it's totally true. You only have to be right once. The converse of it is if you're going to "be right", if you're going to get a big winner, you got to have some skin in the game. You got to actually take a risk.

You got to get yourself in where you're going to have some individual stock. You got to actually go for it. And the arguments about things like an efficient market and all of that apply exclusively to the large publicly traded companies where there's the most intensity, etc. So I don't deny that people can trade successfully, but I myself basically hold to a pretty efficient view of the marketplace for publicly traded stocks.

But that's different than you being in a situation where there's a company that you're involved in, you know you're working, you're being given private units of stock as options, etc. And so I don't see why, from what you're describing based upon the balance of the numbers, I don't see why you shouldn't just take a risk and hold them and wait and see what happens.

You can always sell in the future. Tax-wise, I don't even want to bother with that because it's just immaterial. There's no point in thinking about taxes when you're talking about $5,000 as compared to a $250,000 income. It's immaterial as far as I'm concerned. Do what you want. But if I woke up in your shoes, I would take the risk.

I would just hope that this is a good company and as long as you feel like there's a future for it, then maybe something spectacular happens. And so to be clear, what would cause me to make a different decision? Well, if the amount of stock options were much, much higher as compared to your income and/or your net worth.

So let's imagine you had a $60,000 income and you had $150,000 of stock options vesting and you had a $0 net worth. Well, then my advice would be different because taking that money and getting it set aside might be your first $100,000 that sets you free for life. But in your situation, it's just such a small amount of money that if I woke up in your shoes, I would just say, "I need to be betting.

I need to be betting." Slow and steady is a great base to build on, but I don't think it should be the exclusive base for wealth building. There should be something that you're involved in financially that has the opportunity for good gains, has the opportunity for multiplying rather than just slow and steady.

And if this is the best opportunity you have, then you should stick with it. Now, as always with investments, what is right or wrong in terms of a buying or selling decision comes down exclusively to the alternative use of the dollar. And so if the alternative use of the dollar is index funds, which is what I'm guessing it is, then I would just say, "Sounds like you got plenty of money.

You got some money in real estate probably. You got some money in index funds. You make a great income. You got money in your 401(k), etc. So the alternative use of the dollar is index funds. Well, why not take a risk?" Now, if you flipped it around and you said, "No, Joshua, I actually have this other compelling investment idea.

I have this other thing that I'm really enthusiastic about that I think could go nuts, and I just need $5,000 to make it work." Well, then, of course, I'm going to say, "Sell. Take the $5,000 and do it." But you, of course, wouldn't be talking to me on the phone right now if you had that.

So I simply want to leave you with those three frameworks. Number one, taxes, it's immaterial. I would probably pay the taxes out of pocket, try to keep as much as possible, but that's up to you. Number two is that you need to have some risk at play. You need to have some irons in the fire.

What other metaphor can I mix up here? Like you need to have something going that is more than just index funds in the hope that something hits. And you're not going to bet the farm on it. We'll continue putting these metaphors in. I feel very exposed right now with lacking one metaphor to pull all the way through.

You're not going to put everything into it. You're going to play with it. But you do want to make sure that you actually have something that could go somewhere, and this is one of those things that could actually go somewhere. So I would probably keep it, play it out for a few years, see what happens myself.

Perfect. Thanks very much, Josh. My pleasure. And we move on to David in Quebec. Welcome to the show. How can I serve you today? Hi, Joshua. My question is around traveling with small children, infants. I think a while back you did a podcast on how you travel personally and how you do it really efficiently with essentially only carry-on items.

I don't recall that podcast or the date. So my question is, how are you able to do that when your children are really young? Let's say one year or younger or even toddlers, just because a lot of the items that they need, say a scroller, car seat, play pens and so on, a lot of that stuff is really bulky.

So how are you able to do that? How many children do you have and what are their ages? I don't have any right now, but we're expecting next year. And we have a similar lifestyle to what you're currently doing, which is traveling the world. So we want to keep that kind of travel really efficiently, as I mentioned earlier, minimal possessions.

Yeah. Well, quite literally this week, it's a good time to call and ask the question. I love it. It's a softball for me. Quite literally this week, my wife is packing bags for our family. In a few weeks, we're heading out on an almost two-month trip across 12 countries with our family.

