The Personal Finance Podcast - What are the Best Real Estate Books, Index Funds, and Mortgage Loans - Rapid FIRE Money Q&A

Starting point is 00:00:00 Local news is in decline across Canada, and this is bad news for all of us. With less local news, noise, rumors, and misinformation fill the void, and it gets harder to separate truth from fiction. That's why CBC News is putting more journalists in more places across Canada, reporting on the ground from where you live, telling the stories that matter to all of us, because local news is big news. Choose news, not noise.

Starting point is 00:00:27 CBC News. Okay, when I sell my business, I want the best tax and investment advice. I want to help my kids, and I want to give back to the community. Ooh, then it's the vacation of a lifetime. I wonder if my head of office has a forever setting. An IG Private Wealth Advisor creates the clarity you need with plans that harmonize your business, your family, and your dreams. Get financial advice that puts you at the center.

Starting point is 00:00:56 Find your advisor at IG Private Wealth.com. On this episode of the personal finance podcast, we're going to do something new, a rapid fire money Q&A. What's up, everybody? Welcome to the personal finance podcast. I'm your host, Andrew, founder of mastermoney.com. And today on the personal finance podcast, we're going to be going through a rapid fire money Q&A.

Starting point is 00:01:39 If you guys have any questions, make sure to hit us up on Instagram, TikTok, Twitter, at MasterMoney Co. and if you want to get your question answered, join the Master Money newsletter and respond to any of those newsletters that come out every single week. And I will personally see that come through and you may get your question answered on the show. And if you're getting value out of this show, follow us on your favorite podcast player and consider leaving a five-star rating and review on Apple Podcast, Spotify, or whatever your favorite podcast player is. Now today, we're going to be diving into 12 of your questions. So I'm going to run through these real quick and then we're going to dive into each one of them. And the goal for these rapid fire money Q&As, we may do these more frequently, is to try to answer the question in two minutes or less. And so I want to answer a high volume of questions that may be something that we can answer quickly. Sometimes they actually require a longer answer. And so what we're going to do is try to answer each of these questions in two minutes or less so that you can get a bunch of great content all in one episode. So that's the entire goal. You guys love these Q&A episodes, by the way.

Starting point is 00:02:44 are the most requested episodes, which is why for the most part, we do them weekly. And so as we start to progress with some of these, we wanted to try the rapid fire format as well. And we'll maybe do this monthly or quarterly. We'll figure it out if you guys like this. So let me know if you like this format and keep me posted. And we will definitely continue to do this. And so the questions that we're going to go through today, favorite place to set up a Roth IRA, favorite real estate investing books, why the 6% interest rate is the threshold for a high interest debt, where to park money if you're going to buy a house, some of the top index funds and which ones are my favorite? Are you supposed to move money in a target date retirement fund?

Starting point is 00:03:21 When do you pay capital gains in a taxable brokerage account? How to invest if you're self-employed? What do you need to have ready to buy your first rent or property? What cybersecurity classes would I recommend? Some questions on the traditional IRA versus the Roth IRA and then some questions on mortgage loans as well. So we're going to dive into all of these questions. We've got topics all over the place from personal finance to real estate investing, to investing in index funds, to everything in between. So without further ado,

Starting point is 00:03:50 let's get into it. All right. So question number one is what is your favorite place to set up a Roth IRA? So this is a very simple answer for me. There are only really two places that I'm super interested in setting up a Roth IRA. Number one is Vanguard. And Vanguard is always going to be my default answer for most things when it comes to, hey, where should I start a Roth IRA? Where should I start my 401 or a traditional IRA. Typically, it's going to be either Vanguard or Fidelity. And Vanguard and Fidelity, the reason behind these two is because they have some of the best index funds that are out there. They have some of the lowest cost index funds that are out there. They've been around for a very long time. And those are the two places that the majority of my

