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It's more than just a ticket. Today we do live Q&A. Welcome to Radical Personal Finance, a 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.

Today on the show we have a live Q&A. Today was a free Q&A. I don't know, maybe some of these people are patrons, but I put out a note on the show and I said, "Free and open Q&A today. I have internet, so this'll be fun." I think we got quite the diversity of questions lined up.

Every Friday that I have internet access in my current travel schedule, I try to set up and do a live Q&A show. Unfortunately, that has been more spotty than I wanted it to be. Today I am doing a live Q&A show with callers, anybody caller who's just a listener of the show.

I'm excited about that and to make use of my resources when I have them. We go first to Daniel in Houston, Texas. Daniel, welcome to the show. How can I serve you today? I recently read through or listened through Richest Man in Babylon and had some questions about how you balance the principle of saving at least 10%, which you could argue you should save more than that to compensate for taxes, etc.

these days, but putting that towards insurance as well. Is your question that you would like to save more than 10% or is your question how should you allocate the money that you save among different types of ways that you could save money? I guess maybe what different types. I currently put about 5% in my 401(k).

That's what my company matches. Then I'm also putting about another 5% in savings. I thought about putting more than that, but I also want to get disability insurance and some extra life insurance on top of that outside of what my company provides. Obviously, if I'm doing that, I'm not putting as much money in the savings.

I guess I was curious what your thoughts were and how you kind of balance those two. That makes sense. It's interesting and it's hard because if you're only saving 10% of your income, in a lot of ways you kind of wonder, is that enough? What do I actually do about this?

So in The Richest Man in Babylon, which is my favorite personal finance book, someday soon I'm going to release, I'll save that for another day, but it's my favorite personal finance book. And the recommendation is to save 10% and to always save 10%. For most people who aren't saving anything, then that advice is going to totally change their world.

But if you're already saving or you're accustomed to saving, I can't see any good reason not to save more than 10%. And I think there are good reasons to seriously consider saving more than 10%. So I'm not stuck to the number. If you're only saving 10%, I think in many ways it really doesn't matter where you save it.

There are many good options and there's nothing wrong with any of the modern options. For example, if you just save money in a savings account and you just set money aside, I think that's a really powerful thing. And a lot of people would say, well, that's ridiculous. You're not earning interest.

I think that as you start to accumulate money, you start to change how you look at the world and you start to look for things to invest that money in. I've known a lot of very wealthy people who never purchased stocks. They never used IRAs. They just simply saved money in a savings account and they bought things from time to time that they thought were good investments.

And I've seen those things work out all over the place. So there's something to be said for just putting money in a savings account, or there's something to be said for just stacking up hundred dollar bills in a safe. Those things are valuable, but it all will depend on the context of the actual person and what opportunities for investing they have in front of them.

I've also seen a lot of benefit. I think there are benefits in kind of percentages that go beyond that. So I think there's a lot of benefit in thinking about money in terms of your safe money, your aggressive money, and your home run money. That's a concept I used to use with clients when I was talking with them about their investments.

I look at things like your own business as an opportunity for your home run dollars. That's where you're really going to make it wealthy. Most people who become very wealthy become wealthy because of their own business. And so it has the highest potential in terms of return on investment.

Your aggressive money, I think of that like investing in other people's businesses by buying stocks. Safer dollars, I think of that of things like very safe assets, bonds, cash, value life insurance. Those are those stable, very boring things that will grow predictably. But how to identify the difference between those and what percentages to do, I have no idea.

There are a bunch of different models. Here's what I would say to you specifically. Disability insurance is not savings. That's protection. And you should just buy that because you need it. And that shouldn't count into your savings. If you are then looking and saying, "Now I'm going to save 10% of my income," just strive for 10% of your gross income.

So it's an actual number. My answer of what to do with that is twofold. First, if you don't already have at least about $10,000 saved in actual accessible money, meaning stacks of currency, meaning savings accounts that you can get your hands on right away, then start with that because that opens up life options for you.

Then if you have extra bonus money, like employer matches in a 401k or something like that, take advantage of that. And then if you're trying to figure out what to do with the balance of it, I see nothing wrong with a Roth IRA to fund a Roth IRA. And then start to work out your best guess on what your long-term career plans would be.

Start to work on what your best guess on the assets that would most suit you. And don't be cowed by the financial planning industry that says, "Well, that means you have to buy stocks." Look at your own proclivities and interests and be willing to invest in them. I'll give you an example.

One of the things that I've always tried to do is to invest about 5% of my income back into myself. Now how this works into the richest man in Babylon, I don't know, but it doesn't. But I think it's a really good move to always invest 5% of your income back into your own skills, back into your own knowledge.

And so when I was younger and broker, that meant buying lots of books. Now it means buying courses, buying things that have more opportunity, going to seminars, things like that. I think that's probably more productive than putting money in your 401(k). But I guess I would just say pick a system that you like and follow it because any system will work if you do.

That's my first answer. Does that along the tenor of your question, Daniel? Yeah, that does. And I guess I probably may have been helpful. I do already have, we have about six months worth of savings. So that is already in place. So you would basically say that, I mean, it would be, yes, of course I want to be saving, but obviously I know, I mean, disability insurance, you're very big on.

So that's not a one or the other, it's kind of a both and. Right. So yeah, disability insurance is not a savings. That's just a cost. It's just like taxes. You're not saving because you're paying taxes, it's just a cost, just like groceries. The Richest Man in Babylon is a big picture approach to try to get people to do some basic things.

What I would say is make your own wealth plan. What is your wealth plan? And if you don't know it yet, that's fine. But what is it? Is it the fact that you're going to trade commodities on the internet or you've become super interested in crypto or you're going to buy single family houses and fix them up or you're going to buy a farm and populate that farm with cows or you're going to become a CEO of a Fortune 500 company.

You know, try to work out your own path based upon what intrigues you, what you're interested in and then invest the money into that, whatever that is. And the paths will vary. I would much rather myself, I would much rather buy a farm than be a Fortune 500 CEO.

So I'm more interested in figuring out how do I buy a farm truck? How do I buy cows? How do I buy infrastructure? And how do I set up the kind of lifestyle that I would want to live? But if I were a Fortune 500 CEO and that were my goal, I would buy myself an MBA.

I would focus on enhancing my skills and my network. And then I would just put money in stocks because I'm not going to have the time to deal with, I would just buy mutual funds. I'm not going to have the time to deal with how to invest my money and what to do personally on it while I'm building a company.

And I would just focus on my particular career. So it all is going to depend on your own personal wealth plan. Next we go to Fia in Vancouver, British Columbia. Welcome to the show. How can I serve you today? Hi Josh, thanks so much for taking my call. I'll just give you a bit of backstory to my question.

So my husband Mike and I retired just over a year ago after pursuing financial freedom for quite some time. And in the early stages of our retirement, we decided to start a bit of a passion project being a blog, focusing on sharing our journey to financial freedom, how to find contentment in financial freedom and also strategies for helping raise your kids financial literacy.

Are you willing to share the name of your blog? I'm working on that only if it's okay with you. Go ahead. Yeah, please. The blog is freedom101.ca. Great. Okay, keep going. So freedom101.ca. Yeah. So I've spent about a year focusing on just trying to develop good content, what I hope is good content for readers to use as a resource.

And it occurred to me in the recent past that Mike and I really want to shift our goals to more of a giving back phase of life. So we would like to try and fund some financial literacy programs for youth, both locally and a bit more globally. And my thought is that the blog might serve as a good platform to both as a resource for people, but also as a way to hopefully monetize and fund the programs we're looking to contribute to.

And my focus right now has all been really content based. And I'm wondering if you have tips or recommendations on how to transition to a monetizing focus as opposed to content. I mean, just make sure I understand the question. A monetizing focus for the blog or a monetizing focus for how to develop a curriculum or program that would help children?

Both, actually. I'm wondering if I can utilize the blog to create a stream of revenue that could then be turned over either in the form of using the blog as a non-profit, but could then be turned over to building programs and resources to be utilized in schools for the financial literacy components.

Okay. Interesting question. So I'll give you my ideas. These are just some of my personal ideas. All of these ideas will be tinged with my own thoughts and approach. Feel free to disagree with them, but this is the best I've got. So I'm going to sidestep any question about monetizing a blog simply because that is very well covered in the online space and I don't have anything unique to add to that.

But I have thought a lot about how to teach kids about money. And I so I've thought a lot about how to teach kids about money. And I'll give you some of my ideas that maybe someday I'll be able to pursue or maybe not. So first, I think that we need to teach children about money and we need to teach them about financial independence.

But that's not that I don't see any way that that happens in the context of the FIRE community, for example. The concepts of FIRE might be very helpful to somebody who is older, somebody who's a high school senior, that type of thing. And I think that it would be very helpful to teach, for example, high school seniors and say, "Listen, if you'll save 50% of your income, you can be financially independent in under two decades," you know, and share those lessons.

I wish that I had known that at 18 years old. I didn't. So and I know a lot of people who wish that. So if you're targeting high schoolers, then I think that's where the world of FIRE type of stuff could come in. I would say that if your goal is to actually teach, you should completely avoid any involvement with the school system and you should avoid any involvement with the curriculum of kind of mainstream schools, mainstream school systems.

First, if you are going to be active and involved in the schools, that means that you will have to be involved with the official system of curriculum development. And that system stinks. They will take anything fun and interesting that you have and they'll destroy it because it has to make mass appeal.

Now, along the way, you could find some teachers who are individually, catch the vision and who would individually go with it. But if you try to move and do anything with the Leviathan of the official school program, whether it's in Canada or the United States, there's no possibility to impact those things.

And I don't see any reason why you should. I, for example, I would not pursue trying to teach, trying to create a curriculum that teachers could teach because teachers are with only a few exceptions. They're not well equipped to teach about money. Most teachers, for example, they're not entrepreneurs.

They're generally people who have pursued the path of teaching because they enjoy teaching, because they love children and they want to impact children's lives. And they want the benefits of a stable career within the government system. And so that is not an entrepreneurial attitude. So you can't take, for example, entrepreneurship and expect a teacher to a teacher to do it.

Now, the best thing to study, make sure you study what junior achievement has done in the United States. And I assume probably other countries as well, although I've only was only involved with them in the United States. What they did was they recruited entrepreneurs, business people to come into the classroom and they worked with teachers.

And I used to teach junior achievement and some teachers, they loved it. Some teachers hated it. So you'll always find different solutions. But I think that if you start by saying, I'm going to go and change or try to work within the Leviathan of government education, I can't imagine that's just going to be beating your head against the wall.

I see no reason to do that. What I think you could do is do an end run completely around that system. So first, if you're trying to reach high schoolers, then package your content in a way that is easily digested by high schoolers through the Internet. There's no there's not a high schooler in the world that you can't reach through video on YouTube.

