Afford Anything - Ask Paula and Joe -- How to Give More to Charity While Also Building Financial Independence

Episode Date: June 4, 2018

#133: Andy from Michigan loved the episode with charity:water founder Scott Harrison. After the episode, he and his 6-year-old daughter started watching videos about charity:water, and now they're both inspired to give. Andy's question is on the topic of giving. His is to reach financial independence within 5 to 10 years. He and his wife are debt-free, including mortgage-free, and their retirement accounts are well-fueled. Now they're working on building passive income. In the meantime, though, they'd like to add a bigger charitable slice to their budget. He's not an overly religious guy, but he feels a calling to make more charitable donations than he does. What advice could we offer about how to boost his giving? JR's wife, before they got married, purchased two timeshares at a 17.9 percent interest rate. When the couple met, and she confessed, they immediately paid off the debt. They're now paying $160 per month in timeshare fees. JR is trying to figure out how to get rid of their timeshare, but he can't find any good options. How can he get rid of this? Angela's husband is turning 50, and she is 43. They're on-track to have $1 million in investments within 7 years. They have two rental properties plus a primary residence, all of which will be paid off in around 7 years, as well. They're active and healthy, but they know this can change quickly. What type of long-term care insurance do they need? Joelle works in the public sector. She has a 457(b) retirement account. How does this differ from a 401(k)? She plans to career-change in the next few years, and she's considering whether to keep her funds inside of her 457(b) or rollover her funds into an IRA. What are the pro's and con's of both? Ines from Portugal wants to start a podcast about financial independence, early retirement and real estate investing, specifically for people who live in Europe. The issues that affect people in Europe are different than those that impact people in the U.S., and she sees a need within the marketplace. What advice would I offer to anyone who wants to start a podcast in this niche? For more information, visit the show notes at http://affordanything.com/episode133 Learn more about your ad choices. Visit podcastchoices.com/adchoices

You can afford anything but not everything. Every decision that you make is a trade-off against something else. And that's true, not just of your money, but also your time, your focus, your energy, anything in your life that's a scarce or limited resource. And so the questions become twofold. Number one, what's most important to you? And number two, how do you align your daily behaviors to reflect this? Answering these two questions is a lifetime practice.

And that's what this podcast is here to explore. My name is Paula Pant. I am the host of the Afford Anything podcast. Every other week, I answer questions from the audience. Today, joining me is former financial planner Joe Saul C. Hi. Hey, Joe. Hey, Paula. So happy to be back. Awesome. Thank you for joining us. And I'm excited for this first question, which comes from our buddy Andy. Hey, Paula. This is Andy from Michigan. First, I wanted to thank you very much for your recent interview with the Charity Water founder, Scott Harrison. That interview. was personal, uplifting, and super inspirational. So thank you. After your episode, I found a charity water video featuring a six-year-old girl named Nora, who gave $8.15 of her own money to help people get clean drinking water. I watched it with my six-year-old daughter, Zoe, and we were both so moved by

Nora's act of giving and kindness that we both wanted to give. So thank you very much for serving up that really cool, special moment with my daughter. My question to you is on the very subject of giving. I have a goal of becoming financially independent over the next five to 10 years. I've been on a very aggressive and successful path over the past, you know, five to 10 years, really. We're debt-free, we're mortgage-free, and we're on the course for a really comfortable retirement. We're just working on the passive-income side of things. As I've gone down that path, though, I don't think my generosity and giving has kept pace with my wealth building. I've heard about the practice of giving a tie or a tenth of your income.

We're not quite there yet. I'm really not close to that. I'm not an overly religious guy, but I do really feel a calling to give more to charities that I'm passionate about. So for those of us who are practicing to be better givers, what tips would you have for us to increase our generosity? I personally want to live with a more open hand than a closed one. So thank you very much for taking this question. I've been listening to the show for the past year and I'm really enjoying it. So keep up the great work. Thanks.

Andy, that's a beautiful question. And by the way, Paula, Andy sounds suspiciously familiar. He does sound suspiciously. Joe, should we out him? Should we? That's totally out of him. Because he's a great guy. I love Andy.

I love his podcast. Yeah. Marriage, marriage kids and money. Yes, yes. Andy has a fantastic podcast, which I totally recommend that you listen to. By the way, the reason that we're outing him is because I know that he was not trying to be self-promotional, which is why he didn't, you know, plug his own podcast. So I'm just going to go ahead and plug his podcast for him because it's absolutely fantastic. Sorry, Andy, we got you.

So, and that's the kind of guy he is. He calls and asks this incredibly honest question about, hey, how can I be more charitable? And he does it in a way that is non-promotional. That's how good of a guy he is. And, by the way, if you listen to his podcast, you'll be able to hear an interview with. me on that podcast. So, you know, that's probably his best episode ever. It's got to be, like, number one with a bullet. All right. So let's answer his question. There's kind of two components of this.

