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#190: More than 20 years ago, affluence researchers Dr. Thomas Stanley and Dr. William Danko surveyed a vast number of millionaire households in the United States. What they discovered was groundbreaking at the time. The average U.S. millionaire, they found, lives a frugal lifestyle. They are disproportionately clustered in modest, middle-class neighborhoods. They drive used cars. They don’t spend money on jewelry, watches, boats or other high-ticket items. They’re self-made, meaning they did not inherit their wealth; they’re first-generation millionaires. In 1996, the researchers published their findings in a book called The Millionaire Next Door: The Surprising Secrets of America’s Wealthy. The book became a mega-bestseller and, to this day, remains a top personal finance classic. Fast-forward to 2012. Dr. Thomas Stanley’s daughter, Sarah, followed in her father’s footsteps. She’s grown up to become a researcher, earning a Ph.D. in applied psychology and exploring the world of behavioral finance. She became the Director of Research for the Affluent Market Institute, the research company her father founded, and she launched her own research firm, DataPoints. In 2012, Dr. Sarah Stanley Fallaw and Dr. Thomas Stanley decided to update their research on millionaire households in anticipation of the 20th anniversary of the publication of The Millionaire Next Door. They wanted to see what attributes are different, 20 years later, and what qualities remain the same. They crafted another large-scale survey of millionaires. Yet before they could complete the project, tragedy intervened. In 2015, Dr. Thomas Stanley was killed in a car accident. He was hit by a drunk driver. His daughter resolved to finish the research that the two of them started together. She sent out the survey they created, gathered and analyzed the results, and published a sequel, The Next Millionaire Next Door, co-authored with her late father. The book is Dr. Thomas Stanley’s final, posthumously-published book. The book was released in October 2018, twenty-two years after the original. On today’s podcast episode, Dr. Sarah Stanley Fallaw joins us to describe what’s different about millionaires, more than two decades later … … and what’s remained the same. For more information, visit the show notes at https://affordanything.com/episode190 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#189: Julie, age 27, calculated her expected net worth based on the formula taught in the classic personal finance book The Millionaire Next Door. She’s concerned. Her current net worth is significantly lower than the number that the formula revealed. Is she on-track? Anonymous wants to save for a downpayment on a home. Should she reduce her 401k contributions in order to amass these savings? Should she store some of that money in a Roth IRA? Samantha is more than halfway finished with paying off her debt. In order to make this happen, she took on a second job. How much will she owe in taxes? Maxime works at a job in which his 401k only offers expensive choices. Should he put his money in a taxable brokerage account, instead? Leslie’s parents are going to retire in five years, but they’ve only saved $65,000. What should they do? How can she help? Claire is creating an estate plan. What should she be thinking about? Former financial planner Joe Saul-Sehy and I answer these six questions in today’s episode. For more information, visit the show notes at https://affordanything.com/episode189 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#188: In May 1915, a renowned 58-year-old sea captain, Captain William Thomas Turner, made a series of questionable decisions. He was the captain of the Lusitania, a ship with 1,959 passengers, sailing from Manhattan to London. The first World War was taking place around them, and Captain Turner knew he needed to move swiftly to evade German submarines. His ship approached England; land was in sight. They had almost made it. Yet for reasons that will always remain a mystery, around 1 pm on May 7th, Captain Turner slowed the speed of the vessel to around 18 knots, slower than the 21 knots that they needed to outpace the threat of submarines. Around 45 minutes later, he executed what's called a "four-point bearing," which forced him to pilot the ship in a straight line rather than a zigzag course, which would be better for outmaneuvering torpedoes. At 2:10, the ship was ripped apart by a torpedo. Nearly 1,200 people were killed. Since that fateful day, historians have pondered why he made those two decisions, simple choices which may have permanently altered the lives of thousands. Today's podcast guest, Daniel Pink, has an unusual theory. He believes Captain Turner may have made those sloppy choices because it was the afternoon. Daniel Pink is the author of When: The Scientific Secrets of Perfect Timing. In his book, he makes the case that the time-of-day in which we take actions -- early morning, mid-afternoon, or nighttime -- makes a bigger impact than we realize. Our energy and attention unfold in waves, with a rise, then a drop, then a resurgence. The secret to perfect timing isn't simply a matter of managing daily routines, however. Daniel Pink also shows how this pattern emerges over the span of a natural human life, with the choices we make in our sunset years more prone to editing, to curating, than the choices we make in our younger years when time feels abundant. Senior citizens may have smaller circles of friends, he says, not due to loneliness but rather because they're editing their circles down to the few people who matter most. He discusses how midlife is a fascinating point in which our brains signal that we've squandered half of our time. These midpoints can act as either a slump or a propellant. He talks about how we appreciate things more if we believe that they're ending. In one study, researchers gave five Hershey Kisses to subjects; they asked the subjects to rate their taste and enjoyment. When the researchers handed out the fifth Hershey Kiss, they told half of the subjects "here is your fifth chocolate," and they told the other half of the subjects, "here is your final chocolate." The ones who were told that they were receiving the final chocolate rated their enjoyment of it more highly. How much does timing affect our lives? How do we manage our days, and our decades, with a stronger awareness of the way that chronology impacts our mood, energy and priorities? Daniel Pink answers these questions in his book, When: The Scientific Secrets of Perfect Timing. He talks about it on today's show. For more information, visit the show notes at https://affordanything.com/188 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#187: Sarah needs $36,000 per year in rental income to reach FIRE (Financial Independence, Retire Early). She owns several rentals. When can she comfortably consider herself FIRE? AyV wants to rent out his primary residence. Should he renovate? Anonymous lives in a high-cost-of-living city, but she found a small city nearby with Class B and C+ multifamily properties. These properties need a little work. How can she estimate repair costs? Carly bought a property that underperformed the one percent rule. It’s appreciated in value. Should she sell? Erin is trying to decide if she should buy a $270,000 personal residence in northern Virginia, or a $50,000 rental property in Huntsville, Alabama. Nancy wants to buy rental properties from overseas, but she’s having a tough time finding real estate agents who take her seriously as a buyer. What should she do? I answer these six questions in today’s final Ask Paula - Real Estate episode. Enjoy! For more information, visit the show notes at https://affordanything.com/187 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#186: Mike and Lauren have run a cleaning company, started and sold a biodiesel company, repaired and resold motorcycles, opened a coffeeshop, owned a DVD rental box, sold e-cigarettes, bought a storage warehouse, launched a YouTube channel with nearly 150,000 subscribers, moved to Manhattan, moved back to Florida, backpacked across Europe and gave birth to two children in Costa Rica. Whew. I’m exhausted by just writing their list of entrepreneurial experiments. Their willingness to take risks has paid off … big time. Mike and Lauren reached financial independence at age 30 and 29, respectively. Today, they join us on the Afford Anything podcast to discuss how they did it. For more information, visit the show notes at https://affordanything.com/186 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#185: Hello from Austin, Texas! I’m living in an Airbnb here for the next 5 weeks. Listen to the end of today’s episode to find out why … and discover how these next 5 weeks, for me, exemplify the “why” of financial independence. In the meantime, though, the show must go on! Here are the questions that we’re answering in today’s episode. An anonymous listener named Seeking FIRE wants to know how she can talk about financial independence with people who ridicule the topic. What do you say to those who laugh at the very idea? Russell owns a landscaping company and is also a part-time student. He’d like to earn more money on the side, but his schedule is overbooked. What can he do? Nick and his family are moving to the Washington D.C. area for approximately two to six years. They own two rental properties free-and-clear, and would like to buy a personal residence when they move. How should he save for the downpayment? Gerardo lives in Mexico and wants to retire on his investment portfolio, using the 4 percent withdrawal rule. How should he invest, given currency fluctuations and other international factors? Anonymous left her job and wants to know if she should roll over her 401k from her old employer. We tackle these five questions in today’s episode. We also answer a comment from a listener who says that individual stock-picking and active management doesn’t get the credit it deserves. For more information, visit the show notes at https://affordanything.com/episode185 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#184: In 2003, Beyonce Knowles-Carter felt shy about performing sultry lyrics and dance routines on stage. She needed a tactic to overcome her nerves and stage fright. So she created an alter ego, Sasha Fierce, to bring out her more assertive side. Beyonce is one of many top performers -- along with other top artists, athletes, executives, speakers, investors, bankers, lawyers, negotiators, and