Okay, and today that means live Q&A Welcome to radical personal finance a show dedicated providing you with the knowledge skills insight and encouragement You need to live a rich and meaningful life now while building a plan for financial freedom in 10 years or less My name is Joshua. I am your host today is Friday and every Friday at least every Friday that it can arrange a proper internet signal We go live and today is no different live Q&A coming up in 15 seconds.

I Do really love to do these Friday Q&A shows any day any time that I can actually work it out to Make it work then that's when I do so working out the details on how to do a live show What with Q&A with video live streaming on the internet on Facebook on YouTube YouTube and all over the place.

That's today's challenge, but I think we got it worked out mark. You're up first Welcome to radical personal finance. How can I serve you today? Mark can you hear me? Okay, we are going to go to the backup plan here real quick hang on the phone lines We're gonna switch internet networks and see if we can fix the problem Just A minute here guys.

Thanks on the live stream. We'll get this going in just a second here Just go into the backup network here, let's see if I can get my phones coming in Okay Let's try again mark, can you hear me mark? You're up. Can you hear me now? Mark you're up in first plate.

Can you hear me now? I can't hear you All right Hold on a second mark. It looks like that's you over there. Try again Okay, can you hear me now now I can hear you somehow I had to go to the backup internet network And we're there but we're live now.

Welcome mark. How can I serve you today, sir? Oh great. Excellent. I Have two questions for you. I have a house buying question and a side business Question for you. Okay, let's do it Do you care which ones first? Okay, so First is we're preparing to buy a house in roughly a year I spoke to you previously about this and so I'm trying to make sure my credit is in the right spot we are around 770 and the main reason is just our age of credit is too Frequent too young and so we just have to wait for that.

But the secondary reason is our mix is Not mixed they just I've only ever had credit cards And so I was wondering or considering looking at taking out a quote-unquote credit building loan It would not put a hard inquiry on my credit report But instead would get reported as a loan essentially what the banks do is they give you a loan they put it in a Certificate of deposit then you quote-unquote pay it back until the loan matures And so it's a way to add in a little different kind of credit.

Is that something you're familiar with? Do you recommend it doesn't make any difference. I know it's only 10% of the mix. Yes So yes, yes, and yes, it definitely is important to have a mixture of the different credit types and so if all you have is credit cards and you want to improve your credit score then you definitely want to start by going ahead and Moving in the direction of adding in but more of a diversity add in a car loan add in a bank loan add in some Kind of installment loan and that will improve your credit score Excellent that's good to know excellent that was quick the second question Have started a new venture Seen it the prepared expat and so I've I'm trying to develop it into a Kind of side business have a vision for where it goes and I'm debating whether to make it written form a podcast or both and I was wondering your advice on how to think through making that decision of medium Did you hear at the end of last Friday's Q&A where I talked about Kind of my new venture and I talked with a listener who was thinking about building some kind of local media platform to meet people Okay, so let me Because in the last Friday Q&A show I gave an in-depth overview for a listener who was trying to come up with an idea of how they could connect with their audience in in a How they could connect with their audience and build an overall platform that would help them to make connections And I talked about the media strategy.

I talked about things. I regret personally with regard to Radical personal finance things I would do differently, but basically going forward if I were starting over again today going forward I would not focus on just one medium I would start with one and I would try to start with where I'm best but going forward I think it's best to focus on multiple media that's obviously more difficult because It's hard to do all things well and the skills you need to be a good writer are not necessarily the skills that you need to be a good podcaster and the Skills that need to be a good podcaster are definitely not the skills that you need to be a good video broadcaster They're both they're they're all very different.

And so what you've got to do is you've got to develop the ability to work in the different media podcasts are Really good for building a close relationship with your listeners They're really hard to get found They're really hard for people to share them Because basically either you are a podcast listener or you're not a podcast listener And so people don't usually do a very good job of actually sharing whole episodes So if I were gonna do one or the other I wouldn't writing certainly is gonna be good The benefits of writing is much more shareable It's much more findable.

The SEO is gonna be a lot better people can connect with the content They can look through it very quickly, which is gonna help you to attract a broader audience. So The podcast will go deeper, but I wouldn't just do one. I would do all of the above That's I think where we stand in May of 2020 is it's not sufficient to just do one thing You've got to do all of the above because that meets people in different places So to the extent that you're able I would choose where you want to start But my long-term plan would be to expand into all the different platforms and the different formats Okay, that's helpful Go back and listen to last week's Friday Q&A and I cover it in depth on that Friday Q&A of a lot of details of how you can You know build the different the different models and you can leverage what you're doing on different platforms But that would be where I would sent you Okay, that'd be great.

I will go back make sure I get to that. Thank you Thank you mark and good luck with the new venture again Mark's venture is called the prepared expat so you can find him I know on Twitter if you want to find him there you can find the prepared expat and find his website He's been writing some interesting articles there.

All right, let's go to James in Massachusetts James. You're up. Welcome to the show How can I serve you today, sir? Said a question about buying property at a good price. So My wife and I are considering buying property that we may or may want to you know, put a house on or just farm or homestead on and essentially, I'm trying to think holistically like I've heard you say that you are considering buying property if if Or properties if the opportunity presents itself with downturn with distressed properties and good prices What's your strategy for keeping an eye open?

Are you looking for private sales? Are you looking at any specific? listing Companies or how do you even think about like trying to be ready for when the opportunity comes? And how do you even know when the opportunity comes? What kind of property are you interested in investing in?

So We're mostly interested in buying Either a house on a little bit more acreage than we have now or just some acreage Do you have a specific geographic location chosen that you'd like to pursue New England. Okay, that's pretty broad anything more specific. Ah New Hampshire Okay. So I think the answer to your question of where to look is going to depend on What type of property you're dealing with?

So for me if I'm interested in buying rental real estate My plan in buying that rental real estate is going to be to focus on the type of neighborhood that I want to buy the city that I want to buy in and the region that I want to buy in and so If you I'm laughing because as I'm recording this I've got Facebook comments coming in about my murdery eyes there was a listener There was a listener in the the Facebook group this last week that says I like Joshua's new video Feed but I can't handle it because evidently Joshua has murdery eyes Slightly murdery eyes, so I'll zoom in so you can see my my slightly murdery eyes Forgive me back to property.

I'm still learning how to juggle all of these all of these interesting aspects So for me, my my plan is to buy single-family rental houses in specific cities region and towns And so I have a certain neighborhood type that I personally am looking for my neighborhood type What I've chosen is the best type of of property for me is to focus on Owners neighborhoods where there's more owners than renters on kind of older but not too old Properties kind of the night in South Florida the 1980s kind of style of construction 1980s 1990s and to find houses where there's no HOA Where you have three bedroom two bath two houses two car garage kind of just that middle Slightly under slightly over the middle range of property So there aren't a ton of neighborhoods that fit those markets So what I've done is I've identified the neighborhood and they just simply gotten on an MLS list So I can keep an eye on the MLS listings for those neighborhoods And then what I have done in the past is gone out walk the neighborhoods You can go walk the neighborhoods knock on doors find out if there's you know Anything for sale talk to the neighbors things like that But that's a very specific strategy based upon the kind of thing that you're looking for Now if you're looking for farmland and you say I'd like raw land That's maybe 50 to 100 acres.

