The holidays start here at Ralph's with a variety of options to celebrate traditions old and new. Whether you're making a traditional roasted turkey or spicy turkey tacos, your go-to shrimp cocktail, or your first Cajun risotto, Ralph's has all the freshest ingredients to embrace your traditions. Ralph's, fresh for everyone.

Choose from a great selection of digital coupons and use them up to five times in one transaction. Check our app for details. Ralph's, fresh for everyone. Radical Personal Finance episode 75. Today, we have some awesome questions, a couple of compliments, a few clarifications, and one important correction. I got something wrong yet again.

Welcome to the Radical Personal Finance podcast. My name is Joshua Sheets. I'm your host. Today is Friday, October the 3rd, 2014, and today I have an amazing and packed Friday Q&A show lined up for you. I think you're going to have a lot to think about after today's show.

I hope you enjoy it. In case you're wondering, the reason why I always play that music there is they say that when you start broadcasting, you're supposed to have high energy and be enthusiastic, and sometimes I'm not. So, my music, my intro music, and my theme music always gets me dancing.

And so, that gets the show started off well as far as on a high energy. So, I hope you enjoy it like I do. Even though I hear it every single day, I still dance to it and I enjoy it. It's going to sound even better next week, and I'll let you know why when I get it sounding better.

Today, Friday Q&A show, and I've got a good one lined up for you. And let me tell you right now, this show is going to be long, and I think it's going to be great. But, those of you who complain about the length of the shows, this show will be long.

But let me tell you how to make it shorter, and let me tell you what the topics are that we're going to cover. So, I'm going to answer a number of questions. So, on my outline here, I'm going to answer a question from Beth about how to plan an appropriate amount of life insurance to plan for her 14-year-old son who has autism.

How do you do that? How do you do life insurance planning when you know you're going to have a need that goes on forever? We have a question from Bobby Joe, who is interested in what it's like to actually be a financial planner. We have a question from Julian about what software or what tools to use when doing your own planning.

Should you do it with paper and a pen, or should you purchase a software package? I'm going to correct an error that I made while correcting a previous error in the 401(k) show. I've got just a nice self-serving compliment from Derek in Canada that left a voicemail and sounded really good.

I'm going to play that for you. That's about a minute. I've got a question from Alejandro, who says, "What do you do when you can't do anything more about your financial plan right now?" I've got a voicemail question about ethical investing. I've got some comments on the 4% Rule podcast.

I've got a question on how did I keep from smelling like a pig when I was living in my car for two weeks? That one will be fun. And then I'm just going to close out with a comment on the impact of hobbies. Some of these questions are going to be in-depth and technical.

Some of them are going to be short and a little bit fun, but they're all important. I will make sure on today's show that I go through and put some time stamps in. I don't usually make the time to do that, but today, since I expect this to be a lengthy show, I will make sure that in the show notes, if you're interested in just one of those questions, in the show notes, I will put the time stamp to the question so that you can navigate right to that amount of time.

But give it a chance, because I think you will enjoy--I think you'll find all of these questions useful. And since I've been out of town, I haven't done one of these Q&A shows for at least two to three weeks. These are all the questions that have piled up while I've been gone.

And I've done a lot of work as far as just preparing my thoughts, so I think it'll be good. So also, this is going to be the first time I'm playing on the show some of these voicemail questions that I've been receiving, so I am excited about doing that.

Thank you for those of you who have left me voicemails. I think that adds something to the show, to be able to kind of hear your voice. I think it adds something. If you would like to leave me a voicemail with a question for the show, then go to the site, RadicalPersonalFinance.com.

You can go on your phone or on the computer. Click the "Send Us a Voice Message" button. Leave me a voicemail. You can feel free to leave me a question. Leave me a comment. I like the questions because then I can answer them on these Friday shows, and I'll be happy to have any question you can think of.

I'm also happy to answer questions via email as well, so sometimes a couple of these you'll hear me just reference in email. So let's kick things off with Beth. Beth, here you go. Hi, Joshua. My 14-year-old son has autism, and I need help determining how much money we need to save to make sure he's well taken care of when my husband and I are gone.

So far I have in place a last-to-die survivorship life insurance policy for $250,000 and over $1 million of term life in place for my husband and I combined to carry us through until around age 67. So we feel like he's covered if we both die before the life insurance runs out.

But assuming we live past 67, my question is how much money should we have saved to make sure he's well taken care of? I'm calculating his Social Security benefits to be approximately $460. I'm figuring $700 reduced by one-third because he would be living with others who care for him.

He has two sisters and loads of cousins who we would like to properly compensate for room, board, and companionship. We would love to stop traditional 9-to-5 jobs as soon as possible, but we really want to make sure all three of us are covered. And by the way, I especially liked your recent episode, "55." You really got me thinking, and I've recommended that show in particular to a couple of friends.

Thanks for all you're doing. So Beth, thank you for the question. And Beth was actually the first question that I received, so that was exciting. It took me forever to set up the voicemail line, and then once I had it set up, then it was a week or two before someone finally called in.

So I was excited for that. Thank you, Beth. This is a question that is increasingly important. It seems--I can't quote statistics, I'm not sure about this-- but it certainly seems as though we have an increasing number of special needs cases, and it's a very important area of financial planning.

And there are many planners who really completely specialize in special needs planning. To begin with--I'm going to talk you through this in detail, Beth, and also for the audience. If you don't have someone with special needs, don't tune this out, because you'll find this to be a valuable input on how to do financial planning.

But if you do know someone with special needs, this, I think--my goal is to give you a framework for how to think of. I've got to start with a slight disclaimer, though. I'm not an expert in special needs planning. I have thought about really working at it, and in some ways I'd really like to be.

I would encourage you in your planning to find somebody who's an expert. Now, I don't know how to tell you how to find somebody who's an expert in financial planning for special needs. When I thought about doing it, I first started thinking about it, because I thought, "Well, you know, I can just do this great job, and then I can sell big life insurance policies, and I'll make lots of money, because people need lots of life insurance when they're doing special needs planning." And then I started studying it, and I realized it was far more complicated than I knew.

And I don't know anybody in my family or have a very close connection to anybody who has special needs, so I don't have that kind of personal connection to it. I have met some planners who do, and let me tell you, this is an incredibly important area of planning.

If you are a financial planner, and I believe if you're interested in learning and working in an area where you can have an amazing impact, consider working in special needs planning. I think it would be a great specialty, and if I were to specialize, it would be one area I would seriously consider specializing in again.

But I would need to work a lot on my knowledge of some of the specifics. I'm simply not competent in the specifics for each state and all of the little things that you have to make sure that you get done. I'm competent with the big picture, but not with the details.

And then, as I just mentioned, state-specific means a big deal. So I don't know what state Beth is in, and I'm actually glad I don't know, because if she were in Florida, then I would go where I shouldn't go on the radio. So let me encourage you, find somebody in your state who is an expert in this area.

State law matters. It makes a big difference. So I'm going to answer your question in two lines of thinking. I'm going to give you the simple answer, and then I'm also going to give you some of the complicated answers. So in many ways, the answer to your question is very, very simple.

It really is. And so let's start with, what do you mean simple? Well, if I go away from the complications of the special needs, and I just say, "What is actually our problem? Here's the financial planning problem that we have." Basically, for your son, for your 14-year-old son, we need to provide for him an income for his entire expected lifespan.

And you didn't tell me that we have any reason to expect that that would be less than an average person. So I don't know anything about autism that would cause somebody to have a shorter than expected lifespan. So if he's 14 years old, we may be planning from, who knows, to age 70, to age 50, to age 70, to age 90.

I don't know. I'm going to basically just plan for an entire lifetime would be my idea. And so essentially what you need to do is provide for him the income that he needs to take care of his support, which he's not able to provide for himself. I don't know where he is on the autism spectrum.

I'm going to assume that he needs full support, just simply because that would be the worst-case scenario. But the planning is no different, the process, just the numbers are different, if he's able to provide some of his own support. So let's assume that we need to provide an income for him and provide cash flow for his entire lifetime.

Well, what we need to do is we need to figure out what is the cash flow that we need on a monthly basis for the rest of his life, subtract out what is the cash flow that's available on a monthly basis for the rest of his life, and that will leave us with the cash flow that we need to provide for him to cover the lack, the difference, to cover with life insurance in your example.

Now, while you and your husband are alive, then clearly you have your income, which you're using to provide for his needs. So now it sounds like that's earned income. You're working. It may be in the future. It may be investment income. It may be retirement income. It may be pensions or Social Security that you have for yourself, and you have your investment income from your own investment portfolio, whatever that is.

So while you're alive, you're providing the income for him. And then when you die, you have an asset base that will be available for him. Now, the way that you calculate the amount of life insurance need is always going to be the same, no matter whether it's special needs or not.

The only thing that's different with special needs is that the amount of time that you need to provide the income for is a much longer period of time, because instead of being something like, let's say, as an example, I'm doing life insurance planning for your husband. You're saying, what happens if my husband dies?

I'm 10 years from retirement. I need to cover the 10 years of income from retirement. I'm going to be short $50,000 a year. So because I'm going to be short $50,000 a year for 10 years, then basically I need something like $500,000 of cash. And then you factor in whatever the investment return is.

For the sake of simplicity, let's assume for a moment that we don't need to worry about investment return over those 10 years. We just have that $500,000 of cash. So that's how we calculate it for your husband. And to calculate it for your son, it's no different, except that we have a much longer period of time.

We basically have 70 years of time. That would take him to 84 years old. And I frankly don't know what life expectancy to use. I'm going to use that 70 years just because it makes sense to me, and I think life spans are increasing. But I could be completely wrong on that.

So all you do is just simply do a needs analysis and say, "What's the total amount of assets that we would need to have invested in order to provide him with an income for 70 years?" Now, when you get to the point of 70 years, it's far longer than the point where we're going to normally plan to use it up.

So we're not going to really do an annuity calculation. We're probably going to plan on just simply what percentage of a portfolio could we provide into perpetuity without invading the principle of the portfolio. Now, what number to use in that situation, it's going to depend on your investment portfolio.

It really is. And I don't know anything about your investment portfolio. For the sake of this example, I'm going to use a 3% withdrawal from a portfolio. And I think that 3% would be a fairly decent number to use as a conservative number to say that if we had an investment portfolio that was well invested, that's providing for an income, then we could take a 3% real return and use that on our numbers.

So the word "real return" means 3% net of inflation and net of taxes. That's what I'm going to use it as in this scenario. So our actual annual return from the portfolio may be higher, and it will be higher, but we're going to adjust for taxes and for inflation.

And so we're going to use a 3% real return. Now, you need to sit with your investment advisor if you have one, and I would encourage you to consider consulting a few. You need to sit with your investment advisor and make sure that you have a portfolio that can reliably provide that return.

If you choose to do this yourself, you need to make sure that your portfolio that you've selected for yourself is going to reliably provide that return. You can do this yourself. I am more comfortable having people talk with professionals because I think there are a lot of -- especially in special needs planning.

But you can do this yourself. You can figure out if you're skilled with portfolio managing. You decide the type of portfolio that you need. You can set this up. So let's say that your son needs $3,000 per month to provide for his support. I don't know what the number is.

You can plug in your own calculations. So if he needs $3,000 a month times 12 months, that would be $36,000 a year. So if you take $36,000 a year and the way you do this calculation is you take $36,000 and you divide it by .03, and that will give you $1,200,000.

So if you have a portfolio of $1,200,000, that portfolio could reliably provide for you $3,000 a month of income essentially into perpetuity. So you know that no matter how long he lives, he's going to be taken care of. If you can plan on the $500 a month from Social Security, then that lowers your need to be $2,500 a month.

So you take $2,500, multiply that times 12, that equals $30,000, and divide that by .03, and you find out that you need a portfolio of $1,000,000. So that's our target goal is a portfolio of $1,000,000. Now here's the trick, and here's where it gets a little bit tricky. The fact is that you're planning for your lifetime and also for his.

So this cash flow that we need for your son is in addition to the cash flow that you and your husband would need to provide for your retirement. So you're going to need to budget the money for your retirement, but instead of being able to have the luxury of saying, "My goal is to die with $0 of net worth," your actual goal is that you can't die with anything less than $1,000,000 of net worth, in my example.

So you've got to make sure that whatever your retirement plan looks like, that you have a high degree of confidence that when you die, you die with a portfolio of $1,000,000. Now I don't know what your expenses are. I don't know what your income is. I don't know what your savings are, and I'm glad I don't, because this is not meant to give you a specific answer to your question.

I want to talk to you about how to think it through. But when you are doing your financial planning calculations for your retirement, you're figuring out how much of a portfolio you need, you need to make sure that you plan to have a terminal value of $1,000,000. And that $1,000,000 will also just need to make sure that's adjusted for inflation, the $3,000.

So that's the key. Now there's a bunch of ways that you could do this. For example, you already own a life insurance policy. So you already own a $250,000 second-to-die life insurance policy. For those in the audience who are not familiar with a second-to-die life insurance policy, if you've never heard that, what this policy is, is this is a whole-life policy, and it could be either a whole life or a universal life.

Let's call it a permanent life insurance policy. So this is a permanent life insurance policy, and the policy is based upon two lives, the lives of Beth and the life of her husband. And so the policy will pay out upon the second death. So if Beth's husband dies first, there's no policy payment.

But then when Beth dies at the second death, then that life insurance policy will pay out the $250,000 benefit. So life insurance is a really useful tool for financial planning for people with special needs. So for example, if the goal was, "I need a $1,000,000 life insurance policy," you and your husband could buy a $1,000,000 second-to-die life insurance policy, and then you would have the confidence of knowing that whenever you die, no matter when, there's always going to be a million dollars of cash available.

