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Choose from a great selection of digital coupons and use them up to five times in one transaction. Check our app for details. Ralph's. Fresh for Everyone. Today on Radical Personal Finance it's 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 ten years or less.

Today is Friday, April 10, 2020, and today we do live Q&A. I do these shows every Friday when I can arrange the technology, sit in my command center and open up the phone lines. Works just like call-and-talk radio. Bunch of callers on the line, they call in and we chat and then you get to hear it.

If you would like to join me for one of these Friday Q&A shows, I would invite you to become a supporter of the show at patreon.com/radicalpersonalfinance. Again, you can sign up to become a supporter of the show at patreon.com/radicalpersonalfinance. These Friday Q&A calls are available to patrons of the show and thank you to the many of you who support the show there.

It really helps me tremendously. I really am very grateful. We begin with, let's see, it looks like, I got to close the music. There we go, close the music. Tommy, welcome to the show. How can I serve you today, sir? Hey, good afternoon, Joshua. Just had a quick couple questions regarding the home equity line of credits.

Okay, go ahead. So we have a $60,000 available HELOC that is basically 0% loan as it stands, as long as we don't put it in our bank account. And then we'd obviously, extra interest, whatever that variable percent would be, if we tapped into that. And what market indicators should we watch for to see if we need to put that money out of the standby and then into our bank account?

And what would cause that to not be available funds? What would you do with the money if you put it in your bank account? Nothing right now. So it's interesting. The danger that you face with the HELOC is that at any time, generally, every contract that I'm aware of, I try not to make absolute statements, but it's my understanding that the danger that you face with the HELOC is, at any time, the mortgage company that has provided the home equity line of credit can lower the line of credit that you have.

They can do that if they're concerned about something changing in your borrowing profile. They can do that if they're concerned about something changing with the value of your home. This is similar, of course, to credit cards. I can have a credit card that has a $30,000 credit limit, and then the credit card company can look down and see something that they just decide they don't like about my credit profile.

And they can lower my available credit from $30,000 to $20,000. Now, they generally wouldn't do that without cause. The home equity line of credit company wants you to use the money because they want to sell the debt. They want to earn the interest. But the cause would be something like, probably something like a change in your credit profile or a change in the value of the real estate.

And so when you think about this as either a line of funding that you're planning to use for an alternative investment, or if you think about this as part of an emergency, the timing has to be before you need it for the investment or before you need it for the emergency.

So the time to go ahead and get the money out is before you start going late on all your payments because that would mess up your credit profile. Then they would see that in their computer, would flag it, and then the next thing you know, they would go ahead and lower your home equity line of credit.

Or the time to use it would be when you wanted to have the cash so that you could move quickly to, you know, jump on a deal. Maybe you're planning to use this as a down payment fund for some other real estate investment. So all I can say to you is I don't know the specific triggers that you would look for.

What I would look for would be, do I think that my use of it is going to be coming up in the next months? You know, is this six months kind of thing? And then what I'd like to do is I'd like to have the money sitting in my account, in my bank accounts, available for me so that even the money itself has a little time to season, sit in the bank account, so then I can use it for whatever my anticipated investment is or my anticipated emergency.

The cost is relatively easy to calculate. Just take $50,000 and figure out what the annual interest rate is under the current interest rate and you'll understand your opportunity, you know, the money that you're giving up in terms of interest. But I would want to have it set aside into a bank account before I needed it.

Beyond more specificity, I can't provide. Is that what you're looking for? Yep. Anything else, Tommy? One last question would be, we've been getting emails from our mortgage lender and apparently you don't really need to provide any proof of hardship and we're at 80% of our mortgage currently is going through the principal.

Therefore, kicking that can down the road really wouldn't be too costly even if we're just paying the interest only for two months on the forbearance. So they're offering you a... Hold on one second. Hold on one second. Let me just clarify. The mortgage company is offering you a forbearance program where you can make an interest-only payment on your mortgage without having to represent to them that you've lost income, without having to represent to them that you've experienced hardship due to coronavirus.

Did I understand that accurately? Yes, that's correct. Okay. Go ahead with your question then. What's the downside? I'm just not seeing really a downside because that just adds a couple mortgage payments, you know, back into the emergency fund. Yeah. With what you described there, there's not really any downside.

You'll have a few extra months to pay your mortgage, but that's probably not a big deal at this point in time. And so I would take it. I would take it and use the excess cash flow to pile up cash until we get through this time of emergency, however long it winds up being, and then go back to making full normal payments so that you can reduce the principal balance.

But I would take that deal all day long. All right. Thank you, Joshua. My pleasure. All right. We go now to... Looks like Mark in Canada. Mark, welcome to the show. How can I serve you today? Hi, Joshua. I just wanted to know, I mean, I know you haven't spoken too much about the fire, you know, fire movement in general, the last while, but just in terms of this whole pandemic, trying to position ourselves to put ourselves back on track if the plan was based on a savings rate to be financially independent in, let's say, 10 years, and then having, you know, conceivably 6 to 12 months of not being able to continue to make contributions to your investment plan.

And then just in terms of looking at how to take advantage of the situation or the declines in the stock market to try to reposition ourselves, or do you feel like this is just going to just put out an extra year or two to most people's plans and we just have to, you know, take our lumps and carry on?

I think the only reason why this particular... The major reason why this particular crisis that we're in would affect somebody's early retirement, financial independence, their fire plan is if they lose their income or if their income suffers. Beyond that, you know, if I've got a business that's just trucking along, I don't know what it is, maybe I run a grocery store or a local market and business is trucking along as normal, if you can continue to get paid, then recessions, depressions, declines in the stock market represent an opportunity for you because they allow you to buy less expensive investment assets when you purchase those investment assets.

The people who are being hurt are those of us who are having our income significantly affected. And the extent of the damage will be just simply based upon how big is the cut to our income and how long does it go on. Ideally, this crisis blows over quickly. I'm unconvinced that that's the case, that it's going to happen, but I'm hoping that that's the case and I'm hoping that that happens.

But for those who are pursuing a plan for financial independence and early retirement, I think this does just... I think it all comes down to do you lose income? I do think there are some opportunities here and I'm going to riff on what you said and I'll come back to you, Mark, with any follow-up questions.

But the first thing is there have been some headlines, kind of snarky headlines of people talking about, "Well, the early retirement, the fire movement is broken now because of the current crisis." I think that's silly. I think that's totally silly because the people who have been pursuing financial independence early retirement have developed a set of skills that work in good times and in bad times.

The key skills are the ability to live on a small amount of your income, the ability to live frugally. That's extremely valuable. You know, the fact that I can live frugally when times are good allows me to be much more comfortable at living frugally during difficult times. So that's a really good skill to have no matter what's happening.

The ability to have lots of money saved. You know, people who are pursuing early retirement financial independence are generally going to, as long as they're a few years into that plan, they're going to have a lot more money saved than the vast majority of people. Whether it's in the stock market, whether it's not, they're just going to have more money and that positions them better than those who are living hand to mouth.

I think even just people having thought about, people who are pursuing fire having thought about what they would do in early retirement would possibly give them ideas about what to be doing right now. I've observed that a lot of people don't know how to be at their house. You know, they just don't have, they don't like their house, they don't like their family, they don't know what they want to do.

And so in many ways, this home seclusion that we have is almost a good test case to say here's what early retirement is going to look like. Now you can't go to the gym, but what are you going to do? What are you going to do with your life?

And so there's no downside to pursuing financial independence and the plan doesn't fall apart. The big risk that I do see that people should be very aware of is those who are entirely dependent on the stock market and who are developing a fire plan, right? An early retirement financial independence plan that is predicated upon the stock market giving a certain sequence of returns.

Right now what you see is, do you see a complete collapse of, you know, the 4% rule? I don't think you see that at the moment. I think at the moment, the data would indicate that this is, this could be a run-of-the-mill bear market. That's what the hard data would indicate.

Now if you want to be a catastrophist and say, "Well, this is, you know, the entire world is going to collapse and all these stocks are going to go down," that's legitimate. Are we going to have a V-shaped recovery, a U-shaped recovery, an L-shaped recovery? I don't know. I'm more pessimistic, but, you know, we don't know.

We don't know. But what is, so I'm nervous about people who make their entire financial independence plan based upon stock market returns and I think you see the discomfort that can come if that is your investment plan, if that's your retirement plan. I prefer people to have multiple diversified asset classes that have multiple streams of income versus living entirely on a small stock market portfolio.

The bigger danger though that you should take to heart is how tough this would be if this were the year that you started pulling on investments. Fundamentally, the biggest risk with the stock market is the sequence of returns risk. If the first 10 years of your retirement are years when the market just collapsed and now you were investing, investing, investing at high prices, but now you've got to pull money out and sell stocks at low prices, that really hurts you.

Whereas if the first 10 years of your retirement are when the market is high, then you're pretty good. And every year that you go on and you're living off of the stock market, you get a little bit safer. And so what I think is a good lesson that FIRE devotees should draw from this is the value of having a conservative plan, low withdrawal rates, the value of having multiple streams of income, multiple investment classes, and very importantly, the value of having income streams that come from labor or the ability to quickly pivot into income streams that come from labor in the early stages of retirement.

And so if I were 40 years old and I just this, you know, January 1, 2020, I quit my job and I started living on my stock market portfolio, I'd be sweating bullets right now because we don't know how long a bear market is going to last. We don't know how deep the bear market is going to be.

And there's a very good chance that this one is going to be long and deep. Now, it's been a wacky week as I record this and, you know, there's wackiness all over the place. But if I had retired on January 1, 2020, I would feel a lot more comfortable if I had a plan of very low spending for my first few years, maybe my first few years of retirement.

In the future, I know I want to spend $100,000 a year, but during the first few years of retirement, I had actually moved to Mexico where I could live very well on less money or some variation of that, you know, lower than my ultimate goal. And then I would like to have a job, a consulting gig, a little business, something that was providing me with income.

And I think that this is a good test case for those scenarios. So those are my answers, Mark. I'll unmute you here again. And any follow-up? Did I answer your question? Or do you have any follow-up to that? Yeah, no, it was mainly kind of, you know, I'd always had a plan to, you know, buy the dip and keep regular monthly contributions.

But if your industry or your business has been, you know, hit by this, you're burning through what you've been saving over the last few months that you were supposed to put in the stock market. You're burning the money by that, keeping the lights on and the doors open. So, you know, if you like, you know, so this strategy of continuing to buy the down, like I anticipate that there's a good chance that just around the same time that the stock market is going up, that'll be around the same time where I can start putting contributions back in because, you know, when people start buying stuff and having access to things, I'll probably will have missed this dip.

