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It's more than just a ticket. Welcome to Radical Personal Finance, the show dedicated to providing you with the knowledge, skills, insight, and encouragement you need to live a rich and meaningful life now, while building a plan for financial freedom in 10 years or less. Today on the show, we're going to talk about the natural symbiosis between financial planning and prepping, or preparedness, or survivalism.

Choose your word of choice. Because it's long been a theme and an opinion of mine that there is a perfect symbiosis between the mainstream approach of financial planning and the area of interest, the area of preparation, or the area of what's usually called prepping. Now, let me define these terms quickly for you so that you can understand how these things fit together.

When I talk about financial planning, I'm basically talking about the material that I covered when I took the Certified Financial Planner exam. Mainstream Certified Financial Planner type stuff, which involves understanding the basics of insurance, such as life insurance, disability income insurance, home insurance, long-term care insurance, health insurance, understanding the basic concepts of savings and budgeting, understanding investments, understanding basic estate planning and basic tax planning.

These are all the topics that are covered under what most modern mainstream financial planners study and the areas that most modern mainstream financial planners work in. Now, when I refer to the term prepping, I am specifically referring to preparing for potential future problems with an emphasis on the physical items needed for your safety, for your health and well-being, for your survival.

That's usually the feeling of the use of that term prepping. It's preparing for potential future problems with an emphasis on physical items, physical preparedness, using strategies such as stockpiling, such as redundancy, etc. So these two things, in my opinion, are a perfect fit for one another, but yet they are often not talked about together.

Long-time astute listeners of Radical Personal Finance will quickly understand and recognize that I refer to them both constantly. And I'm going to articulate in today's show just some of the specific reasons why, to help people who wonder about one versus the other. And I'm also going to articulate how even I've changed.

I've changed a lot in the last weeks, and I'll describe that in a moment after I go through some of the more academic approach, more academic perspective. Now, the term prepping, which I just simply use because it's the most common term used today in prepping circles, the term prepping doesn't necessarily have to refer to preparing for potential future problems with an emphasis on physical items.

For example, why do we want our children to graduate from high school or to go to college? Well, we want to prepare them for the future. And so you could use the term prepping or preparing our children for success to talk about really anything you want to, including going to school, going to college.

Or why do we buy car insurance? Well, we want to be prepared in case we have a car accident. So that would come in under the category of prepping. So the term itself could be applied very, very broadly, but it's usually applied to physical items. And yet most people have a bias in one way or another.

In my experience, in my reading, in my kind of talking to people, what I have learned is that people either have a bias that everything is guaranteed to be a catastrophe. And so the only thing to do is to stock up on your beans, bullets, and band-aids, stack them in deep and ignore all of the mainstream common financial planning discussions.

Or everything is going to be great, the future is going to be better than the past, things are going to be rosy, stocks are going to go up. Why would you waste money on things that are unproductive? Why would you buy gold when it just doesn't make a dividend and it's unproductive?

And why would you do these other things? So these are the types of, I guess, extremes that are perhaps common. Now I think there's a wide swath of thoughtful people who wouldn't necessarily fall into either of those extremes. There are a lot of people who have all their investments in modern mainstream mutual funds who also carry a pair of jumper cables in the trunk of their car.

And yet there are also a lot of people who, although they may believe that in the long term the US dollar is going to be worthless and worth nothing more than being used for toilet paper, they still have US dollars, they still have savings, they still earn their money in dollars, they still spend dollars, they still save dollars and still invest dollars.

And so most people are going to be in the middle between these positions. And it seems like at different times in life people want to emphasize one over the other. There are times in life where you want to emphasize your positivism and there are times in life where catastrophism seems more palatable.

And we should all be careful to guard against our biases, we should all be careful to protect ourselves against extremism, unwarranted extremism, and try to imagine what if we are wrong. But these two things go perfectly together if you see how useful they can be. Now here is my working thesis.

Disaster is possible. It's possible. And different kinds of disasters have varying levels of likelihood. Those levels of likelihood can change over time. For example, if you live in Florida, you know that hurricanes are possible. There's a hurricane season. But hurricane season, as it comes closer, increases the risk of disaster.

You're much more likely to face disaster in the next six months if it's June than you are if it's January because hurricane season is of course from June and July onward. So you understand that hurricane season, hurricanes usually come towards the back end of summer. So you think more about hurricanes during that time of the year than you do during the middle of the winter.

That's obvious. Now you can also look out and say, "Hey, if I start to see a couple of storms spinning up across the Atlantic, I can pay attention, but I'm not going to pay too much attention until they start to get closer, a couple thousand miles away, a thousand miles away, you start paying more attention." But you pay a whole lot of attention when the National Hurricane Center issues a hurricane watch and then a hurricane warning and you pay very, very careful attention during those times.

That's the same thought process that could be applied to almost any kind of disaster. So for example, I've done a number of shows on things like the rising level of national debt, the massive deficit the United States is running. As I record this show, there was just an announcement from the US Treasury Department that the US national debt jumps today by $292 billion on the first day of the debt limit suspension.

So now we've gone from a $22 trillion on budget national debt to a $22.022 trillion to $22.314 trillion. That's interesting. Now I have tried to be as farseeing as I could. I've tried to say, "I think this is a long-term problem." I've tried to say, "I don't see any real solutions to this other than default." Could be inflation, could be taxation, could be default.

We should be prepared for all three of those things. But I'm not looking at this as any kind of short-term catastrophe. As far as I'm concerned, we're sitting in Florida watching hurricanes spin up across the Atlantic saying, "Hey, we're in hurricane season now and so we should watch these hurricanes." But when I watch and say, "You know what?

Is there a way out? Is there a way that I could see that this could be solved? Is it?" It's not easy. There are a lot of arguments, a lot of things to process. But at the end of the day, I still look and I say, "It's good to be prepared.

It's good to be prepared for this kind of thing." You sleep better at night being prepared. And that's, in essence, what I think we should do with most things. Now here is the basic functional difference between mainstream financial planning and prepping. It has to do with the use of money.

