Afford Anything - Ask Paula: What Do I Do With Free Money?

Episode Date: May 24, 2022

#382: Joe is buying his first house hack and would like to understand if the FHA loan or the doctor loan would be better for him. Sara wants to leave her job to spend time with her children, and she needs help in calculating her FIRE number. Kat received a windfall and is wondering if she should invest it in stocks, real estate, or a combination of both. Aisha is moving to the US and wants to start investing ASAP - how should she approach her goal to reach FIRE? Former financial planner Joe Saul-Sehy and I tackle these questions in today’s episode. Enjoy! P.S. Got a question? Leave it here. For more information, visit the show notes at https://affordanything.com/episode382 Learn more about your ad choices. Visit podcastchoices.com/adchoices

You can afford anything but not everything. Every choice that you make is a trade-off against something else, and that doesn't just apply to your money. That applies to your time, your focus, your energy, your attention. Any limited resource that you need to manage. Saying yes to something implicitly carries trade-offs, and that opens up two questions. First, what matters most? Not what does society tell you ought to matter, but what is genuinely a priority in your life? That's the first question.

And the second question is how do you make decisions accordingly? Answering these two questions is a lifetime practice. And that's what this podcast is here to explore and facilitate. My name is Paula Pant. I am the host of the Afford Anything podcast every other week. We answer questions that come from you, the community. And my buddy, former financial planner, Joe Saul Seahy, joins me to answer these questions. What's up, Joe?

You don't you always say yes to first, Paula? you say yes to the ice cream. The ice cream is always first. Always. Joe is saying this because as we got on Skype, we record this on Skype, and as we logged on, I was like downing a bag of potato chips. Just like could barely open Skype because I'm going both hands just full speed into this bag of chips.

Using no hands, just both hands on the bottom of the bag, just feeding them like a funnel directly into Paula Pan's mouth. Yeah. Oh, yeah. Because you know what? It was today's scheduled back to back. I just, uh, just finished this live stream with CNBC. I'm going to link to it from social media. So if you go to my Instagram, you'll be able to see it, uh, from there. But, uh, yeah, I just finished this live stream with CNBC and I'm rolling right into this. And so there's no time to eat. So I'm doing the most. You were, you were nice enough to record early for me because I have a meeting. So it's, we're juggling. Yeah, exactly. So so so I'm doing the healthy thing and just, uh, just, uh, just. living on. Doritos. Yeah, exactly.

Doritos at my desk.com. But by the way, you were awfully defensive about these particular Doritos because let's be clear, they weren't really Doritos. And Paula's like, no, no, no, no, no. These are healthy. They're protein chips. They are. And she's reading me the back of this bag in the most defensive way ever.

Like, no, no, no, no, no, no. Huge protein. It's not zero percent fat. It's not Olestra chips. They're Quest Protein Chips. Five grams of fat, five grams of carbs, 19 grams of protein. The macros on these potato chips, I'm telling you, tortilla chips. Quest Protein Chips, if you'd like to sponsor this podcast.

Anyway, let's create a finance podcast. What do you think? Oh, that's a great idea. Have we done that before? Ah, you know, we've dabbled. So here are the questions that we're going to answer today. First, Sarah wants to leave her job to spend time with her children, and she needs help calculating her fire number. Joe is buying his first house hack, and he wants to know if he should

take out a fixed rate loan or an adjustable rate loan. Kat received a windfall, and she's wondering if she should invest it in stocks, real estate, or a combination of the two. And Aisha is moving to the U.S. and wants to start investing ASAP. So, her goal is to reach fire. What should she do? Joe, you and I are about to tackle all of these questions. Before we do, I do want to take a moment to remind everyone, we have a course on real estate investing. Normally, it comes out twice the year. This year, we're only releasing it once. So this is your one and only opportunity in the year 2022 to enroll in our course on rental property investing. You can get all the details at afford anything.com slash VIP list. Again, afford anything.com slash VIP list. We open our doors for

enrollment in June 2022. That's your only chance. After that, we're closing our doors. This is your one-on-only shot this year. So afford-anything.com slash VIP list to learn more. All right, that said, let's get started. Let's start with Sarah's question. Hi, Paula and Joe. I have to start by saying I found your podcast about two years ago and have been hooked. I've learned so much from you and it's truly been life-changing. My question is about how to calculate my fire number. I understand the 4% rule, but I want to how that works if it's a little more complicated because of differences in how much I will spend each year. For some background, I have three young kids and a very limited time with them because of my job. I'm working towards leaving my job mainly so I can spend more time with my kids, but also so I can

relocate to a lower cost of living city, and so I can find a job that is more meaningful and flexible. My plan is to leave my job within a couple of years and take some time off to unwind, settle into our new home, and figure out what I want to do next. I would like to work. work again, but I don't know what that job will look like. I think it may take some time to find because I want a job where I can work in between taking the kids to school, and that allows me to take a couple of weeks off or work remotely during the kids' breaks to travel. My current job pays me well, and because I'm not sure if the kind of job I won't exist or if it exists, how much it will pay, I'm trying to figure out how much I need to never have to work again. I know the 4%

rule, but I don't expect to have the same cost every year, and the differences are pretty big. I have some student loan that I don't want to pay off really because it's at a very low rate. I also have to pay for my kids' school until they are old enough to start public school. These two expenses add about $5,000 per month now, but will be done in three years. My mortgage will be paid off in 28 years max, and I want to pay for my kids' college if they go in about 15 years. I've heard you and Joe talk about buckets of money for these different times, but my question is about how that actually works when I'm trying to find my exact fire number. I'm at about 1.8 million now. The 4% rule says I need 3.6 million now with school and student loans for the next three years. Then my fire number drops to 2.1 million with a mortgage

and 1.2 million after my mortgage is paid off, but these don't include my kids' college that I will only be paying for 6 to 7 years. If I think about college as a bucket, I know I can save $500 a month to have the exact amount I want for my kids' college, but How does this work with the 4% rule? And which 4% number should I use? I'm assuming it's going to be somewhere between 1.2 with no mortgage and 2.1 with mortgage, but not really sure how I can calculate my exact fire number. I really appreciate your help with figuring this out.

And thanks again for everything you have taught me about finance and life in general. Sarah, thank you so much for the question. First, I love your goal. The fact that you know so clearly what you value, what you prioritize, You want to spend more time with your kids. You know exactly what you want your work life to look like when you transition to that next job, that dream job, the one that allows you to take your kids to school and pick them up from school and work remotely or take some time off during their breaks. I love that you have clarity in exactly the type of life that you are trying to design. So let's address the financial piece of that.

