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You need to get ready for global recession and $20 per gallon gasoline in 2015. Thought you should know. ♪ ♪ Welcome to the Radical Personal Finance Podcast. My name is Joshua Sheets and today is Friday, January 16, 2015. We're going to do a little bit of economic prognostication today.

I know I said I wouldn't. I know I said I wouldn't, but, you know, hey, sometimes a guy's got to do what a guy's got to do, right? I got to do this today. ♪ Thank you so much for being with me today. My name is Joshua Sheets and if this is your first time tuning in to the Radical Personal Finance Podcast, this is the show where each and every day I unpack for you all of the things that you need to know to get rich and stay rich.

And one of those things you need to know is what's going to happen in the future. So today we're going to talk about that. I'm going to lead off with an article here from the Bloomberg Business Week. I also have, let's see, Bloomberg Business Week and LA Times. Let's go with the Bloomberg article.

Headline, dateline is January 16, 2015. Headline, "Consumer prices in the United States drop the most in six years as fuel falls." The cost of living in the U.S. declined in December by the most in six years, reflecting a plunge in energy costs that's keeping inflation from rising toward the Federal Reserve's goal.

The consumer price index dropped 0.4%, the biggest decline since December 2008, after falling 0.3% in November. A Labor Department report showed Friday in Washington. The median forecast of 89 economists surveyed by Bloomberg called for a 0.4% decline, excluding volatile food and fuel. The so-called core measure was unchanged, failing to rise for only the second time since 2010.

The biggest drop in clothing costs since 1998, combined with falling airfares and cheaper new and used cars, signal the deceleration in inflation is spreading beyond energy, as Japan and Europe are in or near a recession, and some emerging markets cool. Sustained broad-based price declines test Federal Reserve Chair Janet Yellen's view that the drop in fuel won't reverberate through the economy.

"This is a number that consumers will love, but economists will worry about," said Russell Price, senior economist at Ameriprise Financial Incorporated in Detroit, who correctly projected the year-over-year change in the core index. As plunging commodity prices, quote, "filter through the system, it should take nine months to a year, then we should start to see inflation in the United States and around the world start to pick back up," close quote.

CPI estimates in the Bloomberg survey ranged from a 0.8% drop to a 0.1% advance. Now, isn't that interesting? How's that for a headline for Friday? By the way, don't you just love the horrific nature of economic news that, well, consumers are happy, but this is a number that consumers will love, but economists will worry about.

Don't you love that? So sad, poor economists. But as I record this show at the moment, at 3.32 p.m. Eastern Standard Time, the S&P 500 index is currently sitting at 2010.91 points, up almost 18.5 points for the day, and the Dow Jones Industrial Average is 17,447 points, up 126 points, almost about 3/4 of 1% for the day.

So isn't this a fun day? And I decided to preempt the Q&A show since I did three Q&A shows earlier this week, and we're gonna talk a little bit about economics today. And I hope you find it important 'cause I think you need to know what's gonna happen in the future.

And I'm gonna share that with you today. Decided to do some crowdsourcing and did some informal polling among the Radical Personal Finance Facebook community. I shot a quick video and put it out on the Facebook page, asking all of you to let me know, what is your general feeling about the economy right now?

Do you feel good? Do you feel like it's in a good shape or a bad shape or kind of neutral about it? And I wasn't necessarily looking for any kind of economic, indicator or any statistical analysis, just wanted to know how you felt. And the majority of the responses that I received corroborated my own, I guess, hypothesis would be the right word, that everyone feels pretty good right now, really do.

My primary indicator for everybody feeling good is actually my Facebook feed. I personally measure economic data based upon my Facebook feed. And I see, well, what are people talking about on Facebook? And I've been fascinated to watch the gasoline price updates. And my Facebook feed, and maybe yours as well, has just been packed with people taking pictures of the price that they're paying at the pump.

And I saw one recently, it was something like $1.88 a gallon or $1.89 a gallon that somebody is paying for their gasoline. And I just thought, wow. I personally, I was surprised 'cause I really did never expect to see gasoline under $2 a gallon in my lifetime. And what an interesting turn of events.

I certainly didn't predict it. But here, quoting from an LA Times article that I have here, that evidently the American Automobile Association, AAA, says that on Friday today, a gallon of regular gas's average price is $2.08 across the country. Fascinating, down 4.7% last month, the largest decline since December of 2008.

So, where are we in the economic cycle? That's usually what people would ask. And I'll tell you, by my informal polling, everything feels pretty good. Stock prices are high, gasoline is low. That leads to a good amount of disposable income for many people. And so, when I start to feel pretty good, then I immediately recognize that I have a need to warn people against the other side.

