Afford Anything

Author: Paula Pant

By Paula Pant

PSA Thursday Part II: Let The People Trade!

This morning, almost every major brokerage halted trading on the most volatile stocks, including GameStop, BlackBerry, Bed Bath & Beyond, Nokia, and AMC Theaters.

We’re in a situation where major trading platforms are blocking retail investors – us – from placing trades, while allowing hedge funds and institutional investors to drive prices.

That is not a free market.

When you don’t let people buy, and you don’t let people sell, you’re locking people out of the game entirely.

Yesterday, I was worried that grandma and grandpa would make the wrong investment choices and irrationally bet their life savings away. Now, they’re prohibited from making any choice. 🤯

We deserve the right to make our own trading decisions.

For the latest updates, follow me on Twitter or Instagram (check out my stories). I’m sharing my thoughts on these platforms as things unfold.

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By Paula Pant

PSA Thursday: Wall Street Bets, GameStop, and the Rise of Meme Stocks

If you blinked, you missed the biggest stock market story since the crash of March 2020. 

It’s a story that led GameStop, a brick-and-mortar company that sells *physical* video games (remember when games came on 5.25-inch floppy disks?), to skyrocket its share price by 700 percent in two weeks. 

It’s a story that explains why multiple brokerages — including Vanguard, Schwab, Robinhood, TD Ameritrade, RBG Direct Investing, ThinkorSwim, Webull, E-Trade, and more — had such high volume and demand on Wednesday that these trading platforms briefly shutdown, or had intermittent service.

It’s a story that explains why AMC Theaters rose 264 percent, um, YESTERDAY. 

It explains why overlooked retailers such as Nokia, Blackberry and Bed, Bath and Beyond rose by approximately 35 to 45 percent yesterday (as of 3:30 pm Eastern, half an hour before market close). 

And it’s a story that explains why Express rose 166 percent in a single day, with such heavy trading volume that several brokerages halted all trades of its stock simply because the platforms couldn’t keep up with the firehose of orders.

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By Paula Pant

#297: Ask Paula – Should I Househack or Pay Off My Student Loans?

George is torn between paying down his student loan debt (which he deferred) or buying a househack. Which is better for his long-term goal of reaching financial independence?

Hanan wants to figure out if a backdoor Roth IRA conversion will work for her. She also wants to investigate whether a Vanguard Institutional 500 Index Trust and a Vanguard Institutional Total Bond Market Index Trust are ideal. Are trusts different from index funds or mutual funds and if so, how?

June and her husband netted $400,000 from the sale of some golden parachute ISOs. They want to help their children pay for college and are trying to figure out how to strategically use this money. Should they pay off their home, buy rentals, fund 529s, or Roth their 401ks?

Mario is curious to know: is his two-fund portfolio at a 90/10 split is a good asset allocation for his Roth IRA?

Vivian is worried about bridging the gap between when she retires and when she claims Social Security. Will her plan of doing a Roth conversion ladder work out the way she hopes?

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

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By Paula Pant

#294: Ask Paula – If I Were to Interview Suze Orman Again Today, How Would It Go?

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. Enjoy!

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By Paula Pant

#292: Ask Paula – I’m an Investor Who Likes Volatility; What Should I Buy?

Three Kids, FI has an all-equities broad stock market index portfolio that he’s held for years. He’s confident he can handle maximum volatility, so what investments can he lean into to that will provide him with great long-term returns?

Sarah is concerned: a financial advisor told her that investing in VTSAX over-indexes her in large cap funds and technology stocks. Is this true, and what should she do about it?

Alex’s wife lost her job due to the pandemic. They live in Washington state and are married filing separately due to his wife’s student loans. Can he use half of his income to qualify her for Roth IRA contributions?

Jordan is a new listener and he has three questions: should he use $100,000 to buy more rental properties or invest in a brokerage account? Should he and his wife upgrade their home and buy a property that’s worth double their current home? And finally, how can self-employed individuals who earn more lower the cost of health insurance?

I answer these four questions on today’s episode. Enjoy!

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By Paula Pant

#290: Ask Paula – Is Upgrading Our Lifestyle Worth Mortgaging a More Expensive House?

Sharon owns two condos that are worth $1.4M and has a cash cushion of $120,000 plus a $50,000 emergency fund. She’d like to move into a small house while keeping her cash cushion intact. Should she take out a home equity loan on her mortgage to essentially pay for her house in cash, or get a traditional mortgage and use her savings towards the downpayment? 

Jury and her partner are torn between two options: buying a condo, which would allow them to live off of one salary and invest the other, or buy a more expensive house – a much more attractive lifestyle option. Which should they purchase? 

Daine’s IRA balance is a result of 401k rollovers. He’s concerned that his lack of monthly contributions cause him to miss out on compound interest. What can he do to grow his retirement funds?

Molly and her husband want to reach financial independence (FI) in 15 years, at age 50. They’re unsure of whether their rental property income will sustain their FI lifestyle. How can they plan for this?

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

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By Paula Pant

PSA Thursday: To Buy or Not to Buy?

Many people in the personal finance / FIRE community have a complicated relationship with the concept of consumer spending.

They may see family, friends and neighbors demonstrate one extreme — they’re profligate spenders who will buy anything — and, in an effort to be nothing like them, they may overcompensate by becoming extreme penny-pinchers. (I see this often at the start of a person’s FIRE journey, when the pendulum is swinging sharply in the other direction). 

The reality is that neither extreme is healthy.

There’s a middle ground between being so gullible that you’ll buy anything vs. being so cynical that you build a wall that shuts real value out of your life and hampers your growth.

In recognition of that balanced middle path, today’s PSA Thursday episode focuses on five questions that you should ask yourself before making a purchase.

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By Paula Pant

#287: Put Yourself on the Hook, with Seth Godin

“Confidence is a trap.”

“Personal narrative is another trap; it was invented by the social media people to turn well-rounded, comfortable people into balls of insecurity.”

“Authentic is a ridiculous concept, and it’s a trap, and no one wants you to be authentic. They want you to be consistent.”

Prolific thinker and writer Seth Godin, arguably the most famous modern author in the field of marketing and storytelling, shares these insights in today’s conversation.

Seth Godin is famous for his ideas. He’s written 19 bestselling books on mastery, creativity, business and marketing. His books have been translated into 35 languages, and one of his books was the top bestselling marketing book of the last decade. He’s an inductee to the Marketing Hall of Fame (yes, it exists).

He joins us today to talk about creativity, choice, the importance of practice, and how to overcome your self-imposed limitations.

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By Paula Pant

#286: Ask Paula – How Long Will It Take Me to Become a Millionaire?

Kaitlyn has $78,000 saved for a property, but she isn’t sure whether she should buy a personal residence, a rental property, or both. How can she best use this money?

An anonymous listener wants to lower their housing expenses. Should she and her husband buy a cheaper property and turn their current home into a rental, or should they stay and pay off the mortgage as quickly as possible while saving for a downpayment on another property?

Alex is just getting started with financial independence and asks: how can you calculate your financial independence date, and how do you know how much you need to save to reach that number at a certain age? 

Ell wants to know: what’s the difference between a high-yield savings account and a money market account, and how can you maximize the interest you earn in these accounts?

Jenn wants to know: is it possible for Canadians to find cash-flow positive real estate deals, either in Canada or the United States?

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

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Afford Anything