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"We never seen this before." Max, the one to watch for a good scream with Cricket. "Yeah!" Phone plan, streams, and standard definition. Programming subject to change. Fees, terms, and restrictions apply. See cricketwireless.com for details. Good morning, Radicals. Welcome to Radical Personal Finance, especially Saturday morning Q&A with Joshua. My name is Joshua Sheets and I'm your host.

Special on the road edition of Q&A this morning. Just sitting down here in the corner of Charlotte International Airport in Charlotte, North Carolina. Have a few minutes before connecting flight back to West Palm Beach. Been up in Canada for the last couple of days. And so if you hear a little bit of background noise like the beeping right there of the courtesy cart coming by, it's because I'm recording this on the road in the airport at the moment.

So quick intro here as we begin Saturday morning Q&A with Joshua. As I've been mentioning for a few days, from time to time here, I'm going to be doing these shows for you. We're just going to be fairly casual and me sitting down and sharing with you some of the feedback from the website and also answering a little bit of your questions and providing a little bit of commentary on, or clarification on some things on the show.

The reasons I'm doing this, I'm not going to do this every week. I don't even know how long I'll do it, but I'm trying to accomplish a few things. Number one, I get a ton of great feedback from many of you via email. Very nice commentary, very nice compliments, many questions and requests for clarification.

And that's really, really nice to have that nice email. However, my email is very, very large. I get at this point hundreds and hundreds of messages. And so in order to fix that system, I just kind of declare bankruptcy as most of us can do. But I don't want to just do that.

In order to fix that system, one of the first things I want to do is reduce and eliminate much of the inflow of email. So rather than my spending money on hiring somebody to help me with it, first thing you always want to do is eliminate a potential cost.

So I'm seeking to eliminate some of the email. So my desire is that many of you who send me emails, I'd like to send you over to the blog and have you comment on the show instead of corresponding via email. That way, my inflow of email will go down, and I'll be able to respond in a timely manner to the communications that are actually personal in nature or that actually need some sort of response.

So I encourage you, instead of sending me an email, if you have commentary or feedback about a specific show or about a question of the show, I ask you to please go to RadicalPersonalFinance.com and comment on that specific show episode. Quick note, some of you have refrained from doing that in the past, primarily because the shows were not immediately on the website.

In my current publishing schedule, the shows generally will show up first in the feed. So the feed is called the RSS feed. That's what your phone is accessing. And they'll show up immediately when you refresh the feed. The best way to get an immediate notification of my publishing a show, if your phone or your app doesn't automatically update within 30 minutes or an hour or whatever and put that as a notification for you, you can always just check my Twitter profile.

I publish the shows when they publish live into the feed. I also publish them immediately into Twitter, so you can see that. My Twitter profile is twitter.com/JoshuaSheets, S-H-E-A-T-S. So that's a great way to keep in touch with that. And then my web developer, usually it's the same day, sometimes it's the next day, but sometime later in the day, goes ahead and posts the new episode to radicalpersonalfinance.com.

So in the past, sometimes that would be delayed several days. We fixed that problem and improved it, so it's usually the same day. But if you're Johnny on the spot and you listen to an episode and then you want to go and make a comment and you don't see it there, just come back later that day or the next day and it'll be there on the website.

So the first goal that I have is to reduce the number of emails that I receive. And so that's why I'm doing some of these shows, is to give you an incentive to go and comment on the show instead. Number two is most of you are audio-only consumers. That's one of the funny things with a podcast is, yes, I have a website, but unlike a blog, unlike a website where there's lots of written material, the website exists primarily at this point to serve the podcast.

And so my number one focus is always on the podcast. If I'm releasing to you audio files in the RSS feed that show up on your phone, which is how the vast majority of your course listen to the show, then how do I make sure that you get able to benefit from the insight and commentary and questions of some of your fellow listeners?

Many times there'll be very insightful comments, very helpful feedback, very useful commentary and suggestions and tips from other listeners. And most of you are listening to me where just automatically you're on the road, driving or in the gym working out, and you may not get the benefit of that.

So I want to serve you with some of the ones that I find useful, some of the feedback that I think is especially helpful, some of the questions that I think you might be interested in. To be clear, I am not going to be sitting here and reading all the comments to you.

But if I do find comments that have a particularly helpful piece of information, if I find a comment that clarified something that I wasn't aware of or made a good point that I've missed and forgotten a show, I want to make sure that you get the benefit of that, you the normal standard podcast listener, are able to gain from that insight.

That's very important to me. So with that as a goal, I figure the best way for me to do that is to highlight the comments. That will help me to continue to crowdsource more information to be able to take benefit or to benefit from more of the open source economy.

