Afford Anything - Ask Paula: I’m 24 and Won a $1 Million Settlement. How Should I Handle This Money?

Episode Date: March 6, 2020

#245: Joe has a 24-year-old friend who won a $1 million settlement. How can she use this money to set herself up for financial independence? Jay is 52 years old and wants to retire at 59.5. He began investing in individual stocks to achieve this goal, and has had excellent returns so far. Is this a sound plan for early retirement? Or should he work until age 62 for Social Security? Steve is 54 years old. He plans to retire at 60, which is when he can collect 67 percent of his pension. A Vanguard advisor suggested that he direct some of his 403b contributions as Roth contributions, rather than pre-tax contributions. Should he act on this suggestion? Anonymous in New York City wants to invest their HSA contributions this year, but the expense ratios seem high. Can they move their HSA to a different provider? What fees are normal for HSAs? Brit has a similar question. She wants to know: is it possible to invest in the S&P 500 Fossil Fuel Free Index through Vanguard? My friend and former financial advisor, Joe Saul-Sehy, joins me on the show to answer these six questions. Enjoy! For more information, visit the show notes at https://affordanything.com/episode245 Learn more about your ad choices. Visit podcastchoices.com/adchoices

You can afford anything, but not everything. Every decision that you make is a trade-off against something else, and that doesn't just apply to your money. That applies to your time, your focus, your energy, your attention, anything in your life that's a limited resource that you have to manage. And that leads to two questions. Number one, what matters most to you? Not what does society say should matter most, not like should you have done thing X by age Y? Forget that. What is actually a priority in your life?

That's the first question, and the second question is how do you align your daily decisions and your daily actions 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 Pan. I'm the host of the Afford Anything podcast. Normally, we're a weekly show that typically tries to air on Monday, but once a month on the first Friday of the month, we air a first Friday bonus episode. So welcome to the March 2020 first Friday bonus episode. Every other episode, I answer questions that come from you, the community. And today, my buddy, former financial planner, Joe Saul Seahy, is here to help me answer these questions. What's up, Joe?

We're doing it again. We are. I am so excited. Oh, we've got great questions this time around. I mean, we always do, but this one, oh. It's always an adventure. I feel like we should have like, Steve should have like some Western. adventure theme music because we're always going down a different path that nobody knows.

Ooh, we will use that to lead into today's first question, which comes from a guy, Joe, I think you'll really like his name. His name is Joe. Hi, Paula. This is Joe from Jacksonville, Florida. I'm a longtime podcast vendor and FI enthusiast as well as a buy and hold real estate investor. And I've listened to many financial podcasts. Yours is my favorite by far. I love it because it's always professional, educational, and entertaining. And regardless, I always seem to learn something new,

even though I tend to have a lot of focus on single family rental properties. My question is for a friend who happens to be a 24-year-old young lady who's very sharp however, not yet financially sophisticated. And recently, she was awarded a $1 million settlement net of legal fees due to a car accident involving a large piece of delivery corporation. She is currently being pressured by her attorney in his financial advisor commission-based friend to quickly decide on how she wants the settlement to be distributed

from his legal escrow account. I really think she's in need for an independent fiduciary financial advisor and also a CPA to thoughtfully walk her through her goals and how to best handle this large settlement. In short, I think she could really set herself up potentially for long-term financial freedom or also end up with regrets if she listens to the wrong people or doesn't get the correct advice. So in short, Paula, I think she needs your help. What would you say to her? Her name is Tiffany. Thanks so much. Joe, thank you so much for being a fan of this show. And big kudos to you for calling in in order to help a friend. Most of the people who call in have a question about themselves or their own lives, which is wonderful. I encourage that. But it's heartwarming to hear someone call in because they are concerned about a friend and they want to help. So big thanks to you for being such a good friend to Tiffany.

you're absolutely right in that Tiffany is in a position right now in which she has the potential to be financially secure for the rest of her life if she invests this $1 million well. You mentioned that Tiffany is not yet very financially educated, very smart woman but just not yet financially savvy. Given that that is the case, my recommendation would be for Tiffany to take a fairly simple, straightforward approach with how she handles this money for at least the next one to two years while she learns more about financial management. The simplest, most basic thing that she could do would be, number one, to pay off any debts that she may currently have. You mentioned she's 24, so she might have some student loans,

she may or may not have a car loan, pay off all of her debts and become debt-free. if she knows where she wants to settle, which she may or may not, she might not know what city she wants to live in due to career mobility. If she knows what city or state she wants to settle in, she could use a portion of the money as a down payment on a modest home, nothing too extravagant. And then the remainder of the money, she can put into a target date retirement account through Vanguard. Now, the through vanguard portion is important because a lot of other brokerages offer target date retirement accounts that are riddled, just saddled with fees. They have huge expense ratios. They're not a good deal. But the Vanguard target date retirement funds are low fee.

They're an excellent deal. Given that she's 24 and presumably around 40 years away from retirement, she can put her money into a target date 2060 fund. and leave the rest of it there. And she can contribute to a retirement account in the year 2020, and the rest of it can go in a taxable brokerage account. There's no restriction against having retirement funds in a standard taxable brokerage account. And that would be a sensible place to hold it, where her money would be asset allocated in a way that's appropriate for her age and her timeline. And it would be simplified. She doesn't have to worry about it. She doesn't have the burden of managing it and she can leave good enough alone and let it ride. You know, it's funny. What I love

about coming on the show, Paula, is I agree with almost none of that. All right, she should take on more debt. I agree with all. I actually agree with everything that you said. I just thought it would be funnier to start off by stirring the pot because that's what we do. But I'll tell you, you know, this is a sudden money situation. First of all, let's talk about what's going on with the attorney in the commission-based advisor here. Legally, that commission-based, any advisor, is not allowed to get a kickback from the attorney. There's not supposed to be a relationship

that exists between the two of them. However, it's incredibly easy for unscrupulous advisors to get around that. I'll tell you how they do it. The advisor, quote, rents an office from time to time at the attorney's office space. Those months are about the same time that the attorney recommends a client to the friend and the rent is variable, which goes along with

just about how much money that person has. Wow. That really happens. That really happens. I mean, think about the financial advisor. If they can hook up with an attorney and have a constant stream of people with a bunch of money that they can work with, cha-ching, what would you pay for that? And so even though laws exist, there are many people doing things different ways to get around, to get around those rules. So I'm not saying that's happening here. I'm just saying that I kind of can feel where Joe's coming from, that the attorney might be incentivized to make sure that that friend gets this business, gets Tiffany's business, which immediately

makes me think I don't want to go that way. The second thing, though, is that any time there's pressure to do anything. anything, I immediately think you should do nothing. And there are people that have written great books on this. And this is in the financial planning community, this is called sudden money. All the sudden, you have all this new cash, whether it's a settlement, whether it's the lottery, whether it's inheritance, whatever. And most people, our feelings around that money is different than if we had just earned it ourselves. And because of that, study show we tend to blow the money. And the quicker we make a decision, the more likely we are to blow it.

