Afford Anything

Category: FIRE

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#424: The Power of Knowing When To Walk Away, with Annie Duke

We’re taught to stay in the game.

Persist. Be gritty. Try, try again.

But sometimes, the best decision is to walk away. Move on.

How do you know when that’s right? When should you double-down … and when should you fold?

Today’s guest, Annie Duke, won more than $4 million as a professional poker champion. She wrote the bestselling book Thinking in Bets and co-founded a nonprofit that teaches kids decision-making skills.

Her most recent book, “Quit: The Power of Knowing When To Walk Away,” teaches the behavioral science, mental models and recognition of cognitive biases needed to successfully quit.

It highlights real-world examples of startup founders, athletes, mountaineers, and entertainers who either quit – or didn’t – and explains how to make a wise, grounded choice.

She joins us on today’s episode to describe the forces that hold us back from quitting – and how to recognize when quitting could lead to a better life.

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#423: Ask Paula: Can I Make Money with My Passion?

We’ve heard the warnings about following your passion.

People ask if you can *actually* make money doing what you love. They frame the question “passion or profit?” as though these are in opposition.

The majority – who have never tried – decry, “what if you fail?”

Nobody asks the more important question: what if you succeed?

Are you still going to love your passion when you rely on it to pay the bills?

We grapple with that question in today’s episode, which is devoted to side hustles and starting a business. We use questions from two of our listeners as a jumping-off point to discuss the realities of going into business for yourself, doing what you love.

We share examples from our own lives as professional podcasters, as well as from the lives of friends who are full-time photographers, musicians, writers and other creative entrepreneurs.

Enjoy!

P.S. Got a question? Leave it here.

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#420: What We Learned in 2022, with Paula Pant

Dr. Ellen Vora, M.D., shared insight into the roots of procrastination, offering evidence-based tips for how to overcome our own inner demons of anxiety, fear and laziness.

Psychology professor Bill von Hippel described why too much happiness is just as detrimental to our long-term health and wellbeing as too little happiness.

Wall St. Journal columnist Spencer Jakab observed the perfect storm of conditions that gave rise to meme stonks and other oddities of our era.

Former financial planner Joe Saul-Sehy argued for “strategic under-diversification” and explained the Sharpe Ratio.

Data scientist Nick Maggiulli explains the save-invest continuum.

And financial planner Bill Bengen, the creator of the 4 percent retirement withdrawal rule, talks about what most people misunderstand about the safe withdrawal rate.

These are just some of the highlights from the Afford Anything podcast in this 2022 year-in-review episode.

Enjoy!

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#419: Ask Paula: Should I Stay At My Job For the 401k?

Casey isn’t happy at her job. If she leaves before her one-year mark, she’ll lose her 401k contributions. Should she stay or find a new job?

Ryan’s investing for his son. If the yield is the same between two mutual funds, can he leave his son with more money if one mutual fund pays dividends more frequently?

Emily already maximizes her 401k contributions. Should she contribute to an after-tax 401k next?

Daan resides in a high-cost-of-living area where real estate appreciates rapidly. But there’s no cash flow. How should he evaluate real estate as an investment?

Former financial planner Joe Saul-Sehy and I tackle these four questions in today’s episode.

Enjoy!

P.S. Got a question? Leave it here.

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#418: Maybe We Should Spend More, with Dr. Jordan Grumet

When Jordan Grumet was a child, his dad died unexpectedly.

That was decades ago.

Jordan is a father today, but he thinks often about the possibility of dying young.

And he wonders how to balance enjoying today vs. saving for tomorrow, given that none of us know how long we’ll be on this earth.

How do we think about our lives when the clock starts to run out?

Beyond money, what other tools can we use to live a fulfilling life?

Jordan Grumet, a hospice doctor and host of the Earn and Invest podcast, discusses this in today’s episode.

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#415: How I Give Away 41% of My Income, with Bob Lotich

The average American donates 2.1 percent of their income to charity, according to data from the Giving Institute. 

But an ordinary couple living in Nashville, Bob and Linda Lotich, refuse to be average.

When they were both 31, they decided to “give their age” – they pledged to donate 31 percent of their income to worthwhile causes.

They’ve increased their charitable giving every year since, to match their age. The couple is now 41 years old, and they give away 41 percent of their income.

When they began this project, the Lotich’s were earning a combined household income in the high five-figures. They were making just under $100,000 combined, living in St. Louis. They carried a mortgage on their home. They worried that their commitment to giving might impact their ability to pay the bills.

Over the last decade, their income has fluctuated – up some years, down in others. They moved to Nashville and had three children. These higher living costs have drastically impacted the family budget.

But their commitment to giving persists.

