Afford Anything - Ask Paula: How Should We Invest to Retire By Our Mid-40’s?

Episode Date: November 9, 2021

#348: Aja’s mom is 75 and has to take required minimum distributions from her IRA. She doesn’t need the money. Where should she put it? Anonymous from MA is flummoxed by HSA-compatible health plans. His copay and deductible are awful, and even bronze plans seem better. Are HSA plans overrated, or does the math work out? Julia and her husband, both 27, want to retire by their early to mid-40s. Is there a point at which they should stop contributing to tax advantaged accounts and only contribute to taxable accounts? Ileana and her family like their home, but it needs to be bigger. A cash-out refi didn’t give them enough funds for their dream renovation. Should they put their money into the market in the hopes that it will grow large enough to fund a future renovation? Or should they move into a bigger house, rent out their house, and fix it up years down the road? Nick has a seasonal business. Can a sweep account help stabilize him? My friend and former financial planner, Joe Saul-Sehy, joins me to answer these questions on today’s show. Enjoy! Do you have a question on business, money, trade-offs, financial independence strategies, travel, or investing? Leave it here and we’ll answer them in a future episode. For more information, visit the show notes at https://affordanything.com/episode348 Learn more about your ad choices. Visit podcastchoices.com/adchoices

You down with RMD. Yeah, you know me. 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. It applies to any limited resource that you need to manage. And that opens up two questions. First, what matters most?

Second, how do you align your daily decision-making around that which matters most? Answering those two questions is a lifetime practice, and that's what this podcast is here to explore and facilitate. My name is Paula Pant. I am the host of the Afford Anything podcast. Every other episode, we answer questions from you, the community. And my buddy, former financial planner Joe Saul Seahy, joins me to answer these questions. What's up, Joe? I'm here to, what are the two things?

Does something and facilitate? Explore and facilitate. Explore, yes. I'm excited to explore and to watch you facilitate. Well, let's see if I can facilitate a good episode. So here are the five questions that we're going to answer today. Julia and her husband are both 27. They want to retire by their early mid-40s.

When should they stop contributing to tax-advantaged accounts like a 401K or IRA and switch over to contributing to taxable accounts? Anna and her family like their home, but it needs to be bigger and a cash-out refi doesn't give them enough money for their dream renovation. should they put that money into the market and invest it in the hopes that it might grow large enough to fund a future renovation? Or should they move into a bigger house, rent out their current home, and fix it up years down the road? Anonymous from Massachusetts is flummoxed by HSA-compatible health plans. His co-pay and deductible are awful, and most bronze plans that are not HSA-compatible seem better than the one that he's got.

So are HSA plans overrated? Asia's mom is 75 and has to take required minimum distributions from her IRA, but she doesn't need the money. Where should she put it? And Nick has a seasonal business. Can a sweep account help stabilize him? We're going to answer all five of these questions right now, starting with Julia. Hi, Paula.

I'm a big fan of your show. My name's Julia, and I have a question about early retirement. My husband and I are both 27 and interested in possibly retiring early. We have a combined income of about 200,000 and we save very aggressively. Right now, we're both maxing out our 401K, 403B, and Roth IRA accounts, and then putting the rest into a taxable brokerage account. My question is, if we're interested in retiring early, perhaps, in our early to mid-40s, when would we stop contributing into retirement accounts and focus only on taxable brokerage accounts? This question is hard for me because I'm not sure if there's a number

that we should be hitting. I know about safe withdrawal rates, but it seems hard mentally to not save in a tax-advantaged account and instead save in a taxable account if that's available to you. Really love to hear what you have to say on the topic. Thanks. Julia, thank you for calling in. That's a fantastic question. Congratulations on everything that you're building, everything that you're doing to get you to this point. You're putting yourself on a great trajectory for the decades to come. Now, let's talk about your question. What's interesting about the setup of it is that first we need to establish what your withdrawal strategy will be in retirement. There are two

types of strategies that immediately come to mind. One is the two bucket approach and the other is not. So in the two bucket approach, right? Is that the technical name? Yeah, yeah. The technical name is not. The other one. Yeah. There's the two bucket and then there's the quantity that could be either greater or less than two. So if you've got a two bucket approach, then essentially you're looking at your retirement savings in two buckets. One is the savings. One is the that's going to get you from the point at which you retire. Let's just say it's age 45 or 40. I don't care. So the point at which you retire sometime in your early to mid-40s, up until the point at which you're eligible to take out money from tax advantage retirement accounts. So the first bucket

will get you through those early years of retirement, approximately, depending on whenever you retire, one and a half decades, maybe two decades. That's that first bucket. And then the second bucket is the money that you plan on living on from the point at which you can take out money from conventional tax advantage retirement accounts. And so you plan for each of those eras separately. That's the two bucket approach. And that's withdrawal strategy number one.

Withdrawal strategy number two is that you look at the entire thing as one big cohesive mishmash. I think you can tell from the way that I'm going to. describing it that I'm not as big of a fan of this strategy. I had no idea. Couldn't tell. But it's worth stating because there are people who do it. You look at the entire thing as one big cohesive grouping and develop a withdrawal plan that assumes that there's not going to be major strategic differences between how you draw

down in your 40s versus how you draw down in your 60s. And so an example of this might be if you plan on invoking the SCPP 72T rule, or if you plan on doing a very technical, very elaborate Roth conversion ladder strategy, or if you plan on living off of rental property income for the bulk of that time, or software royalties, or book royalties, I mean, there are a million different ways that you can do it. And of course, there's also sort of a hybrid between these two, where you have one plan for one amount of time, but then you also kind of shift that plan a little bit once you can access the rest of your funds when you're in your 60s. I mean, there's all kinds of

different combinations of these. But I think step one in your plan is you need to decide how you want to draw down from your retirement portfolio. And that's going to inform the way that you split the pie. I think there's something we need to know before that, Paula, which is how much money is that going to be in relation to the entire portfolio? And do we have enough time then to fund the non-qualified account enough that she'll be able to do that not need SCPP, right? Can she reach that point in time, depending on how much money it is that she needs? If she can't, that she's forced into some sort of an SCPP strategy anyway, and then I think

that will guide her hand as well. For the listeners who aren't familiar with SCPP 72T, can you briefly describe what that is? Yeah, it's a way of taking out money from your retirement plan as if it's a pension. And there's three different ways that you can calculate it, which makes it really nice. You can also segregate some IRAs from other IRAs, meaning that you can kind of force the number to be whatever you want within reason. But basically, as long as you keep going for five years or until your 59.5, whichever is later, you can remove money from your IRA like it. It's a pension amount. So you've got to take a similar amount every year.

