Afford Anything - Q&A: When Your Crypto Bet Pays Off TOO Well

Episode Date: January 7, 2025

#571: An anonymous caller’s crypto investments have recently skyrocketed to 17 percent of her investment portfolio. Given the volatility of this asset, should she rebalance it or go all in?  Jocelyn wants to buy a house in three years but she’s reluctant to keep her sizable down payment in cash. What if she splits the difference and invests half the money instead? Allison feels antsy holding $1 million in cash with falling interest rates on the horizon. How does she optimize this money while keeping it liquid enough to buy a house on an uncertain timeline?  Former financial planner Joe Saul-Sehy and I tackle these three questions in today’s episode. Enjoy! P.S. Got a question? Leave it at https://affordanything.com/voicemail. For more information, visit the show notes at https://affordanything.com/episode571 Learn more about your ad choices. Visit podcastchoices.com/adchoices

Joe, your brother-in-law made more than a million dollars in cryptocurrency. If he ever listens to this? She'd be like, I don't want that out there. Yes, he has. Do you know what percentage of his portfolio that represents? Oh, no. But I'd love to speculate. Wow.

Well, we are going to hear a question from a listener who has cryptocurrency investments that have grown to 17% of her portfolio. And she's wondering what to do. We're also going to hear from a listener who has a million dollars in cash. Let's talk about the other end of the asset allocation spectrum. One million dollars. And we're going to hear from a listener who wants to buy a home in three years and is wondering what to do with the money that she intends to use for that down payment.

All that in one show? All of that in one show. Wow. Welcome to the Afford Anything podcast, the show that understands you can afford anything, but not everything. Every choice carries a tradeoff. and that applies not just to your money, but to your time, your focus, your energy, to any limited resource you're managing. So, what matters most and how do you make the right choices?

That's what this podcast is here to explore. We cover five pillars, financial psychology, increasing your income, investing, real estate, and entrepreneurship. It's double-eye fire. I'm your host, Paula Pant. I trained in economic reporting at Columbia. Every other episode, ish, I answer questions that come from you, and I do so with my Buddy, the former financial planner Joe Sal Si-hi. What's up? They let me out of mom's basement. They did. So for those of you who are watching on YouTube, you can see this, but for those of you who are listening to the audio version. We can touch.

We can, oh, look at that. Look at that. So strange. It's like, what is that? David, Michelangelo. Just the fingers? Pull my finger. That's a whole different one. Yeah. So those of you who are listening via audio, I guess you can't see us, but we are looking, we are face to face, eye to eye. toe to toe. Live from the luxurious afford anything studios at cubulous headquarters. Yes, in New York City. We took a picture of the Statue of Liberty, like right out that window. Right. It's beautiful. Not as nice as the little windows at the top of mom's basement, but a good second. Exactly. Well, let's kick off today with this question about cryptocurrency allocation, because I bet a lot of our listeners are the ones who invest in crypto are experiencing the same thing. They intend to

for high-fiveitis. Right. My muscles in my arm hurt from high-five and everybody. I'm hoping, by the way, so we're recording this in mid-December, and this episode is going to be coming out in early January. I am hoping that crypto is still high, high or better. Let's not say that out loud, Paula. We hope it's even better. Right. Yeah, I'm hoping it's even better by the time that this episode comes out, but it is so volatile. We have no way of knowing what the landscape is going to be. If that asset allocation is still going to be huge by the time this episode comes out, that's how volatile this asset class is. But let's hear her question. The first question is from Anonymous. Hi, Paula and Joe. I have a question about cryptocurrency

and asset allocation. I bought two different cryptocurrencies a few years ago, and they have skyrocketed in value recently. My original plan was to keep my crypto holdings at about 5% of my total portfolio, the balance being in equities, index funds, and bonds. My crypto holdings are now 17% of my total investment portfolio, and I'm not sure if I should rebalance now or continue to see where it goes. I view crypto investing as very risky and speculative, but potentially great for wealth building. I'd love a framework to help me think about how this asset class should be managed given the volatility of that market. Thanks for all you do and any wisdom that you can impart. Anonymous, first of all, congratulations on your good fortune. Man. Wow. Beautiful, beautiful, beautiful,

and now before we answer your question, we of course, because you're an anonymous caller, we need to give you a name. And Paul, I think it's your turn. Uh-oh. Oh, I was ill prepared for this. Me too. Which is why I just threw it back to you. Exactly why. I'm off the hook. Oh, all right. Well, I know what I will name Well, nobody knows the name of the person or persons who invented Bitcoin. That person or persons is also anonymous. But that person or people goes by the pseudonym Satoshi Nakamoto. And so since this caller is anonymous, I'm going to call you Satoshi. I bet that's who it is. Yes. Satoshi listens to this podcast and is calling to find out what should she do? This is a great question, Paula, because I think we can even widen this out away from crypto. This is truly an asset allocation question. What a professional does in this case, they build what's called an investment policy statement.

You and I had dinner together last night. We were talking about working in a good place of business works like a machine. You're not making it up every day. You're making sure that I come in and I do this first. I do this second. I do this third. Well, your money really is analyzed the same way. So if you begin with the end of mind, what allocation reaches my goals? Once I have that allocation, then I write it in an investment policy statement. So if I'm hearing that 5% is not the allocation she really wants anymore,

it's 15%. My next question is, what does that volatility do? Not the upside volatility, but the downside, right? If she loses a bunch of money, what does that do to her ability to meet the goal. And then I figure out what that percentage is, how often I'm going to reallocate back to it. Maybe that's once a year is a good allocation for most people. Whether it's crypto or anything else, figure out what that asset allocation is, and then what are the parameters by which I'm going to rebalance, and then follow that rule and don't go high fiveitis, you know? So, Joe, I've got two follow-up questions for you. First, when developing an investor policy statement, would it make sense to have an asset allocation that's within a given

range? So, for example, Satoshi might decide that her ideal asset allocation for crypto is somewhere between hypothetically, I'm not saying this is what it should be, but hypothetically between 10 to 15 percent. And so that gives her the parameters around the bottom end of the range. If it goes below 10, she'll buy more. And if it goes above 15, she'll sell to get it back down. think about it like it's a wide belt and I love that and that's that is frankly what pros do they want to let that run a little bit but not too far so but they do have the number that they begin with so if the number's 10 the belt goes all the way up to 15 but then if I get to 16 then I decide where in that belt I'm going to sell and that's part of my policy now do I sell

back to the middle of the belt do I sell just to the top of the belt do I sell the bottom of the belt that's all going to be based on your goal your wrist tolerance how you're building this machine. But most pros will use that belt strategy specifically for what Satoshi's talking about right now, right? When good things happen, I want to let that run a little bit. So my next question then, because I mentioned that I had two follow-ups, my second question is, given the volatility of crypto as an asset class, is an annual rebalancing sufficient? That's a good question. I've spoken once or twice lately here about the efficient frontier.

