Afford Anything - Ask Paula: The Three-Year Reunion with J. Money

Episode Date: June 17, 2019

#199: Ashley is paying affordable rent for a home she enjoys, but she feels certain that the real estate market in her local market will stay strong. She’s thinking about buying a home with 3 to 5 percent down, but she doesn’t have much in savings. Should she wait for a year to save more? Or should she take advantage of a rising market and relatively low interest rates? Ian and his girlfriend live together in Washington D.C. and have a combined 40 percent savings rate. He’d like to buy a rental property, but his girlfriend has $18,000 in student loans and is about to re-enroll in school. Should they buy an investment home, or use their cash to repay her loans and cash flow her new academic program? Annette is about to travel to Spain with her family. How can she plan an affordable and high-value international trip? William is concerned about losing his job. What if he can’t pay his bills, especially his new mortgage? How can he protect himself? Anonymous is a renter, and she often encounters surprise fees and charges when she arrives at the lease signing. Can she negotiate with her landlord? I answer these five questions in today’s episode, and I also feature a short interview with special guest J. Money, my former podcast co-host from the early days!! Enjoy! For more information, visit the show notes at https://affordanything.com/episode199  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. It applies to your time, focus, energy, attention, anything in your life that is a scarce or limited resource. And so the questions become twofold. Number one, what's most important to you? And number two, how do you align your daily decisions in accordance? Answering these two questions is a lifetime practice, and that is what this podcast is here to explore. My name's Paula Pan.

I'm the host of the Afford Anything podcast, and today, I am. I'm going to be answering the following questions that come from you, the community. Ashley wants to know if she should buy a home given that she expects that real estate's going to hold its value well, or if she should work on saving a bigger down payment and a bigger emergency fund for that future home. Meanwhile, Ian is wondering about a similar question. His girlfriend has 18,000 in student loans and is about to go back to school, and he's wondering if they should use their cash to cover the student loans plus. cash flow the return to school or if they should buy an investment property. Annette is about to take a

trip to Spain and is wondering if I have any tips. William just bought a property and is concerned about how to protect himself in the event that he loses his job. And Anonymous is a renter in a high cost of living area and wonders if she has any ability to negotiate with her landlord about some of the terms in her lease. Finally, Marcella is moving from South Korea to Texas. She wants to live in a particular school district, but the homes there are expensive. Should she buy or rent? We're going to answer all of these questions in today's episode. Plus, we are going to, in celebration of episode 200, which is coming up next week, we are going to, as the, I guess, episode 199 celebration, feature a short 15 to 20 minute interview with Jay Money, my former

podcast co-host from the early days of this show. So all of that is coming up right now. Let's get started. Our first question is from Ashley. Hey, Paula. I have a question about renting versus buying. My husband and I live in the Atlanta area. We have no debt and a three-month emergency fund. We have a great rental situation that we're paying $10.60 a month with everything included. We are wanting to have our own house and our own space. We've been in this place for about four years, and I know interest rates are rising. So we are debating whether we should when our lease ends in August, save up to put 3 to 5% down on a house that's 250 to 275k,

or sign another year lease and save more cash. Part of me leans towards that because of the safety and security and having more cash and just more money for anything that may happen. But then I know investing in real estate also invest in your future because the area we are in is definitely growing and not a shortage of people coming here. I know if we did buy a house, we would be able to resell it, no problem in a couple years in the area that we're looking. We are investing in our retirement and putting towards that, but I also thought, if we don't buy a house this year, we could invest more into the retirement and not into the house right now by maxing out both individually our Roth IRA raise. any thoughts on pros or cons whether it is better to go ahead, take the risk by the house,

maybe turn it into a rental one day or sell it in a few years, take the equity and invest it into another house that would better suit our needs a little later down the line. We'd love to hear your thoughts or any pros, cons. Give me a few more things to think about. Would appreciate it. Thank you. Ashley, first of all, congratulations on where you're currently living. That's a great fine, 1060 a month. With everything included, you,

obviously like the place because you've been there for four years, so that's awesome. Also, congrats on having no debt and a three-month emergency fund. Super cool. Now, to answer your question, there's a difference between which option you will ultimately decide and the thought process that you use in order to get there. And so what I really want to walk through is how to think about this question. Because there are a couple of red flags that I hear in the way that you're framing this. First, you referred to this as an investment. Buying a personal residence is not an investment. Buying a personal residence is a personal expense.

And now you hope that in the long term, this is a net worth positive decision, and oftentimes it is. But not all net worth positive decisions are investments. Sometimes you might buy a consumer good, which is functionally what a personal residence is, and that personal expenditure happens to be a decision that helps you build wealth.

It's a net worth positive choice, but that's not the same thing as making an investment. So I want to break the idea of a personal home being an investment. To put it this way, what's the cap rate on the house? What's the cash on cash return? What's the net present value, meaning the how do you determine the present value of future dollars? Those questions don't apply to an analysis of a personal residence. And if you're not calculating returns on something, then you're not making an investment. There's no ROI.

Now, that's not to say that you shouldn't buy it. That's simply to, in terms of when we're taking a step back and thinking about how we're thinking, I want to break that association. So that's one thing. The second thing, you mentioned interest rates are going up. That's never a good reason to buy. Again, that's the tail wagging the dog. You buy when you are in a position in which you can buy, both financially and social. emotionally, you know, you buy when you are in the right spot in which to buy. And when you do so,

you try to get the best interest rate possible based on the time and based on what you qualify for. But you don't want to purchase out of turn. You don't want to purchase at the wrong time based on a prediction of what the Federal Reserve might do in six months. Let your own personal financial decisions be reflective of your own personal financial situation. You buy when you want to own a home and you know you'll be in the city for a while and you have enough money to do so and you have no other more pressing competing choices, right? Those are all good reasons to buy a personal residence. But being afraid of the interest rates might go up and hastening to buy something as a result, that's not a sufficient reason to make a big six-figure commitment. Now, to be clear,

I'm not saying that you shouldn't buy. Remember, there's a difference between the result or the outcome and the thought process that we use to get there. So I'm not taking a stance on whether you should or should not buy this property. I'm simply walking through some of the underlying assumptions that you're using as you're thinking through this. And remember also the interest rates are still at historic lows. When you zoom out and you look at decades of history rather than simply the last decade, when you look across, the last 50 years, interest rates are still low. But again, even that, I hesitate to say it because I don't want to over-focus the conversation where it doesn't belong. And when you're thinking about buying a personal residence, the question is whether or not you're ready. The question isn't, might the Fed boost rates by another 50 basis points? So that's the second thing. And then the

third red flag is that you mentioned in your question, you said, I know if we bought a house, we could resell it no problem. I'm going to pause right there because any time you know the future with that level of certainty, that's a red flag. Rule number one of investing is that nobody knows the future. In 2006, everybody knew that housing prices would always go up. In 1996, everybody knew that Blockbuster Video Rental was a video rental chain that could never go out of business and no other company could ever come close.

