This week, my friend and former financial planner Joe Saul-Sehy joins me for another round of Q&A in our (newly!) biweekly segment called Ask Paula!
Kicking off today’s episode, Nicky asks:
I’m young and healthy. My car is old and not-worth-much. And my personal property isn’t exactly fancy-pants.
Do I *really* need health, auto and property insurance? Or can I drop these insurances and save the money?
Next, Shelbi explains her current situation:
I’m 26, recently earned a graduate school diploma, and I’m taking the first steps into my career.
I take home $2,600 in monthly income, and my cost-of-living is $1,900 per month.
I maintain a $5,500 emergency fund and invest 20% of my income into a Vanguard Target Date Retirement account, with a Roth tax setup. I’ll get an employer match after I’ve spent another year on the job. My employer also contributes $100 per month into my H.S.A. account, which is the only money that I’m putting into that fund.
I hold $49,000 in student loans (yikes!!) at 6.8% interest. I pay $400/mo towards this debt, which is included in my $1,900 cost-of-living and is more than the minimum required.
My goal is financial independence and early retirement.
Shelbi asks three questions:
- Should she lower the 20% she’s putting into her 403b in order to max out her Roth IRA and HSA, instead?
- Should she prioritize repaying her student loan debt over retirement savings?
- Should she schedule a private coaching call with me? (Surprisingly, I said no. Tune into the episode to find out why.)
Next, Nicole asks:
What types of investments can you hold inside a self-directed IRA? If I open one of these accounts, what custodian should I use?
Finally, anonymous asks:
What’s the deal with bond investing? What’s a coupon payment? A maturity date? WTF? Can you help me make sense of the world of bonds and bond funds?
Joe and I tackle these four questions … plus reveal a top-secret recipe for the Best. Oreo. Cookie. Dessert. EVER.
Like, ever.
Enjoy!
— Paula
Resources Mentioned:
- Interview with Andrew Hallam, the man who became a millionaire on a teacher’s salary: Part one and part two.
- Investing the Geeky Way – Afford Anything article
- Private Coaching
- Bluehost – Start a Blog in 5 Minutes or Less
Want to hear your voice on an upcoming episode? Leave your question at affordanything.com/voicemail.