You said that given that you don't know exactly what this new career is going to be or when it's going to start, your ideal situation is to calculate a fire number that will carry you through the rest of your life, a fire number that will be enough such that you never have to work again. I want to challenge that approach. And here's why. Right now, your kids are very young. You mentioned that they are not yet old enough to start public school. Sounds like the oldest one is 15 years away from starting college. So the oldest may be around three years old. Right now, your kids are very young. And this is a special time, a time that you will not be able to get back down the road. And so if the goal is to accumulate enough. assets such that you never need to work again, that is a bigger goal, which will require significantly more money and therefore significantly more lead time than the goal of saving enough such that you could take a few years off work, let's say two or three or four years off work, and then return to work from that point forward. If you have that latter goal, the goal of, let's say, having enough money to cover a four-year runway.

That would allow you to quit your job faster, which means that you could spend more time with your kids now while they're young. And it sounds as though that's really what you want to do. It isn't that you never want to work again. It's that you're feeling uncertainty around not knowing what type of job you'll get when you return to the workforce. And in order to assuage that uncertainty, you would like the comfort of knowing that work is optional.

But the challenge with that is that to get to the level of assets in which work is optional, you're going to have to stay in your current job for a lot longer. And by the time you get out of your current job, your kids are going to be much older. And based on the way that you've stated your goal, it sounds as though that trade-off, the trade-off of waiting until your kids are older isn't aligned with what you're really trying to do. But what if the real question, Paul, isn't that at all? What if the question is she's done a great job of saving now and she's wondering if she does have enough? Like I wasn't clear from her question really whether she's seeing how many more years she's going to have to work there,

where she's trading. Because I agree with you, if she's trading these years, you're never going to get that back. I think there is probably a different approach there. But if she's wondering, do I have enough right now and is my number solid? And I can go to work and say, you know what? I'm I'm going to chart this new course. Well, then that's a whole different thing that she's worried about. Yeah. So the construction of her question, she's looking at the timeline of her life and she's seeing how her expenses are necessarily going to fluctuate at different points in time. So her expenses now are different than what her expenses will be when her mortgage is paid off. Her expenses, when her kids are in college are going to be different than her expenses when her kids are in public school.

And that's different from her expenses when her kids are too young to even go to public school. Right. So she's rightfully looking at the timeline of the rest of her life, seeing that her expenses are dynamic, they're not static, and seeing that as a result, the 4% rule doesn't work. Because the 4% rule, and Sarah, I'm not saying that you stated it, the 4% rule doesn't work. I'm stating that the 4% rule doesn't work. And I know I've gone on rants about this in previous episodes where I think that this traditional notion of calculating your phi number is a bunch of garbage because the mere concept of a phi number assumes that your

expenses are static. But the reality is, as you so clearly illustrated in your question, expenses are dynamic. And so to peg to a specific number with the expectation that your expenses will be unchanging is a poorly designed setup. It overemphasizes one specific data point in the expense graph of your life. This is where you and I completely agree because when I was hearing this question, there were two things that in our community, Paula, drive me crazy. The fine number drives me crazy, number one. And number two, the 4% rule drives me nuts. And the reason is, and think about the care. And I love the fact that you acknowledge right at the top of this, the care that Sarah has taken into thinking through very carefully all these things that she

wants for herself. When we have goals that are this important, we don't trust rules of thumb. You should not trust any rules of thumb. The 4% rule you should throw it away. There is no such thing as a five number. There just isn't. I totally agree with. And I think the first person that I heard say this was our mutual friend Roger Whitney, the retirement answer man, who said the key to success during your retirement years, whether it's a fire retirement or later retirement, is this idea of ambiguity, of the fact that you're going to have uncertainty. The only thing that is certain is uncertainty. And I feel like if we say that my fine number is 1.267 million, that's baloney. It's not that number.

The problem is we don't know what that number is. I mean, we can use some of these statistics and average rates of return to try to get close. But the reason that it's planning and not a set point in time, I create a plan, I lock it in and then it rolls from there. It doesn't work that way. And I think that with her goals being as careful as they are, applying careful planning using better calculators to those planning than a 4% rule and a five calculator, I think is really warranted in this situation. I mean, just as an example, I went to Jordan and Egypt recently, two-week vacation.

If I went on a vacation, I was using rules of thumb, I'd say, okay, how am I going to pack my bag for these two weeks? Well, the median temperature on Earth is 67.7 degrees. so I'm going to pack for 67 degrees, right? Because that's the average. That's what everybody does. That's what we do around retirement. I mean, so many people have these careful goals,

these things that they really want for themselves, and then we apply these rules of thumb. The rule of thumb is it's going to be 67 degrees. Is it going to be 67 degrees when I'm in Egypt? It was 100 on two days when I was there. So had I packed for 67 degrees, I would have packed completely incorrectly. And I think that that's where we're right here.

So what I would do, I mean, I was seeing the spreadsheets in my head, right? I was seeing these changes on a spreadsheet. And what's funny is, is between our ears, this feels like it's going to be so difficult. It's going to be so hard. When in reality, maybe, maybe three hours with a more advanced calculator that will walk through some of this ambiguity a little more in a little more granular way, it's going to be well worth the extra time. So, so worth it to spend a few more hours on the planning.

And then setting up a consistent, you know, every six months, once every six months I'm going to set aside an hour to tweak the plan and review the plan and see if I'm behind or ahead of these milestones that I've set up for myself, I think is a much better plan of attack. Hmm. So what I would do if I were in Sarah's shoes is first I would decide, at what point do I want to leave my current job? Sarah said that she would like to leave in a couple of years. So are we talking two years, three years, four years from now? So question one, how many years from now does Sarah want to leave her current job? Question two, how many years does she want to enjoy the cessation of income? producing activity, does she want to not be producing new income for two, three, four years so that she can spend that time with her kids while they're very young? That's question number two. Question number three, what kind of margin of error, what kind of window does she think

it's going to take to transition to the next job or the next career at the time that she's moving out of this period that we'll just call it an extended sabbat. right? At the time that she's transitioning out of the extended sabbatical and back into a new career, what window of time does she want to give herself for that on-ramping? And based on all of that, that set of questions can help Sarah calculate how much money she'll need in order to cover her expenses during that particular window of time. And determining when that window of time begins will also help her in the timelining of what are her expenses going to be during those specific years. Because as she mentioned, she has two expenses that currently add up to about $5,000 per month,

