Hey parents, join the LA Kings on Saturday, November 25th for an unforgettable kids day presented by Pear Deck. Family fun, giveaways, and exciting Kings hockey awaits. Get your tickets now at lakings.com/promotions and create lasting memories with your little ones. Radical Personal Finance is sponsored by YNAB, the modern, up-to-date way for you to budget the money that's in your checking account and actually tell it where to go in a really convenient and remarkable fashion.

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Personal Capital is completely free. Comment on tomorrow's Saturday show. Tune in for a comment on the compensation model with Personal Capital. But for now, plan for Personal Capital for free at RadicalPersonalFinance.com/PersonalCapital and check back tomorrow for info on how they make money. (Music) Welcome to Radical Personal Finance, the show dedicated to providing you with the knowledge, skills, insight, and encouragement you need to live a rich and meaningful life now, while also building a plan for financial freedom in 10 years or less.

My name is Joshua Sheets. I'm your host, and today I'm your answerer. Today is Friday. That means we do a Q&A call. I've got callers sitting here on the line live. It'll be, I guess, what, open mic Friday, something like that? For those of you who are new to the show, on Fridays, as much as I'm able to do it and around my travel schedule, basically every Friday we try to do, I have a live Q&A call.

I pre-record these calls about a day or two early before Friday, but then they're released to you in the feed on Friday. On today's call, we're going to have a couple of callers calling in. I've got them waiting here on the line, and we're just going to go to the phones.

It's basically my way to create similar to a live talk show, and I really enjoy this ability to speak to you and speak to you live. If you'd like to join on a Friday Q&A call, the best way to do it, or the only way to do that, is to become a patron of the show.

The patron model is where you, if you find value for the content that I create and you'd like to support me and help me be able to continue to do it the way that I do it, if you find value in that, then go to radicalpersonalfinance.com/patron. Sign up as a patron of the show, and then I'll share with you the notifications and the call-in information so that you can join on one of these Friday Q&A calls.

That's the basic concept of it. We'll go to the phones in just a second. If you'd also like access to me, so again, these patron calls are probably the most reliable way for you to do that at the moment. I have plenty of time to visit, but of course that does result in the public release of your question and of our conversation.

So you might need to edit private details or something like that in order to make sure that you aren't overly exposing yourself on a public podcast. If you'd like to speak with me privately, that option is also available to you. You can book a private paid consulting call with me.

Go to radicalpersonalfinance.com/phonecall. Again, radicalpersonalfinance.com/phonecall. That will forward you through to a page where if you'd like to set up a time to speak to me privately, just you and me for consulting, then that's a great way for you to do it. So if you enjoy my answers or the way that I approach the questions and the problems here on the show, then this would be the way for you to go ahead and to join there, would be to schedule a call at radicalpersonalfinance.com/phonecall.

Finally, I don't take emails anymore in terms of private emails. I do read them, but I'm not able to respond to them. But what I would encourage you to do is if you'd like to give me feedback on a show, go by the show page and comment on the show page at radicalpersonalfinance.com.

And then from time to time on many Saturdays throughout this year, I'll sit down and I'll take those comments and I'll make clarifications or answer your questions as well. So I encourage you to do those things. Final quick announcement before we go right to our first caller, who's David from Canada, in just a moment here.

If you have not yet taken my demographic survey, could you please do me a favor and just go to radicalpersonalfinance.com/survey and it'll take you just about, literally about 20 seconds. It's about a six question demographic survey. You put in your age. I can't even remember all the questions. It's six seconds, six questions, about 20 seconds worth.

It's anonymous. There's an option on there to put your email address in there. You can put it in or not put it in. I don't care. But just put it, fill in the information there on that survey. That'd be super helpful. As I'm bringing new advertisers onto Radical Personal Finance, I need to have some sort of demographic data to be able to share with them who you are, who you, my listener is.

And that'd be very helpful to me. You can do it right on your phone. There's a link in the show notes for today's show, which shows up on your podcatcher, whatever podcatcher you're using, whether that's the Apple Podcasts app or any of the rest of them. Just click on it, click on the description.

You'll see a link that will forward you through or just type it in straight on your phone or on your computer at radicalpersonalfinance.com/survey. All right, announcements out of the way. First caller, let's go to David in Canada. Welcome to Radical Personal Finance. How can I serve you today, David?

Well, thank you so much, Joshua. I am very excited to be on the call. Your podcast has shaped and directed a lot of my financial independence thinking over the last couple of years and definitely helped me in a number of areas and I really appreciate it. So I've only recently joined as a patron and will hopefully be there for many years because it's definitely worthwhile for me.

Awesome. So here's my question. I've been following the Dave Ramsey plan and I'm through baby step three, which is build up your emergency fund. So I've paid off all my non-real estate debt and I've built up an emergency fund and now I'm trying to decide what to do next.

According to his plan, it would be, you know, focus in and pay off my house essentially. And I'm open to that idea. My wife is excited on that idea. Her security, she would feel much more secure if we do that. And I think it's a good idea, but I wanted, you've often had a different angle on a lot of things.

And so I wanted to hear your thoughts. Basically, what I've got is I work a nine to five job. I've also got six rental properties and I've also got a cleaning company that runs. I don't do the cleaning, but I'm an owner in it. And so I'm just trying to decide where to focus, sort of maintain the intensity I've had over the last year and where to focus my efforts and finances.

Recently I've heard you talk about the idea of having a significant amount of money in the bank, just as what that does in your spirit, just to have breathing room. And so I just, I don't know, do you have a thought on that or should I provide some more info?

Absolutely. Well, first let me just clarify for those who are familiar with Dave Ramsey's baby steps. So again, Dave Ramsey, uber popular personal finance pundit and teacher. And so his seven baby steps, step one is to save a thousand dollars cash. Step two is to pay off all the debt, except your mortgage debt on your own personal residence, or possibly as you mentioned, possibly a mortgage on an investment portfolio.

Step three is to fund an emergency fund with three to six months worth of expenses. And then step four is not pay off home. Step four is to invest 15% of your income for retirement. Then his step five is save money into ESAs or five to nine plans for college.

Step six is to pay off the home early. And then step seven is kind of, doesn't really mean anything, get rich and give money. And I don't know what step seven is. So basically you've done all this stuff. So you said that you're considering paying off your home early.

