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That's FijiAirways.com. From here to happy. Flying direct with Fiji Airways. 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 and I am your host. I am your fellow journeyman, fellow voyager down this path towards financial freedom. And I want to share with you some things that I have found useful in my own quest for financial freedom. Specifically today, I want to talk to you about the number.

But I want to talk to you about the number in a way different than usually this subject is addressed. Most commonly when people think about the number, they think in terms of how many millions of dollars do I need in order to be financially independent. There's a place for that.

But the trouble is we have a hard time conceptualizing millions of dollars. Very few of us have ever seen a million dollars. We very rarely held a million dollars in our hands. Very rarely do we have the ability to grasp what the time and the effort were that were needed in order to accumulate a million dollars.

And so most commonly this millions of dollars number floats into your brain, usually at the input of some financial advisor or some financial writer, and then it floats right out again because it is a number that's hard to grasp. Well, I'm a simple man and I like to keep things in a way that I can grasp.

So here's something that I have done over the years. I've taken my numbers and I've translated them from millions of dollars into the smallest unit that I can conceive of, the smallest practical unit. For me, that most useful number has been daily expense. Certainly there's a place for monthly expense and annual expense, and I use those all the time when I do financial planning.

But a daily number is really interesting because it comes and goes every day. Number of years ago in my own quest towards financial freedom, I sat down with a spreadsheet and I took all of my expenses and I consistently built a column in my spreadsheet that would translate those expenses into a daily number so I could look at them and analyze them.

Let me give you a simple example. How much does it cost you to house yourself and your family on a daily basis right now? Pause for a moment and think about how much it costs to house you and your family on a daily basis. Let me give you an example.

Let's assume that your rent payment is $1,800 a month. That would be, that's about the median rent where I live. Your area may be higher or lower, but let's just use $1,800 a month. I like to divide by 30, so take $1,800 and divide by 30 and you come up with a number of $60 per day.

So it costs you for your rent payment $60 per day. Now of course you have other utilities that are associated with your housing expenses. Perhaps you have an electrical bill. Perhaps that bill is $150 per month. Well if that's $150 per month, then your electrical bill is $5 per day.

Perhaps you have a water bill that's also $150 per month. Well if so, then you're paying $5 per day for your water bill. Perhaps you have a utility, a cable bill, an internet bill, and perhaps that bill also, everything combined is $100 per month. Well now you know that your daily cost is $3.50 per day.

You can do this with any other numbers that you have. For example, if your lawn service is $100 per month, well now you know it's a little under $3.50 per day, and you go down your numbers. But let's just stick with those four simple numbers that I've chosen. In fact, I'm going to round up.

I'm going to say that your TV and your internet comes out to be $150 per month, so that's an even $5 per day. After all, audio math is generally better when we do $5 numbers instead of $3.33. If you add that up, your rental cost per day is $60 per day, your electric cost is $5 per day, your water cost is $5 per day, and your TV and internet is $5 per day.

Totals $75 per day. $75 per day is what it costs you to live there. Now there are a number of ways that you can take this number and you can expand on it. So you could look at your income and you could say, "How many hours of work does it take me to earn $75 after taxes?" That's a useful thing to know.

But you can also take this and look at it and say, "Well, how could I replace that $75 per day?" As an entrepreneur, I've often found it easier to think of ways to make $75 per day than to save the large number that I would need in order to pay for the $75 per day from investments.

That number would be about just under $700,000. I think this also shows my own personal bias towards entrepreneurship as a path towards freedom. Not that entrepreneurship is easy, but most experienced entrepreneurs would say that it's easier to figure out a way to earn $75 a day from a reasonable, pleasing business that adds value to your neighbors than it is to work and save just under $700,000 to provide for that with investments.

But here's what I want to home in on. If you think about the number in terms of $75 per day, let's assume that you can square away the income. How could you arrange your lifestyle to get the most value from that $75 per day? What could you do? This was a calculation I did a number of years ago when I first thought of taking an RV trip.

