Adam is 23 years old and wants to achieve financial independence as quickly as possible. However, he’s nervous about investing in the stock market and real estate. How can he overcome his fears?
Paris, age 35, has a similar question. She earns $150,000 per year, is debt-free, and doesn’t own a home. How can she reach financial independence in less than 10 years?
Paul wants to househack his first home, but none of the properties he’s seen meet the one percent rule. He doesn’t want to rent forever. Does he need to compromise on his commute time, or wait until he finds an undervalued gem?
Anonymous Househacker rents an apartment with three bedrooms, two of which he rents out on an inconsistent, short-term basis. They want to know: does the money they earn count as rental income if they aren’t making a profit on it?
Ben is a real estate investor who’s curious about growing his portfolio from four units to 20 units. What’s the best approach to take?
I answer these five listener questions in today’s episode. Enjoy!
Adam asks (at 02:30 minutes):
I’m 23 years old and earn $41,000 per year as a music teacher. I side hustle on the weekends as a bartender. I’m on track to pay off my student loans this year, my emergency fund has 2 months of savings (a little over $4,000), and I contribute $300 per month to my Roth IRA.
What can I do to accelerate towards financial independence? I’m nervous to invest in the stock market because it’s new to me; I don’t want to invest in something I have no knowledge of. I feel like I’m too young to invest in real estate, and I don’t have enough knowledge of that, either. Do you have any advice that can help me feel confident with investing?
Paris asks (at 20:38 minutes):
I’m 35 years old, debt-free, and do not own a home. I earn $150,000 per year at my new job, and I’m excited to save more money on this higher salary.
I know I’ll reach financial independence in 10 years if I continue on this path, but I don’t want to wait that long. If you were in my shoes, what would you do to achieve financial independence in less time?
Paul asks (at 35:53 minutes):
I want to buy a two-bedroom condo in Northern Virginia. I plan to live in one bedroom and rent out the other. However, none of the homes in my price range that have a reasonable commute come close to meeting the one percent rule. Should I keep searching for an undervalued gem? Or should I compromise on my commute?
Additionally, since Amazon’s HQ2 announcement, housing prices have already increased. I’m afraid that I’ll get priced out of this area if I wait for an undervalued gem to come on the market. On the flipside, there’s increased potential for capital gains because of HQ2. Should I give any weight to this?
Anonymous Househacker asks (at 53:19 minutes):
I rent a three-bedroom apartment for $690 per month, and pay around $100 in utilities per month. After my two roommates moved out, I decided to try househacking. I charge $500 per month for roommates that stay with me on a monthly basis.
On average, I have one roommate a month. There are months I have two roommates, and months where I have none. Since I’m not making a profit, do I need to pay taxes on this income? Would this even be considered rental income?
Ben has a financial independence story and a question (at 01:01:18 minutes):
I’m a former property manager who moved from California to Cincinnati to start a new chapter. After moving, I bought a 4-plex for $48,000, put $100,000 into it, and rehabbed it myself. I did a cash-out refi for $266,000, and now I’m financially independent and semi-retired.
I want to repeat this process for more cash flow. How can I grow my four units to 20 units?
Resources Mentioned:
- Adam’s Question:
- The Simple Path to Wealth, by J L Collins
- Paris’ Question:
Thanks to our sponsors!
Gusto
Gusto makes payroll, benefits, and HR easy for modern small businesses. In fact, 72% of customers spend less than 5 minutes to run payroll! If you sign up at gusto.com/paula, you’ll receive 3 months free once you run your first payroll.
Freshbooks
Save time by using Freshbooks, an easy-to-use, cloud-based accounting system that takes the stress and hassle out of bookkeeping and, especially, invoicing. You can create an invoice in a few seconds, and Freshbooks’ automated system will handle the rest. Visit Freshbooks.com/paula for a free 30-day trial. Please mention this show when they ask how you heard about them.
Blinkist
Busy, but love to read and learn? Blinkist is the only app that takes the best key takeaways from thousands of nonfiction books and condenses them down into just 15 minutes. You can start a free 7-day trial when you join at blinkist.com/paula.
I’m wearing my Betabrand pants on a flight – they’re that comfortable!
Betabrand
Most of us find ourselves in situations where we need to wear dress pants, whether it be for work, a conference, or a meeting. If only you could wear comfortable pants to everything, right? Well…now you can! Betabrand offers dress pant yoga pants, and they’re as awesome as they sound. Check out betabrand.com/paula and get 20% off one pair.