but that will be done in three years. So let's say hypothetically that she leaves her current job three years from now. Well, she knows that her expenses are going to drop by $5,000 per month at that three-year mark. So those three questions taken together, what are her costs? going to be, how long does she want to stay out of the workforce, and what window, margin of error, does she want to give herself for transitioning back into the workforce? That's going to tell her how much cash she needs to save for this window of time. And I think that is the most immediate and most important goal. There's this book that I heard is pretty good on this topic and starts on chapter

one with timelining all these goals out against each other. And I think it works really well if she takes these three things, this sabbatical time, her kids college, and her fire number. And she plots when she ultimately wants those, looks back then to today, measures back to today, what are each of those going to cost? And then she has some wonderful internal discussions or discussions with anybody she's planning with fighting those things out, like which one wins. Because at the beginning of this discussion, you challenge the assumption of, you know, we might have a long time with these children and maybe one at that time now. So you end up having these phenomenal values discussions when you put all these on a timeline

and have them then talk to each other and work against each other. Right. Because the reality is if she is trying to see. save enough money such that she never needs to work again, I mean, there's a chance that her kids are going to be 15, 16, 17 years old when that happens. And if she wants to spend more time with her kids, leaving her job when the kids are 17 is not exactly the path to that. And maybe, maybe, you know, when you put these on a timeline, they're also sometimes her middle ground. Let's say she can't get where she wants to go. But maybe she is a

job where she can change her hours, where now she gets half day. So she enjoys her kids and goes on adventures with her kids for half a day. And the other half day, she's at work. She's bringing in less income, but she knows that she's done a good enough job saving that she is able to still reach her five number or, you know, like I said, there is no real such thing. But she's still on the path to get where she wants to go for that goal because she can coast for a little while while she's doing that and put less money toward it. I don't know, but you find those things out

by timelining these out against each other and see how they work. It's an exciting spot to be in, and I think it's actually going to be a lot of fun for Sarah to do this. And I think it's a lot more fulfilling because what she's even challenging

in her question, Paula, is how do I know the five numbers correct? And I think our answer of, it isn't. Right. Gives you permission then to, dig deeper and find more granular numbers. And there's calculators all over the place out there that you can use for this. I like the new retirement calculator. You'd have to pay a subscription

cost for that. There are websites that have tons of calculators. One of my favorite list is at can I retire yet.com. I think that Darrow and Chris have done a fantastic job of listing a lot of great calculators out there. And also, by the way, telling you the upsides and downsides of different calculators, that some are going to be free, but they're not going to be as granular. Other ones are going to cost you a lot of money, and maybe they're two in the weeds where it's very difficult to figure out how to even fill the things in. So finding that balance of what Sarah wants means spending a little time comparing the different tools that are available. Joe, I love the idea of using more complex calculators, including calculators that you may have to pay for.

I'm a huge fan of paying for value, paying the people who have taken the time to program and build something that has complexity. Well, and you and I've talked a lot about risk management, right? Lately, especially by helping people with insurance coverages and thinking bigger than should I buy this insurance policy or not to your whole. risk management strategy. I think for Sarah, this is a risk management strategy. If you pay $20 for a calculator, that's a $20 insurance policy that says that I'm going to have a number that's far more accurate for me than a universal 4% rule. Right. Exactly. Sarah, one conceptual way, there's a piece of your question that speaks towards the difficulty of planning for big ticket expenses that are anomalies. And so one conceptual way to wrap your head around that in the

context of planning for the cessation of income producing activity. And I use that phrase very intentionally because there's a distinction between reaching financial independence versus the cessation of earning income, right? There's a distinction between work being optional versus work being non-existent. So in the context of planning for big ticket expenses, one way to look at it, and this kind of speaks to when you mentioned buckets, one way to look at it is to plan for financial independence

for fixed life costs that don't change and then have a separate standalone bucket that is outside of that financial independence number that is earmarked specifically for kids college or earmarked specifically for the mortgage, such that those would be viewed as different increments of money. In other words, how much money would be required if you were to save enough such that you never needed to produce income again, right? And that was one bucket of money. And then separately, you also had a big lump sum that you could apply towards your kids' college. And then,

Separate from that, you also had a big lump sum that you could apply towards your remaining mortgage balance. And those two big lump sums, the mortgage lump sum and the kids college lump sum, were separate from the calculation of covering your living expenses. I think that would be an interesting set of numbers to calculate. So thank you, Sarah, for asking that question. Enjoy all of the changes that are coming up ahead. We'll come back to this episode after this word from our sponsors. Fifth Third Bank's commercial payments are fast and efficient, but they're not just fast and efficient. They're also powered by the latest in payments technology built to evolve with your business.

Fifth Third Bank has the big bank muscle to handle payments for businesses of any size. But they also have the fintech hustle that got them named one of America's most innovative companies by Fortune Magazine. That's what being a fifth-third better is all about. It's about not being just one thing, but many things for our customers. Big Bank Muscle, FinTech Hustle. That's your commercial payments, a fifth-third better. The holidays are right around the corner, and if you're hosting, you're going to need to get prepared. Maybe you need bedding, sheets, linens.

Maybe you need serveware and cookware. And, of course, holiday decor, all the stuff to make your home a great place to host during the holidays. You can get up to 70% off during Wayfair's Black, Friday sale. Wayfair has can't miss Black Friday deals all month long. I use Wayfair to get lots of storage type of items for my home, so I got tons of shelving that's in the entryway, in the bathroom, very space saving. I have a daybed from them that's multi-purpose. You can use it as a couch, but you can sleep on it as a bed. It's got shelving. It's got drawers underneath for storage. But you can get whatever it is you want, no matter your style, no matter your budget.

Wayfair has something for everyone. Plus, they have a loyalty program. percent back on every item across Wayfair's family of brands, free shipping, members-only sales, and more terms apply. Don't miss out on early Black Friday deals. Head to Wayfair.com now to shop Wayfair's Black Friday deals for up to 70% off. That's W-A-Y-F-A-I-R.com. Sale ends December 7th. Our next question comes from Aisha. Hi, Paula. A bit of a different one here. I'm a 31-year-old nurse from London, UK, moving to the U.S. in a few months. I have a private pension, 40,000 pounds in liquid savings and about six months worth of living expenses in an emergency fund. I also have about £10,000 invested in index funds.

