Afford Anything - Ask Paula: How Can I Pay for Grad School?

Episode Date: November 20, 2020

#285: Sam wants to use the funds in her Vanguard S&P 500 index funds for a downpayment on a house. She isn’t sure if she should keep her savings in the market. Should she move her money, and where? Hailey purchased a duplex in March and is already looking to sell due to a hostile tenant during the purchase process. How can she shift her focus from her initial return on investment to a long-term outlook? Zoe dreams of attending grad school, but her savings are locked away in retirement accounts. How can she save for grad school in the next two to three years? Mohamed wants to monetize a new podcast with affiliate relationships, but the service providers he wants to promote don’t offer affiliate programs. Can he still make this work, and how? I answer these listener questions in today’s episode. Enjoy! For more information, visit the show notes at https://affordanything.com/episode285 Learn more about your ad choices. Visit podcastchoices.com/adchoices

You can afford anything but not everything. Every choice that you make is a trade-off against something else, and that doesn't just apply to your money. That applies to your time, your focus, your energy, your attention, any limited resource that you need to manage. Saying yes to one thing implicitly means saying no to something else. And that opens up two questions. First, what matters most to you? And second, how do you align your day-to-day values to reflect that? 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 episode I answer questions from the community. And today, I am answering the following four questions. Zoe is 23, debt-free, earns $63,000 a year, and saves half of her income. She wants to attend grad school, but most of her savings is locked up in retirement accounts, funds that she can't access. What should she do? Haley purchased a duplex back in March, and although the numbers are good, she had a bad experience with a tenant that makes her no longer excited to own the building. What's her next step? Sam has money saved in a Vanguard S&P 500 index fund. She wants to use this money to buy a house, but given that that is a short-term investment goal,

is it proper to keep that money in an index fund or should she move it to a less volatile asset? And Mohamed wants to start a podcast and monetize it through affiliate relationships. How should he proceed? I answer these four questions in today's episode, starting with Zoe. Hi, Paula. My name is Zoe, and I'm a huge fan of afford anything. I'm 23 and have been at my first job out of college for almost a year. My annual salary is $63,000. Up until this month, I was maxing out my 401k, my HSA, and putting a little bit in a traditional IRA. It's always been a dream of mine to go to grad school and get my master's degree. Recently, I sat down with my spreadsheet and realized that even though I was saving nearly half of my income, I wouldn't be able to access any of that money to fund my education. I scaled back my 401k contribution to 10% instead of 30% of my paycheck,

and I'm putting all of that extra into a high-yield savings account. My question is, what is the best place to put that money, and how else can I save to go back to school? I read about using a 529 plan, but I'm not sure if that's a good idea. I've also considered house hacking in a duplex to offset cost so I'm school, but I don't know what university I'd attend or what city I'd be in. For some more context, I live in Massachusetts. I'm debt-free, and I'd ideally like to attend grad school in two to three years. Thanks so much, Paula. I love your show. Zoe, thank you so much for that question. And first of all, congratulations on everything that you're doing, everything that you've built.

The fact that you have such a high savings rate is amazing. As you know, one of the most important components of long-term financial success is starting young so that you can let compounding work in your favor. And the fact that you're 23, you have a huge savings rate. You've got plenty of money in retirement accounts. I mean, no matter what you do in the next couple of years, even if you, when you're in grad school, even if you have to stop contributing to your retirement accounts for a couple of years while you're in grad school, the fact that you already have money in your retirement accounts is going to put you far, far ahead of the pack. So big congratulations to you first and foremost. In terms of how to say for grad school,

I think what you're currently doing is perfect. So you mentioned that you have decreased your contributions to your traditional retirement accounts, such as your 401k accounts, and you are instead putting money into a high-yield savings account. That's exactly what I would do if I were in your shoes. So keep doing what you're doing. I think your approach is perfect. And here's why, not only for your sake, but for the sake of anybody else who's listening. Given the fact that you want to use this money within the next two to three years, you don't want to have a this money invested in some type of volatile asset. Equity index funds are great if you've got a 10 to 15 year time horizon or if you have flexibility, a lot of flexibility around when you might

pull out the money. So if it were the case that you had some type of a goal in which you said, you know, I want to achieve this goal in the next seven years. But if the market tanks in seven years, if seven years from now we're living through another 2008, I'm willing to defer it for seven more years and do it in 14 years. You know, if it were a goal that had that level of flexibility, that would be one thing. But given the fact that you want to use this money in the next two to three years and that that is a relatively fixed time horizon, I mean, maybe you might delay it for a year or two, but you wouldn't want to delay it for five more years. Given that relatively fixed time horizon, you want to keep this money safe. And so keeping it in cash,