Starting point is 00:04:34 brokerage accounts and or retirement accounts are. Now, I have a 401K in one of the location, but every other investment account that I have is in either Vanguard or Fidelity. having both of them. In fact, my first investment account that I ever opened at 15 years old was at Fidelity. And Vanguard was the first place I opened my Roth IRA. And so between the two of them, I have a fond long-term history with both of them. I'm not associated with either one of them. I just really like both options and they are the places that I've had my money the longest. But in reality, both of them, I think by far have some of the best funds that are out there. question number two what are some of your favorite real estate investing books so this is a fantastic

Starting point is 00:05:15 question and books were the foundation for me to really learn as much as i possibly could about real estate now i i say this a lot in the podcast i think i read too much at the beginning meaning that i had a little bit of analysis paralysis when i started to invest in real estate and so when i went through this process i went through tons and tons of books in fact i read over 50 real estate books in one year alone. And sometimes you just got to take action on some of this stuff as well. So I would encourage you to read maybe five to ten books and then get started is kind of the thought process that I would have. So I'm going to give you some of my favorite ones that you can start with that will really help you. And some of these are tactical. And some of these are books that I think are just really

Starting point is 00:05:57 helpful with mindset. So the first one is a mindset book. And it is Rich Dad, Poor Dad. A lot of people have read Rich Dad, Poor Dad. If you have not, it is definitely one of the best. books that are out there for real estate investors when it comes to mindset. It teaches you the difference between, you know, why assets are so important, but also it just changes your mindset on how you think about literally every single business in life. It's not only a real estate investing book, but it's also a business book. And Robert Kiyosaki is the author. Robert also has another book called The Cash Flow Quadrant, which isn't talked about as much, but I actually almost like that book more than Rich Dad, Poor Dad, as a side note. Now, Robert as of late has made some wild

Starting point is 00:06:37 predictions and I think a lot of the stuff he says now is I wouldn't agree with. But in rich dad, poor dad and the cash flow quadrant, those are two great books that I think are absolutely fantastic. Now another one is the millionaire real estate investor. And this is actually written by Gary Keller and J. Papp is on. And this book is a fantastic book that interviews, it's similar to the millionaire next door, but it interviews a bunch of millionaire real estate investors who started to buy rental properties and what they did. And it goes through the exact process. I think that's a great beginner book, one of the first books you should read. Building Wealth One House at a Time by John Shop. So if you're interested in single family homes and investing in

Starting point is 00:07:16 single family homes, this is one of the greatest books I've ever read. I had the chance to meet John at some real estate meetups and he is exactly how he sounds in the book. He's an awesome guy. And another underrated book I think out there for real estate investing that I think most people should read. Building wealth one house at a time. I think that system is also a great system for most people who want to build a retirement portfolio with the real estate investments, not just get super, super rich. And so that's another great one. The book, 36 things you need to know about cash flow is a great tactical book that you need to utilize in order to understand how to run your number. So if you didn't know already, by the way, we have a real estate calculator that you can use.

Starting point is 00:07:55 I think it's 17 bucks or something like that. So if you're ever interested in that to run your numbers for real estate investing, we have that available that you can buy. But 36 things you need to know about cash flow, a lot of those metrics. in that book. We also utilize in the calculator. So that book kind of got me into learning how to run the numbers on real estate properties and what everything means like cap rate and net operating income and diving even deeper into some of the other ones as well. And so that is a fantastic book for you to understand some of the financial side. And I think that's really, really helpful. One author I want to recommend, which is pretty much all of his books, but Brandon Turner,

Starting point is 00:08:30 who was just on this show, now you know he has over a billion dollars in real estate, but Brandon Turner started writing books when he had like 20 units. And if you go back to some of his early books with bigger pockets, all of his books are fantastic. Now, he has one that he wrote with his wife on managing rental properties that I used as like my Bible for my first couple of rental properties. And it has great systems in there. But he has a ton of other ones as well that are really, really good. So all of his books, I would highly recommend. And the last one is my friend coach Carson, who has been on this show as well. And he has a book called The Small and Mighty Real Estate Investor. And this is also a great.