Remember, all of us are generally smarter than any of us, and that's what I want to take advantage of. And then third and final, of course, is I do have a selfish motive in this, is number one, it'll help to increase the more engagement that I get on the website.

That helps me with all of my web page rankings, things like that, which is helpful in the space of--excuse me, in the online space. Also, the additional comments and engagement on my actual website at radicalpersonalfinance.com, that helps all of the search rankings, et cetera. The search engines like to see shows getting commentary and feedback.

All that search rankings kind of work out. So I do have some selfish motivations as well. So it's primarily to serve you. I think it'll be helpful. But I also do have my own selfish goals in that context. So today I'm just going to tackle just a few simple questions, feedback, and commentary that came in from some of the recent shows of this year.

Now, the first couple of shows of the year about plans for 2017, Motorhome Show has been fairly popular but not a lot of feedback on that. The biggest show so far of the year has been the one where I sat down, number 408, where I did a show on budget categories for the new year that actually matter.

There's evidently a deep hunger here among many of you for some of this information, which I'm taking note of, and I'll try to serve that for you. So I want to give you just a couple of useful comments. First, Joe came in, and he mentioned--he said, "Thanks for the budgeting tips.

I like the reimbursable expenses idea." He says one thing that he does--I use a relationships category to allow for expenses that aren't gifts but are primarily to invest in a relationship, such as travel, babysitter costs, unwanted eating out, etc. Now, Joe, I think that's a great clarification. For example, if I sit down on my goals and I look at my goals--and this is just literally-- this week I've been thinking about it a lot, looking at my 2017 goals and just my priorities.

One of my major goals and priorities is to make sure that my marriage is constantly increasing in depth and quality, and that I'm continually seeking to romance my wife and to build those feelings of romance. There's a phrase that I have always loved--I don't know if it was a book or something, but Zig Ziggle used to use the phrase--I think he presented a course on it at some point-- called "Courtship after marriage." Courtship after marriage.

And I've always thought that was such a beautiful way to express a truth that was so important, is the use of that word "courtship after marriage." And I've noticed in marriages, my own included, it's so easy for people to spend all their time focusing on building romance with their husband or wife before the marriage, but then after the marriage they quickly will pull back and start to lose some of that desire.

And this has affected me. I've done this too. And so it's only through recognizing that and focusing on it that we can make a change. And so the question for every husband or for every wife has to be on a continual basis, "How do I make sure that my husband or wife knows that I love them?

How do I build these deep feelings of romance?" It's very easy to neglect that, and give that a few years of neglect, love grows cold, and all of a sudden people wind up and say, "Well, I don't love you anymore." For me, I personally don't pay much attention to love as a feeling.

I look at love as an action. It comes with feelings, but I look at love as an action. So when people say, "I fell in love with her," I never use that word. I don't believe in falling in love. I believe in loving. Loving is something that you can do.

Falling in love is something that you're hopeless in, and it can't do anything for you. And so people think that somehow they fall in love or fall out of love. It's nonsense. You choose to love, and then the feelings come. And so in a marriage, it's important that I continually choose to love my wife.

And it's sometimes--that means cleaning the bathroom, sometimes that means making sure that I'm taking care of the baby, sometimes that means sending her out on a girl's night-- but it also means making sure that I'm kindling and constantly rekindling and stoking the feelings of romance. Well, that doesn't have to cost money, but sometimes it can cost money.

Certainly, we can do that and have a nice evening at home, and if money is very, very tight and we don't have the ability to do that, then yes, we may sit at home and have a very nice romantic evening with zero cost. But sometimes spending money can be a great investment.

One of the things I've been thinking about is the idea of learning something. One thing that can continually draw couples together is when they're learning new things together. Just this morning as I was sitting on the airplane, I was thinking about my own goals, and I was thinking, "What can my wife and I be learning together?

What would be something that we would both thoroughly enjoy becoming involved in and learning?" Because if we can invest some money there, that can help to enhance our marriage. Well, I'm willing to bring that on as an expense, because my goal is not to spend the least amount of money possible.

My goal is to maximize the fulfillment, maximize the use of the money. And as far as I'm concerned, investing in my relationship, the marriage, with my wife is a very worthwhile investment and has possibly a far greater return than any kind of mutual fund retirement investing could ever possibly have in terms of happiness.

So it's good to break that under relationship categories, Joe emphasized here, where you may be paying for travel, you may be paying babysitting costs, meals out, classes of something new and something fun, and there should be a budget for that, because that's one of those categories that can be very, very useful.

So Joe, great comment and a great clarification of what you do on terms of relationships. A couple of you have asked for a breakout of the visualization of this topic. If I can get that done at some point, I'll try to do that, but I'm not committing to that.

