Afford Anything

Category: Episodes

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#225: Ask Paula – How to Invest for the Next Five Years

Lauren is 26 and earns $48,000 per year after taxes.

She saves $12,000 annually in retirement accounts, and an additional $18,000 per year for a downpayment on a home.

She wants to buy a home in the next five years. Where should she keep her savings in the meantime?

Sawyer has a five-year financial independence plan. She owns two high-end condos in a NYC suburb. She lives in one unit and rents out the other, but she’s bothered by the fact that she’s forgoing collecting rent on the other unit. Should she move?

Katie’s husband is going back to grad school and they want to pull money out of a retirement account to help fund this cost. Are they able to do that? Or is there a better option for short-term investments that they should use?

Cassie is in the process of finalizing a divorce. She and her daughter will receive between $80,000 – $116,000. Should they use the funds to buy a home with a 20 percent down payment or pay off their $30,000 debt?

Andy is curious: should you re-adjust the 4 percent withdrawal rule if your investment portfolio grows?

Joe wants to become self-employed but is concerned about health insurance. What are some affordable options?

Laura is close to pulling the FIRE alarm but her fiance wants to keep working. She wants to know what will change once they get married. Should they file taxes jointly or separately?

Doug is interested in learning more about equity sharing programs. Are these safe to invest in?

Tania wants to know: can you open and fund a Roth IRA if you haven’t worked in the past two decades, but earn alimony?

Brian took out a 401k loan to purchase a new car and regrets his decision. Would it be a wise move for him to take out a personal loan to pay back the 401k loan?

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

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#224: The Science of Rapid Learning, with Scott Young, author of Ultralearning

Today on the show we feature Scott Young, author of Wall Street Journal best-selling book Ultralearning.

Scott finished a 4-year MIT computer science curriculum in one year, learned how to speak four languages fluently in one year, and learned how to draw portraits in 30 days. Scott is also a writer, programmer, traveler, and avid reader who, for the last ten years, has explored the question: what’s the best way to learn? Ultralearning answers that question.

In today’s episode, we chat about the nine principles of Ultralearning, which can help you learn new skills, reinvent yourself, stay relevant, and adapt to whatever life throws at you. If you think you know the best way to learn something…think again. This book will challenge your assumptions.

If you enjoyed my interviews with James Clear or Cal Newport, you’ll enjoy this one.

Whether you want to develop hard skills to become more valuable at your job, soft skills for your journey to self-improvement, or you want to honor your love for learning, these nine principles will help you become more effective at developing new skills.

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#223: Ask Paula – Should I Choose This or That? How to Weigh the Tradeoffs

Elizabeth is curious to know: what does a good net worth breakdown look like? Is it appropriate to have a lot of your net worth tied up in real estate?

Marie wants to start her own business, but she’s living paycheck-to-paycheck. Is incurring debt her only option to make this dream a reality?

Bria wants to take a second mini-retirement and has a good chunk of money saved up. She wants to come back to the workforce with a cash cushion. What should she do with her money while traveling?

Anonymous is relocating from Southern California to Florida. She wants to know if she should rent an apartment and buy a rental property, or buy a primary residence with the $150,000 she has saved.

Connor is facing a dilemma. Is he correct in not prioritizing 401k contributions given that his employer doesn’t offer a match, combined with his goal for financial independence? Is his strategy of using his savings for real estate investing better?

Caroline is wondering: should she aggressively pay off her home and her rental properties, or use her excess savings to fund a brokerage account?

Today’s episode is full of exploring and weighing tradeoffs. Let’s dive in!

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#222: Seven Ways to Escape the Rat Race, with Michael Robinson

Michael Robinson and his wife, Ellen, achieved financial independence at age 33. They ‘retired’ (they still enjoy working) three years later at age 36 on two five-figure incomes. Today, Michael and Ellen are raising their two children to be bilingual by slow traveling throughout Latin America.

Michael and Ellen blog about their FIRE adventures at uncommondream.com. They believe that “the Uncommon Dream is the dream pursued – the dream met with planning, action, and sacrifice. With just a dream and those three tools, you can accomplish almost anything.”

Today, Michael joins us on the show to talk about the seven ways that he and Ellen escaped the rat race and achieved FI at 33.

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#221: Ask Paula – How Much of My Company Stock Should I Buy?

Vanessa is curious about Fidelity and Vanguard. She asks: what are your thoughts on the no-fee Fidelity index funds? What are your opinions on Vanguard’s financial advisors?

Andy wants to know: should my wife and I continue maxing out our traditional 401k and backdoor Roth IRA, or should we start contributing to the Roth 401k my employer offers?