In today’s episode, Bob Lotich joins us to talk about why and how he committed to the “give your age” philosophy – and shares his advice for anyone who wants practical tips for increasing their capacity to donate to meaningful causes.

Enjoy!

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#412: Ask Paula: Should I Repay Debt or Invest?

Taylor recently graduated. She wants to reach financial independence as soon as possible. What should she do first: invest or repay low-interest debt?

Carter doesn’t want to pay too much for his investments. He’s worried about the tax drag. He wants to know how to improve cost efficiency in his portfolio. How should he manage decisions about basis points, dividends and capital gains?

Our first anonymous caller has been working and investing for a decade. Today her portfolio is large enough that she and her husband can finally take a mini-retirement.

They’d like to rebalance their portfolio. They want it to reflect the fact that they won’t be working for a while. They’d also like to calculate how much money they need to travel with their children. How should they handle this?

Our second anonymous caller is worried that their portfolio is out-of-whack. Their money is in a target date retirement fund. They’d like to move some of it to a three-fund portfolio. But this is a scary time to sell. Stocks are low. What should they do?
Former financial planner Joe Saul-Sehy and I tackle these four questions in today’s episode.
Enjoy!
P.S. Got a question? Leave it here.

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#409: Ask Paula: Should I Sell My Rentals to Buy More Stocks?

Liz and her husband are planning to retire in 5 to 10 years. They have rental income properties, but Liz is bored of managing these, and she’s intrigued by the idea of buying stocks at a discount when the market is low.  Should she sell her rental properties and use the money to buy stocks instead?

Rebecca is a high income earner and thinking about investing in a Roth 401k … but she’s scared of how much she’ll have to pay in taxes. Should she do it anyway?

Anonymous made big changes last year: she got a new career AND sold a house! Now she needs help figuring out capital gains and lowering how much she’ll have to pay in taxes … and she won’t have access to her company’s 401K for most of the year.

Kyle and his wife are moving into their dream home! What should they do with their current place?

Former financial planner Joe Saul-Sehy and I tackle these four questions in today’s episode.

Enjoy!

P.S. Got a question? Leave it here.

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#408: Build YOUR 15 Year Career, with Kiersten and Julien Saunders

When Kiersten and Julian Saunders began dating in 2012, they fell in love quickly, and their relationship felt strong – until they started talking about money.

They broke up as a result of their first money conversation.

Luckily, they got back together, figured out how to have tough conversations, and paid off $200,000 in debt over the next five years.

Then they started thinking about how to hack their careers. They came up with a plan for a 15-year career.

Today, they join us on the podcast to talk about the 15-year career framework and how to approach your career – and your finances – in 5 year stints.

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#403: How I Reached Financial Independence, with Chad Carson

Chad Carson’s friends called him a “nerdjock.”

When former college football linebacker Chad Carson graduated from Clemson University, he decided to start a business. But he didn’t have any money.

He was a 235-pound athlete who attended college on a football scholarship. He graduated debt-free with $1,000 in savings from various odd jobs. He wanted to become an entrepreneur, and he knew he was starting from zero.

As Chad viewed it, starting from zero meant he had nothing to lose.

He started jogging around local neighborhoods near the university. Whenever he noticed a property in disrepair, he’d ask if it was for sale.

If he noticed a ‘For Sale by Owner’ sign in the yard, for example, he’d dial the number.

If he noticed a home with an overgrown lawn and no curtains in the windows, he’d leave a note on the door, or he’d knock on the neighbor’s doors to get the owner’s phone number.

By doing this, Chad started a real estate wholesaling business. He’d find off-market properties, enter into a sales contract with the owner, and then ‘flip’ the contract to an investor. He earned around $5,000 for each deal.

The benefit to a wholesaling business, Chad discovered, is that he could get a foothold inside the real estate industry without much access to capital. He was a recent college graduate without any official employment, so most banks weren’t interested in offering him loans. Wholesaling gave him a start in the industry.

But after awhile, he wanted to chase bigger deals. He and a business partner decided to start flipping houses themselves. They earned profits of around $20,000 to $30,000 for each deal.

While this was great, Chad wanted to transition into something that would provide a steady, stable income stream. He was running an active business; he wasn’t accumulating a portfolio of passive investments.

He and his business partner stopped flipping homes and began accumulating buy-and-hold rental properties. Today they have 90 units between the two of them.

A few years ago, Chad realized that the passive income from his investments made him financially independent. He and his wife decided to enjoy their newfound freedom by moving to Ecuador with their two children, ages 3 and 5.

They spent 17 months living in Ecuador, learning Spanish and enjoying a slower pace of life. They recently returned to the U.S. and are considering moving to either Spain or Germany — or maybe Colorado? — for their next adventure.

In today’s episode, Chad and I discuss real estate, financial independence, and international travel with children.

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