Blog

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    #190: The Next Millionaire Next Door, with Dr. Sarah Stanley Fallaw

    ByPaula Pant

    [smart_track_player url="https://traffic.libsyn.com/paulaandjaymoney/AA190.mp3" title="The Next Millionaire Next Door, with Dr. Sarah Stanley Fallaw" artist="Paula Pant" social="true" social_twitter="true" social_facebook="true" social_gplus="true" social_linkedin="true" social_stumble="true" social_pinterest="true" social_email="true" ]More than 20 years ago, affluence researchers Dr. Thomas Stanley and Dr. William Danko surveyed a vast number of millionaire households in the United States.What they discovered was groundbreaking at the time.

    The average U.S. millionaire, they found, lives a frugal lifestyle. They are disproportionately clustered in modest, middle-class neighborhoods. They drive used cars. They don’t spend money on jewelry, watches, boats or other high-ticket items. They’re self-made, meaning they did not inherit their wealth; they’re first-generation millionaires.

    In 1996, the researchers published their findings in a book called The Millionaire Next Door: The Surprising Secrets of America’s Wealthy. The book became a mega-bestseller and, to this day, remains a top personal finance classic.

    Fast-forward to 2012.

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    #189: Ask Paula – How Does My Net Worth Compare to Others My Age?

    ByPaula Pant

    [smart_track_player url="https://traffic.libsyn.com/paulaandjaymoney/AA189.mp3" title="Ask Paula - How Does My Net Worth Compare to Others My Age?" artist="Paula Pant" social="true" social_twitter="true" social_facebook="true" social_gplus="true" social_linkedin="true" social_stumble="true" social_pinterest="true" social_email="true" ]
    Julie, age 27, calculated her expected net worth based on the formula taught in the classic personal finance book The Millionaire Next Door. She’s concerned. Her current net worth is significantly lower than the number that the formula revealed. Is she on-track?

    Anonymous wants to save for a downpayment on a home. Should she reduce her 401k contributions in order to amass these savings? Should she store some of that money in a Roth IRA?

    Samantha is more than halfway finished with paying off her debt. In order to make this happen, she took on a second job. How much will she owe in taxes?

    Maxime works at a job in which his 401k only offers expensive choices. Should he put his money in a taxable brokerage account, instead?Leslie’s parents are going to retire in five years, but they’ve only saved $65,000. What should they do? How can she help?

    Clare is creating an estate plan. What should she be thinking about?

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    #188: The Scientific Secrets of Perfect Timing, with Daniel Pink

    ByPaula Pant
    [smart_track_player url="https://traffic.libsyn.com/paulaandjaymoney/AA188.mp3" title="The Scientific Secrets of Perfect Timing, with Daniel Pink" artist="Paula Pant" social="true" social_twitter="true" social_facebook="true" social_gplus="true" social_linkedin="true" social_stumble="true" social_pinterest="true" social_email="true" ]

    In May 1915, a renowned 58-year-old sea captain, Captain William Thomas Turner, made a series of questionable decisions.

    He was the captain of the Lusitania, a ship with 1,959 passangers, sailing from Manhattan to London. The first World War was taking place around them, and Captain Turner knew he needed to move swiftly to evade German submarines.

    His ship approached England; land was in sight. They had almost made it. Yet for reasons that will always remain a mystery, around 1 pm on May 7th, Captain Turner slowed the speed of the vessel to around 18 knots, slower than the 21 knots that they needed to outpace the threat of submarines. Around 45 minutes later, he executed what’s called a “four-point bearing,” which forced him to pilot the ship in a straight line rather than a zigzag course, which would be better for outmaneuvering torpedos.

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    Six Percent is the New Four Percent

    ByPaula Pant

    Today’s article is extra-nerdy. Pull on your Coke-bottle reading glasses and let’s run through a little bit of math.

    Ready? Let’s go.

    If you’re retiring on index funds, you might plan your retirement on the 4 percent withdrawal rule.

    But if you’re retiring on rental properties, you could use the equivalent to a 6 percent withdrawal rule.

    This holds true even if total returns on the two investments are the same.

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    #187: The Final Ask Paula: Real Estate Episode!

    ByPaula Pant
    [smart_track_player url="https://traffic.libsyn.com/paulaandjaymoney/AA187.mp3" title="The Final Ask Paula: Real Estate Episode!" artist="Paula Pant" social="true" social_twitter="true" social_facebook="true" social_gplus="true" social_linkedin="true" social_stumble="true" social_pinterest="true" social_email="true" ]

    Sarah needs $36,000 per year in living expenses in order to reach FIRE (Financial Independence, Retire Early). She owns several rental properties, and she’s aggressively paying off the mortgages through the debt snowball method. How will she know when she’s ready to live on $3,000 per month in consistent rental income?

