The LA Kings holiday pack is back. The perfect gift for the hockey fan in your life. A three-game pack starts at just $159 and includes a holiday blanket. Buy today and you'll receive an additional game for free. Don't miss out. Visit lakings.com/holiday today. Where are we right now? Here in San Miguel de Allende.

I'm Becky Cortman from Nomad Together podcast for location-independent families and those who aspire to be one. Get ready for it. Today's podcast is the first of a two-part series on money. That thing we love, hate, need, want, and spend way too much time thinking about. Essentially it's what gives us freedom or chains us down.

Today's guest is Joshua Sheets from radical personalfinance.com, who really digs into how to handle money in a radical way. It's not just the 70s. It's money today, but it's still radical. Parts of this episode might be a little heady for some of us, like me, who don't necessarily get all the talk about assets and total cost of ownership calculations, et cetera, et cetera.

But stick with Paul and Joshua here as the tips Joshua gives at the end are fantastic and quite applicable for anyone listening. And listen for it. Paul almost gets Joshua to say that home ownership is a bad investment. You have to listen to the whole episode to get the full truth, people.

This is episode number 35 of the Nomad Together podcast. To get the show notes for this episode, please go to nomadtogether.com/financial. iTunes and Stitcher Reviews. Fantastic show by Amar V. from India. One can live a life that is not as bound by the rules, such as a steady location, a permanent home, and schooling of kids.

This should not be a reason to stay in one location. In today's day and age, an internet nomad is a possibility, and this show proves that. The hosts are not the only ones doing it. Their guests are as well. Great Show by MadYali289 from the United States. This is an amazing show with tons of valuable content that has inspired me to make it work and travel more.

And Can't Wait to Hear More by Brenda Lommely from the United States. My husband and I plan to start traveling together in a few months, and this podcast has given us some great ideas and insight. Thank you, Amar and MadYali and Brenda for your reviews. We appreciate it. Keep it coming, people.

Each week, we read your five-star iTunes and Stitcher reviews here on the show. We'd love it if you said thank you by simply writing a review for us on iTunes or Stitcher. Head on over to nomadtogether.com/podcast to see how to give a review. We're the Cortmans. We are deep in the jungles of the Amazon.

Just kidding. We're still in San Miguel de Allende. Every week, you're going to hear us say that for a while, so I thought I'd just shake it up a bit. Loving it here. Still seeing some good thunderstorms and working on some health issues, and then we'll see where we go from there.

But San Miguel de Allende, it's only 10 miles from the Texas border, Laredo, Texas, right there. So, hey, you know, it's a really nice little trip down into Mexico and a really nice little place to stay. So, y'all are looking for like a weekend getaway? Come on down here and visit us.

We're staying at an RV park that's connected to a hotel, and it's a great place to come visit. So, we're going to be here for a couple more months, probably. So, hey, stop on down. Okay, let's get down to business. Let's learn more about how you can save, spend less, and is home ownership really worth it?

Welcome, Joshua Sheets. Thanks for being here on the Nomad Together podcast. And the little that I know, you have two kids, a wife, and you're Mr. Money Man, right? Something like that. Two dogs, too. But yes, I'm married. I have a two and a half year old son and a one year old daughter.

And we live here in West Palm Beach, Florida, and I run a business called Radical Personal Finance. Radical Personal Finance. Not just personal finance, but to the nth degree that it's so radical or because it's different than everything else. I was looking for a descriptive title for my show and my platform.

And when I came up with the idea of radical, I realized it fit just about everything that is important to me. To give you an idea, I talk about everything from the extremes of... I did a show one time, very popular, on the lessons that we can learn from dumpster divers and vagabonds and hobos.

And I've done shows on how to do multimillion dollar estate planning. And so, I'd cover all of the extremes. And I also have some extreme and unusual political viewpoints. I have unusual religious viewpoints. I have unusual perspectives on many things. And so, what I try to do is I seek out all of the interesting extreme cases, and then I like to present that information to my audience so that they can look at their own situation, learn from what other people are doing, and then figure out what some of the tactics and tools are that they can apply to their own situation.

So yes, radical in every sense. Well, welcome to being the extreme and the outcast and those weird people on the fringes, because our audience is definitely that. We've given up the American dream and set out to do something completely strange and different, although it's becoming more of the norm now that it's more acceptable to sell everything, quit your job and live as hobos.

But what's really interesting, and I think my audience is going, "Wait a minute. So where's the catch? Is this guy location independent? Why do you have a personal finance coach on the podcast?" And so, I do want to run that through. I'm going to ask, are you location independent?

I actually am. And for many years, even though I live in West Palm Beach and I live in a fairly traditional looking lifestyle, for many years, I've had a goal to build a location independent lifestyle. And I've been working towards it for many years, and I have achieved it with Radical Personal Finance.

I started the business two years ago. In the beginning, I had a clear idea of what I was working towards. I didn't know if it were possible or not. But today, I am working from my third bedroom here in my house, and it doesn't really matter where in the world I'm working from.

I can do my business anywhere in the world. And that's been a major part of my planning all along the way. - So do you sell the house and leave West Palm Beach or just stay there and enjoy? - I don't think so. Neither of those, actually. We did actually sell our house about a year ago.

We sold our house, and that was a tremendous blessing and I've thoroughly enjoyed moving into a rental apartment. But although I could go and travel the world, it's not something that is on a full-time basis. It's not something that's a priority for me to pursue aggressively for a few reasons.

I've been a lot of places and at this point in time, I don't really have a desire to go and be on the road full-time. I do enjoy traveling, but the full-time kind of going out for months or years at a time is not particularly important to me right now.