When I get to the US, I'll be making around $80,000 initially, moving up to 130 within two years and by year five, it will be about 170 give or take. I also have a side hustle that earns around $30,000 a year, working remotely about five to ten hours a week with no requirement to do more or less. In terms of debt, I have around £70,000 in student loan debt. But in the UK, there is no pressure to pay it back right away as it doesn't affect your day-to-day life, credit or salary. Other than that, I don't have any other debt. I plan to build a life in the US, therefore I would like to start investing right away. I would also love to own property. I was hoping to reach fire by 45 with about £60,000 a year to live comfortably, a bit more than comfortably, which I was on track for, but that was

based on my life in the UK where we also receive estate pension, free healthcare and the cost of living is just lower in general. I am however still comfortable with the $60,000 figure to reach fire however. Do you have any advice on what priorities should be right away? Is it achievable or do I need to change my goal? Any advice would be really great. I'm really excited but super super overwhelmed. Thank you so much. Aisha, first of all, congratulations and welcome to the US. I'm thrilled that you want to create a life here. I love living here. So welcome. I hope you enjoy it. Good luck with the move. let's talk about your question. There are two things that strike me right away.

First, you mentioned you have about 10,000 pounds invested in index funds. That's a great start, but that is the number that I want to beef up quite a lot. So to the extent that you are able to pour more money into index funds, that will go a long way towards helping you build your net worth and get closer to fire. You're doing very well when it comes to cash. You mentioned that you have $40,000 in liquid savings and six months' worth of living expenses in an emergency fund. So I'm not worried about your cash position. I would say the focus is to start putting more of your money towards investments.

You mentioned that you have a private pension, and that will become relevant, I'm assuming, when you are in your 60s or when you reach some type of designated retirement age. but for the purpose of reaching fire at 45, which is for you, that's 14 years from now, that's not something that would go into the calculation. That is, however, nice to keep in the back of your mind as you're calculating the two different buckets of fire money that you need, the bucket of money that you need to get from age 45 to age 59 and a half, and then the bucket of money that you need when you're in your 60s and above. I would also check the fine print on the pension so that you understand how much you can expect to be getting, at what age you can expect to start receiving it, whether or not it's pegged to an inflationary increase, and so on and so forth. Make sure that you know all of the details of that for planning purposes. But zooming back out again, the big thing that's one of the two big things that struck me when I heard your question is that you don't have a lot right now that's invested in the market. You don't have a ton that's invested in industry. You don't have a ton that's invested in.

index funds. As of the time that we're recording this, the market, the U.S. stock market, has dropped, and so this is a really nice time to buy the dip. But of course, that being said, all times are good times to buy. That's the rule of index fund investing. Just keep buying, keep accumulating those assets, regardless of whether the market is up or down, continually buy in, because time in the market is more important than time in the market. the second thing that struck me is that your side hustle earns about $30,000 a year, and it requires between five to 10 hours a week of your effort. Let's just take the average of that.

Let's say that your side hustle requires seven and a half hours a week from you. That means, on average, you're working around 390 hours per year, and you're making $30,000, that's $76 an hour, $77 an hour, really. That's a great hourly rate, a higher hourly rate currently than what you are earning in your day job. So if there's any way to amplify that, that seems to be a big opportunity. I think there's a huge opportunity here for her to design a new life. I mean, how cool when she gets here to have a clean slate. And by the way, what's interesting to me is that she very clearly has this opportunity.

but in some ways, Paula, we all do and we don't realize that. We don't realize that just because we operated in one fashion yesterday doesn't mean that we have to wake up and be the same tomorrow. We can do things completely differently if we want to. But in a very real way, she's living that. When she gets here, it's all brand new. And so I think this idea, and it's very similar to what we talked about with Sarah, maybe this is a theme on this episode is if she works through the calculation of how much money

she needs to save toward her various goals and puts money in those pots. So her fire number. But then second, I think it might be a second pot. Or maybe it's pot one and pot one A where she's subdividing some money toward building real estate because I'm not sure that I would put the real estate money into an index. fund, if she's building up for that. But it still goes toward her fire goal, right? It's still a great long-term investment to reach that goal, find out how much money she needs to save to reach that goal. And then what's nice is that creates her budget, Paula. Like now she's here and she's wondering,

okay, how much money safe to spend? There it is. She's got that number. And now, now she knows this money safe to spend. This is money that I'm saving. Money's going into the right spot for those opportunities. She can then focus on whatever opportunity she has to build a life instead of worrying about, is my money going to the right place? So how should she approach that, Joe? She asked if we have any advice on what her priorities should be right away. Well, I look at the order of operations. And so let's just walk through these. Number one is to protect and preserve your cash flow, right? So that is number one. We know her cash flow is going to change. It's going to get better over time the longer she's here, but it seems like it's still okay immediately, right?

Operation number two then is make sure that the debt payoff strategy is good. It's that she has a strategy. A lot of people don't even have a debt payoff strategy, but I think she does. I think she's fine with her debt payoff strategy. She knows that she has the student. loans. There's no impetus to pay it off quickly because it doesn't affect her credit. So I like that. So when cash flow is even better, she can set up maybe more aggressive payments, but there's no immediate need to do that today. So then that means number three is investing for your short term and long term goals. And she's laid those out that she knows what they are. So then that leads me to my first question is, well, how much money do we need to do per month to reach that call?

So that's the first place in Joe's order of operations in his head, TM, that I don't have a definitive answer yet. So that's the first thing I do. So that is my advice. My advice is find that number. Find that number and how much is that? And then I get to this wonderful idea that guess what? A question she didn't ask is, what's my budget going to be?

I get here. Right. That number defines the budget. It's awesome. Then we know how much money she has for rent, how much money she has for groceries, how much money she has for travel. We know all those things because we know the long term, the real goals are already taken care of. Right. And the thing that is a huge opportunity for her when she first comes to the U.S., she mentioned that when she arrives here, she will initially be earning around $80,000, which means after taxes she'll be taking home around $60,000. She also mentioned that she's comfortable estimating about $60,000 as the amount of money that she expects to live on when she reaches fire.

So what a cool opportunity, given that her after-tax take home will be ballparked somewhere around $60,000, she's going to be able to see, is it realistic for her to live on $60,000? And of course, you know, as she's planning for financial independence, as she's going through more specifics, she's going to have to change some of her calculations based on what amount of money does she have in tax-deferred accounts versus tax-exempt accounts versus tax-a-ball accounts. You know, she can cross those bridges later.