So it's very current and we're going to be at multiple climates. Again, 12 countries. I charted it out for the children. I think there's seven airplane flights, five trains, one or two buses, two ferries, something like that. So we're covering all of the different styles of travel and doing it.

And that's with five children, including a six-month-old baby. So it's a good time to ask me the question. So to begin with, there are a few principles. And the first thing that I will tell you is that with your first baby, the natural tendency in the United States and other wealthy places is to accumulate far too much stuff for the baby.

And I don't know if it's avoidable. It's probably not avoidable. We used to have all the stuff. We used to do all this stuff. And just over time, you change. You build an experience. And there's no substitute for experience as parents. And experience is not something that can be taught.

It has to be acquired. I can share the lessons, but the experience itself has to be acquired. And one of the tendencies that I see is that as parents become more experienced, they become more confident in themselves, and they start to need less stuff. And I'll give you another – I'll give it to you now.

So here would be another example. If you were a novice hiker and you're going to go off hiking, the first thing you're going to do is get a hike, a list of everything that you need. You're going to get an enormous backpack. You're going to fill it up with all the stuff, and you're going to go on the trail.

And two days into the trail, you start taking stuff out of the backpack, and you start getting rid of it. And by the end of it, you're down to just a tiny little bit. Same thing with travelers. Novice travelers take enormous bags, enormous piles of things, because they think, "Well, I've got to have this, and what if this, and what if that, and what if the other thing," et cetera.

And experienced travelers just say, "Whatever. I can deal with it. I can pretty well fix it." And in life, especially when it comes to stuff, with the exception of a few basic things that can genuinely end your life, then really there's not much needed. So, you know, for example, the things that really matter in medical terms that you should always have with you are things like a tourniquet and an EpiPen, because there are only a few basic things that can end your life before you actually can get medical care.

One of those things is massive loss of blood, and so that's why you should have on your person at all times a tourniquet so that you can stem massive loss of blood. Another thing is inability to breathe, and so inability to breathe can often be caused by an obstruction in the airway, which, of course, you'll try to remove physically, or it may be caused by an anaphylactic shock, which is why I think most people should have and travel with an EpiPen.

You don't know if your children are allergic to something, etc. Beyond that, I mean, the only thing that really kills you fast is, you know, that can be treated with something like maybe a heart attack or having your brains burst open, but anything else can usually have time to get to medical care.

So you don't need – why did I go into that? It was a bit of a rabbit trail, but the point is that in most things you can analyze what you need, and you can prioritize it based upon how quickly do I have to get this. You don't need to travel with Band-Aids.

You can find those anywhere. You need to travel with a tourniquet to save a life. So you can triage your stuff, and you can choose what you actually need and what you don't actually need. And with parenting and with kids' stuff, you develop skill over time. A number of years ago, my wife and I went to Chick-fil-A with some friends of ours, and they had their first baby, and they brought it into Chick-fil-A.

Remember, we were in the United States at the time, so there's a car out in the parking lot, and they have one baby, and they bring in this enormous diaper bag, just this monstrosity, this huge diaper bag, and bring it into the Chick-fil-A. And we looked at each other, and we kind of just smirked.

Like, yeah, first-time parents, you think you have to have a diaper bag, first of all. You think it needs to be huge. You think it has to have all the stuff. Now, like, my wife has this tiny little diaper bag that she sticks a few things into. And by the way, that's not even with disposables, which can even be smaller.

She travels with--she has cloth diapers and whatnot. But she has a tiny little diaper bag, and we basically don't bother taking it ourselves most places. Sometimes we forget it. And that's not to say that we're better than anybody. It's just that over time, you gain confidence in your ability to solve things.

And so most of the paraphernalia related to children, most of it is unnecessary. There are a few things that are, like a car seat. We'll get to that in just a moment. But things like a stroller. Strollers are awesome when they live in the back of your car and you have easy access to them.

But the rest of the time, they're just an enormous hassle. And so I guess we own a stroller right now. I used it one time with our 6-month-old for the first time a couple weeks ago when I took the children to the mall. And I used the stroller to push the baby around the mall.

Other than that, I just carry the baby, or my wife wears the baby, or I put the baby on my shoulders or something. Because I don't want to deal with the hassle of a stroller. So I certainly don't take a stroller when traveling the world. One of the things that I have done is I have used a baby backpack.

