It's Friday. That means live Q&A. I've got an open phone line with one, two, three, four, five, six, seven callers on the line. So today's going to be busy and fast paced. Let's see what happens. Welcome to Radical Personal Finance, the show dedicated to providing you with the knowledge, skills, insight and encouragement you need to live a rich and meaningful life now while building a plan for financial freedom in 10 years or less.

My name is Joshua Sheets and I am your host on Fridays. I do my very best to do a weekly live Q&A. Got a live phone line with callers. It's kind of like radio and just recorded a day in advance before you hear it. And we've got a diverse array of questions today.

I think you'll really like it. These Friday Q&A shows for the last few weeks, they were a really good opportunity. If you wanted to ask me a question, if you wanted to ask me a question directly, you've heard shows in the past where one caller or two callers got the entire hour with me.

So this was about the cheapest access to me that you were going to get. So however, with that, today we've got a busy full phone lines. In fact, I've got them locked and rejected about four or five of you. If you'd like to get on a call like this, the primary way to do that is to join as a patron of the show.

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Let's get right to it. I've got one, two, three, four, five, six men and one lady. So in my world, ladies come first. So Ruha in Alabama, go ahead and let us know your question or comment please and let's see how I can serve you today. Great. Thanks, Joshua.

So we are actually moving into a tiny home. So we're moving from Alabama to Louisiana and currently we live in one big home and we also bought some land in Alabama to park the tiny home on before deciding we were going to move down to be closer to family.

So my question is, what should we do with the house and the land? The house is currently, if we sell it, it'll be worth about $20,000 less than what we paid for it. And that was four years ago when we bought it. And the land, I mean, we can probably get exactly what we bought it for, but I'm worried about closing costs and also I don't know how the tax situation works out.

So the land that you own is in Tennessee or Alabama? Which one? I got confused on the states. They're both Alabama. Okay. But you're moving from the land and the house to other land? Louisiana. Okay. In Louisiana. Why would you not sell it? What reasons would you have for keeping it?

Well, the land, I don't really have a reason for keeping it. I do definitely want to sell the land. I guess my question on that is more along the lines of what are the implications? Because I wouldn't sell it if it turns out that buying and selling something back to back is detrimental to our taxes for the year.

Do you think that you have a profit in the land? In renting the land? No. Meaning that you said it's worth about what you paid for it, right? So you don't have a lot of profit here. Right. And so let's deal with them one at a time with the land.

If you say you have no reason for keeping it and you want to sell it, then you should just simply sell it. And as far as the financial implications of it, the financial implications is just simply going to be how much gain or loss will you have from the sale.

And it sounds like you're not going to have any gain. If it's worth about what you're going to sell it for, you're not going to have any gain. And your only potential loss would be any sales costs with the transaction costs of actually selling it, commissions and things like that.

If you don't see any reason to own it, if the land is not particularly valuable to you, you don't think that it's going to appreciate measurably in price, then I think the simplest and easiest thing to do is just to go ahead and sell it and be free of the hassle, be free of the constraint, be free of the lack of minimalism dealing with a property that you don't really want to own, and just be free of the headache of it.

Even if it loses, even if you lose a little bit of money, a negligible amount of money, I would see value in just simply having it gone so that my life is more streamlined and more simple, unless you have a compelling reason to own it. That approach is relatively simple.

And because it's basically a wash, you're not going to have any gain or loss in the sale, then there are really almost no tax implications. It's just a matter of mentally getting over it. So that one seems simple. Now, the house, why would you choose to keep the house?

What would be your argument there? Well, there's a lot of developments coming closer and closer to where the house is located. And my hope is that in a year or two, it's actually going to be worth at least what we paid for, if not a little bit more. So my hope there is, I believe we can rent it for definitely the cost of the mortgage and some extra to cover any maintenance repairs and things like that.

So I think we can break even on renting it through a property manager so that covers her fees as well. And so I just don't have a really strong motivation to sell it because I don't need the capital at all. If you sold the property today, what do you think it would sell for?

About $20,000 less than what we paid for it originally four years ago. And you've been living in the house for the last four years, right? Mm-hmm. Ballpark, what's the value of the property? So if we sold it today, it'd be about $285,000. And how much equity do you have in the property?

The outstanding mortgage is $225,000. Okay. So the way to answer the question, so the scenario that you're describing here is I don't want to sell it for less than what I paid for it, which is an appropriate consideration. I don't want to sell it for less than I paid for it because you've put investment capital into it and you've lost some of that money.

The way to answer the question is to calculate what your potential return is from this investment and compare it to your potential return from another investment. And so if you sold it today, you think it would sell for about $285,000. That means you paid $305,000 for it. Is that accurate?

Yeah. Okay. And for the sake of simple radio math, I'm going to use just simply, I'm going to ignore the sales costs right now, but you need to redo this analysis later with what you think would be the actual transaction costs of the deal. But if you sold it today for $285,000 and you paid off the mortgage of $225,000, that means that you would clear $60,000 of equity.

