Afford Anything - Ask Paula: Should I Buy a Nice Car or Save My Money?

Episode Date: January 14, 2019

#172: Should a 25-year-old homeowner with healthy savings and no debt (other than his mortgage) upgrade his car? Should he make this choice if his current car is fine, and upgrading puts him into new debt? Should a couple without access to an employer-sponsored retirement plan put their savings into a taxable account, or should they save for a downpayment on a rental property? The market is fluctuating like mad; if someone has a lump-sum of cash, should they invest it now or should they slowly meter it in? Should someone without an emergency fund enroll in an HSA-qualified health insurance plan? Or should they stick with a plan that has a smaller deductible? How should a husband-and-wife team that’s self-employed and running a company together handle their health insurance? Former financial planner Joe Saul-Sehy and I answer these five questions on today’s podcast. Enjoy! For more information, visit the show notes at https://affordanything.com/episode172  Learn more about your ad choices. Visit podcastchoices.com/adchoices

You can afford anything but not everything. Every decision that you make is a tradeoff against something else. And that's true, not just for your money, but also your time, your focus, your energy, your attention, anything in your life that's a scarce or limited resource. And so the questions become twofold. Number one, what matters most to you? And number two, how do you align your daily decisions to reflect those priorities? Answering these two questions is a lifetime practice. That's what this podcast is here to explore.

My name is Paula Pant. I am the host of the Afford Anything podcast. Every other week, we answer questions that come from you, the community. And today, former financial planner Joe Saul See High is here to answer those questions with me. Hey, Joe. Paula, how are you? I'm awesome. How are you? Well, we just moved. My mom moved the basement to Detroit. So I had to move to Detroit also. And my feet are cold. For people who are wondering what that's a reference to, Joe is the host of a podcast called Stacking Benjamin's. The schick on Stacking Benjamin's is. the claim that the whole thing gets broadcasted. What do you mean claim? What are you talking about? Joe claims he broadcasts his show out of his mom's basement. Paula is always on my dad's shortwave when she's on her show every Friday, so she has no idea.

But yes, you have to come visit. Mom says hi. And it's a good time. Well, schicks aside, and speaking of living in places like Detroit that have cold winters, That leads perfectly to our first question, which comes from Miles. Hey, Paul, I'm a huge fan of the show. Thanks for all that you do. I recently, about a year ago, got interested in financial independence and retiring early through listening to your podcast and reading your blog and also the Stacking Benjamin's podcast. My question today is around the timing of when or should I buy a new car or whether to lease one.

I'm currently 25 years old and I have a net worth of about $50,000. I currently live in a condo that I own with my girlfriend. My annual salary is about $60,000 after a recent promotion and I have no debt right now. My car, my current car, is about seven years old with about 85,000 miles on it. And there's nothing mechanically wrong right now with the car. and it probably has a value of about $4,000. The reason I want a new car is my current car is a front wheel drive manual transmission in Minnesota. And with the snow that we have here, I'm interested in getting an all-wheel drive,

and I'm also excited to move on from a manual transmission. Sitting in traffic with a manual isn't that fun. With the goal of retiring early, however, I'm a little bit concerned. about how this affects the long-term plans. And since nothing's wrong with my car right now, I'm a little bit hesitant to get a new car unless I need to. Do you have any advice on buying a new car or leasing and how it affects long-term goals?

And also any general rules of thumb that you use as far as a monthly payment on a car in comparison to your salary. Thanks a lot. I love the show again and look forward to hearing the answer. Thanks. First of all, congratulations on everything that you've achieved. To be earning $60,000 at the age of 25 is incredibly impressive. And to also own a condo and be debt-free other than your mortgage, presumably. You are doing fantastic.

You're starting life on a really strong footing. Do not take a massive step backwards by leasing a car or buying a new car. When you talk about the reasons why you want to get rid of your current car, what I hear is that you have no problem with the car itself, the engine, the transmission, like the mechanicals of it are all fine. What you want is something that is better able to hold up in snow and ice conditions and also preferably something that's not a stick shift. So you've got a couple of choices. You can either put snow tires on your current car and put chains on your current car and make it better able to hold up in snow and ice conditions. Or if you really want to get rid of a manual transmission and go to an automatic, what I did was I went to the Minneapolis Craigslist page and I looked up cars for sale and I set the price parameters to be between $3,000 to $5,000. And at that price point with a $5,000 limit, there's a bunch of stuff that you can get.

Here's a 2006 Honda CRV, all-wheel drive, that you can buy for $4495. It's in Maplewood. Here's a 2003 Toyota Four Runner. You can also get that for Jashaya $5,000. 2003 Subaru Forrester. That one is a manual transmission, so it wouldn't solve that problem. But it's $37.50, right? So there are a lot of cars that you can find if you truly do want to.

all-wheel-drive vehicle. There are a lot of cars that you can find for under the $5,000 price point, which means that you could sell your current car, use the proceeds to buy a different car for $5,000 or less, and then you'll have all-wheel drive, and depending on the car that you pick out, could also have a car that's not a stick shift without putting any additional money into this purchase. When you say new car in your voicemail, I'm going to assume that what you meant was new to you, meaning a different car, because there's absolutely no reason ever to buy a brand new car. And really, with snow tires and chains, I think you'll see a lot of benefit there if you're not using those already. Yeah, I lived in Colorado for eight years, and snow tires

were what got me through. Well, either that or just the phrase, yeha, as you're sliding around, that tends to go a long way, too. No, seriously, what's funny, Miles, is that I'm going through a similar process. I bought a $5,000 car, and we can even talk about how I went through that process of purchasing a car. I do think there's a reason to buy a brand new car, and that's if that's your primary goal. If your goals don't want a new car, I mean, hey, that's great. There's people that really want the brand new, brand new car. But generally speaking, from a financial standpoint, I totally agree with Paula, a new to you car is a much better, much better option because even the dude who sold me my car, Paula, who worked at a car dealer. And we can talk about why I went to a car dealer

instead of buying from an individual. I generally think buying from an individual is a better idea for most people. Buying from a car dealer was actually better for me because of what I know and what I don't know. The dude who sold it to me who worked at a car dealership said, yeah, I'd never buy a brand new car. Never ever buy. We were deep into the process of me buying it. I just signed on the dotted line and we were just talking about it. Now, he also went on and on about how great leasing is. And I totally agree with our friend Clark Howard on that one, which is if you're leasing a car, you're just asking to lose money in most cases. There's a few types of people I think leasing a car makes a lot of sense for, but it's a sliver of the population. So for most people, a leasing a car is an

absolutely horrible option. With leasing, you get the worst of both worlds. You're paying that appreciation for somebody else and you don't even own it at the end. Yeah, you know, for miles, financial independence is important. What's important for me right now in my life are two things. I really want to remodel the house that we purchased in Detroit with current funds and not with investments. And I also want to travel a bunch. So those are the two things that I want out of my life right now. A car is not something that's super important to me. Don't get me wrong, a really cool car would be nice. But when I'm balancing out my goals, it's thing number 37. So for me, buying a Saturday. view with 145,000 miles already on it was the perfect choice. And I paid 5,000 bucks for that. What year is it? And it's fantastic. It's a 10-year-old car. It's a 2008. And now there's a few important things to know if you're going to do what I did. And because Paul and I both advocate purchasing older cars, I think it's important to do a few things for homework. So number one, I used sites like Carfax.com, Cars.com. And I chose from cars that they said were a great value.