And so if you have a nice hiking backpack or something like that, I like to do that. Because it eases the burden on my wife. Because wearing the baby through the airports is always the easiest thing to do. So if you have something that can work for both of you, like a baby ergo or something that fits both of you, that's really ideal if you just adjust it.

But there's no need for a stroller. And even things like the hiking backpack. I have one with a nice Deuter brand with a frame and everything like that. It just gets too bulky. And you rent a car and it doesn't fit in the back. And so I won't even bother to do that.

I just carry the baby on my shoulders. And it does affect your activity a little bit if you don't have something that you need. But in general, I would rather just deal with the pain of carrying this child in my arms for several hours and having sore arms than I would deal with the pain of having a piece of gear that I don't really need along on the trip.

The thing that is hard to get around, especially with babies, is a car seat. And especially at six months old. And so I don't have a plan to avoid that other than just exclusively using transportation where you don't need a car seat. So that is an option. If you simply avoid private cars, private taxis, things like that, then you don't need to travel with a car seat.

If you're going to be having your own car, you can, of course, rent a car seat. And in some cases, taxis, drivers in some countries where car seats are more legally expected, they may have a seat or something that you can use. But most of the time, though, they don't have infant seats.

So when you're traveling with an infant, you often do have to travel with that thing. And I don't know how to get rid of that. Once the baby is big enough, so past about a year or so, we have a couple of basically portable car seats that we use to follow the letter of the law and a little bit of the safety benefits as well as just making them doable.

So there's two ones that we use. One is I believe the brand on it is something like Wiz Rider, and it's basically a vest that you put on the child. It's a small fabric vest, and the vest has a couple of hooks on the shoulders and hooks on the waist.

And what it allows you to do is put the vest on the child. It's no bigger than a piece of clothing. It packs into a little pouch that I can fit in two hands. And it allows the seat belts to be pulled down to where they're appropriate size. Basically, all a car seat does is adapt the size of the seat belts to the child's body.

That's what the basic function of a car seat or a booster seat is. And so in this case, instead of raising the child up by the use of a physical car seat or physical booster seat, this device brings the straps down. And so we like that, and that one is nice and is convenient.

The second one is a brand called MyFold, M-I-Fold, and this one is a little plastic thing that's basically a replacement for a booster seat. And it's a little piece of plastic that sits on the seat, has a couple of hooks that come out from the side to hold the lap belt down.

And then it's got just a little -- almost a retainer strap that pulls the shoulder belt down. So once your child gets past infant seat age, then -- and gets big enough from a weight perspective, those are two great ways of being able to avoid having the car seat.

Clothes are the most straightforward thing. Babies do need a few more clothes generally because they get them constantly dirty. And if you have a baby that is crawling around, his clothes are always dirty. If you have a baby that's learning to eat, his clothes are dirty, et cetera. And so clothes, you do need a few more things.

But the secret to traveling effectively with clothes is simply to wash them. And this is fairly easy to do when you stay in Airbnbs that have a washing machine. Obviously, you can do laundry at hotels, but that's usually cost prohibitive when you're -- and you don't want to do that as a matter of practice.

But we find that generally speaking, at least with the size of our family, very few hotels are family-friendly at this point in time. And so I'm pretty much stuck in the world of Airbnbs. It's okay. I'm grateful that they exist. I prefer hotels to Airbnbs generally, but, hey, that's where I'm at right now.

The nice thing about Airbnbs is you can just screen for ones that have a washing machine. And so if you do clothes every day or two, every couple of days, then you may have a small number of outfits, but you can rotate through them fairly consistently. And then the last thing, I mean, in terms of what do babies need, if a mother is breastfeeding, then you don't need to bother with anything, bottles or any of the other stuff.

So breastfeeding is really hard generally for the first couple of weeks, and then after that, everything is just better. Breastfeeding, again, is hard in the first couple of weeks. Don't be surprised. One of the parts of the standard speech I give to newly expectant fathers and mothers is don't make planning for the birth your only thing because what surprised us when we had our first baby was how hard breastfeeding was compared to the birth.

It was a lot harder than the childbirth itself. And so the first couple of weeks of breastfeeding are really difficult, but from then on, you're just free. And as long as mom's there, you don't need anything other than mom and baby, and baby is fine. And then when it comes to all the rest of the stuff, especially infants are the easiest to travel with because they don't really need anything, I mean, toys or anything like that, because they're generally happy to be with you.

