Radical Personal Finance

Latest Episodes:

196-Friday Q&A: Other Student Loan Ideas, Helping Kids Without Enabling Them, Consolidating Accounts, Maxing Out a Spousal IRA, Retirement Distribution Strategies, and Help With Goal Planning May 15, 2015

Show notes

Today, I'm cleaning out the voicemail inbox for my Friday Q&A show. Here are the questions for today:

What strategies for student loan payoff did I forget last week?
How do we help our young kids without enabling them?
Thoughts on consolidating retirement accounts.
What are the limits on retirement accounts for a stay-at-home spouse?
Thoughts on various retirement income distribution strategies.
Do I have additional services and options to help with coaching individual people?

Enjoy!

Joshua

Support Radical Personal Finance on Patreon: http://radicalpersonalfinance.com/patron

195-Double (At Least) Your MPGs: 109 Hypermiling Tips from Ecomodder.com May 14, 2015

Show notes

How much do you spend each year on fuel costs for your car? What is your current mileage per gallon?

Before you rush out and buy a new hybrid to save money on gas, consider improving your driving techniques. It doesn't cost you anything except attention and focus and it can make a substantial difference.

As an example, check out this guy who got his 3/4 ton pickup truck from an EPA estimate of 15 mpg to almost 60 mpg!

In today's show I feature 109 tips for more efficient driving. These tips come from the good folks at the Ecomodder forum.

Listen to (or read) the list, choose a couple of techniques and start practicing! Enjoy the savings and put the money to work elsewhere in your life!

Joshua

Almost 60 MPG on a Diesel Pickup! "2,009.6 mi on one 35 gal tank ('07 Dodge Ram 2500 quad" cab) http://ecomodder.com/forum/showthread.php/double-kilotank-2-009-6-mi-one-35-a-26259.html
109 hypermiling / ecodriving tips http://ecomodder.com/forum/EM-hypermiling-driving-tips-ecodriving.php
68 vehicle mods for better fuel economy ... http://ecomodder.com/forum/fuel-economy-mpg-modifications.php
Support Radical Personal Finance on Patreon! http://radicalpersonalfinance.com/patron

194-You Just Got Laid Off. Here's What To Do Next! May 13, 2015

Show notes

Today, we finish out the 3-part series on preparing for layoffs in the coming recession.

Today's show will be useful to you, even if you just got notice of your layoff and didn't do anything to prepare for it beforehand.

The major theme of today's show is that you need to take appropriate action with appropriate speed. If you're stuck with little savings and no preparation, that means take massive action, now! If you've planned a bit better in advance, it means be strategic and thoughtful.

We discuss:

The impact of self-confidence on your job hunt.
The importance of having work now and not being unemployed for a long time.
How to take massive action on your job hunt for quicker results.
What types of approaches are most successful for job hunters.
Some radical strategies you can plan for that will enable you to simply wait out and enjoy the recession instead of being stressed by it!

Enjoy!

Joshua

Many If Not Most Employers Hunt for Job-Hunters in the Exact Opposite Way from How Most Job-Hunters Hunt for Them http://www.jobhuntersbible.com/jobs/view/what-to-beware-of-in-searching-for-job-vacan-2
Support Radical Personal Finance! http://radicalpersonalfinance.com/patron

193-Make a Backup Plan In Case You Get Laid Off In The Coming Recession: Simple Action Steps For You To Consider May 12, 2015

Show notes

Yesterday, we talked about ways to avoid losing your job in the coming recession. But obviously there are factors beyond your control which might result in your being laid off, even though you've done everything "right."

So, you need a backup plan.

Don't wait and wonder what you'll do. Make a simple plan now for what you'll do.

Think about some different scenarios and play some mental games with yourself. That way, you'll be able to better respond to events instead of being shell-shocked by them. Today's show covers:

The importance of planning to avoid emotional stress when you get laid off.
The direct impact of losing your income and how to plan for it.
The impact that losing your group benefits can have on your financial life.
Why you should consider establishing lines of credit before you need them.
How you can stockpile both money and the simple necessities of life.
The simple things you can do that will make it much easier to get your next job.
The importance of proactively building and maintaining a network.
How thinking like a consultant will help you now and help you later.

Enjoy!

Joshua

The Queen of Versailles
Living On Our Food Storage: One Family's Experience Of Living Without Income For A Year
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192-Recession is Coming: How to Not Get Laid Off In the Next Recession May 11, 2015

Show notes

For most of us, our jobs are the economic engine that drive every aspect of our financial plan. One of the worst things that can happen is to lose a job.

