Afford Anything - Q&A: A $30K Promotion Near FI, Learning Put Options, and Scaling a 16-Unit Portfolio

Episode Date: March 24, 2026

#700: Today we’re tackling three different financial questions from our listeners. First, we’ll hear from Melanie, who is deciding whether to pursue a promotion that would increase her salary by $30,000 but may add more stress, even though she’s already close to financial independence. Next, Ami wants to learn how options trading works and is wondering how to find legitimate training without falling into expensive or questionable courses. And later in the episode, we’ll revisit Ben who called in six years ago asking how to grow from four rental units to twenty. Today he owns sixteen units and is deciding how to scale from here. We’ll tackle all of that on today’s episode #700!!! Resources: Interview with Rose Han: affordanything.com/episode652 Jeanne_Retired on TikTok (shared by Joe): https://www.tiktok.com/@jeanne_retired/video/7615363778938408223 Ben's original question on Episode 243: affordanything.com/episode243 Share this episode with a friend, colleagues, and your bank teller: https://affordanything.com/episode700 Learn more about your ad choices. Visit podcastchoices.com/adchoices

Joe, if you were on the verge of retiring, but you were thinking about taking another job, what would be on your mind? What would you want for your final job before you pull the plug? Oh, I don't know. Right now, in my life, it's this one. But I think I would just think about what makes me happy. Well, we're going to peel back a few more layers of that onion in today's episode because our first question comes from someone who is about to retire, but thinking about getting a bigger job with a pay raise and more responsibility right before retiring. And then in the middle, we're going to answer a question from a woman who is worried about scammer courses on the internet. How do you avoid the scammer courses? And then at the end of the episode, we're going to talk to somebody who went from four units to 16 units.

Well, I mean, technically everyone goes from zero units first. So from zero to 16, but the last time that we talked to this person, he had four. And now he has 12 more. Building a real estate empire. All of that is coming up right now. Welcome to the Afford Anything podcast, the show that knows you can afford anything, not everything. This show covers five pillars, financial psychology, increasing your income, investing, real estate and entrepreneurship. It's double-eye fire.

I'm your host, Paula Panta. I trained in economic reporting at Columbia. every other episode-ish, I answer questions from you. And I do so with my buddy, the former financial planner, Joe Sal C-high. What's up, Joe? Well, Paula, I am buckled in and ready to roll. Let's do this. Let's do it.

We're going to start with our first question, which comes from Melanie. Hey, Paula and Joe. This is Melanie. I have a question for you about job advancement. There's a posting at my current job that, They had posted previously that I didn't feel like I was qualified for, and now they've reposted it because I guess they didn't get any good candidates, that I think I might be qualified for it. However, it's about a $30,000 increase in salary.

When I do the numbers and the math, I should be five in about four years and my pension vests in about six and a half years. So I'm planning on working six and a half years. getting this $30,000 increase doesn't really move the needle for me on that four-year five journey or that six and a half year pension investing journey. So is it worth it to take on a new job with a lot more responsibilities and work when maybe it's not going to really impact my financial life that much? What should I be thinking about to take on a new job with new responsibilities if money isn't really the primary reason for taking the job. And I'm pretty close to five as it is. And I personally would like to retire early. I'm leaning towards not applying

for it because, you know, my job isn't causing me a lot of stress now. And I fear that this new position is going to add a little bit of stress to my life. Let me know what you think. Thanks. Melanie, first of all, congratulations on being so close to FI. And for anyone who's new around here wondering what that acronym stands for, financial independence, the point at which your work becomes optional. You've got enough money that you don't have to work if you don't want to. And Melanie, it's clear from your question that you would like to retire early and you are about to have a portfolio that allows you to do that. That's so exciting. Yeah, so huge congrats to you on being so close to this goal that I know you've spent years building towards.

I think this is a multi-faceted diamond. I think there's so much to think about here, Paula. What was your first thought? Melanie, what I didn't hear you talk about in the voicemail are two attributes. Number one, what enjoyment would you get from this role? We know from research that the three qualities that make a. significant impact in whether or not a person enjoys their job are mastery, autonomy, and purpose.

Number one, does this new role require a skill set that has the potential for the development of mastery? In other words, will you be using skills that you can develop, that you can master, where you can see your progress month over month or year over year? That's number one. Number two, will you have sufficient autonomy in your role? Can you make decisions on your own? Who has the decision-making authority? Will you be micromanaged or not? Number three, is their purpose? That actually dovetails. I started this by saying there are two questions that I want to ask.

The first is about your enjoyment of the role and enjoyment as a function of mastery, autonomy, purpose. The second question that I want to ask is really a furthering of that third piece, purpose. And so the second question I want to ask is, what good will you do in the world through this role? If you can shed light on both of those questions, and you don't have to tell me, these are questions for you to reflect on. Will you enjoy the role? And will you make a positive impact in the world through it? Those are the two questions that I think determine whether or not this is a good use of your time. I think it's an important point that you make because I've seen people retire from, things that were clearly more than a job in somebody's life. It really was a great mission they were on.

And because of societal influence, because of external factors, they really felt pressure to retire. And so when they left, filling that void, the Wall Street Journal did a wonderful story on this in mid-January about the biggest problem in retirement planning is not the money, which is super important. It's part of what we do here. It's also not health care in solving that thing. Those two are super important. The biggest problem was meaning, was mattering. They actually called it mattering. Do I matter anymore? Am I making that impact that I used to make? And now, if I'm not making that impact, how do I make an impact in different ways, in really cool, fun ways? It's kind of telling that in Christine Ben's book on this topic back last fall where she interviews a lot of retirement planning experts, Paula, she begins the book by talking about this very topic,

about mattering and about treating retirement. People think retirement's like a vacation. Every retirement expert tells you that's a mistake. Treating it like a job, but a job you love, where you still set an alarm, you still get up at a certain time. Doesn't have to be the same time. It could be a time that agrees with you. Your current job, right? It's a job you love because you get up at eight instead of it six. You know what I mean? Yeah, yeah.

