Q&A: He Wants to Die With Zero – Here’s How to Spend $1M Without Running Out

25:34and since then made some work-related changes. You know, I'm not going to spoil the story. He'll describe it. That's coming up next.

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30:08Welcome back. Our next question comes from Kip.

30:16Hi, Paula and Joe. My name is Kip, and you both answered a question about long-term care and retirement for me back at episode 627. After listening to you guys and the stats you provided about the typical length of a long-term care stay, I decided to pull the trigger to retire. Also decided that I would fund long-term care expenses out of pocket if needed. I started the retirement process. And during this process, it is common for management to have a luncheon when long-term employees leave. During the luncheon, I talked to people that I had not spoken to in ages and explained I was just burnt out, stressed, and not fulfilled in my current role.

30:54And that is why I was retiring. I learned that our company, which is a large Fortune 500 company, has an entire community outreach department. In short, instead of retiring, I transferred over to this department and I could not be happier. I get to help people every day. Additionally, I was able to keep my company health benefits and not spend down my retirement accounts right now. On the negative side, I had to take a significant pay cut, but it was all worth it. It's been five months and I'm down 15 pounds. My blood pressure is doing great and I'm just overall happy. So thanks for the nudge and the confidence to pull the trigger and make this change.

31:36Otherwise, I would probably still be unhappy and still searching. On a different note, could you guys speak a little bit about real estate investing syndicates? I have a friend in Corka that just won't stop talking about them. I'm not currently an accredited investor, but you have the assets to qualify them as to these syndicates that I've been looking into. They all require you to be an accredited investor. From what I can see, the pros are the tax benefits and the better returns over the S &P 500s over long time periods. But the negatives are the liquidity of the investments, the opaqueness of the investments, and the trustworthiness slash performance of the sponsor.

32:17Do you guys think these are good investments for people that are not needing the money immediately? And if so, how do you pick a sponsor and evaluate an investment choice? There's just so many out there. I'm just wondering which guy stinks. Thanks again for the help. And I know you guys will always have fun and provide a great answer. Thanks again, guys. Kip, oh my goodness. I love the way that your life has turned out since that question. Holy moly. I am so happy for you.

32:50Paula Pant:I think there's definitely some things that we should chat about in Kip's experience. First of all, Kip, you are living the dream. The real dream is work that is fulfilling. I am a firm believer that there's a fundamental human need to be of contribution, to do work that is meaningful, to build, to create, to contribute. And many people don't find that in their jobs. And I think that's a lot of what drives people towards retirement because retirement then will give you, for many people, retirement is what gives you space to figure out, all right, how can I contribute to society? because I was not able to do that in my job, right?

33:37But you got the best of both worlds. You were able to transition to another role in which you are contributing to society. You have purpose. Your blood pressure's down. You've lost 15 pounds. You're healthy and you're living a life of purpose. And you're doing so with a paycheck still coming in and health benefits still there. that is the ideal outcome in my view.

34:06Paula Pant:We often think, and I think this is a big misconception, especially in the financial independence community, that quitting our job is going to help us get rid of the lack of meaning in the things that I'm doing. And that's generally, when I talk to people that want to retire early, it's because they don't necessarily find a lot of meaning in what they do. They don't find a lot of freedom, a lot of time, a lot of all the different things. And yet, and yet that theory that this will help us is completely, completely false. You mean the theory that retirement will help? The theory that retirement will help with this, with getting rid of this meaninglessness.

34:51Paula Pant:There was a piece just in January, and this isn't the first piece. I mean, this is a continual stream of research coming out, but a piece in the Wall Street Journal in January saying that having enough money is not the biggest problem that retirees face. Having the right healthcare is not the biggest problem. Those two are really important, but they called it, Paula, mattering is the problem. The fact that we are now retired and I don't feel like my life matters, that what I do matters. And so in this quest for happiness, if we're really solving for happiness in my brain, you know, Kip, you said that the downside was a pay cut.