Again, you need to factor in transaction costs, but for radio math, I'm going to just use $60,000 of equity. The question is this, the $60,000 of equity that you have in this property, if your estimate is accurate, if you think that in the next year, because of the local development costs and because of the local changes in the market, if you think that property would increase in value by $20,000 such that your $60,000 of capital would increase to $80,000 of capital, if you think that's a good investment, then you should consider keeping it.

If you think you can do better elsewhere, if you think you can redeploy that $60,000 of capital into something else that's going to do better, then you should consider selling it. Because it's immaterial what you paid for the property versus what it's worth now. That's a sunk cost and you can't do anything about it.

So you've got to clear that from your mind and you've got to think, "Would I rather have $60,000 invested in this property in Alabama, in this particular house, or would I rather have the $60,000 invested into something else or under some other conditions?" That's the question that you have to ask yourself.

And then as you look at that, you need to also consider what the rental cost would be. So if you are just simply renting it out for enough to cover the mortgage and you're not going to be gaining any profit, then you're not getting any return on that $60,000.

You're just covering your financing costs. But the way to do it is just simply to look exclusively at the equity that you have in the property. Consider what you think will happen with that house and then compare it to anything else that you would do with the money. And then out of that analysis, you should be able to make a decision properly.

Is that helpful? Yes, absolutely. Cool. Thanks. Thank you for calling in. Next we are going to go to Guy in Pennsylvania. Guy, it's a little bit noisy, so try to be quiet here. And go ahead and introduce yourself. Ask your question. Let's see how I can serve you today, please.

Good morning, Joshua. I appreciate you taking my call. I've been a listener since you interviewed on the Money Plan SOS podcast a few years ago. So I've enjoyed you ever since. My question today is in regards to switching to a local advisor. This question comes up for me because my younger brother is working with a local advisor who frequently contacts him and keeps him updated, asks him questions just to make sure that everything is going well.

So it's clear that he's monitoring the account. The guy that I set mine up with when I was 27 years old right around in 2012 was a Dave Ramsey ELP. A wonderful guy. He came, we sat down, spent a lot of time together, and he set me up a couple of different accounts through Fidelity with the same, in the Dave Ramsey structure.

So I've got five different A-share funds. One set of five is in a Roth IRA that is set up for long-term investing and one that's in an individual that is set up for short-term that I essentially use for a long-term car fund but I'm pulling out of it frequently when we need new vehicles.

And then he also set me up with a C-share that I used to save up for a down payment on my house over a four-year span which worked out, everything has worked out really well. The challenge that I have is from my understanding, if I try to contact him, it takes a while, a long while to get any word back from him.

So I know he's very busy driving all over the region. So I don't think that he's monitoring my account at all. To me, I feel as if he, because of being so busy, he became one of those guys that sets you up and then moves on and collects the commission which I find to, which I think is at the industry maximum.

I think it's 5.75% for those A-shares. So my question to you is, and it's set up, it's an individual Fidelity account so I can pull it out anytime I want. I have complete control. It's not something that I have to contact him with to get the money from it or to make changes.

So I don't need him other than unless I want to make structured changes. So my question to you is, how do I know if I should switch? Is there value in having a guy like my brother has that will contact him that I can go sit down with at his office to switch to something where I know that it's being monitored and I'm going to get updates on even law changes and just suggestions based on stage of life or can I just trust what I have and just keep putting in the money and I watch it in personal capital and I know what's there and what's happening for the most part.

So I got your question. How much money do you have invested with this particular advisor? It would be right around $34,000. $26,000 of that is in the Roth and $8,000 is in what I call the car fund, the individual investments. Okay, so this is the most important consideration here in terms of how much money you have because this is what's going to drive how much service you get with a financial advisor.

And you need to think like a business person and think about the business of giving financial advice. If you think about the business of giving financial advice, you have to recognize that your financial advisor is being paid based upon the revenue to their practice. And for the sake of simplicity, let's start with pretending that this is a fee-based account where the financial advisor is earning a flat fee and let's use a flat fee of about 1% which would be the industry standard.

If you have a $34,000 account, then that means that on a flat fee basis of 1%, your financial advisor is earning $340 per year. Now on a $34,000 account, your fee would actually be far higher than 1% because there's no way for the advisor to cover the cost, to cover the cost of technology, the platforms, et cetera, and to do it in any measure profitably.

Your fee with a standard personal financial advisor who works with individuals would be probably closer to 2% on this amount of money, 1.5%, 1.75%. So total revenue to that advisor's practice would be about $340 per year. Now in your case, because you don't have this set up in the context of a fee-based account but rather your account is based on commissions, the advisor received a large upfront commission from the sale of these mutual funds.