So these sites will go in and look at the price of the car versus the mileage on it. And they will tell you these cars aren't necessarily a good value. These cars are a very good value. They are priced at X amount of money below what we price the car at based on all the available knowledge that we have. So I let these algorithms work for me. That makes sure that some of the price comparison stuff that I'm going to have to do later, some of the negotiation that I really kind of hate,

that I get rid of as much of that piece as possible. I already want the price to look good ahead of time. Then the second thing is this Carfax report is your best buddy. Because when you look at the Carfax report, you can see the history of a car. And when Paul is looking at these cars and talking about these different cars, the thing going through my head is what type of service record does that car have? Because when you're buying a car like mine with 140,000,

miles on it, there might be some problems with that car. There's a reason why a lot of these cars are priced at $4,000, $5,000, and it's not because they're perfect. So I know I'm buying a car with imperfections and I want to make sure I know what they are. In this particular case, this car that I purchased had a long service record. And it was funny, Paula, when my spouse Cheryl originally looked at the Carfax as we were going through this, she goes, oh my God, it had, you know, huge number of service records. I said, yeah, but look at the service. Two people own this car, and both of them took it in for scheduled maintenance. I know tons of people that never go in when the manufacturer says to go in for scheduled maintenance.

This car I bought had gone in for every single scheduled maintenance, and they changed the oil like clockwork. And it was funny when we actually went out and looked at the car, even the sales guy said, and I actually like the sales guy. He was a good salesman in the way that I thought he was just pretty blunt about, I mean, to the point that he said that he wouldn't buy a new car. And he's on a new car lot in the used car area. He said, he goes, you know, I know I'm a salesman. I'm supposed to say great stuff about cars, but this car drives way more confidently than I thought it would for a $5,000 car as we're driving down the road. Because he's in this massive lot with maybe 200 used cars and he'd never driven it before. And I totally agreed.

But I think it was the fact that I'd already done my homework and I picked a car that had been well maintained and well serviced at a time. So use those sites ahead of time when you go. Now, normally you want to buy from an individual, not from a car dealer, because the car dealer is going to try to upsell you on a bunch of stuff. My car dealer, number one, wanted to sell me an $850 package on top of that $5,000 car for something they called the Family Protection Plan. You know what the Family Protection Plan was? a bunch of baloney, a bunch of wax. And they actually had a car. They had a car in the showroom that showed it with the protection plan and without the protection plan.

And as the guy's walking around the car with me, he's even got a look on his face. And he gets done. He goes, so what do you think? And I know it's because he's required to show me this. And I looked at him and I said, I'm paying $5,000 for this car. Like if I'm walking in here asking for a $5,000 car, I don't expect it to be waxed and buffed and look beautiful. I get it. You get it.

He goes, yeah, I know, but I had to show it. And so then he goes to a service manager to try to take that off. He comes back and he gives me the most salesy thing ever. He sits the piece of paper back down. And now it says $250. Oh, my God. And he slides it across the table at me. And he goes, will you let $250 stand between you and this ride?

And I look back at him and I said, yes. And he goes, okay, I'll see if I can get rid of it. Now, the reason why I would say don't go through any of this. And then there was another one. I won't go into the third one because it was just more of the same. So anyway, to wrap up this soliloquy, the reason I wanted to buy from a dealer was, A, I wanted it to be a dealer certified car because I don't know a lot about engines. I don't know a lot about maintenance.

So I wanted the dealer to sign off on it. And I also had something else in my bag of tricks. I've worked in sales for a long, long time. being a financial planner means selling people on reaching their goals effectively, even if you're a fee-only financial planner, that's what it means. So I know the sales tricks. I'm very comfortable saying no when people gave me the sales trick. So for me, not knowing much about engines and how a car works, but knowing a ton about how

the sales process works, I wanted the dealer. I'd tell most people to do the exact opposite. But it's also know yourself, right? Right. So, Miles, $5,000 car can be a great car. if you do some homework ahead of time. Absolutely. Absolutely. The cheapest car I've ever driven was $400. After that, I graduated up to a car that was worth $1,500. Yeah, you can absolutely get a $5,000

car and not have to worry about setting yourself on a major backward step towards your path to financial independence, since that is your goal. By the way, if you decide not to go to a dealer and you decide to buy privately, what I do is I will, meet with that private party, I'll meet with that individual. And then myself and the seller together will go to a car repair and maintenance shop and I will have the mechanics there do a pre-purchase inspection of that car. And the seller is right there with me. So if something is going to come up, then that seller better disclose it to me because he or she knows the mechanics about to tell me anyway. Yeah, the worst thing you can do is just buy the car without knowing.

what's wrong with it. I knew not only did it have a great service record, I knew that the wheel bearings had recently been replaced. I also knew that the brakes were a little sketchy. So my negotiation wasn't actually on the price. They changed the brake bushings for free as a part of the deal to buy the car. I left the price alone. I'm okay with people making a little bit of money. Everybody has to make some money. I've learned the hard way that being a real jerk to the people on the other side ends up coming back at you. And I think I was very willing to negotiate on that. And so I get a car that has a clean maintenance record and has two known issues already taken care of. I know there's probably going to be more, but that's the cost of driving a, you know, a less expensive vehicle.

Right. It's still net makes sense. When you add up all of the additional costs of repairs and maintenance, it still net makes sense to have a cheaper car. It's certainly a lot cheaper to have a $5,000 car and then put another one or two thousand into it than it is to buy a $20,000 car. Yes, amen. Hey, Joe, by the way, I had a question for you. So you are living in Detroit, Michigan right now, which is a place that gets a lot of snow and ice. Do you feel the need to have all-wheel drive? I don't. It's because I feel like Raidman. I'm a very good driver. I have a lot of experience with driving on ice, long experience of driving on ice when it gets really icy here. I worry much more about the drivers around me than I do about myself. Now, people listening to this are probably going, yeah, overconfident dude.

