Paula helps you make daily decisions about how to spend money, time, energy, focus and attention and ultimately, our life. Host Paula Pant interviews a diverse array of entrepreneurs, early retirees, millionaires, investors, artists, adventurers, scientists, psychologists, productivity experts, world travelers and regular people, exploring the tough work of living a truly excellent life.
Matt is interested in achieving financial independence, and he wants to encourage his friends to pursue the same goal. What podcast episodes provide a light, digestible introduction to the world of financial independence and retiring early?
Daniel wonders why everyone pursuing financial independence seems to have a blog or podcast about this topic. Is the purpose of FIRE to sit around writing and talking about how you’re FIRE? If so, then what’s the point?
Tom is an entrepreneur with an LLC in California. Should he buy a rental property through that LLC?
Anonymous from California wants to know how I decide whether to use a property manager vs. self-manage my rental properties. She also wants to know how to estimate the cost of repairs and maintenance. And how should the tax benefits of rental properties play a role in choosing a property?
Brett owns a rental property in Las Vegas, which used to be his primary residence. He’s getting a strong cap rate but a marginal return on equity. Should he hold the property in the hopes that it will rise in value? Or should he sell the property?
Anonymous is an Indian citizen who lives in California on an H1-B visa. There’s a chance that his visa won’t be renewed, which means he’ll need to move back to India. What should he do with his rental properties? Can he manage his properties from another country? If so, should he purchase more?
I answer these six questions in today’s episode. Enjoy!
When Jonathan Mendonsa was 18, he researched which college degrees lead to the highest income.
Pharmacy was near the top of the list of high-paying degrees, so Jonathan decided to become a pharmacist. He wasn't motivated by passion or calling. His decision was purely tactical. He wanted to make money.
He spent four years in college, followed by another four years of graduate school. By age 28, he held a Doctorate in Pharmacy and an astounding $168,000 in debt.
This debt burden might have been bearable if Jonathan loved his chosen profession. For people who love their fields, tuition is the price of being able to enjoy a lifetime of work they love.
Unfortunately, that wasn't Jonathan's story. He never held a passion for pharmacy; he viewed it purely as a means to an end. Perhaps it wasn't surprising, then, that shortly after becoming a pharmacist, he realized that this wasn't what he wanted to do with his life.
He wanted to change careers. He wanted to pursue more meaningful, fun, interesting work.
He spent the next four years repaying his student debt. And finally, at age 32, he brought his net worth up to zero.
Brad Barrett wasn't thinking about income when he chose his profession.
He had received acceptance letters to some Ivy League schools, but he wanted to graduate from college debt-free, so he enrolled at the University of Richmond, which gave him a partial scholarship.
While studying there, Brad encountered an accounting professor who challenged him and his classmates in the best possible ways. Brad felt inspired to major in accounting.
His decision didn't come from a rigorous analysis of lifetime income potential. He wasn't scrutinizing labor statistics spreadsheets. He was simply following a route that he found fascinating.
After he received his undergraduate degree, Brad decided not to enroll in any further education. Instead, he started working for one of the Big Five accounting firms, with a starting salary in the low $40,000's.
He and his future wife both lived at home with their parents for the first few years of their professional life, which allowed each of them to save dramatic amounts. Brad saved more than 90 percent of his after-tax income.
Perhaps it's not surprising that the couple, who now have two children, are financially independent.
Both Jonathan and Brad are college-educated professionals in their thirties. They both live in Richmond, Virginia. They're both married with children (Jonathan has a son; Brad has two daughters).
Yet their stories could not be more different.
What can we learn about careers, work, income, spending, and financial independence from their life experiences?
Find out in today's podcast interview with Jonathan and Brad, the co-hosts of the ChooseFI podcast.
Should a 36-year-old father of three invest primarily in Traditional or Roth retirement accounts? Should Rose, a grandmother of four, open a Vanguard account for each of her grandchildren?
Should Nancy, who lives overseas and is the sole breadwinner in her family, invest in a Traditional or Roth TSP? Should Scott’s wife rollover her 403(b) from her former employer into an IRA? Should Patrick, age 35, cancel his life insurance plan?
Former financial planner Joe Saul-Sehy and I answer these five questions in today’s episode.
Our first caller is Mr. “Three Kids and Still Hoping for FI,” who asks: As a young man I saved heavily into my traditional 401(k), less because of good long-term planning and more because that’s my natural way.
Last year learned about the FI movement, and I’m hoping to reach FI.
However, I’m 36 and married with 3 young kids, and I’m battling my expenses to regain the deep saving rates of my youth. While I have a healthy traditional 401(k) which has been my main investment for a decade, my work also offers the dual option of a Roth 401(k). I’ve saved about 5 percent of my worth there.
I’ve worked hard to widen the gap by raising my income, and with my salary now scraping against the eligibility ceiling for Roth IRA investments, I’m unsure of how to move forward.