My kids are very young. So at this stage, I'm working to build a business and build many things in my family and in my kids. And then the reason that I live in West Palm Beach is not necessarily because it's my favorite place in the world, although I am from here, but I feel like this is where God wants me to be at this point in time.

And so I don't feel free to do anything else, even though I could do it financially. I don't feel that that's what I should be doing. So I'm here and I'm pretty content for now. I do think in the future at some point in time, we'll go and build the full-time on the road lifestyle.

At the very least, I intend to take my kids to all 50 state capitals and do a tour of the US and show them around there. And we do enjoy traveling. I just bought a camper van. And one of the goals with what I do see appropriate to our lifestyle right now is I do a decent amount of traveling for my work.

And whether that's going to industry conferences or things like that, I'd like to be able to take my family with me. And I don't particularly like the whole jet traveling. Let me get on an airplane, go away and stay at for five days in a hotel, leave my family at home.

I enjoy taking them with me. And so I actually just bought a couple weeks ago, I bought a camper van, a small class B RV, a road trek camper van. I've been fixing a couple of things that need to be fixed on that. And I think in the future that will allow us to do much more of the integrated family travel.

It kills two birds with one stone. If you study the IRS regulations on travel, it's fairly simple to be able to use some of the expenses that are associated with traveling to business conference, things like that, to deduct the business aspect of those expenses, which helps to defray some of the costs for my personal travel.

We will be doing much more of that type of travel, just not planning to go out on the road for years at a time at this point. - Understood. So what's your background? Do you come at this from a registered investment advisor? Are you an accountant? Are you a lawyer?

Or are you totally self-taught and don't have any credentials? - I began with a deep interest in personal finance when I was a kid. I always wanted to be rich. - Nice. - So I was always reading books on personal finance and money and investing and things like that.

I went to college. After college, I was working for a marketing company, doing market research in the corporate environment. And I quickly learned that the corporate world was not for me. I wound up getting laid off from that job. And while I was deciding what to do next, I was having lunch with my former boss.

And I was telling him the five different criteria that I had for a job or a business that I was interested in. One of those, as is appropriate to this conversation, was that I didn't want to be stuck in one place. I didn't like to be stuck in one office.

And I was hoping that I would be able to build something that would go beyond even one geographic town. So that was one of my criteria from when I first got out of college. He wound up suggesting that I go into the financial planning business and did a lot of research and realized that the financial planning business would fit many of my goals.

So in 2008, I joined the financial planning business, starting with a company called Northwestern Mutual. And I spent six years there with Northwestern Mutual until I wound up starting Radical Personal Finance and decided that Radical Personal Finance was much closer to my skill set and my personal goals. And so in July of 2014, I left Northwestern Mutual.

What I was doing was mainstream practicing as a financial advisor. I sold life insurance, disability insurance, long-term care insurance. I sold investments. I became a certified financial planner. I actually, at this point, have a master's degree in financial planning, certified financial planner, chartered life underwriter, chartered financial consultant. I've done a lot of academic study in the areas of financial planning.

The mission that I have with Radical Personal Finance is to connect the world of formal academic financial planning with the world of people who are actually trying to go out and achieve something unique and special. And it often seems like there's this great gap in the financial discussion where you have what I call mainstream personal finance advice.

Hey, put money in your 401(k) so you can retire at 65. Open a 529 account for your kids' college, blah, blah, blah. And then there's this kind of fringe perspective of people who are interested in building more aggressive financial goals. And that can be everything from somebody saying, "I want to build a real estate portfolio and be a millionaire at a young age," or "I want to retire at 30," or "Hey, we don't have any money, but we want to go travel the world.

How do we do that?" And I believe all those things are possible. And what I didn't see was anybody merging those two worlds. Because, for example, if somebody wants to go and figure out how to improve their lifestyle and improve their family life, doing good tax planning is going to make a tremendous difference in that.

Depending on the situation, I would guess that 20 to 40% of your income is going to taxes. Well, you can make a substantial difference in that, but you can't do it by dreaming about something ethereal. You need to do it by sitting down and looking and figuring out where is our money going and what are some strategies to adjust it.

So what I try to do is merge these worlds, this aggressive goal achievement dreams. You give me any goal, we can work out a plan to get there. But we also need some academic integrity from the world of financial planning. Because at the end of the day, you need a dollar to buy a plane ticket, you need a dollar to buy your meal at night.

And that dollar is going to need to be earned in a way that is conducive to your lifestyle. And it's going to need to be managed in a way that allows you to achieve the ultimate end. A couple of things before we get into specifics for our audience. What makes your recommendations and such different from those of like, say, probably the most popular one our audience would know, Dave from Financial Peace University.

Dave Ramsey. Dave Ramsey. What's the difference between what you're presenting and what the big Dave is? I wouldn't say there's so much difference of what I'm presenting. Listen, money advice is money advice. Dave Ramsey's slogan is we give you the same financial advice that your grandmother does, only we keep our teeth in.

That's his joke that he does every day. You're not going to get some unique, different money advice. In fact, I came up with a framework that's a total of 10 words and five points under which I can explain every single aspect of personal financial advice. So financial advice is actually quite simple.

Now, of course, we may disagree on a few steps, but that's just normal. Most of those things are talking points. Whether you have to pay off your debt, you only have a thousand dollar emergency fund for baby step one for Dave Ramsey's plan, and then pay off all your debt, or whether you should use debt, those things are workable.