Partially, it's sort of like, how do you save more so that he can get up to that 10% or higher? And then the other, I think, bigger component, because how do you save more is a little bit more generic. But the bigger component specifically is how do you go about thinking about charitable giving? And one thing that I would jump to right away are donor advised funds. If you set up a donor advised fund, you can make a contribution into that fund and get a tax benefit in the year that you make that contribution, but then you can parcel money out of that fund over time. So, for example, in the year 2018, if you know that you're going to be making high income, you can create a donor advised fund, put money into that fund, and you get the tax benefit of donating that money all in the year 2018 to offset the high income that you're making in that year. And then over the years, as you find causes that you identify with or causes that you want to support, you can then spread that out. And I'd work with a professional. That's one of those areas where I definitely work with a tax professional because the rules that the IRS sets up for any trust fund can sometimes trip people up.

So I've seen different types of trust work trip up too many people. Yeah, absolutely. I mean, work with a CPA who knows what they're doing and who's done this before. Joe, what are your thoughts? You know, I had this similar problem, and I'll just tell my story because I don't know what really where Andy's struggling specifically. I couldn't find it in my budget because I didn't feel passionate about any cause. I mean, to be really frank about it, I thought the money was more important in my wallet than in somebody else's. And so I didn't do a lot of charitable giving. But I really felt that I needed. to be a part of something and I felt this void. So I went into my community and just started getting involved, even though I didn't feel passionately about anything, I just started getting involved. So my mom had, still has arthritis. And I had a client at the time when I was a financial planner who was the head of the arthritis foundation. I said, you know what? Between my mom and this foundation, I've got enough there to just start. And once I got my hands dirty,

more and more money magically left my wallet and found its way out of my budget toward that organization as I found that juvenile arthritis is such a huge problem, just seeing some of the things that people go through there. So for me, getting my hands dirty first and becoming a part of the community brought about the passion which changed my budget. So I think people start off looking at how do I change the budget. I went the opposite way. That's a very good point.

I recently started volunteering. I'm an advisor to the board of directors for a local nonprofit cat cafe here in Las Vegas. Of course. Of course, right? Right. Oh, it's actually, it's fantastic. So my role is to help, I advise them with their social media. So my role is the intersection between Instagram and cats.

It's amazing. Mind blown. That's like heaven, right? Absolutely. in heaven. Mine now, once we move from Detroit, I'm no longer involved with the Arthritis Foundation. I now also work with a local 501C3 charitable organization. I'm the president of the board, and we build walking trails around Texarkana to beautify the town and give kids safe routes to school and make our town a nicer, safer place. But I love it. It's local. Not only do I support it financially.

I know what the problem is, and I found out a lot about how trails are a great thing. in any community. So I tell Andy to do, I think, what you and I have done, Paula, which is, I think, start off with your hands and you'll find your wallet will follow. Yeah, I think that's excellent advice. The other thing that I found that has been really helpful in terms of getting the motivation to find that savings is micro-targeting. What I found is that in donation efforts where my money is going into a giant,

collective bucket. I don't feel the impact of what I'm doing. And as a result, I'm less motivated to do it. One thing, and I learned this from my parents, they set up an endowment fund. They donated $150,000. And that sits as principal. And then the interest, and that principle remains untouched. And then the interest that that money makes gets donated every year to a particular orphanage in Catmandu Nepal called Balmandir. But they don't just give the money to the orphanage. What they've done is they've selected three specific children and they chose them all when they were five years old because at that age the kids are less likely to get adopted. So they started sponsoring these three specific kids starting at the age of five and made the commitment to continue sponsoring them

up to the age of when they finish the Nepalese equivalent of high school. And the specific thing that they're paying for is for these kids to attend boarding school. And so number one, whether or not that money is making a tangible difference is extremely cut and dry, black and white because there's only one question to answer, and it's a yes or no answer, which is, are these three very specific individual kids attending this one very specific boarding school? Yes or no? you know, and so they don't have to worry about whether or not their money is making a difference. They know if the kids are in school or not. They know what the tuition at that school is. And voila, like once you've solved for that problem and you know that your money is actually making a

difference, then that motivation kind of stays there. So that's one thing that I learned from watching them. And that was part of the reason why I, you know, when I was thinking about what kind of charity efforts I wanted to support charity water really stood out to me. And I'm not saying that that's what you should do. I'm just kind of describing my own thought process. I loved the idea that you could sponsor a specific water project somewhere in the world so that I could say, hey, here's a well, like one very specific well, that either is or is not dug. And that level of tangibility, I find, is highly motivating. By the way, at this point, I'm going to make a plug to go to afford anything.com slash store. That will take you to a

page on Amazon where we're selling three different t-shirts and 100% of the profits from those t-shirts will be given to charity water to support this project. So afford anything.com slash store. You can buy a shirt, all the profits, go to charity water. Or if you want to bypass that and just make a donation directly, afford anything.com slash water. There's my little plug. I love that. That's really cool. I love the focus. I have one more thing to add, which, and I want to say this correctly. I want people to hear this correctly that giving is not about receiving, but I do want to talk about things that you receive when you give. And, you know, I'm not the person who I'm thinking about those public television things. Hey, you're going to get this free set of BCR takes, whatever.

