Today on Radical Personal Finance, it's live Q&A. Welcome to Radical Personal Finance, a show dedicated to providing you with the knowledge, skills, insights, and encouragement you need to live a rich and meaningful life now, while building a plan for financial freedom in 10 years or less. My name is Joshua Sheets, today is Friday, January 5, 2024.

And on this Friday, as we do on any Friday in which I can arrange the appropriate recording technology, we record a live Q&A. Open microphones, you call in, talk about anything you want. If you'd like to gain access to one of these Friday Q&A shows in the future, and you're listening to the recorded version, going out on the podcast, or on YouTube, etc., you can do that by becoming a patron of the show.

Go to patreon.com/radicalpersonalfinance, patreon.com/radicalpersonalfinance, sign up to support the show there on Patreon, and that will gain access for you to one of these Friday Q&A shows. I use that paid methodology of simply screening the calls so I get a reasonable number of calls that I can handle in 45 minutes to two hours, somewhere in there.

Usually winds up being between four to 10 callers, things like that. We begin today with Andy in Indiana. Andy, welcome to the show. How can I serve you today? Hi Joshua, thanks for taking my call. My pleasure. I see you have the music back. Indeed. Glad to hear that.

You commented a couple of weeks ago, a couple of months ago, about you wish people would call in and argue with you a little more. So I wanted to call in and prod a little bit about the idea of mindset and how much that gets talked about online in general and how you had talked about that with several callers you had in the last couple of weeks about house buying.

And so I hear that, I think you do this less than a lot of online podcasters and YouTubers and stuff, but there's a lot of get your mindset right, things will follow if you get your mindset right. And I listened to you specifically, the three calls you've had on people looking to buy houses the last couple of call-in shows.

I think that was kind of your approach was, hey, you need to think about this a little differently and it's a mindset thing and a motivation thing. And it seems to me that there's sort of a tiered level and a lot of us who are not at as high a level of success on things, it's really, I would say more of like a toolkit thing.

And so it's not just the mindset of, well, if you had to raise this $20,000 to save your child's life, of course you'd get it done. Well, if you told me I need $2 million in six months to save my child's life, absolutely I would do anything I could to get that.

But I don't have the tools in my toolbox to earn $2 million in six months and I probably can't figure out how to do that. Maybe I can beg and borrow and steal and maybe I'd go rob a bank or something. But I think my problem would be in that instance, I actually have no idea how you earn $4 million a year and I need a different toolbox.

Maybe I need a different mindset to find that toolbox. But I think sometimes things like how should I buy a house really could be, your mindset is go to a mortgage broker, they walk you through some numbers, that's what you can afford, go to a realtor, they find it, here's a different way to walk through the numbers and a different way to calculate what you can earn and look on Zillow instead of MLS and more like sort of practical things that people will figure out for themselves if their mindset is right but also could just be told to them by a different advisor.

Does that make sense? I think I hear you saying two things. I hear your critiques as number one, you can say to somebody you should just have a different mindset and somehow that's going to magically solve something for them and that's not always true. And then the second critique that slipped in at the end was basically, instead of talking about mindset, wouldn't it be better if you told someone go meet with a mortgage broker, sit down and go through the numbers, see what you can afford, etc.

Was I accurate? Were those the two primary critiques you were driving at? I think I didn't maybe say that very well. I think the critique would basically be mindset. If you have the proper mindset, you'll find the tools eventually but if someone can just show you, hey, there's a specialty tool here, that's much quicker.

You give lots of financial advice where there's some very esoteric piece of financial knowledge and you don't say, you do what I'm saying here, you should just go ask an insurance broker who will tell you exactly what the right number is for this and that's how you get your answer.

As opposed to saying, well, if you read a bunch of books and focus your mind on being a person who's well insured, eventually you're going to come across this number and then you'll know what to do. That was the critique with the house buying things in particular. Coming from people who are, several of them were on the, we're just trying to save up 20 grand to make a down payment, this is a more mainstream, I'm not the person that's got hundreds and hundreds of thousands of dollars and doesn't know where to put it, sort of financial problem.

I think you have good insight on there's different ways to look at the problem and use a different tool to solve your problem and then sometimes you get advice that's more like change your mindset and then you'll figure it out instead of, well, most mortgage brokers will tell you this but they don't tell you this other important thing and if you think about this other important thing, that's the actual clue to this problem.

Sure. Let me try to respond and then you can follow up with step two because, first, with regard to mindset, I believe myself that there's a real truth that the mindset that you have about money dramatically affects the decisions that you make, the opportunities you're exposed to and how you take advantage of those opportunities when they come into your life.

I'm mostly aware of it, of the truth of the mindset being important by my own personal lack of, call it a wealth-oriented mindset. Because I grew up in humble circumstances, I am aware of how uncomfortable or how, especially when I was younger, how I thought that the only way to generate significant income, generate significant savings was through more hard work, was through working a little bit longer, being a little bit more frugal, etc.

And then I know very distinctly for me when I became a financial advisor and started becoming exposed to people who were wealthy who had never gone that pathway and had never needed to live the frugality and the kind of the hardcore saving, etc., but who had a different way of interacting with the world, I realized there was something different.

The problem was that when I went looking for advice or input on how to adapt and change my mindset, I found that world of gurus quite slippery. And I found it full of people who wanted to teach me how to change my mindset, enriching the guru in the process.

And so I have believed for many years now that our mindset, our philosophy with regard to money drives us, but I have never known how to completely and carefully articulate that across the board in a coherent kind of all-encompassing package. I have changed quite a lot in my own method of thinking.

My own fixed beliefs have changed a lot over the past years, and so I've tried to embrace opportunity and I've experienced dramatic change myself, but never having been to the mountaintop, I can't look back and say to someone, "Here's all of the mindset things that are necessary." But I do believe that in many financial decisions, just like in many life decisions, the usefulness of a coach is primarily related to influencing somebody's desire and influencing their perspective in some way.

And so I try to incorporate that in how I answer a question or how I think about it to say that a lot of times we already know what we need to do, and there are very few people who are analytical enough to have explored all the options and genuinely be sitting with a conundrum, with two choices, and either one of them could work and they're just not genuinely sure what to do.

Most – maybe I'm just making up an 80/20 rule, but it seems to me like about 80% of financial problems are actually indeed problems of emotion and problems of purpose, problems of clarity of mind. And so those things genuinely are a mindset problem. So I released a standalone episode that had been part of a Q&A and it was a guy, I think he was in Texas, and he said, "I'm trying to save a $20,000 down payment." To me, the fact that the idea that someone doesn't know how to save a $20,000 down payment, that is an ideal question for a discussion of mindset or a question of clarity of goal, etc.