What's interesting about crypto is the time frame still has not been long enough for most researchers that I've seen to have sufficient evidence about when X happens with interest rates or with the economy or with whatever, that this is what happens, right? For stocks, long periods of time, when we look at the economy, there is a lot of that data. Crypto, we don't have that data yet. And frankly, because so many people have been buying in with all the havings that have happened, like this is a whole different world. So my flat out answer is, I don't know. I just want to follow that up with. Here's why I don't know.

I'm not dumb about it. I just know that empirical scientific evidence, the jury's out, which is why a lot of pros you'll see still use very small allocations like 5%. They want a portfolio that the client can predict is going to do. X, Y, Z within these parameters. We still don't know with crypto. Right, right. The predictability isn't there. Okay, so I have some thoughts. Yeah, because I dove in and took over there. What were you thinking? Well, it's very natural for me to go into interviewer mode. That's my training. And so I can very naturally slip right into that training. But to that second question, given the volatility of

crypto, is an annual rebalancing sufficient? Well, you're also going to rebalance, though, if you leave the belt. And maybe I assume that with a belt strategy. So we started off with annual and then we talked about the belt. If you're using that belt strategy where it's between 10 and 15, when you get outside the belt, you're not doing it annually. You're only doing it when it leaves the belt. So you're doing it based on movement, not based on calendar in that case. Okay. In that case, when you mentioned previously in annual rebalancing, what did you mean by that? Well, I meant that for most asset classes, why does a pro use the belt. Why does somebody who's a DIYer not use the belt? The reason is you're checking it way too much.

And what happens with the DIYer when they check it all the time? They start tinkering with it. They play with it more often, which is why they tell DIYers, don't look at it. Just set your clock for once a year and on that day, go rebalance it. A pro isn't going to do that. They're probably not even looking. Right. And so they'll have the triggers built in. And when the trigger hits, they look through the file at the what's this family's investment policy statement. Oh, here's what we do when it goes outside the band. So a band has much more, you get to watch it more often. Right. Okay, in that case, here's what I'm imagining for Satoshi. She could have an asset allocation in crypto that is between two points. So maybe it's between 5% to 10% or maybe it's between 10% to 15%. She can decide whatever

asset allocation feels comfortable for her, have that asset allocation in that belt between those high and low points, but then for every other asset class in her portfolio, hold to a specific asset allocation. I guess mathematically, I'm now going to 105%, right? This podcast goes all the way to 105. Right, exactly. But hold to a specific ideal asset allocation that is not a band, that is just a fixed point, and have count. calendar-based rebalancing. I like that approach. When it comes to crypto, because we don't have enough evidence, I'd ask a couple of questions also of Satoshi. Number one is if all this money goes by-bye for a bazillion different reasons, right? What does that do to your goals? How does that affect your

goal? Because if you can have 15% and you're still fine for your goals, then 15% could be your number, you know, if the other 85% of the money that you have helps you meet the goal. But if it devastates the goal, then I'm not worried about the upside potential that you could hear in Satoshi's voice, right? Hey, this might do even better. And there's a lot of people to think that it very much will do better. I don't know. But I don't care about upside if I can't get my goal if the downside occurs. Right. Well, in that case, let's just say hypothetically that all of the money that Satoshi has invested outside of crypto is sufficient for her to meet all of her goals. It's sufficient for her to buy a home, buy her next car in cash, retire, take care of any family

members that need taking care of, right? Every major life goal can be taken care of through the money that is outside of her cryptocurrency investments. If that were the case, could she just let crypto run wild infinitely, even if it grows so big that it ends up. Half her portfolio. Half her portfolio, right? Yeah. Well, I mean, I think you and I would both say yes. Yeah.

She absolutely could. Here's the question I would always ask, though. I would ask people, which one makes you feel worse? We're not going to go for which one is best, because whenever we try to pick the best, we always mess up. Paula, which one makes you feel worse? You sell a third of it back to harvest the good luck you've had so far. And it truly has been luck. I know that a lot of the crypto fans are going to go, oh, Joe, you don't know.

No, it isn't look. Okay. With any investment, there still is going to be a leap of faith. And I would still pose that it's a bigger leap of faith with crypto than it is with large cap value. So would you feel worse if it collapsed and you did not harvest, let's say a third of it and took that money and put it in a safer place to lock in your gains versus you sold it and it went to the moon, would you feel worse that you got nothing because you didn't sell

or would you feel worse that you sold it and you didn't let it run? And what's funny is, everybody has a clear answer to that question. And if you're walking the dog right now, you have a clear answer. You're like, well, duh, it's this. I'll tell you being in a room with lots of people, everybody has a definite answer to that question. And it's always different. It's always different. But you know which one. So Satoshi, assuming that your cryptocurrency is in Bitcoin, which it may or may not be, but just for the sake of this thought exercise, how would you feel if Bitcoin went to 400,000? And how would you feel if Bitcoin went to 4,000? Yeah. Right? Which would be, which would be worse? And if you feel worse that it went to

4,000 you didn't sell, then maybe not sell all of it. Maybe like I said, sell a part of it to make sure you hang on. You know, the goal's element, going back to our earlier conversation about what are Toshi's goals and how does the rest of her portfolio help her reach them. I think where that becomes particularly relevant when you have a big run-up, and to expand this out of cryptocurrency, this is true. Let's say maybe there's somebody listening who has vested stock options and is debating whether they should harvest those, sell those off, or hold on to those, Right. Like there are a lot of cases in which people are making a decision as to whether to harvest their gains in a wildly performing asset or whether to let that continue to run. One thing that I have seen some friends do that generally has had a pretty positive outcome. I had this one friend in Las Vegas who was very, very, very, very early in Bitcoin. I mean, ridiculously early. in Bitcoin.

That's my brother-in-law. Yeah? It is. Yeah, before the famous pizza sale he was in. This friend that I have in Vegas, when Bitcoin started to gain a little bit of value, he decided that he wanted to buy a home in cash. So he sold off his Bitcoin and he used it to purchase the home that he continues to live in today with his fiancé.