Yeah, you're the best driver on the road for sure, definitely. But I've not only taking additional driving classes, but snow and ice or something that I've been familiar with all my, even before 16. So for me, no. I'm looking right now at a report from Consumer Reports. So in 2015, Consumer Reports did a big article on whether or not all-wheel drive is necessary for driving in snow and ice conditions. And they set up a 327-acre test center in Connecticut. And here's what they said. Quote, we found that all-wheel drive didn't aid in breaking or certain cornering situations.

Our evaluations conclusively showed that using winter tires matters more than having all-wheel drive in many situations, and that the difference on snow and ice can be significant. And then the Consumer Report's report goes on to say, We realize that swapping and storing tires twice per year is a nuisance, and in places where street plowing is thorough, you can probably get by with all-season tires that are in good condition. All-wheel drive is better than two-wheel drive when it comes to driving on sluble. slick surfaces where you need serious traction to get going, such as a snowy uphill driveway.

But our tests found that all-wheel drive by itself won't help if you're heading too fast towards a sudden sharp curve on a snowy night. That's an important point for people who overestimate the capacity of their all-wheel drive vehicle. Our test track observations lead us to advise that using snow tires provides the best grip and assurance for going, stopping, and cornering no matter what you drive, all-wheel drive, front-wheel drive, or rear drive. And, oh, cool. And the Consumer Reports report goes on to say, and buying winter tires for a front-drive car will cost far less than the several thousand dollar premium you'll pay for all-wheel drive. So, there we go. Outside of the world of opinion and into the quantitative

data gathered by Consumer Reports, we will link to that article in the show notes also. The Show notes are available at afford anything.com slash episode 172. One final thing that I wanted to comment on, you asked about payment plans. The approach that I take is to make a car payment to yourself. So if, let's say, three years from now, you would like to upgrade to a nicer car. Let's say that your goal is not only financial independence, but it is also to drive something nicer than what you're driving right. now. Start making a car payment to yourself and make that car payment to yourself every single month for the next three years or the next four years or five years or however long it takes.

And then when you reach that three or four or five year time mark, you will have enough money to purchase this car in cash. That's the beauty of making a car payment to yourself in advance of buying the car rather than buying the car first and then making the payment to somebody else. Great point, Paula. I used to advocate that all the time when I was a financial planner. It's important just to even supersize that advice. Keep that in a separate account for most people. Keep it in a separate account. So it's like your car fund that's a separate fund so it doesn't get commingled with your emergency fund, with your other goals. I like having separate buckets for different goals. For most people, it helps you visualize the goal and where you stand in relation

that goal. And setting up another account is free. Banks are very willing to set up a separate account for these things. Yeah, absolutely. Sometimes when you have a whole bunch of money that's commingled and piled together into one account, it becomes tempting to just look at that very large number there and think, I've got a bunch of money I can relax. Whereas if you took that same amount of money and you split it up into multiple accounts, each of which are tagged to certain goals or uses, like this is my emergency fund. This is my making a car payment to myself. This is for a big trip that I'm going to take. These are the savings for a future wedding or a future honeymoon. Right. If you start breaking things up in those sorts of ways, then that big lump sum no longer looks big. And then you don't

rest on your laurels thinking that you're done. Yeah. Thank you, Miles, for asking that question. And congratulations on being in such a solid place already. It's only going to to improve from here. We'll come back to this episode after this word from our sponsors. Recently, I had a chance to try HelloFresh, which is a meal kit delivery service. And what I found out that I liked about them is that they send the ingredients for each meal already organized into distinct bags. They don't just send you a box with everything jumbled together. When the box arrives, you pull out individual bags, and inside each bag, you have the ingredients for the meal that you're going to cook that night. So I made a bunch of their recipes, their flatbread

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Our next question comes from anonymous. Hi, Paula. First off, thank you so much for your podcast and blog. I'm a longtime follower and love everything about your show. My partner and I are about to get into the rental real estate market, and I credit our momentum there to you in this show. So thank you. My question today actually isn't about real estate, though.

Well, at least not directly. Here's our situation. I currently work for a small startup. I make a good salary, but there's no 401k or IRA, currently offered to help put money away pre-tax. My husband runs a successful restaurant, and they don't offer a 401k or IRA option currently due to the amount of employees they have and what they'd have to match from a safe harbor standpoint. In both of our cases, we may have access to some kind of pre-tax plans in the future, but probably not for the next year or so. We do max out our Roth IRAs and Vanguard

accounts. We will likely be able to do this for probably another year or two before we meet the cap. And like I mentioned, we're about to close on our first rental. property. My question is this. If in addition to our Roth IRA contributions, we were to set aside the equivalent of maxing out our 401Ks, would we be better off putting that into a taxable account in Vanguard, saving for another rental property down payment, or some combination of the two. I'm personally leaning towards a split between the two, but not sure if I'm missing something from a tax standpoint or otherwise that would be a red flag with this approach. Thanks for everything you do and keep up the amazing work.

anonymous. So you no longer, unfortunately, no longer have tax-advantaged accounts that you can put your savings and investments into. So would it be better to put future savings and investments into a taxable brokerage account? Or would it be better to put it into a savings account for your next down payment? Well, that depends on what your investment goal is. What I hear you asking about is from a tax perspective, what would be better. But you don't. You don't. You don't. You don't. You don't. You don't. You. You don't. You don't. You want to optimize for tax advantages, you want to optimize for choosing the type of investment that's the best fit for you. And once you choose the investment that you want, then you can work backwards to try to tax optimize whatever investment you choose. But pick the investment first and then tax optimize it rather than letting the tax optimization drive the investment choice. So if you want to invest in the equities market or the bond market through Vanguard via a taxable brokerage account, you could certainly do that if that is the type of investment that you want to hold. Or conversely, if what really gets you excited within the world of investments is buying rental properties, then put your money towards a down payment on a rental property. Regardless of which one you choose, choose the investment that you want first.

don't let the tail wag the dog. Yeah, I think what we all want is Bill Gates tax bill. If we could pay a bunch of money in taxes and have Bill Gates' net worth, I think we'd all take it. The frustrating thing about tax shelters in general is they all come with caveats. There's always some price that we have to pay, and that's generally paid in terms of the timing in which we can get that money out. So if we begin with the end of mine and we start with the goal, we work backwards, than choosing the appropriate tax shelter is much easier.

