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Exclusions apply. See website for details. Exclusions apply. See website for details. It's Friday! Q&A today. Welcome to the show. Today, I've got a bunch of questions lined up for you. Question number one, how do I figure out how much I can withdraw off of a portfolio if I want to leave behind 50% of the remaining balance after my death of a retirement portfolio?

Question number two, how much money is too much money in tax-deferred accounts, and do I need to invest right away in order to take advantage of compound interest? Question number three, how do I figure out how to allocate a bond portfolio across all of my accounts, and which type of bond funds do I buy?

Question number four, do I do a prepayment on a mortgage or invest the money and then pull off extra payments every couple of months? Question number five, help, I'm behind on my bills and I don't have much money. How do I get out of debt? Question number six, how do I apply the trivium to a new career?

Question number seven, I have a bunch of dental expenses coming up. How do I make sure that I pay for those with my dental insurance without coming out of pocket with too much money? And finally, I have some different taxable accounts and different accounts with ShareBuilder. Should I sell those accounts in order to move to a different mutual fund company?

(upbeat music) Welcome to the Radical Personal Finance Podcast. My name is Joshua Sheets, and today is Friday, November 14, 2014. Today we're doing a Q&A show, and I am going to cover all of those questions. Last week I said I was gonna cover them, and I finished with three, but today we're gonna do all of those, even if I have to give you quick answers.

Hope you find it interesting and are able to learn something. (upbeat music) First, I have a busy, busy day today and this weekend, so up early this morning prepping for this and recording first thing, and this show is probably gonna be out pretty early in the day today instead of being late.

Quick announcement, though, real quick. Last Friday, it's actually one week anniversary now, I wound up destroying my feed, and I thought I had it fixed, and ultimately I fixed it with the wrong code. This is what happens when you let novices redirect their feeds, and so if you were subscribed to the show in iTunes or any iTunes device, which would be an Apple phone, an iPad, something like that, or any of the show pod distributing services, I guess pod catchers, that use iTunes feeds as a mechanism automatically, you are no longer receiving updates on the show.

It's an easy fix, just make sure that you unsubscribe in whatever player you're using, and then go and find the show in the store or in the directory, and then resubscribe, and that feed will be working. Right on the front page of the site at the moment also, if you need to manually subscribe to the feed, I have the new feed listed.

So I apologize for that, I'm talking about it a lot 'cause I wound up probably losing somewhere by my best guess between 1,500 to 1,800 of you when I messed up the feed, so I would love to have you back as listeners, I wanna make sure you're able to do that.

If you could help me spread the word, I would thoroughly appreciate it. Today is a Friday show, and these are all gonna be email questions. I received one question this last week, and I'm not ready to answer it via voicemail, not ready to answer it today. So these are all emailed questions that were emailed into me.

If you would like to get your question on a show for today, on a Friday where I do these Q&A, then feel free to email it to me. I would prefer, however, if you call it in on the voicemail line. So if you just go to the website, RadicalPersonalFinance.com, either on your phone or on your computer, and you'll see a little button that says leave us a voicemail.

You click that button, and you can do it right from your phone, right from your computer, and just record a voicemail, and that way I'll be able to play that on the show. I prefer doing those, so I will always give preference to voicemail questions, 'cause I like it when the audience can hear the question.

It also forces you to have your question a little bit more concise instead of me going through and kind of trying to trim out some of the email questions. But the email ones are fine. I would encourage you to keep sending them to me. Two other quick notes as we get started.

Before I start with the first question. One is that when you guys email, I want to, email me. Thank you. I read every single one of your emails. I often am very slow to respond to email, and I'm just so busy that even though I'd like to email you back right away, oftentimes it winds up being a week.

Sometimes I'll batch an entire week's worth of emails into on Saturday morning or something like that. I try email is not my number one priority, so although I spend, we're all, in our modern world, we all tend to need to spend a little bit of time there. But it's certainly not my number one priority or my biggest source of value, so I will usually push it off and lower it on the priority chain for other things.

So if you don't hear back from me for a week, two weeks sometimes, that's why. But I do read them, so I thank all of you for sending me the notes. Number two, I actually had a listener this week send me something pretty cool. Actually recorded a voice message, and I thought that was a really cool way to hear feedback from a listener.

And it wasn't intended to be played on the show as far as an audio, it was a personal audio, but this listener just used the voice recording app on their phone and then recorded a voice memo and then emailed it to me. And I thought that was really fun.

It's tough for me to schedule a, I don't have, I'm not making the time available right now on my schedule to do individual phone calls with anybody really, just because of all the other things that I've dedicated my time to. But that was a fun way for me to get some listener feedback.

And so even though it was a one-way conversation, it was nice to hear his voice, it was nice to hear what he shared with me, and I really enjoyed that form of feedback. So if you ever want to do that, feel free to send it to me and just email me the file, and then I will listen to it.

So that's it for the intro, so let's get started with the questions. First question comes from Lane in Tennessee, and he says this, "Joshua, my question is about "retirement income. I will begin withdrawals "from my retirement funds in July of 2016. "I've heard you discuss the 4% rule, "which is the amount I can withdraw and retain "100% of the principal, which will become part "of my estate for my children.

"What would be a safe number if I wanted to retain "only 50% or leave nothing? "I realize that the answer to my questions "has another variable, how many years? "I would say that 20 years is a good number. "I would be 86 at that time, and 30 years "would be the worst case number.

"There is probably a formula which will allow me "to enter the number of years, the remaining percentage, "and then calculate a withdrawal percentage, "which would be great if available. "Keep up the good work, I enjoy the show." Lane, good question, Lane, age 64 in Tennessee. Good question. Now, there are a few answers to the question, and I want to share with you those different answers so that you can more easily understand the various options here.

If we know what the percentage rate of return is off of a portfolio, this is the easiest question in the world to answer, and it's a very simple future value and payment calculation, and I'm going to do it for you in just a moment. But the problem is that we don't know, in general, usually, with most investment, we don't generally know what the actual return is going to be year to year.

We may be able to guess at the average return, but this gets into what is called the sequence of returns risk. So if the average return from a portfolio is 8%, we may use that 8% number, but the reality is we don't actually know, in the first year, are we going to have a 28% loss in the portfolio, or are we going to have a 28% gain in the portfolio?

And because we don't know what the actual sequence of returns is, then this is a very difficult, if not impossible, question to answer. So let's start with the math if we do know the sequence of returns. All you need to do to answer this question is pull out a financial calculator and run for yourself exactly what the scenario is that you want to calculate.

And so if I pretend that you have a – you didn't say anything about numbers, which is great. So let's do a calculation, though, and let's play with a million-dollar portfolio. So pull out your financial calculator, clear the register, type $1 million. So type $1 million, hit the Change Sign button, and put that in as your present value.

You have a $1 million portfolio. Now, at the end, you said you want to calculate how much of your portfolio you want to have – or how much of your portfolio – you said you want to have a 50% of your portfolio left at the end of, say, 20 or 30 years.

So let's start with 20 years. So just hit 20 and then hit N, and then you're going to have a 50% remainder value. So what you need to do is you just type $500,000, keep that as a positive, stick that in for your future value, and then take your interest rate that you predict that you're going to earn on your investment.

So let's say I'll use 8% as a plug number. Hit the 8, hit the I, and now what we'll do is we'll calculate what the payment function would be. And this is going to tell us how much we can pull off of a portfolio, starting with $1 million, terminating at $500,000, with an 8% return for a 20-year period.

So let's hit the Payment button, and what that tells us is that annually we can pull $84,190 off of the portfolio each year for 20 years. Now let's check the math and see if I did something wrong. So put in $84,000. Let's type $84,190. Let's clear the register first.

$84,190. Put that in as a payment. We'll put it in as a positive number because it's going to be a cash inflow. Put in $1 million as a negative number for the present value, and put in 8% for the interest, 20 for the end, and hit Future Value. And what we'll see if we did our math right, yep, comes out to $500,041 because I didn't put the dollars and cents into the payment function.

So now I know that if you have a $1 million portfolio, and if you can get an 8% rate of return off of that portfolio, and you want to pull payments off for 20 years, and at the end of 20 years have half a million dollars left, you can pull $84,000 off the portfolio.

And this is very simple math to work if you wanted to change it to 30 years. Let's do that one. So let's clear the register. Type $1 million. Change the sign. Put it in as the present value. Put in 8% still for the interest, and let's put $500,000 as the future value.

And now instead of 20 years, put in 30 years for the end, and hit the payment button. And now it will calculate that if you want to do this for 30 years, you can actually pull off $78,160. So it's easy, right? Well, it's easy if we know that you're going to get 8%.

And that's the challenge. Because depending on what 20- or 30-year period you're using, you may or may not get an average of 8% over that time, and depending on the sequence of your returns of the portfolio, then it may or may not wind up with that number. And so that's why when you go back and you look at the research that I referenced in the 4% calculations and the safe withdrawal rates and things like that, if you go back and you actually look at it, you see how I think it was off the top of my head, 96% of the time at a 4% withdrawal rate, the portfolio wound up with still having the 100% of its beginning value.

I'm pretty sure that's right. I need to go back and check the numbers. It's just off the top of my head. So that's why. But the other times, it may or may not. But that doesn't work in terms of the practicalities of life. So in general, it's tough for us to find a fixed, guaranteed account where we know exactly what we're going to return.

If we did know that, we could. So where you get into is -- the subject that you're getting into is called retirement distribution planning. And this is very important, and it's an emerging field of specialization in the area of financial planning. There are a number of ways that you could solve the problem.

But if I were sitting down with you face-to-face doing planning, then I would say, "Lane, how important are these different goals to you?" So would you be utterly destroyed if you didn't leave an inheritance behind for your kids? If you wound up with a terminating value of $0, would you be utterly destroyed?

Well, if not, if you're willing to take the risk, then chances are you might be comfortable keeping all of the money in the highest total average return portfolio that you're willing to be comfortable with because you might be able to leave a much higher amount of money behind. And you might be able to enjoy a much higher lifestyle.

And if you're okay with the volatility and the potential for having a reduced income in the period of time because you wind up into -- your investment plan doesn't quite work out, that may be a plan that works for you. On the other hand, if you have a need where it's very important to you that you leave a certain amount of money behind, you've got to segregate that out and not risk those assets.

And so you could do this with a combination of different strategies. Let's say that you're going to do this all with mutual funds. Well, you might carve off a portion of your mutual fund account, a portion of your portfolio, and say, "This is the money that I'm going to leave behind to -- this is the inheritance bucket." So maybe you have -- let's just go with an ideal scenario.

You have a Roth IRA that has $100,000 in it. And you say, "This account I'm not going to spend. So I'm going to take this $100,000," and you sit down and you just pull out some math and you say, "Okay, $100,000. Then I'll put this in as my present value.