See, one of the most valuable services that I believe a financial advisor can provide for anybody is essentially to talk to you and talk you off of the ledges. For example, in portfolio management, the biggest influence and the biggest factor on the performance of your investment portfolio is you.

What do you actually do with regard to your investment portfolio? And there are various aspects to it. Number one, do you fund it? Do you save money? Number two, what do you do when things are good or things are not good? And so, a primary skill of a good financial advisor needs to be, in essence, to help people help you to manage your emotions.

And so, when everyone's euphoric, I get to be bearish, and when everyone's bearish, I get to be encouraging. And so, today, I'm gonna share with you a few thoughts that I'd like you to consider as far as some things that I think might be helpful for you at this phase of the economic and business cycle.

And I've had a few different influences on my thinking. Interestingly, two things came together on the show recently. I answered yesterday, the day before yesterday, I answered the question from Banika from Sri Lanka. And I hadn't, I've never been to Sri Lanka, but I was, the last time I really ever thought about the country of Sri Lanka prior to receiving his email or was in 2004, when the tsunami hit that part of Asia and brought widespread, massive devastation to that part of Asia.

And I was thinking about this because this week, I've been watching some Hurricane Katrina documentaries. And what's interesting about both of these two natural disasters is I was traveling for both of them. When the 2004 tsunami hit India, excuse me, not India. Well, I guess it did hit India a little bit.

It was primarily Indonesia, and then also Sri Lanka and Thailand and some in India. But when in 2004, when that tsunami struck, I was actually in Hong Kong over the Christmas and New Year's holiday. And it was a unique experience for me to be in another, to be in Hong Kong watching the news come in much closer to it than I would have felt perhaps if I had been in the United States at the time.

And then Hurricane Katrina, I was in Costa Rica for the duration of Hurricane Katrina. So I really didn't have any personal impact, any personal connection to Katrina. I didn't watch the news. I heard something about a hurricane that was going on in the United States, but I was pretty unplugged at that point.

And so I didn't have any of the connection that most US Americans had with the event. And obviously I saw discussions of it. But after going to New Orleans a few months ago for a visit, I decided I wanted to learn a little bit about it. So I've been watching some documentaries, and just so happened this week, I finally was able to get to them and see some documentaries.

And it just was an interesting thing to think about, what would I do? 'Cause that's where my brain always goes, is how would I plan for this financially? What would I do if I were living in a place that was just completely devastated? How would my plans, my financial plans survive?

Would I be able to get through it? Would I be able to prosper through it? Would I be able to help others? How would my planning hold up in this event? And so thinking about the tsunami, thinking about Katrina, thinking about gas prices, and then thinking about just this economic phase that we're in, made me decide to do this show.

And the theme of today's show, which I hope to develop in three different ways, is you need to be out of sync with the rest of the world in order to succeed. And the three themes that I want to develop today are, the three are, one, now's the time to begin preparing, if you haven't, for global recession.

When things are feeling good, you should be preparing for when things aren't so good. And when things aren't so good, you should be preparing for when things are good. Because guess what? There are difficult times coming. If I suckered you into listening to the show because you were hoping for me to give you a prognostication on the fact that we're going to be in global recession in 2015, I'm sorry to disappoint you, but the English language can be tricky sometimes.

You have to read carefully. I didn't say that necessarily, although you certainly could interpret it this way, I didn't say that 2015 will have global recession and we'll have $20 per gallon gas. But I did say that you need to prepare in 2015 for a global recession at $20 per gallon gas.

Because I view those two things as inevitable. In the future, there will be a global recession. And in the future, we will be paying for $20 a gallon gas. Or more, who knows? Now, on what basis do I say that? Well, in my short lifetime, which is fewer than 30 years, I clearly remember paying for gas that was under a dollar.

And also in my lifetime, I've paid for gas that was over $4. So a fourfold increase from a dollar to $4 within my lifetime leads me to believe that it's certainly not even, wouldn't even be the least bit surprising to experience another fourfold increase in the coming decades. And fourfold increase from $3 or $4 a gallon gets you pretty close to 20.

So now's the time to be preparing for times of economic hardship. And now's the time to prepare for recession, 'cause it's coming. That's the first thing. Number two is now's the time to be taking advantage of where we are in the economic cycle and the business cycle. This is the time.

And I'll get to that. And then number three is, let's talk about gas prices at the end. We'll wrap up with some impact of how if gas prices are affecting your budget, maybe we should talk about that. One of the keys for wisdom is to be able to look forward and see the future and see what's coming.