I announced on the show a number of months ago that my family and I are going to be heading off on an extended tour of the United States. We were delayed a few months beyond when I intended to leave, which is why I've been quiet about it on the show, but we are leaving here in June.

In very short order, most of our house is empty, most of our stuff is gone, we're storing most of our things on Craigslist. And so in very short order, my family and I will be on the road and I'll be speaking to you from the road. And I'll share with you a little bit more about that journey along the way.

I'm not going to turn Radical Personal Finance into the RVing the United States podcast, but I will try to share with you some of the experiences to tell you what I thought before the trip and what I've learned from the trip. But the financial feasibility of this lifestyle is really compelling if you stop and think about it on a per day cost.

Here's the major problem with going on vacation. All of the costs of vacation are added to your normal monthly budget. So most people have a housing budget of $75 per day, their rent, the utilities, etc. And if they go on vacation, that $75 per day doesn't disappear. It stays the same, except it gets all of those vacation expenses added to it.

So now we add hotel expenses, say $150 a night. You add eating out expenses, say $75 per day. You add entertainment expenses, other various expenses, and all of a sudden you're at $250, $300 per day. Which is where the average family then says, "Well, I can afford a 10-day vacation at $300 per day, and that's a total of $3,000.

There goes my vacation budget." But if you just simply swap one set of $75 per day expenses for a different set of $75 per day expenses, all of a sudden now you can live a different lifestyle and experience financial freedom. And you don't have to wait until you have millions of dollars in the bank.

You just need to figure out how to solve that $75 per day nut. Now let me give you an additional example. Let's say that you were renting in the circumstances that I discussed, and you had no money, no assets, but you were just looking to live a different lifestyle on a $75 per day budget.

How could you do it? Well, you could approach it with the RV lifestyle. This is of course what many retirees do. There are many people living on Social Security as their only income source, living in RVs. And many people who dream of retirement talk about traveling. It's a major dream for most people.

Whether it is for you, doesn't matter. You insert your own dream. But at least understand how it can be done. The average cost to stay in something like a national park comes out to about $30 a night if you stay in a national park or state park campground. Sometimes you can find them for 20, sometimes you can find them for more, but about 30 bucks a night.

If you stay in private RV parks, it becomes a little bit more. What you get for that fee, that $30 per night, is a place to park your rig, an electrical hookup, a water hookup, and a sewer hookup. So you could look at your at-home electric bill of $5 per day, and you could look at your home water bill of $5 per day, and you could look at your home TV and internet bill at $5 per day, although the internet in most RV parks is pretty bad.

And you could say, "Okay, well, there's $15 per day to stay at home. That's half of my $30 per night cost to stay in a national park. What about the other half?" What's a place to park your rig so you need something to sleep in? Let's assume for a moment that you were just going to stay in parks, and you just needed something to sleep in.

So you went and you spent $30,000 on an RV, and because you didn't have any money, didn't have any assets, you borrowed the full $30,000, and you have a monthly payment now of $350 per month. Well, $350 per month divided by 30 comes out to a little under $12 per day.

Maybe you need something to tow that with. You bought a trailer for $30,000, and you need something to tow that with, and so you buy another tow vehicle, and it comes out to $12 per day. Well, now look what you've done for yourself. You have $24 per day of vehicle payments, and you have about $30 to $40 per day of RV park payments, and now you're right at about that $65 per day, $55 to $65 per day number for RVing.

Very similar numbers to staying at home, but by looking at it under daily cost, you're substituting your own personal expenses and just simply changing the nature of them. Now I'm not advocating that you do this plan. I recommend that you don't borrow money for a trailer or a vehicle, but you got to say at least it's probably better than what most people do.

After all, if you're paying rent, it's a complete cost. If you're making payments on an RV or a boat or some other form of living accommodation, at least possibly you own something and you have a little different lifestyle. I don't think it would be a crazy decision to make.

