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♪ Welcome to the Radical Personal Finance Podcast. My name is Joshua Sheets and I am your host. And it's Friday. On Fridays we do a live Q&A show. Any Friday that I can arrange to be at an internet connection and a phone connection. These are the shows where you call in and we try to together work out some answers to your questions.

I hope you are along for the ride. I've got four callers lined up and today is gonna be fun. ♪ If you are able or if you have any interest in calling in for a Friday Q&A show, I would love to do that. Currently this is your most reliable way to actually get a chance to speak with me, talk about your situation, and get the help and the input of thousands and thousands of other people.

I probably don't speak about this enough, but I would say one of the benefits of this particular way for you to ask a question is getting access to the Radical Personal Finance audience. Frequently I have made mistakes on the show and I've been corrected in those mistakes by intelligent people in the listening audience who come by and comment on that page.

So if there's something that you feel that wasn't incomplete or if there's something that you'd like other perspectives on, please feel free to ask for other comments. Frequently there are dissenting comments or affirming comments or clarifying comments on the show page for the Friday Q&A show that you have become a part of.

If you would like to gain access to one of these shows, come on by at radicalpersonalfinance.com/patron. Sign up to support the show as a patron and that will gain you access to the call-in time, the information, all of that so that you can join the show. So radicalpersonalfinance.com/patron. I do that to allow me to slightly limit the number of callers so that I can create a good show but not have 47 people calling in each time.

And so far, so good. We go first to Jacob in California. Jacob, welcome to the show. How can I serve you, sir? - Hi Joshua, thanks for taking my call. So I, just to give you my background a little bit, I'm 23 years old and I do have some seasonal employment.

I work in Arizona as a wildland firefighter for the summer months. And I've been doing that for, this will be my third season doing that and kind of taking odd jobs in the winter. But last winter I worked at a ski resort as a supervisor for food and beverage.

And I have about 20,000 or 25,000 in a mutual fund that was originally a college fund for me, but I ended up going to a two-year college so didn't use a lot of that money. And now I'm kind of looking at possibly buying a rental property or a home for myself.

But kind of wondering your thoughts on maybe if there's a better place to put that money for now or once I figure out if I can qualify for a mortgage, the best route of going about something like that. - How much money do you earn on an annual basis?

- Roughly about 40 to 45,000. - Okay. And do you intend to increase that? Do you have plans to increase that? What's your plan with regard to your income? - Yeah, I'd like to increase it, but with the seasonal employment that I have now, with the government, since it's with the Forest Service, it would be kind of a standard hourly rate and it's kind of varying on overtime hours and everything like that.

So more of that, trying to increase my income would probably have to come in the winter or I'd have to kind of shift where what I want to be doing with my time, I guess. - So I guess my first concern would be at 23 years old, I would encourage you to first focus on building your income.

And it's up to you how you do that. There's a balance here between me trying to encourage you to build your income versus me trying to encourage you to enhance your lifestyle. But at 23, I would encourage you that one of the most valuable things you can do is build income.

Now that doesn't have to be at the cost of lifestyle. You can do seasonal firefighting work, which is, I would love, it would be very much appeal to me, but you probably also need to have some other plan. Now that plan could be many things, but you need to have a plan.

That plan could be rental properties. That plan could be some sort of other seasonal work, something that happens in the wintertime, some business that you do during the wintertime. That plan can be up to you. You can build your life however you want. But your first priority at 23 should be to focus on building a high income, because that will make a lot of decisions down the road easier.

Now, once you've built a high income and then have developed an investment portfolio, then it's a little bit more appropriate for you to back off and say, okay, now I'm gonna do this seasonal employment. And if you have an investment portfolio behind you, and you can just work seasonally and earn $45,000 a year fighting wildland fires, then that could be great.

But you need that, I think you need that bigger plan. So if you're just asking the question of, should I buy a rental property with the money, or should I buy my own house, or should I do something else? My first question is, what's your income plan? And if you have a way or an idea about developing an income plan, and if you need money for that, then you should save that money for your income plan.

Whether that could be your own business. Sometimes if you are working seasonally, one of the best ways for you to be able to maintain your seasonal work and to earn during the off season is to run your own business. Unless you're working in an occupation that's naturally only done during the winter, you drive, I don't know, snow, you're in Arizona, so you're not gonna drive snow piles.

But the point is, unless you are working something that's automatically seasonal, you might need some work that you can really hit it hard for six months of the year, you have a month off on the shoulder season until fire season, then you go and do fire season, and then you have a month off, and then you hit your business again.

So if you need the money to develop a business, that could be great. But there's no reason why you couldn't also use the money for a rental property. If you only give me the two options, a rental property versus a house to live in, I don't think you need a house to live in, I think you need a rental property.

At 23 years old, half the year, or for the months that you're on fire season, you're sleeping in a tent on the ground, or you're in some barracks somewhere, you don't need a house then. And the other six months of the year, just live in a friend's bedroom, spare bedroom, buy a truck camper and live in that, something like that.

