- Big Boyz Comedy Kings is coming to Yamaha Resort and Casino Saturday, December 9th with D.L. Hughley. - That sweater so tight, it look like a snap between the legs. - Cedric the Entertainer. - Once we stop running, I'll find out what it was we was running about. - And Paul Rodriguez.

- What is it about old Mexican men? They could be missing a leg, they still want to get into a fight. - Hosted by my man Eric Blake and a special performance by Mario. Big Boyz Comedy Kings, December 9th at Yamaha Resort and Casino. Tickets can be purchased at AXS.com.

This is a 21 and over event. ♪ ♪ - Live from Frisco, Texas, this is Masters of Money. Episode 37, Radical Personal Finance with Joshua Sheets. ♪ ♪ - Saving $15,000 into a Roth IRA, what do I get? I get a little bit of a tax deduction now and I get whatever growth those mutual funds give me.

But now let's say I can take that same $15,000 and I can use that to buy four months of labor from somebody. Now, that four months of labor is completely tax deductible. And the benefits of labor, if I can hire a full-time staff person for four months who can go out and help me manage my marketing campaign, who can help me do less $15 an hour work and help me do more $1,000 an hour work, the benefit in my pocket could be multiple six figures at the end of the year.

♪ ♪ - Joshua Sheets is the creator of the Radical Personal Finance podcast. He's the world's leading authority on integrating lifestyle goals and money goals without conflict. He teaches normal people how to seamlessly connect the science of financial planning with the joy of goal achievement. Joshua is dedicated to helping normal people achieve financial freedom by merging the creative and crazy ideas from the world of personal finance with the academic integrity of formal financial planning.

In this episode, Joshua and I have a long discussion about his truly radical journey with money. We get into his past successes and failures and spend some time going over his interesting goals for the future. So let's dig in. Let's meet today's master of money. ♪ ♪ Joshua, welcome to the show.

- Awesome to be here, dude. I'm so excited you're doing this again. - Oh, yeah, man. I am too. And I'm anxious to hear more about your story. Obviously, we've known each other for a few years now, but it'll be good to kind of dig into the dirty details of your finances and take some lessons out for others to explore.

- You didn't tell me to have my balance sheet ready if we're getting into dirty details. - Well, we can go off memory. That's fine. Big round numbers. So the first question is this, what's the one thing that you do that maybe others may not do that you feel has been the number one contributor to your financial success so far?

- I think I'm probably willing to learn. That's one of my strengths is I've always been a good student. I was a good student when I was younger. I was a good student through school. I've always sought to be a good student. And when it comes to finances, it's exactly the same thing.

People often, I think, get this impression that you somehow have to go out and recreate the wheel and find some new great idea. You don't. It's absurd. The principles haven't changed. The principles are exactly the same. The exact application might be a little different, but the principles haven't changed.

One of my favorite personal finance books is George Clayton's "Richest Man in Babylon." And it's classic because he sets this financial allegory into the context of Babylon 3,000 years ago, 4,000 years ago, something like that. And he demonstrates how the principles are exactly the same. And so one of the things that I've learned is simply that you can learn the skills of success and you can learn the principles of success.

In reality, they're very, very simple. And the principles, the actions can be applied in any culture, in any context, in any currency, under any technology. And once you see and understand that, you see the consistent themes throughout society and how to build financial success under any circumstances. >> Yeah, so if there is a framework or a setup like that where you sort of can learn it once, then what kind of keeps you motivated to continue learning?

>> Yeah, there are always interesting variations on how to apply things. So you can always adjust and optimize. I built this framework for radical personal finance that was my attempt to try to encapsulate all of the learning of finances. And I brought it down to a 5.10 word framework.

And number four, excuse me, number five is optimize lifestyle or optimize everything. So I think the reality is most of us can consistently focus on optimizing many aspects of finances. We can optimize how we earn our income. We can optimize how we spend our money, how we invest our money, how we do each thing.

And so there's always an optimization. And then the other thing that keeps me interested is that you have to recognize that money, when properly viewed, is going to transcend the specific dollars and cents and finances. One of the biggest mistakes I think people make is they start off thinking that acquiring wealth or building assets or saving, they have the mistake that money in and of itself is a useful goal.

Money is not a valuable goal. When I die, I'm gonna leave exactly the same amount of money behind as Bill Gates, all of it. That's the reality that each of us face. So if money is your primary goal, your goal's not really gonna work. You're gonna find out and wind up in the place that so many have wound up when asked how much is enough?

Well, just a little bit more. So money is a very bad goal, but it's a great tool to help you to accomplish other goals. And when viewed in that context, the optimization and the improvement has real meaning and value. >> I love that. For someone who may not be as you said early on, learning was something you always just always sort of be learning.

For someone who's maybe not naturally bent that way, is there kind of an easy on road to learning about personal finance that you would suggest people take? >> Yeah, find somebody around you who's rich and ask them how they did it. I mean, there are lots of books and things that could be accessed, but the process is very, very simple.

Let me give an example. I have a family member. This family member in my extended family, this family member arrived in the middle years of their life, the middle decades of their life. They were from a very blue collar background, very, very humble origins. And they had made a series of financial mistakes, primarily compounded by multiple divorces, which had completely wiped them out financially.

The man was a truck driver. In order to build financial independence, he worked like crazy for about a year, two years, he and his newly married wife saved like crazy, spent almost nothing, lived as frugally as they could, and used the difference in order to buy a fixer upper house to start again.

Now this is middle age, blue collar background, truck driver. And within about, I would say, eight to ten years, they are now basically financially independent, have a paid for real estate, haven't borrowed a dollar the whole way through, have a paid for real estate portfolio of rental houses that support them, and live a very comfortable, flexible lifestyle.

And they've done it in under a decade. Not a reader, they don't read books, they don't listen to podcasts, they don't watch YouTube videos, they just understand the principles. And so you can start simple. If somebody's not a study, I'm a reader, I'm a study, I'm a listener. That's what I do.

That is good and bad. The good of that is that I expose myself to a lot of information, a lot of inspiration. The potential danger, or the potential bad, is that leads to less activity. A good plan well executed is better than a great plan poorly executed. And so I always have to be careful that yes, one of my strengths is I'm a learner, but where one of my weaknesses is I'm less of a doer than other people.

Frankly, people who get one idea and follow it through generally achieve more success than people like me who have 100 ideas and never capitalize on them. >> That's interesting. Let's go back a bit. Was there a moment in your life where you decided to become a master of your money and improve your financial life?

>> Probably a couple aspects to that. One, I'm the youngest of seven children, and my parents were from humble middle class background. My dad's an electrical engineer, so not a particularly low paying job, not a particularly high paying job. But I think because my parents were generally modest, we were not poor, but neither were we rich.

Because of my parents particularly modest, I think I had some insecurity that built up, especially given the fact that I went to a private Christian high school. And one of these types of schools where the tuition is very expensive. In order for my family to be able to afford to send me there, my mom worked at the school in order to get the tuition discount.