As you said, let's say it was 5.75%. So on $34,000, pretend you invested that much money, then that would be about $1,900 of commissions and then they're receiving a small trail commission, what are called in the business of trail commissions, which is a very small amount of money on an ongoing basis.

So they've received most of their compensation upfront. So here's the incentive that the advisor has and here's how I would approach the problem if I were you. Because the advisor earned an upfront commission, let's assume the best. It's probably a good guy. You said you've got good feelings from him.

He worked hard. He helped you, et cetera. Because he earned an upfront commission, he knows that he earned that money upfront for not very much work. And so when you call, he's going to want to do a good job for you to help service your clients, to help you with the questions that you have.

He's going to want to do the best for you. But when he's earning a small trail commission of – I can't – I mean, what, 25 basis points, something like that, he's only earning revenue to his practice from your accounts under $100 a year. So in terms of his actual incentive to meet with you, if he's got incentive to meet with you of under $100 a year versus other prospective clients that are million-dollar accounts where he has the potential revenue of say $10,000 a year of revenue or potentially much larger commissions if he's working on a commission basis, he doesn't have a lot of incentive to meet with you.

So the problem is this. He knows that he wants to help you and he knows that he wants to do a good job for you because you're a client. But he also knows that you're not an A client. And so if I were coaching a financial advisor like him, the first thing that we would do is we would do client segmentation and you'd segment your clients into A clients, B clients, and C clients.

And each advisor will have their own criteria for how they would segment their clients. But the criteria would involve, number one, financial considerations, how large is the account or how much financial potential does the advisor have, and it would also involve the strength of the relationship. I worked with clients when I was an advisor.

I worked with clients that probably I shouldn't have spent as much time with, but I liked them and I like spending time with them. And most advisors, one of the biggest things, once you have your feet under you and you're confident in what you're doing, one of the great things you try to do every year is fire a client that you don't like because working with people who drain your energy is really, really exhausting.

And so one of the good pieces of consulting and coaching advice for financial advisors is go through your practice at least once a year. And I always love Nick Murray always recommended doing it on your birthday as a birthday present to yourself. You go through your practice and you fire your most obstreperous client.

And whoever you don't like, whoever's the biggest problem, you go ahead and send them away. So what advisors do is they segment their clients into A clients, B clients, and C clients, done based upon strength of relationship, current financial position, and financial capacity. Many advisors, if you are, let's say that you earn a little bit of money, but they can tell that you're working in a business that's going to result in a lot of income in the future, then they'll say, "Well, this client, they're a B plus because they don't have a lot of money now.

They're not earning a lot, but they have a lot of financial capacity." So the problem with you is, and let's ignore the prospect of financial capacity, the problem that you face with this advisor is the fact that with a $34,000 of account, you're not an A client. And unless you're going to become an A client, this is probably going to continue.

So what do you do? Well, if you like this guy and if he helps you with some of the information that you need, then you can continue to work with him, but you're going to have to be the one who bugs him, who reaches out to you. Because when an advisor segments their client base into A, B, and C, an experienced advisor also goes ahead and puts in place a contact plan.

And so you reach out and you contact your best clients a certain number of times per year based upon whether they're in your A tranche, your B tranche, or your C tranche. And so your C clients will receive, let's say, your monthly newsletter. You sign up your C clients for your monthly newsletter, and then you have your staff go ahead and once a year reach out to you and see how everything's going.

Your B clients get a monthly newsletter and they get a call from you once a year or twice a year. And your A clients get a call from you every quarter or more, and you send them and you set up a spreadsheet in your office and you say, "Okay, they're getting to..." and you plan out the number of client contacts that they're going to get per year.

So the A clients get invited to a client appreciation event. They get birthday phone calls. They get personal notes. They get personal emails. They get personal things, and it's based upon their financial capacity. So that's what the advisor is doing. That's what they're thinking. Now when they're very busy, it's not that he means bad.

He wants to do the best for you, but there's no way for it to work financially to be a really good thing. So here's what I would do if I were you. In order for you to get more advice, you're going to have to pay more money. So if you're not getting advice from this guy, then you should look at your account and you should look around and see is there a place that you can get a better deal.

Thankfully in today's world, there are tons of really great independent investing options. And you can look at your accounts and you can say, "What are my fees? What are my costs?" And you can go and you can look at other places and try to figure out, "Can I get a better deal somewhere else?" If you're not getting the...

What I would do is I would try, if you like this guy, I would try to ask him your questions, reach out to him, schedule a phone call. The best way to do that is probably to reach out to his staff and schedule a time with his staff to schedule an appointment with him because he's going to have...

He knows he owes you a loyalty because you're a client of his and he feels bad. He feels bad that he hasn't served you as much as he would like to, but you're in his C client base. So you've got... If you're the squeaky wheel, you can get time with him and that's how I would approach it.