You know, depending on your income stream, even though you said your husband's restaurant is very successful, he may not show a lot of income directly to him. If he doesn't show a lot of income on his taxes directly to him, you may still be eligible for deductible IRAs. If you decide that that's right for you, you also because of the fact that you don't have programs at either one of your workplaces,

Even if one of you did, by the way, depending on your income stream, you still might be eligible for a deductible IRA. On the other side, there also are income limitations to a Roth IRA. And even though you don't get a tax break today, you might be able to put money in a tax shelter in the Roth IRA as well. There are some complicated plans that your husband might be able to use at his work that are only for executives. So when he talks about the sheer number of employees and what they would have to do to meet the safe harbor rules around a 401k might be able to do that. I'll tell you, those are all complicated. They usually involve permanent insurance products. So unless you really, really know what you're doing and you're working with a certified advisor in that area and you understand how complicated it is,

I don't know that I would go, I would go that route. A lot of times, Paula, people will use those type of plans once they've already maxed out a bunch of other plans that are in place. And they still need to shovel more money away. So a small, small sliver the people those usually work for, but depending on his income stream and his specific needs around the restaurant, I may even look into that and dig deeper. I think going into those even more than I have already is well beyond the scope of the show. So I don't think we need to bore 99.9% of the people about how those work. But I will say this. There are also things that you can do, that your husband may be able to do with regard to a retirement plan that might be more helpful than he thinks.

You know, it's been shown that if you help your employees feel much more certain about their, about their future than they are now, that they can devote more time and attention to the workplace. So I know that restaurants are generally high turnover places. I know that with a 401k plan, you can sometimes make it so that there's a certain amount of time. A person has to work there before they're eligible for these programs. So you can help the people that have given some time to the business and exclude people who are just coming and going frequently that you really, you know, they're not really helping you. So you don't really need to help them. And then your family gets more of what you want.

And at the same time, the restaurant employees have this benefit they didn't have before. And it's a competitive advantage for his restaurant. So I think sometimes, and I'm not saying this is you because I don't know anything about this particular business, but I think a lot of times business owners are much more short-term and obvious about the books and about benefits, when if you look a little bit more long-term and not so obvious, everybody wins far more than they think might be possible. So there may be an opportunity there at the restaurant where you think that there is. And I would talk to somebody who's well-versed in retirement plans and retirement planning about that. generally speaking, I like advisors who are certified by this gentleman who many of us have heard of and have seen before on TV and all over the place, Ed Slot.

If somebody's gone through Ed Slot certification, I think that's a mark of at least they know a lot about what they're talking about when it comes to tax rules and retirement plans when it comes to tax planning. I'd look at Ed Slott's list of advisors. The restaurant might also be eligible to set up a simple IRA, which is a type of retirement plan, a different from a 401K, that according to IRS rules, employees who have received at least $5,000 in compensation for at least two years and who plan on earning reasonably at least that much in the third year. That's the minimum eligibility that the IRS requires for an employee covered by a workplace simple IRA plan to be able to participate in that. And so that might be, and you would want to double check this with a financial advisor, just depending on the structure of your business. I don't know exactly how that restaurant is structured, but there's a possibility that the restaurant might be able to set up a simple IRA, which you could do through Vanguard. It would be very inexpensive and it would already screen out people who haven't worked at that restaurant for at least two years. But to go back to your original question, when you choose where you're going to invest, pick the investment that you want to be in.

Pick the investment that becomes that piece of the portfolio that you are trying to build. And once you make the decision on what that desired investment is, then you can look at that and say, all right, well, how you're do I make the most of any possible tax benefits I could get from this? But tax benefits are always secondary. They should never drive your decision making. And I think this is where a lot of people get it wrong. And I think part of this is the media. You and I read a bunch of financial pieces all the time. And you read, you know, the 10 places you should invest in 2019, the hottest investments of this year. And you find people start chasing hot investments, Paula, because we don't do what we should do, which is begin with our goal and work backward. Begin with your goal and work backward. The beginning with your

goal and work backward, there is a right investment for 2019. It's going to be different for Paula than it will be for me, specifically because of the fact that we have different goals. And what's cool about that, by the way, about avoiding those articles, about avoiding what's hot today is that instead of then having to examine this huge world of all kinds of different investments and tech strategies and decide which one's best, if we start with the goal, we have a certain time frame in mind, which a certain tech strategy is. best for and we can focus on becoming an expert at this little tiny area instead of trying to know a little bit about everything and we can go much much deeper which is going to make us a more

powerful investor and I really love that it just makes the you know I won't say I'm lazy but I don't want to do a bunch of work that I'm not going to use right away right and if I'm in with the end of mind the only work I have to do is the work that's going to impact my life today and that's the important work so just do the important work and let the rest go away And the way you do that is this intentionality with your investments of when am I going to spend the money and work from there. You know what's a perfect example of that? And I don't want this to, of course, turn into a real estate conversation. So very briefly in just a couple of minutes, I'll explain what exactly what popped into my mind, Joe, as I heard you talk, is in the world of real estate investing, there are all of these different strategies. There's buy and hold. There's flipping houses. There's buying tax liens. There's wholesaling. And you could look at that and say, which one of these might have the high. returns or which one of these might have the biggest tax advantages, right? You could approach that menu of options with those questions, but I believe those would be the wrong questions.

The correct question is, what am I hoping to create from my investments? And based on that, you decide which of these many strategies you are going to choose for yourself. And so the reason that I am specifically and only a buy and hold real estate investor, I don't flip, I don't wholesale. I don't buy tax liens. And it's not because I believe that they are, quote, unquote, better or worse in terms of either total returns or tax optimization. It's not for any of those reasons at all. It's because the passive income generated from a long-term buy-and-hold rental is specific to my goals. I want passive income specifically. And flipping houses is not going to give me passive income. So that's the reason that I chose that strategy. It's not because of

optimizing for what the headlines say that I should optimize for. It's not because it's hot. It's not because it's low tax. It's not any of those. It's optimized for my life. It's not because you watch Property Brothers. I've never seen Property Brothers, actually. There's my point right there. Oh. By the way, Joe, with regard to what you were saying about the best investments in 2019 and the way in which a person should invest in the year 2019, particularly given the fluctuations that have been happening in the broad market recently, that leads perfectly to our next question, which comes from Jared. Hey, Paula, this is Jared from Utah.

