Afford Anything

Tag: homeownership

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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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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

#258: Ask Paula – Can I Quit My Job Before I’m Financially Independent?

“Burned Out in Boston” wants to reach financial independence.

But she’s not sure she can stick it out in Boston much longer.

She and her husband want to move to an area that doesn’t have many job prospects, and they want to make this leap soon, ideally before they reach FI. How do they know when it’s the right time to jump ship to their dream location?

Ingrid and her husband own two rentals. They’re torn between paying one of their rentals off or buying more properties. Which is the better route to take?

Pat is torn: should she convert her garage into an accessory dwelling unit, or use funds to buy an out-of-state rental property?

Chelsea wants to know: what should you do if your newly purchased home is an instant money pit?

Julia wants to know how to approach investing in sector-specific index funds, like utility ETFs. Should they be a small or large portion of your portfolio?

I answer these five 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

#207: Ask Paula – Should I Take a $30k Paycut for Better Work-Life Balance, or Stick it Out?

Matt and his fiance earn $7,500 per month combined. They save more than half of their income. He’d like to take a different job that will decrease his income by $2,000 per month, but improve his quality of life. Should he?

Suja wants to take out a loan for business growth. What red flags should she watch for?

Anonymous and her husband are thinking about buying half-million-dollar home, purchasing a second car, and having a baby. They’ve saved an emergency fund and a 20 percent downpayment. Are they ready?

Trayci wants to quit her 9-to-5 and start working as a 1099 self-employed lifestyle. How should she manage this transition?

Daria is curious about the economics of a podcast. What do the income and expenses look like?

Jared wants to retire early and then sell off his rental properties, but he’s worried about the depreciation recapture tax rate. How should he plan?

Ali wants to set up a long-term giving plan, but most of the advice out there is geared towards wealthy donors. How should middle-class workers set up their charitable giving?

Financial planner Sophia Bera (hailed by Investment News as one of the Top 40 Under 40) joins me on today’s episode to answer these seven questions.

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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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By Paula Pant

#187: The Final Ask Paula: Real Estate Episode!

Sarah needs $36,000 per year in living expenses in order to reach FIRE (Financial Independence, Retire Early). She owns several rental properties, and she’s aggressively paying off the mortgages through the debt snowball method. How will she know when she’s ready to live on $3,000 per month in consistent rental income?

AyV wants to rent out his primary residence. What steps should he take to prepare the property for rent? Should he hire a contractor? What level of renovation should he give it?

And more!

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By Paula Pant

#179: Ask Paula – We Want to Start Househacking in a Duplex. Should We?

Should a couple in New Orleans sell their single-family home and use the sale proceeds to househack into a duplex?

What do you think about turnkey investments?

What tax consequences will someone face if they transfer their property to their parents?

How do you handle tough situations related to the way some home renovation contractors treat women?

What’s the latest update on your real estate course?

I answer these five questions on today’s podcast. Here are the details.

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By Paula Pant

#163: Ask Paula – The Future of Index Fund Investing

Does my employer match count against my 401k contribution limits? Should I invest in a Traditional or Roth TSP? Should I invest more aggressively in stocks right now, or should I hold cash and bonds until the next downturn? Should I get a mortgage or keep renting until I can buy a home in cash? Do you think index investing will dramatically change in the coming decades?

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

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Afford Anything