Yes. Are you sitting down? None of that. But there have been, there have been studies that have shown that people that give more actually end up saving more, end up becoming more wealthy, even though that doesn't seem to compute, right? And I think Andy knows that. Andy's actually a guy I'm sure who's seen these studies, Paul, I've seen, and I'm not sure that that's actually causation, like because you give more, but I think it's because you're a part of your community, you're part of giving. You're also someone who is in this community of people that also, by the way are people generally who are upwardly mobile, who are community-minded, and to the point that we are, and I completely believe this, you are the people you surround yourself with and the

organizations you surround yourself with, I think it ends up being good for your brain. It ends up being good for you. And certainly that's not a reason to give to a charitable organization, but it's a great, great side effect. Yeah, you know, I would agree with that. And I think my untestable hypothesis for this is that giving. reinforces an abundance mindset. Right.

Because if you're not giving, then, you know, that can kind of reinforce a scarcity mindset. It can reinforce this hoarding mindset where you think that money is scarce. And oftentimes the perception that you have of money becomes a self-reinforcing prophecy. Couldn't agree more.

But, yeah, if you're giving, then you are consciously taking an action that says, you know what, I have an abundance of money. And because you think that and because you believe that, that continues to be true. I've never given to an organization and thought later, man, I wish I had that money back. Like donor regret?

That's right. At the holidays, reach it into the little bucket, taking the money out. Stealing from the Salvation Army bucket. Where's my $5? I gave five a year ago and I need it back. Awesome. Well, thank you, Andy, for asking that question. Our next question comes from JR.

Hi, Paula. I love the show. I had a thing happen where my, wife before we got married took a free trip you know how one of those things go and she was exposed to a time share and ended up buying a time share actually she bought two timeshares at a 17.9% interest rate when we met and she confessed this financial sin um i immediately we paid it off um we were going to buy a house uh we have thought about just foregoing it and letting it go through a foreclosure process, but instead we decided to pay it off.

So we paid it off and now we're paying $160 a month in timeshare fees. I've been trying to figure out the best ways to actually get rid of this time share and there doesn't seem to be any good options. And I'm wondering if you know of any good options and also just wanted to see if you would be interested in telling your listeners what a bad idea time shares are and how just horrible and if they can avoid that mistake, if just one person can avoid that mistake, that'd be better off for everybody. I look forward to hearing your answer. Thank you. This just puts a pit in my stomach, Paula. I mean, number one, the timeshare presentation,

his wife having to sit through that thing is just, we did on the Stacky Benjamin show, we had a mutual friend of ours, Holly, from Club Thrifty come on because she sat through one of these presentations. And actually, I think her husband Greg did too. And they went through the entire bringing the boss in, the bringing the boss's boss in, and the deal just got sweeter and sweeter and sweeter to buy these. So the whole scammy sales presentation. And then my heart broke again when Jerry mentioned just that that money was going to go

toward a house and now you have this time share at a high interest rate and decided to pay it off. And then the third is my answer is going to break your heart on both on both parts. Number one, there is almost no secondary market for timeshares because of the fact that they are sold in such a poor way. There's no way out. There are ways out, but I'll tell you a lot of people just give them away. I've also heard on AM radio, and I can't vouch for any of these companies, but I've heard on AM radio companies now that will go after the timeshare company asking to get your money back. I can't recommend any of them because I don't know them. I do know there are companies, though, that exist that on your behalf may go after the timeshare company. I don't know their fees.

I don't know how they work. That's it. But you can be informed of their existence, but you can't recommend them because we just don't have enough information. Yeah. Exactly. Thank you. JR, as far as your specific situation, how to get out of it, unfortunately, as Joe said, there are not a lot of options because on the secondary market, people want to get rid of these things so badly that they are basically giving them away. So there's just some sunk costs that you're going to have to swallow, unfortunately.

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So go to gusto.com slash Paula. That's g-u-t-o.com slash paula, and you'll get three months free as soon as you run your first payroll. Again, g-U-S-T-O-G-G-O-G-O-G-O-C-O-C-O-C-O-C-L-A-R-N-A. Our next question comes from Angela. Hi, Paula, it's Angela. In episode 84, you answer a question on long-term care insurance. The recommendation was, don't worry about it until you're in your 50s. Well, my husband is turning 50 later this year, and I'm 43.

We are both active and healthy. but we know things can change quickly. How should we approach long-term care insurance? I'm here in some background. We have no kids, and we're on track to have $1 million in our investment accounts in about seven years by the time on 50. We have two rental properties, and we plan to have them as well as our primary resident paid off around that time too.

I've been listening to your podcast for almost two years, and I love it. I love Joe's insight and his sense of humor, so a big shout out to him. Thanks for all you do. Angela, thank you for listening to this show for two years. That's fantastic. That is fantastic. And this is a tough issue, though, Paula. I mean, this is a really tough issue. Is it really tough? I mean, they're just buying long-term care insurance. Everything else about their situation sounds good. They're on track to have a million in investments within the next seven years. Their financial situation sounds very, very healthy. And now, They are proactively looking for long-term care insurance.