And all of us who were children attending that school contributed some amount financially to our high school education in order for my parents to be able to foot the bill for that. >> You worked. >> Yeah, so I worked. And from the time I was seventh grade through the time I graduated high school, I paid, it was a token amount of my memory, it was about $100 a month.

But I paid my dad $100 a month to support my school, which was great. I really, really value the experience of that, and it did a lot of good in me. That was the deal all the way through. So it did a lot of good in me. But going to this rich school where majority of your friends come from, wealthy backgrounds.

I mean, there were people in my class whose parents were Major League Baseball players and retired NFL players and business people, etc. You're surrounded by a lot of wealth. And so when you're in that type of circumstance, when your family is not the wealthy family, it's easy to have some insecurity.

And because my parents were very modest, I was frustrated with that. And so I wanted to develop my own, I wanted to be rich. I wanted to be rich like all my friends and not have that insecurity, not have those inferiority complexes. And so that drove me a lot even through college, where when I entered into college, my goal was to be a Fortune 500 businessman.

And I wanted to be a corner office CEO. I loved reading business books. I loved reading business magazines, and I identified with that. And I really wanted to be rich. And it wasn't until God started working on my heart through college that I was able to start to give a lot of that up through a pretty intense process, where the intense motivation to be rich came away.

So answering your question in two parts. Number one was I really wanted to be rich, but I didn't know how to do that. And so my parents didn't teach me a lot about money in terms of, my dad didn't buy me stocks and go over the business pages. My dad was always very practical, very, very careful.

My mom was a great shopper, very frugal. I mean, you have to be when you're raising a family of seven kids on a single income. You have to be a great deal finder. And so they taught me some good basics, and I learned a lot of good lessons. But I always felt like they didn't know how to be rich, because my dad was not a big investor.

He wasn't a real estate tycoon or a business tycoon. He was just a simple electrical engineer. So when I was looking for that information, I fell prey to the world of get rich quick, especially even to the world of real estate. I remember distinctly when I was a freshman in college how I had gotten involved-- and this would have been graduate high school 2003, so this would have been 2004, 2005.

So we're right in the middle of the 2000s, the real estate boom. And I had started reading books on real estate. I had gone to a success seminar with a friend of mine. And while I was there, the real estate speaker, the way these success seminars work, they bring you in.

Everybody gives a hoorah motivational speech, and then that follows up, and you sign up for the following seminars. So the real estate speaker piqued my interest, because he taught me that I could be a multimillionaire with no money down, starting with nothing, in about three or four years. So I signed up for that three-day seminar.

And I remember distinctly, a buddy of mine, we went down to Miami for the three-day seminar. I live in West Palm Beach, now we're north of Miami. And we went down to Miami for the three-day seminar. And as we're there at the seminar, I was so completely sold, so sold, that I was ready to sign up for the $30,000 real estate coaching package.

I was looking around, trying to find where can I get the money. I had a few thousand dollars. I was going to borrow the money. And I vividly remember, I went to lunch with my dad and my brother. And I vividly remember my dad basically just putting his foot down.

I was 19 years old, but I'm basically saying, Joshua, do not do it. And thank God I listened to him. I didn't sign up for the super awesome guru coaching package. I didn't put down my $30,000. But through a variety of circumstances, I was paying for my college education.

And I had received some scholarships, but fewer than I had anticipated. So I worked my way through my freshman year. My sophomore year, I started borrowing money to make up the difference, because I felt like I was working too hard. And I wasn't committed to going through without borrowing money.

And so I wound up starting to borrow money. And during my junior year, my brother had gotten a hold of-- had started listening to Dave Ramsey's program on the radio. And he had bought the book My Total Money Makeover. And he gave me a copy of it, because he knew I liked money and finance.

I read the book. And the first time I read it, I was like, this guy, doesn't he know that you're supposed to use other people's money to get rich? Hasn't he attended these real estate seminars that I have, and known how the power of leveraging and compound interest works?

So I read it again. And I still thought he was dumb. But the third time I read it, it really struck me. And I realized. I said, if you had no payments, how much money would you have? And that just stuck with me. And so I decided that I was going to get out of debt.

And this was my junior year. I decided I was going to get out of debt. So I was working hard. I had dropped out of school. I'd taken a semester off. I say dropped out of school. My wife corrects me and says, you took a semester off. But I had studied abroad.

And I came back. And I quit college. Because I didn't know what I was doing and why I was doing it. And then I started working on paying off my debt. I worked very, very hard. And my senior year, I took a full course load, 19 hours of class per semester.

I worked like crazy. I lived on nothing. I cash flowed my senior year of college. And two weeks before I graduated, wrote a check to Sally Mae for all of my student loans. And I graduated from college completely debt free. My goodness. It was a remarkable thing. I worked a lot.

But it taught me something. Because I had the best year of my life. And the skills that I had to use to get there are skills that to this day have been very important for me and have also been really crucial in my own self-confidence. In order to get there, as an example, I had to make a proposal to my bosses to allow me to go from working traditional 40-hour office hours to working flexible hours.

So I could work them around my classes. And so I was in working at night, working in the morning, scheduling everything around-- I dropped my pen-- scheduling everything around my classes. And same thing, I had to schedule every single hour of my week in order to figure out when I was going to work, when I was going to do this, when I was going to do my homework.

And I just had about six hours a week of free time scheduled, a couple hours on Saturday night, Sunday morning till 2 PM, and then I was back to work. But the results of it were really, really powerful. And so those experiences were, for me, very, very transformative and really laid the foundation to some of the good things that I've experienced since then.

Amazing. Most people have a financial awakening post-college. You had it sort of during your college years. Where were you working during the time? What kind of jobs did you have? So I studied abroad. When I came back, I didn't have a job. But I got into a conflict with the dean of the business school.

And I wanted to pursue a certain course of action. He denied me. And so in a huff of spite, I dropped out of school. I called a former boss of mine that I'd worked a couple years for in high school who managed a sod farm and a tree nursery.

And so I started working with him. And so he put me in charge of his tree nursery. So I was working in agriculture. And agriculture is tough, because you've got to start the guys at 6 AM. Most of them are minimum wage workers. And if they don't get 60, 70 hours a week, they don't make enough to make it worth them.

So you've got to start at about 6 AM. And I was kind of the foreman there to open up the gates and get everything started. So I got to be out there early. And you work late. So after about three or four months of that, I had switched. And I had gotten a job at a large company doing graphic design, minimum graphic design.

And so I was working for the company. And that was who I worked my way through college, doing graphic development on our organization's presentations to clients. Man, so that must have felt incredible to be leaving school without debt like that. Did you call up Dave Ramsey and say I'm debt free?

I did. I think I did. Yes, I did. I'd forgotten that. But I did call him. And I did do a debt free scream at some point. And more to the point, what it allowed me-- here's an interesting part of the story. At that time, I organized-- he has this product called Financial Peace University that he organized himself.

And I was such a Dave Ramsey fan boy that I bought the whole course. And I organized all of my friends to go through the course. And we were doing it in our living room type of thing. And in that course, in one of the previous versions that I had bought to show to all my friends, he talked about how if you have an emergency fund, that when you get laid off, you can laugh.