Let's say I'm going to do this for 20 years. This account is going to be invested 100% in stock, so I'm going to get an 8% return net of fees and there's no tax on the Roth IRA. I'm not going to take any payments off." What would that be worth in 20 years?

Well, in 20 years, that would be worth $466,000 if you get the 8% return. And you might say, "Look, I've got this long time horizon, so I'm totally comfortable with that. So I'm going to keep this portfolio tucked aside over here for my kids, and that's going to be the inheritance portfolio, and I'm going to focus on spending the rest of it." You could bring other financial products in.

So as an example, let's say that you wanted to make sure that you leave behind $500,000, but you're not sure when you're going to die. So you might hedge your bets, and you might buy something like a life insurance policy. So you might buy a $300,000 permanent life insurance policy, and you know that money will always be there.

And then you use some of the money for that, but then you keep the rest of the money invested in a mutual fund portfolio. And then over time, you're covered for both eventualities. You've got the consistency and the stability of the life insurance payment, so if you have a bad market condition or if your investment plan doesn't work out quite so well, you've guaranteed the death benefit, the inheritance for your family, and you then have put in place a scenario where you have the opportunity for hopefully more upside because of the aggressive investment portfolio.

But that way, if you have a, let's say, a $300,000 life insurance policy, and then you've got $100,000 invested in the mutual fund portfolio, and you know you're going to need to take premium payments off, depending on what, you know, do you have a policy that's old that has lower premiums?

Do you have to buy a new one? How old are you? Are you healthy enough to qualify for that? That kind of strategy can work out really well because today you've guaranteed $400,000 of death benefit while having the ability to spend most of your retirement assets on yourself. And then you can, and you have the life insurance and the investment account there for your kids.

That could be a strategy. Frankly, an awesome simple strategy that I think some people should consider would be if you don't want to, many people are much more risk averse when it comes to retirement distributions and can't handle the volatility of an aggressive stock portfolio. So sometimes I've been in scenarios where I've said, you know, the best situation is take the money, carve off some of it, buy a life insurance policy and guarantee the death benefit, and then carve off the rest of the money and put it into guaranteed annuity payments.

That's really great if you sell insurance. If you have a case like that, that's a great insurance case. Probably not appropriate in the majority of cases, but there have been cases where a client has just been so uncomfortable with volatility in a portfolio that they wind up being so conservative.

And in that situation, I think the insurance solution is actually superior. So the key with retirement distribution planning is oftentimes you're going to be bringing all of these things together. So for example, do you own a home? Well, some people, if your minimum number is I'm going to leave behind $500,000 for my kids, but you have a house that's worth $500,000, if you can set your plan up and you know that the house is going to be left behind, you just simply instruct the executive of your estate to sell the house and distribute that amount of the proceeds to the kids.

So this is a highly individual question, and it very much depends on what you already have in place. The financial calculations are incredibly simple if you know the rates of return, but the key is that most of the time we don't know the rates of return, and we especially don't know the sequence of returns.

So this is where you will want to work with a planner or look at some of the different strategies that you could put in place yourself to handle this. So the retirement planning industry, they're coming up with things like the buckets of money approach, the asset dedication approach. You can research all of these things.

The guaranteed minimum floor of income approach, all of these are some different tools and techniques, and usually in an individualized situation, one of those is going to come out as being superior based upon who you are as a person, based upon what assets you already have as a person.

For example, if you're 64 years old, if you don't own any permanent life insurance, that's going to be a pretty high premium payment, and the numbers on that, you would have to be very careful with the math to see if that works out or not. But on the other hand, if you have an old policy that you bought when you were 30, and the premiums on that are just tiny, and you were planning to cash it out and spend it on retirement or do something like that, then maybe you just keep that policy in force, and you say, "This is going to be the inheritance money, and we keep on going," depending on your makeup as an investor.

For example, do you have a business that you own or some other major asset, or is all your assets in mutual funds? Do you have enough money where you can live an excess of the lifestyle that you desire without taking the risk, or are you right near the edge financially?

And so those are the different things that you're going to want to consider. I know it's frustrating when I can't give you a straight answer, but it really is dependent upon what you actually have. And I've never seen an ideal-- there's no such thing as an ideal situation. Every person's portfolio, depending on the makeup of assets that you have and the planning things that you need, every person's situation and portfolio is going to be very different.

And then the importance of the inheritance, how you desire to leave that inheritance behind, the tax nature of the accounts and the things that you have or don't have. I'm sorry I can't give you a more specific answer than that, but that really is the answer. It's easy to run the math in the way that I showed you if we know what the rate of return is going to be.

So if you have a portfolio, maybe you have guaranteed investment contracts, or maybe you have some sort of-- let's say that you're working with-- maybe you bought some kind of annuity products that have a fixed return or some type of guaranteed return, and you can run those calculations, that would be something that we could apply and we could run the math.

So that's as far as I can go with a question like that. Great question, and I thank you for asking it. Next question comes from Connor. Connor says, "Joshua, love the show. My question is basic. Where do I go now? I'm 26 years old, working at a bulge bracket bank in New York City in the FP&A space." I'm going to pause the question.

I didn't know what either of those words meant, which is kind of funny to me, because we all have this lingo, and you would think with me being in the financial business, but I'd never heard of either of those terms. So I did a DuckDuckGo search, and Wikipedia tells me that bulge bracket-- the bulge bracket comprises the world's largest and most profitable multinational investment banks, whose investment banking clients are usually large corporations, institutions, and governments.

They usually provide both advisory and financing banking services, as well as the sales, market-making, and research on a broad array of financial products, including equities, credit rates, commodities, and their derivatives. They're heavily involved in the invention of new financial products, such as mortgage-backed securities in the 1980s, credit default swaps in the 1990s, and today, carbon emission trading and insurance-linked products.

They're usually primary dealers in U.S. Treasury securities, and they're global in the sense they have a strong presence in each of the three world's major regions-- the Americas, EMEA, and Asia Pacific. So I thought that was interesting, and I didn't know-- I guess basically right now it's Bear Stearns, Citigroup, Credit Suisse, Deutsche Bank, Lehman Brothers, Goldman Sachs, JPMorgan Chase, Merrill Lynch, Morgan Stanley, and UBS.

So that's interesting. I'd never heard the term before, and so I learned that's something new. So Conor is right in the middle of the finance world in New York City, and FPNA, I assume, stands for Financial Planning and Analysis, which is another-- I guess that's an accounting lingo term.

I've never used it, but my guess from the next sentence is that it's an accounting lingo term. So I thought that was interesting. Continuing with the question, "I have my CPA, "and I studied accounting and finance in university, "but the financial academic badges "don't exactly prepare you for real-world personal finance.

"My personal facts-- "I have a serious girlfriend, not married or engaged, "no kids, no loans, minimal bills, "maybe $150 on utilities, low rent, $500 "in the suburbs of New York City, "and I make somewhere between $88,000 to $100,000 a year "all in, depending on the bonus. "I just paid off $25,000 in student loans "in under a year.

"I've put $10,000 into a cash reserve account, "funded my 401(k), "and thanks to your recent podcast, "I'm going to fund my health savings account as well. "I don't know what I want to do in five years. "I like the sound of the early retirement guests you have on, "and I'm putting away a ton of excess cash.

"However, early retirement may not be for me. "On the three paths to wealth that Todd Tressiter highlighted, "entrepreneurship sounds great, "but I don't have a killer idea to bring to fruition "in the next few years. "With regard to real estate, "I personally need more cash and market knowledge "prior to being comfortable going into "such a capital-intensive investment strategy.

"Finally, paper assets. "I don't scoff at 6% return on investment, "but that will not push me to wealth. "Believe me, I'm constantly thinking, "'What skills do I have to offer in entrepreneurship?' "But right now, I don't have any light bulb ideas. "Is it okay to be sitting on excess cash at my age?

"Or should I get started investing in paper assets "to harness the compounding factor? "After all, Einstein said the most powerful force "in the universe is compound interest." So, what should I do while figuring this out? So, this is a great question. I gave some of those details 'cause I think this question describes many of us, frankly, many of my peers and many people who are serious about money, but like, "What do I do?

"Where do I go? "And am I sitting on the sidelines with money? "Should I invest it? "What should I do?" And I think there are two questions here, two big questions here in Conor's question. Number one, "What do I want to do with my life?" And then number two, "Is it okay to sit on cash?" So, let's answer the question of sitting on cash first because that's, in some ways, the easier one.

The answer to this question often depends on who somebody is and what they're doing. So, if you pick up a range of personal finance books or talk to a range of financial advisors, you're gonna get different questions depending on where you are. Most personal finance books are geared towards getting you to invest, and the idea is you need to invest now.

You can't sit on the sideline with cash. So, you run the charts and you say, "Well, at age 18, I need to go ahead and invest," and start my IRA, and that's what I did. And I think that is, in many ways, it's true. One of the challenges in the financial business is that if you're not investing, if I were a financial advisor and if I'm working with you and my compensation is tied to the sale of an investment product, I'm gonna have an interest in getting you to invest your money and pull it off of cash.

One of the big things that financial people do, especially in the sales arena, is if I'm getting paid based upon the amount of cash that I'm managing for you, I have an incentive to get it invested. And what's so tricky about this is that in multiple ways, this is correct.

So, if you're just sitting on cash, I've run into this with many clients that are just sitting on cash. I had one client, I had a million bucks sitting on cash, and they'd had it sitting there for years, and they were just sitting on it, and I did everything I could to get them to invest it because they needed to get it invested into something.

They weren't sitting on cash in an active way, looking for opportunities. They were sitting on cash 'cause they were basically too scared to do anything. That's a really frustrating thing. So, in that scenario, as a financial advisor, you have a duty, I believe, to really work hard to get somebody to invest their money, to find something they're comfortable with and get them to invest their money.

It's gotta be comfortable with it, but you gotta get them to invest. 'Cause if you're just sitting aside with cash on the sidelines and never doing anything with it, that's, in our world, in an inflationary currency system, which is what we live in, you're doomed. You're doomed over the long term.

But that's very different than sitting on cash while looking for opportunities. And so, you're the only one who's gonna be able to figure out what situation you're actually in. So, let's run the numbers, and let's see what the potential cost is for you of the lost compounding. And this is where, if I were you, your CPA, pull out an Excel spreadsheet and create a compounding chart and calculate this.

But if we just plug this into the calculator, let's pretend you said you paid off $25,000 of student loans in under a year. So, I'm gonna assume, for the sake of discussion, that you could save easily $2,000 a month. And because we're talking, I'm just gonna use, let's see, let's use 5% interest.