You didn't mention retirement. Was there a reason that you went straight to paying off your home? Well, I do have the retirement steps in place according to that plan. I mean, at this point it's 15%. Once your home's paid off, you step that up according to his plan. And I do have that in place as well.

And also I've got five kids. So children's education is a fairly high priority in our home. And those I don't feel like I have as much of a question about. I feel like I've got a fairly good plan on that. In fact, when your episode to a 13 year old, my daughter lashed right onto that and has been researching CLEP and a number of other options to mitigate the cost of college.

So I feel like I'm good on those fronts. But what I'm wondering is, I know you mentioned when you had a home, you felt like the amount you put in a down payment ended up tying your hands later on. Yes. Yes. Okay. So I just wanted to be clear on that simply because you had jumped right to a question on paying off home, but you said you were through his baby step three.

So there are a couple of ways to approach this. First of all, why would you focus intensely on paying off your home? The idea of not having that payment, which in Canada, we can't even write off the interest on our personal home. So there's really no, even the argument that those make about having an interest, you can write that off against taxes.

In Canada, we can't on our personal residence, only on investment properties. So there's really not, I can't find any much value in carrying a mortgage other than I've got that, I don't have all the cash tied up in the personal residence. I run as the financial arm of the business.

So when the business needs money, I front it. We try to run the business without debt. And as it continues to grow, there's going to be a continuing need for me to have money to inject at different times in that business. And so I'm just trying to figure out if I need to, what's that really just whether to focus in on getting the mortgage paid off or whether I should also be building up a larger cash reserve.

Okay, so that's why you would. Now, why wouldn't you focus heavily on paying off the mortgage? What would you do instead? Why wouldn't you choose to do that? That's a great question. Why would I not pay off the mortgage? I mean, I'm basically sold on the idea of paying off the mortgage and just wanted to get a second, get another opinion before I commit into that process.

But can you think of any reasons why you wouldn't? Well, I mean, you know, keeping, I mean, I can build up cash on the outside and use that to grow a business. That would be a reason not to to immediately pay it off until, you know, the business reaches a whatever size within that.

But other than that, I can't find a lot of good reasons to keep paying interest to the bank. So sounds to me like that. You answer your question then. And I'm not being a smart aleck when I say it that way. What I'm trying to get at is the specifics of your situation, why you would and why you wouldn't.

And the answers to that question will determine what you should do, not somebody else's philosophy or framework or plan. Simple example. If you all of a sudden, let's say you have this excess money, but then if all of a sudden one of your children was injured in a horrible accident and you all of a sudden needed lots of extra money for medical bills, you would immediately stop paying extra on your mortgage and you would allocate that money towards the care of your child because you have a more important use for the money than paying down the mortgage quickly.

That's just an example to prove the point that whether you should pay the mortgage off or not is primarily based upon whether you have a better use for the money. Now, I am 100% in favor of paying off all debt, and especially a personal mortgage, because when I look at the amount of peace and rest that that can bring to a family's finances, I see that as having a tremendous benefit, especially if you are in the stage where that's very valuable to you, meaning you're still working.

What ages are your children? - We have one-year-old twins, and then the other three are eight, nine, and 12. - So at this stage of this one to 12 years old, having something like a paid-off mortgage would be extremely valuable to you. It would possibly open up opportunities for you to pull back if you wanted to pull back on your nine to five.

It would bring a tremendous amount of peace to your wife. It would help her to feel much more confident and just at rest and secure, which could do wonders for your marriage and for your family life. It can free up some of your time and some of your expenses to be able just simply to pay out of your income for the expenses that your children need.

If you didn't have a mortgage payment each month, you would be able to more easily write a check for football uniforms or ballet classes or write a check and take your children on nice experiences. If you know that you've accomplished those basic goals, hey, you're saving for retirement, if you're saving for retirement, you have your house paid off, you won't feel guilty about spending lots of money on your children, on great experiences.

And I think that's something that is very, very important. During this stage of your parenting with children from one to 12, spending more money on them will be much more valuable than down the road. So it's better to figure out a plan where you can spend the money on them now, on experiences and the things that will really help them than you to just to be richer at 80 years old when they're grown and gone and on their own.

So I can see a lot of arguments for paying off the mortgage. And I think that's a fantastic purpose. It's a fantastic goal to have, and it can bring tremendous benefits to your life. Now, the only reason why you wouldn't pay off the mortgage is if you had a better use for the money.

And so you can do that in a financial calculation. The simple example would be in terms of the benefit, the cost of the financing versus the potential return of other investments. What is the current rate on your mortgage? Well, I am up around almost 4 percent, although that should be I'll be refinancing that in the next year.

Okay. And you think you get below 4 percent if you were to refinance? Oh, absolutely. Yeah. I got to complete this term and then I'll be able to. Yeah. Okay. So if you look at 4 percent now, as you mentioned, in Canada, you don't have the deductibility of the interest.

And all that that does is it just changes the actual cost of the interest for some U.S. Americans. So if there is a U.S. American who's listening to this and they do have the and we still have the home mortgage interest deduction, which is possible that it might go away in this next year with the forthcoming tax law changes.

We don't know yet, but there are bills and suggestions sitting in committee right now in the Congress here in the United States that could result in that tax law being changed. And if your tax situation is such that you can benefit from itemizing that mortgage interest deduction, all that does is it cuts the net cost of the interest a little bit.

So let's just say it cuts it from 4 percent to 3 percent. Well, you do the same exact calculation. You just factor that tax savings in. And this is one of my biggest pet peeves, is that when people recognize, oh, my mortgage interest is deductible, they pretend that that means that there's no cost to it.

Well, there still is a cost. It just means you have to adjust the nominal interest rate, which would be 4 percent. You have to just the nominal interest rate by the value of the tax deduction in order to get your real interest rate. In my simple example, it would be 3 percent because of the value of the tax deduction.

And then you would use that and compare it. So, David, for you, what you look at and if you're doing the financial analysis is you need to look at your life and your situation and say, do I have a place to invest this money that would get me in excess of 4 percent?