What's tough about it? The tough part is that there's no easy solution. And you're right. The great news is that they have something to protect. Because instead of focusing on long-term care insurance, which I think is the wrong way to approach this, I think we start off by saying, how are we going to approach a potential catastrophic illness? And if we widen it, guess what we did then, Paula, then we got away from the issue of

insurance and all of a sudden we might have a lot of different possible remedies instead of just insurance. I think too many people turn to insurance instead of turning to other ways to solve the issue. I see. They're assuming the solution rather than asking the broader question, which is how do we manage this risk? Amen. Yes. And there's really, the way I see it, there's three different ways to handle it. Number one is take the risk yourself. Number two is hand the risk over to an insurance company. Number three is some combination of the two of those, right so if we look at long-term care statistics the issue especially for a married couple i don't worry that much about a single person by the way going through all of their assets if if they're not

supporting someone else they're not supporting a charitable organization they're not worried about the money beyond their lifetime because if you go through all your assets that's what your assets were for but the issue that i worry about is i'm just going to pick on angela's husband because he's older if Angela's husband ends up having a catastrophic illness needs either home care or to go into a facility, he could eat $100,000 in the portfolio a year. And that's money that if it lasts for a long time, that can end up being catastrophic for Angela, especially if it happens, let's say, when he's 55, you know, she may live a long time past that date. So shouldering the risk for a married couple, I think means that you,

have to project out how much money you're going to need for your lifetime and then have an extra pot of money that's just to cover long-term care expenses. Long-term care expenses vary widely around the nation. So I just go to any, there's tons of websites out there about your community and what cost in your community would be. Look up with the cost of a long-term care state would be in your community. I like using a four-year expectation on that. It could be longer, but four years, two and a half years is the average. So I think looking beyond average four years is being conservative. And in the show notes, which will be available at Afford Anything.com slash episode 133, we will

include links to a couple of websites where you can estimate long-term care costs. Again, that's at afford anything.com slash episode 133. You can imagine, Paula, how much money that is if you shoulder the risk yourself. I mean, as much money as you need for financial independence, and then that's, you can't money on top of it for a long-term care stay could be just a ton of money. So that's what I worry about is it sounds like they're doing great, but just doing the quick math in my head, I'm not sure they have enough money to also shoulder that risk. Then we have to look at insurance. Now, there are big problems in the long-term care insurance industry because actuaries actually

got this wrong. And if you know anything about actuaries, they don't get much wrong. And so long-term care insurance has morphed a lot. It's become a lot more expensive and people that had promises in the late 90s in the early 2000s saw their policies kind of blow up as insurance company said, hey, I know we told you we probably wouldn't raise the premium on you, but we're going to have to raise the premium a lot. In some cases, double. So I worry about just giving everything to a, to an insurance company and having them shoulder the risk and then we're on the hook for that. By the way, people say, well, what if I'm not on the hook? If you look at the statistics, the chances that you'll be on the hook, especially for a married couple, are high enough that I don't like those odds.

And by the way, I also think that's why long-term care insurance is so expensive is because the chance it's going to happen to you is so big. But I'm not sure that when you look at the price tag of long-term care coverage to have them shoulder all of the risk that you'll be able to wipe that out. And I don't know that you want to. So I think there's going to be a hybrid approach. I think that instead of looking at a policy that covers you from day one, maybe look into policies that don't start until after six months or maybe even a year in a long-term care facility and then use your cash reserve to get through those early days. And by the way, when you look at the statistics, most of the long-term care experience that people have, as I mentioned, it's two and a half years, but a lot of people, it's just six months to a year. And so you're going to find that once you give an insurance policy that one year elimination, the price drops considerably. It still isn't cheap, by the way.

It still is incredibly expensive, but that's going to drop the price a lot and you shoulder that risk. And then maybe only go up to four years. And then I like a policy that covers either or because the chance of it happening to both of you is not great. The chance of it happening to one of you is big. So a policy that's kind of a joint policy where one of the. two of you can use it. And if one person, let's say, let's say about a four-year policy, one person uses two and a half years that leaves a year and a half for the other person, I like a policy like that. So that's kind of the directive that I would give you. I think I might

use based on your call and just some back of the envelope math. I kind of like the hybrid approach, but those are the three areas to consider. Do it yourself, but make sure you're financially independent first. Give it all to an insurance company, going to be super expensive, or shoulder part of the risk yourself and understand what that risk is and then give the rest to an insurance company. And Joe, the tip that you gave about self-insuring for the first six months to one year and after that having the policy kick in, so in other words, having a longer elimination period, that makes sense in with regard to that's what you would do if you wanted to lower the premium on any other

type of insurance. So for example, if you want to lower the premium on your homeowner's insurance, you pick a plan that has a higher deductible. If you want to lower the premium on your health insurance, you pick a plan that has a higher deductible. If you are buying disability insurance, there's short-term disability and long-term disability. If you want to lower the cost of the premiums on those, you get rid of the short-term disability. And so you kind of self-insure for the first six months, one year, even two years of having a disability and then have insurance kick in after that two-year mark. So in every other

type of insurance, that same strategy of self-insuring for the short term and having the policy kick in only when it becomes long-term or catastrophic is the way that you kind of have that happy medium hybrid. And the good news about the way it works today, too, you actually have a government plan that kicks in for a short time frame at the beginning. Right now, Medicare will help you through a portion of that elimination period. Those laws can change by the time that you need it. And you have to keep requalifying every so many days.