Because you said six, and so maybe we're not talking, we'd have to decide, are we talking about your retirement assets? Are we talking about stocks? What's your opportunity cost? If you're thinking of something like a five-year period of time, which is what I kind of get the impression of, what I want to do with my life, let's say we use a five-year period of time, and you're saving a good portion of your income.

So, this is a very relevant number. So, let's say that we are gonna be saving $2,000 a month. Let's calculate, let's do this monthly. $2,000 a month payment. Let's do this for five years, and let's put this in, so five divided by 12 is for five years for the period.

Let's use 5% interest. Five, there, 60 months, and let's put in zero for the present value. So, at the end of five years, in this scenario, your growth would be, your account at 5% invested monthly, compounded monthly, would grow to be $136,578.88. So, $136,000. Now, let's figure out how much of that is interest.

So, we did 60 months at $2,000 a month, so that comes out to $120,000. Pull out $120,000, and you can see that the potential cost in your situation is a total of $16,578. Now, here's the reality of the situation. Imagine yourself five years from now, and you have two different accounts.

You get one or the other. Five years from now, you're sitting on $120,000 in one account, or you're sitting on $136,000 in a different account. Here's the question. Will that make a dramatic difference on your life choices and on your situation? Now, I'll cash the $16,000 check if you want to send it to me.

That is a difference. But frankly, if you can imagine yourself and ask most, let's see, you said 26, so ask most 31-year-olds, is it really going to make a big of a difference if you have $120,000 or $136,000? Is that really going to make a big difference? That's not a huge difference percentage-wise.

It's really simply not. So you've got to question and say, "What are the risks that I'm going to take to have the $136,000?" And over a five-year perspective, maybe you might not have $136,000. Maybe it'd be less. Maybe it'd be more. You've got to figure out, "What am I investing in?

What do I expect my potential return to be?" But at 5% interest, that's not really that big of a difference between $120,000 and $136,000. Most of the things that you can do with $136,000, you can do with $120,000. Now, I don't know what you want to do, and this is your problem, but most of the things that you want to do with $136,000, you can do with $120,000.

And so it very well could be a very practical plan for you to say, "I'm going to keep the money, and it's just going to sit in cash for five years." Now, the problem would be this. Let's say that instead of keeping the money in cash while you waited to figure out what you're trying to do, and I'll call that having dry powder to apply to an opportunity, what if we take that to 30 years, and you don't invest the money?

Well, if we just keep those same numbers, but let's put in 30 years, then we wind up with 360 periods, and now into the same scenario, now after 30 years, the number is $1,671,452, so $1.7 million. And if you compare that to the amount of money that you put in, 360 times $2,000, you've invested $720,000.

So subtract the difference between those two, and you wind up in a situation where you are $951,000 of interest poorer. So over 30 years, that makes a huge difference between 0% return and 5% rate of return. And now if you go from 5 to 8, and you did 8 versus 0, then it's dramatically different, etc.

So my point is that rate of return matters. Compound interest matters. But in real life, it only matters really over the long term. It doesn't really matter that much over the short term. If you were $16,000 behind in five years, and you came into a scenario where you said, "I've got to get compound interest working on my side," and you said, "How long is it going to take me to make up that $16,000?" You could make that up pretty quickly.

You really could. Now, mathematically, would it be more if it had been invested all the time? Of course it would have been because now that's an extra $16,000 of interest that's compounding. My point is that in the beginning of a compound interest chart, the rate of return and the amount of money that's there in interest is very small.

And at the end, it's very big. So this is why you almost get this strange continuum that in the beginning of life, when you're just getting started on building wealth, the rate of your savings, the amount that you're putting in, makes a much bigger difference than the rate of return.

But once you accumulate some money and your account starts to grow, then your rate of return makes a much bigger difference than the rate of your savings. So you've got to transition to this in your thinking over time. Now, the problem is, what are you going to invest in?

If you can run various scenarios, let's say that you sit on your money for five years and you don't invest it in anything. But then you have an opportunity, it would probably be entrepreneurship or something associated with that. Let's say you have an opportunity where you could predict a 30% rate of return on your investment or your speculation of some kind.

Wow. Then if you had the dry powder ready to invest, that would make a big deal. But on the flip side, if you don't have that, then what are you going to do? So it's a very difficult question to answer because it all depends on the second question they ask me, which is, "What do I want to do with my life?" In my mind, you've got to get very clear on that.

And I would say, "What are you here for? What is your calling? Why are you here?" I would encourage you, don't feel too rushed on that one. And it's tough because I feel like, in some ways, I have some perspective, but I don't have nearly as much perspective as I'm going to have 30 years from now.

But don't feel rushed. Keep your powder dry. And having money will make a dramatic difference in your options. Do you like doing CPA work and you want to do that? Well, in that case, if you want to leave New York City and you want to leave the bold bracket bank industry and you want to move to, I don't know, little small ski town USA, then it might be more to your advantage to have a bunch of cash sitting there to fund your first couple of years of building up clients and to have that as a cushion than it would be to have it all invested in mutual funds locked in a 401(k).

So do you want to move to ski town Colorado and start a CPA practice, maybe a virtual CPA practice? I don't know. Do you have any attractive investments? For example, you work in the industry. Can you find an inside angle on an attractive place to invest your money? Do you want to buy a house?

Do you want to pay cash for a house and buy an expensive house? Do you want to buy a rental property? Do you want to buy a car? Do you want to move to Belize and open a beachfront bar? If you say, "Then my vision for my life is I want to live in a tropical place," so you think you're going to move to Belize and open a scuba diving shop and a beachfront bar, then no, don't invest the money in paper assets and keep the cash dry and save it to start your beachfront bar.

But on the other hand, if you like the finance space and you enjoy that, then you may just very well plow the money into your 401(k), plow the money into some investment options and talk to some of your buddies at the bank and see if they have any interesting insight into something that might give you a bit of an advantage over the general larger market and see.

So the thing is for me, it's very tough for me to relate to somebody who doesn't know the next thing that they want to do. I keep a list, so I would encourage you to do this. Don't rush into anything. If you're just waking up with finance and you're saying, "What am I going to do?" and you're not.

I mean, you're a CPA, you know your stuff, but don't rush into anything. I would encourage you, spend a lot of time journaling. Spend a lot of time with visioning exercises and journaling exercises and noting what you like and what you don't like. It seems if you've gone through the mainstream approach, it seems that many people, many of us aren't really that in touch with who we are as a person, what we stand for, what our calling is in life, and what our vision is for what we're trying to accomplish.

And so sometimes that takes a lot of time. It takes a lot of time to sit down and do goal-setting exercises and then to find out, "Well, I thought I wanted to set that goal, but the reality is I don't really care about it." And finally you figure that out and cross it off.

What's your vision for your life? What's your vision for your family? How are you going to set things up? Those questions will 100% impact every decision that you make. And then make sure to also keep in mind the idea and the perspective of financial balance. So right now, if you're earning $100,000 a year and you're living in New York City, you're living in, assuming federal taxes, state taxes, and city taxes, you have a high tax burden.

And plus you're single. You don't have any major deductions. So you need to do a good job with your tax planning. And it might be in your best interest to say, "I've got to make sure I fund this 401(k). I've got to make sure I fund this IRA. I've got to make sure that I get my income down right now because I'm planning four years from now to move to a small Midwestern town and my girlfriend and I are going to leave New York City and go move there." I don't know.

But I just think about it. Spend a lot of time writing this stuff down. Once you figure out what your vision is and where you're going, and then you figure out what skills you have and who you are as a person, the thing I started to say a moment ago is that in much of our life in society, who we are as an individual, we're not really encouraged that much to figure it out.

So a lot of us, we trot along the path that society lays out for us and you graduate from college and you get a job and you have this crisis where you realize, "I've only ever done school and I've been a good student and I did well in academics, but I kind of took the CPA thing because Dad said it was a good job." And the reality is, "I don't care about this." And it takes years after college to figure that out and then you make these transitions.

And the real challenge is that our childhood has been extended into-- it's a joke in our culture about failure to launch. Our childhood has basically been extended, culturally speaking, to mid-20s and 30 years old. That's ridiculous. But the problem is that the path that many of us have been on, we don't know who we are, we don't know what we do, we don't know the impact that we want to make on the world, we don't know whether our skill is we want to do entrepreneurship or we want to move to insert place here and do X.

We don't really know. And we probably haven't tried enough things. Many of us haven't tried enough things to feel confident about them. So journal, journal, journal, write, write, write. Sounds ridiculous, but figure out who you are. You might learn more by taking the money and instead of investing it in stocks, you might learn more by quitting your job and taking $30,000 and traveling the world for a year.

Get married and have a one-year honeymoon with your wife. Build a family, man. That's the other thing I'd say. Build a family. It helps a lot. Anyway, so hopefully that helps. Early retirement, I love talking about it on the show. I love bringing early retirees on. I'm a little bit negative toward the concept of retirement ever.

I can't imagine. It's impossible for me to imagine not working on some of the things that are on my goals. I've got too many things I want to do than the time I've got. I feel like I'm almost 30 and I'm like, "I've only got 70 years. "How on earth am I going to get "all this stuff done in the next 70 years?" To me, the idea of retiring is very difficult for me to imagine, but I recognize that I've never had the financial freedom to where it were a choice.

I'm working towards it, but I have to be careful to express my opinion too strongly because I've never had it as a choice. What I've noticed is that those who have a choice don't really retire. I would say keep your powder dry and then figure out what your plan is.

If you take a year and then you start investing, I don't care what path to wealth you choose and choose all of them, but whatever it is, focus on knowing where you want to go. Once you get there, then don't be rushed in, I guess is what I'm saying.

I think financial independence is awesome, but you know what? You can be financially independent whether or not your money is invested. You can just pile up savings and you do that for three years. Now, imagine yourself, most 30-year-olds, imagine yourself four years from now and you've got $400,000 in the bank because you saved like crazy.

You can go anywhere, start anything, do anything, take advantage of any opportunity, any option that you have. That's a long roundabout way to saying, "I don't know. I don't know what you want." But if you don't know what you want, don't do anything until you know that or at least you have an idea.

Next question comes from Max and it's about portfolio diversification. I'm going to read this. You're going to hear a little bit how involved the question is and I'm reading it because I want to make a point because this is the confusion that many people have. So bear with me as I read the question.

Question from Max. "Hey, Joshua, I'm in the process of rebalancing our retirement accounts into a single allocation picture rather than the current hodgepodge of investments. We each have a 401(k) at our current employer. My wife has an old 401(k) rolled over into a traditional IRA. And we each have a Roth IRA.

My wife and I are about 30 years old and my aim is to start with an 85% split between stocks and fixed income or bonds across our whole retirement portfolio. My question, what is the best way to allocate the fixed income portion of our accounts in an environment of historically low rates that are expected to begin rising within the next 12 months?" That's the question.