There are ways to take it where you use an inflation number. So it actually goes up every year to resemble inflation. But it very much is taken out as if it's a pension. You can't decide three years in, I don't need this much money. I'm going to take less. Nope. It has to come out. So it's got to be five years, 59.

5, whichever one is later. And the penalties on doing this wrong are so big. I would definitely partner with somebody who knows what they're doing. and has helped somebody calculate this before. Right. Yeah. SEPP 72T gets very complicated in a hurry. Yeah.

Yeah. It is, though, a great way for people that worry about this very thing that Julie is worried about. You know, can I keep saving into my qualified retirement plan? She said she likes saving into those types of tax shelters. If she does and she thinks she's going to have a very similar amount of money every year she withdrawals, I think she can still then set up the money. money inside of the IRA in buckets in a bucket strategy then of money that she's going to be taking out so she wants that very close to the vest and not in risky investments and then

leave the rest and more of a long-term approach but it's all inside of the inside of the IRA. Right. And I certainly get the psychological draw to wanting to put money in tax-advantaged accounts. I mean, we only have a limited amount of money each year that we are eligible to put into various tax-advantaged accounts, whether that's a 401K, a 403. B and IRA and HSA, you know, depending on the types of accounts that are available to you and everyone listening is going to have different accounts that they're eligible for. But it's a limited amount of money and it's use it or lose it. There's no rollover.

Yeah. I would definitely try at all cost to not do SCPP. Yeah, but I understand the draw, the temptation to want to, you know, if you know it's use or lose it, then the principle of scarcity comes into play. And when we know that something is scarce, what scarce is valuable. And so we tend to overvalue the things that are scarce, mentally, even when they are strategically not right for our plan. Which is funny because the longer I was a financial planner, the less I adored that. Tax Advantage accounts? Well, the more I got attached to flexibility. Right. Instead of optimization, you're talking about you can only optimize so

far. Listen, we can only put so much money in this fund. So I want to put, I want to max it out if I can. The government says we can put this amount in, so I want to do that. I am, I became less enamored with that, even though I'm with you. I get why people do it. And more with flexibility because, and I think it's just because of the law of large numbers, because I worked with so many people and I saw so many plans go off the rails where things didn't work out lifewise, right? All of a sudden, I had this big need for money or I had this big thing and I needed flexible money and I didn't have it. The over optimizers were the ones that ended up in a spot that they never thought they'd be needing less optimization and more just, I just need money on hand. Right. Yeah, exactly. And so conceptually, what we're talking about here is that sometimes there can be a conflict between flexibility and optimization.

Yeah. I would just love to hear if Julie and her husband are going to have income coming. in, you know, even if it's a lower amount of income. Right. Because that may also make it easier. I mean, I think there's a lot of discussion here that we don't know about around how much money is it. What are the funding sources that she might be able to take it from that might not be the pile of money that's inside of the retirement plans. Right. Exactly. That question popped into my mind as well when I heard her talk. Are they going to be working or generating any income during their early retirement period. And if so, I mean, imagine the Roth value on that. They would presumably be in a much lower tax bracket. So if they can Roth that money, that's going to be massive optimization

right there. Agreed. It makes more sense in that regard to save some money into a taxable brokerage account right now so that they can live on that money in early retirement and Roth any earnings that they make while they are in early retirement. Fabulous. And Julie is driving down the road right now going, but I don't want to work. But wait a minute, Paula. Well, and this goes back again to that more broad conceptual conversation about the tradeoff between flexibility and optimization. Because when we talk about a tax advantaged account versus a taxable account, we're essentially talking about the concepts of optimization versus flexibility.

And that's what she has to choose between. That's what they both have to choose between as a couple. But again, when optimization has a scarcity component to it, that scarcity component makes it more tempting. Anything that's scarce is more tempting. It has a higher perceived value. I feel like there's also a lesson there for marketers. It's not just financial planning. If you're marketing something, make it scarce.

Make it seem scarce. Well, I was thinking that's why in dating some people play hard to get, make yourself scarce. Absolutely. Yes. Yeah. See, there's lessons here for all of it. This is what we learn. Dating, marketing, finance.

What the 401k taught me about dating? Make yourself scarce. That's a blog post, Paula. That is a blog post right there. Oh, man. I haven't written a blog post in years. But I do have a new newsletter. It's called First Principles.

It's all about first principle thinking. It's my new newsletter that I send out every sometimes to the people who sign up on my email list. Specific. So, Julia, to summarize our answer to your question, first choose your withdrawal strategy and then work backwards to make the decision fit that withdrawal strategy. But bear in mind that factors such as will you be earning an income, factors such as what do you do when there's a tradeoff between flexibility and optimization, which of those

concepts do you value more highly? Those are some of the factors that you'll need to weigh as you decide how to split the pie between tax-advantaged and taxable. So thank you, Julia, for asking that question. We'll return to the show in just a moment. The holidays are right around the corner, and if you're hosting, you're going to need to get prepared. Maybe you need bedding, sheets, linens. Maybe you need servware and cookware. And of course, holiday decor, all the stuff to make your home a great place to host during the holidays. You can get up to 70% off during Wayfair's Black Friday sale. Wayfair has Can't Miss Black Friday deals all month long.

I use Wayfair to get lots of storage type of items for my home, so I got tons of shelving that's in the entryway, in the bathroom, very space-saving. I have a daybed from them that's multi-purpose. You can use it as a couch, but you can sleep on it as a bed. It's got shelving. It's got drawers underneath for storage. But you can get whatever it is you want, no matter your style,

no matter your budget, Wayfair has something for everyone, plus they have a loyalty program, 5% back on every item across Wayfair's family of brands, free shipping, members-only sales, and more. Terms apply. Don't miss out on early Black Friday deals. Head to Wayfair.com now to shop Wayfair's Black Friday deals for up to 70% off. That's W-A-F-A-I-R.com. Sale ends December 7th. 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, but many things for our customers. Big bank muscle, fintech hustle. That's your commercial payments of fifth. Third better. Our next question comes from Anna. Hi, Paula. My name is Anna. I currently live in Texas with my husband and 14-year-old son. My daughter is a freshman at college. We have been living in Texas for the last 10 years. My husband and I are both PhDs and we work at a university as professors. Our jobs are secure. We make around $240,000 per year. We have a pension with the teacher retirement

