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That's FijiAirways.com. From here to happy. Flying direct with Fiji Airways. It's Friday. That means live Q&A. 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 most days on Radical Personal Finance. I speak into the ether, right into your ears without getting to hear back from you. But on Fridays we open up the phones and I get to talk to you, a real live person. Each Friday that I can arrange the technology in order to do so, I host a live Q&A call.

This works kind of like talk radio where you call in and I answer the phone and we talk about anything that you want to talk about. These calls are open to patrons of the show. You can find out more information about how to become a patron at RadicalPersonalFinance.com/patron. But I would encourage you if you would like to talk to me, ask me questions, discuss anything about your personal situation, this is the place to do it.

I love doing these. I know from many of you, you love hearing them. So today we begin with Greg in Pennsylvania. Greg, welcome to Radical Personal Finance. How can I serve you today? Hello, Joshua. I was excited to be here today. Just wanted to kind of run through some numbers for financial independence and just talk about that and see if I'm on the right track.

I love the topic. So tell me about your situation. Well I am 48 years old and I'm married with two young children. One is eight and one is six. And my wife is a few years younger than me. She's 46. Okay. What we, let's see, we, I guess what I'm trying to just kind of determine is I keep crunching numbers and really kind of thinking about financial independence and make sure that I am going in the right direction with all that and that the path is clear.

What's the best way to ask these questions? I'm sorry. How much money do you have? How much money do I have in my pocket? No I have for retirement, sorry, let me just click this here. So in retirement savings, I have about $790,000. Okay. And let's see, I, yeah, and I have a small mortgage.

It's under $100,000 at this point. And really no other debts, just monthly credit card debts that I pay off as I go. How much is your house worth? Probably about 400. Okay. Do you have any money or investments that's not represented in your house or in your retirement accounts?

I do. I have, let's see, probably about $200,000 outside of that. $100,000 of it I've kind of earmarked for college savings. And I've already probably have about $30,000 in 529s. Okay. And the remaining $100,000 is just invested in stocks? Yeah, in cash and yeah, cash and I have like kind of a personal loan out to a business and things like that.

So all told, your investment assets between your retirement accounts and the $200,000 other are about a million dollars and you live in a house worth about $400,000. How much are you earning currently? Our household income is about a hundred. And how much do you spend every month? Five to 6,000.

That includes our mortgage, that includes paying towards like an IRA, IRA contributions. So taking out IRA contributions, you're just telling me the expenses. How much are your monthly expenses? I'd say $5,000. Okay. Because I've often thought if I was right now, if I was to reach a financial independence, if I was spending what I needed to and my house was paid off, that I would probably need about $50,000 a year is what I think.

So if you had a house paid off and you had an income of $50,000 a year from your investments, what would you do with your life? Well, that's part of why I'm calling Ask because I'm currently working in a position I get to really do what I love, but it's very kind of gig oriented.

So it's not a, I'm not a W2 employee. I get to run through kind of my own business and serve people as they need it. And as I'm able to find this business, but it's not every day, but it pays really well and I really love it. And it also gives me a lot of free time now to do a lot of things that I like.

So it's a good situation. My spouse is the one that has the more formal job, a corporate job and brings the benefits home and things like that. So it seems like we're, we have a really good kind of pairing right now and I would continue to do what I'm doing for as long as I'm interested in it.

And I could see that growing in the future as well. So I guess I'm not too concerned about that part of it, but I would think, you know, if my wife could kind of cut back from her work in the near future, maybe, you know, so that her life was a little more enjoyable for her.

Does she want to cut back? I think if I think that the conversation would be easier if there was a, you know, a very clear path and she understood that that's a good option. I think we need to address the benefits such as the healthcare. You know, that's something important from her work.

But I think she would enjoy cutting back a bit and, you know, doing things she likes more than this. But I think she's also very satisfied in her job at this time as well. Last year, how much revenue did your business bring into your household? After my expenses? Yes.

Yeah, so about 20, 25,000. Could you increase that number to a higher number? Yes. About how much could you increase it to? I can definitely double that in a year, I'm sure. If you were to double it, would you still continue to enjoy the work, the business, the doing the gigs that you're doing?