That's gonna be a totally different scenario in that case. I'd be on land watch I'd be driving around in the counties talking to people getting on some real estate agent lists Basically doing anything you can think of that's gonna lead to that property eventually coming to you But there's a dramatic difference between finding a single-family house between finding a condo for sale between finding You know a bunch of land and what I would say is the first thing you should do is Work out your strategy of what you want to do and then if necessary Talk to some real estate agents and say listen if you were looking for this kind of property, how would you find it?

What list would you get on where would you look for it and then follow their advice for your local network network? That's what I would do Okay, cool, that's more or less what I was expecting I didn't know if there were any like Special sort of like hand-to-hand techniques that you would recommend But that I think going into the communities that I'm interested in and narrowing down makes a lot of sense So, all right.

Thanks a lot. Yeah, my pleasure. I do think what you should do for whatever your Chosen area of focus is is look at the information that's publicly available Look for the properties that are listed on the MLS Look for the properties that are listed on land watch or on the internet on some random site But I think it's also worth it to go and get involved in the community and try to find you know Put shoe leather on sidewalk put rubber under the tires or I guess road under the rubber whatever Idiom we want to come up with but the idea is your best deals are probably not going to be advertised sometimes they are but most real estate investors have developed their own source of High quality property and they've figured out a way to gain access to that property before there's a lot of competition So to this day, there are lots of people who go out and knock on doors and it really is an effective technique So if there's knocking on doors if it's going to local Auctions if it's going to the sale barn if and talking to farmers and saying do you know anybody who's selling their property?

All of those would be good strategies But but you do want to use the lists, but you want to find the properties that aren't on the list as well We go to Daniel Daniel. Welcome to the show. How can I serve you today, sir? Well, Joshua, can you hear me?

Yes, sounds good, sir All right, so my question is concerning my parents right now they're in the early 50s Combined they earn More than 150 K a year They have one apartment in Eastern Europe and also one piece of land that's been laying vacant for over a decade So it's not for living it's for I guess Vacation homes, but they can't do anything with it at the moment and My question is basically they're not really financially educated they come from a Like communist background and the attitude is basically well, the money is here right now.

That's good and We give we give handouts to the family back home even Even if the relatives have like failing businesses for years and the money is never coming back so they're quite generous in that way, but I'm just afraid they're not taking care of their next 10 20 years where they could like right now.

They're in the best position. They're earning well But How should I approach that what I did so far is over like half a year I got them to go to a wealth center and make an appointment. They got some tips how to optimize their taxes and so on But I know that they could do much more But since it's coming from me like the Sun I can tell them really how to do I can just tell them hey Look into it There is much you can optimize because things are not going to stay the same and you are not going to earn This much money in a couple years.

So now you have the chance to set yourself up for retirement and I'm not too sure in 10 years the world is going to be as rosy as it is right now and Maybe they expected I'm gonna be Like handing out things as well in 10 years. So this is kind of the situation.

I don't know if that's enough for you to Make some comments or should I ask anymore? Do they have any kind of retirement plan a government pension a pension from their job? Not from the job but from the government, yes, do you have reason to think that that would be insufficient for them Yes, I'm just not trusting in that right yes How much money do you think they could save out of their income based upon their current lifestyle?

From what I heard they could save my dad's salary which is more than 10k a month That's a lot. It could do that. They could they could do that They could live off the salary of my mom, which is half of that or less than half. All right But they're not doing it what are they doing with the money instead Just You know handouts or just putting it in the bank or Spending in the restaurants, they're not spending much.

So they're thrifty and looking for cheap deals still like they did 15 20 years ago But there back then they were keeping book of everything they spent and Since they were earning much more they didn't do that anymore because well the money's here. So now we can just do whatever Well when you have somebody in a situation I think of it in a number of different different approaches so throughout human history What's the most common way that people have?

Retired the most common way that people have retired throughout human history has always been based upon people. It's been based upon Living with your children. It's been based upon living with somebody in the community And so just because your parents are not skilled at saving money doesn't mean that they're destitute It doesn't mean that they are without options if they're building relationships in the community.

They have friends They have a network of family That's been throughout the millennia the primary solution that most people have relied on for their retirement needs Now the second thing is they do have a government pension or a an employer pension or a government pension And so that's good because it gives them some basic level of support all around the world There are millions of people who without the government pension Social Security in the United States Whatever the version is within your local country Without that they would have no savings because they fundamentally not been trained to save money and so they're probably gonna be okay between their government pension and also you and Possibly other siblings that you might have you wouldn't let your parents, you know go homeless and starve on the street What you do see however is an opportunity that if they could learn some skills of financial management They could dramatically increase their opportunities They have the ability to save ten thousand dollars a month and with this ability to save ten thousand dollars a month They could become very very wealthy.

So I would do a few things I think that that there are a number of things that you could do and To begin with what I would try to focus on is I would try to lay out for them What they could do and how they could genuinely massively increase their possibilities of Wealth if they actually invest it, so let's just assume that they're in their early 50s Let's just say 50 for the sake of easy math.

Let's say they have 15 years of retirement and there could they could save ten thousand dollars of Pay did you say per month or per year? If they wanted to they could do it per month, okay, so what I would focus on Go ahead If they didn't didn't want to cut too dramatically 5k is reasonable.

Let's say between 5 and 10. Okay, so let's say 5,000 because it's a little bit more Believable probably for them. So I would sit down and Running on a financial calculator right now five thousand dollars per month. So we do five thousand dollars per month 15 years and let's just say that they could earn, you know, six percent interest Starting with nothing at the end of 15 years if they could save five thousand dollars per month They could potentially have one million four hundred fifty four thousand dollars saved almost one and a half million dollars at six percent So to me, I would sit down with them and start by saying listen mom and dad I know that you grew up under communism.

I know that you didn't start by focusing on money and investment, but there's tremendous opportunity here and yeah, you think that You couldn't build wealth But if you could save five thousand dollars per month and if you could invest it at six percent over the next 15 years You could become genuinely wealthy within the next 15 years You could become genuinely wealthy within that period of time, which would be really really remarkable So I would start by that and see if they're interested now What I think you need to be cautious of with someone like that is by making sure they choose an investment plan or an investment product that's going to be a good fit for them and Those of us who are more knowledge about investing often go to the products that we would choose Without realizing that these products or these plans are probably not right for them So for example, we'll often go to an aggressive stock portfolio and a lot of times when you're in a situation Like that for for your parents, they just they couldn't handle the volatility And so maybe you would go into some kind of term deposit and just get them invested into bank accounts Maybe you would go into some kind of bond portfolio what I would try to do Especially since they already know own some property I would try to get them to buy some more real estate if they bought a couple of simple flats in the middle of town In a good area in the town that they live.