keeping it in a high-yield savings account is precisely what I would do. Now, you asked about a 529 plan. Here's the thing. If you were a parent and you wanted to open up a 529 plan for your two-year-old child, then a 529 plan would be a great idea because there would be, if your child is two, assuming that they go to college at the age of 18, there's 16 years for the money in that 529 plan to accumulate tax-deferred growth. But given that you want to go to grad school in the next two to three,

three years, there's no time for that money to grow. There's no time for it to accumulate tax-deferred growth. The thing about a 529 plan is that your contributions to a 529 plan are not tax deductible. It's not like a 401k or a traditional IRA in which you get a tax deduction for the money that you put in. The tax advantage that you enjoy through a 529 plan is that the growth inside of that plan is tax-deferred, which, again, is great when you're investing that money for 10 years, 50,000, $5.25,000. 15 years, 20 years, so that money has time to grow. But if you're keeping that money for two years or three years, there's no time for it to grow. Plus, as I previously said, you wouldn't want to invest it in growth assets such as index funds anyway due to the nearness of the time horizon.

I've talked to parents whose children are in high school and they say, well, you know, should I open a 529 plan for my child who is a high school sophomore? No. I mean, it's kind of too late. I mean, in that situation, maybe, maybe at best if you wanted to open a 529 plan to cover that person's senior year or to cover that child's eventual grad school, maybe. But the benefit of a 529 plan is tax deferred growth over a long time horizon. So anytime you're talking about a short time frame, it's not really worth it. Zoe, you also asked about potentially house hacking when you get to grad school in order to offset some of your living costs. that could be a good option. It's certainly something worth keeping in the back of your mind. But as you've pointed out, you don't know where you'll be attending grad school. You don't know what city, what state. And so at this point, I think it's premature to have discussions about it. Once you know the location, then that'll be much more informative about whether or not house hacking is a good fit for you. The thing about house hacking is that it needs to be at that Venn diagram intersection of what makes for a good investment, slash, is is financially responsible, but also what you personally, at a personal level, would want to live in.

If you are in grad school, I would assume you would want to live relatively close to whatever campus you're attending. And that puts a geographic constraint in the volume of properties that you could look at for a potential house hack. So again, that's why location is so important. Because until we know where you're going to school, we have no idea whether or not there are properties within a reasonable commuting distance from campus that would be good candidates for being house hack properties. And of course, you don't necessarily have to house hack into a multi-unit. I mean, there are variants of it. Some people have roommates. They buy single-family rooms and have a bunch of roommates. Some people don't want to do that and will only house-hack if it can be

in a multifamily context. Some people have single-family homes that have an accessory dwelling, such as an in-law suite, or a basement unit, or a separate autonomous unit over the garage. So there are a lot of variations on the types of properties that you might house hack into, but again, that whether or not this is even a good option is going to depend on what is relatively close to the campus that you'll be attending. And without knowing that, then I think at this point it's just something to park in the someday maybe category. If you do decide to house hack, make sure that that's a property that you would want to hold

on to after you have graduated. I don't know if you plan on being in a graduate program for two years or for six. six years. But given the high transaction costs associated with purchasing and selling a property, make sure that if you do buy something, it's something that you are willing to hold for a long period of time. A lot of people, when they're giving advice about buying real estate, say, oh, you need to live in it for at least five years or ten years. You don't need to live in it. You just need to hold it for at least five to ten years in order to make the transaction costs worthwhile. You could live in it for just one year and then move out after a year. That's what a lot of

house hackers do, but make sure that you hold it for long enough to justify the purchase. So thank you for asking that question, Zoe. And once again, I think you're doing everything right. Your strategy of putting money in a high-yield savings account is precisely what I would be doing and an appropriate fit for the goal that you have and the time frame for that goal. So congratulations on that. Congratulations on everything you're building and everything you already have built. And best of luck. Our next question is from Sam. Hi, Paula. I started listening to your podcast and have found it incredibly valuable, so thank you for your perspective. I'm a 36-year-old Colorado resident looking to purchase my first home. Almost all of my savings is in Vanguard SMP 500 index funds. That said,