But there's a chance that you might not even need to pay for all of that for six months year, whatever you decide to shoulder. Nice. Cool. Well, thank you, Angela, for asking that question because this is an important topic, and it's one that I think is not discussed enough. Insurance is never a sexy conversation. It's not a headline grabber, so people don't like to talk about it, but it's crucial. Yeah, and this one especially because it is so expensive, people decide to shy away from it. But the funny thing is, Paula, there's no cheap way out of it, right? Yeah. If you ignore it, It could cost you everything. So I don't want to ignore it.

I love this idea that Angela has of facing it, face it early, face it once, come up with your strategy, never worry about it again. Absolutely. We'll come back to the show in just a second. But first, when your money is in a savings account, it's not doing any social good. But guess what? There's a way to fix that. C-note is a socially conscious savings alternative. When you deposit money with C-note, 100% of your money will be invested in helping underserved communities.

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That's g-r-o-vo-c-c-o-c-la. Remember, it's not a dot com. It's a dot co-grove. Gove.com for a happy, healthy home. Our next question comes from Joelle. Hi, Paula. I'm a huge fan of your podcast and your example of living life to its fullest. Thank you for investing in us, your audience.

My question is for us folks who work in the public sector. My deferred comp account is a 457B, which I understand is a different animal than a 401k. I understand there's both good and bad. Well, the bad is pretty obvious because neither one of my employers matched any of my contributions over the last 15 years. But can you describe how else a 457 differs from the 401k? My main question is that in the next few years, I plan to change gears and try a new and different career. And I'll have the chance to roll over my 457 over into an IRA. I already have a Roth IRA that I maxed out on the side. What are the pros and cons of leaving my deferred comp alone versus rolling it over?

Thank you so much, Paula. Thank you, Joelle. So what I hear is that you actually have two questions. Question one is how does a 457 differ from a 401k? And question two is, when you leave your job should you leave your 457 where it is or should you roll it over into an IRA? Those are great questions and a lot of the differences are subtle but can be really important. So understanding the difference between your 457 to 401K before you make an irrevocable change like rolling it over is something you definitely want to know. So the big difference between a 457 to 401 is that a 457 is 56 numbers bigger. No, I'm sorry. Steve, can we get a b-dam?

Could we go a whole episode without a little dad humor? We had to. We had to. I had to do it. But a 457, a retirement plan through a municipality, and I don't know what municipality JOL works for, but that money goes in pre-tax just like a 401K, and when you take it out, you're going to pay tax on it, just like you would a 401K. So it smells a lot like a 401K.

Here are the differences. on the plus side, you can take the money out pre-59 and a half once you've separated from service without a penalty. So 457, you're still going to have to pay the tax on the money. But you know how 401Ks often have you locked in and IRAs have you locked in? 457s don't have that rule. So if you roll the money over to an IRA like a lot of nefarious advisors might have you do? You're locked in. What you find is you better want to retire after 59.

and a half. And listen, for most people, you know, we don't want to tap that money after 59 and a half, regardless of when you retire. Exactly. Right. So most of the time, I will still recommend that people roll their money over if it's post 59.5 money because there are usually better options than what the city has, uh, is using number one and number two is that if the city decides to make changes, you're not in control. In an IRA, you're much more in control. But that 59.5 rule looms large. And by Better options, Joe, what I assume you mean is investment options. So, for example, if right now in your 457, you can only choose from a handful of brokerages and a handful of funds inside of those and they all suck, then rolling it over into an IRA could give you the ability to be in a better brokerage where you can pick lower fee index funds that are much more attractive. You know, you can roll it into Vanguard if that's what you want to do.

And suck there is a technical term. Yes, exactly. Now, here is the Achilles heel. Let's say that you are going to leave the money in the 457. You have fine options and you want the money pre-59 and a half, maybe even after 59. If you decided to leave it there, big difference between a 457 and a 401K is if the entity that you work for goes under, like a 401K. When General Motors declared bankruptcy, the 401K at General Motors was not subject to that lawsuit and creditors couldn't go after it. A 457 can be subject to a creditor lawsuit.

Now, in the old days, that wasn't a big deal because cities were like the safest place to work. But now you look at some cities in America. You look at some states in America. I'm looking at you, Illinois, New Jersey. Some states are having trouble. So what I would do, there are three rating agencies for bonds, Moody's, Duff and Phelps, and Standard & Poor's, look up their credit rating, at least with one of, you don't have to look up all three. just look up one of their credit ratings. Make sure that the city that you're working with has a bright financial outlook.

