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

#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

#114: This week, I answer four questions about real estate investing from the audience. Joelle asks: I own a home outright on the West Coast. I’m thinking about taking out $100,000 from my home equity, and using this money to buy a rental property. I found a community out east where I can buy a property outright in cash for $100,000 in a good neighborhood. Should I pay cash for one house (via the home equity loan)? Or should I split this $100,000 into multiple down payments on many homes? Yasin asks: My wife and I are living on one income and investing the other. We save $60,000 per year. We’re looking at duplexes in Minnesota that cost $160,000 to $180,000. Our plan is to purchase a duplex, move into one unit, rent out the other, and aggressively pay off the mortgage in about 1.5 years. We’d move out and repeat this process until we have $7,000 per month in passive income, at which point we’d be financially independent. Should we pursue this plan? Or should are we playing it too safe? Should we buy more pr

#113: Natalie Sisson was tired of the corporate world. She wanted freedom, adventure and fulfillment. In 2008, she quit her job and co-founded a tech company -- but soon she discovered that running a company felt a lot like having a day job. Two years later, she quit her own company in order to truly strike out on her own. Since 2010, Natalie has run an online business from her laptop while traveling the globe. She's visited 70 countries, living out of a suitcase while running a lucrative six-figure business. She also owns investment real estate in Portugal and New Zealand. In this interview, Natalie and I discuss: - The four phases of entrepreneurship: The Dreamer, The Hustler, The Superhero and The Freedomist. - Why Natalie transitioned from a steady paycheck to the financially volatile life of an entrepreneur. - How Natalie coped when her bank account dwindled to her last $17. - The major family crisis that reinforced why freedom and flexibility matter more than any job. - How she bought a property in

#112: How can I convince my spouse to invest in low-fee index funds? How should my fiancé and I combine our finances? If I'd like to invest in rental properties, should I also buy stocks? Former financial planner Joe Saul-Sehy joins me to tackle these audience questions and more. Thomas asks: My wife is suspicious of Vanguard. She questions how they could stay in business while charging low fees -- isn't there a catch? She's also reluctant about investing the majority of our money in a broad-market index fund like VTSAX. She'd prefer more diversification. Recently, we met with a major brokerage firm that charges a 1.75 percent management fee. How can I get my wife to see the detrimental effects of choosing this high-fee broker? Shy asks: My fiancé and I are getting married soon. We both live with our families at the moment; we'll form a new household after our wedding. Neither of us has ever lived independently before. How should we budget for this, given that we're not sure what expenses to expect? Al

#111: Tanja Hester and Mark Bunge used to have demanding but fulfilling careers as political and social cause consultants. While they loved the mission behind their work, they grew tired of the exhausting hours and grueling travel. Their home felt like a weekend crash pad. They had no time or energy to pursue outside passions like skiing, biking and volunteering. Six years ago, they read a book that changed the course of their lives. The book, How to Retire Early, set the couple on the path of financial independence. They moved from pricey Los Angeles to the more affordable North Lake Tahoe. They started automatically saving and investing huge chunks of their paycheck. They crafted detailed spreadsheets, plotting precisely how much they'd need to save before they could comfortably quit their jobs. Today, Tanja and Mark are newly-retired ... at the ages of 38 and 41. How did they progress towards early retirement so quickly? And what lessons would they share with anyone else who wants to escape the 9-to-5

#110: Happy New Years! We're kicking off this year on a bright and cheerful note -- with a conversation about the impending recession! Yay! The U.S. stock market is at a peak, continuing its 9-year bull run. The markets have been rising since March 2009 without any major corrections or pullbacks. We are living in one of the longest periods of economic expansion in our nation's market history. That's worrisome. Speculators with short memories are popping champagne corks thinking the good times will last forever, while those of us who are students of history know that what goes up must come down. Trying to guess WHEN the next recession will happen is a waste of time. A more efficient use of time is to prepare ourselves such that when it does happen -- whenever that may be -- we are ready. How can we prepare for a recession? That's one of the four topics I cover in today's episode. Specifically, here's what we chat about in this first episode of 2018: Thayne asks: 1) Broadly -- What are the best investme

#109: Happy holidays! I thought it would be nice to wrap up this year with a lighthearted holiday episode about the importance of keeping a positive attitude. Will Bowen, my guest on the final episode of 2017 (wow!), started a campaign to motivate people to complain less. He noticed that many people in his community said they wanted more stuff -- more possessions -- but they complained about what they already had. So he wondered if perhaps people could find happiness not by purchasing more, but rather by complaining less. In this episode, he discusses how we can move towards a complaint-free lifestyle. I thought this would be a cheerful, light interview to round out this year. Enjoy, and happy holidays! - Paula   For more information, visit the show notes at http://affordanything.com/episode109 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#108: Former financial advisor Joe Saul-Sehy joins me to answer audience questions about investing strategies, early retirement, and tax planning. Whitnee calls in with this: I'm 31, and my husband and I save half of our combined income. We've maxed out our H.S.A. accounts and we're getting an employer match in our 401k. We have $80,000 stashed as cash in a checking or low-yield savings account. We're paying nearly $2,000 per month for insurance policies, most of which is a whole life insurance policy. We have a rental property that cash flows $210 per month; we pocket $150 and use the other $60 as an extra principal payment. What should we do differently? How can we learn about investing? What funds should we focus on? Should we sell our rental property and invest the proceeds, or hold onto this? If we hold, should we focus on repaying the mortgage as quickly as possible? Kim asks about the 4 percent withdrawal rule in early retirement. When you're calculating your savings goal, do you need to account f