Starting point is 00:09:04 one for people out there who want a smaller portfolio. Maybe you want a portfolio of, you know, five to 15 properties and you're trying to buy real estate so that you can become financially independent. Well, this is a great book for that. And honestly, he lays out the case. And it's one of my favorite real estate books that have been written in the last five years. He lays out the case why you should be a small and mighty real estate investor instead of just building this huge portfolio. So that is another real estate investing book that I would definitely consider as well. Question number three, why is the 6% interest rate the threshold for high interest debt? All right, so this is a very good question.

Starting point is 00:09:42 And the reason why we stop at 6% and this is something that I came up with in my own finances and why I fully believe in this, because the 6% interest rate is the line at which you can either make more money investing your dollars if you had low interest debt and or less money if you had high interest debt. What do I mean by that? So on average, the stock market, most people will say the stock market makes between 7 to 10%, depending on how you're investing your money. If you have a portfolio, like a 7030 portfolio, maybe you're getting closer to that 7% range.

Starting point is 00:10:17 If you are fully invested in the S&P 500, you may be getting closer to that 10% range historically. And so because of that, one thing that I do when I run retirement simulations, like if you've ever talked to me in like our master money coaching that we do that we don't do very, very often. But if you ever talk to me in that situation, you know, I run the numbers on retirement numbers at a 7% rate to be conservative. And the reason why I do that is because I think it's a very conservative way to approach future projections of the market and where you're going to land. So if you have debt that is anywhere above a 6% interest rate, you are now encroaching into that 7% interest rate on where you most likely will land. And you'll be in the range of what

Starting point is 00:11:02 the rate of return would be in the market. So instead, I would rather you take those dollars outside of your mortgage. I would rather you take those dollars and pay down that high interest debt because you cannot make more money investing those dollars. And anywhere else you put that money would be a bad use of that money outside of obviously paying your bills and all that other stuff. But anywhere else that you would put those dollars would be a bad use of your money. Whereas if it's below a 6% interest rate, then your money is most likely better suited. being invested in the market if the debt does not bother you. Now, if the debt bothers you, no matter what the interest rate is, if it gives you stress or anxiety or anything else,

Starting point is 00:11:41 then it needs to be paid off. But if the debt does not bother you, then below that 6% interest rate, I am comfortable with investing those dollars instead of utilizing it for that debt. And so hopefully I did not overcomplicate that explanation, but anything above a 6% interest rate, it would most likely not outperform the stock market. Anything under a 6% interest rate would most likely be better suited, invested, because the stock market returns 7 to 10%. And so that's where we come up with that number and why we have that fine line of that 6% high interest debt. Question four, I want to upgrade my house in six years.

Starting point is 00:12:19 Where do I park the money? Great question. Simple answer. If you have something like a house that you're going to be buying with it, usually it's within the next five years we tell you to do this, But six years is right on the line. And because it's a big ticket item like a house, high-yield savings account. High-yield savings account assures that your money will be there at the time you are ready to go buy a house. So let's say, for example, you invested the money

Starting point is 00:12:41 instead, if you invested the money instead of keeping it a high-yield savings account and the market took a dip right before you were about to buy a house, all of a sudden you can't buy that house and you cannot achieve your financial goal that you've been spending six years trying to save and build up. So instead, keeping it safe in something like a high-yield savings account is going to allow you to make sure the money is there. And right now, interest rates are fine in terms of keeping them in a high yield savings account. Your money is actually going to get a little growth going on in there as well. And so I have no issues keeping cash in a high yield savings account right now. But that's where I would keep it is. In a high yield savings account, I would not overcomplicate it.

Starting point is 00:13:18 You could put it in a bond. You could put it in a CD if you want to as well because you have plenty of time. But I would not invest it in the market or anything like that because of the timeline. Now, if you had 15 years, that'd be a different story. But because there's a only one of six years, I would keep it in a high-yield savings account. Question five, V-O-O-O-V-T-I-S-C-H-D, or a combo of all three in your 20s. Another great question. So if you have not seen our YouTube channel yet, Ander Ging-Colah YouTube channel on YouTube, we actually break down. We have individual videos of all three of these funds. If you really want to see a deep dive, I actually dive deep into each and every single one. But I'll give you one thing at the top here. My portfolios have V-O-O. My wife's portfolio has

Starting point is 00:13:58 VTI, meaning like her Roth IRA, stuff like that, everything else is pretty much combined. And neither of us own SCHD. And I broke down SCD and kind of went through some of those reasons why, but I know a lot of people love SCD. And so if dividends are a big part of what you want to do, then maybe it would be an option for you to consider. But it hasn't been around long enough for me to be interested in going through and owning SCD long term.