I would say the biggest thing that would differentiate me and my message from Dave would be two things that are important. Number one, I don't try to approach the subject of financial advice as telling people what they should do. This actually hurts me with regard to the idea that my message is not as clear as, for example, Dave's is.

Dave's message is very clear, and that's helpful. I don't tell people what to do. I tell them how to think about what they're trying to do. And so I try to put myself in different situations and say, if this were your goal, here is what you would need to do.

If this were your worldview, here is how you would approach that question. If this were your philosophy, here's how that philosophy would affect your life. Number two is I'm much less mainstream than Dave Ramsey is. In every business and every kind of thing, you have to deal with a specific situation.

So Dave Ramsey's avatar is a median income, earning household, husband and wife, earning $45,000 each, or household income anywhere from $40,000 to $80,000, two kids, young kids, credit card debt, car payments, etc. And so his message is going to be tailored to that. Well, there are a lot of situations of people that doesn't serve.

And so I try to serve all of those aspects by giving people ideas and information that's applicable in a broader context. We've got a lot of folks in our audience who are sitting there, working their nine to five and listening to us on the weekends or evenings or whatever, and trying to make ends meet to be able to, I don't know, sell their house or fly around the world.

And they're like, how do they do this without burning through their savings account? What ideas would you have for them? Say they have a desk job, location dependent. I'd say they're a little bit above that median income. They're probably both bringing in 60, or if they only have a single working parent, they're bringing in 60, 70.

What sort of suggestions do you have for them? What would you say? So let me start by giving you the framework, how I think about money, because I think it'll be really useful, especially in this context. There are five points to it. And the first three are the only things that you can actually do with money.

So step one is increase income. When it comes to actually physical tactical steps, one of the things you always have to remember is you can always increase income and people often forget about that. That's actually one of the most powerful things that you can focus on, increasing income. Number two is decrease expenses.

That's the other thing that you can do. You can't predict what Coca-Cola is going to do. You can't predict what the valuation is going to be between the dollar and the pound, such as when is the most advantageous time to travel to Europe, which can do is decrease expenses.

Number three is invest wisely. Those are the three things that you do with money that will make the difference, the biggest difference. So I think of that as a triangle where you go continually around those three things, increasing income, decreasing expenses and investing wisely. Number four is avoid catastrophe.

I'll minimize the discussion on that right now. But basically, I think of that as simply putting on my disaster glasses and looking around and saying, what's the worst thing that could happen to me? And that's where you cover everything from life insurance to having savings account to if you're traveling, you think about buying the trip insurance and you make a decision on whether or not you need that based upon what's the worst thing that could happen.

And then number five is optimize lifestyle. And here's where I think the biggest wins will be for many listeners. There's an ideal way for each person to earn an income, to spend their money and to invest their money. There's an ideal way for them to do that. You can earn forty thousand dollars a year doing a job you hate or you can earn forty thousand dollars a year doing a job you love.

The financial impact of that is going to be the same on your financial plan. But the experience is going to be very different in the same way you can earn forty thousand dollars a year doing a desk job in Chicago, Illinois, or you can earn forty thousand dollars a year working virtually with a business that you can run through your laptop sitting on a beach in Mexico.

The money will be the same, but your experience of earning the money will be dramatically different. So under the scenario that you're presenting me with, I would advise somebody who's in a situation like that to start to take a comprehensive view of their life, a holistic view. First thing with money goals is to get very clear on what the actual goal is.

If somebody's goal is to be able to set up a location independent lifestyle so that they can travel with their family, that is a great goal because it's specific and it's clear. Next step, on what budget? You need to know what that budget is because if you need a budget of ten thousand dollars a month or a budget of three thousand dollars a month, those will be a dramatically different set of options.

The best thing that somebody can do in that situation is work to transition their income from a location dependent scenario to a location independent style of income. And this has never been easier in the history of the world. There are so many jobs and so many businesses that can be done on a location independent perspective, and the trend is only in that direction.

The trend is increasing where more and more people are working from different locations. I have a number of people that work with me in my business. I don't care where they are. And in fact, I don't want to even go to the perspective of hiring people, especially not in the United States.

When you get to the cost and the regulations that are involved, it is so tremendously expensive to hire people and to put office space and to handle the taxes and to cover the health insurance and all that stuff. It's much easier for me to work with people in other places.

The way you get there is you look at your skills and you look around and you say, "Is there a way that I can imagine this type of work succeeding in a location independent way?" For some businesses, that's relatively simple. If you are programming software or you're involved in anything where you're staring at a computer for most of your workday, you can do that on a location independent basis.

We could give tips and strategies for how to get into that. We'll save that for another time. If your workday consists of you primarily looking at a computer, you can do that on a location independent basis, and it might take you a year to transition to be able to do that.

If your workday involves you doing something else that's not staring at a computer, then you might need to think a little bit more creatively. But even in these occupations, there are tons of ways that people can do it. If somebody is a plumber, there's no reason why you have to be a plumber 12 months a year.

You could be a plumber six months a year, six months on, six months off. If you're a builder, there's no reason why you have to build houses in West Palm Beach, Florida. You can build houses anywhere you want to go. If you have the skills or are trying to learn the skills of a farmer and your long-term goal is to go and be a farmer, you can volunteer as a woofer on various organic farms all around the world.

You can arrange many, many ways for you to travel. You can work along the way. Believe it or not, people earn their income in every country in the world. Now, some countries it's easier, but people earn a living in every country in the world. There's bartenders in every country in the world.

So if you've got the skills of a bartender, you can certainly earn a living. And I think that's the simplest place to focus, is to recognize that I don't have to do this job here where I am. I can get a job and do a different job anywhere I want to be.