Now he continues on. "We currently have about 10% of our overall portfolio in fixed income through the bond portion of several moderate allocation mutual funds in our employer 401(k) accounts. I'm fine with this as they are actively managed funds that are highly rated and have done well for us.

What I need to know more about how to invest cash currently in a Roth IRA to get another 5% of our overall portfolio into fixed income and bonds. I've read a lot of hand-wringing about bond funds potentially losing principal in a rising rate environment, so I would think I should avoid those for now.

I've also been moving into all ETFs in our individual accounts for the lower fees and added liquidity should market conditions change suddenly. I've read about unconstrained bond funds like Bill Gross's new fund at Janus, but betting on a single manager being able to beat the market seems risky. I've also seen some talk about floating rate bond funds that hold ultra-short bonds and while they have lower returns of 1-2%, they generally won't lose principal.

Lastly, I've read that high-yield corporate bond funds, while riskier, may provide more stable returns as rates rise than government bonds. Obviously, I could just buy T-bills and I'd always get my principal back, but I'd rather hold ETFs or mutual funds so I can more easily manage it online without having to store and secure or insure paper bonds.

Another option would be to just move to like 90/10 or 100% stocks with such a long time horizon, but considering we still sit near record highs, I would like to wait it out a little bit longer and see how things go over the 12-24 months and if a bigger correction does occur.

I'd rather be hedged a little bit with bonds than take it all in the chin with mostly stocks. Any advice you can give would be much appreciated. Thanks. Max, St. Louis, Missouri. Max, thank you for the question. It's a good question. It's an excellent question. However, I want to use it as an example to answer it specifically, but then also illustrate.

This is what the majority of people live under as far as investment confusion and the key thing I would point to you is that you're getting a bunch of stuff mixed up here about your strategy. On the one hand, you're trying to follow an asset allocation strategy of a traditional, what's called the efficient market hypothesis, which is recommending to you that you have a split of 85% stocks and 15% bonds, but on the other hand, you're trying to figure out what bond fund do I pick, when are interest rates going to rise, and how do I figure out what should I do.

Everything is mixed up here and I would encourage you, you've got to figure out what your investment strategy is. Either you're in or you're out and you know your strategy. The key thing here is I'm not really going to answer the question specifically because my answer to the question is go back and research your strategy and I understand this is difficult to do, but research your strategy until you are confident with it and you know what your investment plan is.

Now, 85/15, this is based upon an efficient market hypothesis theory of asset allocation in a portfolio. If you are following the efficient market hypothesis structure, which is what most of us who are traditional mainstream planners are doing and this is what you're doing with your retirement account and this is what every single one of your target date retirement funds is doing, this is what most of the majority of the mainstream books you're reading, this is why if you go to Morgan Stanley and Charles Schwab and Northwestern Mutual and Prudential and talk with a financial advisor and you say 85/15, all of the portfolios practically look exactly the same.

So my answer to that is it does not matter what you choose. Just simply open a book, pick one of those portfolios and if you pick an 85/15 portfolio and it says 15% and put 5% in high yield bonds and 10% in corporate split between corporates and government debt, 5% corporate, 5% government debt, and 5% high yield, fine.

Do that. And the answer is it doesn't matter. It's probably all going to be about the same within some small number of basis points and you should go all in today and ignore the rates. The entire theory behind the efficient market hypothesis is that the market is efficient, you choose an asset allocation, and then over time because you choose and stick with and rebalance your asset allocation as time goes on, you get solid investment results.

So don't even worry about which fund is going to do better. Does Bill Gross do a better job than Mohamed – what's his name? I don't even know how to say his last name. El-Eryai or whatever. He's gone from – he left from PIMCO. But anyway, so the point is it doesn't matter.

And so just pick whatever philosophy, look at your list of funds and just pick one because your entire basis is on the long-term trends and the only way to succeed with the efficient market hypothesis and with modern portfolio theory for you as an investor is to choose something and stick with it.

And then you've got to stick with it no matter what rates do, no matter what the market does, no matter what any of those things do. That's what the theory is predicated upon. All of the academic research is based upon index returns of a perfect non-emotional investor. If you cannot stick with that plan yourself because you can't control your emotions, then you've got to find a good advisor who is a good behavioral investment counselor who can help you to control your behavior and help you to stay invested and pay them their fee and it will be worth every cent of it if they can help you control your behavior.

And I've never seen any research – and if any of you disagree, I want to be proven wrong and maybe you could share something. But I've never seen any research that all of the thoughts that you're trying to have and the discussion you're trying to have is going to matter.

Is corporate going to be better than government debt? I don't know. Who even knows? Now, could you tweak it a little bit? Yes, but you need to find someone that you have a philosophy that you can follow. And I simply don't. I really don't think it matters. I think it's majoring on minor details that are unpredictable and who knows what's going to happen if you're going with the efficient market hypothesis.

So understand, are you going based upon modern portfolio theory and the efficient market hypothesis? That's based upon being an investor, establishing a portfolio, sticking with it, contributing to it, staying with it no matter what. There's no trading except for rebalancing the portfolio on a regular basis. You decide what regular is.

Everything equalizes in the end. If you're going with that, by the way, T-bills are not bonds. T-bills are cash. So you can't make your 15% allocation to T-bills. That's cash. And floating rate ultra short bond funds are probably more like cash than bonds. So I wouldn't do that either.

I'd just pick a bond fund and it doesn't really matter, active fund, index fund, whatever you have available to you on your investment platform. And that doesn't make any difference in the 85/15 allocation. Now, if you're going to predict what fund is better or what market segment is better or what interest rates are doing, then you wouldn't be asking me this question.

You would be trading based upon your specific outlook and the knowledge that you have and the strategy that you're following for your trading. So then the question is, I don't know what you should do. Are interest rates going to go up? I think they are, but you know what?

Every single one of us in the investment business has been predicting for the last how many years that they're going to go up. And it sure seems like they haven't gone up that much. So we've all been wrong so far. Could we be wrong for another three years? Hard for me to believe, but you know what?

Everyone's been wrong for the last three years, so who knows? And time will tell. So I don't have any connection or any unique ability to have any knowledge on this myself. And until you do, you shouldn't be getting in there and doing your trade. Now, if you're going to be doing trading, then you've got to decide on your asset allocation strategy, and it's not just going to be based upon the 85/15.

It's going to be based upon the amount of exposure to risk you're willing to take, and then you're going to figure out, can I hedge my position? What can I do in my scenario? So in that situation, you already need to do the research until you're not asking me the question.

So pick one of the accounts, do your funds, and you're going to be trading, and then you're going to trade your ETF, and you're going to be doing shorts. I mean, you're going to be trading it. So that's also an area I'm not an expert in, but you need to go become an expert.

So my primary desire for you to see is that you've got to decide on your strategy. Are you going to become a trader where you're going to be predicting things in the short term, like interest rate movements, like which bond fund is going to do better than another, like is a short-term, ultra-short bond fund going to be better?

In that case, do more research. By the way, I thank you for the question. Do more research, though, until you're not asking me the question. Or are you just going to say, "My time and energy is better hit elsewhere"? And in that case, pick your portfolio. Pick whatever funds are available to you.

Stick with it and go on about making money and pouring money into it. Incidentally, if you're curious, I actually don't own any bonds. Me personally, this is my personal opinion, not giving investment advice to you, I don't own any bonds, and I don't get it. I think it's easier for me to train myself, as a young person, to train myself to not be emotional about market changes, and that's better in many ways than trying to lower my potential returns with bonds.

Now, if you look at the research, 15% allocation to bonds, is that going to lower your returns? Not much, if at all. But to me, I just—I don't know. I personally, for me and my portfolio, I don't get it. I don't see any reason why I want to own bonds.

That's very different than if I'm doing planning. I want to be clear. It's very different than if I'm planning for someone who's 65 years old and we're getting into this scenario of how do we stabilize income. But in my opinion, I would rather just own stocks all the time, and I'd rather be an owner, not a lender.

And I can't—I don't like the emotion of trying to figure out what's going to happen with government debt, what's going to happen with interest rates, and all of that going to be affecting. I'm more comfortable just simply owning companies and collecting money as an individual. So that's how I've answered it, which is why I don't bother too much.

So my answer to your question is, I can't give you—I can't, and I wouldn't if I could, but I just can't. I can't give you any recommendations that are worth anything on whether you should buy ultra-short bonds or T-bills or any of that because I don't trade, and I don't know anything about it.

So go find someone who's a trader and who can help you and someone that you buy into. Or if not, if you're just going to go based upon modern portfolio theory, pick whatever you've got available. Do it all today. Don't worry about anything in the short term because it's irrelevant to your plan.

Four years from now, interest rates go up. Your bond fund declines in value by 22 percent. Whatever. Keep going. It doesn't matter at all. Hope that helps. It's the best I got for you. Know your strategy, and if it's modern portfolio theory, it doesn't matter. Pick it. Go all in.

And if it's short-term trading and prognostication, I'm unqualified to answer the question, so you're going to have to find somebody else who can talk to that. I'm not qualified for it. It doesn't interest me. Next question comes from Arthur. Arthur says, "Hi, Joshua. I'm trying to get on my way to being financially independent.

Currently, I'm maxing out my 401(k)s, my Roth IRAs, and I have no debt besides my house, and I'm looking to pay off my mortgage to help with my financial independence. I was using an online calculator to try some scenarios, and I'm just going to briefly describe these two scenarios.

He tries to put an extra $50,000 payment up front in one scenario. So he has $50,000 in cash, and he says, "I want to put the $50,000 in up front, or should I put the $50,000 into a Betterment account and take out $2,000 a month over the next two years in order to have an extra mortgage payment?" I put the numbers in, and I was shocked to see that if I did the one-time payment, I would only save $1,467 on interest.

He has a loan with a 3.5% interest rate, and he has a balance on it of $267,000 after what looks like a prepayment that he already had scheduled. So this is an interesting question. He says, "Should I put in $50,000 today, or should I put $50,000 in an investment account and then take out of that account $2,000 for the next 24 months in order to pay extra on the debt?" My answer to this, Arthur, would be that you probably— I think you're answering— you're kind of running the wrong things.

Make sure—go back and listen to the show that I did with Joe, a rebel spy, to talk about the difference between should I pay off debt early, or should I invest early? Should I pay off debt first, or should I invest first? I would tell you that your answer is going to come down to math versus emotion.

And that you should calculate the various scenarios, but at the end of the day, your answer is going to come down to math versus emotion. The math is that you should— if you are comfortable with math and you're not concerned about emotional intensity or emotional satisfaction of paying off the debt, or you don't have some non-mathematic reason to pay off the debt, that you should not pay early on a 3.5% 15-year fixed-rate mortgage.

