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My name is Joshua Sheets. Today is Thursday, October the 9th, 2014. And today we are going to start working through the list of all of your frequently asked questions about early retirement with one of the magnificent moderators from the Money Mustache forums, a rebel spy, aka Joe. You know, I really love one of my favorite trends going on on the internet right now is just the massive growth of the early retirement community.

And I love the community because it's one of the most positive, upbeat, energetic communities. And after spending a lot of time in the traditional financial planning world, where oftentimes I've found many clients and people trying to figure out, "How do I just scrape through?" It's really exciting to spend time in the early retirement community where people are just focused on, "How can I achieve this massive level of success as quickly as possible?" And after spending hours trying to encourage people to save 10 or 15% of their income, it's wonderful to watch people just wake up and say, "I'm going to save 50% of my income," or "I'm going to save 80% of my income." And so I love this community.

And although this show is not the early retirement show, there are others who are doing a much better job about with that than I am. I do think a lot about this, and I am very interested in these topics, and I love being part of the community. And probably there are a number of active forums online that are engaged around this community.

One of them is, I think it's the early retirement forums. I haven't spent much time on there, but I know a lot of people have benefited from there. Then there's also the early retirement extreme forums. But the most active forums that I'm aware of at the moment is the Money Mustache forums.

And there is an awesome community of people that get together there and talk about early retirement topics in depth and all kinds of things from a mustachian perspective, as it's known affectionately by the fans of Pete's blog over at MrMoneyMustache.com. And so I've enjoyed lurking over there for quite a while, and I've contributed to some of the conversations.

I really have enjoyed it. But it's always stood out to me to--I've always been impressed with the wonderful job that the moderators do over there. And I've also always been impressed with how frequently the same question gets asked again and again and again and again. So I've always been--I've always thought that there was one moderator--and there are several great moderators over there, and I may talk with more of them in the future--but there is one moderator, and the screen name is A Rebel Spy.

I thought for years it was Ara Belsby, but it's actually A Rebel Spy. And his name is Joe. And so I reached out to Joe, and because I've always been impressed with how Joe has answered questions on the forum, doing a good job of not being dogmatic about this is the right answer, but rather showing the different sides of the article.

So I reached out to him, and I said, "I'd like to put together a resource, an audio resource, for the early retirement community that could help people get an introduction to some of the major questions that they're going to have to think about. And I'd like to do it in a balanced way to try to give information so they can figure out what's right for them." And so after a little bit of arm-twisting, Joe agreed to come on the show.

And we've compiled a very extensive list of--well, not extensive, but 8 or 10 questions that we just see asked again and again and again and again. And the plan for today's show is to go through that list. Now, this is actually a prerecorded interview. I'm just about to play it.

And we didn't even make it through the first one. So we're going to come back, and we're going to do more in the future. But I think you're going to find the content of today's show very valuable. And we spend most of our time talking about real estate versus stocks as a strategy for early retirement.

And I'm thrilled with who I got to come on. I'm thrilled with Joe and with his contributions. I mean, to give you some idea, I just pulled up his profile on Money Mustache Forums. He has contributed 11,030 posts to the Mr. Money Mustache Forum, which is an average of 11.4 per day.

So I can tell you how active he is in that forum. And that's 11,000 posts since February 14, 2012. And this is October 2014. So I think that's a great introduction. Joe, thank you for all the work that you do. And I hope you enjoy the interview. So, Joe, thank you for making the time to be with me tonight.

Welcome to the Radical Personal Finance Podcast. Thank you. It's my pleasure. So I don't know whether to call you Joe or to call you Arabelspy or a rebel spy. You know, frankly, for the first year I would see you posting on the Mustache Forums, I thought it was Arabelspy.

And one day I looked at it and I said, "That word is a rebel spy." So you must get that a lot. Yeah, absolutely. I first created this screen name almost 20 years ago using AOL back in the mid-90s. And there's people who I've met in person who, until I introduced myself as "I'm a rebel spy," and they went, "What?

Oh!" So many, many people have told me about that light bulb moment. That's awesome. So our mission here today is to create an audio version of just kind of a primer, so to speak, of the frequently asked questions that many people who are first interested in the topics of early retirement would ask.

But before we get to that, though, I would love--because I've only just interacted with you on the forums and read your posts--I'm interested in how did you get involved with the Money Mustache community? Well, I have been into the early retirement scene for years, first finding Jacob over at ERE back in the late 2000s.

And so when Pete first started his blog, I found it within a month of it opening. I think he opened it in April 2011, and I found it in May and immediately was hooked because the guy's just got the most entertaining writing style you can imagine. And a lot of his stuff just resonated with me because I'm not quite as extreme as Jacob, and a lot of those people I have a lot of respect for, for those people who really can get their spending down and really improve their skills.

It's something I--I'm not quite there, but Pete's kind of more middle of the road, seems extreme to a lot of consumers, but not to someone who's quite at Jacob's level. Really kind of struck a chord with me and my wife. So then when he started the forums about a year later, I immediately hopped on.

I've always been a big fan of forums and have tens of thousands of posts across a bunch of different ones across the internet. And so got involved there and have just really enjoyed it. The mustachian people in general, I found, are just an incredibly smart and great group of people to interact with.

I'll concur with your assessment of Pete's ability to spread the good news, so to speak. There are certainly some--the topic of how to build financial independence, I mean, that's been solved for decades. You can go back to Joe and Vicki Dominguez--or excuse me, Joe Dominguez and Vicki Robbins with your money or your life.

You can go back to--I mean, you can go back as far back as probably writing is around. But in the modern era, it certainly seems that Jacob was the one who really kind of cracked the code and talked about it in this more modern internet context. And then as far as being able to make it more accessible, Pete's done a wonderful job.

So I think we all owe him a debt of gratitude for that. And it's also true about what you remark about us being extreme, because, I mean, Jacob is a little bit intimidating for a lot of people. The idea of--you go home and tell your spouse and say, "I found this guy on the internet that says I can live on 7,000 bucks a year." It's kind of crazy.

But if you go home and tell your spouse that says, "I found this guy on the internet that his family of three spends 25 grand plus the cost of real estate." So that's--let's call it 40 grand a year. Well, that's just a median income. And so if we could just live on a median income, then we can achieve financial independence, and he makes it sound easy.

So he's done a great service to the message, so to speak. Absolutely. So you were already following an early retirement plan? And where are you in your process? So I had kind of had it, yeah, in the back of my mind, in that I was real familiar with the concepts, had been introduced to the safe withdrawal rate, had understood a lot of the early retirement stuff, but wasn't really focused on it, per se.

My wife and I are both teachers, and we both love our jobs. And so we were saving, and saving quite a bit, but also making a lot of mistakes, both in investing--well, mainly just in investing. And that was all me, and my wife's very supportive, and I learned some painful lessons in the 2008 recession, and am now a big index fund fan, because I'm certainly not capable of timing the market, even if others might be.