So I happen to agree with you. I also believe, and when I say believe, I mean, I hope, I predict, that Atlanta housing prices will continue to rise in the coming years. But I do not know that. I do not know anything about the future, and neither does anybody. You know, there's that expression, a fool thinks himself to be wise, yet a wise man knows he is a fool.

Wisdom comes from knowing that we have absolutely, no idea what the future holds. We can make predictions and projections, and those may or may not be correct, but ultimately those are nothing more than fancy guesses. Now, again, by highlighting these red flags, I don't mean to talk you out of purchasing this home. There's that difference between the result and the decision process. I can see how buying a home might be a good choice for you. I can also see how waiting until you cash up a little bit so that you have enough cash buffer, you know, sure, you can come up with a three to five percent down payment, but will you have enough to cover all of the many expenses that come with initial home ownership,

everything from the cost of moving to the cost of needing a lawnmower for the first time, the cost of ordering takeout more often when all of your kitchenware is still packed up, the cost of needing to buy a garden hose and a drill and all the stuff that you suddenly discover that you need when you buy your first home. You need a plunger. Oftentimes the expenses incurred when you purchase a home. It's death by a thousand paper cuts. And so is there an argument to waiting? Sure. Is there also an argument to buying? Sure. But the message that I want to leave is I have some concerns about the way that you framed your question, that decision-making process. Because if the reason that you're buying the home is because you are afraid the interest rates will rise

or because you are absolutely certain about what will happen in the future, then those are not good reasons. So it's not whether you do or don't, it's your reasoning behind it. Thank you, Ashley, for asking that question and best of luck with whichever option you choose. Our next question comes from Ian. Hi, Paula. I'm ready to see if you can give me your thoughts and our framework on how to think about two questions. To give you a bit of context, I'm 29 years old and live with my longtime girlfriend in Washington, D.C. My partner is roughly $23,000 in investments and is contributing to a 401k and a Vanguard Roth IRA.

I've got about $85,000 in investment accounts and contribute to a Roth IRA and an employee 401k account. Collectively, my partner and I make about $170,000 a year as I make about $105,000 and she makes about $65,000. We also have roughly $20,000 to $22,000 in cash and are keeping our living. living expenses low and are saving roughly 40% of our take-home pay. My partner currently has about $18,000 in current student debt, but we'll have to make additional payments for a two-year midwifery graduate school program that will increase her earning potential by about 40%. The cost of the program is roughly $45,000. Given that her current loans interest rate is low, we try almost like an expense to be paid off every month, and if everything goes well, her debt should be forgiven in the

next five years. I'm currently interested in creating a passive income stream by becoming a real estate investor, but also know how great it would feel to finish paying off my partner's $18,000 plus additional $45,000 in the short term. So given all to that, I have two questions for you. First, how would you go about framing whether or not to invest in a rental property versus using the cash on hand and additional earnings to pay off the new cost of school immediately? And second, I've learned how both you and other real estate investors bought, lived in, and then rented the first home you owned. Currently, where I live in with D.C., it's really hard to find a house that is reasonably priced in order to make that strategy a viable one. How would you recommend thinking about adapting it

in a location where housing prices are incredibly high? Alternatively, is it a strategy that I should scrap in order to get into the real estate investing game sooner? I don't want to overthink the process and delay investing in real estate any longer than I need to, and would definitely be open to investing out of state. Thanks, Paul. You're truly amazing and love everything you produce. Ian, that's a great question. First of all, congratulations on that 40% savings rate. That's amazing.

Hey, Steve, can we get a stadium full of cheering fans? To your question about how to frame this question around, should we repay the $18,000 in existing debt plus cash flow the $45,000 new academic program, versus use that money to invest, right? How do we frame this tradeoff? there are three things that I would think about, math, motivation, and behavior. Let's walk through all three of those. Number one, let's start with math.

Now, from a pure mathematical perspective, there might be a pretty strong argument for holding on to the debt that has the low interest rate, the $18,000 low interest rate debt, as well as, if possible, taking out another low interest rate loan for this $45,000 new program. If both of those loans have low enough interest rates, then you could arbitrage the difference between the interest rate on those loans and the returns that you would receive in an alternate investment, such as on a rental property. Of course, the spread would need to be high enough to make that viable. So if we're talking about loans that have an interest rate of 5% versus an investment where you think you would have a total return of 6%, there's really not. not enough of a spread there. But if you have enough of a spread, then mathematically, this option could work out well. Right? This is a way that you could use leverage through

low-interest loans to accelerate your progress. On the other hand, of course, leverage is a lever. It can propel you upwards or push you downwards much more rapidly. The power of leverage works both ways. The way that you are currently framing the 18,000 of existing debt as a monthly bill, I like that framing, right? Because essentially, you are paying attention to cash flow management. Rather than getting sticker shocked by the debt, you're saying, all right, this is what the payment is, this is how big of a space it occupies in our budget, and here's how it fits contextually with the rest of our budget. We can make this payment and still maintain a 40% savings rate on all of our income, right? So that tells me right away that the debt on this low-interest student loan is very manageable, very

reasonable and not necessarily something that from mathematical perspective, you would need to hurry to pay off, both from a debt to income point of view as well as from an interest rate point of view. The cash flow management burden, in other words, is extremely small. So that's the mathematical way of looking at it, but let's look at a couple of other angles as well. And so that leads us to number two, the emotion or the psychology behind this decision, because as you said yourself, it would feel good to have this paid off. And that is valuable. Those feelings should not be dismissed because this can serve as motivation for you to save more than you otherwise would. And so if the motivation to pay this loan off causes you to save more or to accelerate your

progress, that might make it a winning strategy because your contributions are the single biggest determinant of your success. So if repaying the student loan, and cash flowing the new program motivate you to spend less, save more. And if they provide more motivation than the alternate option, which is to save up for some hypothetical investment that's less tangible and less visible and harder to get excited about because there's so much uncertainty about what that would actually be or look like or when it would happen, then lean into that motivation because it'll inspire action. So that is component number two.