Starting point is 00:14:24 I'd rather own VOO or VTI. Now, owning both of them has a lot of overlap. And so you really don't need to own both of them. But for me personally, some of the portfolios just kind of work out that way. One of the two would be my anchor point in that portfolio and be the majority of that portfolio as well. Question six, are you supposed to move money from one target date retirement fund to another as you get older? Great question. And this is one where I'm going to kind of explain how target date retirement funds work first so that you can get an initial understanding and then we'll kind of dive into should you move it. So typically how they work is that,

Starting point is 00:14:58 they have this initial investment that you put in. So you select the target date fund based on the year closest to when you plan to retire is what most people do. Now, I say you look at what the asset allocation is inside that target date retirement fund, meaning what percentage of bonds versus what percentage of stocks they have. And whatever fits your risk tolerance is how you buy that at first. Then they have the asset allocation, which just is the mix of stocks and bonds that they have in there. And then they have what is called a glide path. Now, the glide path is something that follows whatever that target date is. So the target date is going to say like, you know, 20, 30 Vanguard target day retirement fund. So the glide path is following that date. And as that date approaches, the fund automatically

Starting point is 00:15:41 adjusts its asset allocation, the mix of stocks and bonds, to become more conservative. And the way they do that is they gradually increase the proportion of bonds inside that portfolio. And so target date retirement funds naturally get more conservative as time goes on. So if you are someone, who wants to follow that glide path. You can see the glide path, by the way, when you look at the Target Date Retirement Fund. If you're someone who is interested in having a more conservative portfolio as time goes on, you do not have to sell your Target Date Retirement Fund ever. You can just buy it, set it, and forget it, and leave it there. That's the beautiful thing about it. Now, I like Target Date Index Funds. Target date index funds are the ones that I like

Starting point is 00:16:20 because they have lower costs. That's just a quick side note. But you don't have to sell it ever if you're just following that glide path. Now, I think the returns on target date retirement funds, if you just leave it in there, are suboptimal. And the reason for that is because it gets more conservative over time. The more conservative your portfolio gets, the lower your returns are going to be. That's just the nature of the beast. But at the same time, you can also sell and continue to buy more target date retirement funds at a later retirement date. So say, for example, you plan on retiring in 2035, okay? And every five years or so, the new target date retirement fund is going to come in. So there's the 2060. There's a 2065. And you really just want to keep it at a 90% stock,

Starting point is 00:17:00 10% bond portfolio. Well, you can look at the 265 portfolio and say, hey, I like that asset allocation more. I'm going to move my money into that asset allocation every five years or so so that my portfolio does not get more conservative. You can absolutely do that. And or if you want to be more conservative than your retirement date, you can also move it to a different date. It doesn't have to be when you retire is when you select that target date retirement fund. So that'd be the time to move it. If you're going to move it from one fund to another, it needs to be for a reason based on asset allocation and your risk tolerance. It does not need to be for a reason, any other reason outside of that really. So if you want to follow your glide path of your retirement year, you can that you selected

Starting point is 00:17:40 and or you can leave it as is and not worry as much about it. So that's how target date retirement funds work. They naturally get more conservative over time. Let's jump to a break and then we'll be right back. I remember when I needed to hire someone fast, but finding the right person quickly felt impossible. And if you've ever been there, you know how stressful this can be. That's where Indeed comes in. When it comes to hiring, Indeed is all you need. Instead of struggling to get your job post noticed, Indeed's sponsor jobs help you stand out and hire faster. Your post jumps up to the top of the page, making sure it reaches the right candidates. And it makes a huge difference. Sponsored jobs on Indeed get 45% more applications than non-sponsored ones.

