Afford Anything - Ask Paula - Automating Savings, Starting a Blog, Emergency Funds, Investing in Real Estate Confidently, and More

Episode Date: December 5, 2016

#54: It's the first Monday of the month, which means I'm fielding questions from the audience. We start with a question from Nicole. She's a new listener, and she's stuck in a confusing situation. You see, Nicole is self-employed. She'd like to save a percentage of her income -- but she doesn't get regular paychecks. How can she automate her savings, when she doesn't know how much she'll make each month? She asks a second question, as well. Nicole has $15,000 in savings and wants to buy her first rental property. However, she's intimidated by the unknown market. What should her first steps be? Next, we move to a question from podcast listener David. Should he invest his emergency fund? David is contemplating putting his emergency savings in the Vanguard Immediate-Term Investment Grade Fund (VFICX). Is this a good idea? Saul, another podcast listener interested in real estate investing, recently sold his home and has a decent chunk of change. Should he buy a 3 bed / 2 bath townhome with a small commercial space on the first floor? Or should he buy a duplex? Podcast listener Albert is wondering: should he buy a home for himself, and rent it out a few years later? He'd like to travel and work remotely. What are the downsides to this idea? It can't be that easy ... right? Finally, Abbey started a personal finance blog, and wants to know:     When should she start promoting her blog?     How much content should she write?     Does she have to share her blog with her friends and family, or can she stay anonymous?     Should she write about other things besides money and travel? I tackle these questions in this month's edition of Ask Paula. Enjoy! -- Paula P.S.  Trying to make a decision? Ask your question at http://affordanything.com/voicemail Resources Mentioned:     Renting is Throwing Money Away...Right?     Everything I Know About Blogging Condensed Into One Post     Should You Invest in This Rental Property? _______________________ To view this information online, visit http://affordanything.com/episode54 Learn more about your ad choices. Visit podcastchoices.com/adchoices

You can afford anything but not everything. And that's true, not just of your money, but also your time, focus, energy, attention, any limited resource in your life. So how do you make better decisions, smarter, more rational, more informed, principle-driven choices about how you're going to spend your limited resources? How are you going to direct what's available to you in a way that will help you produce the type of life that you want to lead? That's a serious topic, isn't it? It's a serious line of inquiry, and this is the Afford Anything podcast where we try to ask better questions and try to find better answers. My name is Paula Pant, the host of the podcast, and today is the first Monday of the month, which means I answer questions that come in from you. Our first question comes from Nicole.

Hi, Paula. I'm a relatively new listener to your podcast, but I'm really loving it so far. I have two questions for you today. The first is I'm wondering how you personally automate your savings. So for me, for example, I have my checking with Bank of America and they do have a program that allows me to transfer the same amount of money each month. So for example, transfer $50 into my checking. But what I would really like to do is transfer a percentage of my income into my brokerage account or into my retirement account. I am self-employed. So my income does vary from month to month.

So I'd really like to do that as a percentage. and I was just wondering if you had any recommendations for somebody in my situation. I know you've mentioned Smarty Pig and I do need to look into that more. But anyways, just if you have any recommendations on that, that would be awesome. And then my second question is, I have about 15,000 in savings right now. And I'm really interested in starting with real estate. But to be honest, I don't feel like I'm at the point where I could confidently invest in something. I live in California.

and to be honest, the idea of investing in an unknown market is a bit intimidating to me. I'm pretty young. I'm only 26. So I don't know. I just wanted some recommendations. Would you recommend trying to find a mentor? And if so, how would you recommend finding one? Or would you recommend certain blogs or just whatever you would have for me to really feel comfortable with my investment? All right. Thank you. Thanks, Nicole. Now, I'm going to answer your first question first. How do you personally automate your savings? Given that you're self-employed, this is tricky because, as you said, your income fluctuates.