And you can say, ha, ha, ha, how big is the severance? So after I graduated from college, the job that I was doing during college I knew was not something I wanted to continue after college. And one of the agreements that I had negotiated with my employer was that they had agreed to give me an extra scholarship stipend, basically, free money to go back to school in exchange for my considering staying with them full time when I graduated from college.

I think they saw the natural skill and hard work and work ethic and ability that I had. But they recognized that I would need some training and some molding. Well, when I called my bosses after graduation and I said to them, OK, I'm ready to talk, they said, oh, sorry, we don't really have anything.

Maybe you can continue as you're doing. And I just said, no, I don't want to. So I quit my job. And I left. And I took this great 13,000 mile road trip all around the United States. And as I was leaving by myself in my $2,000 car with 193,000 miles on it when I left, it was a great, great experience.

But when I was leaving on my last day of my going away party, my boss says, hey, we've been working on something. Come see me when you get back. So I got back from my about two month road trip all around the United States. And I went to see him.

And he offered me a job with a substantial raise and a change in position from this graphics development role into basically an entry level analyst position. I did that for a year. And then I got laid off. And the point of the Dave Ramsey scenario is when I got laid off, it was out of the blue.

I had just gotten a substantial pay raise, like an 8% pay raise. I had glowing reports of all the things. I was involved in all these products. And I remember when I'm sitting there, had a meeting with my bosses, and I was clueless. And I remember them talking to me.

And all of a sudden, I figured out I was getting laid off. And it was such a shock to me. Because I thought, in order to get laid off, like I thought anybody who gets laid off deserves it in the sense of if you've gotten laid off, it's obviously because you're bad.

Like you're just not an asset to the company. I had this idea that laying off and getting fired were synonymous. And here I was getting laid off. And it deeply hurt my pride. Because I knew I was a hot shot, right? And so I remember just kind of nervously laughing when I finally figured it out and saying, how big is the severance?

And then seeing this shocked expression on their faces, like, huh? And then I went on and explained. And I said, well, sorry. I didn't mean to be disrespectful. But I've been preparing for this. I got out of debt. I saved my six months emergency fund. So I'm really just happy that I did all those things so that I can make it through this new experience of being laid off for the first time.

So you quickly had to put into practice the laughing about the situation. So what was next for you? So from there, I didn't know what I wanted to do. And let me rephrase that. I didn't know exactly what I wanted to do. But I knew that the job I was doing as an analyst was not a good fit for me.

In hindsight, I think I was there a little bit more than a year. And during that year, I was in the corporate world. And I had always thought that the corporate world would be great. I had, in many ways, a job that if I spun it the right way, I could make it sound very fancy.

I had the company credit card. I'd gone on the corporate trips and fly here and get the black car to the hotel. And I just realized, this is not for me. I don't want to do this. And I was giving myself to it. I was there an hour before everyone else.

I was there late. I was just doing everything. And I realized, this isn't a perfect fit for me. So along the way, one thing that I did well that really helped me a lot is I always kept good notes to try to understand myself and understand what I liked and what I didn't like.

And so I kept notes of jobs that I thought would be fun, companies that I thought would be fun to work in, industries that I thought would be cool. And that would be as simple as Panera Bread. I always liked Panera Bread. I thought it had a cool atmosphere.

I thought it would be fun to work in a Panera Bread. Or if I were in a hotel, I always liked to travel. And I thought, if I worked in the hotel business, I could travel. And that would be a cool industry I would like. And I would also keep note of attributes of certain jobs that I liked.

I learned that I didn't like sitting in an office. I like to be out and about. So when I was laid off, I had this list of a couple hundred jobs-- I still have it-- jobs, business ideas, everything from as simple as starting a lawn maintenance company, just all these ideas.

But I didn't know exactly what I wanted to do. In searching it through, and I pursued a lot of introspection and good note-taking, I had come up with five criteria for a job that I wanted. For example, I realized I didn't like being paid for time. I don't want to be paid for the hours that I put in.

I want to be paid for what I produce. I want to be paid for performance, not for time. I realized that I didn't like working for one-time rewards. So I sat down. I don't want to be paid for do this job, be done. I want to be paid, do this job, and have a revenue stream, an investment that could continue.

And there were three more. But I was sitting down when I was leaving. I had been a good employee. And after I was laid off, my boss said, hey, listen, give us a couple weeks and give us a call. We'll do anything we can to help you. So I went out to lunch with one of the presidents of my company who had laid me off a couple weeks later.

And there were no animosity, no ill feelings. They were just eliminating my job position. And I was fine with it. They saved me needing to go. And in hindsight, it turned out to be a good thing. And I laid out these five criteria that I had for a job.

So he told me, he said, have you ever considered the world of financial services? I said no. And primarily, I was heavily, at that time, heavily influenced by the world of personal finance. So my theory was that brokers are out to make you broker, insurance is a total scam, I can do better on my own.

I was an index fund guy. I was a do-it-yourselfer. I was like, I'm a do-it-yourselfer. But his son had interned at a company called Northwestern Mutual. And he said, listen, my son did this internship. He had a great experience. You should go and look at it. So I went and had an interview.

And when I interviewed with the Northwestern Mutual rep that his son had worked with, I was extremely impressed. Because the man who was interviewing me was a Navy nuclear submarine. He was a CFP, CLU, CHFC, like a very credentialed, just a really relaxed, really knowledgeable guy. And it opened my eyes.

Their recruiting literature and information opened my eyes to the possibilities, the financial possibilities, the business possibilities, the way the business worked. And that opened my eyes to the world of financial services. So then I spent a couple of months basically researching as many people and companies in the financial services business that I could find.

I interviewed with a bunch of different people. And then ultimately, I went back and joined Northwestern Mutual in the fall of 2008, starting as a 23-year-old life insurance salesman. And so in the fall of 2008, I started my financial services practice and did that until July of 2014 when I left to build Radical Personal Finance.

Cool. Very good. Let's get into a little more detail in terms of the-- obviously, you weren't getting into any more debt post-college, it sounds like. No, I did. No, you did. Yeah. What debt did you take on? On multiple occasions. I'll tell you the worst of it. Probably the most humbling experience, the most difficult experience for me, was when I was building my business initially.

And financial services is an interesting business because it's a profession. And like many professions, it requires some degree of knowledge and experience. But it doesn't pay like most professions. And some companies, depending on the different structure, have different salary structures, et cetera. But in the financial services business, the beginning years are extremely, extremely low-paying years.

And they're low income because it takes a while to build momentum in the sales process where you have a large base. And it takes a while to build personal skills in terms of knowledge where you can help larger clients, where you can make more money. And it's a very expense-intensive business.

So all of your compensation in the financial services business comes on the back end. So first 10 years of your career, you're dramatically overworked and underpaid. Maybe second 10 years of your career, you're probably about properly compensated for the amount of work that you do. And then from then on, if you continue, it can just be a cash cow where you're just dramatically overpaid for very little work in many ways.

And so that was what I was working towards. Well, along the way, I was quickly limited based upon my ability for my business to expand. And I was overworked, was working a ton. And so the path in that process is that you hire help. You go ahead and hire staff.