Then from there, you can go back to some of the basics that might free you up. The next thing to do is once you get clear on a goal, recognize that first and foremost, you want to get the income thing figured out. Now, recognize that there are a couple ways to do that.

You could get the income thing figured out by working along the way, or you can get the income thing figured out by saving money to be able to fund an adventure. And here's where you have a big difference between, do I want to travel into perpetuity or do I want to travel for a year?

Traveling for a year is super, super easy. Here's all you need to do. Live on 50% of your current income, save 50% of your income, and go and you'll have a year on the road. For every year that you save 50% of your income, you buy yourself a year of freedom.

It's as simple as that. And so where that should direct your attention is to your expenses. Many people could put themselves in a situation where they could become completely financially independent and be able to travel into perpetuity in anywhere from seven to 15 years, depending on the approach. If you want to do it faster, the simplest way to do it is to save a very high amount of your income.

And so some of your listeners might have excellent jobs. You might be earning six-figure salaries. Maybe you have a dual-income household. Well, you give me a household with an income of $150,000, and we just put the monthly living budget on, say, $2,500, $3,000 a month by making some simple adjustments in lifestyle.

And in under a decade, that person can be completely financially independent and be able to travel into perpetuity. I've interviewed a number of people who've pursued this plan on my show. There are a number of people who've done that. That's a very simple thing to do. Are you talking like retire in 10 years?

Absolutely. Viable option for anybody to do that in 10 years? Anybody. I am profoundly convinced that anybody who wants to and who has some basic skill, I can't solve the problems of, say, somebody who's mentally handicapped, things like that. But normal people can retire in 10 years, and it's a very simple function.

It's a function of your income and your expenses. See, what happens is most people think that, "Well, if I'm saving 10 or 15% of my income, then I'm in good shape." Well, you don't have to save 10 or 15% of your income. You can save 75% of your income.

The reality is that if you save 75% of your income and you invest that money, you'll be financially independent in under a decade. But most people don't think of saving 75% of their income. A couple of resources people have interviewed on my show, and this is what Radical Personal Finance is all about.

A super extreme one would be Jacob Lund Fisker at Early Retirement Extreme. If your audience is not familiar with that, they'll find that to be interesting and useful. He has a book which is called Early Retirement Extreme. It's one of my favorite personal finance books. Definitely a recommendation. There are two episodes of the show on Radical Personal Finance in the early days where I reviewed the book in detail.

Also, I've done extensive interviews with Jacob Lund Fisker. Another very useful resource would be somebody like the most popular personal finance blogger that I'm aware of is Mr. Money Mustache, MrMoneyMustache.com. He is an excellent writer, and he's done a great job at talking about some of the ways to accomplish this.

This is the way to financial independence. It's called extreme savings by saving a very high percentage of your income. But the way the math works, and I've got an episode and I'll look it up in a second here and give you the episode number, but the way the math works is that if you save a very high percentage of your income, you'll be able to maintain that income for a very long period of time without needing to earn more money.

The reason it is, if you think about this, if you are earning $10,000 a month and you're living on $2,000 a month, I'm not promising that by saving 80% of your income, I'm not promising that you can cover $10,000 a month of expenses. What you're actually doing is you are covering $2,000 a month of expenses.

And so that's why there's a very simple mathematical approach that high savings gives you freedom. Could we look at it this way that making huge sacrifices for 10 years will allow you to live a life of financial freedom, but you'll still have to make those same sacrifices because you'll still only be living off of $2,000 to $3,000 a month?

I wouldn't necessarily call them sacrifices. I think that's a limiting way to look at it. The people who pursue this approach generally don't view themselves as sacrificing. Generally, the people who view this approach are looking at it and realizing, "Look, you're telling me I don't have to go to work and you're telling me that I have freedom to be able to do whatever I want to do." It's a really powerful concept.

So for me, I live in a very inexpensive apartment, not because I can't afford to live in a more expensive apartment, but because I don't value what the more expensive apartment or the more expensive house gives me. And so the key is to adjust your mindset. If you go into it with a typical US-American idea that spending less money is deprivation, you'll never successfully retire early.

You'll never be able to achieve it because you'll always be viewing it as deprivation. But if you go into it thinking about it from the perspective of abundance, in the sense that you gain an abundance of time and abundance of freedom, the reason I won't give up my $1,000 a month apartment or the reason I won't give up my $500 car—I drive a $500 car, a $5,000 minivan for my family and a $500 car that I drive—the reason I won't give those things up is because what they get me is worth so much more than fancier stuff.

What they give me is time. They give me the ability to say no to anybody I want to. They give me the ability to work at home and do something I care about, whether or not the money is—and not to make decisions for purely financial reasons. And so people who approach this are not looking at it from the perspective of deprivation.

They're looking at it from the perspective of gaining something valuable. Now, you don't have to just do it on $2,000 a month. I try to use small numbers, relatively small numbers, to make these things accessible. But there's no reason why you can't earn half a million dollars a year.

There's lots of people that earn a half a million dollars a year. But usually when I say things like that, I lose people and they just don't identify with that. So I like to use examples of somebody earning $80,000 a year. You don't own a house and you're renting.

What's the financial decision there? I thought owning a house is a good investment and mortgages are great investments. - So go and listen to a couple episodes on the show. I hate to sound like I'm plugging my podcast, but a couple of entire episodes dedicated to this topic on radical personal finance, specifically analyzing the numbers.