So, you know, I don't know how much you make, so I'm just going to pull some numbers out of thin air just for the sake of illustration. You know, let's say one month you bring in $6,000, the next month you bring in $4,000, the next month you bring in $7,000, the next month you bring in $2,000. Yeah, figuring out anything as a percentage of your income is going to be tough when you bring in such wild fluctuations every month. there are a couple of ways that you could deal with this. One way is to treat yourself as though you have a regular salary. So here's what I mean by that. Let's say that over the long term, over the course of the past, you know, look back on what you've made over the course of the past year. Let's say that last year you made $60,000, which breaks down into $5,000 a month.

Go for a little bit less than that and pay yourself, quote unquote, pay yourself a salary of $4,000 a month and break that down into whatever it would be per week or per every two weeks. So essentially, what that would look like is that money would flow into your business in these wild, rapidly fluctuating ways, but your business would pay you as its own employee in regular two week intervals. Your business pulls in all of this rapidly fluctuating crazy money, but every two weeks you get a steady paycheck that represents basically what the business would pay you if you were an employee. Like imagine that you were hiring an employee and you were to pay that person out of the business proceeds. Well, that's exactly what you're doing, except in this case, that employee is you.

And so if you do this, then you can transfer a percentage of your income expressed as a raw number into savings because you're getting a steady paycheck. You're essentially imitating what it would be like to be a W-2 employee for another company. So that's one way that you can deal with that. The other possible way that you could do it, option B, is just kind of let go of the idea of saving a particular percentage of your paycheck and instead save a raw number or let money accumulate until you reach a certain amount at which point you chunk it all into one big goal. That's the other way of doing it. But it sounds like that's what you're doing right now and it sounds like you're not happy with that option. So if that's the case, then yeah, basically just pretend that you're going to go. Go for option A. Pretend that you're an employee of yourself.

Now, Nicole, to the second part of your question, you've got $15,000 saved, you're interested in investing in real estate. You live in California. You would want to invest in a rental property that's out of state somewhere where the price to rent ratio is better. But you aren't totally comfortable yet. That discomfort is a good thing, first of all, because the last thing that you want to do is jump into something blindly. That's the mistake that I think most investors, most first time. rental investors make. So good for you. Congratulations to you for not being reckless with, you know, going ahead blind. I do not recommend getting a mentor right away because you need to be

incredibly selective about who you learn from, who your teachers are. Mentors and teachers all have different philosophies, different styles, and you need the ability to critically evaluate what philosophy you want to learn from, you know, what school of thought you want to pursue. If you just pick a teacher out of thin air, you don't know if that teacher is going to give you the advice that's right for you or not. So I wouldn't start with that route. Instead, what I would do, if I were you, is start reading as much as you can. One of my favorite book, the first book that I ever read about rental property investing is called From Zero to 130 properties in 3.5 years. It's written by a guy who's Australian, so disregard any of the legal and tax-related stuff within that book because that all pertains to Australia.

But the high-level thinking of that book is quite good. I'd also recommend my own blog, affordanithing.com, of course. And once I finally get my own course out, which is not going to happen until sometime in 2017, I mean, I don't want to be self-promotional. But I do recommend that as well. But, you know, just read as much as you can. And start with that. And over the course of long, just indulgent periods of reading and thinking and evaluating lots of different viewpoints and different ideas, you'll be able to kind of suss out which of those viewpoints fits within your framework, your goals, and which doesn't. You know, you'll basically, as a result of a lot of reading and thinking, you'll be able to develop the critical judgment to know what style of investing you want to pursue. So thanks Nicole for calling in and best of luck. Our next question comes from David. Hello, Paula. My name is David from Illinois and I enjoy listening to your Aford Anything

podcast. I had a question for you on where to put an emergency fund. I was considering putting in my emergency fund into my regular Vanguard brokerage account. Considering it was a Van Gogh immediate term bond fund, which is B-F-I-C-X. A 6% return since inception. I'm in the 25% tax bracket, so I will assume I will be paying 25% from any bond dividends that were derived. So I just wanted to know, is this a good idea? Thank you, and I will be listening to future podcasts for your response.

