Afford Anything

Category: FIRE

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#591: Harvard Negotiation Expert: Why Conflict Avoidance Costs You More Than You Think

Imagine you’re about to ask your boss for a raise. Your stomach tightens. You’ve rehearsed what to say, but doubt creeps in. Should you be more assertive? More understanding of company constraints?

Bob Bordone, who has taught negotiation for 25 years including 21 years at Harvard Law School, joins us to explain why you don’t have to choose between empathy and assertiveness. In fact, combining them is key to successful negotiations.

“It might feel like a tension, but it’s not an actual one,” Bordone explains. “I can fully appreciate what you’re feeling without ever giving anything up in a negotiation.”

Bordone breaks down his three-part preparation framework:
1. Mirror work: Identify the different sides of yourself in a negotiation — the empathic side that understands company constraints, the assertive side that knows you deserve recognition, and perhaps an anxious side worried about finances.
2. Chair work: Give each side a voice through role-playing exercises, literally sitting in different chairs to embody each perspective.
3. Table work: Bring these voices into the actual negotiation in an authentic way that doesn’t make the other person feel attacked.

He also introduces fascinating concepts like “conflict recognition” — how quickly we perceive something as a conflict — and “conflict holding” — our comfort with leaving conflicts unresolved. These differences often cause relationship problems when we’re unaware of them.

“My best friend and I might debate over Flaming Hot Cheetos for 25 minutes. For me, with high conflict recognition, it’s completely fun. I go home and sleep like a baby,” Bordone says. “For someone with low conflict recognition, they might think, ‘That was horrible. Did I hurt the relationship?'”

When someone tries to shut down your request with policy (“that’s just how we do things here”), Bordone recommends what he calls the “Wizard of Oz tactic” — asking a few more questions rather than immediately accepting defeat.

The skills you develop asking for a raise transfer to other challenging conversations — from family inheritance discussions to political disagreements with colleagues.

Bordone emphasizes that conflict isn’t something to avoid but rather a normal part of relationships. The question isn’t whether we’ll have conflict, but how we handle it when it inevitably arrives.

Want to hear the full conversation? Listen to the latest episode wherever you get your podcasts.

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#590: Small Cap Showdown! Paul Merriman vs. Dr. Karsten Jeske Battle … with Millions Hanging in the Balance

In the left corner, we have Paul Merriman, the seasoned finance veteran weighing in at 183 pounds. In the right corner, Dr. Karsten Jeske, the scrappy newcomer at 208 pounds. The bell rings, and the small cap value debate begins.

This episode features a financial boxing match between two investment heavyweights with dramatically different perspectives. Paul Merriman champions diversification through the efficient frontier, which means adding small cap value to your portfolio. Dr. Karsten Jeska has “thrown cold water” on this approach, favoring simpler strategies like “VTSAX and chill.”

The stakes are high — we’re talking potentially millions of dollars in your retirement account over decades.

Merriman argues that history shows clear evidence for small cap value’s premium. From 2000 to 2009, small cap value outperformed the S&P 500 in all but one year, compounding at 10 percent while the S&P 500 returned negative 1 percent. He believes this pattern will continue, creating a powerful diversification effect when combined with broader market indexes.

Jeske counters that small cap value’s outperformance is mostly “front-loaded” in history, happening before anyone knew about it. Since 2006, small cap value has underperformed. He argues that once an advantage becomes widely known, it disappears in an efficient market. Adding small cap value might even be “di-worsification” — increasing complexity without improving returns.

The debate expands beyond small cap value to touch on:
• Active vs. passive investing strategies
• Market timing vs. buy-and-hold approaches
• Simplicity vs. complexity in portfolio construction
• The role of faith vs. evidence in investment decisions

While both experts disagree about small cap value’s future, they agree on fundamentals: invest early, stay invested for the long term, and understand that no one can predict markets with certainty.

What starts as a technical debate evolves into a philosophical discussion about evidence, probability, and the limits of our knowledge — all with millions of retirement dollars hanging in the balance.

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#589: Q&A: How Much Risk Should My Mom Take in Retirement?

Kimmy is worried that her mom’s retirement portfolio is invested too conservatively. Is she right to advise her to take on more risk?