I'm afraid if I if I went on beyond doubling it, then it would would seem like a bigger business than maybe I would want to do, because it does involve traveling and, you know, just going around the country and things like that. So I would I would think that that would kind of take away from some of this, because then I'd be away from home a lot more and not with the family and things that I do value greatly now.

How much longer do you and your wife want to continue to live in the house that you live in? I am confident this is a forever home for us unless we were to downsize after the children were gone. Would you want to downsize after the children are gone? If I made that decision, I would probably find something that was more simple and was lower cost.

But I love this house. We're in the perfect location, so it's not something that's on my radar now. So in my assessment, you are now financially independent, at least to a degree. You are not financially independent such that you never have to work again the rest of your life.

But I don't use that as the beginning point. I use that as a nice kind of end benchmark. But I consider you to be financially independent at this point in time. And here's how I would explain that. There's no decision in life that you couldn't make at this point in time.

You could change jobs. You could change businesses. Your wife could change jobs. She could change businesses. You could move. You could sell your house. You could move. You could do anything you wanted with your children. You have enough cash available to you to make any decision that you want.

So you should now begin to operate from the perspective of financial independence. Now, of course, one of your concerns is, well, I have to save for retirement. And that's fine. That's laudable. But you are 48 years old and you have already saved for retirement. So let me just give you an example bit of math here on your retirement portfolio that most people forget about.

You with about $800,000 of retirement savings are in the top few percent of U.S. American households in terms of wealth. The vast majority of U.S. American households have nothing saved and have nothing saved for retirement. You're a millionaire. You have a lot saved. And so you should start thinking like a millionaire, thinking like someone who has a lot saved.

Pretend today that you never saved any more money for retirement and you just started with what you have right now. So let's put that into a financial calculator to $800,000 of investments currently. I'm just going to change it to negative. I can't run a calculator these days. OK, $800,000 in to your investments.

Let's put in a 20 year time horizon taking you from 48 to 68. And Greg, what rate of return do you think that you will earn on your investments in the next 20 years? Well, I never put the 11. I usually put the 5 just to be conservative. But I think realistically it would probably be around a 7 or an 8.

I'm comfortable with using 7, right? So let's use 7, be a little bit conservative. And no further contributions to that account. So that would put you in a situation where at 68 years old, beginning with $800,000, if you could earn 7% per year over the next 20 years with a current value of $800,000 with no further contributions, you could expect your retirement portfolio at age 68 to be worth about $3 million.

The retirement calculator, the calculator says $3,095,000. So about $3 million. Now at age 68, would you be comfortable with having a portfolio of $3 million? Absolutely, because I feel that that kind of target financial independence number for me is less than that. So yeah. Okay. So now we've assured that at 60...

We've not assured, but there's a good chance. We've used fairly conservative calculations here and we've squared away retirement. So at this point in time, the goal is... The trick is to say, how can we plan for the next 20 years? Now if I take from you and I say to you and your wife, you are not allowed to save any money at all for the next 20 years, but you can't spend any money at all from your investments for the next 20 years.

Do you think... Well, let me rephrase. You can't spend any money from your retirement account. You can spend the other $200,000 if you need to, but you can't spend any money from your retirement accounts in the next 20 years. Do you think that the two of you could figure out a way to live a lifestyle that you would love and to pay for that lifestyle from your earnings?

Yes. And I think maybe that would have been a better way for me to phrase my question in the beginning, Joshua. I'm kind of curious if we spent the next four or five years adding to that retirement and paying down that mortgage. And then when we got to that point, then suddenly saying, okay, we just need to earn enough to pay the bills and forget about the savings and those other things.

And then suddenly our expenses are more like $4,000 a month. And we go on and do work that we love to earn that 4,000, not ever touching that nest egg until later down the road. Yeah, that's what I would do. I would add one more wrinkle. I think you should consider things in two ways.

First, I think that you should think of things in terms of this 20-year time horizon, because 20 years puts you at about Social Security retirement age. My hope is that you would never stop being productive and financially productive. My hope is that you would never retire, but I know you'll want to be in a position where you would feel like you could if you wanted to.

So at 68, you want to have a retirement portfolio. You're going to have that $3 million. You would have additionally potentially Social Security income of some amount coming in at about that age. And that's enough of a time horizon that you could legitimately look forward for that 20-year period of time.