#107: Scott Harrison spent 10 years as a New York City nightclub promoter, partying until sunrise every morning and ingesting almost every substance imaginable. But when he was 28, he realized his life lacked meaning. "My tombstone might say, 'here's the guy who got thousands of people drunk,'" Harrison said. Feeling lost, he decided to volunteer for a medical charity in Liberia. Harrison spent the next year-and-a-half in West Africa, where he encountered people with diseases he'd never seen before -- such as cholera, typhoid, dysentery, and fatal cases of diarrhea and dehydration. He smelled the yellow-brown parasitic dirty water that millions of people were drinking. He discovered that unsafe, unclean drinking water is the world's leading cause of death. When he returned to New York City, he couldn't bring himself to sell expensive bottled water at nightclubs anymore. Instead, Harrison moved into a tiny closet and launched a nonprofit, Charity: Water. Today, Charity: Water has funded more than 24,00

#106: How do you search for rental properties out-of-state? Should I offer a lease-option contract to my friends? How can I estimate repair and maintenance costs? And can you deep-dive into bookkeeping and taxes for rental real estate? I tackle these four questions in this episode of Ask Paula - real estate edition.   Saul from Salt Lake City asks: I'm converting the first floor of my home into a two-bedroom, one-bath apartment. My "hacked duplex" will soon be ready for my first tenant. Can you deep-dive into the taxes and accounting? How should I keep records of my expenses, and what should I file?   Terri asks: I'm analyzing real estate deals, but I'm getting stumped about how to estimate the repair, maintenance and capital expenditures. It seems like everyone has a different approach for calculating this. Should I estimate a percentage of the purchase price? A percentage of the rental income? A flat amount per unit? Or something else? How can I estimate costs accurately?   Kirsten from Madison,

#105: A.J. Jacobs is the Editor-at-Large of Esquire Magazine and the New York Times bestselling author of multiple books. His three TED Talks have collectively garnered more than three million views. He describes himself as "a father of three, husband of one, and cousin to millions." And he's probably your cousin. Twice removed. AJ joins me on this episode to chat about motivation, habits, and living life as an experiment. Here are some of the stories we cover: - Why AJ divulged his entire sexual history to actress Scarlett Johansson. - How AJ successfully and frequently changes his behaviors and habits. - AJ's experimental approach to life. - Why the adage "fake it 'til you make it" -- or rather, "fake it 'til you become it" -- is essential for developing habits. - How gratitude at extreme levels can become a mindset game-changer. - How healthy living nearly killed him. - AJ's quest to demonstrate the idea that we're all related -- and throw the world's largest family reunion. Resources Mentioned: A.

#104: This week, I answer 4 questions about quitting a depressing job, learning how to ask probing questions, saving for a downpayment, and more. Edward asks: How can I learn from other people around me? I'm 28, and my wife and I have some money that we'd like to invest. We know people who've had both successes and losses in the investing world, but when I ask them questions, they tend to become a little more private and shy away. How can I encourage them to open up, so that we can learn from them? Sara asks: For the last 2 years, my husband and I have lived on one income and used the other to pay off our student loans. We also saved $40,000 to make a downpayment on a house. We need to move to England for 2 years, and we'll buy a house when we return to the U.S. In the meantime, what should we do with the $40,000 downpayment that we've saved? We'd hate to see the money in a savings account, but it doesn’t seem wise to invest in index funds. What should we do? Britney asks: I’m at a job that I hate. I’d l

#103: On today’s show, I'm sharing this random smattering of lessons on money and life.⠀ ⠀ 1) Simplify everything.⠀ 2) Risk = Probability x Magnitude.⠀ 3) Curate.⠀ 4) Never delay gratification.⠀ 5) Know your net worth, relative to your lifetime earnings.⠀ 6) Don't half-ass anything. (Whole-ass a few things.)⠀ 7) When you're not at work, don't be at work.⠀ 8) Yes, and.⠀ 9) Money can't make you happy, but a lack of money can make you unhappy.⠀ 10) Every conversation about money is really a conversation about values.⠀ 11) The less you try, the better.⠀ 12) Work with your nature, not against it. ⠀ 13) The thing should be its own reward.⠀ 14) Practice radical self-reliance.⠀ 15) Achieve being through doing.⠀ 16) What is stated, happens.⠀  ⠀ I elaborate on each of these in today’s episode. In addition, I’m also sharing my mini-keynote from FinCon on the importance of authenticity and passion in online business.   Enjoy!   You can subscribe to show updates at podcast.affordanything.com -- just