So let me ask you that question. Is there a place in your life that if you just simply took the money that you would spend on paying off the mortgage and put it somewhere else that you could get a simple and easy and reliable rate of return that's in excess of 4 percent?

There's lots of theoretical, but nothing that's going to be a guaranteed return. How about your rental portfolio? Do you have mortgages on your rental portfolio that are higher than 4 percent? Actually, all my rentals are lower. I had to do a little finagling to get the mortgage on the personal property because of the complications of the mortgages on the rental properties.

So it was less than ideal terms when I got this house. So it's probably my weakest mortgage and most expensive in terms of interest. Okay. So that's tilting the favor very highly in terms of paying off the mortgage. If you don't have a reliable place where you could invest the money with a very high degree of confidence of earning in excess of 4 percent, given your investments, given your investing acumen, given your comfort, then that tilts the decision highly in favor of paying off the mortgage.

Now, the reason I ask about the rental properties is because for most people, you can get a much lower rate of interest on your personal residence versus any mortgages or debt that you're servicing on a rental portfolio. And so in that circumstance, if you have what would be common in the United States here is that somebody has a 4 percent mortgage on their personal residence, but they're paying a 7 percent mortgage on a rental property.

So in that case, I would seriously consider paying off the rental properties before paying off the personal mortgage. But if your situation doesn't say that, then that's another mark in favor of the personal residence. Now, the only other so you want to answer the financial question, which you've answered satisfactorily for now, if you come and think of it later, then you want to look at that.

You want to think of it and ask yourself that question again. And if you come up with something that's better, you need to seriously consider that. So then the only other couple of questions you would ask yourself is ignoring the financial. Is there a place that you can invest the money that has a much higher potential in business?

So as an example, do you have any interest in leaving your nine to five jobs in order nine to five job in order to be a full time real estate investor and or businessman? That is something I've been wrestling with. I have an entrepreneurial bent and definitely an interest there.

I have been remaining with my current employer. I wouldn't say solely, but in large part because I feel we'll say a calling to remain there in this season until. As as a ministry field for myself, until I hear otherwise from from the Lord, we'll say. Sure, absolutely. And that's a very reasonable that's a very reasonable approach.

So in that kind of circumstance, then you're basically in a holding pattern. You feel a burden to be where you are. You don't feel any freedom to go from there to something else. So you're not going to make active steps to leave because it's not just a matter of an intellectual.

Well, I want to do this other thing. In many ways, I am in similar. I'm in a very similar situation in some areas of my own life where there are things that if I were just choosing, I would say, well, I would like to do this, but I don't feel a freedom to do that.

And so I consciously choose to suppress and subject my own will so that I can move in faith in the things that I do. So in that situation, then you would just consider, well, should I be making preparation? Should you be making preparation for possibly changing or is there something else that you can do that would change?

Now, here's let me tell you why I'm going on this line of thinking. The reason I'm going on this line of thinking is so that you could consider and say, conference unlocked. Sorry about that. Just lost a couple of callers and I wanted to unlock it so they could get back in.

The reason I go on that line of thinking is to emphasize that sometimes there might be if you were preparing to leave your job, let's say that you said, well, I'm doing this job, but I don't want to continue. I'm not going to continue this job forever. And I want to be able to switch.

Well, now if you look at your cashflow situation, you might need to invest the money into your business. Perhaps you can purchase a little bit of advertising to bring on a few more accounts that would dramatically increase your cashflow. Or perhaps you look at some of your rental properties and say, well, if I pay off this mortgage here, then I can refinance this other one and then I can improve my cashflow situation.

Because sometimes paying off a mortgage, especially if it's something like a low interest rate, fixed, low interest, fixed rate mortgage over a long term, paying it off doesn't buy you much additional cashflow. And so if it doesn't buy you much additional cashflow, then sometimes you would have to make a different decision to get you more cashflow.

So consider that. And then the final area of consideration is just simply, is there a way in which your life would be improved from a safety perspective or from a lifestyle perspective with using this money in something, even if it's not the financially correct thing to do? And my example there is to say, would this be better served?

Is there a better use for this that if you bought a little vacation property or if you used it on some need that your family has, does that bring you more value than paying off the mortgage? After listening to you, I doubt that it is. It sounds to me like the right decision for you is to focus heavily and aggressively on paying off the mortgage.

Now, if you did do that under your current assumptions, how long do you think it would take you in order to be able to clear that mortgage debt? It'll depend on the rate of growth of the business, because I've basically got that business. I can focus 100% of the income from that business on whatever the goal is.

So I mean, my income there is about two grand a month right now. Plus, I can pull some from the personal. And it seems to be growing. So I expect that I'd be able to pay it off in probably, it might be five years, but I'd like to be less.

What's the current balance of the mortgage? One, but 160. And what's the value of the house? Around 250. Okay. So yeah, if you've got a plan there, you just look at each amount of money and say, is there a way that I can get a higher return from the business?

And that's where you've heard me say in past episodes, but I will repeat for you. I think there is a lot of value of accumulating the money. Instead of just chunking, let's say you have an extra $2,000 a month, instead of just chunking the $2,000 every month towards the mortgage, I think there's a huge amount of value of accumulating that outside of just in a separate checking account or savings account and planning to in the future, just write a check for the whole thing.

That's probably the biggest thing that I didn't realize in the past was how valuable it was to have lots of excess money, just simply sitting in a checking account. Especially if I were in your shoes, where I knew that there was a possibility that I might want to leave this nine to five job in the future.

And if I knew that I'm trying to work on this business, I think I would prioritize setting as much excess money aside in just a savings account and not throw an extra $2,000 a month at the mortgage. That way I would be able to have the cash. It would be liquid for me to make investments into my business.

And in the future, I can lower down the mortgage balance. The point of that is to show that there is no difference in terms of a risk profile, which most people want to pay down the mortgage because it lowers the risk of their life, bring security. If you have a $160,000 mortgage, and let's fast forward at the end of two years from now, you've succeeded in putting aside a total of $48,000 towards that mortgage.

So now you've dropped your mortgage balance from 160 to $112,000. And then you get laid off. There's a big recession, you get laid off and you lose your job. In that circumstance, you're no safer than you were of having a $160,000 mortgage because you just have the standard monthly payment.