Now, I would additionally encourage you, based upon the age of your children, to think of the next 20 years almost in two separate 10-year chunks, because you're in a very crucial age with your children. They're eight and they're six, which means that your input as a father really needs to happen for your eight-year-old in the next five to eight years, and for your six-year-old in the next seven to 11 years.

That basically, by the time your children are about 13, you need to have put into them the vast majority of the fatherly input that you're going to put into them. Because by the time they reach age 13, that's when they start transitioning to adulthood. That's when they start transitioning into adolescence.

That's when your role as a parent changes. At this point in time, you are a parent. Now, you'll always be a parent, but your role from about age 13 to, say, age 20, will change more into the role of a coach rather than a hands-on parent. And your relationship with your children will also change in terms of the time that they have available and the time that you are able to spend with them.

That relationship will look very different at age 9 than it does at age 17. So you're in that crucial stage in the next decade where your children are still in the child phase. And I would encourage you to say that this next 10 years should look very different than the following 10 years.

Because 10 years from now, you'll have an 18-year-old and a 16-year-old. At that point in time, if you want to move and sell your house, you can easily sell your house, move into a beautiful one-bedroom condo on the lake or wherever you want to live. You can easily make any decision that you want to.

But you should think in terms of the next decade and your role as a father and your wife's role as a mother, and then the following decade at which your children will be more independent and you'll be transitioning into that empty-nest phase of life. Those plans are probably going to be different.

But if I had to choose, I would rather see you taking more time in the next decade, less time for work, more time with your children, doing whatever those adventures are that you have planned for your children, focusing intently on teaching them, on instructing them on the way that they should go, and then do that in the next decade.

And then in the following decade, that's when, you know, ramp up the business. Go ahead and start a new one. Do whatever you're going to do in that next decade and commit that, you know, from years 10 to 20 from now to heavy work or launching a totally new project, whatever that is.

Does that make sense? Michael O'Hara, MD, PhD It does. It does. I enjoyed hearing that part because part of me wonders, well, you know, is it okay for me to not be out there, you know, hustling like crazy now? Because I do value that time with them and I do, you know, it serves a big function for my family, my flexibility and time too, which is great.

So it's something I'm not wanting to give up at this time because I do see a lot of people that don't have that opportunity to quite be there as a father like I do at this time. You mentioned that your work involves travel. Do you take your children with you?

I'm not afraid to, but it hasn't worked out like that. Typically I try to really push the extremes of the travel to get there and back as fast as possible. And I don't usually stop and smell the roses too often. Of course. So I just would encourage you, one thing to think about, and then let's go to one more specific that I want to talk with you about.

But I would encourage you, the most important thing that your children need at this stage of your life is to be with you. They need you to teach them how to live. They need you to teach them how to interact with others. They need you to teach them how to treat other people, how to build business, whatever it is that you're doing.

Your children need to have that interaction with you at this stage of your life. And they're in a perfect phase for you to be working together with them. So I wouldn't view it as either or. Whether you work like a maniac or you spend all your time just hanging out with your kids.

I don't see a lot of value. I see some value in having time to hang out with your children. That's fine. But if you're just focusing on hanging out with your children, what are you teaching them? They're not learning anything other than that life is about hanging out. And I deny that.

I don't believe that life is about hanging out. So what I would say is look at your families, talk with your wife, and look at your overall family structure and say, "How can we at this stage live a life of integrated family connection where we're involved in productive activities as a family, where those activities can be integrated with our children, not separated?" Because you don't want just your children to learn, well, they go to school and they have all their instruction at school, but then they just hang out with dad.

Hanging out is fine, but working with dad, whether it's building an addition or going with you on your business trips, working with dad, in my opinion, is more valuable than just hanging out. So that's a lot of my philosophy. You take it, you test it, you talk with your wife, see what it is about you.

But I don't think that I would...you are now financially independent. So focus a lot on the next decade and think about how you can discharge this time period of your family responsibility in the most effective way possible with you, your wife, your children, in a way that conforms to your vision for your family.

