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Book now at FijiAirways.com. From here to happiness, flying direct with Fiji Airways. Radical Personal Finance, episode 36. Welcome to the Radical Personal Finance podcast. I thank you for being here with us. Today is Wednesday, August 6, 2014. And today's show is going to be all about tax planning. We're going to continue our tax planning series.

And today we're going to mainly talk about the three strategies for tax planning. Timing, income shifting and conversion. With a special focus on timing. I hope you enjoy. I don't know whether it thrills you with excitement, or blows your heart with excitement to think about doing a show on tax planning like it does mine.

But this is going to be fun. We're going to dig into some meat and potatoes of financial planning. And I don't want the show to go off the rails into all philosophy or all politics or all economics, things like that. I want to balance this with a lot of meat and potatoes financial planning topics.

And I think this is very, very important. And I want to share just a couple minutes as far as why this topic, why I hope this topic will be of interest and of value to you. And then we're going to dig into some meat and potato stuff. And I promise I'm going to make it fun.

I'm going to make it interesting. And I'm going to make it understandable. We're going to be working with the highly theoretical today. We're going to be working with the highly theoretical. But I believe this information is intensely practical once you understand it. So I'm going to share that with you.

The last couple show topics have been, again, a variety. We've talked about politics. We've talked about economics. I've talked about current events. I've talked about everything from welfare to philosophy to getting rid of your TV to dumpster diving. And what I really want to do today is I don't want to stay in that world.

I think it's fun and it's important to go into that world. But today I want to dive deep into meat and potatoes financial planning, and I want to give you a framework that you can use to apply to your life, especially as regards tax planning. And I think you'll enjoy it.

Now, any time it comes to financial planning, I've never heard somebody give some of this framework in a book. I've never read it in books as far as reading it in personal finance books. I haven't found it at Barnes & Noble. Most of this information, the best I've been able to find it, comes from college accounting textbooks and things like that.

That's where this is laid out. And so before you roll your eyes back and say, "I don't want to study a college planning textbook," let me explain why this is so valuable. It's helpful to have a framework. And the example that I thought of to try to convey this is the example of a car mechanic.

There's probably two ways to learn to be a car mechanic, and both of them I think are valid and important. So the first way would be learn how to bolt and unbolt certain parts. That's my level of expertise with car mechanics. I don't really understand how the cars work.

I don't understand how the various components work. I do try from time to time to unbolt and bolt certain things on, and I have pictures, and I pull out a manual, and it gives me pictures, and I say, "Bolt this part here. Unbolt this part." I know how to turn a wrench, and if the bolting and the unbolting works, then, okay, great, it worked.

But I don't understand how the systems work. I don't understand how the ignition system interplays with the fuel system. I don't understand that. So if I go to turn the key and the car clicks, I don't know what that might mean. But someone who is an advanced car mechanic can understand what that means.

Now, how did they become an advanced car mechanic? Well, they may have started with bolting and unbolting things, or they may also have started with learning the theory behind how the car works. I think both are valid, and probably what is the most effective approach is to get in, roll your sleeves up, and start bolting and unbolting things.

And then also to learn a little bit about the theory. So let's bring it over to financial planning. Most financial planning radio shows or books that you read, frankly, in the personal finance space are very much, "Here's how you bolt and unbolt. Here's how you turn a wrench." And that's valuable.

That is really valuable. If somebody needs some instruction on you need to establish an IRA, and this will help you to establish an IRA, and that may be the very basic that someone can start with, or here's where you need to study it, here's how a budget process may work, and here's how you can use that budgeting process to enhance your life so that you have more money.

Now, if it's all practical, however, we quickly run into a problem, and we run into this problem. Let's say that the book says establish an IRA, but you read another book, and this other book says you should establish a Roth IRA. Now you have two books, both of whom are written by learned, caring people, and they have differing recommendations.

One says IRA. One says Roth IRA. How do you decide which one of them is right? Well, in order to do that, you need a little bit of theory. You need a little bit of a framework, and so you need to understand what the advantages and disadvantages are of either of them, and they work differently.

They have different components, and so it's not smart just to say, "Well, I'll split the difference and do half and half and hope that I'm half right and half wrong." We need the framework. If you don't have the framework to understand what's going on, then you can't really make a rational decision between those two things, and basically what you're then doing is you find yourself following the personality of the person that you like the most, and then we get into a debate, and we say, "Well, my favorite personality says this, and my favorite personality says that, so therefore this is what I'm going to do," and that personality may be right, or they may just be repeating something that they have heard, and they may not understand the framework, but once you understand the theoretical framework behind what we're going to talk about today, which is specifically the timing of taxes, the timing of shifting the timing of when you pay taxes, a tax planning strategy, then you can quickly look at a personal situation.

I can quickly look at a personal situation. I can quickly look, gather some facts, and I can say IRA, or I can look and I can say Roth IRA, and I know why because I know the framework, so I'm going to share that framework to you. It's not a secret, but that's why the framework is important.

We need both. We need framework, and we need technique, so the balance that I'm trying to drive at in this show, and I don't know whether I'm doing it successfully or unsuccessfully, but the balance that I'm trying to work at is to give you both of these things, give you the framework and give you the technique, and I believe that the integration, the synthesis between these two things is what will allow you, if you're a do-it-yourselfer, to do a much better job of understanding your situation and will allow you, if you're a financial planner of some sort, to do a much better job of helping your clients.

I looked for this information when I was younger. I couldn't find it. I couldn't find the framework because I was lost in the world of personal finance, and in the personal finance, what you have is technique. You have theory. You have technique, but you don't have the framework, the intellectual framework, so I would read through books like I've referenced before on a tax planning book, and it would have a list of techniques, but I didn't have any way to fit it in, and so, again, where I ultimately found this information was through some of my tax planning books for advanced financial planning designations and also through accounting courses, and that's where I started to find the framework, and that helped me immensely because then I could synthesize the technique and the framework because techniques come and go.

Tax code changes all the time. Techniques come and go. Deductions are added. Deductions are disallowed. Tax rates change. Tax rates are adjusted. Tax bases are adjusted. New taxes are added, so all of that changes as time goes on, so if all you have is technique, your technique may soon be invalid.

What do you do with your planning technique? Let me ask you a question. What do you do with your planning technique if your entire financial planning technique is built around the Roth IRA and Congress changes the tax laws about a Roth IRA? People scream from the top of the house and say, "This is the worst thing that could ever happen, so therefore don't trust the Roth IRA system." I don't think there's--I don't have anything to worry about.