system that will cover between 50 and 70% of the salary when we retire at age 65 in 15 years. Five years ago, we started investing $19,500 each year into our 403B for each of us, and we have around $250,000. We are cash flow in our daughter's college, and we have $10,000 set aside for my son in a fee 529. So here is my question. We purchased our house 10 years ago. We paid $327,000 and the house now is worth $650,000. We really like the location, the neighbors, and the lot, but it is a small 1,400 square feet ranch from 1950. We want to renovate and also update the house, so we took a cash out refinance in January of 2021. We reduced the interest on the mortgage from what we had at 4% to a 3%

and we were able to withdraw $280,000 from the house. However, the cost of construction is so high right now that with that money we will not be able to do all we want it around the house. So my question is, A, should we invest the $280,000 into the market, market, maybe some ETFs, and hope it grow while selling more money, and in a few years, maybe four or five, we build a house of our dreams? Or B, should we buy a house to live in the next few years in a cheaper neighborhood while renting hours and then the other remodel maybe in between seven and ten years down the road? Our house can rent for three to four thousand dollars per month,

and this will cover mortgage, payment, and taxes. And with this plan, we will be able to enjoy a bigger house while our son is in high school. Well, thank you, Paula. I hope you can answer my question. Anna, thank you so much for that question. And first of all, congratulations on everything that you've set up. You and your husband both have very secure jobs. You've got pensions.

You're contributing large amounts to your 403B. you're cash flowing your daughter's way through college. You've got money set aside for your son's college. So you've got a lot of things that sound like they're going very, very well for you. So now let's talk about your question. You've got this $280,000. And the two options that you're looking at are either, A, to put it into the market hoping that it'll grow and hoping at a minimum that there won't be loss of principle, but ideally that it will grow to be enough such that it can cover the cost of renovating the current house that you live in, that's option A. Option B would be buying a house in a cheaper neighborhood.

And I'm going to make the assumption that this $280,000 would be enough to purchase that house in cash. If it's not, then if you did have to take out a mortgage, I'm going to make the assumption that it's going to be so insignificant, such a small loan amount, that it's literally not even worth it. mentioning. So I'm assuming that if you were to buy a house in a cheaper neighborhood, as you described, it's either going to be completely free and clear or the loan on it is going to be so small that it's a rounding error. It's negligible. If you were to do that, then as you said, you can get the immediate advantage of being able to live in a home that's more comfortable for you and your family right now while your son is still living with you while your son's still

in high school, and you won't be paying anything out of pocket for the home that you're currently in, the one that you would be moving out of and renting. And in seven to 10 years, you could then complete the remodel. Now, the $280,000 that you've cash out refied would be, presumably tied up in the equity of that home, which means that in seven to 10 years, that $280,000 may not have appreciated that much. Nationwide housing prices have appreciated. at approximately 5.8% between the years 2012 and 2020. But, as I like to say, there is no such thing as a national real estate market. There are only many, many, many local markets.

And we cannot also assume that what happened in the last decade will happen in the next decade. So if conservatively we want to make the assumption that home prices will keep pace with inflation but no better, and that's a very conservative assumption. But if we want to make that conservative assumption, then we can state that that 280,000, that you might use to buy a house free and clear right now that you and your husband and son can live in, in seven to ten years, let's make the conservative assumption that that 280 will have kept pace with inflation, but not much better. Maybe inflation plus one or two percent, maybe, but not much better. Let's start with that as a conservative assumption. Now, if that is

the case, then the next question is, how would you, if you were to in seven to ten, 10 years, then move back into your old but updated home. How would you then have the funds to update that home? Would you be saving money during the interim so that you could cash flow the renovations needed to that home? Would that be the plan? Because the thing is, I keep saying, quote, unquote, free and clear when I talk about the purchase of this new home, but the reality is you will be making payments on the cash out

refi. So you still will have these housing payments coming out of pocket as you repay. the cost, the monthly cost of that cash out refi on the 280. So cash flow wise, the thing that I would want to know is if you were to follow plan B, if you were to buy a cheaper house, move in immediately, get the enjoyment immediately, and then in seven to 10 years, sell that home and use the proceeds from that home to pay for the renovation on the home that you're currently living in, will those numbers actually work out? Given that that 280 may not appreciate, given that you'll have to pay transaction costs on the sale of the home,

and given that the monthly cost of repaying the cash out refight is going to take a bite of money out of your paycheck every month, will you have enough money to set aside sufficient savings to cover the remodel that you want to do? Those are my questions back to you if you were to follow Plan B. That being said, I like Plan B better than Plan A. putting it in the market and hoping that it grows. I'm not a fan of that one. Yeah, I don't like plan A, but I also don't like plan B. Yeah, yeah. Like I don't like plan A and I have a bunch of questions about plan B. Yeah, my problem with plan B, Paula, is that she mentions how much she likes the neighborhood and likes where she lives, and that leads me to believe that they would want to be there in the next few years

and spending seven to 10 years in a suboptimal place than where you want to be. And don't get me wrong, there are times in your life when you need to do that, right? When maybe it's, it's a need. But my first, my very first question is, what do you want to do? Like, what do you really, really want to do? Because I'm, I'm putting thoughts in her head that she doesn't want to do that, that she doesn't want to move out of that neighborhood. And if she's fine with it, then maybe that's an okay plan. I'm wondering, I'm going to wonder out loud here a little bit, if there's a weird kind of version of David Green's Burr strategy that would work here. I don't even know if that's David Green's strategy at first at all, but the Burr method that he wrote the book about,

where she does a portion of the renovation now, she knows she can't get all the renovation that she wants. So she renovates the house now to X point. Then she uses that for an increased appraisal. That appraisal then allows her to finish the house the way that she wants it. So she does it in two stages. And assuming the interest rates, she can get this done fast enough that interest rates remain low, she ends up getting what she wants. Now, the problem here is, I think there's a bigger financial planning question here like you do, which is, how does all this affect her other goals, right? She's talking about cash flowing one college. Are they going to cash flow the other college? If there is another college, I don't know. What's going to happen with the second child's education?