But you still set your alarm. You still dress for it. You still show up every day. That's what looking at the law of large numbers doesn't work for everybody, but looking at these statistics about happy, successful retirements, that more often than not is what makes a successful retirement. There was actually a very, very funny post on social media. this was years ago, somebody was retiring, and they had read the advice, oh, you should still have some type of a morning routine like you did when you were working. And this was a New Yorker who used to ride the subway to work. So he posted a picture of himself standing in his bathroom, holding on to his shower curtain as though he was holding onto a subway pole. He was like, so for 15 minutes every morning, I just hold on to my shower curtain while scrolling through my phone. He gets the same feeling. Yeah. It's perfect. Sometimes I'll just shake.

You know. But I'm glad that we started here because it truly is, you know, if she's putting the money aside, and I want to get back to the money because I don't think the money's as clear cut as she thinks it is. If it isn't about the money, it truly has to be about, you know, what our mutual friend, Doc G, calls Little P. Purpose. Right. And Little Purpose in his definition of it is not this big, esoteric, I'm going to change the world. I mean, those high-minded ideals are great. But on a little P purposes, on a day-to-day level, how do you be a great role model for the people around you? How do you provide training and mentorship to the people who look up to you?

And what's funny is he even goes, well, I like where you're going to that, Paula. And I would 100% agree. He goes even smaller. It can be changing the goal from, you know, I roll my eyes when people say, I want to golf every day. retirement. I heard that so many times that I was a fan of, oh, I'm going to golf. Well, just imagine going to the golf course five days a week for 30 years. At some point, you're going to go, is this mattering? Is this at all? But if I change that to, I'm going to perfect my chip shot so that I X, Y, Z, or I'm going to golf all my favorite courses along the Eastern C border. You know what I

mean? You put some definition around it. You clearly have an end in mind. You've taken in this thing that ultimately is going to be this boring, non-purposeful activity, and you give it a little kick and giving it that little purpose to your golf can take it from a goal that makes me roll my eyes to a goal that makes me go, okay, yeah, yeah, I see that. Melanie, going back to your question, if you were to take on this new role or any other comparable new role, would there be purpose behind what you do? And that might be the, impact that the job's explicit role function makes in society, it might be internally with the team, the way that you improve internal operations, the way that you improve relationships

inside of the organization, camaraderie with your coworkers, are there ways that there would be that element of purpose in addition, of course, to that mastery and that autonomy? I like the way that you played one side of this. Let's equally, Paula, play the other side of this because I know you can also play the other side of this. If that's not the case, sometimes people feel this pressure from people around them. The cool thing about being as close to financial independence as you are is there's huge power in saying no, huge power in saying, you know, there's a lot of things that are going to give me purpose, that are going to give me meeting, make.

me feel like I matter, this ain't it. And when you do that, the way that you will sometimes light up inside in ways that surprise me, I'm like, well, everybody says I should do this. But then you say no. And then for goodness knows what reason I'm skipping to the mailbox tomorrow because I'm so happy that I'm not doing that thing can also, Paula, be hugely uplifting. But only she knows that. Yeah. Melanie, what's beautiful about the position that you're in right now is you get to choose your job not based on its pay, but based on whether or not you want it. So the underlying question is, what do you want? And I think that is, for many people, a difficult question to answer in the context of jobs, because for many of us, we start our

adult lives looking at jobs from the framework of, will this pay my bills? And so, it can be, it's a new challenge to be able to look at a job and not ask the question, can it pay my bills? Because the answer is yes. And the answer is my bills are already mostly covered independently. And so then the question becomes, is it a fit? Yeah. Is it a fit?

Yeah. Can we talk about the numbers, though? Yeah, yeah. Let's talk about the numbers. I think to some degree, ready for Joe's hot take? Ooh, I love Joe's hot take. I think to some degree, Paula, the idea of the FI number is BS. The FI number, I think is BS. Because the FI number is the bleeding edge. And if we're talking about not retiring, but having a happy, successful retirement. And I've, as a lot of people know, I've been diving into these numbers the last few years, I become more and more solidified in my opinion of, the second you cross that line, that is based on so many assumptions that blow in the wind

that while you may stay retired, it isn't going to be a happy retirement. So I think this mental game we play where we read tons of blogs, listen to tons of podcasts, and they're all pontificating about safe withdrawal rate if we want to get into it in the most nerdy way possible. I think starting off with safe withdrawal rate is BS. Because the second we safe withdrawal rate, we get these false conclusions that now I'm safe, which is not the case. It might be safe financially. It isn't safe if you want to be happy. And let me tell you why. We begin in our head then with black swan events. What are the black swan events? Let me give you one that happened. You and I, before the pandemic, we never talked about inflation. We would flippantly,

casually say, hey, you know, 3% inflation put that in your plan. Just remember that. I know people tend to forget it. Remember it. I don't think there's anybody in the afford anything community right now who will forget inflation. Right, right. Well, we told people to plan for 3% inflation. We never anticipated 9% inflation, which if you recall in inflation peaked, when was it, 2021 or 2022, inflation peaked at 9.1%. Crazy number. Crazy, crazy numbers. Yeah.

And it's funny, you see it at the grocery store. And imagine that you just retired on the bleeding edge of your, quote, safe withdrawal rate. And now you're like, oh, was it really safe? Was it not safe? Am I going to be okay? Do I got to change my way of living? And the worry factory begins. And let me tell you how this spins out of control.