So my first thing, whenever a client of mine had sudden money was do nothing, sit with that money, do not spend any of it, sit with it, get used to seeing it in your bank account, make sure that you and the money that it feels like it's yours before you do anything. And that may be three months, it might be six months. it might be a year. Often the more traumatic the situation is, and I don't know what type of settlement this is, and maybe it was really traumatic. The more traumatic it is, Paula, the more I encourage people to do nothing for a longer period of time. And the reason is, is you're more likely to make a very emotional decision. Joe, similar to what you've just said, I have long heard the advice that if you receive an inheritance, particularly if the person who passed away with somebody that you loved or whom you're close to, with that inheritance money, do nothing with it for at least the advice

that I've heard is one to two years because of the fact that your grief could cloud your decision making. So that two-year window after someone close to you passes away, your grief about losing that person will be inseparable from your feelings about that person's money. And so for those first two years, put it in a CD and just leave it in a CD and call that good enough. Well, and on the whole other end of that, when you win the lottery, I mean, how many lottery winners are broke? And the reason that they're broke is because, and I heard the story over and over again, they immediately change their lifestyle. Just immediately everything changes. And then they get used to this faster-paced life that demands more cash out of your pocket every day. And before you

know what, the money's gone. So that's the first thing I do. I also like Joe's idea then and putting a team together because at that number, you want your advice to dovetail. And for me, putting a good team together is like an insurance policy. So take time and interview people to make sure they're people that you like. I've mentioned this before, but often I feel like when people talk about they worked with a bad advisor and the advisor did them wrong, my first response is you need better interview skills. So I would go look at several different places about what questions to ask, think about what you're looking for from your team, and then hire an advisor. And I would also then hire a CPA like Joe recommended.

Here's the thing about the CPA, though. Today, a lot of CPAs do taxes, but on the side, they're also commission-based financial planners. And I've seen before that if you have now a financial advisor who's fee only, and then you go and you hire a CPA who doesn't know that. financial advisor, you might have something that in the business we just call a pissing contest. And you're in the middle and your advisors are fighting each other because the CPA secretly wants your business while your financial advisor is helping you go in a different direction.

For that reason, I think I'd hire the financial advisor first and then I would work from a list that that financial advisor, once you know that you trust them, I would then work from a list that they provide you of CPAs to run down because then you know that these people are likely to have worked together before and their advice dovetail. I'll tell you when I had a client in the room that was in this situation and I was able to bring a good CPA to the table and a good attorney sometimes. It'd be the three of us and we all knew each other and we had mutual respect for each other. We could really dovetail things to help our client in a way that one of us alone could not do. Beyond that, the rubber then meets the road. And by the way, everything that Paula

said is probably right. It's probably the way to go. I just thought it'd be a little more salacious to open up with. I wouldn't do that first. I would sit first. I'd hire the team and then maybe do what Paula said. You know what? I'm actually going to modify the answer that I said, though. I'm going to disagree with myself. Because in my initial answer, Tiffany, what I recommended was, number one, that you pay off any debts that you currently have, such as any student loans that you might currently have. Number two, that you make a down payment on a home if you think you know where you want to live for at least the next, say, five to seven years. And then number three, to invest the rest of it. So I'm actually going to modify that because here's a thing.

You can never go wrong with being debt-free. Debt freedom may not be optimal, certainly there's interest rate arbitrage, but you can never go wrong with being debt-free. And so rather than make a down payment on a home, if you think you know where you might want to live for the next five to seven years, you could buy that home in cash. And then you would be 24 years old with a home that you own free and clear, which means that all future income that you make that you otherwise would have spent on rent or a mortgage is income that you can now invest or save. It frees up your cash flow for all of your future earnings. And there are people who will disagree with me and say, you know what, mortgage interest rates are at an all-time low.

Why would you not take out a loan at 4% if you could invest that money at 8% or 9% and arbitrage the difference? Certainly that's an option. But why? Why? complicate your life right now. Why not just buy a place in cash? Then dedicate the money that you would have used for a rent payment or a mortgage payment. Dedicate all of that to investing. Having that free and clear home will give you a lot of flexibility, a lot of options. So I think that's another great thing that you could do with this money. And you're not going to go wrong doing it. Totally agree. Less debt. Always good. Yeah. Now, that's assuming that it's a reasonable, modest home. I'm not saying to spend the entire $1 million on a house. That would be too much. But assuming it's a reasonably priced home for the area, buy it in cash. There's one other thing that I want to say before we sign off. So, Joe, you talked a lot about the importance of Tiffany hiring a financial advisor. I want to clarify, Tiffany, when you hire a financial advisor, the first question that you want to be a financial advisor, the first question that you want to be a financial advisor.

want to ask this person is, do you have a fiduciary duty to me at all times? And make sure that the answer is yes. If they try to explain away the answer, if they rather than say the word no, if they send you on a five-minute justification explanation, what that means is that their answer is no. And you're looking for a yes. So the question is, do you have a fiduciary duty to me at all times and demand a yes answer from the advisor that you hire. A second follow-up question that you can ask is, are you duly registered? The reason that you're asking these questions is because if a person has what's called a fiduciary duty or a fiduciary obligation, that means that they are legally required to give you the advice that is in your best interest. By contrast, if a person

does not have a fiduciary duty, then they merely have to meet what's referred to as a as the suitability standard, which means essentially that their advice can't be complete garbage, but it's not really held to a standard that's much higher than that. The suitability standard is a bunch of BS, in my opinion. So look for an advisor who is legally required to give you the advice that is in your best interest, not merely advice that is suitable, but advice that is best. Thank you, Joe, for asking that question. Oh, you're welcome.

Oh, you're not talking to me. 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.

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Head to Wayfair.com now to shop Wayfair's Black Friday deals for up to 70% off. That's W-A-Y-F-A-I-R.com. Sale ends December 7th. Our next question comes from Jay. Hi, Paula and Joe. This is Jay. I'm 52 years old and I'd like to retire at 59 and a half when I have access to my 401K. I'm also investing in a Roth IRA and a brokerage account.

