Afford Anything

Category: Personal Finance 101

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#549: Am I Wrong to Worry About Retirement, with $2 Million Saved?

Steven is stuck on the question of financial stability. How do you know if you have it? Is there an objective answer based on net worth? Or is it a calculation relative to your income and age?

Jack isn’t sure how to factor his house into his net worth. It’s an asset, but he has a mortgage against it, and there are transaction costs associated with selling it. How should he frame it?

Patricia and her husband are debt-free with a $2.2 million net worth, but she’s constantly stressed about their finances. Are her concerns valid? Or is she a financial hypochondriac?

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

Enjoy!

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#547: Ask Paula: “We Have $2 Million at 40 – Now What?”

An anonymous caller and her husband have a $2 million net worth at 40, but they’re worried that the one-fund portfolio that got them there isn’t good enough anymore. Are they right?

Jared feels frustrated that so much personal finance media is centered around tech and freelance workers. Does Paula and Joe have negotiation advice for someone in the union?

Sam owns two overseas properties in a country that’s experienced runaway inflation for the past decade. He’s worried he’ll lose $500,000 worth of assets. How does he control the bleeding?

Steve is calling back with an exciting update on his house-swapping journey from Episode 487.

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

Enjoy!

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#542: Are We All Financial Hypochondriacs? Why We Feel Broke, Even When Our Bank Accounts Are Full

Ever feel like you’re never doing enough with your money, even when your finances look good on paper? 

You’re not alone. 

Katie Gatti Tassin, host of the Money with Katie podcast, dives into a phenomenon called “money dysmorphia” in today’s interview.

She shares how she got flooded with responses when she asked her listeners about money dysmorphia. Folks with hefty savings and investments still worry they’re not doing enough. It’s like they’re always waiting for the other shoe to drop.

Where does this come from? Katie points to a few culprits. Social media is an obvious scapegoat. But traditional media plays a role too. Think about all those TV shows where “normal” families live in massive houses and drive fancy cars. It skews our perception of what’s average.

Location matters too. Katie talks about how moving from Dallas to Fort Collins changed her spending habits. Different cities have different vibes and social norms around money.

The conversation takes an interesting turn when Katie shares her own experience buying a Porsche. She felt conflicted, worried her FIRE (Financial Independence, Retire Early) community would judge her. It highlights how even personal finance experts grapple with these issues.

They also touch on how the pandemic shook up financial priorities. When faced with uncertainty, some people realized saving for a far-off future might not be the only goal worth pursuing.

Katie and Paula discuss the importance of balance. It’s good to save, but not at the expense of living your life now. They suggest seeking out voices in the personal finance world to get a more rounded perspective.

Travel comes up as a way to gain financial perspective. Seeing how people live in other parts of the world can make you appreciate what you have or show you where your own country could improve.

Katie and Paula offer food for thought on how to navigate our complex relationship with money. It’s a conversation that might make you think differently about your own financial mindset.

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#541: Your Dream Retirement Might Hinge on This One Choice, featuring Katie Gatti Tassin, host of Money with Katie

Ever wondered if you’re making the right choice between a Traditional and Roth 401(k)? You’re not alone.

In this episode, Katie Gatti Tassin, host of MorningBrew’s Money with Katie podcast, joins us to tackle this common retirement savings dilemma.

We deep-dive into the debate between using Traditional vs. Roth 401(k) accounts for retirement savings, in the context of:

Future tax rates
Tax complexities for small business owners and high earners
Social Security uncertainty
Stock-based compensation
Incentives for business owners vs. employees

Katie explains her strategy for maximizing retirement savings while minimizing taxes. She suggests that for some people in higher tax brackets, maxing out a traditional 401(k) and then investing the tax savings elsewhere might be the way to go.

But as we dig deeper, it becomes clear that there’s no one-size-fits-all answer.

We explore the Traditional vs Roth question, discussing how your current income and expected retirement spending can affect your choices.

It’s not just about the math, though. The unpredictability of future tax rates and policies adds another layer of complexity to the decision.

Social Security plays a major role, as well. We discuss its current funding situation and the challenges it might face in the future.

This leads to a fascinating discussion about how AI might impact future costs and lifestyles. Could things actually get cheaper in the future?