Because saving $20,000 related to his income was a perfectly reasonable amount of money for him to save based upon his income. I do try and I did try in that specific circumstance to probe on the income and make sure we're talking about something reasonable because I wholeheartedly agree with you.

I would never say to somebody, "If you had to save the life of your child, could you come up with $2 million two months from now?" Of course not. The only way out is some massive fraud or robbery of some kind for most people in that scenario. But $20,000 off of $130,000 annual income, that's something that can be done through a series of small steps.

Now the other questions that I think on last week's Q&A show that I was a bit ambivalent on, I think what motivated my frustration on that or my lack of willingness to commit to clear, confident advice has primarily to do with uncertainty over the real estate market broadly and uncertainty about someone's individualized level of commitment to a specific property or something like that.

This is genuinely puzzling to me because what I have observed in my own life and in lives of other people is that I'm quite willing to commit myself to a course of action even if it's very difficult or not entirely correct or someone else might advise me against it because I can assess my own level of commitment.

If I want a house, I'll get the house. Can I afford it or not? If I want the house, I can afford it. Obviously good analysis is necessary and hopefully I stick in some good appropriate analysis to make sure that I'm not going to impoverish my family or put myself into bankruptcy over a house, etc.

At the end of the day, I pretty much live my life doing most of what I want to do and my primary driving factor is that I want to do it and so therefore I figure out a way to do it. I don't go around asking if I can do it.

I figure out a way to do it and to make it happen. But I have a very hard time giving advice to other people not being able to judge another individual's certainty with regard to his goal and I don't know how to do that very well. I guess the other thing is that I should probably drive more practical.

I think it would be good for me to create more standalone resources and go through and say, "Okay, here's how you know what you can afford a house. You go and speak to a mortgage broker and here's what you look at and here's how the whole process works." I guess I've kind of tried to steer away in my own thinking broadly from subjects that are pretty easily answered with a library run, but I also recognize that a lot of people don't know what the inside of a library is and they may be coming across a podcast like mine and my own lack of interest in the topic shouldn't be necessarily a deciding factor of my giving them bad advice on it.

Because you are right, my interest in quite esoteric topics, when my interest is high, my specificity of advice is very detailed. But usually that's because it's something I couldn't find in a book and so I had to go out and figure it out myself and come up with some wacky six-step plan to solve it.

And then because my interest is high, my enthusiasm to share that with other people is high and I just don't have that interest for a lot of the nuts and bolts day-to-day personal finance discussion. But point taken. What are your thoughts on that? Thank you. Yeah, I think that was clarifying and helpful.

I can respond back or if you have another caller, that was a good response. I think maybe that clarifies for me. I think maybe the point I'm trying to make is that you seem to have a very good skill at knowing what you want and being able to articulate that and gain clarity on a question.

And I think a lot of people don't have that naturally, myself included, and need tools to figure out what we want or where we go or if this is a good idea. And I think it's common for all of us when you first start something, when you first start to understand it, it's very obvious.

And then after you become some level of an expert in a topic, it gets harder and harder to remember what it was like to be ignorant about that. And so, for example, knowing whether or not you want a house, it doesn't sound like you have ever struggled very much to think, "Do I want this house?

How do I know which house? There are seven houses that look really nice. This is very overwhelming. How should I prioritize all these things?" Whereas myself, that sort of thing is quite a bit of a struggle. And so, I have found specifically finding tools to sit down and be able to use decision-making tools.

And so, I think maybe a modified point of the critique I was trying to make was it seems to me like sometimes the problem is you're talking to someone like me who is ignorant of how to go about evaluating something and the advice to give is more of change your motivation, change your mindset rather than, "Oh, you seem to be someone who has no clue how to evaluate what you're trying to accomplish, what you're doing, what your options are.

Maybe you should read this book or take this course or use this tool to understand what your options are, how to make decisions better, whatever the specific issue is." >> JASON: Yeah. I think also just for the sake of honesty, our discussion would need to include that there's probably a very significant percentage of a general population and any individual person could fall within this percentage, but there's a significant percentage of the general population that I am simply incapable of really helping or serving because I look at the world in such a radically different way.

And I'll illustrate that with a very poignant example. I have a brother of mine who has gone through many challenges with his career, many challenges with his finances, etc. We have a close relationship. We talk frequently. There is no animus of any kind between us. Our relationship is free, open, of mutual respect.

He respects me, I respect him, etc. I for the life of me cannot seem to come up with any useful advice for him with regard to anything related to his career, his finances, his life in any way whatsoever. We have spent hours going in circles with me listening carefully, him listening carefully, me going back and forth.

And basically at this point in time I've come to the conclusion that we live mentally and intellectually on different planets. And to be clear, he's super smart. His brain just functions in a completely different way than mine does. And I cannot relate to his struggles and he cannot relate to my struggles.

They're totally different. So when I share my troubles and my hardships to him, they're like, "Why do you struggle with that?" And having such a close relationship to me where we have had such extensive communication over such a long period of time and yet having to recognize that I am basically incapable of providing useful advice for him has forced me to just to realize that at the end of the day we can't all learn from one person and we can't all interact with one person.

And so with that as context, when you described to me the difficulty of the hypothetical example you made of choosing among seven houses, I can understand the difficulty of choosing among seven countries to live in. I have a hard time thinking of the difficulty of choosing among seven houses because to me the house is a house is a house.

It's a commodity and it's going to be fairly obvious. Whether it serves the vision or it doesn't serve the vision or it is new and unlikely to cost me a lot of money or it's old and it's cheap. To me, the idea of there being seven similar houses is difficult to imagine but I can totally imagine choosing among seven countries to live in.

So it just may be one of those things where you and I, we have to go and one person can't give us good useful frameworks, we need to keep on looking. And in the same cases like with my brother, we can be good friends, we can respect one another, we can talk about all kinds of things that we can talk about but there are just certain things that for whatever reason we can't seem to understand.

We're both with the best of intentions trying at the deepest levels, we just can't seem to understand how one another thinks or why someone struggles with something. And to add to that, probably we have the same thing is that we can't understand our own hearts as to why we struggle with certain things.

There are some areas of my life where my behavior is objectively superb and there are some areas of my life where my behavior is objectively terrible. And you go through any process where you set a goal and you think this should be simple, this should be obvious and you fail at it again and again and again and you think what is wrong with me?

It's like how is it that in one area of my life I can be such a high performer and in another area of my life I can be such a loser? And even just understanding ourselves is difficult. So my hope is that I can do a good job. I'll do the best job I have possible.