But the fact that her day job will initially be paying her an aftertax income of around $60,000, she's going to be able to see what kind of a lifestyle can that afford her. And is that a comfortable lifestyle that she could sustain? And this can't be overstated because it's not just for her. It's for everybody in the community that this idea of playtesting your goals ahead of time, number one, to make sure that this. truly is the goal. Because to your point, Paula, she sees 60,000. And I don't know how she's, for some people, that might be, oh, my goodness, is way more money than I thought it was going to be. It's fantastic. But I really don't need that much. For other people, it's like, wow, I can't do anything on this money. Right. Right. So, and that's much more what you feel comfortable with and what

your lifestyle priorities are. But she'll get a true feeling. For me as an example, I went through a time, Paula that you know where Cheryl, my spouse and I were living the nomadic life. And I hated it. And I thought that I was going to love it. And the fact that I've been able to playtest that lifestyle ahead of time hugely affects how I think about my future versus the way I thought about it before I'd playtested it. Right. Exactly.

Yes. So she gets to test drive that goal. And the side hustle money, all of that. after taxes can be put towards investing or paying off her student loans or some combination of the two. And what's awesome is because she detailed how her income is going to get larger, by having the goals locked down immediately, it means life in the United States is going to get easier for her overtime. Exactly.

Powerful place to be. Great place to be. Exactly. So Ayesha, I'd say you're in a great place. focus on dialing in your budget when you get here, focus on test driving, that $60,000 figure as a way of deciding whether or not that's a comfortable fire goal for you, and focus on shoveling more money into index funds and other investments, as well as leaning into that side hustle that pays you so well, particularly in the first year or two before your salary increases.

So thank you for asking that question. have fun moving to the U.S. That's such an exciting time. My dad lived in briefly. He lived in England for a little less than a year before. That was long before he moved to the United States. So his first experience of living in an English-speaking country was the year that he lived in England. I lived in England for 12 days.

Some people call it a vacation. Actually, she may call it. it a holiday, right? They call it a holiday. Yes, she would call it a holiday. Yes, but I called it living in England. And I call that delusion. I said hello to the queen. Well, I was in a crowd that waved at her from the gate of Buckingham Palace and she didn't wait back. She wasn't even at the window. So that was kind of annoying. So one star to England for that. That was annoying. You're annoyed with the queen. She had no idea. I was there. I mean, you would think. You would think she'd be inviting you to dinner. Big time podcaster comes all the way over there and yet no.

Our next question comes from Joe. Hello, Paul and Joe. My name is also Joe. Don't you hate it when others make references to things as average and use your name while describing that average thing? Because Joe simply were extraordinary, not average. Anyways, I'm looking for some guidance on some options to acquire my first house hack, and I'm torn between two of loan. types. So some background, I'm 28. My portfolio is good in all other asset types, crypto, physical metals, stocks, mutual funds, and now I want real estate. Currently, I rents 1550. I'm able to save about 1,500 a month with that payment after I'm already saving 20% of my income for retirement.

So my long-term goal is to not need my job by 40. My short-term goal is to acquire a two-to-four unit house hack. And if I don't hate being a landlord, do it again. Maybe again, by 45, I'd like to cash flow about $3,000 a month. And I think to do so, I'd like to aggressively pay a small amount of properties off. I'd rather own them outright than keep acquiring more and more doors and more and more loans. I'm 28 years old currently. So the two loan options I have are FHA versus a doctor loan.

The FHA is a 30 year fixed and the doctor loan is a seven or 10 six arm, you know, 10 years fixed. And then it would adjust every six months. So currently I only have about 15K in liquid cash. So I want a down, you know, a load money down option. I've read your blog post. It was from 2011 about an R inverse of fix, and you state that we shouldn't assume we'll be able to hand the extra payment in five to 15 years when mortgage rates rise, which at this rate they probably will. And, you know, use an example of having twins and a brother getting sick and something explodes. And you make amazing points.

And I don't disagree that a $700 mortgage increasing to a $1,200 once the fixed rate goes away would be an issue. but I plan to aggressively pay this off and hopefully have it paid off in 10 years, you know, all the properties I do acquire, maybe 15. So the reason I lean towards the doctor loan is the overall monthly payment is $250 lower. There's no PMI and I get a better rate by about a quarter to a half a point. I'd really love your advice here, both of you guys. I appreciate everything you do. Thanks.

Joe, fellow Joe, member of the Joe fraternity, the Joe's, the, the Jojo's? The, no, Joe Joe is not. Come on, Paula. Come on. I think it's the badasses that are Joe. Yes. But great question, Joe.

Here is one thing that struck me about your question. And this comes down to behavior, Paula, which is super exciting. I love talking about behavior because we get so wrapped up in optimization. We get so wrapped up in the math. insurance agents. We spent a lot of time in the last few weeks on the show talking about insurance and permanent insurance agents. I'll tell you a sales technique, a cheesy sales technique, I learned early in my career from insurance agents when they would try to get people to save money into an insurance product, which is generally, as we have detailed in the past, for most people, disgusting, gross, inappropriate. No thank you, right?

they will say that people that say buy term and invest the difference, meaning you can buy a permanent life insurance policy where savings automatically gets saved, or you can buy term insurance, which is much cheaper, and you can invest the difference into index funds or wherever the heck you want to, right? Take that extra money and put it aside. insurance agents taught me something that was correct. And the thing that was correct, Paula, that you'll love is that the problem with buy term and invest the difference is that nobody invests the difference. So when people say, when people tell me, I like this loan option better, in this case, Joe, because it saves me $250 a month. My question is, Joe, will you actually save that $250?

Because behaviorally, Paula, people don't. So the key to this question, I think, has less to do with math than it has to do with Joe. If Joe will take that $250 and actually put it down toward the mortgage, so it is aggressively paid off in 10 years, then that may be a better option. But you and I both know that the safer option of the two is the 30-year fixed. We're not going to have to worry about where are interest rates in the future. We don't have to worry about what's this going to do to my cash flow as interest rate shift. I know that's safer. I'm not saying it's better.

I'm saying that 30 year fixed is much safer. But I think for me, the big question for me goes back to Joe. Are you going to be the one person in 20 who actually does take that $250 and saves it? Or are you the person who increases their lifestyle with the $250? And 10 years from now, interest rates are sky high. And all of a sudden, he's got this much more expensive possibly mortgage than he had for the first 10 years. And if things change, which I love the way Joe described that, you know, if things change for the worst in the future and he doesn't have the cash flow to pay it, he now puts his house at risk.