Now, certainly I'm not prescient enough to know everything that's coming exactly when. But, and one of my favorite sayings, I think it was Zig Ziglar who popularized it, is he said, "In general, economists have successfully "predicted the last 11," or excuse me, "have successfully predicted all 11 "of the last three recessions," or something like that.

We're prone to look for, or wired in some way, to look for bad news and to look for problems. But one of the things that we can do is we can plan for those. And now's the time to be planning. Now's the time to be planning when things are easy.

The best example of this would be something like insurance. I come from a background of being an insurance salesperson, and so this is intimately familiar to me. My heart sinks when I read things from people or hear a notification that Joe was just diagnosed with cancer, or Susie just had a heart attack.

Those things make my stomach drop because I just, as a financial advisor, I immediately think, were they ready? Were they ready? Did they do what they needed to do when times were good? Insurance is one of those tricky things that you gotta buy it when you don't need it.

You gotta buy it when you're strapping and healthy and just in great shape and you have no risk factors. That's the time that you have to buy it. And the time when you're most desperate to have it, when you most desperately need it, you can't get it. It takes a remarkable amount of maturity and forethought and planning and vision to be able to look forward to the future and do something that lowers your consumption now so that in the future you will be able to be protected.

And that's what insurance is. But if you can apply that maturity of thought to every aspect of your life, then you can start to smooth out some of the bumps that so many people go through. And then because you can smooth out some of the bumps, you'll be able to help some other people smooth out the bumps in their lives.

Do the planning now that you need to do while things are easy. And I wanna challenge you this weekend, if you're listening to this on Friday or Saturday or whenever, I wanna challenge you to do some thinking about what you can do and what you need to be doing in your life to prepare for the next global recession.

'Cause there will be one. We have no idea on the timing, but there certainly will be one at some point. And if you'll plan now and build the things that you need to do now, then you will be able to get through it. I'd like to give you this as an exercise.

And let me give you the question and then ask you to pause and actually think it through. Pause the recording and just give it some thought and think of some of your ideas. And then I'll share some of mine. If you wanna do this as a journaling exercise, that'd be great too.

Oftentimes though, our lives are so fast paced that if we don't at least just think through it, it's unlikely that you'll remember to do this later. But the question is this. What would happen if your, what will your life look like if we go into a global recession that is fairly severe?

Could be recession, depression, whatever. Let's just call it recession for now, keep it short. Global recession that's fairly severe and your employer has to lower their workforce by 20 to 30% and you get fired. And because of the severe nature of the global recession, you are unable to find a job for let's say a year and you're gonna be out of work for a year.

Or if you are a business owner, then let's assume that your profits are measurably affected. You suffer a, let's call it a 50% decline in your sales and you have to deal with that for a year. What would you do? If you are married, pretend that you and your spouse both lose your job at the same time.

What would your plan be? Now here's where I'll encourage you just to pause and I'm gonna continue on, but go ahead and take a moment and think about what you would do and then add to that thought. What would the world be like? Think about what would you actually be going through and then think what are the things that I could be doing today that would help me to get through that situation a little bit better.

And I'll go ahead and pause now, so feel free to pause and think through that scenario. Now, I hope you came up with your list. This truly is a valuable exercise. The most valuable thing about the exercise if you actually do it, is that it opens your mind to a possibility that most people don't think about.

Most people when they're fired are shocked by it and they've not thought about what they would actually do and what they're going to do. I remember the time I was fired from a job, I don't know what language to use, fired, laid off. I guess it's fired, maybe I'll use the word fired when we talk about for cause 'cause you were a dumb dumb and did something that deserved determination of your job, laid off, general conditions that affect more than one person.

So I'll use those words. So I guess I was laid off. And I remember just how utterly shocking it was to me because I thought I had done everything that I needed to do. I was a star employee, I received glowing, I thought I was, I received glowing reports, I had just gotten a raise, all these things.

And then I just remember sitting in that office just stunned because I thought it would never happen to me. And I think that's how most of us go through life is we think, "Oh, it'll never happen to me. "It'll happen to somebody else." But realistically, statistically, it's massively likely to happen to you and to me.

The only thing that would make it unlikely is if we have more of the reins of our own destiny and we're self-employed in some way. And in that scenario, it's massively likely that something will happen that will measurably impact our business revenues and profitability. Just happens in most businesses at some point in time.

So because people are shocked, what happens is oftentimes people don't know what to do. And it's nice that many large firms have, try to come up with these transition plans and help people with career coaches and resume coaches and these kinds of things, that's nice. But the reality is most people don't work for large companies that are gonna put those resources.

Most people work for small companies and the small employer feels awful about it, but has to care for what they're trying to do. If you'll force yourself to do the hard work of thinking something through in advance, it will prepare your mind for it and it'll prepare you for solutions.