Some people think that because I’m eligible to hold both a Roth 401(k) and a Roth IRA, I should open a Roth IRA and pump all my savings dollars after-tax into both, especially since any future raise or promotion would likely make me ineligible.
Others think that because my tax rate has been rising with my salary, I should be pushing my dollars into the traditional 401(k) because I will likely be in a lower tax bracket in retirement.
I would rather eat a live cockroach than pass up my company match or my maxed-out family HSA. But because of the expenses of three kids, I don’t yet have the savings rate to also be able to max out the $18,500 level.
Should I be trying to grab as many Roth dollars as I can before I can’t contribute anymore? Or should I just pour dollars into my traditional 401(k) and have my Roth conversion ladder and/or SEPP-72(t) ready?
I can afford any investment, but I can’t afford every investment. Which one should I choose?
Rose asks: I have 4 grandchildren, ages 7 months to 6 years, and I’m saving around $30 per month for each grandchild. My intention is to eventually open a Vanguard account where I can leave the money there until they turn 18 years old.
I know some funds have a minimum amount required to start investing. I have about $1,200 for two of the kids. Can you please suggest the best fund I can start with?
Can you also suggest options for birthday gifts? I like giving money, and the kids don’t need anything materialistic. Stocks, perhaps? One stock at a time? Government bonds? I’d like it to be something I can give to them inside a card instead of cash.
Nancy asks: I’m calling to get some information about the benefits of a Roth versus a regular TSP.
I’m 33 years old, married, and have an 8-month old. I work for the Federal government and we have a TSP. We’re living abroad and my spouse isn’t working. I’d like to retire within the next 20 years.
We’re conflicted about whether we should invest most of our money into a Roth or not. We keep getting conflicting information about whether we should take the tax deferment now, or whether we should pay the taxes now and not worry about it when we retire.
We don’t have much debt, and we have international properties as well as two properties in the Washington DC area. We’d like to know how best to manage the tax issue.
Scott asks: My wife recently left a job at a hospital where she had a 403(b) and a Health System Defined Contribution Plan. What can I do with that money? Can I roll it over into something else?
Second, what do we do with the 403(b)? My first instinct is to roll it over into an IRA, where I have more control, but my wife and I (with our current income) cannot contribute to a Roth IRA so we’re making use of the Backdoor Roth conversion. It’s my understanding that rolling money from a 403(b) into an IRA will affect our ability to execute a Backdoor Roth conversion. Am I understanding that correctly?
Patrick asks: I’m about 35 years old and recently married. My wife and I have a combined gross income of about $100,000.
I have some concerns about our MassMutual life insurance retirement accounts. I think MassMutual is a good product, but I think we are over-invested.
We’re both putting away a premium of about $500 a month (about $1,000 combined) into our MassMutual. The payout that we’re expected to receive at the end is about $350,000 for me, and about $400,000 for my wife.
I’m concerned that our premiums are too high and we could be using that money in better, more effective places. I tried to reduce my MassMutual payment a few months ago, and the cut in benefit was pretty drastic and not proportionate … it didn’t seem very fair to me. Any advice?
We answer these five questions in today’s podcast episode. Enjoy!
By the way -- TRIVIA TIME!! At roughly the 36-minute mark of today’s episode, Joe and I talk about the late Senator William Roth, the namesake of the Roth IRA and Roth 401k. His birthday is July 22, 1921, which means his half-birthday is January 22. Which means we can celebrate his half-birthday soon!! Tune into the episode to hear our only-half-joking conversation about this. :-) #AllTheCheesyBiscuits
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 episode, Rachel describes the lessons she learned about saving, spending, budgeting, debt and giving as the daughter of Dave Ramsey.
We discuss “Instagram envy” -- the act of comparing your life to someone elses’ -- and how to avoid the traps of consumerism and materialism.
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.
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 investments overall if you're going into a recession?
2) Specifically -- What's the most recession-proof type of real estate investment?
Aaron from Portland, Oregon asks: In Episode 96, you discussed the benefits of real estate investing -- but you didn't mention the use of leverage, nor did you mention that real estate is an inefficient market. Why not?
Anna from the San Francisco Bay Area asks: I've moved out of my condo, which I'm renting out. But the rent only covers the mortgage (PITI) and HOA. Should I sell the condo? If so, I could use $250,000 in equity for an alternate investment, such as buying rental properties out-of-state.
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 like to start a small business and find other part-time work so that I can quit my job.
I’m planning to move in with my in-laws, so my cost-of-living will be low. Do you recommend that I start a blog as a side hustle, so that I can pay the bills after I quit my job?
A listener in the Midwest asks: I’m a 37-year-old single woman living in the Midwest. I live in a one-bedroom with my 5-year-old son.
I bring home $3,800 per month. My rent is $1,150 and my son's preschool is $700 per month. I have $40,000 in retirement savings and a $3,000 emergency fund.
I don’t want to be making rent payments in retirement. Should I take $20,000 from my 401k to make a downpayment on a rental property?
I answer these questions in today's episode. Enjoy!