If you need more financial advice, you're going to have to find some way to pay for it. With $34,000 of assets, the only way that you're going to get more focused, clear, comprehensive financial advice is to pay for it on an hourly basis with somebody who works with somebody on an hourly or package deal because you don't have enough money pulled together yet to where you're really going to be able to get the services of a good financial advisor.

Does that make sense? Yeah, it does. That brings it into perspective, absolutely. Thank you very much. You're welcome. I'm going to give you the answer. It's really hard because that's the type of thing that the financial advisors face commonly is just this desire to do the best for everybody, but also this constraint with the numbers.

Advisors go... Businesses go through this life cycle where in the beginning, they'll work with kind of almost anybody, but then they create this massive client base of clients that really they probably shouldn't be spending a lot of time with. One more idea that I forgot, Guy, that you can do is reach out to this advisor and see if he'll refer you or refer your account to a younger, more junior advisor, somebody who can work with you on your account who may not be as big or as busy as this other person.

A lot of times, if you don't have a lot of money pulled together, you may be able to find a young and less experienced star who will give you time, give you effort, give you focus and energy while they're still building and developing things. So go ahead and see if you can find, maybe get a referral to somebody within their practice or reach out to one of their junior associates for help.

I hope that helps. All right. Chuck in Atlanta. Let's go ahead and hear your question. Let's see how I can serve you today, please. Hello, Joshua. Good morning and thanks for taking my call. Usually I have where people come to me for financial help and I like helping like non-custodial parents and that kind of thing.

And lately I've been coming across a lot of non-custodial parents who they have one bad relationship, have a child and that breaks up and then they have the follow-up, another relationship that breaks up and then they got two custody or two child support payments. Now usually in most states, well every state is different because it's state by state.

It's about a third of your income for each bad relationship. So they have a third of their income towards the first child and then a third of the income might be towards the second child and then another third of their income goes towards taxes. So basically no matter how hard they work, it seems to go in a negative manner because child support is usually based upon a percentage of the income.

Right? So they get a raise. It doesn't matter. They get a raise and so forth. And I've been giving them some advice what I could think of but I just wanted to bounce those ideas off of you as well as if you can come up with anything else like to tell them because the divorce rate is high, whatever it is.

I don't know what the actual statistic is but it does seem to affect a lot of people. And it's a negative cycle and I want to see if I can help some of these guys change their finances and change their financial momentum so they could be actually a better parent to their kids.

So if you're working overtime and crazy time and all that kind of stuff, then you have no time to spend with the kids. And a lot of times I've come across guys that are living in containers, living in people's basements and my main advice that I can give them is it's a financial game.

They can only take child support on money you earn. So I say, "Okay, well, where can you go and use your social capital and say, 'Hey, friends and family, where you can ask for help?'" And some of them have been able to be living with relatives for free and some of them have houses and a lot of them don't.

But the ones that have houses, I tell them, "Hey, maybe you could take on roommates and then defer the cost of the mortgage payments or something like that." And a lot of it depends upon what kind of situation they're coming in. Some are in their court case and some are after the court case, which after the court case, of course, is harder because prevention is...

An ounce of prevention is worth a pound of cure. And the court sometimes take in the factors such as the distance between the non-custodian custodial parent and that into the child support and so forth and the cost of that. The only other advice I've been giving them is maybe start a business on the side and live in the business, place of business for a little while until you can figure out something.

And then if they get a second job, that's even harder, reduces their time with their children, which is kind of counterproductive. With 90% of the people in jail have no father involvement, that's kind of a bad thing. And they got the big sticker over them of if they don't pay child support, they get jail time.

If they could lose their... I had a truck driver that was in danger of losing his license, which is his livelihood. And people with passports, all that kind of crazy stuff. So that's kind of... What would you tell them to kind of... That would help to get them on a more positive thing?

Because running on zero, the math, one third, one third, one third, you're left with zero. So I don't know what else to tell them. That's tough. My question, I'm glad you kind of shared what you tell them because that was going to be my next question. I've never really...

I don't think I've ever given financial advice personally to someone in that situation. So it's a new kind of problem to me. And I recognize that it exists. It's funny, last night I was looking at a book by a lady named Helen Smith called Men on Strike, Why Men are Boycotting Marriage, Fatherhood and the American Dream and Why It Matters.

And one of her major propositions that she puts forth is that in her opinion, men are mistreated in divorce courts. And the standards that are held on men are much higher than on women. And it leads to ruination for many of the men. And that's one of her arguments is that many men see this.

And so they're avoiding marriage because of seeing how, in her opinion, they're unfairly treated by the courts. So I was just thinking about this just last night and wondering if that were true, wondering how I could learn whether I felt it were true or weren't true. Now this question comes this morning.

I guess my first concern is not for the... Obviously the man is sitting there in front of you. My first concern is not for the financial well-being of the man. My first concern is for the financial well-being of his child or children and of his wife. All of this could have been avoided if he'd been able to stay there and to support his children in the relationship in which they were birthed.