Otherwise you'd have to listen and take notes. I'm working on solutions. FYI, I know many of you would love to have transcripts of the shows, more detailed notes, etc. I'm working on solutions to that. I've tested it in the past. I've bought ten transcripts for shows in the past to see if it was helpful.

But the reward in terms--I know that it would serve some of you better, but the best that I can determine is that it would serve a few of you to some extent, but the cost is tremendous. So I've chosen at this point in time to focus primarily even to the exclusion of things that, yeah, it'd be nice to have on providing good quality, consistent audio instruction and help and daily inspiration for you as compared to detailed notes, time-stamped show notes, good transcripts, etc.

If I can solve that problem at a cost that I'm willing to take in the future, I will do that. But for now, just recognize that I'm doing the best I can, but I see my primary best use of my time and resources at the moment is by focusing intensively on the audio aspects of it.

Next question here came in about setting up personal and business budgets, especially with using YNAB. I described in that show my system of how I use one budget for personal, one budget for business. So Rio--as an answer to Rio's question on that--Rio, or anyone else who's listening who wants to do this personal and business, if you just have an occasional business, a little side business, something like that, it's perfectly acceptable to set up a small little budget within your personal budget and just use a category.

So you could use a master category of business and then subcategories, just like YNAB or any budgeting software will allow you to do. So that's very, very simple. If you are a full-time entrepreneur or like me, where your business is your full-time thing, and it's not a minor part of my financial life--it is my financial life-- I like to keep that entirely separate.

And this is good for a couple of reasons. Number one, it's good to keep it entirely separate so that in the future, when your business has grown to the point and you're outsourcing your bookkeeping and you're outsourcing your accounting-- because don't think that you should not do it forever--just at a certain stage where it's useful and helpful.

You want to be able to have that in a separate system because as you grow as an entrepreneur, you're not always going to be sitting down and entering transactions. You're going to be simply reviewing the reports from your bookkeeper, and as your businesses grow, you're going to be reviewing reports from your bookkeeping team, from your accounting team.

At some point in time, you may just be sitting down and reviewing a summary report with your chief financial officer. That's the natural, normal growth of businesses. So it's good to keep it completely separate for that reason. It's also good to keep it separate, like I said, because of the mindset.

It keeps me in a different mindset where I can adjust my categories. And it's helpful to me to have everything separate so that when I'm sitting down and reviewing budgets-- and let's say I'm talking about money with my wife-- that she doesn't have to worry with all of my business explanations, but our finances can be very simple.

And we can just focus on the personal things, which are the things that are going to be integrated into the family. And we can talk about, are our personal expenditures aligned with our long-term goals? Now, how to do it? In YNAB, it's very simple. You just create a new budget, and you can have as many budgets as you want concurrently.

So you just have--and this is where often if you're setting up a new budget, you can just start a new budget. You can bring over the categories if you want to do that. But here, all you do is just use their budget function, click "Add a Budget," and then create a new one that's going to be primarily focused on business.

Finally, Guy asks on that show, "Did I understand you correctly about taxes? Are you suggesting we enter our gross salary as YNAB income and categorize taxes down to our net salary in order to track our actual tax expenses?" So, Guy, this one is an interesting question because, although you may or may not be asking it, let me kind of clarify.

So for me, I pay many taxes physically with a check. So I don't have an employer who withholds my income from my income taxes. I have to send a quarterly check to the IRS. So under that circumstance, it's very easy for me to include taxes as a budget item right here in my normal expenses.

You will be doing the same thing. If you get to the end of the tax year and you owe a check for additional income taxes due to the IRS, then you'll sit down and you'll write a check. So that's a very simple and easy--so you will have that listed as a category because that'll be an actual transaction that you enter into.

However, many of you are aware that when I talk about income statements, I advocate tracking all income and all expenses, gross income included. Now, I believe this probably could be done in YNAB, and I don't think you're wrong if you choose to do that. However, I don't do that, and here's why.

I reflect those expenses on my income statement. So I make an income statement, just like I talked about in the past shows on income statements. Go to RadicalPersonalFinance.com/archive, search "income statement," and you'll be able to find that. So I talk exclusively about that in terms of income statements when it comes to--that's where I factor in some of those annual expenses that you're not changing.

For example, I would want on there the cost of employer-paid health insurance, but any contributory expenses that I have, group expenses, income taxes that are withheld, FICA taxes, employment taxes, things like that. All of that would be factored in on my income statement. And the reason is that I do that on an annual basis where I'm just simply sitting down and creating that as a planning tool.

So that's where I want all the income, your gross income, all of the income to be reflected there, and all of the expenses, including taxes. But for most of those things, you're not budgeting cash. Yes, once a year during open enrollment, you sit down and may sit down and look and try to say, "Well, maybe I'll adjust here.

