Hey parents, join the LA Kings on Saturday, November 25th for an unforgettable Kids Day, presented by Pear Deck. Family fun, giveaways, and exciting Kings hockey awaits. Get your tickets now at lakings.com/promotions and create lasting memories with your little ones. It's Friday. Friday 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. I am your host and it's Friday. That means live Q&A. That's where you get to call in and chat with me about anything you want and hopefully together we can come up with something useful for you to listen to. Each Friday, whenever I can arrange the technology, I do a live Q&A call with members of the audience.

If you would like to get access to one of these calls, it's very simple. Just sign up to become a patron. You can do that at radicalpersonalfinance.com/patron. Usually these calls have anywhere from two to five callers. If you want to get your question in and have talk with me about something that's important to you, I don't know a better way for you to do it other than to call in to a Friday Q&A show.

If you would like to do that, please consider joining as a patron. Go to radicalpersonalfinance.com/patron. That simply allows me to not have 100 callers, but just to have a few callers. That helps, I think, to have some really productive calls. From what I hear from you, you tell me that you like it.

Since I love doing them and you like listening, I think it's a winning combination. We begin with Joel in Texas. Joel, welcome to the show. How can I serve you, sir? Hey, Josh. Hey, thanks so much for what you do, for sharing your journey with us, your insight. You're just doing awesome, man.

Thank you. I wanted to just bounce off our financial situation, my wife and I, just the two of us, kind of give you an idea of our income, our spending, our assets, maybe get your impressions on that. Cool. Go for it. All right. Cool. We earn about $220,000 a year.

I would like to slow down in three to five years, reach a point where we could maybe go part-time and have some more flexibility. Net worth is around $800,000 to $850,000 right now. We've got about $400,000 in mutual funds, about $400,000 in three, four different properties, and about $50,000 in cash.

On a monthly basis, I could give you an idea of housing and taxes and other expenses and stuff, but just wanted to see how you could guide me. Okay. Well, what specifically are you working towards? Is there something specific that you're struggling with, or in general, what are your goals?

Yeah. In general, trying to find the right mix between rental properties, which produce some income, other securities, just long-term 401(k) type stuff, and maybe have a number in mind on at what point we could slow down with accumulating and start expanding our interests, our time into other things besides just working full-time.

Maybe even a quick check on some of the things that we spend money on month to month, just in general, like something that might be kind of unique as we really believe in giving, being generous with causes, with the church. That's a big part of what we do every month, but something that we've got to evaluate closely.

And I think your perspective, you've helped me in the past, your perspective would be useful on that too. How old are you and your wife? Sure. We're both mid-40s. Okay. And you've said twice that your primary goal is to slow down a little bit. What does that mean to you?

Sure. We both like our work. My wife does two different things on a part-time basis. I do one thing on a very full-time basis, full-time demanding corporate job. So instead of working 50 hours a week, it'd be great to be able to do that, half that much. So if you woke up and had a few million bucks in the bank, you would basically immediately quit your corporate job.

What would you do then? I'd probably be an independent consultant in similar kinds of work, doing it more on my terms. Can you make any money doing that? Yeah, yeah, I think so. I mean, it might cut our income in half, but obviously we could still do pretty well.

How much are you earning right now in salary? The main job is about a $200,000 salary, $205,000. Okay. And how much are your living expenses? Sure. In the range of $6,000 a month. Okay. So you're living on well under half your gross salary. And with regard to your rental portfolio, is that portfolio cashflow positive?

Yes. We've got five rental units and they all make about $100 or $200 a month in that range. So you have currently about say $500 to $700 of monthly profit from the real estate. That does include, however, that you have mortgages on the properties and are those mortgages being paid down?

Correct. Yeah. After mortgages and after... And this is another area where it's highly variable. The properties can take every extra dollar that they make if you're investing in them and building them up. But in general, I would say that we're making about $1,000 a month of rental income. What is the total gross value of the rental portfolio and how much debt is currently on it?

The value of the rental portfolio gross is $525,000. And the debt on the rental portfolio is $250,000. And on the current repayment schedule, when will these properties be paid off? We just got started in the last several years. So they're all 26, 27 years out on 30 year fixed mortgages.

Okay. So if you're living on $6,000 a month and that's your household living expenses, it sounds like your wife with her two part-time jobs, she's earning about $20,000 a year. Is that about right? Yeah, I may be a little low on that. It's probably more like 35. Okay. So if you're living on $6,000 a month and you have, let's say that from her income, let's say that she's earning $2,000 to $2,500 a month and you have $500 to $1,000 a month from your rental portfolio, then you basically have about half your expenses covered from your current sources of income.

And you have enough savings that you could afford to make basically any kind of transition that you wanted to make. So I'm not sure, do you think of yourself as able to go now to make any changes now or do you feel like you're stuck in a job and you just got to keep going for another 30 years?

And I was listening to a couple of your past shows and I think that's a common question is when do you know you're ready? Generally, I don't think we're at that point yet, but we'd like to be there in three years. Right. Well, I mean, for every person it's different.

One person may have a corporate job that they find very deeply meaningful to them and has the benefit of earning quite a bit of money. It's very likely that you wouldn't be able to make up a $200,000 salary in a consulting business in a short period of time. That would be unusual.

Unless you have unusual talents or you have an unusual marketing plan or you have some unusual expertise, it would be very rare to have somebody who in their mid-40s was able to leave a high-paying corporate job and move immediately into a consulting business and immediately replace their income. So I think there's absolutely value in simply saying, "Hey, this is the time at which we're trying to earn a lot of money and trying to save up as much as possible to be financially independent." So I'm not trying to convince you or anybody to unnecessarily walk away from a high-paying job.

What I do want to persuade people and possibly you is approach that job with a good attitude, recognizing that you're working there because you're choosing to. And hopefully that could help to have a little bit more ownership of it. Now, I don't sense this with you, at least anything you've said.