One of the most important calculations you should make is to actually look at what the expenses are of your house and what your house is actually costing you. Most people who approach their personal finances with the idea that owning a house is a good investment are getting bamboozled. Specific examples from my own situation of the simple math behind it.

When I owned a house, I bought the house for about $225,000 and I put 20% down. So I basically put $50,000 down into the house and I had a mortgage and my mortgage payment was $1,250 a month. Now of that mortgage payment, the $1,250 a month, about $250 a month was actually going towards principal reduction.

The rest of it was going to taxes, interest, and insurance. So from the simplest analysis that my rent is $1,000 a month now, I was able to transition from $1,000 of expenses on my house to $1,000 of expenses with my rental payment. And most importantly, I was able to free up and gain back the income and the interest that I could earn from that $50,000.

Now I'm not saying that you shouldn't consider your primary residence and try to figure out how to make money off of it. You can do it. And I wound up, I sold the house, made a nice profit on it. That was part of the ideas. That profit was tax-free.

I lived in the house for over two years. And anytime you've owned a personal residence for over two years, you can gain up to $500,000 for a couple married filing jointly on their taxes and paid no income taxes on the money. And so I was able to free up some money and take some tax-free income from the house.

But I spend less here in the apartment financially than I did on the pure cost of owning the house. Now my apartment is smaller than the house was. Comparable rental rates on a house would have been something around $1,800 a month. So if I were moving in and renting a house, then I had to redo the math.

But here was what made the biggest difference. For the lifestyle of our family, our lifestyle in this rental apartment is far better than my lifestyle was in the house. As I'm building this new business on the house was requiring a tremendous amount of time, constantly fixing things, constantly just dealing with the normal aspects of home ownership.

Now in a rental apartment, I don't need to do that stuff. And so we actually like the floor plan. We like the amenities of the apartment better than the house. And it frees up the time. So tonight when I finish up this interview, I can just say, "Hey, let's go to the beach or take the paddle boards out.

And I don't have to worry about fixing the water softener. It's somebody else's problem." And so there are ways you need to actually go through and calculate the actual cost. And there are a couple of episodes that will teach the audience how to do that in the archives of Radical Personal Finance.

So by cost, you're saying total cost, time, emotional involvement, that sort of thing? Right. Total cost. And I'm being very specific on the financial aspect as well as other things. But I'm saying you can do a side-by-side financial calculation. And most people don't do that. See, the way most people imagine the rent versus own scenario is let me use those numbers from a comparable house.

They look at it and say, "Well, if I rent for $1,800 a month, but I can have a mortgage payment of $1,250 a month, then I'm automatically going to be better off. Because if I rent, I'm losing $1,800 a month. But if I own the house, I'm building equity." So a couple of major mistakes that people make.

Number one, they assume that they're building equity with their entire mortgage payment. It's factually incorrect. Of my $1,250 mortgage payment here in Florida, about $600 of that was for taxes and insurance. And those taxes and insurance are a pure cost. You never recoup any of that money. The balance of the $650 payment was a payment on a mortgage.

However, that mortgage payment, due to the way that this was a traditionally amortizing 30-year fixed-rate mortgage, due to the way mortgages are amortized, of that, only about $250 in the beginning years of the mortgage payment are actually going to a reduction of principal. The rest of it is all interest, which is pure cost.

So from a financial cost, it's actually the difference in that situation would be I'm spending $1,800 a month on rent, or I'm spending $1,000 a month on the cost of owning a house. The next calculation you have to do is what are the costs of ownership? When you own a house, there are constant costs of ownership.

That's fine. It's the same with everything. I'm not saying people shouldn't buy houses, but you should calculate the cost. Whether it's a new $3,000 water softener system, or a new $10,000 roof, or a new $8,000 septic tank, or a new $3,000 air conditioner, there are always lots of costs.

There are both costs for maintenance items and also for improvements and ways to make things better. You're calculating the cost of a fence. So you've got to calculate the cost of those maintenance items in terms of dollar figures and with actual time. And the other one, the big one that most people miss, is you need to calculate what the opportunity cost is that you're giving up on the foregone investment earnings of the money that you're putting down as a down payment.

So I put $50,000 down on the property, and let's say that I were earning 6% interest per year. That's $3,000 per year of cost that I'm giving up because I don't have the money invested, because I had to put the money down into my personal house. That's interest I'm not getting because I put the money into a down payment.

Now, yes, I do own the house, and I have the potential to experience appreciation of the property or depreciation of the property, but that's interest that I'm not getting. And so when you actually line these things up, what you find is that the difference in cost between renting and owning for many people is much closer than they would otherwise say.

And then when you add on the other lifestyle factors, like I mentioned, time freedom, location freedom, the ability to simply move to a different job, the ability to live closer to a job, the ability to move countries if you want to, to go get a better job, those things are compelling.

And that's the big picture. To apply it, you have to do an analysis in a local market, because in some markets, rents are dramatically higher than our ownership costs, and in some markets, the other way. And so I'm not giving blanket advice, but I am saying, don't buy the lie that owning a house is a great investment.

Even in your situation, just let's stick with West Palm Beach and all that. Sure. You're talking about right now in the early years of a mortgage, but if you stick it out for 30 years, those numbers change. You don't have to pay the interest, you're paying more to principal, and you don't have to pay for the insurance.

And so those numbers dramatically change, you know, 10, 15, 20 years into a 30-year mortgage. And if you compare apples to apples, even on your cheaper, smaller apartment, over 30 years, when you're done in the apartment, after 30 years, you have no asset. And when you're done in 30 years in the house, you have the house free and clear as an asset.