Have a good day. asking that question, David. There are a few things that I want to touch on when I give this answer. Now, first of all, your emergency fund, the purpose of the emergency fund is not to grow. It's not an investment fund. The purpose of your emergency fund is that you have immediate access to cash in the event of something unexpected, a medical emergency, a job loss, your roof leaking, your refrigerator blowing up. That's the point of the emergency fund. So don't think about your emergency fund in terms of the missed opportunity for growth because you've kind of got a whole different piles of money in different silos. There's a pile of money that you have that is meant for growth, for wealth accumulation, and then there's a pile of money that you have that's meant for an emergency. And that's money that you want to preserve.

So for most people, in most circumstances, I recommend that they put their emergency fund in a savings account because that way you can tap that money at any time. Now, that being said, there are wildly different ideas about how big your emergency fund should be. So some people say that your emergency fund should be three months worth of your basic living expenses. Other people say six months. Other people say nine months. Some people say as much as a year. I think that it's perfectly okay to have kind of two tiers of an emergency fund. So you've got your, oh, shi-cash on hand, like your three-month emergency fund that is like just the money that you tap really short-term.

And then you might have your second tier of emergency fund that is, you know, maybe months four through 12 that you don't need to protect as much because there's, less of a likelihood that you're going to have to tap it. I realize I'm being a little bit vague right now, so I'm just going to throw some hypothetical numbers in here to make this a little bit more clear. Let's assume that you live on $4,000 per month, right? In the event that you lose your job, you need $12,000 just to cover those first three months of living expenses. So you might keep $12,000 in a savings account. But then, just for some peace of mind, you also want to keep another $12,000, around, you know, to represent that six months' worth of living expenses. And that second $12,000, that second tier of your emergency fund, with that you can take a little bit more risk,

not a lot, but a little bit. And so that second tier of 12 grand, that is money that I think would be okay to put into a conservative investment, such as a Vanguard intermediate term bond fund, if that's what you're interested in. I think that's a perfectly fine conservative. derivative investment for your second tier of emergency fund, the money that you're unlikely to tap. There are a few things that you said within your question that I also want to touch on. Number one, you talked about its yield since inception. I would encourage you not to look at a fund's yield since inception, number one, because that's a very vague and ambiguous benchmark. You know, some fund inception happened in 1990, which means that,

yield since inception represents less than 30 years. Other funds have been around for quite a bit longer. So we're not really looking at a particular fund's yield since inception. We're looking at a given asset class and how well that asset class has performed over the past 100 years. Now, we know that in general, bonds and stocks tend to move an inverse correlation to one another. and we know that in general over the long term, bonds tend to return a couple percentage points over inflation historically in the U.S. over the past 100 years. And that's really what I would focus on. If you're sticking with a passive index fund strategy, which you clearly are since you're interested in the Vanguard funds, then the performance of one given fund versus another given fund isn't what I would encourage you to think about.

Instead, just look at asset classes and figure out what asset class most closely matches your risk profile. That's kind of a long and sort of esoteric way of saying, given that you have this emergency fund and you don't want to subject it to too much risk, but you do want it to at least keep pace with inflation over time. You want a conservative risk profile, and a bond fund, like a low-cost bond fund, like a Vanguard bond fund, is a good solution for that. Hopefully that helps answer your question. Thank you so much for calling in David, and best of luck with everything. Our next question comes from Saul. Hey, Paula. I'm a complete newbie.

I haven't actually bought an investment property. I recently sold my home in New York. I have a pretty decent chunk of change, and I would like to be smart with that chunk of change. I am looking at purchasing a new construction townhome that has three bedrooms, two bath, and then on the first floor has a small commercial space. I was wondering how you thought that compared to a entry-level duplex in my area, which is south Salt Lake City, Utah. Things are incredibly expensive right now, and duplexes are very hard to find. I think that that might be my closest option to rent out the small commercial space.

I wanted to know what you thought about that. Keep up the good work. Love the podcast. Pretty much addicted to all podcasts. It's kind of making me insane, but I love it. Thank you. Hey, Saul. Well, welcome.

I welcome newbies. Thanks for listening to the show. I'm glad you're thinking about these issues. commercial spaces are a completely different ballpark than residential investing. Let me highlight just a few of the many, many differences. First of all, with residential investing, you typically have tenants who will sign leases for increments of one year, right? For a commercial space, you might have a tenant sign a lease for an increment of 10 years. With a residential space, you've got a tenant who you can qualify based on their income.