Right. There's a chance that that $250 a month will turn into a bar tab. That sounds good. And assuming it is, Joe, I want to hang out with you. To increase the likelihood that that $250 a month will actually go towards aggressively paying down that property, automate it. That's what Joe would need to have to do. He would have to set up an automation such that $250 per month, if he were to take out this adjustable rate mortgage, that $250 per month would automatically be applied to the mortgage as an extra mortgage. principal payments. Absolutely. Absolutely. Fantastic. The risk is that one, two, three years down the road, he might change his mind. And here's how this often happens, even among people with the best of intentions. In the world of real estate investing, there are a thousand and one

different approaches. And it can be easy to be swayed by persuasive voices. So right now, Joe's intention is to pay this particular property off in the next 10 to 15 years. He says he'd like to aggressively pay off a very small number of properties. But what could easily happen is that two years down the road, three years down the road, he decides that rather than aggressively pay off this particular property, given that it has a low interest rate, he's going to take that $250 a month and put it towards saving for a down payment on another property because he wants a small number of properties. He doesn't necessarily want 100 units, but maybe he wants five or 10. So he then starts putting the $250 a month towards saving for a down payment on another property, or he starts applying

it towards making improvements on a given property. And all of a sudden, that 250 is no longer going towards principal paydown. Fast forward 10 years, and he's not nearly as close to paying off this particular property as he thought he would be. And he still feels as though he's done a good job with managing that money because that $2.50 a month went towards renovations or it went towards the down payment on the next property. But his assumption that this loan, this particular loan would be close to paid off in 10 years is no longer the case. That's where this plan could go awry, even if he does apply that 250 towards some type of net worth improvement. He's not squandering it.

It's not a bar tab. But he's still making financially responsible decisions. And yet, he's further away from the mortgage payoff goal than he thought he would be. And as a result, he's more exposed to the risk of having the mortgage adjust to a rate that he cannot meet. Joe, what I would do if I were you, check to see the maximum amount that that adjustable rate mortgage could adjust. There is an upward limit to how far it can go. So look at that maximum amount. That's your worst case scenario.

And then ask yourself, in the event that you had to meet that worst case scenario, could you float it? Could you handle it? What's your biggest downside? Right. Absolutely. that's great. Well, thank you, Joe. Both Joe's really like that answer, Paula.

I will speak on behalf of both Joe's. Yes. It's essentially, you're borrowing this concept from the world of poker, risk of ruin. Yeah. Yeah. People in a poker tournament play much more conservatively than people who are sitting around the card table with their best friends on a Friday night playing for chips for fun, right? And why is that? It's because in a poker tournament, you have a higher risk of ruin.

You can get kicked out of the tournament and then you're no longer in the game. So you play more conservatively in a tournament than you do if you're just scrimaging with friends. The same concept applies here. The thing that you're trying to protect against is the risk of ruin, the risk that something will happen that is so bad that it knocks you out of the tournament. It knocks you out of the game. This is a tangent, but I think it's an important tangent. I also like this when you think about new job opportunities. If I pursue this new income opportunity, what's the biggest downside that I have?

What could this do long term to my income? And as an example, I was talking to an entrepreneur yesterday who was contemplating, moving from an established company into a new company. And you know what was neat? He said, so worst case scenario is I work here for six months. This new company fails. But I get to learn how a startup works. I get to learn all these valuable new skills that I didn't have before.

And he was able to detail five new skills. So even though Paula, he might have to regroup on his income, he had confidence that with the people that he knew, the resources he had, that it was worth that risk. And the fact that he went through the risk of ruin, he was able to go through very confidently knowing what his downside was being a part of this startup opportunity. I think this applies, I just wanted to point out that I think this applies in a much wider aspect than we're even presenting it here. Great answer, Joe. Thank you. Honorary Joe, Paula. Paula, Joe. Paula, Paula, Joe. All right, so Joe, there is our answer. Congrats on your high savings rate.

Congrats on the upcoming first house hack that you're about to do. Best of luck with everything that's to come. We'll return to the show in just a moment. Our final question today comes from Kat. Hi, Paula. First of all, thank you for all you do. Your podcast has been pivotal in my financial journey so far. My question has to do with the decision around investing money into my retirement account

versus getting started in real estate investing. For some background, I am very new to this financial journey. So thank you for your help in getting me started. But I only have 20,000 currently in index funds across traditional and Roth IRAs. I am self-employed, so I do not have access to 401ks. I have $18,000 in an emergency fund to act as a buffer during my slow months. And it represents about four to five months of expenses. I have another $20,000, which I received in a windfall, and I'm not sure where to put that $20,000.

I currently rent my home, which I love renting, and my only debt is a $23,000 car loan at 3.99% interest. So my question is what to do with that $20,000. I could throw it all into my retirement accounts, or I could use it towards a down payment for my first investment property and use that as a short-term rental. Whatever income this property produces, I would set aside. and save up for another down payment towards a second investment property or put the proceeds into my retirement accounts. Is being focused on index fund investing or real estate investing better, as in doing one or the other, or is doing a blend of the two ideal? I am 38 years old and feel a bit

behind the eight ball in terms of my portfolio and my journey towards financial independence. So I want to take some really intentional steps towards building that portfolio now. Thank you so much for all your help. Kat, congratulations on everything you've built so far. You have $20,000 in index funds. And I know you said that you're 38 and you feel like you might be a little behind the eight ball and you have only $20,000. Let's celebrate that. You have $20,000 in index funds.

And you have decades and decades and decades for that $20,000 to grow and compound and accumulate. and earn capital gains, dividends. In fact, can we get a round of applause? Cat, celebrate everything you've done. You've got an $18,000 emergency fund. You have no debt other than a car loan, and your car loan has a very reasonable interest rate, a 4% interest rate, which is, at this point,

way below the rate of inflation. I hear a lot of good things in where you currently are. Now, let's talk about what to do with that $20,000. One, I don't want to call it a red flag, but maybe an orange flag. Is there a word for some combination of orange and yellow or yellow? What's the color between orange and yellow? Yeah, what's the color? That is, yes, that's what I'm asking.

Hey, Google, what is the, you know what? I want to find this out. Yellow, orange, because I know that orange is the high. Because I know that orange is the hybrid between yellow and red, but I feel like, you know, calling it. They call it orange yellow according to Microsoft Bing. According to my, I forget you're the one person who still uses Microsoft Bing. Easy. Hey, I get paid to search.

You don't get paid to search because you're all Google. Every time I search or something, I just got some Amazon money by looking that up for you. You're welcome. You're welcome. You know what? We had the founders of DuckDuck Go on this podcast, their previous guests on this podcast. So you would think that that would be the search engine I use. But no.

