By Paula Pant
You make decisions on a daily basis about your career, family, friendships, health and investments; these choices shape your life.But how much have you thought about how to think?
There are common threads and collective wisdom across disciplines. These common threads create mental models, which are frameworks for understanding the world. Mental models allow us to apply insights from a variety of unrelated fields, using reasoning by analogy to make better choices about our lives.
By Paula Pant
Many people in their 50’s or 60’s warn us about catastrophic or ‘black swan’ events. But what’s the likelihood that this will actually happen?
How can you use the 4 percent withdrawal rule for early retirement planning, given that your portfolio will be split among accounts with different tax treatments? How do you adjust your retirement plan for future taxes?
Should a couple in their 30’s switch from term life to whole life insurance?
Should a couple in their 50’s with adult children bother buying life insurance in the first place?
Is it okay to keep all your assets at one investment brokerage, like Vanguard or Fidelity?
And can you deduct rental losses if your income is over $150,000?
Former financial planner Joe Saul-Sehy and I answer these questions in today’s episode.
By Paula Pant
In 2006, Matt Kepnes worked at a hospital in Boston, and he felt miserable. He dreaded fighting traffic, spending his days under his offices’ fluorescent lighting, drinking stale coffee.
He decided to take one year off — a “gap year” — thinking that after his sabbatical, he’d resume another 40 years of punching the clock.
He worked 60-hour weeks in order to save money for his sabbatical year. He saved $30,000, then handed his boss a resignation letter.
Matt traveled for 18 months, returned to Boston, and realized he had lost his willingness to punch the clock. He couldn’t sit still in an office any longer.He re-packed his bags, bought a one-way flight to who-knows-where, and reinvented himself as a travel writer known as Nomadic Matt. He lives on a budget of $18,250 per year, or $50 per day.
In the last decade, his travel information website, NomadicMatt.com, has become one of the most popular travel blogs in the world, drawing millions of visitors. His writing has been featured in The New York Times, CNN, National Geographic Travel, and the BBC. He’s a New York Times bestselling author, and he’s traveled to more than 100 countries.
In today’s episode, Matt and I discuss the art of slow travel.
By Paula Pant
Ross and his wife are both in the Navy. They bought a home while they were stationed in Hawaii. Then the Navy sent them to Virginia, where they currently live; they’ve purchased a home there, too. They kept the Hawaii home as a rental property, and they’d like to move back into it when they retire. Which home should they repay first?
Mike is 33, debt-free except for his mortgage, and earns more than $200,000 per year. He saves half of his income. What should he do with his savings? Pay off his mortgage? Invest?
Josh has a nervous habit of checking his investment account balances daily. How can he break this habit?
Amanda and her husband live in a duplex. They have $115,000 in equity in their home, and another $115,000 remaining on the mortgage. They’d like to move. Should they hold the duplex as a rental? Or should they sell and use the proceeds to buy a cheaper home, with a goal of being mortgage-free?
Christy wants to know how to compete with other aggressive real estate investors who are bidding on homes.
I answer these five questions in today’s episode. Enjoy!
By Paula Pant
Nine years ago, I was flipping through an issue of Kiplinger Personal Finance magazine (as any normal 26-year-old does), when I came across an article about a woman who paid off $70,000 in debt in 16 months.
Her name was Jaime. She lived in Maine, with her then-husband and their young son. Her husband was a professional juggler who earned $30,000 per year; she brought home 3x his income.
They bought the trappings of the American Dream: the suburban house with a white picket fence, a brand-new Honda Civic, a Jeep CJ7 with 36” tires, several kayaks, and a premium cable subscription.
The result? They found themselves in massive debt, with a combination of vehicle loans, student loans, and a home equity line of credit.
By Paula Pant
Ashley is paying affordable rent for a home she enjoys, but she feels certain that the real estate market in her local market will stay strong. She’s thinking about buying a home with 3 to 5 percent down, but she doesn’t have much in savings.