Money is one of the best tools to prepare for catastrophes. If a hurricane is coming into your town and you have a car and you have money to put gas in the car, you can go to the gas station, put gas in the car, and you can leave. And you can go to a hotel, you can pay money for a place to stay, and you can stay there until the hurricane blows through, and then you can go back home.

So money solves the problem. You can buy a plane ticket, you can get in the car, you can get a taxi or an Uber out of town. You can get out if you have money. Now similarly, money solves most problems that happen if, for example, the hurricane comes through and blows your roof off.

If you have insurance, the insurance company will send you a payment for that insurance, for that claim. And then you take that money and you hire a contractor to build a new roof and then eventually you move back into your house. Money solves the problem. Yes, you could stockpile supplies of 2x4s and plywood and new shingles and do the work yourself, but in general money solves the problem.

And it would be very unwieldy to prepare for something like your roof blowing off with physical preparedness. Really, insurance is the best solution and money is the best way to get your roof repaired. But there's a line at which money stops working. And there could be various reasons why that line is crossed.

For example, money could stop working simply because there's no time for money to work. I would guess that your heart, as is mine, might be heavy right now with just thinking about the shootings in the United States over the weekend. It's devastating to hear about dozens of people being killed for no reason whatsoever.

Just the senselessness and stupidity of sin and murder. It just turns your stomach and all you want to do is sit down and cry and cry with the people who lost family. It's devastating. But it's a good example to show how money doesn't solve the problem of protecting yourself from somebody who's killing you in that instant.

Now money solves the problem in the form of the traditional response of police, the fact that there's a whole system, a whole environment where police come and they interact with the shooter or they kill him or they arrest him, etc. And some incredible story of just the incredible efficacy of the police officers in the most recent round of killings.

And yet for several dozen people, that wasn't enough. Thankfully for probably dozens if not hundreds of more people, that was. But that's a clumsy example to say that there are times at which you can't buy your way out of a situation like that. And so that's where we cross over into prepping.

How do you prepare for something like that? And in almost any circumstance you could do it. So the first reason is, you could talk about this, so the first reason is money may not work simply because money can't work fast enough. Money may also not work because there is a complete destruction of an economy.

So listen carefully. I want you to listen to something. I have just stacked eight bundles of cash on my desk right next to my microphone. If I stack all these up, we're looking at about, I guess about 18 inches of cash. Tightly wrapped banknotes, all wrapped up in tape, big thick bundles of banknotes.

Now before you be too impressed with how rich I am and how I'm showing off and flaunting my wealth, you should of course know and you have likely guessed that these stacks of banknotes are not US dollars, they're not euros, they're not pounds, they're not francs. They are Venezuelan bolivars.

Or to not butcher the Spanish quite so bad, they are bolivares as the Venezuelans would call them. And some of these numbers are pretty impressive. Here's one for, here's a big bundle of small ones of 10 bolivares. Here's one for quinientos bolivares. Here's one for veintimil bolivares, 20,000 bolivares.

And here's one for five. Here's one for cinquenta, for 50. So some of these numbers are impressive. Now what's interesting is this mixture is some of the cash comes from before the currency revaluation where a couple of zeros were lopped off and some of it comes from after. But at any rate, this 18 inch tall stack of cash on my desk is worth the equivalent of four US dollars in today's market.

And of course by the time you're hearing it, it could be half that. Because in the last three weeks, the Venezuelan currency exchange rate has gone from about 8,000 bolivares to 12,000, 8,000 to one, 8,000 bolivares for the dollar to 12,000 bolivares for the dollar in three weeks. So for all I know, that could happen again in the next three weeks.

That's what happens when the cash becomes worthless. And what you see if you study an economy like what's actually happening today in Venezuela is financial planning doesn't work anymore because there is no money that is functional. I mean, I don't know if you understand. If you'd like to see a picture, by the way, go to my website, RadicalPersonalPlans.com, find the show notes for today's show.

I'll put a picture with the show notes. Or go to twitter.com/JoshuaSheets and you'll see a photo of this stack of cash. But just consider a world in which, first of all, there's no counting of money. The way this stuff, the way this happens is you exchange bricks of money.

The bills are all put together with similar colored bills, like bills, so that you can have a big stack of, hey, here's a big stack of 5,000 bolivars, or here's a big stack of 20,000 bolivars. And they're all, so they're all stacked to the same color. So you can see I've got a big thick sheaf of paper of all the same color.

And then they're wrapped with packing tape. And the way you exchange money is you turn over a certain number of bundles to make an exchange. And so it's almost impossible to exchange even a measly $20 in today's world in Venezuela, because you can't carry the money physically in even a large backpack if you're exchanging $20.

Forget about changing 50 bucks or 100 bucks. You could do $5 at a time, $10 at a time, and you receive such an awkward basket of currency that it immediately targets you as a risk of theft and other problems as well. That's a world in which prepping makes a lot of sense, because now all of a sudden those physical things that provide for you, now all of a sudden they have a much, much higher value.

So that's another scenario in which financial planning doesn't hold up anymore, a situation like hyperinflation. Now, before you get too scared, I want to repeat, as I always do, the US dollar is not the Venezuelan bolivar. The Canadian dollar is not the Venezuelan bolivar. The euro is not the Venezuelan bolivar.

But what I think people often fail to understand is Venezuela is not Zimbabwe. And what I mean is Venezuela is one of the richest, was, go back a decade, a decade and a half, was one of the richest countries in South America. Very high standard of living, very high level of development, functional, flourishing economy.

We're not talking here about the image that some people hold in their head that, oh, crazy hyperinflation only happens in some abandoned corner of the world where people ride goats around. That's not the world we're in. Venezuela is a very modern economy. And yet today, it's heartbreaking. It's heartbreaking.

You look at lawyers scratching around in the dirt to try to grow something so that they can eat. Business people reduced to nothing. In many ways, the people who are the best off are the campesinos, the people out in the country who know, who are used to living at a low standard of living, who are used to making their living from the ground.

It's all the big business and the high-flying society people who are hurting the most. In general, if things go as we all hope they go, there shouldn't be a lot of interface between physical preparedness, stockpiling, etc. and technical financial planning because hopefully the markets that we all live and work in, the money that we all use, etc.