I heard your episode on building an emergency fund in an emergency, and you said not to put money in the market that you'd want to access in less than 15 years. I was planning to use a this money, most of which is in the market, for a down payment. Is that a bad idea? And if so, where do you suggest putting savings that you're building towards an upcoming real estate purchase? Sam, thank you so much for the question. And congrats on your upcoming home purchase. You are correct. If money has a shorter time horizon, it shouldn't be in equities or index funds. And the reason for that is that the stock market is not a high yield savings account. It is tempting to think of it as one because we've been in an 11-year bull run prior to 2020. And even 2020,

when, you know, the market tanked for a minute and then it rose again. And so it's very tempting to look at recent history and say, oh, wow, money in the market just keeps going up. But the stock market is not a high-yield savings account. And the trade-off for keeping money outside of equities is that there is less volatility, which means that when you do need to tap that principle, it's more likely to be there and to be intact. Now, if there's a bucket of money for a goal that has a 15-year time horizon, you can cycle through. You don't need something that has a less than 15-year time horizon to entirely be in cash and bonds. You can put a portion of it in equities and a portion of it in lower volatility assets like bonds and a portion of it in

cash. And as that time to withdraw draws near, as you move from 15 years to 10 years, And from 10 years down to five to seven years, you know, you continually shift your money into less and less volatile asset classes. Now, in your case, I'm going to assume that you want to buy this house in less than five years. My guess would be probably even less than three years, which means that it's a bucket of money with a short-term time horizon. And so I would start cycling money out of that S&P 500 fund and start moving that money

into, essentially into cash, you know, into a high-yield savings account, maybe a portion of it in Ginny May's, GNMA, and that's assuming that you have a five-year time horizon. But, I mean, if we're talking about money that you really think that you're going to tap in the next three years, that money should be in cash. And I know people don't like to hear that. But preserving cash gives you the ability to tap that money in three years without exposing that principal amount to the risk of loss. If cash is in an FDIC insured savings account, then essentially what you're doing is you're trading off the possibility of growth for that protection that comes with having it in an FDIC insured savings account. And if this is money that you plan on spending in the next,

within the next three years, then that's the most appropriate place for it. And if you, if you listen to our recent episode with Morgan Housel, the interview that we did with Morgan Housel, he makes the point that people often think that the money that they have sitting in a savings account is just not making anything, which if you were to isolate looking at that bucket and that bucket alone, sure, that is technically true. But the fact that you have cash reserves in a savings account gives you the ability to take risks in other areas of your portfolio. The fact that you've got that cash in cash reserves gives you greater flexibility in the portion of your portfolio that's earmarked for longer-term goals such as retirement. So it isn't the case that money in a savings

account is making next to nothing. I mean, that is true in a direct one-to-one sense of the word, but if you look at your entire portfolio holistically, having a portion of your portfolio in low volatility assets gives you the ability to take bigger risks in other portions of your portfolio. That's how it all doves tails together. And that's why I would discourage people from isolating just one component of their portfolio and saying, well, but this one component isn't making very much money. It needs to be taken into the context of the whole. So in your case, since your goal is to buy this house, I'm assuming relatively soon,

having money in a savings account gives you the ability to buy a house within a relatively short time frame, which means that, you know, I don't know what home prices are going to do, and there is no way to accurately forecast if they will rise rapidly, rise slowly, stagnate, drop, nobody knows. But if keeping cash in a savings account allows you to purchase a property in the next couple of years, which means that you then hold that property if its value rises, which it may or may not, that's, in essence, part of the quote-unquote return, so to speak, the quote-unquote value that you get from keeping a bucket of money in cash so that you can use it to make a down payment in a short time frame.

So I know nobody likes to hear keep your money in cash. I know it's tempting to think about the opportunity cost of not keeping that money. in equities, but every bucket of money needs to be invested in a way that is aligned with the time frame and the goal of that bucket. I keep big cash reserves, both for my business for afford anything, as well as for my rental properties, because I don't want to take the risk. Yeah, I don't want to risk that something's going to happen to either my business or my properties that is going to require a cash infusion from me at the same time that there's a huge market drop. Because if you have to convert paper losses into real losses, that is very difficult

to recover from. And so keeping that money in cash spares me from the risk of potentially needing to convert paper losses into real losses. And unfortunately, back in March, a lot of people saw that risk realized. People who did not have sufficient cash reserves had to sell when the market was down. And so, you know, a good game is playing both defense and offense. You can play offense with the money that's in your retirement accounts because that's money that you're 36. You're not going to tap that money, I'm assuming, for at least 30 more years, at least a portion of that money. So you can be much, much more aggressive with the money that you're not going to touch for another 30 years while playing defense with the money that you're going to