That million dollars of cash can fund his special needs trust, which we'll talk about in just a minute. That million dollars could go in there, and then that could provide for him an income of a 3% real income over time adjusted for inflation over his lifetime. Now, it's probably unlikely that you need to do the whole thing with life insurance.

The prices on a second-to-die life insurance policy are pretty good compared to on an individual. Because of the two lifespans, they're a lot easier to afford those premiums. But it's probably unnecessary simply because I'm sure you have other investments and you have other assets. You probably own a home, and you would have other retirement assets.

You'd have other 401(k) assets, things like that. And so the way that you would do this is you would look at those other assets, and you would figure out how much of these other assets are going to be around. So maybe you have a home that is worth $500,000, and you say, "Realistically speaking, we're always going to live in this home, so we're going to count on that." And conservatively, it's worth $500,000.

We're going to be here until we die, and then when we die, we're going to direct the executor of our estate to sell the house, and then to put this money into the trust for your son. Well, that gives us $500,000. Many things that could go wrong with that.

I'm not going to pick it all apart, but that would give you the $500,000. You may have a substantial investment portfolio, and you may run the projections and say, "With a high margin of safety, we're going to be able to save and invest, and given a reasonable rate of return on our investments with a high margin of safety, we're going to be well on track for our retirement.

And so we think that we're going to make sure that we're going to have at least a couple million bucks left in our investment accounts when we die. We feel pretty good about that." So you could do this entirely with investments. The trick is that it's probably going to be a balance of them, because there are many things that can go wrong.

The problem with doing it all with life insurance is that the returns on the death benefit of your life insurance policy are probably not going to be as high, just simply due to the nature of the life insurance policies, as the returns you might be able to get in an investment account, in your 401(k) and off of your portfolio.

In general, a portfolio of all stocks is going to have a higher average ending balance than is your life insurance policy. But the returns on that stock portfolio are going to be fairly volatile, and depending on your distribution strategy, you may wind up into a time where at your death, that portfolio may be diminished in value.

And so the life insurance would be an important component. I would probably do a combination of these. And where that combination would be, I don't know. It depends on your financial situation. If your financial situation is tight, you don't have millions of dollars set aside for retirement, you're working and you're funding for it, but you're going to have to keep on working longer, you're going to be doing other sources of income, then that's going to affect it.

It's going to be very different planning, depending on what your actual situation is. So the answer to your question of how to calculate it is essentially that simple. And how you structure the portfolio is going to be up to you. You could do this with a portfolio of stock investments.

Maybe you and your husband own a portfolio of rental houses, and you have, say, five rental houses. And you could direct those rental houses to be transferred into a trust. You could designate a trustee who will take care of the property management, and then that portfolio of rental houses could provide the stream of income for your kids.

You could do something like when you and your husband retire, you could have a million-dollar second-to-die life insurance policy. You could have all of your money coming in in annuity streams, and you know that you have income that will last you as long as you live. And you could have a life insurance policy that guarantees for your son's needs.

It's up to you. So that's the big picture. That's the long-term goal. But now we've got to look and say, "Well, where are we at?" And so for the purpose of this analysis, I'm going to assume that you're still in the building stage. So you're still in the stage of we're working, we're saving money, we're figuring out these numbers, and we're trying to fund a portfolio that's big enough to provide for me and for my husband at our current lifestyle, and we've got to make sure that it ends with a million dollars.

So we want to stress test that. We've figured out what would be an appropriate lifestyle for you to live in retirement. We've figured out how much you're earning, how much you're making, what your rates of return are, with just some very simple calculations. It's very simple for your planner to do.

And you figure out, are we on track? And if we're on track, what could happen to us that could knock us off track? So you could die early, and that's where the life insurance comes in. So that's why you have the term insurance. So in general, term insurance is going to be your best bang for the buck for a temporary life insurance need.

So you mentioned that your policies go forward through the age of 64. Well, you need to make sure that you sit down and calculate or have your planner calculate for you how likely is it that you're going to be on track up through the age of 64. So that's where your life insurance comes in.

Here's another big risk. You could get disabled. So you need to make sure that you have a plan if you or your husband were to get sick or hurt and not be able to work, but not die. This could be a big deal. Disability derails many, many financial plans.

And this could keep you from being able to leave the million-dollar portfolio that you need to leave for your son. I would encourage you to make sure that if you stress test that. If not, you need to make sure that you have disability income insurance in force. You or your husband could have the normal costs of care for individuals without special needs.

You or your husband might need long-term care help, help with long-term care. You may get older. You may become frail. You may need some help. Well, that could be really challenging. Let's say that your husband were to need some care around the house, and your son also is in need of care.

That could be very, very burdensome on you, especially if that were to happen when you're 85 years old. So I would recommend considering that and investigating your options for long-term care. You may purchase some long-term care insurance. You may set aside an additional fund for that. You may talk with your daughters, and they may agree that we're willing to provide the care so that if you get in that situation, we're willing to take the steps necessary to make sure that both you, our parents, and also their brother is taken care of.

You could have higher than expected health costs in retirement. Most retirees have higher than expected health costs, so you need to make sure that you have adequate health insurance. You could simply lose your jobs, so that's where you would need to make sure that you have savings accounts set aside.

You could get sued, and so if you get sued and you were to lose a lawsuit, that could be devastating, so you need to make sure that you do prudent planning. Your house could burn down, so you plan for that, et cetera. So the key is all those scenarios that I just said are the normal scenarios that we would stress test in any financial plan.

It's just that the stakes are a little bit higher for you, and because you have to wind up with that ending balance of the million dollars, the costs are going to be a little bit higher for you. The costs of you have to save enough that you have the extra million dollars, when some people could spend that down, or you have to cover the costs of the life insurance policy throughout your retirement, and that's a monthly cost, so that has to be covered with additional assets.

But in many ways, it's no different than what other people do. That's just the normal financial planning process. We figure those numbers out, and then we come back and stress test it. It's just we have higher stakes. I hope that helps as far as how to calculate the amount of insurance.

The key summary point that I would make is I would focus on making sure that you have an amount of insurance that will be in force without your needing to invade the principle, and so I would look at something like a 3% distribution off the portfolio, as long as that portfolio is invested wisely in such a way that it's allocated in such a way that that's a reasonable expectation.

Now, a couple quick things to get a little bit complicated and give you some specific things to think about. You need to think carefully about how you structure your life insurance. So I think for right now, I would make sure if I were in your shoes, I'd make sure that you have a lot of term insurance.

I don't know if a million is a lot or a little in your situation. If that were your only asset that you had, a million bucks, if you didn't have substantial savings in addition to that, I would feel a little bit, me personally, if I had the responsibility of a son with special needs, I'd feel like that weren't quite enough.

Term life insurance is so relatively cheap in the grand scheme of things. I might have a little bit more, but if you have other assets, that could be a perfectly reasonable amount. Make sure that your term insurance policies are convertible policies, meaning convertible means that you can change them from term insurance policies to whole life insurance policies without requiring medical exams.

So what could be devastating is if you were to find that you and your husband are working, doing well, but the reality is you're not going to be in a position to be able to retire at the age of 60, and rather it looks like based upon your situation, you're going to be working until maybe you're 70 or you're mid-70s because you've got to make sure that your son is cared for.

Well, it could be devastating if you were counting on that last 10 years of earnings to fund the account for your son, and then you were to be diagnosed with something that would affect your ability to get life insurance. So if your policies would take you to 64, that's probably enough time, but I would go back and check to make sure those policies are convertible for a long period of time.

And I would consider, as time goes on, in case you were to become uninsurable, I'd just consider extending that out, maybe making sure that some of your policies could go for a longer period of time. You could also accomplish that with some sort of minimally funded universal life insurance policy.

Too complicated to explain on the podcast, but that could be an option. Most universal life insurance policies blow up before the end of life, but that could give you an option with your insurance planner, that could give you an option where, if you funded it at a minimal level, it could be slightly more expensive than term insurance, and you know that it's going to run out, maybe at 70 or something like that.

You know that it's going to ultimately blow up, so it's less costly than--excuse me, it's not as costly as whole life insurance, but it's more costly than term insurance. But it gives you the option of continuing it for a longer period of time by increasing premium payments. So you would want to think that through.

Make sure that whatever companies you're using for your life insurance have good permanent life insurance products. Many companies, their permanent life insurance products are so inordinately expensive, and they're just--I would never want to own them. And so the problem is that those are the companies that usually have the cheapest term insurance policies.

So make sure that whatever company you have your term insurance policies with, that that's a company that has reasonably cost-effective permanent products in case you needed it. So in case you needed to convert, your--and I would check on something like this. If you were to go to your company and you were to say, "Listen, my husband and I have just found out that we don't-- we're not going--you know, each of us was diagnosed--my husband was diagnosed with Alzheimer's and diabetes, and he's going to die early, and I was just diagnosed with cancer.

We have these term insurance policies that are going to expire." Well, if you have a company that has good permanent insurance products, you should be able to take that death benefit that's already issued on the term insurance and turn that into joint insurability on a second-to-die life policy. And so that would put you in a situation if you expected not to die within the period of the term, but to die before you were able to get--before you were able to save the money that you needed so that you were self-insured, that would be a good option.

So I would be careful about what companies I have my term insurance with, and if it costs me an extra $40 a month to have them with a good company that has quality permanent products instead of term products, I would consider that. Make sure that you have a competent life insurance agent.

Don't buy this stuff online. Don't try to do this kind of life insurance planning with, you know, term.com or whatever the latest term insurance advertising company is online. There's a place for that. That works great for the 30-year-old couple that, you know, knows exactly what they need and the guy who writes the financial blog.

That doesn't work well for someone in your situation. Make sure that your life insurance advisor--I'd say make sure they're a CLU. If they're not a CLU, find a new one, or at least they can prove to you that they know what they're doing and that they've thought this through from a coherent perspective because the stakes are simply too high.

I'm scared that I got too deep in the weeds there. I hope that stuff made sense. You may need to listen to it a couple of times. I know I got kind of tricky there on life insurance planning, but that stuff is important. And again, that would be important, especially if you don't have millions of dollars of extra, which I'd be surprised if you did.

You've probably spent quite a bit of money over the years, an expense that many people don't have, in making sure that your son has the best education and the best care possible. So that, at least in some of the special needs families that I have worked with, I've seen that has been a major challenge.

Make sure you get your special needs trust set up properly. Just for the audience who may not be familiar with it, in special needs planning, you want to make sure that you establish something called a special needs trust, or actually more accurately called a supplemental needs trust, depends on where you are in the world.

Basically, simplifying completely, what this is, this is a trust that has certain provisions written into it that they'll allow your son to receive income as long as that income does not affect his eligibility for government benefits. So when you're doing planning for special needs cases, the government benefits that you receive, whether that's from Social Security or government health benefits, they may be local, they may be national, they're often a major source of income for your situation.

And so you want to make sure that if your son were to inherit a million dollars directly, that may disqualify him for the government benefits. So that's why you would establish a special needs trust. Make sure that that's done properly. Make sure that you have sought out competent help on that.

It's too important to not have competent help. Make sure that all of your documents are in order. So the documents for the guardianship, if that's going to be passed to your daughters. Make sure that if your daughters are minors currently, make sure that you have established another guardian, somebody that you trust, a family friend, until they're able to serve.

Make sure that they understand what they're getting into. You will probably want to make sure that they have some education on the financial aspects of planning for special needs. So if your daughter were the guardian but didn't understand, let's say she's ditzy and just doesn't, I don't care about money, I don't pay any attention to that stuff, that would be a problem.

She needs to make sure that she understands the basics to make sure that, you know, if you have an investment advisor, is that advisor doing a good job managing the portfolio? If you don't have an investment advisor, is she competent to manage the portfolio? Those are the types of things that you want to make sure that you think through.

Make sure that every beneficiary document is in proper order. It's too important to make sure that that trust is properly funded, and you want to make sure that there's not some, you know, your husband's 401(k) lists, for example, let's say your husband's 401(k), you know, he set it up 10 years ago before you knew that your son had autism and before you had any exposure to any of this aspect of financial planning.

And so he sets this up, you're the beneficiary, and his contingent beneficiary is children, you know, all my children. Well, then you guys are out on date night, you die, and then the money is distributed to, A, your minor children, and then, B, your legally -- your son, who's disabled, he's legally incompetent from the scenario that you described to me.

That would be a disaster, especially because he's going to inherit it directly, and now it's not in the trust. So make sure that your beneficiaries are in proper order. I would encourage you, you probably have, get books and read them. The key in this scenario is I think that you -- I would -- I think that you need a good advisor, but you also need to be educated yourself because you're not going to know who's a good advisor and who's not if you're not educated yourself.

I want to do some shows on this topic in the future and bring on some people who practice in this area to talk it through with specifics. I haven't found the person yet. There's one attorney here in Florida that I've considered bringing on the show, and I may do that.

It's on my topics list, so I will do more shows on that in the future. One final thing, and I mention this just for your benefit, just in case, and also for the benefit of the audience, of the other audience. I am sure that you have spent an incredible amount of time researching options for his help, and so I bet you have already researched this.

Recently, over the last six months, I first came across the work of Glenn Doman, a man named Glenn Doman with -- he has an institute. He's dead now. He died, I think, a year ago. He's continued his work with an institute called the Institutes for the Advancement of Human Potential.

I found them randomly through some weird YouTube surfing, and I came across their work with children, with teaching tiny children, is what they call babies, their lingo, teaching babies to read, teaching babies to swim, teaching babies to do math, teaching babies all of these certain things. I became fascinated with it and read a couple of his books.

