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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 the coming years or less. My name is Joshua Sheets. Today is Friday, July 12, 2024.

And on this Friday, as we do on most Fridays when I can arrange a microphone, we have live Q&A. You call in, talk about anything you want, raise any question, raise any topic, anything you want, you are in charge of today's podcast. For those of you who are new to the podcast, if you would like to join me on one of these Friday Q&A shows, 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 on Patreon, and that will gain access for you to one of these Friday Q&A shows, which allows me to just control the number of callers just a little bit so we don't have mammoth four-hour shows. My mammoth three-hour shows are good enough.

I usually stretch it out well enough. Rahul in Washington, welcome to the show. How can I serve you today, sir? Hey, Joshua. Great to talk to you. I've been listening to your podcast for some time, and I always found them intellectually stimulating and thought-provoking. So thanks for that. Thank you.

So I had a question around internationalization and how to go about planning for it or how to approach it. This would be right up your alley, and I don't even need to ask. But there are two interesting parts that I want to touch on. One is for people who don't have a business, like people who are salaried and they have a good salary job.

And the second is from the perspective of people who are immigrants in the US and not US citizens. So they have the option of-- I think you talk about giving up the US citizenship as one of your things in the course that you have as well. So maybe if you can touch up on some of these, and I can give you more details.

Yeah, is this kind of just a general conversation, or are you actually thinking about something yourself? I have talked about it many times before, but I think it's just a very tricky thing to wrap around in the sense of the impact on the family. And there's more than financial aspects involved as well.

So I think those are probably things that are personal and one can work on on their own. But from your perspective, I wanted to get a sense of what are some of the implications or questions that one should think about or plan for, especially around-- just to give you an example, I don't know what's the case for US.

But I think some companies have the notion of an exit tax or if you move across borders. And there are some challenges. I know Canada probably has something where if you move there for some number of years and then come back, the income that you made there, there's some tax implications of that.

So just broadly in those lines, yeah. So you're an immigrant to the United States, is that right? Yeah. And do you have permanent residency in the United States now? Not yet. I'm on the path to that. Great. Yeah. OK. And where are you from originally? From India. OK, and married, have children?

Yes. And you're building wealth as a salaried worker in the United States. And do you have any reason to think that you might want to leave the United States? I think it's primarily the uncertainty of certain things. Like I think-- I'm not sure how much familiar you are about some of these things.

But for certain countries, the backlog is huge in terms of how long it takes for people to get a green card. And India and China are among those. So I think it's just been a long time. And there's always some restriction in terms of whether or not you can start your business.

Right. So let me cut straight to it, because I am very familiar with it. And let me give you some big picture ideas that I think are useful. First and foremost, internationalization should always be held in balance based upon where you are. So if you come from India and you were able to get a job that allows you to immigrate to the United States, there is almost certainly much more opportunity for you in the United States today than there is in India.

You Indian immigrants are amazingly productive. I mean, I have enjoyed interacting with immigrants to the United States from India more than almost anything, because you are smart, you're incredibly hardworking, and there's such a great culture around the tech industry where-- I mean, you guys go to the moon. You have a cultural expression of excellence.

And the United States loves people like you who are hardworking, who are productive, who are intelligent. The country bends over backwards to reward people like you. And while there are some problems for people like you in the United States, I would say those problems are probably a lot smaller than they are in many other places of the world.

Nowhere is perfect, but there's a lot of benefits. And the financial opportunities for someone like you are probably-- are almost certainly so much higher in the United States than almost anywhere else in the world. There are other places that are friendly to immigrants, but the United States is exceedingly friendly to immigrants and rewards hard work and productivity more than most other places.

The United States is a wonderful place to live. The culture is very, very accepting. One of the things that's my favorite things about Americans is that if you express the basics of American culture in the way that you express yourself, I am convinced that of all the places I have traveled, that the United States is probably the most welcoming country in the world for immigrants.

Because we don't-- we kind of native-born Americans, we don't judge people based upon where they're from. We judge people primarily based upon who they are. And so it's not uncommon for an American to say, man, you're American through and through, or you're more American than I am, to someone who's an immigrant, who may not even be a US citizen yet.

Because we see things culturally in terms of the American culture. And does somebody embrace the values that are common in the United States as compared to other places that are primarily focused on language or ethnicity or religion, things like that? And so I hope that you've had a good welcoming experience in the United States, because I see that.

It's not perfect. There are a bunch of jerks everywhere, but it does work pretty well. On an overall basis-- go ahead. Yeah, I just wanted to echo that. Yes, that's definitely true. I think I've definitely loved spending time here. And all the things that you talked about in terms of being a welcoming culture, the abundance of opportunities, the ability to make friendships and not have a language barrier, all those are true.

Right. Go ahead. Good, OK. So the biggest question for you, though, is, can I stay in the United States? And so you need to-- in order to be able to stay permanently in the United States, you need to get your permanent residence or your green card. And it's not usually easy for people to get on a pathway to a green card or a permanent residence in the United States, especially if they're from India, from China, or from many other nations.

I have spent a lot of time observing immigration systems around the world and participating in them myself. I have nothing good to say about the US immigration system. So if you are on track for something, and if your lawyer tells you, hey, we're on track for permanent residence, then it's probably best just to stay on track with that.

Because there is actually-- once you get permanent residence, there is actually a genuine pathway to citizenship in the United States. And that is something that for your entire family can be an amazing value. When we think about internationalization, first we want to put on a lens of opportunity. And so you could think of this as kind of plan A.

What place in the world offers me the best opportunity for me, my family, my skills, things like that? And the amount of opportunity that a place offers to you is going to depend on where you are in your life. So if you need opportunity for a job that's going to pay you wages, that allows you to save money and build assets, then you need to go to a place that has great job opportunities.

And the United States is the best place in the world that I know of for that. Now, if you are wealthy and financially independent-- you have your own businesses, you have your own savings, you have several millions of dollars in the bank-- then the place that offers you opportunity, you may not need a job opportunity anymore.

And the United States is pretty decent towards wealthy people, but there may be better corners of the earth. You may want to live on a little tax-free island somewhere so you can just be completely tax-free. Or you may want to live in a place that provides you with better investment opportunities with, again, low taxes.

And so people who are wealthy are often those who are looking for other kinds of opportunities. But if you're still building wealth through employment, I don't know of a place that's better in the United States, especially with a long-term better future. There are places you can earn well in the United States-- sorry, around the world.

So many people, many of your fellow countrymen will go to a place like Dubai or many other centers where you can get a good job. But the challenge is that those places don't seem to me to be very good at acculturating people. Every single worker that I've known who's gone to Dubai says, OK, I can go here.

I can make money. But they made some immigration reforms in the last year or two, but there's basically no pathway to permanent residence. And there's certainly no pathway to citizenship. And you're always going to be a foreigner. And the entire culture is based around people coming and going. So there's not the plantedness.

There's not the settledness. But for you and your family in the United States, you have a totally different set of options. There is a pathway to permanent residency. There is a pathway to citizenship. And your children will be fully accepted Americans, just like you and your wife will be fully accepted Americans if you aren't already, regardless of actual citizenship status.

So I think the United States has a lot to offer as a plan A. Now, with regard to a plan B, then you look at, well, why would I need another place to go? And so a lot of times, what I think about is, well, maybe there's an economic crisis in your home country.

Or maybe you're facing some kind of political or religious persecution, things like that. And so it's not that the United States is the perfect place. But it may be more important for you to be focusing on the plan A stuff, building wealth at this stage of your life, than anything else.

Now, there are a few interesting tricks that are probably not yet relevant to your life. So from time to time-- in fact, I've worked with a couple of Indian clients, specifically in this situation, who have built wealth in the United States, usually through being involved in an early-stage tech startup, having significant growth in the value of their stock.

And now they're looking at things more strategically. And they're saying, should I go ahead and get permanent residence? Because after all, I don't want to be a covered person. And there's a few interesting little wrinkles of the tax code. There are a couple of planning ideas that can be put in where you can avoid US taxation, especially if you don't want to be connected to the country for the long-term.

But that's probably-- unless you correct me, that's probably not applicable to you yet. And so I just wouldn't worry about it. I would say, you're going to be a lot better off living, working in the United States, building wealth, having a great place to live for your family, and then reassess those questions in the future.

The nice thing-- the other challenge for Indians, the reason why they usually will be attracted to other options, is that the Indian passport makes your international travel not so great. And so India does not allow dual citizenship. So if you became an American citizen, you would have to surrender your Indian passport, as you know.

But for most Indians, there's such a substantial upgrade in terms of how you're treated around the world, of now you're treated as an American instead of as an Indian, that that's worth it. And then since you can turn around and get your Indian Overseas Citizen card, which is basically a permanent residence that allows you to always have full access to India, the only thing you don't have as an Overseas Citizen is simply the Indian passport, which, compared to an American passport or a Canadian passport or a German passport or most places, is really inferior.

So I think you can still be very well-connected to both countries. And your children can also access that. So that if in the future, India may very well be positioned to have an amazing century coming ahead. And so you can go back and forth between the two countries. You can live and work and bank in both places.

You can build businesses in both places. And so to me, that seems like something really worth having. Makes sense. I think all of those things make sense. And I've thought about that. One part-- and I don't want to take a lot of time-- but maybe you can touch upon the plan B aspect of it.

So the plan A makes sense. And that's kind of how I'm looking at it. But plan B in terms of like, let's, as a backup option, if you could touch on other English-speaking countries or if you have experience with Australia and New Zealand, Canada, just briefly on any specific aspects there that one could investigate further on their own.

Sure. So the way I look at this is quite simply just from a complementary redundancy basis. So most people are going to go through their lifetime. And most people are never going to need anything other than the country they were born in, the basics of the place that they're from.

Everything's probably going to work out just fine. Most people aren't going to need anything else. So this world of internationalization, I think it's important. And I think it makes a lot of sense to pay attention to. But I also acknowledge that the chances of this being needed are fairly modest.

I've made public podcasts that you probably listen to of the reasons that are the most persuasive to me. So for example, why did I myself want options other than the United States? Some big options were things like I was worried about my children being drafted in a war. I don't want my children to be drafted in some pointless war and sent off to the other side of the world to die.

I don't want to go and serve in an army for some legitimate reason, because they think the cause is just and the war is morally righteous. That's their prerogative. But I don't want them to be stuck in a situation like that, where they have to go and die in a useless war.

I would like more for their life than for them to be fed to-- killed as cannon fodder. Other things, things like, hey, taxation could change in the future. And I don't think it's fair to my children if they're stuck paying for a system that their great-grandparents borrowed a bunch of money, and now my children are weighted down with the strain of all this.

