Afford Anything | Make Smart Choices About Your Money, Time And Productivity

#134: We often peek inside the world of business to look for lessons about how to simplify, optimize and innovate. But what can we learn when we examine world-class people who are hacking the system in any field -- including sports, politics and music? What can we learn when we're radically curious about everything? And how can we apply this knowledge to helping us lead more deliberate, curated lives? Today, we tap Shane Snow's brain for answers. Shane Snow is a co-founder of Contently, a company that matches freelancers with publishers. But we're not going to talk about that today. We're going to explore bigger themes. Because Shane isn't just a tech entrepreneur. He's also an award-winning journalist, which is another way of saying that he's an inquisitive person who lives in the world of storytelling and big ideas. His first book, SmartCuts, explores how people avoid climbing the normative career ladder. It showcases people across a variety of industries who hack the ladder, often by making unconvent

#133: Andy from Michigan loved the episode with charity:water founder Scott Harrison. After the episode, he and his 6-year-old daughter started watching videos about charity:water, and now they're both inspired to give. Andy's question is on the topic of giving. His is to reach financial independence within 5 to 10 years. He and his wife are debt-free, including mortgage-free, and their retirement accounts are well-fueled. Now they're working on building passive income. In the meantime, though, they'd like to add a bigger charitable slice to their budget. He's not an overly religious guy, but he feels a calling to make more charitable donations than he does. What advice could we offer about how to boost his giving? JR's wife, before they got married, purchased two timeshares at a 17.9 percent interest rate. When the couple met, and she confessed, they immediately paid off the debt. They're now paying $160 per month in timeshare fees. JR is trying to figure out how to get rid of their timeshare, but he can't

#132: BONUS EPISODE!! On the first Friday of the month for the remainder of the year, I'm rolling out an additional bonus episode. As you know, this podcast airs weekly on Mondays. I'm thinking about maybe -- MAYBE -- expanding the podcast to twice-a-week. Maybe. But before I make such a big commitment, I figured I'd test the waters by producing *one* extra episode per month. I'll release this on the first Friday of every month for the rest of 2018. Today's episode is the June 2018 First Friday Bonus Episode, in which I answer three questions from the Afford Anything community. Enjoy! ____ Cameron accepted a job in the Middle East, where he earns 60 percent more than he could make at a comparable job in the U.S. He also gets free health care and 30 vacation days annually, which gives him time to travel with his wife and four kids. And thanks to his income and benefits, he and his family are on-track to reach financial independence in six years. The problem? He's just not that into his job. He'd like to

#131: Scott Rieckens and his wife Taylor enjoyed a classic Southern California lifestyle. They lived near a gorgeous beach in sunny San Diego. They frequently dined at sushi restaurants. They drove a BMW. But after the birth of their daughter, everything changed. Taylor, an intelligent, career-driven, independent woman, suddenly didn't want to spend any time away from her new baby girl. And Scott had no idea what to do. Their luxury lifestyle depended on dual incomes. At first, he tried to come up with a million-dollar idea. If he could just create a wildly successful business, he thought, he could fix this problem. He started binge-listening to podcasts, trying to figure out how to pull in seven figures, fast. Then he discovered the financial independence movement. And suddenly everything made a lot more sense. Scott realized that if they gave up their consumption habits -- if they moved to an area with a lower cost-of-living, drove less expensive vehicles, or maybe even lived in an RV for awhile -- th

#130: Anna and Dave want to get married … eventually. But they want to buy a rental property together first. How should they approach this from a paperwork/legal structure standpoint? Note: They’re thinking about having one partner purchase the home, with the other partner acting as a lender (with proper paperwork in place). Would this be a wise approach? Fred lives in Saskatchewan, Canada and owns two duplexes. He’s thinking of buying rental properties in the U.S., and he has 4 questions: What requirements or criteria do you establish ahead of time? For example, do you look for a minimum cap rate? Or a specific type of property? When you’re looking out-of-state, what steps do you take to identify a community? How about the type of property? What market research do you undertake? How would you caution an international investor who wants to start investing in U.S. properties? Jordana wants to build financial independence. She’s thinking about selling off stocks and index funds in order to buy her firs