more -- who use alter egos as a tactic to overcome their insecurities and become better versions of themselves. Today's podcast guest, Todd Herman, is an expert at the practice of creating alter egos to improve your performance in any arena of life. He says that crafting an alter ego can help you become a better worker, leader, manager, investor, and even a better parent. Todd joins us on today's podcast to describe the "why" and "how" of creating an alter ego at work, at home, and in social settings. For more information, visit the show notes at https://affordanything.com/episode184 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#183: Should a newlywed couple with two cash flowing rental properties sell one to pay off $92,000 of student loan debt? What percentage of your portfolio should you have in rental properties? What's the smartest way to approach rental property investing, particularly if you get anxiety thinking about tenant requests? How much should high interest rates impact your decision to buy a rental? I answer these four questions on today's episode, plus, I have a big announcement regarding the future of real estate Ask Paula episodes, so check it out. :) For more information, visit the show notes at https://affordanything.com/episode183 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#182: Millions of smart, educated and successful people make dumb mistakes with their money ... and they don't realize it. I'm not talking about obvious dumb mistakes, like spending 85 percent of your income on a fleet of Ultra-Luxe-Fancymobiles for your 16-car garage. That's clearly a bad idea. Instead, I'm talking about hidden dumb mistakes that you may not realize until it's too late. Perhaps you don't have enough insurance, or you hold the wrong types of policies for your age and life situation. Maybe you don't have an estate plan, or you haven't updated your estate plan after your childbirth or divorce or remarriage. What if you're taking financial advice from the wrong people, or buying products that you don't understand? Are you rushing to buy a home too soon? Did you take out too much debt for college? Today's podcast guest, Emmy-nominated CBS News business analyst Jill Schlesinger, describes 13 dumb mistakes that smart people make with their money. For more information, visit the show notes at https://affordanything.com/episode182 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#181: Imagine that you’re going to take a 6-month to 9-month mini-retirement. How should you plan? What should you do? Sure, you’ll need to have enough savings to cover your expenses. You might want to find some part-time work. You may need to sell off a few investment. And of course, you’ll need to think about health insurance. But what else should you consider? And how will your first taste of voluntary unemployment impact your mental and emotional health? Former financial planner Joe Saul-Sehy and I discuss this in today’s podcast episode. For more information, visit the show notes at https://affordanything.com/episode181 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#180: Nearly two decades ago, Stacy Berman, a personal trainer, launched a fitness bootcamp in New York City. She called it Stacy’s Bootcamp. She invited her clients to join her for 5:30 am outdoor workout classes in Central Park. At first, only three or four people showed up. Then the group grew to 10 people. Then 20 people. Then demand grew beyond a capacity she could reasonably accommodate. She hired personal trainers as independent contractors who led additional classes. She limited class size to 20 people who paid $30 to $37 per class, depending on the package they purchased. Her business expanded to Manhattan’s Battery Park and Brooklyn’s Prospect Park. After six years, Stacy’s Bootcamp grossed more than $1 million. The company had zero employees; the other teachers were contractors. Stacy is one of the many entrepreneurs profiled by Elaine Pofeldt, author of the book The Million Dollar, One Person Business. In today's episode, we talk about solopreneurs who make a million without any employees. For more information, visit the show notes at https://affordanything.com/episode180 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#179: 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. For more information, visit the show notes at https://affordanything.com/episode179 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#178: Tanja Hester retired at age 38. She had a negative net worth until her late 20's, thanks to a combination of student loans, buying expensive cocktails and clothes, living far beyond her means, and not paying attention to her money. If you were to have met the 27-year-old version of Tanja, you wouldn't guess that she'd be a likely candidate for retiring early. Yet a decade later, she's saved 40x of her annual cost of living. How? Tanja worked as a political consultant in Los Angeles, and during her career, ascended to important high-ranking roles. Every promotion came with more grueling hours, accompanied by a raise. Tanja maintained her same standard of living, banking every raise. This simple strategy allowed her to rapidly grow her net worth. She didn't obsess about penny-pinching. She didn't clip 50 cent coupons for shampoo and soap. Instead, she focused her efforts on getting that next promotion, that next raise, and when it arrived, she saved and invested every additional cent. Today, at age 39, Tanja has published her first book, Work Optional, about saving enough to retire and live a lifestyle in which paid work is an option rather than a necessity. She joins us on this week's podcast to talk about the lessons she outlines in Work Optional. Here are 5 takeaways from this conversation. #1: We're taught that "you are what you contribute to the economy." Most of us learn, either explicitly or implicitly, that our self-worth is directly correlated with our economic efforts. This is an idea that we need to unpack and process as we face retirement, a mini-retirement, or any career transition. #2: Research shows that we perceive all change as loss, even if the change is positive. Retirement is a loss of identity. It's one of the most stressful and anxiety-producing life events. #3: Retirement and wealth will not create happiness. Money won't magically fix your life, health, relationships, outlook, or anything else. It's a tool that can help, but it's not a silver bullet. #4: A morning routine is grounding. It's an effective way to start your day feeling centered and calm. I'd recommend this for everyone, regardless of whether you're retired or not. #5: The easiest way to save is to keep living at the same level you're currently at, while earning more. Enjoy the podcast episode! For more information, visit the show notes at https://affordanything.com/episode178 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#177: Imagine that your job is extremely well-paying, but you don’t enjoy it. You’d like to switch employers, even though this will probably require a paycut. But before you make the switch, you want to accomplish two goals: buy a home and catch up on retirement savings. Should you pursue both goals? Or should you defer the home purchase, given the potential future paycut? If you decide to pursue both goals, which one should come first? This is one of the five questions that former financial planner Joe Saul-Sehy and I answer in this week’s podcast episode. We also answer a question from a listener who’s self-employed and wants to contribute more to his retirement accounts. We talk to another listener who’s living on $600 monthly paychecks while maxing out his Mega Backdoor Roth contributions. We talk to a 22-year-old with an $80,000 salary who’s debating between paying off her student loans vs. investing. And we answer a question from a listener who’s wondering what she should do with 401k accounts from previous employers. For more information, visit the show notes at https://affordanything.com/episode177 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#176: Cal Newport created a philosophy called digital minimalism, which is idea of reducing your digital life down to only the most important core essentials. Remove the apps from your phone, then slowly re-introduce only the ones that are the most useful and beneficial. Take control of your smartphone, rather than letting it control you. Digital minimalism is a philosophy of technology use. This philosophy pulls from the concepts of minimalism, essentialism, the slow movement, and the 80/20 principle, applying these ideas towards your digital life. Cal discusses the digital minimalist philosophy on today’s episode. For more information, visit the show notes at https://affordanything.com/episode176 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#175: Larry Swedroe is one of the most respected investment thinkers and writers of our time. He's published 8 books on investing, including one of the first books to explain the science of investing to a layperson audience. He recently wrote an ultra-comprehensive guide to retirement planning. He joins us on the show today to discuss the nuances of investing and retirement planning. We talk about the stock market (is it going to fall soon? Are we heading for a recession?), we talk about risk (including three dimensions of risk that all investors should consider), and we talk about what traditional retirees vs. early retirees should know. For more information, visit the show notes at https://affordanything.com/episode175 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#174: Should a 48-year-old New Yorker who’s retiring next year buy more rental properties? Should a Michigan-based first-time homebuyer use an FHA loan to buy a duplex for $135,000 that rents for $1,800 per month? Should a 40-year-old music professor who owns a duplex transfer his property into an LLC? Should a New Jersey condo owner sell her unit as For Sale by Owner? And should a woman who’s anxious about owning her own rental properties dive into real estate crowdfunding deals instead? I answer these five rental property questions in today’s podcast episode. For more information, visit the show notes at https://affordanything.com/episode174 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#173: Paulette Perhach is a journalist who has been published in The New York Times, Slate, ELLE, Marie Claire, and Cosmo. But we’re not going to talk about that today. We’re going to talk