I'm not predicting anything, but I do know that Congress changes tax laws all the time, and so it's theoretically possible. If your whole plan was built upon Roth IRAs, your plan falls apart, but if you were using the Roth IRA as a tool and you understood the theory, you'll just quickly adjust your plan.

I could accomplish exactly the same thing that the--I could accomplish 90% of the things that the Roth IRA accomplishes with other strategies. There are other ways to do tax planning depending on the situation. So I hope you like this information. Another thing that you need to understand before we get into this is you need to look at your personal situation.

All financial planning is and must be intensely personal. If you are in a 30% tax bracket, that is very different-- there are very different planning needs and planning priorities than if you're in a 0% tax bracket. So you need to look to see where it is your bang for the buck-- where are you going to get the most bang for the buck in your planning horizon?

If you are earning a relatively low income and you have a lot of deductions with children and family members and things like that, chances are your biggest bang for the buck is likely not going to come from doing sophisticated tax planning because your tax rates and your tax base is fairly small-- your tax base is small and your tax rate is low.

And if you don't know what those words mean, go back and listen to show number 15, which was the introductory show to tax planning. If you haven't heard that, stop now and go listen to show 15. You'll find it at RadicalPersonalFinance.com/15. That show was entitled "How to Eliminate Your Taxes-- The Basic Foundation You Need to Understand to Do Good Tax Planning." So you need to understand what is my tax base, what are my tax rates, and what are the different taxes that I'm going to be looking at and planning for.

So that show will cover those details for you. But it's likely that in terms of your personal finance, if you're at a low-- again, if you're in a low-tax environment, your best bang for the buck is probably going to be prioritizing something like yesterday's show, talking about communications expenses.

So yesterday's show, episode 34--excuse me, 35-- was about saving on communications expenses, and that built on show number 4. Or it may come down to how can I dumpster dive or coupon my food and save $400 a month on my food costs. So I would encourage you to start there.

But you should still be preparing for this information. So I'm providing this information for you. I think every person who's broke should be planning to be a billionaire. How are you going to become a billionaire if you don't plan to be there? So everyone starts somewhere. You've got to start with broke and then move on from there.

So look at your situation to see where your biggest bang for the buck is going to come from. And this information is going to be just as valid for you whether you're making $50,000 a year or $5 million a year. This information is going to be every bit as valid because today we're going to be talking about framework.

Now, in future shows with techniques, I'll give you an introduction to technique and say here are some techniques that are going to be useful at $50,000 of income and here are some techniques that are going to be useful at $5 million of income. So today's show is framework. The next point I want to make is the difference between tax planning and non-tax planning.

This is where essentially you have to start all discussions. Basically, effective tax planning is all about maximizing the after-tax wealth while also achieving all of your non-tax goals. Just maximizing after-tax wealth is not a rational goal. If the goal were just simply to minimize taxes, then the simplest way to do that is just simply earn no income.

So that may be a possibility for you. If you can figure out how to live and earn no income, and I'm going to profile people on the show who are doing that. There's a book on my reading list. I can't remember the exact title of it, but it was like The Man Who Lived Without Money, something like that.

And I mean I've profiled people. That's why I profiled on Friday's show last week. I profiled a hobo, the guy that just refuses to work. I think that's an amazing thing to learn, but it also comes with some disadvantages. And so if that's the lifestyle you wish to pursue, go for it.

Write a book and I'll read it. I would love to – I'll interview you on the show. I'd love to interview you about that. However, most of us are probably going to find some balance between minimizing the cost of taxes and maximizing the non-tax considerations. So you may – if we were just focused on minimizing taxes, the fastest and easiest way is just get rid of our income and just don't earn any income.

But if you're not willing to go through the resulting poverty that would ensue, if you're not willing to live that way, or if you're not willing to live that way, then that's not a practical way to approach life. So good tax planning means that we need to factor in both the tax and the non-tax advantages and costs in every situation.

Almost every financial transaction involves basically three people. You have the taxpayer, the other person, the other transacting party, and then the government. And you need to understand the roles between them because that will allow you to structure win-win deals between you, the taxpayer – I'm assuming that in this situation you're the taxpayer – and between the other party.

So by understanding these, you can structure more advantageous deals. And when we get in the future – and I don't know whether this will be a couple years from now or what, but when we get into shows talking about how to structure a business transaction, how to do stock-for-stock transactions to avoid taxes and things like that, and buying and selling corporations, then that's where it's going to be very, very valuable.

It's going to be important to understand those decisions because large financial transactions don't happen with money, with cash. They do happen with money and cash, but there may be other considerations. So I want you to understand those three things. So we always want to incorporate tax planning and non-tax planning considerations.

So although we're focusing today on tax planning, a good financial planner is always going to factor in – and you, you being a good financial planner for yourself, or if you're hiring a good financial planner is always going to factor in the non-tax considerations. Hopefully those introductory remarks help.

They're very, very important to understand those as we get into the meat here. So as I mentioned at the end of the last show in this tax planning series, which was episode 15, I mentioned that basically you can boil the major tax planning strategies down to three, and those three are timing, shifting, and conversion.

Timing, shifting, and conversion. Now these are theoretical but eminently practical mental constructs for you to use with tax planning. And this is how I think. As a tax planner, when I hear a technique, I'm quickly thinking, "Is this a timing technique, a shifting technique, or a conversion technique?" And that helps me to place it in my mind as far as to see where does this belong.

So timing is basically doing planning with a timing technique. It's essentially all about are we taking income today and accelerating income, or are we deferring income to a future date? So are we moving income up, or are we deferring it? And then are we accelerating a tax deduction, or are we deferring a tax deduction?

That's what timing is. Shifting is all about shifting income from high-rate taxpayers to low-rate taxpayers. That will be in a separate show. I won't be able to cover that today, but we'll do an entire show on that because there's some very effective techniques that you can use in income shifting, and that may be from a corporation to an individual, or from an individual to a corporation, or from a wealthy family member to a non-wealthy family member, or from an individual to a trust, or from a trust to an individual, et cetera, et cetera.

And it goes both ways. So that's income shifting. And then conversion is all about converting income from high-rate activities to low-rate activities, and that can be done in a variety of ways, whether that's geographic. I wrote an article on corporate inversions on Monday's show. So that article on corporate inversions, you should understand that.