Now, I think that that's less likely. I think that the United States is going to default on all of its obligations through a variety of means, rather than impose onerous taxes. But hey, I could be wrong. And so it seems-- and there are other reasons as well-- moral causes of paying for something that is morally wrong, paying for a war that is morally wrong, or paying for things like abortion that is morally wrong.

I think it's nice to not have to singe your conscience if you can avoid it. But on the whole, I'm not angry against the United States. And those are problems that most people face. What I've observed of thinking about these things is simply that in order for them to be effective, you have to do the preparation many years in advance.

So for example, a couple of months ago, the Ukrainian-- first of all, the best example that we have right now is the Russia-Ukraine war. Now, Russia's regulations are different. I've paid a lot of attention to both the Russians and the Ukrainian response. But I consider it a decent example.

So when Ukraine was invaded, immediately the Ukrainian government closed the border to all men of fighting age, which was a very wide band. I forget the exact number. It may have been 18 to 60 or 18 to 65. It was 55. I don't remember. But basically, everyone who was an adult to old age, the Ukrainian government shut the border.

That was really rough, because I believe that I understand. I think that if there is a just war at all, the Ukrainian cause is perfectly just. And if there is a time in which you're going to be willing to fight for your country, then this is it. You're going to go and defend your country from a foreign invader.

I still look at it, and I consider the entire exercise enormously useless. And it hurts my heart, because I want to stand for righteousness. But on the whole, if you're going to go and die for something, you want to have at least some hope that your death is going to be for some good.

And I don't see why-- I don't see anybody whose lives have been improved with the hundreds of thousands of men who've died. I don't see how anything is better for it. And I don't see how the cause makes any difference in the long run. And so when I think about what I want for me in my life or for my sons in their lives, I don't want them to die in a useless cause and have your population stripped out with war.

It seems pointless to me. So there is kind of an element of what's morally right and wrong. And then there's an element of what's practically intelligent. Anyway, as time has gone on, Ukraine has expanded its draft to include more and more categories of people. And what they have done, though, is they still are very, very low on soldiers.

And so what they're doing right now-- and I haven't checked to see if this is still in force. If it was in force a couple of months ago, I think it probably is. But I haven't checked as of today, July 12. But a couple of months ago, Ukraine passed a law that said that they have stopped providing consular services for all male Ukrainian citizens living abroad.

And what that means is because they're not providing consular services. So if you had a Ukrainian passport, and let's say you had emigrated to the United States, but you held a Ukrainian passport and you lived in the United States for the last seven or eight years, but you're not a citizen of the United States, and now you just want to renew your Ukrainian passport, well, they won't renew it for you.

They want you to go back to Ukraine and fight in the war. And they will not renew your passport for you. They're not arresting you at the embassy, at least not yet. But they're not going to renew your paperwork. What's even more challenging is, let's say that you had gone abroad.

Let's say you had been abroad for many years, but you hadn't actually set up something like an official residence permit. Because if you had an American residence permit, but your passport expired, you would be stuck in the United States, unable to travel abroad. But you could still probably plead for asylum and keep your paperwork moving forward with regard to your residency.

I've consulted with various people, especially Venezuelans in the United States, who have been able to do this. They couldn't get their Venezuelan passport renewed because the government wouldn't provide consular services. But they didn't get kicked out of the United States. So they were just stuck there until they could figure out a solution.

And now, thankfully, many of them have been able to get their documents, again, renewed. But what if you were applying for a residence program? Well, when you go to apply for a residence program, most of the time-- all the time, excuse me, all the time, you need a birth certificate.

And if your country is part of the Hague Convention, then you need to have your birth certificate apostilled. Well, the Ukrainian embassy won't provide birth certificates and won't apostill them for its citizens living abroad. It won't provide background reports of-- police background reports, which are also a standard part of the package.

So those Ukrainians who left Ukraine 10 years ago, who have decided that it doesn't make sense for me to go and potentially sacrifice my life in this war, even though they're probably entirely on the side of the Ukrainians, and even though, in many cases, maybe they do much more good from abroad.

The Americans only won their revolution because of the work that Ben Franklin did to get the French on their side. So who knows? Maybe they're doing all kinds of stuff abroad. But without special dispensation from the government, they can't make it. So examples like that have basically convinced me that what you need to do is you need to have all of this stuff in place, preferably a decade or two before you need it.

So a Ukrainian dual national who is American-Ukrainian has no problem. Because, OK, he can't renew his Ukrainian passport. No problem. But he still has his American one. Or a Ukrainian who moved to Mexico and had a Mexican residency, he's OK. He's got it taken care of, because he can stay in Mexico.

And then later on, he can become a Mexican citizen. He has a backup plan. But that's got to be done before you need it. So I look at that, and I just say, all right, two is one. One is none. Three is a guarantee. And that's for me. So how can I think about the three different things that I need in any particular situation?

And as you know, because it sounds like you took my international escape plan course, and if anyone listening hasn't taken it, internationalescapeplan.com, please. internationalescapeplan.com. I look at it and say, all right, I need three forms of identification to get me across a border. And so I myself have two US passports and a passport card, plus a global entry card.

Well, so that's four. I have four ways to get back and forth across a border. And two of them that'll work on airplanes, and four of them that'll work across the land and sea borders around the United States. But then I say, well, I need three places that I can go around the world.

Two is one. One is none. Three is a guarantee. So let me just choose three places and set up three different residency permits. And there's nothing magical about three. One is good. So you, as an Indian with an American residency, are far better off than an Indian who doesn't have an American residency.

And so it's just a matter of working towards it systematically over time, when you see an opportunity that fits you, to go ahead and build a portfolio. So I want to have three countries that I can live in. I'd like for those countries to be different from one another.

Sometimes I want to be with a big country where I've got good economic opportunities. Sometimes, if I could, I'd love to have a neutral country that was less likely to be involved in wars. And maybe I'd like to have a tax-free country, so I can use that as a future option.

There's lots of ways that you can look for things, but we're looking for complementary redundancy. Now, what's the problem? Well, the problem is that none of this stuff is free or easy. So you mentioned English-speaking countries. Well, that's not actually a very big list. You've got the United States.

You've got Canada. You've got Great Britain. You've got Ireland. You've got Australia. You've got New Zealand. I think those six are all that are officially English-speaking. Now, English is widely spoken all around the world, but those are the big six English-speaking countries. And most of them are not that interested in making it easy for immigrants to come there.

And so you need to generally have quite a bit of money if you're going to buy yourself a residence permit in the United States or in Canada. You need to have a good bit of money generally, or you need to be highly educated. Or in general, they have high requirements for you to be there physically on the ground, which is hard to satisfy if you're working a job where you're working in Seattle.

And so you may not be able to access those countries. However, that doesn't mean there aren't other opportunities. You probably could get yourself a Mexican residence permit, which is world class. All Americans should have a Mexican residence permit. Latin America is very accepting of immigrants who can come and show that they have some form of passive income.

Latin America looks for passive income. Asia looks for net worth. So if you have net worth that you've built up, you can get permits to live in various places. So it's not easy to get backup plans in the English-speaking countries, although it's doable if you have enough money. But that may not necessarily be what you need, because it's just a matter of choosing-- really, any place is good as a backup as you're working towards your ideal scenario.

But due to the physical presence requirements, you probably can't deal with most of the programs in the English-speaking countries. At Cox Mobile, we know you're smart. You brush your teeth in the shower to save time, make coffee ice cubes for your cold brew, and wear goggles to cut onions.

You also added Cox Mobile. So smart. Now you're running on the network with unbeatable 5G reliability and saving on your Cox internet. It's ingenious, just like you. - Aw, thanks. - Cox Mobile, the smart way to mobile. Cox both paid internet required. Cox Mobile runs on the network with unbeatable 5G reliability as measured by Ookla LLC in the US 2H 2023.

If other restrictions apply, learn more at cox.com/mobile. - God, it makes sense. Thanks a lot. - My pleasure. Did I answer your questions? - Yes, I think I got enough to chew upon and I loved your take on some of these things. - Good, good. - Thanks. - Yeah, it's not easy, but all I would say is I love to think about the extreme cases.

Meaning, if I could, I could lay out the plans of here are the 10 different citizenships that I'd like to get in my lifetime. What I learned is simply going from one to two is an enormous increase in options and probably all that anybody needs. Going from two to three almost certainly covers everything.

So if, as an Indian, you can't get another citizenship without losing your Indian citizenship. So that's a big cost. So I would just look first at residencies and say, all right, United States, I've got one there. I can't be absent from the United States for significant periods of time or I'll lose my pathway to permanent residency and I'll lose my pathway to citizenship.

So the United States is probably where it's gonna be for all the reasons we discussed at the beginning of the call. So I would just choose one or another country and look around and see if there's a residence permit that I can get pretty simply that doesn't have a lot of physical presence requirement.

Hint, hint, Mexico. Mexico within a few years is going to change their laws, I'm sure of it, 'cause they all do, they always do. And the Mexican investor with means or person of means visa program is so stinking generous. It's unmatched on a global basis. So that should be almost certainly your next action.

And it makes really great strategic sense because of where you are right now in the United States. So that would be kind of the next action, but recognize that there are many, many other countries that are also out there. Just know that this probably shouldn't be your next hobby.

It's a lot of hassle to go and pick this stuff up. So try to build a strategic plan, get into it because it's fun for a time, but then once you get the stuff done, then let it go. You don't need eight, just three. Working towards three over the course of the next decade should be fine.

All right, we go on to Richard in New York. Richard, welcome to the show. How can I serve you today? - Hey, Joshua. Yes, my name's Richard. I'm a 39-year-old male and I'm recently married. Very much thanks to the advice that you've given about getting married sooner rather than later.

So very much appreciate that. - Congratulations. - That was ideal. - Thank you so much. And I do not have a prenup and that episode was very pivotal in my decision-making. So once again, thank you. - Good. - I'm currently a real estate investor and I'm living abroad with my wife and I have no W-2 or earned income since I am abroad.

So the dilemma is currently I'm about $150,000 in debt, in various debt, mostly credit card, which I know is really bad, but a net worth of about 1.5 million, which is strictly in real estate and in crypto. The other problem is I have basically zero cash and zero liquidity.

And right now I'm living off of my wife's savings and she has an unsteady, unpredictable income. So obviously this is not a good place to be in and I have a bunch of real estate transactions, properties for sale, refinances in progress to get me out of this liquidity crunch.