With a commercial space, you can't necessarily do that because, Neither you nor they know what their income is going to be. They haven't rented the space yet. They haven't started getting customers yet. If they're a franchise, maybe they've got some other stuff, but it's much more up in the air. With a residential space, the tenants aren't going to make major modifications to the dwelling. They might paint the walls, but that'll be about it. With a commercial space, I mean, all right, if it's a beauty salon, they might be installing chairs, each of which need to have plumbing associated. with those chairs so that people can soak their feet for pedicures. That's one example. If it's a hardware store, they might need, I mean, they might need to do some serious buildouts, is what I'm saying. They might need to very, very seriously modify that space. And what are you going to do if a tenant wants to modify that space and their business fails and they end up having to vacate after one or two years, even though they've signed a 10-year lease? You know, those are all of the considerations. That's not to discourage you from commercial investing. That's just to say that you're dealing with a completely

different can of worms here. In commercial investing, there are a lot of different setups as to how you collect rent. Are you going to collect just a flat fee every month? Are you going to collect a flat fee plus a percentage of the business's gross revenue? Is the tenant going to sign a triple net lease, which means that they're paying for all of the buildings taxes, insurance, and maintenance in addition to all of the normal rent and utilities, or is the tenant not? Will the business owners have to personally guarantee that lease? So if the business fails, are they on the hook? And what assets do they have to back that? Those are all of the considerations that you're going to have to think about if you go into commercial leasing. Now, again, I'm not trying

to discourage you from it. I'm not trying to scare you away. And I'm certainly not telling you not to do it. I'm just saying this is a bigger issue than you might be anticipating. I have very, very good friends. We're actually on the opposite side of this. I've got very, very good friends who are looking at opening up a store on the Las Vegas strip. So we've been dealing a lot with commercial leasing from the point of view of a tenant who is trying to sign the lease. And it is absolutely nothing like being a residential tenant. So if you are going to pursue it, do your homework and just understand that even though this is quote-unquote real estate, it's apples and oranges isn't even the right analogy. This is like apples and cats or oranges and freaking unicorns.

One more thing that I'll add, though, if you're serious about this, become an expert in one niche. So, okay, I'm going to pull back a little bit. When we talk about real estate investing, there are all kinds of different niches, right? So there's residential, there's office spaces, there's retail spaces, there's warehouses, there's mobile home parks. All of these are different types of real estate niches and all of them are incredibly different. Because of those differences, don't try to do all of them. Just become an expert in one and be really, really, really. good at that one. So I am a specialist in residential buy and hold rental property investing.

And I don't go into mobile home parks, not because they're a bad investment, but because that's just a different skill set. And I can perform better by concentrating my expertise in one niche area. It's a bit like, you know, being an engineer or being a doctor, you know, do you want to be an electrical engineer or do you want to be an aerospace engineer or a civil engineer or a mechanical engineer? Yeah, they're all engineering, but they're incredibly different subsets. And even within a subset, like let's say you're a civil engineer, do you specialize in roads and bridges or do you specialize in water flow? I mean, those can be incredibly different subgenres. And if you try to do everything, you end up doing nothing very well. You end up kind of sucking it at all. So the way to succeed is to pick your

niche and focus everything on that. Same with being a doctor. You know, you could have, you could be a doctor, but an anesthesiologist and an oncologist and a dermatologist, I mean, these are not the same thing. You wouldn't go to, I wouldn't go to a dermatologist if I broke my ankle. So the way that you succeed is, again, just by focusing on a niche and not making the mistake of believing that, well, as long as, you know, it's in the same general broad category of engineering or medicine or real estate, it's all the same. I'm not implying that that's what you are thinking, but it's just a broad message that I want to throw out there. All right. Well, hopefully that helped. And best of luck. I guess the chief takeaway is, if you're going to do it,

do it well. Like don't half-ass it. If you're going to do it, go all out. learn what you're doing and you could be really awesome at it, but make sure that this is the niche that you want to focus on. Thanks for the question, Saul. Have you ever wanted to chat with a financial advisor, but you don't want to sign up for a long-term commitment? I understand. NerdWallet has a really cool app that lets you get advice from a financial advisor directly from your phone. There's no jargon, no pressure, no hard sell. None of that. You'll just get a financial advisor who gives you a simple answer to your specific personal finance question.