And you should do neither of those plans. You should not put the $50,000 into the mortgage now. You should not put the $50,000 into the Betterment account and then take $2,000 off. You should put the $50,000 aside, and you should just let it be alone and just pay the mortgage on the minimum schedule.

If you are focusing on the emotion— which is, I believe, an entirely valid and important decision-making process. So if you're focusing on the emotion and the benefit of emotionally of having your house paid off, then in that scenario, you should put the $50,000 in today and you should focus as quickly as possible on paying it off.

And you should apply the emotional intensity of paying off the debt. And so you should not invest the money into the Betterment account. But if you're focusing on the math, then even the Betterment account with the $2,000 doesn't make any sense. Because if you're focusing on the math and not the emotion, you shouldn't be calculating what the mortgage prepayment would be.

You should be calculating what that account would be potentially worth at the end of 15 years at the rate of return that you think you're going to achieve on your debt. So let's run some numbers. So I wanted to keep these numbers simple so that they would not be difficult to listen to on a podcast.

But this is why all of you, you have to learn how to calculate your numbers. You have to create a spreadsheet, use a spreadsheet, use a calculator. And this is what Arthur did, is he sent me his calculations, and that was why he was shocked to see that there was relatively little difference in interest.

So in the scenario where we have a $267,000 balance, and we have a 3.5% interest rate, and then a base payment, and I assume, Arthur, that you are doing a principal and interest payment of $2,700 a month, which, by the way, is probably not right. You probably included taxes and insurance in that number, because that would be on a schedule of being paid off in the year 2024.

Now, I assume that's your principal and interest number, and so that would be 10 years left on this loan. So if Arthur has a $267,000 mortgage with a 3.5% interest rate and a monthly payment of $2,700, just paying at that flat number, then in 117 months, he will have his debt paid off.

And 117 months is exactly 9.75 years, so that would be paid off in July of 2024. He would pay a total interest of $48,457 over the coming 10 years. Now, if we put the extra $50,000 in as a lump sum, so we toss in $50,000 of a lump sum today and a balance of $267,000, then the debt will be paid off in June of 2022 instead of July of 2024, so about two years earlier, and the total interest paid would be about $30,821.

So it would be a difference between $48,000 and $30,000 for about $18,000. So that would be a savings of $18,000 of interest versus $50,000. But what did you give up in exchange for that? Well, you gave up whatever you think the $50,000 would grow to, so that's what you need to calculate because that's your opportunity cost.

So if we run a calculation here, let's put in $50,000 in as our present value. Let's use an 8% number for interest, and let's say that we have from today to 2024, so let's just use 10 years for simple numbers, and we're not going to make any further payments.

Well, in 2024, that money would be worth $108,000 if you invested the $50,000 at the interest rate that I just said, so that's your opportunity cost is you're giving up the $108,000 in order to get the $18,000 of interest savings in my example, very simplified example. So that's the true comparison that you need to be doing.

Now, the Betterment account comparison that you made doesn't really make any sense because investing in a Betterment account, that's a stock portfolio, you can't just simply say, "I'm going to put the money in there "and then take $2,000 off over the next 24 months." That's an entirely invalid comparison for a stock account because your term, your amount of time that you have for the money to be invested is far too short for you to put it in stocks, and it's also far too short for you to take off $2,000 a month on a depleting account over a two-year period.

So this is also not a good plan. So the entire kind of foundation of your A versus B, it's flawed from the beginning because the B plan, the $2,000 a month calculation that you ran doesn't include the interest that you're potentially earning on your investment, and it also doesn't include the potential losses on investing the money in stocks.

So to me, this plan simply doesn't work. It simply doesn't work to put aside the $2,000 regardless of the numbers. You are right, however. If I take and I say, "I'm going to put in $2,000 into the account," the interest, instead of the $50,000, the interest savings of doing the $50,000 versus the $2,000 is negligible.

So again, on the numbers, $267,000 mortgage balance at a 3.5% rate. If you put a $50,000 extra payment and then you put the $2,700 in, over the life of that mortgage payment, you're going to pay $30,821.80 of interest. And if you instead take that money and over the next 24 months-- and I actually did 25 months to come out to a total of $50,000-- you put in the extra $2,000, your total interest savings are $33,051.

So if I do $33,051, you've saved, in my example, a total of $2,229 of interest by prepaying the $50,000. But you've given up, to get that interest, the potential investment growth. The problem is that you can't count on potential investment growth on a 24-month period in stocks. It just simply doesn't work.

Unless you are convinced that you can predict the gyrations of the market over the next 24 months, or you can predict the growth of your specific market. So I would reframe the conversation. And I would encourage you guys, this is why you need to learn to do math and run it for yourself.

Get comfortable with it. It's so easy with a decent spreadsheet, so easy with some decent calculators to put it in, but you need the framework. If you want to pay off your house, go for it. That's awesome. Pay it off. Put all the money into it, and get as energetic about it as crazy, and put all the money in today, and enjoy the satisfaction of a $50,000 smaller balance.

But if you don't want to pay it off, invest the money, and don't do this half-and-half thing, because the cost is too big as far as the lost cost, the opportunity cost. The money that you've given up on the interest is simply too big. So I hope that's helpful for you.

Thank you for the question. Next question comes from Ashley. She says, "Okay, Mr. Financial, I need help. "First, I have a medical bill for my son's surgery "that they are demanding that I pay $1,400 all at once, "or else they will sue me. "Is there a company that gives medical loans?

"Also, do you have or suggest "a program for debt consolidation "or the best way to get out of credit card debt? "I was doing fine when I was a general manager, "but I took a step down a while back "so that I can spend time with my son. "That got me into some trouble, "especially because my boss literally said "I can scrounge for shifts since I refuse to work Sundays "since I'm a Sunday school teacher.

"Modern-day persecution. "Anywho, I just got another job "and will be working at both "trying to dig myself out of this hole. "If you can give me any advice "or point me in the right direction, "I'd really appreciate it. "Thank you, Ashley." Ashley, thank you for the question. A couple answers for you.

Man, I'm sorry. That's a bummer to have, when a kid has surgery and medical expenses beyond what is covered by insurance. What a bummer, and to come up with the money. First of all, here's what I would say. Do not be scared when somebody threatens to sue you. I know it's tough, and what happens is that when people first threaten to sue you and they say they're gonna sue you for the money, it immediately just sparks fear in our lives, and we do crazy, dumb stuff when we're fearful.

So do not allow fear to take over. If you are in a position of fear, and if you're in a position of fear, you're gonna make bad decisions. So get out of the position of fear and ask somebody for help, somebody near you. Find somebody that you trust, a trusted friend, a trusted family member.

Find somebody, preferably somebody older. I know from correspondence with Ashley that she's fairly young. Find somebody older in whom you can confide, somebody that is wiser, that you perceive as being wise, and just talk to them. And in my opinion, it doesn't matter so much about the actual knowledge of the person as it does about their emotional stability.

Now, I don't know a lot about what's going on in your life. Ashley, you mentioned a son, but you didn't mention a husband or a boyfriend, so I'm assuming it sounds like you're dealing with this on your own. And so I would encourage you to find a friend or a trusted person that you can talk with.

You need somebody who's outside of the situation who can help you to handle the emotion. I've seen this time and again, time and again, working with people, is that I'm entirely unaffected by the emotion of somebody else's life. As for me, it's just simple. It's just simple math. But when you're in the middle of it, and I get in the middle of it with my own situations, in my life, which is why I need somebody, we all need a good, trusted confidant or mentor or advisor to talk with.

But when I get into the situation, I just can't see around it. You have a very simple life and math problem, and it's very solvable if you can get out of the emotion of it and get into the action of it. Basically, your situation is simple. You owe them $1,400, and you have some credit card debt, and you have a low income, and you have a lower income because they're refusing to give you shifts, and they reduced your income because you're not a general manager anymore.

And you have expenses to care for you and for your son, and that's it. That's it. And so my best encouragement to you is, I hope you'll listen to my show, but in your scenario, I think Dave Ramsey's show would probably help you to listen to him talk with people, many people who are in this situation.

And what he does such a good job at, and I'm going to parrot him because he's the best. He's world class at this. It's amazing. But I'm going to parrot him. It's just got to get free of the worry. Get free of the worry and just stop worrying about it.

You have a certain amount of income. Whatever that number is, in many ways it doesn't matter. It is what it is. If it's $2,000 a month or $3,000 a month or $4,000 a month, whatever that number is, that's the number you've got. And you have a certain number of expenses.

What you need to do is write down what your expenses are. And you need to rank them in order of most important to least important. And the number one most important is food on your table. Make sure that you're fed and your son is fed. Number two is your utilities.

Make sure that your power bill is paid and your water bill is paid. Number three is whatever it takes to keep a roof over your head. If you have rent, if you have a mortgage payment or whatever you have, it sounds like you probably have rent, you need to make sure that's paid.

And number four is you need to make sure that your transportation is taken care of. So if you have a car payment, make sure you pay that. And you make sure that you have a car payment and make sure if you have insurance, car insurance on that. Beyond that, if that's all the money you have, that's all the money you have.

We can't necessarily predict when the medical expenses come in and you can't predict when work is going to get cut. That stinks. So if all the money you have is all the money you have, fine. If they sue you, tell them sue me. I don't have any money. And this is where, again, I would encourage you, start listening to Dave's show and just capture some of his bravado.

He's amazing at this. Just change your phone number and say, "Sorry, I'll deal with you when I have time." If you don't have the money to deal with it, you don't have the money to deal with it. Now, the next step, you got to get the money to deal with it.

This is where you need to talk it through with somebody who's not in the emotion. You need a plan. If your income is generous or sufficient, then the best thing to do is probably for you to keep working at what you're doing. If you're not going to make any progress on your income, so on your current income, let's say that your expenses are $2,500 a month and your income is $2,500 a month.

Well, if there's no wiggle room for you to make progress on your income, you got to change something. You've got to either dramatically cut your expenses, which may or may not be possible or doable or easy, or you've got to dramatically increase your income, which may or may not be possible, doable, or easy.

And so you need a plan for both of those things. Can you move in with family? Can you move in with somebody? You mentioned you're teaching Sunday school. Can you move in with somebody from your church? Is somebody there in your network that can help you? And can you humble yourself and accept the help?

I would gladly if there were somebody, if I were a single mom that I could see were diligent and were working hard but was in a tight spot. That is my responsibility, especially if you're in my church family. That is my responsibility to help you. And if you are being diligent, there are plenty of people, if you'll open up about your need, there are plenty of people that will help you.