That then, that inflation number. you're not doing one who's worried about it at the grocery store. People in stocks worry about it. People Goldman Sachs worry about this. People on Wall Street all worry about it. And guess what happens? Then the stock market begins to gyrate in ways that as a retiree now, who doesn't want to go back to work makes you freak out more than you used to. People freak out anyway. But I'll tell you who freaks out is people that are on a set fixed income that they want to control. And then you begin worrying about government intervention, and let's just throw something crazy out there. I mean, nobody would ever do this, but let's say somebody decided to do tariffs. I mean, if tariffs happen,

and then that makes me worry even more about inflation, then I worry about the stock market, and then we have an AI compounding problem. Oh, God, what's going to happen then? And then we have more government stuff going on, and we have issues going on in the Middle East. What's that's going to happen. And if I'm close to that safe withdrawal rate number, the thing I'm not going to be safe from is unhappiness and worry. I got to get as far away from, I don't got to get as far away. I mean, I know some people that listen to this podcast are going to worry so much that they build this massive amount of money that they're never going to spend. I was going to say, you're really making the case for just one more year syndrome. Yeah, I don't want that. But what I also don't

want is to start with safe withdrawal rate. What I want to start with is what do I want to do in retirement and what makes me happy. We're talking about this job in terms of what makes you happy. So let's think about what is it, because she said she's really excited about retiring. Right. Yeah. Yeah. If I were sitting Paul across the table from her, I would say, what is it that's lighting you up right now about retirement? Let's go through it. And let's get granular. And then I would start putting numbers on those things. And then I would work backwards to, is this safe? And this is then how I apply safe withdrawal rate. And then I see if there is a reasonable delta between these two numbers, the number that's my happy retire rate and this quote unquote safe withdrawal rate

that science is telling me. And if there's a reasonable delta, then listen, I'm always going to worry, right? I'm always going to worry, but then I go. But I don't begin with the bleeding edge. I begin with what's my lifestyle look like. And then I work backwards to safe withdraw. Right. And I don't know, Melanie, when you talk about your safe withdraw number, which one you're working from. So I'm really talking to the community at large, much more than you. Right. And technically she never said safe withdrawal number. She said phi number. Well, she didn't. She said fine number, which is why I'm not speaking Melanie directly to you. Because if your fine number is the happiness number that I just outlined, then high five, great, go, do it, whatever it is.

But in this community especially, with all of the social media crap that I see, people spend way too much time on safe withdrawal rate, which is fine, but not the place you start. Okay, so I have a, Joe, similar take to yours, but it's a, the nuances are a bit different. And the reason I don't believe in FI number in the way that it's traditionally presented is because if you were to map a person spending across their life, spending is dynamic. Every year, your spending is going to be a little bit different based on not just broad macro economic influences like what you talked about, Joe, inflation, etc. But also the details of your own life. There are some years you have higher medical bills, some years you have big veterinary bills, some years you would make discretionary choices. like travel, some years, you move and incur moving expenses. So your spending every year of your life is dynamic. And yet we often form these phi numbers by pulling a singular data point, which is often, what is my spending in the year in which I learn about phi, we pull the singular data

point, multiply it by 25 and say, well, I guess this is the number I need. not only has your spending been dynamic in the past, your spending in the future will also be dynamic in ways that you cannot predict. There are black swan events. Joe, you mentioned macroeconomic black swan events. There are also many personal black swan events. What if somebody hits you to the lawsuit, right?

Yeah. You know, what if a neighbor slips on some ice in front of your house and falls and has an injury and sues you for negligence? I have a friend who a drunk driver drove through their living room window. Oh, wow. Luckily, nobody was hurt, but just imagine the disruption to your life and all the things that happened, like things come out of nowhere. Right. Exactly. There are so many personal Black Swan events that could also happen. And, you know, in addition to Black Swan, there are ways that your priorities, your values, your definition of a happy or satisfied life, that changes over time.

And what? Well, and we talk about the. go-go years, the slow-go years, and the no-go years. I mean, retirement is going to shift, and I love this, that we can't take a single data, which is why, you know, if you're going to have these big rocks during retirement, these things that you really want to do, we should list them. Like, we should have those on a timeline. We should totally, as much as we can identify those, we should have them. It's interesting because when you talk to retirees, they get this aha. Even people that worked in the industry. There's a woman I follow.

on TikTok, Jeannie underscore Retirement, who's recently retired, who shares her journey. Do you want to hear Jeannie, who's recently retired, Paula, makes the same point as a retiree that you just made. Check this out. Four years ago, and there's one thing I didn't realize about retirement until just recently. Retirement is episodic. There's different seasons to it. Now, I know the go-go years, the slow-go years, the no-go years. but I'm talking about even within the go-go years, there's different seasons.

I'm now in season three. It's well documented here that season one, I didn't really like retirement. I retired and my expectation for retirement did not meet the reality. Season two, I call my TikTok era. That's what I took the TikTok and started making TikToks about retirement and started learning. It wasn't just me that struggled. Now, I know there's people that. And so she's going to continue going.

And I can give you the link policy. You can put it in the show notes if you want. even within these seasons, they're seasons, right? It's so dynamic as you're saying, everything changes, your feelings change. Even if you're ready for it, like this woman, Jeannie thought she was ready for it. And it turned out she wasn't is nearly ready for it. Benelais, she thought she was. I want to go back to, you know, your question is not about retirement per se,

but about what comes before that, about the last six years of your career before you retire. And your question is around how do you find work that you enjoy and work that is meaningful when you know that that deadline is imminent? And it's an interesting dilemma because when you're at the beginning or even the middle of your career, you're still building your career. There's a ladder or a path ahead of you and in front of you. And so there's something to build towards. Whereas when you know that that era of your life is coming to a close,

you don't want to start something that's a 10-year project because you know you're not going to be in the game for 10 years. But you also don't want to fritter away the final years. There's this notion in psychology called the peak end experience, which is that we tend to remember things based on two variables. One is the peak of something and the other is how it ended. And so, for example, when we think back to a vacation that we took, we remember to things about the vacation. We remember the peak of the vacation, maybe one particular happy memory, a great sunset, for example, or a great day at the amusement park. We'll remember that peak moment of the overall experience. And we also remember the way in which it ended. We remember

the final day. And our feelings about the way in which it ended often have a disproportionate impact to our feelings about the experience as a whole. As you're thinking about a career that's about to come to a close, it's essential to find work that you enjoy that characterizes those last few years of your working life because later in life, when you look back on the era in which you were a full-time worker, your feelings about your final job are psychologically speaking, we know the space from research, your feelings about that final job are disproportionately going to affect your feelings about your entire working career. So if you end your career by closing out a job that you really enjoy and you retire from something where you're like, you know what? I actually, I love the work. I love my colleagues. I had fun chatting with my coworkers in the office every day.