So, you know, I'm wondering if there's any, what your thoughts are about it when there's a regime change, if you, you know, look at doing any kind of leverage investing, if you have any thoughts about how to take advantage of it, if the cash flow doesn't allow you to kind of carry on as you normally would.

I don't have any brilliant planning ideas there. I'm not willing to use leverage for stocks. I'm willing to use leverage for some other asset classes, but I'm not willing to use leverage for stocks myself. I don't like that. It's too dangerous, unless you are extremely sophisticated and able to cover all your options, but I'm not willing to commit to that.

And I just say it's just, it's unfortunate, but it's real, right? When our industries get decimated and when our incomes get hurt, I don't know of a magic solution to that, other than to say, you know, it's, that's real life. That's the world we live in. And so none of us are promised, you know, a perfect solution.

I guess the best example that I would say, kind of the best solution that I see would be to say, to me, this is a reason why you first build a lifestyle that you don't want to retire from. Because if you had just been planning that everything is going to be great, and I'm going to work, work, work, work, work, and save money, and I'm going to work this job I hate, and in exactly 3.2 years, then I'll be able to retire.

But what actually happens is your 3.2 years turned into 6.3 years, because your income declined, then I don't like that. So I say first start by building a life you don't want to retire from, and then save and invest. Because even if you've built a life you don't want to retire from, and you're not desperate to escape from, then I think that you can just use these times when your income is down, perhaps you're working less, use it as a stab at mini retirement.

Right? This is the time, if you're not working, then go have some fun. Right? Now, that's hard right now with the whole world shut down to travel, but use it as a chance to work on those projects that you'd want to work on in early retirement. So those are my thoughts.

All right, we go to Pete in Massachusetts. Welcome, sir. How can I serve you today? Pete, you're up. All right, Pete, you're up. All right, we'll come back to Pete later. We go then to North Carolina. Welcome to the show. How can I serve you today? Hey, my name is David, and I have about $56,000 in my bank account, and I'm 18.

And I was wondering what I can do to maximize that for the future. Congrats, man. How'd you earn all the money? How'd you get it? I've been working, and I also have it from inheritance from my grandparents. Congratulations. So at the moment, you have $56,000 in your bank account.

Do you have any other investments, or this represents the vast majority of your wealth at this point? This is the vast majority, but I've been working on setting up a Roth IRA. Okay, cool. The past couple of weeks. Now, obviously, in a time of coronavirus, the world is a little bit messed up, but tell me a little bit about your plans for the next few years, as far as you can see down the road.

Well, I'm going to college right now, and that is paid for by my parents. I don't have to worry about those expenses at the moment. Good. And what are you studying? I'm going to be studying business management with IT focused. Okay. That would be the end goal. And when you think about investing, what kinds of things do you think you'd be interested in if you were going to invest?

I'm not really sure. So what I would say is right now, I would just do nothing with the money. I don't think there's any reason why you have to do anything other than leave the money sitting in your bank account. Now, I'll give you a couple of specific ideas to consider, but I want to start with the concept.

There is no reason to try to get rid of money just because you have it. And I think that's something that you always need to consider. There's no reason for you to get rid of money just because you have it. The basic skill set that you need to acquire to become wealthy and stay wealthy is to be comfortable having money.

There are a lot of people who are simply not comfortable having money. As soon as they get money, they go out and they start spending left, you know, all over the place. Whereas other people are very comfortable having money. And so waking up with $56,000 in your bank account is perfect.

But now you got to be comfortable having $56,000 in your bank account and recognize that it can just sit there and there's no reason for you to spend it. At some point in time, you'll want to do something with the money. And at that point in time, then you can start to think, is this a good idea?

You said you haven't, I'm going to pause in my advice here. You said you haven't thought about any investing, but have you thought about something you'd like to do with the money? I mean, I thought right now it might be a great opportunity to utilize that because things are so weird currently.

I agree with you, but what would you utilize it for? What are some of the ideas that you've come up with? I've been brainstorming, but I can't really come up with anything that that amount of money would help me with. Keep going. Go ahead. I was going to say-- We're talking over each other.

I will be quiet. Go ahead. Go ahead, David. I was going to say, I don't think with that amount of money, I could necessarily start a business that I could use for the future necessarily, or I don't know how to do that, I would say. Well, the answer to that is going to depend on the business.

And so the number one problem you have right now in figuring out what to do with the money is simply that you don't know what you want to do. If you knew what you wanted to do, then the answer would be simple. So if you came to me and said, "Joshua, what I really want to do is I want to start a lawn and landscaping company," well, then the answer would be obvious.

You'd take, you know, three or four thousand dollars. You'd go buy a truck. You'd take another three or four thousand dollars, go buy some lawn mowers, another thousand dollars on weed eaters and miscellaneous equipment. So you're in it for seven or eight thousand bucks of gear to have a really nice professional setup, and you go out and start a business mowing lawns.

And you could make that into a very profitable business. But the thing is you don't know what you want to start. If you said, "Joshua, I really want to start a business, you know, a food truck business," well, then you'd use some of the money and you'd go and find a food truck.

You'd invest in whatever equipment you needed to run that food truck, and then you'd go out and you'd start the business. Fifty-six thousand dollars is far more money than most people have to start their business. Most people bootstrap a business. And it opens up tremendous opportunities and tremendous doors to you.

Fifty-six thousand dollars is also money that could be spent in lots of other ways. You don't currently need the money for college, but a lot of people would spend the money at your age on college classes. I wouldn't myself. I would go to college cheap. I generally think the value proposition for expensive college degrees is very, very low.

But it's worth considering. You might need it for a master's degree. You might need it for graduate school. Let's say that you were very interested. You start college and you study business. Then you come across the fact that you're very interested in practicing law. And you can parlay that $56,000 into a legal degree.

That could be a really reasonable investment for you if you really wanted to be a lawyer. You might come out of law school and move yourself into a position where you can make a few hundred thousand dollars a year, even in the early years, and then a lot more down the road.

And so if you were really interested in it, then that would be a reasonable investment. Everything is going to come down to what do you want to invest the money into. You could even persuade me to say, "Joshua, I want to invest the money into life experiences. I'm going to take the money, and what I'm going to do is I'm going to buy a 30-foot sailboat, fixer-upper sailboat.

I'm going to fix it up in my spare time while I'm going to school. So maybe I'm going to pay $6,000 for the sailboat, invest another $5,000 or $6,000 into gearing it up. And I'm going to keep the money in my sailing kitty, and go and live off of some of this money for a few years while I sail the world as a young man, as a solo sailor." You could convince me of that.

You can convince me of a lot of things that you wanted to do with the money. The key is that you actually have an idea of what you want to do. And then we could talk about what's the best way to leverage it. What you'll need to think about, however, is just what do you want?

What do you want to do? And if you don't know what you want to do with the money, then don't do anything with it. Just sit on it. Just leave it in the bank. There's no need to spend it. And if you sit on it for the next 10 years and just sits in the bank, I think that's totally fine.

Until you know what you want to do with it, until you know what you want to spend it on, until you know what you want to invest in, until you know where you want to go, I think that the money should sit there. Now, I'll give you some practical suggestions of what I would do with it.

The first thing is, if you are working and generating active income, earned income, which you should be, your goal should be to get this $56,000 to $100,000. And I would tell you if someone's paying for your school, you're going to school, live at home with your parents, stay with your grandparents, live with a buddy, do whatever you can to live super cheap, work as much as you can while you're going to school, get your degree, but work full time and set a goal of graduating from school with $156,000 in your bank account instead of $56,000 or whatever the number is for you.

But if you're earning active income, I would go ahead and I would make Roth IRA contributions every year. You could put $6,000 into a Roth IRA contribution. You don't have to invest the money. So if you just want to keep it in a cash account, you can keep it in a cash account.

If you want to buy stocks, you can buy stocks. That'll come down to what do you want to invest the money in. But I would start moving at least $6,000 a year into a Roth IRA. The reason I like that is at any point in time, you can take the money out of the Roth IRA if you want to.

You can take the contributions out of the Roth IRA and spend the money on anything you want. But every year that goes by, if you don't make a Roth IRA contribution, you lose the ability to make that Roth IRA contribution because that calendar year is gone. It's gone forever.

So let's say you are earning at least $5,000 a year. Go ahead and make a $5,000 a year Roth IRA contribution every year for the next five years. Then if on the backside, you graduate from college, you decide I'm going to buy that sailboat and go spend a few years sailing around the world, get yourself, you know, make a $25,000 distribution from the Roth IRA, if that's just a return of contribution, there's no tax event, and you can just simply use the money somewhere else.

But if every year that you don't make that contribution, you lose the calendar year and you won't be able to ever get it back. So that's something I would do with it very intentionally. The other thing that I would focus on is I would think about what you want your life to look like in the coming years.

If you're pretty established in the college space, you feel like, and you don't know this yet, but if you're pretty established, you've chosen a college, you think it's a good fit for you, I would look around and I would think about buying a house to live in over the next few years if that's relevant to you.

I think that in the next six months, there may start to be some pretty good deals available on real estate. And if you can use some of this money as a down payment for a house, and if you're earning enough income with your job, or jobs, or businesses, or whatever you're doing that you can qualify for a mortgage, I wouldn't mind owning a house while you're in college.

It's nice if you can buy a three or four bedroom house and then rent out three or four of the bedrooms to roommates while to help you, who will pay you an income. I think that's a really nice and reasonable thing to do. And then the key thing is just to sit on it and start to look for opportunities, and start to train yourself to say, how could I invest this money effectively?

What kinds of businesses would I like to be involved in? You got private businesses that you can get involved in, that's generally going to be your most profitable thing to do with money. You could invest in tangible assets, it could be real estate, it could be, maybe you want to flip classic cars, or buy used cars, right?

There are all kinds of businesses that work really well when you're in college because they could be easily fit around your classes. So for example, maybe you start a business flipping cars. You may or may not need to get a dealer license, but maybe you get a dealer license, you go to the auctions, you buy cars cheap, and then you flip them somewhere.

You find some market, maybe it's a college market, maybe you set up out of a little self-storage warehouse somewhere, and you flip cars. Maybe you flip RVs, you flip boats, you flip, I don't know, hair-cutting clippers, whatever you find that people will sell stuff to you for. Then you start to invest your money into that inventory, and you start to manage those flips.