First of all, I wanted to thank you for the one-on-one coaching session that we did a few months ago. I really appreciate you taking the time out of your schedule to answer all the questions that I have. It really helped me to get an idea as far as the direction that I wanted to go with my investing. I also have completed all of your episodes. Finally, I went back from day one, and I did not want to be redundant in asking any type of questions. And so I decided to go back and listen to all your episodes, and I've loved every single one. It's been some really good insight and some really good ideas. My question I have for you today is I went ahead and open up my Vanguard Roth IRA account,

and I will be maxing that out at the $5,500 a year. To keep things simple, I went ahead and bought the 2045 retirement V-T-I-V-X fund. Again, just to keep it simple, everything above and beyond the $5,500, I open up an individual taxable account, and then I will be making contributions to that as well. In that account, I bought VTSAX. This is where my question comes in. I'm not trying to get caught up in all the noise of the market fluctuation here lately. At the same time, I just wanted to,

find out what your thoughts are as far as making monthly contributions or lump sum contributions. I know you answered this question about maybe a year or so ago, but I'm just curious based off of the fluctuation in today's market, what your thoughts are on which makes more sense. Again, I love the podcast. I appreciate all your help and the motivation and keep up the good work. Thanks, Paula. Jared, thanks for the question. If you don't mind, Paula, I'm going to jump right in.

in here. Go for it. You know, it's funny because when I was a financial planner for 16 years, this was probably the most often asked question when people had a lump sum of money. I could put it in all at once. I could dollar cost average in, put a little bit in every month and make it that way. Dollar cost averaging makes it so that it's going to be a little less volatile. The way it works is you break up that $5,500 into 12, let's say, equal payments throughout the year. And if the market goes down, you're going to buy some today because you don't know where the market's going. And as it goes down, you'll buy shares at a cheaper price later. Then when it comes back up, instead of if you'd purchased all at once, you actually might make some money off the fluctuation, which would be pretty

cool, right? You avoid some of this downturn. The problem is this, is that the market goes up roughly 70% of the time, depending on the time period that we look at. But over long periods of time, about 70% of the time, it's going to go up. And frankly, if you're investing in the stock market, you should be investing for a time frame that's 10 years or over. And if that's the case, there have been very, very few times over 10-year periods of time where you've lost money. So if you're investing for the long term and you're looking at odds, really when we're looking at risk, we're looking at odds, right? What's the odds that this is a bad move? If you're looking long term, the odds that it's a bad move to put it in right now is very, very low.

The odds are that you're going to be way ahead and you don't have to play any games by putting it all in today. The thing that Jared worries about is actually something different than risk. It's actually uncertainty. And uncertainty is a thing that really scares the heck out of us because uncertainty is the stuff where we don't know the odds. We have no idea what the odds are. The reason I want to discern between these two concepts, Paula, is because of the fact that there is a lot of uncertainty in the market right now, not necessarily a lot of risk. When we look at the economic numbers, the job reports look phenomenal.

Inflation looks low, which is why the Federal Reserve has been raising interest rates. The Federal Reserve doesn't raise interest rates when the economy looks horrible. They raise interest rates when the economy is doing well so they can reload their ammunition so that if things get bad in the future, they can protect the economy. They've been raising rates. So economic conditions actually look pretty darn good right now. But there's a lot of uncertainty around trade war with China. There's a lot of uncertainty around a government shut down.

There's a lot of uncertainty in a lot of different places right now. So because of that, the stock market, and nobody knows why the stock market does anything. I don't know why the stock market's acting the way it is right now. But I think it has a lot to do with uncertainty in the market. And people really don't know what's going to happen next in terms of, of the new cycle, we don't know what's going to happen next. So I think there's a lot of that short-term bumpiness. So I think what you have to do as an investor is say this, if the market goes up like it does 70% of the time, and I decided to dollar cost average in over the next

12 months, and I lost a ton of money when it comes to my money doubling more quickly into the future, because I decided to hold off and invest it a little at a time instead of all right now, Does that make you more upset than if you put it all in right now? And let's say it went down 40% before it came back and did the right thing. Like which one makes you feel worse? Did you miss the opportunity and miss out on the fact that you lost a bunch of money? And by the way, to do this accurately, look at the amount of time until you needed the money and see what the cost was of maybe losing out on a, let's say the market does 20% this year,

losing out on that first 20% because you went in a little bit at a time instead of going in all at once versus the other. I know when we would go through this using actual numbers with clients, everybody said, well, that's obvious. And then they were split about 50-50, Paula, on which one was the obvious answer to them. It has a lot more to do, I think, with your psychology and reaching your goal than it has to do with the market in general. The safest thing over long periods of time is to put it all in right now. Absolutely. But I think you have to look at yourself first and which one is going to affect your emotions

because your behavior on what you do next is going to be really important. Right. Exactly. There's the mathematical component of the answer and there's the behavioral or emotional component of the answer. Mathematically, the lump sum makes sense. And if you think about it, if you were to not put it in as a lump sum, if you were to hold that lump sum of money and slowly meter it into the market over

time, then essentially what you're doing is you are giving yourself a period of time in which your asset allocation is totally out of whack because you would have a disproportionately high cash allocation during the time in which you're just keeping this bucket of cash that you're slowly feeding into the market. So if you think of it from that perspective, that can help illuminate a little bit as to why metering that out into the market over time is statistically speaking, according to historic performance, a worse decision than putting it in as one big lump sum. Yeah.

But also, Joe, to your point, part of what you were talking about is in some ways the concept of risk of ruin. In the world of poker, there's this notion called risk of ruin, and that is how much volatility can you withstand, how low, can the chips fall before you are wiped out of the game? And when we take that concept and apply it to the world of stock investing, there are two ways to look at that. There's the numerical risk of ruin. How much loss can you numerically afford to withstand? That's one aspect of risk of ruin. But the other aspect of it is that emotional component. If you invest in something and the investment drops 40%, will you be so emotionally ruined by it that that that, adversely affects your future behavior. That's another way of viewing that concept of risk of ruin. Yeah, because the bad thing that happens in my experience is that once you blow up your strategy and you decide, you know what, I'm pulling all my money out or I'm doing something that is,

well, and actually that's the big one. There really aren't other ones. It's, you know what, I've had enough. I pull my money out. The second you blow up your strategy and you move to cash because you think, think that you can maybe predict where the market's going to go or you predict that it's going to go down more, you predict it's going to come up or whatever you're predicting. Once you get into that game, studies show that you are going to continue to wreck your plan.