And you hire staff to come and help you with some of the simpler things. And so I began that process. But as a new business owner, it was the first time that I had ever done that. So I hired a couple of people, had great employees. But I didn't make up in production what my staff was costing me and my staff and all of the associated expenses-- their computer, their office space, all that stuff.

Rather, what I did was instead of working so much, I worked less. And so my income stayed about the same. And my expenses went up during that crunch time. Because the way hiring works, when a company hires, usually they're at overcapacity. They don't need somebody full time. They need 10 hours a week.

And so they're overcapacity until, for a while, they can bring the work up to the capacity that the employee has. And then they'll be undercapacity. And they go and hire. But the business owner, when they hire, is always the one who's on the hook and who's overpaying. And so in that stage of my business, I didn't need somebody full time.

But I hired for the future. And I started borrowing money. Well, it took a while until finally one day I woke up. And I just sat down. And I was looking at my numbers. And I realized that I'd put myself thousands and thousands of dollars into debt, money that I didn't have anything to show for except the work that my staff had done.

That was very, very humbling. Because I would never, never give the advice to somebody else, hey, listen, what you should do is you should go and borrow money to pay for somebody else's salary. That is stupid. You shouldn't do that. And yet I had done it myself. And so I laid off my staff.

I collapsed my office. And I worked like crazy to pay that back. And talk about eating humble pie. Here I am, a financial advisor. I'm supposed to have a clue. And I made a stupid business decision that I should never have made. In hindsight now, I'm very thankful for it for a number of reasons.

But the primary reason that I'm thankful for is it allowed me to eat a good dose of humble pie and learn a little bit more empathy with people who make mistakes. Because I've always been such a good learner, the challenge of that is that I've often thought that I knew what to do.

I learned by making some very expensive mistakes that just because you know something doesn't mean you can do it. And it gave me a great deal more empathy of working with other people who've made financial mistakes that I wouldn't have had if I hadn't had that experience. - Yeah, what kind of loan was it?

- Credit cards, I just put it on credit cards, 0% credit cards. - Gotcha, can you disclose how much it was? - I think it was like $15,000, I don't remember exactly. - Gotcha. - Something like that. - So essentially using a credit card to float the payroll. - Yeah, yeah, exactly, exactly.

- Gotcha. - Okay. - I mean the world, when you have good credit, that's the most common form. Number one, most new businesses are financed with some form of debt. Should be or not, that's a discussion to have, but they are. And the simplest form of debt that most people use is 0% credits.

And it's a very simple process to do it. And because it happens incrementally, because the way that you do that, if you have revenue, what you do is you use the revenue to pay your hard costs, to pay your rent, to pay your staff, to pay your taxes, all of that, and then you use 0% credit cards in order to pay those expenses.

And so when you don't manage that, it causes the problem to where you wind up spending too much money. And no question, it is an inefficient thing. And because it's easy, I spent way more, I didn't need to do it, it was stupid of me. I should have just stuck to my guns and not borrowed money and things like that.

- Yeah, yeah. One question, you mentioned index funds. And so I know coming out of the Dave Ramsey world, you weren't necessarily taught about index funds. How'd you pick up that knowledge? - Well, that was just reading personal finance. And I was in the, I remember, I think I'm at Lazy Man's Retirement Portfolio or something like that, was the first book I read years ago that introduced me to index funds.

I am not an advocate of index funds. Neither am I an opponent of index funds. And so when I was a financial advisor, I didn't use, so in the financial planning business that I built, first few years, I focused primarily on life insurance, disability insurance, long-term care insurance, and health insurance.

Because when you're new and when you're young, you can learn enough about insurance in a couple of months of hard study to be really useful to people and give good insurance advice. It takes years to learn about investing. But over the years, I went through and I built up my knowledge in financial planning.

I got my charted life underwriter, wound up becoming a certified financial planner. I later got a master's degree in financial planning. Along the way, I changed my business. And I changed from insurance primarily to investment primarily, to working with retirees. And in those portfolios, I used both actively managed funds and passively managed funds for different clients.

So that's always been, I'm not an index-only guy, nor am I an opponent of the indexing. I think in general, many people, most people will be better off with an index approach. But even though most of the academic literature is against me, and I have to admit that, I still have a soft spot for several active managed funds and the approach of active management.

And I think it's a little bit more nuanced. So I'm not a, anyway, those are my thoughts on indexing. - Yeah, I got it, I got it. I'm always interested in someone who's working in financial services like that, how working for your own company like that affects your personal finances.

So how are you saving for your own retirement during that time? - Well, I think it's important to recognize, and this is what I don't like about the financial services business, and I've taught people, is that as a financial advisor, you need to recognize why it is that you're actually getting rich and how other people get rich.

And here's the truth as I see it. You don't get rich by investing in mutual funds inside your IRA or 401(k). That's a great sales pitch in a book. There's no reason why that can't work. It's just that most people who are rich did not get rich that way.

And again, hear me clearly. It's not that it can't work. But in my years of working with wealthy clients, I didn't have hundreds, but I had a couple of dozen very wealthy clients, and I met with hundreds of millionaires and multimillionaires. I only had one client who had actually built their wealth through that path, through the path of saving and putting money in their 401(k).

In this case, he was an educator at college. He wound up becoming a higher ranking university official. And he just earned a multi-six figure income over time, was a pretty frugal, relaxed guy, just chucked it aside in a 403(b) and it worked. But that's not the norm. Most people in the United States who become wealthy, become wealthy because number one, they have a high income, i.e.

professionals, or number two, they build a business. Those are the two things. And so it's exactly the same thing for somebody like a financial advisor. The reason a financial advisor, and this is a nebulous term, but let's just think someone like me, someone who was working in financial services.

The reason a financial advisor becomes wealthy is not because they make great investment decisions. It's just simply because they earn a lot of money because it's a lucrative, very difficult business. And if they save some of that money consistently, then they'll be able to grow. So that's kind of the big picture.

Don't be misunderstood. The reason most financial advisors are wealthy is not because they're great at giving investment advice. It's because they're good at building a business, selling a lot of product, and saving some amount of that. Now, with regard to your specific practice, here was how I approached it.

Number one, my company offered, and this is an important diversification tool. As a financial advisor, I didn't place a heavy emphasis on stocks. I own stocks, and I invested a small amount of money there to make sure that I would understand what it was. But it was largely my IRAs and Roth IRAs that I had established since I was 18 years old.

But as a financial advisor, and I would not give the advice to a financial advisor to invest heavily in stocks. First, I had two traditional pensions as far as defined benefit pension programs that I was involved in, which didn't require contributions from me with my company. In addition to that, as I grew, I was investing primarily into my business, copying what my rich clients did, which means instead of putting money into an IRA, I would hire staff or expand my office space or buy more marketing, et cetera.

That's the way that you do it. That's the way that you really build wealth, not IRAs. And concurrent with that, I was looking and focusing on diversifying my income out of stocks. Because as a financial advisor, especially one who manages money, your compensation, if you're doing fee-based planning, where you're receiving, let's say 1% of the assets that are under your management, your compensation is based upon the amount of the accounts that are under your stewardship.

