It’s our First Friday bonus episode!
Danielle wants to take advantage of pandemic stock prices – what should she invest in?
Lydia earns income as both a 1099 contract worker and a part-time W2 employee. She filed for unemployment as a W2 worker, but can’t find information on how to file as a contractor. Is there a process contractors can follow to file for unemployment?
Florina and her husband have $70,000 in cash to invest. Where should they put this money in light of the current market?
Ali and his wife saved eight months of living expenses in their emergency fund in case they get laid off during the pandemic. Is this too excessive?
Anonymous in Real Estate wants to buy a multifamily property with the equity in their first rental as a downpayment. Their husband doesn’t want three mortgages. Should they accelerate mortgage pay-down and be one mortgage down in four years?
I answer these five questions in today’s episode. Enjoy!
Danielle asks (at 2:02 minutes):
I want to take advantage of the pandemic stock prices. I just created a Robinhood account and I want a profitable portfolio. Which stocks should I buy, and why?
Lydia asks (at 19:53 minutes):
I make a large chunk of my income through W2 part-time work, for which I’ve already applied for unemployment. I should receive those benefits soon. However, I earn a little bit more than half through 1099 contract work. I’ve tried to figure out how to apply for unemployment for my contract work, but the Michigan unemployment office is swamped and I can’t get through. Are there any solutions you’re aware of that could be of help to contractors who need to file for unemployment?
Florina asks (at 35:03 minutes):
My husband and I sold a property and have about $70,000 in cash. Since we’re heading toward a recession, what’s the best way to invest this money? Should we invest in real estate, considering we’re not sure if people will be able to pay their rent? Or should we stick to the stock market?
Ali asks (at 51:50 minutes):
Both my wife and I work in what we’d consider fairly safe industries – local government and healthcare administration. However, both of our workplaces are announcing layoffs. Does it make sense to keep eight months of living expenses in our emergency fund?
Here’s our situation: Our only major debt is our home. Sixty percent is in equity and 40 percent is debt. I pulled out 10 percent to reduce our interest rate and start a side hustle which gives us steady passive income. Our second largest expense is our daughter’s daycare, about $1,400 per month.
Both my wife and I have pensions under the CalPERS system. We both have access to 457 accounts – I max mine out, and my wife increased her pre-tax to $15,000 per year. I also max out my Roth. We contribute $5,000 per year to a taxable brokerage account.
We boosted our emergency savings to eight months in preparation for the worst-case scenario in which we both get laid off.
However, if we both make it through the layoffs, should we keep the eight-month emergency fund? Or should we invest excess cash in our brokerage account? Or put it in an investment property?
Even if one of us is laid off, eight months seems excessive in light of unemployment + one income. What should we do?
Anonymous in Real Estate asks (at 1:04:18 minutes):
My husband and I are in our late 30s. We got a late start with our finances because we both went to grad school. We make a combined $270,000 per year, although my husband’s income varies. We have about $400,000 in our combined retirement accounts, and no debt except for a very low-interest loan that we took out to put solar panels on our house.
We have about $40,000 in cash that we’re building up.
We have a single-family rental home that we owe $100,000 on. It’s worth about $230,000 to $240,000. We rent it for $1,750 per month and the mortgage is $1,400 per month. It doesn’t generate a ton of cash flow, but it’s low-maintenance and we have a great long-term tenant living there. We have nine years left on the mortgage, so it’ll be paid off when our daughter is thinking about college (she’s five).
We also have our primary residence – it’s worth about $430,000 and we owe about $340,000 on it.
I would love to buy a multifamily home in the area using the equity in our rental property for a downpayment. However, my husband is uncomfortable with the idea of having three mortgages at the same time. We could pay the $100,000 mortgage off in four years if we doubled the mortgage payment. We could consider purchasing another property when it’s paid off. Is this a good idea?
Resources Mentioned:
- Lydia’s Question:
- Florina’s Question:
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