But basically my question comes down to this. So currently I also have a failed flip that's not going so well, it's still on the market for sale. And I could either just sell it at a loss right now and just, so after the refinances and sales of all these other properties and what have you, if I sell this property at a loss, I would probably have about $50,000 net, which would be used for me to live off of, as well as to plan a wedding.

And also thanks to your advice, we were planning on a very simple, rather simple wedding, as opposed to delaying. Or I can keep this failed flip, which is currently costing me about $3,500 a month in interest, but in order to keep it, I would have to sell two Bitcoin, which I own, currently own eight, and they are in a self-directed retirement account.

So by selling those two Bitcoin, it would obviously be all taxable income. But by doing so, it would allow me to keep this flip, which is like I said, costing 3,500 a month, and it would either be cashflow neutral or cashflow positive net of expenses, management fees, CapEx, et cetera.

And just a little bit more background info, the house is worth about 500,000. So basically the question is to sell the flip at a loss, and also one last thing is, if I were to sell the two Bitcoin, it would be about $58,000. Well, that's what the price of the Bitcoin is right now.

Net, and that would also be used to pay for a wedding as well as living expenses, but just bear in mind, it would be the taxable implications for the following year. - Understood, great summary, by the way. Do you, are you currently, excuse me, are you current on your debts at the moment?

- Yeah, so I'm working on refinances. I have a couple of properties for sale, so yes. - Okay, but your credit cards are paid at the moment, and although-- - Yep, no, no, credit score of 716, so yep. - All right, are you employable? Could you get a job?

- Oh, so I was a pharmacist in the States. I'm now living abroad in Europe, and so that was, unfortunately those skills, my certifications, they wouldn't transfer over, and it would take quite a bit of a while to, yeah. So just in brief, no. - What does living abroad mean?

Like, you're just renting in a flat somewhere in Europe, and you've been there for a little while, or you're totally all in Europe at this point? - So that's, well, this is a lot of talk about internationalization. So my wife is having, we're having some troubles with her getting her green card over here.

So if she can't come to me, I decided to come over to her. So I'm here in Europe, and just, yeah, living abroad. - All right, your wife is European, not American, and you couldn't get her residence in the United States until married, but you are legally married now?

- Yes. - And what is the advice for somebody who's legally married to a foreign national with regard to getting U.S. residency? - So we're in the process of getting her green card, as well as me applying for a E.U. residency here. - Okay. - To have both options for both of us.

- Well, basically, so let's pretend that you could move back to the United States. Are there, is it called locum's work in pharmacy work? Like, are there, have you looked to see if pharmacists, are you current on your certifications as a pharmacist, and have you looked to see if there are positions available as a pharmacist?

- Yeah, so I actually recently quit my job after we got married because of the visa issues. They said it would take, even though we're already legally married, we got married abroad, it would take about a year to a year and a half for her to get her papers.

So instead of doing long distance, which is what we have been doing, I decided, well, if she can't come here, I'm just gonna go there. - Understood. - Or, well, I'm here now. - Understood. Where in Europe are you currently living? - In Spain. - Okay. Well, I don't love, there are a few plans that I don't love.

So the first plan that I don't love is I don't love you selling assets if it can be avoided. It certainly is smart for you to sell assets if you are avoiding being delinquent on your debts, going bankrupt, things like that. So you do have assets that you could sell.

And if you have a conviction about the market value of some of your assets, if you think that Bitcoin is going down by 50% in the next five months, or if you think that real estate is going down by 50% in the next five months, then clearly you should sell.

Taxes in and of themselves are never a sufficient reason to just hold on to a bad investment. But you didn't articulate to me that you think your real estate values are going to decline or that you think your Bitcoin is going to decline in value. You simply said, you know, I've got these assets that I could sell to cover my debts and cover my expenses if I needed to.

So I don't love the idea of selling assets unless it's absolutely, unless it's actually necessary. Now, you should always sell any investment asset that is a bad deal. And so if something you know, hey, I bought this house thinking this house was going to be great, but now I've found out that I'm never going to be able to rent it because of X, Y, Z problem, then fine, sell it.

But I don't love the idea of you doing it unless it's necessary. So let's move on to other options. I don't want you to get behind on your debts. I don't want you to not pay bills. I don't want you to have trouble there. That's not going to work.

So the obvious solution here is for you to get a job. If you could get cashflow coming in from a job of some kind, then that can solve your problem. And if you guys are newlyweds, your wife has a job, she has income, if you can currently live on her salary, then every dollar that you earn can be put towards paying off the debt.

And if you were earning a pharmacist's wages, then a couple of years from now, you may sell a house, you can keep the Bitcoin, but you may turn around and you have the ability then to just with your cashflow, two years from now, you're totally out of debt. And that's going to be the one that you're the happiest with 'cause then you still own all the real estate, you still own the Bitcoin, and now you've taken care of the debt.

So I don't mind, okay, does it stink to be in debt? Sure, that sucks for a time, but you could probably be one to three years away from making it. And it may be the case that, again, you can turn one of your deals into a significant profit. So I'm not universally saying don't sell a house.

If there's a house that makes sense to sell, then sell a house. And I'm not universally saying, I think I'm repeating myself. I'm not saying what to do it. What I am saying is the obvious solution is keep your expenses as close to nothing as possible and increase your income.

So the strategic move from an income perspective will be this. First of all, once you have, so you're married to a European woman. So that gives you full rights of residence in the European Union, including right to work. So you need to really make sure you understand everything that is necessary for you to work as a pharmacist or in a similar profession or a related profession in Europe.

And you should understand what those options are for you. It's probably not gonna be your best option, especially in Spain, right? The Spanish wanna hire Spaniards. They're not so welcoming as Americans are to foreigners, especially in fancy jobs like that, even from just a cultural perspective. But don't take my word for it.

Go and look, go and see what you can find and make sure you understand a lot about the options. Does your wife work in a physical office or does her job have some remote component? - Well, it's very seasonal. So it's very seasonal work. So it's during the summer, like during peak tourism and then it dies off in the winter.

But I did wanna just touch base because either way, like so this, when I said if I sold the flip at a loss and it would be 50K positive net to like, that would be positive as well as being able to keep the home, I guess I was really just trying to decide between, I understand your advice of getting a job.

And so for pharmacy, that'd be quite difficult because I mean, I do speak Spanish, but in terms of the certifications and like, it's just, it would take a couple of years at the least. So that kind of takes that off the table for right now in terms of working or getting a job.

So I kind of just wanted to point that out, to kind of just go back to the, given these options of like, if selling one and having like 50,000 net or versus keeping the asset, but having to sell Bitcoin that I own in order to have, to pay off all the debts, right?

This is net of the $150,000 of debt. Just trying to get some insight on your recommendations aside from getting a job. - All right, I'll answer that directly, but let me just finish getting the job 'cause I really think that's the best solution, all right? The other thing would be, I would, if you're still current as a pharmacist in the United States, I would commute to the United States for a couple of weeks to try to do relief work for other pharmacists.

Or I would say, honey, listen, I'm so glad to be married to you. Let me go and work for six months in the United States and I'll come and see you on long weekends. But you do need to, you need to fix your financial problem. And so I want, so you know me, I wanna encourage people to be together.

I want you to be together with your wife. I want her to be together with you. Obviously, you gotta be careful with regard to immigration stuff, making sure that you're complying with whatever's necessary for the immigration, for you to be together long-term. But when you make a mess, sometimes you gotta fix it.

And it's gonna be easier for you to fix it now than to fix it five years from now. And so if you can avoid selling assets that you wouldn't otherwise sell, and if you can put in a year or two of hard work with some separation, that's gonna be okay.

And how do I strike the right tone? In the modern world, we are so fixated on our lifestyle and what we want that in many cases, we have forgotten how to sacrifice. I'll give just two stories as an example. One of my favorites was, a few years ago, I was reading the Laura Ingalls Wilder series with my children.

And there's a part in the series, I think it's on the banks of Plum Creek, where the Pa, the father of the story, their entire farm is eaten by locusts and all their crops are destroyed. But of course, he's got four children that he's got to take care of, and a wife that he's got to take care of, and he's got debts from a house that he's built, and things like that.

So here he goes, and he puts on his boots, and he left his family at home, and he literally walked until he found work. And he walked, I think it was something like 200 miles away, 250, 300 miles, and he didn't see his family for an entire season until he was able to earn enough to pay off his debts and to fix his problem.

That's historically normal in many places. It's also historically normal even within our lifetime. When my parents were married, my dad was in the military. And so during the first few years of their marriage, he was shipped off in the Navy for six-month cruises at a time. And so he was gone for 18 months out of the first probably 24, 30 months of their marriage, something like that.

Now, nobody thinks that's a good plan long-term, and I wanna intentionally make decisions to avoid that. So if we were talking and you didn't have the situation and you said, "All right, well, I'm considering doing this," and I would say, "No, you wanna be with your wife. "You wanna be together with her.

"Absolutely, that's what you should be doing, "is newlyweds." But I also recommend that. - Okay, thank you, thank you. - Go ahead. - Mm-hmm. - Sure. - Mm-hmm, okay. Oh, no, I'm so sorry. So we've been together for two years, and it's always been long-distance because of visa issues and what have you.

So a big part of it. And also because I had some real estate, some bad investments, and had to go. I actually went back to work, and went back for about a year and worked. And recently, after getting married, I was like, "Okay, this is the time to finally be together." Since for the two years that we've been dating, we're now over, slightly over, we've only physically been together maybe like three or four months.

So it just seemed kind of-- - Okay. - Ridiculous to-- - I understand. - Get married, and then, "I'm gonna leave you, honey. "Here you go, goodbye." - Okay, all right, so I'll move on. I think I've said my piece. I just wanna be complete in order to emphasize it.

- Oh, no, no, no. - If I woke up in your shoes, I would sell the house, take the $50,000, use that to cover, to pay down some of the debts, and then I would get-- - No, no, no, no. I'm sorry, so if I sold that flip, and after I refinance one of my houses, and sell off one of them, this would be, all the debt would be paid off.

That $50K would be net positive, no debt, as well as the Bitcoin, that positive 50 to 60K would be positive after paying off all of the 150K in debt. And that money leftover would be for a wedding, and for me to live off of, and try to figure out what the next steps are, as well as pay for all the legal fees for us getting residency in both directions.

- Sure, then I think that's the move. I would keep the Bitcoin, and it's not because I'm making a bet on Bitcoin versus real estate, although, who knows? It's because I would rather have the money be in the IRA. Because if something happens, and you get behind on your credit cards, your IRA should be exempt from the claims of creditors, whereas the houses are subject to the claims of creditors.