They're happy to be snuggled up with you, cuddled with you. If you need toys, you just use your fingers and play little finger games, et cetera. Then when they get old enough to be entertained with a book or you're reading to them or something, then you don't need much because you can find stuff on the road.

The only kind of in-between stage that's difficult is from about one year to say, you know, two and a half where you're dealing with a child that is old enough to run around, walk around, but is too young to really be engaged by mental entertainment like reading stories, things like that.

And what we do is usually just make up toys on the spot because you don't need much. You can grab a water bottle somewhere, you poke some fabric in it or put some paper and just make stuff up and find something or buy a couple of toys here and there along the way.

But beyond that, I can't think – what am I missing? You tell me, what am I missing in terms of things that fill up a bag? I guess what about the sleeping situations? Ah, good point. Especially the smaller kids. Yeah. So we've done a couple of different things. So the first thing is – I don't know what you call it.

They sell these little fold-up things that you see them advertised for the beach. I don't know what to actually call them. I would have to ask my wife. But they sell them for the beach and they're like a little tent. And they fold with an internal structure. They're just a very thin piece of nylon and they fold with an internal structure that allows you to – kind of like the sunshades that you fold up into a small circle.

And the nice thing about it is they provide you with an enclosed place where the baby can be. And so we've traveled with one of those and I think my wife has one of those for this trip for our baby that's similar age of what you're describing. And so I think we're going to be traveling with one of those.

And the nice thing about it is it allows you to – basically what we do is just stick the baby on the floor that comes with a pad that goes into it. And then if we're in a hotel or something, we'll take a blanket, fold it up, put it down for some padding or a pair of towels or something and just set it down.

And the baby can be in that. And it's zipped up so you know where he is. If he starts rolling around or something, that's trouble. But little ones – when a baby is small, they're defeated by the zipper. And when the baby is old enough to defeat the zipper or roll around, then you can train the baby not to move and just to put his head down and go to sleep.

And so that's the thing that we travel with. That fits in an underseat bag. It folds up to about the size of – I would say maybe 12 inches across and 2 inches thick. So that's not too bad. And then also you can get cribs along the way. And so if you are staying in hotels, even Airbnbs, many places, you can just order a crib.

And that certainly is the most relaxing thing. And then from time to time, I mean, frankly, just stick the baby on the bed and pay attention to him. And again, it goes back to the pain of carrying stuff with you is not free. So if I'm taking a car trip to see my friends in another state, then I'll take along a portable crib, absolutely, because I can just toss it in the back of the car, etc.

But if I'm going on an airplane trip, I'm not schlepping a bunch of gear from one side of the world to another. I'm going to make sure that I have – that I just have the bare basics. And if that means that at some point the baby sleeps on the floor somewhere and I got to pay attention, as long as I'm thoughtful – again, we don't want to be reckless, but so what if the baby gets up and crawls off of his blanket?

As long as I lock the door and there's no stairs and there's no everything like that, I make sure I take precautions, then I'll hear him and I'll wake up. And then what you probably haven't experienced yet as a parent is it's just a natural thing that your brain tunes in to what you need to pay attention to.

So prior to the birth of your first baby, you probably have been in situations where you've slept through a thunderstorm or slept through something like that. Have you experienced that where you don't wake up when you think, "Man, how did I miss that?" Have you experienced that? Yes. Okay.

So here's what I tell you is that when you have a baby and when you are on duty, your brain knows it's on duty and it will wake you up. What's funny is that your brain will still filter stuff out. There was a time when my wife and I had our second child and we had a young baby – a young child and we had a baby.

And so both of us were on duty and basically the way that we kind of set things up is that my wife deals with the baby during the night. I take the baby in the morning so she can hopefully get a couple extra hours of sleep. But at least I need to get a decent night's sleep.

So she gets up with the baby, feeds the baby. I can't do much in the night anyway. So there's kind of no point in it. So we would have this baby in our room that would wake up, cry, want to nurse, etc. I never ever heard that child. I just slept right through the feedings because my brain knows I'm not on duty, she's on duty.

But our older child who was still a toddler was sleeping in the next room and that was my responsibility. So if he woke up or cried in the night or something like that, my brain was instantly on and she never heard that child. I'd say in the morning, "Oh, did you not hear that our older child did such and such?" She's like, "I had no idea." And my brain would filter out the baby because I knew I wasn't on duty and her brain would filter out the older child because it knew she wasn't on duty.

