Afford Anything Podcast

Build Financial Independence, Escape the 9-to-5, and Live Your Boldest Dreams

#146: Ask Paula – Where Should I Keep My Money if I Want to Retire Early?

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Ask Paula #98 - The Side Hustle EpisodeMy friend and former financial advisor, Joe Saul-Sehy, joins me to answer a multitude of questions on retirement savings and investing, so let’s dive in.

Elyse has two questions:
#1: Through her job, Elyse has a 401(a) hybrid. Right now, she contributes 0.5% as her employer will contribute 2.5% only when she contributes 4%.

Should she contribute the full 4%, or keep her contribution as low as possible, save it, and invest it on her own (which is what she’s been doing)?

#2: Elyse also has $18,600 invested in a mutual fund through her bank. Everything that she has read says to invest in index funds. So, should she pull her money out of the mutual fund and into Vanguard to avoid high fees?
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#145: How I Paid Off $500,000 in Credit Card Debt, then Launched a Company with $35 Million in Annual Revenue — with Rand Fishkin, Founder of Moz

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Rand Fishkin on stage giving a talkWhen Rand Fishkin was 25 years old, he carried $500,000 in credit card debt.

Less than a decade later, Rand was the Founder and CEO of a company that grossed $35 million in annual revenue.

In this podcast episode, Rand shares the story of hitting his financial rock-bottom and making the ultimate comeback.

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The saga began in 2001, when then-22-year-old Rand dropped out of his senior year of college to grow a business with his mom.

His mom, Gillian, owned a small marketing company that helped local businesses with tasks like placing ads in Yellow Pages. (If you don’t know what that is, ask someone over 30.)

Rand had an early entrepreneurial streak, and had spent the late 1990’s and early 2000’s working part-time for his mom’s business. By his senior year, he was ready to dive in full-time.
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#144: Ask Paula – What Do You Think of Real Estate Crowdfunding?

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Today I’m answering your real estate questions!

First up, Rich asks:
What are your thoughts on real estate crowdfunding versus investing in a traditional REIT and non-retirement account?

He doesn’t want to give up the time it takes to manage a rental property. He wants to spend more time with family and friends, and his eventual goal is to generate enough passive income to transition into becoming a social worker.

Rob asks:
As a real estate investor who also invests in index funds, how do I decide what percentage of my net worth to allocate towards the stock market versus real estate?

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#143: Life After Financial Independence – with millionaire investor Emma Pattee

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Emma PatteeEmma Pattee became a millionaire at age 26. But she hates it when I describe her like that.

Here are other ways that Emma would prefer to be known: She’s thoughtful. She’s hilarious. She’s kind.

Emma is the child of hippies. She grew up in a tent in Oregon, at least for a portion of her childhood. She has a BFA in writing from Emerson College.

She bought her first house at age 21. At the time, Emma was juggling a demanding full-time job with her ambitions of becoming a writer. This balancing act felt too tough. She felt motivated to quit her job as quickly as possible, so that she could devote her time to writing.

She moved in with her boyfriend’s parents, saved 70 percent of her income, and contemplated what to do next.
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#142: Ask Paula – How Can We Downsize from Two Incomes to One?

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Paula Pant - Ask Paula: The Early Retirement EpisodeHow can a family of four shift from earning two incomes to one, while still pursuing financial independence?

How would a 55-year-old couple with $2 million saved know if they’re ready to retire?

Can parents use leftover money in their 529 plan to help their daughter with her college loans?

If you start a job with an employer who doesn’t offer high-deductible, HSA-compatible health insurance plans, could you use a plan from your old boss?

And where should a father keep his daughter’s Bat Mitzvah money?

My friend and former financial advisor Joe Saul-Sehy and I tackle these five questions in today’s episode. Here’s a close-up look at each situation.

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#141: The Gap Between Knowing and Doing – with Dr. Stephen Wendel from Morningstar

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Steve Wendel, Morningstar

“I’ll get around to rolling over my 401k … next week.”

“Eventually I’ll switch to a cheaper insurance plan.”

“I really should move my portfolio into lower-fee funds.”

“Yeah, yeah, I know I should create an estate plan. I’ll do it later.”
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We know how to improve our financial lives. We know what steps we ought to take. I’m betting that everyone reading this can name at least one action, big or small, that you could take to improve your net worth.

But we don’t follow through.

Why not?
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#140: Ask Paula – Should I Buy a Rental Property with an HOA?

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Should you buy a rental property that mandates HOA payments? How do you adjust for cap rate over the years, as the property’s rent increases with inflation? Should you buy an $88,500 house that rents for $1,250 a month? And can you dive into detail about how you work with contractors and property managers?

I answer these four questions in today’s Ask Paula episode, themed around real estate investing.

Daria asks:
My husband and I live in Charlotte, North Carolina. I’ve been looking at local properties and I notice that a lot of these properties, Class C+ or higher, come with HOAs. For example, I’ve found properties that cost $80,000, rent for $1,000 per month, and have HOA fees of around $150.

How do you think about HOA fees in general, and how do these affect considerations like cap rate? I’d love to hear your thoughts.

Here’s a brief synopsis of my answer:

Avoid the temptation to have a knee-jerk reaction to HOA fees. These can be excellent for helping you control and predict costs, if they handle exterior maintenance at a predictable rate.

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#139: How I Save Half of My Income as a Firefighter, While Living in an Expensive City — with Kim E.

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Five years ago, at age 29, Kim E. started her first professional, salaried full-time job, working as a firefighter for the City of Austin, Texas. She received a starting salary of $42,000.

Today, five years later, she has saved:

  • one year’s salary ($40,000) in an emergency fund
  • one year’s salary ($42,000) in a workplace retirement fund
  • more than half a year’s salary ($27,500) in a Roth IRA

She also paid off her student loans ($10,000), paid off her car loan (roughly around $16,000-ish), and contributed to an H.S.A. account ($6,000, half of which came from an employer match.) Oh yeah, and she also bought and renovated a rental property.
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#138: How to Create an Authentic Life

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Paula Pant World Domination Summit - Credit Chris Guillebeau

Credit: Chris Guillebeau / World Domination Summit

There’s a famous quote that’s attributed to Henry Ford. The quote says, “If I had asked people what they wanted, they would have said faster horses.”

There’s no proof that Henry Ford actually said this. But whether or not that quote is historically accurate, the point remains. If Elon Musk had asked people what they wanted, they would have said a car with better gas mileage.

But Elon never bothered asking. Because he knows you cannot change history from the middle of the bell curve. And he knows that design by consensus, by definition, leads to average results.

He may ask for input on the details. But he will never ask the crowd to guide his vision.
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#137: Ask Paula – What the F**k Are Annuities?

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Today’s episode is an annuity sandwich: we answer one question about family and relationships, three questions about annuities, and one question about time management.

My friend and former financial planner Joe Saul-Sehy joins me to answer questions in what, I hope, is the most entertaining episode about annuities you’ll hear.

Here are the five questions that we’ll tackle today.

Anonymous asks:
I didn’t grow up with much money, and my father recently went into bankruptcy. I’ve worked hard to become financially stable. Unfortunately, my parents expect a handout. How do you handle parents and other family members who look for handouts when they see you’re doing well?
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