He was single at the time, but now the home is large enough that it could have come. accommodated growing family, his fiancé has moved in. He still lives there today. He paid cash for that home. And to this day, he does not regret selling off that Bitcoin. Even though the quote unquote amount that he paid in opportunity cost is enormous, he still doesn't regret it because that early investment in Bitcoin got him a home in cash. That he wouldn't have had otherwise. Exactly. And so because there was such a clear delineation between, look, I harvested this Bitcoin for this very specific thing. Because he has so much personal enjoyment from the thing that he harvested it for, he has no regrets about harvesting it, even though he did so at a price point that's a lot lower than where it is today. This is why I think beginning with the goal is so important because when you begin with the house and you know I want the house and oh my goodness I can finally buy this house of my dreams that I didn't think that I could afford and I could pay all cash for it. And so I have the house. Like the house is the goal, not more money is the goal. When we have more money as the goal, you don't know what your exit strategy is. And I would also say that I think that the exit strategy is very much a key to great money management because you'll see people, every time there's a downturn, you see people. selling at the bottom. They're like, oh, I'm in a panic. Well, you know how you're not in a panic,

Paula? You know you don't need that money for 10 years. If I don't need that money for 10 years, why am I panicking? But if I don't know when I need the money and the market goes down 30%, 40%, now I'm lost. I'm in this hurricane in a rowboat and I have no idea what's going to happen next. I have to do things that I wouldn't do if I'm like, no, I can afford to wait. But I would say in some cases, more money can be the goal. if all those other goals are taken care of first. So again, going back to Satoshi's dilemma, let's say that all of her non-crypto assets are sufficient at funding all of her life goals, home, retirement, family, whatever.

If the rest of her life goals are entirely funded by non-crypto assets, then the crypto portion of her portfolio could just be this wild card where the whole goal is, let's see how high we can take this. But it still comes back to because the goals are accounted for, she can afford to wait out a downturn. You know what I mean? She can afford to say, let's see what happens next. Because she knows, she's like, I'm okay. I don't need this money now.

I mean, what a position of power to know that the goals are already taken care of and I can let this thing ride and see how big it can go. That's pretty exciting. Right. But it's when I don't know that everything comes on glued. Right. In that case, if the rest of her life goals are accounted for by non-crypto assets and the crypto portion is the just for fun portion, if that's the case, I would recommend not thinking about what percentage of your portfolio crypto represents.

Because it's irrelevant. Because it's irrelevant. It's just absolutely relevant. Right? So I would think about asset allocation for the portion of your portfolio that is dedicated towards specific life goals. And I would not think about asset allocation for the portion of your portfolio that's purely just for fun. You could very safely make an argument that you take that out of the IPS, the investment policy statement. Right. And the only investment policy I have is

that thing I said earlier, which was, how would you feel if? Right. That becomes your criteria. Right. Well, because, all right, let's take this to its logical conclusion. We'll pull this out of crypto and put it into, make a parallel with other types of assets. When you are a financial advisor, you owned your own business. Sure. That business, I'm guessing, if you were to have calculated the value of that business as it relates to other assets in your portfolio, right? The value of that business relative to your large cap holdings and your small cap holdings

and your bond allocation, the value of that business was an outsized portion of your, quote unquote portfolio. I should have sold most of it. Yeah, yeah. But you never thought of it that way. No. Why? Because that was the goose that was laying the eggs to reach the goal. Right. So in that way, it's the same reason why we don't talk about pension in terms of net worth statement. When you're calculating your net worth, how do you figure out where the pension goes on a net worth statement? Clearly on cash flow, you know where it's coming from. You know the certainty that that's going it happened. But in terms of an asset, what is it? Right. Because if I sold it, I would ruin its role in the entire game, which was to throw off cash. Right. So at the time that you held that private

company, even though that private company was a portion of your quote-unquote asset allocation, you didn't think of it that way and just didn't count it in your asset allocation. That's right. You still build your business as if you're going to sell it. You still calculate the sale value. You try to increase that value. But when I'm counting my retirement vision, the standard deviation on a single business versus the standard deviation on the S&P 500 is going to be way higher. Yeah, exactly. You know, so many things, as you know, can affect a business every day. And a lot of the time, it's out of your hand. This comes out of the blue. I mean, restaurant owners in the pandemic, right? Yeah.

Nothing, there was nothing you could do that was going to save your restaurant or very few things you could do. And it wouldn't even save it completely. Right. So it's a different world now. But when these Black Swan events happen, they'll happen more often to a single asset. So yeah, don't count it. But that's interesting. So I'm just very curious.

We talked to Satoshi about how to think. Maybe we're not done with that. But I am curious, what would Paula do? If you were in this situation. I would try as hard as possible. I don't know the rest of the details. But this assumes, I'm sorry, but this assumes the goals are taken care of. I want to assume that. The goals are taken care of and this is just free money. Oh, okay.

Which of those answers is yours? If the goals are taken care of and this is just my wild card money, I'm letting it ride. That's so funny. Yeah, I am absolutely letting it ride. I'm going to... I'm selling between a quarter and a third of it. Hmm, interesting. Yeah. If assuming the rest of my goals are taken care of and by non-crypto assets and the crypto portion is just purely for fun, I am going to hold this until I'm 100.

I still have the engine. It's going to keep on building. It's just not as big an engine for me. And that just is my, when Cheryl has said to me about my brother-in-law, like, why didn't we do that? You're the smart guy around money. Why didn't we get into crypto right away? I remember, you know, making fun of my brother-in-law at first. I'm like, really. Really? Crypto, huh? How about that? And then later on, now he's making fun of me, which is fine, which is great. And it's very playful. But my risk tolerance is not high enough. My personal risk tolerance is it isn't about the asset as much as it's about me. I would sell off a piece of it because I would go, okay, I need to lock this in. Because the bigger that number gets, the more I'm just going to think about it all day. I'm going to have trouble sleeping. I'm going to

watch it nonstop. I'm going to obsess over it. And I don't. want to do that. Right. Actually, you know what, let me put a caveat to the answer, because there's probably a certain number where harvesting becomes life-changing. So you would put a number in mind at the top. You know, because if I'm harvesting this and it's going to give me $200,000, that's a lot of money, but it's not a life-changing amount of money. My life is not going to be meaningfully different. But if I'm harvesting it at $10 million, my life will be. be meaningfully different from that point forward. That would literally be such a major inflection point in my life that you would be able to write the story of my life before and after that

harvesting because it would be such a meaningful amount of money. So I think that's the point at which I would harvest, the point at which it becomes life-changing. I love this mental exercise. Right. So Satoshi, there's your answer. If your other money does not meet the goal, then it has to be part of your investment policy statement to get there. And then if everything else does, then you can feel free to answer that one question and either let it run or sell a piece off. Yeah. Satoshi, I really hope that your life goals are covered by your non-crypto assets so that crypto can just exist in its own independent bucket where you don't have to think about asset allocation. I'm hoping something different. I'm hoping that this growth is why she met her goals.