That would be a really good business to be involved in in college. There could be things that you could do which would take advantage of the resources that you have around you. So as a college student, one of the resources you have is ready part-time labor. So I don't know if there's still a business for it, but in the past there's been a business available for hauling junk, cleaning out junk.

I know people who do that. There's of course the big franchises, Hunk's Hauling Junk, or 1-800-GOT-JUNK, but you can do the same thing informally as well. I've known people who have made their business just simply based on offering to clean stuff up, and then they flip all the stuff that they find.

They flip it all online, flip it on Facebook, on Craigslist. Sometimes they open up a thrift store. But those kinds of businesses can work really well around a college schedule because you set up the marketing arm to bring somebody in. You set up the marketing arm to bring in the customers, but then you have a labor base that if on any Thursday or any Saturday that you got jobs, you just offer some guys cash to come and work for you for a day.

And you manage all the details of it, but that would be the kind of business. You don't need much money to run a business like that, but maybe you need to buy a truck or a trailer or something like that so you can run the business. Look around and see what opportunities you see around you for running a business.

The classic college job of painting houses still works. You know, the classics of pressure cleaning businesses or detailing businesses. People can make, you can make a lot of money with that. And so the fact that you have money gives you the ability, if you're interested in those kinds of businesses, you see the opportunity around you, it gives you the ability to buy the equipment that you need.

Let's say you start a pressure cleaning business and you keep it really lean and mean, you know, some simple machines, just a cheap trailer, buy some used one from some guy that's going out of business with a tank on it. And your job is to become, because you're studying business, your job is to become excellent at the marketing of it, figuring out how to get the clients, figuring out how to get the customers.

And then you've got a ready pool of guys that you can hire just for an hourly wage ad hoc to come and run the pressure cleaner for you. So I'm not steering you exclusively in the direction of these kind of manual labor jobs, but they are huge opportunities for a guy who actually understands how business works.

The majority of people who go into industries like that, they don't have any creative imagination, they don't understand marketing, they don't set up funnels, they don't think about it, they just want to go and run a pressure cleaner. And so if you're thinking from a business perspective, you can go into almost any of those businesses and do really well.

Another one to think about would be things like bounce house rentals. What do you have available to you? Well, you have money, and so you could buy bounce houses and you have access to labor, to guys who will work for you. And if you can get them out of bed early on Saturday morning and early on Sunday morning, and you give them a truck and a trailer and say, "Go deliver these bounce houses," then you can coordinate a pretty decent business.

And so people who get into bounce house businesses often don't have money to start it, but you have capital. And so you go and test it out, buy a used water slide, buy a used bounce house, and get yourself a little trailer or whatever vehicle you have. Maybe you need a little truck to drive them around.

You know, figure those things out, but use the money. And so what I would do if I had $56,000 is I'd say, "How can I invest five grand? "I want to keep 45 grand in the bank. "Sorry, I want to keep 50 grand in the bank, "but how can I invest five grand "and turn that five into 30 in the next few months?

"What kind of business would allow me to do that?" And I think that you've got really good opportunities with those kinds of businesses because of the labor market that's available to you. So those are just some ideas off the top of my head. If I woke up in your shoes at 18 with $56,000 in the bank, I would probably do all of those things and see what works and then do more of what works because that's a good way of leveraging your money.

And that's a far more profitable way for you to invest your time than doing some silly hourly job. But what you have is capital, and that's one of the most valuable things you have, and you don't want to waste it because most people in your situation don't have capital, but you do.

And so use that capital very judiciously and use it so that you can always keep yourself where you're not working. You're not profiting from your labor. You're profiting from your capital. And some variation of those ideas is readily available around you. So that's what I got for you. - That's great.

Thank you so much. - Cool. My pleasure. Keep in touch. I thank you for being here. Thank you for supporting the show so that you're on the call today. And keep in touch because I'd be happy to talk with you every week about some of this stuff. All right.

Josh in California. Welcome, Josh. How can I serve you today, sir? - Hi. My question is more of a philosophical one based on gold and handcuffs. - Okay. - I live in Southern California. My wife works full-time as an RN, and we make really good money. She's bringing in six figures.

I work from home bringing in 20 to 50 depending on side work. But I'm home full-time with the kids. - Okay. - Our issue is-- - $20,000 to $50,000 a year? Or $20,000 to $50,000 a month? - Yes, sir. - Okay. Got it. Go ahead. - A year. So I'm home full-time with the kids.

We kind of did a roll swap after a back injury. - Cool. - But my issue is Southern California, especially in this pandemic-esque environment, isn't really conducive for any substantial self-care or any potential growth of crops or anything like that in the backyard. - Sure. - The issue I run into more philosophically is my wife is in a very specialized niche of pediatric cardiac nursing.

And any place that we go that would have that specialty does not have good lifestyle options. It'd be major cities, major metropolitan areas where you can't really get acreage and a hobby farm. So I'm trying to decide, we have two young kids. Do you think grand scheme, it would be better to move now, walk away from a specialty into just general nursing and focus more on staying home with the kids and doing a little hobby farm or-- - I lost you right-- There we go.

Sorry, you're back now. Yeah, I was losing you right at or. Keep going. - Oh, so or we could move to the-- or stay in the suburbs, stack up cash now and then move once the kids are a little bit older. Right now, the kids are two and five.

- And so your long-term ambition would be to move to a hobby farm somewhere or a specific geographic location? - Pretty much anywhere. Any place that's taxable, has good tax benefits, good Second Amendment benefits and isn't Southern California. - Got it. Is there another large market outside of Southern California?

For example, Dallas, Texas, Miami, Florida, Chicago. Is there another market outside of Southern California where she could practice this pediatric cardiology nursing specialty? - One of the places was in Jacksonville, Florida. There's the Mayo Clinic and then Houston also has a pretty good setup. But to be practically close enough because she's on 12-hour shift, the hour or so commute really starts to add up quickly to a 14-hour day.

So being able to manage that, it's kind of hard to find any decent-sized land that's close enough to the hospitals where we're running into right now. - And why do you think you need decent-sized land and what is decent-sized land for you? - Right now, we're looking at somewhere around 20-ish acres.

Something that we can have small-ish livestock, goats, chickens, things of that nature. Small shooting range in the backyard, that type of a thing. We can go back to kind of like the old country living. More so than the hustle and bustle. It's become more self-evident these last couple weeks as we haven't left the house that the quarter of an acre that we're on here in Southern California is just not quite big enough for people to live in.

- Understood. Well, it's a fair question. And for me, I would begin with how bad do I want it? There are some people who just desperately want to move to the country. They're clear, they know this is our thing, we want to move to the country. And because they want to move to the country and that's very clearly what they want to do, then I say go for it.

You don't have to sit around and wait for more money if you're sure that this is what you want to do. And the great thing about nursing is that it is such a common thing that can go basically everywhere. It can go all around the world and be extremely valuable.

If you're going to start with that kind of big picture mentality, I would say think carefully about where you want to be. So let's say for example, let's say you wanted to have 20 acres. Well, I would look at it, you know, maybe somewhere like from California. I don't know if you have family in Southern California, but Californians, there's places in New Mexico, kind of arid of course that maybe you want more.

Go to a place, you know, to Idaho. And there are plenty of hospitals in Idaho. Your big two areas would of course, well, you could do Idaho Falls if you want a smaller place, Boise, you know, Coeur d'Alene. But if you wanted 20 acres in the woods and your wife wanted to work in Coeur d'Alene, there's a hospital right in downtown Coeur d'Alene and they hire nurses.

And so you can find a hospital that's going to do it and an hour's commute from Coeur d'Alene to, I don't know, up north, you know, living in Bonners Ferry and commuting down to Coeur d'Alene, a little tough during the winter, but an hour's commute there is very different than an hour's commute in California.

And there's tons and tons and tons of acreage around a city like that. I would look really hard at keeping the specialty. I think that there's got to be a significant jump in pay for having that specialty. And I think it also leads to more job security by having such a specialty.

And so I would look hard at the Jacksonville area. Jacksonville is a great city. You get tons of benefits of going to Florida. You'd have a major reduction in state taxes by going to Florida, major increases in freedom, you know, with some of the things that you're talking about.

Florida has very good, very decent gun laws. Florida's got great homeschooling laws. Florida's pretty good across the board in most laws. There's not a lot to complain about in Florida with regard to laws. Most of the complaints are going to be kind of functional complaints of the city. You know, if you're in South Florida and Broward or Miami, it's just a very dense place, not nearly as dense as Southern California, but still very dense.

And so Jacksonville, however, is very different. South of Jacksonville, west of Jacksonville, north of Jacksonville, there's plenty of places where you could do that, especially if you're willing to do a little bit of a commute. But Jacksonville would be a much more livable place than Southern California. So if you are convinced that that's what I want to do, then I say go for it, make a plan to make it happen as quickly as possible.

If you're kind of on the fence about it, I would say earn the money and stack up as much money as possible and then look for ways to do the farming thing or the hobby farming thing in other directions. With a two-year-old and a five-year-old, it is in some ways an ideal time to go, but it's still to the point where your children are basically functionally useless to you.

So if you go to 20 acres, you're going to be doing all the work while your five-year-old helps for five minutes and your two-year-old is functionally worthless. And so another few years of strong earnings, letting some land prices maybe come down. If your wife can stay employed right now, I would not jump.

I would be shopping the market hard, but I wouldn't jump because I think you'd have a very different experience going with an eight-year-old and a five-year-old in terms of how useful they can be. There's danger in that, right? If your kids are addicted to, you know, couch potato lifestyle right now, and then you try to put them on a farm, maybe it is better to go with a five-year-old and a two-year-old just to avoid that danger.

But I wouldn't jump. I would say it all comes down to how clear you are. If you're clear this is what you want, whenever I'm clear on a goal, I calculate the cost of the goal. So if you say my wife's going to go from $130,000 to $90,000, I calculate the cost.

I say how much of that is lost in tax, how much of that is lost in high cost, high insurance cost, high housing cost, etc. And if I can go to a little cabin, you know, in an hour, you know, 30 minutes outside of Coeur d'Alene for a much lower cost versus the cost of living in California, and I can get closer to our ideal lifestyle, closer to a place that respects freedom, closer to neighbors that I'm more likely to see eye-to-eye with, closer to this 20 acres in a dream kind of scenario, then I say do it quickly.

I'm never going to let golden handcuffs keep me if I know I want to change. Just simply because I can't get time back. I can always get money back. I can always get jobs back. I can always pivot, but I'm never going to let golden handcuffs keep me. I feel like I kind of gave you two answers, but was that useful?