So if you know that these credit card companies, if I get behind with them, they're gonna sue me, and they're gonna take my houses anyway, but they can't get at the money in my IRA, depending on how that works, I don't know where they sue you, but the IRA laws are different from every state, I'm not gonna go into that.

But just conceptually-- - Would it make a difference if the houses weren't in single-member LLCs, each one individually? - No, because you own the LLCs. And then you're gonna ask me, well, wait a second, what if I move LLC membership units, and I'm not going down that road because it's immoral?

Not because it couldn't be done, but because hiding money from creditors, when you have the ability to pay them, is an immoral action. If you have the ability to sell a house, and pay off the debt, then that's what you should do. So I'm gonna be defensive in my planning, and I'm not criticizing you, I'm just going, that's where most people's minds are going.

Let me explain how I shoot through this. If you come to me, and you have $150,000 of debt, and you get diagnosed with cancer, and now you're fighting cancer for the next five years, then I'm gonna tell you, stop paying your credit cards, and focus on getting well, because I'm okay with that, because that's the legal contract between you and the credit card company, and you don't have the ability to work because you're fighting cancer.

And so, I'm not opposed to getting behind on credit cards. I have many times given people advice, stop paying, but you stop paying when you can't afford it, when you don't have any money, and your children are going hungry because you're paying the credit cards. I'm not opposed to bankruptcy.

Bankruptcy is for when you cannot pay your creditors, and I think it's morally permissible to declare bankruptcy in a situation that you can't get out of. However, what is not morally permissible is for you to have assets that could be sold, and not sell those assets to pay the claims of your creditors.

That would be immoral, because it would be stealing from your creditors to do that. So, what I'm saying is, I'm willing to play defense, and say, keep the money in your IRA, because if things get bad, you're still protected there, but I think you're better off selling the houses, and you'll have a lower tax rate.

You'll sell the houses, you'll pay off the debts, and then you'll be free of it, and you'll still have the protected money in the IRA. So, I'm trying to shoot the middle, and not be stupid, and just say, oh, let's not take any asset protection planning into account, but also not to give any hint that we're gonna play games with people that you owe money to.

- Well, I fully have the intention of paying off my debt. Either one of these solutions would net me positive after paying off all my debt. So, that was never about, I was just wondering about the asset protection, but I see what you're saying about keeping it in the retirement account, because those are so, God forbid, in the future, if I ever were to have to declare bankruptcy, then that money would be protected from the claims of creditors, where they can go after.

So, basically, you're kind of implying that the other houses, even though they're in single-member LLCs, that they could potentially pierce the corporate shield, and seize those assets, if I'm understanding it right. - I am not a practicing bankruptcy lawyer, so know that first and foremost. However, I've read a lot of books and articles from those who are.

So, first and foremost, from an asset protection standpoint, single-member LLCs may not be useless, but they are certainly not ironclad. That's the first thing. So, one of the standard pieces of advice when you read their books is, you always need to make certain that all of your companies have multiple members, and they need to be multiple members who aren't seen as a unit.

So, if you really have a high need for high asset protection, then it's not just gonna be you and your wife owning the LLC, but rather, it's gonna be you and some unrelated parties also, because there is a much higher level of respect for a multi-member LLC, where innocent parties can be hurt, versus a single-member LLC, which is just a shell that was put in place for the purposes of trying to keep money from creditors.

The other aspect to it is just that, anytime you're sued, you and all of your entities are going to be sued. So, you're gonna be sued, and all of your LLCs are gonna be sued, and then you would have to demonstrate to the court why your LLCs are not you, and why the court should protect those assets.

And that's just not how most real estate investors do it. So, I don't think that there is a significant, and again, I'm not a lawyer, but I don't think there's a significant asset protection benefit of your properties being in single-member LLCs, generally speaking. I think that maybe there's some opportunity for it, but maybe it does work as if, let's say, a tenant sues you, maybe.

But in general, the way the US courts work is they want people to pay bills, and they want debtors to pay creditors. And so, if it ever feels like there's not a genuine, legitimate purpose for the planning beyond asset protection, it seems like the asset protection schemes pretty well fall apart most of the time.

So, you gotta work really hard to create that genuine business purpose, and that's not generally what real estate investors do when they just set up a bunch of single-member LLCs. By the way, there are other reasons other than asset protection to have single-member LLCs. So, I'm not saying don't set up LLCs.

What I'm saying is that I would not count on that myself. - No, I understand, and I'll be honest. You're spot on, and as a real estate investor, I'm not the best record keeper, and if, God forbid, there was a lawsuit or what have you, I would imagine they would probably pretty easily be able to pierce this corporate shield.

So, I appreciate that advice. It makes a lot of sense. I've heard your other insights in the past about using retirement accounts and their protection from creditors. So, that is very insightful. - Can you get, last comment, back to the job. I would look for an online job, working online.

The schedule of living in Europe and working online in the United States is a wonderful schedule. It would allow you to be physically present with your wife, and every dollar that you earn online, especially if there's some flexibility with it, is a bit of property that you don't have to sell.

So, obviously, you have a plan here with selling the property that would work, give you the money to pay everything off, but I would just say that if you could have a job online, even if you're making $70,000 a year, over the next year, that's a huge number, and that may keep you from selling a property that you wouldn't otherwise want to sell.

So, I won't beat that drum anymore, but to me, the obvious answer to the problem is sell what you have to sell to stay current, but just get a job and work the job so that you can manage your property part-time and put all of the income from the job to paying off the debt.

And then, a year from now, you would still own potentially more assets while also fixing the problem. All right, good enough? - Yeah, yes, well, just one, I guess, real quick, follow-up question. So, if you would suggest getting a job, but would you recommend as well? Because it probably won't be a highly paid job versus like a reading and acquiring skills and new skills and talents, for example.

Would you not go that route or recommend or advise that route? - If I were in your shoes, I would try to see if I could do relief work for pharmacists who want to go on vacation. I don't know anything about that, but that kind of work, I would guess, is probably out there.

And there's a lot of pharmacists who are overworked, and if they could hire a qualified pharmacist to come in and run the pharmacy for a few weeks so they could get a break, that would be my first thing. That would take you away from your wife, but if it's a couple weeks out of a month, that's what I would do.

But other than that, I would just say, look for anything online that you could, anything that you could get. I don't think it makes sense for you to work for $15,000 a year. That would be dumb. But you should be, with your training and your education, you should be qualified for a variety of things.

So I would just work really hard to see what I could do or what I could get qualified for very quickly. So hopefully that starts, and congratulations on your marriage, and I hope that, call me back and let's celebrate when you get all that debt paid off. Samuel in Colorado, welcome to the show.

How can I serve you today? (chair squeaking) - Hello. - Hello, Samuel, and Samuel's chair. You have a chair almost as squeaky as mine. - Oh no, I just don't hear it anymore 'cause I'm here all the time. - Well, I heard it very loudly. Go ahead, Samuel, it's okay.

- Yeah, so I called two weeks ago, and you must not have heard my chair then, but I called on the topic of career and income planning. I'm 31 years old, and the topic of early retiring at 35, and you provided a response of possibly scale that back, 40, 45, and I think that's a great response.

And I just wanted to kind of evolve that into a related topic. And so what we talked about, yeah, I'm in public accounting, I'm in auditing, and I'm a senior manager. So, and you mentioned like one thing you mentioned was you could reduce your income, like calculate what you would need if you just took your current net worth and figured out how long it would take under an interest rate assumption to get to what you need under the 4% rule, you could reduce your work.

So my topic today is kind of sunk cost fallacy and how to think about that in terms of career and income, because thinking about it, I think sunk cost takes away some aspects, but it doesn't take away other aspects. And what I mean by that is, so yeah, I'm a CPA in Colorado and California.

I've been in public accounting for almost 10 years and studied that in school. So in my mind, sunk cost would say what you've done in the past shouldn't impact your choice in the future, but how it would impact it is, if I were to be teleported to where I am right now, all the experience I have, all the certifications I have, I take those with me.

So that would impact the decision, but I shouldn't say because I've been in this career for nine years, I need to stick with it. So then to kind of narrow it down to the specific question, I mentioned that public accounting has some downsides relating to more hours and more commitment, but at the same time, it may be the easiest way to get the highest rate of income for the foreseeable future, since I have experience in it, compared to your example of, just random example of a flight attendant.

So I could definitely live for a long time with making less income, but how do you balance the sunk cost thing, the career path you've gone down versus just totally, potentially throwing that away and going down something for the purpose of work-life balance? - Let me try to answer it with a question first.

So as I mentioned on our previous Friday Q&A show, there are a couple of exercises that I have found to be really effective in answering these questions with private consulting. The first exercise is the one that I described to you. And that exercise specifically is for me to take your net worth, as you've already repeated back to me, take your net worth, figure out what net worth you need to live on, and then just assume that you stopped saving money and then project it forward to the future to figure out when you could afford to retire based upon how much you've saved.

And then just say, "Hey, you just gotta live a job. "You gotta work something now over the next decade "or whatever it takes, two decades, doesn't matter. "And you can't save any money, "but you can't spend any of your assets." And so that's what I mentioned to you last time.

And I usually will do the calculations, but of course, you can do that yourself. Now, in working on this, I also eventually wrote two other questions that I find I frequently use. And let me articulate these questions to you because I believe they'll be helpful and they're kind of games.

And I'm gonna do the first one a little faster 'cause what I wanna get to is the second one, but in my experience, they work better. So play this with me and I want you to play a game, okay? Game number one. I want you to pretend that you have just received a phone call.

And the guy on the other end of the line says, "Listen, Samuel, I've got some sad news for you. "Your long-lost great-aunt Mildred has just passed away." And of course, you feel sad because you have very pleasant memories of long-lost great-aunt Mildred. You're not too sad because she was a very old woman and you haven't seen her in 35 years, or excuse me, you're 31.

You haven't seen her in 25 years because she's been gone for a long time. But of course, you're sad to hear that great-aunt Mildred has passed away. He continues and he says, "But there's some good news. "And the good news is this, "that great-aunt Mildred has left you, Samuel, "as the sole beneficiary of her estate." And great-aunt Mildred was very wealthy.

The reason you haven't seen great-aunt Mildred in 25 years, however, is simply that she fell in love with a Norwegian prince and they eloped to Switzerland where they have lived for the last 25 years. And so years ago, great-aunt Mildred renounced her American citizenship and she decided that she hated the United States.

So she inherited all of her husband's wealth from his family wealth and they put all of the money into a tax haven. It's in an offshore trust in the Cook Islands. And the attorney explains to you that since you're an American, he can't actually give you the money and you can't be a trustee on the trust.