But around that time, we got into real estate. We live in Las Vegas, and real estate crashed pretty hard here. And so we made some mistakes there, too, trying to catch the falling knife with investing and buying some homes that still had a long way to fall. I thought, hey, they've fallen for a year, they've fallen for a year and a half, these must be good investments now.

And there were still some more painful times to come. But we kind of kept at it, and almost sort of dollar-cost averaged into homes, and ended up with a fair number of rentals here in Las Vegas. And after that, I really got into real estate as a hobby, and enjoyed reading about it and learning about it and going to real estate.

So then started partnering with people on rehabs and investing in notes and buying some rentals out of state once Las Vegas prices got to where it didn't really make sense to buy here anymore around early 2013 or so. And so all that to say, we're looking at having our first child and retiring in maybe another two years or so.

It'll be right about the time that I'm 30, and my wife will just be about to turn 30. Wow. Yeah, so it's been a pretty interesting wild ride. But most of it has just come through the last four years of finally educating myself before making investment decisions and making smart choices that are based on knowledge rather than speculation.

So I'm definitely glad that I decided maybe I should learn what I'm doing rather than just hope and pray. That's fantastic, though. And you've been able to do that all on a teacher's salary. Well, two teacher salaries, I guess. What a great story, man. Thank you. Congratulations. Thank you.

And then so after you retire or declare yourself financially independent, are you going to continue teaching at all or just focus full-time on managing your properties? Do you have any idea what your lifestyle is going to look like at that time? Yeah. My wife and I, we both really love to travel.

And we did a backpacking through Europe trip one summer for a couple months, and we've traveled to a number of different places. And so our plan, though it kind of fluctuates, roughly looks like have a kid and start to travel full-time, probably a slow travel around the world if you're familiar with Go Curry Cracker.

And I know you are because you've interviewed them. If your listeners are familiar with Go Curry Cracker, kind of moving to a place and living there for a few months, getting to know the neighborhood, local market, and then getting to know the people and actually living there, not just visiting there as a tourist.

And so we're looking at doing something like that. I don't know about teaching. One of our kind of plan C or D is to teach English overseas if we find out that we need some more money or there's some kind of shortfall or whatever, then that's always a backup plan.

And if we find that we miss it, we can always go back. But just having that freedom to do whatever we want is really what we're looking for. That's exciting. Now, let's start there because I think you raise a really interesting scenario. And so we're going to tackle first.

It sounds like you had some exposure to investing through mutual funds, specifically through an indexing strategy and also through real estate. So one of the common questions that I see in the money mustache forms, the only early retirement form I've ever been much involved in. So we'll just pick on that.

I often see the question about real estate versus stocks, basically real estate versus index funds. Very few people on there are pursuing strategies other than indexing. But you are planning to travel, but yet you're going to own a bunch of real estate. Do you see yourself able to continue owning the real estate and managing it from abroad, or are you planning to sell out and move to another strategy?

That's a good question. I don't think that -- we're not planning on selling anytime soon unless, for whatever reason, the market dictates that and there's better opportunity. Because real estate offers us a couple advantages that stocks won't that I'm sure we'll get to in just a minute. So there's a number of different options for handling real estate management when you're not local.

One of them is, of course, a property manager. And they'll typically manage your properties, find tenants for you, things like that, and charge you about 10% of the gross rent. The tricky part is finding a good one because you are relying on them to take care of your assets.

You're relying on them to find good tenants who will pay on time and make sure they don't do a bunch of damage to the house. So you do need to find a good property manager, which can be tricky, especially if you're investing in areas where there's not a whole lot of choice, more rural areas.

Another option besides a property manager is managing it remotely yourself. This obviously is tricky because if you're half a continent away, completely different time zone, you can't go deal with things. One of the better ways I like to deal with this scenario is to buy a home warranty. And a home warranty, if you don't know, is you pay -- it's generally around $300, $400 a year for just an average single-family home.

And that covers a number of repair issues. The tenants can call the home warranty company directly. Typically when you buy a single-family home, you'll get -- the seller will pay for a year of coverage of a home warranty. So a lot of people might be familiar with it that way because the seller doesn't want to have a hot water heater break a month after the person moves in.

And so if you have a home warranty, the tenants can call. And usually there's a small trade fee for just the visit. It's like $60. And then the home warranty company will cover the cost of the repairs. They'll send out a local plumber or electrician or whatever is needed and fix everything.

So that's a really good solution if you're self-managing to kind of deal with the maintenance issues. Because if something happens, if a pipe bursts or whatever, the tenants can call them directly. The home warranty company will send someone out. The tenants will pay them $60. And you've kind of capped your repair costs at that $400, $300, $400 a year that you're paying to the home warranty company.

And that will cover all those different issues. And then you don't even have to get involved. The hardest part about this strategy is the turnover. When you have a tenant move out, you need to get the place cleaned up, maybe paint, carpet, any repairs, anything like that. And then you need to show it to new tenants.

And if you're not there, it's kind of hard to show it to tenants. So there are companies in different cities that will just find tenants for you and realtors even that will do this. So it is kind of a more hodgepodge strategy of finding a company that will do that and getting the home warranty and trying to piece together these different parts of your team to help you manage the property.

I think that strategy works best if you have really long-term tenants, ones that are going to be staying for multiple years. And you're off traveling. They have the home warranty company, and you don't have to worry about turnover. And it kind of just takes care of itself, and the checks show up.

Cross your fingers on that. So yeah, traveling and owning property does add some complexities. Right. Well, I liked how you led off with watching for a market correction. If real estate is undervalued, there's no reason to sell it. And so you'll figure out a lifestyle strategy that can make that work.

And it's very, I think, possible, up to you. But perhaps traveling with a two-month-old is not what you want to do. And it may be different after a couple of years. And so you can kind of figure it out, and you can adjust as time goes forward. So in solving this question of real estate-- and let's keep it simple, just because-- let's keep it of real estate versus index funds.

And let's use that as our two options and ignore investing in-- ignore other individual stock strategies or other equity strategies. We'll ignore options. We'll ignore all of that. What do you see as far as the usual, the conversation, the pros and cons between those approaches for early retirees? Good question.

So the main thing that everyone sort of gravitates towards to begin with is the amount of work. Because obviously, an index fund, you buy and you're done. Or you set up your auto withdrawals from your bank account, and you're good. It doesn't require any more than a click of a button in a few minutes, and maybe once a year going on and rebalancing.

Real estate obviously takes a lot more work. You do have those phone calls from tenants to deal with issues, or texts, in my case. I have all my tenants text me. I don't want to deal with phone calls. And so you do have those sort of issues. So that's the first big major difference.

Real estate does take more work. I have a property manager for my out-of-state properties right now, and I manage my local ones. And they take about a month-- or sorry, an hour of work a month per property. And that's averaged over a year, but it usually doesn't bunch up like that.

Most months, it takes no time at all. It's five minutes to check my bank account and see that the rent was deposited and go on. And every couple months, maybe there's a text that there's an issue. And so I see, oh, there's this plumbing issue, and I call up a local plumber and give them the tenant's number.

