Hey, parents join the LA Kings on Saturday, November 25th for an unforgettable kids day presented by Pear Deck. Family fun giveaways and exciting Kings hockey awaits. Get your tickets now@lakings.com/promotions and create lasting memories with your little ones. It's Friday and after about a month of no Friday Q and A's because I've had my hands covered in grease, fixing my camper, fixing my truck and dealing with all of that.

We're back. It's Friday Q and A. Welcome to Radical Personal Finance, the show dedicated to providing you with the knowledge, insight, encouragement that 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 and man, it is good to be back to a Friday Q and A show.

I have missed these and today is particularly fun because on the road, I'm sitting here at a rest area on the side of the road recording a show. Isn't technology great? Over the last couple of months as we've been working on planning out our cross country trip, one of the things that I wanted to be able to do was to record an on the road show.

I can hear what I've just done here is a little bit rusty. We'll get better with time. But just to talk about how amazing the world we live in really is as we get started here. I am sitting here recording a podcast underneath a tree at a picnic table at a rest area on the side of the highway while my family and I desperately drive north to escape the summer heat.

Isn't that amazing that I can sit here and speak to you in what I'm hoping is pretty decent quality as you drive across the country, drive across the world, work at your job, work out in the gym, whatever you're doing. And I can do this with several hundreds of dollars of equipment and not that much money on a monthly cost that it costs me.

And I can talk to people all over the world. From time to time, I go through these circumstances and I just see how much the world is changing. And as far as I'm concerned, this is a perfect example of how much that is changing. So, man, it's good to be back to Friday Q&A shows.

My hope, hope, hope is beginning this coming week. We'll be back to a consistent, reliable schedule here on Radical Personal Finance. It has been the last couple of months have been incredibly tumultuous. We begin today with Friday Q&A on time with live phone lines. These Friday shows, if you're interested in joining me for a Friday show, just sign up to become a patron of the show at RadicalPersonalFinance.com/patron.

If you join there, you get access to the conference call. You can call in and talk with me about anything that you would like to talk. We begin with Leif in Alabama. Leif, welcome to Radical Personal Finance. How can I serve you, sir? Hey, Josh. Thanks so much. I'm 37 years old.

I'm a stay-at-home dad right now. I've had a kind of an independent career in video production and partly as a result of your inspiration. I'm currently in a CFP program wanting to become a personal financial planner. I really just want to help people. And I know that heart will only get you so far.

I wonder what advice you have for someone starting out this career. How far along the path are you in terms of are you just thinking about this? Have you decided I'm doing this and you're taking classes? Have you started interviewing with firms? Where are you in the process? I've decided I'm doing it.

And I am in the second class of my CFP program and plan to take the test next July. Up until that point, I'm going to plan to be a stay-at-home dad. And then after I take the test, I plan to go out and search for jobs. So you have young children in July after you take your CFP exam.

Then that's when you plan to go back. And do you intend to work full time, part time? How do you intend to handle your child care responsibilities with your career? Well, my wife will be able to help. She's currently starting her career. So right now she's working night shift and it just wasn't an option for me to go out.

And well, it was an option that we wanted to accept for me to go out and find full time child care. So I do plan to work full time. And between my wife and my family support, we hope to figure out the child care at that point. OK, have you chosen or are you interested in a certain track within the world of financial planning or are you just at the stage where you're gathering information?

I'm mostly gathering information. I'm pretty sure I don't want to work in corporate finance. I want to work face to face with clients, help them with their family. My background is, you know, my parents didn't teach me a lot about finance. And as a result, I find myself in a spot where I can advise my friends and family a little bit.

And I really enjoy that. And I just want to be able to help teach people and make a decent living. Well, you can do both of those things. So starting from the fact that you don't have a strong, kind of a strong ideology established, let me just give you some ideas.

The reason I ask is many people do have a strong ideology. For example, some people know that without a question, they want to manage money. They want to do investing. They love the topic of investing. They really enjoy thinking about stocks, designing portfolios, et cetera. And they want to be a money manager.

If you come to the idea that you have an interest in something like that, that's going to drive you in a certain direction in the industry, because being a money manager would not be at all compatible with your having a local office in your hometown where you're selling life insurance.

Some people feel very strongly about a structure of compensation. So there's a big press in the financial planning world to be a fee only financial advisor, not to earn any money on commissions. Or some people really want to pay just hourly. They just want to earn their money on hourly fees.

And if you have some strong ideological bent like that, then you're going to have to consider that. And that'll drive you in another direction. So as you're going through your educational process, here's the first thing that I would encourage you to do. You have the time to interview various types of financial advisors, and that's what you should be doing now.

I get very nervous with people really investing a lot of time in a big, challenging educational track before they've had exposure to a career or to an industry. Now, in your case, I think it makes sense because you said, I'm primarily working as a stay at home dad. I can fit my studies here in my parental duties.

And this is a really efficient way to do it. And you will come out the other side well credentialed and you'll be in a good starting place. So I think it makes sense for you. But conceptually, I get really uncomfortable with people spending a lot of money and time on studying something when they're not sure if they actually like the business in the first place.

So the way that you can head that off at this point is to engage in a process of interviewing. And your situation, you're a very non-threatening person in terms of you're not looking for anything from anybody. You're just looking for information. And so I would begin by interviewing as many different financial advisors as you as you possibly can.

Look at your schedule and figure out maybe you can do one a week or one every two weeks for the coming year and try to interview people in different occupations that are locally. So here would be some examples. Start with the guys at the big traditional firms, like look around and see if you know anybody or have a friend or a family friend or any connection with somebody at a Morgan Stanley or a Merrill Lynch or or the local bank.

The financial advisor at the local bank or if you bank at a local credit union, talk to their financial person and say, hey, can I buy you lunch? I'm interested in getting into your career. Do you would you be interested in sharing with me a little bit of information about it?

Additionally, talk to some of the big local insurance companies. Consider the local property and casualty companies. So traditional ones like State Farm and Allstate. Talk to some independent brokerage companies. If you live locally and you live in Smithtown, then there'll be a Smithtown insurance agency. And so find out who the insurance agent is there and ask them to lunch and ask them some questions about it.

Call up your local life insurance companies, call New York Life, Northwestern Mutual, Mass Mutual. Look and see if there's a prudential office or an independent life insurance company. Talk to your local benefits companies like a local Aflac or other types of sales roles. Look to see if there's a local accountant who offers financial planning services.

If there's an accountant with financial planning work that that you can talk to, then see if maybe they can provide some advice or some insight for you. But I would work my way through an interview as many different people as possible. And in that process, you'll gain from real people who what they like and what they don't like about their business structure.

And you'll just ask good questions. Ask them why they chose the path. Ask them if they were starting over in your situation, what they would do. Would they do the same thing again? Would they do something different? And if you'll do that over the course of, let's say you've got a year plus.

So in the next year, if you'll interview 30 to 40 different financial advisors doing different types of practices, different types of businesses, I think you'll develop a better understanding of the business than you could even get from talking to somebody like me, because you're going to be working with people locally.

Now here is the incentive that they have to talk with you and the incentive that you have to talk with them. In addition to understanding the industry, recognize that they are always prospecting for good candidates to join their company. And that's the biggest challenge they face. So that's why almost anybody will take a meeting with you.

