Afford Anything

Author: Paula Pant

By Paula Pant

#258: Ask Paula – Can I Quit My Job Before I’m Financially Independent?

“Burned Out in Boston” wants to reach financial independence.

But she’s not sure she can stick it out in Boston much longer.

She and her husband want to move to an area that doesn’t have many job prospects, and they want to make this leap soon, ideally before they reach FI. How do they know when it’s the right time to jump ship to their dream location?

Ingrid and her husband own two rentals. They’re torn between paying one of their rentals off or buying more properties. Which is the better route to take?

Pat is torn: should she convert her garage into an accessory dwelling unit, or use funds to buy an out-of-state rental property?

Chelsea wants to know: what should you do if your newly purchased home is an instant money pit?

Julia wants to know how to approach investing in sector-specific index funds, like utility ETFs. Should they be a small or large portion of your portfolio?

I answer these five questions in today’s episode. Enjoy!

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Written By Paula Pant

The Lamborgurus, driving their Scamborghinis …

You know those flashy “real estate seminar” types, the ones who wear $10,000 wristwatches and flash cheesy Powerpoint slides of their Lamborghini at you? 🙄

Don’t trust them. (I reaaaalllly hope I’m stating the obvious.)

I call them Lamborgurus, driving their Scamborghinis. They can be found lurking in the spotlight, dispensing a blend of platitudes and high-leverage, high-risk speculative strategies from the stages of big hotel chains.

They can be forgiven for being tacky. But not for destroying peoples’ retirements with their shoddy ‘investment’ advice.

Here’s the thing:

Be careful about choosing who you take advice from. This is true in any arena — health, fitness, personal finance, business, real estate, travel. Some teachers are better than others. The slick, sentient-infomercial Scamborghini types offer the most dramatic cautionary example.

But there’s another reason.

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By Paula Pant

PSA Thursday: Quick Weekly Update

Hey there!

We’re in the middle of enrollment week for our course, Your First Rental Property, which is occupying our time and attention, so unfortunately we won’t be airing a PSA Thursday episode this week. Bummer!

But don’t worry!! We’ll be back next week with an “Ask Paula” episode on Monday, a PSA Thursday episode about charitable giving, and an interview with business leader Michael Hyatt that’ll air the following Monday.

We also have two new blog posts — which you can read here and here — both of which describe the 2020 housing market. Are we due for a real estate crash? These articles elaborate.

Finally, our flagship online course, Your First Rental Property, is open for enrollment THIS WEEK ONLY! It’s a 10-week online course that walks you, step-by-step, A-to-Z, through everything you need to know as a beginner rental property investor. You can learn all about it (and check out our detailed FAQ’s) at affordanything.com/enroll.

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Written By Paula Pant

“Invest in real estate during a pandemic? Are you crazy?”

“Invest during a pandemic? Are you crazy?”

That’s a reasonable question. Why would anyone want to invest in a volatile market and in the midst of economic uncertainty?

But recessions create opportunities. Yes, it’s terrible that millions have lost jobs and suffered huge portfolio losses, but the unfortunate reality is recessions happen. Like it or not, this is our current situation. By looking at the market and asking “what opportunities can I find?,” we contribute to the recovery. 

We contribute to the recovery in all types of investments: stocks, real estate, side hustles. 

When we buy stocks, we infuse capital into companies that we believe in and/or into the market as a whole. 

When we buy, renovate and rent properties, we create jobs for contractors, agents and property managers and we offer our tenants a safe, comfortable and well-maintained home. 

When we start a side hustle, we build products or services that thrill our clients and create jobs for our team. 

When we invest, we participate in the recovery. Recessions are an unfortunate fact of life, but they carry a silver lining. And for newbie investors in particular, recessions can open the door.   

Unfortunately, during times of uncertainty, many people surrender to their fear of investing. They sit in cash until it’s too late.

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By Paula Pant

#257: How to Stop Screwing Up Our Finances, Even in a World That Leads Us Astray — with Dr. Dan Ariely

“The checking account is like the trash can of personal finance.”

Today’s podcast guest, the famed behavioral economist Dr. Dan Ariely, is not a fan of checking accounts. Or supermarket end caps. Or anything that distracts us from our financial goals.

In this episode, he explains why.

Dan Ariely is one of the world’s most renowned behavioral economists. He’s the James B. Duke Professor of psychology and behavioral economics at Duke University.