about the fact that she’s made every decision by putting her life first, and then forcing her career to follow. She’s hiked through jungles and watched eclipses and volunteered with the Peace Corps. She’s been on crazy adventures in far-flung places. She endured unimaginable pain and it’s because of those challenges -- not despite them, but because of them -- that she knows her one precious, wild life is too short to spend in a cubicle. Many people who pursue financial independence are looking for a fully-funded lifestyle change. But Paulette made an unfunded change. She lives her life, and then figures out how the money follows. What can we learn from her resourcefulness? Find out in this episode. For more information, visit the show notes at https://affordanything.com/episode173 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#172: Should a 25-year-old homeowner with healthy savings and no debt (other than his mortgage) upgrade his car? Should he make this choice if his current car is fine, and upgrading puts him into new debt? Should a couple without access to an employer-sponsored retirement plan put their savings into a taxable account, or should they save for a downpayment on a rental property? The market is fluctuating like mad; if someone has a lump-sum of cash, should they invest it now or should they slowly meter it in? Should someone without an emergency fund enroll in an HSA-qualified health insurance plan? Or should they stick with a plan that has a smaller deductible? How should a husband-and-wife team that’s self-employed and running a company together handle their health insurance? Former financial planner Joe Saul-Sehy and I answer these five questions on today’s podcast. Enjoy! For more information, visit the show notes at https://affordanything.com/episode172 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#171: Chris Hogan surveyed 10,000 millionaires in the United States. Here's what he discovered: - 89 percent of millionaires have a net worth between $1 million to $5 million dollars - 62 percent graduated from public state schools - 9 percent didn't graduate from college - Close to 50 percent had a B average or less in school - 55 percent give to charities and churches on a regular, monthly basis - 73 percent never had a penny of credit card debt - 18 percent are self-employed - 62 percent earned a household income of less than $100,000 annually - 80 percent exercise at least three times a week. On average, their homes are 2,600 square feet, and they've lived there for an average of 17 years. Two-thirds have a paid-off mortgage. They paid off their home on average in 11 years. Their net worth breaks down as one-third their home, and two-thirds their investments. They became millionaires at the average age of 49. They spend, on average, $35 on a pair of jeans. What can we learn from these everyday millionaires? Find out in today's episode! For more, visit https://affordanything.com/episode171 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#170: When should you NOT use the one percent rule for rental property investing? In today’s episode, I encourage two callers to violate the One Percent Rule for real estate that they already own. WHAAATTTT? Why would I say that? Especially given that I’ve gained a bit of a reputation as The World’s Most Staunch Advocate of the One Percent Rule? (Long title, I know, but someone’s gotta wear it.) And if you’re not going to use the One Percent Rule, how should you make decisions about your real estate investments instead? Find out in this podcast episode. Enjoy! For more information, visit the show notes at https://affordanything.com/episode170 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#169: Happy New Years! To kickoff 2019, we've created a free book called One Tweak a Week, outlining 26 easy, actionable ways that you can improve your financial life. Today's podcast episode covers these 26 tweaks, so you can listen in audio format, in addition to reading the book. If you put these into action for the first six months of 2019, you'll be in a more stronger position in June than you started in January. Each tweak takes less than one hour (some are as quick as five minutes), and taken together, these tweaks can accumulate into a serious impact. Improve your money management and get closer to financial independence with our free book, One Tweak a Week. You can download it here: https://affordanything.com/2019 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#168: You can do anything, but not everything ... and definitely not everything at the same time. How can you optimize your time and energy? How do you choose what's worthwhile and what's a waste of time? How can you eliminate small decisions so that your mind is free to focus on the few choices that make a massive 10x impact? How can you spend less time struggling with your Inbox, and more time on long-term projects that can boost your income? When inspiration strikes or new opportunities present themselves, how can you decide whether or not this new project is worth your time? What's the difference between being efficient vs. being effective? How can you eliminate distractions? Can you train yourself to pay attention to important tasks, rather than getting distracted by Facebook, email, television and other time-wasters? When is it okay to relax? And what are the keys to a great morning routine? In today's episode, productivity expert Mike Vardy describes his answers to these questions. Here are five of the nine takeaways from today's episode: 1) Eliminate decisions. Don't waste your time and energy deciding what to work on; create a system that makes this decision for you in advance, and review that system periodically. Your decisions, therefore, are focused on the system, not the daily tasks inside of it. 2) Create boundaries, so that you know your limits, and also don't be afraid to break them. Boundaries are a guidepost, not a strict law. 3) Rather than setting New Years Resolutions, choose three words that will be the "theme" of your year. These words will be the values that guide your decisions throughout the year, helping you identify what projects to undertake and which ones to defer or decline. 4) Time-management tactics are really meant to be a compass. The purpose of "productivity hacks" is not tactical task-management; it's strategic decision-making. 5) Productivity is not about getting things done. It's about aligning your attention with your intentions. Enjoy! For more information, visit the show notes at https://affordanything.com/episode168 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#167: Angelisa is a college senior with $30,000 in student loans. She has a part-time job, from which she’s saved $2,500. Should she keep saving money, or should she get a headstart on paying down her student loans while she’s in school? Mackenzie is also a college senior with some student loans. She recently received a settlement from a car accident. Should she invest this money? If so, how? Franchesca is 35 and is carrying $212,000 in debt, mostly student loans. Could she reach financial independence, even with a late start? Erica wants to make environmentally-friendly investments. How should she approach this? Caroline is 42 and has started making after-tax (non-Roth) 401k contributions. Is this a good idea? Schaffer is curious about podcasting. How did I get started? I answer these six questions on today’s podcast episode, alongside former financial planner Joe Saul-Sehy. Enjoy! For more information, visit the show notes at https://affordanything.com/167 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#166: Michelle Singletary learned everything she knows about money from her grandmother. Well, okay, I shouldn't say "everything" that she knows. After all, Michelle also has an MBA from Johns Hopkins University. She writes about personal finance for the Washington Post. Her nationally-syndicated personal finance column, The Color of Money, is published in more than 100 newspapers nationwide. She's written three financial books. Michelle has been learning, thinking, writing, researching and speaking about money management for decades. Yet the most important education she received, she says, came from the lessons her grandmother taught her. Today, Michelle joins us on the Afford Anything podcast to talk about what she learned about financial independence, and her views on the FIRE movement. For more information, visit the show notes at http://affordanything.com/episode166 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#165: Should Kim, an entrepreneur, invest in index funds or rental properties? Should Nick, an MBA student, househack into a more-expensive home with stronger cash flow, or a cheaper home with more budgetary wiggle room? Should Kelly, who is getting married soon, sell her current home and use the proceeds to buy multiple rentals? Or should she use her current home as a rental property? Should Trayci and her sister invest in rental properties or bare land? I answer these four questions in today’s episode. We’re a weekly show, but on the first Friday of the month, we air a bonus episode. This is our December 2018 First Friday Bonus Episode. Enjoy! More resources and be found at https://affordanything.com/episode165 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#164: As an entrepreneur, Bob Lotich loves growing and expanding. But after a particularly stressful year, he realized he had burned out. He woke up one Monday morning and, for the first time since he’d started self-employment, he realized he didn’t want to go to work. This was a new and uncomfortable feeling. He decided to take a mini-retirement. He had taken long breaks before. In the past, Bob had taken a full month off of work. This time, he wanted to a more ambitious break. He wanted to take a quarter off. He went to his whiteboard. He wrote the goal “take a sabbatical,” intending for this to last for three months. But then he paused. He wondered if he spelled the word “sabbatical” correctly. He Googled the word, then started reading about the concept. Bob learned that a sabbatical is historically a one-year break. Hmmm. That’s when he changed direction. Bob Lotich shares the reasons he decided to take a full year off work. For more information, visit the show notes at http://affordanything.com/episode164 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#163: 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 four questions in today’s episode. For more information, visit