Kyle is wondering – how can he minimize his taxes when he earns $450,000/year?

Rob is self-employed and has been maxing out a Roth IRA, but recently discovered that he can open a self-employed IRA. Should he move his Roth IRA money over, or just open a new account and fund it from scratch?

Christina is torn. She and her husband have been saving to buy a house, but because they live in New York, their savings won’t go very far. Is it a good idea for them to continue renting, despite their dreams?

Mercedes is wondering how REITs compare to stocks and owning actual real estate. Additionally, she’d like to know more about Forex trading.

Craig has an employee stock purchase plan (ESPP). Since these tend to be risky, he’s wondering: is he better off moving the $25,000 that he puts towards the ESPP into mutual funds? Or is an ESPP a good way to diversify his funds?

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

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#220: Stillness is the Key, with Ryan Holiday

In a hectic world, stillness is the key to a calm, enjoyable life.

That idea comes from Ryan Holiday, author of Stillness is The Key.

Stillness is finding flow, staying present, and being impervious to the pressures of the outside world. It doesn’t mean removing yourself from society and sitting in a forest; to the contrary, many CEOs and world leaders have practiced remarkable stillness during times of crisis.

Stillness exists within, regardless of the frenetic pace of the outside world, and irrespective of the pressures that you face at the moment.

In today’s episode, bestselling author Ryan Holiday discusses actionable tips on how to practice the art of stillness, as well as its applications to the pursuit of financial independence.

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#219: Ask Paula – How Should I Invest $4,000 Per Month for Early Retirement?

Stella is working toward FIRE and wants to know: how can she create passive income in her retirement years? Is a portfolio with stocks and bonds enough, or should she invest in real estate?

Travis and his wife are also on the FIRE path, and are comparing their investment options. Travis is concerned about the inefficiency of reinvesting returns in real estate. How can you factor this into your decision when buying a property?

Stephanie and her husband are also interested in FIRE (hooray!) and they have $20,000 to invest. How can they best use this money to help them FIRE sooner?

Cade, a 24-year-old listener, wants to FIRE by age 30 (we’re on a roll!). He’s saving $4,000/month and wants to know how to invest these savings.

Anonymous and their partner are taking a mini-retirement and have questions surrounding the logistics of healthcare. What options should they consider?

On a different note, Amanda works in academia. After listening to Episode 12, she’s looking for tips on managing long-term, complex collaborative projects now that she’s in a leadership position.

Steve’s question brings us to the topic of building an online business and social media following. Should he have one brand for all of his interests, or divide these interests into separate channels?

I tackle these questions in today’s episode of the show. Enjoy!

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#218: Why We’re Irrational with Money, with Kristen Berman

Kristen Berman is co-founder of Irrational Labs, a behavioral product design company, along with Dan Ariely.

She has a fascinating job that involves looking into why people behave the way they do with their money, and discovering the easiest solution to help them create more positive financial behavior.

In short, she’s a proponent of redesigning the current financial system to make saving automatic and easy, and that’s part of what we discuss in this episode.

If creating better financial habits has been a challenge for you, or if you have trouble framing spending as a positive thing, rather than a loss, then Kristen has awesome advice for you.

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#217: Financial Independence – My Philosophy and Origin Story, on The FI Show

Earlier this year, Cody and Justin from The FI Show interviewed me and asked some excellent questions about my journey to financial independence, entrepreneurship and passion, and minding the gap between your income and expenses.

We talk about the importance of side hustling and how to create a well-paying job from your skills.

We touch on real estate and why I chose this strategy to reach FI.

We also discuss the bone I have to pick with the financial independence movement.

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#216: Unraveling the Four Percent Rule, with Dr. Wade Pfau

It’s September! If you’ve been listening to the show for the past few months, then you know that I’m on what I’ve dubbed my September Sabbatical, in which I’m traveling the globe and taking a break from podcast production.

In light of that, we’re digging through the archives and airing some of my favorite interviews on the show, in between airing interviews I’ve done on other podcasts.

Welcome to another episode from our archives! This one was recorded in March 2018, and Dr. Wade Pfau had a ton of insight into the four percent rule that so many of us are concerned with.

First, here’s a brief history of how the four percent rule came to be.

In 1994, William Bengen decided to look at 30-year timespans throughout U.S. History, beginning with the year 1926.

He worked under the assumption that a retiree held 50 percent stocks (in the form of S&P 500 Index), and 50 percent bonds (intermediate-term government bonds).

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Afford Anything