And then number two is, will this affect their retirement? And if so, how will it? Because I think if it affects their retirement, they might also make changes. Because I don't know what's more important either. Is preserving retirement at X time or preserving education? Is that most important? Is this house most important? Like, how do you prioritize these goals? In absence of all of that, I'm wondering if she could just rehab in two parts, assuming that that ends up making financial sense. Right. That's an interesting proposal because it's built on a foundation of assumptions. It's built on the assumption that

that phase one of the renovation can stay in budget. It's built on the assumption that that renovation will cause the value of the home to increase by significantly more than what she put into it. That part, I think she can look at comps around the neighborhood and I think she can focus on the pieces of the renovation that would increase the value of the home more. And then with the second piece, do the things that are more less bang per square foot

so that she, you know, more of the creature comforts that she's looking for in the second half. Right. The first would be strategic and then the second would be personal, essentially. Yeah. I don't know if it would work, but it certainly is an option three. And by Burr method, do I need to explain what that means a little bit? Oh, that's a good point. Yes. Yes, you should. See, look at you facilitating this podcast. I'm not trying to. I just realized that I just use some big jargon. And Anna's going, I don't even know what this Burr Method thing is.

So without getting into the entire thing, because this is a way that people that want to purchase multiple properties will do it. In essence, what they'll do is they will purchase a property that is suboptimal. They will put some money into that house to renovate it. then they will take the cash out of the now renovated house that's worth significantly more than it used to be and they will use that to put into the next house purchase. It's more complicated than that, but it's a way to keep the real estate acquisition moving in a way. And David Green from a mutual friend of ours from Bigger Pockets has a book on this topic for people that are interested in real estate. And that's the way that he purchases real estate. If that sounds

sketchy and risky, it did to me at first, too. And when you hear the entire strategy, David has a bunch of safeguards that he's put into place to kind of mitigate the risk of continually using debt. Because whenever you use debt, whenever using somebody else's money, there is a chance for that to go haywire. Right, right. There's a whole section in my course about the Burr method and the ways to apply the burr method that are, in my view, sound and could be part of even a conservative investing strategy, as well as the red flags within the Burr method that some people push too far

and that might want to be avoided. For people who are wondering why it's called Burr, so Burr, BRR, R, St, for buy, rehab, rent, refinance, repeat. I missed one of those. I was about to guess on what they were because I could never remember them. And, you know, and really of all of those, the most dangerous one is the final R, the repeat. Like, if you just, if you buy a property, you rehab it, you rent it out, or in, in Anna's case, live there, because this is her personal residence, right? You buy it, you rehab it, you put an occupant in there, whether it's yourself or a renter. And then you refinance against the higher value of the property. Cool. None of that sounds sketchy. The most

dangerous part is the repeat, the final R, because burr, when taken to excess, turns into a house of cards. But if you only do it once or twice, you know, with just a couple of properties, then it's a fairly sound strategy. In fact, a lot of people kind of accidentally do it without even knowing what burr is because it's just so intuitively obvious. Yes, of course, you buy a distressed property. It's a fixer upper and then you fix it up. And then you borrow against it and then you use that money to fund the second purchase, right? You don't need an acronym to let you know that that's, of course, what you would do if you wanted to buy a couple of rentals.

This would be a fun discussion. You can see why I got that as inspiration for honest question while it's something wholly different because it's a single house. but I think that people that have done mortgages before that are in that business. And I think if she has any friends who are in real estate and know how to help her look at comparable properties, she could even look at comparable properties herself, look at the difference between her house and other houses to hopefully, and don't be too optimistic. I would be pessimistic about what the valuation will be after you finish your first half of the rehab. Maybe.

Yeah, I think that's the scariest. part, like there's this acronym called ARV after repair value. And it's what investors use in order to determine if something's going to be a good fixer up or not. And typically, investors are very aggressive. You know, they're looking for something where they're buying the total money that they put in, purchase price plus the cost of renovations would be 70% of the projected ARV, right? And investor is going to be very aggressive about it and they're going to use fairly aggressive deal-finding tactics like driving for dollars or direct mail campaigns or working with wholesalers. You know, they're going to be using those types of tactics in

order to get off-market deals. And they're going to have spent months, sometimes years, building a network of contractors who can get them materials at cheaper rates than what you would find at a Home Depot or a lows. Right. So a lot of running a successful real estate business where you can create those margins comes from your team and it comes from a long knowledge. Basically, it comes from really taking the time to develop the knowledge and training to be able to do it. It's just like any other skill. It's like flying a plane or being a master chef. It takes years of training to be able to do it well in all weather conditions or in all culinary conditions. Which also, even as you're talking, I'm thinking that the

other factor here that we don't know that's a big question is how far away is she now from being able to have that complete she said she can't do it with the roughly quarter million dollars she took out of her of her latest refinance what is that final number that she thinks it is because you know if she's if she's short by another 60,000 70,000 bucks maybe if she's short by another 250, then my strategy doesn't work at all. Right. Yeah, that's a great point because there is, I guess, option C, D, E, one of some downstream option that we haven't yet discussed is she could just park that money in cash or into a Ginny Mae or something very conservative. You know, neither of us like the idea of putting it in the market, but she could park it into something

incredibly conservative and then old-fashioned save up the rest. If, that remainder that she needs. The only problem I have with that strategy is she's already taken out the loan and the difference between a Ginny Mae and what a Ginny May pays and the interest she's paying on the loan. Yeah. Maybe she's treading water, maybe. But Ginny Mays this year are down, down, I think as we record this, half a percent,

which has been made up for by the reinvested dividend, by the way. So really in a Ginnie Mae, if you had said it at the beginning of this year in a Ginny May, as of right now over the last 10 months, you've lost money against that mortgage. And as I've mentioned before, given five years, I'm not worried about that. Because the last time Ginny May's lost money in a calendar year was 2013. It happens rarely. Excuse me. As of today, the Ginny May, I share ETF down 1.5. for. So I don't know that I like parking the cash for that reason. I think she has to deploy that

cash now that she's already taken it out. From a financial perspective, if she must deploy it, then option B that she proposed, which is buying a cheaper house, presumably free and clear, that would provide enough space for her and her family. It would be in a different neighborhood, a cheaper neighborhood, but it would be a larger home. You know, of the two options she floated, if she needs to deploy the cash right away, that would be my preferred one. Well, it's clearly the winner. But, yeah, there are still many unanswered questions if she were to take that route,

namely, where's the money going to come from for the renovation? And on my end, I think there's all of those other goals to factor in, too, Paula. Mm-hmm. How does this dilemma affect your retirement and any other goals that you might have? Yeah. Well, the good news is she and her husband both have pensions, and those pensions. will cover a big chunk of their income. Yeah, I think based on that and the,

and once again, we have no idea how much they want to spend in their retirement years. So we don't know, but the pension certainly, and the fact that they're aggressively saving into retirement plans and using the rule of 72 on the money they already have. Right. I get a decent feeling about that if their spending is typical. Right. Yeah, I feel fairly confident about the retirement.