the show notes at https://affordanything.com/episode163 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#162: How will artificial intelligence, AI, impact jobs? Former Harvard president and leading economist Larry Summers predicts that one-third of men will be out of work by 2050. Finance guru Suze Orman says not to be surprised if we see 25 percent unemployment by 2030. And major research institutions predict anywhere from 14 percent to 50 percent unemployment. But could this really be possible? Or is everyone panicking about what will essentially be a shift in the types of jobs that people hold — reminiscent of our shift from farm to factory, and from factory to office — but not an actual net job loss? To answer these questions, we talk to Darrell West, author of The Future of Work, about artificial intelligence, robots, and the future of jobs. For more information, visit the full show notes at https://affordanything.com/episode162 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#161: Matt is interested in achieving financial independence, and he wants to encourage his friends to pursue the same goal. What podcast episodes provide a light, digestible introduction to the world of financial independence and retiring early? Daniel wonders why everyone pursuing financial independence seems to have a blog or podcast about this topic. Is the purpose of FIRE to sit around writing and talking about how you’re FIRE? If so, then what’s the point? Tom is an entrepreneur with an LLC in California. Should he buy a rental property through that LLC? Anonymous from California wants to know how I decide whether to use a property manager vs. self-manage my rental properties. She also wants to know how to estimate the cost of repairs and maintenance. And how should the tax benefits of rental properties play a role in choosing a property? Brett owns a rental property in Las Vegas, which used to be his primary residence. He’s getting a strong cap rate but a marginal return on equity. Should he hold the property in the hopes that it will rise in value? Or should he sell the property? Anonymous is an Indian citizen who lives in California on an H1-B visa. There’s a chance that his visa won’t be renewed, which means he’ll need to move back to India. What should he do with his rental properties? Can he manage his properties from another country? If so, should he purchase more? I answer these six questions in today’s episode. Enjoy! For more information, visit the show notes at https://affordanything.com/episode161 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#160: When Jonathan Mendonsa was 18, he researched which college degrees lead to the highest income. Pharmacy was near the top of the list of high-paying degrees, so Jonathan decided to become a pharmacist. He wasn't motivated by passion or calling. His decision was purely tactical. He wanted to make money. He spent four years in college, followed by another four years of graduate school. By age 28, he held a Doctorate in Pharmacy and an astounding $168,000 in debt. This debt burden might have been bearable if Jonathan loved his chosen profession. For people who love their fields, tuition is the price of being able to enjoy a lifetime of work they love. Unfortunately, that wasn't Jonathan's story. He never held a passion for pharmacy; he viewed it purely as a means to an end. Perhaps it wasn't surprising, then, that shortly after becoming a pharmacist, he realized that this wasn't what he wanted to do with his life. He wanted to change careers. He wanted to pursue more meaningful, fun, interesting work. He spent the next four years repaying his student debt. And finally, at age 32, he brought his net worth up to zero. _____ Brad Barrett wasn't thinking about income when he chose his profession. He had received acceptance letters to some Ivy League schools, but he wanted to graduate from college debt-free, so he enrolled at the University of Richmond, which gave him a partial scholarship. While studying there, Brad encountered an accounting professor who challenged him and his classmates in the best possible ways. Brad felt inspired to major in accounting. His decision didn't come from a rigorous analysis of lifetime income potential. He wasn't scrutinizing labor statistics spreadsheets. He was simply following a route that he found fascinating. After he received his undergraduate degree, Brad decided not to enroll in any further education. Instead, he started working for one of the Big Five accounting firms, with a starting salary in the low $40,000's. He and his future wife both lived at home with their parents for the first few years of their professional life, which allowed each of them to save dramatic amounts. Brad saved more than 90 percent of his after-tax income. Perhaps it's not surprising that the couple, who now have two children, are financially independent. ____ Both Jonathan and Brad are college-educated professionals in their thirties. They both live in Richmond, Virginia. They're both married with children (Jonathan has a son; Brad has two daughters). Yet their stories could not be more different. What can we learn about careers, work, income, spending, and financial independence from their life experiences? Find out in today's podcast interview with Jonathan and Brad, the co-hosts of the ChooseFI podcast. Learn more about your ad choices. Visit podcastchoices.com/adchoices

#159: Should a 36-year-old father of three invest primarily in Traditional or Roth retirement accounts? Should Rose, a grandmother of four, open a Vanguard account for each of her grandchildren? Should Nancy, who lives overseas and is the sole breadwinner in her family, invest in a Traditional or Roth TSP? Should Scott’s wife rollover her 403(b) from her former employer into an IRA? Should Patrick, age 35, cancel his life insurance plan? Former financial planner Joe Saul-Sehy and I answer these five questions in today’s episode. Our first caller is Mr. “Three Kids and Still Hoping for FI,” who asks: Should I be trying to grab as many Roth dollars as I can before I can’t contribute anymore? Or should I just pour dollars into my traditional 401(k) and have my Roth conversion ladder and/or SEPP-72(t) ready? Rose asks: I have about $1,200 for two of the kids. Can you please suggest the best fund I can start with? Can you also suggest options for birthday gifts? I like giving money, and the kids don’t need anything materialistic. Stocks, perhaps? One stock at a time? Government bonds? I’d like it to be something I can give to them inside a card instead of cash. Nancy asks: I’m 33 years old, married, and have an 8-month old. I work for the Federal government and we have a TSP. We’re living abroad and my spouse isn’t working. I’d like to retire within the next 20 years. We’re conflicted about whether we should invest most of our money into a Roth or not. We keep getting conflicting information about whether we should take the tax deferment now, or whether we should pay the taxes now and not worry about it when we retire. We don’t have much debt, and we have international properties as well as two properties in the Washington DC area. We’d like to know how best to manage the tax issue. Scott asks: My wife recently left a job at a hospital where she had a 403(b) and a Health System Defined Contribution Plan. What can I do with that money? Can I roll it over into something else? Second, what do we do with the 403(b)? My first instinct is to roll it over into an IRA, where I have more control, but my wife and I (with our current income) cannot contribute to a Roth IRA so we’re making use of the Backdoor Roth conversion. It’s my understanding that rolling money from a 403(b) into an IRA will affect our ability to execute a Backdoor Roth conversion. Am I understanding that correctly? Patrick asks: I’m about 35 years old and recently married. My wife and I have a combined gross income of about $100,000. I have some concerns about our MassMutual life insurance retirement accounts. I think MassMutual is a good product, but I think we are over-invested. We’re both putting away a premium of about $500 a month (about $1,000 combined) into our MassMutual. The payout that we’re expected to receive at the end is about $350,000 for me, and about $400,000 for my wife. I’m concerned that our premiums are too high and we could be using that money in better, more effective places. I tried to reduce my MassMutual payment a few months ago, and the cut in benefit was pretty drastic and not proportionate … it didn’t seem very fair to me. Any advice? ________ We answer these five questions in today’s podcast episode. Enjoy! By the way -- TRIVIA TIME!! At roughly the 36-minute mark of today’s episode, Joe and I talk about the late Senator William Roth, the namesake of the Roth IRA and Roth 401k. His birthday is July 22, 1921, which means his half-birthday is January 22. Which means we can celebrate his half-birthday soon!! Tune into the episode to hear our only-half-joking conversation about this. :-) #AllTheCheesyBiscuits Learn more about your ad choices. Visit podcastchoices.com/adchoices