I'll do the best job that I'm able to with the skills, resources, knowledge, etc. And I appreciate critiques and feedback because I'll try to even consider it and ponder them and try to think about how to do it better. But at the end of the day this is one of the reasons I'm so excited about the revolution in connectivity that we have that any other individual who also has similar skills or different skills or complementary skills can go and create content, attract an audience and be able to provide useful feedback and useful advice with a completely different perspective.

And that's probably what is necessary. So if you find that I'm unable to articulate something in a way that's truly helpful, don't stick with me. Go and find someone else and look for someone else until you find someone who speaks your version of brain language in a way that really connects on a deep level.

Thank you. That's helpful. And for the record, I do appreciate all of your mindsets. It's been tremendously helpful in my life. I thought that was it. And I will keep trying to talk appropriately about mindset without becoming just another guru who makes his money by telling people that they should believe about money kind of the way that I do.

Anything else, Andy? No, I think that's good. Thank you. And you're definitely not one of those gurus. Not yet. There's still time. There's still time. We all start somewhere. I'm going to go ahead and close out the show. Thank you. Thank you. We all start somewhere. I'm just kidding.

All right, Marcus in Virginia. Marcus, welcome to the show. How can I serve you today? I'm doing well, Joshua. Can you hear me? Sounds good. Yes, sir. I'm happy to be here. A long time listening to your show. Epic, epic show episode you did on the last call where you talked about the experiences of what men are experiencing in church.

I love that episode. I pulled over and screamed to the roofs off when you said what you said. So thank you for what you do. I'm calling you. I need some advice. I'm an entrepreneur, but I've fallen into the trap of doing that hybrid situation where I'm working a nine to five, but I also have several entrepreneurial endeavors on the side that generate passive income for me.

I am tired. I am exhausted because I have a logistics company that I do Monday through Friday from 8 a.m. to 3 p.m. virtually. And then Wednesday through Sunday I work IT help desk at night. And that's Wednesday through Sunday. And I do it from 3 p.m. in the afternoon to midnight.

So I'm exhausted. So my question is I want to give up the IT job because the logistics job that I have or the self-employed thing that I do on the side, I can make the same amount of money doing that that I make doing the IT help desk at night.

And I would make the exact same amount of money that I make per month. I would just beef up the amount of deliveries that my logistics business does. And I would make the same amount of money. The job gives me medical dental vision, and I've calculated what that is.

And I pay through my employer $331 a month to have the employer benefits and HSA and all that. But with Obamacare, I can do the same thing and get a plan for the same amount or a little bit more. So for medical and dental. And so I wanted to call in and ask, do I go the self-employed route?

Because I'm tired. To give you a breakdown of why, I do medical carrier work and I do medical equipment delivery. So I deliver specimens, labs, pharmaceuticals from hospitals. A lot of hospitals where I live. And I get paid about $6 to $12 per package. And on average, Monday through Friday, I deliver about anywhere from 21 to 32 packages a day.

And I can do that in four hours, which gives me the rest of my day to do everything else. So in essence, I make more per day, just taking on more deliveries versus working a nine to five job for eight hours. The equivalent is I'm working eight hours and I'm making less.

Does that make sense? I understand. How old are you right now? So I'm 36. I just made 36 in December. December. Thank you. And are you married? Single children? Single, no kids. Okay. Tell me the vision. What's the vision five years from now? The vision, if I continue to follow your show, is family, married, but I'm not this absentee father, right?

I'm home. I'm present. I can be home because of my investments and my different compensation, the different businesses that I have on the side that supplement my income. Right now I'm a veteran, so I received disability compensation. I have a cannabis dispensary vending machine business. I just picked up my second location.

And so that's going to grow. I have a third machine on the way. I have an ATM portfolio of about 10 to 13 ATMs that produce cashflow for me. I have three rental properties that kick off. So as you can see, I have a progression towards affluence, right? And I'm working towards one day just being completely self-sustaining so I can be home.

So I can be home and daddy doesn't have to be this apparition that you see pictures of him all over the world, but he's not home because he has to work three jobs. That's what I grew up in. My dad worked three jobs to support 11 siblings. And so I don't want that.

And so that's the vision. But coming out of COVID, to give you some insight, I almost lost my life to COVID in 2021. I got sick and I was hospitalized for a month and a half. And last year, the company that does the logistics, the dispatching company that sends us the deliveries, they lost a major hospital.

The hospital had just fired us because they put out a bid and someone outbid us and won the contract. Now luckily the company couldn't do what we do, so they fired them and brought us back. So we're back up and running as if normal and the income is fine, but it's self-employed income and Virginia is an at-will state.

So they have the ability to lay you off and we can't have them sign a long-term contract saying, "Hey, you have to work with us for at least five years. You can't just terminate us like you did before." So hence my apprehension. The IT help desk job is not a necessary job.

It's a hedge against a potential loss of the contract again. Okay. But I'm tired. Understood. How much money do you currently... What's your current net worth? Current net worth is 400,000. And across all of your sources of income, what is your current monthly income? My currently monthly income, I mean, there's real...

Ballpark, ballpark, just big numbers, big numbers. About 8,000 a month. And current monthly expenses, big picture. Big picture monthly expenses about monthly or... Yes, monthly. Monthly expenses are about 6,000. Why are your monthly expenses so high for a single guy? They're high because of debt. I don't require money to do some of these entrepreneurial and different...

These things. I'm not including the rental properties. So the rental properties have mortgages on them. So I'm just including the personal debt. Okay. So that's enough personal details for the moment. We'll come back to it in a moment. One more question and then I'll give you some thoughts. What is the biggest obstacle for you?

What is the biggest impediment or obstacle right now for you? What don't you have enough of right now that you would need in order to go up two levels in your current wealth building plan? What is holding you back at the moment more than anything else? To go up two levels in an IT job, I need certain...

No, no, no, no, no, no, no, no. Two levels in your overall plan. I'm just... Think big picture. What's keeping you from doubling up over the next couple of years? Is it lack of money? Is it lack of time? Is it lack of energy? Is it lack of context?

What's the biggest impediment to your significant success over the next couple of years? Lack of time. Okay. What would you do if you had more time available under your control? I would double down and focus on getting more ATMs, getting the second CBD dispensary profitable, getting the rental properties are going, and I'll take more deliveries, the logistics business, but the goal is to get rid of that eventually too, because it's me delivering those packages.

And that's not sustainable long-term for my age and body wise. I can't... When it's a great day, it's a great day, but when it's snowing, it hurts. When it's raining, it hurts. And I have to do those deliveries. So that will be gone. That's the goal to get rid of that too.

And so replacing that passive income so that I can have... If I had more time, I would increase the vendings, the ATMs, and the real estate. Okay. The first thing I would point out, this is a pet peeve of mine. You didn't do anything wrong, but I don't think you have a single source of passive income.