It sounds like you're pretty clear on that. But a lot of people work a job and they just feel like, "Well, I'm stuck. I'm hopeless. I can't get out." My point is, yes, absolutely you can. You have enough money. You could change. You could adjust. You could start a new business.

You could move. You could move from one industry to another. Probably, Joel, in your case, have you thought of negotiating with your company at all and adjusting slightly so that you're able to slow down a little bit, perhaps in some of your responsibilities or in your position in your current company, in order to move towards the lifestyle that you want to live while also still saving aggressively?

Yeah. And that may be a future step in that three to five-year time frame is saying, "Okay, I need healthcare. I need some part-time work, but let's scale back a bit." And that would be a good spot to be three or five years from now. Okay. Well, from everything that you're telling me, you're well on the path to financial independence.

You have all of the basic framework in place. I'm not sure how detailed your goals are. For example, I'm not sure how much you're planning to expand your real estate portfolio, what your target numbers are, how you're planning to pay down your debt, or whether you're going to keep it up, or how you're going to adjust these things.

Do you have a specific question that you would like to hone me in on that I can provide some useful thoughts on? How about asset allocation? A general quick gauge on where a person at my level should be with that mix of cash or securities or property assets. Okay.

So when you use the term asset allocation, how do you believe you should structure your money? In more than one place, for one. I mean, stock market, obviously, great long-term potential there, but we want to be aware of the risks with that. And so having, let's say, 400,000 there now, and some of that is highly volatile, let's say, my company stock, which is a part of that.

So there's certain risks and things to be aware of there. Properties, slower growth, but totally different market sector and good for that reason. And then I feel like I'm a bit low on cash with around 60,000 out of that 860,000, but just your thoughts would be helpful there. So my gut would be that you're probably low on cash as well, especially given that you're managing a portfolio of five properties and your cash reserves will be partly for your own personal life, for your own personal emergency funds, personal expenses, personal something happens, you need it.

It'll be for your own personal opportunities. If you see something you want to buy, you've wanted a boat for a long time, and now all of a sudden you came across a $70,000 boat that's selling for 30,000 bucks, you need plenty of cash on hand. And then of course, a big risk that you have is managing the rental portfolios.

So my gut would be that your cash is a little bit low, but there is no formula that I could come up with to give you. There's no specific number. There's no academic construct that I'm aware of that would answer that question. But it would just be my gut that your cash reserves are probably a little bit low, given the potential expenses of your real estate portfolio.

If I woke up in your shoes, what I think I would do is I would just set aside the cash that the excess cash flow, the $1,000 a month, or however much it ends up being from the rental portfolio into a separate account. And I would just start to stockpile that cash until it built up.

And you'll need to decide how much you want to expand your portfolio versus how much you'd like to lower debt. I think the best way to build a real estate portfolio is to design, just to think and consider how big you want that portfolio to be. That's going to come down to how much money do you need?

How much time does it take you to manage a property? What's your span of control? How much could you actually accomplish with regard to your real estate activities? And so if you, let's just say very simply, let's say you say, I need $6,000 a month to live on. I really like this approach to planning because it makes sense.

It's a simple approach. But let's say you say, I need $6,000 a month to live on. And I could expect with each of my rental houses, I could expect to earn $1,000 a month net of taxes and expenses. So if that were the case, then I would target and say, well, my goal is to have six rental houses.

And each of them is going to provide for my living expenses. Now, as long as you additionally have other assets, which you do, you have additional stocks, et cetera, then that could be a really good goal to set for your portfolio. It's very doable. You haven't set a target of having 60 rental houses.

Six is very doable. It's very reasonable. And it's very much within your ability to control, your ability to manage. You could probably easily manage more than that. But it's very much within your ability to manage as a part-time endeavor while you also then had a part-time consulting income. And so in terms of asset allocation, that's how I like to approach it is to say, here's the lifestyle that I need to provide for.

Now, if you provide it with real estate, then you've got one set of income. Earlier in the call, you talked about multiple streams of income. The second goal I would say would be to say, OK, with my stocks, how do I provide $6,000 a month from my stock portfolio?

And you can calculate that out a little bit and set yourself a target goal of providing for that. Now, obviously, it would be more than you need. And so you wouldn't make these targets if you were stuck somewhere. You could quit sooner than that. But then you could also come back and say, well, now with my consulting business, I want to build a consulting business that provides for my $6,000 a month.

And so those would be simple examples of three very reasonable targets. The only one of those that would take longer would be you're building enough money to provide in the mutual funds. But if you just follow that pattern, break it down, $2,000, $2,000, $2,000, or however you decide to structure your income, that's first what I would look at.

And so in your real estate portfolio, as you build it up, then you want to have a capital fund that's available for acquisition. So when you find a deal, you need to have cash to put in place. And then also that cash is available. And so if from time to time you start to build up that cash, you decide to go ahead and use it to pay down one of the properties or pay off one of the mortgages or refinance, et cetera, then you have that cash.

So my gut would be that that would be a little bit low. The reason I asked you about asset allocation is this. I want to hear how you're thinking about it. There are two approaches. I divide the question of asset allocation into two approaches. The first approach is the academic approach.

This is what you get when you go to your stock broker, your financial planner. They give you a set of questions to help you understand your investor risk profile. And then based upon those questions, they try to design for you an ideal portfolio. There's nothing wrong with this approach, but it's basically only applicable to a specific portfolio of assets.

And that's where you look and say, how much of my money is invested in stocks? How much of my money is invested in bonds? Of my stock allocation, how much is applied to big companies, medium-sized companies, little companies, companies that are headquartered outside of the United States, companies inside the United States?

How much is in real estate? How much is in bonds? How much is in precious metals or commodities, et cetera? I have no beef with modern portfolio theory as it's applied to asset allocation on a portfolio. So with regard to commentary on that, I would refer you to your stock broker.