35:32Paula Pant:If you're fine financially, who cares about the pay cut? Yeah, exactly. And this is a reason, by the way, to be financially independent. So you would think that we'd be chasing this mattering, but often I feel like we're, and this is so trite. It is so trite, but it's so true what I'm about to say, which is, you know, you got to retire to something, not from something. How many times we heard that, right? Right. But it's true. It's a cliche because it's entirely true. You can't just run from the meaninglessness that you have. You have to run toward meaning. And by the way, meaning, because I know how much hate we get, Paula, people like, oh, of this purpose thing is overrated.

36:12Paula Pant:It isn't overrated. It's just that you're misdefining it. Like you have to build an Eiffel tower or you have to some Taj Mahal to, you know, so that whatever, you don't need to do that. But just Kip, what really got me excited was when you're like, I'm in a job where I'm helping people. The mission is now bigger than you. Right. And every study shows that if we get away from the selfish retirement vision toward a more selfless, community-oriented vision, it gets better. And I've got an example of this, Paula. I spoke with this researcher, a woman named Dr. Anna Corwin. She has gone on to publish a lot of stuff, but I talked to this woman maybe 12, 13 years ago.

36:55Paula Pant:She had done this study of Catholic nuns. And these Catholic nuns don't retire. They continue until they die with this community service stuff. What's funny is, is that in her research, not only do they live nearly a decade longer than the population in general, they're generally happier. When you look at what Catholic nuns own, they own nothing. They own next to nothing. They have very little of the trappings. And yet, what do they have? They have this mission that's way bigger than them. They have this mission to serve a community. And so the joy they get from serving that community and the - And they also have community amongst themselves.

37:38Paula Pant:A hundred percent. Yes. You know, and you see the study with nursing homes too. You know, that famous study where they gave half of the people in a nursing home a plant. And they said, you have to make sure this plant lives. And everybody else might've had a plant, might not have, but they didn't give them any special instructions. Everybody already knows where this study's going. The study showed that people that had to keep the plant alive, a mission bigger than themselves, that person lived longer. So for solving for happiness, Kip, you're on it, man. You are on it. Yeah, exactly. Kip, the story you shared, this is the best possible outcome.

38:14I mean, wow, what a best of both worlds. There was a story, another story that the Wall Street Journal just ran. It was actually an editorial written by two retirees, former Wall Street Journal editor who'd retired several years ago. One of the most depressing headlines I've ever seen, the headline said, where does our free time go in retirement? Too often, it's social media. And the piece goes on to talk about how in retirement, with the absence of bosses and meetings and deadlines, there is nothing to interrupt just zombie doom scrolling. And so I'm going to quote, actually. So this was written by Stephen Kreider Yoder, retired Wall Street Journal editor.

39:02He said, quote, we retirees have a particular vulnerability. We have time on our hands and no external authority telling us to snap out of it. And I'm continuing to quote, quote, let's have a show of hands. How many retirees have ended a day looking up from the phone, wondering where the time went, and feeling the mental equivalent of having finished off a family-sized bag of potato chips? Ugh. Yeah, end quote. And so I posted this on Twitter, on X, and it went super viral, over 400 ,000 views. I was reading through my comment feed and a lot of people made the point, and I thought this was a very valid point.

39:48They said, you know what? Retirees scrolling social media today is the equivalent of the retiree that just channel surfed 20 years ago, that sat on their rocking chair and watched The Price is Right and just channel surfed all day long. And I was like, oh, that's a good point.

40:06Paula Pant:Yeah. And then I thought, well, what did retirees do before television was invented? But, you know, retirement is a pretty new social phenomenon, at least in the United States. It didn't really exist before the development of television. There wasn't much before then, and it didn't last very long. Yeah. What's the Hobbes quote? It was brutish and short. It was brutish and short. Right. It is interesting that a successful retirement looks a lot like entrepreneurship. Being a self-starter is important. Treating it like a job, but a job that you love is important. Christine Benz in her book last fall, How to Retire, it was shocking that the very first chapter of this book, she's talking to an annuity expert, which is exactly what you expect.