The conversations are encrypted so you can feel safe and secure and all of it is available at no cost to you. To download this app at no cost to you, head to nerd.m.m.m. slash Paula. That's nerd n-e-r-d.m-e-slash Paula. Our next question comes from Albert. Hi, Paul. My name's Albert. First, I just wanted to thank you so much for writing such comprehensive and data-driven article posts instead of fluff. They've been so helpful. I've shared your rent versus own article numerous times with friends whenever they say rent is just throwing away money. Well, here's my question. I found that it's cheaper to rent in my area than to buy. However, I only plan on staying in the area I'm in for the next couple of years. So conventional wisdom would be, duh, rent, dummy. But here's kind of the twist that I was thinking. What if I were to buy, only live in the house for a few years, and then as I move somewhere else, just convert that into a rental property, particularly I was thinking of traveling and working from my computer.

But I feel like more people would do that if it made a lot of sense. So what would be the downfalls of trying to do such an endeavor? Am I being kind of too rosy-eyed in this pursuit of buying my first home and then renting it out in just a few years. Thank you so much for helping. Hey, Albert. If you're going to buy a rental, buy a rental. And if you're going to buy a house to live in, buy a house to live in. I don't see what the benefit of combining the two would be.

And here's why I say that. Imagine that you were going to buy a stock. Would you buy a stock of a particular company just because you use that company's products or just because that company is headquartered in the same city that you live in? No, of course not. If you were going to buy a company stock, you would, hopefully, research all of the companies that are out there and choose the stock that you think would either appreciate the most in value or pay the best dividends

relative to the risk profile that you're okay with. That's how you would choose any investment. So that's the same mentality that you should carry when you are looking at. at buying an investment property. If you're going to buy a rental property, you want the property that's going to give you the best returns relative to its risk profile. So if that's what you want, then buy that. The likelihood that that property would also happen to be the property that is located in your neighborhood that you want to live in is, I mean, it's slim. It's like if you imagine the Venn diagrams of like the Venn diagram of great rental property and the Venn diagram of

houses that I want to live in. Yeah, there might be a tiny overlap, but not a big one. Let me frame this in mathematical terms. There's this formula called capitalization rate or cap rate. And cap rate measures, and bear with me because this is going to get really jargony, but I'll explain what this means. Cap rate measures your unleveraged cash returns relative to the asset value. I know, jargon alert. Here's what that actually breaks down to. Cap rate looks at how much cash net you could get from a house, how much net operating income a house will produce, and then it compares that to the price that you paid for the property. So if you compare it again to the stock investing world, it would be analogous to the dividend that you would get on a stock.

It doesn't, the cap rate formula does not take any appreciation or equity growth into account. It doesn't take your financing into account. You know, it's not a measure of cash on cash return. It purely looks at the dividend that you're getting on that house. So let's say that you are the rental equivalent of a dividend investor. Let's say that your goal is to produce awesome dividends on the properties that you buy. If that's the case, you're going to want to look for the property. that's going to give you the best cap rate, again, relative to a given risk profile, you know,

relative to like the tenant quality and the other various risk factors within that area. And if that's what you're looking for, then you're going to start searching for houses that produce great cap rates. Now, if you look around for houses that produce awesome cap rates and you find one and you're like, hey, yeah, I may as well move into that place, then, okay, fine, sure, go for it. But I don't see why the two. The two, two pools would be conflated. In fact, I'd say there's a much stronger likelihood that the property that's going to give you the best cap rate or the cap rate that you want is probably, depending on where you live, probably going to be outside of your town, your neighborhood,

your city, maybe even your state. So, yeah, go where the money. When you're making investments, go where the money is. And when you're buying personal items, buy personal items. Try not to mix the Now, that being said, there are two reasons why you would buy a primary residence to live in and then use it as a rental property. And those two reasons are down payment and interest rate. And what I mean by that is that if you're buying a primary residence, you can put a low down payment. If it's an FHA loan, it can be as low as 3.5% down. And you can also get a lower interest rate than you could on an investor loan. So if you're buying your own primary residence, you can put 3.5% down and get like a whatever the bottom interest rate on today's market is, assuming you've got good credit.