I'm hoping that she was maybe a little bit behind, and because of this fantastic gain that she's had, she's now going to be fine because of it. Oh, so you're hoping that she's like my friend in Vegas who paid cash for a house. Yeah. Yeah. That this was the life-changing thing. Right. That would be super cool. Wow.

Yeah. That's very sweet. So, yeah, both very different hopes for you, but I think both very good hopes. Yeah, mine's better. Mine's a better hope. Thank you, Satoshi, for the question. Now, way over on the other side of the asset allocation spectrum, Allison has a million dollars in cash.

In cash. What should she do? Give it to me. Allison, you're up next. 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.

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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 of fifth-third better. Welcome back. Let's hear from Allison. Hi, Paula and Joe.

I'm a longtime listener of your show, and I'm calling today with a question about what to do with a large sum of cash that I have on hand. Over the past year, I have sold multiple rental properties, netting me about $1 million in cash. This is currently sitting in multiple high-yields. savings accounts at around 4% and dwindling interest rate. My initial plan was to use this money to purchase a new primary home outright. I'm in New England in a high cost of living area, and to give listeners a better picture, a moderate two to three bedroom home could easily run upwards of

$800,000 to a million in my desired area. Over the past year, the available home options have also been pretty scarce, and so I'm not been too excited to dump that much money into a home that I'm not in love with. I do like the idea of being mortgage-free, but another struggle in this area I'm recently realizing is that property taxes are also very high and would still leave me with a sizable expense each month, just adding to my hesitation to pull the trigger on the home purchase here. I'm currently renting a two-bedroom one-bath apartment for around $3,700, which also feels too high for my comfort-level long-term, but I'm okay doing this while I'm in decision limbo. Just to give a bit more financial background, I'm 48,

and I currently have about $2.5 million in investments, with $2 million of that in a taxable account and about $500,000 in retirement accounts. I previously had a high-income job as a physician, but in January, 2024, I left the traditional workforce due to burnout. I did start a small business, a cash-only practice

that currently covers my living expenses, but not much more. So I'm not withdrawing from my investments yet, but this is likely going to be a short-term project for me with plans to fully retire in the next five years. During all of my uncertainty, I am watching my index investments grow quite nicely, but the $1 million in cash just sitting in high-yield savings accounts

is just puttering along and does not feel optimized. I know high-yield savings rates are likely going to continue to fall in the coming months and years, so I'm looking at a better way to deploy this. cash. It's important to me the money stays fairly liquid as hopefully I will make a decision on a long-term home purchase at some point, and I do not want to worry about getting a mortgage when I'm not employed. My question is, what would you do with this million dollars in cash? Is it too risky for me to put in a two or four fund strategy for the time frame that I continue to be a home renter rather than

owner. I have tried real estate investing, but it just felt like not the right path for me, hence the liquidation of my rental properties recently. Thank you for your time and consideration. I look forward to hearing your advice on the show. Alison, thank you for the question. You know, the first thing that I want to address, Allison lives in a very high cost of living area, and as she said, homes are between 800,000 to a million for the type of home that she wants in the type of location that she wants. And she mentioned that the rent that she's currently paying is $3,700 a month, approximately. And that is a little outside of her comfort level. And I can certainly sympathize with the notion that we've all been fed the idea that quote unquote renting is

throwing money away. And as a result, people often really dislike spending a lot of money on rent because it feels like quote-unquote throwing money away. And I want to address this directly, both for you, Alison, as well as for everybody who's listening to this. Because, and Alison, I just want to be clear, I'm not putting the throwing money away words in your mouth. But when you said that the $3,700 a month made you uncomfortable, it sounded to me like that wasn't a cash flow issue or a budgeting issue, but rather an issue related to, wow, I'm spending a lot on rent. I'd really like to purchase a home. Oh, I didn't have that feeling at all. Really? Yeah, I had the feeling that it was a cash flow issue that she's like, I don't want that out of pocket expense every single month.

Interesting. Okay. Yeah. But to your point, that's a good question, right? What type of issue is this? Right. Well, actually, to your point, Joe, she did make the point that if she were to buy a property in cash, property taxes are very high, and that would be a high monthly payment. So, you know, I actually retract my statement, maybe from Allison, it might have been a cash flow issue, but I still want to address it for the sake of the broader audience. Because I've heard from many people this notion that if I'm spending a lot of money on rent, I'd like to just go ahead and buy a personal residence as quickly as possible so that that way more of my monthly payment can start going towards principal rather than just evaporate as rent. As Allison pointed out, property taxes are a

big expense and they never go away, even when the home is purchased free and clear. Insurance costs, maintenance, repairs, the opportunity cost of not investing that money elsewhere. Allison has $2.5 million in other investments. You know, I assume that that money is invested well. Yeah. And there's an opportunity cost that comes with not having that million dollars that she's holding on to that would be used for a home. This is going to be exactly where I'm going. Right. Is calculating what that opportunity cost is while she waits.

What's the cost of waiting? Right. Oh, okay. So I'm going to talk about that opportunity cost, but in a different context. That's awesome. Which is the opportunity cost of tying that money up in a home. If Allison purchases a home, pays the opportunity cost of having that million tied up in the home, pays the ongoing costs of property taxes, of insurance, of maintenance, of cap-ex, of all of those things,

then is that actually better than renting? That is the question that I want to address here. And the way that you would calculate that, is it actually better to own your personal residence rather than to rent, is by calculating something that's called the price to rent ratio. And the formula is very, very simple. It is the price of the price of the rate. the home divided by the annual rent cost if you were to rent something comparable. So, Alison, I'm going to, just to walk through the math of this, I'm going to make the assumption, which may or may not be true, that the $3,700 a month that you are currently paying for rent is for the type of home that's comparable to the $800,000 to $1 million

price point of home that you would buy. Now, that may or may not be the case, right? It might be that for $3,700 a month, you're renting something that's just not comparable in either direction. You're renting something that's far more luxurious or you're renting something that's far more meager. I don't know. That's only for you to say. But let's just assume that she is renting something currently that is comparable to the type of home that she would buy. Now, $3,700 a month is $44,400 per year for the sake of easy math. Let's just round, we'll eliminate the 400, we'll round that down to $44,000 per year, $44,000 annually that she is spending on rent. One million dollars divided by $44,000 is 22. Now, $800,000 divided by $44,000 is $18. There are a few decimals after that, but rounded to the nearest whole number. Now, why that matters and why there is a big distinction between 18 as one answer versus 22 as the other answer is because if your price to rent ratio is 20 or greater, renting is a much better idea.