#158: Clark Howard loves the FIRE movement. That's because he's one of us. Clark began investing in real estate at age 22, started a travel agency at age 25, and retired at age 31. He sold his travel agency, moved to the beach and relaxed for four years; then he started a second career as the host of The Clark Howard Show, a popular radio show that's syndicated nationwide. Today, he's a personal finance celebrity. His website receives more than 50 million views per year. He has more than 1.1 million followers on Facebook. Clark is a consumer advocate and personal finance voice who walks the talk. He doesn't accept sponsorships that conflict with his values. He loves frugality and efficiency. Last week, he was traveling in New York on a company expense account, yet he still rode the subway, because he didn't like the idea of wasting money on a taxi ... *even if it wasn't his own money.* He's a philanthropist who leads with a service-first framework. During Hurricane Katrina, he volunteered with a team that handled medical evacuations. After September 11th, he joined the Georgia State Defense Force, which is an unpaid, unarmed volunteer component of the state Department of Defense. He sponsored the construction of 74 houses through Habitat for Humanity. He's provided toys for more than 150,000 foster children at Christmas. He's a multimillionaire and he flies in coach. When the now-infamous Suze Orman episode came out, Clark immediately issued a response on his own syndicated radio show. He came out in strong support of the FIRE movement. He said that he couldn't imagine how anyone could criticize the notion of saving half of your income. When I heard his remarks, I invited him on this show to elaborate. What does he think about the FIRE movement? Why does he like it? How would he respond to the objections? For more information, visit the show notes at http://affordanything.com/episode158 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#157: We're back with another Ask Paula - Real Estate Edition of the show! In this episode, we cover down payments, cash flow, investing in condo hotels, building a rental on the side of your own house, selling your properties, and whether it's better to buy actual properties or REITs. Erin asks: Would you ever put 30% down (or more) in order to make a rental property cash flow positive? Avy asks: In 4-5 years, I'd like to have a rental property for diversification and passive income. Is it better to stick with the plan to buy rentals, or should I go into REITs? Additionally, if I want to invest in rentals, where should I look? Rod asks: Could you tell me if investing in condo hotels as a rental property is a good idea? I'm 10 years away from retirement, and I was thinking of buying one in Las Vegas, since I plan to move there when I retire. Being a traditional landlord doesn't appeal to me - I don't want to deal with the hassle of bad tenants or repairs when I'm retired. I'm hoping a condo hotel might be a way for me to get income from a rental property without all the hassle. What are the pros and cons I should consider? Tom asks: I want to build a small two-bedroom house on the side of my personal residence (located in Texas) to use as a rental. What advice can you offer to help me execute this plan? Sandra asks: I live in California, and 5 years ago I purchased 3 properties free-and-clear in Memphis, TN. While they’ve been working great for me, I think they have much more potential, but I’m no longer interested in managing them, or my property managers. It’s too much for me as I changed careers; I’m now going in a much different direction. All I want is to cash out and invest that money into my new business, as that’s more fulfilling to me. I know to sell them cash is the first choice but investors are in the game of low-balling - way too low. Selling retail is an option, but it’ll take longer, and I don’t know if the market is in my favor. Seller financing drags things out, and lease options are not great for me, so I’m interested in your feedback. Learn more about your ad choices. Visit podcastchoices.com/adchoices

#156: James Clear wanted to start flossing, but he never managed to follow through. Despite his best intentions, his dental floss sat unused in a bathroom drawer. Fortunately, James had learned a thing or two about human behavior and habit formation. As a self-improvement writer, he'd spent hours pouring over scientific data about behavior changes. He decided to apply a few of these concepts to his own quest. First, he placed the floss on the bathroom counter, rather than tucking it inside a drawer. He made the floss visible. Second, he realized he didn't enjoy the tactile sensation of wrapping floss around his fingers, so he replaced it with floss picks. He made the floss more enjoyable. Finally, he decided to floss immediately after brushing his teeth. He used a technique called "habit stacking," in which a new habit is more likely to stick if it's tied, or triggered, by an existing habit like toothbrushing. Thanks to these techniques, James built a flossing habit. He shares these tactics and more in today's podcast episode. James Clear is one of the most well-respected and widely-known thinkers and writers in the world of habit formation and behavior change. His website, jamesclear.com, gets more than one million visitors every month. In this week's episode, we deep-dive into how to create impressive habits and how to break the terrible habits that hold you back If you'd like to start new habits like exercising, saving more, investing, meditating, journaling, practicing yoga or flossing, but despite your best intentions you can't seem to make the habit stick, then this week's podcast episode is for you. Learn more about your ad choices. Visit podcastchoices.com/adchoices

#155: How can a schoolteacher dad and stay-at-home mom send their four kids to college? Where should a 23-year-old keep the savings that she’s accumulating to buy a home by the time she’s 27 or 28? What should we know about retirement planning if we have a pension? And should I rollover my 401k from my old employer? Former financial planner Joe Saul-Sehy and I tackle these four questions in this week’s episode. Here are the details. Miguel asks: When I hear friends and coworkers talking about college tuition for their kids, all I can think about is how in the world am I going to send my four kids to college? I think I have a plan - I’d love to hear your opinion. From what I hear, college can be between $20-50k per year. I currently own two houses - one is a rental and one is our personal residence. We’re working on paying those mortgages down in about 7 years. I want my kids to get their basic courses from a community college to save some money, but for the rest I really think that taking a loan will be the best option. Usually these loans don’t have to be paid until they graduate, so I feel like that will give me some more time to become more financially stable. If I get to pay those mortgages in the time that I’m thinking, I’d like to buy a couple more rentals. I’m currently halfway to max out my contribution for my 403(b) plan. I’m a teacher, I’m making about 91k per year and my wife stays home. I would love to hear your opinion on my plan. I feel like if I had that kind of cash - $20-$50k a year - I would rather invest it and help my kids down the road. Anna asks: I am 23 and I’m saving to buy a primary residence in 4-5 years. In the meantime, I’m wondering where to invest my money so that it will grow but won’t be too susceptible to market fluctuations since I’ll be needing the cash relatively quickly. Andy asks: You’ve written before that if we contribute 10% of our salary towards retirement and our employer matches 5% automatically, we are saving 15% for our retirement. My question is, does the same principle apply to pensions? For instance, if I’m contributing 5% of my salary towards my pension and my employer is contributing 9 to 10%, making it around a 15% contribution overall, should that then count as a 15% retirement savings? Drew asks: I have a question about a 401(k) rollover. I recently switched employers and so far I’m very happy with the transition. With my new compensation, I’m now able to more than double my 401(k) contributions, and I’m on track to max out my new HSA while still maintaining the same take-home pay from my old job. My old employer had a 401(k) through Merrill Lynch and I was able to do a mix of contributions to both Roth and Traditional. My new 401(k) through Charles Schwab has this option. According to the documentation I’ve received from Merrill Lynch, I have four options at my disposal: 1. Keep assets where they are 2. Roll them into some kind of IRA 3. Transfer them into a new 401(k) 4. Take a cash distribution With this in mind, here are my questions: • Aside from the four options presented to me, are there any other options I should consider? • Are there any time constraints I should consider for this kind of roll over? • What would you recommend I do with these funds? I’ve heard you repeatedly mention the benefit of having all of my assets under one dashboard, so I am leaning towards transferring the assets into my new 401(k). I currently do not have an IRA, and I’ve been meaning to get one set up for a while. This seems like a great opportunity to get one up and running as an alternative strategy. Enjoy! Learn more about your ad choices. Visit podcastchoices.com/adchoices

#154: Want to retire early? You'll need at least $5 million, more likely $10 million, says famous financial personality Suze Orman. I should know. She said that to me, directly, on my podcast. I asked Suze for her opinion about a frugal, flexible person who wants to retire early with a $2 million portfolio. She warned that retiring would be a massive mistake. "Two million dollars is nothing," Suze said. "It's nothing. It's pennies in today's world, to tell you the truth." Wait, what? "Listen," she said. "If you have $20 [million], $40 [million], $50 [million] or $100 million dollars, be like me, okay. If you have that kind of money ... and you want to retire, fine." "But if you only have a few hundred thousand dollars, or a million, or $2 million, I'm here to tell you ... if a catastrophe happens ... what are you going to do? You are going to burn up alive." But what's wrong with retiring early on $2 million? Assuming it's invested 50/50 in equities and bonds and harvested at a 4 percent withdrawal rate, a portfolio of $2 million could create annual investment income of $80,000. Surely that's enough, right? *Riiiight?