Even if the person that you're talking to isn't involved directly in recruiting for their firm, they can pass along a recruiting, a recruit, a potential recruit to a recruiting officer. And if you were to join their firm, then they'll receive a referral bonus. Usually in most companies, they'll pay that person a referral bonus.

So that's in their best interest to talk to you. And so you should find that very, very non-threatening, but by doing it, you'll find, get exposure to a lot of people. Now, here's what I would look at. I would look at your areas of interest and I would look at your community and try to figure out who you would want to serve.

There is almost any way that you could imagine you could structure yourself into the financial planning business. And with your being on the entry side of financial planning, you haven't known all these different people who've done different things, like I'm describing to you. And so you can't know exactly where in the industry would I best land.

And frankly, you're probably not going to know until you've actually started the business. And most people who are entering the financial planning business bounce around from one company to another company. They try different compensation models until eventually they settle on a winner. Yes, there are people who pick a company and go with it and stay there, but many people bounce around.

And so if I were going to go back into it personally, and this is I'll just tell you my personal bias. What I really enjoy is I really enjoy technical challenges and I enjoy I enjoy technical challenges and I don't love the public investing markets. I don't thrive on the world of publicly traded securities.

It bores me a lot. I feel like it's an extremely overstudied area. There's so much competition in that area and there's the smartest people in the world who do that type of work. So that doesn't appeal to me. But I have a lot of friends who love that and they really do well at that.

If you love it and if you do well with it, you can learn what you need to learn, credential yourself up, develop a client base and you can develop a boutique investment advisory firm where all you do is manage money. That wasn't me. So that's not the direction that I would go, but that might be the direction you would go and you should investigate people like that.

What I really love from a product stand from a structure standpoint is I really love the world of insurance products and and technical financial planning. The reason I love it is because it's under there. It's in my opinion, it's undersold. When you go into the world of insurance products, whether you did that with a local general agency.

So so think of, for example, your local state farm guy where you do property and casualty insurance or you can and also some financial planning products because those products are so they're needed so much by people. Then you have a wide base of people that you can help. So I would seriously consider that.

And I think that in that world, you can set yourself apart largely through the service that you offer. There's still a tremendous amount of service that you can do. And if you're interested in a particular area, for example, I had a good friend of mine who is an insurance broker.

And what all he does is does business insurance for very large companies. It's a very different compensation model. But one of the things he loves about it is his business is primarily a service business. And he's judged not on his on his ability to produce investment returns. He's judged on his ability to to help business owners solve their insurance needs and keep premiums competitive.

And so that really works well for him. He really loves the property and casualty insurance side of things. I personally love life insurance. It's such a fun world to me. It's such an interesting world that if I were to go back, I would I could I could happily at this point build a career doing nothing but selling life insurance.

And the wonderful thing about life insurance is the compensation structure. Because you're paid by the insurance company, you can work with people and you can build a tremendous stream of revenue for your practice. That also builds up ongoing residual income for you. And you don't have to deal with some of the account management stuff that you have to do on the investment side.

When I was a new financial advisor, I thought the investment side was super interesting. And I was really engaged. And I thought it was super sexy. I thought the idea of selling life insurance was was was it was just not it was not sexy enough for me. And so I moved in the direction of investments.

Looking back now, there's a guy in my town who does nothing but massive estate planning, complex life insurance policies. And if I were to go back and do it again, I would seriously consider building a career like that. If you love the financial planning aspect of things, the tax law, etc., that works really well in the retirement space.

And that's the other place that you can build a holistic practice. If you like doing retirement planning, people who are retiring usually need so many little things to be buttoned up that that's a that's a place where a good financial planner can really provide a lot of value. Now, there are a lot of things beyond that, but those are just kind of some some segments of the marketplace that I find really interesting.

I also personally would would really enjoy working in the context of a multifamily office because of the interest of it. Instead of just dealing with, OK, we've got our publicly traded mutual funds, you're dealing with real estate. We're doing some real estate acquisitions in Thailand. We've got a stock portfolio over here.

We're reviewing the property and casualty insurance. That type of work really appeals to me. And also the tax side of things really appeals to me. But as you're studying, just take note of the different things that that you find interesting and interview. And if you'll do those two things, then I think six months from now you can call me up and you can say, OK, I'm really interested in this type of business.

And you can design a way into that particular area of planning. That's all I got for now, Leif. Is that any follow up questions for me? That's all really good. I think one follow up question would be, is there a model to help low income income people and make good money?

Or is it kind of a side thing where you're going to have your high net worth clients that are your bread and butter and then have some on the side that you do for, you know, pro bono or just because you like to help people? I really don't think there's a model.

Model. I really don't. Go work for Dave Ramsey and work with him, with his seminars, his radio program. It sounds silly, but you have to look and you have to see. Let me explain why I don't. I don't think there is much of a model. So to start with, more than any other person that I know personally in the financial advice space business, I think I, when I was a practicing financial advisor, I think I helped more low income people than anyone else I knew because that was my market.

I started in the financial planning business when I was 23 years old. And so the people that I was calling on were primarily 23 year old people just starting to getting their first job, making $50,000 a year. I didn't come from a wealthy family. I worked with advisors who they came from wealthy parents and they just all of a sudden the first phone calls they could pick up the first phone calls they could make when they got in the business were to people earning hundreds of thousands of dollars, millions of dollars per year.

They could sell giant cases and do very, very well, but I couldn't, I didn't have that market. And so my average client for my first couple of years really was a young single or newly married couple with a household income, right about the median income. And I, and I also was not a hardcore enough.

I was, I should have been to make more money. I should have been more discriminating in who I was willing to go and see, but man, there were so many times I'd wind up at this little broken down house, this little, you know, double wide trailer, you know, working with some elderly person living on social security because that was where my heart was.

I wanted to help them. But so other people would just, they would just turn around and leave. And I learned in time, like, I can't make a business on this. If you could make a business on it about the only time you could do it is if you're, if you're low income person had a large opportunity.

So like they were the kind of person where they were probably going to be doing better in the future. In that case, then you could afford to do work with them if you sold insurance. So if they needed disability income insurance or life insurance, before the Affordable Care Act, I would from time to time sell some health insurance.

The Affordable Care Act changed the whole market and the individual health insurance marketplace collapsed. So, so, but if you could sell some life insurance or disability income insurance, then you could maybe make enough money to make it worth your while. But it's just not there. And here's why. People who don't have a lot of money, they're primarily focusing on their needs.

They're primarily focusing on their rent, their, their, their, their food, their, their, you know, their entertainment, etc. Second thing is people who don't have a lot of money are usually there because of a choice, choice or a series of choices they've made. Now, tragedy strikes a lot of people.

But when you start working with people who are low income, you'll find very rarely that they have a low income because tragedy struck. And you'll usually find they have a low income because they just don't care about money. Well, if your job is trying to care about money, you can't help people who don't care about money.

And there's just no where's the money going to come from? People for you as a, as a, as a competent professional, if you look at your business, you should be charging as a financial planner. You should, you should target an hourly wage of no less than a couple hundred dollars per hour when you're with a client.

And you have to do that because, because your actual time to, of all of the infrastructure, the administrative expense, etc. You can't do anything less than that. So let's say that you were just going to say, I'm going to set my goal on a hundred thousand a year. And you should, that should be the bare minimum that you desire to make as a financial advisor.