You want to ask any follow-up? Yeah, no, that definitely is helpful. And again, it's just nice to talk through it with somebody. My question then on that is we do own our house in Southern California. We still owe a little bit on it, but I'm hesitant to rent it out in our current environment where if somebody decides to move in and then not force.

Right. I think you dropped out. You muted yourself and dropped out, but I got the question about what to do with the house. So I would say that certainly I would be nervous and I don't know the right answer there because the real estate market is in total flux.

I guess the first thing I would do is I'd put the house on the market and see. There's no downside to putting your house on the market and I would get busy doing whatever needs to be done to fix it up, doing whatever needs to be done to see if I can get this thing to sell quickly.

There's some good resources out there. I read Jack Spirico, he co-published a little book that I thought was good. I don't think I've ever mentioned on the show, but he co-published a little book on how to get a house to sell quickly. He did it with a real estate agent I think, but he's not a real estate agent, but I've always thought his strategies were pretty good.

Go find that book online and grab it, cheap little Kindle book and basically start shining up your house and do whatever needs to be done to put it on the market so it'll sell quickly when the market goes. If you got an offer on your house, let me ask you a question.

How much equity under normal times, kind of pre-coronavirus, how much equity do you have in your house? About 100. It's worth $350, or before all the nonsense, worth $350. We have a $230 or $240 on it, so about 100. All right. And do you have other money, other savings that you could use to facilitate a move if you needed to?

Right now, liquid cash, $30-ish. So you got plenty of money. If you could get a job and if you could sell the house, you could be free of Southern California. Is that correct? That's correct. Okay. And are you and your wife convinced that in the coming years, you want to get out of Southern California?

We are. My big concern is that with her specialty, she is essentially unfireable right now because she has enough of the cute little letters after her name that there's nobody to replace her in her current role. Okay. So what I would do is I would recognize I'm determined to get out of here.

And for me, that would be I would not live in Southern California ever. The only way I would ever live in Southern California is if God spoke from heaven with a blinding flash of lightning and said, "Joshua, thou shalt move to California." I'd say, "Yes, sir, boss, and go." But short of that, I'm not living in Southern California.

So for you, then I would do two things. I would start looking for jobs and I would put my house on the market. And the fastest you could possibly imagine that happening would be, you know, all those things happening, you know, being able to sell the house and find another job, the fastest would be a few months, right?

A couple, three months? Yeah. Okay. So a couple of three months will give plenty of time to figure out what's happening with coronavirus, what's happening with the economy, etc. I'm not going to leave a place where she's unfireable if I can't get another great job offer and if I can't get an offer on the house.

But if she got a great job offer that was a 20% decrease in pay because somebody wants her as a specialist because they're expanding in there, maybe, you know, a children's hospital and in, again, a place that you like more. Anywhere in the country, you pick. But if I get a great job offer and I'm getting good offers on the house, then you don't need that security.

But if you do find that the housing market is dead, the house was worth $350, but now, you know, you can't give it away for $250 and she's not getting any job offers that are anywhere near what she's making now, then the answer is obvious that you stay put and you keep earning and saving until you can navigate those two things.

But if you're clear you want to go, there's no reason to wait on working on the logistics of starting the move. Okay. I like it. That definitely is clear. I just think—yeah, go ahead. Sorry, I didn't mean to interrupt you. No, no worries. I definitely think that will help to kind of guide conversations and kind of give us a better outlook of what to focus on and what to prioritize.

To me— Kind of a zero to 60 kind of a thing. Absolutely. To me, I just go back to this very simple scenario. If you know what you want, go after it. Right? None of us are promised tomorrow. If you know what you want and it's something different than you're doing today, go after it.

Go after it with enthusiasm. Go after it with gusto. Go after it with vigor. Don't wait around. Why sit around and make more money unless you need that money to do something that you want? And from what you described, you don't need that money to move. You want to move.

You don't want to raise your children in Southern California. So make a plan and move. Now, along the way, don't be stupid. Make a strategic plan. So you need to sell the house. There's no reason for you to pay two mortgages, you know, if you don't have to. If you get a great offer on the house, sell the house.

And you need a job. She needs to get another nursing job so that she can earn the income that the family needs so that you can get the farm going and work with the boys. So you need those two things in hand, but I'm not going to sit around and make more money if I've already decided that something that I want is ahead of me.

And if I just pursue that something that I want, you know, I think I think the money solves itself in the long run. Just doesn't make any sense to sit around and make more money if you don't need the money to make the change. All right, Timothy, welcome to the show.

How can I serve you today, sir? Timothy in the USA, you are up. Go ahead. Hang on just a moment, sir. Hold on. Hold on. Hold on. Sounds to me like your Bluetooth is disconnected and I cannot hear you. So pick up your phone or do something so I can hear your audio because I want to hear the question.

I can hear me now. Now I can hear you. Go ahead with your question, sir. All right. Thank you much. I'll start back at the beginning here. I was just a little background. I was raised on essentially to pin my money into three categories, spend it, save it or give it.

So even now today, I kind of budget with those three categories in mind. You know, I've been it into spend it, save it or give it. In the personal finance world, I see a lot of advice out there for how to save it smartly and invest it or and also how to spend it smartly.

But I haven't come across a whole lot for how to give it smartly. So I would say, you know, in my in my personal finances, that's the area where I have the least amount of confidence. So I was just curious if you have any nuggets of advice on how to make sure that I'm giving smartly or opportunities to give smartly.

Thanks. Yeah, it's a subject I think about a lot and it the scale of your giving matters intensely. If you've got a hundred dollars to give away, it's pretty easy to give away a hundred dollars effectively. If you've got a million dollars to give away, it's a lot harder.

And so I'd like to think more about these topics in the future and I'd like to teach more about these topics and facilitate experts on this topics more in the future because it's very important to me and I agree with you that it's an underrepresented area of the market.

How to give money away effectively so that it does good and not harm. On an annual basis, how much money do you want to give away right now? I'm shooting for 40 to 50 probably in the next next two years here. Forty to fifty thousand dollars per year. Correct.

Okay, so that's where it becomes difficult because when you're moving into the range of forty to fifty thousand dollars per year, it's hard to give that much money to individuals just one-on-one. You can give away several thousands of dollars per year individually one-on-one, but with forty to fifty thousand dollars per year, that's tough.

It's tough to give that much away one-on-one just with you, you know, one you versus two, five other people. The numbers start to get too big and you start to have a want to have a you say you have to you have to upgrade your infrastructure. What kinds of things do you want to give the money to?

Do you have some ideas? I do, but again, that's kind of where I'm looking for advice as well. You know, I want to get towards the areas that I feel like I can get the most bang for my buck. So I look at child sponsorship, for example, you know, those programs are run fairly cheaply and you're changing lives for forty dollars a month.

So really, a lot of my giving tends to go internationally towards underdeveloped areas to meet basic needs. Are you also going to those areas and doing things personally? Are you just giving to organizations that are working there? Well, I've not been there personally. Just life has gotten in the way of, you know, just haven't had the time.

But in the next few years, I'm thinking about a transition where I would have more time to go and travel more to these areas. Okay. What about nearby you? What problems do you see near you physically, geographically near you in your life, in your daily life? What kinds of problems do you see, things that you wish were different?

Oh, it's tough to say. I live here in Washington, D.C. and, you know, one of the most affluent countries in the nation, you know. So, you know, I give to my local church here in Washington, D.C. and I've helped a couple of friends in need during the current crisis.

But that's about it. That's kind of why a lot of my giving is focused externally. Although, you know, I'd certainly welcome the opportunity to give more to my local community as well. Have you prayed about where to give your money? Not as much as I should have. So I'm not trying to make you feel bad about it, but I'd say genuinely start there.

Start by just simply praying and say, "Lord, show me where I can give this money." And ask God to open your eyes to specific needs and to specific people, to specific places, to specific organizations, to specific causes, to specific things, and ask Him to open your eyes to that.

To me, that's where I always start. I always start with where's the need and trust that God will show it to me. What I do is I set money aside into a giving account. And I just have a separate account that this is the money that I'm going to give away.

And you can choose it. I recommend you choose it based upon a percentage is a good way to do it. And a percentage that's a minimum level that you're going to give away. And then you add to it when you want to, right? You can always go above that percentage, but you just set it aside as a percentage.

Just like you do, you know, pay yourself first in your personal finances, or just like you do profits first with your business finances, or just like you do the same thing with giving, that you give first. And so if you are tithing to a local church, then that would, of course, be your start.

You know, "Okay, 10%. I'm tithing 10% into my local church." If that's something that you're engaged in, and then you choose how much additional, or if you've chosen something else. And by just simply having the money staring you in the face, that I got to get rid of this, you start to look for opportunities.

I think that opens up a lot of people's eyes, that many people have never, you know, gone around looking for ways to give money. Just like many people earlier, I was talking with the caller about having money for investing. Many people have never gone around with money burning a hole in their investing pocket.

We're like, "I got to invest this money. I don't know what to invest it in." Well, if you've got money, then you start to see more investment opportunities when you go looking for them. Now, being a Christian, you are responsible to God. All people, of course, are responsible to God, but I'm just speaking using Christianese language.

You are responsible to God for where you give the money to. And so, if you're going to be responsible, if you're a steward of God's money, then it's fair for you to expect that your master would tell you where to invest the money. And so, you should start by praying about it and saying, "Lord, show me where do you want me to invest the money?" And then believe God to open up opportunities for you, to believe God for him to show you specific scenarios, specific people, specific places where you can invest the money that will do good.

And I want to be very cautious not to tell you what to invest your money into. I believe that it's every bit as important for you to give money. There's a guy in your church is starting a business, or he's trying to finish his house and he ran out of money.

I believe it's every bit as important for you to get $20,000 to that guy as it is for you to get $20,000 to a charity organization overseas. And in fact, a lot of times I think it's better for you to give the money to that guy who's local than the money overseas.

I'm very skeptical about a lot of overseas money giving. I don't want to go too detailed into it right now, but I'm extremely skeptical about a huge amount of it. And I'm skeptical of the vast majority of organizations. If I'm going to give money overseas, I want to make sure that I know the people involved and that I know that they're faithful men who are going to handle it wisely, who are going to move with wisdom.

Because international charity distorts so many things and messes up so many local markets. I'm convinced in a lot of situations it does more bad than it does good. I don't have a list of organizations. I'm not out trying to say that Samaritan Ministries is wrong because they give away Christmas boxes, right?

I think that all of us can choose and we can pick the things that are valuable. But the most important thing I think is to develop personal exposure to the marketplace and personal exposure to the needs. And so I recommend that you start nearby and ask yourself, what are the needs in our local church?