If your price to rent ratio is 15 or less, buying is a much better idea. And if your price to rent ratio is between 15 to 20, if it's 16 through 19, you're the gray zone. So if the type of house that Allison wants is $800,000 and comparable rent for a place like that would be $3,700 or $44,000 a year, at a price point of $800,000, she's right there in the gray zone where she could rent or buy, depending on how long she wants to stay in the area, the argument goes either way. But if we're talking about a million dollars for that property and she could comparably rent it for $3,700 a month, she's actually been. better off staying a renter.

It's great when you can apply some math to these decisions anyway because it's such an emotional time. You can hear it in her voice, you know, that I have left this career because of burnout, going to retire in the next five years. There's a lot of emotional stuff going on there. I'm fairly certain. So to be able to use some math,

I think it's really important because often it's the emotional decision that ends up being the one that you regret later. I can see the spreadsheet in my head. We know when you want to retire. We know how much money you're applying to that goal. We know how cash flow is going to change except for this one thing. So with all of that, my first question is, how is the rest of the plan doing?

Because I think that will also affect what you decide to do, whether you decide to buy or keep renting or retire in five years. Like what does that give you? I don't know what that gives me, but I know that that is data I want as I'm making this decision. Because then I know how to deploy the million dollars. I know more. I may decide that I want to put less money toward the house because more money is needed toward my long-term ability to beat inflation over time.

And I can't have it in a house that's going to appreciate pretty much at a rate of inflation. And it's a primary residence. So once I buy it, I'm not going to want to count it. I don't want to have to move because I messed up and I bought too much house. That will affect what I do with a million dollars. And then second, almost like we said with Satoshi, once we know that the goals are okay and she's fine with the two and a half million, renting as long as she wants, she can afford then to sit with that money in a high yield savings account and not worry about

it. She can worry more about making sure that she's out looking for that. house and a limited supply environment, like a lot of communities, not just where she is, you know, Paula, it's a tight market. A very tight market. When that perfect house comes around that she can jump on it. But the cool thing is, if the goals are taking care of doing what she's doing now, she can also wait, right?

One of my favorite Warren Buffett phrases is the great thing about investing is there's no such thing as a called strike, meaning that's a baseball reference. People don't know baseball. If a ball comes right down the middle and you don't swing, the umpire will say strike one. You get three strikes. So there is a called strike in baseball to move the game along. Imagine if the dude just never swings. But in this case, if she knows that she's okay with it in a high yield savings account with deteriorating interest rates, Allison, I totally agree with you on all that. But imagine that you can afford to wait. And it's okay to wait. It's fine. Right. That's a powerful place to be.

Right. The need for you. to have a liquid lump sum eliminates what would in other instances be options for how to manage cash in a manner where you want to keep it as cash or cash equivalence, but you want to manage against losing it to inflation. You know, laddered CDs, for example, that's one of many ways in which people manage cash or cash equivalence, but also eke a little bit of additional yield out of it. But that wouldn't be appropriate here because she needs a lump sum. Grab it right. She's going to need to maybe essentially grab it all at once.

Yeah, the whole freaking amount. And it might be on a dime. Like, particularly with real estate, sometimes you wake up one morning, you look at your phone, you see a text message. And it's, hey, this house came up. Let's make a move right now. And by the time you go to sleep that night, you're on. under contract. Real estate is a game of wait, wait, wait, wait, wait, wait, wait. Bam. Yeah, exactly. Got to go now. Got to go now, no, no, no, no. Exactly. A lot of waiting and then

hyper fast action. You know, and so for that reason, if she wants to have pre-approval, she wants to already have that done, she probably already does. But make sure with your lender that you have pre-approval and that that's updated as often as ask the lender how often you're going to need to update that pre-approval that's still good. So she can pull the trigger right now without having to call a bank or anything, just, yep, I'm going, I've got it. Second thing is she also wants to figure out if there were to be financing what would be that number that fits the budget, which is why I go back to the other goals, right? How much money is she going to need every month to meet her obligations, including this

potentially a mortgage or not a mortgage? Right. So if she does end up with a mortgage, then how much would that be? what's that maximum? I'm sure she's already done all those calculations, even though she prefer to use cash. But I would be locked in, these are my numbers. I know exactly where I am with all of these things, so to your point, so that I can go today. Which brings up my final answer to her last question, four fund strategy or two fund strategy. Oh, God, no. Oh, God, no. Not in a million years. Yeah, I was thinking that too. Yes. Now we're gambling. Exactly. The

only case in which I think it would be acceptable to put money that you might need for the short term into equities would be if you have a greater multiple of that money than what you actually need. So for example, and I've heard some people take this approach with their emergency fund or their cash reserves, they'll say, you know what? What I need is to build cash reserves of $10,000. What I'm actually going to do is build reserves of 20,000. And now I can invest it in a total stock market index fund. And even if it drops by half, I'll still have... I'm okay with drawing money. Exactly. Right? I'll still have the base that I need. Wow. I just wouldn't do that. I just wouldn't do that. I think for the average person, I would not recommend that for behavioral reasons.

Yeah. But mathematically, it works. Sure. Yeah. Because the chance that you're actually going to use that money is pretty slim. I mean, when somebody finally gets the discipline to actually have an emergency fund, they just don't touch it often. And so in a case like that where you've got a big buffer or a margin that's in your checking account so that it can accommodate the natural volatility of your spending, including those car repairs, those large deductibles, those things that come up. And in addition to that, you also have some cash reserve set aside, some additional cash reserve set aside. Mathematically, it makes sense to oversay for that so that then you can give it equity exposure.

Behaviorally, I don't think is a strategy that's suited for beginners. And in any event, it's tangential to the conversation that we're actually having right now. Yeah. I mean, I'm thinking of other downsides to this, which is my meat and potatoes analogy. I don't want the meat touching the potatoes because that's gross. I would probably then keep my emergency fund in the same account as all my other long-term non-IRA money. And the ability then to go, well, I'm just going to this one time go over that number and go into my long-term money. But I'll replace that later on with, you know, whatever the head game is, you're going to play with yourself that day.

I don't want to do that. So I'm even thinking, I'm like, well, if I did that, I'd need a separate account, probably with a completely different institutions. And so I'm thinking of Schwab is my long-term money and M1 finance or Vanguard or whoever, fidelity, it doesn't matter, is going to be my reserve fund. And then I think I just added another layer of complexity to my plan. In any event, that's a bit of a side tangent off of addressing. What are you guys talking about? Yeah, addressing Allison's question. My point is that those kinds of more sophisticated games for how do I manage a large sum of money that I'm intending to keep in cash don't apply here.