Build your wealth at this stage of life, I don't think you need a big fancy house. Unless you take a house and you buy a house and you fill it with a bunch of roommates, and you just keep one little room on the back corner and available for yourself, I don't see any reason for you to own a house at 23 years old and young and single.

Make sense? - Right, yeah, that does make a lot of sense, yeah. That's kind of more towards what I was thinking originally, also, is, yeah, I wouldn't think it'd be more important, but I know there are a couple, or I've heard of things like your first mortgage, there's certain advantages to it or something, so I don't know if maybe waiting to buy something worth a little more money might be to an advantage tax-wise or something like that later on.

- Yeah, so you could, so it comes down to kind of what you're buying and how you're gonna finance it. And here would be the type of thing that would be, that you should consider, a couple of different real estate strategies. So first of all, you can, if you're buying a house for your first time house, you can purchase a house under what's called the FHA, First Time Home Buyers Association, is that what it's called?

FHA loan, basically it's a loan for your first time house. And that can be an advantage for you because you can qualify for the loan with an income of $40,000, you can qualify for a loan. It would be a modest loan, but you can qualify for a loan. One of the benefits of an FHA loan is you only need to put down a very small amount of money.

If memory is right, it's something like 3%, but the specific number is easily available to you with a quick online search. So you only need to put down a small amount of money, and now you can control a property. And as a primary residence that you're living in, and with a primary residence that you've bought as an FHA buyer, you could control a property with a very low outlay of cash, with good financing terms as a first time home buyer.

And as long as that is your primary residence, then you put yourself in a situation where you can rent out a bunch of bedrooms. And that, I wouldn't, that's just to me, that's a tactic that you can use that basically comes down under the idea of I'm buying a rental property.

That's essentially what you're doing. And so you can buy that house and you can park a camper in the back corner of it and rent out, buy a four bedroom house and rent out four bedrooms to four of your buddies. And that can be a very effective thing for you to do.

So that's a tactic that can be used, but basically you're still buying a rental property. What I'm trying to discourage you from is the idea of buying a house that is gonna be a big three bedroom house with a beautiful deck out back, and you're gonna keep the whole thing empty just so you have a beautiful place to live.

That seems like a waste to me. At this point in your life, more important for you to focus on building your wealth at this point in your life. If you're handy, one of the benefits I would say is if you're handy, don't neglect the value of your being able to apply yourself to your work on a seasonal basis.

If you're a firefighter, there's a good chance you have exposure at least to other blue collar type of people who are experienced in the trades. And being a part-time handyman, being a part-time home renovator can be a very effective way for you to use your off season. Your firework season can be a stable form of income for you.

And then for the other six months that you're not doing firework, then go ahead and apply yourself to fixing up a house, buying an inexpensive house, buying a rental property every couple of years, fixing them up, renting them out, doing work for other people. That's a really appropriate form of seasonal work that's very flexible that could be a good fit if you've developed some of those skills.

- Yeah, yeah, I agree. I wouldn't wanna buy a big house or anything like that and not be renting it. That would be the primary reason to buy the house would be to get some, you know, have it pay it kind of for itself in a sense. - Right, and the FHA loan can get you there.

My understanding of the rules, it's gotta be your house. So you gotta plan to live there. But different people's definitions of living in a place are certainly subject to interpretation. I don't have a problem if I'm receiving mail at a place and I'm there frequently and I'm using that address for some purposes as far as I'm concerned, I'm living there.

You can adjust accordingly in terms of how much you can rent out, how many bedrooms, how much space you actually need for the entirety of the year. Read the contract and make sure you follow it, but use whatever's subject to your own interpretation for your own benefit. Travis in Kentucky, welcome to the show.

How can I serve you, sir? - Yeah, thank you for taking my call, Joshua. Appreciate the show, you do a great job. - Thank you. - My question is, I just started a small business. It's an ambulatory veterinary practice here. And I have yet to set up a retirement.

You are my only employee and I'm the only person that I ever plan on. And going through and looking at the different options, I think that I've arrived at a decision, but I wanted to make sure I wasn't missing anything as far as what type of retirement account to open within the business for myself in order to maximize the opportunity.

And I guess I just kind of wanted to run by and get your take to make sure I wasn't missing anything. I think for my situation that a solo 401k would be what I would want because I can put the most away as quickly as possible, which is my goal.

But I wanted to make sure that there wasn't any other reason to take a second look at doing a SEP or a simple IRA or something like that. - Sounds like your analysis is right on track. So in your own business where you have no employees and you don't intend to have employees, then you basically have three retirement plans available to you.

Those three plans are a SEP IRA, a simple IRA, and an individual 401k or a solo 401k. And the benefits largely come down to how much money you wanna put in and in what format you want to put it in. Thankfully today, they're all fairly easy to do. They're all fairly simple.

So let's start with a SEP IRA. The SEP IRA is, SEP stands for Simplified Employee Pension Program, I think. And the basic benefit of the SEP IRA is it's dirt simple and you can make your contribution after the calendar year is over. The SEP IRA, any investment broker will have a standard boilerplate SEP IRA where they just say, "Here's the form, you sign it and you have an IRA." You can make your contribution at the end of the tax year, which is one of the benefits.