touch within the next three years for the down payment on this house. So thank you so much for asking that question. And congratulations on the upcoming purchase of your very first property. That's really exciting. We'll come back to this episode after this word from our sponsors. Fifth Third Bank's commercial payments are fast and efficient, but they're not just fast and efficient. They're also powered by the latest in payments technology built to evolve with your business. Fifth Third Bank has the big bank muscle to handle payments for businesses of any size. But they also have the fintech hustle that got them named one of America's most innovative companies by Fortune magazine. That's what being a fifth-third better is all about. It's about not being just one thing,

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they're really stable investments. I purchased a duplex using hard money loans because it couldn't be financed. It had some structural issues and the previous owners were just in a bad spot, so I got a good deal and could help them out. Since then, I've addressed the structural issues, repainted the whole property, did some new flooring, upgraded the furnace system, just basically got it into a much better state and move tenants in. So with the leases and everything, I'm getting in about, I'm hitting about a one and a half percent, A.RB. So much better than the 1% rule. And I'm in Spokane, Washington. So if anyone's familiar with our market, that's just not typical. Anyway, the reason I'm trepidious is because during the, during the process of purchasing the building

and getting tenants in there, I had a hospital. decline tenant. I've met with both my lawyers and all my standards were up to snuff. The experience just gave me a bad taste in my mouth. And although I have tenants in there that I don't think will cause any issues, I'm just not excited to own the building anymore. After getting, uh, working with my realtor to figure out what my net might be. I'm looking at making about 15,000 after all of a sudden done and owning the building for at most 150 days. This isn't a bad return, especially considering I wasn't planning on flipping the property, but I just would like some guidance on decision-making for a business

and thinking long-term versus looking at my return on the initial investment and knowing it's a good deal. I'd love your thoughts on that, and I'm looking forward to hearing from you, and thank you for all you do. Haley, thank you for that question. So a little behind the scenes here for everyone who's listening. Haley and I actually just spoke on a Zoom call, like live, on a Zoom call a few days ago. We were able to talk about this. Broadly speaking, we were able to talk about, like, long-term thinking and big picture thinking when it comes to thinking about your rental properties and your rental investing strategy. So we had a great conversation on a Zoom call in front of, I think there are around maybe 50 or so other people on that call.

Haley has an adorable cat, by the way. I hope you don't mind me saying that, but you do. My cat was also on the call. She was just off camera, but also very much on the call. Reason that to Haley and a group of 50 of our closest friends were able to be on that call is because she's on the VIP list, which you should totally be on. So go to afford anything.com slash VIP list and sign up. Or you could also sign up for our show notes, Affordanything.com slash show notes.

In the last couple of weeks, we've sent invitations. to people on the VIP list, as well as people who are subscribed to the show notes, to join me on Zoom. So if you sign up for either of those, then you can occasionally get emails from me saying, hey, want to hang out on Zoom? And when that happens, you can come join me and ask a question there, and I can answer it right there on the spot. So that's my little plug for afford anything.com slash VIP list. So Haley, let's talk about your situation. Now, there are two things that come to mind immediately. Number one, the fact that you will have held this property for 150 days, so five months, and you will, after all fees and expenses are taken out, you will have earned

a net $15,000 in five months for something that wasn't even intended to be a flip. Wow, that's awesome. So I'm very, very happy to hear that it's worked out well. Now, with that said, let's refer back to the podcast interview that we did with Annie Duke, the professional poker play, in which she talks about this concept known as resulting. And resulting is judging a decision based on the result that happened rather than based on the decision itself. So in the podcast interview that we did with Annie Duke, which you can find in our archives, that was episode 281, you can get to it at a ford anything.com slash episode 281.

In that episode, she talks about how any given time that we make a decision, there are a range of possible outcomes that could arise from that decision. decision. And oftentimes we judge the decision based on the specific outcome that happened to happen, but that's not the correct way to judge the merit of a given decision, because the soundness of a decision is not determined by which potential outcome happened to unfold. So for example, just to keep it simple, you go to a restaurant, you order chicken, and the range of possible outcomes is you love it, you like it, you dislike it, you hate it, it makes you sick, it doesn't make you sick. If it makes you sick, it might make you mildly sick, it might make you severely sick.