I met with a financial advisor who determined that I would need to average about 15% annualized returns in my brokerage account if I want to retire at 59.5. That's assuming that I get market returns from my 401k and my Roth IRA. To me, that meant one thing investing in individual stocks, and since I didn't know anything about that, I did some research online, and I was able to find a company that has a track record for beating the market, and that company is the motley full. So I started out with $50,000, and I put that in a brokerage account, and I invested in their recommendations. So far, to this date, the brokerage account has returned 58%. my 401k has returned 49% and my Roth IRA has returned 38%.

These numbers are well above what I need to average in order to retire early. My fallback plan is just to wait until I'm 62 and can claim Social Security. So my questions, number one, do you think it makes sense for me to try to retire early? In the big scheme of things, we're talking about two and a half years between 59 and a half and 62. If so, do you think it makes sense for me to invest in individual stocks in order to achieve this goal? One thing I have found since discovering the FI movement is that it's pretty ubiquitously frowned upon to invest in individual stocks. I know I've had a good luck so far, and I do think the Motley Fool, like I said, they have a track record for beating the market. So I am happy with their service, but I'd like to know what you think. And question

number three, and I will give the specific area, but I'd like to retire in Summerland, Nevada, and I believe that's an area you're probably familiar with. The specific area I'm looking at is right across the highway from downtown Summerland and Red Rock Casino, and it's also a short drive from Red Rock Canyon. These things are very important to me. Do you think, that I should purchase a residence as soon as I have enough money saved up in my brokerage account and then just rent that out until I'm ready to retire, or should I keep the money compounding in my brokerage account until I am ready to actually retire?

Once again, thanks for all you do. I really enjoy your podcast, and I look forward to your answer. Thank you very much. Hey, Jay. I'm actually excited about talking about Summerlin, mostly because I have a lot of, a story. And you thought Paula was going to have a bunch of stories about Vegas, but I actually do as well. And Summerlin specifically has a fond place in my heart. But let's talk about that teaser for what's coming up later in the episode. But wait, there's more. Before we get to that, though,

I want to go through some of the assumptions. I don't want to address your actual question because I think there's some assumptions that you're working from that are incorrect, which I think are game changing. The first one is, is that you mentioned that you want to retire at 59 and a half because that's when you can get your 401K. The cool thing is, is that 401Ks do not have the 59 and a half rule. There are rules, but it's based on the summary plan description. If the summary plan description allows you to take withdrawals before 59 and a half, you can get 401k money, not IRA money, but 401k money, without penalty before 59 and a half. So reading your summary plan description is what it's called,

reading that and understanding the rules is going to be super important for you. But you might be able to do it earlier then, which brings up the analysis that you and your advisor did. I was very interested when you said that your advisor said you have to have 15%. Mostly because in the 16 years that I was an advisor, number one, that isn't all I would have said. I wouldn't have just said, well, you got 50, get 15%, where's my money? Because the cool thing is, is that you have some other things that you can do.

The great thing about any, any plan is that it's a very simple math equation. You need to save X dollars and get Y return to equal the goal. Each one of those things are changeable. So when I hear why return equals 15%, my brain says a couple things. It says, number one, you can also make that up without going to individual stocks, and we'll get to that next, but without going to individual stocks, you can make that up by maybe changing the X, which in this case is, can you save more money? Are there ways that you can save more?

Maybe there are some things that you can change there. Now, with the goal being pretty close, I would guess that that's probably not going to be that doable. Although I will throw in that saving can come from either decreased spending or increased earnings. So can you earn more? Yeah, could do that as well. I mean, those are two great things. And the earn more could be a very definite possibility that people often overlooked. On the other side, though, the end of that equation equals the goal.

The goal could change. Now, you talked about pushing it back from 59.5 to 62 so that you can get your social security. However, you can talk about how much money you save during retirement. Is there a way to partially retire and maybe earn some money in retirement? Are there ways for you to either decrease expenses for a piece of your retirement or increase income a little bit during retirement so that we don't have to have that 15% number? You presented 15% as if that's an in stone number. you've got a lot of different levers that I would look at before I look at at trying to get 15%.

Because even with individual stocks, I think that casino in Summerlin you talked about is a easier way to get 15% or a much less easy way to get 15% than stocks. Stocks don't do 15% historically. The change from going with index fund passive investing to individual stocks, most people just think about risk about you're going from, let's say, 500 companies in the S&P 500 down to maybe 10 companies or 15 companies, depending on what you're doing. The way I look at it is, is this. What you're changing is by making that move, you're changing what's called the standard deviation on your plan. And that's what scares me the most. When you say, I'm going from 500 companies to 15 companies and companies that either I or somebody with a methodology like the Motley Fool does,

one of those, somebody came up with a plan to buy those stocks, you're increasing the amount of potential volatility in your portfolio. So rather than have an upside, which might go as high as 30 or 40 percent, a downside, which also may go 30 to 40, it could be closer to 70 on both sides. You're just going to have much bigger swing. So when you're talking about retirement planning, the words bigger swings and retirement planning, for me, don't go hand in hand. So that's why I would not be a huge fan of individual stocks.

And I should disclose, too, that on my podcast, Motley Fool is an advertiser on my show. So I'm not going to talk about them specifically. But regardless of who picked the individual stocks, I don't like increasing standard deviation to the point that you're looking for a 15% rate of return. Yeah, I completely agree with that. Joe, for exactly the reason that you said, he's increasing the standard deviation, he's increasing the volatility,

and he's doing it at exactly the time in which that volatility needs to be reduced rather than increased because of the fact that his timeline to retirement is five years away. And full disclosure, I used to write for the Motley Fool for probably about a year or so, approximately 2012, 2012, 2013.

I was a writer for them. And I would not recommend that anyone be seen as a source that can consistently beat the market. Because what we have seen historically is that fund managers that outperform the market temporarily over the span of a few years will ultimately revert to the meeting. I'm not going to go there. I'm just going to lay two words here. Ray Delia. More words. Warren Buffett.

I will lay down two words. Cherry picking. I will lay down two more words. Survivorship bias. Even after they were famous, they still survived. Like Gloria Gaynor said in the fantastic song, they will survive. Oh. Oh, that's not what that song was about.

Joe and I will not get into our, we will not pull our boxing gloves on and get into this debate right now. I was halfway there, though. You were. You still are. I still am. She makes it so well. But, Jay, to answer your question, I am not a fan of trusting that some outside entity will be able to beat the market and especially of, number one, betting your retirement on that. And number two, needing that to happen in a timeline that is as short as five years.