Because of the fact that Allison is going to need this money in a relatively short time frame and also, assuming that she buys this home, she's going to, A, need the money in a relatively short time frame and B, she's going to need immediate and instant liquidity. Yeah. Those more sophisticated games, they just don't apply in this case. Like, she's got to keep this in cash. So the answer I want to know, Allison, is what's the cost awaiting? What is the cost? Can she afford to wait? even if interest rates continue to deteriorate. If she can, then don't worry about it. I want to say one other thing, Alison, and that is I want to applaud you for knowing yourself well enough

to understand that rental property investing or real estate investing is not for you. I think you and I talked about this on a recent episode in which somebody asked about... It was almost FOMO. Like, I think I should get into real estate, wasn't it? Oh, no, my answer was about FOMO. his question was about syndication.

Oh, that's right. Yes. So his question was about syndication. And in my answer, what I said was there is no quote unquote best, right? It isn't that syndication is better or worse than flipping houses, which is better or worse than long-term buy and hold rentals, which is better or worse than those are like strategies. But then there's also, you know, verticals like offices or warehouses or commercial units or multi-term. family residential, none of them are better or worse than any other. They all have different pros and cons. They all have different risk profiles. They all have different attributes. And if you

decide that you're excited about one of them, it's natural to go down that rabbit hole and do a bunch of reading and do a bunch of due diligence and get super into it. And if that's the case, then you're actually excited about it. You're doing it for the right reasons. But by contrast, if you, as Allison did, you try it and you're like, I just don't enjoy this. You know, this is just not for me. It is perfectly not just fine, but wonderful to remove yourself from this asset class that you're just not that into to break up with it because it's not quote unquote better or worse than some alternative asset class that has a, a similar long-term return profile. Is that, I agree with you on real estate.

What's funny is, in my head, is we never talked about the inverse. Can you really do that with the stock market? Can you really say, I'm not going to use the stock market to reach my long-term goal? You can certainly avoid individual stocks, but if you live in the United States, or if you plan to retire in the United States, you need some equity exposure. I don't think you can avoid the stock market to some degree. and real estate at the same time. You certainly could be all in on real estate.

I would question that strategy because of the illiquidity. But you could just be all in on real estate and avoid stocks. But I don't think you could avoid real estate and stocks. Right. I think you've got to kind of pick what percentage of each I'm going to use. But where I would caution people on eliminating stocks completely and going to 100% real estate, I could see people doing it the exact opposite. But that is interesting to me.

I suppose, this is just as an purely academic thought exercise, I suppose you could do it. I would not recommend this, but it would be theoretically possible to do it through ownership of private businesses. Individual businesses. Yeah. You could do it that way. Yeah. I've mentioned standard deviation.

Yeah. Your risk goes way up then. Exactly. Your standard deviation is like, phew. Yeah. Open a restaurant. Good luck. It is theoretically possible.

You could do it that way. You could do it purely through private business ownership. You could. With zero. You definitely want to have an exit strategy, though. Yeah. Which is what most small business owners lack. Right.

Yeah. Completely like. I can hear Allison's worry, but I really just get the feeling she's in a pretty good place. Mm-hmm. I feel that way as well. That was why when I first heard her question, I didn't initially interpret cash flow worries. Yeah. It was only you're prompting, Joe, and then upon further reflection, that I could reinterpret her question as,

oh, maybe she does have a few cash flow concerns. And that's why I think that for Allison, if I'm interpreting that correctly, historically, back when I was a planner, that was what helped my warrior clients. Math. Cold, hard math. Just these are the numbers. Because I think for a lot of people, when you see the numbers, especially since, right, physician deals with science a lot.

I think for someone like Alison running through those exercises would give her a lot less worry about whether she can afford to keep the money in a money market while she waits on this thing that she clearly wants. But you're right, Joe, it's powerful to be able to say, you know what, my money might lose a little bit of purchasing power and that's okay because it's worth the goal. What a flex. Right? If she decides that that goal is worthwhile enough.

Yeah. All right. Well, thank you, Alison, for the question. Next, we'll hear from Jocelyn, who has a similar question. Jocelyn also has quite a bit of money, $250,000, that she wants to use as a down payment on a home in three years. But what should she do with it in the meantime? We're going to answer that next. Welcome back.

Let's hear from Jocelyn. Hi, Paula. I wanted to call to ask you what you would do with money that you want to be. use in three years. So normally I would put it all in a high-yield savings account, but there's a couple of reasons why I'm thinking that putting the whole thing in a high-yield savings account isn't the right move. So I have about $250,000 saved up that I want to put as a down payment towards an upgraded house. Right now, we own a house that is worth about $700,000. And because we locked in a low COVID interest rate, I'd love to hold on to this house as a rental, but I don't necessarily need to do that

if it's not the right financial move three years from now, I want to buy a house that's about $1.2 million, but I don't necessarily need to put 20% down on it. I would ideally like to put 20% down on it, but if it wasn't the right move at the time, I'd be open to putting down less on the upgraded house. So with the potential that I could use the about $200,000 in equity that we have in our house, maybe $250,000 in equity that we have in our current house and that we also could put down less if needed, I'm thinking that I should put $100,000 of this $250,000.000. $1,000 in a high-yield savings account because that's what I need to put down and then put the rest in stocks in a barbell allocation similar to your approach. Then if the market was down,

I wouldn't necessarily need to draw down on the stock portion, but it would help me to keep up with inflation, especially if there were a tariff war in the next three years. Wondering if that makes sense or if I'm overthinking this and it really should all be very conservatively put into a high-yield savings account given that my goal is so close out. Thanks for all that you do. It's funny how similar this question is, Paula, but how different it is. Exactly. Should we elaborate on that for a moment? At a 30,000-foot view level, what are the core differences between Jostelin's question and Allison's question? Because I can understand that for many listeners, they're thinking, wait, isn't this kind of the same scenario? With this draft style, I'll do one, and you give one? How about that?

Oh, okay. Okay, my first one is that because of impending retirement and the fact that cash flow wise, Allison wants that number to be as small as possible. Jocelyn is comfortable with the flexibility of that number maybe being bigger. I would question that. Like, how big can it be? How much money can that mortgage be if she doesn't have enough money? What are the parameters? I would ask that first. But I think just the fact that this feels much more flexible to me means we're going to answer

this a lot differently. So Jocelyn's question also more flexible to me, but for a different reason, which is that she talked about wanting to buy this home in. three years. Yeah. Allison's desire to make a purchase is much more immediate. Could be now. Right.