His TED Talks have been viewed more than 15 million times. In 2018, he was named one of the 50 most influential living psychologists in the world.

He’s the New York Times bestselling author of many books, including Predictably Irrational, a book that challenges our assumptions about our ability to make rational decisions. He also wrote Dollars and Sense, a book about our cognitive biases, and The Honest Truth About Dishonesty, a book about how we lie to everyone, including ourselves.

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By Paula Pant

PSA Thursday: How Can I End 2020 in a Stronger Position Than I Started It?

Welcome back to PSA Thursday, a mostly-weekly segment in which we talk about how to handle money, work, and life in the middle of a pandemic.

Today, our discussion focuses on work. 

How can you find business and investment opportunities in today’s tough pandemic bear market? 

What should you do to emerge from 2020 stronger than you started?

We tackle this question in today’s PSA Thursday episode. Here are 7 specific, immediate actions that can set you up to succeed in this recession.

#1: Keep your plans intact.

Don’t rewrite your life plans based on fear or anxiety. 

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By Paula Pant

#256: Ask Paula: Bonds Are Tanking. Should I Switch to Real Estate Instead?

Jon is wondering if now is a good time to move his RRSP into a tax-free savings account, given the market downturn. He knows you can’t time the market, but the opportunity is tempting. What should he do?

Laurel’s question revolves around the CARE Act and early withdrawal from a 401k. She needs to rebalance her 401k and wants to buy a rental. Instead of selling stocks, should she sell bonds as a form of rebalancing and to withdraw for a rental property?

After seeing so many businesses experience financial hardship, Rebecca and her husband are curious: why don’t companies have emergency funds?

Salome sees the stock market downturn as an opportunity for tax-loss harvesting, but does this hold if you’ve held stocks for less than a year?

Josh and his wife have funds in Vanguard and Betterment, and they own their apartment in Queens, NY. Does the equity they have in their apartment count as real estate, or should they invest in something else for more diversification?

Jenny and her husband earn $220,000, max out their 403b and HSA, and have an extra $4,000 per month to invest. Where should they put this money?

Sheena has the option to purchase company stock at a 15 percent discount through an Employer Stock Purchasing Plan. However, it’s volatile right now. Should she contribute the maximum amount, or nothing?

My friend and former financial planner Joe Saul-Sehy joins me to answer these questions. Enjoy!

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Written By Paula Pant

Um, yeah – so what’s happening with the real estate market in 2020?

The economy is tanking; unemployment claims have topped 30 million; even optimistic analysts say it’ll take years for jobs to fully recover. So what’s happening with the housing market?

To fully understand the residential real estate market, let’s break this down into three sub-questions:

How strong was the housing market before the pandemic struck?
What’s happening now?
Where might it be going?

Here we go!

How strong was the pre-pandemic housing market?

Home values rose steadily after the Great Recession ended. From 2012–2020, home prices rose 5.8% annually, according to the US Housing Market Health Check report from Thomvest Ventures. (All stats in this article come from that report unless otherwise indicated.)

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By Paula Pant

#254: Ask Paula – Should I Invest During a Pandemic?

It’s our First Friday bonus episode!

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?

Danielle wants to take advantage of pandemic stock prices – what should she invest in?

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!

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By Paula Pant

#252: Ask Paula – Will the Stimulus Cause Massive Inflation?

The government issued a $2 trillion stimulus. How will that affect the economy? Could we endure massive inflation or hyperinflation?

Bradley kicks off today’s Ask Paula episode with this timely question. What inflation rate will we see in 2020, and how can we prepare? How should we hedge against hyperinflation?

Anonymous Retiree (whom we call Sequencing Sally) is 64 and retired last year. She lives off of monthly withdrawals from a Vanguard portfolio. Given the bear market, should she leave her portfolio alone and spend from an emergency fund?

Additionally, her target allocation is off-kilter. Should she rebalance now or later?

Jay wants to reach financial independence in five years, but she’s in a job that will pay her $270,000 student loan balance if she stays there for another 17 years. Should she stay, or quit and face the balance?

Jan has $500,000 in a managed fund with a three percent annual fee. He wants to move his funds into his Vanguard personal brokerage account, without incurring a ton of taxes from the sales of his holdings. How can he accomplish this?

My friend and former financial planner Joe Saul-Sehy and I answer these questions in today’s episode. Enjoy!

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Afford Anything