And it takes me a total of 15 minutes that month to deal with that property. And then it's bunched up to where then when a tenant moves out, I maybe have 10 hours of dealing with that property in terms of getting it fixed up, cleaned up, showing it to people, and getting it re-rented.

And so it'll be about once a year, maybe every 18 months on average, that I'll have a big chunk of time over a weekend or two dealing with that property. And then most months, it's no work at all. And then, of course, my out-of-state ones are maybe 10 minutes each month kind of reconciling the statements from the property manager.

So it does take more time. I think the most time and work it takes is up front, finding a good property, finding a good deal. And that takes a lot of patience and knowledge and can be aggravating. And you put in offers, and they don't get accepted. And so I certainly see why a lot of people don't want to deal with that frustration and why index funds have a very ease-of-use appeal.

So that's kind of the downside to real estate. That's sort of the pro of index funds. And then, of course, their great historic record in terms of returns. It's hard to go wrong with just a solid total market index fund with low costs and just kind of set it and forget it and maybe rebalance depending on your asset allocation.

Right. The pros of real estate are it's a much more inefficient market. I don't believe in the strong EMH, but I do believe the stock market is mostly efficient over a long enough time period. Especially for large-cap stocks. Absolutely. Yeah, absolutely. And so even though we do occasionally see just wild inefficiencies like March 2009, they generally get corrected pretty quickly.

They're fairly rare. And in general, stuff's kind of priced where it's supposed to be. So you're just kind of buying at the market rate and whatever that is and just kind of holding. There's not a lot you can really exploit. At least I don't have the knowledge to do so.

And I think most investors probably don't. It's kind of the rare exception who might be able to. So but with real estate, it's a much more inefficient market. There's kind of due to a lack of liquidity. It takes a while for a property to sell. It has to go through the whole title process and there's inspections and all that sort of stuff that happens when you purchase a piece of property.

And there's also a lot less information. So whereas companies may publish their earnings report, you don't have a property publishing information about itself. There's some very limited stuff in the public records, which can often be wrong. And there's some sort of limited information if it gets put up for sale in a formal way on the MLS.

And due to that sort of limited information and kind of transaction time that it takes, you can find good deals. You can find things that are priced below market. You can find more of those whole markets that are almost inefficient because, you know, in March 2009 with stocks, stuff corrected pretty quickly within a few months.

Whereas because of those lightning fast transactions that can occur with the click of a button, whereas it does take months and months with real estate. So the markets move rather slowly. So when they're kind of inefficiently priced and you can find deals where the rents are returning you a really good return relative to the price, then you can kind of jump on that and get something that over the next 30 or 40 years is going to look really good in terms of your return.

So that's one benefit is due to the inefficient market of real estate. You can search for deals. And if you're patient, you can find good deals. Another benefit, and this is kind of maybe jumping the gun on where I think you might go a little later with safe withdrawal rates, but typically with stocks, you want to have around a 4% safe withdrawal rate.

And some people like to be more conservative. Some people might be a little more aggressive. But most people want around 4% withdrawal rate. So they say, OK, 4% or 1/25 of my total portfolio I can withdraw each year and adjust that to inflation, and then I'm good. And sort of-- and not to go too deep into the Trinity study or anything like that, but just to give a quick recap of why that is is due to volatility, sequence of returns risk.

If the stock market takes a dive right after you retire and you withdraw your money to live on for that year, you're withdrawing it at that lower valuation, and then it's harder for your money to make its way back up from the return. So a higher withdrawal rate would be just fine typically on average, but just because if it might dive, you kind of say, OK, well, 4% is going to be safe in case that happens.

It was kind of what they called the safe max or safe min, the very kind of minimum withdrawal rate you could take and not have to worry about that sequence of withdrawal risk. Well, real estate kind of doesn't suffer from that problem. With real estate, let's say you are earning 8%-- 8% real or nominal, it doesn't matter for the purposes of this illustration.

But you're earning 8% on this, and you expect your stocks to also earn 8%, but you can only withdraw 4% of the stocks because you're worried about the stock market taking a dive. Well, with real estate, with your rents coming in, they're a lot more stable return. And I think that's why a lot of people kind of invest in dividend stocks a lot of people wanting to retire early, like dividend stocks for that cash flow coming in.

Right. Well, with real estate, your rents typically aren't going to dive the way the stock market might. And so you might be OK if you're getting an 8% return. You might be OK withdrawing 6% of your total portfolio. And it's not even a withdrawal rate because you're not withdrawing anything.

You're just spending those rents as they come in. But if you took that amount of rents that you were spending and divided that amount by your total portfolio value, you might find that it's 6%. But that's OK because you're not worried so much about running out of money and because you're not withdrawing from anything.

Theoretically, your rents should increase with inflation as your tenants make more money. Even though you're retired and not earning any more, your tenants' wages rise, and so you increase the rent, and now you're getting more money. But I feel like I'm not saying this very clearly. So let me give you an example.

In 2009 or so, when Las Vegas just took a dive in real estate, the values dropped about 60% from their peak. And if that was a stock and you were relying on withdrawing some, you'd have that sequencer returns risk and it'd be really hard to make your money back.

But while the valuations dove 60%, rents in Las Vegas dropped about 5%. Wow, interesting. Yeah, the median rent went from about $1,000 a month to $950 a month, and then kind of since then it's climbed back up. And so if you had retired in 2007 on Las Vegas real estate, a lot of people lost a lot of money in the real estate crash because they were overleveraged and they had a negative cash flow, and so then they couldn't afford their mortgage payments.

But if you had a positive cash flow and you retired on those rents, your properties may have dove in value, but as long as you still had that cash flow, your rents barely dropped, and you kind of just went along your business. Right. And so real estate has that kind of advantage over index funds of not having that sequencer returns risk.

Rents generally are very stable unless -- I mean, you may want to have some diversity in your portfolio. I invest in a number of areas to spread out a geographic risk. If you were investing in New Orleans in 2004 and Hurricane Katrina hit, you're going to suffer some losses of rents, of course.

But in general, rents just -- they don't dive the way a stock market might. And so while you'd probably be fine withdrawing 6% from an index portfolio, you might not, and that's why a lot of people want to go for 4%. Well, obviously, if you're doing a 6% withdrawal rate instead of 4%, then you can save a lot less money.

You can get to early retirement a lot quicker because you don't need to save as much. You only need to save -- what is that? I don't know the percentage. 16 times your assets instead of -- or 17 times your assets instead of 25 times your annual spending, not assets.

You need to save 17 times your annual spending instead of 25 times your annual spending. So you can obviously get to that point a lot quicker. Right. I want to add something here because you're making an excellent point. And one of the things that I think we don't -- well, one of the things that I don't see discussed very much, that I'd like to see discussed more, is really the impact on -- the impact of the rate of return that you can earn on your investments.

Now, what frustrates me about -- this is just a personal hangup. One of the things that frustrates me about the indexing and basically the indexing argument is what often happens is people often say, well, let's assume that we have either a weak or a semi-strong form of the efficient market hypothesis like you talked about.