And if that's the case, I wouldn't worry about your 457. But as we know, there are some cities and some states that have been struggling that have 457s. So I would be mindful of that. And we will link to all three of those in the show notes. The show notes are available at afford anything.com slash episode 133. I'll tell you, there's one other cool thing. Some institutions that you work for offer a 457 and a 403 and Joel.

I don't know if you have the money to do this. I don't know if you want to do this. But if you've got both of them available, this is different. You can contribute to both. You know how usually if you have a 401k, you can't make an IRA contribution if you make over X amount of money? Here, you can actually contribute to both. So instead of 18,000 to one, if you're under age 50 and 18,000 to the other, you could put $36,000 into pre-tax plans. Chuching.

The bad news is Joelle doesn't get a match, but if a municipality, let's say, or an institution does give you a match in a 457 plan, the match counts toward your cap. So it counts against your cap. So if you're putting 18,000 in and you're getting match, you're actually over the amount of money that you can put into the 457. But Joel's not getting a match. So for her, and I don't know if she's eligible for a 403B, but if she is, that that would be extra awesome. Yeah, or for anybody else listening. I mean, if you've got this plan where you can do both and you've got the wherewithal to do both, chouching.

Yeah, exactly. So, Joelle, an answer to your question as to whether or not you should roll it over once you leave your job, I mean, I guess the answer is it depends, but the factors to weigh, it seems the major pro versus the major con to weigh is the availability of investment options that you have if you were to leave your money inside of a 457 versus the major prox. versus the fact that if you were to roll it over into an IRA, you would not be able to tap that money until you were 59 and a half without penalty.

And of course, there are those other factors as well that Joe mentioned, the fact that if the city goes bankrupt, it could be subject to creditors, all of those other issues as well. But those to me stand out as the two major points, the major benefit and the major drawback. Yeah, I'd agree. Thank you, Joelle, for asking that question.

Our final question today comes from Ines, and she actually, so this is actually a topic that we have never covered on the show. Because, and honestly, I had some reservations as to whether or not I should play this question because it's a little inside baseball. But we're going to do it. Throw caution to the wind. Exactly. Dogs and cats living together on today's show. So here is her question. Hi, Paula. My name is Inez.

I'm from Portugal, Europe. I wanted to write to you, but actually I couldn't find your email, so I decided to use this platform. I am thinking about starting the first real estate fire podcast in Europe. Everything I hear is from the US, and I think we really need to have some more information about Europe, because not only the real estate markets, but also other type of markets where you can invest your money are quite different. And so I see the need of creating a podcast to talk about this issue. I love your podcast, so I thought, why don't I ask Paula? How did she started?

Which type of platform shall I use? What shall I learn before I start a podcast? What do you recommend? I mean, in terms of thinking about the topics to be discussed or even I also should think about a name. So do you think I should have a blog together with a podcast or is it enough just to have a podcast where I was thinking about doing something similar to what you do. So inviting people in the real estate world and in the fire world, but in Europe to talk about how did they manage

to reach financial independence or what are they doing to reach financial independence. And also about real estate markets and valuations because that's quite different from the US, I think, Europe. Appreciate your help. Thank you very much. Bye. Two words. Don't do it. Those are three words. Oh, foiled again. Math is not my strong suit, so we're good. That's bad to hear your financial planner say.

Matthew's not my strong suit. Also bad to hear your podcast host or podcast guest say, don't be on a podcast or don't start one. No, I love having a podcast. But Joe, let's hear your take on it. I think this could open up into an interesting. on what it is. And, you know, since this is a financial show, of course, I will steer part of this answer into the side hustle, making extra money angle as well. But first, before we talk about monetizing it, let's just talk about what is it to start and host a podcast. You know, starting a podcast is a lot easier than I thought it was before we started the stacking Benjamin show. We waited a year because I was worried about things like the equipment. I'd worked with some of the equipment before because I'd done a little radio. I'd had done some like mobile DJ stuff in college,

but I still worried that I didn't understand like, how do I have guests that are in different places? How do I actually get my show on Apple podcast or on Stitcher, Overcast, Google Play, wherever? How does it show up, tune in, all these places? Like, that just all seemed really complicated to me. And I'm a keep it simple kind of guy. So I waited.

If I had anything I would have done differently, it would have been to start earlier because the cool thing about your first episodes, no matter how hard you try, you're going to get a bunch of stuff wrong, and it's kind of going to stink. Or I'll use Paula's word. It's kind of going to suck.

And don't get me wrong. You don't want it to, but get it out of your system. And I love this advice that, or just, I guess, thought process more than advice, that one of my favorite, I guess I'll call a mentor. We don't know each other,

but I think it as my mentor. In podcasting, Roman Mars said, Roman Mars has a wonderful podcast called 99% Invisible that I really love. Roman said, right now, I'm embarrassed by the work I did last year. And I'm hoping that a year from now, I'm embarrassed by the work I'm doing now. I feel that same way. I've been podcasting for seven years, and I'm horrified when I go back and we play our rewind episodes of things that we did a year ago. And I'm hoping for the same.