It's that motivational or psychological component of it. And then number three, let's talk about other behavioral aspects of this decision, right? Because this is a trade-off. And we're talking about the habit of building assets versus the habit of not relying on debt in order to fund your activities. Now, from what you've described of yourself, it seems. as though you don't have an issue with debt. You have no other debt, from what I understand, you have no car loans, no credit card balances. So it seems as though you have already built the habit of not looking towards debt or relying on debt. And so from that point of view,

I can see there being an argument towards focusing on a rental property because it'll help you develop that habit of building assets. On the other hand, just to give the alternate argument, you do have a habit of contributing to your retirement accounts. You do totally have a habit of building assets. It's not like this investment property is going to be your first asset ever. So which habit are you looking to build? Which habit are you looking to strengthen? That's the third piece of the puzzle that I would ask yourself as you're facing this question. Now to the second part of your question, which is you live in a high cost of living area. Should you house hack locally or should you invest out of state? If you are going to buy locally, then the framework

from which you want to approach this could be this property that I am buying is not an investment per se. It is a personal consumer expense and I'm defraying the costs of that expense through house hacking. So you could look at it almost like a bond rather than a stock, right? So let's say that you're looking at a duplex or a triplex, the property does not meet the 1% rule, but you calculate the total return on the property, meaning the cap rate plus inflation, and that total return is maybe more analogous to a bond return rather than a stock return. I wouldn't be against buying it, but the benefit of buying it is not going to be the investment return in and of itself. The benefit of buying a property like that is, first, the lowering or eliminating of your

own personal housing costs, which enables you to save more so that you can contribute more money towards investments for properties number two, three, four, five, and six. That's one benefit. The other benefit is that house hacking oftentimes helps you overcome the fear and anxiety that many investors typically feel about their first property. The first property is almost always the scariest. And in that regard, you can think of house hacking almost as an apprenticeship or as graduate school. It's not something that you do for the money, but rather for the training.

So I am not against house hacking. And in fact, house hacking is, when it comes to exceptions to the 1% rule, house hacking is in there for exactly the reasons that I just outlined. Of course, the numbers still need to make sense. They can't be too wildly off the mark. But as long as the numbers are reasonable, then a house hack might not be the greatest return on the planet.

it might be the apprenticeship property. And so the operative question, if you decide to house hack or if you're thinking about house hacking, the operative question that I would want you to ask yourself is, am I looking for a fantastic investment or am I looking for a reduction in my personal living costs coupled with a real estate apprenticeship? From a pure investment perspective, you are more likely to get better total returns by investing out of state. But, from a reduction in living expenses perspective, as well as from a training or apprenticeship perspective, you're more likely to have the easiest experience by house hacking locally.

And so if you imagine a continuum, right, imagine that there is a continuum with effort and reward. And so as effort increases, reward increases, investing locally in a high cost of living area will require, in most cases, less effort, but also less monetary reward, even though it has a huge experiential, educational, and psychological reward. Investing out of state is a higher effort undertaking, but it has the potential for much higher monetary rewards. So where on the effort reward spectrum do you want to be? Those are some things

to think about as you're thinking through all of these questions. The should I repay debt versus use the money to invest and also should I invest locally or invest out of state. Thank you for asking that question, Ian. We'll come back to this episode after this word from our sponsors. Would you like to wear shoes that are environmentally responsible, eco-friendly, and super comfortable, plus they look good? Check out Rothies. Rothes creates everyday flats.

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Do you have any discount airlines you love? Are there any you stay away from? Also, how can I tell if a hotel is in a safe area if I am booking online? I am planning a two to three week trip to Spain this June with my husband and five-year-old sun. Our style of travel is quite unstructured. We like to have a general idea of where to go, but nothing planned. We just drive and stop when we see something interesting. In the States and Canada, I use hotwire to book same-day hotels to save money. Do sites like this exist in Europe? My plan is to fly into Barcelona and stay in a pre-booked hotel for the first two to three nights. After that, I want to go wherever the train or a cheap airline takes us, but not pay the high walk.

in price. Is there a way to do this without staying in a hostel, as I assume children are not allowed in them? For some context, I have been to Europe a few times, but I have stayed with family or friends or have been on a more structured trip. Thank you so much for taking the time to answer my questions. I love the podcast to keep up the good work. Hey, Annette. So first of all, enjoy your trip. Now, as far as booking websites for international travel, particularly for places to stay, the usual Airbnb, VRBO, any place that's recommended by the Lonely Planet Guide, those are typically where I look. You'd mentioned last-minute deals for your unstructured travel. So typically for unstructured travel, Airbnb is not an option because hosts like having more advanced notice.

So for unstructured travel, I would stick with hotels or guest houses rather than Airbnb's. For last-minute deals on those, try roomkey, last-minute.com, kayak, hitmunk, laterooms. And also, you mentioned the possibility of staying in hostels. I've seen kids in hostels, in some hostels at least. I distinctly remember seeing families with kids staying at a hostel in Brazil. So check with the hostel because there are probably quite a number of hostels where kids are not only welcome, but commonplace, right? Kids regularly stay there. And then the kids also have other kids that they can meet and play with.

In terms of discount airlines, in Europe, there's EasyJet and Ryanair. Of course, there's Air Asia that gets you from Europe between Europe and Asia. That one's probably my favorite. Also, flights.gov.com is an excellent resource. That's probably one of my favorite comparison sites. It's the one I default to. There is an app called Hotel Tonight that specializes in last minute deals. I have only used the Hotel Tonight app inside of the U.S.

So I don't know if they operate internationally, but they're worth checking out. But beyond that, like really any website, Expedia, Orbitz, TripAdvisor, booking directly through them. I mean, any of them will give you both information and prices and options for various places that you can stay, including last minute deals or same-day bookings. As far as finding out more about the area that the hotel is in, just read the reviews. If it's in a seedy neighborhood, people will say so. So I love that you're planning an unstructured trip. I think that's one of the most fun ways to travel. Have a great time. Enjoy your trip. And thank you so much for your question, Annette. Our next question comes from Anonymous. Hey, Paula, this is Anonymous. First, I just want to say I really appreciate your podcast and all of the information you're sharing.

And I think you really have a gift with communicating complex topics really clearly to people. I have a real estate related question, but more so from the renter's point of view. I am a renter. I'm in a high cost of living area. And one thing I've noticed is that I might agree to rent it. a property. And then when I get the lease, I realize that there's a bunch of extra fees that I didn't anticipate. And it's kind of like foot in the door where I'm sort of like, okay, at this point, I already have kind of agreed to this. It's kind of hard to back out. And I was just wondering,

to what extent do you think renters have the ability to negotiate the terms of the lease? Thanks so much for considering my question. Anonymous, that's a great question. If you haven't signed the lease yet, then you haven't agreed to anything. The deal is never done until the ink is dry. So before you sign the lease, you have a lot of ability to negotiate. Now, once you sign the lease, game over, you've made an agreement. But prior to signing the lease, that's when you can feel free to bring up anything that's on your mind. So a couple of tips. Number one is during showings, just ask the property manager or the landlord, hey, do you have any other fees or any other costs in addition to the rent that I should be aware of. And also ask them, can I review a copy

of the lease? Tell them that you'd like to have a copy of the lease at least 24 hours in advance so that you have time to review it before you come in for the lease signing. That way, you've got a day to read through it, to look over it, to write down any questions that you have. And when you show up for the lease signing, you can show up as a more informed, more prepared renter. It actually reflects pretty well on you because it shows that you're taking the lease signing seriously. There are a lot of renters who don't read the lease, absent-mindedly sign the pages, and then six months or eight months or 12 months into their tenancy, they'll object to some policy. They'll say, hey, you never told me that.