The SEP IRA in the financial planning business, we always called those the accountant's best friend. Because if your tax accountant is doing your taxes on April 14, and they're trying to get you to put some money in a retirement account, you can call your investment broker on April 14 and you can open that account online and boom, it's fundable for the previous tax year.

The limitation for a SEP IRA is the contribution amount. And there are two ways that you can calculate the contribution amount. The first is, and it has to be the lower of these two. The first is it has to be either 20% of your business's profit minus the deduction for one half of your self-employment tax.

So let's just simplify it and say 20% of your profit. Or it's a cap of, what is it? 2018, it's like 50, somewhere between 50 to $60,000. I can't remember, it's like 55 or $58,000, something like that. You can check that number in the IRS current amounts. But it's whichever of those is lower.

So if your profit from your business is $100,000, then your total contribution is $20,000. If you are going to, if you're going to use, if the $20,000 is enough for you, then it's hard to get simpler than a SEP IRA. And that's a really good option for you. Simple IRAs have a slightly different contribution limit.

It works on a different formula with has an employee and an employer amount. But I don't know of any reason why you would choose a simple IRA over a SEP IRA. Let me think for a moment. I can't think of any reason at the moment. A solo 401(k) is the plan that will allow you to get the most into it because you can adjust your contribution formula and you're not limited to that cap of 20% of your profits.

So with a solo 401(k), you can adjust your contributions as far as your employee contributions, employer contributions, and all that. And you can get very close to that $55,000 number. So if you're an aggressive saver and you're earning $100,000 and you want to put $50,000 into a solo 401(k), that's your basic option.

I don't think you can do the solo 401(k) at the end of the calendar year. Generally, that's the problem with 401(k)s. I'm pretty sure you can't do it at the end of the calendar year, although I don't know that for a fact. But if you are an aggressive saver, then you would probably go in the direction of a solo 401(k).

They used to be fairly rare, but today almost any investment broker, it seems like you can just download the forms and it's pretty simple and straightforward to set up. They're very popular today. - Gotcha. All right, I think that's really all I wanted. I just wanted to make sure there wasn't anything else.

A clarification on the SEP IRA. The way that this business is structured is I have a certain percentage that I pay myself in a salary, and then the rest of it is distributed as an S-corp dividend. So the limit for the SEP IRA would be 20% of the business's profit altogether, not the 20% of what I pay myself in salary, correct?

- That is my understanding, yes. - Okay, all right. I'll go back and I'll do the math and make sure that those numbers are as different as I think that they will be. But that's another good thing to take into account. So I appreciate it. Thank you. - My pleasure.

The great thing about it is basically all of these plans are fairly flexible. You can adjust them as you need to. The SEP IRA is great because you don't have to do it year to year. You can do it in some years and not do it in other years.

Check with your broker to see whoever's servicing your 401(k) if you choose that way, and just make sure it's as flexible as you need because what you may find in your own business, don't neglect investing in your own business so that you can invest in other people's businesses. And this is one of my big concerns, especially in the early retirement community.

There's so much of a focus on investing in other people's businesses. And I think there are a lot of benefits of investing in your own. Remember that with regard to your tax savings, yes, putting money in a 401(k) is great, but even better than that is buying advertising for your own business or investing in a piece of equipment that's gonna increase your profit.

You have a 100% tax deduction on anything associated with your business, according to the proper categories. So make sure that you're not shorting your own business so that you can invest in other people's businesses. I think that's unwise. Now, if you can fully invest in your own business and you can maximize every profit opportunity that you have and also have money left over to invest in other people's businesses, go for it, as far as I'm concerned.

Erin in North Carolina, welcome to the show. How can I serve you today? - Hi, Joshua, thank you for taking my call. I've been a listener now for two years and really enjoy your content. I've actually recently started listening to other Choose FI podcasts and other financial independence podcasts, and I am really enjoying their content as well, but a lot of them really push taxable buckets and using indexed funds for investing.

And I guess my husband and I, we don't have access to any taxable buckets with our employers. And I guess I wanted to take a second to kind of share our financial independence plan with you and maybe to see if we're missing an opportunity like a Roth IRA or another way to possibly diversify ourselves in any of our investment options.

So currently last year, we actually paid $50,000 off of our debt and we are just purchased our first house pack house and it's set up like a duplex. And we have three leases ready to go in August. We live in a college town and we're renovating the top floor and students will be living up there and we will be renovating the bottom floor within a year and basically trying to enforce appreciation, refinance in a year, and then pull out some of our capital to be able to continue real estate investing and investing in other properties.

And I guess our plan is to continue that route of real estate investing, maybe a property every year, trying to do small multifamily. We also have access to private investors as my husband is working kind of as a property manager, but also as a construction manager and has worked in construction his whole life.

And he'll be taking over, basically running student rentals for one of the owners. And there's three other private investors that we could have capital as far as to go and invest in other properties with. But I guess my question for you is, should we also try to do like a Roth IRA or, I don't know, I just hear all these other outside voices and I know we're supposed to kind of use our skills and strengths and whatever works for us and every individual is different.