I want to talk just a moment about health insurance. You mentioned that your wife has health benefits through her job. And so of course, one concern is how to replace that. Are there any other benefits that you have that you're concerned about? Well, I mean, she has a great package for the dental and vision and 401k matches and all that good stuff that comes with a job like that.

And I would say that's the one that seems the hardest to replace would be the health insurance. Is anybody in your family sick? No. So this is a huge pet peeve of mine. You'll hear me talk about it all the time. But if neither of you is sick, you should not labor at the altar of health insurance.

Health insurance is designed to protect you from a catastrophic illness. But statistically, if neither of you is sick and neither of you has a catastrophic illness, then chances are that health insurance is not going to be a huge factor for you. That would be different if you had a problem, had a physical problem.

Good friend of mine is in very bad physical shape, all kinds of medical issues. And he works at a job for the government and he works there exclusively. He doesn't need the money, but he needs the health insurance coverage. It's reasonable if you have it. But if you don't have it, don't buy into this weird American thing where it's all about working so that you can have health insurance.

You can go out and you can buy health insurance in the open market and you can just simply pay for it and you can plan for it. There are all kinds of you, whether you go with a traditional health insurance policy, after the Affordable Care Act, that market became very difficult.

But my hope is that in the future, more options will be presented. We'll see. We're in this weird in-between legislative stage where some of the requirements of the Affordable Care Act were reversed and some of them were not. Prior to the passage of the Affordable Care Act, you could buy a catastrophic health insurance policy for your family for a couple hundred bucks a month.

Things like that should still be available in the future. There's also health care sharing programs. There are more of those coming on and the average cost there is only a few hundred dollars. And you can pay for stuff out of pocket. Dental insurance almost never works out in a positive sense in the terms of dental insurance is always capped on the upside.

So it gives you a little bit of benefit, but you can also just go to your dentist and just offer to pay them cash and you can get most of the same benefits cheaper by paying cash. So figure out how to earn enough money to pay for health insurance, but build your life and your lifestyle first, beginning with an open slate, and just put health insurance on a list as something that needs to be solved rather than this insurmountable problem that if I don't have a job, I can't get health insurance.

And hey, if that doesn't work, go get a job at Starbucks for health insurance like lots of people do. Anything else, Greg? No, this is valuable. Thank you so much. Begin and build from a place of strength. You are now financially independent. Now act like it. Build your life in the way that fits your vision.

You are now financially independent. And from now going forward, you will have increasing levels of financial independence. But don't buy into this lie that the financial advice industry says that you have to have your $3 million now to be financially independent. You are now financially independent. Even if you just earned $30,000 a year for the next five years and your wife quit her work and she came home and did nothing productive that brought no financial benefit to the family.

And for the next five years, you took $20,000 per year out of your savings so that you could spend your $50,000 a year. Even if you did that, that would be fine. You could do that if that was what you chose to do. And you wouldn't be stupid. You've saved this money for a purpose.

So break it out into reasonable, thoughtful life stages that actually matter versus this monolithic, "I'm either working or I'm retired." That, in my opinion, is a bad formula for life. Richard, in Virginia, welcome to Radical Personal Finance. How can I serve you today? Hey, Joshua. First time caller, long time listener.

I'm a retirement plan administrator by day and a husband and a father by night. I'm in the beginning stages of trying to redo my life insurance. And I do have about 1.5 million of term life insurance already in force. I do have a young child who's three years old and I haven't redone my insurance since she was born.

And my specific question is, I already have an existing relationship with an agent, but he is not able to give me any quotes with any of the mutual insurance companies, to my knowledge. And just due to my position with my employer, I've had the opportunity to informally interview several financial advisors just by way of the company to see what they offer to our executives, but haven't necessarily taken the personal step forward to contacting some of those agents who happen to work for the mutual insurance companies, if you will.

And after listening to several of your old podcasts on life insurance and with your particular work experience background, I was wondering if there really is any value to starting our new relationship with a captive insurance agent or just sticking with my current insurance agent who won't be able to give me any life insurance quotes with the mutual insurance companies.

So, it's a little bit of a muddle because it used to be clear, used to be there were captive agents and then there were independent agents. And some companies only wrote their business with captive agents and some companies only wrote their business with independent agents. That line is a little bit more, it's not as clear as it once was because there are companies that restrict their products only to their own representatives.