And as a landlord, you're like, yes, I did. It's in the lease. And so the fact that you want to review the lease ahead of time, the fact that you come in with a list of questions, that's going to make you a more attractive renter in the eyes of the landlord and the property manager because it shows that you honor this as a binding legal document and you're taking it with that degree of seriousness. But the long and short of it is when in doubt ask, are there any pet fees? Are there any cleaning deposits that I should be aware of? Do you charge storage fees? Do you charge parking fees? Do you charge a fee for move in or move out? If you're talking to a property manager or a landlord who uses the word deposit,

clarify whether they're referencing a refundable deposit or a non-refundable deposit. Just go in with a list of questions and remember the best and truly the only time to ask is before you sign the lease. Because when you're signing the lease, you are binding yourself to a legal contract. So get everything worked out before you do that. Thank you for asking that question. I think it's awesome that you are taking this so seriously. Honoring the lease is really, that's model tenant, so congratulations. And I'm also really glad that you're looking out for the fees as well, because those things add up.

Paying a fee for keys or for a garage door opener. I mean, those things can add up to a few hundred dollars. So it's good of you to be aware of them at the outset so that you know whether or not you want to rent this place. And if so, you'll know how much to budget for it. Cool. Thank you, Anonymous. Our next question today comes from William. Hi, Paula. Love your podcasts.

I've learned tons. We recently bought our first house with my wife, $200,000 in a mortgage. Our monthly mortgage payment is close to $1,400, very affordable according to our salaries. But I wonder, what if I lose my job and I cannot make the monthly payment? I have some money for emergencies.

But if that emergency extends, I don't want to default to my mortgage. What should I do to protect in these scenarios? Should I buy a mortgage insurance? And if so, what type of insurance that would be? Let me hear your thoughts about it. Thank you very much. William, congratulations on buying your first home. Now, I totally understand the concern about what happens if you lose your job.

All of a sudden, you have this. extremely high monthly bill that you have to pay every single month, and 30 years is a long time in which there will be a lot of ups and downs of life. So how do you protect yourself? I'm going to answer this in two different ways. I'm going to talk about, number one, how to gather money or how to gather savings, and number two, I'm going to talk about where to hold those savings once you've gathered them. So let's start with the first part, which is how do you gather more savings. Now, the word savings is really a description of the gap between what you earn and what you spend. And so the only two ways to grow that gap are to either spend less,

you know, find parts of your budget that you can cut or to earn more or some combination of the two. Now, earning more could be some type of a second job or an extra job that you work outside of your normal full-time job. It could be some type of a second job. It could be some type of a job. side hustle that you start, I think that is one of the most powerful ways to earn more because you already are living on the money that you're currently making, which means if you start a side hustle and you make extra money, you can save all of it because you don't need any of it. You're already living without that money, so any additional money that you earn can go straight into savings. And that can be a very powerful buffer for when these types of calamities and

emergencies happen. The other benefit of having a side hustle is that you don't ever want to have all of your eggs in one basket, right? That's what people always say about investing is diversify, don't put all your eggs in one basket. But if 100% of your income is coming from just one single employer, then all of your income eggs are in that one basket. If you get laid off, or if the company folds, then you've lost 100% of your income. And so getting all of your income from just one single source is risky. That's why the additional benefit to having a side hustle, it's not only the fact that you make more and therefore you can save more. It's also that if you lose your job, you still at least have some income from that side hustle that's coming in. And so rather

than your job, your current job being 100% of your compensation, if you start a side hustle, then maybe your current job becomes 80% of your total compensation, you're still working the same hours, you're still getting paid the same, but you're making more. So your current job is 80% of your current compensation, and that side hustle is the other 20%. And then that way, if you lose your job, rather than falling to zero, you fall to 20. So those are several of the benefits of having multiple streams of income. Now, once you have some savings, where do you put that money? A few different options. Number one is a standard emergency fund. So open up a sales. savings account and have at least three to six months worth of expenses saved into that emergency

fund. That's the first thing that I would encourage you to do. You mentioned that your mortgage is $1,400 a month, which means that you would want to save $4,200, which is three months worth of mortgage payments, plus three months worth of any other normal bills that you would pay in a month, like your electricity, your gas, car insurance, gasoline, groceries, health. health insurance premiums, anything like that, any of those fixed necessities, have an emergency fund that represents your mortgage payment plus your three months of basic living expenses. So make that goal number one and keep that in a savings account. Don't get fancy with it.

Don't try to put it somewhere where it can maximize its returns. Just keep it somewhere safe. Tuck it away. And three months is the minimum, but you can grow this to six months, eight months, nine months, whatever helps you sleep more easily at night. Now, after you have that emergency fund built, then if you have additional savings on top of that, and you want to hold this in a place in which you can access it in the event that you lose your job or there's some other type of emergency, then a couple other options that are available to you, you could put the money in a taxable brokerage account, meaning you put the money in an investment account that's not a retirement account. That way you can withdraw it at any time. you could also put the money in a Roth IRA because the principal contribution that you make to a Roth IRA, meaning the money that you put in there, you can withdraw that penalty-free at any time.

Now, the gains that that investment makes, you can't touch that, but the money that you yourself put in, you can take that out without penalties any time. So I encourage people not to do that, like to only tap that money as an absolute dire emergency last resort, but it's nice knowing that the option is there. just in case there is an emergency. And then the third and final option, we've talked about taxable brokerage accounts, we've talked about the Roth IRA. The third and final option is that you can put money if your health insurance plan is HSA compatible, meaning it's health savings account compatible, and not all health insurance plans are, so you'll have to check the details of your plan. But you could put your money into an HSA account and then pay for your medical expenses out of pocket and keep the receipts, just take a picture of your receipt and upload it to a Dropbox

folder or upload it to Google Drive. And then what happens is that your investments inside of your HSA grow tax-deferred, which is great because then they're accumulating all of this tax-deferred growth. But during an emergency, you can withdraw against your qualified medical expenses penalty-free. In other words, if you pay for qualified medical expenses out of pocket, as long as you save the receipt, as long as you can prove that you've done it, then you don't have to reimburse yourself out of your HSA in the year in which you pay for that qualified medical expense. You can reimburse yourself the following year or two years later or five years later or 10 years later or 30 years later. So you may as well let the money inside of your HSA keep amassing its tax-deferred growth,

knowing that that is essentially another quote-unquote emergency fund, albeit a higher risk one because that money is actually being. invested long term, but, you know, that is an emergency fund of last resort. So those three options, the taxable brokerage account, the HSA and the Roth IRA principal contribution, those are ways that you can tap money in the event of an absolute worst case event, but those, because that is money that's being invested in the market and therefore it's subject to a much greater risk, that's money that you shouldn't think of as your emergency fund. That is money that's, money that is money of last resort in addition to the emergency fund that you also have.