And I guess I just wanted to get your feedback on what you think about our plan and if we're kind of on the right track. - Sure, what a great question. Congratulations to you guys for all of your wonderful progress. That is exciting. What an exciting-- - Thank you, thank you.

- You are weird in a great way and I'm excited for you because you're doing, sounds like you're focused, you're clear, you have ideas, you have a plan. And the things I listen for are not any specifics, but rather a way of thinking, a way of approach and a way of analysis.

When you are out searching for information, when you're out searching for inspiration, when you're out searching for example, as you clearly are by listening to a show like mine, to other excellent personal finance podcasts or other resources, you will find and develop your own plan that is appropriate for you.

So I'll give you a couple of comments and then I'll explain my approach to your situation and hopefully help you clarify. So first, with regard to other podcasts, I actually, I have a confession I'll tell you. I don't listen to any personal finance podcasts. And I do that intentionally because I'm very good at remembering what I hear and what I learn.

And I don't want to inadvertently steal other people's stuff because so if I hear someone else's idea in a podcast, I try to give credit for the book where I read something or where I learned something. And I don't, so I don't, I try not to listen to other personal finance podcasts because I don't want to steal other people's stuff.

The second reason I don't do it is because I don't want to inadvertently try to copy someone else. I don't want to listen to someone else's show and say, well, that sounds great, I want to do it. I want to create something that is uniquely mine and then encourage other people to create things that are uniquely theirs.

That said, I do know a lot of the people behind a lot of the other podcasts and they do a good job. Choose FI, they're doing, I mean, going gangbusters right now and they're doing a great job. And there are other, lots of other great personal finance podcasts. Each person that, each podcast host will bring a certain flair to their work.

And this is the same whether they're a podcast host or an author or a speaker or just your next door neighbor. They're all going to bring a certain flair to their work based upon what they believe, what they've experienced and what they do. And so this is one of the reasons why I would, my guess would be that what you hear me talk about is different than other people.

In the, what's frequently referred to as the FIRE community, the Financial Independence Retire Early Podcast community, or not, or just online community, the basic path seems to be, is usually brought down into earn a high income, save a lot of money and then invest that money. And the most common investment is to use mutual funds, specifically index funds.

And that path is awesome. It's wonderful. It really is good. I have nothing bad to say about it. It can work. But the reason why this is so common is because the type of person who is in this community is likely to be somebody who is a high income earner at a corporate job.

And for a high income earner at a corporate job, that's one of the major opportunities they have. Somebody who's working 50 hours a week as an engineer, a software engineer, and who's earning $140,000 a year, it's unlikely that they have a lot of time to devote to other things.

And so they can work, they can keep a very modest expenses, they can earn a high income, they can save money into mutual funds, and it works wonderfully well. They have access to a 401k, and that's a very effective way for them to save $20,000 a year, sheltered from taxes.

They often have other matches as well. And that's a very effective plan. I don't know of a lower stress plan with regard to actually being fully independent than that one. People often say, what is passive income? The only form of passive income that I actually know about is living on dividends from publicly traded companies.

That's the only form of passive income that I actually know about. Real estate is not passive income. Investing in tax lien certificates is not passive income. Your own business is not passive income. That is truly passive income. Now, I actually prepared an outline for a whole series one time called "Why I'm Not Part of the FIRE Community." And I decided not to record it to this point.

I probably should record it, but I'll give you a couple of points as to why I don't particularly, although I've spoken to the FIRE community, I probably am part of the FIRE community. I like the FIRE community. I have no problem with the FIRE community. I don't personally identify as being part of the FIRE community because I have a few frustrations with it.

So first of all, let me give you the first thing. I think that that's not necessarily the most efficient approach. For somebody who is a high income earner, yes, it is an efficient approach for them to save money into index funds. But regardless of how much they do that, they're going to have to work for a lot of years in order to save enough money to declare themselves financially independent.

And I think that's unnecessary. I think the first step should be to transition into a career that you wouldn't want to retire from. And if you do that, you can get there in a year. You don't need to save 10 years. You can get there in a year if you just transition into a career that you don't want to retire from.

So that's one of the first things. And I feel like it's a much wiser decision, especially for somebody who's wrestling with the reward of their work. And they're saying, "I don't love this work, but I'm just going to grip my teeth and do it for another eight years so that I'm financially independent." I say, "Why not just go ahead and move to something that you would really, really feel important about?" One of these things comes down to philosophy.

I believe that work is meaningful and important for reasons that are outside of income. Much of this is from my own personal religious philosophy and ideology. I don't believe it's permissible or advisable for people to stop working. I think you can change the nature of work, but I don't ever want to stop working.

I think that's fundamentally bad for the human soul to stop working. And so because of that, I have no intention of ever stopping working at any point in my life. And so I see no reason. Why should I work, work, work to save in a 401k and pile up a million dollars in mutual funds so that I can quit working and goof off?

I don't see that anybody actually does that. Rather, I see that people who are in that situation, they keep working and do something else. So I say, "Why not just do it now? Why not transition?" The other thing that I've observed is due to my life experience, I've seen so many other people become financially independent as measured by independent of other people's constraints on their time through things that just seem a lot more efficient to me than saving millions of dollars.