They'll help you with food. They'll help you with money. They'll help you with a place to stay. They'll help you with fixing your car. Me and my family, we've helped many people over the years, and this is important. This is why the whole reason of being financially stable is so that you can help people.

Now, if you're being frivolous or foolish with your money, then help is probably going to be slow to come. There are a lot of people that I know that I would be very slow to help because I don't perceive that they are invested in it. So do what you can and open up about it.

As far as them demanding to sue you for medical bills, forget about it. I would rather owe them or the collections company the money than refinance it on someone else. I'm not aware of any company that gives medical loans after the fact, especially if they've given you a bill and they've transferred it to a debt collection company.

Just deal with it when you can. You're going to want to save the money. If you don't have $1,400 to pay them, you don't have $1,400 to pay them. If you can save the money, and let's say that you have $800, ask them if they'll take $800. Go down and talk to them.

If they're with a hospital or with a doctor's office, go in person and talk to them. Take your son and tell them, "I'm really struggling right now. "My hours have been cut. "I can't pay this. "Here's what I have. "Could I pay this?" and see if you can work out an arrangement where you can pay on the debt with a lesser amount.

If you could check in, if it's at exorbitant rates or exorbitant fees, you could check into something like a Prosper loan, a peer-to-peer loan, something like that. You might be able to find something there. As far as debt consolidation, in general, debt consolidation doesn't fix the underlying problem. If you are on track, so if you have a bunch of credit cards, if you can't pay the bills or you're constantly running behind, debt consolidation usually doesn't solve that problem.

You often want to just start by saying, "How am I going to get on track with this, "with saving the money and planning out my budget "and getting on track?" If you can find a way to consolidate the debt and get at a lower interest rate, that's always to your advantage to get lower interest rates as long as you're following through.

Check to see if they're at your church. Talk to somebody at your church. Tell them you need some help. There will be somebody at your church who is a debt counselor of some kind or just somebody who has done this, been there, who can help you. That needs to be somebody in person that you know and that you respect that can help you think through that.

If not, there are some good debt counselors online. Dave Ramsey has a whole team of people who are certified counselors. Go and listen to my friend Steve Stewart, his Money Plan SOS podcast. He's got a lot of information on that. Download the Dave Ramsey podcast and download the Steve Stewart podcast.

They're two really excellent people as far as encouraging you as you work your way through it. I hope that's helpful. That's the best I got for right now. Three more questions and we're done for the day. Question from Louis. This one's really interesting. He says, "Joshua, been the beneficiary "of your podcast for a while now "and wanted to reach out to express my appreciation.

"Can't tell you how much I enjoy listening to your show. "Your series on the Trivium "and the Lost Tools of Learning essay "was fantastic and truly resonates with me. "I'm amazed that these tools "weren't specifically taught in school. "In February, I moved to Chicago "to start a new job as a healthcare banker.

"Since then, I've attempted to understand "the pharmaceutical market. "It wasn't until I heard your show "that I had a method of learning and boxing it in. "Thank you so much for the inspiration "and keep up the good work. "All the best, Louis." I thought this was a great email and I responded to him.

I was inspired when I responded to him so I've turned it into a question that I wanted to cover on the show today. And one of the things that's interesting to me about studying the Trivium and classical education model is to see how I can apply it. I was not trained in the classical education model and I'm personally not necessarily convinced that Trivium is the answer to all of life's learning questions.

A lot of people feel that it is. I'm not yet convinced that way myself but I do see the value of it. And so if you're not familiar, the steps of the Trivium are essentially three steps. Number one is that you start with grammar. Then number two is logic or dialectic depending on which term you're using and who you're listening to and what you're reading.

And number three is rhetoric. And this was the initial stages of a classical education that they used to try to teach people the process of learning. So I was inspired to give him this response and when I responded back as I said, "Here's how I would apply, yes, "apply the lessons of the Trivium in your career." And so here was my suggestions for him and I share them with you as far as how I would approach it.

So step one of the Trivium is grammar and grammar, what we mean is basically not so much grammar as far as the structure of the English language but grammar in the sense of the words, the meaning of the words and the language of the subject. So I told him, I said, "Number one, "learn the grammar of your new industry." How I would suggest, find 12 books on the industry and read them one per month.

Order away, figure out what they are, look around online until you figure out what books are talking about my industry. Order away for them and read them one book per month. Take careful notes, highlight them, write down the words that you don't understand, look them up. At the end when you're finished reading the book, write down and look at the bibliography to get book suggestions, make notes on anything in the book that you understood or didn't understand and write a book review of the book and write a book review for, you know, the Amazon style or critical newspaper type of style.

Find 12 books, read them one per month on your industry. Number two, I said, "Find 12 experts in your industry." So you have a brand new industry, you need to learn it. So find 12 experts in your industry or at least people who know a little bit more than you and take them to lunch.

And so in my mind, this would be people at your bank, people at competitive banks, people that are in different parts of your industry. So I don't exactly know what healthcare banking is. That's kind of an interesting niche. But I would find anybody in the industry and I would look to people and take them out to lunch.

Try to do this at least once per month, one per week would be great because there are lots of people, middle-ranked, upper-ranked that you can learn from and you can find somebody in healthcare, a receptionist at a doctor's office if that's what you're dealing with or a salesperson. Take people to lunch one per month and do it intentionally.

Use LinkedIn to find them, use industry publications, trade journals, things like that. Write them a handwritten thank you note afterward. If you can think of it, find a small gift that they're going to appreciate and start to build a real strong, really strong network in your industry. Think of this the way that a spy or a secret agent approaches their business.

How do they get any information? They build a network, right? They got to have your intelligence sources, the person that will reach out to them and tell them when something's going on. Next, find whatever industry conference is most applicable to your new role, call the coordinator of the conference and buy the CDs or MP3s of the most recent conference.

So figure out is there a healthcare conference or a healthcare banking conference or a health financing conference or a government thing, I don't know. But find something that's applicable to it and buy the recordings of the past sessions. Then listen to all of the sessions. If possible, take notes.

Take notes of the names of the people who are speaking at the sessions and take notes of the names and take notes of their topics, of their books that they've written, things like that. Write down the words that you don't understand. Write down the themes of their talks and what they did and keep notes on what they're doing if you're able to do it while you're driving or whatever.

Next, find whatever trade journals serve your industry and subscribe and start reading them to understand what the issues of your industry are. Look for the names of the contributors to those trade journals, the authors, and look to see if they have companies, if they have blogs, if they have books they've written.

If they have books, order away and read the books. If they have blogs, follow the blogs. Connect to them through social media. Write them a note when you read their stuff. Comment on their site. Reach out to them and look to see if you can build a relationship with them, whether that's virtual or not.

So find those trade journals and subscribe. All of this information is essentially what I think of as learning the grammar of an industry. So you're going to learn what are the words, what is the meaning, what are the issues. That's all learning basically the foundations of a new industry and every industry has this.

So that's how you would learn the grammar. Number two is you would apply logic or dialectic. Now when you're teaching a classical education, by my best understanding, the second step is actually usually logic, which is formal Aristotelian logic. I like the word dialectic because it helps me to understand a little bit.

Dialectic is basically more of an engaging and a discussion of the issues. If you actually pull the formal definition, then as a noun it's described as the art or practice of logical discussion as employed in investigating the truth of a theory or opinion. Logical argumentation is another definition. So there's various philosophical backgrounds to this, but the idea here is engage with the – how I think of it is engage with the issues.

So in every business, in every industry, there are certain issues. You want to engage with those issues and try to figure out what am I going to do. I don't know what healthcare banking is. In finance, it's things – the big debate. Should I pay off debt or should I invest?

We need to think that through and understand the issues behind it. Are mutual funds better than stocks? Are index funds better than active – are passive funds better than active funds? Is term insurance better than whole life insurance? Is – et cetera, and you're kind of engaging with those.

So you want to understand the arguments and then you want to argue them with yourself in some kind of formalized or semi-formalized way to help people understand what the issues would be. In farming, it would be GMO versus non-GMO, monoculture versus polyculture, organic versus conventional, all of these things.

In every industry, there's going to be certain discussions, and that's how I would apply it is learn to deal with whatever the issues are of that industry so that you can become expert with both – with all the different sides of the issues. This can happen in a formalized way or an informal way.

You won't know until you learn the grammar of a subject. You won't know what the debates are. But as you start to look through them, research them. And I think you should – with any debate, you should research it until you can argue both sides. And you should try to develop the argument for whatever the issue is.

You should try to develop the argument for one side as – with as much strength as you can. And then you should flip it to the other side and you should argue that with as much strength as you can and fully engage yourself in both sides of the argument so that you can understand all of the nuance and you can see where the strengths are and where the weaknesses are.

I wish that we still taught formal debate. One of the things I'm hoping to do if it's of interest is I'm hoping that my son studies formal debate because in formal debate, as far as my knowledge of it, then oftentimes if you come to a debating contest, you don't know which side of the debate you're going to have to argue.

I only did this one time in high school and I wish I had an opportunity to do more formal debate. I only did it one time and in that time, I knew what side and I missed out. And it wasn't until later I learned that you could actually do this and I learned that you could actually say, "Okay, I'm going to argue both sides." And when you can get in that situation, it fundamentally forever changes the way that you engage with people because instead of arguing with them, you're trying to understand what their points are and how to defeat them.

And then you either find out, "I can defeat their points or I can't." And so figure out what those are. If you find a theme or issue that's of special interest to you, research it. Use that to guide your grammar research. Formulate your thoughts and your opinions and then just test those opinions against what you're reading and learning.

When you're at lunch with the industry leaders or with the people that are involved in the industry, this gives you something to think about and ask. It gives you something that's of interest. And I personally enjoy--I find that it's a lot easier to get to know people if we just dig into something that we know and then let a lot of the personal stuff come later when you're taking people that you don't know out to lunch.

The best thing of all time, everyone should do sales jobs at some point in their life because you quickly become comfortable with job interviews and the idea of meeting new people and becoming comfortable. I mean the skill set that you gain working as a financial advisor or an insurance salesperson, whatever it is, is amazing.

Many people are nervous about job interviews and the way I think about it, for the last five and a half years, I often had basically three job interviews a day. And when you start to deal with that, it changes who you are dramatically. So debate with people. Question people.

Debate with them. Find people who disagree with you and then think through and write down their arguments and then see if you can defeat them and grapple with whatever the issues are. So that's how I would apply the dialectic or logic to this learning process. And then number three is I would say apply the skills of rhetoric to your industry.

So rhetoric is the ability to express clearly your thoughts on a subject and that can be rhetoric through spoken word or through the written word. So I would encourage you, start a blog. Either start it under your name, joshuasheats.com, or under your industry name, healthcarebanker.com, if you're in that, something like that, something associated.