And so the goal is grow those accounts. But the problem is, what do you do when things go wrong? So remember, every three years, you should expect about a 33% decline in the value of the stock market. So that can bring tremendous volatility to your income. If your investments are experiencing a 33% decline at the same time that your income is receiving a 33% decline, that's a bad plan.

So as a financial advisor, I was intentionally focused primarily on diversifying my income and my plan was to diversify out of stocks so that my income and my investments would not be connected. And this is the same problem that people face when they invest in their company stock. Generally a bad idea, because if the stock, if your income is affected, you're getting laid off, it's also gonna affect your investments.

So right when you can least afford to handle it, you're facing a double whammy. Same thing for financial advisors. - Gotcha. So were you investing in the business forsaking things like maxing out your Roth IRAs? - Yeah, absolutely. - Okay. Dave Ramsey wouldn't have said to do that. - But that's exactly what Dave Ramsey's done.

Dave Ramsey is rich, not because he put money in a Roth IRA into mutual funds, he's rich because he built a huge business that was completely leverageable and completely scalable. And this is the problem with financial advice. It's great financial advice to say to somebody, someone like you, okay, when you were working as an accountant, if somebody's an accountant and they're an established career accountant, putting money into an IRA is a perfectly reasonable thing.

But you will never be as rich putting money into an IRA as you will be if you make partner or start your own accounting firm, if that works. So the thing to recognize is, it's not that the plan can't work. It's just simply that it doesn't work. And the data proves that it doesn't work for the majority of people.

Majority of people in the United States of America have no retirement savings, they don't save money. And the majority of the wealthy didn't get there because of putting money in the 401k. So the reason that people have a million dollars in the 401k is not because they made great, you know, financial decisions.

The reason they usually, most people get there is because they make a multi six figure or a multi six figure income. And so they can easily afford to put the max in it. And you do that over the course of a decade or a couple decades and it grows.

So that's one of my major messages is to recognize, do what works, not just what you're told. And putting money into, you know, just simply working a job, putting money into a 401k or an IRA, nothing wrong with it, but it's really good for the financial services industry. And I'm convinced it's not the best thing that most people should be starting with.

- Yeah, could you do a hybrid approach though? - Sure, absolutely, and that's a great idea. So all good financial advice is gonna be intensely personal. - Right. - Okay? That's a big deal for me. If you wanna make a mistake, if you wanna demonstrate how little you know about finance, just give broad sweeping advice.

Now we all do it, I do it, but what I mean is you can't give good financial advice until you get the details of it. So let's say for example, as a financial advisor, if I was going to put money and the scope, $5,000 is different than $15,000. Let's say I had the choice between saving $15,000 into a Roth IRA or into an IRA or defined contribution plan that would allow me to contribute to it, that it would grow, okay?

Well, what do I get? I get a little bit of a tax deduction now and I get whatever growth those mutual funds give me. But now let's say I can take that same $15,000 and I can use that to buy four months of labor from somebody. Now that four months of labor is completely tax deductible.

And the benefit of that four months of labor, if I can hire a full-time staff person for four months who can go out and help me manage my marketing campaign, who can help me do less $15 an hour work, 'cause I can hire $15 an hour work, and help me do more $1,000 an hour work, the benefit in my pocket could be multiple six figures at the end of the year.

So it would be really foolish in the beginning to focus on putting $15,000 aside when I should invest. And so this is what is important. In business, you should focus primarily on the business in the early years. Now there does come a point in time at which you need to diversify out of the business.

In the beginning years, the best investment that you have is gonna be the business. And so it's foolish to pursue other things. Why would you let Coca-Cola manage your money when you can put it in and you can get 1,000% return? It's silly in the beginning for people who have these options, a business owner whose income is not tied to their hourly work, who's not limited based upon 168 hours that they have total and the 60 to 80 that they can work consistently.

A business owner has huge exponential opportunities. So it's silly in the beginning to put that money into an IRA. But down the road, you have to diversify out of your business. And that's where you have excess money. That's when you tuck it aside and you say, listen, Coca-Cola is probably not gonna do well as FinCon Enterprises will, but FinCon Enterprises could blow up and go away two years from now because I have a competitor that comes in and all my people like him better than me.

And so there's a transition stage. It's not that one is right or one is wrong. It's a matter of when do you focus on which one of those options. - I like that. Yep, yep. Managing your cashflow, managing your money on a daily basis during this time period of your life, do you use actual budget sheets?

Do you use credit cards and pay them off every month? Like what's the more strategic or tactical money management systems you had set up? - Yeah, this was the most difficult thing for me. All during the time that I was a financial advisor, I haven't had a steady income since I was 23 years old.

So I'm 31, so it's eight years now. I haven't had a steady, consistent paycheck. And so managing a variable income with a high degree of variability is very, very challenging. Most money I ever made in a month was, I think it was like $31,000 a month. I went multiple months when I made nothing.

And I went and made months where during this, the weird thing of financial services where I owed my boss money for the privilege of working. It was a remarkable thing. But managing that degree of instability is very, very challenging. So over those years, all during the time that I was a financial advisor, I'd simply used some custom spreadsheets that I built myself.

And I used my custom spreadsheets to manage and to track everything. And that worked for me. It was after I started Radical Personal Finance that I started using the YNAB software, radicalpersonalfinance.com/ynab. That was when I started using the YNAB software. And the YNAB software, the You Need a Budget software, is awesome.

If I had used You Need a Budget, if I had used their software all during the time, and the problem was, I told Jesse Mecham this when I interviewed him on the show. I said the problem was I had the first version of YNAB when I was interested in software.

And I thought it was a spreadsheet, and it was a spreadsheet at that time. Well, I made a better spreadsheet myself. But I didn't keep track of what YNAB was doing when they were iterating through and they got out of the spreadsheet world and they made an awesome app, application.

If I had used YNAB during that time, I'd be a lot richer today just because it's so, so good. - If you've been listening to the podcast for some time now, you've no doubt heard me mention MediShare. MediShare is the medical sharing program for Christians that I use to cover me and my family of five instead of regular old health insurance purchased through the Obamacare exchange.

I've been on MediShare for over three years now without any issues. We still use the same doctors we always have. Here's the thing, I used to pay over $1,000 a month to insure my family. Now with MediShare, I pay just $235. There are a few more out of pocket expenses on this plan, but overall, the program saves me thousands each year.

I've been able to save more and enjoy more of my hard earned money thanks to this program. Look, there's a ton on the line when it comes to you and your family's medical needs. So visit PTMoney.com/MedishareReview to see all the pros and cons of this program. I hope you discover if it's right for you.

(upbeat music) - What is one area of personal finances, obviously you've become a master of your money at this point, but what's one area of your personal finances that you're still just not good at? (laughing) - This pause here is gonna sound really arrogant. There's no way to answer a question like that properly.

- Yeah, we can be specific or theoretical. - Probably the biggest challenge for me, the biggest thing that hurts me, financially speaking, is that at this point in time, I don't think I'm a very good businessman. As far as the day-to-day management of checking accounts and things like that, that at this point is a learned and practiced skill.

