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Choose from a great selection of digital coupons and use them up to five times in one transaction. Check our app for details. 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 ten years or less.

My name is Joshua Sheets. I'm your host. Today is Friday, September 8, 2023. And on this Friday, as we do on any Friday, when I can set up the microphone and computer system and everything, we do a live Q&A show. You call in, ask me about anything that you'd like to discuss on the show.

You're welcome to ask any questions, comments, bring up anything that you would like to chat with me. If you'd like to gain access to one of these shows, go to Patreon, look for Radical Personal Finance, sign up to support the show there on Patreon at patreon.com/radicalpersonalfinance, and that will gain you access to one of these shows.

We begin in the great state of Florida. Welcome to the show. How can I serve you today? Hi, Joshua. I wanted to learn something about Lady Bird Deeps. What are the pros and cons, if you know anything about it in Florida? It seems like a good way to transfer house on passing, or like a transfer in debt designation.

But other than that, if you know of any other alternatives to that. What was it you wanted to know about? What? Lady Bird Deeps in Florida. Lady Bird Deeds. I don't know anything about a Lady Bird Deed by that name. Is there a more official name or something that it's called?

Like a living estate trust. To transfer like a primary residence, real estate. So, just a revocable living trust that holds a house. Is that what you're talking about? Yeah. Okay. Just doing a quick little bit of reading here to make sure. Alright. So, certainly I know about a living trust, but it looks like this is something specific.

So, a Lady Bird Deed, also known as an Enhanced Life Estate Deed, is a type of legal instrument used in Florida and some other states in the United States to transfer real property, such as a house or land, while retaining certain rights and protections for the grantor, the person transferring the property.

Lady Bird Deeds are a specific form of life estate deed that offers unique advantages in estate planning and property transfer. So, ownership and control, the person creating the Lady Bird Deed, the grantor, retains full ownership and control of the property during their lifetime. So, they can sell, mortgage, make other changes, etc.

without needing the consent of the beneficiaries. The grantor maintains a life estate in the property, right, to live in, use the property, etc. Beneficiaries, the Lady Bird Deed designates one or more beneficiaries who will automatically inherit the property upon the grantor's death. The beneficiaries have no rights to the property during the grantor's lifetime, but they receive the property without going through the probate process.

Avoiding probate, yep, avoids probate. Unlike some other forms of deeds, a Lady Bird Deed can be revoked or modified by the grantor during their lifetime, giving flexibility and control over estate planning. Medicaid planning. Lady Bird Deeds are often used in Medicaid planning because they allow the grantor to retain Medicaid eligibility while still preserving the right to transfer the property to beneficiaries outside of probate.

It's important to note that the term, that the name Lady Bird Deed is not a legal term, but rather a colloquial name that is sometimes used to refer to this type of deed due to its rarity. Lady Bird Deeds can be complex legal instruments, blah, blah, blah. Okay, I'm up to speed, so go ahead with your question then.

If you are familiar with this type of deed, one of the fine artists, if there's any alternative to this, it's a really good option for its purpose. Is this something that you're trying to do yourself in your own planning or in your family in some way? Yes. Okay, and what's this?

For my own purposes. And who owns the house? Tell me a little bit about the situation. Husband and wife. Who is the husband and wife? Is this your house that you're living in? Yes, my house. Okay, and how would this type of arrangement help you? Help children to avoid a probate on the house.

Is that the only goal that you have, the only thing you're trying to accomplish? Yes. Okay, well then that's easy, and I would not go in the direction of this based upon what you are describing. Meaning that this is, so as I see it, so I'm unfamiliar with the name of a lady bird deed.

That's again more of a colloquial name, but this is just a form of life estate as I can see it. So you transfer your house into a trust and you retain a life estate that allows you to, you retain a right that allows you to live in and use the property for the duration of your life.

But I don't see why that would serve just a normal person and why that would be necessary. If you want to avoid probates, all you need to do is put the house into just a very simple trust, just a standard revocable living trust, and the house will avoid probate and boom, done.

There's nothing more to it than that. So why would you need to retain a life estate in the property rather than just simply moving the property into a trust, a simple trust? My basic understanding was that this was a cheaper, simpler way in Florida and some other states to achieve the same purpose if trusts were not necessary for other property or accounts.

Do you have other property or accounts? Not the accounts that wouldn't have a beneficiary designation on them that would achieve the purpose of avoiding probate. How much would it cost you to do a ladybird deed as compared to a simple revocable living trust? I mean, it looks like there's a bunch of forms, like generic forms that you can download, standard forms for this, and recording is very cheap, like I think it's under $200.

How much is the house worth that you own? Probably around $800,000, $850,000. How old are you? 36. Okay. So, listen, I'm not an estate planning attorney. I know a good bit about estate planning, but I'm not a Florida estate planning attorney. I don't understand why you would be working on this at the age of 36 unless you have some specific life-threatening condition or you or your wife have some kind of specific life-threatening condition.