There's not a high schooler in the world that you can't reach through an online platform there. And there's no reason to worry about the people who aren't looking for the information. Your job is to be in a place where you're serving the people who are looking for the information.

So just adjust the concepts and meet the high schoolers and you can do that on online. Now, for younger children, I think the biggest thing to do for younger children is we've got to figure out how to help them to be involved in entrepreneurial activities where they can actually make money.

One of the worst things and I'm not familiar with the laws in British Columbia, but one of the worst things that has happened in the United States of America is we have excluded children from the workforce. And so children basically don't have the opportunity to work. And from time to time, we give them a little token, you know, idea of go start a lemonade stand.

But it's a even even that it's gotten better now. But even that all of a sudden, the government, you know, comes in and says, well, no, you can't have a lemonade stand because you don't have the official licenses. So there's almost no opportunity for children, most children to actually be able to to earn income and to practice and to work.

And so they're there. But in the in the system, they're basically taught that the only way to be successful in life is to go to college and get a good job. And there are a few people who buck that system and who figure it out themselves. But they're usually very strong personalities.

They're usually very independent thinkers. And and they're the ones I don't I think you don't really have to worry about all that much about. But but they're they're very few in number. So what I've considered is I've thought, how do we inspire ideas? How do we inspire people to how do we inspire people to develop projects where they can do at a very young age?

My favorite quote on this is I've always loved Jim Rohn's quote. He used to talk about this and he always would say that children need to have two bicycles, one to ride and one to rent. And that's kind of what I've tried to teach my own children. You need to have one bicycle to ride and one to rent.

And I am constantly keeping my eyes open to try to figure out what are some things that that that children can do where they can earn money while sidestepping all of the legal regulations that keep them out of the workforce. And I've got a bunch of ideas. But what I think would be most effective, effective is if you develop an independent curriculum for parents who want to teach their children and then profile stories and ideas of people who are doing things and show hands on the types of things that people are doing that can work out really well, then and put that together into an informational package and then market it in people who are not involved in the government schools.

Now, my personal interest is I enjoy working and being around the community of people who are engaged in home education. And usually by the time if you work in that world of people who are involved in home education, much of your work is done for you where you're already finding parents who are very dedicated with their children.

You're finding children who are usually much better students or much more focused. And you're finding you're finding people who have already broken out of kind of the mainstream mode. So much of your work is done there. But what I haven't seen is I have not seen in that community, I have not seen any effective personal finance entrepreneurial curriculum.

I would dearly love to develop it myself. Maybe I'll get to it soon. I don't know. But what I would do if I were you is I would develop a curriculum and I would develop a website around the subject of teaching children entrepreneurship. And I would make a practice of going out and profiling and interviewing case studies, people who are doing it and trying to show people the things that can be done and the way that you can actually multiply money through entrepreneurship.

And then I would use that. And on the second phase of it would be personal finance. There is a huge hunger in the market for that type of content because parents struggle with ideas and so I would profile things like independent work that can be done online, independent businesses that children can do.

I would focus on low cost, high value startups that people can do. You know, I bought this last just last week we're at a farmer's market and I went and I bought and I was talking to some of the there was a bunch of homeschoolers that had their children had tables out.

And one of the young men, he was I think 14 years old, he had a table where he was selling microgreens and this was his parents work to try to help him develop a business. And they had worked with him to try to help him establish a business growing microgreens and selling them.

And I was so impressed with him and I was impressed with what he was learning. He was doing good salesmanship, the whole thing. But businesses like that are perfectly suited to to children and young people. So that's what I would do to bring all those things together in a concise statement.

If I were trying to impact this part of the market, I would establish a website that was specifically focused on teaching children entrepreneurship. I would go and I would interview all of the authors who are talking about entrepreneurship, the big famous ones, people like Gary Vee, who have had a very loud voice, some of the academics, and I would specifically interview them on the topic of how do we teach entrepreneurship to children and young adults.

And then I would develop a curriculum and I would develop a portfolio of ideas that a parent could use, whether their children are in the government schools and they're providing extra help, or especially for the home education community, that a parent could use with their children to help their children develop a business.

I would partner with some of the organizations, the small business people, the junior achievement people like the entrepreneurship organizations that are already doing it. And I would use those out those those organizations outside of the schools to try to help expand the marketing message. And then on that basis, after you have kids generating income, then you can add on the personal finance component and the FIRE stuff.

So that's kind of my outline. That's what I would do if I were trying to pursue that. I don't know if that's helpful or anything along the lines of what you're thinking, but I'll pause there. Any of that in line with what you and your husband have considered? Yeah, it's incredibly helpful to hear you put it into a much more concise form there because we were really struggling with how to gain some movement within the school system.

There has been some movement in Canada in terms of them encompassing some financial literacy within our actual curriculum, but the teachers are now screaming for resources to back up that content of the curriculum. And so it hasn't really had the impact that I think was intended behind it. So something outside the school would probably be much easier to achieve, as you mentioned, rather than dealing with the bureaucracy that is putting that system right now.

It's very helpful. When you take something and you try to make it appeal, when you take something and you try to make it politically balanced and you try to be moderate in your opinions and you try to give general information, then you wind up with what's already done, which has no attractive value.

There's no attractive value. But if you are willing to take an extreme position, if you're willing to take an extreme perspective, and you can't fake this, you probably don't share the ideas that I do. You probably don't have quite the strongly held opinions that I do that are very abrasive to some people.

But if you take a more extreme position, then you'll attract people to that extreme position. I guess the best example I would give here would be somebody like Gary V. If you study the online entrepreneurship world, I'm not aware of anybody who's more influential right now than Gary Vaynerchuk.

And yet he is an extreme abrasive figure. But because of that, he's able to break through the noise and show people, hey, there are different ways. You can do this differently. I personally don't have any idea of how you would work within the school system, but I see no reason to work within the school system.

Now, the only kind of people group that I don't know that I would struggle is, how do you reach the people who are the poorest? How do you reach the poorest children? In my mind there, I don't think you have any chance of doing that in the official system.

I think you have a twofold approach to do that. One, if you can provide a teacher with tools, that teacher may be able to take the role of the parent in some way and apply some of those concepts. But here, I don't see any reason why you shouldn't just focus on parents and let the teachers find it.

So you'll have a teacher who is working in an inner city school and every child in their class is from just awful background and they're completely poor. That teacher can use the resources that you develop for parents, and you can make it, make your profit from the parents and build a large business selling the curriculum to parents.

And if you want to offer scholarships to teachers here and there, that's fine. And they'll do that with their students. But I think the second solution is to work with community organizations. And what I have seen is I think the kind of the urban farming, urban gardening movement, in my mind, there's no more impactful way, no more kind of, I'm not aware of a more effective way to reach the children that are in that world.

Because you can bring in, and in the concept of farming and gardening, you can use the unskilled labor of a child and you can show them how they can turn that unskilled labor into profitability because of the communal environment. So I look at some of these organizations. My favorite is what the urban farming guys are doing in Kansas City.

I look at what some of the, many of the people in the, again, the urban farming, urban gardening world are doing. And I think they're having the most effective inroads into the poorest communities and developing the platforms to, you know, developing the platforms to do it. And I think that if you started with something like that, and I don't know if that's any of your interest, it's an interest of mine.

But if you start with that and then you develop that and add on the makerspace community, then I think you can really start to provide opportunities for children and young people to start to be productive and to see how the fruit of their labors can really make a difference.

So check out what the urban farming guys are doing in Kansas City if you haven't seen that, and hopefully that would be inspirational to you as well. I definitely will do that. And keep in touch. So your blog is freedom101.ca and we will look forward to hopefully seeing more from you on the topic.

I would love to see you and your husband tackle it. I'd love to see dozens and dozens of people tackle it. I'd like to tackle it. If I could figure out how to make it work, I would dearly love to tackle it myself. But in the meantime, we'll just have to defend on the audience.

Mike in New Jersey, welcome to the show. How can I serve you today? Hey, thanks, Josh. Really appreciate it. So my question is, I guess, in a nutshell, looking for some direction on what to do with some extra cash. So to give you the backstory, I'm 40, married, two kids.

My wife is a stay at home. I have a 10-year-old son and a one-year-old daughter. Very awesome stuff. Financially, so where we are, I fully fund my 401(k) year over year to the full amount. And then similarly, over the last several years, have opened up and fully funded Roth IRA accounts, both for myself and for my wife.

I also have contributions set up for a 529 plan for my older child. I need to get on the stick and set one up, I feel like, for my one-year-old at this point. But after that, of course, we pay our mortgage. That's our only debt that we have on our house.

And then basically, after all the typical monthly expenses, all the extra cash and available dollars has really just been going into an online savings account. And this is since before my son was even born. And so, it's earning a measly half of a percent, I think, at this point.

So where I am now, I've got roughly $150,000 that I'm ready to play with or to do something with to get it out of there and to actually try and do something smarter with it. And I'm really having a hard time kind of getting beyond thinking of anything other than just going to Vanguard, opening a low-cost index fund account, and just putting it in there for the total stock market index or something along those lines.

And at this point, of course, we're at an all-time high, essentially, in the stock market. And I know it's not about timing the market, but more about time in the market. But I still feel a little hesitant to put all that money in one shot right now. So I was just eager to hear your perspective and thoughts as to whether or not, if you were in my shoes, if you would think to do something similar and just kind of play the index fund game at this point, or if you'd have any other ideas.

Why do you think you shouldn't just go ahead and plan to invest it into index funds? Yeah, I don't know. I guess because for me, it's basically all of our money that's liquid at this point that I would be putting in the market. Of course, we know the risks associated with that.

And I know you don't lose the money until you actually sell. So if I put it all in there tomorrow and the market took a bath and lost half of its value, I didn't lose anything until I sell. And I really wouldn't put anything in there that I'm not comfortable with that risk.

Of course, keep probably a 10-month safety account always available, probably in that same online savings account. But I don't know. I've been struggling this for maybe about a year and just watching my money really not do anything and not even keep up with inflation. So let me just, you went right to the question of, should I invest the money all at once, which I'll give you some thoughts on.

But first, I want to just ask about the investment idea, regardless of how or when you put it in there. Why do you feel uncertainty about just simply saying, "You know what? I'm just going to go ahead and start putting this money into Vanguard Total Stock Market Index Fund." Yeah, you know what?

I guess I feel maybe I stated it not super clearly. I like the idea of index funds. I think it's a great idea and that's what I do for the Roth IRAs that we have. And I just think it's a good move. Personally, I like that. I am comfortable with that.

I guess the question's more along the lines of, is that kind of tunnel vision? Am I thinking too narrowly? Should I look beyond that to other investment vehicles? And then as you touched on it, I did mention, you know, putting kind of going all in, big bang approach, just put everything in at this point versus maybe trying to take that $150K and do a little bit of dollar cost averaging and maybe go in spurts with it.