But tomorrow morning in the mail, you're gonna receive a FedEx envelope. And that FedEx envelope has a black American Express card in it. And what you can do is you can swipe that card for anything that you want, anywhere in the world. And at the end of every single month for the rest of your life, that card will be paid off.

Now, ignore the technicalities. I'm just focusing on the, you know, ignore the taxes and all that stuff 'cause I have to say this to you, the accountant. Question is this, tomorrow morning when you receive that FedEx envelope with a black American Express card in it, what will you do and how will you live?

- I would quit my job and start going back to church, build a bunch of relationships, do a lot of skiing and rock climbing, never work again. - Okay. What else? - Hmm, never thought beyond that. Like along what lines? - Anything you want. - Just financial? I mean, I don't have big financial goals.

- Let's say that you do that. Let's say you do that for the next three years straight. You're skiing every winter, rock climbing all summer, three years straight. What would you do after three years? - I think more of the same. I mean, it's a lifelong pursuit, right? Like there's people who rock climb like Alex Honnold and Tommy Caldwell.

I'm so far from achieving that. You know, it's a lifetime away at the rate I'm doing it. You know, skiing, jumping a hundred foot cliffs, like it would take a lifetime to build that level of proficiency. - Okay, great. All right, so I'm gonna pause there. Later, go back and think about that question.

Replay the little game that I said and just really think about that. And what I want you to do is I want you to think about it in two phases. So it sounds to me like your consumption, you're pretty clear, you know, your goals are simple. I want to ski and rock climb.

That's what I want to do. For anyone else who's listening and doing the exercise, some people have a long list of things they would buy immediately and a whole bunch of stuff that they would do for a year. Okay, fine, write all that stuff down, but then fast forward five years and assume that you've just done nothing but this thing for the last five years.

What would you do then? Because what I think most people find is that once they get out of their system the recreation, then they're looking for something that is more constructive than pure self-indulgent recreation. When I was in high school and college, I taught wakeboarding and water skiing. And that job plus a different job cured me forever of thinking that doing something fun all day every day is where it's at.

Because what happens is you enjoy your recreation the most when it's a respite or an interruption from something else that you're doing. But when all you do all day every day is recreate, then it may lose some of its attraction. Now, maybe not, I don't know. I've never been a rock climber maybe, and there's probably lots of guys out there who would say, "Nope, I'm ready to do this for 20 years." So think carefully about the question.

But let's go on to game number two, all right? Here's game two. - I see your point, sorry. I would definitely pursue something that I could do because I wanted to, not because I had to. - Right, so that's what I want you to think about. I want you to assume however long you need.

If it's one year or five years, you're living in a fancy RV, rock climbing, skiing nonstop, but then fast forward. Imagine yourself at 40. You know, what would you wanna do at 40? Recognizing that you've got this black Amex card still. You can do anything you want. We'll come back to that in a moment.

All right, let's play game number two. I want you to pretend that you've just received a phone call. And this time, the guy on the other end of the line is a guy that you know. Now, for whatever reason, even though you're a CPA and a public accountant and an auditor, for whatever reason, this is your accountant on the line.

I always use accountant 'cause it works for my game. So you just gotta play along with me here, even though you're an accountant. So this is your accountant, John, on the line. And John has filed your taxes for you for the last 20 years of your life, since you earned your first paycheck at 11 years old.

And John says to you, "Listen, Samuel, "I don't know how to say this, "but I am standing at my office window, "and I'm looking down in the parking lot, "and there's a bunch of scary-looking guys with guns "getting out of dark SUVs, putting on blue windbreakers "with three letters on the back.

"And I know for a fact that they are here for me. "And the reason they're here for me, Samuel, "is that I, because I've been doing your taxes "for the last 20 years, "I have been filing false tax returns in your name "with the IRS for the last 20 years.

"And I have been embezzling money from the IRS." And of course, Samuel, you yourself are entirely morally innocent in this sordid affair. You had no idea what I was doing. I concealed it from you. But what you don't know, Samuel, is that there is a very little-known law. It is in the Internal Revenue Code, section 674, subsection G, subsection 1, subsection A7, that says that if somebody embezzles money from the IRS in your name, whether or not you know anything about it, you are guilty of it, and you have to pay back the full amount of money that has been embezzled.

And so, Samuel, by the end of today, since you were a client of mine, again, even though you're morally innocent, this rule exists, and by the end of today, all of your assets are going to be seized by the IRS. All of your bank accounts are going to be seized.

All of your retirement accounts are going to be seized. And what's more, you can still live in the house that you're living in, that's not seized today, but what's more is that for the rest of your life, all of your wages are going to be garnished at the end of every month.

At the end of every single month of your life, for the rest of your life, any money that's left over in your bank account is going to be taken by the IRS. Even your Social Security is seized. So what that means, Samuel, is you will have to work for the rest of your life.

You will never be able to accumulate money because you owe the IRS a bajillion dollars. You can still work, you can still earn money, but you will never be able to accumulate wealth because at the end of every month, the IRS will take it. So if that happened, what would you do and how would you live?

- Well, eventually I would transition, similar to the last example, to a job. Yeah, it was better for lifestyle. And I mean, see, that's what I have to, you frequently say, when people come to you and say, like, I need a job, it's like, you can't help with that.

You need to know your goals and know what you wanna do. So the easy thing to think about is, something in my current industry, either work in the industry, do like some of the seasonal jobs you've discussed, or work for the government is a compelling one 'cause it seems chill.

But there's the alternative position of saying, I'll do something really chill, like flight attendant or something really seasonal, work at 7-Eleven, be a farmer for part of the year. So I'd have to really think through that. And that's part of why my question is difficult, because I don't know what that alternative answer would be, but I know it would be different than what I'm doing now.

- Right, and that's what I want you to think about. This is my way of answering your question about how do I think about the sunk cost fallacy. The reason I wrote those two games the way that I did is that I generally work with people like you, who are good accumulators of wealth.

And what I've discovered is that there are two ditches that prodigious accumulators of wealth go into. Ditch number one is they think nonstop about what they can buy and what they can do, and that's what they're going for. And so I try to give full, that credit card, the idea is, okay, listen, you can buy everything that you want.

I've covered it all. Let's write all that lifestyle down. Now, you've bought everything that you want. Now what? All right, what's the point? And I'll give you as much leash to run on as you want. Buy everything, make the whole list, make the giant purchasing list. But when we do that, what we realize, most people, not everyone, is that purchasing list is not actually all that long.

Like, okay, I wanna buy a new car, but most people don't want 33 cars. They just want a new car, you know? And so let's make the list of all the stuff that you would do, and then let's say, okay, what would you do if now working has no point, because you're not working to buy more stuff.

You can buy everything. And so let's try to figure that out. The second question I wrote was to try to get at people who save too much money, because there's a lot of people that save money. And what they do is they view it as, well, I'm gonna invest, sorry, back, real quick, following the second question.

The first question also is that what people do who are prodigious accumulators of wealth is they're always focused on the next investment. And, you know, okay, I've got seven houses, but I'm gonna get 11. My goal is to get 11. Well, why? Well, I don't know, but it just sounds good.

It sounds better to have 10 houses than it does to have seven. Just, you know, I want $5 million in net worth instead of 3 million. Why? And so they get fixated on accumulating money, money, money, thinking that they actually wanna spend it, but in reality, it's just an addiction to making more investments.

All right, but now to the second one. The second one is to say, all right, you're saving money, but you're so fixated on this idea that I don't wanna work. And this is what I mentioned to you a couple of weeks ago is that, you know, I just don't wanna work.

I wanna be 35 years old and I don't wanna work. Okay, fine. Okay, great. But now let's take that away and say you can't, so you're focused, laser focused on early retirement. Accumulate, accumulate, accumulate. Nothing wrong with accumulating, but let's figure out what you would do if you couldn't accumulate.

And let's imagine life in that situation. So if you genuinely play those games, you'll come up with something that's different. Now, everyone is gonna have something different. One guy in your situation, it would be pretty obvious to him that if he gets a job as a ski instructor in the wintertime and a climbing instructor and guide in the summertime, then he would be pretty well living his dream lifestyle.

And that'd be pretty obvious to that guy. Now, for me, like what would I do? - You say you'll never join the Navy, never live on a submarine or power a ship with nuclear energy. Joining the Navy sounds crazy, saying never actually is. Learn why at Navy.com. America's Navy, forged by the sea.

- I know in an instant, I would go and get a PhD and be a college professor, 'cause to me, that is the perfect dream job. It has the perfect encapsulation of intellectual stimulation, enough money to live comfortably on, good control over schedule, and I would love the social and intellectual environment of that.

But everyone has a different thing. And so I want you to take away the idea that you can just somehow escape if you save enough money and figure out what you would do if you escaped too, and consider that pretty deeply. So then now back to the sunk cost fallacy.

The sunk cost fallacy is basic, I think is something that you need to recognize and then acknowledge, I'm 31 years old, and I have tons of options before me. And the idea that at 31, you would say, well, I can't go and retrain for something else or go in a different direction 'cause I have these degrees and designations and experience to me is crazy.

If you knew that you would want to go and be involved in this, whatever this is, then go and just pursue it. Now, there is an element of intelligence, maybe you're two years away from having your house paid off, and that would provide you with a really wonderful thing, and you need to do two years of training anyway to move to this new career.

Well, obviously be smart about it, but it's just mostly a matter of saying the past doesn't exist, it really doesn't, it's dead and gone, and the most intelligent thing for any man to be doing at any stage of his life is to be going as vigorously as possible in the direction that he thinks he wants to go.

And related, one more kind of comment, the caller before you talked about my comment on getting married. One thing I have learned also is this, and I try to bring this into, basically I think it applies to every area of life. If you think you wanna go in a different direction, I may have said this two weeks ago, but forgive me if I'm repeating.

If you think you wanna go in a different direction, the best move is go in that direction as hard and fast today as you possibly could. I've thought and thought and thought about this situation, and I can't come up with any real scenario in which it makes sense to wait when you know a direction that you might wanna go in.

And so, again, I think I'm repeating, but let me just do it even so. If you're gonna move across the country and you say, I don't wanna live in Colorado anymore, I wanna move to Maine. Well, you should move to Maine today, as close to today as you can.

Because if you get to Maine and you discover that you hate it, then now you can instantly move back to Colorado six months from now, and now the whole idea that I might wanna go to Maine is gone. And now I'm just totally happy and content in Colorado. On the other hand, if you get to Maine and you love it, and it's obvious that that was the right move for you, then you're perfectly in great shape.