Starting point is 00:18:22 And there's no need to wait any longer. Speed up and you're hiring right now with Indeed. And listeners of this show will get a $75 sponsored job credit to get your jobs more visibility at Indeed.com slash personal finance. Just go to Indeed.com slash personal finance right now and support our show by saying you heard about Indeed on this podcast. Indeed.com slash personal finance. Terms and conditions apply. Hiring, Indeed is all you need. So lately, I've been noticing how fast things are changing at home. The kids are growing like crazy. Clothes don't fit anymore and routines are changing.

Starting point is 00:18:57 And it just hits you. Life is expanding. And when your life grows, your responsibility grows with it. That's something I've been thinking about more this spring, making sure the safety net we have in place actually matches the life that we're building. And that's where PolicyGenius comes in. PolicyGenius is an insurance company.

Starting point is 00:19:15 They're an online marketplace that helps you compare life insurance quotes from some of the top insurers in America, all in one place for free. And their licensed team works for you, not the insurance companies. So they help you find the right coverage for your situation without all the guesswork. And they walk you through everything. Answer your questions, handle the paperwork,

Starting point is 00:19:34 and help you get the coverage that actually fits your life today and where it's going. So protect your family with a policy that grows with your life. With PolicyGenius, you can see if you can find 20-year life insurance policies, starting at just $276 a year for $1 million of coverage. Head to PolicyGenius.com to compare life insurance quotes from top of companies and see how much you can save. That's policy genius.com.

Starting point is 00:19:59 Rosen lasagna, medium power, 15 minutes. Sounds like Ojo time. Let's play. Feel the fun with Play-O-Joe. The online casino with all the latest slot and live casino games. What you win is yours to keep with no wagering requirements, instant payouts and no minimum withdraws. Hey, I just won. Woo-hoo.

Starting point is 00:20:18 Feel the fun. Play-O-Joe. Honey, forget about the lasagna. Let's celebrate. 19 plus Ontario only please play responsibly. Concern about your gambling or that of someone close to you. Call 16-531-2-6-360 or visit connectxontario.ca. Section 7. I am new to taxable brokerage accounts.

Starting point is 00:20:31 When do you pay capital gains? Great question. So on this, when you pay capital gains on a taxable brokerage account, I encourage you to listen to our episode where we break down taxable brokerage accounts and why they are great. They're super flexible. There's a ton of great reasons to own them. But you pay taxes when you sell that investment.

Starting point is 00:20:48 And so there's realized gains and there's unrealized gains, okay? So unrealized gains are what you kind of see on paper when you look inside of your taxable brokerage account. Maybe you open up your Fidelity or a Vanguard app or you open up whatever else you use. And you see, hey, Apple just made me $50 today. Well, that's an unrealized gain because you haven't sold that yet. Whereas a realized gain is when you sell an investment for profit, that game becomes realized. And that's when it becomes subject to capital gains tax. Now, there are two types of capital gains tax that you need to understand.

Starting point is 00:21:19 There's short-term capital gains tax. So if you sell a stock and have not owned it for an entire year, you're going to pay more in taxes, then you would if you sell a stock and you've owned it for a year or longer, because short-term capital gains tax is higher than long-term capital gains tax. So what you want to do is when you buy an investment, you always want to make sure that you are going to hold that investment for a longer period of time. Warren Buffett always says it best. I quote this all the time. If you're not willing to own a stock for 10 years, do not even own it for 10 minutes. And so that's where you want to own these stocks for long term because you pay significantly less in taxes. It could take away a significant portion of your gain in taxes up to 37% if you have short-term

Starting point is 00:22:01 capital gains. And so instead, you can have long-term capital gains, which depending on how much you make, if you make less than $400,000 a year, but more than $42,000, I think it's $42,000, if you make more than $42, but less than $400,000 per year, then you're going to pay 15% in capital gains tax, which is not bad at all. It's lower than your income tax and everything else. So that's exactly how it works is when you sell that at the time of sale is when you sell that. And you'll report the gains when you file your tax return and that's when you pay it. So it's not like the moment you sell it, then boom, there's a tax bill that comes in the mail. It's you'll report those gains when you file your annual tax return. Now, if you're making a lot of