And I call this war gaming. If you think about it, if you look at training for any kind of event in which there's going to be intense pressure, the pros, the world-class professionals in any field go through a period of training where they think about what's going to happen and they role play it.

So whether that's a field of athletic competition on an individual basis, an individual athlete, as part of their training, they will think through the scenario they're gonna perform, their routine. They'll go through it again and again and again and again mentally. If it's some kind of race course, maybe a slalom course or something, they'll think it through every aspect of their body very, very carefully.

It's important for high performance. If you are on a team sport, you'll think through what's this gonna be like. If you are in the military, you'll train again and again and again for various situations. If you're on a SWAT team, you see them in the movies, you know, the SWAT guys breaching the door, practicing again and again and again so that by the time you're actually doing it for real, you've gone through it many, many times.

If you're a firefighter, part of your training, you're in a burning building, what do you do? How does this work? And you go through it so that when the real thing happens, you aren't caught blindsided by it. Well, we need to apply that to our own lives and think, what would I do in that scenario?

I know for me, I had some experiences as a financial planner in the last recession in 2008 that were really tough for me is because as I watched the, 'cause economic malaise linger on and there are those who would say it's still lingering. That's not my point today. But as I watched things linger on, I saw people be affected that never thought they were gonna be affected.

And as I watched people go through a job loss, what I noticed was that many times they weren't able emotionally to deal with the reality of the job loss. Specifically, remember one prospective client. This person never became a client, but he was laid off from a job that he'd had for several decades.

And he was in a crucial point of life where he was living a high lifestyle as a well-paid executive, was living in a beautiful house in a ritzy part of town, kids in private school, private high school, which is a very expensive period of a parent's life. And so he was doing well income-wise, but his expenses were rather high.

And then most of, due to the financial planning that's taught, he wasn't extremely affluent, but the assets that he did have were primarily tucked aside in retirement accounts and with minimal accessibility for actual cashflow. And as I watched him go through the just intense emotion of trying to figure out what do I do?

How do I take my, do I take my kids out of school and suffer the embarrassment of walking into the private school and saying, I'm sorry, I can't afford the tuition anymore. Do I put my house on the market? It just was clearly something that was overwhelming for him 'cause he'd never thought about it.

And so because he'd never really thought about it, he'd become so comfortable in his middle executive lifestyle, he'd become so comfortable that there wasn't, he couldn't conceive of the thought of essentially starting over. And he didn't have much of the great planning in place necessary to be able to maintain his lifestyle.

And as I watched many people personally and also vicariously through reading about different people's experiences, one of the things I've noticed that when people get fired, oftentimes they wait too long to start making changes in their lifestyle. Now I'll make my statement, I recognize there are caveats, but I think that if you get laid off or if you get fired, the most important thing that you can do is immediately cut things to the bare bones, immediately, because you don't know how long it's gonna last.

Now I recognize that there may be exceptions to that. There may be intelligent, there may be an intelligent course of action to finish out a school year or finish out this or finish out something else. And with good planning, hopefully you're not right on the edge such that you gotta have to sell the house right away.

But I think, and so I recognize that that is true, but my point is that by taking drastic action immediately, it sets your mind in the right place. If you don't adjust your lifestyle, it's easy just to simply feel as though, well, I'm just gonna go on with my life, everything's gonna be perfect, I'm gonna find a job in months, month, month, month, months later, and all of a sudden we wind up deeply in debt, no money, no assets, and now it takes years to dig out of that, where if we just cut back immediately and cut our lifestyle immediately, then you can be better off.

So here would be the question. If you were fired, if you were laid off and you knew that you weren't going to have a job for the next year, what would you cut? How could you get down to the bare bones? What would be the bare bones? What's your backup plan?

What would be the plan if you knew you were going to be out of work for three months, six months, 12 months, 24 months? Remember, they extended the unemployment stuff to 99 weeks. What would happen if you were out of work for two years? Now, use that thought process and think about it, and you'll come up with the right answers for you.

I don't know what they are. I have ideas for me, but that's for me. What would they be for you? What would you need? Now, here's the next part of that. What would you need to do today to prepare for that? So certainly, if you have resources built up, if you have cash, it's a simple example, savings, that can help hugely.

If you have liquid cash that can just simply be tapped, that's a massive help. If you have a low-cost lifestyle, low fixed costs, minimal fixed debt obligations, minimal high, you have just low lifestyle costs, that can help you hugely. If you have a high savings rate, then that automatically implies that you have a lower-cost lifestyle in proportion to your actual income.

