Afford Anything

Tag: savings strategies

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#354: Ask Paula: How Do I Make Sure I Don’t Spend the Money I’ve Invested?

Charlie in Cali has enough money saved to pay cash for a house, but she and her husband decided to finance their home, instead. They’d rather invest the money and arbitrage the spread.

But one problem: how can they keep themselves from touching this investment?

Jay is choosing between Fidelity and M1 Finance and has questions about tax loss harvesting.

Nicole and her siblings will be inheriting some properties that they eventually plan to sell. How should they set up or organize these properties among so many owners? Should one person take the lead? Do they need a shared business account? Also, how should they evaluate a property and make sure they get a good deal when they sell?

Ed owns three homes, two of which he plans to sell in the next few years. He plans to live in them long enough to establish residence and take the capital gains exemption when they sell. Is his plan for handling the taxes solid?

We answer these four questions in today’s episode.

Enjoy!

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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

#286: Ask Paula – How Long Will It Take Me to Become a Millionaire?

Kaitlyn has $78,000 saved for a property, but she isn’t sure whether she should buy a personal residence, a rental property, or both. How can she best use this money?

An anonymous listener wants to lower their housing expenses. Should she and her husband buy a cheaper property and turn their current home into a rental, or should they stay and pay off the mortgage as quickly as possible while saving for a downpayment on another property?

Alex is just getting started with financial independence and asks: how can you calculate your financial independence date, and how do you know how much you need to save to reach that number at a certain age? 

Ell wants to know: what’s the difference between a high-yield savings account and a money market account, and how can you maximize the interest you earn in these accounts?

Jenn wants to know: is it possible for Canadians to find cash-flow positive real estate deals, either in Canada or the United States?

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

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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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Afford Anything