Furthermore, if you wanted to buy a multi-unit, you could get that. You know, you can get duplex, a triplex, a fourplex, which means that you could live in one of the units and rent out the others. Now, if those are the reasons that you are moving into the property, if in other words, you're buying a primary residence so that you can, qualify for the low down payment, the low interest rate, and the opportunity to buy a multi-unit, then those are valid reasons simply because you're moving into the house as a stepping stone into buying a property that you otherwise might not qualify for. Again, I feel like I'm being a little bit too high level or too esoteric. So to give it a specific example, let's say that you only have 20,000 that you can put down and you go to a bunch of different lenders.

to try to get investor loans for rental properties and none of the lenders are going to give you a loan unless you put less than 20% down and you're going to need quite a bit more than 20K for that. Okay, if that's the case, then you're just being sidelined completely. You're kept out of the game completely. And if that's the situation that you're in, then it makes sense to buy a primary residence just so you can get into the game. But getting into the game and making an optimal investment are not the same thing. So, I guess the first question that I would ask you to ask yourself is, what's your goal here? Is your goal just to get into the game or is your goal to make the best investment? And if your goal is to make the best investment that you can, then do that by the property that would be the best rental. So I feel like I'm rambling a little bit here, but long story short, look for a property that's going to be an awesome rental. And when you find that property, then ask yourself, is this something that I'm willing to move into? And if the answer is yes, then awesome. But if the answer is no, then you've prioritized good investment over personal preference.

And when you're buying any investment, that's what the priority should be. The logic of the deal should supersede your personal preferences for the same reason that you wouldn't buy a stock just because you personally really like the company. So I hope that helped. And thank you so much for asking and thanks for sharing the rent versus buy article with all your friends. That is one of my favorites. By the way, in the show notes, which you can find at afford anything.com slash episode 54, I'm going to link to an article that I wrote about cap rate, cash on cash return, all of these formulas that people use when they look at rental property investing. So check that out, Affordanithing.com slash episode 54. Our last question of the day comes from Abby.

Hi Paula, love the show. My question is about blogging. I just started a blog a few weeks ago, and I just wanted your thoughts on finding an audience, specifically the timing. I did read your awesome blog post about everything you need to know, and I'm wondering, when do you start promoting a blog and trying to find people to read it? How much content do you need? Currently, I have about 10 post and lots of ideas for additional posts. Am I required to share this with all my friends and family first, or can it be more of a anonymous blog to find a new reader audience? Any advice you have for a new internet writer would be greatly appreciated. Also, I am writing about personal clients, not sure if that is relevant, but I also may explore travel and other topics as well. So if you have

any thoughts on expanding the range of topics. I know you cover two main subjects, but just let me know what you think. I really appreciate your show. Thank you so much. Hey, Abby. Congratulations on being a new blogger. It's a fun world. To answer your questions, first of all, when do you start promoting a blog right away? I mean, you're writing articles. You want people to read it. So there's no reason to wait to start. That being said, I'm a big believer that the best promotion, the best marketing is to write stuff worth sharing. Because the thing is, there's a lot of mediocrity on the internet. There's a lot of noise. There's a lot of people who put up these blog posts that looks like it took them 10 minutes to write. It's just fluff and opinion and noise. It's nonsense.

That stuff doesn't ever make it very far because it's not ultimately. It's not ultimately, something of value. My goal when I'm writing is to write a post, to write articles that I would want my grandkids to read after I'm dead. I want that level of quality. That's hard and it's rare. But the thing about stuff that's rare and valuable is that it's rare and valuable. So I would encourage you to stand out, stand out not by like, 20,000. tweeting your posts a million times, but rather by writing posts that are so good, other people just can't help but tweet it. There's a famous quote, good marketing will only make a bad product fail faster. And, you know, I've never seen your blog. I don't know what I don't even know what the URL is.