Maybe I'll adjust this insurance benefit, change this withholding, et cetera." But that's not something that factors into your monthly budgeting. The whole point of a budgeting, using something like YNAB or your own spreadsheet, is to actually allocate where your money is going. You don't always have to do this.

In the past budgeting shows, I've explained that you'll go through phases of budgeting. When you're in the beginning phase, very tight budgeting is very important. But then as your income grows and as the margin in your budget grows, at that point in time, it'll be much simpler for you to adjust.

And you will have no need to budget as frequently, every single week sitting down and reconciling transactions. There you can just look at an overview. And that's, again, where your bookkeeping team or you will just simply pull up an annual report and see, "Okay, are we in line with things?" But at this stage, when I'm talking about budgeting, I'm talking about budgeting the cash that you have.

So the expenses should only be for the cash that you are actually spending. So I would leave off taxes, withholding taxes. I would leave off employment taxes, your Social Security and your Medicare taxes. I would only factor things in on this planning that you actually have to write a check for.

So that is my answer to you. Next show was episode 409, "How to Get Yourself Put Six Feet Under, Dirt Cheap." I was feeling very punny that day. If you read the title and descriptions, there are a number of puns. And so, unfortunately, this show wasn't very popular. I really thought it was fun, a great topic.

But it wasn't particularly popular. But there were a couple of comments that I thought were helpful. Artem commented and said, "Joshua, you went way too quickly over an option of doing burial for free, which is to donate a body to science. I believe it is important to disclose that when a body is donated to science, many things may happen to it.

For example, a body may be dumped in a field for a year in the open to study its decay. Or medical students may practice plastic surgeries on genitals, face, including sex change procedures. Source, Stiff, The Curious Lives of Human Cadavers by Mary Roach." Artem, that is a great comment.

And I actually had earmarked that book and added it to my reading list to read to be more aware of the actual feedback of it. And I frankly, I don't know anything about donating a body to science other than that is an option for free. And I had not even thought of those potential things that you said.

Usually, when you think about donating a body to science, we think about organ donation. But, of course, organ donation would be different than actually donating the entire body. There are many people who may participate in organ donation whose bodies don't wind up, as you said, put out in a field to study the rate of decay for forensic science, things like that.

So, that's an excellent point. I hadn't even thought of that. I appreciate your mentioning that. And then, obviously, I should have read or I need to follow up and read that book to educate myself on that. But at least here I can do this public service announcement for the audience.

Ross comments and says, "Please do remember that funerals are for the living. It is a ritual that helps those you leave behind reflect, find peace, and gain closure. It's a good idea to get to know how your loved ones feel comfortable grieving and take that into consideration as well as you make plans." Ross, that's a really great point.

And I think I minimized that to a higher degree than I should have in that show. Funerals are indeed for the family that's living. And it's not just about your wishes. It's also about your family's need for closure. And I didn't think of addressing it in that way. So, I thought that was an excellent comment.

One thing that does attract me very much to some of those green burial techniques and some of the things that I mentioned and highlighted in that show is that I feel like actually caring for a loved one's body after death, preparing it for burial, etc., can be, and based upon the testimonials of those who have done it, can be a very cathartic experience to bring closure.

I think it's very helpful. Even just something as simple as not freaking out when somebody dies in the house and saying, "Immediately we've got to call them and get this body out of here." It does a good, I think it does a good job of, well, I think it helps to have time to process.

So, that is an excellent point. You may want to not have anything particularly helpful or important about your funeral, but it may be very important for your family. So, let's skip through now. The next episode was 410, Dow 20,000. I haven't received any comments about that one. I hope it was useful to some of you.

But I did on 411 where we talked about how to do your homework, how to check, monitor, and freeze your credit score for free. I did receive a couple of pieces of very helpful commentary from listeners. And the first one comes in from Hannah. And Hannah makes this point, talking about my suggestion to use the free website Credit Karma to help you track and improve your credit score.

Hannah writes this, "Credit Karma uses the Vantage 3.0 credit score, not the FICO 8 credit score. What's the difference? The Vantage score improves when you pay off collection items, but FICO 8 doesn't. Vantage also weights total outstanding credit more than the credit utilization ratio. The difference only matters when you're applying for a mortgage, since Fannie and Freddie use FICO 8.

For other loans, banks use different scoring algorithms, often excluding stuff like medical collections items or weighing similar loans more highly than other loans. Finally, if you're worried about ID theft, I recommend looking into the Capital One Venture or Quicksilver cards. They offer ID resolution services as a perk, even if the ID theft isn't on the credit card itself." So, Hannah, those are two very useful tips.

