Afford Anything

Tag: savings strategies

By Paula Pant

#285: Ask Paula – How Can I Pay for Grad School?

Sam wants to use the funds in her Vanguard S&P 500 index funds for a downpayment on a house. She isn’t sure if she should keep her savings in the market. Should she move her money, and where?

Hailey purchased a duplex in March and is already looking to sell due to a hostile tenant during the purchase process. How can she shift her focus from her initial return on investment to a long-term outlook?

Zoe dreams of attending grad school, but her savings are locked away in retirement accounts. How can she save for grad school in the next two to three years?

Mohamed wants to monetize a new podcast with affiliate relationships, but the service providers he wants to promote don’t offer affiliate programs. Can he still make this work, and how?

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

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By Paula Pant

#266: Ask Paula – Your Real Estate Questions, Answered

Ali is a travel nurse and wants to get into real estate investing. Should she buy a duplex that needs fixing up or a cheaper apartment that’s rent-ready?

Max is torn between investing in a rental property or taking advantage of a mega backdoor Roth 401k through his company. Which is the better option?

Paul’s parents own a property worth $100,000, and they owe $80,000 on the mortgage. If he wants to buy this property from them, how should he do it?

Kate and her husband own a townhome that has appreciated substantially, but they need a bigger house. They’re wondering: is it wise to keep it, rent it out, and use a cash-out refinance as a downpayment on their next property?

I answer these questions on 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

#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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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

#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

#195: Ask Paula – I Make $168,000 Per Year and Spend $5,000 Per Year. What’s Next?

Alex makes $168,000 per year, combined between her full-time job and her side hustle. Her company pays for breakfast, lunch and dinner during the work week, plus a cell phone subsidy, health, dental and vision insurance, a gym membership, and commuting costs. She also househacks, so her living expenses are only $400 per month. What should she do with her ample savings?

Christine is 38 and earns $70,000 per year running her own business. She holds $70,000 in investment accounts, has another $16,000 in savings, bought a condo with 20 percent down, and has no debt. What can she do to fast-track her path to financial independence?

Amy is unsure whether she should pay off her mortgage, downsize to a smaller home, or invest.

Katherine is 23 and househacking into a duplex. How much should she set aside for cash reserves?

Miriam started a podcast and wants to know how to morph a passion into a lucrative income stream.

Nick wonders if the FIRE movement should plan an annual gathering … you know, like a FIRE Festival. (But not like the Fyre Festival.)

I tackle these six questions in today’s episode.

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By Paula Pant

#193: Ask Paula – I Spent Ten Years in School, and Now I’m Behind on Retirement Savings

Lori is behind on retirement savings, as a result of being a full-time student for more than a decade. She makes good money and lives frugally, but she’s aware that she’s behind for her age. What should she do?

Sierra wonders whether she should apply her savings towards paying off her mortgage or building investments.

Jenessa plans to retire at age 35, and she’s wondering if the 4 percent withdrawal rule applies for such a long time horizon. Her friend swears that it’s designed to cover a 30-year retirement, not a 60+ year retirement. Is that correct?

Jacqui is 24 and recently married. She’d like to open a 529 College Savings Plan for her future children, which she doesn’t plan on having for another 8 to 10 years. Should she do this?

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By Paula Pant

#191: Ask Paula – Would You Live in an RV to Save Money?

Should Russell rent a cheap apartment, or should he take out a loan for an RV in order to save money on rent?

Carl is working two jobs that each pay $12 per hour. He has $5,000 in student loans. What can he do to improve his situation?

Caroline is about to finish paying off her student loans, and in the next few years she wants to buy a home. Where should she park her savings in the meantime?

Philip is saving for financial independence, but he’s not sure what to do with his time once he quits his job. How can he discover what ignites him?

Amanda is receiving an inheritance, a New York City 4-plex valued at $500,000. How should she handle this?

And an anonymous caller wants to know what the step-by-step path to wealth building would look like.

I answered all of his questions in today’s episode, plus I feature a short follow-up interview with Kim, the firefighter whom we met in Episode 139.

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Afford Anything