When you have a compressed timeline like that, you simply do not have years to recover. So if something goes wrong with your portfolio, if standard deviation hits you the wrong way and your money takes a big hit, you don't have time on your side because you're five years away from retirement. And for that reason, the goal here is to decrease risk in your portfolio and not use risk or added volatility as a method of compensating for insufficient contribution. The lever that you want to pull here is the contribution lever. And that's going to come from increasing the gap between what you make and what you spend. And then investing that gap. So that can come from spending less. That can come from earning more.

It can come from some combination of the two. But the contributions that you make, that's where the focus ought to be. We can't go, though, Paula, without you talking about Summerlin. And actually, before you do that, I'll just say that, So when I was with the big firm that I was with, I was one of the few advisors in the country that were nationally known for speaking. So I'd have people hire me from all over to come give financial talks, either to their clients or to prospects that wanted to work with them. And one of the top advisors in the country had an office in Las Vegas, which I was thought was kind of funny. We are not a gambling city.

Thinking of Las Vegas as a gambling city is like going only to Times Square and concluding that that is all of Manhattan. Oh, I know. But just for the rest of us, there was always some irony when I would get on a plane many times and I would go give speeches in Summerlin. And I gave a couple in Henderson, which were fun. It was always fun going to Las Vegas. They would always put me up on the strip, even though I really don't gamble because that's where the cheapest hotels were. And so I would work from my room and then I would go people watching on the strip. And then at about 5.30 at night, a car would come for me.

And I'd go out to some place in the suburbs, either Summerlin or Henderson, and give a talk about responsible financial planning. A car would come for you. That sounds so fancy. I mean, these days, it's Uber or Lyft. But before that, having someone send a car for you. Yes. It's very doubtnabby. But let's talk about Summerland. Do you like where he's moving? I love Summerlin. In fact, I typically am not personally a very big fan of suburbs. And Summerlin is one of the few suburbs that I actually really love.

So I think that's a fantastic place to live. I know exactly the area that you're referring to right across from downtown Summerlin. It's a great area. a proximity to Red Rock Canyon, proximity to amazing hiking, a beautiful outdoor scenery, plus you're still in the city, so you have easy access to any type of groceries or doctor's offices or dentist offices, anything that you would want in the course of your day-to-day life. I think it's a great area. And so to your question, which is, should I keep money invested now so that I can have compounding growth over the span of the next five years, or should I purchase a home in Summerlin right now and then rent it out in order to offset the holding costs and hold on to that until I'm ready

to move there, I think either of those are fine. I mean, six of one, half a dozen of the other. Because if you were to buy a home there now, then the advantage that you would have is that you capture homes at the price at which they're at right now rather than the price that they will be at. in five or six years. So you can try to speculate the rate at which home prices in Summerlin will rise over the span of the next five to six years. But any attempt at guessing what that rate will be is pure speculation. We just have no idea. We know that housing prices in Las Vegas rose 16% last year, but is that going to remain forever? Or will it return to the national average, which is 5%, or will it return to less than the national average and simply go down to

3% and merely keep pace with inflation? Or will it exceed last years and increase by 20% rather than a mere 16? Like, we simply do not know. We don't have a crystal ball. We have no way of knowing. And so any decisions based on Market appreciation is pure speculation. Appreciation is speculation. So if you want to buy a home, put a renter in there in order to offset your holding costs. Now, to be clear, this is not a home that it's intended to be used as a rental property. So the presence of a renter does not indicate that this is a rental investment. The presence of a renter simply offsets your out-of-pocket holding costs. Right. If you want to do that, I think that's perfectly fine. And you lock in the price where it is today. But if you'd rather keep your money in the market, I think that's perfectly fine, too. Either way, the decision matrix is speculation about what may happen, may or may not happen in the future. And given the fact that we don't know and we know that we don't know, then either of those, based on historic data, are bound to be pretty decent decisions. Yeah, my only thought around this, Paula, is just the volatility that we've seen, to put it mildly, in the market lately.

I think that whenever you have a decision that's that close, deciding whether to leave it invested versus buy a property is also kind of a false decision because I don't know that I would want it to be in individual stocks if the goal is now less than five years away. Oh, certainly. I would want it to be in an index fund or in a series of index funds, a diversified series of index funds. Yeah. And maybe not even stock index funds at that point. you know, he's had nice growth. I think if you're going to spend that money in the next five years, it's time to, you know, the plane analogy is overused, but it's time to start landing the plane. Yeah, absolutely. And so to that end, that does pose an argument for buying the home right now

insofar as that is the less volatile of the two options. Yeah. So, Jay, in conclusion, please get out of individual stocks, increase your contributions, and either buy the home in Summerlin or don't. strong arguments either way. But if you want to decrease volatility in your portfolio, buy that home in Summerlin. So thank you, Jay, for asking that question. Our next question comes from Steve. Hi, Paula. My name is Steve. First, I want to say, I appreciate you and many others in the FI community. I've learned so much from you and your guests. I have one specific question and then one broader question. I recently met with a Vanguard representative at a retirement planning event in my workplace. He suggested that I might consider directing some of my 403B contribution as a Roth rather than pre-tax contribution.

My specific question is, what factors should I be considering in making this decision? A little background on my situation. I'm 54. I've been with my employer for 33 years and I'm fortunate to have a defined benefit pension. My current plan is to work until age 60, at which point I would be eligible to collect 67% of my pension. I've contributed to a 403B account my whole career, and I've maxed out my contributions over the last several years. That account balance is just under 400,000. I'm saving about 40% of my net pay contributing to a taxable Vanguard account, brokerage account,

and 529 accounts for one child still to go to college and three grandchildren. My wife is 50, has also been with the same employer for 30 years, eligible for a pension, currently maxes her contributions to 4 or 3B, and has an account balance around 300,000. I was a little late to the game but discovered the backdoor Roth option this year, and so each of us opened accounts for 2019 with the max $7,000 contribution. We're currently in the 32% tax bracket. I can't imagine being in this tax bracket in retirement, especially given that we will earn less by retiring before age 65 from our pension standpoint,

but wanted to ask about the Roth contribution to make sure I wasn't missing something. My other more general question, besides increasing our savings rate and investing in a taxable brokerage account, Are there other things I should be doing or investments I should consider making? Our only debt is two mortgages, one on our primary home for which we owe about $80,000 and one on a vacation home on which we owe about $40,000. Both are 15-year mortgages, both in the latter half of the loan period. I had been paying down the vacation home aggressively, but switched my thinking about a year ago