Like all of these are potential outcomes from ordering chicken at a restaurant or fish or vegetables or any given pasta, anything. These are all potential outcomes. But the outcome that unfolds does not necessarily mean that we made a bad decision. And so when I look at your particular situation that you outlined with you this rental property, it strikes me that there was one thing that happened that was very negative and there was one thing that happened that was very positive. The thing that happened that was very negative was that the tenant that you had was very, very headache-inducing.

It was a tenant experience that was so bad that it made you not even want to own the property anymore. And I'm sure it caused many sleepless nights, many headaches, many headaches, many. knots in your stomach. That's a really tough experience, and I'm sorry that you went through that. So that's one of the things that happened as a result of buying this rental property. And then the other thing that happened is that you made a $15,000 profit net after all fees and everything, a $15,000 profit in five months. And so that's a very positive experience. And given that there's both a negative and a positive experience, the question

that arises is which one of those, the negative or the positive, is indicative of the soundness of the decision itself. And in my view, neither, right? There's a range of possible outcomes that could occur. And the fact that you experienced various outcomes within that range, in one that's very negative and one that's very positive, neither of those two impact judgment around the decision that you made in and of itself. I know that you've been part of this community for a long time, and so I believe that your decision making was probably very sound going into this purchase. And one of the things that I often say to the students in my course is that one of the risks when you buy rental property is that the experience that you have of your first tenant

will have a disproportionate impact on your feeling about owning rental property. Again, we'll go back to the Annie Duke interview. If you have 100 tenants, then statistically speaking, some of them will be awful, and some of them will be excellent, and then there will be that whole bell curve of average in the middle. So let's say you have 100 tenants, and I'm just making up numbers here, but let's say five of them are excellent, five of them are awful, and then there's that bell curve in the middle.

The five that are excellent and the five that are awful could occur at any given point within that numbers one through 100. So it could be that the very first tenant that you have is the excellent one or the awful one or the average one. It could be that number seven is the excellent or the awful or the average, right? The distribution could be scattered anywhere. But the experience that we have, that first impressions mean so much, So the experience that we have of that very first tenant or the very second tenant has a disproportionate impact on how we feel about a given property or how we feel about rental property investing generally.

One of the things that I also often tell my students is that one of the risks of buying a Class C property as your first property is precisely what I just outlined. If you have a bad experience up front, maybe it's an older property, the age, and the condition of the property are tenuous and you buy a property and something breaks in the first three months, that's a very, very expensive fix, again, that will have a disproportionate impact on your feeling about the property. You know, if you own a property for a hundred months, there will be items that break over the span of that hundred months. But whether that item breaks in month one versus month 27 is going to have an outsized impact in your emotions around it. And so as you think about rental property investing and as you think about what your goals are, how many properties you want to own, what types of properties you want to own, what locations, how long you want to hold these properties, as you form that real estate strategy, bear in mind precisely what I've just said, that part of being a long-term buy-and-hold investor is taking that long-term view.

And that's true, not just in rental properties, but with index funds as well. If you were a first time brand new investor in 2007, January 2007, your first experience investing in the stock market was going to be pretty rough. So fighting the urge to not let first impressions overwhelm a sentiment around it, I think that is, that's key to taking that long view. So thank you for asking that question, Haley. And again, for everybody else listening, I'll give one more. plug to joining the VIP list, afford anything.com slash VIP list, to get much more info about

real estate and invites for Zoom calls. All right. Thank you again, Haley. We'll return to the show in just a moment. Our final question today comes from Mohamed. Hi, Paula. Thank you for all the great work that you are doing. I have a question. I have a small group of followers through my Facebook page, and I am going to start a podcast soon. My plan is to monetize through my followers by offering them some service as an affiliation program. So my goal is to get a small cut

from the service providers that I'm providing with my programs. It's not an advertisement. Basically, I'll host a program about the service provider, give some valuable input along the service that they are providing. And at the end of the program, I will be offering my listeners to sign up for the service from the provider. When they do, I will get a cut

from the provider. So that's my plan. My question here is, how do I make sure that I get my share from the provider? Because this is not a product where I can give an affiliation link. Most of the providers that I'm going to work with do not even have an affiliation program. So I have to somehow route to them through my website, which I can do. But the challenge is when my followers sign up with my providers, with those providers, that's going to happen offline without me knowing it. So how do I make sure that I get my cut without being cheated? I hope most providers won't plan on doing it. However, they may not be tracking it religiously either. So can you please share your thoughts and guidance for me? Thank you very much.