Well, then that means that I'm just going to not worry about getting the highest return. I'm just going to plow my money in and I'm going to go with it. Fine. That's totally fine. And there's nothing wrong with it. But as you point out, if you could achieve and plan on a higher distribution rate from your investments, that can make a substantial difference in the amount of time that you can reach toward your goals.

So there really is -- and this is why we have an efficient market in the first place -- is because there are a lot of people trying to maximize their return. And all those people maximizing the return keeps the markets efficient. But in real estate, like you pointed out, there might be a fairly inefficient market in your area.

Now, you may find it's very efficient. You may find that the rents just simply don't work out. You may be in some funky place. For example, I have no idea what it's like to be a real estate investor in Manhattan. I wouldn't even have a clue how to do that.

But I can figure out how to buy and sell single-family houses in a moderate-sized city. That's a well-established market. So if you can reach -- get a slightly higher rate of return on your investments, it may make a dramatic difference in your ability to achieve your financial goals faster.

And I'm sure you're about to touch on the topic of leverage. And I want to tell you a story on our way to talking about leverage. But the point you make about just simply spending rents and rents adjusting over time with inflation is a very useful behavioral finance topic.

Because the problem that many -- the reason why we have the issue with the 4% rule is because we are spending capital gains and we're spending rents. And this is actually one of my beefs with how the current -- I wish the stock -- the way the stock market functions now with large publicly traded companies where many of them are emphasizing capital gains and growing their appreciation -- growing their -- just through the stupid tax code that we have where dividends are the worst thing that they can do is pay out dividends.

And everything that comes -- and let me pause just a moment and explain that real quick just for the audience in case you're not familiar with the concept. So if you own a company and let's just say you own a small public -- you own a company. You own a real estate -- you own a painting company.

Now at the end of the -- and this is a traditional corporation. Then at the end of the year if you have profits in the company you need to pay those profits out in the form of a dividend. But the problem is that those profits are double taxed. So you're going to pay tax on the dividends at the corporate level which can be basically about 35%.

And then the person that receives those dividends is going to be taxed on those dividends on their individual tax return as well. So they may -- depending on what their actual -- depending on what the corporate tax rate is and depending on what their individual tax rate is, depending on what the national tax rate is, depending on the local or the state tax rates, there can be a very, very high amount of taxation.

And the reason is because they're taxed twice at the corporate level and at the individual level. Well due to this very silly design of the tax code, this has forced a lot of companies to move their -- well it's not forced them, but because it's in the best interest of their investors they're focusing on the appreciation and the value of the stock.

Or they'll look for some other way to spend the money. So for example they'll do a stock buyback and they'll buy back a portion of their stock for the treasury stock for the company and that will increase the share value, but they're able to do that in a more tax efficient way.

So when you're doing all these calculations on the 4% rule, that 4% rule assumes selling off and harvesting capital gains versus dividends. But fundamentally we get more intuitively the idea of spending dividends. So you have your business and then you only spend the profits and you don't ever actually sell the business.

Now you could structure it, and the problem with indexing and using this approach is with indexing you generally have a mix of companies in there. You have Apple, which is not a big fan of paying dividends, and you have an old traditional blue chip company that is an excellent dividend paying company.

And so you have all those things mixed together so you have to look at your total return of the dividends versus the capital gains. But with real estate most of the time people are just focusing on rents and it's much easier to budget for maintaining consistent rents than it is to budget for rents and the value of the house.

So I feel like I also was a little long-winded Joe, but I think it's important because there's a lot of behavioral aspects there. And you could create, like you said, you could create a dividend portfolio of companies that are just paying dividend stocks and you could just choose to only spend your dividends.

You could go buy a Master Limited Partnership in an oil firm or something like that, or buy an energy MLP and spend the money on that. There's all kinds of things that you could do, but this is a fundamental concept that you have to look at. And it is a much more powerful place to be if you can only spend the profits of your company and you never have to sell the company.

Then you can enjoy your lifestyle, but you also have a major asset that you can pass along to heirs. Now you have to have a little bit more money usually, so if you can sell the profit-generating asset underneath and spend the profit, you need to save less money. So it's all a matter of trade-offs.

Yeah, absolutely. And I think, well, only one minor correction in there. You said that people focused on real estate will just look at the rents and retire on that, and I hope they do. I see too many people that are trying to look at the appreciation and are counting on some certain number.

They have this projection of what the properties will be worth in their spreadsheets, and that can be dangerous. Good point. But yeah, it's... Good point. Excellent point. Well taken. I do think that it is probably more accessible for an average person to be able to make a decent prediction.

As long as they're not new to real estate, they don't have stars in their eyes. I think it's probably more possible to make a decent prediction about the future of a local neighborhood than it is for the average person to be able to make a decent prediction about the short-term trend of the stock market.

Because you can... I think you can pick up, especially if you've been doing it or paying attention for a while, you can kind of pick up. Is this city in decline or is it growing? Is this neighborhood in decline or is it growing? You can look at some of the macroeconomic factors.

You can look at some of those things. Now, you can still be blindsided incredibly by some change. For example, I don't fully understand all of the details, but I have read a number of real estate investors that I admire that got completely blindsided back in the '80s with some of the changes in the laws.

And so you can be blindsided by an outside influence. But I think it's just more... you can drive around and see, is this a stable neighborhood that's growing and that people are moving into and young families are buying and the prices are going up and there's businesses coming here because we're working in a state that has a friendly tax environment?

Or is this in decline and people are fleeing? And you could probably do that with a little higher degree of certainty than big cap stocks. Yeah, most likely. Touch on leverage. Leverage. Okay. That's, I would say, kind of a very personal decision. A lot of people are kind of in the Dave Ramsey school of thought of all that is bad.

Some people are kind of on the opposite extreme of saying, "Man, while I'm young and working and can afford to take risks, I want to go ahead and try and scale up as quickly as possible." And then, of course, you have everyone in between. And so there's a number of benefits to real estate leverage that's not seen again if we're comparing them kind of to index funds in that if you're using margin to try and increase your returns, there's obviously that risk of a capital call and a risk that if the price drops, you may lose your investment.

Whereas with real estate, if you're using leverage, a mortgage, as long as your cash flow positive and you're paying your mortgage every month, the bank can't call that note due. You're not in violation of the terms of your mortgage. And so it doesn't matter how underwater you are. If you're paying that, you can keep your asset.

And so that goes back to why it's so important to be cash flow positive, especially if you're using leverage, is you don't want to get into a situation where you can kind of lose what you have. So you need to be prudent with it, I would say. That being said, I'm personally a big fan of using leverage for real estate with the interest rates we have today.

And right now it's early October 2014, and our rates are quite low historically compared to pretty much any other time. And the fact that you can get a 30-year fixed mortgage for under 4% on a primary residence and maybe 5% on an investment property is just incredible compared to back in the early '80s when it was 18%.

And the fact that your mortgage rate can be so low, there's people who post who have 3.25% or 3.5% mortgage rate, that it's essentially at the cost of inflation and sometimes even below, which is just, to me, free money. When you can invest the government's money into a good, solid, performing asset, and you can put down whatever percent you put down, there's lots of no-money-down strategies in real estate that we won't get into, but whatever you're comfortable with putting down, I typically put down about 25%.