40:54Paula Pant:But Paula, they didn't talk at all about annuities. they talked about this. They talked about getting out of bed, putting on actual pants. With a button. With a button. Setting a schedule so you've got your scheduled activities for the day and sticking to that. Because I like what he said in that piece about, we don't have any boss who's telling us what to do anymore. So blowing off the things to doom scroll longer, you go, well, I deserve it. I'm in retirement. The bad news is, yes, you do. beware what you ask for. When it comes to real estate, real estate is not my forte, but real estate syndication gets very much into an area, Paula, that I know a lot about because evaluating investments is something I've spent my entire career doing.

41:47Paula Pant:So if you don't mind, I'll take a quick stab at this and then we'll hand it over to the expert. I think syndication is far more dangerous than people give it credit for. the number of headlines we've done on stacking Benjamins over the years related to people not getting what they wanted out of syndication is big it can be immensely profitable it can be fantastic but here is the problem with syndication and Kip you you actually alluded to this in your question but a lot of people don't even know what real estate syndication is but this is where you are essentially like a limited partner. You are handing money to a general partner, to somebody who is going to make all the decisions.

42:28Paula Pant:You don't make any of the decisions. They're going to buy and develop some property. Maybe they've even already bought it and they're already developing it. They're going to give you a list of conditions around a property or properties. You're going to be the funding. They're going to take your money and leverage it so that everybody's able to hopefully do really well. And if things work out as expected, it can go really, really, really well. But much like if people have ever done a Kickstarter campaign, if you know what Kickstarter is, you're helping some developer, some maker create a new thing.

43:07Paula Pant:Even if the maker has a long, long track record of successfully bringing things to market, you can still hand them money and they could just run away with it. Unexpected things still happen. So the past, what you're evaluating here, Kip, is the past. And you have to do that. And the number of people that get, there was a huge developer in Dallas just maybe 18 months ago. The Dallas newspapers did this horrible expose. it got picked up nationally about this guy who could tell a great story, got millions of dollars. In fact, Paula, there was one person that was being profiled in the piece who had given this developer over a million dollars and they only had like a million and a half for all of their retirement.

43:58Paula Pant:So they gave this guy two thirds of his retirement and the guy just didn't know what he was doing. He had no idea. He was a great talker, but he had never done a syndication before and shock of shocks, he ran into zoning requirements. He didn't know anything about. He ran into the fact that cost overruns with contractors that this guy didn't know anything about. He was just great at sales and people flooded him with money. So you have to look at their past track record. In this case, I would have told a client of mine that asked me to evaluate this. I would have said, this guy's got no track record.

44:32Paula Pant:He's telling you a great story. He's got great numbers. He probably has charts and graphs, right? He's got no track record. You can't hand them money that you can't afford to lose. So if you do hand them money, make it a small amount and consider it a bet. But even after the track record, the problem with syndication is somebody could have done 20 of these, 30 of these, 40 of these, 100 of them, and the next one could still go really bad. And there's nothing you can do about that. I see people go, well, rather than put my money in index fund, I'd rather give it to a real estate syndication. As if we're talking about two Honeycrisp apples, we're not even talking about apples.

45:10Paula Pant:We're talking about the same type of apple. These things are not risk-wise anywhere in the same generation of each other. They're not even close. A real estate syndication is always at the end, even after meticulous research, going to be a bet that this particular person is going to do what they said they were going to do on top of the fact that you also have concentration risk, meaning it's one development versus in an index, you've got hundreds of different companies that have hundreds of different outcomes that are going to help you get rid of that concentrated risk. So I don't know, Paula, that's my feeling about syndication.

45:53Paula Pant:It can be huge. It could be great. Yeah. I actually have the same feeling. So the sponsor risk that you were talking about, Joe, that is huge. You are essentially casting a vote for the management capabilities of that sponsor, right? Like, how are they going to manage the expenses? How are they going to handle vacancies? How are they going to manage this project? Evaluating a manager is itself a specialized skill set, right? Right. So that first and foremost is the big thing. The other, and this is really the major problem that I have with it, because you might argue, all right, well, if you were to choose an individual stock, you are essentially casting a vote for the executive team of that company.