But the first priority is to build the emergency fund and keep that emergency fund in a traditional boring savings account or money market account. Don't put it in investments. So I hope that helps. Best of luck with building up that emergency fund. I'm very excited for you to have that because it sounds as though you're on this great path. You've just bought a home. You're building an emergency fund. Things are going really well for you. So enjoy. it, celebrate it, and keep growing it. This is fantastic. So congratulations. We'll return to the show in just a moment. Are you tired of getting nickel and dined by your bank? And are you also tired of not earning very much interest on the money that's in your checking account? Check out Radius Bank.

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Gusto will automatically pay and file your federal, state, and local taxes so that you just don't have to worry about it. They also make it easy to add on health benefits and 401ks for anyone on your team. You can hire employees or pay contractors. These old school clunky payroll providers that are out there weren't really built for modern small businesses. But Gusto is. They specialize in working with small businesses. So let them handle your payroll and your taxes because you've got better things to do. you have a business to run.

You can try them for free for three months when you run your first payroll. So try a demo for free and check it out for yourself at gusto.com slash Paula. That's g-u-t-o.com slash Paula. Gusto.com slash Paula. Our final question today comes from Marcella. Hi, Paola. This is Marcella and this is our story. where a family of four that have been living in South Korea for the last six years and this summer

2019 we will be finally relocating back to the U.S. and planning on landing in Texas. We have two teenagers that are currently in high school and our priority is to get them through school and up to college. We more or less have picked the area we want to live and the high school they will attend, but this is the thing. In order for them to be eligible to attend a school, we need to be rest of the school. to the neighborhood is beautiful and it has these great houses with huge old trees

but as you guess the prices are very high and consequently access to this is definitely a seller's market average prices in this area are from $250 to $550,000 for that four bedroom and three bedrooms

approximately and more we have right now access to quit cash and could put 20% down for purchasing a home and also we think we could get approved for that 30-year loan, fairly easy, we believe. Another point to consider is that if we buy, we will probably look to sell this after four to six years after our kids finish school. We really don't want to pay taxes, those taxes forever. Now, if we're rent, we're looking at rents average of $3,500 a month. We also think that if we find a house

that we could remodel and then sell later after. It could be an accurate option, but we don't know if we will find that such a deal. My question is, does it make sense to buy a house in this area or is it better to rent? I would love to hear from you and hear through advice and opinion, Paola. All times of true, I came across your podcast some time ago, and I'm a huge fan of yours and your work.

Thank you, thank you very much. and I will send more questions in the near future. Marcella, thank you so much. Congrats on moving from South Korea to Texas. I understand you have two teenagers who are still in high school, and so you want to live in a particular school district for the next four to six years. And in that school district, you can rent a home for $3,500 a month,

or you can buy a home for anywhere between $250,000 to $550,000. Now, that's a pretty big range, that $250 to $5.50. So a lot of my answer is going to depend on what end of that range you end up buying in. Because if we're talking about you buying a home for $250,000 with a 20% down payment and a 30-year fixed-rate mortgage, and if you hold on to that home for about six years, well, in that case, buying will sounds like it would be a better option. But if we're talking about buying that home for $550,000 and you hold it only for four years, Well, if that's a case, then there might be a stronger argument towards renting. Here's how I think about it.

When you buy a home, you pay closing costs on the purchase of that home. When you take out a loan, you'll be paying the loan origination fee. You'll be paying various other closing costs. Then during the time in which you hold that home, your mortgage consists of four elements, principal, interest, taxes, and insurance. I don't consider the principal portion of that payment to be, quote, unquote, spending, since you are converting cash into equity in that principal portion of the payment. But in the early years of a mortgage, that principal portion is a very, very tiny piece of your mortgage payment.

The bulk of your payment is going to be interest, taxes, and insurance. So when you buy a home, you pay the closing costs up front. Then as you hold that home, you pay interest, taxes, and insurance, and if applicable, an HOA fee. you also pay for repairs, maintenance, and potentially other utility costs that you might not have to pay if you were renting. If the home is located in a neighborhood in which landlords pay for a portion of the utilities, and that varies location to location. And then when you sell the home, you have to pay real estate agent fees and other closing costs. Real estate agent commissions can be around 6% of the cost of the sale of that home, and those are often paid by the seller. And then you might pay another 1% or 1.5% in other closing costs as well on the selling side.

So there are a lot of transaction costs associated with selling a home, buying and selling both, which is why the longer that you hold that home, the better. So the fact that you only plan on holding the home for between four to six years is a slight area of concern. But again, the answer is going to depend on if we're talking about buying a home at the $250,000 end of that range or the $550,000 end of that range, because you gave a very wide range of home purchase prices. The New York Times has an excellent rent versus buy calculator. I'm going to link to that in the show notes. The show notes are available at afford anything.com slash episode 199.

Again, that's afford anything.com slash episode 199. But the way that that calculator works is it takes into account, everything that I've just talked about, the closing costs associated with both the purchase and the sale of the home. It takes into account the opportunity cost of tying up that down payment as compared with putting that down payment in an alternate investment. It takes into account the rate at which you predict that your rent would increase over the years if you were to rent. It takes into account the additional utility costs that you may have to pay as a homeowner that you wouldn't pay as a renter. It takes repairs and maintenance and major capital expenses. It takes all of that into account along with the timeline.