That should be the absolute minimum. So a hundred thousand dollars a year means you need to produce $50 per hour of every single hour on a 40 hour work week of value. Well, where's your revenue going to come from front of doing $50 an hour a week? You can't possibly spend 40 hours a week in front of clients.

A busy, busy advisor, busy advisor, who's working hard is going to keep probably about 15 to 20 hours a week in front of clients. If you could keep 20 hours a week in front of clients or prospective clients week in, week out, if you actually did that, you would make half a million bucks a year.

But to start with, if you could just do, keep 20 hours a week in front of clients, that automatically puts you at a hundred dollars an hour. Now to get in front of 20 clients a week, sorry, 20 hours a week in front of clients, that's going to require an additional 40 hours a week doing the client work, phoning to get those clients there, figuring out your marketing plan to get those clients there.

So now all of a sudden it moved you up to 60 hour work week, which is about the normal starting week. And so basically, like you can't afford to sit and talk with somebody for less than a couple hundred dollars an hour. And yet what person do you know that doesn't have a lot of money?

Have you ever met somebody who is broke, doesn't have a lot of money, who would be willing to sit down and write you a check for two, $300 an hour just to sit and talk with them for an hour? Have you ever had a conversation like that, Leif? No, I haven't.

Yeah, they don't do it. They will not do it. So then you look and you say, well, how can I work with this person? How can I work with this person otherwise? People who are poor are not used to writing checks to professionals for their time. People who are wealthy are.

They write checks to all kinds of people for their time because they have the money and they're used to allocating the money. But people who are poor aren't. So then you say, well, I've got to do it based upon commission. And that is true because then instead of you being written your check by the person, you're being written your check by the company whose products you're selling.

Well, you can't sell investment products that are commission based to somebody who is low income. There's not enough money on a commission to make it worth your time again, unless they have $300,000 in their 401k when they're going to roll it over. That's what many advisors who do do that.

So you're down to insurance products and you can sell somebody a life insurance product. But let's say you do a life insurance product that's a term life insurance product. And let's say you're working with somebody who's actually relatively low income and they need to buy, you know, half a million dollars of term life insurance.

Well, the premiums on a half a million dollar term life insurance policy are going to be something like 500 bucks, 500 bucks a year. And when you're selling term life insurance, you're just a cheap company that brokers their business. Your commissions on a term life insurance product are going to be anywhere from, let's say, 75 to 110 percent of the first year premium.

So you're talking 300 to 550 dollars of revenue. So but the amount of time that it requires, however, just to sell somebody a 300, sorry, a half a million dollar term life insurance policy is very significant. Usually most people, it'll be in a situation like that. It'll be a minimum of an initial meeting to find out their situation.

Then you'll have a second meeting. And if you are, if everything goes great, they really want life insurance. Let's say that you that they buy the policy on the second meeting. Now you're in it for two hours. But it's two hours plus 30 minutes to drive there, 30 minutes to drive back or for them to come to your office.

Or then you have to do the work of creating the proposal and you have to figure out where did I get this person. And for every you only sell one life insurance policy for for every five people, 10 people that you meet if you're doing referred lead prospecting and five people that that will sit and talk with you.

So your closing rate is going to be one out of three, one out of five on life insurance could be a little bit higher if you're really good. But it never gets that much higher. So you actually are going to go through 10 hours of work to sell one person a life insurance policy.

My ratio there was five to one. So 10 hours of meetings for two hours of meetings with the person who buys for a total revenue of 500 bucks. It just doesn't work. And so that's why working selling financial advice to low income people. I don't know any way to make a business out of it except as a media business.

And that's where that's what I that's one of the reasons why I have done it. You can do it as education. You can do it as a media business. But the only way to do it is to sell one to many. And so instead of ever meeting with one of the person one on one, you can only do it if you can speak one to 100, one to 1000, one to 100,000.

So your your path to do that is host a podcast, host a radio show, sell books, sell products, sell seminars. And that's the way that you can meet. You can help people. Now, if you also want to do professional financial planning after you get people on that track and they're actually making money, then you can afford to come back and do it.

Then you can afford to go ahead and bring in those other areas. But I I share your heart of wanting to help. But you can't do it. I don't I don't know of any way to do it. If you know of anyone who's doing it, you let me know.

If you interview someone and they're doing it, let me know. I'll bring them on radical personal finance. But I have never been able to figure out a way to do it. Sure. That's really helpful, Josh. Thanks so much for your time. Here's the great thing. If you will serve the wealthy, serve people who make a lot of money, serve people who have a lot of money, they will really appreciate your advice.

And then if you want to donate your time to teaching a seminar locally or to doing something like that, go ahead and do that. But there's no way to do it that I know of make a business other than, like I said, go work for Dave Ramsey. Dave is is has done a tremendous job because he speaks the language and he does a great job.

And that man has helped more people, more poor people become rich people and just avoid problems than anyone else I know. So go work for him or just go and copy what he's done. Chris in California. Welcome. How can I serve you today, sir? Hi, Joshua, I'm actually in Idaho.

We used to live in California, but we live in our motor home full time, traveling around the country. So we're just here in Idaho at the moment. Great. I'd like to hear your opinion on whether or not my wife and I should convert some or all of our traditional IRAs to Roth IRAs.

OK, why do you think you should? Well, in order to reduce our required minimum distributions in the future, thereby reducing our future income taxes and leaving more non taxable asset to our beneficiaries. So we're both retired. We did we retire early two years ago and we don't need those distributions at all.

What is your current effective tax rate? Current effective tax rate is right now effective is about 12 percent this for this year. I know I'm sorry for this year, 22 percent. And who do you intend to leave these accounts to when you die? Our brothers and sisters or their offspring, are your brothers and sisters or their offspring wealthy or are they in fairly low?

Are they in high tax brackets or low tax brackets now? And what do you think they'll be in the future? The five or four of the four siblings are in high tax brackets and will be in high tax brackets in the future. Well, so the scenario you're describing is the right scenario to convert.

How old are you? I'm 47. My wife is 54. Yeah, I think that I think I would. So just by way of background, here's the decision tree. So for most people who have accounts that are in traditional retirement accounts, for most people, they're going to be spending that money in retirement.

And because they're going to be spending that money in retirement, usually it doesn't make any sense to convert it to a Roth, because most people in retirement are going to have lower income than while working. And it's true because it's very hard to accumulate through a traditional job. It's very hard to accumulate enough money so that you're going to have more income after retirement than than while you're working.

The people who do that are people who either start very early and save very aggressively and earn good rates of return or those who build big businesses and sell them. Those types of people can enjoy a higher income after retirement. Most people who are accumulating in retirement accounts just through a 401k at their work, they're generally just not going to have a higher income in retirement.

They're also not going to have a higher income in retirement because the retirement for most people is a time of lower expenses than higher. When you're younger, you are having a bigger house because you have children, you're paying for the expenses of children, etc. Most people at that point in time will have more expenses than they do later.

And so for the average person, really, their income is lower in retirement. Well, in that situation, it makes sense to take the income as a traditional IRA because you're going to be paying taxes at the lower rate. So that's most people. That's not your situation, because if you have an account that you don't need, now you're thinking of it from the perspective of minimum, let's say, a 50 year time period.