#129: Laura Adams grew up in an upper-middle-class family in South Carolina, and her parents supported her through college. She attended her top-choice school, met her husband while they were still students, and enjoyed a charmed life. When she graduated, she continued to live at a lifestyle to which she felt accustomed. She rented a beautiful apartment. She took vacations. When she felt lonely, she comforted herself with shopping sprees. Unfortunately, her spending habits weren't aligned with her meager post-collegiate, entry-level income. Laura quickly found herself buried under thousands of dollars of credit card debt. She began feeling anxious about the debt. Fortunately, Laura channeled that anxiety into action. She cut back on discretionary spending. She watched her monthly mortgage payments fall. She focused on ways to earn more. Every time she'd free a small chunk of money -- a hundred here, a hundred there -- she made an extra payment on her credit card balance. Eventually, Laura wiped out her d

#128: Antonia, 27, wants to retire in 15 years. She's trying to figure out whether to contribute to pre-tax or after-tax retirement accounts. Most financial advice for 20-somethings that she's encountered says to contribute to after-tax (Roth) retirement accounts. These articles assume that a 27-year-old will continue earning money for the next 30+ years, presumably escalating into higher tax brackets along the way. By paying taxes upfront, these articles say, you'll enjoy 30+ years of compounding gains, which you'll be able to withdraw tax-exempt. But what if, like Antonia, you're only 15 years from retirement? Should you stick with Roth tax treatment? Or is there wisdom in making retirement contributions with pre-tax money? _____ Marisa is young, high-income, and highly risk-tolerant. She'd like to know: what asset allocation would I suggest for a young, risk-tolerant person? And is rebalancing her portfolio necessary, or just a distraction? _____ Dylan owns his home outright. When he sells it, he'll

#127: Most people know what they “should” do — save for the future. Spend less than they earn. Why do so few people follow through? The answer may have less to do with tactics, and more to do with a person’s deep-seated beliefs, fears and anxieties around money. Your income, debt, and spending habits aren't merely a function of your actions. They're a reflection of your deep-seated inner psychology around money. Dr. Brad Klontz, a clinical psychologist and financial planner, joins me on today's show to discuss four "money scripts" that may be harming us. These scripts include: Money avoidance -- We believe money corrupts or that staying poor is noble, so we self-sabotage our success. Yet at the same time, we also desperately (at the conscious level) want more money in our lives, and feel trapped between these conflicting ideas. Money worship -- We believe money will solve our problems. And even though we know that the research says that, after a tipping point, it won't, we don't internalize that idea.

#126: It's time to answer real estate investing questions! Tom asks: "We're thinking about buying a duplex on a beach in a popular vacation destination in Florida. If the property stays 85 percent occupied as a short-term (VRBO) rental at current rates, the income from one unit of the duplex could cover the costs of a 30-year mortgage. "But if a recession hits, Florida real estate might tank. The rental rates or occupancy could drop. And we'd be stuck paying the mortgage out-of-pocket, which means we might not be able to retire. Should we take this risk?" Rachel asks: "Would you consider purchasing a beach house? Also, would you consider buying out-of-state?" Alfredo asks: "I own a couple of rental properties. I have to admit, my personal and business funds are completely co-mingled. I'm trying to separate these expenses, but it's a mess. If I hired professional help, how much might I pay?" Anonymous from the Northeast asks: "I'm gathering friends to invest. We live in the northeast, where home prices ar

#125: Morgan Housel has spent thousands of hours reading about investing. As a former columnist for the Wall Street Journal and The Motley Fool, he's spent more than a decade reading, interviewing, thinking and writing about how to manage money. And he's come to a simple conclusion: less is more. Doing nothing is often the best course of action. Patience, humility and long-term thinking give individual investors a massive competitive edge over major institutions. The classic strategy of dollar-cost averaging into index funds is a smart approach. And ultimately, success is based more on emotions than Excel. This week, Morgan joins me on the podcast to discuss how to gain a competitive edge as an investor. For more information, visit the show notes at http://affordanything.com/episode125 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#124: Former financial planner Joe Saul-Sehy and I answer five questions about investing, retirement, insurance, travel and selling an expensive car. Eliana is 25 and makes $63,000 per year, plus a little extra from freelance work. She holds $95,000 in cash, $67,000 in retirement investments, and no debt. She doesn't necessarily hold early retirement as a goal, but she'd like the option to access her funds before she's 59-and-a-half. She asks two questions: First, she's been spreading her money between a Roth IRA, pre-tax 403b, and taxable brokerage account to spread her risk. Should she not contribute so much to the taxable account? She's also paying $88 per month for a $25,000 life insurance policy for her mother, who is 57 years old. She likes the peace-of-mind that comes with knowing it'll be there to cover funeral expenses, if needed. But she recognizes that there's a huge opportunity cost that comes from paying for such an expensive plan. Should she drop it? Rudy's employer offers two options: a pen