And then the other 75% is the bank's money that they're going to loan me at a very low interest rate for the next 30 years. And this will go to show again that I can't predict anything, and I'm not good at timing anything, because I thought for years our interest rates have to go up, and they're still low.

But I've thought since 2010, 2011, we're going to start seeing interest rates like-- but I still figure at some point-- I don't think we're going to be in a Japan scenario where our interest rates stay low for 20 years. I do believe that at some point in the future--I don't know how far into the future-- but at some point our interest rates are going to go up.

And when you have that fixed sub-4% mortgage, and interest rates at the time are double that 8%, which is typical historically, is that's not a high interest rate. Depending on the age of our listeners, they're either saying, like, yeah, no, that's still pretty good, or they're saying, like, whoa, that sounds really high.

But 8% is a fairly typical number. And when your interest rate is half that and you're literally saving hundreds and thousands of dollars every year on interest, that's just an incredible asset to have. That mortgage is an asset, not just the house itself. But again, it goes back to how much are you comfortable with, and then also how good is the asset that you're buying.

Because if you're buying mediocre properties on leverage, you're going to get mediocre results. And your leverage should be a tool to help your investing when it makes sense to do so. And I see a lot of people who are just like, yay, mortgages are great, I can buy four properties instead of one.

But they're not good properties. They're not properties I want to own. And so it still all comes down to correct evaluation and knowledge of your investment. I think as with most financial conversations, there's a lot of nuance. And what happens is that many times you might read a thousand-word blog post, and a writer is trying to make it sound as though -- or you might listen to a six-minute blurb on the radio, and the speaker is trying to make it sound like either your choice is to be completely leveraged to the hilt and you're one empty apartment unit away from bankruptcy, or your choice is to pay cash 100% along the way.

It's simply not those two options. And now, first, my disclaimer, I've never purchased investment real estate. I've been interested in it, I've studied a lot, but I've never purchased it. And the reason I haven't is simply because I haven't wanted to do the work of managing it. So there is that disclaimer.

But I think this theme, and since you are actively involved in this world, and I'll bring many more real estate investors on the show in the future, you let me know if I'm right, but I would simply say that the simplest way to get rich is borrow a million bucks and let your tenants pay it off.

This is probably the simplest way to become a millionaire. And that's the fundamental attraction of real estate, is that there's a very liquid lending market. You can, if you have some money, and you can get into a safe rate, you can get, like you said, you can get 25% down on a property with cash out of your pocket.

There's skin in the game, and it's a win-win for the lender, and it's a win for the borrower, and the tenant is the one who ultimately can pay the mortgage off. But there has to be a margin of safety there. If you run the rates of return on paid-for real estate versus leveraged real estate with a degree of safety, the rates of return are astronomically different, and that makes a real difference.

And so I was a recovering, I am a recovering Ramsey-aholic, and I used to run spreadsheets on this stuff, and I was like, "I wonder if I could figure out a way to make Dave's strategy work of buying paid-off real estate." Couldn't make it work in a traditional market in any reasonable time frame.

Now, here's the key, though. Just because you leverage property doesn't mean that you always want that property to be leveraged. So I worked with a real estate investor here in West Palm Beach who's a client of mine. This guy had $5 million worth of property that was leveraged to the hill.

He's buying all kinds of property all over the place, and he was as stressed as anybody because he never built up any margin and he never eliminated his debt. So you can, as a young person, you can heavily leverage yourself. You can take advantage of the increasing returns that that gives you, and then you can slowly pay those properties off, and then you wind up in a short order with a portfolio of paid-off properties.

Then you're fully insulated from either situation. I have seen one person--and this person's actually a family member--I have seen one person actually accomplish becoming an independent retiree, I guess. Not really. You're never retired if you own real estate because it's partly a part-time business. But this person did it completely with cash.

But what they did is they were operating in a smaller town in Florida where they were able to work at the lower part of the market. They started in middle age, and they didn't have much money, but they were able to scrape together about $15,000-$20,000. Through putting in a lot of sweat equity, they were able to buy some cheap properties, build them up, and now they have a very nice portfolio of properties, all of them paid for.

They're able to live just purely on their rents, but they didn't do the all-cash model on going out and buying $100,000 single-family houses. They dealt in a market where they could close quickly, and having all cash and doing it themselves and working at the low end of the market and doing a couple of nice flips, doing some good rentals, they were able to make it work, and it worked out well for them, and they were able to maintain their independence and their safety and sleep well at night.

My summary is just not as simple as one or the other, and there are times at which I think a wise investor will integrate the two strategies. Absolutely. Go ahead. It's funny you say the easiest way is to get a million dollars in debt and have tenants paid off, because that was exactly my strategy.

A number of years ago, my goal was to retire once I hit a million in liabilities. Once I hit a million in debt, then I would retire. And, of course, I'd have a very positive net worth at that point because my equity would be quite large too, but once I got a million in debt at this low-interest fixed long-term debt, then I was going to retire.

And just as strategies have to shift, that's not going to be the case. I own a number of properties now free and clear with no leverage. I have a number of properties that have appreciated quite a bit and have a substantial amount of equity. And I've looked at different scenarios of doing cash-out refis on those or getting mortgages on the ones that are free and clear, different things, and run the scenarios.

And the numbers have to make sense, and they just don't. And so I think you have to evaluate every situation and decide what is the best outcome if I choose A or if I choose B. And it's not just a blind "I want a mortgage just for the sake of having a mortgage," because it doesn't make sense when I run the numbers on some of my properties.

On other ones I'm purchasing, I do want to get mortgages, so it very much is a situational thing, absolutely. Right. And you've got to have--I would be slow to encourage somebody to go out and say, "I'm going to go out and this year I'm going to buy 10 properties, never having owned rental real estate.

I'm going to go buy 10 properties, I'm going to put mortgages on all of them." That seems like a bad plan to me. It might be smart to take a little more time and buy one this year, because with real estate everything that you do matters. So the thing is that I've lived through, and you've lived through, I've watched several of my friends from college go completely broke and bankrupt, destroyed in the real estate market here in Florida.

And the thing is, though, that they had the best of intentions, but they did not spend enough time learning. And they had a lot of big ideas, but they didn't spend enough time learning. And the key, I think, is go slow. You've got to get--as the slogan goes in real estate, you make your money when you buy.

So just because you can mortgage a property doesn't mean that you should buy it. You've got to get a deal on it. You've got to get a property that's going to not be a headache. You've got to get a property that's going to work. And there are a bunch of different strategies to it.

But certainly, I think because the terms of leverage on real estate can be so excellent, it is one of the most--I think more people have built independent lifestyles off of real estate than probably just about anything. And that's the whole point of early retirement is to be able to have an independent lifestyle.

And it can be done faster, I think, with real estate than probably many other strategies. Yeah, I agree. Any resources that have been helpful to you that you'd like to recommend on real estate? Well, there's a number of different books. There's a post on the MMM forums stickied in the real estate section with book recommendations.

