Afford Anything Ask Paula: Should We Drain Our Brokerage to Make a HUGE Down Payment?
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Jan 10, 2024 In this podcast, Paula and Joe discuss whether it's wise to liquidate stocks for a larger down payment in a high-interest rate environment. They also explore the risks of putting most of one's net worth into real estate and using home equity to accelerate retirement goals. The hosts emphasize the importance of understanding mortgage terms, aligning debt with long-term goals, and evaluating risks in personal finance. They also touch on the need for pre-validation and playtesting when starting a podcast or business, and the significance of financial priorities and a profit-first mentality for entrepreneurs.
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Joe's Brokerage Account History
- Joe Saul-Sehy has never drained his brokerage account for any reason.
- He admits to maxing out credit cards when he was bad with money.
Mortgage Pre-Approval Advice
- Before considering down payment size, assess mortgage approval and terms with a mortgage professional.
- Non-traditional income can complicate mortgage approvals, impacting interest rates and loan amounts.
Financial Readiness for Barista FIRE
- Jay has enough real estate income to cover expenses, enabling a pay cut.
- Build a brokerage account for flexibility, as retirement accounts and real estate have withdrawal consequences.