Even if you do have a high-cost lifestyle, do you have a high fixed-cost lifestyle or a high discretionary-cost lifestyle? As an example, two people could be spending $8,000 a month, $10,000 a month. I don't know what number. I mean, it's hard to know on a general show like this what number to use.

Let's just pick $10,000 a month. But for one person, that $10,000 a month is just a basic standard of living. This is, let's call it, $4,000 a month mortgage, principal and interest taxes and insurance costs of an overhead on a house. Let's call it $600 a month for a car payment.

Another $500 a month for another car payment would be about normal in that kind of lifestyle, at least where I live. You would have a high utility costs, call it $500 a month. High, just embedded costs to the lifestyle. Now, it's very different than another person whose fixed costs are $3,000 a month, but they're spending $10,000 a month on things that they enjoy that they could easily pull out of.

There are no contracts involved, no commitments. They don't have to finish out the lease payment. You could just adjust much more quickly. So being flexible and being adjustable is a massive benefit in that situation. You might wanna consider having some cash on hand. You might wanna consider having some of the things stored up that you would need to buy.

This is one of those scenarios where it might be useful for you to have some reserves. I don't know what that is. I bulk buy razors, so it would be, to shave with, I haven't shaved in a few months, but I still have lots of razors. I guess I don't have to buy razors, but the point is that if you have the things that you need and use regularly and you have them in supply, that gives you flexibility.

So we talked about the alpha strategy. Talked about that in previous shows. Now, here'd be the more useful things. Could you get a job quickly? And what would be required to get a job quickly? Well, I would suggest that would be where the care and feeding of your social network would be important.

Do you have a list, whether it's just mental or real, I'm not, I don't think that most people are gonna have a list of here are the first 10 people I would call, but who are the first 10 people that you would call? I remember I didn't, I wasn't smart enough to plan for it, but I'll just share one personal anecdote.

It was kind of happens accidental, but I remember there's one job that I've been legitimately fired from in my life, and it was kind of, I don't know if it was legitimately fired. It wasn't working for me, and it wasn't working for my boss, and we both figured it out concurrently, and we agreed in a meeting, like, listen, this isn't working.

I was working in a print shop at the time. And I remember leaving there, and I finished around 11.30 in the morning. It just was clear it wasn't working, and I was driving home. It was in, I think it was in college. And I was driving home, and I didn't know what to do.

So I was like, I don't know, I don't have a backup plan. So I pick up my phone, and I called the boss that I had worked for at the company I had worked for the previous summer. And it was like, absolutely, come and have lunch with me tomorrow.

And I had a job by the next day. And I just thought, wow, I didn't intend to put that in place. I wasn't smart enough to do that. But the reality was that it was nice to have a backup plan, and I had a job the next day. It's pretty cool.

Now, from this perspective, a few more years now, I look at that, and I say, that's important. So I need to be planning for that. I need to know who are the people that I would call. Who are the people that I've done good work for? Can I go back to every single one of my bosses, and would they rehire me?

Would they rehire you? If you needed a job, could you call any of your former bosses and would they be glad to have you back? I hope so. For me, I hope it is. I think it is. I mean, I've never tested it, 'cause most of the times I don't really wanna go back to things I've done before.

But it's nice to have that, that if I needed to support my family, I could just immediately call at least a list of, for me, 20 or so different former bosses. So that means today, while I'm happily employed and times are good and gas prices are low, I need to be working hard and being indispensable at my job, which incidentally will probably help me to avoid being fired, but that's not the point of this mental exercise.

It is one of the things I need to be doing. I need to be indispensable so that I'm not on that list. I need to be working hard and building things up now. But having that social network, knowing, staying in touch with people, having simple things like contact information.

I was that nerd in high school, and I hope this doesn't sound too self-important. My goal is not to do that. I'm just talking out of what I do know and what I've learned. I was that nerd in high school that, since the time I graduated high school, I don't think I've lost anybody's contact information that I ever met.

And it just was all accumulated and accumulated and accumulated over time. That has served me so many times to be able to pull up a list of people that I've had some contact with that I could reach out to and ask for help. Could reach out to, and if I needed to create a job, at this point, there's 5,000 people in my cell phone, and that I could go through there one by one and make 5,000 phone calls, and I bet that within the first couple hundred, I would have a list of opportunities.

I might have to go and completely relearn some new industry, some new skill, some new something, but I could at least find out about some kind of opportunities, and that's a much more efficient way to approach a job search than just going on whatever the jobsearch.com site of the day happens to be.

So giving care and feeding to your social network, helping people, serving people, giving. Serving is the key thing, serving people in advance, and being excellent, being trustworthy, being honest, being forthright, being dependable. These are all things that really matter. What skills do you have or could you develop now that would help you?