Hopefully these things will not collapse. Hopefully our societies will not collapse. That's the hope. But if they do, that's where the problem comes in. So now I want to talk about cost versus benefits and then financial independence. Cost versus benefits. The way that I personally approach many decisions, especially decisions that involve some ability to prognosticate the future, is with a cost versus benefit or impact of this happens or impact of this does not happen sort of analysis.

I get really nervous being fairly conservative by nature. I get really nervous betting something significant on one certain outcome. Some people seem to thrive in that kind of environment. That's not me. I get nervous having to depend upon things going my way. So if my political candidate wins election, then I'm okay, but if not, I'm in a bad situation.

Or if this company goes the way that I need it to go, but if not, I'm in a bad situation. I don't like that. I like to be prepared for any and all circumstances to the best of my ability. So I want to be prepared if my preferred political candidate wins or if my preferred political candidate loses.

I want to be prepared if this particular investment goes up or if this particular investment goes down. I want to be prepared if this road is closed or if this road is open. I want to make sure that I have solutions in place for all of those things. So my tendency is to want to try to be in good shape for every eventuality.

But of course that comes with a cost. There are costs to all of our actions. We have to weigh those costs. If I think that things are going to go in this direction, am I really willing to spend the money to go in that direction? So let's talk about something like prepping as compared to modern financial planning.

I want you to pretend for a moment that you are absolutely convinced that on the first of next month there is going to be a global thermonuclear war. It will happen. You're going to have Russia and China and the United States all lobbing nukes at each other. Pretend that you were absolutely convinced that that were going to happen.

What would you do? What would you do? Now, what you would do would of course depend on what you have done. But if you were convinced that that were going to happen, you would be very quickly turning all of your money, all of your resources, filling up all of your credit cards and turning all of that into physical preparations to help you and your family survive the nuclear holocaust.

You would be building a bunker if you don't already have one. If you have one, you would be adding probably another layer of concrete just to make sure. You would be provisioning like crazy. You would be looking at plane tickets and saying, "Can I get to a place where there's not going to be nuclear bombs falling on my head?" You would be considering all your options and you would be doing everything you could to get out of the war zone or to be protected within the war zone.

You would not be thinking about the value of the stock market at that moment. You would call your broker and say, "Sell all, turn everything to cash," and you would spend it all on your survival. But the problem is that there's no way that any of us could know on the first of next month global thermonuclear war is going to break out.

So you are understandably concerned about taking all of your money, building a new bomb shelter in your backyard or better than that, under your house, building a new bomb shelter under your house, and then sitting there on the second of next month saying, "Oh, it didn't happen. I feel silly." And now your kids have no college fund and you have no retirement account, et cetera, because you bought giant stacks of food and you put more concrete on your bunker.

So that's the problem that we all face is how do we reconcile the uncertainty of a bad thing happening with the cost of being prepared for it? And that's where I think these things are a natural ally, meaning mainstream financial planning and prepping, because the cost of good preparation is not that high.

It's analogous to a mere insurance payment. And that applies for the vast majority of the things that most of us are concerned about to even the hardcore scenarios. Let me give you an example. When I talk about hurricane preparedness or tornado preparedness or earthquake preparedness, et cetera, for a few thousand dollars, you can assure your families if not survival, you can assure that you can make things go in some level of comfort until help arrives from outside of the disaster zone.

But even if we go up to the hardcore worst case zombie apocalypse scenarios, the price tag, in my opinion, is still not all that high. Let me give you an example. In my opinion, there are three really bad catastrophes that could happen that all have historical precedents, that are all realistic things that could happen, and yet they're pretty hardcore.

And I like to use them as the most extreme case of something to plan for, something to prepare for. Number one, perhaps most likely, would be some sort of global pandemic. A flu pandemic or some sort of major sickness, a global pandemic. Here, of course, your best historical, most recent historical event would be the Spanish flu of the early 20th century, where you go back and study how many tens of millions of people died from the Spanish flu.

Whether you look at it and you study something like Ebola to see some kind of modern mutation. There's a great Tom Clancy novel that dealt with an Ebola infection. But some kind of global flu pandemic is a very realistic thing. It has happened before. It will probably happen again.

And it's one of the worst case scenarios that you could come up with. How do you prepare for a global outbreak of disease? A second hardcore scenario would be something like an actually successful widespread electromagnetic pulse attack, something that wipes out the electricity for a continent. That would be unbelievably devastating.

And that's the kind of hardcore scenario that it's hard to imagine, yet devastating in terms of its impact. Or something like an outbreak, an actual outbreak of a hot nuclear war. It's pretty sobering when you study history and you realize how narrowly nuclear war has been evaded in the past.

Very, very narrowly. Now we hope, of course, that it continues to be evaded and yet it's a very distinct possibility. A number of years ago I was thinking about some of these issues and I went and studied nuclear war. Read a couple of books on it, kind of worked through all the scenarios.

I came to be convinced that nuclear war, even one of those hardcore scenarios, is eminently survivable. Even if you live in the United States and Russia and China and the US start going at it, it's eminently survivable. And I also came to the conviction that it doesn't actually cost that much to prepare for.

To be adequately prepared for nuclear war, depending on whether or not you need to move and change housing, etc. And depending on where you build your fallout shelter and how much, how grandiose your fallout shelter winds up being. I came to be convinced that for a budget of anywhere from a few tens of thousands of dollars on the low end to as much as a hundred thousand dollars to a couple hundred if you want a luxurious, luxuriant fallout shelter, you could be adequately prepared for a hot nuclear war for a few tens of thousands of dollars.

Basically the price of a new car. You could be extremely well prepared for nuclear war. And that's the scenario that basically convinced me that prepping, even hardcore prepping, has a very low price tag when compared to the dollars that most of us spend. When compared to the situations that most of us are in.

Now if we back off the brink of nuclear war, which is of course pretty hardcore to talk about, and we go to something like making sure that you survive in case your town goes through a, has a tornado, things like that, and we go to the fairly mundane things like having extra food, the price tag is a mere few thousands of dollars.