Now, if you had done what I recommend, which is to put that $48,000 aside into a savings account, and you get laid off, well, now you're much safer because $48,000, let's say that your standard monthly payment is $1,000, $48,000 in the bank, even though you may still have $160,000 mortgage, that $48,000 buys you 48 months of mortgage payments.

And so you're much safer having the money aside. That assumes that you don't spend the money. And that also assumes that you're able to maintain as high of a psychological motivation towards that goal. And that is actually what I see the biggest weakness in my suggestion, is for many people, when they can look at that statement every month, and I've been in this too, when I had a mortgage and when I was prepaying extra, it's very exciting to stay very focused on that goal when you can see the numbers dropping substantially.

And so that keeps that intense emotional focus there for the family, for us to lower expenses in other places, because you can see it going down. So you have to judge for yourself, will it be psychologically motivating for you and for your wife to keep your expenses low so that you can get this mortgage cleared as quickly as possible?

Because perhaps with this psychological motivation, you can have the whole thing gone in three years, just because you're very, very laser focused on it. And you're imagining, well, at that point in time, I have a 15 year old, I have some three year olds and children in between, we'll have that mortgage payment gone and we'll be totally free and available.

You have to decide that. I don't know of any way to give you advice. It's a matter of what you would find to be psychologically motivating. Absolutely. Thank you very much. That very much gives me, that's exactly the type of answer I was looking for of something that sort of approaches from a different angle than I was thinking.

And so I appreciate that. We'll have to listen back through it with my wife and see what we can come up with. Absolutely. Thanks for calling in. Let's go next to Ursula in Hawaii. Ursula, welcome to Radical Personal Finance. How can I serve you? Hi, Josh. I am a long time listener, first time caller.

It feels so strange for me to hear people say that, because that's always the thing you hear on talk radio. And it's so funny, but it's on my own show. So thank you for saying that. It's just so funny to me. Welcome. Thank you. So my husband and I are originally from California.

And we have relocated to Hawaii because he found a job. We have a young eight month old. He is the best thing in our lives. But he kind of came to us as a surprise. And I'm in graduate school. It's still in California. And I've been going back and forth with a young baby that's really hard on our family.

It's really hard for my husband to be apart from him for such a long period of time. In fact, I'm going back tomorrow to finish another semester. We did that last semester. And this semester, he got the job here last semester. And basically, I wish I had found a show earlier, because instead of going to graduate school, I would have probably just kept working and saved my money.

But so the problem, well, I guess it is a problem. What's going on? I'm sorry, I'm so nervous. No problem. So I have, so I'm doing a master's in speech and language pathology, which requires an internship as well. And as I told you, I'm going back and forth between Hawaii and California.

And my program is, there's a lot of hurdles to jump in order for me to do my internship here. So after the semester, I'll be done with all my classes, but I won't be able to do my internship. And so I kind of feel like I don't really have, well, where I'm going with this is that I really admire your show and I'm rambling.

Oh my gosh. Okay. I got to stop. You're going to, are you going to ask a question? Is pathology, is speech and language pathology, is that where you're treating children or people who have speech impediments or problems? Or does pathology mean something different? What is speech and language? No, that's exactly it.

So you treat children and adults that have speech and language issues. So children who have developmental disabilities and also adults who have had strokes or have some kind of degenerative condition or some type of traumatic brain injury. And how close are you to finishing your coursework? So my coursework will actually be done this semester.

Like I said, I'll be going back and forth to finish up my classes. And, but I will need, I still have three more semesters of an internship to do. And why is it so difficult to find internships in Hawaii? Is there not the need for therapy? Is there, are there not a lot of other practitioners there?

No, there are. It's just that my program is very specific about the place where I'm going to be doing my internship. And there's also, there's also the fact that they need their own supervisors to supervise me, you know? Sure, sure. And they need to come to the clinic site.

But basically, I am very fortunate to be able to mostly stay at home with our son, with the exception of going to school a couple of days a week. And California is easier for us because we actually have family members that help with him. Whereas I wouldn't be able to do this here if I was doing my internship, I'd have to find something on the weekend.

But I would like to do, I have some ideas of about some lifestyle businesses, you know, like how you started your podcast. I have some ideas about, you know, with my background, about what I can do. And the information I get online is just so overwhelming, because there's so much great things and so many, it's so much crap that's out there.

Oh, yeah. But so I, like I said, I really admire your show and admire what you do and admire how you've been helping people. You certainly have helped me and give me some food for thought, even though I'm not at a point where I can actually implement some of the strategies you talk about.

But I just I'm wondering about your creative process. And I know you've talked about in the show, how you prepared yourself to be in the position that you're in. And you had to like have a transition job for a little bit, because you're supporting your family. But in any case, I'd like to know more about that.

Maybe I can make a decision about whether I'll stay here for a few years and work on that and then move back to California to finish my program down the road. Yeah, I'd be happy to tell you about that and give you some advice. With your permission, let me ask you just a couple questions about the California program.

So your son is this is your first child for you and your husband? Yes. And so you were hoping to have children, but he came earlier than you planned. You were working towards finishing school, and then he showed up as a surprise. Is that accurate? That's accurate. Yeah. Okay.

Now, if you given the fact that he's there, has that affected your career plans? Yeah, it has. I have always thought that I would stay at home with the children once I had them. But in my mind, I would have finished school, worked for a year, and then stay at home for the first five and figure it out from there.

But that was something that I always was able to do. I always wanted to do, I'm sorry. And I'm very fortunate that my husband is in a position that we can actually do that now. And since he's come, I would much rather not have to be in a position where I have to leave somewhere to go to work, especially being in Hawaii where I don't know anyone and leaving him with strangers.

Is there any pressure, for example, from your parents or from other people? Is there any pressure as to why you need to finish your master's degree? Or if you do need to finish it, why you need to finish it on a certain time schedule? Yes. So there's several reasons why I'd like to finish my master's degree.

There's certainly pressure, mostly because I've already I've already invested so much into it financially and also time-wise that I feel like, and it's also such a competitive program. I'm in such a fortunate position to be able to have gotten into it that I just kind of feel like it would be a waste if I didn't finish because I was given this opportunity.