If you have sales skills, and I have sales skills, I could take those sales skills and I could transfer them to another market. A good salesperson is always, there's always an opportunity for a good salesperson. That was what attracted me to the sales field in the first place. Every business lives and dies based upon top-line revenue.

I mean, that drives more than anything else. If you got enough top-line revenue, you can figure out the stuff in the middle to get to the bottom-line profit, but if you don't have top-line revenue, there's very little else that you can do until you can build that, and that's sales.

That's a key skill, sales and marketing skills. What skills do you have that you could transfer? Have you developed them to a high level of proficiency? Could you develop them to a high level of proficiency? If you get used to developing them, you often won't need them, but sometimes I hurt so much when I think of people that are close to me and I care about that need work, need a job, need something, and they'd say, "Well, I need work." I think, "Well, what skills do you have?" I ask them, "What skills do you have?" "I don't know," or if you just have one or two skills.

We've gotta keep our skills current. We've gotta continually be expanding our skills, and they need to be diverse. Yes, they need to go deep in certain areas, but if we're only just deep in one thing and the market moves on and that one thing either is out of style or is just simply too crowded of a market, we've gotta be able to be flexible and transition.

The world of the future, the economic situation that we're facing in the future is far different than the past, and one of those key things is flexibility, flexibility, flexibility. In addition to the skills, what resources do you have that you could employ? Many people are just so, my observation, many people are so uptight and so proud of doing what they do that they don't think to of all the resources and all the skills that they could apply.

Sitting in my garage at the moment, I've got at least a dozen businesses that I've got the basic tools and equipment for that I could use to feed my family. I've got a pressure washer sitting out there. I could go and start a job pressure washing roofs. Down here in Florida, we've got the moss that grows all over our roofs, and I could just walk around and pressure wash roofs.

That's pressure washers, the foundation of a car cleaning business, of a siding business, of going around, and in my neighborhood, we've got these horrible rust stains, and I can talk about, I don't actually have pressure clean them off my house. I shouldn't say rust stains. Point is, pressure cleaner is money.

Is it a lot? No, but there's a little bit. There's a little bit. I've got a lawnmower. I certainly could create a lawnmowing business. People do it all the time here in Florida. It's a pretty simple, straightforward business. You just need some clients, and that's where the sales skills and those marketing skills and the ability to knock on 200 doors, 300 doors in a day comes in, and out of it, you talk to a few hundred people, you're gonna find a handful of people that need something.

I've got all the basic tools of carpentry. I've got some construction experience, these types of things, so even just that basic, straightforward, manual type of work, you can create work, but if you don't have those skills, this is where I've often felt sorry for some of the, and I'm so grateful that, again, it was due to no foresight of my own, but my father always worked to get me involved in all kinds of different jobs, and the best thing that he ever, one of the great things he did for me was that I did a different job in a different industry every single summer, every single year from basically seventh grade on, and you start to accumulate these diverse skills.

That helps so much. Instead of me, when I've tried to do career counseling with some people, friends of mine that have needed it, I was like, "Well, what do you do?" Well, I don't know. I have one friend I care greatly about, but this friend was always involved in one specific athletic sport, and in talking with him at one time, I just realized that his entire life was overwhelmed with this one sport, and he developed this world-class proficiency in one unique competitive sport, but it left him so bereft of other useful skills that it's very tough for him to figure out, okay, what are my career plans now?

What industries can I transfer into? I commend just the thinking process to you, building up your skills, building up your resources, the business resources, the tools of various trades, the skills to apply them, the skills of learning, the social network to get the opportunity, and make sure you keep your expenses low.

If you keep your expenses low, you can always have the opportunity. You're not forced into a point of desperation. It's certainly, there's certainly a big difference between if you can avoid lifestyle creep, or at least avoid the fixed lifestyle creep. Most people can't, that are making a few hundred thousand dollars a year, they can't go and survive on half a hundred, 50 or 60 thousand dollars a year.

But if you can, that gives you so much confidence. I remember talking to a prospective client one time, who was a bond trader, made hundreds of thousands of dollars per year as a bond trader, no debt, very low lifestyle expenses, just had the ability to go bag groceries at Publix, and it just really stuck out to me as a unique, a unique scenario.

How great is that, as far as a lifestyle consideration? The last thing, lest I belabor this point too much, is having some kind of side business established now. Something that you've built up now, that you could transition into. And it's a lot easier to take a side business, that you have some ability with, and take something that's established to the equivalent of a full-time income, than it is to take something from zero to a full-time income.

So be working on that now, and building that up now, so that you have a backup plan. If you start to put these things together, and you say, how can I be unfireable at my job, by being so incredibly valuable? That's the first thing, and I wouldn't rely on that, because things change.