He's written like six books on working with kids, but he started by working with brain-injured children -- or excuse me, brain-injured adults, and then moved into working with brain-injured children. But if you haven't, I'll put one quick link in the show notes to information that he has as far as hurt kids who have autism.

I've watched some of his videos where he talks about the programs that he's done with autism and some of the successes that they've had in the work that they've done. I'm sure you've done those things. Don't take this as offensive. Of course I have. I'm just saying I thought it was pretty cool.

I don't know much about autism from the perspective of what it can be done, but it seems from reading his philosophy -- and he worked in this area for 40, 50 years -- he didn't view much of a difference between the source of the brain injury. He just simply viewed it as an injured brain, a hurt brain, a hurt kid that needed some help.

And so he's developed quite an extensive amount of resources to help enhance things. And I read some of his testimonials of children that he's worked with with autism. Pretty amazing. So I just passed that along in case there may be somebody else in the audience who would be interested in resources like that.

And I'm sure if you were to go into the autism boards and things like that, that there would be much, much more information. So, Beth, I hope that helps. Thank you for being the inaugural caller into the show. It was really great to have your question. And for the rest of you, I hope that that helped.

I know I gave a lot of information quickly there, but it's really a unique planning opportunity, and you can see how, even what I shared, how everything works together. Hopefully. That's what I hope in the way that I answer these questions. Next question is via email, and this question is from Bobby Joe.

And Bobby Joe sent me an email. I'm going to cover just a couple of her points. And as a way, because I think this will be something that will be interesting to more of the audience. So here's a question. He says, "Hi, Joshua. I'm a distance trail runner and enjoyed listening to your show during my long runs.

I'm so glad I found you, and thanks for keeping me company. I am currently a legal assistant and have been recruited by an acquaintance who is also a CFP who owns her own company to become a CFP and work at her advisory firm. It's all still tentative and pending, and I've been trying to do some research about what exactly CFPs do and if it's something I'd be interested in before taking the plunge and signing up for courses.

I was hoping you could help point me in some worthy directions. There doesn't seem to be a really clear-cut career path for brand-new financial planners, and it seems easy to get lost in the wealth" -- pun intended -- "of information. Number one, I'm thinking that the DePaul online course would be a good fit.

All online, it finishes in about 11 months for around $7,000. Seems like a reasonable investment. Do you have an opinion on whether getting a master's versus the regular CFP is better or worse?" So I'm going to answer these. Instead of going through all the questions and coming back, I'm going to do them one by one.

So Bobby Joe, and also for the audience, in my opinion, the master's degree and the CFP are very, very different. In many ways, if you're going to work as a financial advisor or financial planner, the certified financial planner designation is and is quickly becoming -- it's not technically this way -- but it's quickly becoming in the industry almost a minimum standard.

And it is very different, however, than working through a master's degree. The CFP course, there are -- what is it? I don't remember the number of courses that are required. You're required to take some courses and pass an examination, and it largely is going to be a minimum standard.

The master's degree, I would view, is advanced education on top of that, and it has its place. But, yes, if you're getting started, you don't need to worry about a master's degree. You need to start with the CFP exam. Now, one thing that you need to be aware of is that even though you may start working and you may start studying and working, the CFP designation requires you to have at least three years of experience and also a bachelor's degree before you can begin using the designation.

So you will need to work your way through the courses, but you cannot actually become a CFP certificate, which they get mad if you call yourself a CFP. You can't become a CFP professional or a CFP certificate without at least three years of experience. So this is the kind of thing that you really should be doing this concurrently with other education instead of -- with your other work as you're working and getting experience in the industry instead of trying to do it in advance so then you can go and get experience in the industry.

One of those weird things, those are the rules as they are. Maybe they'll change in the future, but that's the deal. Now, as far as the DePaul online course, I don't have a clue about it. And so 11 months for seven grand, that's fine, I'm sure. I looked real quick at their website.

It sounds fine. I don't have any problem with it. I did all of my courses with the American College simply because my firm paid for them all. And so my company paid 100% for all of my American College education, and I didn't come out of pocket for a dime.

That was a really, really nice benefit of it. It was a really, really nice benefit, and so that's why I chose the American College. I haven't studied with any of the other colleges. You can go directly to the American College, and you can see their tuition on their website for the coursework.

So if any of you are interested in financial planning education, you can do that. I had a good experience there. It was cheaper than 7,000 bucks. I also did my CFP review course with a man named Ken Zahn, and he also does education all online. His website is KenZahn.com.

He does a great job, and his review course was awesome. I learned more in four days than I felt like I'd ever learned. And so I have the books that he uses for his actual courses, and those books are excellent. So I would encourage you to consider his as well.

The advantage to doing it with the American College is that the education that you have there would also count toward your other designations, so designations like the CLU and the CHFC and maybe even the CASEL designation, but there is some overlap. So if there were a choice between them, I would choose the American College just so that you could continue on with them and not have to retake their classes.

They may have a transfer credit, but I'm not sure about that. Now, continuing with education, I would say that the biggest thing that you need to have a question on is how you're actually going to learn the job. Let's go into question number two. You said, "My friend said I would start in 'operations' until I were certified.

What does this mean, and is it the appropriate place to start while I'm in school?" So I'll just describe, and if any of you guys are financial advisors, financial planners, feel free to disagree with me. I'll just describe my industry experience, and feel free to come by the show notes and comment on your own, and you can tell me what I missed, what I'm crazy about.

It doesn't bother me a bit to help Bobby Joe out with your experience. Basically, I've come up with--there are a few different ways to get started in financial planning, and it depends very much on how you actually--it depends on how you actually-- what your practice is going to be structured like.

So your additional questions--and I'm going to bring all of these together-- your additional questions are, "What does a day in the life of a CFP look like? What are some various career paths for CFPs to take? It seems like there are areas for sales, not interested. More client-based approaches?" And it says, "Any other advice or resources I should check out to get a better idea of what being a financial planner means so I can decide if it's a good fit?" So I'm going to bring these all together into one question, just give you some thoughts.

There are many ways to get started in the financial planning industry, but you have to understand them and understand the different models to really figure out what's going to work for you. So the harsh reality of starting as a financial planner is, in the beginning, you know very little.

Even if you've gone through, and if you're one of the very few-- and I think there will be many more in the future--but if you're one of the few who has an undergraduate degree in financial planning, even knowledge that's required for an undergraduate degree in financial planning is going to be not that much.

Even if you're a CFP certificate, it's really not that much because most of it is academic. And the major skills of financial planning are not necessarily academic but rather experiential. The major skills of working with clients are not academic. And this is one of the biggest problems. I don't know of any way to gain those skills other than to get experience.

And there are many people who think, "Okay, if I just have the knowledge, that the knowledge is going to make a difference." Here's the thing--the knowledge is all available for free on the Internet. Here I am giving away the knowledge every day. So you've got to look and say, "What are my actual skills?" The great skills of a financial planner have little to do with tax law, have little to do with how investments work, and have everything to do with how you work with clients.

And so I would like people to quickly see, "Do I like working with clients?" That's my personal preference. The arrangement that you described is common in the industry. So what is very common is you may have a financial advisor. This financial advisor has worked hard. They built up a book of business.

That would be the industry lingo, which means that you are managing assets. So you have investment accounts that you're managing, which may be $10 million, maybe $50 million, maybe $100 million, if you are starting to get towards the upper levels of success. Let's say you're managing $50 million. So you've got $50 million of client assets that you're managing.

You have a couple hundred clients. Now, this financial advisor--it's hard to do. There's a lot of work to be done. So this financial advisor is going to need staff. So usually the structure you'll see--you may see a financial advisor, and then you may see some unlicensed staff. So this staff might be secretarial staff.

It may be client communications staff, prepping, answering client questions, things like that. And this financial advisor will need licensed staff people. So they'll hire an associate financial advisor. And this would be a licensed person. So you've gone out. You don't need a CFP to get started in the financial advice business.

You need a series--to pass your series exams. You need a series 7 and a 63 or a 65 or a 66, depending on what you get. And so you're going to start this work in the--working as staff. So when you're working as staff, you're working with this financial advisor.

You may be meeting with their clients. You may be placing a trade for them. You may be servicing them in some capacity. And then what's expected is that as an associate advisor, you're going to go out and you're going to build up your own client base. And so what's common is it's uncommon for people to charge planning fees directly for planning.

And what's more common is that the compensation comes from either commissions earned on the sale of investments or on fees earned on the management of investments or on the commissions earned from the sale of insurance. So this is where most of your compensation is going to come from. So the challenge with being an associate financial advisor is you have to be in the business, and you're learning in the business.

You're getting to meet with clients. You're getting to have a chance to do it. But in order to be paid, to go past the salary that the financial advisor is paying you, you're going to need to go on and build up your own sales skills. And so you're going to need to go on and build up your own insurance sales, your own investment sales, and to build up your portfolio that you're managing and have your fees off of that.

So that's how the business works. The challenge is that you're an employee. You're not really a business owner. You are an employee of the advanced advisor. There are many great advisors who will bring a young advisor on. You serve that advisor in exchange for the salary. That allows you to get started, and you can build your business.

And then that advisor may sell you part of their book. So this is often common is that the advisor may, as part of your comp package, they may sell you part of their book, or you may just be able to build up your own book. It takes time, especially if you're focused on managing investments.

It takes time to really build up competency to be able to sell investment accounts, basically, and sell your services in managing investments. By the way, as I tell you this information, all of the -- I can just hear half the audience cringing in disgust at the idea of paying fees to financial advisors of the BOGO heads are cringing.

But this is how the industry works. Now, how else can you do it? It takes time to build up investment assets. If you don't have any knowledge, if you're working as a legal assistant, you probably know nothing about investing, or what you do know is what you've gained from, like me when I started, just from some personal finance books and some things like that.

Nothing wrong with starting there, but you don't know much. It's going to be a little bit hard if you're young to walk up to someone and say, "Listen, here's why you really should hire me. You really should hire me to manage your $400,000 portfolio." That's a challenging sale to make, especially if you're new.

So that's one model. Another model is to work and start with a primary focus on insurance. And so I'm going to give you three models, and then you'll have to figure out what works in your world. So the second model would be to start with a primary focus on insurance.

The thing about insurance is there are two advantages--well, there are three advantages to insurance that I can think of off the top of my head. Number one is the market of people that actually need insurance is much larger than the market of people who have substantial assets to invest, if you're getting your fees being paid to you off of assets.

So your actual potential client base is much larger. Number two, the way insurance works--so let's say that you're selling life insurance, disability insurance, long-term care insurance--number two is the way that insurance works is that your commissions are paid to you up front. So instead of the fees on an investment portfolio, let's say that you're managing $400,000 of investments, and let's say that you are billing a 1% fee.

Well, that's $4,000 of gross income to your practice, and that $4,000 is going to be billed quarterly. So you're going to get $1,000 the first quarter, but oh, by the way, I'll give you some more industry lingo. $4,000 is going to go through the grid, is what it's called.

It's going to go through the grid, and you're going to only receive a portion of that. So what going through the grid means is that your broker-dealer retains a portion of those fees to compensate them, and you get a balance of it. So maybe it's 50/50, depends on the firm.

Maybe it's 90/10, just depends on the firm. So that's the challenge. So it's tough. If it's really tough for you to build a $400,000 portfolio, so A, to bring in a $400,000 portfolio, to bill a 1% fee on that, you don't have a lot of knowledge, you don't have a lot to offer, it's a tough thing to get going.

Whereas if somebody needs a life insurance policy, let's say that you're talking with Beth, who I just did a life insurance plan for you, and Beth needs a life insurance policy, and she needs another million bucks of term insurance for her, and let's say her premiums are -- for easy math, let's just say her premiums are $100 a month, so $1,200 a year, and then her husband also needs a million bucks of term insurance, and that's $1,200 a year.

So then the commissions on life insurance, they vary from companies, but anywhere from 50% to 120% of the first-year premium. So let's say that you're working with a company, maybe one of the cheap term companies, where their rates are 90% of the first-year premium. So let's just -- I can't do 90% math in my head, so let's just say $1,200.

So you make $1,000 on the sale of the life insurance policy to Beth, to fund her special needs trust with a 20-year term policy. So that's a really good way for you to get started and be able to eat while you're studying and while you're learning and while you're building knowledge.

So that's what I did, is when I started, I started with Northwestern Mutual, and I didn't want to go and work for somebody. I wanted to work for myself, and I wanted to learn how to be a financial advisor. I didn't know how to be a financial advisor, so I wanted to learn how to be a financial advisor.

And with that knowledge then, I wanted to take it and go on and be able to build, but I needed to eat. Like, how do you make money? I knew I couldn't -- I didn't have anything to offer to somebody. Say, "Joshua, why should I choose you to manage my $500,000?

You're 23 years old. You don't have a clue what you're doing." I don't know. You probably shouldn't, would have been my answer. But I could do life insurance planning, and I could go read a book on special needs planning, and I could go sit down with Beth, and I could help her solve her problem, and she needs to buy life insurance.

There's no non-commissioned life insurance companies, so why wouldn't she choose to buy it from me? And I'll make $2,000 on her 20-year term for her and her husband, and that allows me to eat. And here's the cool thing about that approach, is that the process of helping somebody do simple life insurance planning is no different than the process of helping somebody plan for their $150 million estate and how to avoid estate taxes.

It's the same process. Now, there's a major difference in knowledge, but there's the same process. So I chose to go and work with a life insurance company. I chose Northwestern Mutual. I chose to go work with a life insurance company because that would allow me to sell insurance. I could sell life insurance, disability insurance, long-term care insurance, and health insurance.