You have several businesses that provide you with residual income, but you work very hard for every dollar that you make. And I point this out because I think that people with a mindset of building various businesses, investments, et cetera, are often attracted to the term of passive income. You say, "Well, if I own a string of ATMs or a string of cannabis dispensing vending machines," or whatever the version is, it's passive.

No, it's not passive. You have to work really, really hard to go out and find those locations, to place your machines there. You have to work to go and service them, to keep them in proper running order. The income is residual. It may grow over time. It may even be, in some cases, exponential, but it is not passive.

And so I used to use passive income for that term, but I think that when we use passive income for that kind of stuff, we're selling a lie. And what's happening is the reason it's important to be honest is that if we're not honest with the fact of what it is and what it's not, then we may be successful and not actually realize it.

So, if we were to go back 10 years and I were to tell you that if you woke up with three rental houses and 10 ATMs and three vending machines, wouldn't you feel like you were winning? You would have said, "Of course I'd feel like I'm winning. I'd be doing amazing." But in reality, you don't currently feel like you're winning because you're hustling all the time, even though you've built this infrastructure.

So I exclusively reserve the use of the term passive income to things like dividends and stock appreciation from publicly traded companies that I don't manage, control, or even choose among necessarily. And I'm also willing to consider it for something like royalties, where it's an intellectual property that has been done and created and it's not something that I'm trying to enhance, not something I'm trying to build, et cetera.

And since most of the time, even when we create royalties, we're generally trying to continue to grow the brand and not just live on the current royalties. Since that's the case, then I usually just use it for stocks because that's the only thing that's actually truly passive, that you truly do nothing for and have the income.

Everything else, I relabel it. So I relabel it as residual income or renewals or a low, whatever word is appropriate for it. But I don't label it as passive because it's not passive. And so that is kind of just a personal pet peeve that I think will be helpful to some people.

It's not directly related to advice for your situation. Now back to your situation, you need to start always, begin with the end in mind. And so when I asked you what the vision is, you said, "I'd like to be a family man and I'd like to be home with the children," et cetera.

That's a, "I'd like to have enough money that I don't have to be gone all the time the way that my dad was with me." Do you agree? I agree. Okay. So question, are you currently dating anybody who might become the mother of your children? Yes. Okay. When will you know whether she's likely to become the mother of your child?

Are we in the process of getting married and stuff? Yeah. Just saying, you said you're dating someone, great. We hadn't entered into the factor before. So is this the kind of thing that, "Hey, a year from now, we'd like to have babies," or "I don't even know, I just met her, it might be five years," or where are you in this process?

How soon do you think realistically, based upon the prospect that's in your life right now, how soon do you think you might be having babies? A year and a half, two years. Okay. Awesome. So the reason I ask that is because one of the big, and this doesn't apply to you, just fact finding, but if you had said, "Well, I'm not dating anybody," one of my first points was going to be that you might be doing all this for reasons that aren't actually helpful, meaning you're never going to meet a girl if you're spending all your time working and you're not going on dates.

And so we got to get things in the right priority. And if you have a $400,000 net worth and you have a lot of goals and visions and things that you're trying to do, but your primary reason for doing those things is so that you can be a present father with your children, then we got to remember that along the way we can't neglect to go and meet a wonderful girl and have children.

And the longer that you wait to do that, the harder it becomes. And so don't settle for the idea that somehow it's going to be easy if you're 50 years old and you got all the money, that then that's the time to go and have babies. No, the time to have babies is now, as soon as you find and set up an appropriate family situation, find a girl who is going to be a good mother, marry her, et cetera, then start having babies.

Don't wait until 50 because the biggest, what we're looking for is to say, what is the biggest obstacle? And the biggest obstacle to you living that kind of life that you described is not financial. If you have a $400,000 net worth and you're 36 years old and you're a hardworking guy with all of these businesses that you're working on and properties that you're controlling, et cetera, you are dramatically ahead of the curve.

You're so far ahead of many other people that you have to then make sure that you're not getting focused on a fake goal. And financial independence is in some cases, and even in many cases, a fake goal. You don't need to be financially independent with $2 million in the bank and $100,000 of passive income, truly passive income, in order for you to be a present father.

It's not that difficult. You don't actually need that. And so I used to think I needed that and then I found I didn't. And basically just to share kind of my story is that I became obsessed with the FIRE movement early on and I had something similar of a vision to what you have.

I wanted to be, it wasn't so much to be, I always knew I was going to be a very present father because I couldn't conceive of anything different, but it wasn't to sit home all day. And I don't think actually, by the way, as a man, I don't think that should be your ambition, but I'll come back to that in a moment.

But it was more of a matter of being in control of my life. I wanted to be able to come and go as I wanted. I wanted to be able to fulfill my vision of the things I wanted to do with my children. And virtually none of those things involved me having the constraints of a job requiring me to go to the job all the time.

And so when I sat down and looked at it, the first thing I came across when I finally became clued into the world of early retirement, I was like, "Well, I'll do this with money." So I started working, working, working, practicing extreme frugality, saving, et cetera, but I got my timing wrong because here I was married, having babies, et cetera, and I realized the entire edifice of early retirement doesn't work for me because it would destroy the most important years for me to actually accomplish the goal.

So I need a different goal. And what I realized was the single biggest obstacle for me living my life the way I wanted to live was simply to have a job or a business that provided me with flexibility and enough money to live on. Because if I said, "If I have enough money to live on and I can make this job or business from anywhere, then it provides me with basically all of the lifestyle of being financially independent except the ultimate ease to know that I can lie around in bed all day and do nothing." And I realized that Paula Pant has this great line that you can afford anything, but not everything.

I don't know if she would talk about it. You can afford anything, but not everything. And I look at it like that way. It's to say that my goal is to be able to do anything I wanted, but not to do nothing. And so financial independence would give me the opportunity to do nothing.

So then the question is, is that necessary? Well, it's not necessary for me to do nothing, nor is it even particularly desirable. Now I think we all have a sense in which we really want that to be the case. We want to sit back and do nothing because that appeals to us, but we all know deep down that that's not actually good for us.

We all know deep down that it doesn't actually feel good for a long period of time. And so if we can be a little bit rational and recognize that it's just not good for us to do nothing and it doesn't feel good to do nothing, then we can set the whole thing aside.

And I came to the realization that financial independence is not a necessary step for me to live my life. And it also – and just to define the term here, what I mean by financial independence is the ability to live off of the passive income from my portfolio of investments rather than from things that I'm actively working in and involved in, etc.

So when you do that, it makes it much more feasible and achievable. And it's not that you can't and shouldn't accumulate assets and it's not that your ambition long-term shouldn't be to be able to live on the passive income from your portfolio of investments, but rather that it's not a necessary thing in order for you to live something like the life that you want to live.