So those are certain things that I've been thinking about as well. Okay. So two questions. The first question is, should I put the money into an index fund or should I do something else with it? The second question is, if I've decided to put the money into the index fund, how and when should I put it in?

So let me just answer the first one very briefly. If you don't have an alternative, if you're happy with that, then you should do it. Now, I may not do that. You know, Joe next door might not do that. But if you are happy with that, you should do that.

And there's nothing wrong with it. You're not being stupid for doing it. It all comes down to your particular options in life, your particular satisfaction with your career, your lifestyle, your particular interests, the things that you like to do. Those are very subjective. And so it sounds like you've already made that decision.

So go for it. There's nothing wrong with just having a bunch of money in a stock market index fund because that is, I mean, a Vanguard total stock market index fund is such a massively diversified, safe basket of assets. You've got thousands of companies from all over the world that own billions of dollars of real estate, have all kinds of diverse interests, incredibly safe investment.

If we measure safety by actual value. Now, there'll be volatility. But the way you answer that, you already answered that in terms of your phase of life. You're saving a lot of money. You have savings. So the volatility, who cares? So let me answer the question of how and when should I put it in?

Should I put it in all at once and just stroke a check to Vanguard for $100,000 tonight or should I put it in over time? The academic answer is clear. You should put it in all at once because it is impossible to know what's going to happen. And the statistical likelihood is a decade from now, however high the stock market is today, a decade from now, statistically, it'll be much higher.

So whether or not there's a dump two or three years from now, statistically, a decade from now, it'll be higher. That's the academic answer. The real answer is nobody does that because nobody can stomach the regret that they would face of doing that in two or three years. And so given that, I would say start slow.

What I would do in your situation is I would say I'm going to invest 2000 bucks a month and make it set up a $2000 a month transfer from my savings account into this index fund. And I would do that for the next six months, next three months, next six months, and just watch it.

And then if you continue to be happy with it, watch the market. If you continue to be happy with it, then maybe bump it up to 3000 a month. But at 2000 a month in four years, you can put in $100,000 and you bump it up to three years and now you're at your time to put in $100,000 in three years.

I think that's entirely reasonable to manage the significant risk of the stock market at a very high and your personal regret if the stock market goes down. And then you watch it. And then if a year from now we're deep in the throes of a recession and the Dow has dumped off 20% and the S&P 500 has dumped off 20%, then you might go ahead and start putting in more.

But the academic answer is you should put it all in today. But the realistic answer is nobody's going to do that. It's too much of a risk. So I would say set up an auto draft for $2000 a month right now and then six months from now reassess and either increase it or just keep it steady and then watch for decline.

And when you see decline, then go ahead and stroke a big check. Very cool. What are your thoughts, if I may, around the robo investment options to take a little bit of a different angle on it? Don't see any compelling benefits, but there's nothing wrong with it. Okay. But the automatic rebalancing and things like this?

But what I understood was you were going to kind of pursue the Jim Collins approach of just owning a total stock market index fund, right? Yeah, that's where I'm leaning. So in that case, rebalancing really is immaterial. You're just going to buy the stock market fund and in that context, you're buying a massively diversified, very balanced portfolio that's reflective of a huge range of industries.

So I don't see any problem with that. If that is what has attracted you, I see no problem with it. The problem, I know it sounds like a wishy-washy answer. I don't have a strong opinion on it. It's like arguing, should you buy a Honda Accord or a Toyota Corolla?

Ask a car guy and maybe there's some feature that an Accord has that a Corolla doesn't have, or maybe somebody just likes Toyota, but I don't have any strong opinion on it because I'm unconvinced that it's this incredible buy that you should absolutely invest with a robo-advisor, but there's nothing wrong with it.

It works fine. So that's why I'm so ambivalent about it. Well, it makes sense. Josh, I appreciate it. Hey, my pleasure. Thank you for calling in. We go now to Samir in Chicago. Samir, welcome to the show. How can I serve you today? Hi, Josh. My question is, what would you recommend I or someone in my situation does to protect my future wife, relationships, things of that sort from the assets that I have currently and the assets that I'll accumulate before that marriage occurs?

So assets, income, investments and such. Are you concerned about the financial risk of divorce? Meaning if you were to marry and then you were to divorce and your wife were to take half of your assets, is that your specific concern? So the concern is kind of the exact opposite where I'm concerned that my current financial situation would affect my future relationship in a way that I don't want it to affect.

Are you poor or are you rich? I'm neither, but I'm working towards, I think I'm pretty well off for my age and well off financially. And is there a woman in the picture right now or is this more of a future potential? There's no one in the picture right now.

This is more of if I get married in five years, what's going to happen at that time. So here's some suggestions for you and hopefully this will hit on what you're asking. So first, I think in general finances and marriage are not particularly related. And what I mean by that, I would encourage you to be financially prudent so that you are prepared for marriage, but you're already doing that.

And I'm convinced, and many people will talk about things like, well, I've got to wait until I can afford to get married. It's all nonsense. Either you're committed to marriage and you're pursuing the path of marriage or you're not. And you can be rich and not pursue marriage, or you can be rich and pursue marriage, or you can be poor and pursue.

I don't see any connection between finances and marriage. Marriage very much is going to come down to a philosophy and a worldview and a plan for your life in terms of what you prioritize and what values you hold to be important. Now, it sounds like from what you're saying that you consider yourself to be the marriageable type.

Marriage is important to you. You don't consider this to be a death trap. You consider it to be something worth planning for. I agree with you and I think that's worth considering. So the bulk of what I would encourage you to do is to spend your time thinking about who would be the appropriate person to marry.

What is the appropriate ideology that you're looking for in a wife? What is the type of woman that you are looking for? Because if you are in today's world, in today's marriage environment, if you are just going into marriage thinking that, "I believe in love and I love you," you're in for a rude surprise.

Love doesn't matter. It's not something that'll make a difference. Love is something that has to be built on a strong foundation of commitment and of ideological alignment and common goals and common vision and mutual respect of you and your potential mate. So what I would encourage you to do is spend a lot of time thinking about marriage and get clear on the type of woman that you are looking to marry and then get busy going and finding her because your odds of finding a great wife are now.

Now, unfortunately, I don't know how old you are, but it's always better to go now than to wait for later because the pool of eligible candidates starts to change and especially... How old are you, Samir? I'm 23. Okay. So at 23, if you survey the potential marketplace of potential spouses, you will find an interesting dichotomy.

If you are looking for a girl and looking for a girl that's interested in marriage, in your current age bracket, you will be able to find that kind of girl. But if you wait a few years, what will happen is all of the girls that say, "No, I don't need to be married.

I'm not that interested in it. I'm just going to wait around and I'm going to have my fun." What will happen is they will continue to do that and pursue that course of action until they're in their 30s. And so the marketplace of potential mates will start to dry up in your late 20s.

And those types of girls don't turn around and start considering marriage again until they're in their 30s. But at that point in time, I'm not sure you necessarily want to be married to them, at least many of them. So I would encourage you to look seriously now, make it a priority now, but I don't see any relation to that with your finances other than personal prudence.

That's very much kind of an ideological discussion. That's very much a discussion of what you're looking for. And that's much more of your being willing to be serious and to seriously pursue and to find a wife. And I think it's absolutely doable. But that one decision, all of those things will make a bigger difference in your money and in your life than almost anything else.

If you marry poorly, if you marry a wife who is not prudent, if you marry a wife who is not frugal, if you marry a wife who is not committed to you, then of course, all of those types of things have incredible impacts on your finances, but you can't really solve them with finances.

Now, financially, I would encourage you just go ahead and work on building your fortune and building your life. And if you'll do that and you'll be prudent, you will have done the majority of what you need to do in order to be financially successful in marriage. I don't see any reason to put off any of your decisions with the idea of a potential of getting married in the future.

You don't know whether that's going to be six months from now or six years from now. And I think that's too uncertain to try to make any financial decisions based upon what may or may not happen, especially if you're not currently interested in and pursuing a woman. So I think your best bet is just focus on building your fortune, work on your plans, and think carefully about the kind of girl that you would want to be married to so that you will recognize her when you meet her and then make a priority of meeting her.

Don't approach it haphazardly. I've watched a lot of my friends and I'm in the phase, I'm in my early to going on going to my mid thirties. And what's interesting is I'm in the phase right now where most of my friends who did not prioritize marriage have now decided that, "Okay, I'm ready to look around and I'm ready to get married." And many of them, both male and female, are deeply frustrated by it.

So that's my personal opinion. Take it for what it is. But I would just say build your fortune, build your business, build your career, save money, invest money effectively, but don't worry about that until or unless you find a suitable candidate. Make sense? Yep. It makes a lot of sense.

Appreciate it. My pleasure. Any follow-up questions or is that enough for now? That's good for now. I appreciate it. Well, I would say keep up doing the good work and be, well, keep doing what you're doing. And my encouragement to you is make it very clear that you are interested in marrying, but be very careful and very discriminating in your selection process.

I was talking with my wife last week and I was reading the article, I shouldn't even say, I was reading an article in New York Times opinion piece. And I was just reflecting on how hopelessly naive I was when I was in my early twenties. And I was far more of a curmudgeon than most people my age, but I was still hopelessly naive.

And the entire world has shifted in terms of the sexual marketplace, the dating marketplace, the marriage marketplace. And I would encourage you do your research and be very careful because of one wrong decision can completely change your life, but one right decision can completely bless your life. I'll go to Ben in South Dakota.

Ben, welcome to the show. How can I serve you today, sir? Hey, Josh, thanks so much. Really appreciate you taking the time to answer my call. Hey, my question runs along the line of contentment in comparison. To give you a little background story, I'm 29 years old, 24 years old, me and my wife are a hundred thousand dollars in debt.

Since then, we went through the Dave Ramsey route, paid off all our debt and are now able to save and invest 20% of our income. And just reflecting over the last five years, I thought I was going to be at a point where I was just going to be extremely happy with that.

And though I am very excited about that, I still come from a sales background where I can always be doing more and I could be more efficient here and more efficient there. And so I'm struggling to figure out, you know, the grass field is the same way to me as it did five years ago.

And so I didn't know if you had any thoughts on how to be satisfied with what we're doing on a daily basis. Do you feel like you should be making more money? Do you feel like you should be saving more money? Can you give any more texture to that discontentedness that you feel?

Yeah. So, I mean, we're making more money than I ever thought we would. So it doesn't have anything to do with that. It more has to do with just feeling like we're still some sort of like a rat in a wheel and the fact that we have $200,000 saved for retirement and I'm 29 years old and I feel like, you know, there's just, there's not a number where I'm going to be content with.

I remember listening to one of your podcasts and you mentioned, you know, this guy that said, you know, there's a little bit more is all I need. And so I'm having a hard time balancing and figuring out what do I need versus what do I want, if that makes sense.