I don't think that this kind of planning is necessary in a situation like yours, and I don't think that you should cheap out when it comes to proper legal advice, especially when you're dealing with almost million-dollar assets. So the idea of taking your $800,000 house and using forms and things that you get on the Internet and $200 filing fees, to me, is a nightmare, and I can't imagine any attorney or any financial professional thinking that that's a good idea.

I don't think that avoiding probate is particularly important to most people. The primary reason to avoid probate is to maintain privacy over your estate. Is that very important to you for some reason, to maintain privacy? Yes, it is, but also in Florida, probate can be from 12 months to 18 months, so that is also important.

Jointly. Okay, so you already have a joint ownership there, so the house is going to pass by joint ownership. At 36 years old, you're hopefully 40 to 60 years away from your death, and so this is not something that is likely to happen. If you die now, your wife would inherit the house as the joint owner.

Sounds to me, with the noise in the background, like you and she have young children, and so the biggest problem is not avoiding probate, the biggest problem is how do I have proper management of the house so that the house is managed for the benefit of the children by my trustee for my children's trust.

That's your biggest issue. Do you have a will and do you have a trust in your will for the benefit of your children already? Yes, we do have a will. Okay, and so what are the terms of your will? If you die today, what happens to your house? There are designated guardrams.

Okay, and it goes directly to your children? Do you have a trust? Do you have a springing trust, a testamentary trust in your will that comes into being at your death? No, there's property defined and basically the accounts defined that already have designations on. So the will is going to catch up for accounts that do not have a beneficiary designation.

Okay, well the normal use of a life estate is to help the grantor get rid of property for the purposes of some form of specific estate planning, often either taxes or Medicaid planning. In the short article that I find here on a ladybird deed, it seems like it's probably a Medicaid planning tool.

And the idea is I want to get rid of my ownership in the house, but I still want to have control. That's evidently what this kind of deed offers. And I want to maintain a life estate. I want to maintain the right to live in this house, even though I no longer own it.

And so none of those seem to me to be applicable in any way to your situation. And the only reason I've heard you say that this is something you would pursue is simply due to the fact that it might be cheaper than a revocable trust. Is that correct? Correct.

Okay, so to me, with all the caveats that I stated, that it could be that I'm ignorant on this in some way, this does not sound like something that I would pursue. The normal use of a life estate would not apply to your situation as a 36-year-old father owning an $800,000 house that you own jointly with your wife and have young children.

I don't see the applicability in any way of a life estate. If you want to establish a trust, I think a traditional revocable living trust is probably a better solution. It is simpler and does not involve this particular bifurcation, this separation of the life estate, of the grand tour, with the actual property control.

And so I've never had one of these deeds, so I don't know if it's a problem, but I would not want to be involved in this unless there was a clear and compelling concern. I would not worry about avoiding probate at 36 years old unless you specifically know that you're facing some kind of medical condition or something that means you're likely to die soon.

Avoiding probate is not a concern. Now, again, you say I have privacy concerns. Sure, that's fine, but you're unlikely to die at 36, and so I would just skip this altogether. Own the house yourself in joint ownership with your wife, especially given the fact that you're in Florida. You will want to do that so that you maintain the asset protection benefits.

And I would think that a significant reason not to make this kind of transfer would be that you would lose out on the generous homestead exemption benefits for asset protection in the state of Florida. So I would just say own the house with you and your wife. Have in your will what happens to the property and who manages it for the benefits of your children.

If you desire, just set up a simple testamentary trust in your will and maybe set up your own living trust that's available for you that you could transfer your house into in the future if you wanted to. But this seems extremely premature for a 36-year-old to be working on this.

Now, fast forward, maybe you're 76 and you're still living in this house and you want to change the ownership and control of it and maintain a life estate. That's for some reason that I'm open to it, but I can't see any application of this for a 36-year-old. Thanks, Josh.

I noticed. I actually think the reason I was thinking about this is because it had to do with family members passing recently in the last two years. And it's actually another feature, I think, of the deed to have privacy because they're recorded like it's a public record who's on the deed, who we would transfer to.

But good point. Thank you. My pleasure. Again, I could be ignorant on this. I'd never heard of a ladybird deed until you asked me the question. I know the basics of life estates and trusts, etc., but I don't know what a ladybird deed is. So I could be ignorant.

If you find out that I'm ignorant, then let me know. But from what you're describing, I can't see any use of it, at least for a compelling reason. I would say this with anything. Anything you're going to do, make sure that you can make the clear and compelling case for it as to why it's necessary and important for you.

Anything else? No, that's it. Thank you. Wonderful. We go on to Tuscaloosa, Alabama. Welcome to the show. How can I serve you today? Hey, is that me? That's you. Go. Great. Joshua, this is Wayne from Birmingham. Welcome. I had two potential questions I wanted to ask you. I am seriously thinking about taking your advice and going to Canada to open a Canadian bank account.