That's a conversion strategy. The companies that are engaging in corporate inversions right now, leaving the United States to go to a lower-taxed authority, they're engaging in a conversion. They're converting income from high-rate activities to low-rate activities, but you can apply conversion strategies to your own individual situation. So let's talk about timing.

When it comes to timing, it's all about when the income is taxed or when an expense is deducted. So if you can--in essence, one of the major constructs that you want to have is that any time you can have an expense, that's a deduction, and then you can avoid taxes.

This, if you're an employee and if you've never run a business, this may be a concept that you're not familiar to thinking about. But in business, you're only taxed on profit. So you don't pay--if you earn $10--let's use $100. If you earn $100 on services provided, but in order to provide those services, you incurred $50 of cost, you're not taxed on the $100 of income.

That's called gross income. You're only taxed on the $50 of net income or profit. So in the business world, one of the most important tax planning strategies is to use the deductions that we have available, and there are many more deductions available on the business side of accounting than there are on the personal side, but there are deductions available on the personal side as well.

So our timing strategy is all about when are we going to take this income, when are we going to bring it in, or are we going to bring it in now, or are we going to push it to later, and when are we going to take this deduction. Are we going to push it out and take it in the future, or are we going to take it today?

Now, as part of our timing strategy, there are two important things that we've got to keep in mind. So now I'm drilling down. We've got the three strategies now as part of timing. We've got income and deductions, and then we've got two important things that we need to keep in mind.

We need to focus on the present value or the future value of taxes paid or taxes saved, and then we also need to focus on the tax rates and any changes in the tax rates. And timing strategies are in one way the simplest, but in another way the most complicated, and we're going to go over the variables.

I'm going to go over and cover in detail these variables so that you can understand them fully, and then you can apply them to your situation. So let's start with present value and future value. One of the most fundamental concepts of financial planning is the concept of present value.

This would also be known as the time value of money, and the basic idea here is that a dollar today is always worth more than a dollar in the future. Now, is that true? It's true, and the assumption comes from the fact that if you have a dollar today, you can invest that dollar and make a positive rate of return.

If that's true, then you should always, if given the option, between having a dollar today and a dollar a year from now, you should always choose to have the dollar today so that you can invest it. Now, I'm going to cover a little bit of math, and these formulas are in the show notes.

If you're driving, don't worry, look at the formulas. I think I can cover it in a way that is quick enough and interesting enough to do in an audio podcast, but yet still conveys the factor. But I want to give you a mathematical formula. I'm going to give you the future value formula and the present value formula so that you can do the math.

And this math is important. We're going to be using it continually, but this math, you need to get comfortable with this math. It's a very simple formula. If you don't want to do this, I'll give you two ways to do it. I'll give you the formula, and then I'll tell you how to run it on a financial calculator.

In the future, I hope to be able at some point when I get my production ability to do that, and there's probably videos on YouTube already done, but I want to teach you how to run a financial calculator because just a simple financial calculator, which you can find online for free, if you understand how to run it and how to run a financial calculator, it will do far more than all of the web calculators that you find online for you.

There's a lot of value in the web calculators, but the problem is those are all built on the underlying assumptions, and it's easy to run a calculator and not understand what the assumptions are-- the web calculator--not understand what the assumptions are. But if you know how to run a financial calculator, then it will be valuable for you.

It's funny. When I started as a financial advisor, I didn't know how to run a financial calculator. Most financial advisors don't. Most financial advisors just simply don't know how to run it. And I started it because I thought, "Well, I need to learn this," and I thought it would be cool if I did it.

So my dad actually, when I started working in the financial planning business, he got me the same calculator he'd always use, which is a classic, an HP-12C, which was the classic one that hasn't changed in, I don't know, 80 years, 60 years. And so I thought it would be fun to learn--I thought it would look cool if I knew how to run it.

So I just started originally because I thought it looked cool, and then I learned how to do it, and I just realized the power of the financial calculator. And like I've said it before, if you can run a financial calculator, you can give a pencil and a legal pad, and I can design a comprehensive financial plan.

And it's a very, very valuable tool. So let's talk about the present value formulas. So the first formula that I'm going to start with is the future value formula. And please don't--I promise I won't go into too many details to make this boring. But the future value formula is the present value times 1 plus r raised to the n.

This is the calculation that you need to figure out how much money is worth in the future. So if we were going to use dollars, and in the 1 plus r, in the mathematical term, that 1 plus r is in a parentheses. So the present value--I mean, what's the money worth today?

And we're going to multiply that, but we've got to do this other function first, times 1 plus r, r being the rate of return, expressed in a decimal. So if you had a 10% rate of return, that would be .10. So 1 plus .10 equals 1.10, raised to n.

And n is the number of years of the formula that we're investing for. So 1 plus r raised to the n, and then multiply that times the number of dollars. So if you--let's say that you were going to get a 10% rate of return, how you would do this function is you would say a 10% rate of return is 1 plus 1.-- excuse me, 1 plus .10 equals 1.10.

Let's just do this for one year. So 1 plus .10 raised to the 1 is 1.10. And let's say you're investing $100. You would take $100, and you would multiply that times 1.10, and that would equal the answer of $110. So if you had $100 today, and you could invest it at a 10% rate of return for one year, you would have at the end of one year $110.

Intuitive. Now what if you could do it for two years? Well, in this situation, all you need to do--and here's where you probably need a calculator-- you could do it by hand, but do it with a calculator would be a lot easier. So now if you were going to do it for two years, you would do 1 plus .10 is 1.10, and you would raise that to 2.

And the answer there, if you were putting it out, the answer would be 1.210. Then you would multiply that times your $100, and multiply 1.210 times 100, and at the end of two years, you would have $121. So there would be $10 of interest credited in the first year, and then $11 of interest credited in the second year.

This is the basis of compound interest. This is why money grows over time. If you were going to do this for 10 years, you would do 1.10, raise that to the power of 10, and the answer there would be 2.5937. Let me just drop this to two decimals. So the answer would be 2.59, multiply that times $100, and you would have $259.37.

So if you could invest $100 today, and you could invest it each year at 10% interest for 10 years, at the end of 10 years, you would have $259.37. That's the future value formula. Now, on a financial calculator, you basically have five buttons on your financial calculator that you can operate.

If you have a financial calculator, get it out, pull it out, or take a look. I will put a link to an HP 12C, an online calculator I've often used, in the show notes that you can use. So the way a financial calculator works is you have these five buttons, and these buttons are N, which stands for the number of years, or rather the number of periods.