And so if we're in a hotel room and let's say you put the baby down on a blanket on the floor and then you wake up to sounds of little feet and knees going across the floor, your brain wakes you up because you know I'm in a strange place, I locked the door so the baby wouldn't fall down the stairs, he can't get out but still he should be on his blanket asleep not crawling across the floor.

And you'll instantly wake up, you'll instantly deal with it, etc. I'm not advocating for carelessness or stupidity on behalf of parents but I am saying that you can trust your body. Your body knows what is needed and you'll work it out pretty easily. Okay. Well, I think that makes a lot of sense.

I think some of the ideas you gave are similar to my own thoughts so that helps a lot. Well, thank you very much. Yeah. And one final comment is just that having less luggage is not like a sign of superiority or something like that. And so if it fits your trip that you're just going to one or two places, man, bring a big suitcase loaded up with the stuff that makes your life easy, check it through to your destination and be done.

The reason you travel light if you're going to travel light is because that enhances your capabilities. It allows you to go more places, do more things, etc. And so for example, in our trip with what I described, because we have so many young children and they're not all capable of having suitcases and caring for suitcases, we have to be super, super light.

And because we're on and off trains, planes, automobiles all across the board, I need to be light in order to cover as much ground as we're going to cover. But recognize that's a self-imposed limitation. And so what I'd encourage you is don't try to plan a cross-continental, multi-country tour when you're getting started.

Plan something relaxing. You're going to an Airbnb for a couple of weeks, check a bag, go through to that, and then pare it down over time. See what works, see what doesn't work. And then embrace the times in a child's life in which it's easier to travel. And don't feel like the goal of traveling is not to make your friends jealous on Instagram.

So it's a skill that builds over time, and I can't – those are the best solutions. I've just found that most of it, though, is mental, that once you get used to the fact that the whole world lives where it is. And so if you need something, you can go buy it.

If you need deodorant, you go buy it. If you need a Band-Aid, generally you can go buy it. If you need a fresh shirt, you can go buy it. And so it's not that difficult to just get the stuff that you need, and that gives me the mental freedom to travel a little bit lighter.

Okay, another good point. Thank you. My pleasure. And with that, we move to – I have a couple of written-in questions here, at least one. So I wasn't able to stay on the line, but Artem writes in and says, "Hi, Joshua. Could you paint a picture of how losses in a business can offset taxable W-2 or business distributions income in another profitable business?

What structure does the business with expected losses have to have for this to work? I'm considering a new software as a service business, which will likely have net operating losses in the first year or two. Is this the type of business that can be good for offsetting other income?" So the short answer is yes, it can be.

So losses and the deductibility of losses depends upon the structure of the business. So from the perspective of capturing full losses, the best kind of business structure to have is simply a sole proprietorship. No corporation, no LLC, just a sole proprietorship. You file a Schedule C on your American tax return, and the reason is that losses from a sole proprietorship can be deducted against your active earned income without limit.

So let's say that you earn $100,000 from your day job as a W-2 employee, and you start a side business as a sole proprietorship, and that side business loses in the first year $10,000. That full $10,000 can be deducted over against your W-2 income in full. So your taxable income would decrease from $100,000 to $90,000.

If you bring in some kind of corporation, then now, generally speaking, your losses are deductible based upon the limits of how much your contributions were to that company and/or your profits of that company. And so if you know you're going to have a business with heavy losses tax-wise, it's superior for that to be structured as a sole proprietorship.

Now clearly, there are many good reasons not to structure a business as a sole proprietorship. Things like liability protections, things like taking investors, all the reasons that we have corporations. But if you know there's a business that you're going to be running that's going to have losses and you don't need a corporation, always run it as a sole proprietorship, because from a tax loss perspective, that will be your best option.

What I would say though, if you have – so that's if you have W-2 income. Now, if you have W-2 income and you're trying to start a business and you know you're going to have losses but you need a corporation, then your losses are going to be deductible according to the S-Corp and the C-Corp rules based upon your contributions and your profits.

So it's not as superior, but they're still there. And then if you – depending on your activity, whether you're an active participant, passive participant, how much your income is, you can take losses for a very long period of time. Again, I think the current number is still $3,000. I think I had to check the tax charts on that.