How much money and time have you invested into your master's degree? So far, I have invested about, I want to say, $22,000. And how much money and time remains for you to be able to finish your master's degree? Well, so there's currently at this point, there's two years, one semester of classes, which is just coming up and then three of internships and probably another five, 10 grants.

So let's first talk about that. I am a heretic when it comes to the modern kind of standardized acceptance of certain things, but I'm also not an irrational heretic. I recognize that you do need to consider the amount of time that you've invested. The first thing that I encourage people to do is to always practice what's called zero-based thinking, which means the answer to this question.

Knowing what I now know, if I had to do it over again, is there anything that I would do differently? So let me ask you the question. Knowing what you now know, knowing that you're living in Hawaii and knowing that you have an eight-month-old son, if you were going to do everything over again, is there anything that you would do differently than what you've done or what you're doing currently?

Yes. What would you do differently? Well, for one, you mean would I have done differently or would I be doing something different currently? You can answer whichever one you prefer. So yeah, I mean, knowing what I know now, I probably wouldn't have started the Masters. I would have worked at that point and saved money and that's probably what I would have done.

Now, if you wouldn't have started the Masters, why? What's changed between when you started it and today that causes you to say, "Well, three years ago I really said this is important. I want to start the Masters, but today I don't." What's different for you? It's the time commitment that I have to put towards the Masters and also the monetary commitment because both take away from me being able to spend time with my son.

Having spent that money, obviously, not obviously, but I had to get loans to do the program and then I have to pay them back. And so that would take time to clear up and also the actual time that I have to invest in studying, going to class, and commuting to and from school.

Does this Masters degree, is it primarily oriented around preparing you for a career in speech and language pathology? Yes. Or is it primarily related to the career? Yes. Do you have any interest now that your son is here, do you have any interest in pursuing this career aggressively or have your interests changed?

No, I don't have any interest in pursuing it aggressively. Once I finished the program, my idea was to work very part-time and just as little as possible to meet our financial goals. Right. So let me just kind of give you some ideas, some things to think about around the concept of zero-based thinking.

I won't be able to give you any answer, nor should I, because the answers are going to be intensely personal, but I can at least give you a few ideas and some things to think about. Zero-based thinking is an incredibly valuable thing to consider and it's very hard to consider.

Zero-based thinking is also closely wrapped up with the concept of what's known as the sunk cost fallacy. And so this comes from the world of accounting, and it goes something like this. It says basically, well, in accounting, if we've spent money on something and it's not working very well, we need to continue spending more money on it.

The idea is we invested, we had this new program for our business and for our company. We thought that if we could go ahead and launch this thing, it would do really well. So we've invested $50,000 into it over the last few years. Now, things have changed and we look at it now and we say this new program for our company is not a good use of money.

It's not going to result in a win. So the question is, what do we do now? Well, because we've spent $50,000 on it, it's very easy to look at that and say, I've got to get something out of this. I've got to make this work. And so we want to put more money into it.

But this is a fallacy. And the reason it's a fallacy is because the $50,000 is gone. It's been spent. It's a sunk cost. There's no way to get it back. And so today, what we need to do is we need to start with a fresh decision and say, today, if we were knowing what we now know, if we were going to do this over again, would we put more money into it?

That's got to be the question that we answer. If the answer is yes, then we go ahead and continue to pursue it. If the answer is no, then we should look to say, how can we end this program? And how do we get out as quickly as possible? So in investments, this is where you see this a lot, where an investor, let's say an investor is buying stocks in various companies.

It's so easy for an investor to look at an investment that they have made and say, well, I've already invested this amount of money into this investment. And because I've invested this amount of money into it, I want to make sure that I get the full benefit out of my investment.

So because I want to get the full benefit out of my investment, I've got to keep going. I've got to hold this, even though it's losing. Skilled and experienced investors have learned to come against this. You don't chase your losers. You don't put more good money after bad. You cut your losses.

You say, oh, well, I lost money there, and I move on. So when we bring it over from-- in the world of finance, it's simple and it's relatively straightforward. When we bring it over from the world of finance and we start to look at our personal lives, it's much more difficult.

But the concept still should be applied. And so that question that you ask yourself, which I learned years ago from Brian Tracy, is so phenomenal. It's something that should be asked about every single area of life, at your job. Knowing what I now know, if I were going to take this job, would I do it again?

If the answer to that is yes, then you know you're on the right track. Yes, I would take this job again. If the answer is no, then what you immediately start doing is you say, well, if I wouldn't take this over again, I shouldn't have it now. So how do I get out?

How quickly can I get out? And what's the cheapest way for me to get out? It might be as simple as looking for another job. It might be as simple as looking and saying, well, let me go and switch within my company. You just look to change the situation.

If you have an employee, knowing what you now know about this employee that you've hired, if I were going to hire them over again, would I do it? If the answer is yes, great. If the answer is no, you should immediately look into saying either, how do I change things so that the answer is yes, or most likely, how do I fire this employee as quickly and as simply as possible so that I can get something else in?

The reason this is so important is because we all have a limited amount of time, a limited amount of money, and a limited amount of resources. And if we hang on to things that are not in our own personal best interest, then it keeps us from pursuing something that's better.

So if we stay in a job that's only mediocre, that keeps us from pursuing a job that's perfect or that's ideal. If we stay in an investment that's mediocre, that keeps us from pursuing an investment that's fantastic. If we keep an employee that's mediocre, that keeps us from bringing in an employee that's fantastic.

And so it's very important to always look at every aspect of our lives and to say, "Okay, knowing what I now know, if I were going to do this over again, is there anything that I would do differently?" And listen to those answers and again, start to make the changes.

Now, let's bring it over to the question of education, careers, et cetera. You now have new information that you didn't have three years ago. Three years ago, you thought you had plan A, and today you have new information, you have a new plan. So when you have new information and you have a new plan, you have to sit down and you have to say, "Well, maybe I should make some changes." Now, the trouble with this, especially in this area for you is that this area that you're facing challenges in covers so many deep questions and deep concerns, and it's not just a matter of you.

So let's just pretend that we're just a matter of you, and I'll sketch that out and we'll talk about some of the other pressures that are on you that come in externally. I faced this myself when I was pursuing a master's degree. At that time, this was a few years ago, I was with Northwestern Mutual, and because I was with Northwestern Mutual, I had the opportunity to have them pay for my education.