I've done enough crisis financial counseling with people who are in that. That's the blocking and tackling of personal finance. It's the basics that you have to do well. If you don't do that well, it's gonna be very difficult to do well, but it doesn't take that long to learn.

And so the basics of handling personal checking, et cetera, is pretty simple. Now, you may not know this, but I actually have a pretty unique financial situation in terms of a couple of things. Number one, for both business reasons and personal ethical reasons, I no longer own any stocks.

And the primary reason that I did that, including retirement accounts, things like that, all of my tax-deferred accounts are simply sitting in cash at the moment. And the primary reason was because I closed my financial planning business after six years to start Radical Personal Finance. And during that period of transition, it would be foolish for me to have my money exposed to stock market volatility risk when I have use for it, potentially, in building this business.

Because once again, the opportunities that I face with building Radical Personal Finance and trying to create the empire that I wanna create, the opportunities are so much bigger than what the VTS whatever can get me from the whatever index fund or whatever American funds mutual fund that I wanna have.

It's incomparable, it's night and day. But the financial risk of starting a business is tremendous. And so first of all, there's important when you're making major transitions, don't be scared to move your money to cash. I think this is something many people are scared to do. Don't be scared to move your money to cash.

Now, if you've got millions of dollars in cash, you don't need to move your other millions over. But when you're somebody like me who's still building, I don't have millions of dollars yet, I'm working hard on it, but-- - Do you share publicly how much that cash is? - No, I won't.

I don't and I won't. I don't see any benefit. When people share numbers, I don't know if you do or not, maybe you do, but I have never seen somebody who has shared details on their personal finances, who wasn't doing so with the intention of selling more product because of it.

I am deeply suspicious of somebody who publishes things like income reports, net worth reports, unless they're doing so as a component of like a debt payoff plan. But beyond that, it's very, it merges into the world of pyramid marketing. And all of the rich, in the sense of look at me, look how rich I am, so come and do what I do.

And I see no benefit of it. I teach, one of the things that's very important to me, and that I see wealthy people do, is in general, I think you want to practice a lifestyle of, I mean, the best term for it is stealth wealth. People should never be able to look at your lifestyle and understand how much money you have or don't have because of it.

Because if you look at the wealthy, the people who are truly wealthy, you'll often won't have any sense of how wealthy they are based upon looking at their lifestyle. So, long-winded explanation to say, I don't do it because I don't want anyone, number one, it's my business and there's no benefit to me.

There's only negatives to me. Unless I'm selling something that's gonna try to show you how you can make money like I make money, there are no positive benefit to me to talk about how much wealth I have or don't have. There's only negative consequences. - Yeah, just looking for context for the conversation of, is this a significant retirement stash that we're talking about?

Because that's a significant move to move that all into cash. Or is it 10 or $15,000? - I'll just say this. I've been saving diligently since I was about 18 years old. I've made financial mistakes. I've made financial mistakes. I consider myself to be a wealthy person, but I'm not a millionaire.

- Gotcha, that's all I needed. - Yeah, so my assets, and let me home in on that because obviously some of the statements can be misunderstood. One of the things that I don't like actually about our modern world, and I have a real beef with the modern financial advice, is sending people into primarily things like retirement accounts before they have the opportunity to get their hands on money.

If you look at most people's financial situations, when you're beginning off life, a few thousand dollars, perhaps $10,000, can buy somebody a tremendous degree of flexibility. I can't quote this stat off the top of my head, but I would guess, and I don't think this is directionally wrong. I don't have the stats at my fingertips, but probably if you have a few thousand dollars of liquid cash, you have more cash available to you than perhaps 50% of the country, in terms of 50% of the population.

That might not be exactly right, but it's directionally right. If you've got $100,000 cash, I'm convinced you've got one of the major stages of what I define as financial independence in this sense. If you've got $100,000 cash, you have the ability to go anywhere in the country you wanna go, to take any job that you wanna take, or to start almost any business that you wanna start.

And one of my biggest beefs with the financial industry is the first thing that we wanna do is put that $100,000 into 401ks and IRAs, instead of putting that first $100,000 into savings accounts. Now, there are good reasons why we advocate for that. Most people spend all the money that they have.

And so if you can put a little distance between people and their money, it's probably gonna be in their own best self-interest. But if somebody doesn't have the connection between the amount of cash that they have and the amount of money they spend, I'm convinced it's far better to put that $100,000 into a savings account and have it available to them, not in a retirement account.

For you, when you were leaving your CPA job, I don't know how much money you had saved, but if you've got $100,000 sitting in the bank, then that buys you, you know that you've got a couple of years worth of runway. But if that $100,000 is sitting in a 401k, you're much more nervous about it.

So I guess the question you asked me, which I got away from was, I've lost the question. I was preaching at you. What did you want me to answer about investment diversification? Was that where we were? - I think I've forgotten as well, Joshua. - Okay, so I was answering the question about investment.

So I moved it to cash for the reason of stability when starting my new business, in order that if I needed to access the money, it would be available to me. And number two, I moved it for ethical reasons. I became comfortable with the conduct of many of the large companies that represent companies, such as those that are listed on the New York Stock Exchange.

I've realized that there are many, many more options available to me to invest money. So I have bootstrapped Radical Personal Finance, working on the side while building up the business so as to not have to touch invested assets. But it's been an important safety net for me along the way.

And in terms of my own personal financial planning, a couple of things. Number one, my business has tremendous potential. 2016 has not been the year that I hoped it was, but 2017, I'm very excited for the prospects and I've got some solid plans because of the hard work that I put in over the last couple of years.

I also have looked at the economy and I have become convinced myself that there will be, I've said for a year or so, I expect, I don't know whether it's this year or sometime in the next year, couple of years, who knows? I expect us to be back again in recession.

And I have become deeply appreciative of how the business cycle can be a tremendous value to somebody in their quest to acquire deeply discounted strong assets. I think there's a mistake. Most people associate the efficient market hypothesis with all markets. The idea is that the efficient market hypothesis, there are three forms of it, but the strongest form says, well, you just can't make any choices in the stock market, buying and choosing what stocks to buy or choose and expect to profit because you know when to buy and when to sell.

- The future gain is already built in. - Right, exactly. Now, let's pretend that we grant that to be the fact. That doesn't apply to every market. Just because the stock market might be efficient doesn't mean that every market is efficient. - Sure, okay. - And so one of my big focuses is to seek to move from markets that are efficient where I have no competitive advantage, such as the broad-based stock market, to markets that are inefficient where I can find a competitive advantage with my investing.

So for example, I've been preparing, if we go into recession, I expect the simple example of real estate to be substantially devalued through the course of that recession. And so if you wait till the back end of a recession, real estate is the deep discount. You can walk in, you can negotiate excellent deals, and you can buy things at good assets at good prices, simple things like that.

And there are many alternatives for that as well. When I was a financial advisor, I had a number of business owners, clients, and I learned this through watching that, for example, one of my clients created fencing products. During the 2008 to 2012 economic turmoil, systematically, one by one, all of his competitors went out of business, and he bought them out for pennies on the dollar, and he now owns a huge, massive business.