You're going to wreck it over and over and over and over again. So the key is not to wreck it the first time. And if emotionally you can't take putting it all in at once, it's about knowing yourself. I'd much rather have you put it in a little bit of time, Jared, over a 12-month period, then get six months into your plan and blow it up. Absolutely. Oh, and by the way, the IRA contribution limit in 2019 is $6,000, not $5,500. Yeah, extra 500 this year.

500 more in IRA contributions, just listening to afford anything. You're welcome. I take credit for all good IRS decisions. Absolutely. Well, Jared didn't know. He heard it here first. So you should take credit. If he had been smart enough to listen to this show, he would have never known.

Oh, you're well. Breaking news. Jared heard it here first. But Jared, one of the key takeaways that I want to leave you with is that, yes, the market is volatile right now. Yes, it has been fluctuating right now. This is no different than any other point during our lifetimes, any other point in the last 100 years when the market has occasionally fluctuated. And so the rules are the same as they always were because they're not. rules that are dependent on what's happening in the market, they are more principles that withstand

the test of time. That's so funny. I did media for American Express and AmeriPrize for a decade. And then, you know, obviously we have our podcasts now. I get to hang out here with you. And Jared's question, the same question for what, 25 years. Is market condition X today? should I put money in slowly because of that condition or should I put it all in at once?

And it's funny as I'm listening to you talk about that, Paula, in every single one of those instances, all of those market conditions looking at it from afar now, it would have been a better idea to put it in at once. Yeah. And that's, by the way, is no guarantee it's going to continue. But certainly, especially when it come, when you look at economics and how businesses make money and how the stock market actually is a reflection over long periods of time of the valuation of the business, then it has to continue or we're all in trouble.

And with that cheerful note, we'll go to our next question, which comes from Anonymous. But first, before we get there, we're going to take a break for this word from our sponsors. If you're an entrepreneur who sells physical items, I think you're going to really like Ship Station. When you're selling online, you know that getting your orders out the door, quickly can be really difficult. Shipstation.com is a fast, easy way to manage and ship your orders from one place. And the thing that I think is really cool about them is that they give you access to discounts, big discounts, the kinds that big companies get.

You as a solopreneur or as a small business can get those same types of discounts. You can create shipping labels for all the top carriers like UPS, FedEx, the U.S. Postal Service, and you can manage all of your orders from one simple interface that you can look at on any device, even your cell phone. What's one of the reasons that ShipStation is the number one choice of online sellers? Right now you can try ShipStation free for 30 days and get an extra month free if you use promo code Paula. So don't wait, go to ShipStation.com.

Before you do anything else, click on the microphone at the top of the homepage and type in Paula, P-A-U-L-A-U-L-A. That's shipstation.com, interpala. Shipstation. Make ship happen. Do you remember starting your own small business or starting to work for yourself for the first time? It was tough. You had to take care of a lot of things. And you've been pretty busy ever since. So let FreshBooks handle your invoicing.

FreshBooks is a cloud-based invoicing and accounting software, designed specifically for small business owners. It's simple, it's intuitive, and it keeps you way more organized than keeping a shoebox of crumpled receipts and trying to manually enter everything on a spreadsheet. I've tried that. It doesn't go well. You can create and send professional-looking invoices in 30 seconds, and you can get them paid two times faster through the automated online payment feature that Fresh Books offers. You can also file expenses even quicker and keep everything perfectly organized for tax time. And the best part is that FreshBooks grows alongside your business. So you'll always have the tools that you need when you need them

without needing to learn the ins and outs of accounting. Join the 24 million people who have used FreshBooks. Give it a try for free for 30 days with no catch and no credit card required. Go to FreshBooks.com slash Paula to get started. And when they ask how did you hear about us, type in Afford Anything. Again, to try them free for 30 days, go to get started. to freshbooks.com slash Paula, P-A-U-L-A. And when they ask, how did you hear about us? Enter, afford anything. Our next question comes from Anonymous. Hi, Paula. I am calling with a question

about open enrollment. So for the first time in my career, I have access to an HSA plan, which potentially I'm very excited about. I'm in my late 20s. And if I do choose an HSA plan, my employer will also contribute $500 to my HSA. The only thing is that I take a medication every month that would cost about $100 a month. However, I found a coupon that I can use through an app that will make my medication down to $30 a month. Besides that, I'm really healthy, don't really have any other chronic health conditions. Again, I'm in my late 20s and take really good care of myself. The only thing also is that I have a pretty low savings amount right now in terms of my emergency savings. It's around $500 to $1,000. I should be able to build it up soon because I've had some recent changes in my income and that's definitely my biggest

priority area. And then I'm also actively paying off about $8,000 of debt that I have. So in terms of my debt and my low savings, I am hoping that that will change very fast. But I just wanted to see if you have any thoughts about how to reduce my risk if I were to choose an HSA plan and a high deductible plan over a traditional health care plan. Thank you so much. Anonymous, that's a fantastic question. First of all, congratulations on being so attentive to your finances and on taking the steps right now that's going to set you up for an amazing future. Now, with regard to this HSA, as you mentioned, if you get an HSA, your employer will contribute $500 per year into this HSA. And this medication that you take with a coupon will cost $30 a month, which is $360 a year. So the employer

contribution to your HSA will cover the cost of that medication plus leave you with an additional 140 in there. One thing that I will say as a bit of an asterisk here is make sure that the pharmacy that you go to or any pharmacy that you could go to reasonably will accept that coupon because there are times that I know myself personally I have carried a coupon into a pharmacy to try to pay for a prescription drug and the pharmacist has said no sorry we don't accept that. I mean the best way to verify it is to call in or to even go into the pharmacy, show them the coupon, show them your insurance card and say, hey, are you willing to accept this? you know, you don't necessarily need to be filling a prescription right then, but just have a conversation with them and see if, double check to make sure that that coupon would be accepted.