Today you can go to Costco.com, you can order up a pallet of long-term storage food that's supposed to have enough servings to last a family of four for a year for a couple thousand bucks. Put it on your credit card, have it delivered to your front door. Now, I don't know if that's the best way, it's certainly not the most frugal way, but it's better than nothing.

And if that were all you did, was spend a couple thousand bucks and stack some food in your basement, you'd be pretty well ahead of most people. Make sure you've got some stockpile of water, make sure you've got some good water purification methodologies, but you'd be pretty well ahead.

The price tag of this stuff is cheap. And so when you look at the cost of prepping, and you look at the cost of prepping for a dire scenario, all things considered is relatively low compared to the benefit of being prepared in a disaster scenario. Now, one of the things I've learned over the years is I have come to use the stockpiles and such that I've set aside far more than I ever thought I would.

And there can be a variety of different reasons. I've used them when I've had bad months of income. I've used preparations to help people, give things away to people in need. I've used it when I needed to make major financial changes in my life. That what happens is when you can turn money from money into things, the things still have and maintain their value.

Now, one more point on the natural symbiosis between prepping and financial planning. By definition, if one is prepared to live independent of systems of support, by definition, one is financially independent. So imagine this for a moment. Let's assume that you live on a nice homestead, little ways out of town.

You've got maybe a few acres, two, three, four, five acres. You've got a nice milk cow, some goats, some chickens, a couple of pigs. You've got some fish in your fish tanks. You've got a nice garden. You've got some fruit trees. You have a house that you don't owe any money on, completely debt-free house.

You have some sort of home business that can bring in income into the home with things that you have and do out of the home. You're basically in a situation, may need some stockpiles. Say you have some stockpiles of shoes. You've calculated that you wear out a pair of shoes every five years and you've calculated that you have another 50 years of life expectancy.

So you've laid in 10 extra pairs of shoes and things like that. You are basically in a position where you are now financially independent. You are financially independent if you are prepared to live independent of systems of support. You can stockpile the things that you need. Again, use my shoe example.

You can do that for many things in your life. And then if you have the ability to feed yourself, to house yourself, clothing yourself from the land would be a pretty big job for most of us, but hey, clothes are cheap at Goodwill. As long as you don't gain a lot of weight or lose a lot of weight, you can stockpile whatever clothes you need.

You are financially independent. And that's one of the most powerful concepts behind prepping, is there's a natural symbiosis between financial planning for financial independence with the modern mainstream tools of investments and generating income from investments as well as the traditional tools of having a debt-free house, having a garden that provides some percentage of your needs, providing for your own meat, providing for your own energy, investing in solar panels, things like that.

These things function really well together. And in fact, you can have far better results of one or the other if you have both of them. For example, let's say that you are that financially independent person who has a large portfolio of investments, who also has substantial physical preparations. Now assume that your portfolio of investments declines dramatically due to a change in market conditions.

Well now, by choosing to stop taking money from your portfolio of investments and to start taking money from your stockpiles, sorry, taking things from your stockpiles to provide for yourself, you can actually enhance your long-term wealth by not selling when investments are cheap. So you can wait out the decline in the markets and then when the investments recoup their value, then you go ahead and start selling again.

On the flip side, if you are that person who has some physical preparations but also has substantial investments, if physical preparations start to increase in value, you can turn around and fairly quickly turn your investments into physical items. And you'll be far ahead of the person who has no investments, who has no money.

One of the unique things about Venezuela that I've learned is simply that if you have a source of funds from outside of the country, and especially if you have a source of funds that's not measured in Venezuelan bolivares, you can be far ahead of most people. Because this stack of currency that converts into $4 is still only worth $4.

So if you have a paycheck of a couple thousand dollars from outside the country, you can live pretty decently. Because for the things that are available, you can get them. So now we get into the natural diversification that we talk about when we work in professional financial planning. How do we diversify an investment portfolio?

How do we diversify across currency, risk, etc.? And if you did those things, you would be far ahead of one of your neighbors who did not have those things. And so they work together synchronistically. They're perfect complements for one another. So it's not that you should only engage in formal financial planning.

It's not that you should only do prepping. It's that they work synergistically. They have their place. And if you're thoughtful and careful about how you approach it, you can set up what's best for you. Now there are costs for both things. For example, there's a cost to having too much stuff.

If you have a whole lot of stuff stockpiled, that can make your life very unwieldy. It's hard to move. You need a big house, a big barn, etc. That can be hard. That could be a downside. There can be a cost of focusing too heavily on investment assets. Realistically, I think that if you were to compare somebody who took their first $15,000, $20,000 of their working life and put it all into investments to start that compound interest rolling versus somebody who took that $15,000, $20,000 and put it thoughtfully towards physical preparations, I think in many ways I'd make an argument that the physical preparations are going to be far more useful.

I imagine the stability of the person who buys an inexpensive trailer, single wide trailer or something like that to live in, owns a little piece of land debt free, $15,000, $20,000 could build an incredible infrastructure on a piece of property with trees and gardens and some animals, etc. And that person can still be working and making money and saving money.

But yet by investing it into physical preparations, they're probably far ahead of the person who just puts the first $20,000 in their Roth IRA. I think most of us have enough money where we could do both effectively. But if you had to choose, I think the argument is pretty strong in favor of physical preparations.

So they work together really, really well. Now I want to talk briefly about my own opinions on this subject. Thus far, nothing I have said is, I think, all that surprising to any long-term listeners of the show. I've never hidden these opinions. I don't understand why a lot of preppers are so secret about how I just don't talk about prepping.

The best thing that you can do if you want to ensure your long-term survival is to build a resilient community. It's far better for you to be a part of a community and a culture that is resilient and strong and prepared than for you to be the lone wolf who is well-prepared yourself but surrounded by lack and by all your neighbors.

That's really hard. So the best thing that you can do is try to encourage other people to become debt-free, encourage other people to plant gardens, encourage other people to take control of their own energy needs for their house, etc. So you always want to encourage others and build communities of people who are resilient.