So you could use this in years, you could use this in months, you can use it in quarters, you can use it in six-month periods. And this is important to a financial planner because oftentimes you'll use an annual number, but what if someone's contributing monthly? Well, then you might compound something monthly, or if you were calculating bonds, you would compound bonds, or generally the interest is paid twice per year.

So you would use six-month periods, you could use quarters, you can do whatever you want to do. But N is the number of periods, I is the interest rate per period, PV is the present value, PMT is the payment, so the cash flows in or the cash flows out, and FV is the future value.

So if we wanted to check our math on the $259.37, that our $10 would--excuse me, our $100 would grow to over 10 years, I could do this. I would do $100 for my present value, and when you're doing a present value calculation, you're going to put that in as a minus.

So I would change sign, put in $100 as a present value. I would put in 10 as my interest rate for 10% annually, compounded annually. I would put in 10 for my number of periods. I would put in zero for my payments because I'm not putting in any cash flows, and I'm not taking cash flows out, and I would press the future value calculator--future value number, and then the calculator will calculate, and my answer will be $259.37.

So I've proved that my formula works both ways, both by using the calculation function and by using my formula. If you are a financial planning student or if you are a financial--if you're preparing for something like the CFP exam, learn how to do these things both ways, and what you'll find is just by running the financial calculator, you can always check yourself, and once you understand the end, the payments, the future value, and all of that, you can check yourself to make sure that you're getting your formulas correct.

So this future value formula is very important because we know that a dollar today is much more valuable than a dollar in the future, but this depends upon the rate at which we can grow our money. So if I offered you $100 today or $100 in a year, which would you choose?

Well, to run this and calculate this actually, what you would need to do is you would need to run the calculation and see what the present value of the $100 in a year would be today or what the money is worth today and what the money is worth in a year.

So if we assume that you can grow your money at 10%, which is an assumption, and I don't care what number you use, 3%, 8%, 10%, I'm going to use 10% to try to keep the math very simple for those of you who are just listening. If we assume that you can grow your money at 10% each year, what I'm actually offering you is would you like to receive, in terms of future value, would you like to receive $110 today or $100?

And the answer is $110. So that's what we're going to choose. Now, the flip side of this calculation would be the present value. So we did a future value calculation that the exact flip side of this is the present value. And so from here, we want to always calculate what the present value is.

So the present value is basically--the formula for the present value is the future value divided by 1 plus r raised to the n. So if we had--let's continue with our $100 and 10% number. If we were going to use $1, we would use $1, 1 plus .10 and raise that to the number of periods.

And so if we raise that to 1 period, then the answer of what that would be is 1.10. And then putting that into the formula, we would take $1 and divide it by 1.10, and we would wind up with an answer of .91. And we would call that our discount factor.

The discount factor is essentially--it is a numerical factor that we can use to apply to figure out what is the present value of money today. So I think that's as deep as I need to go into the math. Look at the formulas and learn to work with these present value and future values.

Now, let's bring it back to taxes. What we always want to figure out is would we rather have the cash inflow or the cash outflow today or would we rather have the cash inflow or the cash outflow in the future? So let's do an example. And I am--this is a good example that I read in one of my financial planning textbooks.

And so the example here is let's say that you go to a--let's say that you go to one of these furniture places where they say, "We'll give you--we'll sell you furniture today with no money down and no payments for one year." And so let's say that you buy $1,000 worth of furniture and you go--let's say two couches, $1,000 worth of furniture, and you decide you're going to do no money down and no payments for one year.

So the question would be what is that worth to you? Ignore all the personal finance nonsense of how the contracts work and fixing it and being in debt and all that stuff. Let's just figure it out mathematically. I shouldn't have said the word nonsense. It's not nonsense. It's important.

But let's just focus on the math. So let's say that you can annually grow your money every year at 10%. You have an investment opportunity, whether that's an investment in yourself, whether it's an--let's say that you're going to invest that $1,000 into your own education in some way, and you expect that to increase your income by 10%.

So how much is your deal worth to you? Well, the discount factor that we just calculated would be .909, would be the--.91 to .909 would be the discount factor. So if you multiply $1,000 times that discount factor of .909, you wind up with the answer of $909. So you saved $91 by taking that no money down and no payments for one year number because you either have to pay the $1,000 today or you have to pay the $1,000 one year from now.

But by pushing your $1,000 payment forward one year, you can now satisfy that payment for only $91 because you can take that $91, invest it at 10%, and that $91 will earn you $9 of interest. Excuse me, your $909, and that'll earn you $91 of interest, and that'll grow to be the $1,000 that you need.

Let's get out of the math weeds. So hopefully this makes sense to you. We would always--anytime that we are--anytime that we're going to spend money, the rule is this. Anytime we're going to spend money, so we're going to have a cash outflow, we want to always take whatever is the lowest present value, the lowest cost.

And anytime we're going to earn money, we're going to take a cash inflow, we're always going to bring in the higher present value. That's the rule. So let's apply this present value, future value, and let's look at tax rates and timing of income. When it comes to tax rates, we need to understand are tax rates constant or are they changing?

Constant is simple. It's fairly simple. Changing is a little bit more complicated, and this is why you get so much disagreement in the finance space about what you should do with your money. So one economist thinks that tax rates are going down, another economist thinks that tax rates are going up.

One financial planner says you should--your personal tax rate is going to be lower in retirement. Another financial planner says your personal tax rate is going to be higher in retirement. And so the answers would be different depending on what assumptions you use. So when tax rates are constant, we want to always accelerate our tax deductions, and we want to defer our income.

And the reason we want to do that is because of this present value calculation. If we can accelerate our deduction, then we can invest that money that we save, and it'll have a higher present value than if we take that deduction a year from now. And if we defer our income to the future and pay those taxes in the future, then we can pay those taxes with cheaper money, money that has a lower present value.

So when tax rates are constant, we always want to bring up the deductions, and we want to push off our taxable income. That's it. It's as simple as that. And because we're maximizing the present value of the tax savings from bringing forward the deductions, and we're minimizing the present value of the taxes that we're paying by pushing them off.

Now, I'm using the technical financial planner words for this, but this is intuitively true. So if the words are confusing to you, just think about this. If you have the--let's use IRAs as an example that most people are familiar with. If you have the possibility, if you're going to pay the same $100 of tax on the income--so let's assume that you're going to earn the income now, you're going to be at the same tax rate now, and you're going to be at a tax rate later.