So the looming questions then become how much money do they want to save for their son's college education if they choose to do so. They've got 10,000 so far and a 529 for him. How much more do they want to contribute? And given that goal, plus any other retirement goals, how much can they save if they were to try to bridge the gap between this 280 and the rest of the cost of the Reno? But I like the creative thinking. about the burr strategy, it never occurred to me to bur your own home, your own personal residence. To live in the same house and to burr that house twice, you know, that's a new application of this model. It could work. So thank you, Anna, for asking that question.

And we've presented to you an array of options. There's now a plan A, B, C, D, E. I think we've kind of lost, we kind of lost count a little bit. But, you know, we've got to be. the plan A and B that you suggested, and then we threw in a couple of other alternative plans as well. So you've got a menu of different options, all of which have their various pros and cons, and all of which open up a whole host of other second order questions. So best of luck to you as you think through that menu of options and as you think through the second order questions that each of those options lead into. See, you see why the name of my newsletter is first principles, right?

There it is. First principles, because you start with the base questions, and then that opens into second order questions. Money management is really less about money and more about thinking about how to think. What if we think about Aja's mom and her RMDs? Ooh, there we go. Nice segue. Is that a scooter you're riding?

Because that's a great segue. I am bordering on facilitating today. Yeah, you are. Back it down. Yeah, look at that. The Joe Saul-Sehigh takeover of the podcast. I got to tell you it's an ulterior motive. Tonight's game night, Paula.

We got to keep moving. All right. Well, then let's go to our next question, which comes from Aja. Hi, Paula and Joe. My mom is 75 and is receiving Social Security, has a paid off home, has a small amount of rental income each month, and can easily fund her day-to-day living expenses, medical care, et cetera, with a bit of surplus each month. She has about 250,000 or so saved up in non-retirement accounts. She has health issues, but is by and large, very sprightly and active for her age,

still traveling and socializing with friends even more than I do. My question relates to her single retirement account. She has about $14,000 in a local bank CD under a traditional IRA. Yields about 1% and it matures this month. She doesn't need the money, but she does have to take the RMDs because of her age. Do you think she should leave it there or should she? she transferred into her Vanguard account and invested somehow. If you'd recommend, she move it. What type of funds do you recommend she move it to? Thanks so much. Aja, great question. And you know what,

the fact that your mom is old enough to get requirement of distributions that she has to take and she doesn't need, and she is, to quote you, would she say sprier than she is? Does she say spryer than? The part that caught my attention was socializes more than me. socializes more. Yes. Right. That is my goal, by the way. That is my goal. If I can be that age, socializing more than my kids, definitely winning. I think that the way that she invests this, if she doesn't need the money, the only barrier that she has is that she's going to have to take money out every year for this requirement of distribution. And on $14,000, that distribution is not going to be that large. So the way requirement distributions work, they're based on your lifetime. The IRS wants that money out at the date that statistically, according to them, you are going to pass away. So their goal is to have that empty. So they get bigger and bigger over time. But generally, if her largest one is going to be, let's say, 10 years from now, she's going to be slowly withdrawing that money out over long periods of time.

So it's not, if she doesn't need the cash and she's not going to change your lifestyle, then I would look at long-term investments, meaning, and I think this is a mistake, Paula, by the way, that a lot of people make. I have seen people that get frustrated because a financial advisor will recommend that an older relative stays in fairly aggressive investments. But when I've looked into that, what I've found 99% of the time is that the older person and the advisor both know that they do not need the money, and this is money that they are now basing on their children's goals, so on Aja's goals. So if mom doesn't need the money,

then grow it, which means that even at an advanced age, if her risk tolerance is high enough to be in something and not wreck her own plan that is going to be available for Aja and any other siblings 15 years from now, do that, do that type of a fund. And then when she makes the requirement of distribution, then put that same money after she takes the cash out, withholds any taxes that she needs to withhold, puts it in the same fund but in a regular brokerage account. Right. Yeah, exactly. I was going to answer this very simply, because my parents are in the same boat. They have to take required minimum distributions, but they don't actually need the money for actually because of a teacher's pension. My dad qualifies for the state of Ohio,

state teachers pension, and that provides enough money for both him and my mom. And, you know, their home is fully paid off. So they don't really need a bunch. So they take these RMDs. They don't need them. And they just reinvest them back into a taxable brokerage account. And that's about the end of the story. Yeah. But what type of a fund, that's the key. So what I told my dad, because my dad asked me what fund I recommend. And what I told him was that I want him and my mom to spend their money. I don't want them to want to, want to, set aside anything for me, I want them to enjoy what they've earned. So I encourage them to spend as much as they can while they can. But any money that is for them, they should invest conservatively.

And I told them to put it into a Vanguard Target Date 2020 fund. Anything that is for me or for charity or for any other long-term downstream purpose, they should put into Vanguard Target Retirement 2060. Or crypto. I did not tell him that. So yeah, it was very simple. It was, dad, put your RMD into a taxable brokerage account. If it's for you, Vanguard Target Date 2020. If it's for me or for charity or for anything that you want long term, Vanguard Target

date 2060. Boom. Done, done, done. Simple. I don't even think you need the Target Date fund. I think this is beautiful for VTSAX or the ETF equivalent. I think just by a total market fund. Yeah.

Yeah. be fine too. Yeah, that I think is great if it's long-term money. But I'm with you. You know, maybe she spends it as she takes it out. And if she's doing that, I don't like the idea of it in a CD right now unless she is going to spend the money over the short run. If she's not going to spend the money over the short run, make sure it's the same aggressive fund on the inside and on the outside. And the reason is if it's going to be more aggressive, if she has to make that required distribution when the market's down, she wants to reinvest it immediately into the same fund on the outside that's also down. So whatever roller coaster she's going to be on, if she's not in a

CD, she wants to stay on that roller coaster. But do you like a CD even if it's invested now? Let's talk about just the CD. I still don't like the CD. I am not a fan of CDs right now. If you had asked me this question in 2005, I would have been like, who are you and why are you asking me this? But then I would have been like, yeah, CDs are great because it's 2005, right? Yes. But these days, there is no money in being a saver. And unfortunately, the payouts on CDs are so low and have been for years that CDs just aren't worth it anymore. Even that anemic Ginnie Mae that we've been talking about is a far better place than a CD. Last year, three and a half percent, plus you had a nice dividend. And by nice, I mean that it is most of the time.

better than what a CD is paying just on its own there. So I'm, yeah, I think I'd stay away from the CD now. You know, and at the very least, a high yield money market is paying the same as many CDs, and you don't have to lock the money up. It's a weird time for CDs. Yeah. And it has been for years. CDs have been bunk for, geez, as long as I've been podcasting.