Just sit and talk with them. But with regard to your own personal life, I think the way to approach asset allocation is to start by saying, what am I trying to accomplish? And then make sure that you have the assets that are going to put you in a place where you're able to accomplish those goals.

And that's where by taking ownership and control, you'll be able to allocate your assets in a way that cover your goals. So if you were going to leave and start a consulting business, then it would behoove you to have very stable assets so that you could draw on those assets if needed to provide for your family while you're building your business.

But on the other hand, if you have a very high income and you have a good base of assets, then you can adjust your asset allocation in a different direction. And so that's where I would just encourage you to be confident in your skills as an investor and look at the specific needs that you're concerned about and then allocate your assets towards those goals and towards those concerns.

That sounds good, Joshua. I appreciate the idea of the capital investment fund for the business to be able to finance the next purchase or refinance a mortgage or something like that. That's pretty much it. Just wanted to do kind of a quick financial checkup. Cool. Well, don't forget also, I don't know that we did a complete or a quick financial checkup, but remember the value of sitting down and checking through all your insurances, doing your risk management as well.

But in general, the five points I teach, increase income, decrease expenses. Sounds like you're on track with those. Invest wisely. You're on track with those. So step four is avoid catastrophe. Work through any kind of catastrophic thinking. What would happen if a tornado blew through your house? Are you protected from that?

What would happen if you lost your job? Are you protected from that? What would happen, insert any scenario you're concerned about global flu pandemic? What would happen in that case? And plan accordingly. And then number five is optimize lifestyle. So in the situation that you're in, if there's something you should behave as a rich man.

So if there's something that's bothering you, if there's an employment agreement that you have in place, look to renegotiate it. And with slowing down, in terms of slowing down, recognize that that doesn't always mean that you have to leave your primary source of employment. And by the way, we didn't talk about charitable giving.

So call in next week and let's talk about charitable giving. We go to Bill in New York. Bill, welcome to the show. How can I serve you, sir? - Thanks for taking my call, Joshua. How are you doing today? - Very well, sir. My pleasure. - So the reason I called in today is because I'm going to closing on a house in 13 days, which looks to be pretty sound.

Obviously, anything can fall through. But I'm just kind of wondering what the next steps should be that I should be concerning myself with. - Is this a house that you're going to live in? - Yes. Well, it's a house that I'm going to live in as well as rent out.

I plan on taking in a few roommates and kind of house hacking to try and get a little ahead financially. - Great. I love it. So what questions do you have? - Well, so just to give you a little background about my philosophy, I'm not a huge fan of the stock market for the main reasons that I don't have control over what those companies do, what their practices are, as well as how they choose to invest and prioritize ethically.

So my plan long-term would be either real estate or a small business or some combination of the two. One book that left a huge impression on me was "The 10% Entrepreneur" by Patrick McGinnis, which I'm not sure if you're familiar with or not. But I kind of like that idea of being involved in a lot of small businesses, being involved in some rental properties.

And essentially, I don't know how to... Or not that I don't know how, but I'm not sure what is the best way to prioritize those kinds of investments. - Well, you are not surprisingly echoing my own approach to life and kind of my own personal interest in investment plans.

That's not surprising because we usually seem to bring to ourselves friends and fellow journey people that will reflect kind of what our own interests are. So I share your concern with many large public companies from an ethical perspective. I share that perspective that you have. How old are you?

- I'm sorry, what was that? - How old are you? - I'm 25. - Okay. And is this house your first house? - It is, yes. - Are you single? - I am. - Okay. Is there any reason to expect that your singleness will change in the next handful of years?

- Hopefully, but not at the moment. - Okay. So we're waiting on a prospective candidate. Okay. So I guess with regard to the house, I would say it sounds exciting. The approach that you're taking of purchasing a home to live in and then also rent out, I think is one of the best approaches, especially if you live in a place where you can expect a good flow of tenants or if you have the type of network where you can bring in roommates that would be suitable and compatible for you.

That is a really, really excellent financial foundation to build from. Many young people lack the financial foundation to be able to purchase a house, either due to poor credit or no money or no steady job, etc. And if you have built those assets, you have established credit, you have a steady income, then you can go ahead and purchase a house and you can fill it with people that you would like to spend time with anyway, and it can work out very well financially for you.

So absolutely, I think that's a wonderful place to start and a place to build from as a young man establishing the foundation of your financial empire. Real estate financing on a primary house is the easiest of almost any real estate financing, and it really can work well. And it's fun.

It's nice to live with people that you like. It's a lot better than living alone. I don't understand why people want to live alone. It's way more fun to live with your friends. So I would say that's fantastic. Now, if this is your first time house, this is your first house, I would simply encourage you, set aside as much money as possible, because you're about to face a whole new rash of expenses that you haven't faced before.

And you're aware of those things intellectually, but probably you haven't gone through them emotionally, but they'll come. Everything on a house breaks down, wears out. And so the equipment in the house was going to need to be replaced. And what very possibly your home inspector went through and said, "Oh, this is not a big deal." Well, three years from now, it's going to be a big deal, just because three years is going to pass.

So set aside money. It also often takes quite a bit of money to go ahead and fix up the house and do whatever it is that you need to do. And those expenses are quick. I've talked to a lot of young people who've purchased their first house and going in, they didn't think it was a big deal that there were no window coverings.

But then very quickly, they discovered that window coverings can be $8,000 to purchase blinds all around to cover the windows. And yet, it's kind of got to be done to some extent. So just set aside money for that and then work hard to get good tenants. And I think that absolutely will work.

Back to your goals of establishing yourself as an entrepreneur and an investor in various small businesses. Do you have any specific ideas right now? Or what's your work and how does that interface with this investment plan? >>James: So currently, I work for the government. I went to school for chemical engineering, and I got a job after school as an environmental engineer working for local government.