And my clients didn't have to put their trust in me to deliver on something like they did with investment management. They only simply had to put their trust in the insurance company, and the insurance company was going to be around, and then I had to help them find the solution, understand their needs, and then help them understand how I designed the solution that would fit their needs, and I got paid my commission.

So I liked that better because that put me in the position, instead of having to go and work 40 hours a week, 50 hours a week for somebody else, and then somehow prospect for clients at night, I said, "I want to run my own business." And so I ran my own business right from day one, focused mainly on insurance planning, studied, studied, studied, learned, learned, learned, took exams, took exams, took exams, then started bringing in investment clients, and that was kind of how I built my practice up.

Now, that's the second model, the major model. Now, the third model that is currently existing in the financial planning business is the model of the prospect of hourly fees, okay, hourly fees or project fees. So some fees that are not connected to the management of an investment account and no commissions.

So this is the third model. So if you hear people say and talk about, "Go and consult a fee-based planner or a fee-only planner," and I'll ignore that for right now, explaining that because this show is already going to go long. But if you say, "Okay, how do I charge fees?" Well, to charge financial planning fees, there are a few models that you could take.

You can bill for them on an hourly basis. So you could say, "Listen, my planning fees are $150 an hour or $400 an hour, whatever your fee is," and then clients can come. They can consult you on the basis of an hourly fee. Or you can charge on a project basis.

So I'm going to put together a retirement plan for you. I'm going to bill you $1,600 for this retirement plan. Or you can charge on some other basis. So whether that's the basis of an annual retainer, this is a model that many planners are doing, or a monthly retainer is a newer model that some people are doing.

You could charge with some kind of fees. Now, the problem with fees and fees only is you have a problem of getting people to pay the fees because you have a marketing problem. So let's say that you're going to do planning for an hourly fee. This is the simplest thing to understand.

So if you're going to bill $150 an hour and you're going to do planning on the basis of an hourly fee, then how many clients do you need to make a living wage? So let's assume you've got a 33% expense ratio for your rent, for your office, for your staff, for, you know, go and take your exams and get your CFP and all that stuff.

So let's say you're going to profit $100 an hour. Well, if you need to make, say, $4,000 a month at $100 an hour, that's a total of 40 billable hours that you need to bill every month in order for you to make $4,000 to cover your personal expenses. So if you're going to bill for 40 hours, the question is how many people do you need to reach to be able to pay you for services?

A lot. To bill 40 hours means you've got to do a lot of prospecting or you've got to be in a situation where somebody has a steady flow of clients, a steady flow of leads through some sort of lead generation system flowing in your door where you'll be able to help them out.

That would be -- that's the problem with doing the hourly fees. So to give you some guidance, okay, all of these models can work. The biggest thing that I would be concerned about if I were going to work with somebody, and so if I were going to work with a friend of yours, so you said, "Hey, my friend, she has a firm," the biggest concern I would have is, is this a training firm or is this a doing firm?

And there are different kinds of firms. Some firms will be excellent at training you, teaching you, "Here's what you need to do. Here's how you need to go out and develop clients. Here's where you go to learn the information." Some practitioners are just really great practitioners, and it's likely if your friend is the kind of person who is -- she's running her own shop, she has maybe a couple of staff people that are supporting her, maybe she's in business with another planner, something like that, she might be an awesome financial planner, and she may have a stable of clients, a client base that just loves her, that she does an amazing job for, and she may be a terrible trainer.

There are people who are able to build their own firms, who can go to take college classes, they can go learn financial planning, they can open the doors on their own firm, they have enough experience with running business that they can sign the lease on their office, they can do something else.

There are people who can run their own firms, and who can succeed right from the beginning without the need to ever work with anybody else. But the number of people that are able to do that in this business, I would say, are very few and far between. And many people who are running their own firms are not good at training you.

So you need to do an accurate assessment of, "Do I need training?" What I would encourage you to do is that I would encourage you to go out and interview. It's not a nasty secret. Here's the secret to the financial planning business. The most difficult thing that financial planning firms have to do is to recruit new people to work within them.

So whether this is traditional insurance companies, traditional investment companies, traditional wire houses, the most challenging thing to do is to find people that are going to be working for them. And the firms that are in the business of training people, it's easy to get an interview. What I would do is I would go and interview with a minimum of a dozen, ten, or a minimum of a dozen different firms.

And I would interview with some of the big insurance companies. So I would interview with -- I had a great experience at Northwestern Mutual, New York Life, Guardian, MetLife, Prudential, things like that. I would interview with the wire houses. I would interview with Merrill Lynch, Morgan Stanley, Smith Barney, Merrill Prize, Lincoln.

I would interview with some of these companies. I would find some local small financial planning boutique firms. So you'll see wherever you are -- I don't know where you are -- West Palm Beach planners or Palm Beach financial advisors would be where I am. And I would just go in and I would ask them for an interview.

I would interview -- I would look online. I would go in forums. I would try to figure out where different things -- and I would figure out what's the best fit for you. I was not a good fit for the wire houses because I didn't like their model. I didn't want to do it.

And I didn't think that it would work for me. I had a great experience with the insurance companies, and I learned a lot. And I felt like I was able to stay true to my ethics and my integrity, and I was able to work on my own terms, which was important to me.

And I felt like I had the training background that I needed. I had the support that I needed. I had the training. I had the influence put into me. But I'll tell you this, my office was unique. And there are other offices in the same company that did not have that culture.

So even within one company, you may go to one AXA advisor's company, and you may go to another AXA advisor -- excuse me, one AXA office, and you may go to another AXA office, and you may find that they are a dramatically different culture. So there is no one answer to it that I'm aware of that's going to solve your problem.

But by going out and interviewing, you'll figure out kind of what is working for you. Three other quick comments. Number one is also check out an organization that I'm involved in, and I'm actually a member of it, called the XY Planning Network. And so the XY Planning Network is actually a group of us who are fairly young who have recognized this problem and the problem of access.

And if it sounds like it's hard for a young person to get started, that's because it is. And if you want to be a fee-only planner or something like that, if that's important to you, the problem is how do you get started. So check out XY Planning Network. And I really don't think it's a good place for people to start with no industry experience.

I really think you need to go work somewhere and get some industry experience. I mean, you can't even get listed on the front page of XY unless you're a CFP certificate, and you're not going to be a CFP certificate without three years of experience. So you can't start there.

You've got to go get trained somewhere. And that training may be working as an associate FA, financial advisor, with your friend, helping her with her client base, and you'll get enough industry exposure to see if you like it. I do want to tell you just one -- I do want to comment on -- well, so that's thing one.

Also check out XY Planning Network. Number two, check out -- go and read everything that Michael Kitsis writes on his blog at kitsis.com. He writes primarily to a financial advisor audience, and he will go through some of the theoretical constructs and problems of the financial planning business. And he'll go through things like, how are you going to do your marketing?

I don't see any way -- if you want to do hourly planning, go research the Garrett Planning Network. That's what they do. I don't see any way that a new young person could ever have any hope of getting started as an hourly financial planner with no other source of income.

I don't see any way to do it. Unless you were working and you had a tax practice, like let's say that you're a CPA and you have a tax practice and you want to expand into financial planning, maybe that would work. But I just don't see any way that it could be started from scratch.

Not if you're planning on that as your primary source of income. If you have another job and you're doing it part-time, maybe. But I would direct you in the direction of his information. And then I forgot to say -- and I'm getting to the third thing in a minute.

But I forgot to say also, check out some of the banks. So you might start in one of the banks. You might start with JPMorgan Chase. You might start there. I know there are several people who have emailed me who listen to the show who work as advisors at the banks.

And once you get into the business and you start to get a little bit of familiarity with the business, you'll start to understand kind of the lay of the landscape as far as companies and firms and practice structures and things like that. It's really hard from the outside to get it.

So that's why I've tried to give you the lay of the land. Here would be the biggest thing I would caution you on. You said specifically here, "It seems like there are areas for sales, not interested, more client-based approaches, or..." I'm going to challenge you on that line of thinking.

I am a salesperson. And I am a darn good salesperson. I'm very proud to be a salesperson. I'm also a very ethical salesperson. And I'm a man of integrity. And those two things are not conflicting. Now, there are a lot of schmoes in our business that have sold people inappropriate products, inappropriate stuff, and I'm not a fan of that.

But sales and client-based approaches are not antithetical. They're not opposite. They're not opposite in any way. And the sale of products is not in any way, in my opinion, is not in any way unethical. I have many times gone to seek out somebody when I'm going to go buy a product, and I want the person to receive a commission from the sale of a product simply because they did a good job.

I've specifically gone and sought out people, people who have been solicited online or some things. I've specifically gone and said, "I want to make sure that you get the commission on this because I value the input that you've given to me." If you have the mindset that you do not want to be a salesperson, I don't see any way that the financial planning business is for you because the financial planning business is fundamentally 100% through and through sales.

Now, it's not always the sale of product. So it's not always the sale of insurance or it's not always the sale of investments, but it's always the sale. I'm selling to you right now on this show. I'm selling information. I'm selling ideas. I'm selling inspiration. I'm selling myself. I'm trying to sell you on why you might want to consider listening to me.

So I'm selling you right now, but I'm doing it in a very honest and straightforward way. I'm going to guess that you are probably not yet rich. I do not know a rich person who does not value sales because every rich person got there by valuing sales. You want to know why all companies fail?

Because they don't sell enough. If the company is selling enough, the company is not going to fail. If your company is selling like crazy and your expenses are out of whack, you might be able to figure out how to cut your expenses and continue the company. If your company is selling like crazy and you hit legal battles or you hit problems, things like that, as long as sales are good and you've got cash flow, you're good.

So the number one role of everyone in the company is sales. And I would encourage you, even as a legal assistant, your job is sales. Sales and selling is one of the most highly compensated, highly sought-after skill sets you could possibly have. The attorneys in your firm, the ones who make the most money, are the best salespeople.

If you are an attorney--again, you're working in a legal environment-- if you're an attorney and you can't sell your services and you can't sell your advice and you can't sell why somebody should choose to work with your firm, you're going to be stuck in a back office 60 hours a week pushing paper because they can hire that all day long at a law school, some guy with too much in student debt to be able to go and take a risk on something.

And so he's stuck at one of the big law firms, and this guy can write the papers. But the guy or gal who can sell is out there bringing a business. And every single one of the partners in your firm, their compensation is tied to how much business they brought in.

And that's as it should be. Because the mark of effective sales is the mark of the value that you give. Do you think that somebody--you're going to manage a million-dollar portfolio-- do you think that person doesn't have other prospects? Do you think they don't know that they can call Vanguard and get their portfolio managed for 15 basis points and toss it at an index fund?

Do you think that they don't know that they could call any-- if you're at Merrill Lynch, do you think they don't know they can call JPMorgan Chase and they'll have an appointment with 15 advisors in an instant? They know. So you've got to provide service commensurate with what you're earning.

Do you think if you're managing money and you're billing-- on a million bucks you're billing $10,000 of annual fees-- that your client doesn't get that statement and look at it and say, "Why am I paying you this money?" You've got to sell. Again, even if you're doing--I don't know what a non-client-based approach is, but if you're selling somebody a life insurance policy or let's say you're selling someone hourly planning, do you think that if you don't sell them on why they should spend hundreds of dollars with you that you're not going to have the sale?

You've got to sell. So I would encourage you--study what good sales is. And I'll tell you, at the top of every industry are the best salespeople, and the best salespeople are always the most client-focused people, are always the most client-centered people. I'll tell you a secret I learned. I learned that the better a job I did for the client, the more I would sell.

And I learned to take my time with every single client-- and there were people who tried to push past because they didn't see they could take the sale-- I learned if I took my time and actually tried to help somebody and focused exclusively on the client and ignored the commission, that every single time that client would send me dozens of other clients.

And I promise you, you go and you interview with a dozen people and you will find at every firm the most effective, the most highly compensated financial advisors are always the ones that are the best salespeople. And they're always the ones that are the most client-centric and the most client-focused.

So I apologize. It's a big passion for me. I wish--frankly, I wish that we sold sales--I wish we taught sales in high school. That would be a much more valuable course of study than would be many of the things that we teach. Because ethical sales is the key to business success.

And there is not--I was going to say there shouldn't be. If you find any difference between your ability to serve your client and sales, you're in the wrong business. So be careful because you're going to be shut down because your clients are going to be so unhappy with you.

It will come out and you're going to be destroyed. And there are--man, there are some scumburgers in the financial business. And they go from firm to firm because their firm gets shut down. And there are a few people that I can't stand in this business. But I'm telling you, they're not successful, and they're not successful in the long term as big producers unless they are the best salespeople.

And the best salespeople are the people that are the most filled with integrity. I hope that helps. All right. Hour 12 minutes. We're going to go. If you are done with the show for today, just hit pause. It will still be here for you tomorrow. But I want to make sure that I make up for lost time with not doing some of these questions.

Next, we have a voicemail question from Julian. Hi, Josh. This is Julian calling from Chicago, Illinois. What would you recommend for someone who wanted to do their own financial planning at home other than, of course, listening to all your shows? Would you recommend software, pen and paper, Excel, a financial calculator, all of the above?

How would someone begin doing this? And how could they continually update this on their own? I love the show, and I look forward to hearing the rest of your podcasts. Julian, great question. Thank you for the question. This one is tough for me, so I'll answer it specifically. I would start with a pen and a paper.

I would start with a financial calculator, and I'd start with Excel. There are a lot of software options, and if you go online, you'll find many, many calculators. Many of them are useful, and I think the calculators are useful. I have not found any friendly, consumer-friendly financial planning software.