But it came because he had cash sitting ready to buy up his competitors when they were desperate to sell. - Interesting. So let's talk about the future for you. Do you have any future personal finance goals that you've set for yourself, and what's your plan to achieve them, maybe outside of the business, if you have them?

- Yeah, I've got tons of them. I mean, I've got goals of, I wanna be careful with the things that I share, 'cause not all of my goals am I willing to talk about publicly. But I am working towards building financial independence, as defined by my ability to live and support my family without the need to be engaged in active employment.

I am working on that, but it is not a primary motivator in this sense. There's nothing that I'm doing now. There are very, if I were today financially independent, I would continue doing the majority of the things that I'm doing. I have achieved a significant degree of financial independence, in the sense that I'm not beholden to anybody.

Nobody has control over what I do or don't do, what I say or don't say. For me, one of the major definitions of financial independence is that 168 hours of your week are yours to say, do what you want to. And I've intentionally built a business that doesn't require me to account for those, to be accountable to anybody for those hours.

So I've achieved most of the financial independence goals in terms of lifestyle goals that I want to do. But I don't have any interest in quitting working. I don't have any interest in retiring. I think it's a very bad idea. And so I'll continue to build in the business and the businesses.

And I have very significant long range cultural goals, family goals, changes that I wish to see worked in the world that I will be pouring every dollar and ounce of energy and sweat into over the next decades of my life, if God gives me those decades, in order to see happen.

- Give people a quick snapshot of what the business does and how you make money. - Yeah, it's a, come back in a year and I'll probably be prouder of the answer. So when I began it, I didn't begin radical personal finance with a solid business plan. And the reason that I didn't was because I had a hunch that there was a desire for significant types of information financial information in the marketplace, and that I could meet that need, but I wasn't sure about it.

And so I had a goal to build a media business, but building a media business is about a solid of financial plan of saying, I'm gonna become a multimillionaire by becoming a bestselling author. Well, it can work. JK Rowling has become an incredibly wealthy woman because of her Harry Potter series.

But just because it can work doesn't mean that there's a high probability of it working. And so when I started radical personal finance, I did so in this understanding. If I could build an audience and if I could build a platform, there were dozens and dozens of ways that I could earn a living from that.

If I couldn't build an audience, I couldn't build a platform, and there was almost no way to earn a living from that. So when I closed my financial planning practice, I got a part-time job, which was sufficient to pay for my income. And I started creating the podcast. And you can go back and listen in the archives of the show, episodes 11 through the first couple hundred are all during that first year, and I made no money.

After that point in time, the audience started to become substantial enough that I have started to work on a variety of different things. I tried to start a membership site. I had a bunch of people sign up for that, but then it didn't work for various reasons. I took on advertisers on the show.

I had a bunch of people sign up for that. Some things were great, some things were not. I've done a bunch of things. The primary basis of the business is the podcast at this point in time. And so as a component of the podcast, I'll just tell you what we're doing going forward.

My audience supports me through a tip model using a website called Patreon. It's basically, they say, "Hey, Joshua, we appreciate what you're doing, the hard work you do for us. We wanna send you some money for it." I am building a number of self-help financial products, trying to give people good, solid, practical answers to their questions that they will be willing to pay for.

I'll be bringing on more advertisers and sponsors to the business, and then building it out with, you know, systematically, whether it's live events, other products and services. Once you have the audience, once you have a platform, there are dozens of ways to earn a living from it. And it's all based upon actually having the platform and having the audience.

- Well, cool, man. Good explanation about the business. Congrats on all the success with that. Always ask entrepreneurs these questions of, what are you doing? Do you have any specific retirement accounts for entrepreneurs now that you've started on your own world? Well, I guess you sort of were before with your own practice, but have you done anything different there?

And what do you do about health insurance? - Yeah, so with those two things, there's kind of two ways to that. There's number one, there's advice to entrepreneurs. The SEP IRA is powerful. The Solo 401(k) is incredibly powerful. If an entrepreneur wants to participate in a 401(k), you can set up a Solo 401(k) and you do the right paperwork in the right way.

I mean, we can set that thing up. You can put 50 grand a year in there, and it's fantastic. And you can do all kinds of interesting things within that. You can do a self-directed Solo 401(k), and you can invest in all kinds of interesting investments. So that's some of the stuff we talk about in Radical Personal Finance for entrepreneurs.

For me, however, at this point in time, I'm not making any contributions to retirement accounts, and I'm not particularly keen on doing so. I haven't decided that I am not ever going to participate in retirement accounts, but neither is it a priority for me. After spending, I would say, from the time I was 18 through probably the last couple of years, which is called 2006, when I was starting to really gain an appreciation for alternative forms of investing, having come from the world of IRAs and 401(k)s, and now being in the world that I'm in now, I am far less keen on the use of tax-qualified accounts as a valuable tool on the way to financial independence.

And I'm far more keen on the flexibility that one can have when not participating in those schemes and the diverse types of investments that people can make of all manner of things. So at this point in time, I'm not participating in any 401, any retirement accounts, and I'm not particularly keen on returning to that.

And just one comment that your listeners might find interesting, I have often felt like the black sheep. I'm the pariah of the, you know, here I am, you know, financial planner, blah, blah, blah. And I hold this opinion, and this very low opinion of retirement accounts. I was speaking with a prominent public financial planner, active financial planner, also active financial planning guru in the world of professional financial advice.

And I was sharing with him my opinion. And he said to me this, he said, "Joshua, I haven't put money in my retirement accounts in 10 years." He said, "I have got so many other business opportunities that are so far more exciting to me." He said, "I haven't funded my accounts in 10 years." And I realized that, okay, I'm not the only one.

Retirement accounts have their place, but I think people have made it more of an unfounded ideological or just an unfounded kind of emotional commitment rather than truly assessing them and their benefits and drawbacks objectively. - So with your particular business, have you invested funds to this point already? - Yeah, I mean, I got a microphone here.

(laughing) I got a computer. - I guess what are the significant investments, I guess? - Well, I would say the most significant investment is the opportunity cost. That's always what it is with business. I walked away from an extremely lucrative business. I walked away from a very established business.

I walked away from hundreds of thousands of dollars in my pension plans. I walked away from thousands of dollars per month of renewal and residual income. I walked away from a huge amount of money to do it. So the biggest cost to me was that, was what I gave up by closing my financial planning firm in order to start this business.

I'd do it over again in an instant, but that was a tremendous financial cost. I chose a business that did not require tremendous capital, financial capital to work in. And I think this is one of the most important things with giving good advice. You should always seek to play in a market where you can be dominant based upon your assets, your attributes, and your skills.

Here'd be two examples. I don't have millions of dollars, so I'm not gonna go out and try to develop strip malls or do new real estate development work. But I do have years and years and years of study and of experience in financial planning. And so I chose to go into this world, the world of financial media, because I have a high competitive advantage that gives me a significant advantage over many of my competitors.

And I didn't need a lot of money to play in this space. I needed a microphone and internet connection, et cetera. The expenses of my business are very low. So this was, as I have analyzed my own situation, the ideal form of investment for me. Now, as my assets grow and my time becomes more valuable, I'll move into other areas where my assets give me a competitive advantage.