Peyton has heard the financial advice about staying away from Whole Life Insurance as an investment, but what about as a savings account for children? Is there good a use case for this?

Jeff and his wife are in a great financial position, but they fear that their retirement savings are too heavily apportioned in traditional IRAs. Will they run into tax problems in the future?

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

Enjoy!

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#588: First Friday: The Economic Maze We’re Navigating Together

Jobs are growing, interest rates are holding, and your student loan options just hit pause. Welcome to this month’s economic rollercoaster.

The economy is sending mixed messages this month. We added 151,000 new jobs in February, slightly better than January’s 143,000. But unemployment ticked up to 4.1 percent.

Health care is booming (52,000 new jobs). Restaurants and bars? They’re hurting (lost 27,500 jobs). Federal government shed 10,000 positions while state and local governments added 21,000.

The Fed isn’t making any sudden moves. They’ll likely hold interest rates steady at 4.25 – 4.5 percent when they meet March 18-19. Fed Chair Powell made this clear: “We do not need to be in a hurry and are well-positioned to wait for greater clarity.”

Meanwhile, Treasury Secretary Scott Bessent is working a different angle. He’s targeting 10-year Treasury yields instead of pressuring the Fed on short-term rates. His strategy? Use fiscal and regulatory reforms to convince markets that inflation will be controlled long-term.

Energy costs are a key part of his plan. Bessent believes lowering gas and heating oil prices does double duty: saves consumers money and boosts economic confidence. This matters because consumer spending is 70 percent of our economy.

Speaking of confidence – it’s plummeting. February saw the largest monthly decline in consumer sentiment since August 2021. People across all age groups and income levels are increasingly pessimistic. They expect inflation to hit 6 percent in the coming year (significantly higher than current rates).

Got federal student loans? Applications for income-driven repayment plans are temporarily on hold. This affects all plans, even the older ones not being challenged in court.

The pause came after a federal appeals court expanded a suspension of the SAVE plan. About 8 million borrowers had enrolled in this program, with more than 400,000 having their debts erased. If you’re working toward Public Service Loan Forgiveness, this is particularly important since income-driven plans are a key requirement.

In crypto news, bipartisan legislation for stablecoins is moving forward. The Senate has the GENIUS Act while the House has the STABLE Act (yes, that spells “stable genius”).

These bills would establish clear rules about who can create stablecoins and require them to be fully backed by high-quality assets like U.S. dollars or Treasury bills. They would also officially classify stablecoins as payment instruments rather than securities – a significant regulatory distinction.

The housing market? It varies dramatically by location. In DC, some zip codes are seeing prices climb rapidly while others face steep declines. The lesson: real estate is hyper-local. Success comes from becoming an expert in just a couple of specific zip codes rather than trying to understand entire metropolitan markets.

As Fed Chair Powell wisely put it, the key is “separating the signal from the noise as the outlook evolves.” That’s solid advice for navigating our current economic landscape.

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#587: Q&A: Should You Cash Out Your ETFs? The Hidden Consequences of That Decision …

Debi is stressed about saving a down payment to buy a house in her high-cost-of-living area. Should she cash out her brokerage account to speed up the process?

Lucas and his wife are high earners, but they’re tired and ready for a change. What strategies can they use to maximize their investments and confidently step away from their jobs?

Grant is thrown off by recent discussions about the efficient frontier. It sounds a lot like market timing to base an investment strategy on an arbitrary set of historical dates. What’s he missing?

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

Enjoy!

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#586: Money Doubles Every 10 Years (and Most People Never Notice!), with Scott Yamamura

If you are a complete beginner at finances, or if you know someone who is, this episode is for you.

The biggest hurdle for beginners? Money seems complex and intimidating. But Scott Yamamura, author of Financial Epiphany, explains personal finance doesn’t have to be complicated. He breaks compound interest into three easy-to-grasp frameworks:

1. Money as a Multiplying Ability: Just like athletes have peak physical abilities in their 20s, your money has its greatest multiplying power when you’re young. At age 22, every dollar invested can multiply 16 times by retirement (assuming a 40-year career and 7.2 percent returns).

2. The Doubling Framework: Money can double approximately every 10 years with average market returns. This explains why a dollar invested at 22 becomes $2 by 32, $4 by 42, $8 by 52, and $16 by 62.