There's a decent chance that in most places in the world That's probably not a losing investment That's probably a place where they could break even and in time if they choose well and you guide them towards maybe like a city center apartment that could be the kind of investment that could pay income and the nice thing about real estate is It's it's more intuitive.

I think for most investors where they don't have to worry about, you know Figuring out how to hold on through the difficult times They just spend the rent payments and so at five thousand dollars per month if they could say five to ten thousand dollars per month They could probably just pay cash for an apartment every you know year two years Depending on what market in Eastern Europe they're in or where you're living And I think that would be really appropriate.

So I would probably try to go in that direction I would say mom dad look if you were to buy four or five apartments in You know the downtown area or help them choose a good neighborhood where they already live Figure out the prices of those apartments and then lay it out and show them if you could buy one apartment every other year and that apartment pays us maybe $800 a month or $1,000 a month or 15 whatever your market is That's a really good strong financial plan and they have enough money that they could do it So that's where I would go is I would try to keep it super simple save money in the bank buy paid-off apartments Something like that Okay, one thing that the apartment they bought they bought it for When they would go back to visit the family and I told him for like five years.

Why don't you rent it out? It's not like 98% of the year. It's it's standing empty and The Aunt is living in the same house so she could take care of people going in or out or whatever if it's Airbnb, but They decided not to rent it out. So that's one thing that this like This left to understand that that's the one thing and the other That you talked about about choosing the right investment Maybe you could answer this as well Like they're Christian and my mom always says Making money with money is unethical.

It's like usually it's against against the commandments and stuff like that I don't know if she really believes that or she just says that to not do the hard work of researching financial stuff But these are like also some mental blocks that they have against these things. So maybe you're taking that Do they invest in anything?

They Invested in some Stocks at the peak of the tech bubble and That's break-even after 20 years So it was down for like two decades and they always joke about that a little bit, but it was not much he was not much and My dad chose some single biotech stocks But That's just random stuff.

So they don't really know what they're doing And they burnt their fingers a couple times. So they're not really doing anything Yeah, that's fairly common with people who are not particularly experienced with Stock investing. What is the Christian tradition that they're a part of is there a denomination? Is there a tradition name of a church?

Roman Catholic, okay Roman Catholic So There are that's probably a bigger question than we can tackle here because There are definitely religious Convictions that are going to affect somebody and you've got to Work within that now. There are almost two ways of working with that. The first way is you can say you have this conviction and It's wrong, right?

So maybe if I had a different conviction and I'm sitting and talking with somebody and they say I'm Roman Catholic This is what I believe. This is what I believe the Bible teaches and I'm gonna I'm willing to use The authority of Scripture. Well, then I would go to Scripture and start talking through that of course Roman Catholic there would be the authority of Scripture and also the authority of The church tradition and the church teaching and so we would talk through that and and discuss it from a theological perspective and try to understand If there were a way that they could change their theology, maybe it's possible.

Maybe it's not I have friends of mine who are Very fundamentalist and when for example, Jesus says do not lay up for yourselves treasures on earth They understand that to be a wooden Lee literal Fundamentalist command of Jesus and they are very diligent about not laying up for themselves treasures on earth They don't save money.

They don't try to stack up wealth. I Respect that, you know, and so I don't try to change them I try to create a financial plan within that context and there you often go back to community the power of community because In those kinds of traditions what you have is you have a community that works together to support one another So it's not that people who understand that to be the the proper interpretation of the words of Christ It's not as though they just go and spend all their money What they do is they invest into the community and the community cares one for another and so there are ways to do it So that's the second way is that let's say that I'm not gonna change their theology I'm not gonna persuade them that you're wrong and I'm right or you just have a flawed understanding I would just try to understand the extent of what do you understand?

The restrictions to be there's not a strong There's no that I'm aware of there's no official Roman Catholic teaching against investing. Okay now there are That's what it seems that they just use it as an excuse Not to look into it that that's my understanding of it. They're not really saying well This is a part of the scripture that tells it they're not praying every day So they just go to church once a week so that I think they're pretty educated And they would respond well if somebody laid out to them the numbers and all of that So I think that approach would work.

Yeah, what I would do is I would try to find are you Roman Catholic yourself? Do you share that tradition? I grew I grew up like that, but it's more like a cultural thing I am another fundamentalist. Okay, so what I would do is I would try to find some Roman Catholic You know oriented Resources if somebody hasn't created it then I'm sure I have a listener that can and should but I'm sure somebody out there is Teaching about finance from a Roman Catholic perspective Who understands I'm not an expert on Roman Catholicism I'm not Roman Catholic and so but I'm sure there is somebody out there who's done that There are many Roman Catholic writers who would have written books on money and so I would try to find that understand a little bit about where they're coming from and then work within the constraints of their Doctrinal commitments, that's what I would do.

But there's no that I'm aware of there's no strong Roman Catholic tradition or prohibition against Lending money the the comments on usury you can go back and and and look at it And and think about it, but I think probably there Gary North would be the best guy read his commentaries on usury If somebody is actually interested in the biblical approach and in dealing with the Old Testament laws on usury Gary North's Writings there would probably the best place to start But I would just try to understand what their constraints are and then try to build a financial plan that is sensitive to those constraints That may be term deposits in the bank For some people it may be just investing in other people and I think that that's a worthy thing to do I think there are a lot of 50 year olds that if a financial planner came to them and said What we're gonna do with your money is we're gonna use it and we're gonna open an orphanage and we're gonna invest your money into the orphanage and build a System of caring for the children who are fatherless here in our city as far as I'm concerned, that's a great retirement plan and The children in the community would be happy to provide for them on the other end of the day So those are my answers anything else Daniel?

Yeah, I think that's a that's good, thank you very much thanks for the work you do my pleasure I appreciate it. All right, we go to Jason and Texas Jason. Welcome to the show. How can I serve you today, sir? My pleasure A quick question. I don't know if you've done a podcast Children's insurance or adding a rider to your current insurance for a newborn But we're expecting at first this fall and just wondering if you could expand on kind of your thoughts on Child insurance and what's he there?

I've covered it in the context of Q&A shows here and there. I'll do it briefly. I intend As soon as I can I intend to come out with a standalone course where I can teach through some of the details But I'll go ahead and give you a short answer here and I'm gonna mute you out Jason for a minute Just to keep the audio clear.

So when it comes to children's life insurance, there are a few different reasons as to why People would want it. The first reason that some people think about is burial cost So I have a child the child dies and I need to provide for them. Well, I need money to be able to pay for a funeral to buy a casket and to go ahead and Pay for those costs.

That's one thing another aspect would be maybe things like recognizing that I've You know, there would be hard for me to go to work If one of my children died, it's hard for me to imagine that I'd be here on the microphone the next day so maybe a time of Emotional adjustment for the family.

There are other things that you can consider. So for example Some people would say if a child died then my financial expenses are based upon the investments That I have made into those children if I bought I paid for their early child education I've invested in their schooling. I've paid for private school for 12 years of private school and then I paid for college It wouldn't be unusual for a parent to have invested six figures or multiple six figures into their children And then all of a sudden that child dies.