If the engine on your car dies, you're going to be stuck by the side of the road for a while. That's not pleasant for anyone, even if you're stuck in a safe area. But, if you're driving up a mountain (paying off debt and digging yourself out of a hole), having your engine die can be disastrous. And, if you have a destination in mind (financial independence), losing the engine in your car will at least delay you from reaching your destination.

So, the key is plan in advance to not lose the engine. Make sure you're doing the things you need to be doing now to avoid being laid off.

Obviously, you can't guarantee that you'll never be laid off, but you can do a lot to improve your possibilities!

On today's show, we cover:

The need to proactively improve your position within your company, your company's position within the industry, and your industry's overall prospects in advance.
Some ways to know if you've got a big target on your back or a small target on your back with the HR people are figuring out who to cut.
The importance of competing with your fellow employees and of collaborating and cooperating with them and why both are valuable.
Ways to stand out and produce up to 4x the output of your fellow employees.

Enjoy the show!

Joshua

Business Insider: 13 Things Everyone Does At Work That They Don't Want Bosses To Know About
Federal Reserve: Average Annual Hours Worked by Persons Engaged for United States
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191-Friday Q&A: Invest or Pay Off Debt, Rent or Buy Calculations, Double Tax Credit for Multiple 529 Accounts, Roth Conversion or Not May 08, 2015

Show notes

Today, I handle these four questions:

3:02 Joshua, I just started listening to your show and I've learned a lot already. I originally started listening because I have an interest in one day becoming a personal finance consultant, but that's a long way off, for now I just need help with a crazy student loan issue! I am currently paying almost $600 a month for a $102k student loan at 7%, couple of key things, credit is shot due to bk filed last year, the loan is with the nelnet through dept of Ed, the question is should I pay down the loan, or find an investment that will pay me $600 to offset payment? Right now the $600 is preventing me from moving forward on anything financial, I'm expecting a lump some of money in February, like $60k, I would love to invest it where I can earn $600 or more a month to offset the payment! Any ideas?
28:56 Joshua, I recently stumbled upon your podcast and just started listening to it from the very beginning. Your approach to each podcast has been a from a very practical point of view which I really appreciate and hence enjoy listening to it! Please keep up the great work! At the time of writing this, I just finished with the episode "rfp-0009 - Why is your house a terrible investment." I myself am in the stage of having signed a contract on a home and waiting for closing date. All through the show James and yourself have made many, many valid points. I myself have already tracked down my cost (also factoring in an average monthly maintenance expense) to owning a home in an excel spreadsheet and even-though most often than not, one usually tends to buy a home which is slightly bigger in area that the what one was renting (same with me), the numbers for buying a home vs renting still look better (to me) in the long run. I live in the slightly expensive Northern VA area. I have been renting for the last 7.5 years (in various capacities from being a full-time student to full-time employee to full-time employee + part-time student) and can definitely say that annual rent increase adds up over each year. In order to keep the rents at a reasonable rates you will have to move every 2 or 3 years. This would add moving expenses, cleaning expenses, security deposits and a peace-less mind to your rent calculations. But this has not been factored into the James' calculations. Yes, when you own a home your property taxes may also go up as the home appreciates, but this won't be as much as how much the rent would increase year-in year-out. Also your home may or may not appreciate every year for this to happen. Would like to know what your comments are to this.
36:09 Joshua, I have a 1 year old son and am married. My wife is in school earning her PhD. Can my wife and I create two separate 529 plans to double our tax benefits (one in my son's name and one for my wife)? Indiana's benefit is 20% tax credit ($1000 max credit). If not should we create a 529 anyway? We have the money to pay for her $30,000 education already saved to be spread over the next 3 years. Thoughts?
40:06 Joshua, My parents just recently started working with a fee-only financial adviser after their recent retirement. She has been doing a nice job with them so far helping them come up with their financial goals, seeing if they are able to achieve them with their current assets, and choosing the most appropriate Social Security choice for their needs and goals. I have been attending the meetings with them. Either in the next meeting or the meeting after, the question of converting their traditional IRA to a Roth IRA will come up. Other than their paid-off house, most of their portfolio is in traditional IRAs. She is of the belief that it doesn't make sense to convert any of the traditional IRA to Roth because they don't have the taxable funds to pay the necessary taxes. I'm of the opinion that since the income they currently receive from their IRAs is well under the $74,900 limit (filing jointly) keeping them in the 25% bracket, that they should convert some of it and pay the 25% tax rate before they have to start taking much larger RMDs in the future at higher tax rates. Of course that also ignores future potential tax hikes. They understand the benefits of having some flexibility for the future as well as the benefits of passing a Roth to me and my sister on their deaths (another one of their goals). The question I have is: What are the appropriate questions to ask the financial advisor as to how to look into whether converting makes sense outside of the generalities that you shouldn't because you don't have taxable funds? How do you 'run the numbers' so to speak to determine if converting is in their best interest? And also, how do you come up with that sweet spot amount in order to stay inside the 25% tax bracket and not pay taxes outside that bracket? Is that a question for a tax accountant or should a financial adviser be able to answer that question as well? Thanks for all you do.