Mohamed, thank you so much for asking that question. First of all, I really enjoy this question because not a lot of people ask me about small business or marketing or podcasting when in fact that's what I do. That's the bulk of how I spend my time, the bulk of where most of my money comes from, it's all running a small business and everything that comes with it. It's all entrepreneurship. So I really, really enjoy getting these questions. So thank you for asking that. Actually, just yesterday, I gave a talk to a marketing class, a college class, where I gave a very high-level overview of what it is to be a niche influencer, to be a podcaster, like you said, you had a Facebook following. Like, what is it to be an influencer but not somebody with millions and millions

and millions of followers. You know, I'm not Logan Paul or Amanda Surny or Lily Singh, and I'm not in a mass market space like food or fitness or health and beauty. I'm in this niche of financial independence. And so I gave this talk, a Zoom talk to a college class yesterday, a virtual class. And I'm going to, I'll give another little plug here. I'm going to record myself giving this. I'm going to like do a screen recording of myself doing this talk and email it out to anyone who signs up for my online business email list. This is a very specific subsection of my email newsletter where I just break from time to time. And I admit I'm silent on there for months at a stretch.

But every now and again, I just brain dump about how to run an online business and how to make money online. So if you want to sign up for that, it's completely free. Afford Anything.com slash online business. that is where you will find all of my brain dumps about running an internet business, earning extra money from your living room, which I guess we're all earning money from our living rooms right now since there's a shutdown. You can find all of that there. Affordainthing.com slash online business.

Totally free. Anyway, there's my plug, but let's get to answering your question. So as you are talking and as you are describing having a podcast and monetizing it through affiliate revenue, all of that founded fairly normal, fairly straightforward, fairly industry standard right up until the point that you said that the companies that you're representing don't have an affiliate program, at which point a giant warning sign flashed in my head. If there is no formal affiliate program, then there's nothing. Like there's no agreement between you and the companies. There's no payment schedule. There's no agreed upon commission.

there's no tracking mechanism. It's just not a thing. So I'm a big fan of the idea of having a podcast and generating revenue from that through affiliate marketing, particularly when you're adding value, you're providing really good information to people, you're benefiting people, and you're recommending tools and products and services that you enjoy, that you believe are ethical, that you yourself use. I think that's a really wonderful way to go. grow a business, but you can only work with companies. If you want to be an affiliate

provider, you can only work with companies that have an affiliate program. So I'll give you an example, a little peek behind the scenes. If you've been listening to this podcast for a while, you've heard me do ad spots for Bluehost. That is completely an affiliate program. They're not paying me to run those ad spots, not directly, but if a person goes to afford anything com slash bluehost and they click through and they get hosting, online hosting through Bluehost, I get an affiliate commission for that. Now, the way that I give people an incentive to use my link rather than just going to bluehost.com directly is that I have a deal with Bluehost where they provide my followers

with a special discount. So if you just go to Bluehost.com, you'd be paying eight bucks a month for that hosting. If you go to afford anything.com slash bluehost, you pay three bucks a month for that exact same thing. So you get a discount, you as the audience member, you as the person who's going to the website, you get a discount of $5 a month if you do it through afford anything.com rather than going to them directly. And that's how I can incentivize people to go to afford anything.com slash blue host and to use my link. You know, it's a win-win, it's really a triple win. Like, it's a win for Blue Host because they are getting more business.

It's a win for me because I get affiliate revenue. And it's a win for the audience member because that audience member gets a $5 discount off of the price that they would pay if they just went directly to that website. And so it's a triple win. It's not a win-win. It's like a triple win. And that's the critical piece here. You have to make it a win for the audience.

You have to present the audience with some type of incentive that makes it better for them to use your link than it would be for them to just go to that provider directly. So you'll notice in a lot of the other ad spots that I do, like Beta Brand or Rothies or almost any sponsor of this show, there's always a discount. And even when I direct people at the end of the show to go to afford anything.com slash sponsors, I don't say like, hey, check out all of of these companies, I say, hey, check out all of the deals and discounts that you can get. Because our team here behind the scenes has worked out deals with every single one of these companies. Well, not every single one. There's a few, like, policy genius.