to invest more in a taxable brokerage account. There will be college expenses beginning in the next four years, and I have considered increasing our contribution to this child's 529 account. I'd be interested to know if there are other ideas as we work toward increasing our savings rate. Thanks, Paula, for any advice you may have. Hey, Steve, congratulations on being close to retirement. Man, you have a lot going on. This is where, Paula, I think these years before retirement, a good financial planner, not somebody from Vanguard, who is answering maybe a specific question

about the 401K, you might be better served by that relationship. Here's a reason why. I think the Vanguard person might be wrong, but I think the reason they might be wrong isn't that they're wrong generally, because you, if you've listened to the show for any amount of time, you've heard Paula a lot and me very much so, say that the Roth 401K is the way to go. Right. It is definitely, for most people listening to this, that is a fantastic thing. So the Vanguard 403B or a 401k, regardless of the thing that you save into, is the way to go. I think that the advice wasn't wrong if they didn't know as much about your situation as you just told Paula and I. Here is the reason why I like more money in the Roth for you. The Roth represents flexibility. It's flexible money that you'll be

able to more easily get your hand on without worrying about the tax consequence later on. However, I completely agree with you that your tax situation is much less foggy than somebody who's listening to the show who's 25, 35 or 40. You can see the future and it looks like your tax rate's going to be a lot less than it is now. In that situation, sticking with the pre-tax as much as possible is a fantastic idea. So my question then comes to, do we need tax savings or do we need flexibility? When you first told me that you were saving into a taxable brokerage account, my ears perked up and I went, oh, maybe he does have some flexible money. And then you also said you're saving into 529 plans for children. And then I went, oh, man, maybe there's a big, big college expense

coming that is not only going to swallow the 529 plan, especially since you thought you might need to save more into that and swallow the taxable brokerage account. So my question back to you is going to be not about tax savings. It's going to be after you're finished paying for college, how much flexible money do you have available? If college swallows up all your taxable money, then I think putting money into a Roth or continuing with that taxable. brokerage account is the best idea. If you still have some of that left and flexibility is not an issue, pre-tax against the recommendation of what the Vanguard person said, I think is the way to go. Joe, I agree with you in that from a tax perspective, pre-tax makes the most sense in his particular

situation. And the reason for that is because, Steve, you are so close to retirement that you can reasonably predict what your tax rate is now and what your tax rate will be in retirement. On top of that, when money is invested in a Roth, the growth inside of that account, all of the capital gains, all of the dividends, that all continues to grow and compound tax exempt. And so if money is put into a Roth account by someone who is 25, 30, 35, 40, like Joe said, then that person has the advantage of decades of tax-exempt compounding growth. And also, even if that person is high income, they still don't know what their tax rate in retirement is going to look like compared to their tax rate today.

Sure, they might be a hypothetical 40-year-old might be in the highest possible top marginal tax bracket today. But given that they're 40 years old and if they plan on retiring at the least, age of 65, they cannot reasonably predict if today's top marginal tax bracket will be considered relatively low, middle, or high compared to what tax code looks like 25 years in the future. We just have no way of knowing what tax code is going to look like decades into the future. But, Steve, in your situation, because you can reasonably make a comparison between today's tax rates and retirement tax rates, from a tax perspective, from a tax person,

perspective, pre-tax makes more sense. But that said, Joe, I agree with you in that, Joe, you've often used the analogy of a tax triangle in which you have pre-tax dollars, you have Roth dollars, and then you have taxable brokerage account dollars. And so, Steve, if you have not yet built that triangle, if one of the corners of that triangle is weak, then it does seem to me to be sensible to diversify the tax treatment of your holdings by virtue of biasing more money towards the weakest point in that triangle. Yeah, this is definitely a place where all of the online advice where I see people consistently talking about optimization, I think are doing you possibly a disservice.

Optimizing everything so it works, the best today is not the, answer. Flexibility, I think, is the answer. Steve, there are a few more comments that I would want to make about your situation. First, you mentioned that you have mortgages on two properties. One of those outstanding mortgage balances is 80,000. The other is 40,000. To the vacation property that has the $40,000 outstanding balance, what strikes me about that one in particular is that you are, and I don't know what the total equity in that home is, but you are presumably in a situation in which you have a lot of equity in that home,

and yet you're still on the hook for a monthly mortgage payment. And that is, in some ways, that is the worst of both worlds. The benefit to having a home that is paid off free and clear is that it frees up your cash flow. So all future cash flow, either in the form of rental income or in the form of money from your paycheck that you are no longer putting towards that mortgage, all of that future cash flow gets freed up so that you can then put that into other investments. You can put that into 529 plans. You can put that into anything that you want. But if you're in a situation in which you hold a lot of equity on a property and yet you still have a mortgage on that property, then essentially the situation is that you've got a bunch of equity tied up that's not really performing,

and you don't have the cash flow benefit of having that paid off free and clear. And so when you have a mortgage balance that is so close to being paid off, I would pay it off so that that way you free up the cash flow, which you can then dedicate to other goals. I was thinking, Paul, exactly the same thing about that more. mortgage as well because he's getting so close. But then the reason I thought that he might need more liquidity is because he had slowed down paying extra on that so that he could put more money aside, which led me to believe without having to be completely Sherlock Holmes that maybe he

doesn't have nearly the liquidity that he probably needs to meet his short-term funding goals. Right. To start paying for college four years from now means that his most immediate short-term goal is funding that 529 plan. Cash available today. Exactly. To the extent that paying off that remaining mortgage balance could then be, you know, the money that he's paying for that mortgage balance, if he could take that entire lump sum,

whatever that monthly amount is, and start putting it towards college expenses, that would be a fantastic way to pay for college. Well, but then here's the question, depending on where junior's going, and this is where it gets a little more interesting, sometimes colleges have semester payment plans where instead of paying for it all at one time you pay maybe a third a third a third and if that if that amount is small enough and the amount

that he pays monthly toward the mortgage is enough and he can just get it paid by the time that he that junior goes to college i mean when i look at a goal that's that that far away what's the interest he's going to earn versus the interest that he's paying on the house he might actually be getting a higher rate of return on that money by having the mortgage paid. Yeah, exactly. With his kid being four years away from college, I'm not looking at the 529 plan as a source of investment earnings. I'm simply trying to figure out how he can free up the cash flow to pay the bills. Even if the money doesn't go into a 529 plan, even if that money goes from his paycheck directly to the university. Which is why I'm wondering like you are,

if he does the math, can he get that thing paid off in? If he can get that paid off in time, maybe he goes the opposite way and doesn't put so much money into the brokerage account or the $529 and he gets that house paid off. Exactly. And that frees up a bunch of cash flow. Does it give him the money to just pay retail? Right. Does it give him the money to write a monthly check to the university every month? You know, I don't know what that mortgage payment is and I don't know what the university payment is going to be. But if A equals B, you don't have to be a math major to figure that out. But he does have some math ahead of him, which is always fun. We'll return to the show in just a moment. Our next question comes from, oh, we need to give every anonymous caller a name. Joe, what should we nickname this one?