And so this was among many reasons, one of the reasons I became an entrepreneur. And the basic entrepreneurial businesses that I have pursued have been specifically chosen to provide me with the highest levels of flexibility and control over my life. And it hasn't always been easy and it's not easy, but I have always exercised that control so at least I get that to myself.

And one more comment because I guess it fits in here better than later when I was going to say it. In terms of being an absentee father or a present father, as you know, I am a very devoted father, much more devoted and much more involved in the lives of my children than certainly the vast majority of fathers out there.

There are various memes and jokes and they're real, they're true in terms of people go and say, "Dad, do you know the birthdays of your kids?" And things like that. I am very, very involved with my children. Still however, I believe that that's a false god, a false idol, a false goal even.

That the definition of success for a parent, especially for a father, is not measured by your physical presence 168 hours a week. That's not the goal. And in fact, having that as the goal I think can in and of itself be a rather damaging form of helicopter parenting taken to the extreme.

I'm probably currently living the most extreme lifestyle in terms of physical presence because my wife and I live a very home-focused lifestyle. But I'm still acutely aware of how important it is, especially as my children grow older, that I not always be there. And so it's just kind of a false goal.

In addition, I think it's a goal that can become a very feminine ideal rather than a masculine ideal. What I mean is that your wife doesn't probably actually want you there all the time. And if you were there all the time, she probably is not going to be very attracted to you.

Because as a father, you want to be setting an example. And part of that example involves a high degree of involvement with your children in their lives, et cetera. But there's also another important component in which your destiny is to be a visionary leader of society in addition to your family.

And there'll be different periods in your life at which you're more with your family and periods at which you're more with your society. I wouldn't go and run for political office now, as an example. But I also don't want to have my ambition to be completely at home and just to be there all the time as a full-time, never-leaving, stay-at-home dad.

I don't think that's really healthy for dads. I don't think it's healthy for children any more than it's healthy for moms to have the only and exclusive thing that they do be their home and their children. Because then when their children are gone, what do they have left? There needs to be other dimensions of life.

So as adults, we all need to have a multivaried lifestyle. Now, I doubt you'd agree with any of those things, but my first instinct in listening to what you're saying to me is that you don't have to achieve on this intense of a time schedule in order for you to accomplish your goal, which is to be a present father.

You can dial back the intensity a partial amount and still achieve your goals because you've done the necessary foundational work in order to see to the success and the future of your family. So that's kind of big overarching point number one, is that when we get clear about the goal, which is to be a present father, then what we should see from that is that it's not necessary that you be entirely financially independent, able to live exclusively from the income from your portfolio in order for you to do that, nor is it particularly even desirable, especially in the first few years when you're dealing with very small children, et cetera.

Where I think the sweet spot is where you want to be the maximally available is somewhere around I would say maybe seven, age about seven to about age 13. To me that's the sweet spot where as a father being with my children all day every day just feels like a dream.

The reason I say that is somewhere around the age of seven, then children become intellectually active enough for me to really enjoy being together with them, talking with them, teaching them, et cetera. Whereas before that they're babies, they're children and the games and things like that are very simple and they're not super intellectually fulfilling and you don't feel like you're shaping the destiny of the child when you're doing those simple things.

You are, you still should do those simple playing together and being together, et cetera, but it doesn't have anywhere near the same feeling that I have when a child is old enough to be intellectually curious, et cetera. Then I say 12 or 13 because by the age of 12 or 13 we want to be very, very intentionally pushing children towards independence and very, very strong forms of independence.

Those strong forms of independence means that just quite literally not with us. We want to be pushing children to adult roles as they're capable in their early teens and throughout but keeping the relationship one of connection but not the day-to-day always being physically present. You need them to be going out into the world on their own, away from you, into their own unique circumstances so they can fight the battles of life, be exposed to the challenges of life, et cetera, and then be connected back with you.

Those are big words with lots of different ways of applying it. What I mean is that the sweet spot in my mind is basically 7 to 13 and you give or take a year or two here and whenever it's convenient for you, but that's where you definitely want to have maximum connection, maximum freedom in your life and in your schedule.

Let's pivot now back to the money. The first point I'm trying to make broadly is simply that you don't need to achieve full financial independence and that what you need to achieve is control over your schedule and enough money to provide a comfortable living for your family under your own terms and that could probably be achieved as an initial step along the way as you're working towards full independence.

If that's true, then you should look at all the different opportunities and say, "What are the opportunities that are leading me to this potential outcome?" If we talk about the three or four things that you've said, each of them is going to have a different constraint. You have a logistics job and when you labeled it logistics, that was a job that you said of doing medical deliveries for a per delivery fee, is that correct?

Yeah, per package fee. Yes, sir. Okay. You have a logistics job and that sounds to me as basically a dead-end job that pays you a decent rate in a pretty quick amount of time, is that correct? Correct. All right. IT job, that sounds like a fixed job and how much do you make with the IT job?

$21.50 an hour. Is there a future that you're interested in with the IT job of advancing in some way? Yes, but it requires those higher level certifications, which the tests aren't easy. I've attempted one of the certifications and failed and those are $500, $600 tests. I don't want to keep, I want to be able to commit the time.

I feel there's a future in IT, hence why I got into it this way, but the higher pay comes with advanced certifications. And then with regard to these other businesses, what is the constraint right now of your growing the ATM business? Right now, the ATMs are growing. I fill them, they operate, they run.

I have 12 ATMs, 10 of them active, two of them in my garage. And so I haven't placed those two yet. And the ATMs, the beauty about them is as the money grows, it's just recycled money. So the cash that's flowing inside of them, it takes me seconds. Go to the bank, fill them up, put $5,000, $10,000 in there, and then I don't have to visit that ATM for two to three months as the income goes.

So it becomes more relaxed and less obstructive as time passes. And how much money can you earn from one ATM? What do you expect or forecast as your normal operating income from one ATM? Just a mean ATM, not the best one, not your worst one, but just a normal average ATM of your current 10?

$800 a month. Okay. So right now with your 10 that are in the field, you're making say $6,000 a month? Yes. Okay. So we're getting pretty deep in the weeds. And for the sake of my podcast, I don't want to go deeply through each and every one of these things or provide the specific suggestions on each of these things.

But let me just sketch it out in big picture. What you need to analyze is you need to analyze your constraints. And so a homework assignment I would give you is write down each of your different jobs that you're doing. You have your logistics job, you have your IT job, you have your ATM job, and you have your new cannabis vending machines jobs.