So it's a process and just start. And what you'll find is it's easier to start than you thought. The thing about podcasting or blogging or anything, any public-facing type of side hustle that anyone who's listening is interested in doing is that you are practicing publicly. And that is, I think, the biggest concept to wrap your mind around because it's so tempting to want to refine something and refine it and refine it until it's perfect. But no matter how much you do that, as Joe said, you will still be embarrassed about it a year later. And I feel that way about my blog posts. I look back at older blog posts.

Yeah, I've been blogging since 2011 on afford anything.com. And before that, I had a different blog that I'm not even going to mention that I started back in 2007. But on Afford Anything, I've been blogging since 2011. And basically everything that I did from 2011 through, oh, I don't know, last Tuesday, I find cringe-worthy. So, and it surprises me oftentimes when people are like, oh, I love your blog. And I'm like, really? I'm sorry. And that is the mark of a person who is always improving.

And so you just have to get used to the fact that you are practicing publicly. You will fail publicly. You will embarrass yourself publicly. And that's, that is what it is. But what's cool about it is that once you have an audience, they will watch you grow up, both as a person and as a person. and as a public figure. I've heard from a lot of people who listen to this podcast

who were like, wow, you've improved a lot. So, you know, they've told me that they've enjoyed listening to the show as it iterates and they've enjoyed seeing the level of progress

in this show from episode one through episode 133, where we are today. So I think for your audience, hopefully, the ones that like you and the ones that stick around

will be the ones who enjoy watching you improve over time. And your long-term community, they'll grow up with you. Like I said, I've been blogging since 2011. I was 27 at the time. You know, at the time that I started blogging, I either did not own any rental properties yet, or I had just bought my first one.

It was something like that. So my audience on the blog has watched me grow from the age of 27 to the age of 34 and from someone who owned zero to one properties to where I am today. Like, you've watched that whole journey and you've come along with me. And as this continues over the years, you know, you're going to see major life changes. I mean, there will be points in my life where people will die. People will have cancer diagnoses.

Maybe I'll have a kid one day. I don't know. But, like, as I go through the rest of my life, my community is going to experience all of that with me. And that's what's kind of scary and magical all at the same time. It's scary to live your life in public, but it's also really cool to know that you've got a community there. Yeah, I think there's two things that I'll tack on, Paula, to those points, which is that a mentor of mine a long time ago told me, as a financial planner, but it's been anything that I've done that's public facing, you will naturally attract people who are somewhat like you or appreciate

you and you will repel people who aren't. And so your community becomes stronger and stronger as your voice becomes bigger and more honed. And I found that with my show with Stacking Benjamin's. I think the difference between writing or just talking and talking in front of microphone and writing and hitting publish is that when you share things with the world, that means you're also attracting feedback. And online, that feedback is not always positive or constructive or helpful, sometimes it's just horrible. And it can ruin your day if you don't have a really thick skin. Yeah.

And that's one thing that I've struggled with a lot. And I continue to struggle with one of my favorite Instagram celebrities, an account called Yoga Girl, Rachel Brathen, she lives in Aruba. She's got 2.1 million followers. And she posted, what other people think of me is none of my business. And that really resonated with me. Because for her to say something like that, Like when her literal business is what other people think of her, right?

Her literal business is being an Instagram celebrity. That's what she does. She has one of the biggest yoga accounts on Instagram. And so for her to say, you know what, what other people think of me is none of my business? I'm just going to continue to be me. There's an inherent contradiction in that, but you have to embrace that because that's the only way that you can be your most authentic self. And a lot of the talk around podcast, if you get into podcast groups around what microphone you use, what equipment you use, what equipment you use, how do you edit your show, that type of stuff.

Editing your show, I think, can be part of the art. Generally, people don't see it that way. I think that that's an area where we've been very liberally applied some art in the Stacking Benjamin show. I'd say the big things to think about are not any of those. I feel like that would be like asking Michelangelo what paintbrush he uses, you know, or what chisel he uses. I think it's more about the vision.

and I worry when I hear new podcasts that I hear too many Me Too podcasts, podcast mimicking something that's already out there that somebody's doing better. So I would say think about really what you want to. And I love in her question, by the way, things are different in Europe. She hasn't heard podcasts in Europe that are real estate based. I think already there she's thinking about her niche. And if you're listening to this and you're thinking about a podcast, think about your voice a lot. I think that's really the key to a good show.

And with that being said, it will refine over time. I mean, for me, both with a blog and with a podcast, my voice has gotten refined and changed and different over time. It has, but you and I talked right after Jay Money left this show, and that direction, that view in your brain, I don't think is changed. I don't think that, I think you found your voice more, but that's just experience. But like where your show's going and where the niche is for the afford anything podcast, is still, I believe, in that original vision.

Yeah, so, Joe, that conversation that we had, that was actually incredibly helpful. So when this podcast started, when the Afford Anything podcast started, it was originally called The Money Show. And episode 26, up through the first 26 episodes, I had a co-host named Jay Money. He left at episode 26. And then we continued to call ourselves The Money Show for a handful of episodes after that. And then I think somewhere around episode 30-ish, we rebranded into the Afford Anything podcast. And so when that happened, Joe, you and I had a long conversation. And I remember you clearly asked me, you were like, all right, do you want it to be light and fluffy and playful?