Well, that's a real loss Certainly an emotional loss, but there's also a real financial loss that's associated with that And so people might say I've lost the money. I need to be recouped for some of that in many cultures around the world children are a primary as we were talking about earlier children are a primary form of a retirement plan a Security plan for the parents you'll see this if you're coming from the United States where you most often see this is in Indian communities In the United States where it's like the mom and dad will pour out everything for their children They'll pay for everything get their parents their children to the best schools possible and then on the flip side They're expecting that their children will support them as they get older also very common in Latin communities So all of these have a financial cost that's associated with it that you're actually talking about the money Involved and so that's the first step of insurance now when it comes to these Almost nobody is really comfortable Dealing with some of these costs most people it's such an emotionally heavy issue that they think if my child died.

I Appreciate that that might be important, but I'm not going to to want to profit off of that I'm not so bothered by the emotion of it. I don't have any emotional, you know fear of death It's a fact of life and I think it's important to point some of these things out now the burial cost to me seems not Particularly important at least for most of my clients and most of my listeners You know, it's not that much to bury somebody It costs a few thousand dollars to bury somebody and you can save the money so you can easily Self-insure through that an emotional adjustment same exact thing you can Self-insure it's not hard to self-insure through that as well if you have a three month emergency fund if you have a six month emergency fund and you can't work for a few months because You're grieving the loss of your child.

Well, you can self-insure through that as well The financial investment side of it certainly is kind of more relevant I I think it's worth thinking about but I've almost never met a parent who is excited about talking to me about you know Recouping the financial investment on their child.

So you there is it is valuable to have insurance on the child for those reasons But most people genuinely can self-insure. It's not that big of a of a financial commitment So insurance is not always the perfect fit for it. It's one of those optional fits And so the other thing is what about insurance for the benefit of the child?

So do you want insurance for the child? So that in the future in case something happens with the child that they can That they can adjust that they can own their own insurance policy. Maybe they start working as a Excuse me, maybe they start working as a professional You know stunt pilot in their middle 20s.

Well, they're gonna have a hard time getting life insurance So you need life insurance for that? Well when you start to do this analysis what you'll find is that different types of insurance policies are appropriate in different solutions So term life insurance if it were available would cover the burial cost term life insurance If it's available covers emotional adjustment and term life insurance if available covers the financial investment The problem is you can't buy term insurance You can't buy term for those who are less than 18 years old So I do think that term insurance makes a lot of sense If you have a child that you're sending off to college when I used to sell life insurance I had a couple of clients who they would be sending their child off to school they knew where they were getting set up for a $150,000 of cost or possibly in some cases $150,000 of debt and one of the things that we would do is we would buy a couple hundred thousand dollar term life insurance policy On the child when the child is getting ready to go off to school But the child has to be at least 18 years old if you want term life insurance for children Under 18, it's generally only available as a rider on another policy So this might be a group policy at your job where you can go into your job and you can add $5,000 or $10,000 of coverage there Sometimes it can be available as a rider on an individual term life insurance policy or as a rider if you have like all your auto insurance and home insurance and a little bit term life insurance with With a company sometimes they'll offer those kinds of riders, but it's not common when you get into real term life insurance If you got a two million dollar term life insurance policy with Guardian, they're not going to give you a term life insurance policy It just don't they don't write them for children under the age of 18 now when you get to insurance for the child That's when you move over into the world of whole life insurance and whole life insurance can also cover some of those same Those same needs so you can do whole life and use whole life insurance for the burial You can use whole life insurance for the emotional adjustment what you often can't use whole life insurance for because just too expensive is if you're gonna buy a lot of it for a Lot of it for the child.

So what I recommend just to cut right to the actual recommendations for the vast majority of families What I recommend is if you have access to a term life insurance policy Then go ahead and put a rider on it. If they'll give you a rider then add a rider Rider is so cheap It's just not going to be a problem and that will cover the needs that you have For the burial fund and an emotional adjustment fund There's no reason not to go ahead and have a rider if you do need something where you're trying to have something more Permanent you're gonna wind up buying some kind of whole life insurance policy And I really do like as long as you have other savings other investments as well Where you're you're actually you're not just saying this is gonna be my ticket to wealth because it's not whole life insurance policies for children Do not perform well for cash value for the first 20 years.

It's brutal in terms of the actual cash value They're much more they perform much worse than whole life insurance policies for adults do from the cash value perspective But what I do is for all of my children when they're two weeks old and I can get a policy I buy a small whole life insurance policy for them and What I do is I buy something, you know You can the the figures can vary if you have a million dollars of life insurance on you Then you might get you know 25k on the child on each of your children if you've got millions of dollars and you have a lot of income You know, you might get 100k something like that for each for your for your children But with those I buy traditional whole life insurance So it'll be in force forever.

And what I do is I make sure that I add two important benefits to that policy The first benefit is an APB which is called an additional purchase benefit and what an additional purchase benefit allows is It allows the insured to buy more insurance at a certain age So for example with my children's policies at the age of 20 at the age of 23 26 29 32 35 38 and 41 they can buy additional amounts of insurance and I think I've got a hundred thousand dollars either a hundred thousand or a Hundred and fifty thousand dollar APB on those policies So that means that if my child turns 20 and maybe my child has some kind of disease That they can't get any life insurance.

They could buy another hundred thousand dollars of whole life insurance It'll be expensive because it's whole life insurance, but it's better than nothing if they've developed some kind of disease more likely They may have started doing something that's risky So for example, I got a family member who's a pilot and started flying as a private pilot and became professional pilot That kind of thing gets you some big ratings a lot of times on life insurance And so the nice thing is that with an additional purchase benefit in this kind of insurance setup Then your child is protected where they always have the ability to buy more amounts of life insurance Caveat it is going to be whole life insurance You can't do this with term life insurance But that can still be work out really well for them to at least have some life insurance coverage the other thing that I always put on the policies is a disability waiver of premium and so what that means is if the child is disabled then You don't have to pay the premiums for them And so that's a big big deal because there are certain kinds of presumptive Disabilities that the child can get and if they're disabled you don't have to pay the premiums But with the premier companies the premium companies if the child is disabled They'll actually keep on there the additional purchase benefit and they'll let the child buy the bail pay for the additional purchase benefits when they come Available to them and so what I do is split the difference on these and I buy whole life insurance policies Relatively small for each of my children So that they have some insurance if they die.

I've got some money to cover burial costs, etc I've got some cash value, but the cash value returns are really bad on these kinds of policies basically if it breaks even That's good in terms of over the course of 20 years something like that But they'll always have some insurance that's in force and with the additional purchase benefit I feel like that's a really huge benefit and help because it Allows me or my children to buy more insurance in the future.

So that's kind of the the fast lesson on it Jason Nope hold on this Jason I unmuted the wrong person any follow-up questions Jason Oh One last one as far as life insurance on myself My wife will be quitting her job once we have kids And we'll have a household income about 100 K.