Let's say you die when you're 90, 100 years old. And now you're in a situation where you have a very different time planning horizon. And so if you're not going to be needing the money, then you want it to accumulate in the most effective and efficient way possible. And the problem with the traditional account is it starts to spit money out at the age of seven and a half, whether you need it or not.

Most people need it and they spend it. You're not going to. So in your situation, a Roth IRA is a good solution. And here are the major benefits of it. It gives you the ability to avoid required minimum distributions. So instead of a measly, let's say, 54 for the older of you to 70, instead of in 16 years starting to take income out that you don't need, as long as you're alive, it can just continue on.

And then it can continue on as a spousal Roth. And then you can continue on as a stretch IRA for your beneficiary, where if you leave it to a very young beneficiary, that Roth IRA can be stretched out in terms of its distribution schedule over their entire life expectancy, which could lead to a massive growth free of tax.

And then the last wrinkle is you're in a very low effective tax bracket. So I would just do it carefully, strategically, ride the brackets in your conversion schedule. But I don't see any reason not to convert for your situation that you're describing to me. OK, is there what marginal tax bracket should I stop converting at right now?

If my wife turns 70, will be in the 35 percent marginal tax bracket and I turn 70 will be in the 30s using the current tax rate or will I'll be in the 37 percent tax bracket. I was thinking of converting up to the maximum within the 24 percent tax bracket.

Which what's your top marginal bracket that you're in now? Top marginal right now is 22 percent. How much money do you have in the in the traditional IRAs that you want to convert? One point eight million. And how much room do you have in that 22 percent bracket? How much more income can you pick up each year before you go to the next bracket?

Any idea? This first year, about 60,000. So, yeah, it would be about 60,000 every year, I think, in order to get in order to stay into the 22 percent tax bracket. Are you going to leave all this money to relatives? Are you going to give some of the money to any qualified charities?

Do you know yet? We don't right now it's to our relative with the idea of giving some to some charities, but we haven't identified that yet. I do intend to open up a donor advisor fund through Fidelity or Vanguard in the future and put some of that money in there as we're as we're accumulating it and then using that as a tax write off.

But we don't have any specific charities identified at this point in time. About how much is your total net worth currently? About seven million. Do you have a good financial planner that you work with? No, I we had a financial planner that we worked with four years ago and then revisited another two years ago before we retired.

And I don't have one at this point in time. Didn't think I needed one at this point in time. Well, obviously, you don't need one to get rich because you've already gotten rich. So you're doing a good a good thing. Financial planners are not very good at helping people get rich, but they are good at helping rich people save money on taxes.

That's my my piece of advice on it. You know, it's funny. One of the things that one of the things that that bugs me, one of my personal pet peeves, and this is for Leif earlier, who is talking about how to become a financial advisor. One of the things that bugs me is people often give the advice and they say I hear people say, don't ask money advice from people who have less money than you.

And it bugs me because there's a sense in which it's true, but there's also a sense in which it's not true. And the sense in which is true is don't ask a financial advisor how to build a seven million dollar net worth if you've built a business and done it that way.

Go ask a business person who's built a business or whatever, whatever the path that they've gone on. But that that assumes that all wealth that there's no technical aspect. And here what you need is not somebody to help you get rich. You need a financial advisor to help you with some of the technical planning.

So I believe if I were you, I would not make a decision on this at this point in time. What I would do is sit with a try to find an advisor. There are many good ones out there and you could do this virtually. But I would try to find an advisor who would look at your situation and talk to you about charitable planning and consider also some some charitable tools.

Because what I think your situation, yes, you could do a conversion, but I wouldn't be converting. I would not be converting money in anything over the bracket that you're in now because the people that you're likely to leave it to are likely to be in a lower bracket. And I'm going on gut here because I would need to sit down and this would take time to try to run some spreadsheets and try to figure out.

But if your brother has his own ten million dollar net worth, he doesn't need your money. So you're not going to give it to him. And he's the one who's going to be in a high income tax bracket. It'll be your brother's, you know, your brother's son, your nephew who you're going to try to help go to college, you know, and he's the one who's going to inherit the money.

Or it's going to be your grandnephew, your grandchildren or things like that. Those are the types of beneficiaries that you're likely. If you're anything like most people that you're likely to leave the money to because they're the ones who need the money. And they're also probably going to be in lower brackets themselves.

So why should you convert at a 35 percent rate and pay the tax now just so that your beneficiary 40 years from now or 50 years from now or 60 years from now doesn't have to pick up the income and pay the tax at 10 percent? Fundamentally, the question between Roth and our and traditional IRA all comes down to what bracket are you in?

And whatever bracket that you're in, that's going to be the one that that that whatever bracket that you're in when you pay the tax, that's the better option, which is why for most people, the traditional if you have the money in a traditional IRA, it's best to keep it there in the traditional IRA.

Now, your problem, just for the sake of of of other listeners, your problem is the RMDs. But you could handle the RMDs elsewise. You can always just give away the RMDs and you can figure out and we can we can allocate some of the IRAs to a charitable organization.

You can go ahead and set up your own donor advised fund. We can look into some sort of charitable trust, depending on your desire for the income or who you desire to to help with the money. I think you you need to sit down with a good planner, a competent estate planner and and think through some options, because depending on your how much of your charitable goals that you have, like meaning you have more money than you're going to spend.

So thinking through what your strategy is with regard to charity, who you desire to give the money to, how you desire to invest the money that can impact your that that should that should be the biggest impact here. If you're just wanting to give money to people, then this conversation about traditional and Roth is good.

If you're wanting to give money to organizations that aren't tax qualified charities, then that'll be a different approach. If you want to give money to to organizations that are tax qualified charities, then that'll be a different approach. And so I don't know that we can do that here in this Q&A call, but I do think it's worth your time to to cover.

OK, well, then I will look into speaking with a financial planner about this. Absolutely. All right. Next. Isn't that so fun? Good problems to have doing. And that's why I love technical planning. Just real quick, before I go on to the last caller for today's show, I want to just make the point that I was making in case it wasn't in case it wasn't clear about asking people for for wealth.

Here's my issue. Sorry. Asking people about for advice. I don't have as much money as Chris has yet. I'm working towards it. I'm investing diligently. I'm building my my careers and businesses. And who knows how he developed his wealth? But I'm not as rich as Chris is yet. But that doesn't make me unqualified to give him some useful ideas as long as I'm clear about the scope of those ideas and not overstepping.

And that's the key that I would encourage you to think about when you're taking advice. Take advice from people, but make sure that you're clear on what they're qualified to give. I'm not qualified to tell Chris maybe some of the inside secrets that he implemented to develop what he's developed in his portfolio.

But I am qualified in the areas that I'm qualified in. And you are and you are, too. The other problem is if you're seeking advice, don't be scared to seek out advice from people who are a little bit ahead of you. Let me give an but not a lot ahead of you.

Give an example. I try to make sure that radical personal finance is not dominated completely by experts who've written books who are selling them. I try to talk to normal people because the advice that normal people have or that regular people have is often more tangible and helpful than the advice that the expert has taken the time to write down.

No, a good expert will approach their different will think about where they are in terms of who they're trying to help. But if if if we were to ask Chris about budgeting, you know, my guess would be that he's not able. He probably was there at one point when a flat tire was the end of the world.

But his budgeting, I can't imagine he sits down and he budgets every dollar in his on his table. But if you're deep in debt and you're trying to fight your way out of credit card debt, if you go and talk to somebody who just did that and find out what they did, that's going to be more helpful than talking to somebody whose budget whose budget is running to six figures plus per year.