It probably should be your name. So that way it can flow with you as you figure out where in the industry you're going to wind up. You should simply just start with writing a book review for every book you read. Post it on your blog with a lengthy version.

Post a version on Amazon. Post a version on Google. Post a version on Goodreads and just spread that around. Somebody may find you. If you're reading an obscure book on healthcare banking and you post under it, there's probably only about three Amazon reviews and that'll help people to find you.

Very simple, very natural. Write articles about the themes you're finding. So whether or not you publish them, if you want to publish them, great, that's cool. Even if not, just write out the arguments on whatever the issues of your industry are and hopefully publish them so that people can deal with them.

I benefit when you guys disagree with something that I say in a show. So if you come and you disagree with me in the comments, if it's just, now so far, I haven't gotten very little vitriolic, very few vitriolic comments that are just pure hatred or disagreement. Most of the comments that I get are thoughtful, they're informed, and they're disagreeing with me.

Well, I benefit from that because I go and I can research that and I can test, well, do I really believe what I said I believed? And the answer is probably sometimes I'm going to change my opinion and sometimes I'm not. But if you don't expose your opinions, you can't really test them.

Now, it'd be good if they're a little bit thought through, but even if you write an article and somebody rebuts your article and they write a scathing thing where they tear apart your argument, have the self-confidence and the self-assurance to read it, and if they're right, admit it and change your opinion.

We don't want to go around with wrong opinions for the rest of our lives, and the only way you do that is by finding it. So putting your writing out in public can help you. And it doesn't have to be, we've got to forget about this idea that I'm going to make money on blogging, for most people.

Don't blog just because it's going to make you money and you're going to sell lots of stuff. Blog and write so that you can learn the skills of writing that most of us ignored when we were in school and we should have been focusing on it, and so that you can develop and clarify your thoughts.

Consider starting a podcast. For about no money, just about anybody can start a podcast. Now, is it going to be a wide-interest podcast? I don't know. Healthcare banking, I'd be surprised. But you know what? There's an industry there that may or may not be being served. Now, don't start a podcast if you don't care about it.

But if you care about it, do one and do, I don't know, four or five shows a year, and that gives you an opportunity to develop something. So I mean the cool thing about podcasting, one of the great well-publicized secrets is it gives you the opportunity to talk to anybody that you want in the industry.

I could call anybody that I want in the finance industry, and I have, and say, "Hey, I'd like to interview for my show," and then that establishes an opportunity to build a relationship. Who knows where those relationships can go and who knows what you can do? So interview the leaders of your industry and do those interviews online.

Develop some talks about your industry topics. If you're not good, comfortable with public speaking, join a Toastmasters organization and craft all of the speeches that you're preparing around your industry. Don't go there and just talk about how to make a peanut butter and jelly sandwich unless you're just totally scared of talking.

Craft the talks of your industry and see if you can make them compelling to people and see if you can make them concise and compelling and helpful. Take a video recorder with you. It can be your cell phone. Make sure that you either-- and make sure you have an external microphone so you get good audio.

Don't record a video without an external microphone. Make sure that you have an external microphone so you have good audio. If you ask anybody who does YouTube videos, audio is number one--excuse me, content is number one, audio is number two, video quality is number three. If the content is great and the audio is good, the video quality is of third importance.

Don't have one of the Toastmasters people film you. And you want to make sure that you force yourself to watch the films and then critique yourself. Learn to speak better. If they're good, if you're proud of them, post them on YouTube. Are you going to get the next YouTube star?

Probably not, but somebody may find you. And somebody may say, "Hey, this guy knows what he's talking about in healthcare industry." Go to your industry conferences or conference. Do interviews with people for your blog. Post video interviews that you do on YouTube. Do podcast interviews. I mean, with an iPhone and an external microphone and a tripod, you can do world-class, amazing interviews, and that will allow you to overcome the stupidity of the networking, "How are you?" and "Who are you?" that's just non-memorable.

"Hey, I met you. I do this," blah, blah, blah, and pass the business card. And you can say, "Hey, I've researched you in advance." Get a hold of the guest list and research people who are going to the conference so you can know who you want to speak to.

And then, because you're already doing things and you've built the foundation, you've built the website, you've built the YouTube channel, you've got the talks, apply to speak at the industry conference. You're an expert at it after all. You already know what you're talking about. You've become an expert because you've studied.

You've read books. You've talked to the experts. You've thought through the issues. And so apply to speak at the industry conference and create an amazing talk and deliver it. And that process, that's how I would apply the grammar, dialectic, and rhetoric process of classical education to a career. I think it's a useful construct.

So I hope that some of those ideas are helpful to you. This is what very few people do to apply to their career. And if you're not in a career where you want to apply this, I think that to me is a good litmus test for whether you're in the right career or not.

If you're not in a career where you want to apply this, get to a different career. But no matter the career, you can apply something out of this. And this is how I think how you progress. This is how you start to put that thousand percent formula into action is become an expert.

That's how in my mind it makes sense. Not easy to do. Very difficult to do. A lot of work. But I figure if you're going to spend your time working, might as well work effectively. And I hope that helps you. Oh, and by the way, Len Lewis responded to that email.

And he sent me an awesome list. He had developed a whole list of basically the lexicon of pharmaceuticals. And he had all the different medical conditions with the drugs that are branded and generic and that the FDA has approved. So he sent me a thing on acne. And he was working on a file with what are all the conditions, what are all the treatments.

Yes, that's just part of the memorization phase of applying. Now, in pharmaceuticals, it's drug names and drug conditions. In finance, it's IRAs and Roth IRAs and HSAs and life insurance and all this stuff that you've just got to memorize. And there's no way to do it. Sit down and memorize it because you need that basis of fluency.

And I believe you can apply this in every industry. There's a language to every single subject, every industry, every job. You have to learn it. You have to deal with the issues of it, formulate your opinions, and then you have to express those opinions. And I appreciate it now more than I ever did in the past.

So I hope that helps. Next question is from Richard. He says, "Hi, Joshua. I really enjoy your website and podcasts. I use some of the financial advice every day. I have a question. I have some mandatory dental work. I need a dental implant that will be done in 2015.

The total cost will be around $5,000. My employer has two dental insurance plans. Let's call them Mediocre and Mediocre Plus. I have the Mediocre Plus plan. The total annual coverage limit is $1,700, so my dental bill will be about $3,300. Are there any insurance or financial options that I could use to help reduce my total out-of-pocket expenses for this dental work?" So, Richard, thanks for the question.

Short answer, no. I'm not aware of any. I'll give you my ideas in a second. But I want to use this as an opportunity to clarify and express a few important details for those who may not be familiar with this part of the market. Dental insurance and vision insurance function differently than some other types of insurance.

They function differently than health insurance, and especially dental insurance. And the reason is that insurance companies often experience what is called in insurance lingo "adverse selection" with dental needs. It basically works like this. If you have a healthy mouth and all you do is you get a cleaning once a year and that's no big deal, then do you really have that much of an incentive to sign up for the dental insurance plan at $40 a month?

Not much, right? So what happens is that with something like dental insurance or vision insurance, the company experiences, instead of dealing with the general population, they usually experience that the people who actually need work done are the ones who sign up for insurance. And this damages, in essence, the way insurance works.

I have weak eyesight, so I've worn glasses and contacts for my entire lifetime. My wife doesn't. She doesn't use any kind of vision correction. There's no incentive for her to sign up for vision insurance because the likelihood of her needing something, if she needed something, it would likely be an acute need.

If she had a nail go through her eye, and then that's covered by health insurance, not vision correction. So I've always signed up for vision insurance if the numbers worked, but she hasn't. And so that's what happens with dental insurance and vision insurance. Because of that, you can't really get great policies with unlimited coverage amounts.

So if you've never signed up for dental insurance, if you ever do and you research it, what you'll always find is that the dental insurance policy will cover expenses based upon a formula. If your out-of-pocket expenses are capped at, say, $5,000, and you know that I have a million-dollar medical cost, but the most out-of-pocket I'm going to have is $5,000, dental insurance is exactly the opposite.

Where in Richard's case, he's going to have $5,000 of expenses, and the most the policy will cover is $1,700. And so it's exactly the opposite. It's technically insurance, but in some ways it's almost not because it doesn't work like most of the other insurances that we're accustomed to dealing with.

So you've got to be aware of that. So when you're sitting down and trying to decide about how does dental insurance work or should I sign up for it, you've got to run the numbers and see how the policy works. The other thing is because insurance companies know this, when you're signing up for dental insurance, pay a lot of attention to the phase-in.

What happens is people will often put off dental work. So Richard has probably known that he needs a dental implant for a while. It's in 2015 that he's going to have the work done. Who knows whether he means January or September of 2015, but he's probably known he needs the dental work done for a while.

And if he were broke, he would push it off. He would just have the tooth extracted and just not – and wait. So if all of a sudden his company didn't have a dental plan and then they came in and started a dental plan, well, in that scenario, then what would happen is that he would immediately sign up.

And if all the benefits were available, he'd immediately get it and go get his work done. Well, the insurance company knows that. So when they're phasing in a plan, they either have to do it where they require the employer to cover all of the employees or they phase the benefits in to avoid some of that first-year pop basically where they have a massive number of claims.

You need to understand that because it helps a lot of things make sense. So, for example, this was why when the government passed the Affordable Care Act, this was why in order to require the insurance companies to cover everybody, they had to make it mandatory for you to have health insurance so that the insurance companies didn't experience adverse selection.

And, I mean, depending on what the group makeup is, when a new dental plan is instituted, the number of first-year claims can be anywhere from 20% to 50% higher than long-term claims. So they always phase the programs in slowly. So that's a little bit of background that I want you to be aware of when you're thinking about dental insurance.

This actually happened to me one time. I went in for – I had dental insurance. It was capped at I think $1,000 out of pocket. And basically, you pay a set monthly amount and it covers your cleaning. So it was negligible. It was a little bit cheaper for me to have the dental plan.

So I went ahead and did that. Well, I go in for an annual cleaning, routine cleaning, and all of a sudden while the guy is cleaning my teeth, all of a sudden his pick just goes to the center of my tooth right on the side. And I wound up – he got me out of there and sent me to an endodontist with a bunch of gauze in my mouth because basically the whole inside of my tooth was completely rotten.

And they never figured out why. They think maybe there was a little ball of adhesive from when I wore braces as a child that was pressed against the side of my tooth and caused a problem. But the whole inside of my tooth was rotten. So I went from a normal routine cleaning to a significant – I wound up having a root canal in the tooth.

So I was $3,000 out of pocket I think, something like that. I had a gum surgery with a periodontist and it was just a pain. So long preamble to just some background because I want to help the audience with some of that knowledge. But to say to you, Richard, what would I do?