#123: In the 1970's, a woman named Vicki Robin teamed up with a man named Joe Dominguez. They came from different backgrounds: she was an Ivy League graduate with a comfortable upbringing; he was raised in Spanish Harlem on "welfare cheese." But they shared one common thread: a commitment to financial independence, not just as a money management strategy, but as a philosophy on life. Vicki and Joe became partners in both work and life. They united over a definition of "FI" that expanded beyond paying your bills through your savings and investments. They saw FI as a lifestyle that exists in three dimensions: 1: Financial Intelligence -- Your ability to think about money in an objective, unbiased and non-emotional manner. 2: Financial Integrity -- Your ability to earn and spend in a manner that's consistent with your values, and to stay aware of the impact of your earning/spending choices on yourself, your family and your planet. 3: Financial Independence -- Your ability to break the shackles of paycheck

#122: Tony lives in Chicago, where the returns on rental properties are so-so. He's thinking about investing in Indianapolis, where he consistently finds rental properties with cap rates that are greater than 8 percent. Should he invest locally, so that he can get a primary residence mortgage and keep a closer eye on the space? Or should he invest out-of-state, where the returns are stronger? Dan lives in California. He's curious: where should he look for rental properties? And when should he buy? Dan holds $150,000 in a savings account and carries a mortgage and car loan with less-than-2-percent interest rates. Should he continue saving, or is he ready to take the plunge? Isaiah and his friends want to buy a plot of land and build two yurts, complete with internal bathrooms and kitchenettes. They estimate this will cost $120,000 and they can Airbnb the yurts for $100 per night. They'd like this to be a hybrid between an investment and a personal vacation spot. Should they do it? Evelyn lives in Brooklyn,

#121: After Liz Thames graduated from college, she couldn't find a job. "Nowhere would hire me," Thames says. "I had what I thought was this nice resume, and I sent out over 50 applications. Nowhere called me back." She took a temporary job at a document-scanning agency, then joined Americorps to serve as a full-time volunteer in a low-income neighborhood in Brooklyn. She lived on a stipend of $10,000 annually, plus food stamps and a transit pass. She saved $2,000 from her $10,000 stipend, while paying rent in New York. To say that Thames is a natural saver is an understatement. Her frugality stayed intact throughout her twenties. She got married, earned a free masters degree and advanced into higher-paying roles. But she and her husband, who was equally frugal, continued saving as much as possible -- at times pushing their savings rate to as high as 70 percent of their income. When they were 30, they decided to shoot for financial independence. They shared a dream of moving to a rural farm, where they

#120: Roger Whitney, age 51, calls himself The Retirement Answer Man. As a financial planner, investment analyst and podcast host, he focuses on helping Baby Boomers craft a traditional (past-age-60) retirement. Today, he joins me to answer two questions that come in from our community. Our first question is from Emily, who says: “I’m trying to help my mom decide if she should retire.” “My dad was a CPA and then a CFO, making great money, until 16 years ago when he was diagnosed with early-onset Alzheimers. My mom never took care of their finances before, or knew anything them … she took a few years to get everything in order, but during that time, they burnt through their retirement savings.” Their house sold in fall 2009, for just enough money to cover their mortgage balance and keep another $75,000 to invest. Today, Emily’s mom is 64 and wants to retire. She’d like to use her small investment balance to buy a home outright, in cash, so she won’t have to worry about rent or mortgage in retirement. Em

