Afford Anything

Category: Personal Finance 101

By Paula Pant

#219: Ask Paula – How Should I Invest $4,000 Per Month for Early Retirement?

Stella is working toward FIRE and wants to know: how can she create passive income in her retirement years? Is a portfolio with stocks and bonds enough, or should she invest in real estate?

Travis and his wife are also on the FIRE path, and are comparing their investment options. Travis is concerned about the inefficiency of reinvesting returns in real estate. How can you factor this into your decision when buying a property?

Stephanie and her husband are also interested in FIRE (hooray!) and they have $20,000 to invest. How can they best use this money to help them FIRE sooner?

Cade, a 24-year-old listener, wants to FIRE by age 30 (we’re on a roll!). He’s saving $4,000/month and wants to know how to invest these savings.

Anonymous and their partner are taking a mini-retirement and have questions surrounding the logistics of healthcare. What options should they consider?

On a different note, Amanda works in academia. After listening to Episode 12, she’s looking for tips on managing long-term, complex collaborative projects now that she’s in a leadership position.

Steve’s question brings us to the topic of building an online business and social media following. Should he have one brand for all of his interests, or divide these interests into separate channels?

I tackle these questions in today’s episode of the show. Enjoy!

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By Paula Pant

#218: Why We’re Irrational with Money, with Kristen Berman

Kristen Berman is co-founder of Irrational Labs, a behavioral product design company, along with Dan Ariely.

She has a fascinating job that involves looking into why people behave the way they do with their money, and discovering the easiest solution to help them create more positive financial behavior.

In short, she’s a proponent of redesigning the current financial system to make saving automatic and easy, and that’s part of what we discuss in this episode.

If creating better financial habits has been a challenge for you, or if you have trouble framing spending as a positive thing, rather than a loss, then Kristen has awesome advice for you.

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By Paula Pant

#213: Nine Lessons from a Millionaire Teacher, with Andrew Hallam

It’s September! If you’ve been listening to the show for the past few months, then you know that I’m on what I’ve dubbed my September Sabbatical, in which I’m traveling the globe and taking a break from podcast production.

In light of that, we’re digging through the archives and airing some of my favorite interviews on the show, in between airing interviews I’ve done on other podcasts.

If you missed the last episode, you might want to listen to it before diving into this one, as Andrew and I go into the finer points of investing here.

Seriously. This is one of the most in-the-weeds shows I’ve done to date.

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By Paula Pant

#209: Ask Paula – Are Index Funds Unsafe?

Anonymous wants to retire early and often. They’re going overseas, where they’ll make their annual salary within six months. Where should they put their extra income?

Anonymous also wants to know: how can they find a financial advisor they can actually trust?

Another anonymous listener wants to know – is it possible to spend more while minimizing taxes in early retirement?

JuanCarlos asks: is $20,000 too little to invest with a financial advisor?

Angela is wondering how to create a Roth IRA account for a teenager.

Rose is thinking about switching from mutual funds to index funds because it means encountering less fees, but her and her husband are in their 60s. Does this make sense?

Ari has $700,000 to invest in a taxable brokerage account. He wants to know if a 90 percent total stock market index and 10 percent bonds is a good asset allocation.

Dave and his wife want to use their defined benefit plans as their primary income stream in retirement, and supplement with Roth and 457 incomes. Where else should they be saving?

Myself and former financial planner Joe Saul-Sehy answer these questions on today’s episode.

Enjoy!

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By Paula Pant

#208: How to Talk to Your Parents About Retirement and Beyond — with Cameron Huddleston

Well, this could get awkward.

Your parents and grandparents are aging. (Duh.) You want to have a few important financial conversations with them. It’s time to get the answers to questions like:

“So … are you ready for retirement?”

“You’ve been retired for 10 years … how’s that going? How are your finances looking?”

“Do you have a will or legal trust? What’s your estate plan situation?”

“Do you have an advance health care directive?”

“To whom have you given your power of attorney?”

“What types of accounts do you have, and how can I — or someone whom you designate — access the passwords if and when the appropriate time comes?”

These financial conversations are important, but awkward. Most people would rather discuss the news, the weather, or the Kardashians.

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By Paula Pant

#205: Ask Paula – Am I On-Track for Retirement?

Is it ever a good idea to use your 401(k) as an emergency fund?

What’s the best way to break up with your financial advisor so that you can move all of your funds to Vanguard?

Should you put all of your Roth IRA money into index funds, or is there a better option for your money?

A listener has a job offer working less hours for more money, but without a retirement plan. Is this a good move?

When running a small business as a sole proprietor, are there tax advantages to incorporating or forming an LLC? If so, what should you consider?

What’s the best way to maximize the earnings on a large amount of savings while keeping the savings liquid? Can a robo-advisor help with this?

Myself and former financial planner Joe Saul-Sehy tackle these six questions in today’s episode. Enjoy!

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By Paula Pant

#203: Ask Paula – Early Retirement and The Four Percent Rule

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.

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By Paula Pant

#201: Ask Paula – Which House Should I Pay Off First?

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!

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By Paula Pant

#200: What I’ve Learned from Interviewing 500 Millionaires — with Jaime Masters of Eventual Millionaire

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.

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By Paula Pant

#199: Ask Paula – The Three-Year Reunion with J. Money

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!

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Afford Anything