If you're going to owe $100 of tax on--let's say it's at an effective--let's use 10%. Let's say you're in a marginal bracket of 10%. So you're going to earn $1,000. That means you're going to owe $100 of tax. Would you rather pay that $100 of tax today, or would you rather pay that $100 of tax in the future?

Future. So you want to accelerate your deduction and defer your income. It's as simple as that. The key, however, is we need to be careful of when our cash flows are coming in or going out. I'm not going to spend too much time on this, but it's not--it is as simple as saying, "Bring forward the deductions and push off the recognizing the income." But, by the way, recognizing income, that's another accounting word that means that recognition of income means at the point--we now are showing the income at the point we have to pay tax on it.

So we're going to push off the recognition of the income. We may earn it at an earlier period, but we're going to push the recognition back to the time when the taxes are triggered. If there is a large cash outflow that we have to incur now in order to get a deduction, then we need to run the math very carefully on that, and it's too complicated to do on the podcast, but just be aware of that.

So, essentially, any time you can accelerate a deduction without accelerating the cash outflow that you need to get the deduction, then this is going to be your best option. So can you actually do this? Well, yes, absolutely. First of all, any type of taxpayer who is a cash method taxpayer, you can often control when you're paying your expenses, and so that's a key number is when you are paying your expenses.

So individuals may do this when it comes to your property taxes. Let's say you're going to pay your property taxes, and you have the choice to go ahead and pay your property taxes two years' worth in December versus one in December and one in January. That would be an option that you have, and if those property taxes are deductible in some way, you may choose to accelerate that deduction.

This is very, very common in businesses. So in an accrual method of accounting for a business, then here is where you are going to--you have a little bit more-- you have a few more restrictions on you because in accrual, it's not just about when it's--in accrual accounting, it's not just when the income is--when you actually get the cash.

It's about when it's actually earned. But you may use an accelerated depreciation schedule for a depreciable asset. So a little tax tip for you. Have you ever heard somebody say, "Buy a heavy car," or you may have heard somebody say, "Buy a heavy luxury car." Let me explain. This would be a good example of accelerating deductions.

In this case, the deduction that we're accelerating is a depreciation deduction. And let me just give you a little bit of background, and I think you'll understand how you can use these tax strategies to measurably impact the quality of your life if you know what you're doing. So businesses often will involve a car.

So business use will often involve a car. If you were running a business, there's a car that's probably involved, and you are going to be using that car for business purposes. There are tons and tons--by the way, quick disclaimer. There are tons of details that I'm trying to avoid going deeply into because it just can't be done in audio format in a compelling way.

I want to give you big-picture ideas. Don't do anything with what I'm telling you without going and researching the current law. But take what I'm doing as an idea, and then think about it if it may apply to your situation. So businesses will often involve running a car. So if you were a business owner, and you are in--let's assume you're in a high-tax bracket.

I'm going to assume you're in a 30% marginal bracket. So you're in a relatively high bracket, and you're using a vehicle in your business. You have plenty of money. You're not worrying about what you're actually spending every month. You have enough money. Would you like to go ahead and have a nicer car?

And then because you basically--by running it in your business, you basically get a 30% cheaper car. If you can buy a luxury automobile, then you can run that luxury automobile and enjoy the 30% break that you get on the expenses that are associated with it. So business owners would do that, and they would run a luxury automobile.

Well, that would be politically unpopular, so Congress decided, "We're going to limit the deductions that you can take on a luxury car that's used for business." So we understand that you're going to have expenses associated with a normal car, but we don't want to allow you to deduct expenses associated with a luxury car.

We're not willing to let the tax code finance your luxury--your luxury--your luxury's expenses. So in 1986, they passed a law that said you cannot take--you cannot--they limited the-- excuse me--they limited the deductions that you can take on a luxury car that's used for business. Now, at that time, basically, the problem was that they--their definition of a luxury car was very different than what maybe your definition of a luxury car would be.

Basically, it would cover any car, even as little as $11,000 in 1986 dollars. So they didn't want to impact real business vehicles, like trucks. So they said that any car with an unloaded gross vehicle weight over 6,000 pounds, so over 3 tons, was exempt. So any car with a weight of over 6,000 pounds, then it would not be covered by those limitations.

So this opened up a--this opened up an opportunity that if your vehicle was heavy enough, then you could go ahead and deduct the full amount of it. And I'll get through some numbers in just a moment and show you how valuable this is. So that could be something like a van.

That could be something like a pickup truck. That could be something like a large SUV. That could be something like a Rolls-Royce. You might have some big Rolls-Royce, and it's more than 6,000 pounds. Is that a luxury car? Absolutely. But it was written with--there was an exception because it's more than 6,000 pounds.

So maybe you're shopping for a Range Rover, and you say, "Well, this is not a luxury car. It's more than 6,000 pounds." So people started doing that, and the tax benefits of that were awesome, just to be able to take the depreciation. And basically what happened is that there was--there is a section in the tax code that if you don't have to depreciate property, you can expense it.

And in general, there's a difference in business taxes between depreciation and expenses. So--or excuse me, yeah, between deducting depreciation and expenses. If you have equipment that is large and valuable, then you have to depreciate that. So what that means is that as the value of the equipment reduces, you can only take a small expense.

So if you buy $100,000 worth of equipment, you can't just write off $100,000 in the year that you buy it. You have to write it off based upon a depreciation schedule. For the simplicity of my show today, ignore the actual depreciation schedule and assume that it means that it's 20% per year for 5 years.

So let's say that you can write off $20,000 this year, then $20,000 next year, then $20,000 the third year, then $20,000, then $20,000. So basically this applies generally to real equipment, real property. Now, there's another thing, however, that allows you to expense certain costs. So there's a section in the tax code called--in the U.S.

tax code-- called Section 179. If you can put something in under a Section 179 expense, then that allows you to expense the full amount, the full cost of it, in the first year. And this can be helpful in something like computer equipment. So if you can get your computer equipment in under a Section 179 expense instead of in as depreciable equipment, it will save you on taxes now, so you're accelerating your deduction.

So what happened is that for a time, you could actually expense up to $100,000 of business expenses, and that $100,000 could be-- if your car were over a certain weight--then that $100,000 expense could actually be applied to your vehicle. So now, as a business owner, that allows you to purchase a $100,000 car for your business, a luxury automobile.

Because it's over a certain weight, though, it's not classified to be a luxury automobile. And in excess of that--and you could expense the entire thing, which means that you would save the $30,000 of taxes that you otherwise would have incurred in buying the car and using after-tax dollars. So this is an awesome strategy.