I personally would do it on the cheap, and I would use the money I had because if you do that, it all of a sudden changes everything because now your daily costs can plummet, and you don't have to stay in RV parks. You don't have to stay $30 a night.

There's some people that never pay for a place to park their RV. You have to invest in infrastructure. You'd invest in your own power systems, your own waste disposal systems, et cetera, and you can do the same thing on a house. You substitute a monthly payment for infrastructure equipment that handles that need.

But calculate your dollar per day cost. Now you can do this in other ways as well. One of the interesting stories I heard a number of years ago, I read a profile of a very wealthy man. I forget how he made his wealth, but he was extremely wealthy, but he also had a bent towards non-consumption or towards a form of minimalism.

In short, he had seen how the ownership of many items didn't become a blessing. It became more of a weight. And so this mega wealthy man lived full time in luxury hotels. That was the decision that he made. He only stayed in luxury hotels and he just substituted living the luxury hostel lifestyle for owning houses and apartments and things like that all around the world.

Well, if you actually run the math on that, it can be a pretty powerful proposition. Staying in hotels full time, even at retail rates in luxury hotels. Let's say you're spending, I don't know what luxury hotels cost in your neck of the woods. Of course, they could be thousands, but let's say you're spending $300, $350 a night.

Multiply that on a monthly basis, that's only, that's $10,500 a month. Certainly that's a luxury lifestyle, but that luxury hotel cost includes your place to stay, your bed to sleep in, your maid to clean things up, your groundskeepers to keep the place looking beautiful, your electricity costs, your water costs, your internet costs, et cetera.

It's all in. You're just substituting one set of daily expenses for another set of daily expenses. Isn't this useful to you? So here's my charge to you. Take this idea and sit down with your own monthly budget. Work out what your dollar per day cost is. And then ask yourself, am I happy with how I'm spending this?

Don't worry about the millions of dollars that you need. Just look at the daily costs that you need. You can solve millions of dollars later. But today, just work on the daily costs. What could you do to provide for yourself an income so that you can live on the per day structure that you find most helpful?

Sit down and figure out what those numbers are because all of a sudden, the payments that seem so small on a monthly basis, when you put them on a daily basis, all of a sudden I have found that those payments are much more significant. Many people will spend without thinking much about it $100 a month on something like a phone.

Well, that would be a normal expense for many people. But I don't know about you, but I always think twice about handing over a $5 bill. It's not that I can't hand over a $5 bill, but if I were handing over a $5 bill every day, 5 times 30 would come out to be 150, so just using round numbers again.

If I were handing over a $5 bill every day, all of a sudden I would pay attention. But I'm less inclined to pay attention to that monthly number. Sit down, look at your budget, convert your numbers into daily expenses, and analyze that data and see if you are happy with how you're spending it.

Thank you for listening. You've honored me with your time and attention, and I'm grateful for that. And I hope that I've effectively served you today with some ideas and strategies and tactics and techniques and tools that will help move you towards your goals. Before you go, three simple requests.

1. If there's an idea that's been helpful to you in today's show, make a plan to take action on it. Listening does lead to learning, but learning in and of itself doesn't automatically lead to a life change. It's action that leads to a life change. So take action. 2.

Take something that was helpful to you in today's show and share it with somebody that you care about. I'm depending on you to be a co-laborer with me in helping me to propagate the message that I'm seeking to share. That helps the person that you are engaging with, and it also helps you because teaching others is one of the most effective ways for you to learn and for you to cement your learning.

3. If there's an idea that's been specifically helpful to you, and if you're gaining financial benefit from Radical Personal Finance, I'd be grateful if you'd consider paying me for this work voluntarily. Come by RadicalPersonalFinance.com/patron and you can sign up there to support the show at whatever level you feel is right for you.

This is a voluntary support. That's my Patreon page. You can support me with $1 a month, $5 a month, $10 a month, any number that seems right to you. But if you're gaining financial benefit from this show, and if it's achieving financial results in your life, I'd be grateful for your financial support at RadicalPersonalFinance.com/patron.

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