Though you may be unfireable, the business may change. Or the owner of the business might just simply decide, we're gonna go in a different direction. That was what happened to me, at the company I got laid off from. We're changing the direction of the company. And I didn't know they were preparing the company for sale, and trying to adjust some things of the business operations.

So, makes sense to me now, but at the time, I was affected, and I didn't know what they were doing. But the point is, be unfireable. Be that person that is so valuable. That starts today, by going to your boss and saying, what can I do that will help you?

What can I do to improve your life? Give me more responsibility, please. Ask for more responsibility. Discharge that responsibility with honors, and ask for more. Discharge that, ask for more. Make sure you get into a part of your company that is economically productive. You wanna be specifically in a place where you're either creating revenue, or cutting revenue.

You don't wanna be a cost. It's much better to be in a place where there's a measurable contribution of your, you can measure your contributions to the profit of the company. This is what I, again, what I love about sales, is the salespeople, they work for free until they produce.

So, the cost of a salesperson is always less than the business that they bring in, 'cause they're paid on commission. That's what's wonderful about sales. You can always measure your production. So, be unfireable now. Build that network that you would need to get another job quickly. That's a key thing to focus on.

That's where the networking comes in. That's where being involved in the industry. That's where being involved in an industry. Make sure that you're building up your own brand. Make sure that you are a leader in your industry, pushing forward and causing the change in your industry, so that you're not blindsided by it.

Make sure that you have a side business, a side plan, a side hustle, something established that's your backup plan, your baby, that you control. If there's something that's applicable to you. And then, make sure that you've got those basic financial planning steps in place. Having money, having money that's not all subject to the vagaries of the marketplace.

Having resources, however you define those, set aside. Thinking about things in advance, and putting yourself through that mental process of considering them, of considering what's gonna happen. Think about that from the economic perspective. If you wanna do, like I've been thinking about it, okay, Hurricane Katrina, what would I do?

Tsunami, that's, tsunami would be tough to plan for. But you can create backup plans. What would I do? How could I insulate myself from this? Second and third themes, I just wanna say, look for things that are on sale. So right now, with gas prices low, I don't know this.

I haven't market tested this, but I'm gonna bet you, especially if gas prices persist at a relatively low cost for some months and months, we'll see, I don't know. I'm gonna bet you that fuel efficient cars are gonna start to be discounted. I remember so clearly, it was a couple years ago when fuel prices were in the four, almost five bucks a gallon, how you could go out and you could buy a one ton pickup truck for nothing.

You could go out and you could buy a Suburban for nothing. That was the time to be buying Suburbans and pickup trucks. Well, if gas prices persist over time, it persists to be low, excuse me, if gas prices continue at a low rate, then over time, the value of fuel efficiency will decrease to the general consumer.

So that's the time that you need to be out of sync. You need to think, ah, okay, time to go ahead and buy that Prius. Again, gas prices are high. Prius, Prii have a high value. Gas prices are low, they're discounted. So look for that. If you need to adjust something, if you need to adjust something, think in advance for that.

And always strive to be a little bit out of step. It's kind of tough to know exactly when the stock market is gonna peak, exactly when the stock market is gonna bottom. That one's tough. But A, you don't have to be completely right on that, but you don't have to be completely right of exactly when gas prices are gonna peak or trough in your own personal life to know, can I get a good deal on a one-ton truck right now if you need a one-ton truck?

So just look for that. Look for an opportunity to buy and sell with things that are out of whack, when prices are out of whack. Final theme on the show, I just wanna give you a little bit of a challenge and ask you a question. Are the low gas prices right now measurably impacting your budget?

If they are, you got a problem. You're not doing a very good job with your financial planning. I recognize that there are exceptions. I get it. But you need to be careful. If you are bouncing up and down about the fact that gas prices have decreased from $3 and something to $2 a gallon, you're not doing a great job with your financial planning.

You're really not. That means that you've got your priorities. Unless you're, at no stage, that means you've got your priorities out of whack. Now, enjoy it, sure. I like to save money. It's enjoyable. But I'm not that rich, but I haven't really noticed what the gas prices are doing.

And I'm kinda stealing this from an essay I read years ago. I'll go find it and put it in the show notes. But Joshua Kennan wrote a brilliant essay on it. His point was that you're doing it all wrong if gas prices are affecting your household lifestyle. If you're poor, if you don't have a lot of money, then you can't afford to be driving.

You can't afford to have an expensive car. You can't afford to have, you can't afford to be driving a ton. In that scenario, you should get rid of the driving and solve that problem, rather than trying to wish for low gas prices. Cars and the ability to consume lots of gas, this is a lifestyle luxury, and it should be treated as such.

