Afford Anything

Category: Episodes

By Erin @ Team Afford Anything

#309: Are We Due For Another Housing Market Crash?

Are we in a housing bubble?

Are we going to see a repeat of 2006 all over again?

Are there any good investment deals to be found right now?

These are the questions playing on many people’s minds, and we seek to explore the answers in today’s First Friday bonus episode.

We start by exploring some of the forces that are at play in today’s real estate market. What separates the market of 2006 from the market of today?

In the second half of the episode, Paula explains how and why she chose to buy a duplex in Indianapolis, despite being in a seller’s market. There are deals to be had if you know where to look and what to look for.

Enjoy!

Keep reading...

By Paula Pant

#308: Ask Paula – I Want to Travel After I Retire; How Much Should I Save?

Anonymous in Virginia wants to travel after retiring, which will increase her expenses for the first seven or so years of her retirement. How can she plan for a higher withdrawal rate at the beginning of retirement, and a lower withdrawal rate in the middle of her retirement?

Given the talk around student loan forgiveness, Jess wants to know: should she pay the minimum on her student loan debt and save the payments she would otherwise make? Or should she keep throwing extra at her higher interest loans?

Ziggy purchased an $890,000 property in San Mateo, CA in 2016. After living there for a year, he had to move, so he rented it out. Unfortunately, it’s cash flow negative. Is this property worth holding onto, or should he sell?

Vivek has a paid-off primary residence that he’s interested in renting out for a few years, before selling. He’s worried about capital gains tax – does turning the home into a rental impact the amount he’ll pay?

My friend and former financial planner, Joe Saul-Sehy, joins me to answer these questions on today’s show. Let’s dive in!

Keep reading...

By Paula Pant

#307: The Tax Risks That Could Blow Up Your Retirement Plan, with Ed Slott

“Taxes are the single biggest factor that separates people from their retirement dreams.”

That’s a quote from today’s guest, Ed Slott, a nationally recognized IRA distribution expert, CPA, and bestselling author.

If you’re like most members of the Financial Independence Retire Early (FIRE) community, you understand the massive tax challenges inherent in retirement planning. Strategies such as the mega-backdoor Roth are popular because the FIRE community loves to optimize for taxes.

Ed does, too.

His book, The New Retirement Savings Time Bomb, is about how we can diversify and manage our tax risk so that we can achieve our financial independence and early retirement dreams.

So … what should we do?

Ed is a big proponent of Roth accounts because they’re an easy, widely-available solution. His Traditional IRA has a balance of $0.

Keep reading...

By Paula Pant

#306: Ask Paula & Joe – How to Shift From Financial Independence to a Mini-Retirement?

Jake and his wife want to retire in five years, at which point they’ll have 14 years before they can access their 401k funds. To help bridge that gap, Jake wants to know: what should their asset allocation look like for their taxable brokerage account?

This year, Kim’s employer enrolled all employees into a “fully funded indemnity program combined with a nationwide direct primary care membership.” What the heck is this program, and how might it impact Kim’s finances?

Burnt Out in Boston is switching their focus from financial independence to taking a mini-retirement. How can they financially and mentally prepare for this leap?

Matthew is torn: should he and his wife – both 26 – max out their Roth IRAs and then save up for a rental property, or simply save cash for the rental and worry about their Roth later?

Finally, Deva and her husband are fed up with their messy tenants. They’re kind and responsible, but they’ve left the yard a mess. They have a clause in the lease that addresses this, so beyond that, what can they do?

My friend and former financial planner, Joe Saul-Sehy, joins me to answer these questions on today’s show. Enjoy!

Keep reading...

By Paula Pant

#305: The 7 Steps to Financial Independence + 7 Rules of Investing, with J.D. Roth

“What’s your FI number? What’s your FI date?”

People often talk about financial independence like it’s a fixed, static point. When your portfolio reaches $X value, or your monthly passive income is $Y per month, you’re FI.

“When did you reach FI?,” people will ask, as though it’s a one-way door with a distinct date, comparable to graduating from high school or college.

Today’s podcast guest, J.D. Roth, offers a fresh perspective: FI isn’t a fixed point. It’s a continuum, a spectrum.

He says there are seven stages along the road to financial independence, which include:

1: Dependence: This is what we experience when we’re five years old: total reliance on someone else.

This is also what we experience as adults if we depend on our credit cards for basics like groceries and utilities, and we can’t pay the balance in full at the end of the month.

2: Solvency: You can make your minimum payments, and you’re not adding new credit card debt to your monthly balance.

Keep reading...

By Paula Pant

#304: Ask Paula & Joe – Help! I Can Only Save $200 a Month

Paige and her fiancé have two autumn 2021 goals: save for a wedding and an emergency fund. There’s one problem: they only have around $200 per month to save. How can they grow the gap when they’ve run out of things to cut and ways to earn more?