So step one, I would say pray. Step two is I would start talking with the men in your local church. Visit with the pastoral staff, talk to the deacons, talk to other people and say, you know, I've been thinking about what I could do. I'd like to invest some more money in our local community here.

What are some things that we could do? And so you'll have your own unique scenarios. But for example, for me, things that I would want to do, if I were living in Washington DC and I were part of a local church community, I would say, what is our local church doing to support the people within the church?

As a local church, you have a mandate, a divine mandate, to support those who are in need among your community, to support the widows, the orphans. Are you doing that? And I'm not saying, is the church doing it? Are you doing it? Are you involved in that? How much of the church budget is going to a building and to, you know, salaries and whatnot versus how much is going to support widows and orphans?

How much is going to support people who are poor? How much is being given away? What are the needs in your local area? One of the things that I would love to see is, I would love to see all government welfare programs disbanded entirely. The problem is, if that were to happen, that would create total chaos because there are so many millions and tens of millions of people who depend upon those government welfare programs in order for their own livelihood and for everything that they have.

And the problem is that most of us and most of our churches are so uninvolved in our local community. You know, we make some efforts and some do more than others, make a token effort, but there are people that are hurting, that are in need. And if we all of a sudden said, "Oh, let's rely on our local churches," people would be left starving.

I think that's a reality, an honest reality that we should acknowledge. And so I think you pick one, you pick something. I would look at how you can benefit things that are important to you. So I'd be happy to, maybe there's a family in your congregation that they would love to homeschool if they could just figure out a way to make the money work, but they can't homeschool because of that.

Well, man, I'd be writing them a check and trying to help them to homeschool because it's one thing to support a missionary overseas, great. But what about the missionaries in your own church? You know, the mom with three children who's stuck working a job and thus she's got to send her children off and let the government raise her children, and all of a sudden the children come back, they have no interest in Christianity, they've adopted all of the philosophy and the culture of the culture around, and now it's doomed.

And so is there a way that you can start, you know, a homeschooling cooperative in your local church? Or is there a way that you can say, "How can we establish a ministry, an outreach to help, you know, parents have activities for their children?" Or can we, you know, I don't know.

The world is open, but I think that the most important place to start is in your backyard and to say, "What are some problems that I see?" And then brainstorm together with other people to say, "What are some things that we could do to meet some of these problems?" If people are hungry in your community, feed them.

If people are thirsty, you know, provide for them. And then if you have opportunities in other places, then go and build personal networks. So I think it's fine to support big organizations. I do, obviously. If that's what you feel accountable for, go for it. But I think that's not ideal.

I think that what would be better is for you to be involved in the local needs and start in your local church. Start with those needs. Start in your local community. Start on your own neighborhood. Start on your block. And before you go and go to something exotic overseas, start with the problems in your own backyard.

Is there somebody who really feels a burden to ministry, but if they had some financial support, they would be able to do that? Is there a young man who would love to go out and preach on the streets? Is there somebody who is doing incredible work online? Is there somebody who is adopting orphans, right?

How many orphans have—go through and ask yourself, how many orphans have we adopted in this church over the past couple of years? And then start putting your money into whatever it is that comes out to you. And then if you still have money left, when you run out of ideas, then ask God for more ideas.

Ask him to bring you more people who are in needs. And if you run out of money, then when you still have ideas, then figure it out. So that's a lot of generalizations. I try to be very private with some of the stuff that I've done and that I'm doing.

I don't think that those are things that I should talk about publicly, but I do believe that God will answer that prayer. He has answered it for me. He does answer it. He will answer it for you. And I believe that it's just important to— if you're looking for the answers in your local community, you'll find it.

And then in the future, I'll try to talk about broader areas. But I think $40,000 to $50,000 a year, that's an amount of money you can give away without an organization. You don't need some stupid tax-deductible organization. You don't need to get involved in that stuff. You can give that away in your local community to people who are in need if you're looking to the Lord to open up those opportunities for you.

So that's what I got. - Yeah, all that's much appreciated. I think you already answered my second question. My second question was going to be about a charitable giving account, but in light of what you just said, that wouldn't make any sense at all. I was already thinking that it would make a ton of sense.

So, appreciate it. - Let me expand on that for just a moment because it is important. My opinion is, if you can get a tax deduction for giving that you believe is right, take the tax deduction. That's fine. I'm not opposed to taking tax deductions. I'm not opposed to taking tax deductions for charitable giving.

What I'm opposed to, personally, and I think conceptually, I'm opposed to building everything around tax deductions. And I think that it's crazy to get in bed with the government when you don't have to because when you get in bed with the government, they're going to give you all kinds of onerous regulations and restrictions that have to be followed.

And there's no reason to subject yourself to that. Now, the biggest people where we failed the most in the United States is by establishing tax-exempt organizations with churches. I'm a weirdo. No one's surprised by that, but I don't think any church should be registered with the government in any capacity.

They do that largely because of making it possible to hold large amounts of property. And I don't see why a church organization should hold large amounts of property. Now, that puts me far out of the mainstream, but I see no reason why you need an organization, a business organization related to a church.

I just assume that my vision of the church is a nimble, flexible organization of individuals. And those individuals, if those individuals just simply handle most of the detail of their lives and the needs of the church, you can dramatically reduce most of the—you can dramatically reduce. And I'll expand on this for a moment because it's something that's important to me.

And especially right now, it's probably an interesting time to do it. I'm a part of a church, as right, all believers anywhere are going to be a part of a church. But when I look around, one of the things that I see happening right now in much of the world is there are a lot of churches who are—and here I'm talking about the organization— the church organizations who are really suffering right now financially because their entire model is built upon basically a big business model.

Their entire model is built upon this idea that there's a large centralized location, a large centralized community. Everybody goes to a big church building. Everybody meets there. And one pandemic comes along and all of a sudden things start falling apart. Now, many church organizations are very careful with their money.

They eschew debt. They save, etc. Many people are continuing to support their churches, giving online, sending checks in the mail, even if they can't gather together in person. But what I see is—I think this continues— you're going to see a lot of those big church organizations collapse. And a lot of times because there's so much overhead, there's so much of this like massive, centralized business, big building, etc., that the organization itself is not flexible.

It's not able to adjust and to move around. Whereas it doesn't have to be that way. It can be another way. It can be much more nimble. So what we did when the church—when we stopped meeting as a large church, I did what I've been accustomed to my whole life, which is just simply invite a couple of neighbors over for fellowship and meet out in my carport.

And so we had just a handful of people and we got together out in my carport and moved out. And we sat in a far direction and we gathered together as a church. And I see that as an opportunity that every church has. And as we were sharing with one of the church staff—it's actually one of my neighbors— and as we're talking about it, I was comparing.

I said, "Compare this to a food supply." If you think about a food supply, like in the United States and in many places, the food supply is very, very centralized. You got a big mega farm that provides huge amounts of food. The problem is that that big—and that big mega farm, when everything is going great, it's really productive.

The problem is if something comes along that causes a problem with that big mega farm, you wind up—the whole—everyone starves. And that's what's happening right now when people are building everything as far as their function of the church is built upon a big congregation. If a problem comes through and you can't gather as this giant congregation, then everyone starves.

Now, I appreciate and understand that everyone's trying to do stuff virtually. I want to—I believe that every—everyone who—we're all doing the best that we know of, right? We're all doing what we see. Just what I see is I don't have any reason. Why do I need a virtual sermon, like some kind of sermon being sent online?

Why not just gather with fellowship with two neighbors or three neighbors? That's going to be much more effective. And, you know, we'll all sit 10 feet apart if necessary to comply, but I compare that—the agricultural model to small local farms. So let's say that on your property, you grew all kinds of stuff.

Everybody has a garden. Everybody has some vegetables. Everybody has some chickens. Well, now the food supply is distributed, and it's much more resilient when the food supply is distributed. And so, in that context, if there's a problem with one food, you know, one farm on one side of town, everyone else has something to supply.

Now, pure self-sufficiency is basically starvation. So I don't think that everybody should try to run their own—build their own farm on their property and produce everything for themselves. That's starvation. There's tremendous economies of scale that come from having an organization outside of town, a farm outside of town, and having factories, etc.

And so the ideal solution is to have both of these things interacting. I think there's a place for big congregations of people to come together, but that should not be the primary function of the Church, nor should me just in my family with my little, you know, my little fellowship and my little family.

That's not the primary function. But when we can expand and contract at different levels, then it opens up a tremendous amount of resiliency. You create, to use the term, an anti-fragile organization. You create an organization that has infinite levels of expansion and contraction. And that's the design of the Christian Church.

It should be an organization that's eminently flexible because it's not dependent on big infrastructure, big buildings, etc. It can adjust. It can adapt. It can be a group of three people or it can be a group of 3,000 people in different contexts. So now when you come back to meeting the needs of that organization, one of the most powerful and important things is that as a local body of believers, you're looking to say, "What are the needs that are here, right here, right now?" Not you're just stroking a check and the finance committee is going to say, "Well, these are the ministries that our Church organization is supporting." But no, you in fellowship with three people or 30 people or 300, whatever it is, what are the needs that we see right now here in our neighborhood and how can we meet those needs?

Not how can we give to a big organization that's going to funnel the money through, but how can we meet those needs? So back now to the registration and, you know, with the government. When you register a tax-free charity or you register a Church organization with the government, you impose on yourself such massive levels of restriction.

You have to do accounting. You have to do this. That it basically only works at the big level. It basically only works when you have that mega farm. And now you've got to have all this structure. If you go and build up for yourself a charity, you start your own charitable organization.

Now you have to have a board. Now you have to file papers with the IRS. And it stifles you and it stymies your growth. One of the reasons why many churches cannot grow and one of the reasons why many churches do not engage in evangelism is simply they don't have the capacity to handle it.

When I talk to a lot of friends of mine who are pastors, I always ask the question, "What would happen if every single one of your congregants this weekend invited one family to come to church?" Let's say you have a hundred congregants who invite one family to come to church.

Well, let's say that, you know, 20% of them accept. Well, now you'd have 120. And then the next week, let's say that some of them come back. And what if you did that every single week? Just one family, right? What happens is the entire thing collapses within a couple of months because the organization is so calcified it can't handle the growth.

You'd have to build a bigger building and you got to start a building fund and you got to go and do, you know, get a parking lot thing. Have somebody got to expand the parking lot. This is just simply not parking for people. And so you create this calcified organization that's the nightmare because it can't grow.