So I'm certainly not implying that your stuff is bad or mediocre. I'm just kind of making the statement that rather than focus on the quantity of posts you have, you know, should you have eight, should you have 10, should you have 12. Doesn't matter. Just have something good. Have something that people remark upon, something that's truly remarkable. I mean, you heard Albert who just called in, you heard him say that he shares my rent versus buy post with loads of his friends. He's not doing that because I've launched a really great marketing effort. He's doing that because he thought that that post was worth sharing. Ultimately, the reason that anyone reads any blog is twofold. number one, the originality of the ideas, and number two, the quality of their expression.

So work on having original ideas. Writing is the synthesis of lots of reading and thinking and conversing about a variety of subjects. So spend a lot of time in deep thought. And when you read and when you talk and when you consume a lot of media, eventually writing just starts to bubble up out of you. You synthesize all of these ideas from all these different sources and you put it together in your head in a way that nobody else has done before. And then you just can't help. But write it. Sometimes your fingers move across the keyboard and you don't even know what your fingers are about to say. And when you get to that state, that true flow state, that's when you know you're truly on to something.

That is when you have high-quality ideas that are just flowing out of you as a result of all of those hours that you've spent. contemplating. And that's how you get the rough draft out. And once you do that, then you put it aside, shelve it for a day, a couple of days, a week, a month. And then later, you can come back to it with fresh eyes. You can evaluate whether or not it's worth sharing. And if it is, then you can smooth it over, make your edits, you know, do all of the editing that is necessary to make those ideas sing, to make them succinct and concise. And when you do that consistently, for a long period of time, you will create something that is magnificent, and things that are magnificent bubble up to the top. Because 99.9999% of blogs out there are just people clacking, uninspired,

meaningless, echo chamber, Me Too, SEO optimized crap into a keyboard. Like, the analogy that I think of is just a bird pecking at a worm, scented keyboard. And that is noise and it's not going to stand the test of time. So create something valuable and the rest will follow. As to your other questions, should you share it with friends and family or is it okay to be anonymous? It doesn't matter because your friends and family are what, 100 people, 200 people max? That's really a drop in the bucket when we're talking about building a readership of hundreds of thousands, if not millions. And I know that might sound daunting, especially as a new blogger, but believe me, if you write stuff worth sharing, it will happen.

And let me give you an example. One of, not one of my favorite blogs. My favorite blog is a blog called Wait, but Why. The title means like, wait, but why. And they're fairly new, but they're good. They're just, it's so good. It's not a personal finance blog. It has absolutely nothing to do with any of the topics that I blog about or think.

think about or read about typically, but it's just absolutely original in a way that I've rarely seen. And so when I first found that site, I emailed links to like all of those, the articles on that site to everybody I knew, not because there was some big flashy pop-up banner ad thing that was encouraging me to like share it on social media. I didn't, it wasn't for any of those reasons. It was because their material was so good. I just, I couldn't help, but share it. I felt like I was doing a disservice to my friends by not sending them this link to this amazing article. And even though they're new, they now have an email list of almost half a million people. And they didn't do that by obsessing over the minutia of, am I on Periscope? Am I on

Pinterest? They didn't do any of that. They just focused on creating really, really good stuff. and the rest kind of fell into place. So I hope that answers your question. I think I just spent a lot of time reemphasizing the same point. So I realize I'm being a bit rambly, but it's just because it all really boils down to that, the originality of the idea and the quality of its expression. So welcome to the world of blogging and best of luck.

Thank you all for listening to this episode of Ask Paula. If you have a question that you'd like me to answer, on air, head to afford anything.com slash voicemail. Again, that's affordanything.com slash voicemail, where you can leave your question and I'll tackle it on an upcoming episode. If you enjoy this show, do me a huge favor. Head to iTunes and leave us a review. And while you're there, upload some of your other favorite reviews.

Thanks again for tuning in. I'll catch you next week.