Starting point is 00:22:37 money on these, you may have to pay estimated taxes. The IRS always wants you to pay estimated taxes if you're making a ton of money. But most of us are not going to need to pay estimated taxes. most people will pay it when it's time for their annual tax return. And then you may also own capital gains tax on your dividends as well. So just make sure you note that. And so in your taxable account, you'll have things like qualified dividends and non-qualified dividends. And I won't dive too deep in the weeds, but qualified dividends are taxed at a lower rate long term than non-qualified dividends. So that's another one as well. But just to note, it's when you sell that investment is when you have those realized gains. So question eight is how do you invest

Starting point is 00:23:13 if you're self-employed. So for this one, there's a bunch of ways you can invest. Obviously, a taxable brokerage account is always in the cards. A Roth IRA is always in the cards no matter what your employment status is. But if you're talking through something like, how do I get a 401K, you have a couple of options. So I use what is called a solo 401k. And the solo 401k allows me to have a 401k through my company. But if you have a bunch of employees within the company that you're utilizing the 401k through, then you can look at something like a SEP IRA. And the SEP IRA is a little more complicated, but that is also another way for you to be able to invest your dollars as you go through. I actually have both. But right now I only focus on the

Starting point is 00:23:54 solo 401k. Question nine is, what do you need to have ready to buy your first renter property? Number one is you need to know how to run the numbers. And like I said at the top of the show, we have a rental property calculator that does all the work for you. It's 17 bucks or 19 bucks. I can't remember how much it is. But that'll show you how to run the numbers. We also have two episodes teaching how to run the numbers that you can check out. But number one is knowing how to run the numbers. Number two is you need to have a way to either finance or buy the property. So how are you going to finance that property? Are you going to put a down payment and get a bank loan? Are you going to live in one unit and house hack it? And so you're going to get an FHA loan. Are you a veteran? Are you

Starting point is 00:24:31 going to get a VA loan? And or are you going to get private money? Are you going to get hard money and flip the property? It depends on how you want to do it. But which way are you going to finance the property? is number two, you need to know that and have that pre-qualified and ready to go. And then number three is have your team in place. So your real estate agent, if you need one, your handy person, a contractor. And then if you need a property manager, you need those in place as well, if you need to fix up the property. So a lot of people say you need to have all those things set and ready before you buy your property. Honestly, you can use stuff like thumbtack or whatever else that is out there that helps you find some of these contractors. And I found like my main contractor now and my main, actually my

Starting point is 00:25:10 home renovation team as well is all from Thumbtack. I mean, I find people left and right on there, but there's other, you know, I'm not associated with them, but there's other apps and platforms out there that honestly help you find good talent because they are incentivized to be good through some of those platforms. So I actually like those platforms a lot. So those are the things that I would have in place first and then obviously some knowledge. You need to have some knowledge in place and understand what the heck you're doing because that is another thing. So reading books, talking to other real estate investors and going to real estate meetups is helpful, but just, you know, six months is plenty of time to learn and then you can get started. Question 10, what cyber security classes,

Starting point is 00:25:47 which you recommend that you have learned from? So the only class that I have ever taken is a great one, and the one that I highly recommend is called Hackproof by Joshua Sheets. So Joshua Sheets is the host of radical personal finance, which is a really underrated. I think he has a really big audience, but I think it's really underrated in terms of most people I don't hear talk about it as much. I've learned a ton from Joshua, so I'm going to give him a shout out here. But he has a course called Hackproof that literally teaches you about cybersecurity and how to protect yourself. So that's a great one and the only one I've ever taken, but it's great. Question 11. Is the max contribution combined for a traditional IRA and a Roth IRA? So yes,