It just simply is too structured to grow. Whereas if you have as a primary function, you have people meeting in their houses or you have, you know, Timothy has a larger facility where he's got the ability to have 30 people meet in his barn or 50 people or 100 people.

What you have there is you have an anti-fragile organization that can expand and contract without problems. And so financially the same thing happens when it comes to giving money. If you have the ability and you're structured into an organization that has to give and you've got all these reports of how are we handling the money, everything has to go through a process and you have to create a requisition process and a request for grant and we have to document everything so that we can assure the IRS that we've given the money away properly.

And it calcifies you and that may be necessary because that structure is necessary at the very high end. But that calcification leads to lack of flexibility to give. Whereas if you just go and say and you give to an individual and you give this person $100 and you give that person $1,000 and you do that with personal relationships, you're not getting a tax deduction but what you are getting is flexibility.

And it allows you to be discriminating with your giving. You can make sure that you're only giving to organizations or to people that you think are going to be helpful for it and it allows you to actually do much more good. Some of the work that we've done here at Radical Personal Finance in Venezuela, if I were giving the vast majority of the money that came to me did not flow through the organization.

And one of the tax deductible organizations that I could have flown it through just came to me. And so people didn't get a tax deduction for that. But what I did was I got the money directly into the hands of the people that needed it and I did it in a situation without having to deal with the reports and everything.

And now that the work is bigger, most of it's having to go through a large tax deductible international charity. The problem is that it's almost impossible for them to comply with all the reporting requirements. And so this audience got the project off the ground because we didn't have to go through all of that stuff.

There's no way to account for it. You can't account for bribes that you're paying to allow people to get food in across the border. You can't account for, you know, you gave this money and you lost 20% here to this company. But you can trust people that are involved in it.

So I got a little bit off track of the point. The point is that an organization may have a place at a certain stage, right? If you've got 30 million dollars and you're trying to set up a way for you to give away millions and millions of dollars, I think it makes all the sense in the world for you to set up a charitable organization.

But if I'm dealing with lower amounts and 40 to 50 is significant, but still, you know, I think I just want, they can keep, the government can keep their money. And I want to give where it's going to be impactful because I don't want to support these huge, the costs and everything of a huge organization.

I want the money to go somewhere where it's going to do a lot of good and be very, very flexible. And we're so stuck in the US model of giving that whenever somebody thinks about giving money, it seems like they're always thinking about what charitable organization do I give it to so I can get a tax deduction.

Just like when people are thinking about, I'm going to start a church, the first thing they do is start shopping for real estate. And what this does is it creates these giant systems that don't respond and react quickly to the needs and it doesn't have to be that way.

It can be another way and the other way can have some of the benefits of the large place. There's a place for big organizations, big buildings, all that stuff can be fine in its place. But as a primary solution, it doesn't work. Just like as a primary solution for giving, it's not as effective.

And so if everybody who is wanting to give money away just simply said, who do I know that needs money this month? Who's hurting? Who's out of work? Let me go and choose one bum on the street. Let me find one person who has a sick child and give them some money.

Let's make some mortgage payments. All of a sudden that would build relationships and those relationships are in my opinion, some of the most valuable thing that comes from giving. Because in relationship you can put responsibility on somebody because now they're accountable to you. It's not, oh, I received this money from the government or oh, I got this handout from this international charity.

It's, you know, Tim gave me this money and Tim trusted me enough to give me this money and that puts a huge weight on somebody when Tim trusts you enough. Now could they blow it? Of course they could. And then Tim can choose to give or not give the next time.

Sometimes somebody blows money and you give it to them again because you say, I believe in you. You did the wrong thing, but I'm going to come alongside and I'm going to help you and sometimes you don't. But when you just give and you ignore the organizations, you have far more freedom and it builds a much more resilient community that can actually solve some problems.

Tim, I know you dropped off during that and that was the best I got, but I just say if it makes sense to give to an organization, give to an organization. But sometimes you can do far more by just giving to an individual and ignoring the tax deduction. So don't get strapped into the tax world.

Yeah, I came back. Thanks so much for that, Joshua. Much appreciated. I guess, sorry, one last follow-up here, you know, because with my personal situation is I'm looking to make a transition in two to three years from now and, you know, I may be in more of an underserved area in the future.

So what would you do as the trade-off between, you know, giving everything that's in your "budget", you know, for giving today by, you know, storing it up for a day that may never come? I think that that's just a simple answer that you have to answer before the Lord.

And that's where I go back to. It's not my responsibility to come up with opportunities. It's my responsibility to be faithful with the opportunities that I see. And so if you pray about it and you don't see any opportunities for giving, just save the money. All right? Just save the money.

But you're the one who knows that you're saving it for something that you're going to do in the future. You're the one who knows that you're piling it up and you're saving it with intention. But I see no reason why you should just give if there's no good place to give it just to get rid of it.

Again, back to the tax deduction. Why do you have to give it in any given year? Because you're trying to get rid of it so you can get your write-off on this year's taxes. Well, that's silly. If there's nobody, if there's no need that you can see to give it, then just save it and wait.

And then trust the Lord to open the opportunity up for you. You can segregate it into a separate account which allows you to persuade yourself that, "Yes, I'm genuinely just simply giving the money away. I'm not going to spend this." But I see nothing wrong with accumulating it for a period of time until you see an opportunity.

And what that does is that increases the opportunities you have to make a bigger impact. Now you're not stuck in the world where you just had a small amount. Now you can make a bigger impact. And then just trust the Lord to open up the opportunities for you. I think that that's the answer every single time.

So that's all I got, Tim. All right. Well, thanks, Ken, and keep up the great work there. My pleasure. All right. Pete, Pete in Massachusetts. We're back to you, sir. Welcome. How can I serve you today? Hello. They are considering voluntary furloughs at my job. And I'm wondering if that's how you would approach thinking about that.

Do you want to be furloughed? Can you use it? Does it be helpful to you in some way? I don't see it as being particularly beneficial. I think the issue is I think they are trying to prevent across the board salary reductions. And I think that they are exhausting a lot of the maneuvers to spare cash and are trying to get people out of the salary pool.

And this is the only way I think they can do that at this point. Correct. I understand that from the entrepreneur and the business manager's perspective. But what about for you? What would be helpful for you right now? For me, I don't see how doing that would in any particular way be beneficial.

The trouble is if everybody's facing salary cuts eventually, would this somehow breed goodwill or in some other way be beneficial or do we just keep sort of plugging along? Well, I guess my thought is the first goal for your own financial well-being during a time of crisis is to keep your job.

And so if you think that taking a voluntary furlough would allow you to keep your job or to keep some income, then that's why I would prioritize it. I might also quietly go to my manager or upper managers if there's a way to do it appropriately and to say, "Listen, I'm willing to take a pay cut.

I really like this job, but I know we're hurting. I'm willing to take a pay cut." Something like that can be helpful for you to be able to demonstrate that you're a team player. But I don't know that taking a voluntary furlough helps you to keep your job. By furlough, we mean you're not going to be getting your income.

Does that mean that they're going to stop paying you, but they're going to pay your benefits? Correct. That's exactly it. And are you eligible to file for unemployment if that happens? I would actually need to look into that. I wonder if that would be feasible, actually. I don't know the answer to that.

They haven't broadcast that that would be possible. I would assume if it's voluntary, the answer is probably no. But that would be my assumption, but it certainly would be worth checking into. I guess I don't know exactly, but my general theme is I want to keep working. I want to keep helping the company make money.

I understand that cuts are coming. I understand that they're hurting. If they're shut down and they're not allowed to do business, I understand that everyone is hurting. So my answer is what can I do to keep working? And if they can't pay me, if it's a good job and it's something I would want to keep working, I would just say, "Listen, I know you can't pay me, but fine." But at the end of the day, I would probably go in the direction of a layoff so that you can collect unemployment and so that you can be free to go to another opportunity.

I know that we don't know how long this deal is going to go, but I don't like the idea of being furloughed, which means I can't really go for another opportunity, especially if I can't file for unemployment. It kind of traps me, but I understand that that might be a good middle scenario.

But I don't see why you would step up and take that rather than just simply waiting for them to say, "I'm sorry, we have to furlough you and so we're going to furlough you." I don't see why it would help you to take it voluntarily. Yeah, that was my assessment as well.

I was curious if there was some angle I was missing here. I can understand a voluntary layoff. I can understand if there's a severance package and you say quietly, "Hey, listen, you can lay me off." I would understand that. I understand that there's a voluntary early retirement and they say, "If any of you guys would like to retire, we'll start paying you a package of benefits here and that helps you." I understand if there's a financial compensation, but the voluntary furlough, I don't see how that helps you.

Got it. All right. That's that. Great. Thank you, Pete. I'm glad you are here. All right. It looks like Chris in California, I can't remember, did I cover your question or is this a new Chris? Not yet, Josh. All right. Go ahead, Chris. It's strange to be talking to you.

Awesome to be talking to you. I've been listening to you since like 2014. So it feels like I know you, but I'm a stranger to you. So that's kind of funny. At any rate, I'm looking to start a single-member business and I'm trying to figure out S-corp versus LLC versus LLC taxed as an S-corp.

I like the idea of not taking all of my income as wages, but right now I see two issues with that. The first being reasonable compensation because almost all of the business revenue is going to be based on my services. Having said that, I charge quite a bit more for my services than the average employee in this industry would receive in wages.

Then the other issue, more so for this year, is I don't actually plan to make any business profit this year due to high business expenses. Will you have a loss? Although with that I'm wondering. I have not quite done the full math on that yet. The thing is I'm looking to provide a lot of training for myself out of business revenue.

So in the situation that you're in, do you have other earned income that you can use to offset some of the… Do you have other earned income that the losses would offset for you from a tax perspective? I do. Yes, I have a primary employment. And what is the liability?

If you're primarily providing services, do you have significant liability in this new business? I would say moderate liability. Okay. So from a tax perspective, there's a tax answer and then there's a liability answer and there's a practicality answer. So let me walk you through them. Number one, from a tax perspective, if you have a new business that is a genuine business that you are engaged in, but if that business is expected to have heavy expenses in the beginning, from a tax perspective, your optimal way to run that is simply as a sole proprietorship.

Because in a sole proprietorship, you can use your business losses to offset your other sources of earned income. So if you're generating $150,000 of earned income from your income and then you start a new sole proprietorship that generates $50,000 of losses, those $50,000 of losses reduce your total income to $100,000 of income.