So I had done a whole long list of credentials and designations and things like that, but then I got myself in the situation and I said, "Okay, I can go ahead and do a master's degree." And I thought it would be great. I'd have a master's degree and it would be paid for.

Well, I came to the perspective, and as I started working my way through classes, I started Radical Personal Finance. And I got myself in a situation where I realized I didn't really care all that much about the master's degree. I wanted to start Radical Personal Finance. But by then I had already invested my time and my effort and my work into the classes and I was only a few classes away.

And so I had the decision to make. I said, "Do I need to continue this or should I cut my losses and run?" Well, when I calculated it, it wasn't that I didn't value the master's degree at all. It was a matter that I didn't value it very much.

But the actual benefit, I could get free of the master's degree and I could finish it pretty quickly. And so for me, I charted out a course and I said, "I'm going to give myself three months to finish this thing." And so I basically pulled back. I didn't really meet with clients.

All I did was study and pass exams for three months. And I finished that before I left to start Radical Personal Finance. I invested because I could do it. Now, I didn't really want to do that, but I recognized that the cost of finishing was pretty low and I had some value and some benefit for it.

And I figured three months in the grand scheme of things was going to be an acceptable cost. For you, it's much more difficult because it's not three months. It's three years as you've etched out here. You have to do the coursework and then the internships, et cetera. Now, for me, it was easier also because I was going to use the master's degree.

It would give me an aspect of differentiation. For example, I think best of my knowledge, I'm one of the few – well, now that Michael Kitsis has started a podcast, which by the way, those of you who have enjoyed Michael Kitsis and are a financial planner, we finally got him after two years of working on him, three years of working on him, he's finally got his podcast launched.

But as far as I know, he's probably the only other podcast host that has a master's degree in financial planning. So I looked at that and said, "Well, it'll be of some value to me to go ahead and have this master's degree." And it was also valuable for me as a point of differentiation.

It was a fallback plan. If I failed building my lifestyle business, I could go back into the world of financial employment and I would be separate and distinct and have an additional competitive advantage based upon having the master's degree. So for me, that was a relatively simple decision. Now, for you, it may not be so simple because it sounds to me like your primary heart is towards your son, that at this point, your son's impact on your life has changed many other aspects of your life and now you're saying, "Well, I don't really want to go and do this full-time career of speech and language pathology.

I don't really want to go and pursue this." So for you, things are different and a master's degree certainly doesn't contribute to the possibility of your being a better mother. It's not going to make you a better mother. It's not going to make a difference in your relationship with your son or with your children.

Now, let's talk about... So for you, it could be very simple and I would encourage you and your husband to sit and think about this. If it were just you making the decision or better, just the two of you making the decision, would you decide on course A or course B and then factor in other people from an outside perspective?

And here's what I mean. It sounds to me like your primary focus is on your son and your focus is your desire to be present in your home, to be there and work with him. And yes, you'd like to have some part-time income and some part-time career, but it's primarily focused on your home.

The challenge is that there are other people involved in your life. So as a simple example, when my parents were younger, my dad was in the military, my mom was in school and she was in a similar position. They were living in Pearl Harbor, excuse me, they were living in Hawaii.

He was stationed at Pearl Harbor for a time and she was in Hawaii trying to go to school and she had two small children at that point in time. Now for her, she needed, they had made an agreement with her parents that she would finish her college degree. So it wasn't easy, it wasn't fun, but she finished her college teaching degree because she had made that agreement with her parents as a component of their getting married.

My dad had committed that yes, we'll make sure that she finishes her college degree and that was an important family commitment. And this similar things often occur in many families, especially with your being a woman. There's a lot of pressure from parents, et cetera, to make sure that their daughters are well-suited in a career with career skills, with marketable career skills, with an excellent education to be able to list at the bottom of resume in case their daughter is abandoned, in case your husband were to leave you and you were to find yourself as a divorcee trying to support your son and going out into the working world.

And I don't think that's altogether bad, but that's one of the major pressures. There's also a major pressure on you societally that you have to recognize. And this is something that my wife has felt, most women have felt, where in the wake of the feminist revolution, which says women and men are equal and so therefore every aspect of life should be the same, there's this intense focus on career and education, especially for women.

That's why today a majority of... One reason why in colleges today, a majority of the attendees of college are female rather than male. Now, I think men feel this as well, but there is a social acceptance that's different from men versus women. And I think also men and women face a different feel, a different pool towards their children.

And so you've got to look at this and say, "Am I trying to finish my master's degree because this is what will impress society? This is what will be culturally appropriate because I'm kind of the ideal modern woman. I have a master's degree, I have a high-powered career, and I'm a super mom.

Or am I trying to finish my master's degree because it's important to me, for the reasons that it's important to me?" My experience, financial planning, is there have been many mothers that I have worked with who, when given the opportunity to answer that question free of social pressure, free of the social pressure to be super businesswoman and super mom, many of them have said, "You know what?

I don't care about the world of the career. I care about being home with my family. That's where my primary care and importance is." But this causes you to go directly against the culture of our day, which can be very, very difficult. It's especially difficult when it comes down to spending money.

I've done financial counseling with many couples who, because of the social pressure to be super mom and super career woman, have invested tens of thousands, hundreds of thousands of dollars into the mother's education. And yet then, a few years later, things have changed, and she says, "I don't really want to pursue the career.

I don't want to do it part-time. I don't want to do it full-time. I want to be at home with my children." Well, in that circumstance, what was the benefit of spending $150,000? As I have sat there and looked at the financial counseling, $150,000 of debt at times. It's very, very difficult.

So, it's not my place to tell you what to do or to even tell you how to do it, but I would encourage you and your husband to spend a lot of time thinking about the answer to that question, knowing what I now know. If I were going to do this over again, would I do it any differently?

And incorporate into that all of the information, the fact that you have a beautiful baby boy now, the benefits of that, the benefits of that on your family. Factor into that your own personal desire, your own personal goals, how you and your husband are going to work and build your family lifestyle together.

Factor into that the parental pressure and the social pressure, and decide for yourself what is the appropriate course of action. And don't bow your knee to an external pressure that doesn't involve your actual life. It's the same thing that any of us face. And so, I'm emphasizing here the social pressure on mothers because it's substantial, but we all feel the same pressure.