One, I was not thinking about the difference in those scores, nor was I aware that Credit Karma was using the Vantage 3.0 as compared to the FICO 8. So that's a great tip to be aware of, and I now have informed you, the listening audience. In general, the things you're going to do for both are going to be the same.

It doesn't sound like there's a big difference between those scores, and so improving one is probably going to be generally helpful, and it's just a matter of paying off collection items. So if you're applying for a mortgage, and that's going to be through Fannie Mae or Freddie Mac, you may recognize that the score is not going to improve just because you're cleaning off the collections item.

That's the major point there. Also, the tip on ID theft, that's very helpful as well. So again, Capital One Venture or Quicksilver cards offer, as a component of the card, they offer ID resolution services. And again, in ID theft, much of the time, the biggest cost is the time required to do ID resolution.

I have no idea what services they'll actually offer, how good they are, but I pass that along as a tip for you, the listener. Many of the credit cards offer these very useful perk benefits on the side. Again, tracking of the credit score or many of these additional options.

That's why me personally, I'm not a hardliner, no credit cards, except for people who can't handle credit card debt, because these benefits can be substantial. Warranty extensions are very, very useful. Purchase protection are very, very useful with credit cards. And so just read the perks and the benefits substantially, and see if I'm not even getting into the question of mileage and mileage of points, et cetera.

Guy asks this question, he says, "If I freeze the credit of my entire family, husband, wife, children, is there still a need for ID theft protection? For example, Xander Insurance's ID theft product?" Guy, I don't know, but I don't think so, at least not for most people. That's a question I've struggled with as I've looked at these different services.

I just don't see the risk being significant enough if the credit is frozen, and if you're continually monitoring the credit reports. Now, there might be something I don't know, and I could be persuaded to think that these ID theft services can be useful to have. Frankly, for me, being in the place of a public figure, it's increasingly uncomfortable, because I lose a very minor public figure, don't get me wrong.

It's increasingly uncomfortable, because I lose ever-increasing amounts of privacy. For me, I think that exposes me, at least psychologically, I don't know if it's an actual increasing risk or not, but at least that exposes me psychologically to more risk. Having additional protection, or having the peace of mind of knowing, for example, I know Xander specializes in having an ID theft resolution team, maybe having that additional peace of mind can be very, very helpful for me.

I'm open to that. I think it's very possible. However, I just don't know. I don't personally, at this point in time, own any of those ID theft products. I don't own LifeLock or Xander's product or any of those things. It seems to me that if you freeze your credit, and nobody can take out accounts in your name, you have accounted for a substantial amount of the ID theft.

Maybe if someone's using your social security number to file tax returns, etc., maybe that would be an additional problem. I just simply don't know. So if any of the rest of you have feedback on that, feel free to comment on that show and answer Kevin's or answer Guy's question.

A couple of other kind comments, Kevin. Comment, "It's the tip of the day. Don't start this process and then get sidetracked by making your family lunch. It's awesome to have your credit card credit report pooled, only to have this website knock you off after 10 minutes of inactivity, at which point your one free shot a year is used up, leaving you to call these yahoos and sit on hold.

My current position in life." Cheers, Kevin. I think that's happened to me in years past with that website, too. So that's a useful tip. A couple of other comments here. 412, the Friday Q&A. No commentary on that. But on episode 413, which was my speech at Camp Mustache Southeast, we did receive a couple of interesting comments.

So first of all, actually just one question here. And the question comes in from James. He commented on the show. He said, "I'd like to comment here not on the substance of the body of the show, which was great as always, but on the sponsors mentioned and on Joshua's new policy of more frequent ads in general.

I don't have anything against more sponsors in principle, and I take Joshua at his word that a big part of his resistance was pride or vanity more than a principled objection. I do think that if the sponsors are chosen carefully and vetted, there doesn't have to be an ethical problem.

However, I have noticed one thing in Joshua's ad read for Personal Capital that raises a small flag. I agree that the Personal Capital dashboard is excellent, and I use it myself. But what Joshua neglected to mention is something that he's usually careful to mention when discussing businesses outside of an advertising context, how they make their money.

For instance, just the other day Joshua pointed out that Credit Karma gets their revenue by commissions from recommended products. Well, Personal Capital makes their money by converting a certain number of their dashboard users to clients of their money management service, sort of like a robo-advisor, but with more customer service and personal attention.

I don't think there's anything wrong with that business model, but you have to be able to withstand a moderate pressure sales call, or two or three in my case, not to be drawn into signing up for the 89 basis point service. I think Joshua has an obligation to mention this, especially since there might be some listeners out there that just aren't very good at resisting friendly and persistent sales pressure.