Tell me about your career and about your satisfaction with your career and what you're doing every day for work. Yeah. So I'm a regional sales manager and I'm cold calling bringing on new vendors and at the end of the day when I bring in those new vendors, there's a healthy commission for me.

So work is something that I, you know, I foresee me doing for the foreseeable future, but it's something that, you know, I would like to change when I feel like I have enough. When you have enough what? If that makes sense. Well when I feel like I've hit that number of having enough money.

You have at least $200,000. Is that not enough money for you to change careers? Well, I don't think so because I feel like I need to keep putting in money, keep putting in money, keep putting in money so that, you know, 10 years from now I can do something else.

I don't know. I struggle with the fact that, you know, I apologize that I'm not as clear and as concise as I wanted to be on my question, but, you know, I just really struggle with, I can always be putting in more and 10 years from now I'll have the same mindset of you can always be putting in more.

Right, right. Yeah. In my opinion, and I was trying to ask you an inflammatory question to try to kind of trigger an emotional response in you, but I hope you'll consider about the question. And I would just say, dude, first of all, how much money do you have including retirement?

Because you've got six months, if you're doing Dave Ramsey, you've got a six month emergency fund. How much money do you have? What's your net worth? Yeah. So we have a $20,000 savings account, 200,000 in 401ks and IRAs, and I'm still driving a $2,500 car. Yeah. So I guess what I would say is, dude, you got enough money.

You've got, you've got almost $250,000, which is incredible because you can change from anything you're doing now. You can change anything in your life. You could change jobs. You could change companies. You could change careers. You could change houses. You could change cities. You could change states. You have today plenty of money to make any decision in the world that you want.

You already have enough money. You don't have enough money to quit working and sit back on your heels for the rest of your life, but you have enough money to change anything in your life that you want to change. And so if you can embrace that, hang on one second.

I'm going to find my financial calculator. I left it in the drawer. Hold on. I have to go to the backup financial planner, backup calculator. What kind of, sorry, financial planner doesn't have their calculator on their desk when they're recording a live Q and A show. You said you are 29 years old right now.

Is that right? Okay. So let's put this in here and let's just, let's just talk about how much money you will have for retirement. And then we'll come back to how much money you have today. So you've got $200,000 for our present value. 29 to 59 would be 30.

So let's go 35 years to age 64. Let's say you earn what? 8% on your investments and you stop putting money in there. Okay. If you quit today with $200,000 in your retirement accounts and you don't put any more money into those accounts, but they continue to grow. If they grew at 8%, it would be $2,957,000 at age 64.

Now from Dave Ramsey, I should use 12% and see what this number is. Let's see here. So 12% you would have, oh no, $10,559,000. So the point is that you're already, if you quit today and you did nothing but spend every dollar that you earn today, you're already very likely to be a multimillionaire.

You're already there and you have enough money that you can change anything in your life. So you have already achieved financial freedom. It's done. You don't have to change anything else. And if you just continue on the track that you are right now, you stay committed to not borrowing money and you maintain prudence with your finances of saving some of your income, you will be incredibly wealthy for the rest of your life.

Now it doesn't feel like that today for a couple of reasons. Number one, all of your money, most of your money, with the exception of your emergency fund is locked away in your 401k. And because it's locked away in your 401k, you perceive that you can't use it. Number two, you have not yet reached the point in the compound interest curve where your wealth is growing because of itself.

You're still putting more money into your 401k than it is growing every year. But a decade or two from now, that will change. But you've already laid the foundation. So my answer to your question is to reassess your life and to do your very best to ignore money. And you are asking the question that was one of the things that drove me out of the formal financial planning industry.

Because if you had been sitting down with me in my office when I worked as a professional financial planner, I would have told you, you need $27 million to retire because we would figure out how much we would run all the math. And you would have left my office feeling stressed because you've got to save more money.

And over a period of years, I looked at it and I said, this is stupid. Why does our entire system keep people from living the life that they want to live when you've already done the things you need to do? So my answers today are very different than they once were.

I want you to keep saving and investing tons of money, but I want you to build the life of your dreams now. And so what I would encourage you to do is a few things. Number one, I would encourage you to carefully assess your career. The two questions that I think are worth answering on paper carefully are these, and many others as well, but worth answering carefully on paper are these.

Number one, what would I do if I knew I could never retire? Because you probably, I don't know, but I don't know if you would do what you're doing now if you knew you could never do anything else. So start by saying, I'm never going to be able to retire, which means I've got to build a job or a business or a work life that I'm excited about going to every day because I'm never going to be able to retire.

And I don't want to live in drudgery for the rest of my life. So start with that. Then on a different day, ask yourself the question, what would I do if I were already retired? What would I do if, you know, great aunt Jane died and left me $10 million tax free?

What would I do? And kind of brainstorm that and try to see if there's a connection between those two things. But I personally find financial goals very unfulfilling. So here's my personal philosophy. Well, first build a business and a work life that you're really excited about for reasons that are important to you.

Number two, live in a place that you're excited about for reasons that are important to you. Number three, build a family that you're excited about for reasons that are important to you. Those are areas where you can make big impact and it doesn't cost a lot of money. When it comes to earning, I think you should always change your numbers of earning into a sense of impact or a sense of contribution.

I believe personally that the basic foundation of earning is service. And so making more money is a major goal because making more money equates to my serving more effectively. The people who get the richest are the ones who serve the most effectively and serve the most people. Dave Ramsey is probably the richest financial pundit out there.

I don't know if, my guess would be that he is, but he's also served the most people out there the most effectively. And so a guy, his career, he can look at that and feel satisfied that the more effectively he serves, the more money he makes. And you and I should be doing exactly the same thing.

So focus on your contribution and your service. You can safely afford to ignore your salary at this point in life because you're rich. You are in the top few percent of US Americans. You can safely afford to ignore your salary and focus on your service and your contribution to others.

And then that salary increase will follow in time. On the consumption level, I think you can look at your consumption and you can set a number or set a lifestyle that's appropriate to you. You and your wife can sit down and you can decide what lifestyle is appropriate for us.

And there's no reason to expand it beyond that. If you can do your job and be effective in a $2,500 car, it would be a stupid waste of money for you to take $25,000 and go and buy another car when you could invest that $25,000 much more effectively into something else.

Whether that something else is an area of need that you see in the community, a financial opportunity that you see, it'd be stupid to spend $25,000 on a car if that's not something that you personally need. Now on the other hand, if you say, "I want to spend $25,000 on a car because it's really important to me," fine.

Some people live their life and they're so embarrassed about the car they drive that they never park in the parking lot. If that matters to you, go buy a decent car. But minimize your expenses and set your consumption at a level that is appropriate for you and your family, and then save everything beyond that and invest it into something that can grow.

What I would encourage you is start to build your satisfaction. And the key to building wealth is to build your personal satisfaction around your financial productivity, your skill with growing assets, your skill with investing wisely, your skill with making an impact, and less upon your consumption. Then from now on, you can always have your consumption and your income completely disconnected, and you can feel a sense of satisfaction there.

So those are my answers to it. I don't think there is a financial answer. If you don't solve these things of career impact, family impact, living where and how we want to live, if you don't solve and get a sense of clarity about the service that you provide in your work, 10 years from now, you could have $2 million in the bank and you would still feel like you didn't have enough money to change.

So if you had a thousand bucks to your name, I would say save 10, but dude, you're rich, so act like it. Enough for now, Ben? Perfect, Josh. I really appreciate your time. Thank you for calling in, sir. We go to Bart in Florida. Bart, welcome to the show.

How can I serve you? Hey, Josh. Thank you very much. I'll get right down to it. I'm 52 years old. I retired last year, a 31-year career in public service. Started my own business, trying to do exactly what you just told your listeners to do, and that is try to serve others and make a contribution.

So I'm doing training consulting right now, which I enjoy. Trying to get that off the ground, but it's not something that's really paying the bills. I have a pension because I worked in public service for so long. I have a monthly pension that I have. I just sold in the last month, we just sold our home in South Florida where we have lived for 19 years.

So we had a good deal of equity in it. And we've moved 300 miles up the coast to Northeast Florida and we're renting right now a pretty inexpensive apartment. I am looking to purchase a home within the next year. And because I have this sizable chunk of money from the equity in the sale of my home in South Florida, I'm wrestling with this idea about how much money to, do I just buy a home outright?

Do I take the Dave Ramsey approach, which I've done Financial Peace University. I know his philosophy on that and, or, do I take out a mortgage and maybe go the Rick Edelman way, take out a big mortgage and do it that way. And maybe take the difference in the money from the equity that I have and invest it.

And of course I'm not super risky, but at the same time, I am retired. So I would probably look to invest the sizable portion of this equity in an index fund and a total stock market index fund like you talked about earlier. And yet also, maybe think about doing some CD laddering on this home.

So I can get the most return on this money that I'm not putting into the house. I mean, like putting as far as a down payment on the home. And maybe do like a take out a year and put it in a long, or excuse me, put it in the highest interest rate savings or checking account that's out there.

And then maybe do like a five year laddering of CD. So allowing for market corrections and things like that. And then the remainder of that money would be in the total stock market index fund. I'd just like to know your thoughts and opinions about it. Maybe if you were in my situation.

Do you have children? I, well, I do. I have two older sons right now who are in college. They're pretty much, they're fine. They're good. And then I have a son who just started high school. How much is your monthly pension? $5,000 a month. And can you live with your household budget?

Can you live on under $5,000 per month? I could, but I mean, like right now I'm doing it, of course, but I would kind of like to maintain the same standard of living that we had when we were in South Florida. So I'm looking to purchase a home that's probably equivalent in value.

And I don't, looking at the numbers, I can't, I can't, I really can't pay that, you know, that mortgage. I don't think I could pay. I mean, I'd be strapped. I don't want to be cash strapped, you know, you know, on my mortgage here. And where I don't really have money to be able to do things with the family and stuff like that.

So I would really need that money in the equity to help kind of offset some of those payments on the home. How much of a, what price range of a house are you considering? Probably $400,000 to $500,000. And how much did you sell your house in South Florida for?

I sold it for over $500,000. Absent, in addition to this equity and in addition to your pension, do you have other significant assets or other significant investments at this point? I do. I do. I have, because I was in government for a period of time in Florida, I'm sure you're familiar with the deferred retirement option plan or the drop.

I have a sizable chunk of change in there. And of course I did deferred compensation for almost the entire time of my career. So I have a nice chunk of change in deferred comp. Well played, well played. With your, with your pension, is that guaranteed for your entire life at the same level?

Yes. Yes. Yes. It's not going to change. I mean, I could get a COLA, you know, I'm not counting on COLA's. I mean, I'm not an FRS. I know you're familiar with that. I was a local municipal plan, but it was not FRS. Do you have any interest, you mentioned putting the money in the stock market.