But assuming that it will be, then that cost of that medication is covered, and that means that you can then focus on building additional savings, both specifically in your HSA, as well as as a greater emergency fund. I'm not as gung-ho about the HSA as you are. Well, because of a few things. Number one is I know that in the past I've had coupons. I know that as manufacturers get what they want from sales of a particular drug, particular thing, those coupons begin to go away. And so we have to think about the coupon today, but also the fact that there might not be a coupon in the future. Also, for me, the primary reason to have an HSA is to build long-term savings.

and if she has an illness that requires X drug today and may need it in the future, then I think that your ability to build that long-term savings in an HSA becomes a lot less attractive. So then it comes down to, for me, looking at then, the two plans side by side and seeing, and I think you covered this already, Paula, but with that $500 subsets, what do I get from both plans? And it seems to me that for people that aren't going to build long-term savings because she wants to pay down the debt, build her cash reserve,

and she has these other priorities that in a lot of cases, going with the traditional plan may be the safer way to go for today. Now, the cool thing about going that way, if she doesn't go with the HSA, open enrollments occur every year. And what's neat is that she could do the safe thing today. And as she gets the debt paid down and she gets her emergency fund in place, then she switches over to the HSA. And then I'm not as worried about it at that point because then her ability to use the HSA for the reason that we get really excited about it becomes much more apparent and on the table right now. So, and by the way, and this is for me, it comes down to the way I evaluate insurance in general.

And I see people a lot of the time can't really afford car insurance the way that they need it or homeowners the way they need it because they have other priorities. So you know what they do? They get rid of it. And the bad news is those are the people that need it the most. It's once you get that cash reserve in place the way that you wanted that emergency fund and you're able to handle these things that insurance is handle for you, then you can start dropping some of those coverage levels. And so it almost is a case of the rich get richer. Like as you build wealth, it becomes easier to build wealth because now I can get rid of some of the car insurance features that cover me when I don't have a cash reserve. I can make those deductibles bigger.

I can worry less about what happens if a bad thing happens to me tomorrow, the next day or the day after it. So for me, I would still compare the two plans side by side, but I'm betting it probably is a safer option for her today to not do the age. HSA and to consider it a year or two from now. Wow. And I have the totally opposite perspective. My perspective is given that she's healthy, given that her only predicted medical need is this $30 a month payment, which would be subsidized by the contribution that her employer makes, she might as well take that $500 contribution, use it to cover the cost of that prescription over the course of the next year, and then use the HSA to be able to accelerate the building of her savings. I think it still depends, though. I think you still have to compare the plans side by side. Yeah, that's true. The missing piece of information that we don't have is what is the size of the deductible and what is the amount of the premium in the HSA versus non-HSA plan.

Yeah. What do you actually get with these two plans is the piece that I think is really important here. Yeah, but part of the reason that I like HSAs generally is because, number one, they have maximum tax advantages. And of course, the tax advantage should never be your reason for making the decision. But one benefit of HSAs is that you get a tax advantage both going in and coming out. So that income is tax deferred when you put it in. And you spend it without paying taxes on it when you pull it out and spend it on a qualified medical expense. But think about this. If she doesn't have the expense in the first place because it's already covered, it's irrelevant.

Well, if she doesn't have the expense in the first place immediately, she could still have that expense down the road. Right. So 10 years from now, she could have a major medical expense. for which she can then pull accumulated savings out of her HSA. But that assumes that she's going to be able to let the money sit there and build and with these other priorities. I don't know that it would make sense to sit that money there and build while she's paying, you know, what's the average interest rate on a credit card here, 18%.

I mean, she might be sitting money in an HSA, not earning much to build for expenses down the road when she's sitting on an 18% credit card payment. Yeah, I suppose, and I like that, Joe, you and I have different opinions because I think this adds more context and color to the answer that she's hearing. The reason that I like in HSA, even in her case, is because it allows her to build an emergency fund, and specifically an emergency fund that is health-related. And I think that there's, even when you do have debt, building a small emergency fund, not, I'm not talking anything as drastic as six months of your living expenses, that can come later. But building a small emergency fund that will get you through a ride in an ambulance, a trip to the ER, or a sudden job loss, I think there can be a lot of value in that. And so, but yeah, again, the missing piece is what's the cost difference between premiums? I mean.

No, but before we get too far off that, I totally agree with you there. The nice thing about the HSA is that it's a forced emergency fund. And a lot of people feel the emergency of debt repayment. So they put every last dollar toward the debt repayment. And then because they have no cash, the next time something bad happens, they have to go right back into debt. And the key is to break the cycle. And the only two ways to break the cycle are to never have anything bad happen or to figure out a fund to make sure that when it inevitably does happen, that you have an alternative place to go to for cash. So an HSA in this way that you're talking about could be a force.

savings plan to make sure that you've got that alternative cash available for health care. Absolutely. But what if it's already covered, Paula? Because the other plan is so good. I think the thing, though, is that she doesn't seem to have a high likelihood of having any other major medical expense this year. Now, it's always true that an unplanned medical expense, a catastrophe could happen. She could get hit by a car.

She could get a sudden diagnosis. That's always true. and that's why it's important to have insurance. But she's young, she's healthy. There's a high likelihood that she's not going to have any significant medical expenses this year other than that one prescription that's $30 a month. So thank you so much for asking that question.

Hi, Paula. I'm a fan of Afford Anything and appreciate your thought leadership to the fire community. I have a question about how to manage health care expenses as an entrepreneur. now that the health insurance I used to get as an employee is gone. Here's my situation. My husband and I are taking the plunge and starting our first business together.

It's an LLC, and we currently do not plan to hire employees. I recently quit my corporate job and my husband plans to do so soon. We're in our late 20s and early 30s and are generally healthy. What insurance should self-employed people like us get? what are the pros and cons of various healthcare options for us? Thank you so much for your help. First of all, congratulations on starting an LLC and on quitting your job and having him be close to quitting his job as well. In terms of buying health insurance, you can go to health care.gov or you can go to a private third-party website that looks at insurance policies, such as policygenius.com.

Now go on those sites and look at what the options are that are available to you because depending on what state you live in, you're going to have different types of health care plans in each state. So before we can talk about what factors should I consider in terms of the premium, the deductible, the out-of-pocket annual maximum, the co-pay that's involved. Before we talk about how to weigh all of those variables against one another, the first thing that we have to start with is what options are each. even on the table. What's on the menu? And the only way that you'll be able to find that out is if you go to a website like PolicyGenius or Healthcare.gov and take a look at the plans that are out there that you qualify for. When you go to health care.gov, your experience is going to vary because, and this has been shown over and over and over in studies, if you live in a state where the politicians have been trying to get rid of what's commonly called Obamacare,

what you'll find is the policies that are available there are few and far between, and they're not very attractive. And that is on purpose, by the way. On the other side, they're not necessarily phenomenal on states where the politicians really want it to be fantastic, but it certainly will usually give you, in most states, will give you a much bigger range of options there. I'll also warn you that talking just to many of our listeners, when you go on some states to health care.com, gov, you get on some horrific lists. Oh, my goodness, I can tell you all about that. They will call your phone over and over and over from multiple numbers. So you can't block them. It's terrible. And they'll call at seven in the effing morning. It is absolutely a nightmare. So I would know about