I have some great memories from that. It was time for it to come to a close. It was time to move on. But wow, what a great senior year. You know, it's the equivalent of having a wonderful senior year of high school or a wonderful senior year of college. You know, when you can close that out and say, it was time for it to end, all good things must come to an end. But wow, what a great final chapter. If you can do that, you're going to have fond memories of your entire working career.

And what's beautiful is that you don't have to choose a job based solely on the pay. So in your message, you asked about responsibilities. I'm less concerned about the responsibilities per se and more concerned about your ability to have autonomy, to have decision-making authority. Right. Your feelings about the responsibility. Yeah, exactly. Because sometimes having increased responsibilities is liberating. Because sometimes with increased responsibility comes increased freedom.

With great responsibility comes great freedom, right? Did you just point that? And when that happens, someone much wiser said it before me, although it was the reversal of that. But with great freedom comes great responsibility and vice versa. With great responsibility comes great freedom. And with that freedom, that freedom is a synonym for autonomy. And if that's the case, then you're actually more likely to. enjoy it, not less.

Regardless, I think she's in an enviable position. Being able to make this decision is a fantastic place to be. Absolutely. Congratulations, Melanie, and please call us back and let us know what you decide to do. We're going to take a moment to hear from the sponsors who make this show possible and allow us to bring you this at no cost to you. When we return, we're going to hear from someone who is worried about. scammers online, how do you know who you're learning from because choosing your teachers is incredibly important? And then at the end of today's episode, we're going to hear a success story

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Welcome back. Our next question comes from Amy. Hi, Paula. I really enjoy your show and I've learned a lot. And I wanted to ask a question about something I heard you talking about in the interview. We did last February with Colin Roche. You had mentioned something about people investing on their own versus taking courses or classes. And that's exactly what I have been trying to do.

I am having a hard time trying to figure out what information or courses of. There might be scams and what isn't. And I was hoping that you would mention some names of some courses or classes or even instructors that you might recommend. Specifically, what I'm looking to learn about is understanding put. how they work, knowing when to apply them, what to look for, all of that. And it's really hard to find people who will share that information about how they learned it or where would be a good place to learn. And I don't mind paying for a real, legit, comprehensive training course or I can ask questions and get information back. And I know that I can Google some of this stuff

and I have, but it's just not the same as talking to somebody who will give you a better understanding of things and also give you information that you don't even know to ask about. Thank you so much for your help. Amy, thank you so much for the question. And before we handle it, there's one thing at the end, I really want to shine a light on Paula, which I learned way too late in my career. I've mentioned it in the past, but this is Amy doing the thing that. I learned too late, which is I did a Google search on it, but I thought it was better to ask someone.

Yeah, I love that. I noticed that line too. And I actually, I was thinking, I'm like, man, I want to write that line down because that is so important. The actual line that I learned, the way I learned it was ask who, not how. Right. Yeah, you've said that many times. In fact, I read the book, Who Not How, after I heard you say that line so many. times. It is a fantastic lesson that I learned way too late. And Amy, I love the fact that you called in with this because while we don't know you, it's actually better to ask someone that you know who's an expert in the area. Paula and I certainly know a lot of the right people that we can shine a light on. We can tell you more about it. We can give you context based on the fact that

you're in the afford anything community. So while it's not the, we're not your. We're not your your best who were a much, much, much, much better who than Google. Right. Far better who than Google. Right. And Amy, you said it well when you talked about how sometimes there are questions that you don't even know to ask. You have unknown unknowns and that, you know, the benefit of a great teacher is that they

can make you aware of those unknown unknowns. So let's talk about some of the unknown unknowns, Paul. So I will say, option. Options trading is not my thing, but I do know Rose Hahn, who is a previous guest on this show, Rose Hahn teaches a course on options trading, calls, puts, all of that is in her course. I have not taken the course personally. I am also not an expert on options, so I cannot personally vouch for the course itself. But I do know Rose.

She's been on the show. I've met her several times. She is well respected within the personal finance community. That is the one specific name and course that I can give you. And to everyone who's wondering the same, should I be interested in options, the issue when you get into options trading is that while options can be used in a very conservative way to make your portfolio less volatile, you can use them as insurance. so I often don't agree with people going, ooh, options, that's risky.

Options can make your portfolio a lot less risky if you use them in a way where they are locking in gains or they are insurance in case your portfolio goes down. You're going to pay for those. Options are not free, but you can use them like an insurance policy. So they can actually be very, very conservative. But on the other side, it gets into. into the area of gambling a lot. And when I see a lot of the courses out there on options, and I'm sure Amy's already seen this, which is why she called him, you get these options traders who are using options more like a gambling tool than they're using them to make your

portfolio safer. I'm glad you brought that up, Joe, because to broaden this out and make this applicable, not just to Amy, who wants to learn about options, but to anyone listening who wants to learn about anything, how do you determine who's going to be a good teacher? Well, these days, anyone who is teaching courses online is going to have a lot of free information online. And so the first thing that you want to do is recognize, A, not all teachers are created equal. They're not all the same, both in terms of their style and more importantly in terms of their their philosophy, their approach. There are some people like Joe, to your point, some people who use options to make your

portfolio safer and others who use it to make it riskier and to gamble. And so how do you separate that out? I would start by looking at their free material. And every person who teaches this online is going to have free material. Now, some people present their material in different formats. Some people are better at text, so they've got a newsletter or a substack. Some people are better at video, so they've got a thriving YouTube channel. Some people like me are better at audio.