And I don't know of any company who does that, whose representatives can't write other products. And there are mutual insurance companies that are represented by independent agents. So it's not, so there are companies that you can buy the policies and they have both. They sell their policies through captive agents and through independent agents.

The first thing that I would do is I would ask your current advisor, your current life insurance agent. If they can become appointed with any of the companies that you are interested in. It would be common that that particular advisor could gain an appointment with some large mutual insurance companies.

There are a number of them that do represent their products independently. The general downside is usually an independent life insurance agent will not be as familiar with the ins and outs of those particular companies' products. If you're dealing with a simple product, like a simple term life insurance product, or if you're dealing with a very simple traditional whole life insurance product, I don't think there's any, that's a danger.

But if you're dealing with a more complex product, a hybrid product where it has a certain number of internal options, there you do want to make sure the agent that you're working with is well versed in the actual product. So to begin with, do you feel like your current life insurance agent is competent and are you satisfied with their service to you?

I would say they do a good job. They don't knock it out of the park in terms of impressing me, but they don't necessarily do anything wrong. He is not a CLU, so I've learned the value of a CLU. And so that concerns me a little bit. If I'm not so much losing out per se, I'm not trying to express that concept, but just is this the best for my family or should I just be keeping with the existing insurance agent?

So that's kind of my concern if you will, working with an existing agent and being independent, what am I losing out on? And then also not being a CLU, how much am I losing in that transaction, not having that certification behind this fellow's name? So here's what I say.

There's no reason for you not to meet with other people. In anything in life, no matter how much you like somebody or appreciate somebody, you want to go ahead and get multiple sources of input, multiple quotes. Now when I was an insurance agent, I of course would have liked it if my clients had loyalty to me and never wanted to talk to anybody other than me.

But the reality is they need to. They need to talk to other people because that keeps me on my toes and that makes sure that they're served effectively. If I'm not serving them to the best degree that they need, then they should be being served by somebody. That's honest, that's forthright, that should be happening.

And the only thing I would always just ask is that if you're working with another agent or if you are taking, you're collecting quotes, give me a shot, give me a shot. Let me compete for the business. All I want is a chance to compete, a chance to bid.

And so I don't see any reason for you not to go ahead and meet with other people, especially if there's an agent that's impressed you, because there very well may be that you'll get better service, you'll get better products, you'll get good and useful ideas. And I think throughout life, we should always maintain an openness to new ideas.

Closed-mindedness is rarely a virtue. Openness is usually a really good course of action on anything. We shouldn't be scared of ideas, whether they're about the large existential problems of life or the simple application of how to do a life insurance analysis. Chances are you will want to keep the insurance that you have in force currently.

A good rule for anybody who has life insurance is you should always be highly skeptical of replacing any insurance coverage that you currently have. Usually an insurance policy that you have will be better than any insurance policy that you could buy. You bought it when you were younger. You probably bought it when you were healthier.

You bought it when it was cheaper. And unless some of those things have changed, unless you've magically become younger, ha-ha, or unless you've become healthier or it's become cheaper because you're looking at a different option, those are the only reasons why you should change. So most likely you should keep all the insurance that you have in force.

That will allow you to make sure that your existing agent is still getting the commissions from the policies that he sold you. And then if a new agent can suggest something else that does help you, that does materially help you, then at that point in time, it's up to the new agent.

That's their job. Clear enough answer? Any follow-up questions, Richard? Richard D. Lawyer, MD No, that's very helpful. That's exactly what I was looking for. I was struggling with reconciling the idea in my mind of shopping around and being loyal and thank you for giving me your perspective. I appreciate that.

Tom Holland In financial relationships and financial sales, a lot of the strength of the interaction is based upon the relationship. I believe the relationship is valuable. I believe there's a value to loyalty to a person. There really is. I think that there are people that I do have interactions with that I'm happy to pay more to, that I'm happy to get a slightly inferior product if such a thing were the case, in order to do business with that person.

So if your answer to me had been, "This life insurance agent is awesome," and there were no hesitation in your voice, then I would say, "Well, just go with them because you're going to get more value out of somebody who knows you than some tiny little product advantage." However, competition is a benefit.