So take advice. And that's just a point of clarification, because that that's one of those little things that sounds cute when people say it. But it's not very accurate. It's a personal pet peeve of mine because I give advice to a lot of people who are richer than I am.

But I try to tell you what I'm good at and what I'm not. So maybe that was just to solve absolve my own conscience. But it's done. We go finally to Alex in Ohio. Alex, welcome. How can I serve you today? Hi, Josh, thank you so much for taking my call.

Thank you for everything you do. It's really you have got a fantastic podcast and I really appreciate it. You've definitely given me some advice over the last half a year or so that I've been listening to you. You steered me away from some bad decisions. Great, thank you very much.

How can I serve you today? Well, I'm looking for maybe just a little bit of advice or affirmation to what I'm doing. It's I'm early in my career life. I've had this is my second job now that I've had for going on two years. And. I know that the key to increasing my.

You know, being able to increase my income is the most important key while maintaining my monthly spending. But in the meantime, and as my income grows, I just want some advice on how to save better and where I should be saving and maybe what my focus should be on, because right now I have it spread into a few different places.

And I'm not really happy with how high the savings are for any of those three places that they're in. OK, but let's start with your income. What is your current advice? What is your current income? It's forty five thousand with bonuses closer to 50. Great. And how much are your current living expenses that you're spending?

Just monthly rent and utilities or how much money do you spend every month? That's about. I would say about eighteen hundred dollars a month. OK, so how much money do you add to your savings accounts every month? Each month can vary a little bit, but I'm on track to be maxing out my profit IRA at about four hundred and fifty a month.

Three hundred and fifty to four hundred a month for. Let's call it liquid savings and about another two hundred or so a month for long term housing for kind of a long term savings, I'm thinking of it as a sort of a house down payment. OK, so that's about a thousand a month that you mentioned there.

Four fifty in the Roth, four hundred in the savings, three fifty to four hundred in the savings and then two hundred into your house down payment funds. That comes out to be a thousand or a thousand fifty a month, which brings our total to between eighteen hundred dollars a month of expenses and a thousand dollars a month of savings.

That brings us to twenty eight hundred dollars a month, which. And that's about right. Right. So we got twenty eight hundred dollars a month, which annually comes out to thirty three thousand six hundred dollars. So we're missing here about fourteen thousand dollars. Any idea where that money is? Sorry about sixteen thousand four hundred dollars.

Any idea where that money is? I guess I'm just I didn't have a spending figure on hand. I guess I'm spending a little bit more per month. That's something I need to work on cutting down my expenses. Yeah. So the reason I'm asking the question that I am, I'll tell you my secret.

And it's fine if you don't have it at the top of your head or if it might not be in front of you. But the reason I ask those questions first is to find out if you know the answer and to find out, can you account for all of the money that is coming in in the form of your paycheck and all the money that's going out?

Now, you may not be able to do it here live. Who knows if you have your spreadsheets and whatnot in front of you? But if I gave you a day and said, come back and tell me where your money is going, could you could you do that? It might take a little more than that.

OK, so here's where you should start, and I'll answer your question on accounts and we'll go to that in a minute. But before you worry about that, what I want you to do is to build a system for yourself so that you can track where all of your money is going.

And so what you need to begin with is you start with your total amount of income. You take your paycheck and you whatever paycheck you have now or whatever one you just got and you write down on that paycheck, you write down the gross income number, the top line number, and then you write down all the things that are on your pay stub.

So you've got there your income taxes that are being withheld by your employer. You've got your employment taxes that are being withheld by your employer. You've got your medical costs and benefits, et cetera. Whatever your medical insurance is or if you have any kind of group benefits that are being subtracted there and write down all of those numbers.

And then in your personal spending, write down all of those numbers as well. And in the coming weeks, try to get a sense of how much all of these figures are over the course of a normal year. So if you say net 12 months, I earn fifty thousand dollars.

Well, let's start with your employment taxes, if all of that money is coming to you as wages, then you know that three thousand eight hundred and twenty five dollars of it is going to go out to Medicare and Social Security taxes. So that means that you're spending you're actually spending three hundred and eighteen dollars a month on your employment taxes.

Now, I don't expect you to to say that number to me right off the bat, but I want you to be very aware of it. I mean, most people, of course, don't think about that in their spending, but you should because that's a lot of money. Three hundred eighteen dollars a month that you're spending on your employment taxes, your Social Security and your Medicare contributions is more than you're putting into your house fund.

And so you should be aware of that money. Then you look at your taxes, you look at your your federal income tax return, and you look and you say, how much money did I pay last year in federal income taxes and then possibly in your state income taxes? And you write all this stuff down on a piece of paper so that when we when we run the numbers, you know that you have personal expenses of one thousand eight hundred dollars a month.

You have savings of a thousand dollars a month and then you have tax expenditures of a thousand dollars a month. And so you can figure out where that money is. And so the way that I ask you the question, I'm listening for how quickly you know these answers. And that's giving me an idea of your of your budgeting system.

I'm listening for your precision. I'm listening for if you're if you're thinking about it and that's giving me an idea of your budgeting system. So my guess, my my radio guess from you would be that that's your should be your first area is try to get a sense of of where all the money is coming in from and where all the money is going from into on an on a monthly basis.

And that'll help you, because even if you just let the money accumulate in your checking account, the more money that accumulates there, the better. Now we can figure out what to do with it. So before we go on to the account, does that make sense? What I've the instructions I've given you?

Yes, it does. OK, now tell me why you aren't happy. First of all, tell me how much money do you have in these accounts and why you're not happy with your current plan? Well, I began saving about. Maybe a couple of years ago now, my retirement account is up to about ten thousand dollars.

House or long term savings is about twenty five hundred and my liquid or car. I consider it my car savings since I don't make a car payment that gives me extra. I put that money aside, that would be towards a car payment, towards liquid savings, so that goes to that's up at about a thousand right now, used to be a little bit higher at some expensive car repairs.

So it's about thirteen hundred total. Congratulations. So I'm sorry, 13,000. You are officially in the top third of the US American population with regard to wealth, because you could lay your hands on over a thousand dollars immediately if you needed to. So you've officially gone from the bottom two thirds to the top third with your savings over the last couple of years.

So congratulations. You should feel really good about that. Thank you. Now, what are your financial goals at this point in time? Well, that's sort of what needs a little more focus and direction. I, I know that I want to be saving as much as possible, but and I'd really like to get my retirement savings from four hundred and fifty a month to closer to a thousand dollars a month, get my savings up to closer to ten thousand a year.

And then for my liquid savings, that's serving as mostly as kind of an emergency fund kind of for repairs or this or that, whatever might come up. And I would like to be saving for a house as well, but that sort of competes with my retirement savings. So that's why it's sort of a it's a low it feels low to me.

It's very slow growing. I struggle with that. Understood. So let's begin with retirement. When do you want to retire? The general age, I mean, who knows, but the general age I have approximate is maybe sixty eight. OK, why do you want to retire at sixty eight? I feel like.

I really don't have that great of a reason, really, necessarily one way or the other, I just feel like that's. About the right time where you'll want to start slowing down. OK, all right. Next, you talked about building up your you said you said one of your goals was to move your retirement contributions from four hundred and fifty dollars a month up to a thousand dollars a month.