I also wonder about the status of sponsors we don't hear about much anymore, like the book doctor. I assume we don't hear about him because he's not buying time, and also because Joshua isn't working actively on a book anymore, but a long-time listener is bound to wonder, and I do wonder, what would Joshua do if he had a falling out with a former sponsor, or discovered unethical behavior on their part?

Would he feel obliged to tell the audience, or obliged not to tell because of the past business relationship with that sponsor? These are the pitfalls, and I wonder what he has to say about them. So James, excellent questions, and a very thoughtful and cogent comment. I appreciate your making the time to answer.

A couple of things. I've never done media before, before Radical Personal Finance, and so in terms of actual experience, or knowing all of the industry inside tips and information on what you're supposed to do and what you're not supposed to do, I'm basically making it up as I go along.

And my theory is that if I approach it just simply and treat people the way that I want to be treated, and just simply approach things in an honest way, where I just simply am honest with everyone involved, speak about things the way that they are, and admit my mistakes when I make them, I figure it'll all work out in the long run.

And I think that's generally what I want from people. I don't expect people to be perfect. I don't know how to do that. But I do appreciate it when people are honest. And so that's the approach that I have used. Now, interestingly, there are many aspects of actually the business side of negotiating things like sponsorships that it's not a matter of honest or not honest, but it's a matter of how much information should I disclose, how valuable and helpful is it, and why am I doing it.

And that's something I don't know the answers all the time to. So just to kind of explain the things. First of all, with regard to personal capital, you do make an excellent point that I should explain the personal capital business model. So for those who aren't aware, there are a number of free tracking services out there.

Like I explained the other day, Credit Karma makes their money on selling a really great service to understand your credit score. And then they make their revenue model is built upon earning commissions upon the sale of financial products if those financial products are well suited to you. And so that would be why on Credit Karma they would recommend to you certain credit cards based upon your credit score, your credit utilization.

There will be ads you can click for mortgage application or car loans, etc. Because they have access to your credit information. Now, similarly, another website that does something similar would be the website Mint.com. Mint has a free budgeting service. It's very, very useful. Many people use it. The Mint business model is the same.

They provide you with a free tool and in exchange for that, they offer you, because they now have access to all of your transaction data, they offer you additional products. They offer you credit cards. They offer you car loans. They offer you banking products. And if you choose to buy based upon clicking on one of those loans and signing up, then they'll receive a commission.

So that's the way it works. And in many ways, this is the fundamental basis of business. I'm offering you a free show, giving you a free show, and hoping that in time you'll buy my products. Whether that product is to use a sponsor that is sponsoring my show or whether that product is something that I've created to sell to you, I'm doing the same thing.

And much business works like this. This is, I guess, called the freemium model of advertising. So there are many businesses that work like this. Personal Capital does something similar. Personal Capital works exactly like James described. They offer a free dashboard and then they make their money off of a certain number of their clients who are using their free dashboard who sign up for their personal advisory service.

So, what is my relationship with them? Well, Personal Capital doesn't... let me explain. There's two advertising models that are commonly used in advertising on media. And they're not always exclusive. They can be one or the other. The first is called, in the industry it's referred to as CPM. CPM stands for cost per mille or cost per thousand.

And so the idea here is that based upon the size of your audience, the size of your readership, the size of the... if you're a magazine, the size of your circulation, if you're a blog, the number of page views, if you're a podcast, the number of listens that you get, you get a certain rate, an advertising rate per thousand impressions, readers, listens, etc.

That's called cost per thousand model. And under that model, the advertiser just simply shares the comment and the brand gets the benefit of it. The other basic model is called CPA model, cost per acquisition model. And this is done under more of like what you would be familiar with in the direct mail context, where you're paid based upon the acquisition of an actual customer.

And so under these types of relationships, there's a commission that's paid based upon somebody making a certain action. Whether that's clicking on a page, signing up for a product, completing a survey, doing something. It's the actual action that results in the payment of the fee. So these are the two basic models.

They can be combined together. For example, you'll often hear... and that's why it's so important when you hear a host say their code. Let's say for me, when I say use the code Radical or use this tracking link, it's often because... or not always on my show, they're one or the other at the moment.

But it's often because there's a mixture of these. On the radio you hear, go to this company and type in a host's name. Type in Joshua at the top of the page. Well, that's partly so that the ad campaign can be tracked, but it's also so that possibly there may be some performance pay that's included in the advertising contract with the host.

That's the way that the business works. And it's helpful, and I think that's actually... the hybrid model is a great model because it recognizes that the company is getting exposure just simply by people listening to it, whether or not that someone actually follows through and uses the tracking link of the show host.