An early retiree, somebody who chooses a lower standard of living, so quote unquote, has to face the same thing. Do I value my time and my freedom, or do I value the higher income, et cetera? And then after going through that thinking process with you and your husband, after going through that process, I think you'll be able to figure out a better plan for this.

And it may be a plan, for example, one thing that seems to me, it might be best for you to finish up your coursework because you're in that mindset of the academics of the coursework. And if you're close to finishing coursework, you've already invested this amount, perhaps it would be a really good idea for you to finish the coursework.

And then perhaps you might look at that point into transferring. Maybe there's a transfer university that maybe it's not as prestigious of a program as the one you're in now, but at least it could be local. And then you could do your clinicals and your internships to be able to get some of the benefits.

Maybe if you just finish the coursework, but don't even do the internship, you have that as a fallback plan, where if you decide that you do want to go back to it in the future, you want to enter that career, then again, you could just brush up on some of the changes in the coursework.

If this is a year from now or 10 years from now, you brush up on the coursework, transfer your credits, your credits should transfer into a different university and do your clinicals and your internships. Maybe you should go ahead and finish, but maybe I know this is unlikely because you've just moved to Hawaii, but maybe there's an opportunity where you can go ahead and your husband can find a job in California that would allow you to finish it.

Or maybe you just look at it and say, "Okay, you know what? It's only three years. Let me buckle down. We've only got another couple of years and another $8,000 to invest." And then we'll have it. That way, it's there as a backup plan. If you want to go back and do the career on a part-time basis, or if you want to dig into the career full-time, maybe when your children are a little bit older and aren't quite as dependent upon you, then you have it as a backup plan.

I don't know the right solution, but that's how I would approach answering the question. - That's really helpful, Josh. It gives me different perspectives. And like you said, the societal pressure is really, really great, but it's also the fact that it's very important for me to, like you said, to stay at home with my son and devote my time to him, but having a fall back plan is really important to me.

- Absolutely. - Which is why, so in the grand scheme of things, if I am not allowed, because I've looked into it and I can't really transfer to Hawaii to finish my program, but I was thinking we were just gonna do a back and forth thing for the next few years.

I'd take a semester off here and there, just because it's hard on our family to be apart for so long. But so my main concern is my ability to help my husband achieve our financial goals, because that's something that we've talked a lot about. And he's helped me in achieving my goal of devoting my time to our son.

And I feel like in our partnership, we've agreed that we would help each other out with our goals. And his main goal is to purchase a home. He really wants to buy a home. And so I would like to help him achieve that and so since we are gonna be going back and forth and I am gonna be taking a few semesters off here and there, ideally, I would like to devote my time while I'm here a few hours a week to starting a lifestyle business.

So with the knowledge that I have, with the background that I have, utilize that in some way. And so yeah, and I think that that's where I'm headed towards, you know, and seeing where that goes and I don't know. But I'm not too sure about how to start it and how to go about it.

- So let me just give you some ideas on that in terms of to focus. In general, the term, so the idea behind the term lifestyle business just simply means a business that is not an all-consuming obsession with growing big, but rather a business that's designed to bring specific benefits, monetary benefits, income to our family to enhance our lifestyle without causing major problems with our lifestyle.

And in general, the place that you should start in looking for a lifestyle business is start by doing an assessment and an inventory of your skills and trying to figure out where, based upon my skills, my experience and my knowledge, how can I bring to the market something that is the most valuable.

Now, if you have specialized education in the world of speech and language pathology, or if you are achieving it, make sure that you don't spurn that benefit. Lifestyle businesses are very difficult. Certainly, some people are able to take an education that they have worked hard to accomplish, especially as measured by a college degree, go into a completely unrelated field and make it big.

But this is very, very difficult to do. And if you're gonna do it, my encouragement to you, if you're gonna finish the degree, make sure that you actually want to build a business in the degree. Otherwise, it's a waste of time and it's only a sunk cost fallacy. So if you're gonna go three years more and be apart from your husband, have the challenge of how to do that, make sure that you're at least gonna use the degree.

Otherwise, better to cut your losses and go get a real estate license and build a lifestyle business selling real estate so that you can find an undervalued property in your local area to get a discount, negotiate it on the private market, achieve your family goal of buying a house, if that's the primary financial goal.

Much better off having a lifestyle business as a real estate agent than a speech and language pathology degree if you're not actually gonna work in it. So a big litmus test for me, if I were giving you personal counsel, I would say, if you finish this thing, you better be convinced you're gonna use it.

Otherwise, cut your time and don't waste another three years doing this if it doesn't fulfill your long-term goal. Now, let's assume for a moment, 'cause it sounds to me like it's important to you both as a backup plan for your own knowledge, education, career plans, etc. It sounds to me like it's important to you to finish it and you're probably gonna figure out a way to do that.

Well, in that context, make sure that you're building a lifestyle business with that speech and language pathology degree. And you can do this. One great benefit to having this certification is you can charge a very high hourly rate. I have a friend of mine who does this. You can work part-time.

You can establish yourself part-time and gain a very high income on an hourly rate, which will help you and your family and your financial goals based upon that. And you can do it with a high degree of flexibility. So focus on that. Now, you probably will need to work with a clinic, obviously, to have the internship and to have the supervisory requirements of your internship program met.

But then look to see, is there a way that I could do this from Hawaii? And so what I would be looking at over the next few years is I would be looking at, if you, you know, people often think of the internet, I think you should. Is there some way that you can offer speech and language pathology at a discounted rate through the use of Skype, through the use of video conferencing, that this will allow you to reach clients in other places in the world in a different way?

And based upon the Hawaii time zone, is there a way that you can take advantage of the Hawaii time zone in order to work with clients in another place that would work around your son or work around your family schedule? So make sure that your lifestyle business, if you're going to finish the degree, make sure your lifestyle business is entirely focused on that.

There's no shame as an adult in quitting something because your goals have changed. The only shame in quitting is if you're quitting because you have the same goal, but somehow, you know, you don't want to follow through. But there's no shame in quitting if your goals have changed. If you're going to do this, Bill, I would, how I would start, I would be establishing myself as a thought leader right now.