The second thing you wanted to build was liquid savings. How much liquid savings do you want? I'd like to maintain. At least several thousand. And liquid savings to cover emergency expenses, let's say, OK, how much how much is several thousand? Let's call it thirty five hundred. OK, three thousand five hundred.

And how did you come how did you arrive at that number being the right number? Mainly because besides that, I can't think of. Any emergency besides. You know, a significant maybe medical emergency or that would. Require more than that, I think, even if I were to lose my job, I would that would give me enough time, thirty five hundred to.

To comfortably search for, let's say, a couple of months. OK, all right. And you said that the final financial goal that you have is you'd like to save for a house. What kind of house would you like to buy? That's a complicated question, because I don't know if I'll be living where I am right now within the next couple of years.

I have a girlfriend who whose family is in Michigan, and I don't know whether I'll be staying here or there. And. She also is she would like a big family, and I don't know whether it would be really what the best strategy would be to start off in a cheap apartment for a little while or to.

Move into its, you know, a large house to start off with and just live there forever for or at least, you know, for our entire working lives or so. So that's where I sort of another place where I struggle. I'm not sure what I'm saving for. OK. And in addition to these three goals, do you have any other financial goals?

These are really the only three right now, although I know in the future there will be a lot more things to consider. So of these three goals, which of them is the most important to you? Oh. That's tough, but I guess retirement would be the most important, I think I've ordered them and important so much I put into them every month.

OK, why is retirement more important to you than building more liquid savings and more important than saving for a house? I think it's because I feel like I have time on my side right now and I want to put as much as possible into my retirement savings so that I give it the best opportunity to grow to as high of an amount as possible.

But I'm ready to retire. How old are you currently? Twenty three. OK, all right. And then the second in order of importance, your second goal is liquid savings. Why is liquid savings more important to you than saving for a house? For one thing, a house isn't necessarily an emergency to get a house.

I could continue living in an apartment without much of a problem or living somewhere that doesn't require a huge down payment, whereas with my liquid savings, that. I can be very important in case of an emergency, particularly for expensive car repairs, or if I need to look for a new job or anything that comes up in that way.

OK, now let's talk about for a moment about retirement. And I'm going to start giving you some advice and stop asking so many questions. You mentioned that you're going to retire at age 68. How much money do you want to spend? Per year in retirement, I would say somewhere in between sixty thousand and one hundred thousand.

OK, so how much money do you need to have accumulated in order to spend that amount of money? For. Sixty thousand. About there, I believe, I'm not sure how much I need by the time I'm 68, but I did some calculations online and according to it, assuming a 7 percent return on investment annual return.

I think I need to be saving about twelve thousand dollars a year. OK. All right. So I suppose that's my floor for where I want to be as soon as possible. Why do you want to spend sixty thousand dollars per year in retirement, but only to spend. Twenty one thousand six hundred dollars per year now.

I'm just. I suppose since. I like the I like the idea of having more money in the future to be able to do what I want and not have to worry about. Not have to worry about not having enough money to do things or to or to help my family or to give.

I don't I don't want to be limited, I suppose, at that point in my life. I guess that's how I envision it. Right. Right. Now, that's good stuff. I think that's that's what we all want. I think all of us want to have enough money to not be limited in our choices by finances and to have enough money to help others and to be able to have enough money so that it's not a concern.

Such a big, big concern to us. Here would be. Let me ask you one more question. Your frustration about your savings plan. It sounded like you were trying to say, well, am I saving enough as your frustration that you're not saving enough money? You don't think you are. Is your frustration that you're not sure that you love where the money is being saved?

Explain to me a little bit more of your frustration. It's it's the fact that I it really comes down to increasing my income and and saving more, reducing my my monthly spending on other things. Just because I know I have these goals, I should be saving this much per year, this much per month to reach my goals.

And or at least I know I don't have as much of a goal and say my house down payment that I do my retirement and liquid savings. But I feel like I want to be saving more and. And it's frustrating having to choose between house savings and retirement savings, and I wonder whether I should be putting more towards retirement, going all in on retirement or.

Maybe until I reach the three thousand or three thousand five hundred in my liquid savings, maybe I should make sure I have that first before I put more money into my down payment and retirement. I guess I'm just a little bit confused. OK. All right. So if I if I have good allocations.

All right. Right. A decade ago, I also was 23. So I was where you are and I made about the same amount of money as you were making at that time. And I was where you are. And in terms of life stage, I was not married at 23. My wife and I were friends and we were certainly interested in one another romantically.

But we were I was where you are. So let me and I also was where you are with regard to my interest in retirement, my use of financial calculators and all of those things where we would probably get along really well. So I'll just share with you a little bit of what I've learned in the last decade and what the what I think a little bit of what my message is from this stage of life.

I don't know what it's going to be like to be 63 yet, but I'll tell you what a little bit of my message is for the younger men like you who are a little bit younger than than me. The world of finance didn't serve me well by focusing me on retirement.

Now, I'm all about your achieving the goal that you described, not having to worry about having enough money, not having your choices limited by money, being able to help other family members when they need help, etc. I love those goals. I'm 100 percent sold on that. But I was diligently when I was your age, I was diligently stocking money aside into a Roth IRA.

And I didn't know. I didn't know what I didn't know. And so here's what I have learned. I think the reason why we struggle a little bit with our savings goals is because they're not meaningful enough to us. You have impressively long term perspective. Your ability to think 45 years into the future is admirable, and it is absolutely the probably the number one thing or at least one of the top three things I would look forward to see is somebody going to be successful.

People with a long time horizon, the ability to think in the future. That seems to be if you study the literature, that seems to be one of the most predictive factors to know whether somebody is going to be financially successful, successful in life. The ability to delay gratification and to defer gratification seems to be the number one or one of the top few factors that leads to success.

And you have proven and are now proving that you have that. Your girlfriend should consider you a great catch because of that, because if you have the ability to think forward multiple decades and to defer gratification today because you could buy some really fun stuff with a thousand dollars a month.

But you're choosing not to buy that fun stuff. And instead, you're choosing to think about your future financial security. You're choosing to think about your future financial assets. You have the cornerstone of success habits by having that long time horizon. People who have a short time horizon usually are broken, desperate most of their life.

And so if you were going to change anything about yourself, if you were going to change anything about your children, teach yourself and your children to have a long time horizon to develop the ability to delay gratification for the future and to follow through on a good plan for a long time.

Now you're doing that. Here's the problem. Because your goals are so vague, you're contributing money to these accounts without any clear sense of purpose. If you want to retire with a $60,000 per year income in today's dollars, you probably don't need to save a thousand dollars a month. Let's do some quick math and I'll just I'll do it real fast to give you an idea of it.

I'm going to ignore doing an inflation calculation here and I'm just going to assume just static numbers that not accounting for inflation because inflation calculations take me a few extra steps and they just slow me down just a little bit. The calculator that is fine that you used, but let's just do some quick math.

If you begin today at the age of 23 and you save and invest until you're 68 years old, that gives you a 45 year time horizon. So I'll just plug this into the calculator here. 45 years and let's convert this to monthly. So it's going to be 540 months from now.

Let's go with your 7% number right now and let's put that in. So that comes out to be 0.58% per month. Let's start with a present value of $10,000, which is what you have saved in your account. And let's put a thousand dollars per month into that account each month going forward.