Yeah. Sadly, not a good choice. So, there's our answer. Essentially, put the RMD into a taxable brokerage account and invest it in a way that is reflective of the timeline for which that money will be used. And note that there's a difference between age and timeline. A person's age does not necessarily dictate their timeline. So don't worry about the age per se, worry about the timeline for the withdrawal and use of the purpose of that money. And that's going to guide what you invested in. So thank you, Aja, for asking that question. We'll come back to this episode after this word from our sponsors. Our next question comes from an anonymous caller. Joe, what's your favorite male name these days?

My favorite. Yeah. Right? I mean, we always give a nickname to our anonymous callers. You know the name I sit around dreaming about. Paula. What is that, Joe? I spend my days and nights saying, you know, if I had the name, I don't even have a name. Should I give him your middle name? Your middle name is Andrew, Joseph Andrew. There it is. Come on. Come on. You can be an Andrew too.

Or he could be Joseph Andrew. We could we could go all the full you. Yeah, we'll talk to him the way that my mom talks to me when she's mad. Joseph Andrew. All right. Okay, well, our next question comes from Joseph Andrew. No, I think you have to pronounce it. Joseph Andrew. All right, fine. Clean your room. Our next question comes from Joseph Andrew. Hi, Paula and Joe. This is anonymous from Massachusetts.

My question is whether HSA-compatible health insurance is severely overrated. My wife and I are in our mid-40s and we have a young child. We're both self-employed and buy our own insurance on the Massachusetts Health Connector Exchange. Normally, we make too much to qualify for subsidies, but not always. This year, we have an HSA-compatible plan, $1,100 a month, $7,200 deductible, and $100 copay. That's right, $100. To quote the receptionist at my last appointment, holy copay! Recently, I had some unexpected neck issues requiring.

several sessions of physical therapy. When I signed up for the sessions, their finance office called me back saying they had never seen such crummy insurance before. Before deductible, I'd owe $150 per visit. After deductible, I'd still owe $150 copay per visit. In other words, my insurance was useless. They said any other plan, even other bronze plans, would result in a lower bill. They literally asked if I wanted to cancel my appointment, until I got different insurance. They also said I could pay without insurance at $110 instead of $150. After this episode, I checked the exchange for different insurance options.

There are 40 plans on the exchange and the majority have high deductibles, but one and only one is HSA compatible. I was under the false assumption any high deductible plan was HSA compatible. But according to Value Penguin, 81% of high deductible plans are not HSA-compatible. In other words, HSA-compatible plans aren't just the bronze plans. They are bottom-of-the-barrel bronze plans covering close to nothing. Some bronze plans cover costs before deductible, but not HSA plans. Is this correct? As for non-HSA insurance options, I could do a silver plan at $1,000 a $1,000 deductible and $25 copay, or a limited-provider

bronze plan at $800 a month with a $5,400 deductible and $40 copay. Admittedly, we do not take advantage of the retirement hack for cash flow reasons. But even if we could do the retirement hack, I'm not convinced the math works for us. And if the HSA plan doesn't work for us, I suspect it doesn't work for most families. Not in Massachusetts anyway. Am I wrong? What do you think? please set me straight Paula and Joe I love the show and I respect your feedback greatly and while I appreciate when you both agree on a topic

I think it's podcast goals when you disagree so here's hoping you disagree and I get two valued viewpoints thank you Joseph Andrew's hitting back at HSAs Paula yeah mom says clean your room he's like I'm going to get a new HSA mom that's what I'm going to do

oh rebel Joseph Andrew First of all, I love your name. Second, I also love the way that you've asked that question. Like the enthusiasm, the character, you have a future in radio. I don't know what you do for a living, but radio, I see radio in your future. I disagree. I don't think he does.

Oh, don't you love it when we disagree? I'm only saying that specifically because he wants us to disagree. Okay, fine. He's got a future in podcasting, which is technically different from radio. Yeah, going for the big money now. Number three, I do have an answer to your question, and it's a very simple one, which is, HSAs are fantastic if the health plan that you have is HSA compatible, and you don't choose that health plan for the fact that it's HSA compatible.

It just happens to so be. So in other words, don't let the tail wag the dog. choose the health plan that is the best health plan among the array of options that are at your disposal. And depending on what state you live in, depending on what employer you have, depending on if you are buying a health plan that is ACA compatible, meaning the options that are on health care.gov, those are all ACA compatible. But not all individual insurance plans are ACA compatible. So depending on all of those options, whether or not you're in an ACA.

compatible plan, the state that you live in, your age, I mean, all of these play into the premiums, the co-pays, the deductibles, the details around the plans that are available to you. So you take a look at all of the plans that are available to you. You make a decision about which one has the attributes that you most prefer. And if the one that you decide is HSA compatible, then that's super awesome and HSAs are fantastic. but don't pick a plan because it's HSA compatible, that would be letting the tail wag the dog. And so the answer is, you have a bad health plan. Well, I mean, it's a good point to bring up because in the way that a lot of people let the tax

tail wag the decision dog, that's something that we talk about on this show a lot, people often want to know, like, what decision should I make that's most tax efficient? And Joe, you and I are always like, no, no, no, no, no. The question is not, what investment choice should I make that is most tax-efficient. The question is, what investment choice is the best choice for my age timeline goals, risk tolerance? You make the investing decision first, and once you make the decision, then you find ways to tax optimize it, but you never let the tax tail wag the decision dog, right?

Same thing with HSAs and health insurance. You never let the HSA tail wag the health insurance plan dog. I think that's an important point, and I had somebody pointed out to me this way. My goal is to have Bill Gates tax bill. Right. That is my goal, because I end up with more money. If I have more money than having Bill or Melinda's tax bill is what I want. I want Justin Bieber's tax bill.

Oddly specific. Suspiciously specific. Wait a second. Isn't he Canadian? So maybe I take that back. Is that a worse tax bill, higher tax bill? I think so. I think, but he gets the health care included, and then there's no question here that Joseph Andrew, for Joseph Vander.

Right. Is Joseph Andrew move to Canada? So that was a short and simple answer to a very well thought out and entertaining question. So thank you, Joseph Andrew. I love that Joe can't listen to me say your name with a straight face. He is just, he is cracking up. Look at this. I'm turning beat red, too. I'm looking at myself in the, holy cow. All right. So thank you for asking that question and providing that entertainment.