You know, there are a few that don't provide any specific discounts to, you know, whether you use our link or not. But the vast, vast majority, we have deals with them where if you use our coupon code, if you use a promo code, or if you go through a link that we provide, you as a member of the audience will get a discount. You'll get a deal that is much better than anything that you would get if you just went there directly. And so making sure that the audience has that win, making sure that the audience gets that

discount, gets that special offer. That's how you can more accurately track the number of people who are using that link or using that promo code or coupon code or discount code. So you have more accurate tracking. The audience gets a great deal. You get the affiliate revenue. The sponsor is happy. But again, that has to, the origin of that, the foundation of that, has to be an established

program. You know, you and that company need to be partnering together. And typically that happens when a company has an affiliate program that, you know, that they use. I'm certainly not Blue Hosts only affiliate. They work with many bloggers and podcasters. They offer different deals to different people, depending on what kind of volume those people bring. But for people like me who have relatively larger audiences, they do offer that deal of, you know, we will give your audience a discount. We will discount our product from eight bucks a month to three bucks a month.

And so it's the relationship that I have are really my team forms with them that allow is those kinds of triple wins to happen and, you know, makes the whole thing work. So my recommendation to you, you know, you're just starting out, you probably won't have the ability to go to a sponsor and say, hey, I want you to create a very special program for me or a special deal that's just for me. But you could certainly go to a sponsor that already has an established affiliate program and work through those established channels. So that would be my recommendation for you. Only work with established affiliate programs that have mechanisms in place for everything

that I just mentioned, for links and tracking and setting up special coupon codes that you can give to your audience so that they have a reason to input your coupon code so that that can be better tracked. So that's my answer to your question. And again, I'm very, very excited that you asked about that because I love talking about entrepreneurship. I love talking about online business. Not a lot of people ask me about it. And I feel like I'm just bursting with lots of information that I can, that I am so eager to share. So again, I'll give another plug for my free email newsletter about running an online business, afford anything.com slash online business. And the talk that I gave to that college class yesterday, I will be sending

out to that list shortly, probably within the next week or week or two, I would say. And also, congratulations on starting a podcast. That's huge. I know how much work that is. So big, big, congratulations to you for taking that step, for putting in that work and for doing something great. I'm sure that you will provide immense value to your audience. And I'm really excited to see what becomes of this. So please call back, you know, six months from now, a year from now, call back and let us know how it's going. All right. Thank you so much, Mohamed. We have one final voicemail that we want to share today. And this is not a question. This is a comment, but it blends perfectly with this conversation that we just had with Mohammed. So this is a comment from a listener

named Danielle. Hi, Afford Anything Team. My name is Danielle and I was just calling because a few episodes ago, or maybe many episodes ago, there was a show where Paula mentioned that Afford Anything is created by a big team of people. And that was news to me. I had no idea. I had no idea. I thought to succeed, you really had to be a one-woman show. So I was wondering if occasionally you can include the team credits in the podcast just to remind us all that creating great works in the world is a collaborative effort and it's okay if you can't do it by yourself. Thanks. Danielle, I love that comment. So, okay, first of all, definitely, definitely, definitely afford anything is a big undertaking. There's a lot. There's a lot.

a lot that goes on here. So we have a big team and I very much believe that Afford Anything is successful because of the team and in spite of me, I am among everybody on the team here. I am the weak link. I am the bottleneck. Afford anything is successful because of the fact that we just have this incredible, hardworking, extraordinary team and everything that we create is thanks to them. if you go to afford anything.com slash team, you can see a rundown of everybody who works behind the scenes that afford anything. And there are a total of 15 people listed on that page, not counting myself. Fifteen people. Now, some of these people are more involved than others. Aaron, who is our chief sanity officer, which truly that role is cheap operating officer, but I like the title

chief sanity officer because she truly is the person who keeps this thing running. She's a a full-time employee, full-time W-2 employee with health insurance benefits. She is full-time employee number one at afford anything besides myself. We just recently promoted somebody to the title of Deputy Sanity Officer because all of the operations couldn't just fall on air in. Like, there are so many moving parts here. So to break it down, so I know some people who are listening are like, but wait, how could you possibly have work for 15 people? What do you even do? So to break it down, all right, let's look at the community, right? So, you know how I'm always talking about?