* Nope. Suze says that's not enough. "I think that in the long run, $80,000, especially after taxes and as you get older, is not going to be enough. You may think it's going to be enough, but it's just not," she told me on the Afford Anything podcast. "You can do it if you want to. I personally think it is the biggest mistake, financially speaking, you will ever, ever make in your lifetime." I asked her if a $3 million portfolio at a more conservative 3 percent withdrawal rate would be okay for an early retirement. She said no. "Think about it logically," she said. Supporting a disabled family member who needs full-time care could cost $250,000 per year, she said. Ordinary cost-of-living would cost another $100,000 per year. This means you'll need $350,000 per year after taxes to cover your costs, which is $500,000 per year before taxes, which at a 5 percent withdrawal rate means that you'd need a portfolio of $10 million. If you don't have at least $5 million or $10 million, don't retire early, Suze said. "Here's what the FIRE people, you are not thinking about, so I'm going to give it to you straight here now," she said. She described the possibility of getting sideswiped by massive taxes and catastrophic emergencies. What if your home gets destroyed by an earthquake or flood and insurance denies your claim? What if you're in a tragic car accident and you need full-time care? What if the U.S. experiences 25 percent unemployment, which means you won't be able to find another job if you wanted one? What if your investment income gets consumed by massive future tax hikes? "When you get older things happen," Suze said. "You're hit by a car, you fall down on the ice, you get sick, you get cancer. Things happen." "Alright, you can do it if you want to," she said. "I'm just telling you, you will get burned if you play with fire." For more, visit the show notes at http://affordanything.com/episode154 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#153: A few weeks ago, Suze Orman's team reached out to me and asked if I'd be interested in chatting with Suze on my podcast. "Um, duh," I replied. Sure Orman is one of the most famous voices in the world of personal finance. From 2002 to 2015, she hosted The Suze Orman Show on CNBC. She's the author of 10 mega-bestselling books, she wrote a financial column for O, The Oprah Magazine, and she's made multiple appearances on The Oprah Winfrey Show. I turned to Twitter and Facebook and asked this community, "What would you like me to ask Suze?" One question stood out far ahead of all others in popularity: What does Suze Orman think about the FIRE movement? I opened with that question. And Suze's response shocked me. "I hate it," she replied. "I hate it. I hate it. I hate it. And let me tell you why." That's a direct quote. (Really.) She spent the next 30 minutes explaining why she thinks pursuing FIRE could be the biggest mistake of a person's life. Well, then. Why does Suze Orman hate the FIRE movement? Find out in today's episode, and join the discussion and help spread the FIRE by sharing your thoughts on today's episode in the show notes, on Facebook, and on Instagram. Learn more about your ad choices. Visit podcastchoices.com/adchoices

#152: Dr. Brian Portnoy is an expert in making decisions. He holds a Ph.D. from the University of Chicago, he's a Chartered Financial Analyst, and he's the Director of Investment Education at Virtus Investment Partners. Dr. Portnoy joins me on the podcast to discuss how to make smarter decisions -- not only about investments, but also generally in life. How do we sharpen our decision-making skills? How do we improve our critical thinking processes? Here are some of the takeaways from our conversation. 1. Beware of resulting. Great results can come from poorly-planned decisions. And wise decisions can lead to good results on occasion. Don't judge a decision based on its results; judge a decision based on the soundness of the thinking process through which you made that choice. 2. Manage your expectations. Your happiness with an outcome will depend on the gap between your expectations and reality. If you can't control reality (at least, not completely), then manage your expectations. It's the happiness variable that's most under your authority. 3. Don't make hasty evaluations. When you go to a restaurant, you order a (vegan?) cheeseburger, and based on the taste of that burger, you can immediately evaluate your decision. You can't do that with investments. When you make an investment decision, there's a huge time-gap between when you make the choice and when you see the results of that choice. This time-gap may last for decades. And this means that your decisions are tough to evaluate. Don't judge an investment decision on one-year or two-year results, as tempting as that may be. Judge your decisions based on the soundness of the thinking, not the short-term ramifications. 4. Automate. It's the best way to save you from yourself. 5. Define risk. Some people think that "risk" is synonymous with volatility. Others think that "risk" refers to the loss of capital. Know what "risk" means to you. Personally, I define it as probability x magnitude. Today's guest, Brian, points out that magnitude can happen in a multitude of dimensions and verticals. 6. Diversification, risk management, and behavior. When in doubt, pay attention to these three factors. In order to better manage your investing choices, manage these qualities. You cannot control broad market outcomes, but you can control your exposure, risk, and choices. 7. You're the average of the 5 people you spend the most time with. Surround yourself with frugal, ambitious, reasonable, wise, intelligent, kind, adventurous people -- and you will become stronger in those qualities. You are in charge of the community with whom you surround yourself. Even if you can't change your physical neighborhood, you can form an online or digital community of people who support your goals and reflect your philosophy. 8. Keep a decision-making journal. What gets measured, gets improved. If you want to improve your decision-making skills, keep a journal of the way in which you make decisions, e.g. your thinking process. Then in the future, when you have the benefit of hindsight, you can look back on your decision-making process. Remember, don't judge your choices based on outcome; judge your choices based on the soundness of the decision-making process itself. Dr. Portnoy dives into detail about how to make better decisions in today's episode. Enjoy! For more, visit the website at https://affordanything.com/episode152 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#151: We’re back with another “Ask Paula” episode of the show! As usual, my friend and former financial advisor, Joe Saul-Sehy joins me in answering your questions! Let’s dive right in. Hailey: I just graduated from college with a major in Computer Science and minor in graphic design. The whole time - it was rough. I come from a family that didn’t have a lot to give me going into this journey of getting a college degree. So I did it basically on my own - they gave me things here and there - but college is expensive. I wound up getting scholarships and taking on student loans to get through. It was a lot of hard work. Some days, I wanted to quit. I felt like I was never ever going to see the benefits of what I was doing. Well, I am now at a point in my life where I was able to secure a job (I started a week after graduation) making $80k a year. Obviously, this is great - this is what you’re supposed to do when you graduate with a Comp Sci degree. But for some reason, I don’t know if it’s guilt or shame, but I feel bad watching my friends and family struggle, while I don’t have those struggles anymore. I find myself asking if I deserve this - to have a nice apartment, to have nice things. Inherently I know I deserve it because I worked so hard, but I don’t know … My question is - do you have any advice for me to help me understand what it is I’m feeling? How I can feel better about it? Chris: I’m 45 and my plan is to retire early - not super early - at 57. To keep numbers straight, I’m hoping to have a million dollars in a 401(k) and a million dollars in a taxable account with stocks. My thought was to - at 57 since I won’t have any income - to convert the 401(k) over to an IRA and then start converting that to a Roth at the max, keeping me in the 12% tax bracket, which is roughly $77,000, potentially more, and live off of the stock which will be at 15% tax and that shouldn’t go against my AGI because it’s an asset. Then at 67 I would start taking full retirement Social Security. Hopefully by age 70 I’d have very little to none in the 401(k) and most of that money would be in the Roth. Thoughts? Am I overthinking this? Rose: My goal is FI in about 5 years. After maxing out my 401(k), I make automatic monthly contributions to a robo-advised fund, specifically a Schwab intelligent portfolio. I like that it rebalances and has tax loss harvesting because I’m in a high tax bracket. To me, it feels somewhat safer than putting everything into VTSAX because it’s diversified, but I don’t fully understand all of the different funds that I’m invested in through the robo advisor. Should I keep putting money into the robo advisor, or should I switch to VTSAX? Does your answer change at all with ongoing economic uncertainty and the benefits of being balanced across stocks and bonds? Juan: I’m 24 and I live in NYC. I just graduated from engineering school and found a full-time position earning $75k/year before taxes. There’s a possibility of overtime so I might be able to make another $5-10k a year. I have $15k saved in cold hard cash; I have $6k in a Robinhood account which is doing well; and I have $5k in a Wealthfront account. I am planning on maxing out my Roth IRA ($5,500 a year starting now) and I have $2k there already. I also plan on participating in the employer’s contribution for the 401(k) traditional - which is maybe a 4% match. I don’t know where exactly I should put the money that I’m going to save to get the most out of it (mostly to beat inflation). $75k after taxes is probably around $55k and I plan on saving around 50% of that, or $30k a year for the next 3-5 years. I live by myself but my expenses are not high. I am very good with budgeting and everything is on track. I just want to get your suggestions/advice on where to put my money or what to do with it starting now. I am going to open an online savings account where I can get at least 2%. Learn more about your ad choices. Visit podcastchoices.com/adchoices