So I tend to be one of those who starts there. But I also do acknowledge that the situation is very, very difficult. And if you're sitting there with a guy and he's saying, "Listen, I am doing this. I'm doing very well. My children are supported. And what I'm trying to do here is I'm trying to figure out how to get free and how to be a better father because I'm not spending all my time working and all the money's not sucked up, then I am doing my best." So I guess the only advice that I could think of in that situation would be to study the rules of the game and figure out how it's played and then find the break in the rules.

And I think it relates to income. First, it would be a very high-earning man who one-third of his income goes to taxes. That would be a very high-income earning person. A truck driver, as you said, somebody who's earning, let's just say, $60,000, $70,000, $80,000 a year, a third of the income is not necessarily going to go to taxes.

So we got to look at what exactly are we talking about. If the child support payments – so a couple of things. As you well know, if you were retained to give financial advice to the husband in a divorce proceeding, one of the major things you want to do is you want to get as much of the money that – as much of the settlement that's split between alimony and child support, you want to get as much of the money counted as alimony versus as child support in order to lower the overall taxable burden.

If a man is going through divorce proceedings and if the judge rules that he owes $1,000 a month of alimony and $1,000 a month of child support, the $1,000 a month of alimony, the tax burden of that will be removed from his return and it will be added to his wife's return.

So that can help with the tax planning as well. Now I think most divorce attorneys, if the man has good counsel, most divorce attorneys are aware of that and will do that. It's not a matter – there's going to be – when the judge is working through the case, they're going to decide how much goes to alimony and child support based upon the proper split.

But that is important and that can be a very significant financial planning consideration because if we can lower the taxable income by having more of the money shifted to alimony payments versus shifted to child support payments, then that will be helpful for the man that we're giving financial advice to.

So that's – but by the time you come into the situation, that's a little bit too late. Next, I think it's important to look at the term of the payments. So given the fact that we're talking about child support, child support is not judged as a lifelong commitment. It's generally until the child reaches the age of majority.

So there's a difference if a man has a 15-year-old son or daughter versus if a man has a 2-year-old son or daughter. That will make a difference in the financial advice. So I think it's important to consider where the person is in their financial journey. Then if the game is played on income, I think you go to income.

I think that instead of – if the man is going to be assessed higher child support payments by – based upon earning a higher income and I want to be very clear. First I want to make sure that he's meeting his child support obligations and I think we – I would assume we would be agreed on that.

I don't want a man playing games and his child going uncared for because that would be immoral for him to not take care of his own children. So as long as his children are being cared for adequately and their needs are being covered and we're just doing – we're just trying to figure out how can we fix the situation a little bit.

I think you lower your income partly through to reducing needs, doing things like you said of reducing living expenses, taking advantage of some of the social capital that you have to be able to lower housing costs, to be able to lower transportation costs. I think you approach your business and your career differently.

Instead of pursuing earned income, you pursue equity. So if I'm advising a man who is – for the sake of scenario analysis here, he's got 13-year-old children and he's got high child support payments which would adjust based upon him earning a higher income and he knows that and he is adequately caring for his children, their needs are met, they're not suffering.

Then in that situation, I'm going to tell him, "Build something. Start a business. Build something that's going to result in higher equity. Don't just pursue immediate income. If you need to make a career transition, transition into something that's going to be lower earning for the next few years and then when your child support obligations are going to be paid, then you'll be in a situation where your income is increasing because of the equity that you built." That can be done in building of a private business.

For example, maybe the trucker should pursue working as an owner-operator instead of working as an employee. It can also be done in some jobs that are commission-based and that are slow to get started such as real estate or something like I did, life insurance sales and financial advice. The first five years of a financial advisor's career are very expensive, very low-earning years.

But the balance of the career would be much higher-earning years and there's really not much of a way around those first five years. So if I'm making a career decision and I know that if I take this job that's high-paying over here, I'm just going to lose all that money to higher taxation and child support payments or if I've got the other job opportunity where I'm going to build equity and deferred comp, then I'm going to move in the position of equity and deferred comp.

But Chuck, you've already said that. That was just me elaborating and explaining what you already said. I'll think about it. I've never really faced that situation in consultation so I've not thought a lot about it but I will invite any listeners who have additional ideas. This would be a great place for listeners to chime in.

Come on by today's show and give us your suggestions of anything that Chuck and I are missing. Go ahead, Chuck. Well, I just really appreciate it and I really think you hit the nail on the head when I said start a business on the side. Maybe they could use the benefit of like one guy slept in his business and he wasn't realizing too much income from it but he had a normal job so his business was on the side and then he was able to defer it and then I think his kids are a majority age so then he's starting to reap the profit from it and then be able to do a career transition.

So it's a delayed gratification and long-term planning which is what I try to talk to people about rather than the short jab that gets you in trouble. Yeah. Well, keep it up. I mean the biggest challenge is that the men and women with the highest divorce rates are usually in the lower class and they're often the ones who struggle the most with financial planning, the ones who struggle with business and that's kind of really sad.