I look at, I have friends, I know a guy who's a beekeeper and he started keep caring for bees and make tons of money just with this random side business caring for bees or people who do all kinds of things that are different than what is described. The final point is this.

I don't talk much about that because I don't actually invest in, I'm not currently invested in any publicly traded companies. And this is a personal hangup for me that I don't talk a lot about publicly because I don't have a lot of easy solutions. I used to sell stocks for a living.

I used to sell publicly traded companies and earn my income from commissions on the sale of those stocks or the management of assets, commissions and fees from the sale of stocks. But over the last few years, I have become so concerned with the ethics and morality of many large modern US American companies that I just came to the point where I felt like I didn't want to earn profit from many of their activities.

Now, each person is going to have a different level of tolerance for this type of thing. And I have never encouraged anybody to take the same conclusion that I have had. But when I look at it, I've become very concerned about some of the, I became concerned about some of the dividends that I was receiving in my stock portfolio.

And I just came to the point where I couldn't do it anymore. And so I sold all of my stocks. I don't currently own any publicly traded companies. Now, I have been working very diligently the last few years on developing alternatives for how to profit and how to invest without the use of publicly traded companies.

But it's not an easy path. And I don't know how to teach it yet because I'm still working at it and still figuring it out. So that's partly what influences my own thinking. And I'm much more excited about investing in smaller businesses that are in my local community where I can see them, where I can impact them, where I can see them impact lives, and where I can have some form of input and control into the activities of that business so that the corporate activities are not things that are evil and immoral, but rather the corporate activities are positive, that they're of benefit to a community rather than a leech on a community.

I don't know how to teach that. And so I usually stay fairly quiet about it because I'm still working hard in my own life. And if or when I feel like I'm competent to help others, I will do that. But until then, I prefer to be quiet about it and just go about it in my own life.

So back to your situation. That's the background to understand. And let's go back to your situation. In your situation, here's the analysis you have to make. Number one, what will give me the highest rate of return for my activities? At the end of the day, you should look at your investments and you should calculate the rate of return.

In general, the more involved you are in an activity, the higher the return you will get or the higher the return that you should get. If you have a $10,000 investment portfolio and I give you two investment options, investment option A is to put it into an investment that you don't have to pay any attention to.

Let's just say it's a certificate, an annuity, a guaranteed fixed annuity, and an insurance company offers you a 7% return on your money. And they say, here's a 7% guaranteed fixed return if you'll just invest your $10,000 with us. Now, across the street, I give you another investment opportunity.

And I say, hey, look, here's a real estate project that will have, it's gonna be wonderful. We've got all these great potential options. If you invest $10,000 from us, and if you come over here and you work every weekend for the next three years on this property, and then on Tuesday night, you take a phone call from a tenant, and on Thursday morning, you meet a prospective tenant and take applications.

And you do this every week for the next three years. At the end of three years, we guarantee you'll earn 7% on your money. Which of those two investment options would you take? - Right. The second one? - No, but they're the same 7% both ways. So would you take-- - Oh, I'm sorry.

Yes. - Exactly. - The first one. - You take the one, the first one. And the reason is, why would I put all of my blood, sweat, and tears into this real estate idea just to earn a measly 7%? That's absurd. When I can just walk over and they give me an annuity with a guaranteed 7%.

So what I've just clarified, hopefully clarified for you, is the difference between passive investing and active investing. Now, usually this is done solely or discussed solely in the context of the stock market. The idea between something that's a passive investment, somebody that creates an index fund that just seeks to strive to maintain the index, versus an active investment manager who's going around looking for good deals.

That's what I've just determined. And what the science behind that simply says that the proponents of active investing say, "Look, we're gonna cost more money, "but we're gonna get a higher return "because we're much more involved in the market. "We're doing the work to find good deals." And the passive investors say, "Well, you can't get a return "that's in excess of what it costs you to do that.

"You can just sit back and kick your feet up "and just take the market return." But here's the thing. As an individual, you're not limited to just choosing between active mutual funds and passive mutual funds. Your investment horizon, your investment opportunities are huge. You can take your money and you can buy an index fund.

You can take your money and you can buy real estate. You can take your money and you can buy old broken down vacuum cleaners that you find on Craigslist and you can fix them up and you can sell them. You can buy farmland and lease it out. You can buy cows and raise them.

You can buy old fixer-up beater trucks and paint them and sell them to collectors. I've just not even scratched the surface of the things that you can do with money. But you have to analyze that in terms of how much time do I have available, what skills do I have available, what's the market around me, what does it offer, and you have to go from there.

Now, I think if I were totally broke today and I wanted to be financially independent and I were starting with nothing, I would go into something like real estate long before I would ever buy an index fund because of the fact that one, I can leverage financing other people's money.

I don't necessarily have to borrow the money. I could just leverage other people's money. I could be a bird dog and I could have signed contracts. I could figure out how to leverage other people's money in building up in partnerships arrangements. And so I could use other people's million dollars to control a $2 million portfolio.

