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Tag: investing

October 30, 2024By Paula Pant

#553: The Brutal Money Truth No One Wants to Hear, with Dr. Brad Klontz and Adrian Brambila

This is the third and final episode in a three-part series. Dr. Brad Klontz and Adrian Brambila join us to share 21 harsh truths about building wealth.

This episode focuses on the final 11 harsh truths, following up on their previous conversations about the first 10 harsh truths.

The conversation begins with a key distinction: poor people buy stuff, while rich people buy time. They explain how wealthy people focus on building passive income streams rather than trading hours for objects. Brambila shares how he learned this lesson personally, discussing his pickleball court purchase through investment income rather than active work hours.

The duo challenges common assumptions about luxury brands, arguing that people who constantly show off designer items are usually compensating for insecurity. Klontz shares his own experience of buying an expensive watch early in his career to prove his success.

They examine whether college, marriage, and homeownership are necessary for wealth building. While data shows these traditional paths often lead to higher net worth, they acknowledge these aren’t the only routes to financial success.

On the topic of retirement, both guests argue that completely stopping work can be psychologically harmful, sharing examples of successful people who stayed active well into their later years.

They break down specific money-saving strategies like getting roommates, using public transportation, and cutting your own hair. Brambila demonstrates how women can cut their own hair during the interview.

The discussion covers specific side hustle opportunities, with detailed explanation of how to make money doing Amazon product reviews. Brambila shares how his videos have generated significant income, including $2,000 in a single day during Black Friday.

They address money myths about credit cards, particularly the misconception about carrying balances to improve credit scores.

Real examples and personal stories illustrate their points. Klontz shares how his 11-year-old son is making $5,000 monthly doing Amazon reviews, while Brambila discusses living in a van while earning six figures to demonstrate that wealth isn’t about outward appearances.

The episode concludes by connecting financial security to Maslow’s hierarchy of needs, explaining how building wealth enables higher-level personal growth and positive impact

Keep reading...

October 22, 2024By Paula Pant

#551: The Dark Experiment That Explains Your Money Problems, with Dr. Brad Klontz and Adrian Brambila

Financial psychologist Dr. Brad Klontz and Youtuber Adrian Brambila join us to talk about money psychology, starting with a dark but revealing story about an experiment with dogs.

Scientists put dogs in electrified cages from which they couldn’t escape. Eventually, the dogs stopped trying to escape and just lay down, even when later moved to […]

Keep reading...

October 18, 2024By Paula Pant

#550: Paul Merriman: The 4-Fund Strategy That Beats the S&P 500

Paul Merriman, a former wealth manager turned financial educator, joins us to share investing wisdom that could reshape how you think about your money.

We kick things off talking about portfolio diversification. Paul suggests a simple four-fund strategy that includes large cap, small cap, and value stocks. He says this mix has historically beaten the S&P 500 with lower risk.

We then dive into international investing. Paul explains that while adding international stocks doesn’t necessarily boost returns, it can help smooth out the ride. He keeps half his equity portfolio in international stocks, even at age 81.

Got kids? Paul’s got some advice for you too. He tells us about putting money aside for his new granddaughter, aiming to fund her Roth IRA as soon as she can earn income. He breaks down how investing just a dollar a day from birth to age 21 could turn into millions by retirement age. It’s a powerful lesson in starting early and the magic of compound interest.

We also chat about some common investing mistakes. Paul stresses that young investors often underestimate the power of stocks over bonds for long-term growth. He shares some eye-opening numbers: $100 invested in bonds since 1928 would have grown to about $12,000, while the same amount in small cap value stocks would be worth nearly $15 million.

Paul wants you to think of investing as a partnership with businesses. When you buy a mutual fund, you’re becoming a senior partner in thousands of companies. At first, your contributions drive most of the growth. But over time, market returns take over, and you become the junior partner to a much larger fortune.

We wrap up with Paul sharing his excitement about a 40-hour financial education program he helped create at Western Washington University. It’s designed to teach students essential money skills throughout their college years, from budgeting as freshmen to understanding 401(k)s as seniors.