I would be taking all of my education and my experience in learning speech and language pathology. And if I woke up in your shoes and I wanted to build a lifestyle business in that, I would be seeking to teach parents what they needed to do to avoid my services.

And I would teach those parents everything that I knew about speech and language pathology techniques. Or if, let's say, you're working with somebody who's trying to help their spouse recover from a stroke or trying to help their parent be able to speak more clearly in wake of a medical event, I would give every bit of helpful information that I could for free.

I would, if it started a podcast, I would create training materials on YouTube, etc. And what I would be doing is two things. Number one, the more you give away for free, the more the people that value time more than money will want to hire you. You can go on the internet and you can find every bit of information that you need in order to fix your car.

But just because it exists out there, doesn't mean that every single person is going to go and do it for free. Many of us value our time more than we value the cheapness of fixing it ourselves. And so a mechanic, the best thing a mechanic can do is give away all the information and then their potential customers will just bring the car and say, "I don't want to do it.

Can you just do it for me?" And so you should approach your business in the same way. Give away and teach, and then the people who want to buy will come to you and say, "Will you do this for me?" And then secondarily, you can prepare carefully built out materials to teach people with the use of products and courses like I do here on Radical Personal Finance.

I give away everything for free. So those who have a lot of time to dedicate can get all the benefit for free. And that's great for a 13 year old who's listening to my show, who has time and not a lot of money. But if I come in and somebody is 36 years old, they don't have time to listen to my whole archive of shows, even though it's all for free.

They would rather spend $100 and get a clear, concise summary that's useful to them that they can act on versus go and spend 100 hours listening to something to gather it together. So you can do the same thing as you build your lifestyle business. That's how I'd approach it.

Josh, you have been so wonderful. Thank you. It's so refreshing to get advice from a different perspective, something not so mainstream, because if you don't really have, don't really look at things differently. And just in general, it's just so refreshing. Good. I appreciate the compliment. The subject even that we talked about here, in terms of your career, when you asked the question of husbands and wives, when I raised the word feminism, I opened myself up to being beat upon by the modern culture.

But having worked as a financial planner, I am convinced that for many people, for many moms especially, who have a deep heart to want to be with their children, it is incredibly freeing for them just to say, "No, I actually really want to be with my children." And I get so sick and tired of the pressure that's brought to bear on women to be supermom.

And when I look at my wife and the work that she does, I don't know how she could possibly integrate into that a money-making career and be as effective as a mother. So I have no interest in going out and telling people what they should do. As far as I'm concerned, you can arrange your relationship with your husband and your relationship with your children pretty much however you want to do it.

That's not my business. But I do get frustrated that you have to overcome this intense social pressure when, to me, I look at it and say it's much simpler. It's much simpler if you just recognize what's more important. And I do it with fear and trembling because I don't know how to give advice in this area without knowing somebody's intentional areas.

But anyway, so I do it with fear and trembling. I hope it's useful to you to consider and in conversation with your husband, I'm confident that you'll figure out the right path. Sometimes you can buckle down. I'll just finish the story with my mom when she was younger, when she was finishing her college degree.

At that time, my dad was in the Navy and he was in the submarine forces. And they would go out for six-month cruises. And so he was gone for six months at a time. And he went on three individual cruises during that time, which he was stationed in Pearl Harbor.

And it was not easy. Frankly, I am amazed, especially in the military. I don't know how any military marriage can survive. I don't know how. I think it's possible. Some do, but I don't know how. It's only by the grace of God that a military marriage can survive. And my parents' marriage certainly was tested.

But in hindsight, recognizing the investment that was needed to be made, this was important and they found a way to make it work. And a lot of people can find ways to make it work. Not necessarily fun, but that can give you a lot of motivation to get it done quickly.

And so if you need to do that, if you need to keep an apartment in California and fly back and forth, just look to get it done as quickly as possible. And if you are going to do that path and finish this out, I would encourage you to do it as quickly as possible because your son has an intense need for you at eight months, but he also has a much more intense need for you almost at two or at three.

At eight months, yes, he's communicating, but his communication is much more minimal than at two. So the quicker you can get it done in some ways, the better. What that looks like, I don't know. Lean on your family network, lean on your friend's network, try to minimize the cost as much as possible, but you'll figure it out.

Thank you so much, Josh. Thanks for calling in, Ursula. All right. Well, talk about going to difficult subjects. Well, the name of the show is Radical Personal Finance. So hopefully those were helpful calls to you. I encourage you on today's. There were a couple more callers that dropped off during the call.

If you would like to join on a call like this and have a conversation with me, I would welcome you to. I really enjoy that. And at the moment, it's only open to patrons. But as you can tell, if you'd like to be on and discuss the details of your situation, please come by and join.

RadicalPersonalFinance.com/patron. Take the output from these calls and don't try to think in terms of the individual caller's perspective. Think and try to seek how to apply the thinking process behind those callers to your own life. Even in terms of thinking about Ursula's question where she's talking about, "Well, what do I do?

How do I handle this?" You may be facing a similar situation. And in many of these situations, there's no objectively right answer. The only right answer is based upon a prioritization of what's important to you. I could see very easily why you would go one way or the other.

For you, you might, by asking that zero-based question thinking, just look and say, "No, I don't care about this degree. Chuck the thing and move on." Remember, half of college students drop out and don't finish their degree. That's the data. And in the long run, it really doesn't matter for so many people.

My mom, in the circumstance I described, yeah, she finished her teaching degree. To this day, she's never... Just making sure I'm right. Yeah. To this day, she's never used it. So it was important to finish because it was part of a commitment that she made to her parents. It was important to them, especially as a wife and mother, that she have that.

Many mothers have needed that in terms of when they were abandoned by their husband. They needed that educational background to make sure that they could support their family. But in hindsight, would their life be any different if she hadn't done it? I don't think so. But on the flip side, some people, it's very important to them.

They are going to aggressively pursue their career. So make sure that you take the information and you apply it to your situation. Ask yourself that zero-based thinking question. Knowing what I now know, if I were going to do it all over again, is there anything I would change? If so, get about changing it as quickly as possible.

Oh, and please go take my survey, radicalpersonalfinance.com/survey.