#150: Chad Carson's friends called him a "nerdjock." When former college football linebacker Chad Carson graduated from Clemson University, he decided to start a business. But he didn't have any money. He was a 235-pound athlete who attended college on a football scholarship. He graduated debt-free with $1,000 in savings from various odd jobs. He wanted to become an entrepreneur, and he knew he was starting from zero. As Chad viewed it, starting from zero meant he had nothing to lose. He started jogging around local neighborhoods near the university. Whenever he noticed a property in disrepair, he'd ask if it was for sale. If he noticed a 'For Sale by Owner' sign in the yard, for example, he'd dial the number. If he noticed a home with an overgrown lawn and no curtains in the windows, he'd leave a note on the door, or he'd knock on the neighbor's doors to get the owner's phone number. By doing this, Chad started a real estate wholesaling business. He'd find off-market properties, enter into a sales contract with the owner, and then 'flip' the contract to an investor. He earned around $5,000 for each deal. The benefit to a wholesaling business, Chad discovered, is that he could get a foothold inside the real estate industry without much access to capital. He was a recent college graduate without any official employment, so most banks weren't interested in offering him loans. Wholesaling gave him a start in the industry. But after awhile, he wanted to chase bigger deals. He and a business partner decided to start flipping houses themselves. They earned profits of around $20,000 to $30,000 for each deal. While this was great, Chad wanted to transition into something that would provide a steady, stable income stream. He was running an active business; he wasn't accumulating a portfolio of passive investments. He and his business partner stopped flipping homes and began accumulating buy-and-hold rental properties. Today they have 90 units between the two of them. A few years ago, Chad realized that the passive income from his investments made him financially independent. He and his wife decided to enjoy their newfound freedom by moving to Ecuador with their two children, ages 3 and 5. They spent 17 months living in Ecuador, learning Spanish and enjoying a slower pace of life. They recently returned to the U.S. and are considering moving to either Spain or Germany -- or maybe Colorado? -- for their next adventure. In today's episode, Chad and I discuss real estate, financial independence, and international travel with children. Enjoy! Learn more about your ad choices. Visit podcastchoices.com/adchoices

#149: Welcome to the September 2018 First Friday bonus episode! We recorded this episode at Camp FI, which stands for Camp Financial Independence. It's a gathering of people who are pursuing financial independence; we spend a few days eating, drinking, and having late-night poolside conversations about money. There are several Camp FI's throughout the year; I recorded this bonus episode at the Camp FI at Joshua Tree National Park in Southern California in early August. I invited several of the people at Camp FI to come to the microphone and share one thing: “Tell me a story about something you did that scared you." Justin shared a story about getting invited by a corporate sponsor to take part in a mountainous 75-mile cycling ride, despite the fact that he wasn't trained or ready. Tim told the story of the first time he met his future father-in-law, and, to phrase it mildly, the meeting didn't go well. GingerFI shared a story about something she ate while traveling that ... well, I won't give away the ending, but let's just say that it's something she'll never forget. Anna described moving from New Zealand to the U.S. to attend school, while Johanna talked about getting laid off from work and deciding to use her newfound joblessness as an opportunity to road trip from Maryland to Los Angeles. Jennifer described the resilience she discovered after surviving a disability, layoff and divorce. Wakefield talked about investing in real estate before he felt ready, and Vickie shared a childhood story of overcoming the intimidation she felt when she wanted to meet someone. Listen to hear the stories they shared, and the life lessons they learned along the way. Enjoy! For more information, visit the show notes at http://podcast.affordanything.com/episode149 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#148: Welcome to a special episode of Ask Paula! Today I’m answering questions about real estate investing, and I’ve brought a special guest on the show to join me. His name is Lucas Hall, and he’s a landlord with 5 properties in three locations (D.C., Virginia and Colorado). He’s also the founder of Landlordology and head of investor relations with Cozy. We met about five or six years ago through blogging about rental properties, and I invited him on the show today to answer questions alongside me. Anonymous asks: If you have significant equity in a home due to market appreciation, what’s the best way to leverage the value of this equity? Should you sell? Refinance? Something else? Here’s a quick snapshot of the answer: You have three options: sell, cash-out refinance, or take out a HELOC. If you’re unhappy with the property, sell it. There’s no reason to hang onto an undesirable or underperforming property. If you choose to sell, use a 1031 exchange to defer taxes on the capital gains and use the proceeds to purchase another property. Be aware, however, that the rules regarding a 1031 exchange are onerous, and there’s a chance that you might either miss the cutoff or you may be forced into trading one mediocre property for another. That said, wanting to tap equity is not a sufficient reason to sell. If you’re happy with the property, keep it and either use a cash-out refi or HELOC to tap the equity. On today’s episode, Lucas and I discuss the pro’s and con’s of both of these strategies, and explain which one is our favorite. (Lucas prefers the HELOC and I prefer the cash-out refi; on the episode you’ll hear each of us explain why.) Richard from Massachusetts asks: I’ve been listening to this podcast regularly, and thanks to this podcast I’ve opened a Roth IRA. I’ve saved $54,000 and I’m interested in investing in a Class B or Class C neighborhood in an out-of-state location. How can I find out if a neighborhood is Class B/C without visiting it? Catherine asks: I’m 27 and need investing advice. I make $75,000 per year and I have $60,000 in retirement savings. I max out an HSA. I have $12,000 in an emergency fund. I live in Los Angeles and I’d like to invest in real estate, but I don’t want to travel to another state. I’ve been thinking about Roofstock; what are your thoughts? Anonymous in Atlanta asks: My wife and I have $500,000 in savings, in addition to our 401k. We keep $130,000 of this in the market. We had an advisor that was charging a 1.6% fee, and we recently fired him. What should we do with the remainder of the cash in our savings accounts? Should we put this in Vanguard funds? I’d also like to get into real estate, but many homes in Atlanta don’t meet the one percent rule. Should we look at foreclosure auctions? Should we look further outside the city? We’re in our early 30’s and would like to retire in around 15 years. We answer these questions in today’s episode. Enjoy! Learn more about your ad choices. Visit podcastchoices.com/adchoices

#147: Which of the following two attitudes describes you? "I'm crunched for time." -- or -- "I have all the time in the world." I'm guessing your answer is the first, rather than the second. But what if you could feel like your time is expansive and abundant, without drastic changes to your schedule? Most of us want to feel "off the clock," enjoying an existence in which we can linger, without feeling pressure from the demands and stresses on our schedules. According to Laura Vanderkam, even the busiest, most-scheduled people can achieve this feeling. We can live off-the-clock. Laura is a time management expert, but her latest book isn't about *management* in the traditional sense of the word. Rather, it focuses on *time perception* -- getting into the headspace of believing time is abundant, regardless of the demands imposed upon it. The brain stores memories efficiently, which means it vividly recalls novel experiences -- such as the one-week trip to Belize -- while compressing repetitive experiences, like a commute, into a single memory. For that reason, time feels like it passes more quickly when we encounter situations that are routine and familiar, and slows when we experience new situations. That's how a one-week conference feels long, but a routine week at the office flies by. Of course, we can't eschew familiarity; there are many benefits to adopting a routine. But we can slow time by savoring our everyday experiences. The more we engage mindfully in everyday activities -- from savoring each bite of food to noticing the flowers during our commute to work -- the more we're likely to feel relaxed about our time. We create happy memories, rather than compressing our experiences in our minds. Treating our hours with intention can also lengthen our experience of time. We plan and structure our workdays, deciding how to spend our hours between 8 am and 6 pm. But often, we aren't deliberate about how we'll craft the hours from 6 pm to 11 pm, and therefore can feel like we rarely see family, even if we're with them for three to four hours each evening. Deliberately crafting hours doesn't mean jam-packing our schedule in 30-minute increments. Scheduling a two-hour block of time to linger over a long dinner can blend intentionality with the art of savoring. In fact, Laura notes, those who are the most disciplined about their time are also more likely to feel that they enjoy plenty of free time. Structure creates freedom. Today on the podcast, Laura and I talk about how to make time feel abundant. For more information, visit the show notes at https://affordanything.com/episode147 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#146: My 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? Anonymous also has a few questions: She has a 9-year job history with the state and local government, during which she has been enrolled in the Florida pension plan. Her new job offers a 457 Plan and/or a 403(b) Plan to supplement the pension earning. Her first question is: is a 403(b) better than a 457 Plan? Or should she enroll in both? Second, in her most recent job, she had a 457 deferred compensation Vanguard account which has $22,000 in it. Should she roll the Vanguard account over into one of the above plans, or leave it alone? Lastly, she has a 3-month old and wants to put a lump sum of $10,000 toward an account she can make contributions to, but she isn't sure which account would be best. Florida has a pre-paid program, but are there better options? Rachel has a question on retirement accounts as well!: Rachel recently left a government job where she had a TSP. In addition to that, she also has two IRAs - a small traditional IRA and slightly larger Roth IRA. She's actively contributing to the Roth IRA. When she left her job, she started an S-corp, and as she looks forward to business picking up, she wants to know how to best organize her retirement savings moving forward to make it easier to manage. She's also interested in tax optimization. What actions do we recommend she take? Stephen, a new listener, asks: If we're following the 4% rule route, does it make sense to fund an HSA, Roth IRA, Traditional IRA, or 401(k) at work? Or should we put all of the money in a Vanguard fund? Essentially, if you're planning to retire in 10 years or less, which is more beneficial: splitting up your money, or focusing on one account? P.S. If you have a question you want me to answer on an upcoming Ask Paula episode, leave it here! Learn more about your ad choices. Visit podcastchoices.com/adchoices