    AyV wants to rent out his primary residence. What steps should he take to prepare the property for rent? Should he hire a contractor? What level of renovation should he give it?

    And more!

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    #186: How We Retired at Age 30 and 29, with Mike and Lauren

    ByPaula Pant
    [smart_track_player url="https://traffic.libsyn.com/paulaandjaymoney/AA186.mp3" title="How Mike and Lauren Retired at 30 with an Average Income of $56,000 / Year" artist="Paula Pant" social="true" social_twitter="true" social_facebook="true" social_gplus="true" social_linkedin="true" social_stumble="true" social_pinterest="true" social_email="true" ]

    Mike and Lauren reached financial independence at age 30 and 29, respectively.

    But their story begins a dozen years earlier.

    Mike and Lauren started dating high school. Mike worked as a restaurant server in high school, earning $19,000 per year. He built his first net worth tracking spreadsheet in December 2005 as a high school student. He had a net worth of $416.

    In 2007, Mike dropped out of college to start a commercial cleaning company. He made $76,000 that year. As history would have it, that was the couple’s second-highest-earning year ever.

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    #185: Ask Paula: How Do I Talk to Friends who Ridicule the Idea of FIRE?

    ByPaula Pant
    [smart_track_player url="https://traffic.libsyn.com/paulaandjaymoney/AA185.mp3" title="Ask Paula: How Do I Talk to Friends who Ridicule the Idea of FIRE?" artist="Paula Pant" social="true" social_twitter="true" social_facebook="true" social_gplus="true" social_linkedin="true" social_stumble="true" social_pinterest="true" social_email="true" ]

    Hello from Austin, Texas! I’m living in an Airbnb here for the next 5 weeks. Listen to the end of today’s episode to find out why … and discover how these next 5 weeks, for me, exemplify the “why” of financial independence.

    In the meantime, though, the show must go on! Here are the questions that we’re answering in today’s episode.

    An anonymous listener named Seeking FIRE wants to know how she can talk about financial independence with people who ridicule the topic. What do you say to those who laugh at the very idea?

    Russell owns a landscaping company and is also a part-time student. He’d like to earn more money on the side, but his schedule is overbooked. What can he do?

    Nick and his family are moving to the Washington D.C. area for approximately two to six years. They own two rental properties free-and-clear, and would like to buy a personal residence when they move. How should he save for the downpayment?

    Gerardo lives in Mexico and wants to retire on his investment portfolio, using the 4 percent withdrawal rule. How should he invest, given currency fluctuations and other international factors?

    Anonymous left her job and wants to know if she should roll over her 401k from her old employer.

    We tackle these five questions in today’s episode. We also answer a comment from a listener who says that individual stock-picking and active management doesn’t get the credit it deserves.

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    #184: The Alter Ego Effect, with Todd Herman

    ByPaula Pant
    [smart_track_player url="https://traffic.libsyn.com/paulaandjaymoney/AA184.mp3" title="The Alter Ego Effect, with Todd Herman" artist="Paula Pant" social="true" social_twitter="true" social_facebook="true" social_gplus="true" social_linkedin="true" social_stumble="true" social_pinterest="true" social_email="true" ]

    In 2003, Beyonce Knowles-Carter felt shy about performing sultry lyrics and dance routines on stage. She needed a tactic to overcome her nerves and stage fright. So she created an alter ego, Sasha Fierce, to bring out her more assertive side.

    Beyonce is one of many top performers — along with other top artists, athletes, executives, speakers, investors, bankers, lawyers, negotiators, and more — who use alter egos as a tactic to overcome their insecurities and become better versions of themselves.

    Today’s podcast guest, Todd Herman, is an expert at the practice of creating alter egos to improve your performance in any arena of life. He says that crafting an alter ego can help you become a better worker, leader, manager, investor, and even a better parent.

    Todd joins us on today’s podcast to describe the “why” and “how” of creating an alter ego at work, at home, and in social settings.

    Here are six takeaways from our conversation:

  • So I Gave a Talk at Google …

    ByPaula Pant

    A few months ago, I got an invitation to speak at Google.

    “Cool,” I thought. “That’s, like, grown-up stuff!”

    The invitation came from one of my podcast listeners, David Moltz, who works at the company’s Los Angeles office and who hosted the hour-long Q&A.

    “Could you talk about financial independence,” he asked me, “but maybe leave out the part about everyone quitting their job?”

    “Haha! Sure thing,” I replied.