I'm going to pivot now and just briefly discuss some personal experiences that I've had that have caused me to decide to intentionally change my mind about some of my past opinions. See, although I have always been interested in these topics, I've always thought they're interesting to discuss, I've always generally been a moderate.

I'm the kind of person that would be happy to give a preparation or a presentation at the local Red Cross meeting or something like that. I'm not the kind of person that you would see profiled on the doomsday preppers. I've never been an extremist and I've often really struggled with the people who are extremists and I've just thought, "I appreciate your intensity but I think you're missing some level of what I would have said, would say, would be reality." For example, I pay a lot of attention to economics and I repeat the statement I said, "The dollar and the United States are not the same as Venezuela and the boulevard." There are a lot of ways that you could prove that case but they're just very, very different.

So although in many ways the US dollar has the same basic problems as the boulevard does, its fiat currency, its worthless paper, its value comes from the exchangeability, its value comes from the size of the economy and those things are very different. So I've often been a moderate but a number of experiences have convinced me to move a tick or two farther off the scale of moderate towards, sounds bad to say the word extreme but just give you an idea of the scale, towards more hardcore.

Let's use a word other than extreme. And they are these. Number one, Venezuela. I've tried to bring you on the show some input into the work that I'm involved in and many of you have given money to that. But I don't know how to articulate more other than just to tell the stories of how impactful it is to see collapse in real time and not collapse of the old variety but collapse of the right now variety.

To see people who wear all the same brand names that you and I wear, who know all the same international pop culture icons that you and I might know and yet to see that culture and economy and country implode. I mean it's a countrywide, a nationwide collapse. It's absolutely a collapse society.

It's a level five collapse society and it's devastating. And what it's caused me to do is to recognize that a lot of the things that I was dismissive of in the past, actually there's more thought to them than I want to give credit. I'll give you an example. In the prepper world there is an idea that having an older vehicle is better.

An older vehicle, especially a non-computerized vehicle, because it can be fixed without the need for modern diagnostic equipment. And then there's also a sub-argument of this position that relates to the threat of the vehicle failing during an electromagnetic pulse event which can wreak havoc with any kind of electronic or computer equipment, especially in the car.

It can cause a car to stop functioning. Now I concede the risk for equipment failure during electromagnetic pulse events but from the research, the test research that I've been able to find, I think that risk is usually overstated. I think people who seem to be knowledgeable would not say that every car that has a computer would stop functioning but that a percentage of the cars would stop functioning.

But it's a difficult debate because a lot of the data a few years ago, a US government panel was commissioned that studied it. But their methodology, the test methodology was not real life in any way. It just wasn't good. So it's still an unknown question. Nobody has devoted the money and the time to actually blasting a bunch of modern cars with an actual up-to-date current strength electromagnetic pulse weapon to see what actually happens.

It's all test data that's then extrapolated. So I think the risk is lower. But I've always been a modern car guy. I mean, I don't know about you, but you think about starting a vehicle that has a carburetor, it's just a hassle. You have to pump the gas a bunch of times.

It's much easier. Fuel injection is great. And I've always been to the conclusion that a modern car is so much better than the old cars in terms of reliability and efficiency. And I've generally thought of the position of saying, you know, yeah, a computer-controlled car might be a little harder to fix, might take some diagnostic equipment, but it's actually a lot more reliable than the old-fashioned car is.

That's generally been where I have been on that particular debate in the past. But Venezuela has changed me. Because what you see happening right now, as you see a collapsed society, is first, of course, you see massive shortages of fuel and whatnot, which is horrific in a country that has incredible fuel reserves and oil reserves.

But you see that old cars have become much more valuable than new cars. And new cars have lost a huge portion of their value. Because if something breaks, the parts are not available. The spare parts, you can't get them. They're just not available. So if you, yeah, the computer told you that you only need this one part, but you cannot get it.

And then the computer diagnostic equipment, etc. doesn't work. The power's on an hour a day, two hours a day, if that. It's just a nightmare. And so if you have a 1965 Volkswagen Beetle, you've got a gold mine because it's fuel efficient. It's all manual. There's no computers involved.

You can fix it on the side of the road. You can pull the whole engine out and rebuild the engine on the thing practically if you've got the manual on the side of the road. And so seeing something like that, it made me say, "Huh, well, maybe I was wrong.

Maybe the hardcore people were right, that there is actually something to this." And there have been many other experiences like that. Simple things of protecting from theft. You know, okay, put solar panels on my roof, but yet how do I protect those panels from being stolen? The physical violence in Venezuela right now is horrific.

And it's things like communication, laying in the ability to communicate outside and to be off-grid and to have off-grid communications. If you have that right now, you have a lifeline. Now, there are still somewhat sometimes functional cell phone systems. So the modern cell phones still work. When the network is on, you can go buy a SIM card.

You can get data out and that's still really good. You know, it's a lot easier for you to just wait 24 hours for WhatsApp to start working than it is for you to necessarily sit down and start tapping out messages in Morse code. But still, there's value in some of those things.

And then being able to have food. Being able to have a way to feed your neighbors. And then being able to have stockpiles of food. Because you can have a garden that can provide for you, but then how do you figure out how to get your community fed? You need some outside support a lot of times.

But yet if somebody would think ahead, it's not that hard to be prepared for some of those things in advance. So Venezuela has really impacted me deeply. And seeing a lot of what's happening there has caused me to say, "I'm not going to be just on the moderate perspective.

I'm going to crank things up a little bit." Because that was an economic collapse. And what worries me and what concerns me is when I look at the United States, I look at it and say, "You know what? A lot of the positions being discussed by many modern politicians echo the same arguments that were discussed 15 years ago in Venezuela.

And a lot of the things that in the Venezuelan society... It's easy, for example, it's easy to dismiss Latin America and Latin American politics as being somewhat dysfunctional. Because they are. They're just not stable. The United States is far more stable than most of the countries in Latin America.

Of course I want to concede many people say, "Well that's because of the US intervention in Latin America." Shelve that for another day. The point is, the US is far more stable than the events in Latin America. But you see the increasing levels of instability in the US-American society.