So, Joe, speaking of the names of members of your family. This gets even weirder. Is my son writing in? Our final question today, and this is the caller's actual name, or at least the actual name that he's given us, is from a caller who shares the same name as your son. So our final question today comes from a caller named Nick. Hey, Paula, my name's Nick. I was curious if you could talk a little bit about sweep accounts. I own my own business and it's extremely seasonal. So we bring in a ton of money during August and September and then, you know, essentially use that for the rest of the year. I'm wondering if opening a sweep account would help keep things invested and keep my money making money for me during the busy season.

And then, you know, we can slowly spend it out of the sweep brokerage during the slow parts of the year. Thanks for your help. I'm very surprised that Nick started his own business that's seasonal because I thought he worked for Microsoft this whole time. I think your son works for Microsoft, but I don't know if you're aware of this. There's more than one Nick. There's more than one Nick in this country. Wow. It's true.

It's true. So congratulations, Nick, on the badass name. And congratulations also on setting up what's a really cool business. Now, a sweep account for people that don't know what that is, that is a money market inside of a brokerage account that when the things pay dividends, like your stocks pay dividends. If you don't reinvest those, it sweeps into that account. When you make a trade, it sweeps out of that account. So what he's talking about basically is setting up a money market fund

so that he can earn a little bit of money while he's living off of that cash. And the bad news, Nick, is that sweep accounts don't really make much money now. I mean, if what you're asking is, do I open up a brokerage account in my business's name so that I can buy investments that might make a little money. The problem is, is you've got a one-year time frame. And in a one-year time frame doing anything that's not cash is really asking for it. I do like the budgeting aspect, though, of this question. And normally, I don't like to get into specific products.

But I use, and I'm sure there's other banks that do this, but I use an ally money market. And the reason I bring that up, Paula, is because, Ally has this cool thing where I have one account and I can have buckets. And so Cheryl and I have our vacation budget. We had our home rehab budget. We have all this. But I don't want to go open 10 different accounts. I could have one account.

And so what Nick could do, if he knows what his budget is for his business every month, he could have separate buckets inside that ally sweep account. And he's got every month of the year, this is the money that he needs. And if he doesn't need the money for that month, for whatever reason, then they can take it out of the business. and spend it on himself. And that would be a nice way to budget the money that he has out there. But in terms of a sweep account, I'm not really sure what he's trying to do where a sweep

account makes sense unless he thinks that a sweep account inside a money market is going to make more than the ones that I know of make because those money markets aren't really lighten the world on fire. This might be one of those questions where the assumed solution is proposed inside of the question, and as a result, the question isn't necessarily phrased in terms of what is the problem that we're trying to solve. Because as I understand it, the problem that Nick is trying to solve is that because his business is highly seasonal, he has this massive amount of cash that he doesn't want to just keep sitting in cash all the time, but it's meant to be

metered out over the span of a year. So inherently, it's not something that he's saving for 10 into the future. It's not something super long term. He just has a big pile of cash seasonally that he needs to manage properly and also not let it lose too much purchasing power. Yeah. And so if we step away from the assumed solution, which is the sweep account, and look at the problem that we're trying to solve, which is essentially a cash flow management problem, then I'm with you, Joe, putting it into any type of account that may not necessarily beat or even come close to inflation because we know products for savers suck these days, but put it into an account, even a savings account that has the highest interest rate on a

savings account that you can reasonably find. Don't go nuts with it. Don't be like chasing savings accounts all day long. You've got better things to do, right? Don't go chase in savings accounts. Am I just coming up with every song? Sorry. Oh, boy.

It's karaoke hour. It is. On the Afford Anything podcast, right? Yeah, I mean, don't go nuts with it. Don't like try to over-optimize it, but just find any bank account that has a decently good interest rate on savings. Put it there. And then I'm with Joe.

If ideally that account lets you compartmentalize so that you can bucket, you know, This amount of money is for X purpose. This amount of money is for Y purpose. That will help you manage that large sum of money. That mental compartmentalization, and in this case, it wouldn't just be mental. You would be visually seeing it whenever you log into your account. That's going to help psychologically break up that big chunk of money into smaller chunks that you will be less tempted to pull from because you'll understand where you're pulling it from.

And by the way, the research that backs this will link in the show notes to a couple of interviews that we did with behavioral economist Dan Ariely. He's one of the most renowned behavioral economists in the world. He's been on our show twice, and he talks a lot about the importance of mental compartmentalization when it comes to managing large sums of cash. So we'll link to that in the show notes. You can subscribe to the show notes for free at afford anything.com slash show notes. You know, if we can expand this a little bit. I know Nick is talking about inside his business, but there is a similar issue that people have that just get money in big chunks.

Some people that work commissions, some people that own businesses like Nick's. And for those people, what I found when I was a financial planner was there was a propensity to have a boom-bust lifestyle, meaning that when big chunks of money came in were steak dinner, right? It's going to be fantastic. we're going to five-star restaurants. We're blowing cash. And then until the next chunk of money comes, it's ramen noodle diet and nothing.

We're buying all kinds of stuff. And then we're buying absolutely nothing. So it's this boom-buss cycle. And the frustrating thing that I've seen by people that have either seasonal income like Nick or people who have a commission-based income stream, it's very difficult to budget. It's incredibly difficult to budget. And then you feel like when that big, stream of money comes in, you know what, Paula, I deserve to do something with some of this for me

right now. And you end up, you end up in credit card debt because of this, you end up with less money saved because of that. So what I would always try to help people do would be to set up an account like Nick's talking about, a sweep type of account, but then either putting themselves on payroll or giving themselves a set amount that they know they're going to make throughout the year. So if somebody's on a commission, we would look at the last couple of years if they've had some stability in the overall amounts they get in a 12-month period. And we'd take a number that's a little less than that. And we would set up a monthly amount that they give themselves. So just because the company's paying them a commission today, like in August or September, if it's Nick, we're not using all that money today.

That money goes into using Nick's terminology, a sweep account. And then I pay myself X amount of that every month. It's the same amount every month. And now I can save money out of that. Now I can budget for groceries out of that. I get rid of the boom bust. I stop buying big screen TVs and then nothing. And it makes it so, so much easier to play in your life that way.