But even still, what I'm guessing that you're going to say is the total cost of ownership, the financial side of the total cost of ownership, all of the upkeep and maintenance that you had to do on that house over the 30 years, it'll be closer to the same loss, if you will, of renting?

I wouldn't necessarily say that, although I think it would be important to consider it. Because if, in a scenario like you described, if you had two identical houses, two brand new houses side by side, this person is in a very healthy financial situation, because we didn't even get to the risk factor.

So many people buy houses and their houses wind up sinking them when they lose their job or run out of money and have an unexpected illness or something like that, because it's very risky to buy a house, because now you're on the hook for a tremendous amount of money.

But if you were going to put them side by side, and you were going to give me a scenario where a family is going to live there for 30 years, I would say most likely buying the house would come out to be financially superior. But that's not the normal experience for most people, especially not in our modern world.

Very few people live in a house for 30 years. Very few people stay in one property for a long time. And my example, in my case, would be a good example of that. When I bought the house that I bought, see, the decision you make with housing is one of the most important decisions that will drive your overall wealth.

If a listener is interested in studying the academic research on that, start with the work of Dr. Thomas Stanley, who wrote the popular book, The Millionaire Next Door. The reason the housing decision drives everything else is because housing is often associated with lifestyle. If I buy a house in a middle class, blue collar type of neighborhood, it'll be perfectly acceptable for me to park a Toyota Camry and a Ford F-150 pickup truck in my front yard.

It'll be perfectly acceptable for me to go over to my neighbor's house for an afternoon barbecue and barbecue some ribs and smoke some cigars in the back room. But if I buy a house in an upper middle class neighborhood, my F-150 and my five-year-old Camry are going to look out of place.

And so I'm going to feel the pressure to increase the cars that are in the driveway. Now I need to park a Mercedes and a Lincoln in the driveway. And now all of a sudden, instead of going over for a backyard barbecue with a Budweiser and a cigar, now all of a sudden we're going to go down to the club.

And my $10 evening turned into a $100 evening because these are the friends that we're associating with. And now my kids, instead of their friends in the neighborhood going to the local government school where we're not paying anything out of pocket, now my kids are going to be associating with people who are in private schools.

So the actual housing decision that you make will drive many other areas of your spending. My example is when I chose the house, I chose a house that was half a mile from my office. My office and my job at the time I thought were very, very stable. I've been there for five years.

We had a 15-year lease on the office. I chose a house that was half a mile from my office so I could walk to work. Diminishing commuting expenses is a tremendous place to save money. Most listeners, if you have a long commute, you should seriously look at adjusting that.

For anybody, commuting expenses are non-deductible expenses. And driving is expensive. It's expensive in money and in time. So it's better to trade non-deductible high expenses of vehicle maintenance for deductible interest costs and buy a more expensive house that's closer to your office. For us, it allowed me to walk to work every day and we were able to get rid of a second car.

So we chose that carefully. Bought a house that was big enough but not too big, big enough to handle kids and family, but not so big that we had a lot of wasted space. Bought a house that was nice enough but not too nice. It wasn't a starter house.

I didn't think we were going to have to move up and out in three years because the friction. Buying and selling houses is very expensive for most people. So you want to minimize the frequency with which you buy and sell houses because of the friction cost, the sales expenses, fixing the thing up, repainting it, fixing the things needed to do it.

You want to stay put. If you're going to own a house, your best bet is to generally stay put for a long period of time. So we bought a house that was nice enough. We'd be happy there for a long time, but not so nice that we needed to drive Mercedes and BMWs.

And we bought a house that fit what we wanted. It was half an acre right in the middle of the city, walking distance to great stores and to the library. It was what we defined as perfect. I told my wife before we bought it, I said, "I think this will be a 40-year house for us." Well, two and a half years later, I quit my job, closed one business, started a new business, and our life was completely turned upside down.

I never expected that. But those things happened. And so I moved into the house thinking it was going to be a 40-year house, and I sold it with less than three years of ownership. I think that's the normal case for most people. A lengthy story, just to point out that who's the person that you know who actually lives in a house for 30 years?

They exist. Not saying it's a bad idea, but for most people, it's not going to happen. They're going to move after a few years. I want to be very clear on the point, Paul. I'm not saying that renting is financially superior to owning. I am saying that you need to approach the calculation much more carefully than most people approach it.

And I'm saying that owning a house is not necessarily a good investment. The reason it seems to be a good investment for most people is because most people don't invest or save any money other than what they're forced to invest or save in their house. But that's their choice.

They're choosing not to save other money. They're choosing not to invest other money. I think that's their choice, and they can do that. But recognize that it wasn't buying the house that made the difference and made them wealthy. It was the fact that they actually bought an asset and they paid it off over time.

Well, you can do that living in an apartment and buying rental houses. I'd much rather live in an apartment and buy rental houses and see somebody. If I were giving financial advice to a young, enthusiastic, highly motivated person who wants to build wealth, I'd tell them, "Don't buy a house unless you're doing it with what we call house hacking, where you're filling up all the spare bedrooms with renting them out and things like that.

That can work really well because you get great financing rates on residential mortgages. So that can work." But in general, I'd tell somebody, "Rent a cheap apartment and buy rental houses. And then when you own 10 rental houses and you've got $10,000 a month rolling in, then go and buy yourself a fancy house." Your primary house is not best viewed as an asset.

It's best viewed as a consumption item. Nothing wrong with consuming money. Just don't confuse your consumption items with your investments. Fast forward a little bit. We've got folks who have made these decisions. They're now out on the road. They're living a life of location independence. They have whatever assets floating around in different places.

