Afford Anything

#207: Matt and his fiance earn $7,500 per month combined. They save more than half of their income. He’d like to take a different job that will decrease his income by $2,000 per month, but improve his quality of life. Should he? Suja wants to take out a loan for business growth. What red flags should she watch for? Anonymous and her husband are thinking about buying half-million-dollar home, purchasing a second car, and having a baby. They’ve saved an emergency fund and a 20 percent downpayment. Are they ready? Trayci wants to quit her 9-to-5 and start working as a 1099 self-employed lifestyle. How should she manage this transition? Daria is curious about the economics of a podcast. What do the income and expenses look like? Jared wants to retire early and then sell off his rental properties, but he’s worried about the depreciation recapture tax rate. How should he plan? Ali wants to set up a long-term giving plan, but most of the advice out there is geared towards wealthy donors. How should middle-class workers set up their charitable giving? Financial planner Sophia Bera (hailed by Investment News as one of the Top 40 Under 40) joins me on today’s episode to answer these seven questions. For more information, visit the show notes at https://affordanything.com/episode207  Learn more about your ad choices. Visit podcastchoices.com/adchoices

#206: We live in a society that values career specialization. You’re not a “doctor” -- you’re a pediatrician, an anesthesiologist, an oncologist. You’re not a “lawyer” -- you practice family law, or bankruptcy, or criminal law. You’re not an “engineer” -- you’re an electrical engineer who specializes in solar technologies, or a civil engineer who specializes in the application of artificial intelligence in highway traffic design. Specialization is beneficial and necessary, but specializing too early in life or too narrowly can also have drawbacks. According to today’s podcast guest, New York Times bestselling author David Epstein, overspecialization can stifle innovation if we’re all digging in parallel trenches. Sampling a broad range of subjects prior to specializing (e.g. at the undergraduate level, or as a hobby) allows people to make connections between far-flung domains and ideas. If you’re an athlete, spend your childhood playing a variety of sports before you commit to the one you’d like to develop. If you’re a musician, try learning different instruments before you pick your primary focus. If you’re bound for a graduate degree in a STEM field, consider a multidisciplinary undergraduate that pulls from chemistry, physics, biology and perhaps even art. Specialization can come later. We hear stories of people who specialized early in life. Tiger Woods won his first golf competition at age two, beating everyone in the age-10-and-under category. Many world chess champions started training in early childhood. The notion is that early specialization provides a headstart; if you haven’t started training at chess or golf by age 12, it might be too late. But chess and golf are limited in their scope. They’re contained games with fixed, predictable rules. In the wider world, in which challenges and assumptions fluctuate and problems are ill-defined, being a generalist is a lifehack. For more information, visit the show notes at https://affordanything.com/episode206 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#205: Is it ever a good idea to use your 401(k) as an emergency fund? What's the best way to break up with your financial advisor so that you can move all of your funds to Vanguard? Should you put all of your Roth IRA money into index funds, or is there a better option for your money? A listener has a job offer working less hours for more money, but without a retirement plan. Is this a good move? When running a small business as a sole proprietor, are there tax advantages to incorporating or forming an LLC? If so, what should you consider? What's the best way to maximize the earnings on a large amount of savings while keeping the savings liquid? Can a robo-advisor help with this? Myself and former financial planner Joe Saul-Sehy tackle these six questions in today's episode. Enjoy! For more information, visit the show notes at https://affordanything.com/episode205 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#204: You make decisions on a daily basis about your career, family, friendships, health and investments; these choices shape your life. But how much have you thought about how to think? There are common threads and collective wisdom across disciplines. These common threads create mental models, which are frameworks for understanding the world. Mental models allow us to apply insights from a variety of unrelated fields, using reasoning by analogy to make better choices about our lives. For example: Critical mass is a concept from physics that can be applied to our understanding of microeconomics or entrepreneurship. The availability heuristic and filter bubble are concepts that we can use to check in with ourselves whenever we’re assessing risk in our businesses, careers or personal safety. Loss aversion and information aversion are notions that, when articulated, allow us to understand why we hesitate to learn more about investing during recessions. Mental models can make us better thinkers. Warren Buffett’s business partner, Charlie Munger, says he relies on mental models to evaluate businesses and make investing choices. What we know is that we’ll never be right. But mental models can help us become less wrong. On today’s episode, Gabriel Weinberg and Lauren McCann join us to discuss Super Thinking, their book about how to use mental models to improve the skill of thinking. Enjoy! For more information, visit the show notes at https://affordanything.com/episode204  Learn more about your ad choices. Visit podcastchoices.com/adchoices