Throughout our chat, Paul’s message is clear: start early, stay diversified, and think long-term. He believes that with the right education and mindset, anyone can build a solid financial future.

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October 11, 2024By Paula Pant

#548: Is Your Retirement Safe in Today’s Economy?, with Dr. Karsten Jeske (Big ERN)

Economist Dr. Karsten Jeske talks with us about the current economic landscape. Karsten, who retired at 44, breaks down the Fed’s recent decisions and how they might affect our finances.

He explains how markets often anticipate interest rate changes before they happen. Karsten challenges traditional views on inflation and unemployment, telling us that textbook models don’t always match reality.

Karsten shares his personal investing experiences, covering both market highs and lows. He emphasizes the value of consistent investing regardless of market conditions.

For those eyeing retirement, Karsten dives into safe withdrawal rates. He advises paying close attention to current market valuations when planning. On the topic of mortgages, he offers clear guidance on when refinancing makes sense.

We also touch on economic history, discussing the Weimar Republic’s hyperinflation. Karsten uses this to critique modern monetary theory, expressing skepticism about unrestricted money printing.

Throughout our conversation, Karsten explains complex economic concepts in accessible terms. He draws on his background as both an academic and a Wall Street professional to provide well-rounded insights.

Karsten, also known as Big ERN, is the author of EarlyRetirementNow.com, where he writes about safe withdrawal rates and personal finance while enjoying his retirement.

Keep reading...

September 18, 2024By Paula Pant

#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.

Keep reading...

August 21, 2024By Paula Pant

#533: Q&A: My Insurance Bill Jumped 60 Percent – Should I Drop It?!

Kristin is floored by the 60 percent increase in her homeowner’s insurance this year. Should she cancel the policy and self-insure instead?

Susana and her husband are torn. They bought their dream home last year but now need to relocate indefinitely. What should they do with the house?

An anonymous caller wants to help his soon-to-be wife invest a five-figure gift she received in another country. How do they untangle the complexities of managing money from abroad?

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

Enjoy!

Keep reading...

August 5, 2024By Paula Pant

#528: The Stock Market is in Panic Mode and the Unemployment Rate Jumped – But Everything’s Fine

The Federal Reserve recently decided to hold interest rates steady, leading to significant shifts in the stock market. The Dow dropped over 850 points, and the NASDAQ entered correction territory, falling more than 10% from its peak.

But what do these numbers mean for you? We break down the latest jobs report, which shows a rise in unemployment to 4.3%, triggering a recession indicator known as the Sahm Rule. This isn’t just economic jargon; it affects real lives, impacting job security, investments, and financial planning.

We discuss potential ripple effects on various sectors, such as real estate, where interest rates influence housing affordability.

We also examine the technology sector’s volatility and how recent market corrections might influence tech stocks and the overall investment landscape.

Understanding this can help you make informed decisions about your investment portfolio.

Every First Friday of the month, we bring you our “First Friday Monthly Economic Report,” where we help you make sense of these trends.

We aim to make complex economic concepts accessible. Join us as we explore these pressing economic issues.

Keep reading...

July 24, 2024By Paula Pant

#525: Michael Kitces: Is the Economy Worse than We Think?

We chat with renowned financial advisor Michael Kitces at the Morningstar Investor Conference in Chicago.

Kitces answers a big question: Is the economy worse than we think? He explains that a few big companies like Nvidia, Meta, and Alphabet are holding up the S&P 500. But this doesn’t mean the economy is bad. It’s common […]

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June 26, 2024By Paula Pant

#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!

Keep reading...

June 18, 2024By Paula Pant

#515: Q&A: Sell Your Home or Stay Put?

Jessica and her husband are juggling two home sales and one home purchase within the next two to four years. How do they execute wisely while navigating a tight real estate market?

Zerai works two jobs that both offer a pension and retirement plan. Can he take advantage of everything at his disposal or must he make some tough choices?

Emily and her husband bought their home a year ago. But a national builder tempts them to sell and upgrade using a 3-2-1 buydown mortgage. Should they do it?

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

Enjoy!

Keep reading...

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Afford Anything

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