Oh, so Cheryl and I go see movies together. Cheryl is your wife? Yes, and we were talking to a guy in Franklin, Tennessee when we were there recently. And we're at a deli, a really cool deli. And the guy says, what's the name for the order? And I don't know what happened, but Cheryl and I just kind of looked at each other like, do we use your name or her name? And the guy volunteers, he goes, it doesn't even need to be one of your names.

And I'm like, oh, that opens up a world of possibility. So now the name that we use whenever people ask us what our name is, is a character in the last movie that I saw. Ooh. And what's the last movie that you saw? Well, here's the problem. It was called the wild. And I don't want your name to be Harrison Ford or Ben.

And those are the two that I knew. So I got to go to the one that was before that. And the one before that I saw was bad boys forever. And I don't think your name should be either one of those two guys. So I'm going to go with, I haven't seen a Meryl Street movie in forever. But we're going to go with Meryl. Merrill. Yes, Meryl.

All right. Our next question comes from Anonymous, who goes by the stage name of Meryl. Street. Hi, Paula. I just got an HSA and I'm planning on using my savings to front out-of-pocket expenses. So I want to invest my HSA contributions starting this year. My question is that I'm setting this up through my employer and they use an account through health equity. When I looked into investment options, it says that the expense ratios are about 0.03 to 0.15%. But then there's also an additional 0.03% fee that it says because the funds are not supported by my employer. So is this normal? I'd rather avoid expenses at all costs. And what are my options to move this money

either now or when I leave this employment situation? Just trying to avoid fees and understand how to actually select the funds once I'm in an HSA. Thank you so much. Merrill Streep, that's a great question. So first of all, I love your strategy of maxing out your HSA and yet paying for your health-related costs out of pocket. And very quickly, for the sake of everybody who's listening, to explain the rationale behind this strategy. When money goes into your HSA, as you know, Merrill Streep, that money goes in pre-tax. So the money that you contribute to an HSA is pre-tax money. Once it's inside the HSA, all of the growth, the investment growth, is tax-deferred. And then when you spend that money, if you spend it on a qualified medical

expense, that money is tax-exempt, right? So you get a triple tax benefit. And if you don't end up having sufficient qualified medical expenses in order to gobble up the entire amount that's in your HSA account, then when you reach retirement age, it gets treated just like a supplemental 401K. There are huge tax advantages that come from both contributing to an HSA as well as letting the money inside the HSA grow. And that is the reason why using out-of-pocket funds to cover health care costs is such a Y strategy. Why would you remove money from an account that is giving you tax-deferred growth if instead you have the flexibility in your budget to be able to use normal after-tax money that otherwise, if you were to invest it,

would go into a taxable brokerage account. Basically, why cut short that tax-deferred growth if you don't have to? So that's the rationale behind the strategy of maxing out in HSA and yet paying out-of-pocket for health care costs. I do that myself and Merrill Streep, I love that you're doing that. I think that's a fantastic plan. Now, Merrill, you mentioned that these expense ratios are 0.03 through 0.15. I'm going to assume that you put that decimal point in the wrong place because if the expense ratio is actually 0.03, that's like one of the best expense ratios out there on the market. That is so freaking low. So if I am to take what you said at face value and that expense ratio is 0.03 through 0.15, whew, that's low. That is cheap. I would not worry about that. Now, if, on the other hand, the expense ratio is an order of magnitude more expensive, if it's somewhere between 0.3 through 1.5, well, Joe, I'm going to let you. chat about what you think of that. Because honestly, at least at the lower end of that,

it's still not that bad. Do you think I have an opinion? I, you know, I suspect you do, Joe. So when I wake up every morning, I think to myself, what things can I do today that are the big rocks, the big things that really are going to move the needle in my life? So I have decisions in column one that are things that are going to be life-changing, that are going to make my trajectory better, and then there are ones that really won't. The decision around these funds in your HSA are not in the big rock column. I wouldn't spend any of my time here. I wouldn't spend 40 seconds here.

And the reason is the reason why people don't retire, the reason why they don't get their goals isn't because of a small difference in expense ratios. I do believe that paying attention to your expenses is important, but I think it's dragon number four, or maybe even five, in a long list of things. How much money you put in, far more important. How are you going to be able to pay for those medical expenses out of pocket? Far more important. But how you asset allocate those investments. Far more important.

That said, I'll go ahead and go down the rabbit hole, even though I don't know it's worth our time. And because the cool thing is this. A great loophole in HSAs is that you do not have to stick with the plan that your company goes through. You are legally allowed to move that money to another plan that isn't associated with your work. Now, you need to leave enough money in there so that if your company's matching it or they're putting money in, you have to leave enough money to leave that open. And that's going to be a different number for every company. So make sure you know how much money you need to leave in there at all. times, but maybe once a year or twice a year, you can move it to a better family. I had back in

November on my podcast, Stacking Benjamin's people from Morningstar on, and they did a very in-depth research on different HSA plans and which ones were the best and which ones weren't so good. The best in both categories, whether it was investments or usability, if you are going to pay for your health expenses. Across the board, it was Fidelity's plan. Fidelity, according to Morningstar, a great third-party research company said that's the number one plan. So that would be my advice. And by the way, we talked to them last year and the year before, Paula, three years in a row, Fidelity's come out as number one. So they're clearly a company that over the short run anyway, and these types of accounts haven't been around that long. But at least over the last three years,

Fidelity has shown their commitment to HSAs, and I would doubt that that's going to change anytime soon. You always need to evaluate who's holding your money, but if you're going to save a couple bucks, I would start off by looking at Fidelity. Yeah, I agree with that. Of the major brokerages that are out there, Fidelity Schwab and Vanguard are the three big discount brokerages. They're the ones who have consistently shown a commitment to offering the lowest possible expense ratios. that are out there on the market. So Fidelity's HSA sounds like a great option. My account is with HSA Bank and that links to TD Ameritrade in terms of how I invest. That's fine. You know,

and here's a thing, Joe, listening to what you just said, it strikes me that I could probably lower my expense ratios if I switched over to fidelity. Maybe. I don't know. I haven't done a comparison between the two. Given that fidelity is constantly best in class as rated by Morningstar, which is a very esteemed independent third-party source, there is, if I were to do the research, a reasonable chance that I might be able to shave one-tenth of a percent or two-tenths of a percent off of the expense ratios that I'm paying, maybe.