#203: Many people in their 50’s or 60’s warn us about catastrophic or ‘black swan’ events. But what’s the likelihood that this will actually happen? How can you use the 4 percent withdrawal rule for early retirement planning, given that your portfolio will be split among accounts with different tax treatments? How do you adjust your retirement plan for future taxes? Should a couple in their 30’s switch from term life to whole life insurance? Should a couple in their 50’s with adult children bother buying life insurance in the first place? Is it okay to keep all your assets at one investment brokerage, like Vanguard or Fidelity? And can you deduct rental losses if your income is over $150,000? Former financial planner Joe Saul-Sehy and I answer these questions in today’s episode. For more information, visit the show notes at https://affordanything.com/episode203 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#202: In 2006, Matt Kepnes worked at a hospital in Boston, and he felt miserable. He dreaded fighting traffic, spending his days under his offices’ fluorescent lighting, drinking stale coffee. He decided to take one year off -- a “gap year” -- thinking that after his sabbatical, he’d resume another 40 years of punching the clock. He worked 60-hour weeks in order to save money for his sabbatical year. He saved $30,000, then handed his boss a resignation letter. Matt traveled for 18 months, returned to Boston, and realized he had lost his willingness to punch the clock. He couldn’t sit still in an office any longer. He re-packed his bags, bought a one-way flight to who-knows-where, and reinvented himself as a travel writer known as Nomadic Matt. He lives on a budget of $18,250 per year, or $50 per day. In the last decade, his travel information website, NomadicMatt.com, has become one of the most popular travel blogs in the world, drawing millions of visitors. His writing has been featured in The New York Times, CNN, National Geographic Travel, and the BBC. He’s a New York Times bestselling author, and he’s traveled to more than 100 countries. In today’s episode, Matt and I discuss the art of slow travel. For more information, visit the show notes at https://affordanything.com/episode202 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#201: Ross and his wife are both in the Navy. They bought a home while they were stationed in Hawaii. Then the Navy sent them to Virginia, where they currently live; they’ve purchased a home there, too. They kept the Hawaii home as a rental property, and they’d like to move back into it when they retire. Which home should they repay first? Mike is 33, debt-free except for his mortgage, and earns more than $200,000 per year. He saves half of his income. What should he do with his savings? Pay off his mortgage? Invest? Josh has a nervous habit of checking his investment account balances daily. How can he break this habit? Amanda and her husband live in a duplex. They have $115,000 in equity in their home, and another $115,000 remaining on the mortgage. They’d like to move. Should they hold the duplex as a rental? Or should they sell and use the proceeds to buy a cheaper home, with a goal of being mortgage-free? Christy wants to know how to compete with other aggressive real estate investors who are bidding on homes. I answer these five questions in today’s episode. Enjoy! For more information, visit the show notes at https://affordanything.com/episode201 Learn more about your ad choices. Visit podcastchoices.com/adchoices

#200: Nine years ago, I had no idea that personal finance blogs existed. Then, as I was flipping through an issue of Kiplinger magazine, I came across an article about a woman who paid off $70,000 in debt in 16 months. Her name was Jaime, she lived in Maine, and she earned 3x her husband’s income. He made $30,000 per year; she made $100,000. They wanted to have a baby, and she wanted to stay at home for the first year, but their debt load made this impossible. She aggressively went into debt-crushing-mode, working 70 hour weeks while 7 months pregnant in order to tackle their debt. She started a blog (and later a podcast), Eventual Millionaire, to track her journey and interview millionaires. This article made me aware of the existence of personal finance blogs. I immediately thought, “I want one.” The following year, I started my own site, Afford Anything. Like Eventual Millionaire, it later became a podcast, as well. Today, we’re celebrating Episode 200 of the Afford Anything podcast. And so it feels fitting that the special guest for Episode 200 should be the woman whose story inspired the creation of this platform, Jaime Masters.   For more information, visit the show notes at http://affordanything.com/episode200  Learn more about your ad choices. Visit podcastchoices.com/adchoices

#199: Ashley is paying affordable rent for a home she enjoys, but she feels certain that the real estate market in her local market will stay strong. She’s thinking about buying a home with 3 to 5 percent down, but she doesn’t have much in savings. Should she wait for a year to save more? Or should she take advantage of a rising market and relatively low interest rates? Ian and his girlfriend live together in Washington D.C. and have a combined 40 percent savings rate. He’d like to buy a rental property, but his girlfriend has $18,000 in student loans and is about to re-enroll in school. Should they buy an investment home, or use their cash to repay her loans and cash flow her new academic program? Annette is about to travel to Spain with her family. How can she plan an affordable and high-value international trip? William is concerned about losing his job. What if he can’t pay his bills, especially his new mortgage? How can he protect himself? Anonymous is a renter, and she often encounters surprise fees and charges when she arrives at the lease signing. Can she negotiate with her landlord? I answer these five questions in today’s episode, and I also feature a short interview with special guest J. Money, my former podcast co-host from the early days!! Enjoy! For more information, visit the show notes at https://affordanything.com/episode199  Learn more about your ad choices. Visit podcastchoices.com/adchoices

#198: Money flows. When you receive money, you’re in the path of this flow. Money flows from someone else to you, and eventually, it’ll flow from you to someone else, either in the form of a purchase or an investment. A healthy relationship with money is to feel gratitude when money flows towards you, and to release your money without attachment or resentment when it flows away from you. Today's guest, Ken Honda, is known as the “Zen Millionaire” of Japan. He’s sold more than seven million books in Japan about the intersection between wealth and happiness. In today’s podcast episode, we discuss four core principles for developing a healthy emotional relationship with money. For more information, visit the show notes at https://affordanything.com/episode198  Learn more about your ad choices. Visit podcastchoices.com/adchoices