Great. I wonder if you might be able to give some granular detail about what I might expect in the visit, the funds that I take, what form should they be in, what denomination, the amount, just various things to help me maybe plan a little bit. Sure. Absolutely. The only thing that is really different than opening any other bank account in the United States is that normally the Canadian banking system works on an appointment basis.

So it's not strictly necessary. You could just simply go to Canada and open an account, but they often do want to take an appointment in advance. You call up a local branch of whatever bank you're interested in, and it can be any bank that you're interested in. I try not in public to make any kind of specific recommendation of one bank versus another.

Basically, any of the big, large, well-known Canadian banks are about the same as the difference between Wells Fargo, Bank of America, Chase, etc. in the United States. It's like, okay, it's a bank. They all work about the same. So you find a branch that's going to be convenient based upon your travel plans.

If you're in Toronto, then there's a bazillion of them. If you're in a smaller town, there's a few of them. And then I would call them up and just simply say, "Hey, I'd like to open a bank account. Can I make an appointment with you for Tuesday at 10 o'clock?" And they'll make an appointment with you.

When you go to the meeting, you need to take your identification. You'll need to take your passport and identification. You'll need to have your documents ready just like you would in the United States. There is no privacy or secrecy involved with the process in any way. They will require you to give them your Social Security number.

They will require you to give them your address information, etc., and all of that information. If you want to take some money to open an account, that's fine. I wouldn't take a lot. But, I mean, crossing borders with more than $10,000 of cash requires disclosure. So I certainly don't want to be near that limit.

And I don't think it's necessary because you can take, you know, a thousand bucks or whatever it is that's reasonable for you, open a bank account, and then you can wire in the money later or send money over directly. Again, this is not, don't think of yourself as some 1970s skulking over to Switzerland with your bag full of cash.

That is not this way in any way. You're just simply opening a bank account in another country where you have access to another currency and you have access to another jurisdiction. And with those documents, again, I take my driver's license that shows my home address on it, take my passport, and have your Social Security number ready, and they'll go and open the bank for you.

They'll give you a debit card, send you one in the mail, and they'll go over the options. And so basically what you'll want to think about, and maybe you can do a little research in advance on the website of the bank, is what are the options in terms of the different types of checking and savings accounts that I want to have.

Standard practice will be for someone like you to have a U.S. dollar account or a Canadian dollar account, sorry, and a Canadian dollar account. So you'll want to have an account in both currencies. And so just depending on how much money you want to keep in there, they'll have different fees that they will assess on the account based upon the account balance.

And if you're willing to keep the maximum amount in the account, then you can avoid the fees. Now the only other thing that you'll want to be cautious of is your reporting obligations to the U.S. government. If a U.S. citizen has more than $10,000 held in foreign bank accounts, then you're required to file annual reporting and disclosure forms.

And so if you're underneath that number, then your reporting requirements are simplified. Other than checking the box when you're asked if you have a foreign bank account, then there are, let me just triple check my mind, I'm not aware of any reporting requirements if you keep less than $10,000 in foreign bank accounts.

If you want to keep more than $10,000 in foreign bank accounts, and by the way, that's cumulative, so it's not like you could have $8,000 in one account and $8,000 in another account and $8,000 in another account and not report them. Then you'll just need to file your annual banking disclosure forms telling the U.S.

government how much money you have, what accounts it's in, et cetera. And then they will reconcile those documents with the annual disclosure, the annual reports that the Canadian bank will file to the U.S. government about the existence of your account, its balances, et cetera, at their banking institution. And so from a functional perspective, it's really, really simple.

And it's just like opening an account in the United States. It's just difficult the first time, and then after you do it, you say, "That was simple, super easy." Yeah, okay, so just U.S. dollars cash is fine to go with. Okay, and one specific thing, I was looking at the different banks.

I see that there's a TD Ameritrade sort of bank there, which is a familiar name in the U.S., and apparently they have a big U.S. presence as well. Is that still a separate Canadian bank as far as our purposes that we're interested in? So this is where it's hard for me to know what to say.

So first, let me go back to why I think people should have a foreign bank account. Basically, there are a few reasons. Reason number one is you want to have the ability to access foreign currencies in a simple and straightforward way in case something happens with your own home currency.

And I should state for the record that I do not expect or predict massive problems of the U.S. dollar. I expect the U.S. dollar to maintain its leading status as the reserve currency of the world. I'm not expecting that anything bad is going to happen to the U.S. dollar in the current time.

But I like to be prepared in case something did happen that I don't expect because I don't place a lot of stock in my predictions. Rather, I try to have insurance policies against possible scenarios, plausible scenarios, especially scenarios that could hurt me quite a lot. And if I'm living in the United States and I'm earning money in the United States and I'm saving and I'm banking in the United States, and if the situation in my home country were to go bad for some reason, then that could wipe me out if I don't have the ability to access other places where things are better.