during which you will own the home, then it shows you whether renting or buying is in your best interest based on all of those assumptions. And what's cool about this calculator is that you can then start fiddling with these assumptions. You know, you can play with variables and you can see that if you live in a house for X number of years, then renting makes more sense. But if you live in a house for Y number of years, then buying makes more sense. Or alternately, you can see that if you assume that the opportunity cost of tying up the down payment is an alternate investment with a return of X amount, then it makes less sense. But if it's an alternate investment with an expected return of Y amount, then it makes more sense, right? So you can play with all of these variables

within the calculator, and you can see how adjusting any of those variables affects whether renting versus buying is better in your particular situation. So I would encourage you to go to that calculator and plug in your own numbers. But right off the bat, what I can tell you from everything that I've heard you say is that given the fact that the rent in that area is $3,500 a month, if you could buy a home for $250,000, even if you don't live there for that long, that certainly sounds like it would be a much better deal. But when we get into the $550,000 range for a house, plus potentially an HOA payment, plus you mentioned that you would be able to make a 20% down payment, but I don't know if that 20% applies to the $550,000 end of that range

or if it applies to the lower $250,000 end of that range. But if we're talking about a home that's $550,000, plus there's an HOA, plus you might not be able to pay the total 20% down payment on it, plus there's a chance you're going to sell it after four years. Then we're talking about a very different set of circumstances. So that purchase price of the home is going to make a big, big difference. And that's why, given the fact that that range is so big, I would encourage you to go to that calculator and play with those variables to see at what point you reach that crossover between when buying is a better deal versus when renting is a better deal.

Again, that link is at Afford Anything.com slash episode 199. Thank you so much, Marcella, and enjoy your move to Texas. Finally, I wanted to close out today's episode with a special bonus. This is episode 199. Can you believe it? Next week, we are going to be celebrating episode 200. Now, for those of you who have been with us since the beginning, or for those of you who have gone back and binged on our earlier episodes, as you know, when this podcast initially started, it wasn't called the Afford Anything podcast. It was called The Money Show.

And I had a co-host by the name of Jay Money. Jay and I co-hosted from episode one through episode 26. He left at episode 26, and then shortly after that, I changed the name of the podcast to Afford Anything podcast ever since. And so for the past 173 episodes, I've been hosting the solo. We've taken it into a bunch of directions. I mean, if you listen to our earlier episodes versus you listen to today's material, it's a world of difference. And so it's amazing how much this podcast and life has changed in the last three years. And so, in celebration of episode 200 and really in celebration of episode 199 as a way to tie a ribbon

around these last 199 episodes, I invited Jay Money to come back on the show and share with us what he has been up to in the three years between when he left this show and now as we round the corner and we celebrate episode 200. So as a special bonus to end episode 1,000, And to bring us into episode 200, here is a 15-minute conversation with Mr. Jay Money, the former co-host of this show. What up, Jay Money. What up, Paula P. Feels good to be back, my friend. Oh, man, how are you? I'm doing good. I'm a little chill and relax. It feels good with three kids, you know. It's a good feeling to have.

Yeah, so that is a major change. between the time that you that you departed the money show and now another child was brought into the world. Oh yeah. And he's turned one. So I have a six year old boy, a five year old boy and a one year old boy. Congratulations. Yeah, thank you. And I got to say, the older you get, it's a lot harder to deal with those little babies. How old are you now? I'm almost 40. It's crazy. Nice. Actually, it's funny. When you asked me to come on the show, I started going through all the archives. You know, the nice thing about a blog, right, is you have archive of all your life, you know, even if it's finance. But I found like 10 different juicy things that went on my life in the last three years.

All right. Cool. So let's go through that because a lot of people, especially the long time listeners of this show and the people who have been with us since the beginning or the people who have gone back and binged on the earlier episodes. Like, they want to know what's new in the world of J Money. Yeah. You want me and go through the bullet points and then you can tell me whatever when you want to talk about. Yeah. Let's go through them all because there's a lot of juicy stuff that's happened. Yeah, and I didn't even know because, you know, it's your life. You kind of forget about things. I'll start down with the list, okay? Cool. And then you can go in whatever. All right. Number one, had a baby. Number two, woo, grew our net worth from 496,000 to 923,000. Yeah, so let's pause there because in the last three years, of course, you wanted. Of course.

So three years ago, your net worth was basically 500,000. It was four grand shy of 500,000. And now your net worth is almost a million. You're like 75 grand shy of being a millionaire. Yeah, that's cool. And granted, like, it's me and my wife, right? So I don't take, you know, all the credit. But yeah, it's fun. And oddly enough, like, I feel exactly the same as I did three years ago, financial wise. Like, it feels a little more stable. But it's interesting when you hit a certain level that you don't really think about money as much or doesn't impact your quality of life, which I think is good for people that are starting the process. Like, Once they get to a certain level, usually like, I think for me, it was like 100,000 really changed me.

And then around 300,000, I'm like, okay, this is cool. And then it's kind of evened off. I remember reaching my first 100,000 because somebody had told me, I think I'd heard somewhere like the first 100,000 is the hardest. And so when my net worth hit 100,000 for the first time, I remember that moment. I remember 100,000 and I remember a million. Those are the two snapshots in my life that I remember clear. You know, it's funny on Twitter, Drake, the rapper, had one said, like, the first million is the hardest. And then Tebow Boone Pickens, the billionaire, was like, wait until you hit your first billion.

Well, yeah, the first hundred usually is. I mean, that's where you're learning and growing and figuring stuff out, you know, it's so hard to get to that first level. Once you get the ball rolling, I mean, I was talking to someone the other day is like, I really haven't done that much different. I haven't done anything different in the last, you know, five or six years. It's just the same stuff on automation for the most part, you know. Yeah, that's exactly what I was about to ask you, because you've basically doubled your net worth in three years. Yeah, most of it's investing. You know, and obviously the stock market keeps going up and it has its, you know, crashes and then goes back up again.

So that was number one. Number two, something that's changed actually in the last three years two is my wife actually went back to the workforce, which really helped out because for a few years we were losing money every year. I think we had lost like $900,000 in cash in like three years. just because what my business wasn't making as much money. She was in grad school. We had all these kids. So that really helped us get back to even and then starting to make more or to save and invest more.

And then I started just selling off a lot of my projects that just weren't, you know, my heart wasn't in it. You know, like this podcast, that was this start of a change in J Money. Like when I started letting go of things that weren't perfectly aligned with my lifestyle, you know. And so I sold, you know, I had rock star finance. which was going well. I sold that. That was a little low six figures that was able to help plug the leaking. Right. And for the people who are listening, what is Rockstar Finance? Yeah, so Rockstar Finance was a site that I started about five years ago, I think, now. I just used to read lots of financial articles, and I would just post my three favorite, like,

just to send traffic around to people, you know, that are doing cool stuff online, other bloggers. So every day you can just go to one site, read three awesome articles, you know, and that was it in a nutshell. And over the years, I grew a directory of blogs and some other stuff. But after a while, it didn't. I don't know. It was taking up a lot of time. It wasn't really making much money. And I started to not enjoy it as much.