And that's a superior option to the reduction down the basis from either an S-Corp or an LLC taxed as an S-Corporation. So if there's a significant tax savings here, then that should be weighed against the benefit of the liability. Now, if you engage in a business as a sole proprietor, then of course you lose the liability protections of either a limited liability company or of a corporation.

And so you have to weigh how liable am I? What are the real problems here with this business that I need to protect against? It's not hard to start a business as a sole proprietorship and then just simply in time grow it into something else and just adjust it along the way.

You can adjust fairly easily along the way. Now, with the difference between the S-Corporation and the LLC, the primary reason why you would choose the LLC is to minimize your corporate record-keeping requirements. An S-Corporation has the same significant bookkeeping and corporate record-keeping requirements as a C-Corporation, standard corporation. So you need to keep your annual shareholders meetings.

You need to file your annual reports. You need to have everything done with proper corporate formalities with your S-Corporation. Even though you're saving some money on taxes, you still have the corporate formalities. An LLC gives you the liability protection but a much more streamlined operating environment and much simpler.

And so unless you have some other compelling reason to go to an S-Corp, then from a tax perspective, I would just say start a single-member LLC and elect to be taxed as an S-Corporation. And that gives you all of the same tax benefits. It gives you the liability benefits and it reduces your corporate record-keeping requirements.

I would feel kind of silly doing board meetings with myself. Exactly. Exactly. The LLC is your tool there. And the fact that you can do the LLC taxed as the S makes it a superior option for most people. I think there probably are reasons to choose an S-Corporation in certain industries, but I can't enumerate those at the moment for you.

And so from my perspective, it sounds pretty squarely like an LLC is the ideal solution for you. That's great. I do like the idea of being able to offset my income by doing it as a sole proprietorship. The business entity that I would most be working with wants all of its folks to set up LLCs due to California cracking down on independent contractors.

Right. So I don't know if that's an option for me. Yeah, I would say that unless it's really significant, I would just go ahead and start with the LLC. It is possible that as a sole proprietor you can deduct, but where I think that really makes the most sense, a lot of people get nervous with big business losses because you run a risk of triggering an audit.

And now you've got to demonstrate that all your expenses are ordinary necessary expenses that are reasonable. And then that, depending on what your startup cost can be, that could be, of course, totally provable. But some people take liberty with the expenses that they classify as ordinary and necessary business expenses.

And so if all of a sudden you're reporting a $100,000 loss against a $400,000 income, there's a big tax savings there and there's a good chance that that comes under scrutiny. And so I think that, number one, there's no reason to be scared of an audit if everything's above board.

But in general, probably unless it's a big deal, big potential savings for you, just go ahead and start the LLC. Do it from the beginning and then you can have the benefits that come from that, from having it all set up right from the beginning. Yeah, I guess one advantage for me is I'm, well, an advantage, I guess, is a bad advantage to have.

I'm not looking at $400,000 primary income or even $100,000 in income in this side business. So I guess that's the opposite of a good problem to have. It's a bad advantage to have, but I still feel pretty comfortable where I'm at. Yeah, but I don't think that that's a reason not to.

You know, I've coached many people that they start a side business, but it may lose a little bit of money. If it loses money in the beginning, happens in a lot of businesses. And if there's moderate liability exposure, there's no reason not to just do it. It's so simple just to file a Schedule C.

You can do four businesses in one year. You can do, you know, zero businesses. Just run a Schedule C and keep your records and you're good to go. So I don't think that the only reason to do it would be if you have a lot of money. But I do think that you need to just look and say, is this worth it to me?

Am I actually going to be saving significant money such that this is worth taking the liability exposure of running it as a sole proprietorship? Okay. And then I am calling from California. I am legally not a California resident. However, I do live here and the business would be here.

So I'm also looking at ways to keep myself distance from California. I don't plan to stay here forever. And I don't want California following me forever. I was wondering if you had any insight on that. Why does the business have to be in California? So the services I provide is instructional services and that's where my students are.

So, I mean, at the end of the day, first you need to follow the law. And so you need to understand what the law is around California residency and California work and income generated in California and follow the law. That's the first thing. Then you need to understand that California is going to be extremely aggressive in collecting from you.

California, New York, and my understanding are the two most aggressive states in the country that they are going to get their pound of flesh. And so if you're going to do business with them, then you need to understand you're dealing with a mafia boss. Like you're dealing with a tyrant.

You're dealing with somebody who is determined and who has a massive infrastructure dedicated to finding out where you are and what you are doing. And they're dedicated to, I mean, they watch the license plates, right? There's a computer system with automatic license plate readers that registers the state, the license plate.

So you might have a state for some other, from a tag from some other place. But at the end of the day, you know, they're going to be watching you. And if your business activities are going to be generated in that area, then they're going to be tuned in to you.

So what you could do is you could do your best to keep your finances out of California. And then just try to keep your own footprint in California as lightly as possible. What I would do if I woke up in your situation, I would first understand the law, understand what is required of me.

And as long as I know what the rules are, then functionally I'm going to minimize my footprint in the state to the maximum extent possible. So I will keep my finances outside of any California banks. I will keep my finances in a regional bank from another region, you know, another state.

Preferably a bank that doesn't even have any branches in California. That minimizes California's ability to seize money from my bank account. I would minimize my exposure inside the state. I would not create, for example, a long list of electronic transactions proving that I was physically inside the state. Rather, I would try to make sure that I had all my transactions that were outside of California were digital, you know, on a credit card.

And all my transactions inside California to a reasonable extent possible are made with physical currency. That minimizes my presence within the California system and it makes it much harder for them to make some stupid argument against me that somehow I violated something. And then with regard to my living circumstances, I would not set up, I would not take up residence.

If you need housing in the state, I would take short-term temporary housing and some variation of that. I would minimize flying in and out of California. I'd drive in and out of California instead of flying in and out so that I can just simply moderate how much I'm actually there and what the records are.

So then I'm going to anticipate and I'm going to do these things so that I'm going to anticipate that they're going to come after me. If I owe taxes, I'm going to pay the taxes, file the returns, whatever. But then if they come after me and they say, "Hey, listen, you owe us all this money." I'm going to argue back, "No, I don't," and I'm going to have the paper trail arranged in the very best way possible to demonstrate my case.

So you're dealing with a tyrant and so you need to plan and prepare accordingly. And whatever the practical application of that to your specific situation is, you figure out whether that is applicable, but that's the basic mindset that I would think about. Okay, so I'm understanding I need to pay $800 for the privilege of doing business in California to the Franchise Tax Board as well as income taxes for all of my California-generated income.

Now with that, is it worth paying another $100 a year to establish this LLC as an out-of-state LLC? I would think probably so. Here I think you need to solicit advice from a knowledgeable local expert. I try to stay out of California and I have no reason to go there.

I understand. I understand. My largest listening audience is in California and so I'm not trying to do things unnecessarily, but I don't know the answer. So I would guess that if you're trying to demonstrate that you're not a California resident and that you do have some business operations in California but you want to minimize that, then I think that the natural extension of that would be that the first place that you would establish a business entity would be outside of California.

And then for the extent of your business operations that are in California, you would do whatever the California Franchise Board wants you to do, whether that's file your $800 fee, pay taxes on your California-generated income, do that. But I don't see how you would make an argument just having a California LLC and not a foreign LLC.

I can't see how you would win that argument that all your money wasn't there. Because, you know, let's flip it around. You're spending most of your time in California, you file a California LLC and you have 20% of your business in California but you have 80% of it elsewhere.

Well, California wants tax on all your income. So that's how their system works in my understanding. So you definitely would want your LLC established in your state of residence and then just simply file the appropriate tax forms for that specific – for the businesses generated there. Great! That is very helpful.

Yeah. Just think about how you can pay Caesar what you owe Caesar but not let Caesar into the rest of your life. So, again, even things like the California Tax Board is very aggressive. And so I would not have bank accounts in California. I would not. I would make sure that all my business banking was done in another region.

And there's no reason why you need business bank accounts in California. But if you have business bank accounts in California, it makes it much simpler for the California government to come and place a lien on your bank accounts and just take money out of them. And so you're dealing with an extremely aggressive tax collector.

And so you should protect yourself appropriately. Pay them what you owe them but protect yourself so that they can't try to get more money than what you do actually legitimately owe them from you. Great! Thank you. My pleasure. All right. Final call of the day. Matt, welcome to the show.

How can I serve you today, sir? Hey, Joshua. I have a couple of questions for you. But I'll try to do my best to summarize them. One of them is about jobs. I actually am in a lucky position, I should say, compared to others, where I actually have two job offers I'm currently considering.

And I'm having a tough time trying to make up my mind between them. And I've spoken to a few of my mentors and my girlfriend and other people I trust. And I keep going back and forth. I just want to get your thoughts as well. If you want, I can just summarize them really quickly for you.

Yes, go ahead. So one of them is a senior finance officer for a European bank that has operations out here in the LA area. This is going to be the US headquarters. And they are looking for a place for a senior finance officer. So I won't be headquarters, I won't be a co-overallist person at the European bank.

But the good part about that is that they're going to bump me up to the North American CFO position in the next couple of years, which is great. At least that's what the outgoing CFO is telling me that that's what they want me in for. Because he's kind of made up his mind to leave and he just needs somebody to groom and take on the job.

The pro is that, well, I've always waited for the CFO title and here it's sitting in the grass, so that's great. The money is not too bad. It's not great, but it's like, you know, low to space and then mid to all in. They don't pay much to the European banks.

So that's that. The other option is the US bank, a mid-sized bank, again, based out of the greater LA area. They are in a different space. They're actually high growth. They actually do short term lending to personal consumers. So, you know, if you need a loan, a short term loan, then you'd go to them.

So over here, I'll be second in command to the CFO. They are privately owned right now, private equity owned, and they're going to go public in the next five years. But who knows how that's going to work out. So I'll be second in command and I expect to stay second in command at least until the IPO happens.

And then if the CFO decides to move up or whatever, then I get a chance over there. So it's kind of delaying the CFO role, the CFO experience, but it pays a lot more. The all in comp, including stocks and everything, comes up to in the low threes. So, you know, and then of course, if you go to IPO, then that's going to be worth a lot more.

So those are kind of the options. I've kind of currently said yes to the first role, given that that's what my eventual goal is. Even if money is a little bit shy right now, I'm not really struggling for money, thank God. And, you know, but what I'm finding now is that because of COVID, they are unable to give me an offer letter just yet.

They're really working hard on it. HR over here is working really hard with the European head office to get me that offer letter ASAP. But they're struggling right now. So that's where I am. I'm not really sure what to do. On the other side of either of these jobs, what's next?