And then you have your real estate job. And maybe something else as well that you're considering. You need to identify and think about that job individually. And then ask yourself a series of intelligent questions about it. I'm making up these questions on the spot, but these are the kinds of things that you want to think about.

Number one would be something like, what is the ultimate opportunity that I have with this job/business/investment? So logistics job. Notice that that's kind of what I was hinting at. Logistics job is, all right, I can make a little cash, but it's kind of a dead end thing. They can hire anybody to drive around and deliver these things at the same fee that I'm making.

So the long-term opportunity is not super great. On the other hand, with an IT job, you might say the long-term opportunity, if I had these five certifications, is I could make $75,000, $100,000 a year pretty comfortably with a pretty stable job, good security, et cetera. What's the long-term opportunity of the cannabis machines?

I don't know, but you'll put that in. What's the long-term opportunity of the real estate, et cetera? So get clear on kind of what the best case long-term opportunity is. Another kind of question you would want to ask yourself is something along the lines of what is keeping me from maximizing this opportunity?

So let me give two examples that are very obvious. What's keeping you from maximizing the logistics job? Well, one thing just might be the number of deliveries. There's just no more than four hours a day available. Okay, great. So you know that there's just not a market there. But then we get into things like, well, what's keeping me from maximizing the real estate business?

It might be deal flow. There may not be any good investments that I can purchase right now. What is commonly the case with things like real estate businesses, well, what's keeping me from maximizing this is I don't have enough money for down payments on properties. Or this might be the same thing for another business.

It's like, what's keeping me from buying more ATMs? You obviously have enough of them. So what's keeping you from doing there is not money. It's not even machines or availability of machines. It's availability of locations. What's keeping me from getting the locations? Well, the time to go out and talk to the business owner to wherever your placement scheme would say that you would put one of those machines in.

And so in order for that to create, you have to have more time. And so if you look at these and you go through them one at a time and you ask yourself some intelligent questions, another kind of question would be, what's the long-term vision? Is this something that I would be doing in the long term, five years from now when I've got two children at home or not?

And so example would be if you've got ATM machines that are making you $800 each and it's super simple for you to make your rounds with whatever frequency you need to to replace the cash, et cetera. And lo and behold, you can have 20 of them making say $15,000 a month from 20 machines.

Obviously that's something that you're still going to be doing five years from now. On the other hand, you're not going to be doing the logistics job. So you need to free up your time, which is your most valuable asset. And you need to drop off your lowest returning activities of time from your schedule so that you have the time to invest in your highest returning opportunities.

Because right now you have full control over your time and you have 168 hours a week. So you need to get rid of anything that is not the highest and best use of your time and focus in on the things that are the highest and best use of your time.

And in order for you to do that, you need to analyze and be clear what is the highest and best use of my time and then do more of that. And I guess the best image for this comes down to basic idea of an hourly wage. If you set yourself an hourly or an annual wage target, so the obvious example is if somebody is earning, you know, somebody wants to earn $100,000 a year.

Well, $100,000 a year is $20. Hold on. What's the mathematical relationship? There's a simple formula that just flipped me. So $100,000 a year, divide that into 50 weeks, give yourself. >> 100,000 a year? >> Yeah, just a second. >> Divided by 50 weeks? >> All right. So that's $50 an hour.

There we go. I forgot the mathematical relationship between the hourly rate and the annual outcome. So if you make $50 an hour on average for a 40-hour week for a 50-week year, then you make $100,000 a year. And so if you're making right now $50,000 a year, then what you have to focus on is you have to say, how do I go from doing $25 an hour work to doing $50 an hour work?

Now if you want to go from $100,000 a year to a million dollars a year, you have to go from doing $50 an hour work to doing $500 an hour work. The problem is that you only have a certain number of hours. And so any hour that you work for below your target hourly rate, that's an hour that you can never get back.

And that's an hour that is going to keep you from achieving your ultimate long-term goal. And so if you're doing medical deliveries at $6 to $12 a package, and you're going and let's just say it's $6 a package, and you're delivering four of those in an hour, and you're making $24 an hour, but your goal is to make $100,000 a year, you can't do that anymore.

Because making those deliveries is keeping you from doing $50 an hour work that's going to make you $100,000 a year, et cetera. So the point is that you have to systematically prune out of your schedule the low return activities and put in the highest returning activities and always focus on the most important things.

And this is just a variation of an application of the 80/20 principle, which is simply that 20% of your activities are going to give you 80% of your results. And financially, 20% of your investments are going to give you 80% of your outcomes. Or 20% of your decisions are going to give you 80% of your long-term results, et cetera.

So you need to decide and prioritize what is your most, your best returning business. You need to do that in light of your goal of whatever your lifestyle goal is, and then systematically get rid of everything that you're doing that doesn't, is not necessary for you to achieve that goal.

So if your highest returning business is ATMs, then you should be focused, laser focused on placing those ATMs. And the only reason you would bring something else in, like an IT job or a logistics job or et cetera, is because it's giving you something that is otherwise a constraint.

So there's a lot of guys who will have a job, and they'll have a job because that job gives them income that they're using to save for a down payment or to, you know, buy more Bitcoin miners, or buy more ATMs, et cetera. You need cashflow. And so a job is a good provider of cashflow for you, but that job can't be getting in the way of your businesses, and it can't be destroying your health, et cetera.

So I want to stop it there. Does that kind of method of analysis make enough sense to you that you think you can take it a few steps further on your own? I think so. I feel like I want to get rid of the IT job because my highest returning, even though it's, my highest returning is the logistics because I make 192 in four hours.

And that's not four hours because I'm limited to four hours. That's four hours because I'm that quick with, I have 32 deliveries per day average. And so at $6, that's 192, where I'm working eight hours for 2150, 2150, and I'm making 172. So the highest use of my time is the logistics temporarily to make the extra cash so that I can invest in the more residual income so that I can eventually walk away from it.

That's what is screaming out to me. Sure, sure. So as you're making those decisions, just don't discount the long-term value of something that could be very useful for your family in the future. So I don't want to add more confusion. But what I would say is that if you can get a few certifications, having always a great backup career can be a good move for you as well.

You probably don't need it. Actually, nevermind. I take that back. You have enough net worth at this point in time that you should be fine. You should be able to handle those details. And if you can just keep pressing forward on your businesses and you don't need the cash from the IT job, give it up.

You can always go back and get it in the future. And if the logistics job is enough to give you cash flow in a short amount of time, then that's fine too. I'm going to quit there just because we've gone pretty deep into it. Call me back on a future Q&A show and we can dig further.

I just want to close with this, close yours and I go on to the next caller, close my comments to you to say, get clear on what you want, as clear as possible. Imagine what is necessary to get you what you want and then think about what the constraints are to getting you on that pathway.