Now, I also haven't done a complete survey of the marketplace. That's on my list of things to do. But the problem with most of the software options--and I don't know, there's dozens of them targeted towards financial planners. You've got MoneyGuide Pro. You've got eMoney. I didn't look up a list of them, but those are just two that are popular off the top of my head.

The problem with the financial planning software is the software is built with a lot of underlying assumptions, and those assumptions are very valuable, but you need to be familiar with them. And so the skill for a good planner is to know, "Wait a second. Is this passing the sniff test?" I know that many times when I was with Northwestern, we had a proprietary software program that was exclusive to our company.

It's not available publicly. It was different than many other plans. But in the beginning, I would go and I would create a plan, and I was more likely to get the plan wrong than I was to actually get it right. And so you get the plan wrong, and it takes a while until you figure out how to spot the wrong plans.

And I don't see any way that an individual could actually get past the learning curve of the software programs, at least with the ones that exist, in a timely enough manner to work with themselves. So I take your question as for an individual. I think it's much simpler, and I know this sounds self-serving, but I think it's much simpler to learn how to just run a financial calculator, do simple plans, grasp them conceptually, and hire a planner for a couple hours of a planner's time.

It'll save the time and learning curve on most of the software packages. Now, there are some consumer-friendly packages that help. For example, what's a good example? FireCalc. Okay, so FireCalc. If you want to run a Monte Carlo analysis, FireCalc.com is going to help you do that. But the number of people listening that are going to know what Monte Carlo analysis is and be able to be competent with it, you've got to understand what's actually going on under the hood.

So I think it's better just to stick with big-picture rules and think about concepts, rather than to worry too much about running software. Now, I plan at some point -- it's on my list. I don't know when I can actually get the bandwidth to be able to do this, but I plan to go out and try to bring you guys a complete survey of the marketplace.

So it's the kind of thing I'd love to do with a series of YouTube videos. I'd love to do some reviews, and instead of some silly review of personal capital or some consumer-facing thing, I'd love to bring you some reviews of some of the software and see if any of it could be applied to an individual.

But frankly, just learning how to run a financial calculator, you can solve most of the things that you need. The reality is that as complicated as I can make things sound sometimes, the numbers are pretty simple. Let's say you're going to do a simple life insurance calculation for yourself.

Let's say you calculate you need $920,000 of life insurance. Just buy a million bucks. I mean, it's a difference of $3 a month. Who cares? Just get your million bucks and overshoot it a little bit. Most people are not going to be sitting there, and most of the real financial planning stuff is not going to make that big a difference.

I feel like I've answered that going in circles. But I would say start with a pen and a paper. Start with a financial calculator. By the way, you don't need to go out and buy one. You can get one online. I'll link to one that I've used a lot of times online.

I use the HP-12C simply because I thought it'd be cool if I used the same thing my dad did. But I have one online that I use sometimes if I'm at a computer and I want to show a screen to a client on a virtual meeting, something like that.

And then also you can download an app for your phone, so if you are doing stuff for yourself. In reality, the actual using of a financial planning calculator, all you need to know for most calculations is N, I, PV, payment, and future value. And if you know how to do those, then you're good to go.

Someday when I can build the bandwidth, I want to do a series of YouTube videos showing people how to actually do it for themselves, explain how to do it. I don't think I can do it in audio in a way that's compelling or complete. I think it's the kind of thing I need to do in video with a screen capture and talk through so you can do it.

I also think we should train financial planners to do it on paper and pen. I'm young and I'm all into technology, but there's a reason why you learn what 2+2 is and 8x8 is, and then later you get introduced to the calculator. What happens is that today what I've seen is a lot of young advisors, they don't know how to do things manually.

And so because you don't know how to do things manually, you can't spot the mistakes in a financial plan. And if you can't spot the mistakes in the financial plan, you can't figure it out, then the software is useless. And the thing is that the software, as I've tried to point out, there are assumptions inherent in everything.

Financial planning as a science, you can be precise, but you're built on so many assumptions that if those assumptions change, then your whole plan falls apart. So it's much less about actually what the right answer is, "Here's the right answer for this situation," and much more about understanding the assumptions and playing within those assumptions.

And there are many fewer right answers in financial planning than there are right ranges, so to speak. So that's how I would answer. I would start with pen and a paper and a financial calculator. And with that, and then also I would move on to a spreadsheet, some simple spreadsheets.

And then I would just simply, if I were an individual, I would just simply... The people who do it yourself first, I want to equip you as do-it-yourselfers. You probably don't, you already can go and do it yourself. But for the majority of people, it's simpler just to buy an hour or two of somebody's time and pay them.

And they'll take care of, you know, they'll run your analysis for you. They'll stress test your stuff for you. I'll give you one example. I can't use--there's a major difference between TurboTax or, you know, tax--what's the other one from--anyway, TurboTax. We'll pick on them. And the software that accountants use.

I can't use the software that accountants use. I was trying to solve some tax stuff the other day. And, like, I was trying to do something, and it's not important what. And I signed up for a free trial version of one of the pro versions of the tax planning prep.

And I tried to go in and put my figures in because I was trying to do a calculation that was, you know, 30 years out, something like that. And I couldn't figure out how to make the software work. It just didn't work. So I can use TurboTax, but my ability to actually do good planning with TurboTax is not very much.

I mean, yeah, there's some stuff, but I don't ever--with TurboTax, the problem is you're just putting stuff in. You're not actually understanding what's going on. So if I were--so that's how--if it were me trying to do taxes, I would start by trying to do them by hand. And once I've done them by hand, worked through the worksheets, that's going to take some time, but that's going to teach me more about how the tax return actually works.

Then I would go to TurboTax, and I would just go to TurboTax and use that to help me-- or whatever the equivalent of it is--and use that to help me run the calculations a little bit easier. But now that I understand what's going on underneath the hood, I can use it a little bit better, and I can spy the problems.

And then for really good tax planning, I'd call a competent advisor, and it's going to be a lot cheaper for me to--for most of us, not for everyone. It's going to be a lot cheaper for most of us to actually sit down and just buy an hour of somebody's time, or two hours of somebody's time, and say, "Here's my situation," with as much detail as possible.

"Can you see something that I'm missing?" And then you can take that information and go back and do it yourself. You don't necessarily have to hire the person to do it for you, but you need the planning. But if I were a professional--and this is how I view financial planning software-- if I were a professional accountant, a CPA, then I would be able to do everything far faster with the same professional program that I signed up for and couldn't make heads or tails of.

And so a lot of times when I'm helping new advisors or something in the past with a plan, I'm flying around the software, but it didn't happen that way when I was a beginner, so I think software gets in the way a lot of times. Not to say there's not a lot of value in the calculators, not to say there's not a lot of value in maybe a simpler program.

I talk with my brother sometimes who's a web programmer about trying to figure out if he could create something better, but we'll see when time comes. Next, going to correct an error that is important. And this is something that I got wrong as a mistake. So in Show 55, which Beth so kindly complimented me on--and in fact, Derek was about to compliment me on, so let me play Derek's compliment.

Hey, Joshua, how are you doing? It's Derek from Moncton, New Brunswick, Canada. I'm a regular podcast listener, and I just finished listening to Radical Personal Finance #55 with John, your 35-year-old almost millionaire who's looking at his early retirement. I just wanted to say I really enjoyed the way you worked through the various scenarios and laid it all out.

I actually took five pages of notes as I was going through, and it certainly gives you a lot to think about. I'm not quite in John's situation, but working close towards that and also looking at an early retirement situation for myself. So thanks again for the good work. Hopefully John learned something because I know I certainly did, and I'm sure a lot of your other podcast listeners did as well.

Keep up the great work. I'll keep listening, and we'll listen to you next time. Thanks again. Very cool, Derek. Thank you so much for the comment. It's cool to have listeners in Canada, or as I like to bug my best friend who's Canadian, in Canadia. That's my word for it.

So I actually – thank you. I felt really good about that show, and I really enjoyed answering that show, but I actually made a mistake. So in that show, I talked about 401(k)s, and I talked about making a distribution from the 401(k), and this is at the end in a series of equal periodic payments under the 72(t) rules to avoid the age 59 and a half problem.

And if you're a new listener and this is your first show, I'm sorry if that was too much too fast. So I went back, and a listener commented on that show and reminded me that you can make a distribution if you separate from service after the age of 55.

You can make a distribution from a 401(k) plan and not have to pay the 10% early distribution penalty on that. So in show 60, I actually went back and corrected my error. And then last week, I was listening to something, and I learned something, and I found out that I screwed something up in correcting my own error.

So I need to go back and add a little note to that in show 60 about this, but I wanted to make sure that you who are listening and already listened to that show get a chance to hear it. But also I think it'll be interesting and important, but also I just wanted to point it out as how frequently, you know, how easy it is for me to get stuff wrong.

And there are so many little rules about planning. There's so many little rules that you can get wrong that I really don't think it's possible for anyone to get it right all the time. So when I put this little disclaimer in that I recorded and put in, and I say, "Please correct me," I mean that.

I need you as an audience to correct me. And if you find something I'm wrong in, I need that input. So in this case, I discovered it myself, but I need that input. So just for your knowledge, very quickly, the 401(k), if you are going to utilize that one exception, and there are a few exceptions, which I'll go through in a future show, but there's one exception that we talked about under Section 72(t) of the Internal Revenue Code.

If you are going to use that exception to take your distribution from your account after 55 but before 59 and a half, you must be leaving the job that you're taking the 401(k) from, and you must be leaving the job after 55 and then starting your distribution. So there was a court case on this.

Was it a court case or -- yeah, it was a tax court opinion. So from September 28, 2011, and I will link to it in the show notes. I've got the tax court opinion here. It was Gail Marie Watson, who was the petitioner versus the commissioner of the Internal Revenue Service.

So Watson v. Commissioner. And this is a -- this is not a -- it was an opinion that was issued by the tax court on this subject. And so what happened is that this lady, Ms. Watson, she left her job at the age of -- I think it was 52.

I'm just going to go close enough. You go read it if you're interested. I have the material facts are correct enough. So she left her job, something like the age of 52, and then -- okay, so respondent contends -- so she separated from service with her employer at the age of 53.

And then at the age -- after reaching age 55, she wished to make a distribution from her 401(k). And at that point in time, she made the distribution from the 401(k), but she did not include the 10% penalty tax. And what the tax court found is that the payment made from the plan -- that you have to be at least 55 after you separate from service.

And so here is one quote from the case that was actually quoting a previous piece of legislation. It says, "In all cases, the exception applies only if the participant has attained age 55 on or before separation from service. Thus, for example, the exception does not apply to a participant who separates from service at age 52 and, pursuant to the early retirement provisions of the plan, begins receiving benefits at or after age 55." So I'm reading directly from the tax court opinion.

This is important, because one of the things that I thought I had thought up in my head, which would be wrong -- I was wrong about it -- is I said, "Well, you know, that might be one reason to leave your money in a 401(k) instead of rolling it over into an IRA, with the idea that, let's say, that you are an early retiree, and you retire at 40, and you leave the money in the 401(k) so that you can access it at 55 instead of waiting until 59 and a half." I was flat-out wrong.

So my idea completely didn't go, and I want to make sure you're aware, and that is my error. So I have to go back and do a show trying to correct an error, and I find out that my actual correction is an error itself. Hopefully you find that interesting, and I find it humbling.

Next, question from Alejandro, and this was part of an email thread that he had emailed me. I want to read his question because I think it's a useful question, and I have some thoughts that I want to help him with. He didn't specifically ask for this to be included as a Friday Q&A show, but I want to include it.

So Alejandro emailed me, and as part of an email exchange, he said, "I recently heard an archived episode where you and the person you interviewed agreed that increasing income was usually the first step in the road to wealth. I'm currently in a PhD program, and I don't really have the opportunity to increase my income.

My wife already works full-time and may actually need to go back to school to meet certification requirements, more expenses. Increasing our income substantially is almost without a doubt simply impossible for the next two years. We have some savings and emergency reserve cash, but we also have a lot of debt, maybe $20,000 if you include student loans.

We try to keep our expenses low by monitoring cash flow and eliminating anything that is unnecessary. What else can we do? I realize we will hit a point where we are doing everything we can. Maybe we are there already, maybe not. Aside from couponing, I heard that episode today, I'm not sure what else there is left for us to do except plan what and when our next move is.

What are your thoughts?" So I thought this was an interesting question, and I do have some thoughts. I hope you will find them useful. I think there absolutely is a time when you have hit all you can do. Sometimes all you can do is all you can do, and it sounds silly to say it, but it really is.

If you are doing all of the right things at something, and you are on track, but you can't do any more, that's fine. In that case, just keep doing what you are doing. You very well may have a plan, and simply be working your way through that plan. You might actually be going backward financially.

Let me give you an example. People do this all the time when they start a business. Many times when you start a business, you are going to invest in that business, especially the bigger the business, the more likely it is that you are going to invest. It is probably going to take time for there to be cash flow from the business, and you are going to invest a lot of money before you expect to receive a payoff.

That's not bad. If Bobbie Jo, from the earlier question, were to go and become a financial planner, it is likely that her income would go down from being a legal assistant to working as a producer. It is likely that her income would go down. That's not bad, because the potential income of her working as an excellent financial advisor is far higher than it would be as a legal assistant.

You may be in that situation with school. If you have a plan, and it sounds like you do, you are fine. Just go for it. When you are getting a Ph.D., you are voluntarily sacrificing years of earnings that you could have in order to get that Ph.D. This is what medical students do.

If you are going to go through 10 years of medical school, specialties, residencies, etc., you are sacrificing what you could be earning if you went out to another job for those 10 years. You are going to be behind at the beginning, and that's fine. It may be that this is the stage in life that you are at.