And in case you're wondering why I think that the tax-- and why I and most economists think that the tax code should be completely simplified, it's because rich people have the money to sit around and pay people to--well, pay people to sit around and think up this stuff. And poor people don't do it.

So I'm just giving you the information now. So people were taking advantage of this. It was a great market. I'm sure Range Rovers sold lots of vehicles. Hummer, Chevys, Suburbans--they should be over 6,000 pounds. These big vehicles, they did awesome. And so it accounted for major sales. So then the tax code changed.

So then in 2004, Congress updated the tax code, and they changed the limits. And instead of it being 6,000 pounds, then those limits became 14,000 pounds. Well, now that disqualifies basically anything except an actual truck. And there were still some limits for vehicles between 6,000 and 14,000 pounds, but it's a much lower number, and there's a much lesser pool.

So now if you want to get your vehicle depreciation, you're going to have to drive a big old truck every day, not a 6,000-pound Rolls-Royce. This could still be applied to something like a heavy pickup truck, and this would be valuable for you if you were running something like a construction company.

If you were deciding between a half-ton pickup truck and a one-ton pickup truck, it would be valuable for you to know. So the laws changed. But here would be--and even with the limitations, though, the knowledge of this-- I'll give you one example here, and I'll read from half of a paragraph from-- let's see, which book is this?

This is Jeff Schnepper's "How to Pay Zero Taxes" book, and he gives some great examples here. But from page 737--and this is last year's edition--it says, "In 2012-- so if you buy a new"--this is for 2012-- "If you buy a new $60,000 SUV with a loaded gross weight over 6,000 pounds, you can expense the first $25,000." So because it's over 6,000 pounds, you can expense the first $25,000, but you can't expense the full amount like you used to be able to.

"Half the remaining $35,000 cost," which would be $17,500, "qualified as bonus depreciation. You also get 20% of the leftover basis," which would be $17,500, "or $3,500 as regular depreciation. Use the car 100% for business, and you get a $46,000 first-year deduction." So this wouldn't apply to used vehicles. So the example here is if you are running a business, and let's say that you're going to buy a $60,000 SUV-- let me pause here and run the math real quick.

Okay, so I ran the math, and basically if you were to follow these rules, it would allow you to buy a new $60,000 vehicle for a cost of--out-of-pocket cost--of about $46,000 because of about $14,000 of savings due to a $46,000 first-year deduction and a 30% bracket. So this would be a good example of how, when someone's in a high bracket, by accelerating the deduction by using this strategy, and this would also be an example of a shifting strategy, of a conversion, converting expenses if you could convert them over from the personal checkbook over to the business checkbook, this would be how you can make a major savings.

It allows you to buy a new $60,000 car for a cheaper price than some other people might pay for a used car because all those rules are only applicable to new cars. So hopefully that's a good example to say that this stuff actually does matter. I always get scared that I'm getting too deep, and I don't know if I'm getting too deep or not.

You tell me if this was too deep or if this is good. So you can accelerate deductions, and if you can accelerate deductions, that will be extremely valuable. You can also defer income. So if you can defer the recognition of income without deferring the actual receipt of it, that would be a really amazing thing as well.

So this is why IRAs are such a useful tool because the IRA law is explicit about the fact that you can defer recognizing the income for tax purposes without deferring receiving the income. So you can actually receive the income. You have constructive receipt, which we'll talk about in just a minute.

It's on my notes to go over constructive receipt. You have the receipt of the income so that you can go ahead and invest it. So you can invest the money because you have received it. It's in your 401(k) account, but it is not recognized for taxes. And I'm going to go over constructive receipt in a minute because it'll fit in better.

So that would be a good real-world example. So that finishes up as far as the timing strategy when tax rates are constant. Well, what about if tax rates are going to change? This is a problem. So this is why financial planning is in some ways a science but is in other ways an art, and why financial planning has to be integrated with economic analysis and it has to be run personally.

When tax rates are constant, it's easy to do the math, but we don't know what tax rates are going to do. In the last 25 years, Congress has changed tax rates at least nine times. So if you go back and look at it, you'll see what are the maximum tax rates that are applied to ordinary income or capital gains.

They've changed no fewer than nine times. So how do we know what Congress is going to do? Well, we don't. The marginal brackets changed just this last year, and depending on what you think about the political climate of this country, will it change more in the future? I don't know.

I bet it's going to change. Which way is it going to change? I don't know. Now, here's where you'd have to look at an individual situation if you're talking about individual income taxes. Are you in a very high bracket or are you in a moderate bracket? The reality is that effective brackets haven't changed much for the majority of people, but they have changed at the margin.

So this is where you have to look at an individual. So is the overall rate going to change, and what about your rate? So is your rate going to change because you lowered your income, because you raised your income, because you changed jobs, because you retired, because you started a new business, because you're pursuing a strategy of early financial independence?

Your own personal rates are going to be a major factor. So we've got to figure out, are rates increasing or are rates decreasing? And this is a big question, because depending on if rates are going up or if rates are going down, then this is going to make a big difference as far as should we bring income forward or should we defer income.

In general, the higher the rate, the higher the tax rate, the higher the tax savings for a tax deduction. The lower the tax rate, the lower the tax costs for taxable income. So everything being equal, in general, you would want to recognize your deductions during high tax rate years, and you would want to recognize income during low tax rate years.

So all things being equal for retirement, if you are going to be at a higher tax rate while working than you are in retirement, which, by the way, most people will be, you're going to want to recognize more of your deductions during your working years, and you're going to want to defer your income towards your non-working years.

Now, is that precise? It's precise if you know what tax rates are going to be and what your personal tax rate is going to be, but the problem is you don't know that. Now, you can do some calculations, some in general calculations, but ultimately this is incredibly personal, and that's why you have to look at the personal numbers.

If tax rates are increasing--this is the really challenging one-- because if tax rates are increasing, you have to do a complete calculation, and you have to figure out what is the actual calculation. There's no rule, because you would look and say, "How much are the tax rates increasing? Am I going from a 25% bracket to a 28% bracket?" And then you would calculate the present value of a tax deduction or calculate the value of the income.

So you have to do the calculation, and I can't give you a rule for that. If tax rates are decreasing, then you're going to want to bring forward your deductions, and you're going to want to push back and defer your income, depending on whether rates are going up or rates are going down.

Are there some general strategies that you can pull from this? I think there are, and that's why most financial planners would rather you take deductions now rather than in retirement. It's very hard to get the tax code to say that you're going to be in a higher tax rate at retirement than during your working years.