And so if I lose my job and there is massive inflation and a banking crisis, etc., then I'd like to have the ability to access some other options and potentially protect some of my savings and move to another currency. Now, I'm also not trying to make any kind of official endorsement of any particular currency.

The Canadian economy has plenty of problems. The Canadian dollar is different than the U.S. dollar, and I'm not claiming that it's better, but it is different. And one of the things that I've noticed over the years in studying financial collapse has been that many kinds of currency crises and collapses, they don't seem to be contagious in the same way that – they're not contagious.

Now, the hard thing about this is factoring in the United States. There's a saying that goes around in international circles with regard to the United States, is that if the United States sneezes, the world catches a cold. Basically, because the U.S. economy is so enormous and so influential in terms of the U.S.

dollar, etc., that when there are problems in the United States, that can impact the world on a global basis. And so I want to be cautious about that and recognize that if the United States dollar faced problems, there would probably be many issues that many currencies could face. And so I don't want to make bigger claims than I can defend.

However, if I look at places that have experienced financial collapse, my favorite example is Venezuela, that when you had an absolute hyperinflation of the Venezuelan currency due to a complete and total collapse over the last decade, that didn't automatically mean that the Colombian peso or the Brazilian real were immediately affected.

Those currencies had their own issues. Now, Colombia's had inflation, Brazil had inflation, they had separate issues, but they didn't have the same issues that Venezuela had because the currency crisis was largely a national system. And so my idea is that by having access to foreign currencies, then if something happens in my primary currency, then I want to have quick access to something else that may not be better for the long term, but will at least allow me to diversify out of my primary currency.

And so for someone in the United States, this can be any other country, but Canada is easy because it's an English-speaking country, it's easy for Americans to go to, it's kind of, that's why I recommend it, not because it's the best, but because it's the easiest. If somebody is living in another place, if a Canadian is living in Canada, the exact same advice applies going the other way, that a Canadian should have a US dollar account in the United States, a German should have a US dollar account in the United States, or a British account in the British pound, something that is different than your primary currency.

So that's the first big thing, is I want to have access and the ability to transfer some of my savings out of my primary currency into another currency in case there's some kind of overall issue going on. The second reason is so that I have the potential of avoiding currency controls if there starts to be a collapse.

One of the things that governments always do when they face a financial crisis or collapse is they start to impose currency controls, and those currency controls are in different expressions. So they'll limit the amount of money you can get out of an ATM, they'll limit the amount of a cash transaction that you can engage in, and they'll limit your ability to transfer money in and out of the country.

Now these are not the kinds of things that happen in the first few days of a crisis, but they do happen quickly in a severe crisis because they are kind of a standard part of the playbook. And so in order to escape these currency controls, you have to have an infrastructure established in advance of how to get your money out of that country.

How do you get substantial amounts of money out of the country? Again, here I go to a place like, let's use Argentina. Argentina is in financial crisis about every few years, and they go on for a few years, and they seem to come out, and it's back in again.

And so right now, I forget the details of the Argentinian currency controls, but they're very, very strict in terms of how much money you can go with. And if you want to get more money out of the country, there's something like a 50% tax. I haven't checked these numbers recently, but there's a huge tax on it.

So I had a client I worked with some time back that inherited a house in Argentina, and she was working to sell the house, and she wanted to take the money out, but there was no way for her to get the proceeds of the house out of Argentina because of these controls.

Either she would lose half of it to taxes, or she'd basically have to shuttle the money out, $10,000 at a time in her pocket, making trips back and forth across the border. And of course, that's not suspicious. And so how do you do this? Well, when those currency controls go up, you already have to have your money and your assets on the other side of the wall.

Otherwise, you're in trouble. And so how do you do that? Well, in normal times, you make a bank transfer, and it's super simple and easy. But that bank transfer has to be to an account that is established that you can do it. And if you have that set up, then you can just open up your phone, do a wire transfer, and transfer your savings out.

And so what I particularly like for Americans is for Americans to have a U.S. dollar account in another country. And the example that I give is basically a tunnel account. And so think back to the early stage of the coronavirus crisis. There was a period, the first couple months of it, where things were looking really bad.

There was massive uncertainty about the situation, the health situation, huge uncertainty about the economic situation. Stock market was crashing. Inflation looked bad, et cetera. And I started to say, like, is this it? Like, this is bad, but is this it? Well, the great thing is I didn't really have to choose.

All I needed to do was, if I wanted to protect my money, was transfer some of my savings from my U.S. dollar account in the United States to my U.S. dollar account in a foreign country. And by so doing, I now know that at any point in time, I can just simply transfer out of the U.S.

dollar into foreign currencies in other countries. But I don't have to take that bet in advance. I could just keep the money sitting in a U.S. dollar account in another country. So those are the two basic reasons why I think it's smart to have foreign accounts, is for those reasons.