So with regard to that approach, I have done a combination of these different things, as I've tried to work this out. Now in the early time, I wasn't sure if I could do CPM. I wasn't sure if I would do CPA or what I would do. But each of the sponsors and the advertisers has been a different model.

Going forward, I'm changing that is my intention. But each of them has been a different model. So for me, the personal capital, personal capital doesn't pay me a fee just simply for mentioning their name. That is a program that they have that's available to a lot of large personal finance bloggers, a lot of large personal finance podcasters, etc., where if we mention personal capital and have a free referral, then we use that referral link.

And if somebody with a certain amount of assets links their accounts under that link, then we receive a commission. Now, is this ethical? I don't have a problem with it. It's a free service. And the challenge is just simply that I only get paid when someone with a certain size of asset links their account.

I've received a couple of commissions, one or two, but it hasn't been a major focus for me. So that was why I haven't in the past done a lot of personal capital ads. I was just simply using that as -- well, in the past, because it didn't really excite me all that much.

I figured it's a great service, but I didn't want to do that. So I didn't sit down and explain in the 60 seconds of ad. I didn't try to explain the business model and say, "I get paid when rich people link their assets." I figured that I wasn't -- it was a free service.

I didn't see any ethical conflict in it, etc. Now, if you need to be able to resist sales pressure, etc., that is a valid point. I didn't see it as being a particularly important thing when I started to do it. At the moment, all of the advertisers that I'm currently using and talking about on the show are all cost-per-action model.

So I'm not receiving any standard, any significant direct payment for mentioning the name. However, I'm changing that. And so the reason that I'm doing the advertisers on this model now is, yes, partly, number one, so that I can have some additional income from advertising. But it also helps my show to sound different.

Meaning that if I'm negotiating with a company for a CPM model, which is my intention, is to move all of my advertisers to CPM model. If I'm doing that, I want them to listen to my show and I want them to hear me doing ads for various companies. Now, they don't have to know what that model is.

That's why, for example, if I do an ad for Audible, I could do that. Audible would be another one. I do that on one of my other podcasts. I just do an ad for Audible. I only get paid when somebody signs up for it. And anybody with a blog or anything can go and set that advertising relationship up.

It's not individually chosen. I didn't negotiate with the CEO of Audible for this advertising deal. That's just a standard affiliate link model where anybody can go and sign up for it. But I'm doing that because I want the show to sound differently. I want there to be that ad space there in the show so that when new sponsors go and hear that, they're hearing that, yes, Josh was a serious, legitimate broadcaster.

I can hear how he does ads, et cetera. So that's my primary purpose. So that's why I started doing the personal capital ads more. It was, yes, I hope a few of you, especially those of you with assets above the minimum--I don't know what the minimum is. I can't remember.

It's 100 grand, something like that. I hope that a few of you who actually have assets go and sign up. That way I'll get whatever they pay me, a small commission for it. But the biggest reason that I'm doing these ads is because I need to change the way the show sounds.

And I need to make sure that I improve my ability to do the ads well because there's a skill in doing the ads. So I'm trying to make them very relevant, very helpful. My goal is that the ads serve you just like the standard show serves you as well.

So that's one of the major focuses and things that I'm working on. All of my--so to answer your second question of what happened to the book doctor and what would I do if I fell out of sorts with somebody, all of my past advertising--so they varied. Some of the advertisers are based upon a commission model.

SoFi, that's based upon a commission model. If you go and refinance with SoFi, I get a commission--I can't remember what the number is. I get a commission that is based upon what type of loan that you closed and then you get money back. And so other companies, for example, Paladin.

My deal with Paladin is that I get a commission whenever somebody goes and signs up through that link to request a financial advisor. It's a sliding scale that varies based upon the amount of assets that the person declares on the initial intake form. I only get paid when a valid lead goes through and after they check up that, yes, this is a valid lead and it gets passed on to a financial advisor, then I receive that commission.

So these business models, they're designed to try to help to protect everyone involved. And so the idea--to explain that and also personal capital, the company needs to make money. So if Paladin, for example, is only getting people who don't have money, then they're probably not going to get a lot of great clients for their financial advisors.

So therefore, everything falls apart. So the commission scale varies based upon the size of the client. And in that case, they have to verify the actual leads, make sure that, yes, this is a valid lead. So if somebody goes through and puts in fake client, fake@email.com, 555-5555, then that gets tossed out and I don't get paid for that.

But it also has to be just paid based upon the commission of a lead because I think it would be unethical--or I don't think--I would not be comfortable if it were based upon somebody saying, yes, you come up and sign up as a specific financial advisor in that context.

So some of the other advertisers work similarly. I'm going to everything into the CPM model. And that's where I've had advertisers like that in the past. My friend Patrick Snow, that relationship was a barter arrangement that I had set up with him where in exchange for some of his services, I bartered him advertising in exchange for some of his services.