You see the increasing fracturing of society. So instead of having a homogenous society with a common cultural understanding, you see increasing fracturing. You see increasing hyperbole. You see increasing distrust. And in a society with low trust, where it's hard to trust your neighbors, it leads to problems. That's pretty sobering to me.

Another event is of course the increasing financial... worsening financial situation in the United States. I'm trying to be very diligent to not be given over to hyperbolic rhetoric, to be very cautious and thoughtful. But it doesn't inspire confidence as I continue to watch politicians. For example, this last week we had the second round of democratic debates.

I covered this in a Q&A show, about 20 minutes of commentary in the first round. But in the second round, not a single mention of the federal deficit, not a single mention of the US federal debt, not a single mention of lowering expenses save Tulsi Gabbard made one comment about lowering expenses by ending the war in Afghanistan.

Not a single mention of these things. And yet, as I have profiled extensively here on the show, as we look forward in the coming years, this year, next year, the next few years are really, really crucial. And I don't see a way, from my current perspective, I don't see a way where politically spending changes in the next few years.

Now I can see a way where the rate of spending increases could change. And let me just briefly discuss this, the problem. Right now, the US government is running in excess of a trillion dollar deficit, possibly far in excess of a trillion dollar deficit. And that's at a time of relatively low unemployment, high employment, low unemployment.

That's at a time of pretty strong economy on all sides. By many measures, a pretty strong economy. You could talk about the forward-looking indicator softening, maybe. You know, Dow just took a big dump today, but whatever, that happens a lot. So is it a long-term trend? You'll know in terms of what happens in the coming days.

I don't know today. But you have a relatively strong economy and massive deficits. But yet, President Trump and the Republican congressmen and senators and all of the Republican political leaders, generally, I don't see any loud, vigorous protesting against the level of spending. Now on the flip side, I watched the Democratic debates and most of the Democratic candidates have large priorities for increased spending.

Now, the best solution I could come up with would be to have a Democ- financially, just speaking fiscally, the best solution I could come up with would be to have a Democratic president be elected in the next presidential election and to have a Republican senate and a Republican congress.

Because that was what President Obama faced, which actually turned President Obama into one of the biggest budget hawks of any recent president. It seems to be very dangerous for one political party to control the executive branch and the legislative branch, at least when it comes to spending. President Obama, I don't think because he wanted to spend less, but because there was a Congress controlled by Republicans in opposition to him, that spending decreased significantly under his administration.

And so the best I could come up with would be a, in terms of a fiscal perspective, would be a Democratic president and a Republican senate and a Republican congress. Now, will that happen? I don't see how it will happen, but maybe so. But even that is not great because the built-in increases in spending are too high.

So unless something were to change in the next year or two, where you start to hear a vigorous national debate on these subjects that actually matter, I don't know what happens. And then I look at the current debate and I say, is there any way that this thing changes?

Is there any way that what you see changes? And it's just, it's dangerous. The way that people are speaking to one another at this point in time is dangerous. Just this last weekend, we of course had a number of devastating shootings in the United States. I try whenever I think and talk about these subjects to put them into historical context that with regard to their actual impact and their actual meaning, their actual impact and actual meaning is relatively low on a numerical basis.

Mass shootings are not particularly common, but what they are is they're widely reported and they're widely discussed in a huge country like the United States. But they're not particularly common and the numbers are not particularly large. When you look on a global basis and you look at places where the news is less focused, when you don't have the massive amount of the English world and you're outside of the place that we are, where the whole world media is focused on the United States, stuff is just, bigger things are less reported.

For example, talking about Latin America, are you aware of what happened in Nicaragua in this past year and what's happening right now? Over about 300, I think 320, 325, something like that, over 325 people were killed by the government in Nicaragua in mass protests. When you start to look at things like that, a tiny little country like Nicaragua, some few millions of people and 325 people killed, anti-government protesters killed by the government, it starts to put things into context a little bit when you talk about a few dozens of people who die in shootings.

However, when you look at the actual impact, especially this weekend, what seems to be from early reports, one person coming from kind of a right-wing perspective, the other person perhaps coming from a left-wing perspective, I think what you see is an expression of a very mild, quiet form of civil war.

And what worries me is the basic conditions that lead to these things happening. And it's a complex subject, very, very difficult, very hard to talk about because there's so many contributing influences, depending on which way you look at it. And when you survey data broadly, there's a lot of things that go into it.

But what also concerns me more, however, is what happens after the effect. How do people talk to each other? And what I see, and I'm talking from mainstream perspectives, when I look at the editorials written and published in newspapers, when I look at the commentary that's being produced on TV, I don't see a lot of responsible adults, all of us being willing to humble ourselves and say, "We've got serious problems.

Let's talk about what we could do and let's see if there's some things that can improve things." It's just, it's like you'd have a violent, horrific event, and then it just gets cranked up. And that causes both sides or all sides, because there's more than two, to become more and more entrenched.

And all the fuel is there for more and more chaos, more and more violence to come. A couple of years ago, I personally moved the scale, the likelihood scale, the matrix that is in my head on civil war in the United States from implausible to plausible. Kind of a mild move, but there's a big meaning in that.

A listener recommended it to me, and I listened to a podcast, I'll share it with you, you may be interested. There's a podcast that a man did called "It Could Happen Here." He did a podcast on basically civil war, one scenario of how civil war in the United States could happen, could break out.

That term is very fraught to use, because when we think civil war, we think of Civil War I, or we think of this neat geographic division, these big armies, these kind of state-sponsored actors. I don't know of any modern military theorist or person who thinks about these things who would predict any of that kind of thing.

I think what you see more would be basically what you saw this last weekend. So you might be interested in the podcast. The guy's kind of a left-wing guy, so if you're a left-winger, you'll like it, if you're a right-winger, you won't. But I thought he did a really good job with kind of discussing the plausibility of the potential of civil war in the United States.

Again, the podcast is called "It Could Happen Here." I have a number of significant disagreements with him, but I appreciated his analysis, and you may enjoy that podcast if you're thinking about things like this. Now before I close the show, I should hasten to add that with most of these things, it's very hard to know how to give an appropriate context or level of weight to any particular event or the risk of any particular event.