It's very hard to get that to happen if, indeed, tax rates stay similar to what they are now or close to what they are now. However, is it possible that tax rates could change dramatically? Sure they could. Brackets could change, absolutely. And so is it likely that you're going to be?

I don't know. It would depend. Are you making $5 million a year or $50,000 a year? There's no political will in this country for-- or, frankly, most countries-- to move the bulk of the tax burden onto people making $50,000 a year. There is a tremendous, it seems, political will to move the bulk of the tax burden onto people making $5 million a year.

So you would have to consider this for yourself. So let's wrap up now with a couple of challenges and then a couple of examples and then a couple of challenges and a couple of examples. So timing strategies do have limitations. One of the limitations, for example, would be, in general, if you're going-- let's say that you're going to invest in an asset.

You're going to invest in stocks. You can defer your income. You can defer recognizing the income on the stock if it's going up in value until you sell it. But you can't defer it any longer until you sell it, assuming it's held in a taxable brokerage account. So you can't let the tax strategy wag-- you can't let the tail wag the dog, so to speak.

You can't let the tax strategy dictate your investment decisions. You have to make your investment decisions and then figure out how to make them appropriate to the tax strategy. And when I explain something like that, you can see, then, how valuable some of the tools like tax-deferred accounts can be because a tax-deferred account does allow you to-- if you can do all of your trading in an account that does allow you to defer the income completely, then--so such as a Roth IRA.

Let's say you can do all of your trading inside of the Roth IRA. Well, then now you can ignore the tax consequences of your trades, and you can buy and sell, buy and sell, buy and sell, because the tax consequences are already squared away. But then again, you have to pay income taxes on that money.

It may be better for you to use--if you're using-- you have limits as far as who can participate in those accounts. So there's a lot of things interplaying here. And in fact, I forgot--I was trying to stay away from using U.S.-centric examples. If you're an international listener, today's show should be completely valid to your local tax environment because the concepts are the same no matter what tax environment and no matter what tax authority you're dealing with.

So you do have some limitations. And then you get the whole question of can you afford to defer income. If you are a single mom and you're raising--you're a single mom with three kids and you're earning minimum wage, you probably can't afford to defer income. So this whole idea of Joshua has this fancy tax strategy of, "I'm going to defer my income," this is pointless.

This doesn't do any good for you because you need the money now. But if you don't need the money, then there's a lot that you can do. I was working on some tax strategies for an early retirement person, a popular early retirement personality, and I was just struck by how if you are able to save a huge percentage of your income, man, it allows you to be so efficient.

It's amazing. If you don't need the money that you're earning, it's amazing how efficient you can be from a tax flow perspective. So consider the non-tax scenarios and the tax scenarios. You've got to always consider both of these things. Are you going to defer income forward or are you going to pull it back?

And I want to finish with constructive receipt, and this is both a limitation but an advantage. So there is a doctrine in tax law that is called the constructive receipt doctrine. And basically the idea is that if you receive money, if it is yours, you can't pretend it's not.

So you would think if you're an individual, say you're an individual employee, then you would think, "Well, if someone gives me money, then, yeah, I'm going to go ahead and get it." But here would be the example. So if I give you a check on December 1, 2014, and I'm making a payment to you on December 1, 2014, when do you receive the money?

Do you receive the money on December 1, 2014? Or if you just simply put the check in your drawer and don't cash it until January 10, 2015, did you receive it on January 10, 2015? Or did you receive it on December 1, 2014? Or just whatever the date I said was.

Which year did you receive it in? Well, the answer is that you received it when I gave you the check because you must report your income when the income is received, whether it's received in the form of cash, received in the form of property, or received in the form of services.

You must recognize the income when it is actually or constructively received. And so constructive receipt means that you are legally-- you are assumed to have received the money if the income has been credited to your account or if the income is unconditionally available to you or if you are aware of the income's availability to you and if there are no restrictions on the taxpayer's control over the income.

So let's say that I give you the check. That means that you've received it. I've given you the check. It's unconditionally available to you. You're aware of it being available to you, and there's no restrictions on your control over the income. So what if I put the check in your box?

Let's say that you work for me as an employee and I decide to put the check into your box and you're going to receive a bonus check at the end of the year, and I deposit it there on December the 20th. But you don't want--and it's a $100,000 bonus-- but you don't want to get the $100,000 bonus, so you just decide, "You know what?

"I'm going to go away and I'm going to take the last two weeks of the year off, "and I'm not going to go into work and pick up the check, "and I'm going to pretend I don't know that it's there." Would that get you out? No. Under the doctrine of constructive receipt, you have control over the income.

You could go into your box at work or into your desk and you could pick up the check. So even though you said, "I'm not going to go in and get it," you still got it. You still received it. So now, does Congress catch--excuse me-- does the IRS catch most people that do things like this when they push things forward or push things back?

Probably not. There's a very low audit rate. Many people do this all the time. Does the IRS really care if you are going to screw around with your $5,000 end-of-year bonus check? I don't think so. Probably--I mean, they care if they're auditing you, but you're not a--you're not a big target.

What about a $5 million check? And that's where the IRS is going to get involved. So this doctrine of constructive receipt will actually influence just about all of our planning. And when we get to talking through financial planning strategies such as, let's say, non-qualified deferred compensation programs, which that's probably a mouthful for you, but a non-qualified deferred comp, one of the things that we're going to get to is you figure out who has the money.

Has the employee received--constructively received the money, or does the employer still have it? And when you, as a business consultant or a benefits consultant-- when I'm designing a plan-- let's say I'm designing--let's say I'm working with a physician, okay? And this physician has a small independent medical practice. Let's ignore group practice because that's more complicated.

And the physician is making $500,000 a year. And I'm sitting here, and he says, "Joshua, I need help with my tax planning strategies." Well, frankly, if you're earning $500,000 a year, a 401(k) doesn't get you that far. A $17,500 that you can defer may be an additional $5,000, so a total of $22,500 that you can defer out of your income if you're over the age of 50.

And a business--let's see what that number is. So $22,500. So this guy says to me, "Joshua, great. "I can defer a total of 5% of my income into-- is that right, $500,000? No. Yeah, right. So I can defer under 5% of my income there. That doesn't get me where I'm trying to go.

I'm 55 years old, I'm a successful physician, and I'm trying to defer my income into-- I'm trying to build it for retirement, and I'm just sick and tired of this tax bill that I have. Well, $22,000 doesn't get me there. So let's say then that I can go ahead and I can say, "Well, let's design your 401(k) plan properly, and let's max it out.