And then only do what you need to do and then use that as kind of the filtering framework for what you're doing. And then call me back on a future show and we can go through the details again. Tyler in Bogota. Tyler, welcome to the show. How can I serve you today?

>>Tyler: Hey, not actually in Bogota, but thanks, Joshua. >>Joshua: Your VPN is in Bogota today, so that works great. >>Tyler: Yes. Yeah, I had a quick question. You've talked in the past several times, at least you've mentioned it, about that you treat some of your whole life insurance policies as a glorified emergency fund.

I have both myself and my wife have annual renewable policies that have conversion options on them. And I was just kind of thinking through, wondering if you could maybe walk me through your thought process on how much you would recommend having in whole life if you were to use it as an emergency fund.

How would go about doing that? And maybe your thought process on thinking through what makes sense given our situation and how much you might recommend that we keep in that kind of setup. >>Joshua: Yeah. Let me give you kind of a big picture framework to that and then you can decide if we want to talk more details rather than kind of just probing for specifics in your situation.

So first of all, I think you have to value life insurance. You value life insurance such that you have it. Somebody who doesn't value life insurance shouldn't buy whole life insurance of any kind because it doesn't value life insurance. Number two, you need to value having insurance that is enforced forever, that is permanent.

And that is necessary. It can't be something where you just don't care at all about the insurance. You have to actually appreciate having insurance. And what that means is that generally you're going to be someone of a certain financial class and a certain asset base where the idea of having insurance that's around when you die at 107, it feels good and you can see how that can be useful and appropriate.

Now most people, their first initial steps are to say, "Well, okay, I could see that it would be nice to have a little bit of money around that's around forever. So maybe there would be $50,000 for a funeral and final expenses, and it might be nice to have another $50,000 for cash," or whatever number is relevant for your situation.

And so when I used to sell life insurance, I would often start with a $100,000 policy, something like that. And then you go and the idea is that I'm solving for death benefit first, which is always the appropriate ethical way to sell life insurance. Quite literally, you can't buy a life insurance policy unless there's a justification for the death benefit.

So if you go and you look and you say, "$100,000 of death benefit for me, $100,000 death benefit for my wife, what does that look like in premiums?" And you talk to an insurance agent and the insurance agent says, "Well, your premiums for that are X number of dollars per month." And you look at an illustration and you say, "All right, where is this going to be in five years in terms of cash accumulation, et cetera?

Is that a number that's relevant to my life?" So for someone who's making $150,000 a year, then to have some life insurance policies that might be a death benefit of $100,000 and might after, sorry, total $200,000 for the family and might have, say, $30,000 of cash value after five years, something like that, that's an okay start on an emergency fund.

It's a few months worth of expenses. It's a good start. But for someone who obviously is at different levels, you have to make it be more. And so you want to have enough money in the policy where it's actually going to make sense to where it's in the amount that you're targeting.

And so if the number is really small from a cash accumulation perspective as compared to your goals, then you need to ramp up the total policy size. And then the two levers that you push there is you ramp up the death benefit, obviously, to have more capacity, and then you start smushing the premiums earlier into the policy.

And so in many cases, if you can sit with an insurance agent, let's say you build a 10-pay life program and your goal is to put 10 years' worth of premiums and it's an amount that feels good, like this will be a good amount of money that's there in my emergency fund for myself, then that'll provide you with a starting point and you get there based upon premium.

What this shouldn't do is it shouldn't do a few things. Number one, it shouldn't limit your other advantaged investing, so 401(k)s, things like that. This should be complementary to 401(k), Roth IRA, HSA, et cetera. It should not be instead of because I think that those things are superior to whole life insurance.

Number two is it should not be something that is harming you, and there's other obvious stuff, so it shouldn't be keeping you from making a job change that you want to make, making a house change that you want to make, et cetera, making those lifestyle decisions. It should be a number that is significant but is also something that you can commit to kind of consistently because the problem with life insurance payments is they got to be made consistently.

You can carve off a lump sum, put it in a bank account with the insurance company and just pay the policy from that if you have the money, but if you're doing this out of your just normal income, there's got to be an amount that is feasible, and that's feasible if you get laid off, that's feasible, et cetera.

That's how I would always approach it, and then the details make sense. I guess I shouldn't have gone that route. I should have asked you numbers about your own situation, but if you talk with an insurance agent and you look at a policy and you look at your income and you look and you say what can I maintain over time, then it should be a fairly apparent number, and if you're looking for a percentage, you know, a few percent of annual income, 3 to 5 percent of annual income was often something that I would look at because that kind of percentage would never keep you from doing investments into retirement accounts, but it wasn't so significant that it – I wish I had answered it the other way, Tyler.

Does that help at all or you want to get into some details of your situation? Yeah, maybe just some details would be helpful because the reason I'm asking is I have a lot of idle cash on the sideline right now that are just in high yield savings accounts that I do value insurance and I kind of admired your philosophy of using the whole life policies as a venue for emergency savings.

I just wasn't sure where the numbers shake out. And your income is how much? 185. And current net worth is how much? About 750. Okay, and how much cash is currently on the side? About 200. And right now, any idea what your expenses are, just ballpark either on a monthly or annual basis?

About 5,500 a month. So you've got quite a lot of extra cash. So in that situation, I would say two things. Number one, when we're trying to do – so in what I have described, we're not trying to do bank on yourself or infinite banking or some kind of hardcore thing.

I think that can work in some circumstances but limited circumstances. So I'm setting that aside for the moment. So what we want to shoot for is an amount of money that we can do basically over 10 years or so that's going to be really doable. And so if you looked at premiums of say $10,000 a year and you look at those policies, $10,000 a year over 10 years would be $100,000 into a policy.

That would buy you several hundred thousand dollars of permanent death benefit. You would break even in the cash value accumulation probably depending on the policy design within four to six years, three to five years, somewhere in that range. I got to be careful because I don't even have policy illustration tools anymore.

And so I would look at something like $10,000 for the household. That would be a starting point and then just see how it feels. And if you've got $5,500 a month of expenses, you still have other… So maybe somewhere in that range, $4,000 a year for you, $4,000 for your wife, $8,000.

That would be around less than 5% of your household income. I would talk to an agent and try to look at something in that range of like $8,000 a year for 10 years and then see what that would buy you. And I would make sure that a significant portion of it is additional premiums.

So anything that's uncomfortable in time, if there's some kind of change, would be able to be dropped off if necessary as well. And then see what those numbers would feel like five to 10 years from now in terms of the amount of money in cash value. Is that sufficient for you in terms of an emergency fund with your other things that you have as well?

