Afford Anything

Category: Personal Finance 101

By Paula Pant

#344: Ask Paula: I’m Bored at Work, and I’m 14 Years from Retirement; Should I Tough It Out?

Anonymous is on track to be financially independent in 14 years, but isn’t living up to her potential working a boring job. How can she live up to her potential and do more without sacrificing her quality of life?

Daan is wondering if he should stake or lend his current cryptocurrency portfolio to make additional gains on assets he plans to hold long-term?

C wants to know what tax implications she should consider before working remotely from abroad?

Russell’s job offers the option to contribute to a 457 plan. Since he’s in the highest tax bracket, should he take advantage of the tax deferral offered through the 457 or invest within a taxable brokerage account?

Do you have a question on business, money, trade-offs, financial independence strategies, travel, or investing? Leave it here and we’ll answer them in a future episode.

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By Paula Pant

#336: Ask Paula: I’m Barely Breaking Even on My Rental. Should I Sell?

Paula standing outside by a wall wearing a blue shirtAnonymous and his partner have a one-bedroom condo that they rent out in Pasadena, CA. The problem? They’re barely breaking even. Should they keep the condo, or sell it and make better use of the profits?

Sam wants to know: how much of an emergency fund does a rental property need?

Michael and his wife expect their taxable income to be less than $10,000 this year. Should Michael (age 56) take distributions from his 401k to minimize or eliminate their income tax burden?

Shanon wants to switch to an ethical bank with values that align with hers. How can she create a framework for making decisions about financial institutions when authentic information is scarce?

Sharon’s husband purchased a property with a below-market loan in 2008. They now have an extra $4,000 per month, and Sharon wants to buy a property as a first-time buyer. They’re torn between keeping the property or selling it. What should they do?

Former financial planner Joe Saul-Sehy joins me to answer more of your questions.

Do you have a question on business, money, trade-offs, financial independence strategies, travel, or investing? Leave it here and we’ll answer them in a future episode.

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By Paula Pant

#334: Ask Paula: What Paintbrush Did Michelangelo Use? (said no one ever)

In today’s episode, we answer three questions from a college senior named Rafael.

He asks about productivity tools and tactics, student debt, Robinhood and market investing, and how to establish yourself as an expert in a given domain.

We answer his questions by widening the lens.

People often ask about productivity tools. “Do you use Asana or Trello?” But nobody asked Michelangelo what paintbrush he used to paint the Sistine Chapel. The discussion around tools misses the point, which is to master the craft.

Sure, we answer his direct, overt questions. But we also dive deeper, refining these topics and exploring the questions *behind* his questions.

This is an episode in which we peel layers off the onion.

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By Paula Pant

#332: Ask Paula: What’s the Point of Financial Independence if I’m Not Going to Retire?

Ginger’s financial independence (FI) number is $2 million, but she doesn’t want to fully retire early. Once she hits ‘coast’ FI, she wants to 1) buy her time back with outsourcing, 2) take a mini-retirement, and 3) buy a vacation home. Does it make sense for her to divert retirement contributions to these goals, or should she aim to save $2M?

Wilson plans to have a two percent withdrawal rate in retirement. Given this low rate, should he go all-in on stocks? Or should he split up his retirement funds and invest one half conservatively and the other half aggressively?

Jennifer has a low-stress doggie-daycare, but she needs a bigger space to scale up. How the heck can she find a property to suit her needs in Austin, TX?

My friend and former financial planner Joe Saul-Sehy joins me to answer another round of listener questions.

(If you have questions on business, money, trade-offs, financial independence strategies, travel, or investing, leave them here and we’ll answer them in a future episode.)

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By Paula Pant

#330: Ask Paula: How Do I Know If I’m Ready to Retire?

Linda is 58 and wondering how to account for her Social Security benefits when thinking through the 25x expenditure equation. Her expected expenses are $100,000 – $150,000. How can she figure out if she’s ready to retire?

Mr. Man is eligible to retire with a full pension, health benefits, and social security at age 48. He has 20 years to go. Should he include his pension and social security benefits in his financial independence plan, or think of them as extras?

“Timothy,” a lawyer from Colorado, has $250,000 in a SEP-IRA account that’s invested in mutual funds with fees ranging from 0.61 percent to 1.06 percent. Fees on these funds are projected at $200,000 over the next 20 years. Should he and can he transfer these funds to another SEP-IRA account? What are the consequences of doing that?

Alise has dreamed of living abroad for long periods of time and wants to buy a property in Portugal before the minimum spend requirement increases. Should she go through with this, or is there another way to gain dual citizenship or travel abroad for long periods of time?

Former financial planner Joe Saul-Sehy joins me to answer more of your questions.

Do you have a question on business, money, trade-offs, financial independence strategies, travel, or investing? Leave it here and we’ll answer them in a future episode.

Keep reading...