#145: When 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. _______ 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. Gillian and Rand both realized the internet was more than a passing fad. Households were switching from dial-up modems to broadband connections. Clients were more interested in websites than Yellow Pages ads. The mother-son duo decided to start designing websites for local businesses. From 2001 to 2004, they hired contractors, rented office space, hosted booths at conferences, and purchased advertising. They paid for most of this with personal credit cards in Rand's name. By 2004, they'd accumulated $150,000 in credit card debt. Then they defaulted. They couldn't make the minimum payments anymore. The interest and late fees grew this balance to an astronomical $500,000. They decided not to declare bankruptcy. Instead, they took a two-pronged approach: Rand's mom spent the next three years negotiating with creditors, getting big chunks of the interest and late fees waived in exchange for making payments on the principle balance. Meanwhile, Rand focused on growing the business. Several of his clients needed help with a specific aspect of internet marketing called search engine optimization, or SEO. Rand began researching SEO tactics and started a blog to share his findings. This blog attracted new clients, and soon Rand developed a reputation as an SEO expert. He created a company called SEOMoz, later rebranded as Moz, to offer consulting services for businesses. After a few years, his company started developing and selling subscriptions to SEO software tools, as well. By the time Rand stepped down from his role as CEO, the company had raised multiple rounds of funding and was collecting $35 million in annual revenue. But there's a difference between a company's earnings and the personal income of its founders. Today, Rand and his wife still have a liquid net worth that's less than one million. How did Rand transition from carrying $500,000 in debt to becoming the founder and CEO of a successful eight-figure company? Why isn't he a millionaire yet? And what lessons about entrepreneurship and finance can he share with the world? Find out in this podcast episode. ___ P.S. Rand's wife, Geraldine DeRuiter, is a hilarious travel writer and an alumni guest of this podcast. You can listen to her interview in Episode 77. http://podcast.affordanything.com/9-years-nonstop-travel-geraldine-deruiter-everywhereist/ P.P.S. If you'd like to learn more about starting a blog, check out this free tutorial. Learn more about your ad choices. Visit podcastchoices.com/adchoices

#144: 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? Anonymous asks: How do you maximize value in real estate? Is real estate worth the sum of its parts? Should you strip out some of that before you sell a property to maximize its value? Laura asks: How did you develop your real estate course? How do you market a course? I answer these questions on today’s episode of the podcast. Enjoy! For more information, visit the show notes at http://affordanything.com/episode144 For more details, visit the show notes at http://affordanything.com/episode144 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#143: Emma 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. She decided to "buy a small house in a not-so-nice neighborhood, and live for free by renting out enough rooms to cover my mortgage and make a little money on the side." But then she developed an addiction to real estate. She kept buying houses and converting them into rental properties. She DIY'ed some projects and hired contractors for other projects. She improved the homes and raised the rents. She reinvested the cash flow into buying more houses. She borrowed against the equity and bought even more houses. And that's how Emma, by age 26, became a millionaire. Her seven-figure net worth -- and more importantly, the cash flow that accompanied it -- allowed Emma to reach financial independence. She could stop trading her time for a paycheck. Emma quit her job at age 26 and dove into the world of self-employment, starting a lucrative one-woman enterprise as a professional ghostwriter. She writes books and articles, for which her clients receive authorship credit. In exchange for this effort, Emma makes a substantial amount of money. So who is Emma Pattee? She's a financially independent millionaire real estate investor who started a lucrative self-employment business as a writer. (Sound familiar?) Among the many words in that sentence, the most important word, to Emma, is the word "writer." That's why she started down this path. She wasn't trying to become wealthy. She wanted to become a self-funded artist. She wanted, simply, to write. __ Emma is a close friend. She was my guest of honor, my Plus One, when I delivered my keynote speech at the World Domination Summit last month. She's my travel buddy and real estate investing companion; we visited Alabama last year to check out potential investments in Birmingham and Montgomery. She and I have talked about meeting occasionally for writing retreats. In today's episode, Emma and I sit down at her dining room table, plug in a microphone, and hit "record." In the 30-minute conversation that follows, we talk about how and why we reached financial independence -- and what comes next. Enjoy. Learn more about your ad choices. Visit podcastchoices.com/adchoices

#142: How 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. Tyler asks: My wife and I both work 9-to-5 jobs. She's an elementary school teacher, and I work in sales. We've recently welcomed our first child into the world, and we're expecting our second. We'd like to transition to a one-income household, at least until the children are between three to five. We've maxed out my Roth IRA and 401k, funded a pension through my wife's work, funded a small Roth IRA for her, and started a 529 for our son. We have no credit card debt, but we have a mortgage, a car loan, and a student loan from my wife's graduate work. We're thinking about gradually phasing out her income, by reducing her "income" in 25 percent increments over time, and using that money to repay our debts. We hope to have the car loan and student loan paid off by the time our second child is born. What other recommendations would you offer as we transition into a single-income household? Heidi asks: We saved money in a 529 plan for our daughter's college education. We took out some loans for her freshman and sophomore years, thinking that we'd spend the rest of the 529 money during her junior and senior year. Then a wonderful thing happened: my daughter received $40,000 in scholarship money, covering her junior and senior years. Now my daughter has $13,000 in student loans from her first two years, and also $13,000 sitting in her 529 fund. Can we use the money in the 529 plan to repay her student loans? Or are our hands tied? Andrew asks: My 13-year-old daughter just had her Bat Mitzvah, and now holds $5,000 in a Schwab custodial account. Where should I put this money to preserve the capital, but also allow it to grow? She'll probably want to use a portion of this within the next five years. It's currently in a Schwab money market account, but I'm thinking about putting it in VFTSX, the Vanguard Social Index Fund. Anonymous asks: My husband just started a new job, and his employer doesn't offer HSA-compatible plans. His new employer only offers plans with low deductibles. I know that this isn't idea. Could he enroll in plan from his old job, so that he can still contribute to an HSA? Laura asks: Am I ready to retire? I'm 55 and my husband and I have $2 million, but we recognize that the market is volatile. How do we maintain our $2 million principal when we're no longer making contributions? My second question is about real estate. If the returns from both index funds and rental properties comes to around 8 percent, then why would you bother with the additional hassle of real estate? Enjoy! Learn more about your ad choices. Visit podcastchoices.com/adchoices

#141: "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." ____ 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? Why do we procrastinate? Why do we ignore the important, in favor of the urgent or the more-pleasant? Why do we act against our self-interests? Why is there a gap between our intentions and our actions? More importantly, how can we bridge this gap? How can we align our knowledge and intention with our behavior? Dr. Stephen Wendel is a behavioral economist and the head of behavioral science at Morningstar, an independent investment research firm. He joins us on the Afford Anything podcast to answer these questions. Here are a few tactics he shares: #1: Automate Set up systems that save you from yourself. #2: Create mental accounts Give every dollar a job. Earmark dollars for specific purposes, so that you don't view your money as commingled in a giant bucket that you can raid. Once you start thinking of piles of money as "my emergency fund" or "my kid's college fund," you'll be less likely to spend it on champagne and luxury hotels. #3: Imagine vivid scenes Our minds are predisposed to prioritize the vivid over the subtle, which is one reason why we suffer from "present bias" -- the tendency to only think about the present, often at the expense of the future. (For example, "I feel like sitting on the couch right now" takes priority over "If I workout, I'll feel better in the future.") In order to combat this, create vivid scenes in your mind that imagine the future in great detail. #4: Create artificial hindsight Imagine a future version of yourself, and from that perspective, look back in hindsight at yourself today. What will Future You regret doing, or regret not having done? This technique is called "prospective hindsight," and it allows you to anticipate the thoughts and emotions of your future self. #5: Simplify If you find yourself drowning in a sea of complex financial decisions, you might lose confidence in your ability to make choices, and therefore not take any action whatsoever. Reduce complexity by making moves that are 'good enough,' rather than perfect. Simplify in order to take action. Dr. Wendel shares more tactics and insights in this episode. Tune in for a deep-dive! Learn more about your ad choices. Visit podcastchoices.com/adchoices