I don't know how relevant some of this is going to be but I applaud you for seeking to help these men and I would encourage – as again, I'm sure you'll agree. The primary interest here that we need to look – be careful for is to protect – we need to protect the innocent party and we need to protect the person who's most helpless and most defenseless which is the child.

So I do appreciate your counsel to the man to say giving more money to your son or daughter is probably not going to materially change their life. But giving them the love and the care and the focus and the attention and the time and really seeking to care for them even though it's difficult when you're far away, that will make a big, big difference.

A lot of times I agree with you. If I've got a 13-year-old, I'm not going to say how much more money can I – how much more time can I put into business. I might just simply say, "You know what? For the next few years, things are going to be tight.

But I'm really going to do everything I can to build into the life of my son or daughter during this very important transition period of childhood to adulthood and I'll pick up my own personal financial well-being in a few years." I think that's important to recognize. All right. Let's go on to Matt in North Carolina.

Matt, go ahead and let us know your question or comment and let's see how I can serve you today, please. Matt Thurston, Chief Financial Officer, Alphabet and Google Hey, Joshua. Thank you very much for the chance to be speaking to you again. A lot of times when I'll listen to you talk to callers, you'll just have some very kind of quick and good consulting ideas from a business standpoint.

One of the things that I've been working on is organizing a branch after FinCon. I'm looking forward to going to that for the first time in 2017, just for some of the folks who've been helpful to me in my own, I guess, personal finance blogging journey. Certainly, as you know, you're among that crowd.

I wanted to ask, essentially, kind of besides the meal, which will be delicious, do you have any special ideas to make this more interesting and valuable to the folks that I hope will join me? For example, in the case of each of the invites that I've made, I've offered folks the chance to bring guests or things like that, but I'm wondering if you have ideas about ways to go beyond that.

And then secondly, one of the things that I'm hoping to do with this is maybe use it as a chance to gain some additional visibility for my blogging work. And in addition to what I hope will be some of my, I guess, guests who can join me, will be to do some giveaways of spots at that event through my website.

So I didn't know if you had any thoughts on adding value there as well as combining kind of the marketing element with that thank you brunch, which is sincere. Right, right. Interesting. I'm kind of feeling flat-footed at the moment. So I'll just tell you, yeah, yeah, it's an interesting question and I want to give you something helpful and I appreciate your heart and even your service.

I think that probably just from my perspective, having – I'm kind of in this in-between world where I'm not unknown, but I'm also not a major celebrity. I guess my thought is this. So conferences for somebody like me, and I would use that as an example because obviously that's the question you're asking, or other people who are in the middle tiers of a profession.

Something like a conference can be a very exhausting experience. It's really, really tiring because the primary reason that I go to a conference is – or let me rephrase. The primary reason why I go to a financial conference, something like a FinCon, is to be available to my audience, to be accessible to my audience because the most important people to me are my listeners, the people who tune in.

And I want to make sure that I do everything I can to be as available as possible. And it's really hard to do that on a private basis, although I try really hard. Even last week I had dinner with a couple of listeners who came to town. But at some point in time, I always have to put borders around my schedule and make sure that my family comes first.

And I just have to turn off the email, and I feel bad that I can't respond to everybody, and I feel bad that I can't do it. But it's just the way it goes. So conferences can be very tiring and very kind of emotionally draining because it's constant. It's from breakfast through the whole day and through the evening.

And it's also challenging because somebody who's at a conference often has a lot of commitments and engagements. If someone has a – they're speaking, they're having a meetup with their audience, their listeners, I try to do that. I try to be very accessible to my audience, have meetups or breakfasts or things like that.

And so it's just challenging. The scheduling is really hard. And if you're doing podcast interviews or TV or YouTube interviews or whatever, the scheduling is really hard. So I think anything you can do to provide a little bit of a respite from that that also brings value is really cool.

And probably the biggest thing that I would say, the biggest thing that would be exciting to me is something unique that's small, that's intimate, but that's a unique activity. And when you go to these meetings, it's just as simple. When you go to a FinCon as someone like me, a podcast host, from morning till night, it is – from morning till night, it's events.

It's a breakfast thing. It's a lunch thing. PT, the founder of FinCon, does a great job of providing lots of food. He does a great job with that. So there's plenty of food available. In the evening, all of the companies and the vendors make offers to go to various parties and cocktail parties.

There's plenty of free alcohol. There's plenty of all of that. What I look for is – and what I notice that nobody really does very well – is something unique. So get out of the cocktail circuit. I'm not a big drinker and I don't drink it when I'm in public and in situations like that.

And it's just very exhausting. But if you told me, "Hey, let's go skeet shooting," or "Let's go and do this ATV ride," or something unique like that, to me, that would be something that would quickly go to the top of my list. So obviously, you have to balance this financially with the invitation that you make.