>>BETSY EVES: Okay. And would you prioritize doing that cash flowing it as a premium or taking a lump sum? Do you have any preference? >>AJ DAHLIA: Well, you don't really have… So you only have two choices. So what we're trying to do, especially if this is going to be an emergency fund, is you can't run the risk of it becoming a modified endowment contract.

And a modified endowment contract means that if your policy becomes a modified endowment contract, then you lose the ability to take a tax-free loan from the policy. And that kind of destroys the whole thing. So how does a contract become a modified endowment contract? Well, first of all, if you pay into it for fewer than seven years, it's automatically a modified endowment contract.

And so single premium life insurance is a great product, and it's a modified endowment contract from day one. There is something called the seven-pay test that has to be met, that there's a ratio of death benefit to premiums, and that ratio can't be too high. I can't explain to you how you calculate it.

It's in all the illustration software. But basically, you have to make sure that you have enough death benefit as compared to the ratio of death benefit to premium. And so you have to pay at least seven years of premiums into the contract, and you can't put so much in that it becomes unstable.

Unstable is not the right word. For whatever reason, about 20 minutes ago, my brain just turned off, so I apologize. So that's the rule. So in order to defeat that, you have to have a big enough policy, and you have to pay into it for a long enough period of time.

So that's why I'm saying something like 10 years. A 10-year quick pay contract will never be a mech, but it's not something that you're planning to do forever. And so that aggressive extra premiums and things that you put into it allows it to very quickly accumulate cash, unlike what we call an ordinary life contract, just a kind of a long-term, very slow thing that accumulates more in the long run.

This kind of contract would fit your goal of developing a contract that would be suitable for your emergency fund. So you can't just put $200,000 into it on day one. What you can do is you can, the insurance companies all have some form of like a service account, an insurance servicing account, and those accounts can basically function like a cash management account.

So if you want to have both of those things, you could take your $200,000 of cash, you could design a policy for your wife and for you that's total annual premiums of $20,000 per year, paid over 10 years. You could deposit your $200,000 with the insurance company. They will give you a normal market rate on your money, et cetera.

They all have FDIC insured versions and things like that. And then they'll just take $20,000 a year from your $200,000 initial deposit and use that to pay the insurance premium. And then if you wanted the money back, you could do that later. So you could manage it in that way, but what you can't do is just make a lump sum premium payment into the life insurance policy or you'll lose your ability to take out the tax-free loans when you need it and the tax-free gains first, excuse me, the return of premium first, which kind of destroys the whole point of it being as an emergency fund.

Okay. And is that, so the point I mentioned earlier too is I've got policies that have conversion riders on them. Is this something I can do with that or is that more of a conversation? No, absolutely. No, you would convert the term that you already have. Okay, great. Okay.

So I see like I could also potentially just keep the money in my high yield account and have the trickle from that to pay the premium for 10 years as well. Got it. The balance, it's a difficult balance because I can't give a formula that makes sense. I always used to use these words.

I'd say something that's doable and meaningful and both of those are important, meaning that with insurance, because we're dealing with a contract that you have premium payments to go into and there's always non-forfeiture benefits. So let's say you go into a contract and you're planning to put money into a life insurance contract for 20 years and you get 10 years in and you can't do it anymore and you have to stop making premium payments.

That's fine, right? You can just reduce the amount of insurance, take the policy paid up, you can do policy loans for a time to pay the premiums. There's always options. But at the end of the day, it's not like just putting money into an investment account and if I run into a difficult time, I just stop putting money into an investment account and don't have to do anything.

This is a contract and so you need to do something that's doable where you feel like I can see this plan through because a well-made insurance plan is something that is going to make sense for the long term. And so the big mistake that junior insurance agents make that I made is you get super hyper aggressive about selling insurance.

And I learned this the hard way. I was pretty good at motivating people, pretty good at saying like, "Hey, this is going to be fantastic," etc. And somebody in the thrill of the moment and the throws of all of their future money signs up, starts writing you big checks.

You're highly motivated as an insurance agent to take those checks because your commissions are based on them. You get into it and all of a sudden, sometimes six months later, sometimes three years later etc. And they're like, "I just can't do it anymore. It was just too much." And they just abandon the whole thing, cancel the contract and go away.

And that's really bad because whole life insurance doesn't have good returns when it's only owned for a short period of time. You wind up losing all your money basically. And so it's got to be something that's really doable. So I learned very quickly to always dial back my enthusiasm a little bit and say, "Hey, it's got to be doable." The flip side is it's got to be meaningful.

Is that because you got to get the contract, the money in, there's this really difficult kind of balance that the earlier somebody starts doing life insurance, the lower the cost of the mortality, the lower the mortality cost inside the contract. And so the better it is to do it earlier and the longer you have for the money to accumulate.

And so the best life insurance contracts are the ones that are taken out at the youngest age and have the most money put into them. That's when they perform the best. And so these two things are in conflict with each other. That you want something that's really doable and yet the best performance always comes when you get the biggest contract at the youngest age possible.

And so you want something that's meaningful. And so it's a delicate balance of doable yet meaningful where it's got to be enough money where it's going to make a difference to you. Because if you sign up at your current age and you say, "Well, I'll go ahead and put $100 a month into it." And then five years from now, you've got an account that's got $10,000 in it, that doesn't do much for you.

It's not a genuine store of money. It's just a tiny little asset that doesn't make much of a difference. The plan didn't work. And so I don't have a formula for it other than that kind of soft tension between doable and meaningful. That's where the tension always is. And then we also want to remember that life insurance never makes us rich.

And so we don't want to put money into it that would be otherwise destined for a great business or a career advancement, et cetera. It's got to be those lower amounts, but those lower amounts that accumulate over a long period of time wind up being really, really valuable and they wind up changing your psychology and allowing you to go for the bigger riskier opportunities as well.

So it's one of the most debated subjects in financial planning because it's so complicated and it's rightly complicated. And that means that if it were so obvious to give the exact formula for it, then everyone would do it. But it's not. There are things that are obvious. If you have access to a 401k, you should max it out every year.

That's obvious. There's only tiny exceptions to that. So that's why everyone agrees on that. But with how much to go into life insurance, that balance of doable and meaningful and what role is this contract likely to play in 10 years, in 50 years, in 70 years. Great. Thanks, Joshua.

My pleasure. And that is our last caller for today. Thank you all so much for listening to today's podcast. If you would like to be on next Friday's Q&A show, you can do that by becoming a patron of the show, patreon.com/radicalpersonalfinance. Remember that we're still taking participants for the Panama event, January 22.

If you would like to come to Panama, talk about international planning, frankly talk about anything. If you just want to get away for a week, if you want to get away for a week and come and hang out with me in Panama, then come and sign up. You can do that at expatmoney.com/radical.

Thanks.