#102: This week, I'm back to answering questions posed by listeners of the podcast. An anonymous listener asks: Should we continue to rent out our home, or should we sell it? We bought a home in California but have since moved to New York and have been renting there. After all expenses on the rental are accounted for, we receive $150/mo in profit. We estimate that even with repairs factored in, we'll still be in the positive. However, my husband thinks it's better to sell the property and invest the profits. I think we're better off keeping the house and having someone else pay the mortgage. Who has the better idea? What would you do?   Jessica asks: My husband and I are about to relocate from the mid-west to Colorado Springs, and we anticipate making $80,000 from the sale of our house. Should we take the proceeds from the sale and put it toward our next home? Or should we put that money in index funds instead? For context, we plan on buying either a duplex or triplex, or doing a fix-and-flip like we

#101: Robin Dreeke is former head of the FBI’s Counterintelligence Behavioral Analysis Program. His primary role, at the time, was to thwart foreign spies and  recruit American spies. That's not an easy task. To accomplish this, Dreeke needed to gain people's trust -- even when they had no reason to trust him. He spent years developing and testing systems on how to develop trust with others in high-stakes situations. Today, he joins us on this podcast to describe The Code of Trust, a set of practices that he developed during his days as a high-ranking counterintelligence expert.   This system is based on 5 simple principles: Suspend Your Ego Be Nonjudgmental Honor Reason Validate Others Be Generous   Tune in to hear him elaborate on each principal, and discuss how this applies to anyone who wants stronger, more trustworthy relationships at work and home. For more information, including links to resources mentioned in this episode, visit http://affordanything.com/episode101  Learn more about yo

#100: Over a year-and-a-half and two million plus downloads later, the Afford Anything podcast has hit another awesome milestone: the 100th episode! To celebrate, I recorded this one live from Ecuador with my good friend Brandon, otherwise known as the Mad FIentist. If you've been a listener since the early days, you may remember Brandon from episode #7. He was the first guest to appear on the podcast, and I'm thrilled to have him back on for round two! In this episode, we focus on life after financial freedom: What projects has Brandon been working on? What are the biggest lessons he's learned from being FI so far? How does he maintain motivation to get things done now that money isn't an issue? What does a typical day look like for Brandon? How Brandon's wife became a FIentist after some initial resistance. Why full-time travel after FI didn't work out for him and more! Enjoy, and thanks for listening! For show notes, go to http://affordanything.com/episode100  Learn more about your ad choices

#99: Thirteen years ago, Joshua Dorkin's friends teased him about starting a website that seemed to have no future. "I would get calls from my buddies who would literally call me on my cell phone [and say] 'Hey Josh, we just walked past a penny on the ground. We were thinking about picking it up and mailing it to you." At the time, Dorkin had just launched BiggerPockets, a then-nascent website about real estate investing. "I was working a full-time job making no money as a teacher," Dorkin says, "... and then [I] quit that job, reliable income, to blindly create this platform for other people. And I was helping other people get rich, and I was broke." Dorkin spent the next 8 years working mostly as a one-man operation as he tried to monetize a fledgling website. "We were struggling and scrapping by on every AdSense check that we could collect," Dorkin says. "The business really wasn't making serious money for probably getting close to a decade." The story has a happy ending. Today, BiggerPockets has gro

#98: How much money should you invest in a side hustle or side business? How do you know if your side hustle idea is viable? What if you want to start 5 or 6 side businesses? Should you lump these together under a common business umbrella? Or should you separate them out? These are the questions about side hustles -- asked by listeners Adalia and Brionna -- that I answer in today's episode. My friend Joe Saul-Sehy from the Stacking Benjamins podcast joins me to chime in with his views on building side businesses, as well. Joe and I also answer two non-side-business-related questions, as well. Skye asks: -- You talk about saving 50 percent of your income. What exactly does this mean? Steph asks: -- I have $10,000 in credit card debt and $48,000 in student loans at a 5 percent interest rate. I have a $1,000 emergency fund and $32,000 in retirement funds. My dad is willing to give me money to repay my student loans; should I accept this? And if so, should I put this money towards student loans or retirem

There are more heroes than villains in this world. We have seen a tremendous outpouring of love and support today. Please support the cause that's calling you, whether it's supporting the victims of the Las Vegas shootings, or disaster relief in Puerto Rico, or ongoing humanitarian crises that don't make headlines. Please support the victims of the Las Vegas massacre at https://www.gofundme.com/dr2ks2-las-vegas-victims-fund Learn more about your ad choices. Visit podcastchoices.com/adchoices