Frankly, there aren't a lot of options, but here's what comes to me. Number one, start by carefully reading and understanding your policy. Call the insurance company and discuss it with a rep. Look for – make sure you're taking advantage of in-network versus out-of-network advantages. Make sure you understand the terms of the policy.

Make sure you understand what's covered. It sounds like you do. But that's a good place to start because many people don't ever – they don't – the average person doesn't understand how their insurance policies work. So call the insurance company and ask them. Number two, make sure you shop around for good pricing and good quality on your services.

You do have the advantage of not having an acute need. So the difference between driving maybe 45 minutes away to save $1,000 could be a big deal. And just shop with your fingers and shop around. Clearly, you need to choose a good dentist. Obviously, that would be important. And maybe in your area there's only one person, but maybe there are other people.

And you have the advantage of being able to employ some competitive pressure on the services of the dentist because of not being in acute need of having to do right now. So make sure you shop around. Call the dentist office and talk to the insurance billing receptionist and ask them – talk about it with them and see if they have any ideas for you.

A lot of times people don't do this. They don't access the information that's there. But I could tell you all kinds of – I could tell you where all the tricks are in the insurance system or in the investment world because I've been there, done that. And if you call a dental receptionist at a time of the day when maybe she has time to talk and ask her and say, "Can you help me?" Or ask the dentist, say, "Can you help me?" And maybe the dentist, she can say to you, "Yeah, if you do this or if you do this other." So maybe there's something where you can split it up over two calendar years.

Usually that probably wouldn't fly because it's going to be billed as one event but maybe it would. Maybe you could do some of the prep work in one year and then flip to the next calendar year and do some of the other. Depending if you can talk with your – the billing person and/or the dentist, maybe they would have some ideas for you.

It's easy to make a phone call. So maybe there would be something there that could work. Consider medical tourism. I doubt your insurance company would pay for care that's outside the country. But who knows? Maybe you could find an amazing dentist in another country that's going to charge you $2,000 for a dental implant and you just do a medical tourism trip, travel there, get the work done, spend $3,000 total and save yourself the out-of-pocket – well, it's only $3,300 in my example – and throw in a vacation there.

It's worth considering. I wouldn't do that if I were only going to save $300 because I'd want to have the dentist local. But research it. Maybe there's something there that would work for you. Plan ahead for how you can pay for the care with a different account. So try to do this with a tax-advantaged account if you can.

The best idea would probably be either an HSA, which is a health savings account, or an FSA, which is a flexible spending account. So depending on what's available to you with your health insurance program, maybe if open enrollment is coming up or is right now, maybe you can switch to a high-deductible health plan, which will allow you to open an HSA.

And some HSAs at some companies, your employer will fund them. So maybe by switching to a high-deductible health plan for a year, you can get a funding of an extra maybe $1,000 that your employer is going to put into that HSA account. Or at any rate, you can fund the account, and you can pay for the expenses with pre-tax dollars.

And if you do that, make sure you do it through payroll deductions, and that will save you – if you do it through payroll deductions, that will cut your $3,300 bill by 7.65% for employment taxes plus 25% – whatever your income tax rate is. So 7.65% on $3,300 out of pocket would be $252 of employment taxes saved.

And let's assume that it's triple that for your tax rate. Maybe that's $600 or $700 of income taxes saved by paying for it with an HSA. So see if you can do that, and maybe you can switch during open enrollment. Consider a flexible spending account if you have access to one.

So the flexible spending account is the one where you have to fund the account, and then you lose it at the end of the year if you don't use it. But since you know you're going to have the expense, you can fund it to the tune of $3,300. And to the best of my knowledge, dental bills are easily paid out of the flexible spending account.

Check, I think, the IRS publication that covers that is publication 502 that you can check, and that's what covers the flexible spending account expenses for everything that you can spend out of that. So you have to have a high deductible health plan to have an HSA, but you may not have a high deductible health plan, and you can just fund the FSA.

And since you know you're going to use it, go ahead and do it that way. And then maybe this is unusual, but if possible, maybe this is more than 10% of your income, and you can deduct it as a medical expense. Most people never are able to deduct the health expenses, and especially they recently increased that from prior.

Previously, if it was in excess of 7.5% of your adjusted gross income, you could deduct it on your health insurance. Now it has to be in excess of 10%. But perhaps you have some scenario where your income is going to change and your income is going to be low.

You can go ahead and stack your health expenses. Maybe you need to have the dental work done, but then you also need some orthodontia done, and maybe you also have an elective procedure that's going to cost money out of your pocket. Well, stack your medical expenses together so you can deduct them on that.

So those are the best ideas that I have. Oh, and then even if you can't split the insurance billing from the insurance cut perspective, you can do some kind of payment plan with a dentist to where it lines up with your HSA renewals or something, where maybe the company makes a contribution to your account on a certain schedule, and you can figure that out.

So that's the best I got. Short answer was no, but if any of those are helpful for you or any of the rest of the audience, then I hope that can be beneficial. Last question should be fairly quick. This is a question from either Kaija or Kaiha. What a cool name.

I don't know which it would be, but what a cool name. Joshua, I have a question about taxable accounts. Several years ago, maybe eight, my husband and I opened an account with ShareBuilder. It's linked with our savings accounts at Capital One 360, and at the time it seemed to make sense and help streamline things between 401(k) plans, Roth IRA accounts, and a few others.

We have eight different investment accounts. Now, though, I'm wondering if ShareBuilder was the best idea. We own three Vanguard ETFs in that account, and they charge $6.95 per purchase. It makes more sense to me now to simply own Vanguard funds through Vanguard. At this point in my life, though, I've only ever bought funds.

I've never sold them, so I'm unsure of the best way to do this or even if I should do it at all because of taxes. What are your thoughts on this? We haven't put any money into that account recently, but we plan to start making contributions in 2015. Should I close that account and move the funds to Vanguard?

Should I keep it open and also open a new Vanguard account for my 2015 investments? Any advice is appreciated. Thank you. Kaija, I'm going to keep this simple. Call the companies. Write down the costs. Chart it out. List all your benefits. I can go into multiple advantages and disadvantages either way, and I appreciate the question.

I really do. However, this is a question that is very simple and very easy for you to do if you apply a focused thought process to it. The simple way to do it would be to say, "Write down on a sheet of paper what are all of the advantages to keeping things as they are and what are the advantages to switching to a new format, and then what are the disadvantages to keeping things as they are and what are the disadvantages to keeping things in a new format." Call ShareBuilder.

Call Vanguard. Clarify all of the details of what the costs would be, what the minimum investment amounts are. Can you hit those minimum investment amounts with Vanguard in order to be able to make your purchases? What would be the total fees? What are the costs? Figure out how frequently are you paying the $6.95.

Do it in writing on a piece of paper, and the answer will emerge. I'm intentionally sidestepping giving you my opinion because this is the type of question that is common in financial planning, and the answer is it depends. But you can think it through for yourself if you do it with a disciplined thought process and write it down.

So, sheet of paper, advantages of doing one course of action, advantages of the next. Disadvantages of one course of action, disadvantages of the next. List all of the costs. Include the $6.95. Put all of the expenses there, and that's why I say you should be tracking all of the money from gross income, every dollar you earn and every dollar that gets expended so you can see it.

And then by knowing the costs, you can easily say, "Okay, if I close this account and move to this new account, here are the costs and here are the savings," and the answer will clearly emerge. You also need to look at simplicity and say, "Is this going to simplify my life?

If it is, is it worth it to me to make the expenditures? Is it worth $5 to me to simplify my life? It sure is. Is it worth $500, though, on the other hand? Not so sure." Probably on the tax perspective, you could probably avoid any taxation issues by doing a transfer in kind.

So call Vanguard or whatever custodian you're going to use to house your investments and ask them if they will accept and handle for you a transfer in kind so as to avoid selling the investments. This is also where you'll need to actually call. In order to figure out your tax implications, you would need to call or research what your tax basis is on the investment, and then you would need to talk with your tax advisor and figure out what the implications of that would be.

If you have no tax basis or if you have a low tax basis and a high gain, is there a reason to sell it out? If you have a low tax basis and a high gain, can you do a transfer in kind and just move the shares from the one custodian to the next custodian?

That's fine as far as the tax code goes. On the flip side, do you have a loss? In that case, maybe you are better off going ahead and selling so that you can take the loss in the account. In that case, you take the loss, deduct it against your other gains, and maybe that's going to be to your benefit.

If the money is in IRAs or other, then it varies. So there are a lot of variations to this, and I can't possibly answer all of the variations to it, but you can. So write it down, research what the tax implications would be, and take advantage of the people who have the specific access to your accounts to tell you the answers to those questions.

And that's my answer. Hope you guys enjoyed today's show. Last week, I only handled three questions, and all weekend I felt guilty that I had another five lined up, and I'm like, "I didn't do a good job. I should have done more." And I know some of you, it's death through a flood of content, but I am going to put the time stamps on this.

So if you're interested in one question or another, you can easily just go to the time stamps, and hopefully you'll like that. Thank you guys so much for listening. I really appreciate each and every one of you listening. When I ditched all of my iTunes subscribers, that made me so much more appreciate my subscribers.

I was appreciating you, but now I appreciate you a lot more. I hope everyone has a great weekend. If you've enjoyed this content, if you would like to support the show, I have designed the membership program called the Irregulars for you to do that. It's a direct listener support model.

If you're interested in information on that, go to RadicalPersonalFinance.com/membership. I just launched it on Tuesday. I'm really excited about it. I've had some people sign up, but man, I would sure benefit from a lot more. So if you have some time over the weekend, if you've benefited from the content, if you would like to support what I'm doing here, I'd be thrilled if you would join that program.

Next week, to let you know what you can expect at the moment, here's what's planned. On Monday, I'm going to be doing a show on getting money out of retirement accounts early, before 59 and a half, how to do that, the advantages and disadvantages, a lot of people are confused with all of the early retiree interviews of how that's actually done.

So I'm going to try to give that in a standalone show that can be a resource for people. On Tuesday, I'm releasing an interview with Tammy Strobel from Rowdy Kittens on minimalism and tiny houses as a financial strategy. On Wednesday, I plan to continue the college planning shows. I've been tossing around whether to continue on the technical planning, dive into some of the accounts, or go to some of the irregular college ideas.

We'll see. I may switch that out, actually, for some different topics. Thursday, I'm releasing an interview with David Downey from Australia, who wrote a book called Radical Immediate Retirement. And basically, the deal is, how do you just simply wake up and decide to quit? And then on Friday, assuming I have more questions, I'll be doing a Q&A show.

Thank you all so much for listening. I value you. I really appreciate the questions. I hope this has been a helpful service for you. Have a lovely weekend, everybody. 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.

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