Starting point is 00:26:29 the maximum contribution limit is combined for both the traditional and Roth IRAs, which means, that the total number you can contribute to all your IRAs in a given year cannot exceed the set limit, regardless of how you split the contributions between traditional and Roth accounts. So, for example, in 2020, for the max out for the Roth IRA and the traditional IRA is $7,000. And so say you're under the age of 50, you can choose to contribute $7,000 entirely to a traditional IRA. You could choose to contribute $7,000 to a Roth IRA, or you can split the contribution between the two. So 35 to traditional, 35 to Roth or however else you want to do that. However, the combined total across both those accounts cannot exceed the annual contribution limit

Starting point is 00:27:14 for your age group. So you got to make sure that you are aware of that. And that's hopefully what you're asking there to answer your question. But yes, the max contribution is combined for both traditional and Roth. Question 12. This is the last question. I actually kind of like this format. just ripping through some of these questions. It's fun. So question 12, what is your mortgage loan preference? So I am kind of assuming here on what you're asking me. So my mortgage loan preference, if I was going to go get a mortgage right now in my house, it would be 30 years. The reason why I go 30 years instead of 15 is if you want to pay it like a 15 year mortgage, you can, but you still have the flexibility of a 30 year mortgage in case something happens in life where you need to make sure you don't have as high

Starting point is 00:27:56 have a debt liability as you would on a 15-year mortgage because your payments go much higher on 15-year. And so I am just more interested in doing that instead of just getting the 15-year and being required to make those payments. So I would set it up as 30 years. And then whatever fits your total cost of ownership numbers. So if you've never run the numbers on buying a house, it's amazing to me that people don't run the numbers on probably their biggest purchase in their entire life, which is their personal residence. And so you need to know how to run. those numbers, we have a free spreadsheet that shows you called the total cost of ownership calculator. And in that total cost of ownership calculator, you'll be able to run the numbers on that.

Starting point is 00:28:36 But whatever works for your number. So like, I love the FHA loan for a lot of people because you only have to put three and a half percent down. The VA loan is also great. Those are both really, really good in low interest rate environments. In higher interest rate environments, you may be interested in putting a larger down payment down just so you're not paying so much in interest. pretty much all of my mortgages have been traditional loans. I didn't use the FHA. I didn't use the VA. I've always used traditional. So that's another thing to think through as well. Now, for your first house, I have grace in what you put as your down payment. For your second house, I don't have grace. You need to put 20% down. And that's just so you have some skin in the game and what you're doing.

Starting point is 00:29:14 But specifically, trying to think through that you'll also have equity you can roll in from your previous residence. So 20% down is kind of what we want you to have, just so you have some skin the game and make sure that you are making the right choices there. So that is my loan preference. There's a bunch of other loans out there that you can consider. There's some very, very intricate specific ones. One great YouTube channel, by the way, if you're like considering one loan or the other, there's a great YouTube channel out there called Win the House You Love. And I got to get that guy on the show. But he is really, really good. And he has like an hour long videos explaining each loan type. I think they're amazing. And so that's a great option. If you have not check.

Starting point is 00:29:52 him out yet. He is one that I would definitely check out because it's a very, very interesting way to think through this process. So yeah, that's how I would structure it 30 years. Whatever loan kind of fits your numbers, but you've got to run the numbers when you buy a house and then kind of go from there. So that is the 12 rapid fire questions that we have for today. If you guys like this episode and you want to send me rapid fire questions, we got all of these from actually an Instagram story I just threw out and said, hey, I'm going to do a rapid fire episode today. Shoot me your questions and you guys shot these over. So truly, truly appreciate everybody sending over their questions. These are fantastic questions. And thank you guys so much for investing your time here

Starting point is 00:30:26 in us. You are investing in yourself. That's what happens when you listen to this podcast, is you are investing in yourself. So thank you so much for doing that. It is absolutely amazing that you are here with us. And I'm really excited for you to hear this week's second episode. So make sure you are following the podcast and you'll see that come up this week. Thank you guys again for joining me and we'll see you on the next episode.

The Personal Finance Podcast - What are the Best Real Estate Books, Index Funds, and Mortgage Loans - Rapid FIRE Money Q&A

There aren't comments yet for this episode. Click on any sentence in the transcript to leave a comment.