Do you have any interest in owning other real estate other than the house that you live in? Actually I've considered that. In fact, kind of one of the things that I thought about or considered is maybe doing rental properties. And, you know, while we're right here in Northeast Florida right now and I'm enjoying it, I'm liking it.

I don't know if I'm going to be, if this is my forever place to stay. I mean, it's possible, you know, in five to 10 years we might want to uproot and go somewhere else. So, you know, maybe think about possibly, you know, this home, this next home that we might buy might, might later, I might later consider that as a possible rental opportunity.

So that's- But yeah, I would consider, I would consider rentals apart from that too. I mean, if it's the right deal and I've listened to you enough to know when people call about like, you know, trying to pay extra towards their mortgage and things, I've heard you tell them, listen, save that money, try to invest it.

And then, and then once you, once you feel like you have enough, you can pay it off, then pay off your mortgage. But don't just make those payments to make those payments, you know, to cut your mortgage down and things like that because it's hard once you, once you've done that, you know, it's hard to get that money out of your house.

Then you got to take out a HELOC or whatever. And I really don't want to do that. I want to try to avoid, you know, you know, taking money out of my home like that if possible. I'd rather, I really, if I see a good opportunity, I mean, if having this money in a long-term equity index fund, excuse me, an index fund, you know, gives me the opportunity to, that if I do see a good investment opportunity, you know, I can jump on it and I can seize it.

So here would be a few suggestions for you. First, with regard to your business, your investments and your household budget, I think you should challenge yourself to live on your income and not to spend your capital. So if you had to spend your capital, obviously you could, you could take money from what you've saved here and spend it.

But why do that? Go ahead and embrace the idea of living on your income and set yourself a personal challenge of generating enough income to provide for your lifestyle and especially with your consulting and training business. Use, keep, keep, even though you're rich and even though you're financially independent, keep your, keep the pressure on yourself to make sure that you're not just goofing off, to make sure that you're dedicated to what you're doing and figure out how to use that financial pressure to keep you working and productive.

And so figure out how to live on your income. With regard to a mortgage, there's no, I don't see any reason for you to not get a mortgage on your personal residence. And the reason I say that is because you have a, you have a guaranteed income. And so there is virtually no risk.

There's virtually no reason why you would not be able to pay a mortgage payment because you have a guaranteed income that is not connected to your work. The biggest benefit of debt-free houses, especially for young people, is the risk reduction. The fact that if they, if you get sick or hurt or laid off, et cetera, that you can, that you don't have a mortgage and that dramatically lowers your risk.

But for a retiree, especially one who has a guaranteed fixed pension, what's the benefit? Unless it's just very important to you to be debt-free, ultimately you could pay a mortgage. What I would do if I were in your shoes is I would buy a rental house. I would pay cash for it, or probably a couple of rental houses because buying $500,000 rental houses is probably not a great rental market, but I would buy a couple of $250,000 rental houses, pay cash for them, and then I would put a maximum mortgage on my primary residence and I would use the cash flow from the rental houses to pay for my primary mortgage so that I'm not actually dipping into my capital.

I'm maintaining my asset base and I'm not spending capital on consumption. Rather, I'm turning capital into income and then I'm spending income on consumption. So that's what I would do. Now, if you don't want to buy rental houses, then fine, put it in an index fund or whatever it is that you want to invest it in, but maintain your capital and I don't see any reason for you not to get a mortgage.

Now, the only thing that would be difficult is if you get a mortgage payment of $3,500 a month and you have a pension of $5,000 a month, that would be somewhat uncomfortable, especially if you're committed to not spending your capital. And so, of course, you could defray that by putting more money down on a property, which is kind of what you laid out.

You're going to buy a $500,000 house, but you're going to put $250,000 down and that drops your mortgage down to a reasonable monthly amount that is comfortable given your pension situation, which you can do. That would work conceptually, but I like the idea, the personal challenge of saying, "I'm not going to spend capital.

I want to get richer and richer every single day. I want to be richer tomorrow than I am today, which means I can't spend capital. I can only spend income." And I like the personal challenge of forcing myself to be productive because if I'm going to get richer every day, that means I've got to figure out how to grow the capital.

The final thing for you to consider, you are in a phase of life at which everything's going to change. Your son is in high school, which means he's still there. Your older sons are a little bit older, but your high school son would still enjoy and appreciate some of the benefits of a big house on the water and things like that.

But very quickly, he'll be gone. And so I would caution you to be very careful before all of a sudden you sign up and buy a six bedroom house on the water because if it's just you and your wife, there's a good chance that you're going to not need that some months from now or a couple of years from now when your other son is out of the house.

So I would just say, think carefully and move slow because it'd be silly to buy a $500,000 house today when you can rent that $500,000 house for a few thousand dollars a month for the next couple of years. And then when Florida real estate market prices drop in a few years, you could easily buy a much more modest, comfortable home as your empty nest home and be much happier with also having less money out of pocket.

And you bring up an interesting point. I've actually considered that, Josh. And here's the dilemma that I'm kind of in, though. And you'll understand this being a Floridian, is that in Florida, you have two years from the time you sell your house to make that portability move, that portability rule, which helps also kind of keep your property tax from going, you know, getting too crazy, especially if you're going to buy up or similar to what you were in before.

And so I wrestle with that idea of the portability rule here in Florida. And do I want to miss out? But at the same time, I mean, I could like, I'm renting this condo or this apartment. It's like $1,200 a month. It's half of what I was paying in my mortgage in South Florida.

It's very doable. It's very comfortable. And then, like you said, just continue to let that capital work for me, live off the income that I'm receiving monthly. But again, at some point in time, I think I do want to buy a house. And that's not going to be a six bedroom.

I mean, I think I would like to live a little bit closer to the beach. I'm not going to be on the beach, but I think I'd like to be a little bit closer to the beach. I'm talking about hurricanes, but I do like that. I do like that lifestyle.

And so what are your thoughts about that? Is it worth foregoing the portability and just not even considering that? Well, calculate the numbers on what your personal tax portability would be. Calculate those numbers so that you know what they are. But I would guess just simply the phase of life that you're in.

The house that you want to live in when you have children in the house is different than the house that you want to live in when you don't have children in the house. And the rents on luxury homes are often much more reasonable than buying those luxury homes. So if you want to rent a luxury home for the next few years, you could buy one.

But the danger is, of course, you buy one and then the market changes and now you're the one holding it. So if I were in your shoes, I would give myself these goals. One, I'm not going to spend capital because I want to be richer tomorrow than I am today.

Two, I want to build the perfect lifestyle or my most ideal lifestyle, reflecting the idea that I'm already financially independent. And I want to make sure that I'm living where I really want to live. If you tell me, Joshua, we want to live on the water, we want to dock for the 38-foot boat out back, that's important.

We want a luxury home. That's fine. You can figure it out. Right. I mean, I've worked with a lot of people who've had big houses. I found that most people would rather, especially empty nesters, would rather have a smaller house in a beautiful townhouse, a beautiful condo, a beautiful apartment, a smaller house that has less work associated with it in a more luxury place with more amenities.

And that's different than the house that you probably want right now when you still have children in the house. So those would be my suggestions. Right. I mean, I'm not in the position of- That was two. That was two. What was third? You said- On a mortgage? Not to spend the capital, build a life, and then a mortgage.

Yeah. Yeah. And on the mortgage, I would just challenge myself to say, "How can I put this money to work? Let me take the $500,000 tax-free that you got from the sale of your home. Let me take that money and turn that into investment capital." And so, again, you buy a handful of $250,000 homes, pay cash for them.

That'll generate for you $3,000 a month of income, and then use that $3,000 a month to pay your mortgage on your primary house rather than putting it all into consumption. That way, you're building your capital base. So that's what I would do. Got you. Okay. All right. Great. Bart, thanks for calling in.

Keep me updated on what you do. I look forward to hearing from you. All right. We move now to Michigan. Welcome to the show. How can I serve you today? Got a Michigan phone number, 248-AREA-CODE. Welcome. Can you hear me? Michigan, are you there? All right. We move on to Washington.

Welcome, 202. Tell me your name and how I can serve you today, please. Hold on a second. I guess I'm not sure, but I got some tech problem here. All right. That didn't work. So let's go to Isaiah in California. Welcome to the show. How can I serve you today, sir?

Wow. Well, first of all, I just wanted to say thank you so much. And just all the things that you share, especially from your value perspective that you share with us, is really awesome and it's something we don't hear anywhere else. So I wanted to thank you for that, Josh.

My pleasure. Thank you. Yeah. I don't have a question in particular, but I guess I just kind of wanted to give you, like I've been kind of just listening to the things you say and giving a little rough outline for my future. And so right now where I'm at is I have a pretty steady job and I've been able to save a good amount of free cash that I've just been investing in individual stocks, ETFs, and international markets.

And so the things I've been saving up for are, well, first of all, marriage. So I've been saving up for a ring and then a house possibly. And I think overall, I was kind of going back to that lady from Canada. I think I'd like to get involved in the education, not with the state education system, but I was just kind of thinking of maybe starting a business that could help support a school that would be privately funded.

And I think some of that would come from maybe buying and selling cars or maybe some type of like a farming system. But I just wanted to kind of get your input on that. Well, there are a lot of career opportunities and compelling business opportunities in the world of education.

It's kind of funny, one of the years ago I read a manual on how to build a system of daycares. I think the author was Nick Kozell. It was published by Gary North. I think he was involved in it. But the manual was how to build a series of Christian daycares and to make a lot of money off of them.

And I thought the arguments made in the manual were very strong. I thought the business opportunity was significant. And I thought it's filed away in the back of my head as one of those things that if I ever decided that I wanted to dedicate my time in that direction, that I could build a series of daycares.

And I think especially this is an area of where we as men have a major advantage, especially if you are a well-educated man and competent, because there's a major benefit because so many of the people who are involved in that business are women, that it's one of the areas that I think you could go into as a man and really stand out.

But education is also the same way, whether that's as a teacher, whether it's as a school administrator. I've talked to and listened to a number of people who run private schools, and you can do well and make a major impact on your students and also use it as a foundation for your financial growth.

Now, you can do that within a more structured system, starting a local private school with buildings. I think there's a huge opportunity if you're interested in education right now. I think there's a tremendous opportunity for people to kind of blur the lines between an accredited school and, well, this is just one of my hunches.

Now, I don't know if this is true. Somebody would have to test it. But if I were going to start a school, one of the things that I would personally try to pursue right now is I would have to investigate more about the system of accreditation, but I would ignore accreditation.

And I would try to put together resources for parents to be involved in home education, but do it under the cover of somebody helping with some of the details of a place to go, a school building, helping with some administrative needs, helping them to have a place for children to be.