If so, cool. Fine. I would, however, give you a few additional ideas. One thing that you could really focus on doing is developing and practicing skills of living cheaply. What occurred to me when I was thinking through your question is an example from a website that I used to read, and I still read there every now and then.

I hadn't been there in months until I went to find the article I wanted to find, called Cash Cow Couple. It's kind of a funny name, but I like it. The Cash Cow Couple is a young couple. I can't remember the names. It's Vanessa, and I think Jacob is the husband's name.

They started writing this financial blog for themselves when they got married. They are newlyweds. They have been married for fewer than two years. They started writing this financial blog. From what I understand from their writing, Jacob is actually in a Ph.D. program out in Texas, actually in a Ph.D.

in financial planning program, and they blog about finance. What's cool about their blog and what made me think of it is they don't spend much money. They are pretty hardcore with their frugality, and they write on their blog a lot about saving money. They bought a mobile home. They figured out that would be the cheapest way for them to live out in Texas.

I think he rides the bus, or she rides the bus, and they have an old Saturn that they drive. They hyper-mile the car to get the maximum amount of mileage from it. They save on groceries with all these coupon hacks. They do their travel with credit card hacks. He posted their expenses for their first year of marriage.

It's kind of amazing. Their total expenses for their first year of marriage were $10,336 for this young couple, which is probably in a similar situation to you. I can't remember for sure, but I think she has a job and he's in a Ph.D. program. Their annual cost for rent and utilities is $660.

They rented for a couple of months, and they had utilities. No mortgage payments. They're self-insured. No homeowner's insurance. Mobile home taxes are $30 annually. Land cost was $2,200 for the year. Water and sewer, $310 for the year. $410 for the year for electricity. $90 for natural gas. $100 for trash service.

$171 for household maintenance. $1,400 on transportation, which includes his Ph.D. program. Pays for unlimited bus usage. $312 for car insurance. $100 for registration and taxes. $500 on gasoline. So Jacob rides the bus. Vanessa has a short commute. So $500 for the year on gasoline. $405 on traveling for three different vacations.

And then some other miscellaneous living expenses. A total of $2,640 for the year for groceries. $624 for the year for restaurants. And a few more, some gifts and some miscellaneous expenses. $10,336 for a couple of two who are in a similar situation. Now, if this is your first time, you the listener, or you Alejandro, if this is you the first time hearing people who are just amazingly frugal, don't get upset.

Before you get upset about, "That's a crazy lifestyle," consider how they frame it. So for them, in their worldview, this is not deprivation. This is not living a deprived lifestyle. It's fun for them. They enjoy the challenge of figuring out how to get all of the modern standard of living for an inexpensive price.

And by the way, Alejandro, if this is your first time with this stuff, I don't know if you and your wife talk about it, but be careful before you tell her, "We're going to live on $10,000. $10,336 a year." She might not react well. You might want to work into that a little bit.

A lot of times that causes problems in couples. But the cool thing is that they're living a lifestyle, and they learn how to do it with skills on $10,000--let's call it $11,000 a year. I think that's pretty awesome. I'm pretty impressed by that. I don't have those skills as much as they do.

I'd like to have them, but I don't have them. And I think it's pretty cool. So what you could do is you could consider, "Are there some skills that I could learn?" Go read their blog and just do some of what they do. You're going to have a different situation.

I know you're in South Florida, which is more expensive than Texas, where they are. But you might have a similar situation. So remember that you can be learning skills of saving money and living cheaply all through that point in time. Now, the cool thing about what they're actually doing is they're actually probably making some extra money.

And so I don't know how popular this blog is. They've got at least a few thousand subscribers and a few thousand Facebook fans. That tells me that it's starting to grow. And they're basically doing what most personal finance bloggers are doing now. They're doing 5,500 Facebook likes. So this is a decent-sized blog, I guess, from this point in time.

They're doing, it looks like, primarily affiliate income. They've got some credit card affiliates. They've got personal capital reviews. So that'll be an affiliate link. They've got Motif Investing Reviews. That'll be an affiliate link. Republic Wireless, affiliate link. Betterment Options House. So he's got some reviews on here, and he's getting affiliate commissions.

So I assume he's making some extra money from that. So you might consider, is there some way that you could replicate that? Now, it may be that your PhD program is in something completely unrelated to finance. But there may be some way for you to do something similar and build a little bit of extra money with something like that.

He's going through a PhD in financial planning, and he's writing about personal finance. And I'm sure he's making, I don't know, some money with his affiliate income. So there might be something like that that you could do. Now, one other question is, are you doing your PhD program in the most efficient way?

Are you paying for it, or do you have a fellowship where they're sponsoring it? I thought of him as an example. He's clearly doing a fellowship where they're paying him for-- they're paying for his PhD program while he goes through and teaches some classes and things like that. So are you paying for the PhD program, or are you doing a fellowship?

Are you early enough that if you don't have a fellowship that you could do it? That would be one thing that you could consider. If you need income but you don't have time, it's an interesting puzzle. And if you ask yourself the question, I bet you could come up with some answers.

So I thought to myself, and I said, "What would I do for income if I didn't have any time to do some kind of a side hustle?" is the popular word for it now. And the best thought I had was, "Could you take on roommates? Could you rent a three-bedroom apartment for-- let's see, you're in South Florida-- so could you rent a three-bedroom apartment for $2,400 a month and rent out each of the bedrooms for $800 a month?" And that would cut your own expenses cheaper than you and your wife living in a studio apartment.

Or could you--I would be slow to do this, but could you buy a house? Could you buy a big house and rent parts out? Or could you just rent out some of your rooms on Airbnb? I know some people that pay for their whole rent renting out a couple extra rooms on Airbnb.

So are you in a place where you would be a popular Airbnb host? So that's the type of thing that you could use an asset that you already have-- maybe it's an apartment, maybe it's a house, maybe something like that-- and you could make extra money with only a little extra time.

Sub-leasing, all that stuff, check your lease, but conceptually that's an option. What I would really spend a lot of time thinking about is, am I really investing in a way that has nothing to do with money? It may be that you need three more years to finish your PhD program, and in those next three years you're just going to let this $20,000 of debt just sit there.

Refinance it if you can, defer the student loans if you can, keep the rates at the lowest rate, but maybe you can't make any progress on that. But are you investing into things that will make you more money in the future? So when you're done with your PhD, will you have an established social network that will open up for you a really nice job?

Don't forget that. Don't graduate with a PhD and then sit there and say, "Oh, I'm just going to go and start sending out resumes." Make sure that you've got people bidding on you by the time you finish your dissertation. That's doable, but you've got to do it. You've got to go out and you've got to put in the work.

It takes work and planning to actually make that happen. Are you maintaining a blog in your field that's going to build your reputation? If you don't have a website that is in your field that you're writing to, maybe you're doing book reviews, maybe you're discussing your personal process, maybe you're just talking about what you're learning as you're doing it, I would submit to you that that's short-sighted and that you should be doing that.

Is your dissertation on a subject that's actually interesting and important? So maybe you're working on your dissertation topic. Are you really picking something that's going to be valuable? Are you pouring everything into it and are you giving it full effort so it can actually be something useful? Can you actually do some groundbreaking research?

Or did you just pick a topic that said, "Well, I'm going to do this topic and I'm sort of interested in it, and this is a topic that's going to disappear into the-- What are those websites? I don't remember which one. The vault of academic papers where you go into these academic websites and there are millions of papers in there that no one ever reads.

Consider it. I'm not judging you on what is right or wrong. I'm just trying to give you ideas about how I would think about it. I would think a little bit uniquely about the opportunity that you have to invest that. I would think about it that way. And I'd make sure that if you're going to put the time into doing a dissertation, make sure it's something that's interesting to people.

Do some groundbreaking research. It'll take you more effort, but it'll actually be worth it, and it'll help to build that social network. Maybe you do the kind of thing where it's important enough that you get on-- you're on TV somewhere being interviewed because of the groundbreaking research that you've done.

So consider that. If your wife is working-- Question, is she working at the highest-paying job? Most people don't. The most inefficient area in most people's lives is their job. Most of us, we find some place, we pick it, we like it, and we don't do anything. Now, I'm cool with that.

That's totally fine. If that's what you want to do, great. There are dramatic options to every three years or so going and upgrading your job, upgrading your skills, upgrading your job. And you can take some lateral moves, and sometimes it's far easier when you're making $60,000 to go and interview for the $100,000 job than it is to get promoted within the same company from the $60,000 job to the $100,000 job.

Is there a way that--you mentioned she needs more education. So maybe she's--I don't know, she might be an educator, it sounds like to me, from that. Is there a way she can work somewhere where they're going to pay for the cost of the classes? I finished a master's degree myself.

I didn't pay for any of those classes. My firm did. And I really valued that. But I would have had to earn a lot of extra money in order for me to do that. So can she go work at a college somewhere part-time? I've done planning for families who worked for--both of them worked for a college so that they could live in subsidized on-campus housing, even with children, and get tuition rebates.

That may be a very efficient way to accomplish your goals. So those are some ideas that I had for you. I hope that maybe something in there might spark something. I would just simply say in summary, don't worry about it if you're in a stage of life where you're spending more than you're making.

That's called investment. But make sure that if you're investing in something like your education, make sure that you're investing wisely and you're doing everything that you can to make it valuable. Hope that helps. All right, next, Dave. Hi, Joshua. I've been enjoying the podcast. I was hoping you'd do a primer on ethical investing.

I've reached a point where the basics are squared away, and I want to start having my money work for me. And while the idea of a Vanguard TSMX seems appealing and just keep my hands off of it, I've looked at a lot of the organizations in their portfolio, and there's a few that I don't want to support with my money because they violate my values.

I've also looked at SRIs, and more often than not, they may have screens in place that are really not concerns of mine, or they may still invest in organizations that I have issues with. So I was kind of hoping if you could provide a starting point for how I can identify SRIs that not only aligned with my values as closely as reasonable, but also do perform.

Any other thing I haven't thought of, I'd very much appreciate it. So thanks so much, and I'm looking forward to hearing your answer. Good question, Dave, and I thank you for asking me. By the way, if you are new to the concept of socially responsible investing, when Dave references SRI, that is what he means, socially responsible investing.

And so basically, in summary, how I would say is this is basically how can I combine my investment strategy with the purpose of returning a return on capital with something that's going to do also some social good. So how can I marry earning investment returns from something that's going to do social good?

Now, I've got two ways I'm going to answer the question, Dave, is that I've looked at some of these SRIs. I used to get pitched on them from the wholesalers about some of the funds, and I'm interested in them. I'm very interested in this area of finance. I'm pretty ignorant, however, on the different funds, so I'm not going to spend much time on those funds.

I would point you toward the Wikipedia article on socially responsible investing. They actually have a decent chart in it that will show the different funds that they've listed out, various funds, and they've listed out the different topics, the different--what would these be called? The different--excuse me, I don't know what to call these areas.

Do we invest in alcohol? Do we invest in tobacco? That kind of thing. They've invested in different screens. There we go. That would be the word for it, screens. So I would point you to the Wikipedia article on socially responsible investing. I linked it in the show notes for you.

The problem that I face with this--I'm going to have some experts on. I've been looking for somebody who works in this area, maybe a wholesaler, maybe somebody who's in the business, who I can talk through this area because it's a growing area and there's a lot of interest in this area.

My problem is I've got some weird stuff that to me is--how do you define socially responsible? You even mentioned in your question, you said, "There's some things that I'm not really concerned about that other people are." I'll just give you an example. In this Wikipedia chart, here are the screens that they talk about.

Alcohol, tobacco, gambling, defense or weapons, animal testing, products or services, environment, human rights, labor relations, employment or equality, community investment, and proxy voting. Here would be these scenarios that they've got listed out for how to do social screens. But the screens that bother me, most of them aren't even on there.

A couple of them are and a couple of them fit. But the things that really bother me are pretty non-mainstream. I actually don't get how many people are bothered by some of the things that they list here because I'm not bothered by them. But I'm very--and before I give you some ideas of some of the things that I'm bothered by, I'll just mention this is something that really affects me more and more now.

I never used to have a problem with some of this stuff. I've always invested through mutual funds in the past myself, and I've never worried too much about what the companies that my mutual funds owned. I never worried too much about what they were. But lately, over the last about a year, this bothers me more and more.

I haven't done anything about it myself yet. I haven't sold my funds, but I think about it, and I'm moving in that direction just because I find that this is a bigger deal to me than not. But I'll give you an example. Here are some of the things that bother me.

Something that doesn't appear on here anywhere on this list is financial. I just finished--when I was on my trip, I just finished the book. I listened to the audio book called "The Big Short" by Michael Lewis. This is about the 2008 financial meltdown. I'm in the process of reading the official financial crisis inquiry report.

It's sitting here on my desk, and this is the official government report that was issued by the team that was commissioned to investigate the financial crisis of 2008. The Big Short, by the way, is an awesome book. This financial crisis inquiry report book is interesting, but it is horrible.

These government reports are awful to read through--not my kind of deal. But it's valuable, and I want to have it. I'm not okay--especially after listening to "The Big Short"--I'm simply not okay with profiting from some of these big investment banks. I don't want Goldman Sachs in my portfolio. I really don't.

I'm not okay with making money on AIG. Are all the people that work there bad? No. The people that committed--did these literally, I would say, criminal-- could be criminal actions, but are they all bad people? No. I have a friend of mine who's the former head of Goldman Sachs.

I have a friend who I've met--the former head of Lehman Brothers. And they're not bad guys, but I don't want to profit from some of the stuff that they're doing. Not very many people went to jail, and I'm not really okay with that because there was some crazy stuff going on.