Exactly. Also, it might be in three years, but it needs to be now. Right. So Jocelyn, she wants to buy this home in three years. It feels like there's a little bit of flexibility to that timeline as well. Yeah, she might be able to not use any of this money. I'd be curious to just explore what these numbers are. Like, what's the difference?

If you don't use the money, if you use the money, what's the long-term impact? again, much like the place where they're the same, I would go through the same thing, Jocelyn, that we told Allison. How are your goals otherwise? Because when you have this goal, it isn't in a vacuum. What you use this money for could impact another goal differently than it will on your house. So what's the impact on the house? If you don't use it for the house and use it towards some other goal, how will it impact that goal? I want to know those answers first. I liked Jocelyn's suggestion, you know, where she said, I'm going to hold 100,000 back in a high-ield savings account. We'll keep that safe.

Keep it secure. Now I've got the minimum down payment lockdown. I've got some security around that. And let's play with the other $150,000. Let's see where this goes. I still don't think I don't go to Satoshi's Bitcoin. I don't do that. I also don't do the two fund of the four fund.

But this has, you know, my go-to. written all over it, which is an incredibly low risk investment that is volatile, but over a slightly longer period of time. Are you going to say Ginny Mays? We'll do better. I think this is a good thing to look into Ginny May. I knew you were going to say Ginny May. I think it truly is. There's a little bit of risk there, but not much. And you will over those longer periods of time, more flexible periods of time, get more for it. Plus, this is a case where, differently than when I said before because I know that this money could be used but doesn't have to be used. Right.

If it's up, she can decide then to apply it. If it's not up, if the Ginnie Mae's down a little bit, she can afford to not put it toward the house now and wait for it to come up later and maybe have an early mortgage payoff strategy with interest rates, let's say interest rates continue to go down. If they do, then she could refinance later on and add this to the new. she's got lots of flexibility with that money. So because of the flexible term, the fact that she doesn't need it, but she wants it toward this, that's his Jenny Mae all over. Wow. Okay, so let me actually push back on that a little bit. I don't bring it. Given the fact that Jocelyn has so much flexibility,

right? Like, I think one of the distinguishing factors between her question and Allison's question is there's a lot more flexibility in Jocelyn's plan and in the uses, both the timeline and the uses of the money, given that level of flexibility, why wouldn't she invest that entire $150,000 in equities, right? As long as she's keeping that minimum down payment secure in a high-yield savings account, then why not put the entire $150,000 in equities? That's why I didn't leave with that. I didn't leave with that because my first answer was, how are the other goals doing? Because if the other goals aren't doing well, then I'll take the risk of equities. I'll put it out there. But the other goals are fine, then I start thinking about, okay, the happiest retirees have paid off

mortgages. And I know the other goals are okay. Well, then now I really am going to focus on the mortgage. I'm going to focus on making this not a cash flow suck for a long time. So if I can get away with it, I would then go with a Ginnie Mae. So you come from the school of thought of don't take on any more risk than is necessary. Yeah. That's the difference between us. You're from the school of thought of don't take on more risk than is necessary. And I'm from the school of, well, it sounds reductive to say it like this, but I'm a little bit more from the school of thought of, okay, let's see how big can we grow this. Well, it's funny because I said this the last time you and I were together, Paula.

I mean, not physically together like today, but the last time you and I were chatting that when it comes to risk, I like the broader argument. Like I'm going to take risk in other facets of my life. I'm going to do things on the stacking Benjamin show and push the envelope. I'm going to try out new things. I'm going to see if we can help somebody that we hadn't reached before by doing something crazy. So risk-wise there, I'm not. How much risk do I need to take?

Let's go for it because maybe we find somebody and help them become financial alert that we couldn't find before. But with my investments, then I take that money and I go, why do I need to do that? I don't need to do that. If I know the statistics on happiest retirees, and the happiest retirees have two big things, number one is they have a lot of things that are not hobbies, but we'll call them super hobbies, so these passions that they do, usually it's five or six, right? Over and above their work. And then the second thing off is they know the math around debt. They understand leverage, and they still, despite that math, pay off loans early. which I think is really powerful when you think about that.

These are not dumb people when you're a happy retiree. I think these are people that successfully were able to save enough, do enough, get where they wanted to go. And they go anti-math. Why would you do that? So then I think if the end game here is happiness, not more chips, then I'm playing for, okay, now that money's free to pay down the mortgage. And if it is free, then I'm going to bet a little bit on a Ginnie Mae. I'm not going to bet big time on equities. I'm going to take the opposite argument.

Well, you're wrong again. Well, I'm going to bet big on equities with that $150,000. And I want to be clear of the $250,000 that she has, this hinges on the assumption that that $100,000 is kept in a high-old savings account. It's kept in cash. It's secure, right? I'm going to expose that $150,000, the other $150,000, to a high level of equity risk because I know that $3,000. three years from now if the market's down, cool, leave it, let it stay invested. But 10 years from now, statistically speaking, that's probably going to be up. And at that point, she can pull that money out.

Very high probability, by the way. Not a small probability. Very high probability. There's a very high probability 10 years from now that it's going to be up. And she can at that point, or at any point prior to then, pull that money out and make a giant lump sum payment towards the home. So I don't see this as being in conflict with a desire to pay off that home and cash. I think that's going to give you so much mind share. I think the mind share suck of that strategy over time. You're going to continually reevaluate it. You're going to continually rethink about it. Rethink about it. Is it B? It's rethink about it. Yeah. But I like that as a synonym for reevaluate it. Yeah. You're going to rethink about it. Yeah. So, yeah, that's why I wouldn't do that.

I also have found that generally the simplest plan is the best plan because I want to save my mind share for other things as well. But that's interesting. Yeah. And, you know, it's fine. You're wrong. I would go to the Bellagio. That's where I would go. So, yeah, Jocelyn, those are your two answers.

Either the more conservative approach, which is what Joe is championing. I wouldn't call it conservative. I'd just call it right, Jocelyn. Yeah. I guess would it be accurate, Joe, do you think, to characterize your approach is a little bit more playing defense and minus a little bit more playing offense? Absolutely. Yeah. Yes.

So Jocelyn decide, do you want to play defense or do you want to play offense? Can I tell you why I think we have the difference there? Yeah. I mean, A, part of it is going to be our personalities, our risk tolerance and who we are. I think the other part is I have been in the room with a lot of different families at the same time. Not literally us all in the room at the same time, but I'm working with 150 families at the same time. as a financial advisor. I have seen things go wrong on a consistent basis literally once a week. Something's going wrong for one of my clients. And so seeing, I think, that law of large numbers

has turned me more defensive than I used to be. And I noticed that. I noticed that in online communities, financial communities. Mine is always like, wow, you want to really do that? I can tell you a story. and I know that the probability is it won't happen to you, but I do know that this downside will happen to somebody and you'll go, man, I regret that. So that I think is the difference. And by the way, you know, I'm teasing about right and wrong, but doesn't make it right. I think it just shows you why I'm going to be more. Let's pump the brakes. There are very, very good reasons to take a defensive strategy. I have selectively taken defensive strategies in certain components of my financial life. and selectively take in very aggressive strategies in other components.