I currently have 250 On myself and 250 on my wife. Would you recommend upping that once we have a kid? Do you are you financially independent? Do you have millions of dollars in savings? No, okay. So yes You can do a needs analysis and that's the proper way to do it you calculate how much money you would need if you Died how much debt you would want to pay off how much income your family would need and then you subtract all your assets that are Available.

So the proper way to do it is to perform a proper needs analysis And this is life insurance 101 talk to any life insurance agent. They can do that for you What you will find out is it's gonna be somewhere between 10 to 20 times your annual income That's always where it is If you actually sit down with a hundred people with 98 of them It'll be somewhere between 10 to 20 times your life and you sorry your annual income so you'll be at somewhere between a million to two million dollars of total coverage for you and I would buy if your wife is going to be a stay-at-home mom.

I would buy minimum half of that for her I would buy more if she's still working and she can qualify She won't be able to qualify as a stay-at-home mom for the same amount that you can qualify for So what you want to do is at an early age while she's still working and can financially qualify for more insurance Go ahead and get more so you know where you're gonna wind up when you do that needs analysis with an insurance agent is you're gonna wind up doing a million and a half on you and 750 or a million on her but the great thing is if you guys are relatively young non-smokers This is a total net cost with you know for you to have a million and a half is probably forty dollars a month for term life insurance and for her to have 750 is probably you know thirty dollars a month and by I'm not gonna explain it right now But by a type of life insurance called annual Renewable term life insurance do not buy level term life insurance when you're under the age of about 45 So if you're in your 30s by annual renewable term life insurance and you can go and investigate that elsewhere My pleasure, all right, that was Jason I've got too many colors here.

Let's go to The Florida Keys welcome to the show. How can I serve you today? Hey, good morning, Joshua John here. I'm gonna stick with the theme of this episode. It seems like real estate. I got a Decision to make and was looking for your insight. Okay So I'm currently active-duty military and I just received what will be my final set of orders Taking me back to New Orleans, Louisiana where I intend to retire I was there previously during my career and I already have one riddle rental property there in Louisiana so the decision is is now we're looking at The orders are three-year orders, but we know this is our long-term desired location to stay at So do we buy another three two for a second rental property?

Or do we go and look to make the decision to buy that longer five to ten year? Forever home so to speak do you have children? One children one child and one on the way, okay, how old is your child that you have? She's three. Yeah, I Would buy a rental first I would buy a house That's a good rental with a three-year-old The good thing is she's kind of right at that cusp where you're gonna start to appreciate some of the amenities but I would I would buy the rental first and maybe even two over the next three years and Then and live in them, you know while you While you're while you're there live in them and then rent them out do the the nomad investing strategy read James Orr's book And kind of let that be your inspiration But I would do yeah, I would do the rentals first and then you know, if you have another child If you move into kind of the long-term House when you have a seven year old and a four year old that would be really ideal I would I would go ahead and build that rental property portfolio first and then Have that ticking away there before I move to the forever home because you guys are used to moving You know, you've got to move.

You've got a three-year-old doesn't need that much space You're gonna have a baby doesn't need that much space if you'll stretch it out for another three years Purchase one or two rentals in the interim then you'll be much on a much higher Financial independence trajectory than you would be if you go ahead and move to the big house you get comfortable you start You know settling in doing that nesting thing defer it just a little bit till you have more houses and then go ahead and make That lifestyle upgrade.

That's what I would do Sounds Sounds what we were thinking about doing and I appreciate your insight there Joshua Yeah, I think it's important to acknowledge that you don't want to live like a pauper forever. Your goal is not to Kind of always be stuck in this place where we're just gonna move and it's money money money money It's nice to set up that home base that nest that forever home Your wife is gonna be thrilled when you're done with the military She doesn't have to be a worry about moving too much two years from now But it's a lot nicer to do that if you've got a good solid financial base And so I would definitely just defer it a little tiny longer and you'll get more benefits out of it When you are settled what book I'd recommend if you haven't read it It's available free online, but search for James or and it's called Nomad real estate investing and He has that book available online for free but it's basically the strategy of buy a house move into it live there for a year or so and Then move out and do it again and you can do this with your VA loans There's a little bit of trickiness with regard to the technicalities of how many VA loans you're supposed to have you can investigate that But there are a lot of people who have used the VA loans purchased a large rental state port portfolio of multiple properties and it seems that It's something that they've been able to do.

So that would be my approach All right. Let's go to Charleston, South Carolina. Welcome to the show. How can I serve you today? Hey Josh, my name is Steven. I was just tolerant actually on a Somewhat similar topic. I'm 27 years old got two kids and a wife and we live in Tennessee actually Okay, I'm joining the military in September as an officer and that will produce a significant increase in salary just because uh I've been I'm only just now getting into being physically physically responsible with my personal finances We have four goals to pay off student loans Adopt a child buy real estate back in Tennessee for when we get out of the military and begin savings how do I do you have any resources you would recommend for how I strategize accomplishing those goals Considering I'm gonna see a pay increase, but I also I'm just trying to figure out how to how to maneuver on that So well, the first thing I would do is save money.

It's never a wrong thing to save money So that would be priority number one. I would live on the minimum that is Comfortable for your family and save the maximum amount of money now with regard to student loans I would think carefully through my overall strategy. Am I gonna pay them off?

and is that gonna help me or is it more strategic for me to keep them and Invest the money as well. Should I pay off the debt or should I invest? I've got an entire episode on that just go back in the archives of radical personal finance and you'll find that episode and You can you can think through that but I would especially in an environment like now where they'll give you deferrals They'll freeze the interest etc.

I would build up a big savings account and if you're gonna move in the direction of buying real estate then You know, I would This is probably going to be a good time to buy now with regard to having a child I would say this is time dependent not money dependent.

So sorry with adopting a child so I Would not wait on the money to adopt a child if I knew I wanted to have a child We would adopt a child when the child is available when we see the opportunity and we say This is the child that we want to adopt.

I would do it I think it's although I appreciate that it seems Sensible to try to wait on big life decisions until you've got the money thing all figured out You know, there's people who especially in the the fire community It's all about I'm gonna be financially independent by the time.

I'm 30 and have children. I personally have come to the conclusion that Those things are life decisions that are more important than money. Do you need to be able to afford it? Yes, but a lot of times, you know If I didn't have the money and I felt the desire to adopt a child I would pursue the adoption and wait for the money to show up.

Maybe I worked it. Maybe I did a deal Maybe friends and family donated money. Maybe I was able to find some discounts I just would not wait on money to get married would not wait on money to have children I would make those decisions because I felt the time was right and then I would make the money make sense over time so in my My order would be savings Because you can do that now Adoption would be whenever it's appropriate number three would be real estate when I find the deal and Then number four would be student loans.

And if you're gonna be You know aggressive About building a real estate portfolio You have to do that when the property is available and when they're a good deal Now if you can pay off the student loans quickly and be debt-free that can go now it can go after savings It can go at anywhere along the line.

That's the big question mark, but I don't that's how I would order them myself Yeah, no that totally makes sense I'm tracking with you it sounds like a It's almost more of a what are what are my personal? priorities rather than you know and Having savings helps to accomplish a lot of those so right Great.