Taxes for high earners and small business owners is another focus. We break down some misconceptions about who falls into high tax brackets. It’s not always as simple as it seems.

Stock-based compensation is another hot topic. We discuss how it affects corporate decision-making and the wider economy. This leads to an interesting comparison of the incentives for business owners versus employees.

Throughout the episode, we keep coming back to one key point: no matter which type of account you choose, the most important thing is to contribute as much as you can.

Your contribution amount has a bigger impact on your retirement savings than the type of account you use.

By the end of this interview, you’ll have a better understanding of the factors that go into choosing between a Traditional and Roth 401(k). More importantly, you’ll see how this decision fits into the bigger picture of retirement planning and overall financial health.

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#539: Ask Paula: Escaping a $100K Tax Nightmare

An anonymous caller feels trapped. She owes $100,000 in back taxes on earnings she had to give up as a result of a lawsuit with her former business partner. What should she do?

Saul and his wife want to retire in Mexico but they don’t want to give up the ability to continue investing in US stocks. Can they buy a primary residence that doubles as a short-term rental?

Nina and her partner are eager to start a $500,000 renovation on their home but they’re still three years away from saving enough. How can they bridge the gap without risking too much?

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

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#529: Q&A: The Unintended Consequences of Early Retirement

Anonymous, 60, recently lost her job and is worried about retirement. She owns a paid-off triplex, living in one unit and renting the others for $30,000 a year. She used her 401(k) funds to buy the triplex and now has $50,000 in retirement savings and $150,000 in cash. She expects only $2,400 a month from Social Security at age 67. After losing her son two years ago, she’s seeking advice on managing her underfunded retirement.

Noelle, 40, and her husband, 49, want to cancel his whole life insurance policy. They are debt-free, own their home, and plan to retire soon, relying on Noelle’s $80,000 income. They have $504,000 in retirement savings. Should Noelle keep her $100,000 term life policy until she retires?

Sleepless in San Antonio, age 35, plans to retire at 45 but is concerned about how this will affect Social Security benefits, which is calculated based on the top 35 earning years. Should they work longer in order to boost their Social Security benefits?

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

Enjoy!

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#527: Q&A: Can They Be Financially Independent in Five Years … By Breaking the Rules?

Christina is worried. She’s retired with a paid-off condo in Florida. But rising fees, insurance rates, and a major HOA assessment are killing her cash flow. Is it time to become a renter?

Les is surprised by Paula and Joe’s allocation recommendations for international equities. Based on market capitalization, it makes no sense. What’s he missing?

Luke and his wife are breaking some personal finance rules in the name of financial independence. Are they right to take this approach or is there a better way?

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

Enjoy!

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#517: Should I Raid My Retirement Plan to Buy Real Estate?

Kimiko is dismayed that the asset allocation books she’s read led her down a path to an underperforming portfolio heavy in ex-US stock investments. Where should she go from here?

Julie and her husband dream of owning a vacation rental in the Denver area even though the math doesn’t add up. It seems like everyone around can make it work though. What’s missing?

Casey is excited to build his real estate portfolio and purchase his third rental property. He’s also worried that his plan to fund the purchase with his 457 Plan is flawed. What should he do?

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

Enjoy!

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#512: Don’t Let One Big Bill Blow Up Your Budget (Here’s How)

An anonymous caller who received a large inheritance feels paralyzed by all the investment philosophies he’s read about. How does he pick a winning strategy he can stick with?

Josh is an expectant dad looking to buy a bigger house but doesn’t know how much everything will cost. Should he save more or invest more?

Another anonymous caller worries that large expenditures like buying a new car or replacing her home’s roof will blow up her budget in retirement. How does she plan for unexpected expenses?

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

Enjoy!

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#509: “I’m Retiring at Age 34 and a Half!”

Rob wants to retire early, but a real estate investment led to $30,000 of credit card debt. Should he take on more debt to pay it off?

An anonymous return caller took Paula’s advice and ran with it, doubling her income within a few years. Should she update her investment strategy now that she’s in a higher tax bracket?

Humaira is tired of paying rent with nothing to show for. Can she leverage some benefits by using her credit card to pay the bills?

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

Enjoy!

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