And that job is fantastic in terms of its flexibility and in terms of the benefits that are offered. It gives me a lot of opportunity to invest time in other endeavors. I'm just not sure where to direct my energy and my money. I have a lot of interests, various different interests.

And I don't know if you could kind of talk me through philosophically how to determine what kind of direction to go with that. Do you know what I'm saying? >>Adam: Yeah, it's a big question. So it's a huge question. And I think it's a normal question. Most people don't have the question that you're asking.

Because if you, many people, so the standard investment advice is take your money and purchase mutual funds with it. And that's reasonable advice. But if you are making a personal choice to eschew that path and to choose to invest your money into something that is closer to you, that you have the opportunity to control more, all of a sudden you face huge challenges.

Because that path is not well trod by people who are writing books. That path is not well trod by people who are selling you products. It's a very different path. I have explored this path pretty extensively. And I've come to the conclusion that there are essentially two very different groups of people.

There is a group of people who relies primarily on the mainstream financial products that are available for them. And they function very well in that market. They use their 401(k) or their 403(b) at their job. They purchase mutual funds. They purchase stocks. They use traditional bank mortgages to buy houses.

They purchase vehicles. They finance their cars, their boats, their RVs through their local credit union and through their bank. And they're very comfortable with that. And that financial system works really, really well. It functions and it's effective. But there seems to be, in my experience, almost an entirely different world of finance.

And it's populated by people who really are harder to find. But these are people who lend their money out privately. These are people who fund small enterprises. These are people who do all kinds of business deals, all kinds of real estate deals. But they do them with alternative forms of financing, private money, consortiums of investors, et cetera.

But it's been very hard for me to find anybody teaching that publicly or anybody who really is a part of that who sat down and written books on it. And I'm convinced it exists because I've talked to all kinds of people who are in it. But I don't know how to organize that information.

I don't know how to even lay out here's what the strategies are. I don't even know how to discuss those things. But I've seen all kinds of people who have built, again, interesting businesses, who invest in other people's businesses. And it's just beyond my – but I can't find a lot of written, published work on it.

Here's what I'm doing and what I would recommend that you do. First, in looking – so, before I give you my advice, if you were to summarize the 10% solution, the book that impressed you by Patrick McGinnis, what would be your summary of his book in about one minute or less?

>> My summary would be that 10% of your time and 10% of your money should be going into personal small business endeavors to diversify income streams. >> Okay. So, with the other 90% of money, is he saying 10% of your income or 10% of your savings? >> He's saying 10% of your income as well as 10% of your time.

>> Okay. So, I think that that's totally reasonable. And what I've observed is usually when you have questions about this, it's because you don't know what to specifically do. And the only advice I know to do is to say, "Just wait and look." So, just like real estate, if you – just like buying a house, if you know that you'd like to buy a house and you're thinking about buying a house, what do you do?

Well, you save money, you wait until the time is right, and you look. You look at the market to see what's available to you. You look at the market to see what you might like to buy. And then when you're ready, it seems really right. It seems like, "Oh, here's the house.

This fits what I'm looking for, and I have the money." So, with private business investment, I don't know anything else to do other than to say, "If you don't know what you're interested in, just wait and look." And then when it appears, you'll recognize it. Somebody will come across with a great business idea, or somebody will have a product idea, or you'll see somebody doing something in one town and you think, "I could do that in my town." Or you'll come across somebody who is building something and you say, "I'd like to work with you.

I'd like to partner with you in some way." But I don't know what that is today, and you don't either. But the two things that you will be interested to have, that you'll want to have, is money and interest and knowledge. So, if you... That was three. Actually, if you just work on that and you talk to people, you explore ideas, and you stockpile your money, you won't regret that.

And you can't predict when the opportunity is going to come along, but it will come along. And if you're working to be ready for when it comes along, you'll recognize it when you see it. I feel like that's really kind of mealy-mouthed, not specific advice, but it's the best I've got.

So, can I ask, how was it that you determined that the proper path for you is radical personal finance? Do you have other ideas that you thought of pursuing, or was this the main focus for you? Were there any ideas that you were considering and then threw it to the side?

Because one of my issues is that I have several ideas, and I don't know how to prioritize those and which one of those to kind of jump into first and test out and see if that will work. I have a long list of ideas, both business ideas and job ideas, and just frankly, lifestyle ideas that I have.

Most of them are on paper with just a physical written list. Some of them are just things I'm aware of or interests that I know that I have. And those ideas are different. And so, I'll explain when I started radical personal finance why I chose that particular idea. But my ideas vary.

I'll give you one from my list. I joke with my wife that if we go broke, there's no chance in the world you're going to get me back into corporate America. I'll go and open a hot dog stand before I go back into corporate America, in the sense that for me, big corporate world, I am not interested.

I think for some personality types, it has a lot of advantages. And there have been plenty of days when I have wished to go and get a job. But for my personality type, I find it very stifling. I find it very constraining. And I don't wish to engage with corporate America.

So, I would rather have a hot dog stand and live on the income from that hot dog stand than I would go back into corporate America. And just to continue with the serious but slightly probably amusing ideas, I keep my eyes open constantly for jobs that would give me a degree of independence and a relatively stable source of revenue, while also allowing me to pursue a big, to use the lingo, a big moonshot idea, or a big business idea, or a big investment plan that would require my time.

Now, in choosing what you're going to do, I think you have to do an analysis of what you bring to the table. And what capital do you have to offer? So, if you're very young, and you don't have a lot of money, the capital that you probably have the most of is time.

And time capital is extremely valuable. If you have time capital, you can really build, you can start a lot of businesses with just simply a lot of time. You also have money as a capital. And as I grow older, and as I save and earn more money, and earn more and save more, then I increasingly have more money.