Another example--banks. I'm not okay with the fact that the big five banks basically have a cartel in place, and I'm not okay with how they treat their customers. I think some of the work that they do and some of the stuff that they do is nuts. It's just--it's not right, and it should be changed.

But the thing is that they're continuing their own interests, and they're trying to continue their own interests, and they're trying to advance that for their stockholders, and so they're going to keep doing it, but I don't want anything to do with that. I'll read you one quote here from--this is from the introduction to the Financial Crisis Inquiry Report.

It says, "By 2005, the ten largest U.S. commercial banks held 55% of the industry's assets, more than double the level held in 1990. On the eve of the crisis in 2006, financial sector profits constituted 27% of all corporate profits in the United States, up from 15% in 1980." That's not okay.

In my opinion, it's not okay for those ten banks to do that. Now, do I want to go and just say, "You've got to get rid of this"? No, but I don't want to own them. I don't want to profit from it. I want to encourage the smaller local banks.

And the problem is there's this cycle of--what do you call it--crony capitalism where there's not a chance that those banks are going to give up their right, their hold on the market, and there's not a chance that the government's going to do anything about it. So we're stuck in this, and you're left with the standpoint of, "Am I going to profit from what Bank of America does?" I don't want to profit from it.

I'm not okay with some of the work of the major media companies. I don't like some of what they do. I support their right to produce their content. I don't want to stop them from doing it, but I don't really-- I've got some pretty strong moral convictions about some of the filth they put out, and I don't want to make money from it.

I'm really interested in green energy. I'm really interested in sustainable development and sustainable energy because it just makes sense to me. But I don't want to invest in green energy if investing in green energy means destroying people's rights and freedoms. I don't have any interest in the government stepping in to redistribute people's tax dollars to benefit some company versus another.

All this global warming crap has so much politics involved with it, and so we're going to do a carbon tax, and we're going to have all this stuff. And there are some really simple, really effective solutions that can make a dramatic difference in the health of the global ecosystem that could be pursued, but there's no money in that.

So we just pursue the crap we can tax. I'm not okay with owning some of the big bio companies. I'm really not cool with what they do. I don't want to own Tyson Chicken stock and drive past the hell holes that they call a chicken house. I was driving across the country, and I passed a bunch of these things on my way up to Pennsylvania, and I don't want to make money from that.

Those things are hell holes. Go look at how they treat their animals. I don't want to own it. And if I can figure out--try to cut back on the stuff, and I'm supporting it with my dollars, I can't find any good local suppliers of pastured poultry, so I'm kind of stuck, and it bothers me.

I don't want to own it. I don't want to give them my money, and I don't want to make any money off of that business. I don't want to give any of my money to some of these-- I drive past the feedlots. I mean, that is completely inhumane, the way we treat these cows.

I don't want to own that, the companies that make money off that. I'll give you the worst example of how conflicted I get about it. I don't want to profit money from the global war machine and from the war economy. Increasingly, as days go by, I'm becoming increasingly convinced that war is--to borrow the terms of who was that guy, the general who wrote the book back in--I think it was like the 1950s.

I'm going to Google it. The guy who wrote the book, "War is a Racket." It was General--or General Major-- United States Marine Corps Major General, two-time Medal of Honor recipient, Smedley Butler. And so he wrote--he had a speech in a booklet called "War is a Racket." And so in the 1930s, after he retired from the Marine Corps, he went around and did that.

I mean, "War is a Racket." War props up our economy. The problem is you actually start studying history on the textbook you were given in eighth grade. And yes, I passed AP U.S. History, and no, no one ever told me. I got a five on the history exam in AP U.S.

History, and no one ever told me any of the history until I actually went and started looking it up. You find that basically in every single war, the major people that get rich off of the total destruction of human life are the guys that are making the guns and the tanks and the ships.

So what do I do with this? Here's the conflict that I face. Personally, I would love it if every single company in the United States-- and I don't know about the world--I assume the world, too-- but I would love it if some of the gun companies would just sell millions more weapons.

And they make lots of money doing it. That really appeals to me, and I fiercely support each and every individual, no matter where in the world they are, their right to defend themselves from their aggressors. Frankly, I would prefer to fly on an airline where every passenger on the airline were required to have a Colt 45 on their hip.

Now, is it ever going to happen? Not a chance. But I would prefer to fly on that airplane. I feel a lot safer there than I do when I'm out on the streets in Pennsylvania or Philadelphia or Chicago or wherever. New York City--I was in Washington, D.C. Not a gun allowed forever.

I would much rather be on that because I would feel a lot safer if I knew that the good people had the guns instead of the good people not doing that. So from that perspective--so let's say that I have that philosophical perspective-- and so now I would love it maybe to own some shares of Colt Defense, Inc.

or Sturm Ruger and Company--those are Ruger firearms. But what do I do with the fact that some of the same companies who manufacture weapons for the private market also supply and make a lot of money from the military-industrial complex, as Eisenhower called it, and basically the military war machine?

What do I do with that? I'm not okay with the fact that if a mutual fund has a defense or weapons screen on it that it screens out the companies that serve private individuals and provide arms for private individuals and the companies that make arms for global governments. Those things to me are very, very different.

So from their perspective, they wrap up a fund and they say this fund doesn't invest in defense or weapons. But to me, the U.S.--here's a little example for you. Did you know that U.S. companies supplied the vast majority of technology to the Soviet Union over about a 50-year period to actually build the Soviet Union?

So who got rich from the Cold War? Who had an incentive to do that? The arms companies. So there's an environment fostered that winds up with billions and billions of dollars of arms contracts that make the companies that make the weapons safe, and the rest of the world pays for it.

So I'm not okay with that. But I'm very okay with the fact that if a company produces a better rifle and they can get that rifle into the hand of an individual, that builds freedom because that puts fear of the populace into the government, which is how it should be.

So how do I deal with that dichotomy, that dramatic difference of something that--something would be? That's a fairly nuanced view. I would imagine that very few people hold the kind of view that I do of seeing those differences. By the way, if you doubt my facts on the Soviet Union, I would encourage you to go and read the books written by Antony Sutton.

The name of the one is Antony Sutton, S-U-T-T-O-N, one of the most careful researchers ever that wrote a number of books. I'll find a link to kind of a summary of him. But he was a college professor, and he is one of the most careful researchers. And if you're interested in the Soviet Union and the Cold War, I would encourage you to read his books.

It's very interesting. Now, so I've just destroyed basically in my mind the companies that I'm not okay with in something like the Fortune 500. Even things--let me give you an example. So I would consider--let's say that I'm going to talk about maybe a home-building company. Is there anything really controversial about a home-building company, as D.R.

Horton or one of these companies? Really, frankly, I think they're pretty uncontroversial. I don't know of anything that a home-building company, a house-building company is really doing that around the world that's destructive, that violates my personal ethical considerations. I don't know anything evil about that they do. But you know what?

I guarantee you they're lobbying Congress to keep the tax incentive for the ownership of houses there and the reduction of mortgage interest. And you've got the--who is it?--the National Association of Realtors constantly lobbying Congress to keep their little perks. That's all a bunch of crap. Get rid of all of it.

So I would say, from a moral perspective, get rid of that stuff. Clean up the tax code. I'd get rid of income taxes if I could. I'd go to a head tax model, but that's just me. Never going to happen, so whatever. It's one of those weird things--views I hold that never happen.

So I'm not okay with these companies doing this stuff. I'm not okay with the insurance companies lobbying Congress to keep their little perks, and I'm not cool with that. So I basically throw out the whole system. So what do I do with that? It brings me in a bind.

And I could go on and on and on. I could go--racism. Do I want to--community building. Human rights. I can't stand half of the non-profit organizations. So in case you can't tell, I'm probably the most skeptical guy you're ever going to meet. And also in case you can't tell, I find the world a very challenging place to live with all of my oddball issues and my points of view that I've never met anyone that shared half of them.

So how do I deal with this? Well, I'm beginning to think that the only thing that I can do, really, that's going to make a difference is just simply to take charge of the things that I know I can affect. And I can't affect the whole world, but I know I can affect a few things.

And whether that's big or small, I don't know. I personally have an opinion. I think Sam Walton has helped millions more people than the biggest non-profit foundation ever did simply because what he did brought a higher quality of life and a higher standard of living to more people than anything else.

And he completely revolutionized the retail industry. And all of us today benefit from that. So if I could have had the--if I could have been alive and had the prescience to go back and invest with Sam Walton, man, that would be awesome. Now, is the Walmart today the same thing?

Probably not. You get to the point where you get so big and you've got to support your stockholders, and it probably changes. But, man, if I could have profited off of what he did, I would love that because look at the amazing amount of good that he did for millions of people all around the world.

So here's how I'm dealing with it right now. A, I'm just investing in what I know and what I care about. So I started this podcast, and I'm investing in it. I'm investing my time. I'm investing my money. I think I can make a difference in this part of the world.

I think I can help people make better decisions, and I think I can help people choose things more carefully that are helpful for them. I really do. And so I'm doing this show. I've got some side projects that I'm working on that I'd like to invest in. You know, I'd love to see local agriculture build up in my area.

It's horribly weak. So if I could invest in that, and I would. I haven't figured out how yet, but I will. I'd like to invest in guys like the urban farming guys out in Kansas City. You know, they're doing some real work. You want to conquer inner city--I think they're still doing it.

I haven't checked on their projects in at least a year. But you want to conquer inner city problems. I mean, there are some guys that actually went and did something. Instead of talking about it and forming some stupid, massive organization, they just put their money where their mouth was and moved there and started working on projects and started actually helping.

You know, I'd love to--me personally--I'd love to invest in an education company that's transforming how education is delivered on a global basis and getting it out where it can't be usurped for political gain. I don't know how to deal with some of this stuff, so I'm not really giving you an answer to it, but I'm telling you I think a lot about it, and I don't know the answers.

But here are my answers. Frankly, sometimes I wish I could-- it really bothers me how so much of our money is kept beyond-- in 401(k)s and IRAs, and we can't really touch it. And so then you're forced to basically invest in publicly traded companies because the ability to do something different is very difficult.

And so if you're investing through your 401(k), it's kind of hard to take the money out and help a guy get started with a pastured poultry operation in his local backyard. It really is. So sometimes I wish I could tell people to cash out their 401(k)s and just go start businesses that change the world.

You know, more farmers and--I may not pick on them. I don't know. I was going to say more farmers, fewer attorneys, but I just feel bad about that because I like attorneys and I like law. But I can't. I could never tell--I mean, that's bad advice, but frankly I think of it sometimes.

So sorry, buddy. Don't have a better question--better answer for you than that. But I would say probably where I would start, at least where I go in my mind, is I don't start with socially responsible mutual funds. I start with what can I invest in and who can I touch on an individual basis that's going to make a difference.

And I walk away from politics and I just want to start doing stuff. I'm tired of it, so that's why I'm doing this, and I've got some other projects as well. A couple of more things and a couple quick--two quick comments and one comment and we're done for the day.

So really going to be--we'll see what I hear from this one. How about a long show, two hours? I got a comment on the 4% show, and the comment was from Fabian. And he said, "Joshua, I found this podcast more puzzling than anything else." He said, "So far I was relying on the idea of the 4% rule, but now I'm not sure if it's a good idea.

Your interview was very theoretical and had no practical element. It was more discouraging because the element I was relying on was devalued. So now how can I plan my retirement? I know you're saying it should be an individual matter, and that's right, but that doesn't help the individual who is not a financial advisor.

How can I build my own plan? The more I read, the more I get the expression, 'It's a gamble, Fabian.'" And you can see this comment. It was a public comment on the show, and you can see my response to him. "But I thought this was valuable, and I wanted to bring it up and touch on it," and part of the things that I wrote in the comment and a couple of additional things.

So I understand that feeling, and I actually--if Fabian had that and he was willing to write on the comment on the show, I'm sure there are at least a dozen or two other people that had that same feeling, maybe even you. And I didn't intend to kind of take the 4% rule out because-- and I'm going to emphasize in a minute--the 4% rule is entirely valid.

It's kind of tough when something that you rely on highly is kind of taken apart. That really hits you. I've had a lot of things that I used to think these were sure things that they fell apart under closer examination, and I really didn't intend to do that with the 4% show, but I get it.

I get why that might have happened. And so what I told Fabian is I said, "Just keep learning your way through it, and fact-check me and fact-check yourself." And then I hope as you move through things, you actually will get more confident in your understanding of the 4% rule and how it applies and how it's limited.

And I'm going to give a little bit of nuance to it, but I think this happens a lot in financial planning, and that's actually why I'm starting the show is because I had to go through this process of having some of the things that I thought I got to be popped.

So, for example, you'll notice I have yet to do a single show on insurance on this podcast, and we're at episode 75. I haven't done a single show on insurance, and I've sold a lot of insurance. Frankly, it's just because I'm bored and don't like talking about insurance. I'm just tired of it.

But I'm going to talk about insurance and death. I used to feel like I used to be a buy term insurance and invest the difference guy. I used to say, "Well, what you should always do is buy term life insurance and invest the difference in mutual funds." That was my go-to situation.

But if you go back and you--or if you think back to how I answered Beth's question earlier in this show, you're going to find a little bit of a different, more nuanced answer. And so I had to learn that maybe there were other situations where my buy term and invest the difference kind of had to get adjusted.

And then I had to learn, "Okay, well, maybe then it's term insurance and whole life insurance." I didn't like universal life insurance because I always found these policies falling apart. And then I had to have that challenge, and I had to go back and figure out, "Oh, wait a second.

How could I use a universal life insurance policy to solve this problem?" So each one of those things was I had a rule that I had in my mind that I said, "Here's a rule that I can stand on." And now somebody brought something else, and I have to learn my way through it.