At the age of 68, under those expectations, you could expect to have an account value of $4,045,952.84. Now that's probably far more money than you would need to produce $60,000 per year of spending. So if we just use the 4% rule on that number and we'd say, "What's 4%?

You're going to spend 4% of that account value." That's $161,000. That's over two times the amount of money that you said that you need, $60,000. And it's over 150% more than what you said you needed with regard to $100,000 per year. I don't think you would even need that much because if you're not spending $100,000 a year today, you're not going to spend $100,000 a year in retirement.

People who are frugal don't just all of a sudden start spending more money in retirement. If you have saved that much money for retirement, you would wind up in a situation where you're like the last caller, where you've got millions of dollars that you're not going to spend and you're just thinking about, "How do I give this away?" Which is great.

I want you to be there. But the point is you don't need to save this much money for retirement. Now here's what I didn't hear from you. I didn't hear in your financial goals, I didn't hear you talk about anything related to marriage. Do you hope to marry at some point in time?

I do. Okay. So you didn't say to me, "Joshua, I'm saving money for an engagement ring," or "Joshua, I'm saving money for a wedding," or "Joshua, I'm saving money to move to Michigan," or "Joshua, I'm saving money for a really great honeymoon," or "Joshua, I'm saving money so my wife and I can do such and such." I didn't hear any of those things.

And so that concerns me. Now I'm not saying that to be mean to you, but as somebody who is 10 years down the road, that's going to be a much bigger impact on you than having $4 million at age 68. Similarly, I didn't hear you say anything about opportunity money, opportunity funds.

You mentioned that you're saving money into a car account and you have $1,000 in that right now, but you didn't say anything about investing into something that is related to your career or into switching from your current career and developing a higher source of income. You mentioned that you know that's important, but you didn't talk to me about any specific goals related to that.

So here would be some goals that I would recommend that you consider that I think are a little bit more tangible. And my hope with these tangible goals is I want you to save more money than you're saving now, but just to put slightly different names on it so you can understand what those goals actually are.

So the first thing that I would recommend that you do, I would first recommend that you allocate about $10,000 of your current savings strictly as your emergency fund and/or your opportunity fund. As a single man, you should put yourself in a situation where you have six months of an emergency fund, and at $1,800 per month, six months comes out to $10,800.

Now, you could get a job faster than that, but what I would recommend to you that you set as your first goal is to save $10,000 and save it, and here I'll come back to this in a moment, you could save it in a Roth IRA because there's no reason why you couldn't get it out.

But because retirement is so important to you, I would just say just keep the Roth IRA as it is. And I would say save $10,000 first into your liquid savings accounts, just a saving account at the bank, money market. I'd put half the money in cash and store it in your safe or in your safety deposit box at the bank or put it in your dad's gun safe or whatever.

Find a safe place to stash it, but save $10,000. In your life thus far, have you ever had $10,000 sitting in your bank account? I have not. Not even close. All right. Once you hit that number, you will achieve your first target that you told me that you wanted to achieve at 68, meaning having enough money to not to worry about having enough money if you need money and to not have your decisions limited by money and to be able to cover yourself and to help someone else.

I can't use your exact words, but that's basically what you described to me. You don't need $4 or $5 million to do that. You need $10,000 to do that. Can you think of any decision that you would like to make or any problem that you might face financially that if you had $10,000 in the bank you couldn't solve or anything you couldn't make at this stage of your life?

No. That would make things a lot easier, I'm sure. Right. Now, 10 years from now, $10,000 won't be enough, right? Because I have lots of problems in my life that could happen that are bigger than $10,000. But at your stage of life, $10,000 gets you there. So I would recommend that you set that as your first target, is that you save for that.

After you've saved for that, and I think you should be there in a few months. So if I were you, I would set an aggressive target of that goal. Do you have any major important dates coming up? Birthday, anniversary, at work, anniversary with your girlfriend, or any important dates coming up in the next few months that are personally meaningful to you?

Not particularly, I suppose. All right. Then make one up. But pick a date that seems exciting to you and set a goal of saving $10,000. And try to get there as fast as possible. Now, when you have a short-term goal like that, it makes it a lot easier for you to put yourself in a situation where you're aggressive about cutting your expenses.

You put yourself in a situation where you can actually build more money and savings because you have a short-term goal. It's hard to feel motivated about putting $1,000 a month aside when you've got to wait 45 years to see the results of that. Especially when the compound interest curves don't start kicking in really powerfully until about 20 years from now.

But having $10,000 and imagining that and putting yourself where you've got that as a goal, that should be personally motivating to you. Now, after you've done that, the second thing I would recommend to you, as you sit down and imagine over the next few years, as best you can, any big expenses that you think would be coming up.

So, here you should be thinking about marriage. And you should be thinking about establishing yourself in a new household together with your wife. Think about how much money you might like to save to be able to do something like buy an engagement ring. Think about how much money you might like to save to be able to pay for a wedding.

Think about how much money you might like to save to be able to pay for a honeymoon. Think through those. And I would recommend that you put those on your list. Because if you'll be thinking about that and preparing for that, it will make your entry into marriage, if you wind up proposing to your girlfriend, it will make your entry into marriage far, far more pleasurable than most people's entry into marriage.

So, I recommend you consider that and start allocating funds for that. Second, with regard to the house, try to get some clarity on it. And set some bigger goals as far as, okay, what do you need a house for? Here's what I'll tell you. You can't know now what you'll need 10 years from now.

And the best way to approach it is just to wait until you're married. Your first year of marriage, rent the cheapest apartment that is appropriate for your and your wife's income levels and what she and you together decide that you can handle. It should be comfortable enough to not be frustrating, but it should not be opulent.

And start to build your life together. And then after you start to build your life together and spend time with her and after you're married for a year or two, then you'll start to have an idea about the best types of things that you like and the types of things that you don't like.

And then, as you start to have children, children only come, you know, one or two or very rarely three at a time. Usually they come one at a time, which means they're pretty easy to tuck away into little corners. And they're small when they're born. They don't really move around a lot.

And so you still have loads of time that you can take time and be flexible. And what you want to do is at this stage of your life, maintain your flexibility as much as possible. Because in order for you to hit your lifestyle goals or your career goals, if you can keep your flexibility and you can just stay renting an apartment so that you can easily move, and if you can keep your possessions few and limited in number and in size, then you'll be able to make strategic moves that will help your career to go from $50,000 of earnings to $150,000 of earnings five years from now.

That should be your target. In the next five years, figure out how do I go from $50,000 to $100,000 to $150,000. And if five years intimidates you, make it ten years. But you could go, at 23 years old, you can go from $50,000 to $150,000 by the age of 28.

But in order to get there, you'll want to maintain your flexibility. And so I would caution you to be slow about committing to big things like houses, save for them, but be slow about moving in that direction. And build your career. Build your life together with your wife and build your career at this stage.

And keep your financial options open to you. The next target I would recommend that you target is set yourself a goal of getting to $100,000 of accessible money as quickly as you can. Now that accessible money should include your Roth IRA, but outside of that, it shouldn't really include many other major investments.

It should include primarily money that's available to you. And then in the next few years, meaning just in bank accounts and cash and money markets, etc., then over the next few years, dedicate yourself to trying to figure out what your investment strategy is going to be. Is your investment strategy going to be to pursue the path of corporate income earning, where you're going to pursue the corner office approach?