I can maintain full control of my time, full control of my investment activities, and I can use the power of leverage to build more wealth quickly than I could with index funds. But that would assume that I didn't have a satisfying job. So if you already had a satisfying job, then just work the job and buy index funds.

That's my method of analysis, is you have to say what gives me the highest rate of return with an appropriate lifestyle based upon what we want to do. In your situation, it sounds like that's probably real estate. But in many other situations, especially somebody who is working a corporate job or who is a professional, and those opportunities, they're not interested in them, they don't have the time, they don't want to learn about them.

For them, an index fund and a 401(k) is a beautiful solution and it works very well. Does that make sense? - Yes, it does. - So what do you think is the best for you and your husband? Real estate or buying mutual funds? - Definitely real estate, just because of our time.

Because like I said, he recently changed jobs, and right now it's very busy and they're working on projects. But in six months in the winter, I mean, the owner told him, who he's gonna be taking over his position, said, "You will feel like you're retired "because you will have maybe 15 or 20 hours of work a week." And basically he's giving him the opportunity to go and work on his own projects.

So I definitely feel like real estate is our avenue and what we should continue to pursue. And I guess I was just wanting to have the affirmation that we were doing the right thing 'cause you hear all these voices around you, but you definitely have confirmed that. - Good, good.

So the key is to understand why that's the right thing for you. And to understand also why you could listen to another podcast or talk to a friend and that's not the right thing for them. And when you're clear on that and you're comfortable with that, then you have the opportunity to just rest in your decisions and you feel good about that.

So I don't feel the need to try to get other people not to invest in stocks. Not my business, but I'm not gonna invest in stocks for my own personal reasons. And I can explain to you why stocks are great. I can teach you all the theory. I used to sell stocks for a living.

And so the same thing with real estate. Real estate may be wonderful, but recognize that that also could change. I've known a number of people who have gotten into real estate thinking that that was their surefire ticket to wealth. And then over time, they realized that that wasn't actually the best move for them.

And then they moved on. And so the key is self-awareness and understanding why you're doing what you're doing. And then you'll work out the right plan through. But you guys are on the right track and it sounds awesome. And I'll say this, I love the lifestyle of real estate and privately owned business because you don't have to be, to use a pejorative term, you don't have to be a corporate drone for 15 years just so that you can escape your soul-sucking job.

You can, in real estate and in private business, you can choose any day what you wanna do. Now you have a lot of responsibility that that other person may not have on the weekend, but you have also a lot of freedom and flexibility. And so I like, my bent is always towards private business, towards private investment, and towards private, well, private business and investment activities, because that allows me today to live a lifestyle of freedom and liberty that I didn't have when I was a corporate employee.

So great job, Erin, keep up the great work. - Thank you so much. - Let's help those other podcast hosts. As you've listened around, what have become your favorite personal finance podcast? Who's doing a great job right now that you want other people to be aware of? - Absolutely, well, I mean, I listen to your podcast on a regular basis, and then I listen to Choose Fi, and I think that their stuff is amazing.

And then the other podcast that I listen to is Bigger Pockets. Those are the three that I stick to on a regular basis. - And both of those are, Choose Fi and Bigger Pockets are awesome. They do a great job. I know all of them, casual friends with all of them.

They do a great job, and I wanna see them build up. And I want to encourage tons and tons of people to build more podcasts, more things. I wanna do that, because it all helps. And there are people who click with what I do, and there are people who don't click with what I do.

And there should be a huge diversity of voices and ideas and opinions. So if you're looking for good podcasts, I check out both of those that Aaron just recommended, and see if those will also help you with good ideas, either to challenge you or to help you. Finally, we go to Ed in Virginia.

Ed, welcome to the show. How can I serve you today, sir? - Josh, what a long-time listener. Really enjoy your podcast. I'm calling the situation my son is in. He's worked for a regional real estate sales company, and he recently took another job and negotiated a departure date. And then about a week later, the company changed his departure date to two weeks to the left, which significantly affected his pending commissions.

We just wanted your thoughts on approaches of what he could do and how he could approach the company to discuss that. - So let me clarify the facts of the case. So he's moving, but because the new company that he's moving to wants him to start two weeks earlier, that's impacting the closing out of his current deals?

- No, what happened was he gave his two weeks notice, and the company said, "Great, we'll give you two weeks of vacation at the end, "and we'll accept your two weeks." And then about a week later, they sent him an email that said, "Well, you're not getting to leave "on the day we negotiated.

"We moved it back to the day you told us." - Got it. - And that affects the commissions by roughly $3,000, I believe. - That's frustrating. To the best of your knowledge or to your son's knowledge, has he acted in good faith? Has he upheld his duty? Has he been a useful and reliable employee?

And this just seems like bad faith on their part? - Yes, and he kind of, I would offer up that he attributes it primarily to his direct manager more than the company in general. And he's approached his direct manager, supervisor in the HR department. And he's sorting through that.

And he wanted your thoughts on what he might do because he's also a listener. - Okay, well, so here's my philosophy. I don't know if this is, this is just a philosophy, just an operating framework on things. So number one, I think the best course of action is always to approach any situation, including any negotiation or contentious point of disagreement with as much honesty, with as much openness and with as much clarity as possible.