And in order to put that into place, we've got to actually judge the competition. You've got to actually go out and collect the quotes. And going out and collecting the quotes will be important for you to know that you're getting the best deal possible and you're doing the best thing for your family.

And it helps collectively to keep the entire industry of life insurance agents better. If there were no competition, we'd have real problems. So you're doing your part to feed that competition. Kevin in Washington, welcome to Radical Personal Finance. How can I serve you? Thanks for taking the call. I had a hopefully simple question and maybe get your opinion on raising my cost basis in the context of a taxable investment account.

I understand it means paying taxes, but I just wanted to see what your thoughts were upon that. Okay. Tell me more. I guess, what do you need to know? It's kind of an odd question, I think. What investments do you own that you're thinking about selling? What's your cost basis and what's the value currently?

So just index funds, about 780K, possible 250 capital gains. And why do you think, so you're basically referring to the concept of tax gains harvesting. Why do you think this would be beneficial to you at this point in time? Well, I wasn't trying to, I guess, gain anything, but I just wanted to ping the taxes now instead of just doing it later.

Is there any benefit to that, more or less? Do you have any reason to believe that the taxes will be lower now than they will be later? I guess not necessarily. I mean, the tax rate stayed fairly consistent over the last long time. I guess not. All right. So let me back up and just kind of explain the concept, first of all.

So when you own a capital gain asset, you choose when the tax will be due based upon when you realize and recognize the income. So when you choose to sell it. So if you have an asset such as a set of shares of a mutual fund or a piece of real estate property, there won't be any tax due on the property until you actually sell it and realize the gains.

Now, in general, you never want to pay a tax that you can push off to the future. The basic rule is any kind of expense that you can push off to the future, you always should. So if I told you you can pay me a thousand dollars today or you can pay me a thousand dollars a year from now, you should always want to pay me a thousand dollars a year from now because you get the utility of using that thousand dollars today for the next year.

So any expense that we can push off to the future, that should always be our default option. Same thing with any income, any income we can bring forward to today, that should always be our default option. So if I gave you the option of having a thousand dollars today from me as income or a thousand dollars a year from now as income, you should take it today.

So you push expenses out and you bring income forward. That's the default position. Now if I adjust the numbers a little bit and I say to you, Kevin, you're going to incur an expense, would you like to incur a thousand dollar expense today or would you like to incur an eight hundred dollar expense a year from now?

Well now all of a sudden you're going to go for the eight hundred dollar expense a year from now because you get the best deal of time to use the money and it's a discount. Now if I flip it and I say, would you like to incur a thousand dollar expense today or a twelve hundred dollar expense a year from now?

Now you have to do a few calculations and you have to calculate and see, is it worth it to me to take the two hundred dollar discount in order to pay now versus later? So this is just basic planning. Same thing with income, just in reverse. This is basic planning.

So the basic rule of expenses is you push them out to the future and that applies to taxes. There's no reason to want to pay a tax today that you don't have to pay when you can pay it later. So if you were just going to sell your index funds, incur the tax, and then move those index funds back and then buy the index funds again so that you've increased your tax basis in the account, there's no reason to do that unless it gets you some very valuable benefit.

So what are the valuable benefits that you could get? Well first of all, you might have some knowledge or guess about the direction of tax rates in the future. So you might say, tax rates I think are going to go up. If you believe that tax rates are going to go up in the future, then you might place your bet and say, it's better for me to pay the tax now at a lower rate and then in the future I won't owe so much tax.

So there you're making a guess about tax rates. The information that you would need to make your guess about tax rates is what will the U.S. Congress do about tax rates in the future? Now if you can accurately predict that, you ought to take the microphone and take my job away from me.

That's a question that nobody really knows. Everyone has guesses and your guess is as good as just about anybody else's, but nobody really knows. I'll go ahead and just tell you my guess on it. My guess is that I don't think tax rates generally will go up. The reason I don't believe that is I am persuaded that tax rates over the last 50 years have actually been on the whole fairly stable.

Now the tax brackets march around a little bit, but on the whole they've been fairly stable. If you actually look past the political rhetoric during election season to what people actually do, there's very little change in what the politicians in the United States actually do. During the election season, you'll generally hear Republicans say, "We need to cut taxes," and you'll hear Democrats say, "We need to raise taxes on the rich," but you'll actually watch them.