So the one I always recommend to beginners if someone's listening to this and is like, "Where can I start with just one book?" It's called "Building Wealth, One House at a Time." John Schaub's book. Excellent. Yeah. And I would say the only thing I kind of disagree with in that book is his assumptions for appreciation.

It was written in 2004, and he has some assumptions that houses are going to appreciate at a certain rate. I forget what he says, 7 percent or something like that. And I wouldn't project any appreciation above inflation personally. But other than that, it's a real solid book for beginners.

It kind of lays out everything and even gives a plan for buying one house a year for 10 years and what to do with that and how to do that and how to find it. And it's a pretty easy read. Some books are just kind of overwhelming. It's kind of more simple for the beginner, and I like recommending that one to start out with.

Online, there's a website called biggerpockets.com, and it's a real estate forum and website. It has a blog. They have a podcast. And there's tons of great information on there. I still tend to recommend books before I recommend that because I think there's just some topics that are so broad.

When people post on a forum and they write a couple paragraphs, you can't get into a nuanced discussion of something that quickly. There's just not enough time to develop an idea that may take a chapter or three. So while I think it's good to go read some blog posts and go on the forums to interact and ask questions and read about people's scenarios and stuff, to get kind of a more in-depth view, I still prefer going to books, go to your local library, and they'll have a real estate section with a dozen plus books and flip through them and see what sounds interesting.

And that's, I think, where I would start and then move on to asking questions over at BiggerPockets or at the real estate section of the MMM forums or go to your local real estate meetup, go to meetup.com and search real estate in your area, things like that. I'll make sure to link to your--I haven't seen over there your recommendations, but I'll make sure to link to them.

And I've got a couple, though. On the topic of blogs, I 100% agree with you. I've got a show I'm going to do at some point. I'll probably just be one of those when I'm traveling or something, a six-minute show, because basically I can tell the whole thing in the title.

But the title of the show is going to be "Why Blog Posts Are Destroying Your Intelligence." And you cannot convey some concepts in a thousand-word blog post. There's a reason why we get knowledge from books, and I actually have made it over the past years. I've made the decision to spend--if I go and someone has a great blog, I'll often read somebody's archives.

But if they've got a book, I need to read the book first, because there is a massive difference between producing a coherent book that is all-inclusive of the subject covered versus the ability to just produce a few articles. And I'm really concerned about the things we think we're knowledgeable in if we're not willing to read a book.

But a couple of recommendations. I read a book a couple of years ago called "Landlording." I'm not sure if you're familiar with it, but written by a guy, I think it's Lee Robinson. Yeah, Lee Robinson. Right, right, right, right. That, I think, is--I read it, and I was like, "This is the best-- this is the first resource that anybody who owns a property should be spending time in." And don't buy a property until you've read that book.

It's almost like the comprehensive guide to managing a property. That's one of those tomes I was reading. That's kind of a bigger one that I--for someone new to real estate, I say that's something you definitely want to get before you buy rental real estate. But it goes through more of the nuts and bolts and is great to have as a resource when you're like, "Oh, man, tenants are moving in.

What do I need to do?" And you flip to that, and you find, "Oh, here's a pre-moving inspection form." And it's great to have all those resources of--to look up and use it almost like an encyclopedia of landlording. But for someone looking to get an overview of, like, "How do I even find what a good property is?" Right.

Agreed. But that is a great resource for anyone wanting to be a landlord. Yeah. Right. I should have clarified that. I think, of all the books I've read, I think Building Wealth One House at a Time is probably the best starting point. Are you familiar with any of John T.

Reid's books or his works on real estate? No. He's kind of famous, infamous around real estate circles because of his skewering of the various real estate-- The guru ratings. Right. But I've not--since his books aren't available on Amazon or in any public libraries, he kind of self-publishes and sells them directly from his websites, from what I understand.

Right. And so I've never had the opportunity to read any of his stuff. Is there one in particular you recommend? I was going to send people to the guru ratings. And so I actually started--I made major mistakes when I was young, when I started with the gurus, and I got sucked into the real estate seminar world.

And I wanted so desperately in 2000--it would have been 2006--I wanted so desperately to put $15,000 on my credit card to borrow when I was in college to pay the entrance fee to a--who was it? A guy in Orlando, Total Scheister, I don't remember the guy's name, but he was doing these real estate seminars, and I wanted desperately to put the $15,000 down for the private mentoring program to build my wealth in real estate on my credit card.

And thankfully, my dad just flat out put his foot down and wouldn't allow me to do it. I still could have gone past him, but thankfully I listened to him and I avoided making some major mistakes. But the gurus that you can find in real estate, there are so many Hucksters and just Scheisters.

I would encourage people to go and read Reed's Guru Ratings. And the thing I like that I appreciate about him is that he's very fair. At least my observation is that he's very fair. And he is not--I'll leave it at that. He's very fair. But as far as the books, you're right.

He self-publishes and he only sells through his website. And his books are expensive, about $30 to $40. But I own two of his on real estate, and I plan to buy and read more, but my rule is I can only buy more books when I'm ready to read them.

I've bought a couple of his other books as well. I have found them all to be worth the money and very, very pithy. And he also has a newsletter that I think is very, very pithy. When you look at the articles and the topics that he writes on, I don't know of somebody writing who has more experience, who is more prolific with specific, actionable steps.

So what I find is when I read his books, that almost every paragraph winds up being highlighted and underlined in some manner with notes. They're just extremely pithy. So he's got one called How to Get Started in Real Estate, and I think it's the most practical guide that I've ever found to how to actually implement it.

So if you read Building Wealth One House at a Time and get excited and want to go on, then I would say start with How to Get Started in Real Estate, and he gives you action steps. Here are your action steps. And then you can go on and you can read other books to pick your strategies, things like that.

Gotcha. Good to know. One thing I would add also about John T. Reed, spelled R-E-E-D if anyone's Googling him, is I think he's most kind of famous, infamous for his skewering of Robert Kiyosaki and his Rich Dad, Poor Dad. And I do recommend a lot of people come to real estate through Rich Dad, Poor Dad.

They read that and they get all excited about the idea of having an independent income, and that's great. I do recommend anyone who reads Rich Dad, Poor Dad also read John Reed's comments on it and take it with a grain of salt. I think the truth is somewhere in the middle, but I think it's good to have a balance of opinions to kind of hear arguments on both sides.

And so I think it's worth reading both Rich Dad, Poor Dad and reading John Reed's opinion of it and some of the stuff he calls out as bad advice in that book. It was actually that his article was very helpful to me because I was a big fan of Rich Dad, Poor Dad, and I just didn't know what I didn't know.

And one of my professors in college suggested, he said, "Are you familiar with Reed's write-up on him?" And, oh, Russ Whitney, that was the guy that I got sucked into. Leave that alone. And I went and read it and I said, "Wow, Joshua, you need to learn a little bit more," because I appreciated how he talked about it.