That's at least worth looking into. Am I going to do that? No. And the reason for that is because it goes back to what we were talking about at the beginning of this answer. expense ratios, you don't want them to be outrageously high. And certainly I think anything that's above 0.6, 0.5.6, it starts to get up there. So if you're looking at funds that have an expense ratio at the upper end of the range,

Merrill Streep that you talked about, that 1.5%, yeah, no, that is serious. That's huge. You definitely want to do something about that. But when we're talking about a 0.3% expense ratio and you can lower it to 0.2, I mean, sure, that's great, but could you make more money having a side hustle? Could you reduce your health care spending by spending an extra two hours a week at the gym? I mean, there just seem to be, like Joe, as you said, there seem to be bigger dragons to slay. So if we're talking about a cumulative 0.6% expense ratio, right? The 0.3 charged by your employer and then another 0.3 inside the fund. I mean, that's not great, but it's not an emergency. It's not a hair on fire. Got to do something about this. This is the big financial thing that I've got to change. If you've got the time to change it, you know, if it's like Friday night and you've got nothing else to do, then sure, go ahead, knock yourself out, enjoy your weekend. I just wouldn't worry about it too much.

It's a question that comes up over and over and over, and it's because I think so many people in online forums don't know what to really focus on. And listen, fees are an easy win, right? I mean, it is an easy win. Clipping coupons is an easy win. That when you start looking at efficacy, time versus savings,

it's not usually the way that you should spend that time. It might be a harder win up front to learn how to follow as an example, the efficient frontier, which most people don't even know what the hell the efficient frontier is. And yet, Dr. Harry Markowitz won a Nobel Prize for that. And it's not difficult. It is not difficult. You can spend 15 minutes learning about the efficient frontier and make your investment portfolio much, much more analytical than VTSAX. And I will fight this one all day long. doesn't make the VTSAX strategy horrible. It just means it's very easy to do a lot better and a lot more analytical without spending a lot of time doing it.

I would fight that dragon all day long versus saving 0.1.2% in fees. You know, Joe, that's an interesting analogy that expense ratios are the frugality of the investing world. They really are. And the thing about frugality is that it's a track. active because, number one, there's no fear of failure. You know, if you're trying to start a side hustle, if you're trying to freelance on the side, or you want to be a consultant on the side, there's a fear of rejection. There's a fear of failure. You might flop. You might send out a bunch of pitches and absolutely none of them receive any welcome reception whatsoever. Or a fear

of success, some major company hires you as a consultant and you completely bungle it. It's scary. It's intimidating to go out there and try to earn more. And the same thing is true with investments. Like you want to buy an index fund or an individual stock or a rental property. What if you screw it up? There's always the chance that you're going to screw it up. And that's going to cost you. Real money, money that impacts your sense of loss aversion. You know, it's not just going to cost you opportunity cost. It's going to actually take dollars out of your pocket, which is emotionally more painful. And so because there's so much fear around, the growth side of the equation, I mean, frugality, it's appealing. Like, there's no risk to it. It's tangible. It's visceral. It seems accessible. And it doesn't trigger any of our insecurities, our fears or insecurities. I don't want this to sound as though I'm anti-frugality. Sometimes I joke that I am. But in truth, I got to where I am due to hyper frugality, especially when I was in my early to mid-20s. My frugality in my 20s was extreme to the point where it was unhealthy.

I was about to say borderline unhealthy, but no, it was straight up unhealthy, and I needed to actively learn how to walk it back. And so I come to this conversation as a recovering over frugal person with a deep understanding of why frugality is so much more appealing than a focus on growth. and also with a deep understanding of how skipping over dollars in order to pick up pennies is not the way to best grow your net worth. Which is funny because I'm a guy, Paula, who is far more frugal today than I have probably ever been. And yet, when I look at how I got there, mine was exactly the opposite of you. I spent lots of money on stupid things.

I made a lot of horrible mistakes that I've talked about publicly all over the place. And yet, I built a business that I was able to. sell for a lot of money. That lesson to me was also that it was the big rock, right? The fact that I spent those hours building a business that was sellable was far better than if I'd spent that time clipping coupons. That said, I've become more of a deal guy. Then I don't know if I'm getting curmudgeonly or what's going on. So thank you, Meryl Streep, for asking that question. Our next question today comes from Britt. Hey Paula, my name is Britt, and I'm a millennial very concerned about global warming.

I am currently an investor with Vanguard for my retirement funds, and I held a lot of VFTSX, a social index fund. I have found the S&P 500 fossil fuel-free index, but I can't really figure out how to invest in that through Vanguard. I'm really wanting to divest, and I've noticed that the social index fund I have the most of, still have some fossil fuel assets. If you could help me figure this out, I'd really appreciate it. Thanks, Paula. Britt, I love that question. I love that you are making climate change a priority in your life. And to answer your question, your question was, how do I invest in the S&P 500 fossil fuel free ETF? How do I invest in that through Vanguard? It's very simple. So what you do is you log into your Vanguard account. We'll go to the homepage, and that homepage will show you all of your account.

inside a Vanguard. So for example, if you have a Roth IRA and you have a 401k and you have a taxable brokerage account, that homepage, that dashboard inside of Vanguard will show you a list of all of your accounts. Now, depending on which account you want to hold this in, go to that account and you'll see a link that says trade an ETF or stock. So click that link and it's going to open up a new page. The heading of that page is going to say trade an ETF or stock. What you want is ticker symbol SPYX. So that is the S&P 500 fossil fuel-free ETF, S-P-Y-X. So simply go to trade an ETF for stock, type in ticker symbol SPYX, and boom, that's how you're able to buy it. I also, Paula, looked at a site that I like for this type of thing called Fossil Free Funds.org. They look at different funds in the percentage of fossil fuels that they have.