that first. Yeah, that's why I like policy genius. And in full disclosure, they are a sponsor of this podcast, but at least they don't call you a bajillion times. Now, I want to make a couple of other clarifications here as well. There is a period of time called open enrollment in which a person can change their health care plan. And so many people mistakenly have the impression that the open enrollment period, which happens at the end of a calendar year,

is the only time that they can enroll in a new health care plan or change the current plan that they're in. However, if you have what is considered a significant life event, such as moving to a new state, losing health care coverage from an employer, getting married, getting a divorce. If you have a significant life event like that, you can enroll in health care coverage outside of the open enrollment period, which makes sense, right? Because health care is so state-specific that it absolutely make sense that if you move from Utah to Nevada in the middle of the year, you shouldn't have

to be stuck with a plan that is optimized for residents of the state of Utah. So when those significant life events happen, and it sounds like that's about to happen to you because you're about to lose your health care coverage, then you will be eligible to enroll in a new plan, regardless of what time of year it is. Great point. Final thing that I'll say here is that depending on the type of business that you're running, you may also want to look into getting business insurance. For example, depending on the type of business that you're running, you may need errors and omission insurance. That is a conversation that you should have with an insurance agent because the type of insurance that would be best for your particular

business depends on the specifics of what your business does and who it serves. So there's There's no blanket one-size-fits-all answer with regard to, oh, you're starting a business. You absolutely need X. But chat with an insurance agent and see what type of insurance he or she might recommend. Some type of umbrella policy or some sort of liability coverage is oftentimes very good to have when you are running a business. Well, that's our show for today. I can't believe it's over. Joe, what are you up to over on your side of the planet?

Well, you know what's cool is we have launched a second podcast a few months ago called Money in the Morning, which is a film live in front of a Facebook studio audience. And I now partner on that show with my good friend, Bobby Rebell. So every other episode you'll see me. Every other episode, you'll see her. I've got the financial planning background. So I kind of dig into the stories that we read online. What's the kind of the advisor take?

And Bobby, having been an anchor and a news reporter, with Reuters, among other business news outlets, talks about from the reporter point of view, what are some of the important questions or what's kind of the angle that we might be missing. So that's every Tuesday, Thursday, Saturday, money in the morning. People can download money in the morning on their favorite podcast playing app. Wherever finer podcasts are distributed. Before we sign off, I've got two announcements, number one. And this is something that I have been working towards for more than a year.

we have released a huge new website redesign for Afford Anything.com. So if you head over to Afford Anything.com right now, you will see a very different looking website than one that you've ever seen before. Please go check it out. Poke around. Check out the articles. Subscribe to the email list. It looks, if I do say so myself, it looks awesome. I love the way that it came out. I've been working with a designer, Will Now Design, Greg and Hannah Willnow. They're a married couple. They very much live this location independent lifestyle design type of a lifestyle. They're a couple of it stays in Airbnbs around the world and they both work remotely online. And the work that they do is redesigning websites. So they handled the redesign of this website, which is perfect because what afford anything.com talks about perfectly lines up with the way that they live.

So it was a very, very good fit. And then I hired a developer named Zach, who also very much lives this lifestyle design life. He is an American who for a long time was based in Chang Mai, working out of there, doing development work out of Chang Mai. Recently, he moved to Portugal, where he's doing the same thing. Both my designer and my developer are living their best lives. And it's really very satisfying to be able to work with a remote team like that and create something incredible, something way better than I could have done if I were just working completely on my own without anybody else on the team. And that's one thing that's really been great about the growth of Afford Anything is the best thing about revenue growth is being able to use that

to hire awesome people. And the new design of the website really highlights what that can accomplish. So go check it out. Affordainthing.com. Greg, by the way, is the same designer who created the design for the course, Your First Rental Property, which I shared a screenshot of what the inside of that course looks like in one of my most recent blog posts. So that is one announcement. My other announcement is that we are hosting the very first financial independence Chautauqua with an all-female speaker lineup. The financial independence Chautauquas, for people who are not familiar with this,

these are events that have been going on for the last six years in which a group of people get together, and historically it's been either in Ecuador or Greece or Portugal or the UK. Those are where the four countries where the Chautauquas have been held so far. And a group of people, usually about 20 to 30 people, including a handful of bloggers and people in the community, get together and talk about financial independence and money and life. And so this year, for the first time ever, we are having a Chautauqua with the very, very first all-female speaker lineup. It is myself, Vicky Robin, who is the author of Your Money or Your Life, and Tanya Hester, who is the blogger behind Our Next Life and the podcaster behind The Fairer Sense

podcast. Both Vicki and Tanya were also previous guests on this show. So the three of us, along with Cheryl Reed, who is the organizer of the conference, will be the speakers at the very first all-female speaker lineup Chautauqua. If you would like to come, I would love to have you there. Everybody is welcome. Absolutely everybody is welcome. And you can sign up at above the cloudsretreats.com. Again, that's above the cloudsretreats.com.

We will link to it in the show notes as well. Thank you so much for tuning in. My name is Paula Pant. This is the Afford Anything podcast. If you enjoyed today's episode, please hit that subscribe button in your favorite podcast playing app so that you will catch all of the upcoming future episodes. Coming up, we have an interview with Dr. Cal Newport. He is the author of a book called Deep Work, and he most recently wrote a book called Digital Minimalism, where he talks about how to apply the minimalist philosophy to your online and digital life, to the apps on your phone, to your use of social media. So we talk about that and we talk about how that relates to the concept of financial independence.

It's a fascinating interview. Cal Newport is incredibly intelligent. I always enjoy speaking with him. So tune in to an upcoming episode where you will be. able to hear that awesome interview. We also have an interview with Paulette Perhatch coming up. Paulette shares a very raw, very emotional story about her life. And, well, I won't give it away. But if you want to hear about the heart of money in life, if you want to hear about the life part of money in life, you'll want to listen to our conversation with Paulette Perhatch. She's a

for the New York Times as well as many other major publications. And we recorded a very heartfelt interview together. So all of that is coming up. Make sure you hit the subscribe button on your favorite podcast playing app so that you will be able to catch all of those awesome upcoming episodes. My name is Paula Pant. This is the Afford Anything podcast. I'll catch you next week. What I did was I went to the Minneapolis.

Stupid microphone won't stay outside. I have to hold it. Put your head through the air like you just don't care.