And now you get to spend years and years more in Maine than you otherwise would do. So bringing it to careers. If you knew that what you would really love to do would be to go and work as a journalist for a rock climbing magazine, then what you should do is as close to today as possible, go and get that job.

And then if you love it, you'll be thrilled that you did it because now you get to spend more years doing the thing that you love. If you hate it, you'll be so glad that you did it now. So you can turn around and go back on bended knee to your boss and say, "Hey boss, can I have my really cool auditing job back where I make all this money and it's really great?" And they'll give you the job back.

And now you're not sitting on, wondering if the grass is actually green or on the other side or not. So the key is developing the vision of where you might wanna go and then pursuing it aggressively. And at 31, I think it makes the most sense for you to try to move in the direction of that thing that you would do based upon those scenarios that I described.

And it may take you a while to discover it or to create it. And in the meantime, you should be living cheap, earning as much as you can, saving as much as you can, still working towards financial independence. But if you discover that thing that you want to do, then go towards it as quickly as possible because you can always go back to auditing.

- Yeah, thank you so much. That's exactly it. And it's just because I don't know what that thing is. So if I knew what it was, I would definitely do that. For example, some of my roommates do engineering and I often look at that and say, "Oh, it's so casual.

They never work weekends. They always get off work on time." But that's where sunk cost comes in. I don't wanna take five or six more years of schooling because I don't think it's truly that I wanna do engineering. It's just that you can always see your grass is greener on the other side.

On one of your other podcasts, you interviewed someone who was talking about all these businesses. One of them was an ATM machine. And then just last night, I looked at it, and I'm like, "I never thought of starting an ATM machine business." And the more I looked into it, it has a lot of cons.

It's almost as much work as real estate. So I'm just really skimming the surface and looking at what that thing would be. I think that's the biggest challenge. - Yeah, look at franchises because you have the money to buy a franchise. And a franchise, well-managed, may give you the kind of freedom and flexibility you're looking for.

And it can provide for you with the income that you need that's a much higher return on investment that you can make with most other things. It will require your attention, but you're probably well-suited to developing those skills in a fairly short period of time. And you can use technology to provide you with a lot of benefit to a lot of what you're looking for.

So if you had some kind of franchise in Denver and you're up in the mountains and you've got your cameras and you've got your texting service with your employees and everything's good, you can always get back down to Denver in four or five hours or whatever it takes when you need to.

But in the meantime, you could have a business that's providing you with the kind of income that you might need. So consider that because a lot of times some people have pretty clear dreams and ambitions of I really wanna do this other kind of work, but you may not have that.

So just think strategically and say, what kind of business would provide me with it? All right, love the question. Feel free to continue calling in. I've got three other calls on the line. Let's go a little faster. George in Florida, welcome to the show. How can I serve you today?

- Hey, Josh, good afternoon. Well, I'm sure you're getting tired at this point of hearing this, but I just wanna say thank you for everything you do. And I really appreciate all the work you do and the way you analyze things. And your work is so unique and is what separates from other financial experts out on the field.

So I just really wanted to say, I appreciate everything you do and thank you for what you do. And I hope you continue to do it as long as you enjoy, of course. - I thank you for saying thank you and don't, no, I don't get tired of it because I get tired sometimes of doing the work and it's knowing that I may be useful to people.

I look around and all I see is how everyone else is better at everything than me and I get discouraged plenty of times. And so people saying nice things and giving genuine insight into some way that I've served them is definitely fuel for my emotional gas tank. So thank you, I appreciate it.

And I appreciate it. How can I serve you today, sir? - Appreciate it. So I thought I had, well, maybe I still do, but it seems to be like a car purchasing question, but the more I think about it is it becomes more of like, how do I manage my goals?

To give you the context, I'm 34 years old, I'm currently engaged and we are already saved the money. My fiance and I already saved the money for the wedding and we're of course working towards our future, currently saving money to buy our next home and probably continue, we'll do so for maybe two or three more homes.

And one of the things, our cars are paid off and I'm trying to look and plan ahead. And I'm estimating that we might need our next car in about six years from now. And that gets me thinking, okay, we're currently saving about $2,000 every month, which we are putting on a high yield savings account.

And that's basically what's gonna fund our next goal, which would be primarily our primary goal is getting to our next property. So we're saving money towards that. But then I am thinking, since I know that in about six years I'm gonna be needing to buy a car, and if I know, I don't know, or I estimate I'm gonna be spending about like 25, $30,000, whatever the cost that might be, would it be wise to start working towards that goal now?

For example, putting aside, because the cars are paid off, so basically set aside like 200, $300 every month, perhaps putting it on an investment account so that it gains interest over the course of six years. And when the time comes, being able to pay the car in cash without taking away from the bigger savings that we're using for our primary goal, which is getting on our next property.

So that's basically my question, 'cause I'm in a point to where I, should I just save the full 2000 and get to the house first? And then once we're in the house, kind of like save for the cars, but at the same time I wanna move on to the next property, so I don't wanna delay that as well.

So that's what I'm trying to figure out. And because of course, you don't wanna put any money that you're gonna use in the relatively short term, right? In something risky, like I don't wanna, I'm putting it, the safest bet is to put in a high-yield savings for buying a house, because of course you're gonna be using that cash.

So you don't want the market to just erase all that. - I understand the question. Let me give you two viewpoints to choose between. The short answer is gonna be anything you do is fine. So you know that any plan that you do is fine. So what I'm gonna try to do is I'm gonna give you plans that ideas that I think are really compelling, and then maybe this will resonate with you.

And I'm stealing my own thunder from even the series that I'm doing right now on intelligent goals, because this one will be coming up later, or the number two one I'm gonna tell you. So first and foremost, for a guy like you who is earning income, sounds like you've got income, your wife's got income, you guys have lower expenses, you're accumulating properties, you're buying a house, you're working, you're on a plan.

Buying a car is basically a meaningless thing. And I'm not saying that, what I'm saying is you can buy a car anytime. You have a car, the car works fine. Cars last basically for most people in the United States who drive on these pretty little roads that never tear your car to bits, your cars last forever.

Not literally forever, but your cars right now could probably last you for 20 years with no problem. There's been so many advances in car design that cars last forever. On any day in the United States, when you need another car, you can walk out and get yourself a perfectly reasonable car for 5,000 bucks that will drive you down the road and be safe and reliable and no problem at all.

Cars in the United States, good used cars, are so easy to come by that it's just laughable. Now, in the $25,000 range, you can find those cars all the time, and there's no problem whatsoever. And the whole point of cars is kind of silly, meaning what I mean is that, okay, yes, we need them 'cause the whole culture is built around them, but there's so many options that planning too far ahead for a car really is not a big deal.

If you need to save $2,000 a month in 12 months of savings, you can cover your, you can buy your $24,000 car. So I'm not too worried about the car. If my car breaks and I wanna sell it, you'll sell your current car for something and you'll go and get some money together and go buy another one.

So I would say, number one, just ignore the whole question. Don't even bother to have a goal for a car. Focus on accumulating assets. So what I got excited about was when you described to me, you said, you know, we're gonna buy a home and then we're gonna buy a next home, we're gonna try to do this a few times.

And when I think of a newlywed couple who's just moving in and being together and still young and willing to be aggressive, and I think about the idea of you buying three or four houses in the next six or seven years, I'm much more excited about you having three or four houses in the next six or seven years than I am about anything else.

And you won't wanna do that six years from now, right? Six years from now, if you've got a couple of children, you won't want to be flexible and move. It's too much of a hassle. The children, this house works for us. This house is close to the school that we want and blah, blah, blah, blah, blah.

So you've got a very narrow window of time at which this aggressive kind of house hacking approach, you know, buy, move in, live there, move out, rent it in 12 months, buy a bunch of houses. And we've got dual income that we can get good financing. You've got a very small window of time.

And so from a financial perspective, the pressure should be all about accumulating as many houses as is appropriate for your family in this very narrow window of time before you guys become old, you know, married people who just don't wanna deal with the hassle of moving again. And that'll happen faster than you think.

It'll happen probably within about six years. And you just won't wanna deal with the hassle anymore. But during the next few years, if all of your focus is on buying a property, two years later, buying another property, two years later, buying another property, you flip one or two, you've got an amazing foundation for yourself by taking those actions.

So I would just say, ignore saving for a car. If your current cars will work forever, no problem at all. If you need to replace them, then just pause and take some money. You'll have money from savings and you'll just go buy a car. You don't need to be in that world of, I need to plan ahead for five years from now and what should I do?

Just focus on accumulating investment assets. That's option number one, all right? Option number two is this. I think if you want to drive, you know, nicer cars and you wanna have motivation, the best goal to set is I'm going to buy an investment that is going to pay for my consumption.

So what I mean by that is you figure out what kind of car you want to have. You describe a $25,000 car. You figure out what, you know, go out and look at whatever brand new car you want. Figure out what the lease payment on that car is. Maybe it's $500 a month.

And then say, here's what I'm gonna do. I'm gonna go, instead of saving for the car, I'm gonna save for an investment asset that's gonna buy me a car for the rest of my life. And so if you go and you take the money that you would otherwise save for the car and instead you go and buy a house and the house has a net cashflow of $500 a month, then now, five years from now, when you're ready for another car, just go out and lease a car and have your house pay your lease payment for you.

Or go out and buy a car and have your house pay your car payment for you. And position your asset accumulation with a specific consumption target. So I wish, I appreciate the dedication of people who are good savers like you're describing, who are sitting down and who are saying, all right, I think in five years, I'm gonna need a car.

And so if I do $200 a month at the current high yield savings rate, great. You know, that's good. If you just go a half a step further and say, how can I buy an asset that will pay for this consumption item for the rest of my life? I think it's way more motivating.

It's totally doable. It certainly will cost you more money than just paying for the car, but it's totally doable. And now for the rest of your life, you know that whenever I need a new car, I've got this house over here and one, two, three, Maple Street, this is our new car house.

And now honey, we gotta get you a new car house. So let's go and buy 457 Fern Avenue and 457 Fern Avenue, that's your new car house. And put names on your investments. And what's cool is do it from cashflow. And then magically when you wake up 20 years from now and the mortgages are all paid off, now you have the giant asset plus the cashflow and the cashflow continues to grow and you're good to go.

So to me, I don't wanna get too involved in all of the complications that you described. I'm either gonna just ignore it and focus on accumulating because you can get cars anytime you need 'em and/or option B to say, let me buy an asset that will pay for this car five years from now when I need it.

- Gotcha. Yeah, no, I appreciate it. I totally understand the point of view. And I guess my fear is, you know, housing, the housing market has been going up so much and it feels at times that houses are going up faster than you can even say for a down payment.

