Jeffrey is curious: if I were to interview Suze Orman today, would I agree more or less with her thoughts on the financial independence retire early (FIRE) movement?
Matt wants to know: if a property cash flows really well, is it worth paying significantly more than the appraised value to purchase that income stream?
Sara and her husband are returning to the states after living abroad for a few years. They’re moving to an expensive area where homes cost $800,000+. They have $150,000 saved for a downpayment, but a $600,000 mortgage isn’t what they had in mind. What should they do?
Eva and her partner are squirreling away money before the birth of their baby. They’d like to pay off their $90,000 mortgage in three years, but they’re afraid to use the money in case of unexpected baby expenses. What’s their best move?
Justin and his wife want to take a gap year with their children in three years. They plan to visit Spain and London for six months each. What are unexpected expenses that they should factor into their budget?
I answer these questions on today’s episode alongside my friend and former financial planner Joe Saul-Sehy. Enjoy!
Sara asks (at 4:07 minutes):
After living abroad for a few years, my husband and I are heading back to the states. We’ve never owned a house before, and we’d like to buy one upon returning. Due to the type of job my husband has, we’ll most likely end up in a high cost of living city, like Redmond, WA. The 3 to 4-bedroom houses in this area cost around $800,000+. We only have $150,000 saved, and we’re uncomfortable with taking on that much debt even though my husband will be paid well.
We’ll rent for six months to one year to get to know the area and make sure my husband enjoys his job, but at what point does a mortgage become too much to take on?
Matt asks (at 16:45 minutes):
I’m looking at a piece of property that has a well-established short-term rental history. It grosses $50,000 per year, and the sale price is $250,000. However, the property would only appraise for $150,000 as a residential property. Would you ever pay significantly over appraisal value just to purchase the income stream from a property?
Eva asks (at 23:35 minutes):
I’m pregnant! I’d like to stay home for the next 10 years, and we also want to pay off our $90,000 mortgage. How can we accomplish this?
Our emergency fund will reach $40,000 before the birth of our baby, and we live off of one income and save the other.
After contributing a hefty amount to my 401k, my take-home pay is $38,000. I’m around $7,000 away from a minimum viable retirement. If I can work from home with my company after the birth, I will.
Our mortgage balance is $90,000 and the refinance is 2.5 percent. We’d like to pay it off in three years. To do so, we can grow our emergency fund to $70,000 and pay it off in one lump sum.
Is that a good move to make? We could pay off a significant chunk now, but with our baby on the way, we’re hesitant to deplete savings. What do you think?
Justin asks (at 31:20 minutes):
My wife and I want to take a family gap year with our children in three years. We plan to spend three months in Spain, six months in London, and three months back in Spain.
We’re starting to budget so we can set our monthly savings goals, but we want to go beyond the basics like housing, food, and entertainment. Can you give us advice on things we might be missing? What about international health insurance? Do we need it, or should we pay cash? Do you know anyone in the financial independence retire early (FIRE) community that has done something like this?
Jeffrey asks (at 51:28 minutes):
If you were to re-do the interview with Suze Orman today, how would the conversation differ? Would you agree with her more, or less, about her stance on the FIRE movement?
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