But you can deduct $3,000 of your losses for a very long period of time, but you're just limited on those corporate structures. If you have some other kind of business, then I would just say that it would in many cases be best just to go ahead and start your new endeavor within the context of your other business.

So let me clear up something that usually surprises people for when you talk about losses. The biggest concern, which is a genuine concern and it's also often a misplaced concern among people when you start talking about losses, have to do with what are called the hobby loss rules. And the idea that the IRS says is that when you have losses, you can only deduct losses that are connected to an actual business.

You can't deduct losses that are associated with a hobby. And so in order for you to avoid – in order for you to be able to deduct your losses, you have to be able to demonstrate that your losses are due to your having a business that's losing money, not a hobby that's losing money.

So does that mean that a business actually has to make money? Well, that's the big misconception. The answer is no. You could start a business and that business could lose money every single year for 25 years. And all of those losses could be completely deductible as losses against your other sources of income as long as those expenses meet all of the other IRS rules such as their expenses that are ordinary and necessary for the business.

They're properly documented, of course, and that you can demonstrate that you are doing the kinds of things that a wise businessman would do with an attempt to make a profit. The key thing is you must be trying to make a profit. You cannot be engaging in tax games where you just made up something to spend money on the business ledger.

You have to actually be trying to make a profit. So that's the thing that you're trying to prove to the IRS is that I'm trying to make a profit. But the key to the hobby loss rules is actually the opposite. So what the hobby loss rules say – the opposite of what many people think.

What the hobby loss rules say is that if you've made a profit in two out of five years or if it's an equestrian business two out of seven years, then you're automatically deemed to be operating a business. And so rather than the two out of five-year rules being perceived as people think they are, that you have to make money in order to be able to deduct your other losses, think of it the opposite, that if you make money, you automatically have a business.

So if your business makes profit, you're good to go. So now if you consider this, let's say that you have one line of business within your corporation and this line of business has $100,000 of net profit. And you are thinking about adding in another line of business. Well, if you go and you start another company, a completely separate independent company, now you have a whole set of rules of what you can deduct in that company based upon your contributions to that company.

But if you start that new venture within your current company, even if that new venture winds up being expensive and let's say you have $50,000 of losses from the new venture, because you have a profit within the company, you're pretty well protected from any kind of trouble with the IRS to be able to deduct those expenses.

And the net effect is basically the same because you're deducting the expenses over against your income. And this is really powerful. Now, again, to emphasize the point that you have to follow all of the other rules. So these need to be ordinary and necessary business expenses. You need to be systematically trying to make this work, making wise decisions, having a business plan.

If you lose money, trying to stop losing money, all that stuff applies. But if your business activity fits underneath the umbrella of one of your existing companies, then you'll have much greater freedom with your ability to deduct those expenses in your existing company because of those hobby loss rules.

So that would be my thoughts. And I believe that I've answered that completely. So if you have losses in the first year or two, then probably look at having that as a sole proprietorship, especially in something like a software or service business where you should have minimal liability. Just start as a sole proprietorship.

And then this is a good reason that also as your business becomes more sophisticated, you can go ahead and operate as a sole proprietorship for a couple of years, take your tax losses fully. Then you can go ahead and establish an LLC, elect some form of corporate taxation if you desire it, and you can just steadily become more sophisticated.

That's the best general way to start. And then if you have some kind of existing business already, then consider starting this with underneath the umbrella of that business. And with that, we conclude all of the callers. Let me double check my notes. That's it. So thank you all so much for listening to today's Q&A show.

I remind you as we go that if you'd like to join me next week, go to patreon.com/radicalpersonalfinance. Patreon.com/radicalpersonalfinance. That will gain access for you to this Friday Q&A show. I also remind you my consulting season is closed, so that's gone. But I would love for you to come and hang out with me in Panama in January.

I am co-hosting a Panama investment tour in January. So please go to expatmoney.com/radical, expatmoney.com/radical. Check out that opportunity. It's going to be a great week for you to come hang out with me for a week, hang out with several -- it's just going to be a great time. Great, fair price.

Everything is taken care of for you. expatmoney.com/radical for that, and I'll be back with you very soon. When you're in winter's favorite town, the snow-covered mountains surround you. A historic main street charms you. And every day brings a new adventure. Welcome to Park City, Utah, naturally winter's favorite town.

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