Because there are a lot of people who are willing to take some measure of responsibility for their children's education, but they feel like they lack the facilities, they lack the competence to teach themselves, or perhaps what their work schedule is just doesn't work out. There are a lot of single parents who struggle to figure out how they could, to homeschool, etc.

And so I think there's an opportunity to have a very low cost private school environment where the parents are actually the responsible parties in terms of the education quality, meaning you're not an accredited school, but you are providing a place for them to have teachers, to have enterprises, etc.

So I think there are tons of things that can be done. I don't know if that idea would work. I've never researched the systems, but it's just one of those things in looking at it and talking to people. I know of almost no people, I know of very few people who, at least in my circle, who really want to send their children down to the government school.

But there's a big difference between the ease of saying, "Okay, I don't want to do that," versus in my area, saying, "I'm going to spend $23,000 a year for one of the elite private schools." So I think that there is an opportunity for people to fill that few thousand dollar a year price tag, but to do it in some ways that take advantage of digital learning, do it in ways that take advantage of not having accredited teachers trying to do the teaching, but rather just having people who are facilitating the use of online instruction.

And I think that's going to be significantly moved forward in the next few years. Time will tell if I'm right or not, but there are definitely opportunities that a young man could get involved in, and you can use it to build a business and also to make a significant impact in the lives of young men and women.

Yeah, I think it's really interesting that you bring that up because through my high school years, or junior high and freshman year of high school, I was homeschooled. And there was a local program here for homeschoolers where you attend individual classes. It wasn't like a full class day, but individual classes that you would sign up for and attend those classes twice a week.

Yeah, absolutely. And those things are growing more and more. And one of the things that has happened is even if you were using, for example, the state system, in Florida, we have an entire online virtual school. You can use the government's curriculum, you can use the government teachers, you can do all of that, but that still doesn't solve the problem for somebody who's struggling to figure out, "Well, who's going to supervise my child?" And they know they don't want to send their child into Parkland High School where they're going to get shot or they're going to get bullied or they're going to get drugged on a daily basis.

They know they want to avoid that, but they're struggling to figure out, "How do I compensate for that?" And so, well, the market will have to prove it out, but I think there's probably a demand for that. And what we need is entrepreneurs to try it, put something together, put an offering to the market and see.

And that's a good opportunity for young men to try those kinds of things. Because, for example, I have a friend of mine who is a college professor. And this college professor, I've talked about it, he's like, "Yeah, that's my idea." But he can't take the financial risk of walking away from his job in order to try it.

But a young man can take that risk and you dedicate a year to it. If it doesn't work out, it doesn't work out. If it does, it does. So I'd encourage you, this is the time in your life, you sound like you're closer to the young end of the spectrum.

This is a time to take those risks and grab an idea, try it and see what works. If it doesn't work, move on to the next one. Do you think that, because a lot of my heart goes towards fatherless children who maybe aren't able to pay for that private education, however much it is.

Do you think it's viable at all to focus on a separate business to help support the school? Or do you think it would be better to go directly into the school and start it that way? I think there's a third way. I share your heart. I personally have a deep burden for young men, especially young men who don't have a father figure in their life.

So I share that burden personally. But I don't think that school is necessarily the best solution for that. Young men who are academically skilled and gifted, they already have opportunities in school. If they are linguistically competent, if they're cognitively capable and they can do well in academics, then there are teachers who are already there who will come alongside and who will help them point them in another direction.

The men who I see being laid aside by society are the men who don't have a high degree of cognitive ability. They're the men who don't do well in school. And one of the things that I have often wished for is I've wished for a business that was basic enough that I could hire young men in order to work with me where I could actually train them.

Unfortunately, with my business, there's no way for me to use somebody who is unskilled. But I've worked with a number of entrepreneurs who do have that opportunity, and I'm jealous of them in terms of their ability. If I were you and if I had that kind of burden, I would seriously look to building some kind of business in the manual trades in some way.

And what I would do is I would look at it as an opportunity to first of all, do very well financially. Because if you are... Here's what happens in kind of the sorting process that happens in the US American society. Smart people, people who have high cognitive ability and who do well academically, generally tend to sort themselves into careers that are more prestigious and that depend upon that significant cognitive ability.

So if you're smart, you're going to be pointed in the direction of engineering or law or medicine, something like that. But if you take that same person, especially somebody with an entrepreneurial bent or a mind toward business, and you go into the trades, you have a significant advantage because of your intelligence, because of your cognitive ability.

Many people who are in the trades started off as basic laborers and they grew their business more by accident than with intention. I've done some consulting for a number of people and I think of one person who in particular, he's a tile setter. And today he owns a tile business, but he's never been a competent businessman.

Rather, it was a tile setter who recognized that he couldn't afford to work on his knees for the rest of his life and he started to build a business. Well, I could go into that business and I could partner with him with the specific knowledge and I could apply business systems and modern marketing methods and tools, and I could make a major impact to that business.

But there are very few people who are intelligent, have high cognitive ability, who choose to go into those low prestige industries and apply themselves. But if you do, you can do well. One time I was sitting in a hot tub with some friends and I struck up a conversation with a guy.

We were at a luxury condo here in South Florida and the guy owned a landscaping company. It was a multimillionaire from a landscaping company. So the point is, I would rather have a landscaping company where I could bring in a young man who is struggling and I could say, "Listen, you don't have to do anything except do what you're told." And I would use work as the basic foundation to help him acquire some job skills, some soft skills, earning ability, et cetera.

And I think that if you have that type of business, then you can use the business as a form of charity and you can hire people that you wouldn't otherwise hire. And you can be a little bit more patient with people who you would otherwise not be patient with because as the entrepreneur, it's your right to do that.

So that's the direction I would go. I don't think charitable enterprises should generally be able to earn their own way. And I do think there are things that need just money where you can give money. But if you give money, you generally will create a culture of an enterprise that will constantly be just sucking down money and doesn't do anything.

Better to start a business or figure out how to earn an income from something and use that as the foundation so it can support itself. I love the story of the Trappist monks. And with this, I'll give you one more comment, Isaiah, and I'll move on to the next caller.

But if you think about the monks, you have to figure out, they say, "Okay, we want to live this lifestyle where we're living in a monastery, but we've got to figure out how to support ourselves." They come up with ways to serve. And so you've got the Trappist monks that brew beer or the monks that do all these different things.

They're much stronger as a monastery. They're much stronger as a religious order than those that continually are out soliciting donations because they actually bring something to the world. And so I don't want to start a business giving... I don't want to start a charity giving classes to young men.

They don't need to sit in school. What they need is they need a job and they need a foreman and they need someone who will come alongside and pick them up in the morning and who'll make sure that they're there. I have a client of mine who does this very effectively as a roofing company.

And he brings in people who you shouldn't really hire them. They're losers. They're failures at life, but he comes alongside and he calls them and he wakes them up and he goes gets them and he makes sure to feed them and whatnot. And he's a father to them. And they need that kind of input.

So I'd encourage you, build something. And if you have a desire for that, just build a business where you don't have to hire people with college degrees. Build a business where you can hire somebody and give them an opportunity to develop themselves within the context of work. Thank you so much.

Yeah, that gives me a lot to work with. My heart isn't really, you know, I've never really been focused on retiring, but I just, yeah, I just want to get involved and be a father to people. Especially young men. I just, yeah, I just see a need. So that gives me a lot to work with in terms of where to fit in.

Absolutely. Well, we share that desire. So keep in touch. And as you find examples or people who are doing or you have ideas, send them to me and I'll try to give them a little bit of publicity. All right, Carla in Michigan, welcome to the show. How can I serve you today, please?

I thank you very much for all the good information that you provide on your podcast. I am a regular listener, a fan of yours, and I also follow Dave Ramsey. The reason why I wanted to listen today, I didn't know I would be on, but I'm in a situation where I'm in a turning point in my life.

My kids, my last son just went off to college. So I am officially an empty nester. I'm not married. I live in an apartment. And right now, financially, most of all of my money is in a 401k. And I have about $15,000 cash that I save, you know, just doing the Dave Ramsey baby steps, you know, making sure you have money set aside in case of emergency.

So I'm doing that. And my... Being an empty nester, I wanted to start about starting, finally starting my own business. I work full time. So I thought about, you know, different businesses such as retailing, Amazon, that sort of thing. But my question was regarding real estate. I lost my home in 2008 during the down market, and I was debating on whether or not I should even buy another home.

I've been in an apartment since that time, and I like the convenience. No tax write-off, obviously. But I really, really like the convenience of not owning a home. You know, the responsibility of a home. Fifteen years old, you know, I don't know. So do you feel like you are supposed to buy a house?

I feel like I'm supposed to buy a house. I was taught to buy a house. You know, everyone in my family owns, you know, their home. My grandmother, God bless her, she's 90 years old. She owns her home. My mother owns her home. And, you know, and it's very...

I see them being very secure, and I'm glad that they do have a home because obviously they're retired now, and they have a place of their own. But for me, I'm thinking that I may want to travel a little bit, and I don't... I just don't want the headache of it.

You know, I don't know. And I'm thinking that if I had a business, that I can still reach some of the benefits tax-wise. You know, I may not have the mortgage interest and stuff like that, but I can still write off, you know, investment-wise as far as having a home.

But I can offset that by having my own business and just stay as a renter. And I'm just wondering if you thought. So a little bit of background history on kind of the concept of home ownership. I would not defend either of the extreme cases around home ownership. I wouldn't defend the idea that owning a house is a significant security, but I also wouldn't defend the idea that nobody should own a house.

The correct answer, which is frustrating, I think, is it depends. It depends on the circumstances. First, I think in the past, owning a house was a much more stable form of security for two reasons. One, you had a higher respect for property rights than I see today. And two, you had fewer security blankets in society than you have today.

So the first of property rights, I think, is really important. In the past, it seems to me that you could defend the idea that because I own this house, I own it and nobody can tell me what to do with it. It's mine and nothing can happen to it.

Unfortunately, I have entirely, basically entirely relinquished that notion. And on whatever level you want to argue it, whether you want to argue it on a level of taxation, because of the fact that today, if you don't pay your taxes, the government could kick you off of your land, that we don't have an allodial title system.

If we want to open up that can of worms, like some people would like, you know, you basically, you can be kicked off of your land and you could be kicked out of your house by all kinds of people and for all kinds of reasons, which are is really, really frustrating.

And so those, again, range from things like you don't pay your property taxes because if you don't rent your land from the government, then they'll take it. You get kicked out by a mortgage company. If you buy a house that is part of a homeowner's association and you don't pay your homeowner's dues, then the homeowner's association can foreclose on you.

I had a situation with a house that I bought. I had chickens in my backyard and some anonymous person complained to the government that I had chickens in my backyard, even though I had a half acre lot. And the government comes by and they cited me for having chickens in my backyard.