And you can't change another person, but you can change yourself. And so looking honestly to say, have I done a good job? Did I do something wrong? Now, assuming that's the case is no, then going and saying, well, how can we work this out? And I think in general, people respond to somebody who's willing to go and have an in-person discussion and to talk and say, listen, this is unfair.

So if he has been treating, if he is being treated unfairly, for example, if the commissions that they're saying he's not gonna get, if he did the work and those deals were closing and he were entitled to that because he did the work, then that's unfair for them to withhold those commissions just because they're working through the payout cycle.

Now, if his leaving is causing a problem that now someone else has to finish the work, and so that's why they're saying you have a less of a commission, a lower commission amount, then he's gotta assess that. But assume that everything is on his side. Well, in that case, I would go to an in-person and I would just appeal first to whoever it is that I have the most interaction with.

Appeal to them first and say, please, I did this work. These were my deals. I gave you a two-week notice. I should have been paid out for that two-week notice. These were my commissions. I'm entitled to these and make an honest, heartfelt appeal. It also would probably be appropriate to do it in writing.

It's important to do things like this in writing or to take good notes on them in case you ever end up in a legal case or a lawsuit of some kind so that you have the data to present as evidence. So if you can make an in-person appeal and also deliver a written letter, I think that's a useful way to approach it.

If you're denied by the person who's a direct superior, then going up, I don't see any reason not to go up a level or go to another person and say, listen, I'm being treated unfairly here. I'm entitled to these commissions. Would you please pay me these commissions? Here's why I think I'm entitled to them and make your case.

In general, I think people are pretty fair and they wanna be treated fairly. And if they don't treat you fairly, then they should know that they're opening themselves up to a much bigger cost. You start shorting people on commissions they're due and you open yourself up to a much bigger cost than just the $3,000 of the bad reputation that you get, the ability for your son to open a website.

He can put up a free website and explain his story of the situation. And that bad publicity would haunt that company much more than just paying them the $3,000. So I would go and make a series of appeals. And then if they won't listen to him, I would try to think, is there someone else that I could appeal to, a friend?

I don't personally think there's any point in threatening legal action. In some business disputes, that's obviously appropriate, but I prefer to approach it in a good faith manner and go from there. Now, he should of course consider if he has grounds for a potential lawsuit, whether that's of whatever basis.

I would guess that for 3,000 bucks, I mean, it's hard for me to imagine that being worth it. I would probably, if I've made a number of appeals and if I've really asked them and the answer is just simply that these people are, if they're crooks, I would probably just choose to walk away from the money and let it go and never do business with them or anyone associated with them ever again.

Because when people will show their hand like that, then you know that there's no point in doing business. But it's just hard for me to imagine that 3,000 bucks is worth legal action, it's worth the hassle, probably easier for them just to move on, him just to move on to the next company and earn the money out in no time.

But I don't know that I have anything more intelligent than that. - So that's essentially consistent with what we've talked about. And the one final question I'd ask is, if it gets to the point where they're not willing to talk to you, is that something that's worth an afternoon in small claims court without a lawyer?

- Probably so. - Is that something that you-- - I think so. For this type of thing, if you can do it, yeah, I think so. For $3,000, if you've got the evidence and you've got things together, then that probably is worth an afternoon in small claims court. Just to say, here's the facts of the case, here's what happened, I'm entitled to these commissions.

He's gonna need a paper trail, he's gonna need to prepare his presentation, but I think there is. I struggle with that, knowing how to answer that, because on the one hand, it often just feels easier just to walk away. But on the other hand, if you do that, sometimes you're letting somebody who is immoral or a crook continue on without establishing a paper trail of a lawsuit.

And I recently had interaction with somebody and it was a landlord-tenant dispute. The tenant acted in good faith and the landlord absolutely did not act in good faith. And the facts, in my opinion, the facts were clear. And I gave the advice in that situation, I said, "I think you have a duty and an obligation." In that situation, the person had the bandwidth.

I said, "You have a duty and an obligation "to take this to court so that you can, "at the very least, establish a reputation "against this landlord, 'cause this landlord is a crook. "And we have a duty to stand up against and oppose those "who are committing injustice." And oftentimes, if more of us would be faithful to seek to expose those who are doing evil, who are committing injustice, when that evil and that injustice is small, then I think many times we could possibly minimize their ability to commit larger injustice and larger evil at a later date.

Now, that's a very big kind of consideration, but I think we do have the responsibility sometimes to do that. And so an afternoon of small claims court, yeah, I think it's a good idea. And at the very least, there's gonna be facts of the case that'll be there and he'll feel like he's done his best.

- That's a great answer and I really-- - Go ahead. - And I really appreciate it. - Absolutely. - It's a great answer and I really appreciate it. - Good. - So final thing is you're one of my top podcasts that I listen to. And the episodes that I enjoyed the most were the one about how to avoid being arrested.