This color is characterized by its bright orange. Mixing yellow and orange will give you orange yellow or yellow orange. This color is characterized by its bright orange hue, but with a lighter note, in the event you do not have orange yellow on hand, you may easily use primary colors to arrive at this outcome, it says. I kind of have a craving for citrus fruits now. Yeah, everybody's saying it's, we need a better name, Paula. That's the problem. We have a horrible name here.

This is a huge opportunity for the Orangeella marketing community to, to increase their exposure in the world. Like anybody who's part of that community is like, we have a branding issue. Meanwhile, Kat is like, wait a second. So what is the actual concern here? Yes. What's the actual flag? Easy Cat. get to it, but we have far more pressing things to talk about.

The thing that created a citrus fruit flavored flag. That is a tongue twister, by the way. We get loopy at this end of the show. The thing that brought up that flag for me, you mentioned that you are interested in making your first investment property a short-term rental. And so I want to pause and explore that idea. And I'm not saying don't do it. I'm just saying go into it with your eyes wide open knowing what you're getting into. Your first investment property is your training wheels property. Anytime you do anything for the first time, whether it's your first time driving a car, your first time cooking a steak, your first time holding a tennis racket, any time that you are a novice at something, there's going to be a learning curve, and it's

going to be a little clunky, and you're going to make some beginner mistakes. And that's the reality of learning any new skill and doing anything for the first time. Now, your first time owning an investment property, therefore, will be stressful enough without the added pressure of it also being a short-term rental. And the reason that there's added pressure is because whenever you own a property, the turnover is where the majority of the workload happens. And if you have a long-term rental, where the tenants stay for at least 12 months, if not longer, you have a turnover once a year. If you have a short-term rental, you might have a turnover every few days.

So owning a rental property is akin to owning a commodity, whereas owning a short-term rental is more comparable to being in the hospitality business. And it's not just the turnover that distinguishes the commodity. of a rental property to the hospitality industry of a short-term rental, it's also the level of service and expectation. If you have a rental property, you're not expected to resupply the toilet paper, the dish soap, the sponges, the laundry detergent. You're not expected to wash your tenants' bed sheets and sweep the floors and empty the trash cans. Those are all expectations of you or of your team when you own a short-term rental. And that's why a short-term rental is far more analogous to running a hotel or being in the hospitality sector than it is being a rental property owner.

Now, it might be the case that you already know this. It might be the case that you used to work for a bed and breakfast, or maybe you used to work in the hotel industry. Maybe you still do. I don't know. So it may be the case that you are very comfortable with the hospitality sector, and part of what draws you to the idea of a short-term rental is the fact that you enjoy that sector so much. But in the event that that's not the case, and in the event that you might be conflating being a buy-and-hold real estate investor with being a hospitality provider, I want to be very clear that these are incredibly different fields. This is what I love about this show is that I think there's a whole different way she could go.

Now that I've climbed off of my hospitality sector soapbox. Yes, absolutely. What lit me up was when Kat said that this money was a windfall. And so here's a couple of assumptions I made that could be wrong. assumption number one is that cat before this windfall already had a trajectory and a plan that she was using to reach her long-term goals and I could be wrong there because she's new to this maybe she doesn't yet have a plan but if she does and she knows where the money's going to come from to reach her goals without this $20,000 then I think okay how can we best

apply this $20,000 so it makes a long-term impact and I actually think that possibly, if those assumptions are valid, the best move she could make would be to pay off that car. What? But I feel like I need a sound effect here of like some cartoon character. I think I need an Anniville dropped on me. This is nothing to do with the interest rate. If you remember the order of operations that we talked about earlier for Aisha, it's number one, preserve cash flow. Number two then is debt payment strategy.

Those are those are one, two. This I think Paula accomplishes a lot. Having a car loan is something that if we can avoid it in the future, is always going to be a win. Regardless of whether interest rates high, interest rates low, you're always going to win by not having a loan against a depreciating asset. Instead, she can actually take the money that she now has that's going toward that car loan and put it into a fund, which is now her next new car fund. So she goes from a net negative to a net positive with the cash flow that she has on a monthly basis that goes toward that car.

And what's cool is when she gets enough money for her next car, I'll tell you what happens with most people when we've deployed money in this way in the past. they know they have enough money for their next car, but then the game becomes, how long can I drive this existing car and not use that money, which gives her an even bigger win. So I think it has nothing to do with the interest rate.

I think that if she takes this windfall and pays off that car and then takes the $250, $300, $400, whatever the amount is, she's paying toward that car loan every month, and automates, just like we told Joe, you have to automate and make sure that money gets saved, but she automates it into an account that's paying her interest. Wow. From here on the rest of her life, she could have money in a spot

that her cars are always going to be paid for ahead of time. So what you're saying is pay off the car and then take that same amount of money and start making a car payment to herself. I think it's great. I think it, and only because of the fact that I think at 38 years old, she looks at doing that over the next 40, 50, 60 years. That's a big, big win. That is a big permanent win when it comes to transportation cost. So I like it. I don't like it over the short run.

And I also think if she hasn't calculated how far behind she is, it may make more sense to apply that windfall in a way that it helps her catch up. let's say that $20,000 is exactly what she needs to catch up on her long-term goals when she says she feels like she's behind. I would love for her to run that number and to figure out what that number is. How much is she behind by? So that might cloud my thinking on this, but I think the car loan, Paula, is much more in play than people think it is. I mean, it's not a terrible option.

But given that the interest. rate is so low, 4% interest rates. They're not always going to be low, though. Car loan interest, we don't know what the car loan interest rates are going to be in the future. I'm not saying it about that as much as I'm saying. Remember, number one is cash flow. Right. She captures whatever that car payment is, $250, $300, $350, $350, $400. She captures it immediately by deploying this windfall money she didn't know that she was going to have. She all, she then goes to a net positive for the rest of her life if she captures that every month. It's a huge.

It's a sea change. Right. But she also has the option of putting $20,000 into her retirement accounts. Right. So right now, she's got the opportunity to invest $20,000 into tax-advantaged accounts at the moment of a market decline. She's not to be able to put $20,000 all at once to, uh, into a tax-advantaged account.

I mean, the only place she'd be able to put $20,000 all at one time in a tax-advanted account would be an annuity. No, she could do, so she could contribute 18,000 to a 401K, and then up to 6,000 to either a Roth IRA or traditional IRA. Remember, she's self-employed, so her numbers are going to be a little different. But 18,000 is the max that she can put into a 401K. Yeah, but she's already putting money toward that goal. Okay, but still, she can do the 401k maximum contribution is 18,000.

