Afford Anything

Tag: debt payoff

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#387: Ask Paula: Is A Crash Coming??

Lila is concerned about inflation and the risk of a recession. Should she invest in the stock market, despite the scary headlines? Or should she pay off her primary residence or her investment properties?

Linda invested in a 529 for her son’s college, and he’ll be starting in the fall. But, the value of the plan dropped right before she was planning on using it and she is wondering how to keep from losing more money.

Jen and her husband want to retire in 8 years. They’re hoping to have paid off their mortgage AND hit their net worth goals when they stop working. How should they prioritize between these two goals?

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.

Enjoy!

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#370: Ask Paula: My Income Is Dropping From $190,000 to $40,000; What Should I Do?

Michelle makes $190,000 and is going to switch to a career that pays $40,000 on average. To prepare for this lower salary, she’s selling her current home and buying a different one. Should she pay off her new home with the proceeds from the old one? Or should she invest her profits?

Kristen is 32, and she and her husband want to retire in less than 20 years. They make too much to contribute to a Roth IRA. Should they use back door Roth conversions to speed along their path to early retirement?

Anonymous lives in a high cost-of-living area and is wondering where to keep her down payment and emergency funds. Should she use I-bonds, TIPS, or some combination of these two?

In today’s episode, former financial planner Joe Saul-Sehy and I tackle these tough situations.

Enjoy!

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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#352: Ask Paula: Should I Pull Money from My Emergency Fund to Invest or Pay Off Debt?

Anna and her husband have volatile income, but Anna thinks that having 18 months of living expenses is unnecessary. She’s torn between paying off her student loans ($30,000) or investing the money. Mentally, she always figured she would pay off her debt first, but wouldn’t investing pay off in the long run?

Charlotte and her husband are taking a phased approach to financial independence, where they need to bridge two gaps before they each turn 59 ½. How can they calculate how much they need at each phase?

Elle has a retirement plan in place, but her company is adding a Roth 403(b) option soon. Should she stay the course or adjust her strategy in these last five years before retiring?

Sara wants to purchase land and build her dream house by refinancing her rental property and turning her current home into a second rental. How can she improve this plan?

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

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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

#270: Ask Paula – Buy a Home, Buy Investments, or Pay Off Debt? How Do I Decide?

Briana and her husband want to buy a home, but they don’t have enough saved for a downpayment. They also have student loan debt and a car loan. Which should they prioritize?

Javier is sick of being in debt. What can he do to put himself in a better situation?

Tracie wants to buy her first rental property, but she has student loans and a car loan to pay off. If she receives $20,000 from a cash-out refi, how should she use this money?

Vanitha wants to start a non-profit organization in memory of her uncle. She wants to know: what does this process look like?

Margie went under contract on a primary residence listed as a six-bedroom property. She found out that, legally, it’s a four-bedroom home. Should she re-negotiate the price, or ask for credits at closing?

I answer these questions in today’s episode. Enjoy!

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By Paula Pant

#247: Ask Paula – Is the Stock Market Going to Crash in 2020? How Should I Invest in a Bear Market?

Caroline wants to buy her first home in Denver, CO. How can she calculate how much mortgage she can comfortably afford?

Anne plans to retire later this year on rental income (woohoo!). She’s saved up a hefty emergency fund for her properties, and she wants to know 1) if she should invest a portion of this in index funds, and 2) whether she should rebalance her portfolio to account for this huge cash allocation.

Anonymous Nurse has over $100,000 in debt, not including their mortgage. They want to invest in rental properties, but with so much debt, they’re thinking of selling their home or renting it out. Which option is best given their interest in real estate?

Joy wants to know if she should put $50,000 towards her primary residence mortgage, or use it as a downpayment on her first rental property. What are the pros and cons of each option?

Anonymous owns a cash-flow positive condo…on leased land. The land will revert back to the owners in 32 years. When is the best time to sell this property?

I answer these five questions in today’s episode. Enjoy!

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By Paula Pant

#239: Ask Paula – Should I Put My Student Loans in Forbearance? Should I Buy a Vacation Rental in the Mountains? and More

Lo is in a good spot with her career, but she’s struggling with a ton of student loan debt, and consequently, credit card debt. What should she do to manage it?