And so that allows me to invest into markets that I can use the money to gain an advantage over other of my competitors who don't have as much money. And so that's really valuable. And then the third form of capital is, of course, some form of intellectual capital, inside knowledge or experience, something like that.

And those are just three forms of capital. There are many others, but three forms of capital that I think are really, really useful. So, if you analyze that, and you understand, okay, here's how I'm going to deploy those forms of capital, then you could start to look at business opportunities.

So, I keep simple ideas, and I'm aware, I try to analyze what are my personal tendencies. I don't want to go into corporate America, I'd go start a hot dog stand. But frankly, I don't know how to build a great hot dog stand. It's just kind of a joke.

But there are jobs that I come across all the time that I think, oh, I could do that really well. I recently mentioned on the show that I was so impressed by speaking to one of my listeners who had begun a business where her entire business is cleaning up dog waste from people's yards.

And I thought, what a perfect job for me. Not in the sense that it's particularly emotionally satisfying, but it's a market that has a very decent income potential. I could use it to support my family. It's not intellectually demanding, so it would be a break from something that is intellectually demanding.

And it would give me a tremendous amount of time to think or to read or to listen to something, listen to books, et cetera, while I was serving my clients that I think would be really, really interesting for me. And it's something that has, is very, it's a very independent business.

I don't have to work with a lot of people, I don't have to do a lot of employees, but the earning potential is very good. So, when I heard her describe that, I instantly put that on my list. Now, the reason I put it on my list is because I would be able to do a job like that without being committed 60 hours a week.

It would be enough to pay my bills to live on, while I then devoted all of the rest of my time to working on a business idea, developing an investment idea, or what is my bent is to develop some form of intellectual property. So, whether that's writing books on something or developing some kind of intellectual property, that's where one of my core skill sets is, is developing intellectual property.

And so, if I can use my time and my expertise, my knowledge, my intellectual capital, I can combine time and intellectual capital to develop intellectual property, and that intellectual property is something that I can then sell, and it will create for me a stream of royalties throughout my lifetime.

I view that as dividends. And for me, that particular approach to investing is very attractive. It's far more attractive than almost any other thing based upon my personality. But that's one of my, that's just an example of how I approach it. I look at a lot of other businesses though, and I look at businesses that are more physical, physical local service businesses.

I have contact with a lot of entrepreneurs. I always try to talk to entrepreneurs, and I look at most blue collar type businesses or many types of blue collar franchise businesses, and I look at them, and it seems to me that the competition in many of those is so weak that for somebody who simply was willing to come along and engage with that business and actually just follow the manual, the income potential is huge.

I have a client of mine who owns a franchise business in the automotive servicing, in the automotive servicing industry, and I've worked with him extensively. And as I talk to him about his experience in his business, more and more I see that if I went broke, I would go along and I would, and I look at a franchise like his, and I just see all it requires is somebody to actually be intelligent enough to roll up their sleeves, move in, and to actually follow the book.

But very few people are willing to do it. And the competition in many of those types of businesses is not the cream of the crop. The smart people usually go to law school, to dental school, to medical school, et cetera. And so that's a, I don't know how to make millions there.

You just make it with your labor. But if you go into something where your competition is not, where they're not doctors, lawyers, et cetera, they're not getting the highest SAT scores, there are a lot of businesses that you can work with, and most of those can be great investments.

So I don't want to keep, I feel like I've rambled just a tiny bit, but to say that the way that I look at it is to say, what do I have to offer and what do I want to do? Now, to answer your kind of prompt where you said, what led you to radical personal finance?

For me, it was a unique phase in my life where I realized that I had developed significant intellectual capital, significant ability, skill, analysis in the market, et cetera, to where I had the knowledge necessary to be able to effectively compete in this market. I was moderately dissatisfied with the structure of my previous job, and frankly, I was bored.

It was, I found it, I didn't find it particularly gratifying to have the same conversation over and over again. I feel like that conversation was super important, but I wanted to continually branch out into something new, something different, and it wasn't a good fit for me. And so my, and then I, the thing that pushed me over the edge though, I had decided, okay, well, I'll do this for about 20 years.

I set out a 20-year timeline. I will build a very profitable business, and I built an investment plan for myself on the back end that I say, I'll take all this money, I'll live in this manner, and I'll invest the money to where I'll be financially independent in 10 to 20 years, and then I'll close the business or just put it on autopilot, and then I'll move on to something else.

But what pushed me over the edge was looking at market timing. I was watching the market for online financial information, and as a long-time consumer of the personal finance blogosphere, I had seen the growth in blogs, but I had tried multiple times to write blogs, and I couldn't find, I didn't find my voice, and I didn't press through to find it.

So, but in looking at podcasting, I was seeing an upturn in podcasting, and the specific market change that came was podcasting became untethered. Prior, a couple years, I can't remember the exact year, but podcasting has been around for a very long time, but formerly you had to download the podcast to your computer, you had to plug in your mp3 player and sync it in order to have access to your podcasts.

But a couple years before I started Radical Personal Finance, Apple came out with support for untethered podcasts so that you could just simply subscribe on your phone, and automatically your phone would use the data to download the podcast. And I identified that, in my opinion, in my analysis, that was a market inflection.

Because once that happened, it became so easy to search for and listen to new podcasts, and I couldn't understand why anybody who was aware of that would ever go on and listen to terrestrial radio. And I couldn't figure out how to get a start in radio, but I knew I could get a start in podcasting.

And so it was a gamble that I thought would work out really well. It was a marrying of what I hoped would be unique intellectual property, my unique ability, and a particular time in technology. And I was watching it change, and when I started to do it, I couldn't find any good podcasts, and I said, "This is a niche that I think really can be filled." And so that was why I pulled the trigger when I did.

But I couldn't have predicted that. I don't know that you could predict it. In hindsight, I believe I was right. My analysis was, by my accounting, it was sound, and the market has continued as I thought it would. Now, time will tell where radical personal finance goes, but that was why I pulled the trigger.

