Afford Anything

#194: Fear shows up in our lives in countless ways. Sometimes, fear takes the form of procrastination. We're afraid of botching something, or we don't like the feeling of anxiety that a project gives us, so we avoid it, dodge it, and indefinitely put it off. Other times, fear takes the form of perfectionism through endless iterating and tweaking. We want to keep tinkering with a project, to get it "just right." We applaud ourselves for our attention to detail. Fear takes the form of making excuses and rationalizations for why we can't pursue a goal or dream. We tell ourselves that some outside factor is to blame. Fear takes the form of throwing ourselves pity parties and locking ourselves into a negative self-talk spiral. We get easily discouraged. Fear takes the form of thinking others can't be trusted, and pushing people away. Fear has many faces. Today's podcast guest, Ruth Soukup, surveyed 4,000 people to find out how fear manifests in their lives. She joins us on this episode to discuss the seven fear archetypes that she discovered. Those archetypes are: The People Pleaser: This is the fear of disapproval and fear of not being liked, expressed in the form of weak boundaries and putting others needs first to a self-harming extent. The Procrastinator: This is the fear of making a mistakes. This shows up as over-planning to the point of "analysis paralysis," of spending all your time researching and none of your time taking action. Perfectionism is an overlapping quality, as well. The Rule Follower: This is a fear of authority. This person is afraid of breaking the rules or doing something in a way in which it's not 'supposed' to be done. The Outcast: This is the fear of rejection, which often -- ironically -- causes this person to reject others first so that they cannot get rejected. They're highly self-motivated and driven to succeed and feel the need to prove themselves, but they have trouble collaborating and working in groups. The Self-Doubter: This is the fear of inadequacy, of not being good enough, which causes the self-doubter to forgo opportunities, play it safe, and not take risks. They can also be highly critical of others. The Excuse Maker: This is the fear of taking responsibility or being blamed, which shows up in the form of always having a justification as to why this person can't pursue a goal, or why an outcome isn't their fault. The Pessimist: This is the fear of pain or adversity, often held by people who have been through an immense amount of pain or trauma. The pessimist gets locked into patterns of negative self-talk and self-pity, and believes that they have it worst than most. They can be sensitive to criticism, feel emotion intensely, and has trouble moving beyond the challenges from their past. In today's episode, Ruth and I discuss these seven fear archetypes and cover specific action plans that people can take if they recognize these tendencies within themselves. For more information, visit the show notes at https://affordanything.com/episode194  Learn more about your ad choices. Visit podcastchoices.com/adchoices

#193: Lori is behind on retirement savings, as a result of being a full-time student for more than a decade. She makes good money and lives frugally, but she’s aware that she’s behind for her age. What should she do? Sierra wonders whether she should apply her savings towards paying off her mortgage or building investments. Jenessa plans to retire at age 35, and she’s wondering if the 4 percent withdrawal rule applies for such a long time horizon. Her friend swears that it’s designed to cover a 30-year retirement, not a 60+ year retirement. Is that correct? Jacqui is 24 and recently married. She’d like to open a 529 College Savings Plan for her future children, which she doesn’t plan on having for another 8 to 10 years. Should she do this? David is on-track to reach financial independence at age 50. He would like to start adding bonds to his taxable brokerage accounts. How should he manage this? Mikayla lives in Atlanta. Her employer gives her a stipend to use public transportation. This money can only be used for that purpose. She’s thinking of getting rid of her car so that she can start using public transit, and applying the cost-savings of getting rid of her vehicle into a downpayment fund for a future home. Should she do this? Former financial planner Joe Saul-Sehy and I answer these six questions on today’s episode. For more information, visit the show notes at https://affordanything.com/episode193  Learn more about your ad choices. Visit podcastchoices.com/adchoices

#192: “Don’t buy lattes.” This classic snippet of personal finance advice isn’t specifically anti-Starbucks. “Lattes” are a metaphor for the tiny expenses that leak money from our pockets, often without us realizing how much we’re spending. Your “latte” could be a pile of subscriptions: HBONow, YouTube Red, Spotify Premium, Netflix, Hulu Plus, the CostCo membership that you haven’t used in two years, and -- for that matter -- the gym membership that you also haven’t used in two years. (Ahem.) Your “latte” could be buying bottled water and snacks at the airport, or absentmindedly shopping online when you’re bored, or ordering restaurant take-out or delivery too often. Your “latte” might be spending too much on trinkets and souvenirs during your vacations, when photographs would capture the memory. David Bach is the New York Times bestselling author who created the phrase “don’t buy lattes.” He joins us on today’s podcast episode to discuss The Latte Factor. For more information, visit the show notes at https://affordanything.com/episode192  Learn more about your ad choices. Visit podcastchoices.com/adchoices

#191: Should Russell rent a cheap apartment, or should he take out a loan for an RV in order to save money on rent? Carl is working two jobs that each pay $12 per hour. He has $5,000 in student loans. What can he do to improve his situation? Caroline is about to finish paying off her student loans, and in the next few years she wants to buy a home. Where should she park her savings in the meantime? Philip is saving for financial independence, but he’s not sure what to do with his time once he quits his job. How can he discover what ignites him? Amanda is receiving an inheritance, a New York City 4-plex valued at $500,000. How should she handle this? And an anonymous caller wants to know what the step-by-step path to wealth building would look like. I answered all of his questions in today’s episode, plus I feature a short follow-up interview with Kim, the firefighter whom we met in Episode 139. Enjoy! For more information, visit the show notes at https://affordanything.com/episode191  Learn more about your ad choices. Visit podcastchoices.com/adchoices

#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