But if you told me and said, "Hey, Joshua, listen, there's a skeet club," or – where is FinCon this year? Is it in – it's Texas, right? Dallas. Dallas. So you find some local gun dealer who has a class three license and says, "Hey, man, we can go shoot fully automatic rifles and they got a full auto Glock." I mean, there's no chance in the world I'm saying no to that.

Now those are kind of guy things that really appeal to me. But that's what I would do. If I were in a situation like that, I would rent a room. Instead of doing a dinner at a hotel where it's in conflict, I would set up – and I might do it in the middle of the day, like a lunch because oftentimes a lunchtime thing – many times people like me – I used to go to all the sessions.

But at this point in time, I get so tired and I don't go to all the sessions. I go to a session where I have a friend who's speaking or somebody who's maybe – I go to the keynotes, things like that. But if you look on the schedule and you pick a time that's not during a keynote and when there's not a lot of other presses, when there aren't a lot of other meetups, and you put together a small group of people who might like to know each other, which is the basis of connection, which you're already doing, but you try to figure out who would this person – who do I have in my network that I can introduce these few people?

Then you put it on a fun activity. Man, that would be how I'd approach it. Texas, there's got to be some gun ranges or some ATV rides or something cool like that. To me, that would be the biggest thing. That would also be fun because when I go to a conference, I almost never do any kind of tourist things.

I fly in and I go to the thing and I fly out. I just want to get home as quickly as possible. Scheduling a tourist event like that I think would be – that's the best I got for you. Yeah, cool. I very much appreciate the thought. Awesome. Let me know what you wind up with and we'll look forward to it.

I think you emailed me at some point. I don't think I ever responded, right? Is that where we were? That's true, but I wasn't going to call you out on the air about that. Take a look. There's a second idea in there that might be of interest to you that I won't share on the call.

I'll look for that. You got time for one more or are you two jammed up? Let me wait for next week. I want to take one more caller from another Matt in Tennessee and then call back in with you next week. All right. Cool. Thanks, Matt. All right. Let's go to another Matt or Matthew in Tennessee.

He'll be our last caller for the day. Go ahead and let me know what's on your mind and let's see how I can serve you today, please. Hey, Joshua. Thanks for taking my call today. I actually might have to drop off after I ask the question because I've got to run to a meeting here, but I wanted to go ahead and ask it and I might actually have to get the answer on the podcast tomorrow.

I just want to give you that heads up in case you tried to have some dialogue or something and you didn't get anything back. Just imagine that I am your financial planning client and we're having a discussion primarily around the investment management piece of financial planning. What would you say to educate me on why it's a good decision on going with DFA funds over like a Vanguard index fund?

I know in previous podcasts you said that DFA does a good job of keeping hot money out of their funds, but what are the other advantages of going with DFA? Yeah, that's simple. DFA does a good job because DFA funds are only sold through financial advisors. They do a good job of keeping hot money out and that's big for them.

They focus heavily on training financial advisors to train their clients and hot money means that the clients come in and go out. One of the major helps that a financial advisor can provide to a client is helping them to stay invested and that helps the fund manager to be able to do a better job when he doesn't have to go and sell investments all of a sudden and they can take advantage of some of the little things that DFA focuses on to take advantage to possibly improve their returns just a little bit.

To me that's the biggest thing is that DFA does a brilliant job of bringing together the basic ideology of passive investing, indexing, passive investing and marries that into a package that the financial advisor can use and really serve their client. The financial advisor is not in competition with the internet and that's really helpful.

I think that just their focus on a financial advisor, their focus on keeping costs down, their focus on trying to tweak some of those little investment things that they do because of the benefit of going through an advisor, to me that's the biggest benefit. Is one better than another?

You have to read their literature and judge that. I can't know that but when I was looking at them I really appreciated that they were focused on advisors, not going direct to the client and I felt like there was a lot of value there that I would be able to help my clients understand.

Got it. Thank you for that explanation. Sure. Anything else? Yeah, just real quick. This is more about your personal finances so feel free to divulge whatever you feel comfortable with. I know that you've been trying to build a business over the past three years and I'm curious what personal planning have you done to capitalize on these early years of building a business?

For example, have you completed any traditional IRA conversions to Roth during low income, low tax years with the business or any other planning opportunities that you went through? I've got to decide what I'm willing to talk about publicly. It's so hard because I've lost so much of my own personal privacy since starting this show.

It's so hard to decide how much to talk about publicly and what to do because I really hate to lose much more privacy. Here are a few things that I have done. In a business transition, I took a massive cut to my income. Yes, I have focused on taking advantage of every opportunity that has presented itself to me because of the massive cut to my income.

I've focused on – I actually took some of my – I closed some of my traditional IRA accounts. I didn't do conversions. I actually closed some of my – just a small – one or two small ones, previous accounts because I have become increasingly convinced that I don't want to play the game with the IRS – with the US government in the IRA world.