So I don't know how you can anticipate that or predict that, but I do know that you can work hard to be ready for it. And if you're ready for it, when you see a change in a market that you're interested in, then you can go ahead, pull the trigger, and make your move.

That makes a lot of sense. My follow-up question, I guess, would be, how do you know if that window of opportunity has kind of passed you by? Is there a... Like, one thing that I'm thinking of in particular is that I have thought about getting into podcasting. Not that I have any particular expertise in any specific area, but I have an interest in a lot of areas that I feel are somewhat underserved.

And I guess, how do you know if... Or is it just a gamble? Is it just a, "I'm just going to try this and see if it works," or is there a way to tell that kind of that opportunity has passed? Well, in a sense, the obvious answer is no.

There's no way to tell. And that's what you, as an entrepreneur, you have to... That's the risk you take. There is a very significant risk that radical personal finance will wind up failing. And as an entrepreneur, you got to be okay with that. You got to recognize that, "Hey, this thing may not work." But I'm not going to be bothered by that because...

Well, from the beginning, I decided that if I try it and it fails, I'll be much happier having done that than having not tried it and never knowing. And so I could easily today go back to the financial planning world. I could easily obtain a new position. And I would make up, knowing what I now know, having the experience that I now have, I would make up in a year what previously took four.

So I am confident that I could go and do that. So I like to avoid the risk of catastrophic failure, but you can't be sure that anything will fail. Now, how do you know? Well, that's where you get into the world of analysis. And you're going to have to just educate yourself and clarify what it is that you're trying to do, and then to see if you believe in it enough to try.

And there's no guarantee that you're right, but there's a good chance that you are. And when you have the guts to say, "Okay, I'm willing to put my time into this. I'm willing to stake myself on this," then go for it. But I like the 10% solution. Don't burn all your bridges.

Do it just a little bit. Now, are you specifically, do you want my comment on podcasting specifically? Is it too late to build a good podcast? Is that what you want me to respond to? - No, no, no. But I guess where I'm coming from is the fact that I have a few different ideas, and I'm trying to determine which one of those to pursue and which one of those to invest my time in.

And that's the challenge. It's not like I have this one idea that I think the time is perfect for. It's that I have four or five or six different ideas, and I'm saying, "Okay, well, this one, the timing seems right, but I don't know if I'm quite as passionate about this other one where the timing doesn't seem right," and trying to weigh all those different factors and determine which of those should I really put my bet on first.

And that's not an easy question to answer. I don't expect a neat, tidy answer on that one. But it's just something that I'm struggling with at the moment and trying to figure out where I should be investing my time and my money. - Right. Here's my answer, and I'll give you this as just my closing answer to that question, because it's a good question and it's not an easy one.

But here's my answer to it that I hope will help you. A good idea is pretty much worthless. I've become convinced of that. A number of years ago, I read a book called Execution, and the author's main point, or what I remember is the author's main point, what impacted me about the book was the idea that basically it all comes down to execution.

And if you look at somebody who is successful, especially as an entrepreneur, if you look at somebody who's effective and successful, it very, very rarely comes down to them having a good idea. And it very much comes down to their ability to actually execute on the idea that they had.

There are lots of people with all kinds of good ideas who never do anything with them or who try to do something with them and who can't accomplish them. But it all comes down to your ability to execute. I used to be scared that if I told other people my ideas, then they would steal them and run with them.

And now, as I've grown and I'm gaining more experience, I've become completely unafraid of that. In podcasting, I try to help any financial, any podcaster or any financial podcaster, I give away everything I know, because I have zero fear of an idea doing anything for somebody. Rather, I know that only a very small portion of people will actually succeed because a very small portion of people will actually execute on it.

So here's how I would advise you. First, make a list of your ideas, but recognize, and this will be easier a decade from now, but recognize that there's a good chance that those ideas that you have now are not going to be the same ideas that you're excited about five years from now or 10 years from now.

But make a list of them and try to make your list of ideas as extensive as you can. And then put it away for a little while, come back to it and see, are you still excited about any of them? Do you still have something that connects you with an idea so that you'd be willing to push through the hard times to make that idea work?

If you do, then just pick one and go for it. And if you pick one and you go for it, you'll start to put in place the structure that gives you something to work on. And you'll start learning the lessons that I think can only be learned by actually rolling up your sleeves and getting to work.

And you might find that that idea, you can turn it into a winner. You might find that that idea is a loser. But even if that idea is a loser, the experience that you gain working on it will help you to go down the list, take the next idea, and with that next idea, then you'll be able to work on that one.

Most entrepreneurs have a string of businesses, especially businesses that have failed before they got to their winning idea. And I don't know of any way to short circuit the process. I think the best thing to do is to just pick one, start working on it, work on it in 10% of your time.

That sounds wonderful to me. Work on it with 10% of your income. I love it. And keep yourself from catastrophic failure while you're developing it. Kevin in Colorado, welcome, sir. You will be our final caller of the day. How can I serve you? Thanks for taking my call, Joshua.

And thanks for being unique. It's my pleasure. Yeah. So my question for you today is, how do you manage to balance your family and life, family life and work life? How do you maintain productivity while you are traveling? I really wish you weren't asking me this today. I wish you would wait six months and ask me then, because it is my biggest concern about traveling.

And I have some ideas, but I would love for you to call back in six months and let's see if my ideas were right. Let's see if my analysis was right. Before I answer, are you currently traveling? Are you thinking about traveling? You know, so my wife and I love to travel.

And we have a lot more flexibility now with self-employment. And we've taken some short trips. We have two young boys as well, one-year-old and two-year-old. We've taken some short trips and I have found it almost impossible to be productive with work-related activities while I am in Mexico or in Puerto Rico or something like that.