I'll give you an example from my experience in financial planning. When I sold life insurance and disability insurance, I developed a much greater appreciation for the value of life insurance or disability insurance than I did if I had not been involved in that market. If you go and talk to somebody who sold insurance for maybe a decade or more, they will probably have at least one death claim or at least one disability claim.

You go and talk to an older insurance agent, somebody who's been in the business 30, 40, 50 years, they'll have a long history of stories. And when you start listening to the stories of real people, the lives of real people, it changes your perspective. For me, something as simple as having insurance on the lives of your children, the only death that I ever had when I sold insurance actively, I don't know if anybody has died on the policies that I sold after I left the business, but the only death that I had ever had on an insured was of a parent whose child got murdered.

I think about a five or six year old child got murdered on the front lawn of a relative's house. It was the most incredible story, and yet it was so devastating that it caused me to lose my perspective and to have this deep emotional attachment to something like insurance for children.

The same thing I think happens with considering events, whether it's your political discussions with people online, it's hard to reconcile the furor that you see online or on TV or whatever with your conversation with your neighbors. Just like it's hard to reconcile what you see in your community around, which is most likely peaceful and people just going about their lives, with thinking about what happens if there's mass inflation or hyperinflation.

It's hard to see those things. And so then when you start exposing yourself to something, you wind up putting your brain into a form of selection bias. I can't get away from Venezuela. I can't get away from it. But yet I have to look and acknowledge that Venezuela is, relatively speaking, a small corner of the world, and there are still hundreds of other countries that are doing okay, and that even if you look at something like Venezuela, as devastating it is, there are millions of people just going on about their lives, trying to figure it out as best they can.

And so it's easy to wind up with a warped sense of reality. I don't want to have that warped sense of reality myself. That's why I always try to study whatever relevant data. That's why a few moments ago I was talking about shootings. I said, "They're pretty rare. School shootings are extremely rare.

They're decreasing in popularity. There's not a big risk whatsoever when actually looked at the data." But that doesn't make the emotion of it any less significant. And so you can acknowledge with your mind that people are far, about, I don't know, what, 500 or thousands of times more likely to die from medical accidents, from medical errors, going to see the doctor and say, "Doctors are dangerous.

You should stay out of doctor's offices." You can prove that with the data, but it doesn't feel that way when you're dealing with the distinct emotion of evil. So how do you deal with this stuff either in your own life or in public? I don't know. What you're hearing is me trying to figure out how do I communicate something that I believe is important, in some ways a warning tone that I believe is important.

You heard me say that I've changed my own threat matrix. I've gone from, I can't remember how the DEFCON levels work. DEFCON 5 is higher, DEFCON 1. I've gone from, I don't know, DEFCON 2 to DEFCON 3. I think DEFCON 5 is high. So I've gone from DEFCON 2 to DEFCON 3.

And I'm trying to encourage you to do the same thing, but also to, at the same time, try to stay very grounded in reality, try to stay very firmly aware of my biases, firmly aware of the filters that I have, that we all have, and try to stay grounded in financial stability.

Don't go into debt, don't borrow a bunch of money to make preparations, things like that. But I guess my closing appeal to you would be, if you are the kind of person who puts all your planning in the traditional financial planning matrix, I would ask you to reconsider that because there are many things that traditional financial planning cannot account for.

And the cost of buying some insurance is not much compared to the potential benefit of that insurance if you ever need it. I want to also finally broach one more subject which is difficult, but I think important as you consider how to put this into a common financial context.

Over the years, since I left the financial advice industry, I've thought about a lot of the opinions that I once held, I've thought about the things I once advised, and I've tried to assess, especially with the perhaps perspective of time, I've tried to assess my own actions and if I was satisfied with the things I said, the things I did, my motivations, etc.

And for the most part, I'm fairly happy with my involvement in that industry. I got some things wrong, I made some mistakes, some of them were just due to errors of inexperience, things I wouldn't say or do today, but for the most part, I'm fairly satisfied with my career in that business.

But I've reflected a lot on the bias that is easy to have depending on your exposure to an industry. There's a saying that goes something like, "It's very hard to convince a man of something if his entire paycheck rests on his not recognizing it or not conceding the point." Something like that.

And there's a real truth to that that I think is worth considering. That it's very hard to convince somebody of something if their paycheck depends upon them not conceding the point. Because none of us are immune to the pressures of our paychecks, none of us are immune to those outside influences and outside forces.

We can try very hard to insulate ourselves, but at the end of the day, none of us are immune. I hate doing shows, in a sense, like this. Because it seems like, even though I don't think today's show is particularly divisive, any time I do a show that is hot or a little bit divisive or features some of my less popular opinions, I recognize the fact that it results in a lower paycheck.

And that is hard to take. And so the point is none of us are immune from these things. But in the financial industry, I think I would divide a lot of times financial advisors and financial pundits largely into two camps. There are the mainstream financial advisors and financial pundits, and they largely necessarily thrive on and preach optimism in all regards.

And then there's the other side of the financial advice industry that largely makes its living on fear, doomsday predictions, and largely thrives on catastrophism. And it seems to me that we should acknowledge and recognize that both of these segments in the modern financial advice industry depend on their particular viewpoint being right in order to generate their paycheck.

For example, when I sold investments, one of the things I had to do to get people to invest money was to convince them of the long-term value of investing their money with me. Because why would anybody take their hard-earned money out of the bank or out of whatever it's invested in and invest it in what you're suggesting to them if they didn't believe that they were going to get a better return, if they didn't believe that they were going to get a better outcome?

They have to believe that their situation is going to be improved in some way, and they have to believe that improvement is going to come financially. And so you talk about all the good things that highlight your perspective, your opinion. You talk about the glowing returns, you talk about the stability and the safety of your investments, you try to diffuse the objections and the concerns that the client has and find a way to make them comfortable.

And that's fine, that's right. Hopefully you as an advisor have studied your issues and then you've come to your opinion and you're trying to share that with somebody. But it's not in your best interest if you are a person who's making their living on selling stocks, etc. It's just not in your financial best interest or even your psychological best interest to all of a sudden become a catastrophist.