They cited me for having a hedge that was too high. They cited me for having a shed, which was 40 years old, but it was unpermitted. And if I didn't reckon, if I didn't reckon, improve these things, then they would build, they would start charging me a thousand dollars up to a thousand dollars a day penalty that would be held as a lien on my property.

Well, that's kind of a hard thing to stomach, you know? And so I had to, I had to get rid of my chickens and I had to cut my hedge and then I had to tear down what was probably a $15,000 shed simply because somebody who built it back in the eighties didn't apply for the appropriate government permitting process.

So I don't hold any illusions about the ownership of property anymore. And I think that's different because I bet your mother, your grandmother would probably believe that, well, if you own a house, it's yours and you can do what you want. Well, I'm sorry. No, you can't. You can't take out the front window and change the front window without applying for a government license.

You can't add onto the kitchen. You can't, you can't do anything with your house without applying for permission. So who owns it? You don't own it. Now that's the, that's kind of an extreme case, but I think it's worth recognizing because I think there is an age gap and a generational difference that should be reckoned with.

You know, my grandfather, when he owned a house, it was his house. He could do whatever he wanted with it. He didn't have to apply for a permit to swap out a hot water heater as in today. So that's changed. And unless you live in one of the very few places where you can still avoid some of the government interference, that is changed.

Now, on the flip side, the other thing about a house is a house represented a significant form of shelter and protection. If you go back, you know, 75 years, just consider what it was like if you didn't have a house, a place to keep you warm at night or a place to keep you cool.

But a house was much more basic. It was just, it was providing for those needs. Today, given the proliferation of safety systems, if you're hungry, you can get free food from the government. If you don't have a place to stay, you can get all kinds of free places to stay.

If you can get free rent paid with Section 8 housing, if you don't have medical care, you can get free medical care. So the safety net that was once represented by the house has, I think, largely minimized itself in terms of its actual value. So, because there are other government programs that are providing that same safety net.

So that's kind of my analysis of it first, in terms of saying it can be fine to own a house. You do get some more freedom. You do get some more liberties that you may not get in an apartment, but you also do get a significant amount of responsibility.

The other thing that has changed is the fact that people used to think that a house was a guaranteed gold mine of money. And that was because up until 2008, for the 20 or 30 years prior to 2008, the single best asset that most people owned that made them more money was their house.

Well, that bubble burst in 2008, as you personally experienced. And I think today nobody really believes that. And I would say there's no way that it can be, because housing cannot outstrip real wages on the long term. It really can't, because people are, at the end of the day, are going to say, "I'm not going to live here." So should you buy a house?

You shouldn't buy a house if you don't want to. I think you need security. I think that's helpful, especially for you as a single woman. You need to build for yourself that security blanket. But you can build that in many ways. You can build that with a house, but in some ways a house is actually insecure, because if your job disappears, but you have a house, you can't freely move.

Whereas if you live in an apartment, you can freely move across the country to where there's work. You can build that security with having money, having savings. That builds a significant security blanket around you. You can build that security blanket in many ways. And I don't think you should buy a house unless you want to buy a house.

And I would agree with you that a house is a significant responsibility. And it's probably not one that you would want at this phase of your life, unless you really do for some reason. But rather, build your security blanket in other ways, and then choose whatever housing decision works for you.

I appreciate you. That's what I'm going to do. I'm going to build my security blanket in other ways, and not in the single thought that a house will be it. Because obviously I survived without it. And I haven't won, and that's exactly what happened in 2008. You lose your job, you lose your house.

And that's exactly what happened. So I lost my job and my house obviously wasn't paid for. So I lost it. So yes, I need to build my security in other ways. So thank you for your sound advice. I think that's your gift to us. Thank you. And I think the gift of looking at both sides and helping us make a good sound decision when sometimes we can get kind of cloudy and get down in the minutiae a little bit.

And so I really appreciate you doing this for us. Thank you very much. It's my pleasure. And let me just make a couple of recommendations to you from what you've shared first. The most effective security blanket will be found in your local community. So that community can be as close as your family.

That community can be with your friends, if you're part of a church or some other community organization. But that's going to be the most effective security that you can have for yourself. And so I would recommend that you just think about that and continue to prioritize building that. So continue to build into the lives of your children.

Just because they're out of your house doesn't mean they're out of your life. And I think that continuing to sow into them, if you will respect the change that they're making in life, where now they are independent adults, not dependent children. But if you continue to build into them, that can continue to flourish.

And depending on how stable your children are and what you can do to help them be stable, that will always be your security blanket. One of the things that really bothers me is that many people in your generation look forward and ignore the value of being with family. And I'm concerned because it seems that's a very lonely path through life.

To believe that you have to do it all and that you have to do it all independently because you're the mother will rob you of the joy of being able to be with your children and with your family. And it's really concerning. And the data is actually pretty clear on that.

People who are in the second half of life usually often experience significant mental loneliness, significant sense of isolation. And it shouldn't be that way. Our society is sick in the way that we treat old people and young people because you shouldn't have this idea that, okay, I'm going to reach this certain age and I'm going to be off by myself and I got to figure it out.

One of the things that we should be looking forward to and we should be cultivating is we should be cultivating as a culture an appreciation for the wisdom that comes with age. And it's hard to know how to apply this generally, of course, when people from different backgrounds and different situations.

But I get so frustrated at how in our culture, we only just look at youth and beauty and we don't appreciate age and wisdom. And that is wrong. We should appreciate age and wisdom and you should look forward to the next half of your life and you should look forward to being sought upon as a valuable source of wisdom, as a valuable source of insight.

Your life experience up till now has given you the ability to see situations in a different light. And it's to our shame as US Americans that we despise the wisdom of the elderly and we praise the beauty of the young and usually foolish. So that should change. So continue to sow into the lives of your children because they will look for that.

Now, depending on their age, usually they need to get into their thirties before they start to appreciate mom a little bit more. But that's a significant source of security, right? You sounded like you want to be youngest is just out of the house. Usually it takes a little bit of time.

But I think if you make it clear, if you make it clear that you want to continue to be involved in the lives of your children, then they can continue to be involved. And that will be something that will be beneficial. And the other thing is in terms of the community, focus on building for yourself a community that will support you, that will love you, that will care for you, because that's where most of the security of life comes from.

If you have that community behind you, whether it's through a close family, through an extended family, through a church family, through a community organization that you're involved in, then that community will support you if you're ever in need and that community will stand behind you. And those are the things that are really valuable.

And then along the way, continue to be prudent with your money, save money, stockpile the things that you need, make sure that you never become in a situation where you're financially vulnerable, and then you'll figure out the path forward. But a house does not automatically mean safety. It just is a house.

So I think you're on the right track. Those are my thoughts. And thank you for your kind words, Carla. I appreciate you calling in. Carla Enns Thank you. We go now, let's see, Washington, DC for our final caller. Are you there? Tell me your name, please, and how I can serve you today.

Dan Fletcher Hi, Joshua. Can you hear me okay? Yes, now I can hear you. Tell me your name, please. Dan Fletcher My name is Dan. We've spoken before on a consult call, and I think it was about a similar topic that I have a question about tonight about life insurance.

I am just starting school again, going back to graduate school. I'm 30 years old, and I'm married to a woman who has a consulting job, and I'll be a dependent on her benefits, because I'm also working part time, but going off of benefits because of that. So I do have a whole life policy that I inherited it from my parents.

I think it's either a $50,000 or $100,000 whole life policy. I've been paying it since I moved out because they said it was a good deal. I think it's around like $400 or $500 a year that I'm paying. So basically, I'm wondering if I need to sign up for my, you know, via my wife's benefit as a dependent, if I need to sign up for life insurance, in addition to what I'm already paying.

I understand that, you know, that's a difficult question, you know, not knowing more about my life situation, but it's really just the two of us. We're probably going to have kids in a couple years. I will get back on benefits and have the opportunity to purchase life insurance through them again, I'm sure in the next couple years after I'm done with med school.

I mean, essentially, it boils down to is the $50,000 or $100,000 I currently have in life insurance enough and am I paying too much for it? Tom: Short answer, probably it's not enough money and probably you're not paying too much for it. But let me ask a couple of questions to make sure of your situation and then I'll defend those quick answers just a little bit.

How much money is your wife earning currently? She makes about, I think it's about $100,000 a year. Okay. So with her earning $100,000, you guys are not financially destitute and these decisions are not going to be significant. They're not going to be material in your day-to-day cash flow. That would be different than if your wife is earning $30,000 per year and you guys are scrimping and saving to live in a tiny little apartment while you go back to grad school.

Those would be different. But given her level of income, everything we're going to talk about in the coming minutes is going to be, with regard to the impact to your lifestyle, financially insignificant. So let's talk about do you need life insurance or not? There'll be two answers to the question and depends on how you approach the analysis of do you need life insurance.

Many people look at life insurance and they say, "Well, if I die, what do I need to, what's the bare minimum that I've got to cover?" And by that analysis, you probably don't need life insurance. You don't have children. I'm going to guess, correct me if I'm wrong, but I'm going to guess that your financial situation is stable.

You're not deeply in debt. You're not getting for bankruptcy. Your wife has an excellent income. She is well-qualified in the career world. And if you died, she would continue to be financially stable. So you would not be drop, shirking your responsibility. You wouldn't leave her destitute. You're going to be okay.

That's fine. And that's a reasonable way to approach it. And so many people would say, "I don't need life insurance, so I shouldn't own any." Now, another way to look at it would be to say, "Are we investing into my career and into my income? And would it be very unfortunate if I died, especially while I'm in college?" And by that metric, I think you can make a compelling case that it would be in your wife's best interest for her to own a life insurance policy on your life.

And it would be in your best interest for you to own a life insurance policy on her life. Think about it. She is, right now, carrying the financial load for the earning of your family while you are in school. And not only does that mean that you are not contributing financially an income to the family right now, but you're costing money in expenses and you're investing into the tuition for your graduate school.

And so by that metric, if you died, although your wife would not be kicked out of the house, she wouldn't be destitute on the streets, she would be losing a significant amount of money on her investment. Now, if you died and you have a $500,000 life insurance policy, that would go a long way towards helping her to recoup her investment in you with the time, the labor, and the money that, in effect, she's spending on you in her marriage.

That would go a long way towards making her financially whole and it would certainly help her to be able to grieve for you and to feel like she has enough money to be able to figure out what's next for her while she figures out how to put her life together.

Now, the great thing is, because life insurance is so stinking cheap, especially for, you said you were 30, I think you said, right? 30? Okay. 30, non-smoker? Yeah. Okay. So you could buy a half a million dollar term life insurance policy for $300,000, $400 a year, under $500 a year, depending on what type of policy you buy.

So in a household income of $100,000, where your wife is investing into your expenses, into your tuition, et cetera, with her earning, does it make sense to spend $300 for a $200,000 life insurance policy, $500 a year for a half a million dollar policy? I think there's a really compelling case there.