I think--and here's the problem. Oftentimes, I don't know if you face this, but I struggle sometimes between this motivational aspect of things versus the actually how to implement it. Because Kiyosaki was a master. He wrote a book that was just a motivational master, and it's hard to find someone whose life hadn't--many people's lives were impacted by that.

And yet, that doesn't mean that that's the place to start from. It just means he was great at motivation. So it's very tough to ferret out truth. I just say learn from them all and recognize--the first thing I try to do when I find a topic I'm interested in, read a book.

Then I try to go and find the anti-book, the thing that was written against that, and then try to compare them and just keep learning our way through it. Yeah, that's a good way to do it. Anything else on real estate versus index funds? I would say, I guess in the end, it's going to come down to personality type.

In terms of that, what we were just talking about, actually, of find one opinion and then find the opposite, and the truth is maybe somewhere in the middle. Not necessarily, because that's kind of a fallacy, but at least you should consider both sides of it. I would encourage people, don't immediately get scared away from real estate just based on rumors, based on what you hear, based on people saying, "Oh, you don't want to get a phone call from a tenant at 3 in the morning." I've never had that happen.

I guess I've only been in real estate a limited seven years now, so it's not that long compared to a lot of people, but I've never had that happen. I know other real estate investors who have told me they've never had that happen. You hear these rumors, and you kind of get scared away, or I'll see people post on the MMM forums, and they'll say stuff like, "Well, I don't want to have real estate because I'm not very handy." And I say, "I'm not either.

I don't know where to plug in a hammer. I don't know anything about how to fix anything." So they're worried about, "I have to go over and fix the plumbing when the..." No, no, no, no, no. I don't do any work on my property. Even the local ones that I manage, I call a plumber.

I call an electrician. I'm cutting out the middleman and the property manager because I found that for that 12 hours or so a year I mentioned earlier, it pays a rate of about $100 an hour to deal with that minor stuff of calling a plumber, being the middleman instead of a property manager.

Tenant contacts me. I contact a handyman to take care of stuff. But I don't do any of that work. So I think I would just encourage people who are scared of it for whatever particular reason to find out if that fear is rational. Because if they're like, "Well, I don't want to have real estate because I don't want to deal with tenants," well, then find out, is that a rational fear?

And go on a real estate forum, go on the MMM forums, go on BiggerPockets, and ask people, "I don't want to deal with tenants. Is there a way I can invest in real estate?" And the answer is yes, absolutely. You can get a property manager to deal with the tenants for you.

You can invest in other types of real estate besides owning rental properties. You can own notes. You can be the bank and own the mortgage on real estate. There's a number of different ways that you can invest in real estate that doesn't just directly mean being a landlord. And so if you're interested in real estate, I would say don't just get scared off by what you think or what you've heard, but educate yourself a little bit first and find out, is that a rational fear?

And you may end up with a, "Well, it's maybe not as bad as I thought, but it's still just not something I want to deal with." And that's perfectly fine. I think for a lot of people, the choice to keep it simple and figure out their asset allocation and just go with that and not deal with all that other real estate stuff is a great choice.

It does take more work. For me, the benefits are well worth it because, like I said, I'm going to be able to retire at age 30 from two teacher salaries, having done all of it ourselves just from saving and investing and learning. And it really, I think, is one of the quickest accelerants to becoming early retired.

But that doesn't necessarily mean it's the only way or even the best way. But the only way to find that out is really to educate yourself and start learning. Right. I think that's valuable advice, and I want to add just a couple comments to it. And then, Joe, we're going to have to wrap up for today because we got through one question.

We're at an hour and five, and maybe you'll consider coming back. I thought we were going to get through about 60 questions, but no chance. I think what we're providing here is valuable. We'll work that out here in just a moment, though. I think real estate, there can be many factors why it can be perfect, and there can be many factors why it's not, and they're very individualized.

My father and mother bought an investment condo, and they, here in West Palm Beach, this was some years ago. It was all around the worst financial decision they've ever made in their life. And they bought at the wrong time. They were poor property managers, and not because they're stupid people, but they very much were pushovers.

And they didn't learn enough about their tenants, and my dad to this day says it was one of the worst mistakes that he ever made. And one of the things that I knew going in, and I should have picked up on it. I didn't, and we learned a lot going through it as a family.

But he said, "I don't want to be a landlord. If you don't want to be a landlord, don't go into rental real estate." And there can be more reasons not to want to be a landlord than just simply fixing things. And I think your comments are valid about not necessarily having to fix things.

But with real estate, I think the key thing to acknowledge is that real estate is part investment, part part-time job. And you're never going to get a call from Vanguard, because you own some of their index fund, saying, "Hey, listen, you need to go find a new owner for this." You can just own it for as long as you want.

There's a market. You can dump it at any time. And you never have to worry about, "How do I sell this massive asset, this $50,000 property?" If you want to sell $2,000 of your stock, you go ahead. So I don't think it's either/or. But there are some really powerful advantages to real estate for the right person, for the right temperament.

And I sincerely believe one of the major flaws that is a big deal to me, one of the major flaws with the 4% rule, is that that 4% rule is calculated based upon index returns. It's not calculated based upon investor returns. And there is a broad body of research which illustrates that the average investor underperforms their own investments by greater than 50%.

And there are many people who I think cannot handle the risk of being in the stock market. If you're concerned about the risk of being in the stock market, don't be in the stock market. Get out. And I think there's many people who would be far better off – and again, there's people in my own family who are in this situation – but far better off just from their own peace of mind with the ability to drive past the five rental houses that they own and know, "As long as I keep my five tenants in there and they each pay me $1,000 a month, I've got $5,000 of income." And I think that we don't spend enough time talking about investor temperament.

And I think we need to find a place for that in our discussions. And then we also need to look at what our actual skills are. So if I'm a high-powered CEO and I'm making $300,000, $400,000 a year, unless I really want to do it, it's probably most in my best interest to focus on that and not to get distracted on Saturday morning trying to figure out, "What plumber am I going to call to do this?" And so you've got to focus.

Am I the kind of person who has a great earning potential on my job? Probably you would agree that being a teacher is usually not where you go when you're focusing on earning potential. So it sounds like a perfect strategy for somebody like you who has a stable earning ability, the ability to live on less, the ability to accumulate a down payment, and to get started and then to leverage your way into it.

And you have the time. I'm sure your school schedule gives you the time that you need in the afternoon and weekend to work at it. So I think we just need to have it very individualized and look at our actual situation. I completely agree. The only fear I have around that is--not fear, but kind of worry or reservation, I guess-- is if we are trying to figure out a safe withdrawal rate based on an investor, you have the Dunning-Kruger effect where I think investors are going to think they're going to do better than the market.

What's the Dunning-Kruger effect? I'm not familiar with that term. It's the idea that everyone overestimates their own abilities. You know how 90% of drivers think they're better than average? Right. And the less you know about a subject, the more likely you are to overestimate your ability. So experts in a field are more likely to acknowledge they don't know everything than someone who's just like, "Oh, no, I understand that." Right.