If your personal opinion is that the dollar is going to become worthless and the price of gold is going to shoot through the roof, it's a little hard then to, in good conscience, recommend to somebody that they buy your mutual fund. And so what tends to happen in that sphere of the business is you tend to feed your confirmation bias.

You tend to fill your mind and your psyche with positive articles talking about why the catastrophists and the doomsdayers are wrong, talk about the long-term stability, talk about the case for optimism, talk about the incredible size and resiliency of the American economy, blah blah blah. You fill your mind with this.

And if you're intelligent, you probably do it intentionally. I did. Because I needed to be, myself, psychologically strengthened in that position so that I could share that strength with other people. There's an old saying about selling that is, there is an old saying about selling which says that sales is the transfer of emotion or the transfer of enthusiasm.

And so when you're selling something you are trying to transfer the enthusiasm that you have for something into another person. And so for you to be able to do that successfully, effectively, repeatedly, you need to have a high level of enthusiasm for what you are doing. So it's very hard for most of us who try to, and most financial advisors, try to come from a place of ethical integrity where they believe what they say.

It's very hard to do that if you don't believe what you're saying. You can't do it and keep things going. So the mainstream financial advisor depends upon, for his livelihood, depends upon a presuppositional commitment to positivism, towards the positive story to help paint you into your retirement, to help you see yourself walking down the beach, etc.

Now on the flip side, there's a whole market filled with catastrophists. And they usually sell products like investment newsletters, they sell books, they sell gold coins or they sell preparedness food or bunkers or things like that. And from the catastrophist perspective, the catastrophist has an intense investment into disaster, has an intense investment into everything going wrong.

Because when you're trying to talk about all the problems and all the things that go wrong and you're trying to get somebody to get off their couch and write a check and buy a gold coin or write a check and buy a pallet full of preparedness food, you got to really believe what you see so that you can get that person to make that move.

And so the catastrophist basically depends upon things, everything going bad. And so they can hardly admit when things don't always go bad or they can hardly admit when they've been wrong. And they can hardly admit when there's a case for optimism or reasons to believe that things could get better or reason to believe that things couldn't get worse than they were before.

And I don't know how you untangle those two camps. I don't know how. Because there's so much invested in them. So here's what I would say to you. The only person ultimately that's going to matter is you. And I'll do my very best to try and tell you what I think and to be, if there's a link between the optimist and the catastrophist, maybe the realist.

Right? Because the realist acknowledges that just because everything has gone well in the past doesn't mean that everything is going to go great in the future. And the realist should also acknowledge that just because we can't see a way out of this problem right now, that doesn't mean that we can't find a way out a year from now or two years from now, etc.

Things are probably going to be a mixture. They're probably not going to be as bad as I think they could be. And they're probably not going to be as good as I hope they are. But if you come back and try to maintain your own realist perspective, and then you come back and start counting the cost.

Okay, if this, then what? If this, then what? If things go well, then what happens? If things go poorly, then what happened? And then bring that down to your individual decisions, you can start to, in my opinion, make some intelligent decisions and put in place some plans, etc. That's what I try to do.

That's what I try to teach you. I think it's sound. If you see any errors in my thinking or any flaws in my analysis, feel free to email me and let me know. Joshua@radicalpersonalfinance.com. I'd be happy to hear from you and consider where I may be getting something wrong.

But you're the best judge of where you are. And you're the best judge of what makes sense for you. You know, I guess as I close, I'll just mark it. I have a whole course on how to survive and thrive during the coming economic crisis. I wrote it because I was concerned about the stuff.

I started doing a lot of the stuff that I'm doing now because I've been concerned about these things. And I wrote the course to try to give you my best thinking on the subject. But let me give you just a simple example. As I looked at it, I said, you know, one valid solution to planning for catastrophe is move to a cabin in the woods.

Right? That's a valid solution. But I don't want to live in the cabin of the woods in the middle of nowhere. And I would feel really dumb if I moved to a cabin in the middle of the woods in the middle of nowhere and live there for 20 years and then find out that things are more or less how they are today and that the catastrophe didn't happen.

Now, if I were certain that there were thermonuclear war coming on the first of next month, the cabin in the woods would now take on a lot more appeal. But since I can't be certain about that, I have to weigh the cost of the cabin in the woods as compared to the risk of being wrong.

And so that's why I've started, worked hard to try to come up with other solutions. Now, I don't think the cabin in the woods is a bad idea. I think it's a great idea, but not as a primary plan for me, at least. Maybe for you it will be.

And so the solution that you come to has to be a solution that you're happy with if you're right in your analysis or if you're dead wrong in your analysis. And I think that if you get that way, if you can make that happen and you can build plans and solutions that you're happy with either way, then you have a really stable platform to build from.

I know this was a fairly long show. I hope that I struck the right tone with you. I hope this was helpful to you. I hope that I'm succeeding in conveying how my concern is increasing and I think there's good reason behind that increasing concern, but yet not conveying, trying to sell fear or not conveying any sense of panic, et cetera, which those motions are unproductive and unhelpful, but just simply to try to convey a little bit of concern to get you to think about things that the mainstream financial planning industry doesn't usually think about.

If you think that any of my ideas on solutions could be helpful for you, feel free to go to radicalpersonalfinance.com/store. Sign up for my How to Survive and Thrive During the Coming Economic Crisis. There's a money back guarantee on that. So if you buy it and you take my course and you find that at the end of the day, Joshua was just selling fear and being a catastrophist, you won't find that.

But if you do, you can get a refund. But I think what you'll find is if any of this stuff concerns you and you're thinking about what to do, I do my best to give you some really useful solutions that can help. And then as we watch events unfold, I'll be adding more content to that course as well.

RadicalPersonalFinance.com/store and I'll be back with you very soon. Sweet Hop is an online marketplace curating the best in premium seating at stadiums, arenas, and amphitheaters nationwide. With Sweet Hop's 100% ticket guarantee, no hidden fees, and the personal high-level service you expect with a premium purchase, you can relax knowing you'll receive the luxury experience you deserve.

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