So while this podcast is also on YouTube, our real strength and history is as an audio podcast. So you'll find us on Spotify or Apple Podcasts. So not everybody presents information through the same mediums, but find the people who teach the thing and then listen to them and see if you jive with their approach and their philosophy. I can tell you for real estate investing. One of the ways that I stand out is that I teach a path of real estate investing that emphasizes the valuation of the underlying asset as opposed to emphasizing the cash-on-cash return, which is the leveraged return that that asset provides. And while that might sound like splitting hairs, I assure you, once you

go down that road, you understand why that is so essential and why that approach, the philosophy that I have is so unusual because the vast majority of people who teach rental property investing, specifically residential investing, have really drunk the cash-on-cash-cash-cool-Aid. and I haven't and I actually caution against that and that makes me different in the world of people who teach residential rental investing. But my students have an approach that emphasizes cap rate. Well, and it's interesting because you can take that back to options, which is there are two ways to look at real estate.

There is protect your downside and make sure that this is at the very least an investment that's going to do no harm, right? which I believe is your approach versus the gambling aspect, which is, hey, real estate, they make it more real estate, Paula. So we're going to. Well, I hope they're making more. Geez. We're going to, well, they're not making more land.

Yeah. They're not making more fast enough. That is true. There's no more land coming around, though. Oh, there is. Look at Singapore. Look at Dubai. They are making more land.

Okay. All right. They're making artificial land now. I need to back off that. So now that they're not making more oceans, I don't know. What do you do? But you know, my point, they're selling the potential upside. They're selling the dream. And the dream is great. The dream is fine. But at the very least, you're talking about do no harm. And I think when you learn about options specifically, learning how you can use them as a defense mechanism is a fantastic place to start

with options. And then you see not only the opportunity of using, you know, you can use them. And then you see, not only the opportunity of using them as a way to make more money faster, you also, once you understand using them as a defensive mechanism, you also understand then the inherent risk of using them as a weapon to make more money faster. I don't know Rose at all, by the way. I know her reputation in the community, which seems to be very solid, very conservative, and very thorough, which is good, but I've never interacted with Rose. She's great. We met in person.

She came out to New York and came to our studios. We did a face-to-face interview. She's exactly like, if you watch her YouTube videos, she's exactly like you would imagine from her YouTube videos, very genuine. That's great. Specifically for, again, and I have not taken her options trading course, so I cannot speak to it from any kind of, I do not have any personal experience with it.

but watch our interview with her. We will link to that in the show notes. And check out, not just for her, but for anyone who you're thinking about learning from, check out their free material online, do a deep dive into their free stuff. And if you like their philosophy, their approach, their way of thinking, you know, once you get, once you ingest enough free material from someone, you understand the framework through which they view the world, their decision-making matrix. You know, some people like this show because we're all about nuance.

We're all about questioning the premise of questions. We're all about peeling back the layers of the onion and exploring things and looking at issues through a prism. There are some people who love our show, afford anything because we do that. There are others who say, you know what? I don't want that. Just tell me what to do. and for the people who want something that is prescriptive,

this is not the show for them because we don't give quick black and white prescriptive advice is the type of thing that you're looking for, then this is not the brand for you. And that's for anybody who's thinking about learning from us if what you're looking for is prescriptive, you know, this is good, this is bad, I am the authority and everyone must listen to what I say.

Wait a minute, I'm not doing that. Right. There are other voices. out there that do that. That's not what you're going to find at afford anything. And once you listen to just a few of our podcast episodes, that becomes pretty apparent. So check out the free material and kudos to you for asking who, not how. We are going to take one final break to hear from the sponsors who make the show possible. When we return, we're going to hear from someone who originally called in in February of 2020. And he has called back with an update. We're going to hear

that next. Welcome back. Our final question today comes from Ben. Hey, Paul and Joe, this is Ben from Cincinnati, and I was inspired to write in with an update. You answered my question on episode 243. I've been listening since it was a money show, and I've bragged family and friends how I was on my favorite celebrity show. I had asked how to grow from four units to 20 units. When I last read in, you suggested a path for me was to level up quickly. I'm now at 16 units. I managed seven units and hired a property manager for nine units and in town an hour away. I've used a burr method on each property. Portfolio value of $1.75 million.

Loans at $1.670,000. Portfolio gross rents at $217,000. N.O.I. at $138K. Net rents at $68K. Cap rate at 8%. Retirement funds. My Roth IRA at $143K. Question one.

How do I grow my portfolio? Should I do the first? Fast row and sell off all 16 units as a down payment and reserves for a larger multifamily with like a 40 unit? Or should I keep going and try to pick up a four unit or 10 unit each year? Or should I try to use a portfolio to pay down current debts? Issues. I have a loan at 2.75% on my four unit. It's hard to find a large multifamily or four unit at a discounted price.

I haven't reached my FI number. Question two. How do I get the funds for my down payment from my next properties? Leveraging up last year emptied my reserve. I can take out additional cash of my six-unit refi, but I'm hesitant to eat away at the cash flow. I think I could refill my reserves by starting another business. I could take the cash generated as a down payment for my next multifamily. One idea is starting a wholesaling business.