Enjoy the show!

Joshua

190-Learning To Trade Stocks: Interview With Steve Burns, Founder of New Trader University May 07, 2015

Show notes

Today we dig into the topic of trading stocks. And who better to speak with than the guy who started a "university" to teach the subject?

My guest today is Steve Burns, founder of www.NewTraderU.com.

Here's some background about Steve, directly from his About page:

"After a lifelong fascination with financial markets, Steve Burns started investing in 1993, and trading his own accounts in 1995. It was love at first trade. A natural teacher with a unique ability to cut through the bull and make complex ideas simple, Steve took to blogging and social media by founding New Trader U in 2011.

"Since then, New Trader U has attracted hundreds of thousands of visits a month, becoming the go-to resource for people wanting to build a strong, trading foundation. New Trader U offers an extensive blog resource with more than 1,000 original articles (Steve posts daily).

"Asked daily if he could mentor, Steve realized that there weren’t enough hours in the day to give everyone the attention they deserved, so New Trader 101 was born. Developed to help beginning traders survive their first year in the markets, New Trader 101 quickly became Steve’s passion."

The interview covers:

Steve's personal story as it relates to financial independence
His suggestions for individual investors to protect their portfolios
Learning to manage the psychology of investing
Teaching kids the skills of investing

Enjoy the show!

Joshua

Steve's website and blog, New Trader University and his course "New Trader 101."
Support Radical Personal Finance: http://radicalpersonalfinance.com/patron

189-Term Life Insurance May 06, 2015

Show notes

Today we continue our life insurance series dig into the topic of term life insurance.

Term life insurance is an incredible financial product and extremely useful. It also has some options that are not commonly understood or explored.

We discuss:

What is term life insurance useful for?
Normal life insurance policy designs:
- level term insurance
- annual renewable term insurance
- decreasing term insurance
- increasing term insurance
Key policy features:
- renewability
- convertibility
- disability waiver of premium
- reentry term insurance
- return of premium rider
Group term insurance
How to analyze costs
What about those who say term insurance is the only appropriate solution?
How to find a policy
How to get insurance with a medical condition

Enjoy!

Joshua

If you'd like access to the spreadsheet with return of premium rate of return calculations and the annual renewable term vs. level term discussion, support Radical Personal Finance on Patreon! http://radicalpersonalfinance.com/patron

Out & About: Joshua's Interview on the "Work Strong America" Podcast with Rick Seigmund May 06, 2015

Show notes

I'm not able to record and release a show for you today so I'm releasing an interview that I gave on the Work Strong America podcast with Rick Seigmund.

This interview was originally released on Rick's show on February 4, 2015.

Enjoy the show!

Joshua

Links:

Rick's Work Strong America site: http://workstrongamerica.com
The original post of this interview on Rick's site: http://workstrongamerica.com/wsa-episode-005-joshua-sheats-interview/
Support Radical Personal Finance! http://radicalpersonalfinance.com/patron

188-Avoiding the Sunk Cost Fallacy by Applying Zero-Based Thinking May 05, 2015

Show notes

Years ago, I learned an extremely valuable thinking process from Brian Tracy called Zero-Based Thinking. Today, I share it with you.

Here's the question: Is there anything in your life that, knowning what you now know, you wouldn't get into again today if you had to do it over?

If the answer is yes, then you follow up with these questions: How do I get out? How fast do I get out?

By consistently applying this question to every area of our lives, we can avoid much of the impact of the sunk cost fallacy. As humans, we tend to want to keep doing something because we've invested a lot of time, money, or emtion into it in the past.

But, for the most part, those costs are gone. They're sunk. You can't recover them.

Rather, you have to zero the decision out, ignore the past, take the information you have today and determine if you want to continue what you're doing.

This type of thinking can be extremely challenging and freeing.

I hope it's a useful concept to you!

Joshua

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