- Oh, great. - And I've actually put into practice some of those things, not all of them. - Good, good. Well, I appreciate that. It's always funny because whenever I do shows like that, there's a mixture. I get good people like you who say, "Wow, I enjoyed that." And it's the kind of thing that doesn't, a lot of people would never expect in a personal finance podcast.

But I also have, I always get a rash of angry people who say, "I can't believe you, blah, blah, blah." And I've learned that there are a lot of people like you who do enjoy it. And these are the things that I think make a big difference. And as I said in that episode, those issues are very important to me because they're the kind of thing that you don't get advice from from a money magazine type of scenario.

But yet if you've ever worked with somebody, I've worked with a couple of people over the last couple of years who have just, who have been on that electronic plantation. And it's so heart-wrenching when you see somebody who they made mistakes and they have sought to atone for those mistakes.

And yet they're still on the electronic plantation and they get buried so deep. And it puts such impediment in them when they have sought to make decisions that are right now and they've sought to put things together, but they're buried so deep. I can see the temptation for them to just say, "You know what, I'm done.

I'm going back to the life of crime that at least it was simpler and at least it was easier than this road." And I think we have a duty to work with those people and to help them because I understand why the recidivism, I understand a little bit why the recidivism rate is so high and I think we really fail people when we don't stand with them.

None of us pull ourselves up by our bootstraps. We all need help, but it's our responsibility to help those who are being diligent to fix things that they can. So I'm glad that that show helped you and my only request for you and every listener is take that and teach it to other people.

'Cause the number of people that I can reach in a podcast like this is very small, but you can pass those ideas along little by little and that will have a huge magnifying effect. So thank you for the nice words, I appreciate that. - You're welcome. Sorry about the airplane noise, I'm on the flight path to Dallas.

- And I am sitting on a busy street corner in front of a laundromat while my family waits in the trailer while I figure out how to run my business and run these Q&A shows from the road. And I'm stalling here because the sunshine has gotten so intense that I can no longer see my computer screen to start my closing music, which, there we go.

Welcome to the joy of learning how to record and publish a podcast while traveling. We've been traveling in a very remote part of the Rocky Mountains and I came down to the city to find a data connection so that I could record today's show. Thank you to all of you who called in for today's podcast Q&A.

If you would like to join us on next week's show, please do so at radicalpersonalfinance.com/patron. Become a patron of the show there and you'll gain access to the Q&A calls. I should be able to do another show this next week. It's a very high priority for me. I love doing them and I thank you for listening.

Thank you for being along on this adventure. It is so fun for me to be able to speak with you, share these ideas. I hope you'll take them. And as I so frequently play that little blurb at the end of the show, I hope that you'll take these ideas, put them into practice in your own life and teach them to others.

Because there are a lot of people who are very weak and only the strong really can help the weak. And so my hope is to help you to be in a stronger position in your personal finances, stronger position in your own life, so that you can then move from that place of strength and reach out a helping hand to others who are in a weak place.

Take the time and free up your time so that you can be involved, not only in your own situations, but you can be involved in other people's situations in whatever way is available to you. There's really no limit to the number of opportunities that are available to you. But I encourage you, if you do so, you'll find opportunities for charity and opportunities for you to really impact other's lives at a very granular level.

It's much more effective for you to take some time and bail your friend out of jail and go and work with them and help them to pay their court costs and help them to get off the electronic plantation. That's probably gonna be a more meaningful and satisfying thing than for you to write another check to the big anti-this campaign just because they need more money.

I encourage you, get involved at the levels that you can do so. This is of course just building on that last caller. But one of the benefits of wealth, of stability and strength is your opportunity to reach out and serve others. So this weekend, look for an opportunity to reach out and to serve others.

And I'll be back with you next week. Thank you for listening. You've honored me with your time and attention and I'm grateful for that. And I hope that I've effectively served you today with some ideas and strategies and tactics and techniques and tools that will help move you towards your goals.

Before you go, three simple requests. One, if there's an idea that's been helpful to you in today's show, make a plan to take action on it. Listening does lead to learning, but learning in and of itself doesn't automatically lead to a life change. It's action that leads to a life change.

So take action. Two, take something that was helpful to you in today's show and share it with somebody that you care about. I'm depending on you to be a co-laborer with me in helping me to propagate the message that I'm seeking to share. That helps the person that you are engaging with.

And it also helps you because teaching others is one of the most effective ways for you to learn and for you to cement your learning. Three, if there's an idea that's been specifically helpful to you and if you're gaining financial benefit from Radical Personal Finance, I'd be grateful if you'd consider paying me for this work voluntarily.

Come by radicalpersonalfinance.com/patron and you can sign up there to support the show at whatever level you feel is right for you. This is a voluntary support. That's my Patreon page. You can support me with a dollar a month, $5 a month, $10 a month, any number that seems right to you.

But if you're gaining financial benefit from this show and if it's achieving financial results in your life, I'd be grateful for your financial support at radicalpersonalfinance.com/patron. - Sweet Hop is an online marketplace curating the best in premium seating at stadiums, arenas, and amphitheaters nationwide with Sweet Hop's 100% ticket guarantee, no hidden fees, and the personal high-level service you expect with a premium purchase.

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