And so I actually wanted to ask you while you were early on the trip, before you get everything all smoothed out, and I can call back again in six months, but I figure the first couple of months are probably the most difficult. And I actually promised my wife, who doesn't like cold winters, I promised her that next winter we would spend at least two months somewhere warm.

And so I wanted to ask you early in your trip before you figured it out, because I won't have a long time to figure it out next winter. Well, it's a good question and I am happy to answer it now with the caveat that anybody who's listening to me should know that I am just figuring it out.

My biggest concern and my wife's biggest concern about our current traveling plans are my ability to work. And it is a very significant concern, especially given the stage of life that we are in. We have basic, well, my wife and I, we have five dependents. We have three children and two dogs, and our children are all very young, so they are all very dependent.

And that's tough. It's really, really tough, because you can't just say to your teenage children or your older children, "Go and play." Well, you can say, "Go and play," but then three minutes later, they come right back and they want you to see what they've played with for the last three minutes.

And so it's really, really challenging. And it's also challenging in the context of travel, especially for what I do with trying to have some kind of quiet environment where I can focus and having some kind of quiet environment where I can actually work and create useful audio. So here are a few things that I have learned.

First, I have, over the last year, actually built some new habits of learning how to work in other locations. So one of the big challenges of my business has been having a quiet recording environment. I really try to keep my children and my dogs out of the background audio.

Now, some people like it, and it's, "Okay, this is great. This is Joshua in his spare bedroom," because it's always been Joshua in his spare bedroom. But it is really tough to listen to that stuff. And over the last couple of years, my house has become much noisier, and my ability to control that noise was diminished.

The apartment that we were living in before we moved into our travel trailer was great in the first time that we were there because our children were small, but my office was actually the room through which my children would pass to go outside. And it became increasingly difficult for me to actually work there.

And unfortunately, I just... So that brings back to, "Well, why not just get an office?" Well, that's fine, but I haven't particularly wanted many of the offices, and I didn't see the point of getting an office, especially since I knew that a lot of things were going to change.

So over the last year, I've built the habit many times of working under a pine tree, or I work in all kinds of weird locations. And I try to do that so that I can get quiet recording. The recent course that I have been teaching on career and income planning was entirely recorded from underneath a pine tree.

And somebody who is listening very closely with their earbuds or noise-canceling headphones can from time to time hear an airplane going overhead or birds in the background, etc., because I recorded that under a pine tree. So that has helped me to have confidence in the fact that I can do work effectively from various locations.

At the moment, I'm literally recording this show from a college campus in the Midwestern United States using a conference room that is unused by a friend of mine who works here on the college. And it's the middle of summer here on Friday afternoon, and so I've been able to sit here at the conference room.

But last week's show was recorded at a rest area on the side of the road. And so I expect this to be the norm of my life going forward for the next months is that I'll be in diverse locations. So I have the equipment to work, which is relatively simple.

I've moved entirely to a mobile recording setup. I've done a lot of that over the years, and I guess I'll skip that because that's probably only relevant to somebody who's interested in recording audio. The big thing that I have found tough, Kevin, is being focused when I actually do sit down to work.

In an office, you often go through a time period of, "Okay, I'm going to sit down on my computer. I'm going to get my coffee. I'm going to boot up. Let me see what's happening on whatever your favorite time-wasting websites are," etc. And that doesn't work when traveling because you may not have the infrastructure.

You need to be more organized. And what I find actually the hardest about working and about radical personal finance in general is knowing what to do. Many days, I don't know what to do because I've never done this before, and I know very few people who have. And so I just don't know what to do.

And that's really hard because if you don't know what to do, then it's hard to do it. And it's a very serious, legitimate problem. Today, I sat down at my desk and at this conference table that I'm sitting at, and I knew I was going to record my Q&A call.

I had a consulting call earlier. And beyond that, I don't know what to do. I have hundreds of unanswered emails. I have planning for a personal life that's undone. I have a long to-do list. I have major projects that I'm behind on, and it's hard to know what do I do, where do I focus.

And I say that to say what I'm learning and what I have learned is if I don't have my to-do list planned in advance before I open my computer, before I sit down, then it's not going to work. And so I need to know what I'm going to do, which comes down to having some kind of schedule and having some kind of committed outputs.

What's the date at which I'm going to have this thing done, and what does done look like? And that's where I'm trying to work out. And so to have a schedule of here are my outputs so that you know when you're done. Because with most businesses, especially businesses like mine, it's impossible to ever finish.

You never finish. You just simply quit. And that's really hard because I used to like to finish things, but I don't finish anything anymore. I just quit. I just hit publish. I just do it and turn off my computer and go on. And so, and especially when you're traveling, you have to.

The other tip that I have is to, well, with regard to working, get clear on what you need internet for and what you don't need internet for, because that can be a challenge. So knowing the things that you can do in a different context. So going back now to David Allen's getting things done philosophy, you need to have a context for your work.

So you have at internet and you have at computer and you have at pine tree, whatever it is that you can do. And knowing those things that you can do when you can do them, so that you are prepared in your different circumstances, because there are times at which you sit down and you're on an airplane or you're sitting in a lobby or you're waiting somewhere or wherever you are, you need to know which list to go to at that moment.

So being organized with those things. I have struggled with that the last couple of weeks. I'm fixing it because the next couple of weeks need to change. So I've identified that as a problem. The next thing with regard to traveling, I think comes down to having a schedule and specifically moving slow.

So if you've tried to work while you're on vacation, you are on a short trip, it didn't work, but it probably didn't work, not because it couldn't work, but it didn't work because there's just not enough time. And I think it takes time. It's taking me some time, taking my family some time to get out of vacation mindset.

From what I've learned from many people who've done this, if you go from going, when you go on vacation, you're accustomed to having a big difference between the structure of your home when you're home versus when you're on vacation. You may run a very orderly home when you're at home.