Well, thank you very much. Good my pleasure. All right, we're gonna go a little bit faster. I've got, Indiana Minnesota and Texas and then maybe back to Daniel. Nope, Daniel. We're done, Indiana. Welcome to the show. How can I serve you today? I am a doctor looking to join a new group They currently offer a 401k but no match on it and I was talking to him about that They would like to offer a match to the doctors.

I think it'd be too expensive to offer the match to everyone Is there a way to? Set up your 401k so that you can offer a match to certain positions. They're not others. No No, there's not. Okay Well that somebody in the Facebook group had mentioned something about setting up an affiliated services group.

Is that something you're familiar with? Wait, essentially get the regret the idea being of an affiliated services group the idea is that if you set up a separate company that is focused on You know that employs the doctors but then a different company that employs the staff is that the idea That's my understanding of it.

Yes So is it technically possible? I would say most likely It is technically Paula possible. But the important thing is to Understand that there's still restrictions. So if you have companies that have common ownership, so let's say that I own a Company called company a and my wife and I are the sole employees of company a we pay ourselves $200,000 per year and then I also own and my wife and I own company B and in company B We have five low-level staff that all get paid $20,000 per year.

Well in that situation we When we look at it in that situation We're not going to be able to just set up a 401k in company a but not in company B because the companies have common Ownership, so could you set up some kind of affiliated services group where there was just an employment in that separate?

Company and there were different ownership than the low-level group Yes but you're gonna need to talk to a specialist who will follow the rules very carefully because the number one thing that's important to the government with regard to 401k plans is nondiscrimination they do not want 401ks used to set up extra special benefits for high-level highly compensated employees to the detriment of the low-level staff and so that's the That's the doctrine that is hammered through every single part of the code in Every qualified plan be it a 401k or some other qualified plan You cannot discriminate in favor of highly compensated employees and key key owners.

So Is as long as you study those laws it is theoretically possible to set up multiple companies and do that my answer to you is it's probably not going to be worth it and You need to know that you better button it up exactly in the right way because if you don't you're dealing in an area that that they're very serious about and so You're gonna need professional advice.

You need to make sure that you have all of the all of the T's crossed and the eyes dotted Okay Thank you that I will anything else I've got a separate question. Go ahead. It's completely unrelated if you've got time go ahead So my wife and I are expecting our first child in December you know, I've really appreciated a lot of your philosophies on child raising and you've kind of expanded a lot of You know what I think about as possible new children give me recommendations on resources for a new parent She read classes anything like that But you think a new parent should be looking into So I would say the first thing is With regard to having a new child is going to be to think about the birth of the child I've got a lot about the child, but what I'll do for the sake of the What I'll do for the sake of the this Q&A show is I'll focus on the birth and I'll just kind of give you my standard new father speech Hey Congratulations, you're expecting a baby now Let's talk about some things that you need to know and the things that you need to consider just purely from my experience You're a doctor.

I'm not but I'll give you some things from my experience. What I would say is your first priority with regard to your with regard to your new child is certainly to have a Safe birth of your child, but to work with your wife with a goal of having a healthy enjoyable safe natural childbirth and That's one of the most important things that you can do for the child one of the most important things that you can do for your wife one of the most important things that you can do for Your family and there are a lot of things that you can do to work towards those goals but in order for you to do them I think you're gonna have to what I've learned is you got to be a little bit countercultural because in the West we have a strange view of Childbirth that childbirth is somehow a medical emergency and a medical event and therefore We need tons and tons of medical intervention The first thing that I would do if I were you is apply your medical knowledge and study Childbirth and study kind of the different trends kind of the classic place to start Would be there's an older documentary that I forget the name of the lady that that did it But I think it's usually the place that I encourage people start the business of being born is a good documentary to start with There are a bunch of books that are good There's a book called the business of baby that might be interesting to you.

And so you want to consider carefully the childbirth process Basically, my summary statement is childbirth does not have to be difficult childbirth does not have to be painful Childbirth does not have to be a horrific experience in Most women's lives there are some women who do have significant medical conditions, etc And so of course that's unique where you need medical intervention But I'd encourage you and your wife to to really become educated and really become knowledgeable About the process of childbirth so that you can understand Kind of what you want and talk to her and think about what does she want?

What kind of birth? Experience does she want your three basic options that you're gonna think about is do we want a hospital birth? I would guess that that's probably almost an automatic thing for you being a physician But I don't think that it necessarily should be I think you should consider other options there are birth center births all around the United States and then of course you could do a home birth and So each of them has a different advantages and different disadvantages What I would tell you is I'm convinced personally that a lot of times having a hospital birth increases the risk of birth for the mother and the father because it takes what can be a really rich and and Wonderful experience for the mother and father and it turns it into a very medical event Now we chose with our first baby that we were gonna have a birth center birth We didn't wind up making it out of the house I wound up delivering the baby at home because when it was time to go the baby was already there and I've gone on and I've delivered all four of my babies at home with a midwife assistant now We had low low risk birth.

We everything we looked great. But what we found through that experience is that for us our Experience and our memories of childbirth are some of the most intimate really just wonderful rewarding Experiments experiences that we ever had and We did something that I would commend to you. There are a number of different childbirth methodologies that you can look into We did something called hypnobirthing Which is weird and crunchy But we really enjoyed it in terms of and and got good results from it in terms of the childbirth and basically Hypnobirthing is all about how can you learn about childbirth to the point where you can?

minimize and to some extent even eliminate the pain of childbirth and So by having a child at home or in a birth center where it's a non-medical environment What I think that has helped is it made the the entire birth experience into an intimate and enjoyable? Just experience rather than in a medical event and what what what my wife found is that she found herself much feeling much safer and much more relaxed than if she were in a birthing suite at a hospital with Nurses and doctors coming in and stuff strapped to her stomach and the fluorescent lights, etc Now in most modern birthing hospitals What they've done is they've they've stripped out all the old-fashioned birthing suites and they brought in more of a home like environment And I think that can be a great great solution, but I would really encourage you to consider kind of some other solution We never had the confidence to have a home birth with our first baby We wanted to have a birth center birth and we chose a birth center that was very near the hospital so that if there were complications we could go ahead and transfer to the hospital and have the appropriate medical intervention, but Our experience has been that having a child with the use of a midwife rather than a physician Sorry rather than just an obstetrician just lent immeasurably to a far better Experience because the midwives have so much more experience birthing a baby.

It just completely transformed everything and from a financial perspective While none of us would ever start with saying I'm gonna think about the money I think it's also foolish to ignore the money And so anything you can do to minimize the risk of having a $30,000 c-section Which then generally turns into if you have more than one child multiple c-sections down the road It's well worth the investment spending the money spending the time and really thinking carefully about it And so what I'd recommend to you is don't don't just assume because you are a physician that you know I don't know what your specialty is But don't assume anything about childbirth and really dig into it and work with your wife You got plenty of time and figure out with her.