Kat’s investor friend connected her with a wholesaler who only deals in cash. How can she find $130,000 to buy her subject property?

“Jon,” an anonymous caller, is renting his grandparent’s property, which he plans to make his forever home. It’s on the older side and needs renovations, but the repairs don’t need to happen immediately. How can he fund these repairs while also avoiding a mortgage payment in his 60s?

Anonymous caller “Chadwick” is planning for financial independence. Given that his employer covers his housing, when should he and his wife look for a house? Now, or in the last year of his job?

Annalis wants to know whose approach to business I prefer: Gary Vee’s, or Cal Newport’s? She also asks: how do you become a good speaker?

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

Keep reading...

By Erin @ Team Afford Anything

#303: A World Without Email, with Cal Newport

Photo of Cal Newport, credit Penny Gray

Wouldn’t it be nice if our inbox magically managed itself?

Let’s go a step further.

What if we could live in a world without email?

Email overload takes a real toll on us – on our workflow, and on our brains. A study conducted by RescueTime found that most workers can’t go six minutes without checking email. That, combined with how inefficient we become when switching tasks, creates a gigantic loss of productivity during our workday.

Joke’s on you! I don’t use email. I use Slack instead. Ha!

Slack isn’t any better than email. Any platform that allows for endless back-and-forth communication will cause your productivity to plummet. How are you supposed to get any work done outside of Slack or email if you’re busy checking in every six minutes? Those constant notifications can keep you engaged with unstructured conversation to the point where the day ends and you’ve had no time to get actual work done.

Hmm, those days do suck. But how else am I supposed to communicate with my teammates when something needs to be done?

There are plenty of alternatives that don’t involve back-and-forth messaging. Cal Newport, third-time guest of the show, joins us to talk about these alternatives. His new book, A World Without Email, explores the pitfalls of the “hyperactive hive mind workflow” and the structures and systems workplaces have adopted to cut down on noise and increase productivity.

Cal gives us a brief history lesson on how email came to dominate the workplace, explains the inefficiencies and limitations with email, and tells us which mindset shifts to make in how we manage our time, energy, and attention at work.

Keep reading...

By Erin @ Team Afford Anything

#302: The Financial Benefits of Optimism, with Michelle Gielan

What comes to mind when you think about optimism?

Yeah right, how can anyone be optimistic at a time like this?

*eye roll* What fluff.

Uh…does being optimistic about my chances of eating cake count?

Given our current circumstances, optimism might feel worthless, useless, or both. But optimism doesn’t have to be this mythical, unobtainable pie-in-the-sky concept, especially when considered from this lens:

the expectation of good things to happen and the belief that our behavior matters.

Why? Because we have control of our expectations and our beliefs. We can choose to alter our expectations, and we can choose to believe that our behavior matters.

That’s what Michelle Gielan, Positive Psychologist and bestselling author of Broadcasting Happiness, is here to explain. In this episode, she offers research-based tactics that you can use today to gradually strengthen your resolve, transform your relationship with stress, and shift towards optimism.

Keep reading...

By Paula Pant

#301: Ask Paula – How Can I Reach FIRE in 11 Years?

Sarah wants to refinance her owner-occupied triplex, but she’s torn between a 15-year and a 30-year option. Which is better in her situation?

Amelia is worried that she and her husband are under-insured. Should her husband get a short-term disability policy, even though it’s expensive and they’re unlikely to need it?

Steven just discovered the financial independence (FI) movement in July 2020, and he wants to reach FI in 11 years. He has $30,000 in cash and $26,000 of student loan debt. How should he use his cash given his FI goal?

The South American Anthropologist wants to make a career change. His baby daughter has inspired him to become an example of living life on your own terms. Will his financial independence plan sustain him and his family for years to come?

Annalis and Mike are hunting for their first rental property, but they haven’t found anything nice that meets the one percent rule. Should they purchase a mansion and rent the rooms on Airbnb?

My friend and former financial planner Joe Saul-Sehy joins me to answer these five questions in today’s episode. Let’s dive in.

Keep reading...

By Paula Pant

#300: The Two-Fund Investment Portfolio, with Paul Merriman

Target date retirement funds are simple, automated, easy.

The problem? What’s simple might not be optimal.

Investment expert Paul Merriman joins us to discuss the two-fund portfolio, a mix of one target date fund and one small cap value fund. He describes why this could be the ultimate portfolio for buy-and-hold investors who want to boost their returns, without excessive complexity or risk.

Here’s the idea behind a two-fund portfolio:

  • Your age x 1.5 = the percentage of your portfolio in a target date fund
  • Invest the rest in a small cap value fund

According to Merriman, this simple strategy could dramatically improve long-term aggregate returns without creating too much volatility or complexity.

Keep reading...

Afford Anything