My goal would be to do one house per month in net 10K. One benefit is I could pick cream in the crop of the single families to add to my portfolio. My problem is finding cash on unlinnable properties. I also have a friend who has a cat, this business and that's 250K and he's open to bring me in on it, but it's not quite my wheelhouse, nor does it synergize with my other business. I could also sell furnaces. I have a wholesaler who sells him at $780 and I can charge $36K installed. Unfortunately, I'd need to find an HVAC tech to do the installs. Why handle the business side? Question three, how do I get institutional

money? I was close to getting a traditional bank and local semi-government agency to lend me money for my purchase my six unit, but they didn't like how much money I showed on my tax returns. I ended up using a hard money lender at four points and 12 percent because I couldn't find another lender in time to close the deal. Ouch. Should I continue with private money and hard money lenders, try to find an institutional bank or take on the silent partner? Thank you guys for all that you do. I've been listening to you since I was a handyman with no money or properties. I can't wait to write back to you with an update when I'm at 40 units. He just set the next bar, Paula. Wow. Wow. Ben, I am so impressed.

That progress, Ben, that you've made, starting from a handyman with no properties to an investor with four units, which was your position at the last time that you called in in February of 2020, today, 16 units. Oh, my goodness. Wow. Huge congratulations.

I am so proud of your progress. It's so amazing. Can we just take a moment to appreciate? Ben, when you called in, this was in episode 243, can we climb into the time machine and reflect back on the question that you asked? Five years ago, there was a home invasion. I had a gun pulled on me and went off inches away from my head. My light flashed before my eyes and realized I was not happy with what I was doing, which was property management for, a nationwide company.

I kind of reoriented myself. Long story short, bought a 4plex for 48,000, put 100,000 into it, did all the work myself, rehabbed it, got a cash out refive for 266, so I got 200K out of that, and now I'm level 5 financially independent. I have investors in looking to repeat the process with my second property here, and you got any tips on growing a real estate investment business from four units to 20, I'd love to hear about it. Thanks so much. And what I love, Ben, is you asked about how to grow from four units to 20, and you are, now you've grown from four to 16. You are right there. Six years later,

you're doing the thing that you set out to do. I like you calling that out, Paula, because I feel like in most of our lives, we spend the majority of our time chasing the horizon and the horizon continually moves. And we don't reflect on as we're chasing the ground that we've covered. Right. And when you truly take just a second, you look at how far up whatever mountain you've climbed like this incredible mountain of adding all these units and gaining all this knowledge over this time, it's phenomenal. And now staking out the next mountain, is it's great. Yeah, I am so proud of everything that you've done.

And tremendous, tremendous congratulations to you for all of that work. I know it's been a tough road. I know many things have changed in the last six years. And that persistence and dedication and work that you've put in, it's incredible. So let's address your questions. You've proposed a lot of ideas. Let me start by eliminating the things that I, like the least. Number one, the cactus business. It's outside of your primary wheelhouse.

I believe this would just be a distraction. I guess I am getting prescriptive here. Because that is a hard no. We don't do prescription, except when we do. Except for when we do. A cactus business is great for someone who is focused in that area. I believe that for you, this would just be a distraction. That's number one. Number two, you talked about the possibility of wholesaling, and you mentioned two benefits to that. Benefit number one is that you would make money. You talked about making about $10,000 per deal.

Benefit number two is that you would get first position, prime access to deals. Now, those are two very different benefits. And I think benefit number two, being in a position in which you are accessing deals, you're looking at everything that comes across your desk and you're spotting the best ones. I think that is a compelling reason to do so. I think the other benefit, $10,000 per deal at one deal a month, that's actually, that's a huge workload for a wholesaler. One deal a month is a lot. It's just, especially when you're also managing properties, one deal a month is a lot to be able to pull off. That's funny because while I'm not an expert in this area, I know from a base level how to advise people on whether to even get involved and help them find the right who's my son is deeply involved in real estate.

And I get a front row seed to see his empire grow, which is very close to the same size Benz's. like it is very similar. This could have been a call from my son. And he's done some wholesaling work. And I'll just tell you as a close observer, Paula, the very first thing I felt when I heard him talk about that, it just felt like a job. Yeah. Like another job. And I'll tell you that Nick, my son, has wholesaled some properties. But he sees it more as side hustle income that happens when it happens. If he finds a deal and he finds a person, it's an easy way for him to bring in a few extra bucks or sometimes a lot of extra bucks, right? With frankly not a lot of work. And he's more focused on what you're focused on, which is the opportunity to see lots and lots and

lots of deals. Yeah. And to pick from a wider basket for himself. Yeah. That I think is the power much more than giving yourself another J-O-B. Yeah, I thousand percent agree. Ben, I think if you want to go into wholesaling, do it only for the purpose of finding deals. Don't do it for the purpose of making money. Do it for the purpose of finding deals. And rather than one deal per month,

if you do one or two deals per year, but you're looking at deals constantly, which means that you can close on the gems, Because necessarily, if you're looking at a ton of deals, there's going to be a bell curve, right? And when there's a bell curve distribution, that means that when those beautiful outliers come around, you're going to be positioned to see the outliers. And that's the reason to do it. So, cool.

If you close one deal a year at 10K, awesome. Two deals a year, you make $20,000 a year doing this. Cool. But the only reason to actually do it is to find that those outs. outlier deals for yourself. So Cactus, no, wholesale, only if you do it for the right reason. Furnace business, maybe. I'm open to hearing more about the furnace business. I won't discard it outright the way I would with the cactus business. The issue with the furnace business is that you soon get to scheduling technicians and drawing up invoices and making sure you have good

processes and good operations. And it's, while I like that the business is aligned along the supply chain, it also is a completely separate business. I guess to summarize, cactus, no, furnace maybe, but it might end up being a distraction. And wholesale, yes, but in a much more modified manner and for a completely different purpose and not for the purpose of making money, making money on the wholesale deal, I should say, not for the purpose of the immediate payout. I want to turn to the hard money loans that you're getting. You said you're borrowing money at 12% and four points. That is a very expensive cost of capital. And you have 16 units under your belt, so you have a very, very solid track record.