What is going to What is going to lead her to have the best experience I give you two more pieces of advice one mental and one physical with most women Especially first-time mothers the prospect of giving fear unless they've worked Sorry, the prospect of giving birth for the first time can be a very fearful experience I don't know how many birds you attended as part of your training and how many births you've been at But for the average new father and the average new mother they've never been to a single childbirth in their life And so all of their impression of childbirth comes from TV It comes from some mother, you know splayed out on a gurney in a bright fluorescent hospital room with her legs Splayed open a bunch of strangers in the room screaming your head off Like that's the basic picture that most new fathers and mothers have childbirth, which is a ridiculous picture but all that does is build fear and so one of the things that is Extraordinarily valuable is if you can help to build a plan that helps your wife release all of the fear that she has Associated with childbirth then it can help her to feel much more confident and when she feels much more confident Then the whole experience can go much better now Some of that is going to be related to understanding the process of childbirth So for example, one of the things that we were taught when we had our first child that dramatically transformed Our experience and also dramatically transformed has transformed the experience of other people I've shared this with is just physically understanding what happens with the process of birth So most women don't have any understanding of what a contraction is.

They just feel like a contraction is this stunning? Bit of pain where all of a sudden they just can't control it and they've got to go through all this pain But a contraction is simply the natural process Where the muscles of the uterus press the baby down through the birth path until it's born and it's a natural process whereby the cervix thins and open so the baby can pass through the birth path and yet it's a physical event and so When we understood that it was a muscular event where you had you know the muscles of the uterus that that are kind of Crosshatch against each other and one pulls one way and one pulls the other way and that gentle process over time Presses the baby's head against the cervix and then in time the baby passes through it Transformed it because what we did was we started associating Contractions with a workout we started associating the physical pain of Contractions with the kind of physical pain that you have going into the gym So if you go into the gym and you're in there pumping iron and you're doing you know squats or you're doing chest presses Or benching and all of a sudden your muscles are screaming in pain You understand that this really hurts But it's not this emotional overwhelming thing that you just can't handle and and the secret solution to The the pain and your quadriceps from your squats is to stick a needle in your pen in your your quads and get rid of The pain you understand this is muscular pain that comes for a purpose and so once we started comparing the experience of contractions to Something like a really intense really difficult workout.

It changed the emotional experience for my wife and Allowed her to use some of the tools and skills to manage the pain and not be Emotionally debilitated by it feeling like she had to have a needle stuck in her spine To somehow, you know get through it and so little things like that I found when I've talked to other Expectant mothers and fathers and explained it and they come back later and said that was so valuable Another simple thing that we did was and this was part of the hypnobirthing curriculum if you choose to go through that but we did this kind of fear release exercise where I had my wife write down all of the things that she was scared about and Then we made a plan for them.

So I'm of course sharing intimate details, but it's not I don't think it's it's a bad thing here But like my wife was scared of being pressured. She hates to be pressured or to be You know hurried she despises being hurried And so she didn't want to feel any pressure about the baby coming especially on the due date So to speak the natural range when a baby is expected is a four-week range It's anywhere from 38 to 42 weeks.

That's normal. That's the normal normal range. And of course, it's different for us first time Childbirth versus a later childbirth, but what happens for a lot of mothers is they say hey My baby is due on June 1st and all of a sudden on June 1st all their friends start saying is the baby here Is the baby here then on June 2nd is the baby here and her mother-in-law says hey, is there any is there any news?

Is there any news and then by June 7th? The poor mom is so freaked out by everyone saying where's the baby and what's wrong? And is everything okay that she can hardly relax and and enjoy things when the reality is The normal expected path time is anywhere from a 15 to June 15 And as long as you're getting appropriate medical care through that period The baby's being monitored making sure the baby's okay.

Everything's okay. That's normal and so Once I understood that that was one of my wife's fears we did some some stuff that just to get rid of it And so for example when we are expecting a child We don't tell anybody the expected due date of the child We just don't tell anybody the only person that needs to know is her me and the midwife and our backup doctor, right?

That's it beyond that. Nobody else has any need to know So if the baby's expected due date is June 15, we say sometime in June or July Then you buy yourself lots of time and is that a little bit annoying? It is but it it was one of things that just completely released my wife from all of the the mental Kind of fear and stress of the the event now there are other things as well So just what I would encourage you is work with your wife to help her to understand What she's afraid of and then when you release those things then it dramatically improves the probability of having a comfortable healthy safe natural childbirth if you talk to start talking to doulas and midwives and they start telling you about some of the things where the woman is is in labor and Everything is advancing and all of a sudden it just stops.

It's not Always and then I would now I'm not a pediatrician. I'm not a obstetrician. I'm not a midwife I don't know but I would say it's probably from listening to them It's probably a majority of the time something in the brain something mental where the woman is scared about something or there's a problem in a relationship and then the and it's and then the childbirth process doesn't advance appropriately and so Playing the mental game is super super important and whatever Situation is gonna make your wife feel totally confident totally at rest That's where you need to be and that's where you need to focus Focus your time and attention last thing.

I am convinced that one of the important things to do during the process of childbirth is to Make sure that she gets regular chiropractic adjustments, especially that her pelvis is not twisted So I'll show on the video, but if you imagine that this is if you hold up If you hold up your hands in front of you and you make a V with your hands and you look through them This is the bones of your wife's pelvis And so if you tilt that and you just push one hand forward and one hand back What you see is that it makes a dramatically the dramatic difference in the amount of space that's available for the baby's head and body To pass through when the baby's head is passing through her pelvis on the birth path and so one of the things that we've always worked really hard at is making sure that my wife receives regular chiropractic adjustments during Pregnancy, especially if she's carrying that weight, especially if it's pushing lots of pressure on her bones And that's been one of the many things that we've done to try to focus on having really successful simple smooth childbirth Experiences you can't I'm convinced.

Of course, you can't guarantee anything. Every woman's body is different There are many things that can happen that are out of our control But we've always just worked and worked and worked and worked for months just really diligently to make sure that we've done Everything possible to prepare for a really comfortable safe childbirth and thus far we've had four really awesome Comfortable safe childbirths last thing and Joshua's kind of standard new father speech You will spend a lot of time preparing for the childbirth The thing that I wish someone had told me before we had our first child was it's not all done after the birth The first few days in the first couple weeks of a new baby, especially the first baby are really really tough And so we were very prepared for childbirth What we were not prepared for was how difficult those first few days were going to be how difficult breastfeeding was going to be How difficult just settling into the baby was going to be We weren't prepared for that now second time third time fourth time around things were a lot better but Don't think that it's all over with the birth focus on the birth and focus on the new mom and making sure that you've got Lots of help and support and care for her and then After your baby is a few months old, then you can start thinking about all the other stuff all of the child raising stuff But that stuff there's plenty of time right now focus on the childbirth and those first couple of weeks It's a really special awesome time as a four-time father who has delivered all of his own babies.

I Recommend to you and that's one of the last things I would say to you is that get in there and Receive your own babies. It's a it's a really empowering experience For a father. I remember after our first baby was born. I Felt like the king of the world.