The Roth IRA maximum is 6,000. So even if she's... Hers is going to be the difference between whatever she's doing now and those caps. Right. But she says that she could put this entire 20,000 into her retirement accounts. And if she's HSA eligible, I mean, you can use an HSA as a de facto retirement account also. And so that's another 3.5,000 in terms of... of money that she can sock away into tax-advantaged accounts.

So between the 401k, the solo 401k and the IRA and the HSA, even with the current contributions that she's making, it sounds as though she has enough capacity within all of her tax-advantaged accounts that she would be able to put all 20,000 into it. I would take the car off the table for the rest of your life. I would put the money into tax-advantaged accounts knowing that right now you're buying the dip, right? Right now we're in a moment. We don't know that this is a dip, and I hate the idea of buying a dip. Well, it's a market pullback.

And if we're investing for the long term, we're investing for decades, even if the market does continue to fall, who cares? Because she's investing for the next 50, 60 years. But assuming that she has a plan, which was the way I started my answer. her that she's doing that already, Paula, she's already buying the dip. She's already doing that. Well, she's already probably dollar cost averaging. Yes, which means that she's buying at lower prices as she goes. Right. Right. But it's an opportunity to make additional contributions above and beyond the dollar cost averaging that she's currently doing. Versus an opportunity that lasts a lifetime of never having a car payment again. Versus an opportunity of having money in a tax advantage account that will

compound and grow for the next 60 years. I think there's compounding on the fact that she doesn't have a car payment. That's compounding. Sure, but given the amount that she will need in her portfolio in order to retire. Well, and that's what we don't know. Here's the thing. And that's why I also caveated my answer with assuming she already has a plan to reach her long-term goal if she doesn't.

I would love to see what that number is because I think that we can then apply some math to this to decide which one has the biggest impact. And I kind of did the car for shock value. However, I do think it is way, way more on the table than at the initial glance. I think of all of the options that are on the table, the one that I like the least is splitting the money between index funds and real estate. And the reason that I like that the least is because if she were to invest in real estate, she would need enough money for a down payment plus cash reserves.

Yeah. Because she'll want sufficient cash reserves to cover unexpected repairs and maintenance, to cover unexpected vacancies. You know, she doesn't want to use the entire, she would not be wise to use the entire amount for the down payment alone. So she would need a down payment plus cash reserves. Plus, if she plans on turning this into a short-term rental, then she needs enough money to furnish that short-term rental.

Right? She's going to need to buy a bed and a couch and chairs and a – and, you know, it's not even the big furniture. You're going to get the big stuff off of Craigslist. It's the small stuff that really creates a death by a thousand paper cuts. It's the shower curtain, the bath mat, the soap caddy. The soap caddy. I'm serious.

The spatula. The can opener, right? The oven mitts. Those are the things that really cause the costs of setting up a short-term rental to add up. The hangers in the closet. Yeah, there's no splitting it. If you're going with real estate, it's that and more. Right, exactly.

So, I mean, I think real estate investing is a great option, but she's going to need every penny of that plus, plus some, in order to have the down payment plus the cash reserves, plus optionally, if she does go the short-term rental route, the initial startup costs of that short-term rental. So definitely don't pursue a blend of index funds and real estate with the amount of money that you currently have, Kat, with $20,000. That's not enough to split between the two. But Kat, my vote is index funds in a tax-advantaged account. Thank you for asking that question, Kat. Best of luck with all of the options that are in front of you. You are choosing between a lot of great choices. And so the good news is, you can't go wrong.

I mean, all of these options are fantastic. Joe, we did it. We did. And how much fun was that? Every time I record with you, Joe, I always have a great time. We've discovered the hybrid of yellow and orange. We've talked about protein potato chips. We have not only discovered yellow orange. We've discovered that there's a color with a branding issue. Right. Yes, I think that was the big takeaway people should have from this whole episode. We also reaffirm that Joe is a real badass name. We did that.

And that Paula is fantastic at eating potato chips that aren't potato chips that are healthy chips. Healthy chips, exactly. We've also talked about the relative merits of Microsoft Bing as a search engine for some reason versus Google versus duck. I think, Paula, our work here is done. Joe, where can people find you if they'd like to hear more of you? Well, I'll just say this, Paula, that we talked a lot today about beginning with timelining your goals. And that is chapter one of my new book called Stack, your super serious guide to modern

money management. If you really want to find me in a place where it can make a difference on the things that we talked about specifically today, I would go to your library and dive into chapter one. But the best part of chapter one is that at the end of the end of the first. end of chapter one on page 13, Paula Pant appears and is a big part of talking about timeline of your goals. So that's where I would send people. Yes, it's the best page in the entire book. I was going to, I've gone to a handful of book tour stops with you, Joe, and every time somebody asked me to sign that book, not every time, but most of the times, I sign page 13. Of course. And I sign it with the

words, congratulations on finding the best page in the book. And that signature worth millions already. I continually think I see it on eBay. That's how this audience is reaching fire. Exactly. Auctioning off my signature. There we go. All right.

Well, thank you so much for tuning in. If you enjoy today's episode, please do three things. Number one, share it with a friend or a family member. Single most important thing that you can do to spread the message of financial independence. Number two, please leave us a review in whatever app you're using to listen to this show. And number three, while you're there, hit the follow button. Don't forget, we have a course on real estate investing. It's called Your Frustrential Property.

We only offer this course once a year. And we are rolling it out in June. And that's your only chance to enroll this year. Afford Anything.com slash VIP list to sign up. Thanks so much for tuning in. My name's Paula Pant. That's Joe Sal C-high. We'll see you in the next episode.

Here is an important disclaimer. There's a distinction between financial media and financial advice. Financial media includes everything that you read on the internet, hear on a podcast, see on social media that relates to finance. All of this is financial media. That includes the Afford Anything podcast, this podcast, as well as everything Afford Anything produces. And financial media is not a regulated industry.

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

certified financial planners or certified financial advisors, always, always, always consult with them before you make any decision. Never use anything in the financial media. And that includes this show, and that includes everything that I say and do, never use the financial media as a substitute for actual professional advice. All right, there's your disclaimer. Have a great day. One of my favorite list is at can you retire yet.com. Oh, isn't it can I retire yet? Can I retire yet? com.

Can I retire? Can I retire? Can you? Can anybody retire? I know I can, but can you? Oh, braggy. I can because you come to the website all the time. Right.