By Paula Pant

#328: Ask Paula: I’m on the Verge of Retirement and My Taxes are Rising … Help!

Sarah O Sahara’s parents sold their rentals and business of 24 years. They’d like to create a trust for their grandkids with boundaries in place to avoid entitlement. How should they structure this trust?

Renee and her husband are in their 60s, and most of their retirement funds are in pre-tax accounts. They have federal tax credits they’d like to use to move these funds into taxable accounts. Is this a sound strategy?

Anonymous “Yvette” in Canada has a fully paid off condo that she wants to turn into a rental once her new townhome is ready. Should she mortgage against the condo to reduce the mortgage on her townhome? Are there any tax benefits to having a mortgage on a rental?

Luis’s wife wants to start moonlighting in her field. Can she open and contribute to a Solo 401k even though she has a TSP account with her 9-to-5 employer?

Russell and his partner want to emigrate to Canada in the near future. Should they move their investments into Canadian funds?

My friend and former financial planner Joe Saul-Sehy joins me once again to answer your questions. Enjoy!

(Have an investing, entrepreneurship, lifestyle, or decision-making question you’d like us to answer? Submit it here!)

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By Paula Pant

#326: Ask Paula – The Dangers of Frugality

Photo of Paula Pant crouching down in the middle of woods“Hetty” is struggling with being too frugal, possibly to the detriment of her health. I mentioned in a previous episode that I struggled with frugality for a long time. She wants to know: in what ways was frugality a hindrance or an asset, and how did I get myself out of such a frugal mindset?

John and his wife aren’t sure how much they should contribute to their daughter’s Ohio 529 plan. They want her to graduate from undergrad debt-free, but they imagine she’ll get help from scholarships and that she’ll work as a teenager. How much is enough?

Rafael just got a job as a 1099 sales associate and is wondering how the heck to calculate what he’ll owe in taxes.

Rafael has a second question: he opened an account at Vanguard in December 2020 and noticed that he could still contribute to that account for the first few months of 2021. Which year should he have focused on contributing to?

Elizabeth has two rental properties: one that’s paid off and profitable, the other which shows a loss. If she put her profitable rental into an LLC, could she still combine the rent from both properties?

My friend and former financial planner Joe Saul-Sehy joins me to answer another round of questions.

By the way, if you have questions on business, money, trade-offs, financial independence strategies, travel, or investing, be sure to leave them here and we’ll answer them in a future episode.

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By Paula Pant

#324: Ask Paula – I Make $50,000; How Can I Buy a House?

Nick is curious: how have my views on wholesalers changed over the years, and why?

Rob and his fiancé are grappling with what to do about her $400,000 of federal student loan debt. Should they pay it off immediately, or bank on a 20-year dismissal?

Daniel recently discovered the financial independence retire early (FIRE) movement and got a job earning $50,000 per year. He wants to househack a duplex to get closer to FIRE, but how the heck can he find anything in this seller’s market?

“Nurse Dreaming of FI” isn’t sure what her family’s next financial move should be. She’s torn between investing extra money into index funds, or using it to buy a fix-and-flip. Her goal is to make work optional. Which path will lead her there?

“Phoebe” and her husband have 457s with the City of Chicago. However, they found out that Illinois has a horrible credit rating. How can they – and should they – protect their funds? How much should they rely on their pensions?

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

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By Paula Pant

#322: Ask Paula – I Want to Retire at 50; How Do I Bridge the Gap?

Jess wants to reach financial independence by the time she’s 50. But she’s worried that she doesn’t have enough money in cash or taxable brokerage accounts to bridge the gap in her first few years of retirement. What moves should she make, if any?

Yisell wants to invest money now. Should she cash out her $70,000 pension in hopes to generate more than the $1,000 per month she’s guaranteed from it?

Abbey is 22 and she would like to go back to graduate school for nurse anesthesia. Should she save up and pay for it in cash, or invest her money and take out federal loans?

Eliana enjoyed our interview with Paul Merriman on the two-fund portfolio. She’s curious about what growth stocks and value stocks are, and how they fit into a passive index fund investing strategy.

Finally, Sneezy wants to know: why aren’t stocks a good hedge against inflation?

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

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By Paula Pant

#320: Ask Paula – Thinking about Money from First Principles

Rob hopes to retire at age 60, but he has a pesky mortgage balance he wants to eliminate beforehand. He and his wife expect to inherit $300,000. Should they use this money to pay off their mortgage or should they bulk up their retirement accounts?

“Billy” has two questions. One is about the tax efficiencies of ETFs vs. mutual funds, while the other is about Ginny Mae funds and whether there are bond funds that have an inverse relationship with equities.

Priya is looking for information on home equity loans: where can you get the best terms, and what are the disadvantages? Additionally, she’d like to know which city is best for rental investing: Atlanta, Dallas, or Raleigh?

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

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Afford Anything