3. The Halving Concept: With each decade that passes, your money’s multiplying power gets cut in half. This is the inverse of the above idea.
Scott shares how these simple frameworks helped him front-load his son’s college savings. “We can stop now because it’s going to double,” he said.
For beginners struggling with analysis paralysis, Scott offers a Rubik’s Cube analogy: You don’t need to understand all 43 quintillion possible combinations to solve it — you just need one simple method to get started.

Similarly, you don’t need to master every financial concept to begin investing.

The most important step is just to get started. You can learn the complexities later, but starting early gives your money more time to grow.

Scott also emphasizes finding your “why” — a purpose bigger than just accumulating wealth. He shares a moving story about a man named Ernie who funded his mission trip to Sierra Leone, showing how money can be used to make a profound difference in people’s lives.

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#585: Q&A: The Hidden Tax Drain in Your Investment Strategy

Michael rebalances his portfolio every year. But he’s worried that triggering capital gains taxes on his brokerage account will cancel out the benefits of reallocation. Is there a better approach?

Sam has an opportunity to switch jobs, but she’s confused about how an Employee Stock Ownership Plan stacks against her current employer’s 401(k). Is she […]

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The 60-Year-Old Who Lost Everything | “Trust, But Verify”

Picture this: You’re in your 60s.

You’ve been married for more than 40 years.

You raised six children full-time, while your spouse built their career, earning $200,000 annually.

All those years, you believed you were building a comfortable retirement together.

Then the divorce papers arrive, alongside a devastating revelation — there are no retirement savings.

 […]

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#583: Q&A: Everyone Is Arguing About Roth IRAs And We Have Thoughts

Contrary to recent discussions, Jesse has concluded that a traditional IRA is the smarter way to go for most people once marginal tax rates are factored in. Is he missing something?  

An anonymous caller is four years away from early retirement but she’s unsure if her portfolio allocations are in the right place. How and when should she start converting equities to cash?

Luz is confused about how to handle company stock options. Is there an ideal spread between the exercise price and the stock price? And, what should she do once the stocks are exercised?

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

Enjoy!

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#582: The Marriage Contract You Never Saw (But Can’t Escape), with Harvard Law Alum Aaron Thomas

They had it all. Six thriving children. A 40-year marriage. A household income of $200,000.

Then in her 60s, she discovered a shocking truth: he had gambled away their entire retirement savings in penny stocks.

She had no access to their financial accounts during the marriage. After divorcing, she was left with nearly nothing. Today, she relies on her adult kids for support.

Harvard-trained family law attorney Aaron Thomas joins us for a Valentine’s Day discussion about prenuptial agreements — not just as divorce insurance, but as a framework for building stronger marriages.

Thomas is a three-time winner of Atlanta’s Best Divorce Attorney and a leading expert in family law. He’s the founder of prenups.com and authored The Prenup Prescription.

Thomas explains that every married couple already has a prenup by default: their state’s laws. In 41 states, judges have broad discretion in dividing assets “equitably” — which might mean a 70-30 split rather than 50-50. The remaining nine states are community property states, where assets are typically split equally.

But even in community property states, determining what qualifies as joint property can spark fierce debate. For example: if you entered marriage with $100,000 in a 401(k) and continued contributing during the marriage, how much belongs to you vs. the marriage? What about a home you owned before marriage, but your spouse helped pay the mortgage?

To prevent financial surprises, Thomas recommends couples hold “annual shareholder meetings” to review finances together. He suggests creating three buckets — yours, mine and ours — with clear agreements about spending. For example, his prenup requires both spouses to approve joint account purchases over $500.

Beyond asset division, prenups can include requirements like marriage counseling before filing for divorce, or mediation if custody disputes arise. While prenups can’t determine child custody or support payments, they can establish frameworks for working through conflict.

The biggest benefit, Thomas argues, isn’t protecting yourself in case of divorce — it’s creating clarity and communication during marriage. By having difficult conversations upfront about money, expectations and conflict resolution, couples build stronger foundations for lasting partnerships.

Listen to this episode to hear our full conversation about how prenups can strengthen marriages, prevent costly court battles, and help couples align on money management from day one.

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