If you have millions of dollars, don't go and play in the same sandbox where people with $5,000 can compete with you. Go and compete in a market where you have many fewer competitors and where you do have a competitive advantage. Important investment principle. And so I'm putting my money where my mouth is and following my own teaching with regard to how I invest at this point in time.

- Gotcha. Does your wife work? - Yeah. (laughing) We've got two kids, man. (laughing) - Ah, okay. - I've got two kids and a third on the way. - Fair enough, fair enough. - Does she create an income? - So I'm intentionally calling you out on it because you have hit a very sore point for me.

I have a deep ax to grind with society and how we have trained an entire generation of people, especially a generation of women, to measure themselves based upon their financial earnings. And I'm sorry, but you and I are more than a paycheck. My value and my worth is not dictated by how much money I earn.

And my wife's value and her worth is not dictated by how much money she earns. So I have a deep ax to grind because we despise the roles of mothers and fathers in our society. And we try to teach people that somehow you should play on this economic playing field, that somehow the work that she does in our home with our two children is less valuable than her going and earning some random paycheck by helping make a corporation richer.

So I intentionally caused you an awkward moment there. - No, I appreciate it. And I'm old and bored fully. - So the answer is my wife does not bring in active earned income to our household. - Okay, so back to the health insurance then thing. So how do you guys do the health insurance?

- I participate in a healthcare sharing program called Samaritan Ministries, which is fantastic. I used to sell health insurance. And I'm actually, when we hang up this interview, I'm about to do the fifth in a series that I've done on my show for health insurance. And I'll be talking about healthcare sharing ministries.

But I used to sell health insurance. And after the passage of the Affordable Care Act, the health insurance marketplace was just absolutely destroyed by the Affordable Care Act. Now, some people were happy, some people were unhappy. It opened up insurance at cheap costs, much cheaper costs to many millions of people, but it also changed the pricing of the market.

And so when that happened, I got out of the health insurance marketplace. And we participate in healthcare sharing ministry. So it works, we don't have health insurance. It's a voluntary organization that is exclusively available to Christians. You basically have to affirm to a statement of faith and certain lifestyle practices.

But then the people who are involved in this organization choose voluntarily to share in one another's health costs. So if my wife and I incur doctor bills, we submit that. It's published to other members, and the other members send us checks to pay for that. So right now, we're expecting another baby.

And the midwife bill is basically five grand, or $5,500. So I have right here on my desk the notice of publishing. So that's been published into the network. And starting next month, we'll start getting checks from all of our fellow members, totaling up to the cost of the midwife bills for our forthcoming baby.

- Very cool, very cool. Familiar with it, but we'll link to it in the show notes for people to find out more about that program. We use MediShare ourselves. So we've talked about it a few times as well. Well, very cool, man. Last question for you. Since that moment in your life when you decided to become a master of your money, the ups and downs, the positives, the negatives, how do you feel about it all now?

- Here's what I've learned. I used to think that if I just had money figured out, all of my problems would be figured out. Now, for those listeners who are younger, they'll probably relate to that. For those listeners who are older, they'll probably think, well, that was naive. And I wholeheartedly admit that that was naive.

But I always thought, well, if I just reach the next financial goal, then everything will be better. I remember so deeply when I was working crazy to get out of debt. I was so committed to get out of debt goal. And then I got out of debt and I was lost.

And I was like, well, what now? I've since learned that's a common experience. It's a common experience, not only for people achieving financial goals, but it's also a common experience for people achieving any kind of goal. Well, okay, what now? I've lost that sense of purpose that I was working towards.

So I used to think that if I just figured out my money, to use your nomenclature, if I just became a master of my money, my life would be great. I've since realized that that is a total bogus. It's totally false concept. You can have a great life with very little money.

Money will exaggerate some problems and don't minimize other problems. I don't believe that, although I'm thoroughly in favor of excellent money management, I'm thoroughly in favor of building wealth, I'm thoroughly in favor of these things. You can't look to them to do something that they're not gonna do. And so I remember reading that Ross Perot, he was asked one time if he was happy, as a multi-billionaire.

And he said, yeah, I'm happy. He said, but I'm no happier than I was when my wife and I were, when I was in the army, my wife and I were living in this little tiny officer's quarters on the army base. And I think back to that. And my wife and I, we sold it a year ago, but we had a big fancy house, three bedroom, two bath house, fancy neighborhood, et cetera.

That's a goal that many people wanna have. Now, was I happy when I had that big house? Sure, it was nice. But you know what? For the first year of our marriage, we lived in a 234 square foot studio apartment that we paid $500 a month for in downtown West Palm Beach.

And we loved it. I have since disconnected any expectation of things like happiness or satisfaction or fulfillment from finances and from financial management. There are many reasons, important reasons to focus on your money. And it's important to lower stress to achieve security. Financial security does bring an additional level of happiness to a family.

My wife, if we have lots of money and savings and we're not overspending our income, my wife's stress level is significantly reduced. It brings her a sense of financial security. That has an overwhelming positive effect in our family. So I don't wanna minimize it too much. But I do just wanna recognize that don't look to money and think that if I only have, I'm gonna be better.

The reality is you're gonna be the same person, whether you're rich or whether you're poor. You're gonna be the same person whether you're experiencing great success or not. You're gonna be the same person. - I like it. Good advice, good way to end the show, man. Thanks so much for being on.

Where can folks find out more about you and all that you have happening? - Best way, if you wanna listen to the show, just search the App Store on your phone or any podcast app directly that you have. Search for Radical Personal Finance. Of course, the website is at radicalpersonalfinance.com.

But the tagline of my show is living a rich life now while building a plan for financial freedom in 10 years or less. Both of those things are important. Living a rich life now in every sense of the word while also building a plan for financial freedom. And so we'd pursue those things.

My show comes out probably four times a week at this point in time. It's kinda quasi daily, but four times a week. And I try to keep the content extremely diverse. So one day we talk about some simple personal finance thing. The next day we talk about some complex discussion of financial planning.

The next day we talk about some aspect of lifestyle. We do various interviews. I try to keep the show extremely diverse. So that would be the best way to check me out. - I love it and I highly recommend it. Your show is one of my favorites. And I'm a listener, and so I'm so thankful to be able to chat with you in this regard as well.

So good luck, man, and thanks again for being on the show. - Thank you, PT. (upbeat music) - Hope you enjoyed that. A big thank you to Joshua for giving us the gold today. Show notes including links to everything we talked about can be found at PTMoney.com/radical. Thanks for listening.

Enjoying the podcast so far? If you'd like to support the show, the number one thing you can do is to subscribe in iTunes or your favorite podcast app. I wanna improve the show, so please leave a rating. Tell me what you like and how I can improve. Have a question?

I'm available by email at PT@ptmoney.com or on Twitter @ptmoney. I'll be back next week. This show is part of the FinCon Podcast Network and was produced by Steve Stewart. (upbeat music) - Struggling with your electric bill? Get an energy assist from SDG&E and save. You may qualify for an 18% discount.

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