And this is something that I encourage those of you who are business owners to do. Look through your assets that you have and always see if there's something that you can provide that would be cheaper for you than actually spending actual money. So I paid him direct fees out of my checking account and then I bartered a discount in exchange for a certain number of ads.

So that was just a certain number of ad reads. Now, an example of another company would be something like Trade King. So in the past, I was doing ads with Trade King. The ads with Trade King were not based upon -- that was a CPM model where I would just get paid based upon a certain rate based upon the number of thousands of listeners, etc.

And so I completed my contract with them. There was no problem. I could have gone and sought to renew the contract with them. And there was -- I could have done that. At that time, I was pulling back from advertising because I really wanted the Patreon model to work.

I really didn't -- I just didn't enjoy doing the advertising. And so I said that I would do it a little bit differently. But -- so that I didn't renew the contract. But in that situation, I just kept an eye on the services just like same thing with Paladin.

I keep an eye. And I ask you guys to email me. I've had various emails. Most of it's been positive. But I've had a couple of people who had experience with Paladin write me an email and say, "Well, you know, my guys weren't great." Now, the challenge is for me, what do I do with that?

So the decision I've made is that I just pay attention. And if I feel like something is grossly problematic, then I'll deal with that. And the answer is yes. I would say, "Hey, this is -- you need to be aware of it." I would cancel the contract. If it were that serious, I would cancel the contract and probably refund the money to the advertiser.

I think that would be the proper thing to do. Just thinking about it here. If I had a situation where all of a sudden I had made a mistake, I don't think it would necessarily be fair for me to keep their money. And then all of a sudden two weeks later do it.

If it were two years later, that would be a totally different thing. But if it were just two weeks after the ad campaign starts, I find something out, I'd cancel the ad campaign, send them their money back, and tell you. Because that's why my allegiance and my loyalty has to be first to you, the listeners.

That's why trust is the first and foremost most important thing for me to maintain. So this advertising world is kind of a mixed up interesting world. But that's the reason behind it. I never was seeking to mislead on personal capital. I just thought it was a useful way. It helped me to run ads so I can bring ads back in to make sure that my show sounds different.

And then my goal is in the future to remove and eliminate all of these CPA advertisers from the actual verbal part of the show and just to do CPM. Incidentally, if you're a podcast creator or you're struggling with that decision, something like that, I had wavered back and forth between it.

There was a time where I had thought about not doing any CPM and just doing CPA. And the reason I wanted to do that was because I didn't want to be locked into a specific show publishing schedule. If I'm going to work on a CPM basis where I'm selling ads for a certain number per thousand, in that context, then I've got to produce the shows on schedule.

I didn't have the commitment nor did I want to have the commitment of every single day I'm creating a show. I was just going with it as I could. And so the CPA allows me--forgive me for all the coughing here, airport recording. But this is hopefully those of you who are listening are just a friendly crowd.

Under the CPA model, I can create an ad and then when you act on it, no matter whether that's today or two years from now, I'll simply get paid based upon that action. And so that is in many ways much more valuable because it just sits out there and then I haven't made an agreement with an advertiser where they're not expecting a certain number of mentions.

Now because this year I've committed to going back to shows on a very consistent schedule, I'm moving back to the CPM model because that helps for the best cash flow. And frankly, I feel like most of the CPA people, they get a better deal than I should be giving them.

They get way too discounted rates. Very few people respond to the ads in that model. They're getting a lot of brand recognition for my promotion of them. They're getting some of the benefits of my credibility that goes with them. And I feel like it's not a fair business model.

I feel like I'm underpaid for that. And so that's one of the biggest reasons. So that's a little insight into the world of advertising, a little peek behind the curtains to understand what this world of advertising is like. And hopefully that helps to continue my commentary of always being most loyal to you, the listeners, first.

When I've said that for years, I haven't--I meant it. I meant what I said. There are certainly things that are challenging to work through. Not everything is simple. Not everything is cut and dry. But I meant it when I said my loyalty is first and foremost to you, which is why the patron program is so important.

That's why I insisted on that. That's why I turned advertisers down for as long as I could justify it and say, "Well, I really want to do it differently. I want to do it the crowdsource model," just because I felt like it was so incredibly valuable. A little bit of insight for you there on the topic of advertising.

And with that, my voice is shot and my plane is waiting. I'll be back with you all on Monday. Hey, parents, join the LA Kings on Saturday, November 25th, for an unforgettable Kids Day presented by Pear Deck. Family fun, giveaways, and exciting Kings hockey awaits. Get your tickets now at lakings.com/promotions and create lasting memories with your little ones.