So if you think about sort of amateur investors, I think there's a lot of them who would think, "Oh, yeah, I can beat the market, no problem." And so if we're coming from a place of, let's look at individual investors and their expected return, I think 90% of investors would think they're better than average.

And that can lead to them maybe choosing a safe withdrawal rate or thinking they're going to do better than they actually might in the real world. Specifically, and what's been shown, and like you mentioned, those studies where most investors underperform their investments due to their tendency to buy high and sell low.

And so it's hard. You'd have to have a very unbiased opinion, a very objective, maybe third-party opinion looking at and giving you some realistic assumptions and projections on what you might be able to expect. I like the idea. I think it might be difficult to implement. Right. Right. Valid point.

What I was emphasizing was that the people who don't have the temperament for the stock market should simply recognize that and get out and go focus on something that they do have the temperament for. And I think you'll find that a lot in real estate. You'll find people who recognize, "I can't handle it.

I cannot handle it. But I can handle the real estate." On the other hand, you're going to have people like me. I am incredibly uncomfortable with real estate just simply because it's all based upon supply and demand and it's such massive amounts. I'm far more comfortable, me personally, just for me, with stock investing because that's what I know.

That's what I'm skilled at. But they each have different points. But a good point. One last thing and then I'll give you an opportunity to share anything else that you'd like to share. Reid's book, How to Get Started on Real Estate, is worth the price, whatever it is, $30-40, is worth the price exclusively for the list that he posts in it on real estate strategies, specific, unique real estate strategies.

It's about a page and a half list. I'm going from memory here. I would recommend about a hundred -- excuse me, I would -- Estimate. Estimate, thank you. I would guess, probably from recollection here, about a hundred different strategies that he posts. And the cool thing about it is it shows how, again, buying single-family houses and owning them for rent is not the only strategy.

That's Schaub's strategy and it's a great one. But there are many ways to get involved with real estate if you are interested in a specific market that don't involve tenants. And there are a variety of ways to do it. So I found that so valuable. And he's written some books on some of those topics and he points out some other places to go to learn more.

And most people are familiar with tax liens or people are familiar with flipping. But there are many, many strategies more that he outlines, and I found that really helpful. Anything else, Joe, on this topic? I'm sure we're missing something. I feel like there's something at the back of my brain going like, "Oh, but you forgot something," that kind of itching feeling.

It's just such a broad topic that I feel like we've covered it pretty well. The main thing is start learning, go download the BiggerPockets podcast. One thing I would caution people, though, is because of things like that list you just mentioned that has 100 different strategies, there's a million ways to invest in real estate, and a lot of people new to it get overwhelmed with that.

Or they hear about this new strategy and they want to try that out, and then they hear this other new one, and it's kind of referred to as the shiny object syndrome. They're just constantly chasing this next shiny object, and I would suggest pick one and focus on that and learn everything you can about that.

Because if you do go listen to the BiggerPockets podcast, they've got like 80 interviews with 80 different real estate investors, probably doing 79 different things between them. And it's easy to get a little lost and constantly end up just kind of chasing your own tail. But the first step is to just start learning about what is out there and seeing if it is a viable option for you.

Because certainly, like you were saying, for some personality types, stock market investing may not be the way to go because they can't handle the swings. And when the market takes a dive, they want to sell. But the other way around, too, real estate may not be right for some people.

Like your parents, you don't want to be a landlord if you're a pushover, and you have to treat it like a business. And so it does require learning about yourself and learning about the different options before you can decide which investment is going to be right for me. And maybe that's dividend stocks, or maybe that's the permanent portfolio, or maybe that's rental real estate, or a million other options.

Or a McDonald's franchise, or building and selling websites, or becoming a welder, or just about anything that we want to talk about. Absolutely. Let's do this. I really did think we were going to get through more of these. Would you be willing to come back on in a future show?

And the rest of our list is not this in-depth as far as how we took this one, but would you be willing to come back in the future and we tackle some more of these? Yeah, yeah, absolutely. Maybe what we could do is we'll invite -- since I am specifically thinking of the early retirement community and the Mustachians, let's invite them, anybody who wants to add to our list or has specific questions, we can do that.

But I think this will be fun for them to get a chance to hear you. I've enjoyed seeing you over there on the forum, and I think it will be fun to hear this conversation. It will be a valuable resource for them. So thank you for coming on. We'll coordinate another time to kind of come back and talk through a couple more of these topics in the future.

But thank you so much for coming on tonight. No problem. It was my pleasure. It was nice talking to you. My hope is that that provides you with at least a starting place. I know we didn't answer every question. There's no way to answer every question, but I hope maybe we can pique your interest and give you just a general idea of some of the issues involved in choosing an investment strategy.

It's kind of funny. I got an email from Joe after the fact, and he said, "I just keep thinking of all the things I forgot to say." And that's always how these shows go, which is why they build. And frankly, in years of studying investing, you always just learn a little bit more, a little bit more, a little bit more, a little bit more.

There is no comprehensive curriculum on any of these things. But I hope today you have some of the information that you need to come back with a more balanced perspective. I think that that's the key for you to decide what's right for you. So I trust you enjoyed the interview.

Tomorrow I'll be coming back with another show. I think we're going to continue the college series, so check back in tomorrow. The first show was yesterday on how to pay for college, for your kids' college. And show one was "Teach Your Babies to Read." Tomorrow we're going to be talking about education prior to college and some of the radical and interesting and innovative ideas and how they can make a major influence on your financial plan.

So I hope you enjoy that. Then we'll be doing a show after that talking about some of the alternatives to mainstream college and also the alternatives to the mainstream ways of paying for it. And then we will pick aside the detailed aspects of college planning. We're going to pick apart all the rules of all the accounts that most people know about, the educational savings accounts, the 529s, all of the grants and the credits.

We'll pick all those detailed rules apart so you're aware of them. Then I'm actually going to talk you through some of the more tricky ways that you can pay for college without having any of those college accounts. But just by simply using a few legal tricks, so to speak.

So hopefully you'll find that content and information useful. Thanks so much for being here. Don't forget to subscribe and I would love it if you leave me the reviews on Stitcher. That's awesome. And on iTunes, that's great. And if you have another place that you prefer to listen to content like this, let me know where that's from and leave a review there.

Thanks so much for being here. Talk to you tomorrow. Thank you for listening to today's show. This show is intended to provide entertainment, education, and financial enlightenment. Your situation is unique and I cannot deliver any actionable advice without knowing anything about you. This show is not and is not intended to be any form of financial advice.

Please, develop a team of professional advisors who you find to be caring, competent, and trustworthy. And consult them because they are the ones who can understand your specific needs, your specific goals, and provide specific answers to your questions. Hold them accountable for your results. I've done my absolute best to be clear and accurate in today's show, but I'm one person and I make mistakes.

If you spot a mistake in something I've said, please come by the show page and comment so we can all learn together. Until tomorrow, thanks for being here. Hey parents, join the LA Kings on Saturday, November 25th for an unforgettable Kids Day presented by Pear Deck. Family fun, giveaways, and exciting Kings hockey awaits.

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