And it's just gotten so difficult that I'm like, well, if I'm barely making it as is, well, you know, with the $2,000 in, you know, it's probably gonna tell me if I'm buying a house that is, let's say $300,000 down the line, I will need like, what, like 100, almost like 80, 60K just for a decent down payment plus the commissions and all that.

There's so much money that is required. And I feel like we're not even saving fast enough because, you know, I wanna be really aggressive, really wanna, like you said, I wanna do it before it becomes more and more difficult. So I guess that was my fear. I didn't want, in the future, I didn't want like a car payment be something that will cap the speed or the rate at which I am saving money.

So that's why I was seeing it from the point of view of like, okay, well, if I save for now, then I won't have a car payment. But I understand where you're coming from. - Yeah, it's, can you save for, sure. I just don't see, I don't see the point of expensive cars.

I don't, I really don't. I think I acknowledge that they are necessary. You know, when you study signaling theory, I acknowledge that for some people they're necessary. I've just always found cars to be pretty disposable. And like, I don't ever wanna get into the point where I have to save for a car.

And so to me, you know, that's part of it is my 10% number. If you're buying cars that are 10% of your annual income, then, which I think you should be, then you can pretty much do that anytime you want. And you just save for a couple of months and you can get yourself a new car.

And in the United States where the used car market is so powerful, and they're just so abundant, it's, again, you can walk out and you can get yourself a perfectly reasonable car any day of the week. I'm not opposed to you having, you know, a more expensive car than what I described.

But I think you'll be better off with focusing on accumulating the assets. You will figure out and fill in the specific details of the plan. So first house, probably do FHA financing, right? It's a small down payment if you can make a deal work with an FHA loan. So you'll put your small down payment, that frees up a little bit of money.

Then you'll save, save, save. You may refinance. If real estate prices are going up, then sometimes what you do is you refinance the first house that you're in, and then you use the freed up equity to help you with the down payment of the second house. Along the way, you might sell.

Let's say you bought two houses with what you could save, and then now you wanna buy the third house, but you don't have the money. So this time, instead of renting the second house, you may have a good bit of equity, so you sell the second house. But that gives you enough money to make two down payments on houses three and four, which then become two and three.

So you're smart. You'll fill in those details along the way. I'm purely talking conceptually. And I'm not saying there's anything wrong with saving for a car. I think, however, it's a constant middle-class mindset that gets people into that. And so I've never seen, when I said describe middle-class mindset, the biggest that most people's minds go in terms of goals they can set is I'm gonna buy a car, I'm gonna buy a house to live in, and okay, I'm gonna keep working this job, and I'm gonna save for another car.

And that's kind of a middle-class mindset. I would say an upper-class or wealthy mindset is more like what I described. I'm gonna focus on investing, investing, and I'm gonna just say it's the car, I'll buy a car whenever I need one. I'm always gonna have 10 grand in the bank, so the idea that I can't go buy a car is silly.

And then on the flip side is I wanna have this consumption item, so let me wait on the consumption item and focus on buying assets that are gonna provide me with income for the consumption item. 'Cause I don't wanna drive a $10,000 car, Josh, I wanna drive a fancy car.

Cool, well, if you'll buy an asset that'll pay for you the fancy car, then you're good. And so just delay that consumption a couple years until you can afford the asset, and then you'll be free for the rest of your life. And in the beginning, it feels a little slower, 'cause your college buddy who's 34 comes home in a $75,000 pickup truck, and you're oohing and aahing over it, but he will never achieve escape velocity.

But if you'll wait an extra three years beyond it, then you can drive whatever fancy cars you want for the rest of your life if you'll buy the assets first. So that should be the focus is purchasing those assets and not purchasing the consumption items. All right, we go to the great state of Texas.

Welcome to the show, how can I serve you today? - Hi, Josh, thanks, great show. I have a quick question. A couple of months ago, you mentioned a former colleague who had started with you when you were doing financial planning. You were kind of dismissive of him. He was the son of a, he was a rich kid, and he didn't have much academic or technical knowledge.

It sounds like he ended up being very successful, and in hindsight, what lessons would you take away from that? You never really went down that rabbit hole. What perspectives or mindsets did he hold that allowed him to be as successful as he was, and was part of that a matter of time?

Would you have achieved the same level that he had had you stayed in that previous endeavor? - Fair questions, and good questions. So I've thought a lot about this because I learned so much from the situation. And let's begin with what I realized I was wrong about. The first thing that was important to note was just because somebody has not had a bunch of jobs doesn't mean that he doesn't know how to work.

One of the things that was my experience in life was I always worked. I've always worked. I've always had jobs. I had summer jobs from an early age. I remember making money, so I've had all these different jobs. He never had jobs. His first job was his job out of college.

But that didn't mean that he didn't know how to work. Now, I don't know all that much about his grades. I don't know all that much about what he did in college and in high school. So I just know some things. But what I observed was that a man can learn to work at things that are not a paying job.

The skill of being productive, productivity is not only measured in having a job. So he was probably working all the way along with his grades and then he was on sports teams. And he had all kinds of things that he did. They just weren't jobs. And so one of the things that I have changed about my perspective, and I see this more clearly now as a father than I did back then.

I see this now when, you know, if my children come to me and say, dad, you know, we want a job. I look at it and I say, okay, you can go get a job. That's fine. But I know that the benefits from that job are gonna be nothing like the benefits that can be gained from doing more academics.

And I look at the amount of money that my children would earn at their job, especially at this very young age, and I think, I can just give you this money every day. I don't need your, I don't, the amount of money that you're earning at the job is irrelevant to our family.

I can just pull out my wallet and give you the money. But if you'll stay focused on your academics, if you'll stay focused on your pedigree, if you'll stay focused on the knowledge that you accumulate and the skills that you accumulate, you'll start at a much higher level. And so while I wasn't, we weren't poor, what I realized is this is the difference, when I was growing up, I was never poor, but I realized this is the difference between a working class mentality that prioritizes having a job versus an upper class mentality that prioritizes starting at the right level.

And the best example of this is somebody who is, goes for a career that is very high investment, but yet very high payoff. And so I think of a friend of mine who was a very specialized surgeon. He went to school for I don't know how many years to become this very specialized surgeon.

And he, of course, high school, college, medical school, residency, and all the specialties, just crazy long amounts in school. He had seven figures of student loan debt when he finished. But then by the time he was, before he was 40, he had sold his practice. He was earning seven figures a year.

He had sold his practice for eight figures. And by the time he was 40, it was in a radically different perspective. And so I never in my life even conceded, or sorry, conceived of going and being a lawyer because I just didn't understand, I wasn't gonna go, why would anybody go and borrow hundreds of thousands of dollars?

I didn't understand that there is a very legitimate payoff to these kinds of investments in life. And so what I observed is that his work ethic was not expressed exclusively based, his work ethic was not inferior to mine, just because he had not previously had a bunch of jobs like I had.

On the contrary, he had great work ethic, and that work ethic was certainly honed by other activities. The second thing that I observed is he had a set of skills and relationships that I never had in that business. The skills were enormously social skills and networking skills. And then that was compounded by the relationships.

So when I started as a financial advisor, I didn't know any rich people. I was so intimidated by talking to rich people. And so all I knew was that I liked personal finance and I wanted to be rich. And so I had spent a lot of time reading personal finance books.

And I leaned on academics, I leaned on knowledge. And the financial advisor business is not a knowledge business, it's a relationships business. I never had the skills of relationship formation that he did. And I never had the comfort of interacting with wealthy people that he did. So I remember like the biggest premium in the life insurance business that I ever showed was $150,000 a year.

And I was working with this guy who was a super rich attorney, made lots of money. And I was like, okay, I'm gonna show this guy $150,000 a year premium on a whole life policy. And I did the presentation and I was quaking in my boots the entire time.

I could never believe that somebody could spend $150,000 a year on whole life insurance. And I knew that it made sense. I wasn't showing it because it didn't make sense. I figured, okay, probably up to 100 would probably be smart, but I was pushing it 'cause the numbers are all, everything looks a little bit higher.

So I showed $150,000 a premium. And I couldn't even conceive of how somebody could have that much money to where they would spend $150,000 a year on life insurance. Now, that guy, he didn't buy 150. I think it was a little bit more than 50. But that was, I was even 50,000 a year.

It was like, I was so uncomfortable in that situation. But my friend had grown up in a world in which there was so much money around that of course you just show, why would you ever show a life insurance illustration for less than six figures? And it was a world that I couldn't even conceive of.

And so a lot of this stuff has to do with what you believe about yourself and what you believe about the world. And he was comfortable being from a high-income world. And he was totally comfortable with the big money, with the big dollars. Whereas I was going out and showing life insurance policies to my college friends at $100 a month.

And there's a big difference in your overall production and performance. The other thing is he had the context and I never had the context. I was building context based on technical skill and technical knowledge. He had context based upon family circles and him being a good guy and known in the community.

And in that kind of business, it's very much a relationship business. And so he was a decade in front of me in terms of his connections in the business versus where I was. Other things I observed is that I never knew how the process of building those contacts would work.

Whereas he was comfortable with the process of building those things. You know, I didn't grow up going to conferences or networking events with my parents. My first networking events, I was so scared standing in a room full of people, I didn't know what to do. And so I studied and I went and I found a book.

And what set me free was I found a book that gave me, it was a Bob Berg book on selling and networking. And he gave me 10 questions that were good conversation starters. And I memorized those 10 questions and I would go to networking events and I would just say those questions and they worked every single time.

I knew what to do 'cause now I had a pathway to go on. Whereas what I observed about him is that for him, the social dynamics were always much more comfortable. And he was super good looking, super, you know, just amazing social skills. He was smart, he was confident, he was funny.

I never observed him to be cruel or unkind to anybody. He was just the life of the party, a really great guy. And then he also had everything, he was comfortable in his skin with all of the external trappings of success. So, you know, he came into work on the first day and he's wearing a, driving a fancy BMW and wearing a flashy suit with all the flashy stuff.

I was a super practical guy, you know, I was driving a Honda Accord around, a $3,000 Honda Accord when I started and I would always tone down the flash. Like the idea for me of wearing, you know, all the fancy stuff and the super expensive watch, like that's not me, that's not who I am.

And I never thought that I could become who I was, whereas he was comfortable with that. So he fit well in the social class. And then finally, he was inspiring to people. So his big wins came from being in management, so being a recruiter and being good at recruiting people.

And so he had the image of a successful recruiter, which was something that I never had. And my biggest mistake was that I always, I briefly ran a college recruitment program for our college internship program. And my biggest mistake is that I just believe in everybody. And I believe that anybody can make anything of themselves.