So now let me come back with that logic. Let me come back to the argument about using a bank like TD Bank that has operations both in the United States and in Canada. For the first one, it would certainly be no problem, because if I want the ability to interact in Canadian dollars easily, then I can just simply transfer my money from a U.S.

dollar account to a Canadian dollar account within TD Bank. That's super simple and easy. It's the second one where I'm not so sure. And the basic reason comes down to what kind of pressure could a government place upon an institution that is doing business within its borders, and what would that government do?

And so the TD Bank, they have a Canadian operation and they have a U.S. operation, but am I really going to feel confident about them as a choice in the scenario that I described? If my home country imposes currency controls and says that I can't transfer money out of the country or I can't do it without an enormous tax of some kind, I'm not going to feel so confident with them.

Now, is this likely to happen? I hope not. I hope this never happens in my lifetime. But in terms of planning, that doesn't feel really good. Hope is not a strategy. And so if I had my choice, I'd much rather deal with a tiny little bank on the far side of the planet that has zero contact whatsoever with the U.S.

government, U.S. entities, etc., doesn't even accept Americans. That would be great. Except that I'm American, so I'd have a problem. So everything different from that is kind of a sacrifice of some kind. So if I could find a little bank in Canada, in far north Saskatchewan that had four branches and bank with them and they had zero contact with the U.S.

government but they would give me a bank account, well, that to me would be more ideal for the second option than TD Bank that has operations in both countries. Now, realistically, if this actually happened, I would not feel super comfortable with my money in any Canadian bank for the long term.

So if this ever did happen to the degree that I've described, then the idea of having money in the Canadian bank is just a temporary thing anyway. If this ever happened, I would be very quickly on the airplane and I'd be opening accounts in three other countries, preferably one or two of them that are enemies of the United States, in order to protect my money further.

So how do we make the decision in that scheme of kind of paranoia? Like where is the right way? Well, clearly something is moving us in the right direction, but why would I voluntarily choose a bank that has close ties with the United States, again, for you from a U.S.

perspective, if I have the same choice of another bank that doesn't have such close ties? And so my answer to that is I would only do that if I valued in some way the service part of it. So if there's a TD Bank branch right in my town that's super convenient, and if they can go and they could give me a Canadian dollar account, and I know I'm not fully protected, but I get benefits from using them, then sure, go for it.

But I don't know how to tell someone else where to come down on that level of paranoia. I prefer to keep my commentary to kind of the broadly acceptable stuff, people who aren't in legal trouble, people who aren't trying to hide money, because to me that's kind of the rational insurance policy that I advocate for.

But you make your own decision. I would just say why would I choose a bank that has close ties within my home country, because that creates more of a sphere of influence. Now, the final thing, though, and I'm repeating slightly what I said, but the U.S. government is a different beast than most other countries' governments.

So let's say that you lived in – you were from Ukraine, and you were trying to protect your assets. Well, the Ukrainian government is not a global superpower, and so you can pretty much interact in any country that you want. The United States, on the other hand, is a global superpower, the world's largest spy, collecting information everywhere, putting sanctions on everyone.

And so I don't think that – I don't think you're going to avoid the U.S. government. And so is all of this useless? I don't think so, but I certainly am open to the criticism that, listen, we're dealing with the U.S. government here. So does it really – and the point is that Canada is a close neighbor and a very close ally, one of the five I countries for the United States, where basically they interact, they share all information, they make decisions largely together.

And so I'm not sure that your money is safe in any Canadian bank in that kind of difficult situation that I described. But I would still choose something that is more separate from the country because it would make me sleep better at night. Good, good. That's kind of what I was thinking, and that's really helpful.

I sure do appreciate that. My hope is that this action step is one that you will take, and then it'll feel so good to have done something. And after you've lived with it for a couple of years, then you'll go ahead and set up a second plan, and you'll pick another country that's a little bit more distant from the United States and have one more backup plan.

And you'll practice transferring your money around, et cetera, and just get used to the idea. Because at the end of the day, this is only weird for you primarily because you are an American. It is not weird for the vast majority of the world. Americans are so accustomed culturally to being king of the world and to having an enormous country and an enormous variety of people to choose from in terms of providers that Americans don't generally think about accessing world services.

And so that's the only reason this is weird for you. But on the whole, once you do it, what you'll discover is that it's no weirder to do what I've described than it is for you to have a bank account with a credit union in Alabama that's a local credit union in Alabama.

And yet when you travel to Washington state, you swipe your debit card just like you do in Alabama. It's all the same thing. And yet really, truly, there is a difference between interacting with a large national bank and an Alabama credit union. And even today, there's good value in people having assets, even within the United States, with carefully selected entities.

Happy to give you that speech if you want it. And so this will only feel weird to you until you do it. And then once you do it, then you'll be welcomed into the world that most of the world lives in, which is to say, yeah, of course I keep a bank account in my home country.

Obviously, I need to pay my bills and that's where my home currency is, etc. But it's also perfectly normal for me to access the world's best banks that are in specific banking jurisdictions and keep some of my assets in those banks. And so it's just unusual for Americans because we don't really think that way.