You have regular meal times, you have regular work times, you have regular activities, regular bedtimes, regular wake up times. And that's how my wife and I, that's how we run our home, is we keep it very structured. And especially with little ones, to get anything done, it has to be structured.

So we try to keep it very structured and very consistent. But when you're traveling, usually on vacation, that often changes. You have a leisurely morning, you change, do different activities that take certain energy out of your life. And in a two-week vacation, you can't, it's hard to sit down and actually get anything done.

But what we're trying to focus on is the fact that we're traveling, not vacationing. And so that's been, the last couple of weeks have been a disaster with regard to my actually doing work. Frankly, the last month and a half has been a disaster because of all the complications of leaving.

I had it all sketched out so I would be able to consistently produce work, but it all fell apart because the circumstances just totally fell apart. But we were planning on a very leisurely travel schedule. Our intention was to leave March 1, and we were going to meander around the Southern United States and meander up to the North.

That was our goal. And so we set a goal. We said, we're going to stay three or four nights in each place that we are as a minimum so that we can have a day of sightseeing, a day of work, and a day of settling in. And that was the plan.

And then we're going to travel more than a couple hundred miles in a day. Well, here we are much of the way across the country, and we've totally abandoned that because our schedule kept getting pushed back, back, back, back. And our RV travel season went from a nice leisurely multiple months to a very compressed few months.

And so I have done very little productive work over the last few weeks because just of settling into the new life. We're almost to the point where it's cool enough that we can now abandon this frenetic pace and move slowly. And so in moving slowly, I think we intend to set up, here are the days that are working, and those work days are run just like our days were when we were in a fixed house.

I get up and go to work at a certain time. My wife, uh, uh, works with the children on a specific schedule. She does her normal school activities on a specific schedule. And we're not sightseeing. We're just happen to be living in an RV in a picturesque location. And, and so we're, we're this coming week, that's where we're going to this week so that I can get more work done.

And then my last two tips are these. Um, I think you gotta have work that you care about, uh, work that matters to you. That's what often pulls me back is I find that I care about my work and I want to produce the work that, that matters. Uh, and then the last, so that's helpful.

If you don't have work that matters, I think it's hard because we need a beautiful location. It's easier to say, well, let's go swimming instead of doing the work. And then the final thing is just, I'm telling myself just to be patient and recognize that things will change and you need time to work into it.

Uh, we have been so tired the last month that I've been sleeping in. And so instead of getting up at my normal early time so that I can work before my children wake up, we've just been exhausted and, and the whole morning schedule has fallen apart. And I think just being okay with that and saying, well, we, this is what we signed up for.

It's okay. It's going to change. That's where we're at. So those are some of the things that I'm learning. I think that it's possible. I think it's doable. I don't think it's possible to move quickly or to travel hard and do work, but I do think it's possible to travel slowly and do work.

So those are my thoughts. Any follow up, Kevin, or is that about what you expected? That's yeah, no, that's definitely the info that I was hoping to hear. Um, and I would, I definitely like to hear an update when you are, um, further into your vacation or excuse me, into your traveling.

Thank you. Exactly. When you, uh, when you have some, some procedures kind of nailed down. So yeah, just one last thing I wanted to, uh, to say is that I just wanted to give you an open invite to Denver, Colorado. Oh, thank you very much. I appreciate that. You know, and finally, I guess I would just say with regard to what you talked about, I mean, going down to Mexico and whatnot, I guess the last thing I forgot to say would be, I have learned that having a fixed office is far more valuable than I ever thought it was.

I have missed so many days of work by just weird circumstances. And I didn't use to value an office. I used to think, Oh, I can work from anywhere, but I have come to the conclusion that I was wrong. And having a fixed circumstance, fixed location with fixed expectations is really important for productivity.

Cause I've lost so many days of work. When I went to my preferred working location, I had a bunch of them that I've worked from, Oh, but this one's not available today, or the internet's not working, or all of a sudden it's raining or this it's brutal. So I've come to appreciate the value of an office.

And whenever we, uh, this state season of life, I will set up offices that will work for us at this point. And then whenever we, um, whenever we land, I will definitely have a fixed office away from my children. So they're not so loud. So I can actually do work, but in the meantime, hopefully you get to enjoy the, the, the fun of the journey and from time to time, I'll share with you where I am and you can listen hard in the background to see what noises are in the background, what screaming children or what birds chirping, et cetera.

It is interesting though. I do love it. And I will say, I sound a little bit, probably sounded a little bit negative about working remotely because it's just, it has been super stressful the last few weeks on the road. And the last month and a half, it's been, it's been, it's been tough, but, uh, it's also really cool, uh, where I'm sitting right now, looking out over a beautiful college campus.

And, um, I mean, it's really cool. It's very rewarding to be able to do this. And to think that when you think about so many of our ancestors who, who earned their living in so many unagreeable ways, uh, to think that I can earn my living in such an agreeable way, I'm extremely blessed.

And I have you to thank for that you to think, uh, I spent some time apologizing on last week's show kind of obliquely, but it's because I know that I haven't given you my best. Oh, I haven't given you the best that I'm capable of in the last month and a couple of months.

Um, I've given you the best I was capable of at the time, but I haven't given you the best that I was capable of. And you know, I was, I was reading some iTunes reviews and some of the comments, a bunch of negative reviews came in and, uh, I was reading them and the hard part about it was I couldn't argue with them.

They were absolutely true. Uh, they were true because I've just done the best I could. But with all the circumstances, I did the best I could. Wasn't what I think was the best. So if you've stuck with me, um, thank you for your patience. Uh, since you have stuck with me, I should say, thank you for your patience and I will continue to deliver the best that I'm capable of, but it'll be better in the future.

Thank you for listening. Happy weekend to you all. I'll be back with you next week. RadicalPersonalFinance.com/patron if you would like to sign up and join on next week's show. 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.

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