#119: Once upon a time, in southern California in 1994, there lived a man named William Bengen. He read many claims, widespread at the time, that said that since the markets return at least 7-9 percent compounding rates on average, retirees could withdraw and spend 7 percent of their portfolio. William had a hunch that this was misguided. He decided to prove it. He looked at 30-year timespans in U.S. history, starting from 1926. The first timespan ranged from 1926 to 1955. The second timespan ranged from 1927 to 1956. And so forth. He assumed that the retiree held 50 percent stocks, in the form of an S&P 500 Index, and 50 percent bonds, in the form of intermediate-term government bonds. Then he asked two questions: First, what was the worst-case scenario? Retiring in 1966. The 16-year timespan from 1966 to 1982 was extra-rough, and experiencing this sequence of returns at the start of retirement made for one sad, sad puppy. Second, how much could an investor sustainably withdraw from her portfolio duri

#118: Questions -- I get questions! Today, I’m tackling four queries about real estate investing that come from the audience. Here are the details: Sam says: I work full-time and I’m not handy, so I definitely need a property manager. I’ve found an amazing property management company, but they only serve a small, specific neighborhood. Should I buy a property in this neighborhood so that I can use this fantastic property management company? Terri asks: I’ve heard that if you’re above a certain income level, you’re unable to carry-over losses from your income property. My accountant says it doesn’t make sense to buy a rental property if you can’t carry-over losses. Is this true? Anonymous asks: I’d like to buy my first rental property when I’m in graduate school. I’ll live in one room and rent out the other. What should I consider? Noelle says: We’d like to sell our home, and use the proceeds to pay cash for a foreclosure in the South. How do we find a foreclosure or short sale? We cover these questions i

#117: My friend and financial expert Farnoosh Torabi joins me to answer a relationship & money question from a listener named Janice.⠀⠀ ⠀⠀ Janice is engaged, and she calls to ask: Should she get married?⠀⠀ ⠀⠀ She earns double what her fiancé makes. She has no debt except her mortgage. Her retirement accounts are well-funded. He makes half of her salary. He’s carrying $20,000 in credit card and student loan debt. He has two children from a previous marriage and pays 25 percent of his income to child support. He has zero retirement savings other than his state-funded teachers pension. They’ve been together for 8 years and engaged for three. But she’s unsure about whether or not she should walk down the aisle. Should they get married? Is this a smart financial decision?⠀⠀ ⠀⠀ Farnoosh and I both tackle this question together — and we disagree on some points, which makes this conversation better!! Farnoosh is the bestselling author of When She Makes More, a book that takes an in-depth look at households in whi

#116: Stacy and her boyfriend would like to downsize to one vehicle. But they're collectively $14,500 underwater on their car loans. 
 Stacy owes $11,000 on her car, but its trade-in value is $7,200. She's paying a 12.74% interest rate and her payoff date is 2021.  
 Her boyfriend is in worse shape. He owes $18,500 on his vehicle, but its trade-in value is $7,800. He's paying a 21.5% interest rate and his payoff date is 2022. 
 Theoretically, they could sell Stacy's car to a private party, and she could pay off the rest of her loan. But the boyfriend's car is not in great shape, and probably won't survive for the next couple of years. And neither of them have found better refinancing deals. 
 What should Stacy and her boyfriend do? 
 _____ 
 Rachel earns $65,000 per year. She’s 27 years old, contributes 20 percent to her retirement account, and holds $5,000 in savings.  
 She owes $19,000 on a car loan, at a 4 percent interest rate, and $170,000 on student loans, all with different interest rates, but the hig

#115: Rachel Cruze was born the year her father, Dave Ramsey, filed for bankruptcy. During her childhood, she watched her parents transition from struggling and rebuilding from their bankruptcy, to becoming debt-free multimillionaires. Her dad went on to become the host of The Dave Ramsey Show, a money management radio show and podcast that reaches more than 12 million people per week. It’s central message is to budget carefully and avoid debt. Despite their success, the Ramseys committed to raising money-smart kids. They didn’t want their children to become lazy or entitled. Rachel paid for toys as a child. She partially paid for her car as a teenager. She worked throughout college. Rachel, now in her late 20’s, grew up to become an accomplished speaker and New York Times bestselling author. She and her father co-authored the book Smart Money, Smart Kids, which reached the number one spot on the NYTimes bestseller list. Her latest book, Love Your Life, Not Theirs, is also a mega-bestseller. In this epis