There hasn't ever been a reason to do it, and it's kind of a new mindset for someone like you. Okay. Just need to take that first leap. Yep. Yep. Take the first leap. And once you do it, it'll feel better. Anything else? Okay. Yeah, if you've got time. I do.

I do. You're my last caller on the show, so go ahead. Now for a limited time at Delamo 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 Delamo Motorsports in Redondo Beach and get yours. Offer in soon. See dealer for details. Okay, great. Yeah, recently I listened to your talk about 529 plans and the changes that have happened and all that. And you mentioned the concept of a family bank during your talk.

And I wondered if you might expand on that a little bit. Yeah, when I talked about that, I was not referring to setting up any kind of legal entity. So first, let's make that clear. I wasn't suggesting that we establish a family bank that's registered as a bank. I've read a few articles on some of that, and I find those concepts interesting, but I don't have any personal experience.

You can do this oftentimes if you go and set up. We'll be talking about this at my Panama event coming up. Mikkel Thorup is going to talk about setting up family foundations and whatnot in Panama as an option and some of the global options. He has more expertise in that area than I do.

And I've read interesting options about things like that. So there's always a way to it. I was referring to it just in a general sense that if you look at one of the reasons you have value. And by the way, there are plenty of instruments that you can do for this in the United States as well.

So you can set up trusts within the United States in various countries. In Florida, you could do a trust that has a duration of as long as 360 years. You can have assets in those trusts of various kinds. You have full and complete separation. This is a useful planning form for things like protecting your children against the risk of divorce.

If your family assets are held in a trust and your children are beneficiaries of the trust and then your child gets divorced, well, the child's divorcing spouse is not going to receive the assets because the child doesn't have access to them, etc. And so there's lots of legal instruments that can be used to do this type of thing, both nationally in the United States as well as internationally for those who wish to establish the legal entity.

In my conversation, usually where I talk about this, I think of it just more conceptually. The idea being that as parents, we want our children to succeed. And how can we nurture that success? In my own childhood, I was raised under the "pull yourself up by your own bootstraps" philosophy.

And partly that was because we didn't have a lot of money. Also, partly it was just due to the culture, the culture that my parents grew up in, where it was very much a "pull yourself up by your own bootstraps" culture. And that was passed along to me, and I was proud of that.

And just examples of the practical application of that was that when I was in high school, every year from 7th to 12th grade, because I was attending a private school, I chipped in $100 a month to my private school tuition. I don't know if my dad actually needed it, or if he did that because he needed the money, or if he did that because it was part of building responsibility in his children.

I should ask him. But anyway, that was something that we did. And there was a year I didn't have the money, and it wasn't like he pulled me out of school. But it was a good discipline. I paid for my college. I put myself through. But as I became a financial planner and started interacting with people who were wealthier, I discovered that this "pull yourself up by your own bootstraps" philosophy, while certainly something I was proud of, was probably not the best way to create success.

And the example that I look back on and see so clearly now is how much it harmed my potential in college by spending all my time working to pay for my tuition rather than taking advantage of other opportunities. So without going into the whole story, my first year of college I had three different jobs that probably totaled, I don't know, 25 hours a week of work.

But it allowed me to pay cash for my freshman year of tuition at a private school. In my senior year I was working 40 hours a week, and it allowed me to pay cash and pay off my student loans while working my way through school. But I remember hearing about things like internships.

And at the time I couldn't even conceive of how somebody could afford to work for free. I was like, "Why would you go and work for free? I've got to make money." How on earth could you go and take an unpaid internship? Today I look back and I realize what I gave up.

If I had taken today, if I'm coaching somebody, I would say it's far less important for you to go and get income than it is for you to go and get experience and connections. And an unpaid internship and strategically chosen internships are a phenomenal way for you to get ahead very, very quickly.

But you can't do that when you're trying to work all the time. A similar example that I had was in starting businesses. Not being from a wealthy background, I never had a family bank to fall back and rely upon. Rather, I've always had to bootstrap everything that I have done.

And that's fine. I'm proud of it. It's good. You learn lessons. But it's also pretty painful sometimes to have to bootstrap everything. And you look and you follow the trajectory of people who are wealthy. And you study the way the wealthy people do it. And you see you can use money as a very effective form of leverage.

And so I've wrestled with that a lot over the years. I've tried to reconcile my own predilection for bootstrapping and the value of doing it yourself. And the discipline and the character and all of that stuff. As compared to doing things the easy way. And what I realized is the balance between those things, the proper balance is probably something like this.

Is to have a family bank for a wealthy family. To have a family bank where you will basically support children in any productive use of money. So paying for education, certification, etc. Very productive. Very important. And being able to write big checks out of the family bank. And allow a child to be free of student loans, etc.

Seems really important in the grand scheme of things. Having a family bank to invest into things like businesses. And your children knowing that they have access to money. I think is probably a good thing. Having access to a family bank for purchasing valuable assets. Things like purchasing a house.