I think with the experience you have, with the 16 units, with all of that real estate that can secure loans, rather than spending your time trying to wholesale or run a furnace business, I would spend your time building relationships with commercial bankers. I think you can get much better capital. You're an experienced real estate investor. You're an experienced multifamily operator. You're going to be a repeat customer, a repeat borrower. so I would spend your time doing that. I would also, I'm open to the idea of you finding a partner because if you do want to scale from 16 to 40,

bringing in the right partner who can provide more down payment funds could accelerate that. So rather than spending your time in the J.O.B. Just over broke of trading your time for money, I'd build the commercial banking relationships. I'd look for potential partners, but not be wedded to necessarily getting a partner because you don't want to get the wrong one. Getting the wrong partner is worse than having no partner at all. So only bring on a partner if you are sure that this is going to be a great fit.

Otherwise, keep the 2.75 mortgages, right? Keep the existing properties. Start building relationships with bankers. start looking for partners and then rebuild your cash reserves. That's the other piece of it. I want to see that you having reserves for at least 12 months or more. We keep bordering on things that I actually know something about. And the commercial banking and going for a loan with commercial banking is an area that I do know a lot about and can speak to,

which is that the right relationship is out there, but you're going to have to kiss a lot of frogs before. you find it. It is going to be incredibly difficult. I have friends that are working with operations that are far bigger than yours. And the commercial banks really want from you information and protection against you failing that might be hard, really, really hard to swallow. I have a friend who is the CFO for a organization that owns 28 dental centers. So a lot of dentists, Paula, work for this conglomerate. They're in the conglomerate. And as they've been building them up, the founder, the entrepreneur, the CEO, his reason for bringing on, my friend, a CFO, was specifically to get his personal assets untied from the,

operation so that he could get money without having him personally go down with the ship if things go poorly. And you would think that with the tens of millions close to hundreds of millions of dollars that they are bringing in, that that wouldn't be a problem. It's a huge problem. It's a huge thing. And no banker wants to be the banker that signs off on that. And talking to other people who are entrepreneurs in real estate, just finding that commercial bank. I think you've got to start with smaller banks over large banks. I would look for community banks versus a huge bank with the name that you've seen on television ads. I would look for bankers to have a little bit more autonomy in the community than ones that frankly have none and their job is to just

get you to fill out the application. They send it to an algorithm in Manhattan. Yeah, there are a lot of those fill out the application people. There are too many of those. There's just far too many of those. The whole system has really gotten that way where it's too algorithmic. I have a lot of friends because my wife is in health care who work here locally. And there's one local bank that will do loans for doctors in the community because of the fact, Paula, they are a community bank and they know the community. They know the doctor's position in the community. So the people that work in these clinics can get much easier loans because of the fact that these people, but the fact that I don't see that anywhere makes this bank almost a unicorn.

But in every community, there's some bank that's trying to do this, that's trying to get the local edge, which is why, because of the fact that I think that's going to be a long grueling process, what you advise, Paula, which I think is the right way to go, begin building relationships of bankers, don't begin with the big boys. Eliminate all those immediately, because this is already going to be a long process, I think you're going to shorten your path to success by starting with small banks. Yeah, and start with the people you can meet in person, especially, you know, world of remote meetings, in-person relationships are stronger. I realize I got so caught up in the cactus furnace wholesale question. I didn't address your first question out of the gate, which is

for this portfolio of 16 units that you have, do you cash them out or not? My recommendation is keep them. Number one, these units are an eight cap, right? That eight caps are hard to find, as you know. Number two, you already have a strong sense of the condition of every single one of these units. You already have a very strong sense of how much longer the water heaters are going to last, how much longer the roof is going to last? I mean, you can learn all of that about new units,

but you know, because you've owned and operated these units for many years now, you know the decisions that have been made, you know the condition that it's currently in. If there are surprises, you've caught those surprises by now. So there is a certain level of a risk that is mitigated when you so deeply know your properties. And when you transition out of that and switch to new properties, there's higher variance. There's more room for surprises. And that's okay. You can have higher variance

if the potential higher returns are worth it. But I mean, are you going to find something significantly better than an eight cap? I don't know. I think an eight cap sounds pretty darn good. I guess depending on the risk profile of where these are located in. But it sounds as though you're happy with what you are already holding. And your only reason for wanting to trade them in is to provide fuel to grow. And if that's the primary driver, I think you can provide that growth fuel in other ways without getting rid of what you currently have. Plus, as you mentioned, four out of those 16 units have a 2.75% mortgage. Hold that one. That is gold in today's market. You asked if you should continue using hard money lenders. Only if you have to. I think they're fine as a last

resort. If you can find a good private lender that will give you something slightly longer term with a more friendly rate, that would be better. And then commercial banking and or a partnership, a silent partner would be, I think, the best. So yeah, I feel like a broken record a little bit, but focus there. Well, can we talk about hard money for just a moment? Yeah. Because my son has dealt with this as well and other people, but it's easier for me to reference what? Nick is doing than other people that I know. I would treat the hard lender relationship the same way that I would treat the commercial banking relationship, Paula. When I heard the hard money numbers that he's working with, my son is working with hard money lenders as well, but his numbers are more

equitable. They're still ugly, but they're more equitable than the numbers that Ben's working with. So I would be pursuing hard money lending at more agreeable terms as well. Because if you're stuck with hard money lending, I heard that number. And I thought, oh, wow, that's a lot. And it's always going to be a lot. But I think there's hard money lenders out there that will loan you money for less of a profit in their pocket. They're still going to make a lot of money no matter what you do. But it doesn't have to be the situation that you're in now.