Well, in that situation, then your best investment strategy is just going to be put money in your 401(k) by publicly traded mutual funds and focus on your earnings. Is your investment strategy going to be to build your own independent business? If so, you need money to start the business.

Is your investment strategy going to be purchasing underappreciated, underpriced assets and selling them for a higher dollar figure? Well, whatever assets you're going to be working with, you're going to need money to work with. And so if you have money available to you, then you can pursue whatever investment strategy you decide makes sense for you.

And then you and your wife, as you start to move and get clarity on what your future would look like together, are you going to live in Michigan or are you going to live in Texas? Are you going to live in apartments? Are you going to buy cheap houses, live in them while you fix them up and then sell them a couple years later?

What are her skills? What are her career ambitions? What are your skills? What are your career ambitions? You'll want that money. And as you have that money to draw on, you can achieve that goal you set at 68 far faster than waiting till 68. You'll be there literally in three months with that $10,000 number, three or four months.

And two years from now, three years from now, you can continue to build. Now, if you follow this path that I'm outlining for you and you set aggressive financial goals, then you'll be able to enjoy the fruits of what you're talking about in retirement. Every year going forward, you will be able to enjoy that financial stability, that financial independence.

And then it'll just be increasing levels. So at this stage, you can take your wife on a two-month honeymoon. But three years from now, you guys can do a 12-month trip. Or five years from now, you can build a 12-month trip. And by having money, you'll have life decisions available to you that aren't available to people who put all their money in a 401(k) and just feel like they can't touch it.

And that's really, if I were to go back and preach to my 23-year-old self, that's what I would say. So I'm not saying don't save money. I'm saying save more money than you're saving now. But just think about it with a slightly different frame of mind. And I believe that you will then build from your current place in the top third of society, and you'll go up and up and up.

And you'll enjoy financial abundance at every stage going forward. And you'll be able to build those satisfying things. You know, I always love the phrase that Zig Ziglar used to say. He says, "I want all the things that you want to have, the things that money can buy and all the things that money can't buy." And that's where I am trying to direct your attention, is to thinking about the things that money can buy and also the things that money can't buy.

That's my speech. Questions, comments, anything to be clarified, Alex? Thank you so much. That really gives me a lot to think about. I really appreciate the help with goals. I guess I'm not great at setting goals for myself, but that's going to help a lot. If you will go back, Alex, and listen to the recording of this show, it'll be published in 10 minutes, and listen to the types of questions that I asked you.

I was very intentional in my asking you those questions, because what I'm hoping is to hear that you have good answers for them. And it's not a matter of there's something wrong with you if you don't. Most people don't. But if you get to the point where you can answer those questions for me clearly, then you don't need me anymore.

You can just guide yourself and coach yourself to anything that you want. So here's what I did. I started by asking you about your management of your current situation. Because you can't think about people who are behind on their bills, they can't think about big financial goals. So until you have a good basic money management system in place, which yours is good enough, but you want to constantly be thinking about that.

That's not a goal, that's a tool, that's a methodology. You've got to have a good financial management system in place today. So that's why I started with that, was to get a sense of how in control of your money you are. And you're doing great. You're in control. You could probably tweak a few things, but you're in control.

You know what's coming in, and you know where it's going out. And you want to make sure that as you go forward, that you always know what's coming in, and you know what's going out. That's important. Now the next thing I asked you is I asked you about your goals.

And I didn't feed you the goals. I asked you, I said, "What are your financial goals?" I didn't say anyone else's, I said yours. Because your financial goals are the ones that matter. Then I asked you why those goals are important to you. I said, "Why are those goals important to you?" To try to get you to clarify, "Oh, here's why this is important to me." Then I asked you to rank those goals.

And after ranking goals, you put yourself in a situation where you can know, "Here's what I'm going to work on first." And that ranking should reflect their personal importance to you, and also the logical order. So I don't think logically you should put any money into your retirement funds until you have a big, giant emergency and opportunity fund.

Because if you're going to move from, I think you're in Ohio, if you're going to move from Ohio to Michigan, that's going to cost you money. You're going to need money to put down first, last, and security deposit on a new apartment. You need 10 grand. So I would say put 10 grand aside first before saving for retirement.

But then I also affirm what you said, where you said, "I need to start it now because that keeps the compound interest working on me." Let's go back to our math table. If I drop those years of investing, what was our future value? Let's do it real quick. So again, 45 years, 7% interest is what we used, present value of $10,000, $1,000 per month.

And our future value there is $4,045,952. So let's call that $4,046,000. Now, if we drop that investment time horizon from 45 years to 40 years, that number of future value drops to $2,803,238. So that would cost you, run the math, by waiting five years and not setting aside that $1,000 into that 7% accounts, that costs you $1,242,000.

So you are absolutely right to prioritize retirement investing in terms of the earliness of it. But these other goals are going to make a bigger difference to your lifestyle. Having enough money to propose to your girlfriend and get married and enjoy setting up a household together, having enough money to buy a house when you decide you want to buy a house, that's going to contribute far more to your quality of life than having an extra $1,200,000 at 68.

$1,200,000 at 68 is not going to matter because you're going to have more money than you need no matter what. So that was my final thing that I did, as I said, rank them and then figure out a way to target them systematically, figure out what's the right number, why is this important to me, which of these is more important, then you'll start working towards it.

And then the answer is about what accounts, what investment vehicles, all that stuff is easy. So go back and listen to it. And if you'll hear the way I asked you those questions, if you'll just ask them yourself, then you won't need me. Six more months of listening and you can go out and go on to something more interesting.

Good enough for today, Alex? Alex: Absolutely. Great. Well, thank you for calling in. I really appreciate it. And man, I love doing these Q&A calls. I hope that those of you who are listening, I hope you've enjoyed these calls. If you would like to get on next week's call, please come on by radicalpersonalfinance.com/patron.

I love doing these and I would love to talk to you and answer your particular question. In addition to that, just a couple of notes about administrative things. A couple of things that I'm deeply aware of is thank you for your patience with me the last really two months as we have made this transition.

It has been quite the challenge and the challenge is having to stop. Right after I recorded the show that I just released previously saying to you that we've gotten on the road, I wound up that very next day, I wound up taking my trailer in and spending two days in the shop getting the axles replaced.

Just the challenges of figuring out how to make things work on the road, how to make these shows work, etc., while also keeping moving forward, that's been a challenge. But we are soon to be stable and the show should be coming out back on the regular schedule. Lots of stuff coming.

I'm also aware that, just personally aware, I haven't loved the mix of shows I've done recently. I've done just a lot of stuff personally, not a lot of technical stuff. It's just been done the best I can. So thank you for your patience with that. Look for that to change in the next few weeks as we are stationary again.

We're doing a mad dash across the country right now. In the future, once we get stabilized, once we get into our rhythm, I'll start sharing with you where we are, etc., and what we're doing as well. Maybe you didn't need all that. I just felt like I owe an accounting to you, my listeners, of where things are at.

Thank you all so much for listening. And I am now going to pack up my gear. The first Q&A show from a picnic table at a rest area. Hopefully you consider it a success. A little bit rough on the production end, but it'll get better in the future. If you thought today's show was good, tune in next week for next week's show because they will be even better.

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