I'll go find that essay and I'll put it in the notes. But that means, if you're that close to the edge, that means there's no margin in your life. That means there's no margin in your finances. It's an absolute travesty that the second biggest purchase that most people make in their life is their cars.

I think everybody oughta drive a nice car after they get rich. Don't go out and buy fancy cars that consume lots of gas, and don't set up this lifestyle in place where you're driving dozens, I mean hundreds of miles a day. If you are driving hundreds of miles per day, hey, thank you, 'cause that means you have a chance to listen to my show.

Make sure you're doing it with a massive payoff. Make sure that you're earning a ton of money, or you're getting a huge benefit of some kind for that. Because otherwise, you're probably better off to structure your life in such a way that it doesn't require a lot of driving.

Give some thought. I'll go find that essay, but give some thought. It's an important thing for you to consider that if these small things, if consumer spending, which is what gasoline is, if this is gonna make a measurable difference in the amount of money that you have every month, you're spending too much money, and you're never gonna be rich.

That's the key. Cars are great, driving is great, but this stuff is a luxury, and you've gotta structure your life in such a way that the luxuries are paid for by the wealth. If you find yourself in a situation where you're doing anything more than a casual, hey, this is great, I mean, I get that not every Facebook post of a gas sign means that somehow I've got loads of money.

But if it causes that much of a blip in your lifestyle where it's measurably, you're feeling how much extra money you have because of gasoline, that should be a major red flag for you with your financial plan. Now, if it is a red flag, there's hope. Fix the problem.

If you're a struggling single parent with multiple kids, and you're not able to save much money, and you're just making just enough money to keep things going, my heart goes out to you. I'm not being critical of you as a person. Take the savings. That can be a major savings.

Take the savings now and change your lifestyle so that when the next thing happens, when the gas prices go back up, it doesn't destroy your budget. That's the point. Think in ahead. I'm gonna close with a final thought, just with embellishing that thought. The gas prices will, in the future, go up to $20 a gallon.

Could your lifestyle sustain that? For most of us, the answer is no. But I promise, over time, gas prices will go up to $20 a gallon. So think about how you could set up your lifestyle in such a way that that wouldn't affect you, 'cause you can make some progress there.

I hope that was an encouraging show. That was the primary guts of what I just wanted to get across. Just wanna get across, think counter-culturally. If your Facebook feed looks like mine and you're feeling pretty happy about the future, build on that time for the rest of the time.

Think in terms of being a farmer. The spring is a time to plant, and a lazy farmer who doesn't plant in the spring doesn't reap in the fall. Winter feels like it's gonna go forever, but you know what? Spring is coming. Summer feels great, and you might be tempted to go and run and play all day, but if you don't tend your crops, you're not gonna have the harvest that you need to get you through the winter.

So enjoy the season of life where you are. Enjoy the low gas prices, but make sure that you're planning for them. Enjoy the generally good-feeling economy. Seems to be a good feeling. Everyone's feeling fairly positive about it. But make sure that you're preparing for the next recession. Make sure that when the next recession hits, that you are improving your lifestyle so that you'll be able to help somebody else.

So you'll be able to help your family, help take care of yourself, that your plans won't be thrown off track, but also so that you'll be able to lend a helping hand to some other people who are really struggling and hurting. But you gotta lead by example. Hope this was useful.

I wish everybody a phenomenal weekend. It's a beautiful day here in Florida. I'm done recording. It's been a sunshiny, beautiful day. In the mid-60s, it's been cold today, which is great for us. And I'm gonna go and have a lovely evening with my family. I wish you guys a beautiful weekend and a lovely next week.

And next week, gonna have some great shows. I'm gonna get some interviews lined up and I'm gonna be digging into college. I've been doing some market research with you, the audience, listening to you as far as the show topics that you guys have the most interest in. And I'll be adjusting the show topics toward that.

I'm gonna be going deep into 529s next week on the college topic. I'm gonna be bringing in more investing topics, a lot more retirement topics this coming year. Just listening to you. If there's something you want me to talk about, feel free to send me an email. I would love to hear from you as an individual.

And happy Friday. Have a great weekend. - Thank you for listening to today's show. If you'd like to contact me personally, my email address is Joshua@radicalpersonalfinance.com. You can also connect with the show on Twitter, @radicalpf, and at facebook.com/radicalpersonalfinance. This show is intended to provide entertainment, education, and financial enlightenment.

But your situation is unique, and I cannot deliver any actionable advice without knowing anything about you. 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.

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 help me by coming to the show page and commenting so we can all learn together. Until tomorrow, thanks for being here.

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