I felt like I Don't know how to describe it. I just felt like the king of the world. I felt like the most extraordinarily Accomplished and successful man in the universe and it was a really special experience for us. So there's Joshua's standard speech consider those things work them out do your research and Figure out what's going to make for the best Experience for both of you and you really can in a majority of cases Transform something that some people fear some people dread into some of the richest closest Experiences that you and your wife can experience together Approach She's really not on board with that so, you know, so we follow what she wants obviously, but yeah Good things to look into at the business being born hitting a birthing looking at some of these other options that are out there So I'll definitely go dive on to her and let her look at some the other stuff I love birth tourism birth tourism is awesome.

I Cannot imagine how we ever could have done it with our first child. I've talked to parents who've done it There it's amazing But I would not even as much as I like birth tourism when I think back to what it was like for the first baby I Wouldn't want to be anywhere except home.

I want to be at home I'd want to be at home where our family can be there our friends to me, I think that's just more valuable than a passport, so Whatever is gonna make her comfortable is is where you got to focus but do the research and I'm convinced that you'll find the right solution.

All right, I am going to go rapid-fire here. Let's see Cory in Minnesota, I'm gonna answer your question in two minutes or less if it's worse than that If it's bigger than that, then we're gonna move it to next week's to go fast Go ahead Cory All right, Cory is right there, oh Cory is that we just came back Cory go ahead I can't hear you go ahead I Yes, go fast with your question, please $80,000 in sort of cash emergency fund maybe possibly some of it for real estate at some point, but I'm currently sitting in Partially checking account partially like high interest High interest 1.5% you know online savings account this morning.

I heard on your last year your last show talked a little bit about emergency funds with credit cards and life insurance and things like that just thoughts on kind of where to keep that money and How to structure that I have a podcast episode in the history of radical personal finance Standby and I will tell you What number but it's called where should you keep your emergency fund and that will answer?

The question so stay on the line What I'm gonna do is I'm gonna take the next question and at the end of the show I will mention the answer to that question, but go listen I'll tell you the show number and go listen to that show good out of Pennsylvania.

Welcome to the show How can I serve you today, please? Pennsylvania Go ahead You talk every now again Are they baking the list You know Yes, here's what I'm envisioning a little kid a very very young four two and one right now and I would like to Teach them life lessons through running into their own business teach them just what it looks like and also, I would kind of like to to find a way at an early age to through a family business Business or whatnot to have them have some earned income so I could start teaching them You know money skills and investing and even having the ability to open a Roth IRA for the while they're under 10 What just is appealing to me?

So I just kind of wanted to ask you from a I mean We have some things that we do. We're not really bakers. I do beekeeping So we make and sell High products generally that's honey and lip balm and things like that. So Just kind of your thoughts from a from a structure standpoint and knowing the age of my kids What would it look like do you think or how do you handle that?

to get your kids involved in a way that is then business lessons life lessons money lessons, but also Also the potential of saying hey, this is earned income file a tax return kitty tax and Then have the ability to convert that into long-term savings for them It's Important to me.

I think it is well worth doing I've got a lot of ideas on it the short version that I would encourage you is Start by thinking about the kind of business that would be fun to do That would also be profitable and that would build in just some Pathways where the children can genuinely be involved and what I'll say is call in next week and Remind me at the beginning of next week's Q&A and I'll try to put you in the first spot and we'll try to Flesh out some ideas that would be useful specifically for you deal All right, Texas you're on how can I serve you Hey Joshua, this is Trey I'll go quick I'm interested in possibly converting my regular w-2 job as a director of financial operations at a health system to Maybe a Per diem consulting arrangement where I'd have most of my same duties, but just have more time off And I thought that you might have mentioned some benefits tax-wise and being self-employed versus Receiving a w-2 I can get on my wife's insurance.

So my employer would be saving my benefits cost I'm just trying to work out a way where I can have more days off during my not busy season which is the non budgeting strategic plan time and Not cost my employer much more because I'd want to probably hire an analyst at a lower rate To do the more day-to-day things that I'm doing not during that business It's a good question the first thing to think about is the actual lifestyle benefits and Things like having more flexibility with your schedule can be reasons in and of themselves Why you would want to do this even if the tax stuff is a wash When it comes to tax savings, there are two basic components.

The first is possible savings on employment taxes and The second is other tax deductions. Is there something that you would be able to deduct as an individual business owner rather than You're being an employee I'm gonna give you the fast version You need to make more money and a substantially more money as a contractor Then as a w-2 employee for it to be worth it but if you can and especially if you can move to setting up an s an s corporation, then you have the option and possibility of paying some of your income out of your company as dividends rather than wages and If you can do that, you can possibly save your employment taxes, which would be fifteen point three percent But currently your employers paying seven point six five percent.

You're paying seven point six five percent So you could possibly have some savings there In addition, there are some businesses that would fit well to significant tax deductions So for example, maybe you could go ahead and genuinely set up a legit home office Maybe you could go ahead and start driving your old beat-up car the and take a 60 cent per mile Deduction on business miles that creates thousands and thousands and thousands of dollars of phantom deductions Maybe there are things you could do travel you could take or expenses for equipment or gear that as an employee You can't deduct but you can deduct if you're a contractor But at the end of the day You need to make sure that you're gonna get a better lifestyle benefit and you need to make sure That you're gonna get a decent amount more money so what I would say is call in next week and let's talk about the specifics of Your job and once again, like I said the previous guy Tell me when I start and I'll put you up in the number one slot next week All right, I'd love to do that, thank you so much good stuff.

Thank you all for calling in for today's episode what I want to close with is the thing that I mentioned as far as the Episode of where to keep your emergency fund is episode 481 of radical personal finance from September 12 2017 it's called where should I keep my emergency fund and it's an in-depth detailed discussion of The answers to that question of where you should keep your emergency fund So I would commend that episode to you if you're interested in the question Thank you for listening to today's show If you would like to call in to next week on the show join at patreon.com slash radical personal finance again That is patreon.com slash radical personal finance And if you sign up to become a patron of the show there at patreon.com slash radical personal finance Then you will gain access to these weekly Q&A shows and hopefully I can speak with you next week Thank you all for calling in and there was one comment I wanted to add that I added on this screen as we go from one of the live watchers here on Facebook Watcher says Steve to Steven earlier question joining the military gives you a number of monetary advantages that most civilians aren't aware of Look into the SCRA and MLA Specifically off the top of my head the military will give you allowance to offset the cost Along with paid time off for you and the adopted child reddit has a decent subreddit called our slash military finance is a good place To start Doug Nordman through the bogal heads has a good book.

He wrote to get you started financially with your career Definitely read Doug's book. I should have recommended that myself Doug's a good friend and he does a great job There are a number of personal finance bloggers that are exclusively focused on the military market And if I were in the military, I would read every blog post and every book that any of those guys had written That's it for today's show.

Thank you all for being here and I'll be back with you very soon Welcome to Autozone. What are you working on today? I think my battery's dead with free battery testing and charging we can help you get back on the road So what if I need a new one?

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