Yeah. I'm very defensive in my financial plan with my assets, which is why they have not grown as quickly as maybe they could have if I would have taken bigger bets, aka my brother-in-law, right? Right. But with my career, I've taken big bets. I quit a job that was just about to go from paying well to paying really, really, really well at the age when people don't do that. You were 40 at the time.

I was getting into the Chiching years and didn't want to do that. So I've been much more risk friendly with career moves, with moving my family halfway across the country, with deciding to live anywhere during the pandemic, as you know, with becoming a digital nomad and being a guinea pig. So it's really interesting. Right. And that is, it goes to, if you're going to dial up the risk in one, arena of your life, you counterbalance that by dialing down the risk in some other arena.

Which is funny because we've talked about my brother-in-law a few times today. He's the opposite. I would say very conservative with his home life, with the decisions he makes there. Again, not- His career in his home. Yeah, not right or wrong. But I think because he's so conservative and he knows, hey, my cash flow is going to be, you know, I'm going to spend very little money. I'm going to be very frugal. He's naturally very frugal. He naturally is a planner. And I really love that about him, but that also allows him to flip what I'm doing and he's very aggressive on the other side. Right.

How about you? Well, so I... You're just aggressive. No, you know, I made the decision to pay off all of my rental properties. I have seven rental units. They are all paid. That's defensive. Yeah, they are all paid free and clear.

And they've been paid free and clear since my mid-30s. And they were low-interest rate loans, right? bought them during that low interest rate decade. The reason that I did that, you know, and everyone's like, why the interest rate is low and you're in your 30s? Why would you do that? And the reality is if I were a tenured professor, I would have made the decision to hang on to those mortgages. If I were a tenured professor, I would still have every single one of those mortgages. Very similar. Right? But I'm not a tenured professor. I'm a business. I'm a business. You need the certainty. Right. I'm an entrepreneur. I am a business owner. I have a lot of volatility in my day-to-day job in my career. And as a result, I'm dialing up the risk in the work that I do and in the impact that I bring to the world. And in order to be able to do that, I have to dial down the risk in other arenas.

That's why I'm fascinated a lot lately. As you know more than most people. This is what's on my mind right now, expanding risk and thinking about risk. in a much broader context than just my funds, how risky are my funds. Right. Where should I be taking risk in my life? I think it's a much better question. Yeah, exactly. So Jocelyn, those are two answers for you. Joe has the defensive answer.

Ginny Mae, it's the best one. I have the more aggressive answer. Do you want to play defense? Do you want to play offense? That's a question that you need to ask yourself. And that question will be contextualized in what else is going on in your life. Tick or something for Ginnie Mae is very simple. GNN.N.A.

Yeah, if you're going to use the ETF, it's just GNMA. Yeah. Super simple. Yeah, so easy to remember. GNMA. It has a good morning America feel. It totally does. It really does.

Yeah. It's like they could do GMA like that whole thing and have it like a little carrot. Yeah, exactly. Well, Joe, we have done it again. I can't believe it. And we did it live. In person. Yes.

For those of you, if you're listening to the audio version of this, go to our U.D. YouTube channel, YouTube.com slash afford anything so you can see the video version of this because it's fun. It's fun to be here in the same room. It's fantastic. Joe, like actually seeing your face, looking at your, it's different virtually. It's so. So different. Yeah, exactly. There's life behind those eyes. There's character. We got our friend Jay back here. Yeah. Big thanks to Jay. Exactly. Mike was here earlier setting up this beautiful studio. It's a great place. Right. Exactly. Having the whole team here. So yes, please. For those. For those. those of you who are listening to the audio version, head over to YouTube.

Check us out there. While you're there, please hit the subscribe button and hit the notification bell so that you... I think they can say smash. Smash. Smash that button. Smash the button. Smash the button. Smash all the YouTube buttons. Joe, where can people find you if they would like to hear more of you? Three days a week, the Stacky Benjamin show.

We are kicking off 2025 with a cool episode that Paula you already know about. We're abandoning the usual variety show format of Stacking Benjamin's because I flew out to Las Vegas, This interviewed a gentleman named Alex Harmozy. Alex Harmozy and I chatted about how to make $100 million a year. And, man, it was such a dense interview. We're bailing on everything. No trivia from Doug. No, nothing.

We are taking that interview. We're playing it and we're chopping it up. And OG and I are walking through going, okay, here's what he's really saying here. Wow. And here's how you think about this. So go back in your feed to January 1st because this was a powerful interview. and a fantastic discussion with a guy like OG who knows how to parse the type of stuff that, because Alex Harmosey says things almost like Cody Sanchez very flippantly.

We'll go, oh, you just do this. Oh, you just do this. And we're like, okay, stop. Our stackers, our forters, they don't really know how to do that. So we're going to get into the nuts and bolts of how to do that. Maybe by the end of the year, you won't make $100 million. But we'll certainly, I can guarantee this. If you take a third of what Alex Harmose talks about, you will make more money in

2025. That's amazing. I'm very, very excited to listen to that episode. Andy's got some guns. Yeah. Yeah. He's, he's, he's checked. Yeah. I wanted to tell him, you know how we told Allison, it's okay to leave that money, maybe, probably, in a high-ield savings account for a while? I wanted to tell Alex, it's okay to miss the gym one day. It's going to be all right. Well, thank you, Joe. On that note. On that note. And thank you to all of you who are listening. If you enjoyed today's episode, please do three things. First and foremost, subscribe to our newsletter, Afford Anything.com slash newsletter. It is revived. It is active and you will get insight there that you don't find anywhere else. So for absolutely fresh, unique insight delivered directly to your inbox,

go to afford anything.com slash newsletter. Number two, make sure that you're following us on your favorite podcast playing app. And while you're there, please leave us a review. Talk about what you enjoy about this show. That is so incredibly helpful. We love hearing from you. And number three, most importantly, share this with your friends, your family, your neighbors, your colleagues, your dog walker, your babysitter, your brother-in-law. Share this. Share this with the people in your life. Thank you so much for tuning in. I'm Paula Pant. I'm Joe Sol C-Hi. We'll meet you in the next episode. Thank you.