Or do you want it to be thoughtful and intellectual? And I was like, I want it to be thoughtful because that's the type of personality that I have. I like deep, intelligent conversations with other humans. That's the type of person I am. And therefore, that's the type of podcast I'm going to produce. And Joe, I remember you told me you were like, all right, well, if that's what you're going to do, then keep the intro super short. and cut to the chase as quickly as possible. And that's why, as you noticed at the beginning of this episode, we did a super short, less than one-minute intro, and then boom, we immediately launched into Andy's question.

Because that's the advice that Joe gave me way back at 100 episodes ago. And we continue to do that to this day. But it really is about the voice and about who you are. I mean, in this show, so much, when I listen to your show, it so much reflects who you are. And what's funny is when you're on my show, your personality kind of moves to, but like, I'm way more thoughtful on your show than I am on mine. Yeah. Yeah, exactly. And I'm a lot more sarcastic when I'm a guest on your show, Joe.

Right, right. And don't give me wrong, I like deep, thoughtful conversations too, but generally radio-wise, it's not what I'm attracted to. And so, which is why, you know, a lot of people prefer your show to mine that listen to your show. and people, I'm sure, that listen to my show, prefer my show to yours, just because you attract the audience that reflects you. Yeah. Yeah. And so then I guess the final piece of advice then that kind of wraps that all up is don't try to be something. You know, if you look around and you see that somebody else has a winning quote unquote formula, don't try to emulate it because that will just produce another Me Too derivative. And there's nothing inspired about that. So whatever artistic, or creative work that you create, whether that's a blog or a podcast or a book, and I'm saying

this for everybody who's listening, don't try to follow some formula because you think that it's a plug-and-play, fill-in-the-blank algorithmic equation. It's not. It's, this is, these are creative entrepreneurial works that we're talking about. And if you're going to be a creative entrepreneur, then you need to create. And creation comes from a place of authenticity and originality and vulnerability. Can I kind of twist that just a little bit, Paula? Yeah. I completely agree with that. And it tires me when I hear a podcast and I think, wow, you just ripped off X podcast and tried to be that person, not authentic at all. Yet, very creative people don't come from a vacuum. And I love Austin Cleon's book, Do You Like an Artist? Yeah, I agree with that. We all stand on the

backs of giants. My writing style is an amalgam of a lot of. of my favorite writers. Shane Snow, who is our upcoming guest next week, is an amazing writer. And I've actually, his book, Smartcuts, is the only book that I listened to the audio version first on Audible. And I then bought a physical copy, not for the information itself, but to diagram the way that he wrote stories. And I told him that when I met him. And so his natural follow. of question was, well, what did you observe? And I explained to him exactly what I observed, and he was like, you're absolutely correct. And then he named for me the sources that inspired him to write stories like that. And so as a writer, a lot of my writing style, my voice, my

tone, my narrative flow is kind of pieced together from A.J. Jacobs, Shane Snow, Geraldine DeRoyder, Tim Urban, a lot of the writers who I really respect and admire, it's not that I'm ripping them off and it's not even fully conscious. It's just that the more you expose yourself

to different types of art or different types of creative works, the more that the influence of those will rub off on you and then you will start creating in a way that is in your own voice. But... It's a muse.

Yeah, reflects the accent of the area in which you are. It's so fun. And I have to say, and we've played inside baseball for a while here, but I'll tell you, a great thing that I never thought about that I love is being able to talk to some of these people that are my heroes. This is a great piece about having an interview style show is, you know, you and I getting to talk to Vicky Robin.

I got to talk to Austin Cleon. And Austin, I just mentioned his book. And when I had him on the show, I had this big, huge man crush. And I think my interview was just the question I asked over and over was, why are you so great? No, I didn't do that. But still being able to talk to him, I love Disney movies and to talk to Don Hahn, a Disney producer. Like to talk to these people that you are so inspired by is really a side benefit to this thing. Yeah.

Which is, and even if it's people that I hadn't met before, I've been inspired by so many people that I hadn't met before. just interviewing them and finding these quirky cool things about how we're different and yet the same is so exciting. Yeah, absolutely. I would agree with that. So on that note, don't do it. Yes, on that note, don't do it. By the way, I'm going to put a little plug right here for anybody who wants to start a blog or start a website, I've got a tutorial. It's at afford anything.com slash start a blog. Again, that's afford anything.com slash start a blog.

And it'll show you how to put up a website. I'll put in my little plug here for that. And that being said, Joe, thank you for being on the show. Normally at this point, I'd ask you to plug yourself, but I think everybody knows you're the tracking Benjamin's podcast. I think that's been established. I think apparently we did that, didn't we? I'm sorry.

Yeah. So thank you, Joe, for joining us again. It was fun as always. And remember, kids, timeshares aren't evil. How they're sold is evil. Oh, dear. And with that, I'm signing off. I will catch you next week when we interview one of my favorite writers, Shane Snow.

Until then, see ya.