What am I saying, Paul? am I saying make your hard money softer? I suppose you are. I think I am. Doesn't have to be granted. You know, I feel like we could unpack this for hours because there are so many questions inside of this. But the overarching strategy, if I could unify everything that we've talked about, is focus. It's keep your eye on the objective, which is number one,

preserve what you've already built, you know, first do no harm. And number two, in the context of that, then continue to grow from 16 to 40. But even before you get to 40, you know, before you can get to 40, you need to first get to 20. And after you get to 20, you then need to get to 30. I would focus on first getting to 20 or 30. Well, and I like what you're saying about focus overall, because let's talk about the natural progression of getting good at something and getting into the thing. People are afraid to go through a door because they feel like it closes other opportunities, but the power is always stepping through the door because now that Ben has stepped through several doors and gained a lot of knowledge, look at what's happened. All of a sudden,

now he sees wholesaling might be an option. He's explored hard money lending. He's looking at graduating to a whole different type of unit structure than he has now. Like he has graduated to a whole host of new opportunities. And now the problem then goes to Paula. And it's funny how we can circle this back to the beginning of this episode. The problem goes back to making sure you don't say yes to things that are not along the path that really is in the case of, in the case of Melanie, it was saying, to things that might not light you up is a mistake. In the case of Ben, it's the fact that Ben now is seeing and is becoming more conversant with and potentially even becoming a semi-expert in

all these different areas that it gets more difficult because you start seeing low-hanging fruit on lots of different trees that end up just being shiny objects that distract you. So the further down the rabbit hole you go, the more of, opportunities you actually get. And people are always afraid to go down the rabbit hole at all because they see all of these opportunities. And you know what's going to happen is he says no to the shiny objects. That's going to unlock more opportunities that are much more in his wheelhouse than wholesaling, which you and I both think is a distraction. Well, to be clear, trying to earn 120,000 a year as a wholesaler, 10,000 a month.

Yes, correct. I think trying to earn 120,000 a year as a wholesaler is a distraction. But I think having those deals come across your desk is great. Well, then it's a tool. Yeah, yeah, then it's a tool. And I also don't mean to discourage you from it because I think what I'm trying to say with the wholesaling bit is don't get discouraged if the annual income from the job component isn't 120,000 a year, because that's not the true value of it. If it happens that you actually end up making good money from it, great icing on the cake, but the true value is the deal flow. Joe,

you and I, when we were talking off camera, you used an expression that I really liked. You talked about doing the thing you love versus doing things that you like and how we all face these choices around doing things we like, but that if we crowd out our schedule with too much of doing things we like, it then ends up coming at the expense of doing the thing you love. And I think there's a bit of that happening in this question. I think the danger point for all of us is when we get to that 70% on an activity where it doesn't suck. It's 70% great. And so we keep doing it because it's not egregiously bad so we don't eliminate it. And I'm finding more and more that either notching up those 70% pieces of my life to make them 100% or eliminating those is where I'm

able to find the time for the things that I really love. So look at that. There was actually a through line between Melanie's question and Ben's question and it comes back to the allocation of time, right, and the allocation of energy. That's funny. I didn't think there was going to be a through line when I was first looking at these questions, but there... No, you did. We knew all along, Ben. She's trying to be modest. We had this plan from the beginning. This is how the pros do it. We've got it. And Ben, congratulations once again on everything that you've built. I can't wait to hear from you when you reach... Let's not even wait until 40. When you reach 25, call us back. Or 24. If you get two four-plice. Call us at 24. Or 23.

Well, no, I'm just thinking you get two fourplexes. Cool, that's eight more. That's a normal number. There aren't a whole lot of five units out there. Four or less, you're residential. And then at five or more, you're commercial. And once you're a commercial, why would you stop at five? You know, you'd have six or eight or ten units in that building.

You know, how's he going to get to 25? like two four plexes and a single family home. That's unlikely, you know. So call us when you hit 24. Well, Joe, I think we did it again. It is funny how it truly became a circle, even though they were completely different questions. But there was a through line.

For more of your circular logic, Joe, where can people find you if they'd like to hear more of that? Well, it's funny that Amy talked about courses is because we just reopened the waiting list for our course that actually doesn't go off until the start of next year, but it's a closed small cohort of people. We call it the Stack Success Sessions where I guide you through, not options, but building your financial plan over 10 lessons that we use my book Stacked that I wrote just a few years ago that is very evergreen to walk you through step one, step two, step three.

So I was a financial planner for 16 years. And if you want to learn how to build your own financial plan, even if you're using professionals, which we even talk about how to choose the right professionals as part of that course, dive into the waiting list because we'll take names from the top of the waiting list first before the bottom when we reach out to people in late November, early December, and then the classes start in January. So it's stackybedgements.com slash success. Wow. You are lining this up for 20. How about that? Get in early because every year we have a great cohort of people and it's super fun, but I feel like the more we do it, the more the thirst is there for it, which is good to see. Incredible. Excellent. Well, thank you to everyone for tuning into episode 700. 700. This is a very... I can't believe you. Why did you wait for the end? I know. I know. To tell people that. Well, people can read it in their favorite podcast playing app.

I'm not a reader. I didn't read it. Joe, it's written literally in our Google Calendar invite. We're recording episode 700. Like I said, not a reader. That's so awesome, Paula. Oh, yes. Thank you to everyone who has been part of this journey along the way to Ben, who was on

episode 243 and is now part of episode 700. Can you imagine? Repeat customers. Wow. Thanks to all of you who have been part of the 700 episode journey. And here is to the next 700 ahead. And if you've enjoyed this journey, please subscribe to our newsletter, afford anything.com slash newsletter. Please open your favorite podcast playing app.

I learned an interesting stat, which is about one out of every five of you who are listening. Do not follow us in any podcast playing app. You are not following one out of five of you. Do not follow us in Apple Podcasts or Spotify or Pandora. So please open up every app that you use to listen to podcasts and hit the follow button because one out of five of you has not done that. And the other four out of five of you have. So big thanks to you if you have done that.

And if you have done it, please open that app again and leave us up to a five-star review. Thank you for being part of this 700. episode. I'm Paula Pant. I'm Joe Solciai. And we will meet you in the next episode in 701. No, actually, Joe, you're going to be on 702. So you and I will meet them at 702.