And I said, you know what? It's time to offload it. And I did. And actually, I think it just sold last month. So like now onto like its third owner, which is really weird. I haven't stopped, you know, I haven't looked at it since because it's always weird to see your baby once. You know, you're no longer the daddy of it. But so you sold that for low six figures.

Yep. That went to cash. Yeah. And then, I mean, the rest is just investing at all. You know, that's how the net worth grew, really. So nothing too wild. Nice. What do you invest in?

Vanguard, index funds, VTSAX. Yeah, and that's only recent years. Before that, I was in all kinds of stuff. And actually, it was on a podcast. It was the Dole Roller podcast. Rob was like, what do you invested in? And I was like, I just gave some things. And he's like, what are like the expense ratios?

I have no idea. He's like, you are a financial blogger. And you have. I have no idea. Like, he gave me such a hard time. And I was like, well, I guess I could look into it. Right. And that was right when the fire movement started happening.

And people were like, Vanguard this and that. And I kept hearing about Vanguard, like, ad nauseum, you know. And I was like, I mean, let me pay attention. And, you know, obviously when I compared, it was like a world of a difference. And I just cashed out of everything. It moved all into indexing. And I was like, that's it. I'm done.

You know, I'm not chasing anything. I'm fine with average returns. You know, and obviously they've been working. Nice. Were there tax consequences when you sold? out of everything? No, because most of my investments, actually all of them at the time were in retirement accounts. So maybe it costs whatever to like execute them. But then I just rolled them all over into the same retirement accounts over at Vanguard. So it was like a process to cash out, move everything

over and then rebuy. But there was no taxes because it was all under the same, you know, rolling over retirement account stuff. Nice. Yeah. That worked that well. All right, want me keep going on this list? Yeah, yeah, let's keep going. So you're next. Net Worth has doubled and you're 75K shy of being a millionaire. That's huge. And speaking of millionaire, you also turned down a million dollar offer for some other projects. Tell me about that. Yeah. So we finished, you know, I hopped off of the show. And I was in this funk where like I didn't know what I wanted to do. And of course, when you get offers around that time, it's always tempting to talk about. And it was this offer. It was a two-year deal, a million dollar

payout when all of a sudden done by the time you get commissions and do some. kind of stuff. And at first, I thought, well, this is exciting. I'm obviously going to be a millionaire if I do this, right? But I was like, what's going to happen if I cash out? You know, what am I going to do for my life? This is what I do. This is fun. I enjoy blogging for the most part. But anyways, I said yes. Then I said no at the last minute. And long story short, I ended up turning it down. And actually, the week I turned it down, I won Lifetime Achievement Award at FinCon, which I thought was awesome. But then I was like, man, I'm up here and I'm about to like sell out of everything. And I felt like a sell out. And so anyways, yeah, I turned it down and I took a month sabbatical, which I'd never done before,

and that really put things in perspective. And then eventually, you know, when all in a rock star, built it out, sold it. And then I've basically been trying to work a lot less and live more, you know, when it comes down to it. And actually today or maybe it's tomorrow, marks 21 months of working, of no working at all, not opening up the laptop on the weekends or at nights, which is crazy for any, you know, hustler. And so it's interesting. So I don't work on weekends. And so I free up my brain and obviously more time for kids and stuff.

But at the same time, I'm still getting all my stuff done and my net worth is growing. And so it's wild. Like when you put these parameters in place, you still figure out a way to get stuff done that's important to you. But without more of the slacking, you know, like anytime Friday rolled around, I'm like, well, I can always work on the weekend. magically I'd have stuff to work on on the weekend, you know. So that barrier really aligned stuff easier for me and made my lifestyle a hell of a lot better. Right. Like work expands to fill the time you give it.

Yep. And a book I read was Essentialism by Greg McEwen. It's a really good book. Especially if you like minimalism and entrepreneurship stuff, it really helped zero in on like, why are you doing what you're doing? And what's like the stuff that, you know, 80% of everything you're doing, you know, I was doing a lot of crap on the side that really wasn't, you know, mattering much. Yeah. And so now I went back to blogging every single day, Monday through Friday,

which is crazy. But I love it. You know, the community's there. I feel like I'm focused more. And I'm, you know, I'm back to just being a blogger where it all started, you know, 11 years ago. It's pretty cool. So tell me about when you got this million dollar offer for your entire brand, basically. Yes. Yes. Were you looking for that offer or did they cold contact you? That's the first question. And then the second one is, can you talk about the emotional experience of turning down a million dollars? Yeah. So this one was a cold call. I think a lot of the offers I've gone, I've never really reached out, maybe once or twice out of curiosity, but a majority of them have just come up and they're people trying to get in the game or maybe they have other financial

sites. They're trying to do something fun or combine or, you know, all kinds of different strategies. They usually come to me and usually I'll always talk to them just to see, you know, what it's about, mostly it doesn't go far. But this one did because I like the idea they were going with. They hit me at a time where I wasn't really sure what I wanted to do. And, you know, it was a lot of money. And it was also when I owned Rockstar Finance and some other stuff like tiny things. So it's kind of like a package all or nothing kind of thing.

But the crazy thing is the package, I call it a million dollar package. Other people call it a little differently. But they would give me a chunk of money up front, pay me 100,000 salary for two years. And then I'd get more chunk based on incentives. I was pretty sure I could hit. So it was like a whole two-year package that all encompassed a million dollars. And that felt good too knowing that I would have a plan for the next two years. Of course, emotionally, financially was great.

But me, I've never done anything for money, like for the better or the worse. So to me, to lose this community. And in the brand, I can't really get into details of how it would have happened. But basically, my brand would have not disappeared all the way, but it would have been different. And so a lot of the people that followed me maybe would have followed, maybe not. It just wouldn't weird. It would have worked out really well or really horribly. And the idea of like at two years, everything's gone and I'd miss it.

Like that was real scary to me. And again, I wasn't in the right best of mindsets at the time. So that's why I said yes at first. Great. This solves everything. And then a month later, I turned down. I said no, right before it all closed. And they understood.

But it was a tough ride mentally for sure. All right. So other than turning down a million dollars, what else have you been up to? So here is a really juicy one for you. You know, I'm a number one fanboy of renting, right? I've been doing it for years. I used to own. I hated it. We've been renting without rental properties or owning or anything for three years.