Should she wait for a year to save more? Or should she take advantage of a rising market and relatively low interest rates?
Ian and his girlfriend live together in Washington D.C. and have a combined 40 percent savings rate. He’d like to buy a rental property, but his girlfriend has $18,000 in student loans and is about to re-enroll in school. Should they buy an investment home, or use their cash to repay her loans and cash flow her new academic program?
Annette is about to travel to Spain with her family. How can she plan an affordable and high-value international trip?
William is concerned about losing his job. What if he can’t pay his bills, especially his new mortgage? How can he protect himself?
Anonymous is a renter, and she often encounters surprise fees and charges when she arrives at the lease signing. Can she negotiate with her landlord?
I answer these five questions in today’s episode, and I also feature a short interview with special guest J. Money, my former podcast co-host from the early days!!
Enjoy!
By Paula Pant
Most people have dysfunctional ideas about money stemming from childhood and society.
If your parents said, “I’m not sending you to soccer camp. You don’t practice enough during the off-season, so it’s a waste of money,” the message that you might have heard is, “I’m not worthy.”
If your parents complained about the expense of child raising, you might think, “I’m a waste of money” or “I’m an obstacle.”
These ideas stick with us in adulthood. We’re afraid to ask for a raise or promotion, because we still think we’re not worthy. We’re afraid to start our own business or speak up for our needs within a relationship, because we still think we’re an obstacle.
We soothe ourselves by projecting negative emotions onto money itself.
By Paula Pant
Should Bret invest in a Traditional IRA or a Roth IRA?
If Amanda gets married, how will her child support be affected? What about her student loan forgiveness?
Joe is investing in bonds, which average a rate of return that’s equal to the interest rate on his mortgage. Should he switch to all-equities and redirect his bond investments into mortgage payoff, instead?
Taunia has a car loan, a 401k loan, a home improvement loan, a primary mortgage, and a second mortgage. She also has an emergency fund that only covers two months of expenses, and she’s trying to save for college for her two children. What should she prioritize?
Mickey has a six-month emergency fund. Should he leave it in a savings account or invest in bond ladders?
David made $10,000 from a side hustle last year. Can he open a Solo 401k or SEP-IRA for his side hustle business? If so, which one should he choose?
Should Andy invest in a Target Retirement Date fund, or should he split his money between a U.S. index fund and an international index fund?
Former financial planner Joe Saul-Sehy and I answer these seven questions in today’s episode.
By Paula Pant
When Wendy Mays was in her early 20’s, she earned $12 an hour working as the office manager of a pest control company.
She wanted higher income, so she enrolled in college at age 22. By the time she finished her undergraduate degree, she was 26, married, with a child.
Her husband worked low-paying jobs to make ends meet. They struggled to pay the bills. Wendy decided to enroll in law school, so that she could bring in more money. She graduated around age 30, and became the primary breadwinner for the household. She opened her own law practice.The couple starting bringing in a combined household income of around $200,000 annually. They bought a large house, with a swimming pool.
Sounds like the American Dream, right?
Except it was all financed.
By Paula Pant
Alex makes $168,000 per year, combined between her full-time job and her side hustle. Her company pays for breakfast, lunch and dinner during the work week, plus a cell phone subsidy, health, dental and vision insurance, a gym membership, and commuting costs. She also househacks, so her living expenses are only $400 per month. What should she do with her ample savings?
Christine is 38 and earns $70,000 per year running her own business. She holds $70,000 in investment accounts, has another $16,000 in savings, bought a condo with 20 percent down, and has no debt. What can she do to fast-track her path to financial independence?
Amy is unsure whether she should pay off her mortgage, downsize to a smaller home, or invest.
Katherine is 23 and househacking into a duplex. How much should she set aside for cash reserves?
Miriam started a podcast and wants to know how to morph a passion into a lucrative income stream.
Nick wonders if the FIRE movement should plan an annual gathering … you know, like a FIRE Festival. (But not like the Fyre Festival.)
I tackle these six questions in today’s episode.