Go to afford anything.com slash community. So there's community management, there's community facilitation, there's hosting of those Zoom happy hours, there is, you know, there's all of the community management. Someone's got to do that. Every time that I say a link, like go to afford anything.com slash community, go to afford anything.com slash online business. Somebody has to build that link. And then somebody has to build the page that appears.

there. And then somebody has to go into the email management system and make sure that everything's working together, that the page connects with the email management system. Somebody has to be there to review all of the ways, like the integration of all of the different software that powers this, make sure that all of that integration is working together. Every time I talk about a different type of newsletter sign-up that you can do, when I say you can go to afford-anything.com slash VIP list to get special information about real estate. You can go to afford anything.com slash online business to get special information about online business. You can go to afford anything.com slash show notes to get special information about the podcast. Every time I say that,

there's a preset set of emails that you get that are specific to the thing that you're most interested in. And somebody has to manage all of that. And then on top of that, there's website design, There's development. You know, the course that we have, we decided not to use some third-party plug-and-play platform. We decided to custom build our own website because we felt like that was going to provide a better student experience. So we custom built a website from scratch. So we had a developer, we had designers, and they're constantly tweaking and iterating and burying Easter eggs in there and making it a better user experience. within the course, we have a lot of students who have questions that are specific to their situation.

And we want to make sure that we can answer those questions immediately because when you're buying a property, when you go under contract for that property, you don't have a week to post a question and wait for an answer. You need an answer instantly. Like, hey, I'm under contract for a property. I need to find an inspector. I have X, Y, Z, very specific question. I need an answer to night or by tomorrow at the latest, right? And so we have many people who work as teachers' assistants inside the course because the nature of buying real estate is that sometimes you have questions that need to be answered now. That can't all fall on me because we have a thousand students in the course and we're only continuing to grow. And we have the wisdom,

the collective wisdom of the entire community there. And so we have teachers' assistants. We have strategic mastermind group coaches. We have all of the support because I very strongly feel that if you're a student in the course and you go under contract for a property, that is definitely not the moment that you want to be waiting for an answer. That is definitely not the moment that you should be left high and dry to figure this out on your own. That's the lifetime support that we give to every single student and alumni in the

course. And that requires a team of people to do it. And then, of course, you know, on top of that, Steve, the person who is editing this very podcast that you are listening to, this podcast would not exist without Steve. Say hi, Steve. Hi, everybody. It's Steve, that guy that does Duffer Paul. Yes, I'm real. So we have this enormous team of people who are critical, critical, critical to the success of Afford Anything. And I hope that I have never given the impression that this is a one-woman show. As I said, this is a one-woman show. as I said, this operation exists because of the team and in spite of me. So I think end credits could be interesting that the stacking Benjamin's podcast has end credits, but I would have 15 names to read out.

That's why we put it all on afford anything.com slash team. So go there, meet the team, and please know that absolutely nothing that is worthwhile happens solo. everything that is good, everything that is big, everything that really makes an impact in society happens because of a team of people. And often the most important people are the ones that you never see. They are the ones who are behind the scenes backstage. They're not names or faces that you've seen or heard of, but they are the most critical people to the operation. And with Afford Anything that is 110% true. So thank you for making that comment. Thank you for giving me an opportunity to elaborate on the importance of working with a team and to break that myth of the solo superhero.

I think that myth is very pervasive in self-employed circles or entrepreneurship, soloprenorship circles. And that is definitely a myth that I want to bust because no one does anything alone. Some people start solo at the very beginning, but the minute you begin to grow, you quickly develop a team. And everything that is good happens because of that team, because of the strength of that team. It can never be underestimated and it can never be overstated. So thank you again for asking that question or for leaving that comment. That is our show for today.

Thank you so much for tuning in. Thank you for being a part of this community. My name is Paula Pat. You are listening to the Afford Anything podcast. I've mentioned the course a few times in the course of today's episodes. So we have a course on rental property investing. We open our doors for enrollment only twice a year, one week in the spring, and one week in the fall. This year we are really stretching the definition of the word fall.

So this year we are opening our doors for the fall slash winter cohort. Our doors open for enrollment on November 30, 2020, Monday, November 30, 2020. And our doors close on Monday, December 7, 2020. So there's a one week window. If you want to join this course on rental property investing, meet our awesome TAs, go through a 10-week-long course. with a peer group, with a cohort, where you get lots of instruction and support and guidance on how to buy your first rental property, this is a course that you don't want to miss. We poured years into developing this. I believe that it is invaluable.

Like, I built the course that I would have wanted when I was starting out. So you can enroll in that course for one week only. You can get all of the details by going to afford anything.com slash enroll. That's afford anything.com slash enroll. And I hope to see you in class. Thank you again for being part of this community. And I will catch you in the next episode.