What's your next ambition after either of these jobs? That's a good question, Josh. So on the first opportunity, the next step would be like, like I know that this role won't be a full time CFO role. It's going to be, you know, more of a push down role from corporate in Europe.

They're going to push down things that they want done over here. And I'll be more of a doer, if you may. So I want to pull some more full time CFO role. That's what I'll be looking for next. At, you know, at an equal size or bigger brand name place.

For the second opportunity, the idea is for me to take over the CFO role at that place. I've kind of spoken to the CFO and he has a bigger plan for himself. He just wants to cash out on this IPO and then move on to a bigger and better place for himself.

So the role over there would be to take on that. My initial instinct is your opportunities at the European bank are going to be much more limited than the opportunities at the American bank. Because if you are part of the leadership team of a fledgling North American operation, basically you could be amputated at any time.

You know, they could say, hey, this didn't work out. We're going to end the North American operation. And your only opportunity, you know, would be to say, I want to continue with you, but now I have to move to Europe and be involved in the European operation. And I think that your comment about being a kind of a corporate employee, a doer, is interesting and probably true and worth considering.

Whereas at the American bank, it would seem like there's more opportunity to really grow. Because it might be bigger, a little bit more pay, which is nice, but bigger and gives you the opportunity to be involved with an American operation that has its target set on growing. If this bank is going to IPO, as part of their IPO sales pitch, they're going to be talking about how much growth there is, which means you have the opportunity to be involved in a growing operation.

And the financial incentive for the entire management team is to keep growth just as hot as possible in order to pump up that IPO valuation so that they can cash out at a very high, with a very nice payday. So, in general, because of that, it would just seem like the growth prospects are more limited with the European bank than with the American bank.

But my thought was you said that the European bank might have you with CFO on your business card faster, which possibly could be necessary for you to move on to the next company. And so, that's the counter argument that occurs to me is if you choose the European bank, let's say a couple of years from now, you can say, "Hey, look, I've been the CFO of this banking operation for a couple of years." You may know that it's been less of a traditional CFO role and more of an employee role, more of a doer role, but that might position you very nicely to now target employment as a CFO at a much larger American bank and can provide you with an opportunity to pivot into a higher paid position.

So, I'd be happy to take a comp package of 250 instead of 325 if that meant that there's a better chance two or three years from now that you could make that jump from CFO at a bank where the comp package is 250 to CFO at a bank where the comp package is 750.

And so, if that experience is what's missing on your resume, that CFO experience, then I would tend to wait the one that has a faster pathway into the CFO on the business card higher. So, those are the two basic arguments that occur to me. Do you think the European bank would actually – they're obviously wanting to expand in North America.

Do you think they have good growth prospects? They do. They've actually been here for actually decades now. So, they're pretty well established. They are well-to-do and I'm actually not at all concerned for one single bit that they want to move operations out of here. They deal with the usual only.

So, the clients are other big banks and so on and so forth. So, they're not going anywhere anytime soon. So, that was my concern when you raised that earlier. So, like what you mentioned about pivoting this into the next role, I've actually been talking to some of my exec recruiter friends about what that would mean and what their thoughts were.

And they were kind of saying the same thing that you might be able to pivot that. The only thing is that the one exec recruiter who got me that other role, the second role, the American bank role, he is – and I may say that he's a bit biased, of course.

But he's adamant that this first role is just not going to set you up well. The doer piece that I'm discounting it more than I – not discounting it enough as much as I should because it means that I don't have any control. I'm not really much of a CFO other than for the letters behind my name.

Is the German bank – sorry, is the European bank German? It's not. Okay. Do you get along with the culture, like the business culture of that European culture? Does it work well for you or do you find yourself not fitting well into that culture? You know what? That's interesting that you mentioned that.

I have met quite a few of the people who I'll be working for and working with and who will be working for me. At least over here, the culture is very much North American and they keep that. Like I said, they've had it for decades and the CEO is very much American and they run the shop over here, a very persistent American shop.

What about the finances of the bank? Which of them do you think – do you think either of them is on a risky financial footing right now? Do you feel like both of them are solid? Oh yeah, absolutely solid. The P1 is backed by a large pension plan, so they've got deep pockets over there, even though they're private.

And for the other one, they're a publicly traded bank and again, deep pockets. They actually don't deal with consumers, they deal with usual clients. And their business model is such that they – I don't expect them to have issues, too many issues of any sort. Well, I can understand why you're struggling with it, right?

The hardest decisions to make are always – Probably between good ones. Yeah, between good ones. If you have multiple good options or you have multiple bad options, those are always your hardest decisions to make. The easy decisions are when you just have one good or one bad, then everything is relatively simple.

The only thought I have is try to get a letter in hand, try to get a formal offer in hand from whichever one will give you a formal offer in hand first. And then see if you can use that as a point of negotiating leverage for the other opportunity.

And so, it's possible that if you go to the European bank, maybe that's your primary choice and you like the opportunity there, but their comp package is 250. And you can get a letter in from the US bank that says, "Listen, we're more at 320." Then you can take that back and say, "I've got another offer here.

I really prefer you guys, but the pay is a little bit light. See if you can negotiate for a higher pay or vice versa." So, to me, that seems like the way I would approach it is I'd continue to pursue both of them. See which one can get you a formal offer as quickly as possible, then try to use that as a leverage point against the other ones.

And then I would think carefully about which of these is going to position me better for that next job after this one that I'm targeting. Because in your industry, there's probably not going to be a long way up at either of these companies. You're going to work at one of these companies for an appropriate amount of time, whatever that is, three years, four years.

You're going to try to create your turnaround story, deliver on the results that you're tasked to deliver for the board and for the shareholders. And then with that turnaround story, with that success story, with your division squared away, you're now going to try to leverage that work with your next opportunity.

You're going to try to sell that story to an executive recruiter and see if they can place you in where there's a much bigger opportunity. And so that's probably the primary thing I would consider. I'm happy to walk away from $50,000 of comp if I'm convinced that the lower paying job is going to position me better.

But I would really analyze it carefully based upon that metric. Yeah, that's great that you mentioned those things, Josh. Just to add some color to that, first of all, I've already tried to pivot the other role, the higher paying role, to the first option and told them about that.

They weren't going to budge. They were already at that capacity, which again shows how much flexibility is in the local hands in terms of what they want to do. So they went back. They actually did bump it a little bit more, but they got up at a brick wall at a certain point.

So I know that this is not going to be a long term play. This is going to be an appropriate time, two, three, four, five years max, and then pivot that to something else. The other thing about the offer letter timing, the second option, because they're privately owned and already have the approval, the offer letters just a click away.

That I know, like the executive recruiter over there was very eager to say that I can have this in your hands as early as Monday, I mean, the upcoming Monday, Easter Monday. You can have it in my hands right then and there. I have all the approvals. I've passed all the checks and balances.

You just hit the print button once I give them the go ahead, which is what I'm really dialing in on a little bit, thinking that no one actually has this other role. I've been very transparent with them about the other role as well. Unfortunately, I'm just stuck. I've also reached out to the first option and asked to speak to the CFO over there just so I can address some of the concerns directly with him about, does the coronavirus change the timing of when he leaves or is the board going to be comfortable with having a change happen in a time of global crises and so on and so forth.

I just haven't been able to get a hold of him given his border end right now. There's a lot of unknowns and I'm just stuck between the two good options. Here's the last thing that occurs to me. Have you ever worked at a company that has IPO'd while you're working there?

No. That could be a really interesting experience for you and possibly very valuable for you, especially as a finance professional. That would be, to me, something worth seriously considering. If you had the chance to work there through an IPO, there possibly could be some comp for you based upon that IPO.

But it would expose you, working for a chief financial officer and being responsible for significant amounts of the finances of the company, that would expose you to some really unique work experience that you probably wouldn't get with the European bank. That could be very interesting to you in the future and a really fascinating part of your resume that would set you apart from many other people.

Consider that as well. Consider what it would be like to work at a bank through the IPO process and then what that experience would mean to you in terms of your overall career. I really appreciate that insight, Josh. I consider that, and of course what you said definitely makes sense.

The counter argument to that, of course, is that predictions are made on a reasonable day in California. Especially when the IPO is five years down, nobody knows what the economy is going to be like five years down. Given that they are backed by a deep pocket, it won't be like they'll be searching for cash and they have to get this IPO.

Otherwise, they'll be struggling. This can go out until the pension plan decides the valuation is just right for them. That can mean five years, ten years, or it can mean three years and we just don't know that. Interestingly, you mentioned that, but a lot of executives also warned me about very aggressive IPO predictions.

We vary up those kinds of claims and take them with a bit of a grain of salt. Well, it sounds like you need to just flip a coin. Yeah, exactly. That's where I think I am. No, that's great. At least I have a chance to talk it through with you.

It doesn't seem like I'm missing anything. Indeed. Indeed. Sometimes just flip a coin. Here's what you can do. Here's my recommendation. Flip a coin. Say heads is Europe, tails is American, and flip the coin and say go for it. And then if all of a sudden you have this sinking feeling in the pit of your stomach after you flip that coin and the sinking feeling tells you that you made the wrong choice, then just pay attention to that.

Sometimes flipping the coin and committing to something that is as silly as that can help you to know what you really wanted. There have been things I've started doing even recently where I'm like, "I'm not sure if I want this," and I started the process and all of a sudden, due to a few different factors, it was ripped away from me.

I'm like, "No, I really wanted that," and it dials up the intensity for me. Thank you all for listening to today's show. I am grateful for your being here, grateful for your patronage. If you'd like to join me next week on the Q&A show, go to patreon.com/radicalpersonalfinance. Sign up there to support the show, patreon.com/radicalpersonalfinance.

Here to work with you day by day as we go through this unfolding coronavirus experience. This is momentous days and I hope that you are taking notes and paying attention. Lots of stuff for us to talk about, was it, from a financial perspective. I've been a little bit silent on a couple of things.

For example, last week I spent a long time trying to prepare an outline on the CARES Act. The problem is just that there's this piece of legislation, but every single hour, something substantial is changing with regard to the details of it. And then it's just such a nightmare that the rollout of it is such a, it's going to, it is a disaster already.

It's going to be a disaster. I wish it weren't, but I'm persuaded it is. And so it just makes it very hard to create any kind of lasting content, which is why that show didn't get happened. I worked on it and worked on it, worked on it, and I felt like almost anything I'd say was basically going to be undone in no time.

And it was fairly stupid. So I'll keep doing it when I can. But that was all I got. Thank you for listening. Have a great weekend. And I will be back with you soon. (upbeat music)