Anonymous wants to know how to set up a backdoor Roth IRA.

Eric and his wife own a property in Savannah, GA that brings in more money as an Airbnb than a traditional rental. They want to invest in more properties and are wondering if this model is the best path to take.

James wants to own a vacation rental in the Vermont mountains that he can use when it’s vacant. What features or qualities would make a profitable vacation rental? What red flags should be on his radar?

Ayesha is looking at buying a rental property that has a partial HUD claim on it. What kind of complications should she anticipate? Or should she let this property go completely?

Shelbi and her husband own a rental property that they purchased for $178,000 that’s now valued at $300,000. They’re looking at a multitude of options – sell it, move into it, or keep it. What’s best given their FIRE goal?

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By Paula Pant

#237: Ask Paula and Joe – Should I BUY a Business, Instead of Starting One?

Katie wants to know how to purchase a business that’s already cash-flow positive. What indicators can she look for?

Rob will retire from the military with an inflation-adjusted pension. Does he need a bond allocation in his investment portfolio?

Brian conquered a large sum of credit card debt, but still has student loan debt and a mortgage. Should he pay off his student loans, refinance them, or refinance his mortgage?

Jeff is curious about the pros and cons of investment apps. When should you use them?

Another Kati (without an e!) wants to live a healthy and wealthy life before she’s 70. Where should she allocate her savings so she can retire early?

We answer these five questions in today’s episode.

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By Paula Pant

#225: Ask Paula – How to Invest for the Next Five Years

Lauren is 26 and earns $48,000 per year after taxes.

She saves $12,000 annually in retirement accounts, and an additional $18,000 per year for a downpayment on a home.

She wants to buy a home in the next five years. Where should she keep her savings in the meantime?

Sawyer has a five-year financial independence plan. She owns two high-end condos in a NYC suburb. She lives in one unit and rents out the other, but she’s bothered by the fact that she’s forgoing collecting rent on the other unit. Should she move?

Katie’s husband is going back to grad school and they want to pull money out of a retirement account to help fund this cost. Are they able to do that? Or is there a better option for short-term investments that they should use?

Cassie is in the process of finalizing a divorce. She and her daughter will receive between $80,000 – $116,000. Should they use the funds to buy a home with a 20 percent down payment or pay off their $30,000 debt?

Andy is curious: should you re-adjust the 4 percent withdrawal rule if your investment portfolio grows?

Joe wants to become self-employed but is concerned about health insurance. What are some affordable options?

Laura is close to pulling the FIRE alarm but her fiance wants to keep working. She wants to know what will change once they get married. Should they file taxes jointly or separately?

Doug is interested in learning more about equity sharing programs. Are these safe to invest in?

Tania wants to know: can you open and fund a Roth IRA if you haven’t worked in the past two decades, but earn alimony?

Brian took out a 401k loan to purchase a new car and regrets his decision. Would it be a wise move for him to take out a personal loan to pay back the 401k loan?

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

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By Paula Pant

#223: Ask Paula – Should I Choose This or That? How to Weigh the Tradeoffs

Elizabeth is curious to know: what does a good net worth breakdown look like? Is it appropriate to have a lot of your net worth tied up in real estate?

Marie wants to start her own business, but she’s living paycheck-to-paycheck. Is incurring debt her only option to make this dream a reality?

Bria wants to take a second mini-retirement and has a good chunk of money saved up. She wants to come back to the workforce with a cash cushion. What should she do with her money while traveling?

Anonymous is relocating from Southern California to Florida. She wants to know if she should rent an apartment and buy a rental property, or buy a primary residence with the $150,000 she has saved.

Connor is facing a dilemma. Is he correct in not prioritizing 401k contributions given that his employer doesn’t offer a match, combined with his goal for financial independence? Is his strategy of using his savings for real estate investing better?

Caroline is wondering: should she aggressively pay off her home and her rental properties, or use her excess savings to fund a brokerage account?

Today’s episode is full of exploring and weighing tradeoffs. Let’s dive in!

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Afford Anything