But this whole concept of retirement is elusive. A lot of people I've met are living within their means. So they're not going into debt. They're not living a typical Western mindset of where they're spending more than they can or more than they should. But when it comes to actually investing and saving and that sort of thing, it's meager.

And they really don't know what vehicles to put their investment in. Now, we have lots of other people who are making plenty of money and they're looking for rental properties and that sort of thing to actually make serious business investments into. And also Amazon FBA and that sort of thing, where you can tie your money into an appreciating asset.

But what would you recommend for somebody who's location independent, living a lifestyle and thinking about retirement, assuming, you know, those of us from the States that Social Security isn't going to be there, it's kind of social insecurity. What would you recommend? Before answering the question, I'd like to just step back one point and then I'll answer the question to the person who is considering embracing that type of lifestyle first, because I find that's where the biggest problem is.

It's been my observation and experience working with people who have embraced an unusual lifestyle, lifestyle of perpetual travel, things like that. It's been my experience that they don't have that question as much as the person who hasn't yet started on it. And I think retirement, the question of retirement and college is often something that keeps people mentally trapped.

And so the first thing to do is to adjust your mindset and to realize that most people who are wealthy and can afford to retire don't actually ever retire. And I say that partly from academic study and partly from just observation. And I challenge any listener of this show to look around at the wealthiest people that they know and ask themselves, are they retired?

Now, you'll find some people that are retired, but my experience has been generally the people who can afford to retire usually don't because they're too busy doing something that they care about. And so they're too busy making an impact in their business. They're too busy, you know, running for president of the United States.

They're too busy working with a local charity and building houses. They're too busy with the affairs of their life to retire, and they don't want to retire. The whole idea that we've been sold of retirement being a positive goal is pretty much bunk. When retirement was first invented, people looked at it and said, why would anybody want to retire?

Retirement was a penalty, not a reward. If somebody's interested in an in-depth discussion of that, there's a show in the archives of Radical Personal Finance, something called the Untold History of Retirement, What They Never Told You. Retirement was invented as a penalty, as a way to lower the unemployment rate, and it was marketed to be this award.

And when you actually look at the satisfaction, life satisfaction of people who retire, it varies. And that's why I've got to be careful not painting with too broad of a stroke. It varies. Some people are very happy with it, but there are also a lot of people who find that their sense of meaning and their sense of purpose is removed from them, and it's not particularly joyful.

So to free yourself up, I just say, first, before you say, how do I save to retire? I recommend you say, what would I do if I knew I could never retire? I find that a powerful question to ask yourself, and I recommend it as a journaling exercise. What would I do if I knew I could never retire?

Because what you might find is if you knew you could never retire, you'd go ahead and leave the corporate job that doesn't particularly meet your needs or meet your goals, and you might start the travel company specializing in exotic adventure travel to Patagonia. You might figure out a way to do it, because that'd be a job you wouldn't want to retire from.

Now, for those who have figured out their work and have transitioned into something that they wouldn't want to retire from, say, the person you described, a traveler who's living on the road, earning an income, they're enjoying exactly what they're doing, I recommend not starting with an account or things like that, but starting with impact.

What are you trying to invest for? Major mistake that people make is they don't figure out what they're trying to invest for before they start investing. They toss money in a 401(k) without figuring out, "Do I actually want to retire at 65 or after 59 and a half when I can access the money without a penalty?

Do I actually want to invest in public-traded securities, or do I want to go and start a grass-fed beef farm by renting some land from a guy in Missouri and starting to run cows on it, because that's the lifestyle that I'd like to have?" When you look at accounts and look at things like that, if you know what you're investing for, it'll be much simpler.

In essence, you have a few options. You have the ability to invest in paper assets. Paper assets are assets that are reflecting the underlying value of something else, like stocks, bonds, certificates of deposit, things like this. These are paper assets. You have the ability to invest in real assets, things like real estate, physical property, or you have the ability to invest in businesses, privately-run businesses, which are almost a reflection of paper assets.

Those are your basic options. I think that for somebody in a traveling lifestyle, you should, while you're considering buying an S&P 500 index fund over here, you should also be looking at the beautiful little beach spot on the beach in Panama and say, "You know what? A bed and breakfast, a high-end bed and breakfast would go really well here," or, "Hey, I could start an eco-farm here, and that would be really perfect, and I see the market where I could sell my products into.

Let me go ahead and do that." I think these are all valid investments. Back to my framework, optimize lifestyle. You want to optimize the way that you invest. I think many people make a mistake by jumping straight to mutual funds or straight to index funds or anything like that without first considering, "Do I want to start a surfing company?

Do I want to start this insert option here?" That's how I'd approach it. I do think from there, I can't get any more specific without knowing more specific scenarios, but you should definitely consider for a traveler. You should definitely consider expatriating from the United States. You should definitely consider renouncing citizenship.

There are some really compelling, depending on how your income is earned, if you can escape the clutches of the US government, that can be really, really powerful. There are some great ways to do it. The perpetual travel market has done a great job on this with the five flags theory, things like that.

You can move to another country, gain citizenship in another country, renounce US citizenship. That may save you a tremendous amount of income taxes. You should also pay attention and thoroughly understand the foreign earned income exclusions and how that works. You should look seriously at the technical details of that, but that's beyond what I can just jump into off the cuff like this.

Totally understood. I appreciate the setup for that because folks who are listening, we do have an expert in sovereignty, permanent traveling, and flag theory coming onto the podcast in a couple of weeks. This is a great introduction to that of like, "Wait, wait, what? Renouncing? What? How do I do this?" There is so much to learn there about how you can actually save more of your money by not letting the US government have it.