And the cool thing is, if there's money left over, every six months, what we would do, and we would generally use this because I would meet with my clients twice a year. and then we'd have a phone call the other two times. But during those client meetings, we'd find out if there was extra money left, Paula, above what they were going to take the next month, and they would give themselves a, quote, company bonus, where they'd take the extra commissions out,

and this was their, quote, bonus money. And then they would use that for additional savings, vacation, extra things they wanted for themselves, whatever it might be. Right. But if you or any person were to do that, the important thing is that that be on a fixed schedule, just like if you were an employee of the company, if mentally you're looking to your company to bail you out

any time that you overspend. Can't do it. Right, exactly. That's going to go south in a hurry. So it's got to be like July 30, December 30, or whenever, whatever your dates are, it doesn't matter. I'm so glad you brought that up because that is a key part of this is that you set up an automatic transfer so that you're not even going in there and go,

well, I'll just pay myself. Nope, you don't. You can't pay yourself a little more this time. It has to be the same amount so you make it automatic and you don't touch money that goes into that, quote, sweep account. So if Nick's talking about that, that's a strategy that I really like. Yeah, for any entrepreneur, putting yourself on payroll and mimicking the experience of being an employee is a very powerful budgeting tool. I have put myself on payroll. I am a W-2 employee of Afford Anything.

Me too. Not of afford anything. I'm still working on that. You are? Oh, crap. Did I say that out loud? Yeah, I often joke that it's ironic that I created a business around quitting your job. And the business around quitting your job became so successful that now I am an employee of a company that encourages people to not be employees. The irony is palpable. Exactly. Oh, that's a great way. word palpable. Palpable. Yeah, the irony is palpable. But even if you do quit your job, putting yourself on an automatic, this is the amount I'm going to take this month, no matter what it is. You know, I mean, we talked about RMDs. We talked about SEPP plans, like having that consistent monthly income, even if it's coming from your investments, making that the same makes it so much easier to

budget, just so much easier to budget. You know, you could say the same thing about drawing down from if a person's living on rental property income, that's very volatile income as well. So if you're living on rental property income in early retirement, then paying yourself a consistent monthly amount. I guess that's the universal thread that we keep coming back to is that consistency, right? Yeah. And what we've seen across domains is that consistency is the key to anything. if you want to improve your health, consistency in what you eat and how you exercise and how much you sleep is going to take you a lot further than inconsistent action. And the same applies to money. If you want to improve the way that you manage your money, consistency not only in your spending,

but also in the way that you design your income. And that's really what this question is. This is an income design question, among other things. It's also largely a cash. management question, it's a budgeting question, but there's a component of the question of Nick's question that is an income design element. The more things are the same, the easier all your planning gets, which is why on even a smaller scale, Paula, let's break this down even smaller, which is why I like when it comes to your monthly budget, if you can go to the utility plan that's the even plan all year long, that doesn't, by the way, save you any money. If you do the math, it doesn't save you money, but what it does is it gives you the same amount that you're going to pay the

utility every single month so that you can now save more money. People always have this need to leave money on hand just in case, but the more my bills are the same, the more I don't need that to happen. It's also why I like the envelope budgeting systems, right? Some of the cool systems that are out there now where every job has a dollar, because if I know that my grocery bill is going to be exactly $200, and that is my grocery bill that I'm, that I'm can plan. If that's a variable number, you stack variables on top of variables on top of variables, and then you tell yourself, well, I have to have a little bit more in reserve over here. The more you can make even these small bills the same and stack these now non-variable things

on top of each other. And you've got this much more certainty around cash flow and expenses that are coming out, the easier it's going to be to say, yeah, I can afford to save a little more money. That is excellent advice. We will end it on that high note. Bam. So thank you, Nick, for asking that question. And thank you, Joe, for facilitating today's episode. I don't think I did. I think I, I think I got embarrassed about the Joseph Andrew thing. Did you? No. But then I also think, you know, I got to talk to not my kid, but, you know, nice guy. Nick seems like a nice guy. I got to hang out with Paula. We didn't argue very much.

Sorry, Anonymous. You're Joseph Andrew. I got to do some karaoke. A bunch of karaoke. No extra fee, people. And you know what else you get to do? What's that? You get to tell people where else they can find you.

Oh, you know what I was thinking while you were talking? Is that I have a book coming out, Paula, December 28th. And we are just about to do the audiobook, which is neat. But not only is Paula Pant in chapter one of that book, but Dan Ariely is also in that book. Oh, very cool. Dan Ariely's there. Gene Chatsky's there. Tiffany Aliche, the Budget Nista.

Gabby Dunn is in the book. Jill Schlesinger from CBS, Jill on Money is in the book. Phil Town. Lots of other fun people. Bolus Acumbi from Clever Girl Finance. So some really neat people. But comes out December 28th. You can pre-order it at stackingbevenjements.com forward slash stacked or just wherever you buy your books.

Stackingbenjamins.com forward slash stacked. We will also link to that in the show notes. Thank you so much for tuning in. If you enjoyed today's episode, please do three things. Number one, tell your friends and family. That is the single most important way that you can spread the message of financial independence, good financial health. Number two, make sure that you are following this podcast in your favorite podcast playing up. Open up Apple Podcasts or Spotify or Pandora or Overcast, whatever it is that you're using.

Hit the follow button. And number three, while you're there, please leave us a review. These reviews are incredibly helpful in allowing us to book awesome guests. You can find me on Instagram at Paula Pant. That's P-A-U-L-A, P-A-N-T. And if you want to listen to this podcast on YouTube, we're there too. YouTube.com slash afford anything is where you'll find us. Hit subscribe.

Thanks again for tuning in. My name is Paula Pant. This is the Afford Anything podcast, and I will catch you in the next episode. Here is an important disclaimer. There's a distinction between financial media and financial advice. Financial media includes everything that you read on the internet, hear on a podcast, see on social media that relates to finance. All of this is financial. media. That includes the Afford Anything podcast, this podcast, as well as everything Afford

Anything produces. And financial media is not a regulated industry. There are no licensure requirements. There are no mandatory credentials. There's no oversight board or review board. The financial media, including this show, is fundamentally part of the media. And the media is never a substitute for professional advice. That means anytime you make a financial decision or a tax decision or a business decision, anytime you make any type of decision, you should be consulting with licensed credential experts, including but not limited to attorneys, tax professionals, certified financial planners or certified financial advisors, always, always, always consult with them before you make any decision.

Never use anything in the financial media. and that includes this show, and that includes everything that I say and do, never use the financial media as a substitute for actual professional advice. All right, there's your disclaimer. Have a great day.