And when they're in the middle of a recession, the Democrats sign on for tax cuts and Republicans sign on for tax increases in certain situations as well. So on the whole, I don't think there's any political will for raising taxes. And the only thing that I think personally would change that would be if the flow of money to the US federal government dried up.

But right now the US federal government spends out of deficits and out of debt, not out of tax revenue. So they never worry about adjusting their expenditures to the amount of tax revenue. They just worry about borrowing more money. So as long as they can borrow more money to pay for their bills, I don't see why they would change tax rates.

So I think that on the whole, tax rates are probably politically stable. Again, cut out election season, and it seems like everybody actually does just about the same thing. Marc Thiessen: There are changes at the margin. There are changes with a little bit of fiddling here with an estate tax exemption.

There's a little bit of fiddling there with a corporate tax, blah, blah, blah. But go and look it through and you find that for the last 50 years, it's been pretty stable. Doesn't mean the future will be, but that's my guess. Your guess may differ. So tax rates are hard to predict.

What about tax brackets? Because the other thing that could happen for you is that you could be changing brackets. Right now you might be earning $20,000 per year, but you know that you've got good idea that all of a sudden your income is going to go from $20,000 per year to $2 million per year.

This is where you can actually have inside knowledge on your situation. If you think that your tax bracket is going to go up, either while you're working or in retirement, then in general, you want to pay at the lowest bracket, whenever you're going to be in the lowest bracket.

And here's where capital gains tax, tax gain harvesting does come into play. If your income is low enough so that you could take advantage of the 0% capital gains tax rate, that can be a really wise thing to do. So if your income, your earned income is low, then, and you say, okay, well I can go over here and I can go ahead and recognize $50,000 of gains and I can still stay in my 0% capital gains tax rate, tax bracket.

That can be really, really good because now you're paying tax, you're increasing your tax basis and you're not actually, you're increasing your tax basis and you're not actually paying any tax. That's really good. On the flip side also, and so if you knew, for example, that next year you're going to take a year off and your earned income is going to go to zero, well yes, absolutely start selling and take advantage of as much as you can to harvest those tax gains.

On the top end as well, if you think that you're going to realize the additional 3.8% Medicare tax tax on the very top end of tax rates, then also you might go ahead and trigger your gains now in order to avoid that in the future. But in general, your default option should be, I'm not going to pay taxes today unless there's some compelling financial justification as to why that's in your best interest.

How does that, does that make sense to you? Absolutely. I was having those same conversations in my head. So this pretty much put it to bed to not sell anything, just to wait. Right. And it's good because when you actually look at your taxes and you actually run the numbers, here we get into the question of do you pay taxes from within the portfolio or pay taxes from outside of the portfolio?

And all of the, you know, there are other tax analysis, points of tax analysis, same type of thing of someone asking, should I convert from a traditional IRA to a Roth IRA and pay the tax? Well, where's the money coming from? And then what is going to be your tax brackets?

But on the whole, if you're, if you don't have a need for the income, you don't have a something that you can spend it on, you're probably going to be in a lower tax bracket in the future than now during your high years of earning. So the good general rule of thumb is just wait, just wait.

The other thing that can happen is I wouldn't do it unless something dramatically changed. Let's say that you became sick and you couldn't work for a year. Well, that would be the time. Go ahead and start triggering gains and harvesting your gains. Or again, as I already mentioned, you travel for a year, trigger your gains, or you retire, trigger your gains.

But that is one wonderful about a capital gain asset is you can control when those gains come in. Any other questions, Kevin, or clear enough for now? No, that's wonderful. Thank you. Thank you for calling in. I enjoyed hearing from you. That is it for today's Q&A show. If you would like to be on next week's Q&A show, please come by RadicalPersonalFinance.com/patron.

Sign up to support the show there at RadicalPersonalFinance.com/patron and you will be receiving information on next week's show. We can talk about your situation. Great diversity of calls today. I hope you enjoyed it. I enjoyed it. And I will be back with you very soon. Again, RadicalPersonalFinance.com/patron. Are you ready to make your next pro basketball, football, hockey, concert, or live event unforgettable?

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