Just by doing that alone, you'd "decrease your expense" by not impacting your income at all, but just spending less. That's going out the door. There's fun hacks around doing that. So stay tuned for more information on that. Joshua, we've just been blown away by all of this information. Obviously, we can go find you at Radical Personal Finance on all the social channels and iTunes and dot com.

But what are some things you want to leave us with? What's one thing either that we didn't cover or a major tip that would be really beneficial for our audience? We have two practical tips. One is related to the question of perpetual travel, but it's expandable beyond that. The very first action step that if a listener is listening and they say, "I want to achieve something I'm not achieving.

What do I do?" The very first action step you should do is you should start to build for yourself first a balance sheet, a statement of financial position, what are my assets, what are my expenses, to show in the archives of Radical Personal Finance if you'd like details on that.

Also, a cash flow statement. The most important thing with a cash flow statement is that it should be comprehensive of all of your expenses. What I mean is most people are aware that they should somehow set up a budget. But what they mean by that is, "I should take my income and figure out how to expend it." When I say a cash flow statement, you should have all of your income, the gross income before anything is deducted.

Then you should itemize what every one of your expenses is, including things like employment taxes, including things like income taxes, including things like health insurance, including things like real estate taxes, including things like any expense that you have. Because you need to know those things so that you can evaluate different courses of action.

My understanding is you're down in Mexico right now. So if I'm looking at the options and saying, "Well, maybe I should move to Mexico, maybe I shouldn't." If I look and say, "Well, I need to spend $3,000 a month here in the United States, how am I going to do that in Mexico?" If I miss the fact that I can adjust my health insurance, if I miss the fact that I can adjust my income taxes, if I miss that, I might not be able to figure out how to actually get there.

But if I recognize that by moving from West Palm Beach, Florida to Mexico, I'm going to be able to save here, here, here, here, but this expense over here is going to go up, up, then I can figure out the budget. So get actual data. And that's one of the things, if you are earning $40,000 a year, there's no reason for you to go and renounce your citizenship and go be a perpetual traveler.

You're not going to save enough, in my opinion. You're not going to save enough in that situation to make a big difference. If you're making $400,000 a year, or if you're going to build significant assets in the future, now all of a sudden, you need to seriously consider it and you want to do it in advance.

But you only know that if you actually have the data. So you need to have data. That's tip number one. Tip number two is once you have that data, look at your expenses and ask yourself a question. I think it's okay to start with little expenses like, "Hey, what am I spending on coffee?" Fine, but most people are not spending a latte every day.

Most people are not spending that much money on coffee. I think it's great to look at the big expenses first and to say, "How could I cut... What's the biggest line item in my budget?" For many people, it'll be tax. For many people, it'll be housing. For many people, it'll be transportation.

Those big three are simple. I would say, "How can I look at this line item and how can I cut this by 50% and get a better standard of living?" Not just how can I get it a little bit cheaper. Think in big numbers. Sometimes when you have a compelling goal, all of a sudden, you realize, "Well, I'm going to move out of this house and my goal is to go and buy an RV and travel the world, but as an interim step, what I can do is I can move out of this house.

We can move into a smaller apartment. I can cut my monthly expenses by 50% and we can have a better lifestyle. That'll free me up to work more so we can save more money." The most accessible way for most people to fund a goal like travel is going to be to save.

You can save aggressively for a period of time. When you save, that'll allow you to have money behind you. It'll allow you to cut your expenses and it'll open up many more opportunities for you to figure out how to earn income on the road and stretch the amount of time that you can spend on the road.

Look at your big expenses and start with your big expenses. Fix your housing, fix your transportation, fix your taxes, fix your food. If you fix those things, some people need to fix your insurance. If you fix those four or five things, that'll all of a sudden free up thousands of dollars a month and you can reallocate that money in a direction that's more suited with your long-term goals.

Love it. Man, I wish I had talked to you three years ago when we started planning all of this. Really appreciate you being here today and we will have lots of links shared in today's show notes. Joshua, just thanks for being here and look forward to hearing more from you over at Radical Personal Finance.

Absolutely. And if anyone wants to listen to the show, the best way to get there is not at radicalpersonalfinance.com, but there's a free app in every app store on your mobile phone. So if you want to listen to the show, just search the app store on your phone for Radical Personal Finance.

Wow, that's really inspiring. In just 10 years, you can live a location independent and financially free lifestyle. That's something that we would have signed up for 10 years ago if we had known that this information was available. And to think in just two years, he became location independent in his business.

It's awesome. Joshua mentioned a lot of episodes in that podcast and we have all those episodes linked up from today's show notes at nomadtogether.com/financial. If you have any other questions, please email us at podcast@nomadtogether.com. We're here to help you live your dream lifestyle. Do you like to read? Do you like the content of this podcast?

We have a book. It's not a storybook or a how we did it book. It's a guidebook for the top seven questions asked by families looking to be location independent. You can get your copy today at nomadtogether.com. That's it for episode number 35 of the Nomad Together podcast. Get out there and write a review on iTunes or Stitcher or clean out your fingernails or do something useful and fun.

Stay tuned next week when we discuss money again on the second part of our two part series. Until next week, let's nomad together. See you later. Later. Don't just dream about paradise. Live it with Fiji Airways. Escape the ordinary with Fiji Airways Global Beat the Rush Sale. Immerse yourself in white sandy beaches or dive deep into coral reefs.

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