And to Brits point, I looked at the mutual fund version of what she's talking about, which is ticker symbol VFTAX. It gets a grade to be that particular fund. And Brits write 3.56% of the fund is invested in fossil fuels. Not a lot, but there's 3.56% that's there. By the way, carbon footprint 5587. When you go and look at all the funds, and there's six funds specifically that are Vanguard run that are either ESG funds or socially responsible funds, two that are socially

responsible for that are ESG, of those four Vanguard ESG, U.S. stock ETF, ticker symbol ESG, ESGV takes it down a percent. So still some money in fossil fuel, but it goes from 3.56 to 2.488. And the carbon footprint also shrinks from 5587 to 50.61. So using this tool, I was able to fairly quickly evaluate these funds and find that among the Vanguard family, if that's what she's looking for, if she specifically wants a fund that is a Vanguard fund, that's the winner that's going to give the least amount of fossil fuel. But the beauty is, Britt, you're not required to only buy Vanguard funds. Now, maybe that's what you want, but you can use Vanguard to purchase any publicly traded fund. I mean, Vanguard

is a brokerage, just like Schwab or Fidelity or E-Trade or Robin Hood. Like, these are brokerages that allow you to purchase any publicly traded fund, regardless of whether it's a Vanguard fund or not. And the beauty of this website that you talked about, Joe, which we are going to link to that website in our show notes. The show notes are available at afford anything.com slash episode 245. Again, that's afford anything.com slash episode 245. The beauty of this website is, Joe, as you illustrated, that you can evaluate different funds based on the degree to which they are fossil fuel-free and based on their carbon footprint. And so that gives you access to evaluating a universe of options that are out there and deciding which one of those funds or which combination of several of those funds you would most prefer. Joe, within your answer, you used the acronym ESG.

Now, for the people who are listening who aren't familiar with that acronym, will you tell us what that is? Great question, Paula. ESG is short for environmental and social governance, which means it would, reflects on instead of being socially responsible, which basically was an indictment of a lot of companies and said, well, we don't do this and we don't do that. We don't do another thing. But that isn't about what companies do. And instead, ESG funds are funds more about what they actually are about, not what they're not about, but what they are about. And so it gives a very positive spin to this area of investing. And the cool data that I think we might have talked about

last time that I was here, Paula, is that the recent study show that the difference between ESG investing and just buying the S&P 500 or something that isn't as socially conscious, big difference lately. A lot of ESG funds have outperformed the S&P 500. Doesn't mean they're going to do And I don't think that people invest in them for that reason. But back in the day, most financial advisors said you should not invest in these types of funds because of the fact that you had to decide, do I want to make money or do I want to do the right thing? Well, you don't have to draw that line anymore, it appears. Yeah. In fact, I'm going to do a little spoiler alert here.

So typically I do not announce upcoming guests before I have at a minimum recorded the interview with them because I've learned from past experience that. that's a great way to jinx yourself. You announce that a guest is coming up. And even after you have the interview scheduled, if you haven't yet recorded the interview and you announce that that guest is coming up, then what's going to happen? The next day after the episode airs,

they're going to email you and say, oh, hey, I had some type of emergency. Let's reschedule for six months down the line. Happens every time. Yeah, exactly. It's happened to me multiple times. And so I have learned never to announce that a guest is coming on the show

until after we have recorded the interview. but I'm going to break that rule right now, and hopefully I will not live to regret this. But we have somebody from Morningstar by the name of John Hale, who is going to come on the show in our episode 250 special. John Hale is going to come on the show in episode 250 to talk about busting the myth that ESG funds underperform total stock market index funds. So among other things, we're going to discuss socially responsible funds, ESG funds, corporate social responsibility. We're going to discuss all of those concepts. We're going to talk about what that means in terms of fund selection, how a person can take this alphabet soup and try to make some sense out of it, how a person can make the most socially and environmentally conscious choices for their portfolio. We're going to discuss all of that in episode 250, 250. 250.

So I've made that announcement without having recorded the interview yet. So please regard this as my disclaimer because I have learned in the past that making such an announcement prior to recording the interview is bad luck. So knock on wood, knock on reclaimed forest wood. Let's hope that that's not going to happen. and that the show will go on as planned. So make sure that you hit subscribe or follow in whatever app you're using to listen to podcast so that you can catch episode 250.

So thank you, Britt, for asking that question. That is our show for today. Joe, where can people find you if they would like to hear more about you? Wait a minute. That's it. That's all? That's it. We have had some, I don't know if you know, I'm going to say spoiler,

but we've had some volatile markets lately. I don't know if you know that. Dun, dun, done, done. Yes. And we've had this virus that I keep hearing about from coronavirus. I think I've heard a mention of that on the news. Maybe. And we have all kinds of stuff going on.

The news has been very full lately. And that's why a great place to find me is our show, Money with Friends, where we take a topic ripped from the financial headlines. And a lot of them lately have been fear around coronavirus, the fear around. the market turbulence that's happened. We talked about Bob Iger retiring as CEO from Disney. What does that mean if you're somebody that owns individual stocks or even if you don't? What does it mean for your retirement? We draw some parallels there.

We also talk, you'll like this. We talked about these two people, Harry and Megan, that Paula knows a lot about. Mm-hmm. Next. Yes. And about how the crown said, yes. You can exit, but you can't take the brand with you. And so what does that mean?

We talk about all that stuff on our show six days a week, money with friends. Awesome. And that is available anywhere that finer podcasts are downloaded. Only the finer ones. Such as this one. Absolutely. Thank you so much for tuning in. If you enjoyed today's episode, there are three things that you can do to help spread the word about financial independence and smart money management.

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My name is Paula Pant. This is the Afford Anything podcast. Make sure you hit subscribe or follow in whatever app you're using to listen to this episode so that that way I can catch you. in the next episode. See you there. Hey, my lawyer says I'm supposed to give you a disclaimer. So here we go. This is for entertainment purposes only. Nothing that you hear on here is intended to be advice. And before you make any moves, talk to a real professional, talk to a tax professional, talk to an attorney, talk to a licensed financial advisor, talk to people who actually have credentials and who know what they're doing,

because that is not us. Please do not think of us as experts. or professionals, we are not licensed in any way. We are just random people with access to the internet. So just imagine that you're listening to a comedy show. Imagine that this is the least funny comedy show that you've ever heard. It's purely entertainment. Don't make any moves without checking with the pros. All right, you've been warned.

Check, check, check, check, check. Say check, check, check, check, check, check, check, check, check, please. Waiter, check, please.