So this is going to happen. And, Fabian, you can't fall on one thing just like the 4% rule because the 4% rule has a bunch of assumptions built into it that if those assumptions were to stop being true, then the entire thing would fall apart. Now, if you don't know those assumptions--and most people don't-- but if you don't understand those assumptions, then when somebody comes and says, "Do something like I did with my show," then you can feel like, "What do I depend on?" But my goal is not to break the 4% rule.

My goal is just to illustrate the assumptions that are under it. And then you can feel confident about how you would actually approach it. And then you can feel good about knowing where the margins of safety is and how to do it. And here's the metaphor that occurs to me.

I live in Florida, so we don't get snow and it doesn't ice here. And I see sometimes people walking on ponds, and I've-- let me think to make sure this is true. Right. So I've never walked on a frozen pond or a frozen lake that I can have any recollection of.

I've been in snow, but I've never walked on a frozen pond or a frozen lake. And frankly, I probably wouldn't, because I would be scared that the ice were going to fall through. Because I'm not comfortable--all I've seen is I've seen movies where people fell through the ice, and I don't know how thick does ice have to be.

If I can see the water, is that too thick or is that too thin? So I would be worried about not knowing how to make that judgment. But for somebody who grew up in Minnesota or in Canada-- my friend Derek, who called from Canada, he knows how to walk on an icy pond.

So he knows when it's safe and when it's not. So that's what it is I would say with things like the 4% rule, is that it's an entirely valid rule, but once you're familiar with it, once you understand it, you can know where that margin of safety is. And then you can feel confident about sometimes pushing your withdrawals from 4% to 8% in the times where it's that, and you can figure out how to work that plan.

So that's the best example that I can encourage you with. Keep learning your way through. Even just last week, I had one of my bubbles popped. The bubble that popped for me was I've never been a fan of equity indexed annuities because the internal expenses of them are generally quite high, and when you understand the limitations on the product, on the annuity product and the insurance product, I've just never really been a fan, and I've never seen how they could fit.

But I sat down and I had that really challenged. So my advice to clients in the past was, "No, don't buy an equity indexed annuity." I had some guys in my master's degree class, very competent, very knowledgeable guys, that were talking about some features of it, and we were talking it through that even with the disadvantages, I could see some places where I could use that product in the financial plan in a positive way.

So I'm no different. Here was the thing I thought I knew, don't buy equity indexed annuities, and here I was having something added to that and saying, "Wow, wait a second. How did I get that wrong? Maybe I need to keep learning." Keep learning. The 4% rule is an entirely valid and extremely useful planning concept.

So like I said in the interview, or like Dr. Fowle said in the interview, remember, many advisors view the 4% rule as like the absolute safe floor and would actually feel comfortable with a higher distribution number. So Fabian, if for your retirement you're shooting for 25 times your annual expenses, that's your goal for your retirement fund, you're going to be well on track and you're going to be in great shape.

But you do need to understand there are a lot of assumptions in that 4% rule. So the example that occurred to me is, we talked about it with Dr. Fowle, are you in a market where the 4% rule is valid? So in the U.S. the 4% rule would work, but what if you live in Japan and your money were in the Japanese stock market?

Or what if you're in Europe and your money is in your local market? Does the rule hold up in that situation? I don't know. I actually don't know that answer. So that would be an important assumption, is that where is your money invested? It's also possible that a market like the U.S.

market could change. And that's what I tried to point out with Dr. Fowle, is that every investment prospectus for every investment says there's no guarantee that the future will be like the past, but yet sometimes we still assume that the future is going to be like the past. And there's no guarantee of that.

Is it likely? I think so. I don't think the future will be like the past, but I think it will probably be better. But better may be defined in different ways. Back to my Walmart example, Walmart I believe has done major good for millions of people, but there were a lot of people that got hurt along the way.

There are a lot of businesses that are closed today because Walmart came to town. That's tough. So we don't have any guarantees that the future will be like the past, so you need to understand that. What about the U.S. market? The U.S. market right now, the U.S. business climate, is really pretty unfriendly toward entrepreneurship.

It really is. So you see that in the corporate inversions that are happening. Many companies are wishing to move to other places. Many companies are moving major important subsidiaries there, whether this is the famous ones over the last couple of months, whether it was Walgreens or whether it was Burger King moving to Canada.

This happened--remember when--what's that company that did all the contracting stuff that Dick Cheney--Halliburton. When Halliburton moved to Dubai, they moved to Dubai a few years ago. There are companies all over the place that are moving abroad. So where are those companies going to want their stocks to be traded?

Are they going to be traded on the U.S. exchange, or are they going to move to another exchange? As some of the Asian companies--there seems to be major growth in Asia-- as some of the Asian companies and some of the business environment becomes more transparent and more structured, that could affect the investment markets.

So I don't know what those things are going to be, but those are important. Probably the biggest problem with the 4% rule--Dr. Fallon and I didn't talk about this, but the biggest problem I have with it is that the actual return of the average investor is less than half of the return of their average investment.

So all of this research that we have is based upon index returns, but we know that the average investor gets less than half of the return of the average investment. And that's a major deal. That's a major deal that we've got to control for. So let's say that we control for that with hiring an investment advisor.

Well, now the 4% rule becomes the 3% rule, because if you're taking 1% off for fees, you can't count on the 4% rule because that's money that's lost to fees. So again, half the audience would say, "Why would you ever do that?" Well, because the average investor doesn't actually invest successfully without good investment-- without a good--I will use Nick Murray's words--behavioral investment counselor.

So how do you fix that? You can fix it in a variety of ways, but it's a problem that has to be fixed. And then another good example--and we'll talk in detail about some of the ideas that the financial planning community has come up with about how to actually do these distributions-- but I wrote in the comment to Fabian, and I'll read it here, is Dr.

Fowle wrote a paper in the May 2011 Journal of Financial Planning, and his paper was entitled "Safe Savings Rates--A New Approach to Retirement Planning Over the Life Cycle." And I'll read one paragraph from that paper where he talks about something called the safe withdrawal rate paradox, and we didn't mention this in our interview either.

But he says, "This study can be interpreted as providing a resolution to the safe withdrawal rate paradox, which David Jacobs, 2006, and Michael Kitsis, 2008, developed independently. Consider the following. At the start of 2008, person A and person B each have accumulated $1 million. Person A retires, and with the 4% rule is permitted to withdraw an inflation-adjusted $40,000 for the entirety of her retirement.

In 2008, both person A and person B experience a drop in their portfolio to $600,000. Person B retires in 2009, and the 4% rule suggests he can withdraw an inflation-adjusted $24,000. The paradox is that these seemingly similar individuals experience such different retirement outcomes." So if you grasp that, these seem to be two very similar cases, and yet the one has $40,000 to live on for retirement, and the other has $24,000 to live on for retirement.

But do they really? So you can see that sometimes the problem with the 4% rule is not actually the rule, but actually how do you implement it? So if you retire today in 2014, do you feel comfortable withdrawing 4% of your portfolio for the rest of your life? What if in 2015 we have a 35% market decline, and your portfolio goes from--well, 40% market decline, so your portfolio goes from $1 million to $600,000?

Do you still feel comfortable withdrawing the 4% off of your portfolio that you calculated in 2014? It's a question that you have to answer. So the 4% rule, in my opinion, is a very useful strategy, but do we choose 4% in 2008? Do we choose 4% in 2014 at market highs?

I don't have the answers to those questions except in an individual situation and in talking about strategies, but hopefully that will help you to understand some of the ways that you can add additional information to it and think it through and how my issue is not with the rule, but actually there's some actual challenges of implementing the results of the rule.

So Fabian, I hope that helps, and for the rest of you who may have had that reaction, I don't wish--that was not the reaction I desired. The reaction was just to help impart a little bit of knowledge and a little bit of thinking to help you challenge that and learn your way through it.

One more question, one more comment. Other question. Comment from--I didn't write the name down here. It was a comment on my show where I talked about my history at FinCon. It says, "Joshua, enjoyed your podcast. Thanks for all the hard work I know you put into it. Quick question.

Regarding your two-week trip living out of your car, what did you do for showering?" I've always liked the idea of traveling for a period of time living out of my car. My only experience was back in college road tripping around Greece where my buddy and I lived out of a subcompact Hyundai Gets for a few days.

We bathed in rivers and in sinks for the week, which worked okay as we could dress pretty casual as a tourist, but imagine it would be more difficult in a conference setting where you need to be a little bit more presentable. Thanks again and look forward to listening to more of your podcasts.

I apologize that I didn't mention that, and I figured some more people would have that question as well. It was actually different. My easy solution to that was either, A, to shower at a gym. That's what it seems like most of these people who live in their cars do.

Or, B, simply just to get a hotel room every few days if I needed one. What I actually wound up doing was in New Orleans I couldn't find a convenient gym, but I wound up swimming in the pool at the hotel where the conference was. I didn't need a room key to access the pool, so every night I just went up and went swimming in the pool.

It was kind of a pain because I didn't use soap in the pool or anything like that. Don't worry. It was kind of a pain because I had the chlorine on me and I couldn't get the chlorine off because there was nowhere to shower. Was there a shower at the pool?

I didn't actually shower at the pool, but that would be my other answer to it. That was going to be the next thing. The way I would handle that, though, in the future would be most pools would have a shower, and I didn't even think of that until just now.

I did that when I was in New Orleans. The second week when I was in Pennsylvania I just went to a local gym and just told them, "Hey, I'm in town. Could I borrow a shower? I don't have a place to take a shower." They let me do it.

That was super nice. I didn't even have to buy a day pass, but that was my other plan was to buy a day pass. I encourage you to try it out. The thing about traveling in the car, the biggest expense of road tripping is usually gas. If you can cut that expense by a massive amount by going with the car instead of an RV, that can be huge.

The second biggest expense is accommodation. I would want to make sure I had a tent and stay at some campgrounds or stay out in the woods, but I thought you might enjoy the answer to that question. Finally, I close with this comment, which was a very perceptive comment, I thought, from Dave when I was out of town.

He said it was a comment on the short show that I released on the impact of hobbies. He said, "Hi, Joshua. Thanks for all the work you've put into making your podcast. While I really enjoy your lengthy interviews and detailed analyses and considerations, this short little piece on hobbies was quite insightful and worthwhile too.

Per your comment at the end of the episode, I thought I'd write a short message describing to you how my hobby has helped out my personal finance adventure. I'm a 32-year-old white-collar type in accounting and audit, and just now, with the help of this episode, realized that my single major hobby has contributed more towards my upcoming financial independence than I had ever considered.

Since I was in junior high school, I've been a dedicated martial artist, training three to four nights per week, going on about 20 years now. After listening to this podcast, it's fascinating to consider that for about $75 per month, martial arts has helped me to stay very fit, avoid, and hopefully continue to avoid, expensive health costs, keep my home-cooked diet healthy and rather low-cost, keep my social drinking in check, and has given me a great social circus--circle at a very low cost--circus.

That's going to be my new saying. It's given me a great social circus. Excuse me. Has given me a great social circle at a very low cost of $75 per month, 15 nights per month, equals $5 for a night out kicking and punching my friends. Since I live in a major city, I can easily walk or ride my bike to this hobby and work, and so I don't have need of a car.

This hobby, without my ever really thinking about it, has helped me to construct a lifestyle that is healthy, challenging, social, and rewarding, and all while keeping things on the cheap. So thanks again for the podcast. It's given me a great aha moment this morning. Whenever I feel lazy in the future about getting up and training martial arts, I'm sure I can find a little extra motivation by thinking about how this specific hobby fits into the broader picture of personal finance.

Yes, yes, it's all coming together now. Hope you're enjoying your weeks away. Dave." I just thought that was the coolest comment. I really did. And I had another comment from a listener who said, "I gave up triathlon for the same point at the expense of the hobby, Ironman triathlon." And I just thought, what a great two things to compare, the low cost and all those benefits that Dave talked about with his hobby, as well as an expensive hobby like triathlon, which is awesome.

I think it's cool. I know a few people who are Ironmen. But consider that yourself. Consider the things that you give your time and attention to. And as we go into a weekend here, although I'd be surprised, it's 4.37 as I finish recording this. I'd be surprised if you listen to this on Friday.

But as we're going through a weekend or it's the start of a week, consider is there a way where you can integrate some of these things together? Can you think of a hobby that's going to enhance your health and also your finances and keep your social drinking in check, as Dave said, allow you to have time with your family?

Can you stack those functions? Because if you can, it can open up a great deal of margin in your life. And maybe that's the type of thing that could help out in your specific situation. So thank you for listening. I appreciate it very much. I hope you enjoyed today's show.

I wanted to make sure that I got you the answers to these questions. And even though it looks like we're at about two and a half hours here, that's the point of podcasting. Hit pause if you don't like this kind of stuff. But I wanted to make sure I answered these questions.

That concludes all of the questions that I wanted to answer for next Friday's Q&A. So if you would like to get your questions on next Friday's Q&A, please call it in or email it in and I will handle that next Friday. I love doing these questions because it gives me a chance to share with you some thoughts and concepts in a more succinct way than my creating an entire show on it.

So if you've got a question for me, email me, Joshua@radicalpersonalfinance.com is my email address. Or come by the show on the website and leave me a voicemail. Thank you for being here. I want to thank each and every one of you for listening. I really do value all of the comments and all of the feedback.

Have a great day, everybody. With Kroger brand products from Ralph's, you can make all your favorite things this holiday season because Kroger brand's proven quality products come at exceptionally low prices. And with a money back quality guarantee, every dish is sure to be a favorite. Whether you shop delivery, pickup, or in-store, Kroger brand has all your favorite things.

Ralph's. Fresh for everyone.