Seems to me a really good thing. And I don't think that, I think it's kind of a dumb expression of that pull yourself up by your own bootstraps mentality. That comes out of the American culture where we try to tell children basically do it on your own. And I can't find a lot of evidence for that.

I appreciate and respect when children learn to be productive. But the whole do it on your own philosophy and I'm not going to help you. And you know you got to do it yourself. This to me seems like a really bad way of slowing down the results that your children get in life.

There are dangers to it but that's where I've come to after about two decades of thinking about it. Is that it seems dumb to me to like we want our children to not be just spoiled kids who drive around in the brand new Ferrari that we gave them and smoke crack.

Like that's obviously stupid. But for somebody who is motivated and focused and productive knowing that the family has money and that that money is here for your use. And you as the child are the steward of that money and you have to take it and you have a responsibility to grow it and pass it down through the generations.

To me seems really, really important. And that's what I want to do. And I guess I don't have any other callers at the moment so I'll just make two more comments. I think a lot about the saying there's a proverb in the Old Testament in the Christian Bible that says that a righteous man leaves an inheritance to his children's children.

And I think that's a good expectation for us is that I believe that God has designed that the wealth of the wicked is stored up for the righteous. In the fullness of time the wealth of the wicked will all flow to the righteous. And one of the expressions of righteousness is the accumulation of money.

And as that money is accumulated it needs to be invested into a controlled environment where it can be made to continue to grow and to continue to be productive. And if we have the moral foundation that says that I am not here exclusively for myself, exclusively to consume, consume, consume.

I have a moral obligation to accumulate wealth and to accumulate so much wealth that not only can I take care of me, myself, not only can I take care of my wife, not only can I take care of my children, but I've been productive enough to be able to accumulate a surplus for my children's children.

And then that should be the expectation for every generation. Certainly some may not measure up to that, but that should be the expectation. That should be the vision that we hold. That as a man, I tell my children, I don't interact with them much on money beyond their own personal usage of it, but in the fullness of time my charge to them is going to be, "Listen, you are a sheetz." And what that means is you have an obligation to be productive with the inheritance that you have received from your father, from your grandfather, and from the generations before you, and then to accumulate and to see to the advancement for your own children and your grandchildren, etc.

And this family is here to grow and to impact the world and to be effective and productive. And your righteous stewardship of the resources with which you've been entrusted is expected of you. And one part of that is that you are expected to use the advance that you have in life, the many benefits and privileges that you have in life, and to steward those for those who will come behind you.

And money is a really important component of that. And so holding that expectation that you are going to be so productive that you accumulate money for your children's children, I think is a really important component of life. The second thing that I have seen is I've been thinking a lot for the last, I guess the last five years probably, I've been thinking a lot about demography, birth rates, etc.

And this has been an acute interest over the last about 18 months of mine. And we are living in, depending on what country we're living in, we're living in a population collapse or a population crisis. And if you look back at this and you try to figure out, like, what is happening?

There are many factors that are happening, right? Obviously, industrialization, modernization, secularization, just growing wealth, etc. There's many issues that are happening. But if you talk to young people and you listen to young people, one of the things that they say, one of the reasons they don't want to get married and they don't want to have children is due to their financial instability.

Now, I would like to push back to those young people and simply say, you don't have financial instability. You simply think you have financial instability, but it's not actually financial instability. But setting that aside, let's just assume that they're right, that they have financial instability. So as fathers and as grandfathers, it is our job, if we want to see to the continuance of our family, if we want to see to the thriving of our progeny, it is our job to solve these problems for them.

And so maybe if we went back hundreds of years or thousands of years, we could help our grandson sow a tent out of Buffalo Hides so he and his bride could have their own space. Well, we don't live in that world. But what world do we live in? We live in a world in which we need to help our children.

And in order for them to have babies, we need to help them at a very young age. Because one of the impacts of birth rates has – one of the big impacts on birth rates seems to be simply the delaying nature of life and of pregnancy. And so put very simply, if we went back two generations, I'm skeptical of the idea that it was ever all that common for teenagers, early teenagers, to marry and to have children.

That's kind of a perception that if we went back into the ancient times that a girl was married at 14. I'm skeptical of that for a couple of reasons, but set that aside. Let's go back a few generations. It was certainly rather common for a girl to marry at 20.

Well, if a girl marries at 20, she has 20 years in which she can have babies. Then it became common for the age of marriage to be delayed past college. Okay, so now it was common for a girl to be married at 25. That's okay. If she gets married at 25, she can still possibly have 15 years to have babies.

She can still have a number of babies during that period of time. Well, now it's become common to push past that 25 and to say not only does a girl have to graduate high school and graduate college, but now she's got to be secure in her career. And she needs to really have built her career.

And then she can go ahead and get married and have babies if she wants to. Well, that pushes the age to say 30, right? Late 20s and 30. Well, that means that she is very unlikely if we look across all women as a group, it's very unlikely that she's going to have time or physical ability for her to have more than perhaps one or two babies.