So let's design it where instead of the $22,500 limit, let's use the other sections of the code, and let's get you to the ability to defer $17,500 and to contribute an additional amount." So you can contribute $50,000, and then on top of that, you can do your additional $5,000 catch-ups.

So now we're at a point where we're doing $55,000 into your 401(k) plan. So he's a little bit happier with me. He's got the fruit. All we need is just simply to strike the documents appropriately. This is easy, easy to do. Now he's deferring--you know, he's basically taking 10% of his income.

But he says, "Look, I'm 55 years old. I still can't afford it." Well, now we move over into the world of non-qualified deferred comp. And so what this means is saying, "How can we set up a plan to allow you to defer-- can we do a couple hundred thousand dollars a year?" Well, the answer is yes, and we are not going to go into it today, but we can set up a plan so he can defer $250,000 of income into this plan.

We've got to set it up with him and his employees. We've got to make sure that we're very careful in how we do it. But we need to make sure that he does not have constructive receipt of the money. The money is not available to him. Because if he has constructive receipt of the money, then he's going to be taxed on it.

So we have to make sure that this is still an asset of the business and not his personal asset. This is still--that we have to make sure that this is available to his creditors. So if his business were to be sued, then we need to make sure that this retirement plan is available to his creditors.

And this brings in--if you're a financial planning student, this would be why you can only do non-qualified deferred comp with a corporation, with a C corporation. You can't do it with an S corporation. So if you're taking a CFP exam, if you ever see S corp and non-qualified deferred comp, you know that's wrong.

Non-qualified deferred comp must--is only useful in C corporations. And the reason is because it has to remain an asset of the business under the doctrine of constructive receipt. Or you could--we'd have to make--so then you would--so you say, "Well, can we get some other protection in place?" You know, "Could we set up a rabbi trust?" is what it's called.

If you're a financial planning student, you need to understand what a rabbi trust is. So can we pull this money out into a trust? Yes and no. That's a show for another day. I went too deep. I didn't mean to go into that. My point was to say this.

In tax planning, you only need to understand the doctrine of constructive receipt. And if you understand the doctrine of constructive receipt, you now understand why it's important when you receive the income and you can--and you receive the income when it is available to you as a person. So that is income timing strategies.

Man, I'm done. I hope that that was useful. Again, I would crave your feedback on these shows. If you're enjoying them, let me know. If you're not enjoying them, let me know. And I don't promise to change anything because you let me know, but I do want to know because what I want to do is I want to strike the balance.

I want to kind of provide something for everybody, but I don't want you to listen to this and get my show and get the same old, same old-- I want you to listen and have 18 tips for couponing every day because the reality is there's more that you can do with that.

And hopefully you feel--hopefully you are smarter today. Hopefully you are more educated about taxes and about income timing strategies. Ah, sorry, last thing I wanted to say. Income timing, you can do some wizardry with income timing strategies if you are off the mainstream, or even if--you could do some amazing stuff with income timing.

If you haven't checked out what the Madfientist is doing over on his site, Brandon is the Madfientist. His site is madfientist, F-I-E-N-T-I-S-T dot com. All of his strategies are--most of his strategies are income timing strategies. And he interviewed--there's another blog you should check out. Let me make a note to make sure I get it in the show notes called Go Curry Cracker, a crazy blog name, but these guys are writing a lot about taxes from an early retirement financial independence--Go Curry Cracker--and Madfientist.

And check out their writing. But all that they're doing is income timing strategies. So what I mean is that Brandon, for example, he is writing this-- he has this awesome case study on his site which is really accessible to you, and he goes through and shows how if you can earn a reasonable wage and if you can live on a very small amount of it, you can use some very straightforward 401(k) deductions, HSA deductions, IRA deductions.

You can use some very straightforward tax planning techniques to push off the timing of the income to a future date. Then you can retire at an early age. You can use the transition from a 401(k) or from an IRA into a Roth IRA, stay underneath the tax brackets, and you can basically get the income with zero taxes associated with it.

So he's doing a really great job of showing how this type of strategy can work in that scenario. That's not going to work if you're earning $5 million a year and you're listening to my show and saying, "How can I do this? We need to use something else, but we're still going to be using an income timing strategy." So hopefully by understanding this strategy a little bit more and having some good examples, then you can start thinking to yourself, "Should I bring my income forward or should I defer it?

What's my rates going to be? Are my rates going to be constant? And if my rates are constant, then I'm going to defer income and I'm going to bring deductions forward. If my rates are increasing, then I'm going to do the math. If my rates are decreasing, do the math.

Excuse me, if my rates are decreasing, then I'm going to bring deductions forward and move income off." And hopefully you can start to think this way. Hopefully that's a good place to end on today's show. I want to know if you've heard this anywhere else in any of the podcasts, let me know.

If you've headed to luxury automobile depreciation, non-qualified deferred comp, and Roth IRA early retirement strategies, I hope I didn't lose you. I hope I didn't lose you. My disease is trying to pack too much. I'm trying to make these shorter and make them more doable. Hey, an hour and seven minutes right now for the recording.

That's pretty good. I'm pretty proud of that. Going to have some more shows lined up for you this week, and I'm going to continue these tax planning shows little by little as time goes on. We're going to do some insurance stuff. We're going to do some investment stuff. We're going to do some college stuff.

I've got a bunch of these shows planned. I thank you for listening. Two action steps for you, three action steps for you. If you've enjoyed the show or if you hated the show, let me know. RadicalPF is me on Twitter, so shoot me a tweet @radicalpf or shoot me an email at Joshua@radicalpersonalfinance.com.

Let me know what you thought of the show. Thing two, I would request, please go and rate the show on iTunes. If you hated it, say, "I hated this show." If you loved it, say, "I loved this show," and that rating would be so, so helpful to help people find the show.

One of the things that when people are looking at shows, they look a lot at the ratings, and the ratings and the number of reviews makes a huge difference. So please, I would just ask you, if you want to support the show, go and leave a rating on iTunes.

And finally, sign up for the email list. I'm going to be, as soon as I'm able to, little by little, I'm going to be adjusting the email list a little bit to try to bring more content and make it look nicer as I'm able to. But for now, go and sign up for the email list, and you'll get the full, complete show notes every day, both for your files with the resources, recommendations, and also so you can hear about the show and see if it's a subject that you're interested in that you want to listen to or if it's a subject that you want to skip for the day.

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