And, you know, my managing director was like, "Joshua, not everybody can do it. "You've got to cut people loose." And the idea of cutting people loose for me is just not something that I like to do. I believe in everybody. So those were some of the lessons that I learned.

And I realized that you have to be careful of, you need to appreciate the path that you've gone on, but not think that just because the path is familiar to you, that it's actually the best path. And I appreciate, I have nothing bad to say about my childhood. I'm grateful for everything about it.

But my childhood was never oriented around the best path for wealth building and, you know, making a lot of money. And that's fine. But when we talk about it, we have to look at what other people do and then figure out what makes those other people different. And that's what I've tried to analyze.

Now, your second question, could I have been as successful as he was? I think probably not. And there are a few reasons for that. Number one was I found that business largely boring. And I didn't enjoy, I didn't enjoy the, I found it kind of boring. And that was ultimately one of the biggest reasons I moved.

Because when you said the same thing a hundred times, why do you want to say it again? Just so I can make money. I've never valued money enough just to do something boring. I care a lot about like vision and impact. And so that really hurt me, is that business is a doing man's business.

It's not a thinking man's business. I was always drawn to the next thing. And so, okay, I've mastered this area of planning. Let me go to something else. And then the problem is you've got to bring these things together. And so you can be a really great technical planner, but you've got to be in the space in which that is necessary.

So the people who are the best technical planners, I think probably should be working in the office side by side with somebody who is the best connector and networker and the most fluent in connecting with people. And so you really want to build big partnerships. But what I didn't do was I was always doing it alone.

And so I've got to go out and I've got to make the connections. And I've got to make the connections and also do the planning. And so those two things are often opposed and they're kind of a different skill set. And then this is going to sound like I'm trying to be self-righteous, but it's not.

I never cared. Like I always cared for the people who were broke. That was who I wanted to help because I always figured the rich people are doing fine. And since I was never super motivated by money, it was not, trying to make as much money as possible was never a value that was held in my family growing up.

It was not something that I embraced. And so I was always trying to help catastrophe cases and pull them back from the tracks a little bit. And so that doesn't work very well with regard to building a financial planning business. 'Cause the most effective financial planning business, generally the most profitable, the most successful, generally involves an element of ruthlessness.

You have to continually and ruthlessly pair your low potential clients off of your work so that you can go out and find higher potential clients. And it's a pretty ruthless business and I wasn't temperamentally really well suited for it. So no, I don't think I ever would have been as effective as him.

I don't think I inspired the kind of respect that he did. So because he had the whole package, not Wolf on Wall Street, again, I have nothing but good things to say about this man. I always thought he was good hearted and everything. But there's an element of ruthlessness that you've got to have.

And in fact, I know other friends of mine who kind of fit my temperament. Those of us who go through the world thinking that it's our job to just help everybody, we don't do well in that business because you spend so much time on the people who you're never gonna be able to help, but I believe in you and I really wanna help you.

And you've gotta cut people loose. And so he is a good guy, but he has that element of ruthlessness that's necessary. And I don't think I ever could have developed that nor would I have wanted to develop it. I could have had a very satisfying career, done perfectly fine.

There's lots of people in that business who are not ruthless. But to be at the top, you've got to have that element of ruthlessness. And I don't think that's something that, it's certainly not something I have and I don't think it's something that I wanna have. - Great answer.

I'll call in next week with some follow-ups. Thank you. - My pleasure, please do. All right, and Jeremy in Montana, thank you for your patience, Jeremy. Round us out today. How can I serve you today? - Yeah, good afternoon, Joshua. I'm hoping that I do not drop you if you're driving right now, but wanted to get your thoughts on potentially taking a voluntary severance from my work.

I know that financially I'd be fine. Severance would be about a year and a half of expenses. And then my wife also works and she makes before tax just under our yearly expenses. We're around half five, granted about 75% of that is in retirement funds. But I just haven't loved my job for a while and kind of thinking of this as an opportunity to make a career change and take a little bit of a break for a couple months and then find something that would be more up my alley.

- Do you have any idea of what you might wanna go to? Like, is there anything out there that you've been thinking about? - There's a few things, but I have a challenge with that because I feel like I've done a few different jobs and I can find aspects of any job that I like, but maybe not necessarily love.

So I don't have something that right now I feel like I'm really being pulled towards. - If you take this voluntary severance, and just to repeat, you said it, the severance offer is one and a half years of your household expenses, is that correct? - Yeah, about that. - All right, and if you were to take this voluntary severance, and don't worry about the baby, it's fine.

We're a family-friendly show. If you were to take the one and a half, if you were to take the severance, could you get back into this industry at a similar job, at a similar company fairly easily, or would this be the kind of thing that's really hard to get back into?

- Yeah, so as part of the severance, you can't ever go back to the company and work for them correctly. I think that there's like manufacturers and contractors that work in this industry that I probably could find something. The one thing that is a set of challenges, you know, we live in a rural area, and right now I work from home.

I don't have to travel. As you can tell, I have a baby. Like, I'm not really super interested in travel, which that might be a requirement for a lot of those jobs. But I think that realistically, I probably could find something within the industry. - Why are they offering the voluntary severance package?

- I mean, there's the reason, and then there's the reasons they say, probably. I think that a lot of it is just the economic times that right now are challenging, and then the, quote, target audience for this is people that have been with the company for multiple decades and are highly compensated.

But yeah, I think in part it's to get people off the books for expenses, potentially open up career opportunities for the young up-and-comers. But it's hard to know for sure. - Right. If you weren't, if you didn't have the voluntary severance, knowing that you don't really love the job, it doesn't seem like it's a good fit for you, what would be your timeline otherwise for leaving?

- My timeline for leaving, I think if we got to buy, or just in general, if I could get off the job. - Just in general, let's say, 'cause obviously, the reason you're considering it is you don't love the job. So before you found out about this voluntary severance offer, when you were thinking about it or talking with your wife about how long you would keep working at this company versus do something else, what was your previous plan?

- Yeah, so I had actually called in, like, I don't know, last year, earlier this year or last year, but I've been looking for new internal jobs. I haven't actually looked externally. Like I said, I work from home, and the area I'm in, I'm pretty highly compensated. I just haven't been able to find anything internally that I've been able to land.

So that's the challenge, is I haven't actually. (computer chimes) - Okay, last question. You may or may not be able to hear me 'cause you may be breaking up, but last question is, if you, this thing that you can't ever come back to the company, is that some kind of contract, or is that just an unspoken assumption?

All right, so, oop, now you're back. Did you hear my question? (computer chimes) So Jeremy's driving through Montana. No problem, Jeremy. What we'll do is I'll just go ahead and answer your question broadly, and then you can listen to it afterward. We lost you off the call. So the question is, all right, I've got a voluntary severance offer, and it's kinda nice because they'll give me a year and a half of my expenses as a buyout option in order for me to give up the job.

I'm halfway to financial independence. My wife generates income that almost covers our expenses. So we're in a pretty good spot financially. We can keep this going. Problem is, the job is highly paid. You're working from home. It's a good situation. So things are pretty good. Obviously, because of the hard work you've done with your financial position, you could go either way.

Either way would be fine. If you take it, everything's gonna be fine. It's gonna work out. And if you don't take it, it's gonna be fine because, all right, I've been looking for other jobs internally, but I haven't been looking for other jobs externally. So clearly, it's not that bad of an option.

So you're gonna be fine either way because of the hard work you've done with your planning, and you can just go with either option. What I would say is, it's just useful to look at it strategically and to try to assess, what do I need most at this point in my life?

So if the year and a half of expenses is gonna be useful to you because it could be a big move on to the next stage, then you're probably better off taking it. So what would be some strategic ways to use it? Okay, I need some time off. Great, you can take two weeks off.

All right, take a month off, fine. But we're not taking 18 months off. That's silly at this stage of life, unless there's some clear conviction that we wanna take 18 months and travel around the United States, and that's always what we wanted to do, fine. But the point is, if you can use this strategically, then it can be a real blessing.

So strategically, what we're looking for is not just taking time off and doing nothing. We're looking for doing things that previously the work has made really hard to do. So getting a degree, another degree, making connections, looking for, starting something of my own, writing the book that I've always wanted to write, buying the business that I've always wanted to buy.

So if you can use the time that you have of a year of wiggle room as a way to move strategically to the next thing, then it can be the obvious solution. If you don't have any idea on how to use it strategically, then it's not so valuable. And it might be nicer to have this pretty cushy job where I work from home and I have a good schedule and I make a lot of money, I'm highly compensated for the area.

That may turn out to be more useful in the long run. So I wouldn't take it until I can create a plan of how I'm going to invest the time and feel really good about the option. Because if there are limited jobs in your area where you, for this kind of pay and these kinds of benefits, then just walking away from the one that is their first offer may not be the smartest idea.

So what I would challenge you to do is lay out a plan to say, number one, let's say I take it. How can I really use this strategically in order to advance me on to the next phase of what I wanna do by giving me a little bit more time than I expected?

And if you get a really good plan where it makes sense, then sure, go ahead and take the severance. If you don't have that, then keep the job because they'll probably make you a similar offer in the future. And if it's involuntary severance in the future, then they're probably gonna pay you out something like what you're doing now.

And if you can just keep this job and do everything else that you're doing, then why would you do that? The concern that I have is just simply, I don't want you to get rusty. And if you take a year and a half off and you hang out and you play with your babies and you don't ever do anything and then the money starts to run out and your wife is saying, "Hey, honey, can we get some money coming in here from your end?" Then it can be much more difficult to make progress from that.

So Jeremy, those were my answers. You can go back and listen to it. But in essence, either one is fine because of the good financial position you're in. I just think that before you take the severance, you should develop a really compelling plan that is so obviously useful to you and moving you and your wife towards what you really wanna go and then take the severance.

But if you don't have that, wait until you do have that. Make sense? - That makes sense and I'll listen back 'cause we were in and out. I appreciate the input. Thank you. - My pleasure. And we move again to Seattle. Welcome to the show. How can I serve you today?

Seattle, Seattle, going once. Seattle, Washington, going twice. Seattle, Seattle, you're up. You're up. You've waited on so long. I don't have a name. I don't have a number. I just have so long. So we will wrap it up with that. All right. That concludes our Friday Q&A show. Just wanted to give him just a moment to see.

Thank you so much for all the great calls today, all the great discussion. Thank you for listening. I hope that you have found something useful here. As always, take what's useful and discard what is not. If you would like to join me on next week's Q&A show, you can do that by going to patreon.com/radicalpersonalfinance patreon.com/radicalpersonalfinance.

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