And we're moving back to Virginia soon. And my wife says, you know what? It's time to own. And I say, oh, no, I don't know about that, right? Because I'm just loving the freedom, you know, as I always have. And so she has convinced me for the better of her family, the better for her mindset to own again. So we're currently looking to buy, which is a big mental hurdle for me and something I'm trying to get over, but you obviously love real estate, you know, and I'm sure most of your

followers do. So that one to me is a huge, weird thing that I'm now diving into again. What are the mental hurdles or the objections that come up for you when you think about owning? The number one is just a peace of mind. Every place that I've rented here over the last few years, like things break. We had this thing where just water to start seeping through the basement, like out of nowhere. You know what? It was like a $10,000 or something crazy fix, and it wasn't my problem. You know, I made a phone call, and that was it after a couple days. So the mental stuff really, I feel like for me it's like being stuck. Like it's like handcuffed to something.

And I think a part of that for me growing up in the military and we're moving all the time. Like I enjoy being able to get up and go. Right. And I think now that we're having kids and my wife's ready to settle down more, we're not going to be able to do that much jumping around. And so I think in her mindset, it's time to settle. And in that case, if we're going to be here for a long time, which I agree, you know, owning is a smarter route, at least financially, logically. And I think she's right on that.

But still my head is just so used to being free. And then when things break, and I'm not a handyman, right? Like, I'm not good at stuff. I don't enjoy it. I'm going to pay out money for people to work on stuff, you know. But I don't know. It's just not exciting to me. And so she's excited.

The kids are excited because they want to pick the house and have a nice yard and all this stuff. So I am, you know, excited for that part. But it's a big change coming up for sure. What do you do? So you and I were talking about this a little bit before we started recording when there is a difference between what you emotionally want and what you understand makes financial sense. Well, for me, I always, always nine times out of ten go the emotional

route. Like, that served me really well. And this works in your favor, too. Like, if, you know, the question of, well, should I pay down my debt or save or invest more, right? I have an extra $500 a month or $100 a month. Where should it go? I'm always under the impression that whatever excites you right now, like, that's what you should do. Because, you're a lot of the extra. the more you're excited about something, the faster you're going to keep going, the faster you're going to pay it off. And so in that regard, as long as what you're doing makes financial sense, you know, to me, it doesn't matter which one you do as long as you're excited about it. So I'm always emotional, right? But when other people are involved, like, this is the part where

I'm trying as hard as I can to stand back and be like, all right, you are a part of a family, right? You're part of a relationship. And your other half wants to do something that make her more comfortable, but you not. And so in this case, for the first time in my life, I'm trying to not put myself first, right? And I put my kids first, but it hasn't been that much of an issue until now. And so what's logically right for our family

and for my wife's peace of mind and kids, peace of mind, and all that good stuff, now that's shifting me. And so now I have to be okay with mentally not being all the way there, but logically knowing it's a smart route to go. And that's a hard thing. I mean, it's only been a couple months since we've been talking about it, but I'm still trying to wrap my head around that. It's really

hard, I think. When you know that you need to make a decision that is financially and logically the right decision, but your heart isn't there, do you have any tips for convincing your heart to get there? Not yet. I think I will once I figure out that point. I know for me, like, I do a lot of thinking and walking. Usually when I'm stuck, I go for a walk, and I think of the bigger picture and the bigger picture stuff, you know, and actually death. I mean, like, I don't know why, but I've been obsessed with death the last few years, like walking in cemeteries. And I think that gives me a bigger overall picture of, in the grand scheme of things, this does not really matter at all. It just matters right now, like instantly. And so I think, like, if I were to die tomorrow,

whenever I die, right, because we're all going to die, I'm not going to look back, like, oh, I wish I would have rented instead of owned that house. You know, so that's, so that me so far has been helping me, you know, and also trying to be a better human being, right? Like years ago, we were at the beach and my sister, we were looking for like a place to go to a bar, right, just for a couple drinks. And I remember saying like, oh, I want to go here and other people wanted to go somewhere else. And for whatever reason, my sister's like, Jay always gets his way. So that's where we're going to end up going. Right. And I was like, what? Like, I always get my way. And that's what she thought. She always thought when there's a decision,

and I was the oldest of our family, whatever I picked is what we ended up doing. right? And I'd never heard that or ever thought that. But that is stuck in my head and I keep hearing that with this. Well, Jay wants to rent, but for his family, it's better to own, you know. And so I'm trying to listen to that little head and be like, dude, you can't have your way all the time. Like, step out of the way, right? So that's helped me to really put things in better perspective, I think. Just trying to be a better person and acknowledge other people in your, in your circle of, you know, family and influence. I like that litmus test, the question of How can I become a better human?

Yeah, you know, and it works in other things too, you know, like when you're, you know, out and about driving in traffic, right? Like, I used to get mad all the time. People cut you off, especially here in D.C. People are crazy, right? And politics. I mean, that's even bonkers even more, right? I keep thinking like, well, if someone cuts me off, maybe they are in a rush or someone's sick

and they need to get to the hospital or something, right? Like, I think of these little things that could calm me down, but make me not react negatively and add more, you know, toxicness to the world. And little tiny things like that over time, I think, help you to get better at it for sure. Well, thank you for joining us again, Jay Money, for our celebration of episode 199. Because we're coming up next week is the 200th episode. So thank you for joining us for the celebration of this for closing out the hundreds. Yeah, that's cool.

Thanks for having me, though. Thank you so much, Jay. money, super cool talking to you again, and congratulations on doubling your net worth in the last three years and having your third child and having the emotional strength to turn down a $1 million offer when you knew that it wasn't right, as well as having the emotional strength to go into a home purchase that you don't particularly want because you know it's right for your family. I've been thinking a lot about how much changes in three years. When we talk about finance, and we talk about 10-year time horizons or 20-year time horizons or 30-year mortgages.

We talk about years in such long terms that it can be easy to forget that the span of one year or two years can be life-altering. One year from now, you could be married, you could be divorced, you could have a baby, you could experience a death or a tragedy in the family. I mean, so much can happen in the span of just one year. And when you have a few years in which things radically shift, your life, two or three years from now can be radically different than what it is today. And so oftentimes, I think that while thinking long term is fantastic, and that's what everybody in the financial community does, sometimes when we get into the habit of only thinking long term, it can be easy to forget how quickly things can change. change in the short term.

And so hearing Jay Money's story, in the last three years, he had a baby, he doubled his net worth, he almost sold his business but then decided not to. It's a reminder to me to think both long term and short term. Make sure that you are subscribed to this podcast in whatever app you're using to listen to podcast, hit the subscribe button or hit the follow button to make sure that you don't miss our episode 200 special. If you enjoy today's episode, please share it with a friend or a family member and leave a review. You can go to afford anything.com slash iTunes to leave us a review and let us know what you think. I read every single one of the reviews. Thank you so much to everybody who has left one. Thank you so much for tuning in.

My name is Paula Pant. You can follow me on Instagram at Paula P-A-U-L-A-P-A-N-T. Make sure you're subscribed to this show and I will catch you next week in episode 200.