I haven't gone to the point of saying, "I'm never going to open one again." I haven't gone and said, "Oh, I'm never going to deal with this." But when I look more and more and more, the whole scheme of put all your money into mutual funds and retirement accounts, it just doesn't work well with the major benefits of investing for an individual.

I think it's really wise to invest where you have an ability to compete really well. I'm a big guy. I'm 6'5" and over 300 pounds. I'm not going to go into a world where I'm investing with jockeys to try to ride horses. But I may go into a world where my size is a natural advantage.

I see the same thing with regard to investing. It often feels very lonely for me because I feel like I got to take on the whole financial advice industry with this question. I often question myself of am I accurate in my understanding? Am I accurate in my discussion? It's really hard because taking some of the opinions that I've taken forces, puts me up against things that I previously said and talked to clients.

But I just don't see people winning because of IRAs and mutual funds. I really don't. Not that you can't win. There are people in this audience who are winning. Not that you can't win. But we had the call earlier from the guy who had $34,000 in his various mutual fund accounts.

If we were to go back, and I don't know anything more about Guy other than that fact, but my guess is that he's a man. He's got a family. That $34,000 is a big deal to him. If I were to go back and try to think what could we do with that $34,000 that would be more productive than buying growth stock mutual funds inside of IRAs and other accounts, I got to imagine at this point I could come up with a whole long list of things that I think would be better uses of the money.

I really do. The big challenge that I face in trying to figure out how to do this is to look at it and say, "You got to know someone's background. You got to know their interests. Are they suited for business? Are they suited for entrepreneurship?" For me, I'm willing to say that.

I cashed out some of my retirement accounts because I was able to get my tax burden low enough that the 10% penalty was lower in terms of a total effective tax rate. The 10% penalty was lower than what the tax rate would be in the future and I was able to transition some of that money from under somebody else's control to under my direct control.

When I look at the business opportunities in front of me and the things that I'm concerned about and the things that I'm interested in, not so many of them can be done within an IRA. Not so many of them can be done within a retirement account. So that's a big deal to me.

Given the fact that investing with retirement accounts, it's not the only tax break. It's not the only thing that you can do. When I look at the goals that I have, I'm finding more and more that I want the flexibility of business. The other thing that I have done is I have – I guess the other thing I'm willing to talk about is that I've become much more conservative as a person because of the unique risks and the unique risks that I face going forward that are different than some other people.

I've become much more conservative. I think about the aggressiveness and here I'm not talking about asset allocation conservative. What I mean is when you look at the – how aggressive you want to be versus how conservative you want to be, it's really valuable to look at the whole situation.

Because I have more business opportunities, which if I can figure out how to make them work, that's a big challenge. If I can figure out how to make them work, they have more – they have much more unbounded growth opportunity. That's caused me to be more aggressive with – sorry, more conservative with other areas of my life to offset that risk.

It probably doesn't make a lot of sense if I don't give specifics but I don't think at this point in time that I'm willing to give any more specifics than that. Just to say that what you hear when I talk on the show, what you hear from me is I don't make anything up.

It's all – you can hear and you can hear some of the challenges that I face and things. So I have sought to make intelligent financial moves all along the way based upon the unique situations – based upon the unique circumstances that I have, the unique advantages and benefits that I have.

I have sought to do that all along the way and practice what I preach. Maybe in the future I'll talk more about them. But when you're in the middle of stuff, it's not a good time to talk about it. I'd rather keep my privacy. That all sounds very skullduggerish.

That's it for today's show. Thank you all for calling in. Great number of callers. I know that I turned away about a half a dozen of you. Just you got to get on the line early. So if you'd like to participate in a call like this in the future, please join as a patron and also consider joining my email list at RadicalPersonalFinance.com.

Don't forget about sending me a voicemail feedback of what you've done and the changes that you've made in your life based upon Radical Personal Finance over the last few years. Go ahead and send that to me at Joshua@RadicalPersonalFinance.com. What you do, take your phone, navigate to the voice memo function on your phone, go somewhere quiet and record just a quick about two or three minute discussion of what you've done differently because of Radical Personal Finance.

Then email that to me, Joshua@RadicalPersonalFinance.com. Send me that over as an email for episode 500. I am going to sync all of those things together and publish it as a show just to hear other listeners. I'd love to hear that. Also while you're doing it, please send me a picture of you and your family if you're willing.

I'd love that. It's not going to be published. It's just for me. I'm making just a little computer slideshow that I can look at and I look at it while I record my show sometimes. It helps me to visualize who I'm talking to so I make sure that my tone is appropriate and that I really can see who I'm speaking to.

I'd love for you to do that. Thank you to those of you who have sent me that. Other announcements. I think that's it for today. Join the Patreon program, RadicalPersonalFinance.com/patreon and I'll be back with you on Monday. Bye. This show is part of the Radical Life Media network of podcasts and resources.

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