And so if I were sitting with her, I would say, "Listen, just go ahead and buy it. I think it'd be worth it." And this is the same advice I give to parents who have an 18 year old child and they're putting their child through school. It's like, just go ahead and buy a $250,000 term life insurance policy on your 18 year old.

Once a child turns 18, you can buy term life insurance. Like you're putting, you're investing money into your child, into their education, into their support. There's no reason in the world for you not to go ahead and have a life insurance policy on them. And it's so cheap to do that, okay, so you spent a few hundred dollars on it and you decided, and thankfully your child is alive or your spouse is alive, that's fine.

But there's no reason not to. Make sense? That makes total sense. And that's a different way than I had thought about it before. So I really appreciate that. Would you say convert it, like, can I convert my whole life into term or how does that work? Like with the policy that I currently have, it's not through, you know, it's independent of any corporate benefit package.

Right. What company is your whole life insurance policy with? I think it's New York Life. So the short answer to your question, can you convert it into term insurance? No, you can never convert a whole life insurance policy into a term life insurance policy and keep the whole life insurance policy in force.

Let me explain actually how you could convert it. But first let me explain why. Whole life insurance is expensive when measuring the premium dollars. And the reason it's expensive is because it's in force for your whole life until you die. Your policy is probably, what's the word for the people who do all the calculations, the actuary, it's actuarily planned out to age 120 probably.

So it's in force for your whole life. So that makes the premium very high as compared to the death benefit. Now, if you found out that you were going to get cancer, you had cancer, and then you would have a very much an incentive just to switch it to term life insurance and say, well, I got cancer, I'm going to die.

And that would result in an adverse selection problem for the insurance company. So you can never convert a whole life insurance policy to a term life insurance policy just as a way of automatic conversion. Now, you do have one option where it is possible if you didn't want the policy anymore, you could convert the cash value in the policy to what's called extended term protection.

So one of your non forfeiture benefits that you have in a whole life insurance policy, if you don't want the policy anymore, you have a certain amount of cash value. Do you know how much cash value your policy has in it right now? >>ANDREW: I do not. >>STEVE: Okay.

Let's pretend it has $3,000 of cash value in the policy. So if you're policy has $3,000 of cash value, you could say to the insurance company, listen, I don't want the policy anymore. I don't want it. But what I will do is I'll take the $3,000 and I want you to give me the extended term insurance as part of the non forfeiture benefits for the policy.

And so what the insurance company would do, they would calculate how many months or years of insurance the $3,000 would buy for a 30 year old male. And they would give you that number of years of insurance. So maybe that would buy you 13 years of insurance coverage at the $50,000 level of the policy currently is.

So you can do that. You could convert the cash value into the extended term insurance and they would just give you 13 years of coverage. And if you die in the next 13 years, they would pay your wife $50,000. If you don't die in the next 13 years, then they wouldn't.

And it would just be just like any other term insurance policy. Now that doesn't work in your situation because it didn't approach the numbers of insurance that we were talking about. Notice when I was talking about, Hey, your wife should have insurance. I moved right on past your 25 or $50,000 policy and I jumped right up to two, three, four, $500,000 of insurance.

So it doesn't really solve anything to have the $50,000 of insurance. So I wouldn't recommend that you pursue it. Do you know how old you were when your parents bought this policy for you? I know it's been, I would guess college age. So let's say 10 years and you're at 500 bucks a year.

Okay. So with 10 years- 500 bucks. Yeah. With 10 years at 500 bucks a year, my guess would be that your policy, and do you know whether it was $25,000 or $50,000 that was issued at? I think it's 50. Okay. So your $50,000 policy, you probably have maybe $4,000 of cash value would be my guess somewhere in the fours on a policy like that with a company like New York Life.

So here's what you need to do. Call your New York Life agent if you know who that is, or your parents' agent, and/or just call the local New York Life office and tell them, "I need an agent," and order what's called an in-force illustration for your policy. An in-force illustration is a financial ledger that will show what's actually happening in the policy.

And my guess would be that at this point in the maturity of your policy, any money that you put into the premiums is paying the policy, it's keeping the policy in force of the death benefit, but you're probably at the point where just about all the money that you're putting in in premiums is going directly into the cash values.

Depending on how the policy was structured, I can't answer all this stuff for sure, but it would probably be at this point where when you send in $500, your cash value is probably increased by 500 and something dollars, which means that your analysis here is partly on the basis of life insurance and is partly on the basis of the cash values.

And in short, if you'll order the in-force illustration, you'll call a life insurance agent and you'll review it with that life insurance agent, have them explain to you the policy, explain how it works, et cetera. Probably where you'll wind up is you'll just say, "It's a good policy. I'll keep it.

That way I've always got some amount of whole life insurance." And then you just go ahead and supplement it. If you want some more insurance, go ahead and supplement it with some term insurance. That can be through your work or that can just be a cheap term policy that you buy from the same agent.

The same agent can sell you a cheap term policy. But it's a good policy to have. Whole life insurance policies really stink if they're only kept for a short amount of time. And the reason is because all the expenses are front loaded. So if your parents had bought the policy, kept it for three years, and then canceled it, they would have lost all their money.

But they didn't. They bought it and then they transferred it to you when you came of age. And so once you reach the point in a policy like this, where it's 10 years old or so, it's a mature policy. It can be a very flexible financial asset. And you can own it.

You can use it. You can have access to the cash if you needed it. Doesn't sound like you need it. At this point in time, I would probably just keep paying the premiums. But you'll need to understand how it works. You need to understand when it would become paid up.

You need to understand what the premium schedule is. You need to understand what's happening with the cash value. And those questions can only be answered by an in-force illustration from that company. Beautiful. Yeah, that's another question that I had had about it was, you know, whether it's like a fungible asset that I can take cash from if I wanted to.

Yeah, it is. It is. So what I... In a situation like yours, what I'm most like about things like, or the use of a whole life insurance policy, this policy is too small to be really meaningful for you at this point in time. I mean, your household income is significant, and this asset is relatively insignificant in regards to the cash value.

But as it grows, I think cash value, cash values are best viewed as a component of your emergency fund at this stage of your life. And the reason is the money is very, very stable. New York Life, especially, it's a great company. They do a good job with their investment portfolio.

They do a good job with their dividend rates. And so the money will only ever go up. So you have an account that has money in it that will only ever go up. That's helpful because it means that you can count on the stability of that cash account. Now, the rate at which it'll go up will vary, obviously, depending on what the dividend rate is, depending on the investment portfolio, etc.

But it's guaranteed to go up and it's very stable. So you can count on it as you can count on things like savings accounts. But given the fact that in the life insurance policy, you have the benefits of it being sheltered from taxes, the inside buildup of cash values in a life insurance policy are not taxed year by year.

So it's sheltered from from taxes. You also have the benefit of it being protected from the claims of creditors. Life insurance cash values are generally protected from the claims of creditors. You have the benefit of it being a fairly private asset. It's not reported in the same way that other investment accounts and other savings accounts are.

And you have the ability to access the money fairly quickly if you need it. So you could call New York Life and they could wire you money in 24 hours you could have up to you can borrow out of a cash value policy like that you can borrow up to about 90% of the cash value.

So what I like to look at policies like that at your phase of life is as a component of your emergency fund. If you had an emergency, you can start to use savings that you should also keep on hand liquid savings, but then you can use credit cards, and you can use credit cards to pay whatever you need to pay.

And then if you need to access and pay those credit cards off, you can just take the money from the credit from the cash and put it into the credit cards. And what I think works really well is if you use that as a an asset that can be filled and replenished and then used, and then use it to sometimes you borrow from it, sometimes you borrow from other sources.

So let's say that you had a financial emergency and you ran out of money. If you have $30,000 sitting in a cash value life insurance policy, you could use that. But what I would do is I would keep that asset as collateral and I would take out a 0% credit card offer.

And I would borrow the money on a credit card at 0% knowing that I can always pay that off with my cash values if I want to surrender the asset. And then if I run into a situation where all of a sudden my utilization ratio gets too high on my credit management system, I would take the money out of the cash value life insurance policy, pay down the credit card, wait for my credit score to come up because my credit utilization ratio goes down.

Then I would apply for another 0% credit card and I would go ahead and use that one. And then I would replenish the money back into the cash value policy. So when you have a stable asset like that, and if you're very disciplined about your money, it can actually be really useful because it gives you a lot of options to access other forms of financing.

Now, if those other forms of financing aren't available, you can't take out a credit card, you can't get a loan, you don't have any other savings, you can always just either borrow the money, keep the policy in force, or you just cash it out and use the money. But it's it's really useful from that perspective.

So the challenge is just it's too small, probably at this point to be a big deal. But if I woke up in your shoes, I would keep the policy most likely order the enforce illustration, make sure it's a healthy policy, do that analysis with an agent. But I would keep the policy and I would buy some additional cheap term life insurance.

Awesome. And keeping the policy just is paying the premium each year, right? Right. And ask the agent like if you don't have the money, let's say paying that $500 premium is actually a hardship for you. Because you're in your concern, ask the agent. If you can quick pay the policy, or ask the agent if you can adjust the dividend option, see if the policy you know what the dividends are on the policy.

If you can't pay it, you can always use the money in the cash values to pay the premium for a few years. So your policy will have an option on it called an automatic premium loan. So if you just chose not to pay it for the next three years while you're in graduate school, it will take the annual premiums from the cash value and pay itself.

So you can keep it in force without paying it. And then three years from now, you could decide to pick up the premiums and go ahead and pay off that loan if you want to. Another option that you'll have is you could use the dividends. Let's say the dividends on it are $200 by now, and the premium is $500.

Well, you can use the dividends to reduce the payment, the premium that you owe, and you would just pay $300. Or if you don't want to pay any premiums in the future, the agent can go over your non-forfeiture options. You could take the policy paid up. So maybe by now the paid up option would be $15,000.

So you could just say, "I don't want to take the cash out. I don't need the money, but I want to take the policy paid up." So they would just issue you a policy of $15,000. They could give you the cash value back if you needed it. That's probably your worst option.

Or again, you could take the extended term insurance option for your non-forfeiture benefit. But those are all questions that the insurance agent will answer for you. >>Toby: Awesome. Thank you so much, Joshua. You are invaluable, and I'm sure I will call you on a consult again. >>Joshua: I'm so glad you did.

It was super fun. I love doing these questions. They stimulate my creativity, and I enjoy doing them. Thank you all so much for listening to today's show. I hope you've enjoyed the Q&A show. Keep an eye on your feed. Today's show was a feed that was available to any listener.

But keep an eye, and I'll do these more and more from time to time. I'm doing my best to stay consistent with my Q&A schedule. Just the challenge is whether I have a stable internet schedule and can do it, but this worked out for me to do it. So thank you so much for listening, and I'll be back with you very soon.