Because it becomes much more difficult for her to conceive children. It becomes much more difficult for her to birth children. And it becomes much more difficult for her to have time to even have multiple children. And so if you look in the West and you listen to American women that self-report that they don't have as many babies as they themselves desire to have, to me a big factor is just this extension of life.

Now, there are good reasons for this extension of life. Meaning that for a girl to, you know, I always imagine my daughter, right, placing her trust. Let's say she's 20 years old. For her to place her trust in some 22-year-old guy and say, "Yes, he's ready to support me," etc., that's got to be some guy for her to feel good about that.

It doesn't seem like we're very good at producing 22-year-old men who seem very powerful and strong and in this position to be good husbands and fathers, etc. There are some, and I think we can do better. But at its core, if we want to help our children to have more babies and to have them in a healthy way where they come into stable homes, etc., so that, you know, they're not raised in a catastrophe.

We want the best outcome possible. One way we could do that is by investing our money into them. And some things that we could do is, number one, help to minimize financial obligations, get rid of student loan debt, eliminate big amounts of consumer debt, and help them to have houses.

Because that's the other thing that people all over the world say and all the data seems to bear it out. That if someone's living in a tiny apartment, it's very difficult to want to have three children in the tiny apartment. It's like, "Maybe one, maybe." But on the other hand, if someone's living in a reasonably sized house, in a place where they can handle children, American birth rates are much higher than they are around the world, probably due to our suburbs, that people feel like they can handle more children in their housing.

Then if we want that, then one way we can do that is help our children to get into bigger houses earlier. And so in talking about this on Twitter recently, I made the recommendation, like, baby boomers, if you want grandchildren, then once your children are basically adults, as quickly as possible, give them your house and you move into the small apartment.

Don't expect your children to live in this tiny little apartment while they're just getting their feet under themselves, and then expect them to also give you five grandbabies. That's not going to work. But if you've got this big old house that's paid for, et cetera, why don't you and your wife move into the little apartment and move your children into your big house?

Whichever child is married, say, "Hey, come on into this house." And if you've got another child married, help your next child get the house. And so these are some of the things that we can and should do with our money that are really good investments into our family culture and into our future, the future of our nation, the future of our people.

And so that's kind of the bigger expression of the vision is that there's this stupid idea that we've adopted largely in financial planning in the United States that the goal of money is to have more of it and that proper investing of money is to buy mutual funds and stocks.

And I think that's stupid. The goal of money is to invest it into people, into things that matter. And the primary people that we need to look at first are our neighbors and our family and our neighbors, the people that we're interacting with on a continual basis. And we need to take care of ourselves.

We need to save money. We need to use all of the good financial planning tools that are at our disposal. But at its core, we should use those tools that are going to help us to advance the causes of righteousness and justice through those that we can most impact in our close circles around us.

So those are my thoughts about a family bank is that I want to be productive enough to see to my own needs and the needs of my wife and my children, but I want to use money to help my children get ahead faster so that their children can get ahead faster so that their children can get ahead faster.

And this is antithetical to the very egalitarian American society that we live in. This is much more familiar to those who appreciate the aristocracy. But while I am sympathetic and I see myself as a man of the people, I really think there's a lot more value to thinking of ourselves as the aristocracy.

And in the same way that the aristocracy once saw themselves as having an obligation to use their position rightfully for the advancement of all men, especially including the common men, to me that seems the right way to handle. And this touches even on the whole question of privilege and how to deal with it in the modern world.

I have no interest in living in a world in which we go to privileged people and try to take away their privilege in order to bring everyone down. That to me sounds like a hell world. But I have a great deal of interest in teaching people that to whom much is given, much is required.

And much has been given to me and therefore I expect much to be required of me. And so I want to invest into my children in the traditional vein of a nobleman or an aristocrat and to do that in a full and righteous way so that my children understand that we are different.

But we are different not for our own hedonistic consumption. We are different because of the duty that is expected of us for our privilege in the world. So let me stop. Those are my comments. Yeah, that's good. I also like that it kind of fits in with this concept about leaving money to kids when they can most use it.

You know, when they're still relatively young instead of waiting until they're in their 60s and you die and leave them lots of money when it doesn't help them that much. Right. Yeah. All right. Well, thanks so much. Great. My pleasure. And thank you for calling in. So we only had a couple of callers on today's podcast.

I remind you that a lot of times I have 8, 10, 12 callers. Sometimes I have two or three. And so if you want to chat, this is always a great place to do that. Go to patreon.com/radicalpersonalfinance. Sign up to support the show on Patreon and that will gain you access to one of these Friday Q&A shows.

Thank you so much for listening. I'll be back with you very soon. With Kroger Brand products from Ralphs, you can make all your favorite things this holiday season. Because Kroger Brand's proven quality products come at exceptionally low prices. And with a money back quality guarantee, every dish is sure to be a favorite.

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