46:41And that is true. The difference is if you're buying an individual stock, which I don't recommend doing also, at least not with any significant amount of money, like a tiny amount of play money, sure. The difference is if you're buying an individual stock, it's a publicly traded company that is subject to reporting requirements, financial disclosure requirements. And so you can read through the finances of a publicly traded company. There are earnings calls. There's mandatory reporting requirements. There's a huge level of visibility that you get with a publicly traded stock that you don't get with a real estate syndication.

47:22Paula Pant:Well, and there's another upside of the fact that it's publicly traded. I love the freedom of information, but if I don't like that information, Paula, I can get out. Yeah, yeah, exactly. It's highly liquid. If for some reason I get a sniff of something going badly with my syndication, I can't get out. I still can't get out. Right. Yeah. So with syndication, there's a lack of transparency and a lack of liquidity. Red flag, red flag. Yeah, we're several degrees up the food chain, many degrees up the food chain from even an individual stock. Right, exactly. Kip, you asked about accredited investors.

48:01That's why most syndications do require a person to be an accredited investor is because there's so much risk involved. And to anyone who's listening who is an accredited investor, I still wouldn't recommend it. I'm an accredited investor. I don't touch this stuff.

48:18Paula Pant:That said, Kip, I don't want to position it like it is a ripoff or that it is some kind of scheme. These are very legitimate. There are fantastic people in that arena. I know some of them who do very, very, very well, uh, have a long history of, of doing well, but the past does not equal the future. And I think that once you understand that, once you understand that you're going to, you know, if you've got one and a half million dollars, you're not going to give them a million bucks. Yeah. Maybe if their minimum is 50 ,000, maybe if you strongly believe in the, believe in it, well, do many of them take less than 50?

49:05Paula Pant:Oh. Like I can't think of a syndication that I've seen that takes less than 50. If you have one and a half mil, I wouldn't give them 50. Maybe if you have like three or four mil. Well, then you're saying you wouldn't do it. Three or four mil. Then you're saying you wouldn't do it. Yeah. Yeah. One and a half million dollars, then you wouldn't do it. Because I don't know, generally for most of these syndications, the floor is 50. Like that's the low floor. Yeah. Maybe if you have three or four mil, I mean, just as a percentage of your net worth, I would want it to be tiny. The reason I have the position I do is I want to emphasize it is that combination of lack of liquidity and lack of transparency.

49:42And between the two, the lack of transparency to me is the bigger piece. The operator can tell you that they're sharing the numbers, but are those numbers accurate? Have they been third party verified? Like you just don't have the protections that you do. If you're, for example, buying an individual stock, you don't have the legal protections. You don't have that external regulatory scaffolding that serves as investor protection.

50:10Paula Pant:I have a question for you, Paula. Yeah, what's that? What percentage of investors who are currently in syndications, they're already investing in it, truly understand the investment that they have? I could only speculate. Me too. But I think your and my gut feeling is a lot different than the gut feeling of the world at large because we spend so much time on this and in this community. Do you want to go first or do you want mine? The question is what percentage? What percentage understand or what percentage don't understand? Let's do that. No, no. Let's do what percentage do understand because on the count of three, I can hold up the answer with the number of fingers that I'm holding up.

51:01Paula Pant:Okay. All right. So count of three number of fingers that I'm holding up. For those of you watching on YouTube, you'll see this. For those of you listening via audio, go to YouTube. All right. Going to hold up the number of fingers, count of, well, counting down from three. It'll be three, two, one, boom. All right. Okay. Three, two, one, boom. Whoa. We're pretty close. Wow. Okay. So I guessed 5%. Oh, you said 5%. understand. Yeah. Yeah. Yeah. I thought that was 50. No, no, this is a five. You're saying 5 % of people understand. Yeah. 95 do not. That's my guess. God, I thought my number was high.

51:40Paula Pant:We're way off. If we're talking like a deep understanding of, I really know the numbers. Yeah. I'd say about probably 5%. Well, and I defined it a little differently. A full 30 % of people have no clue, no clue whatsoever. So you think 70 % do understand, do understand, Maybe not the deep understanding that you're talking about, but I think 70 % do. I think 70 % is not a huge number. If you flip it to 30 % of people don't understand, that scares the hell out of me. Like a full three in 10, have no clue. Yeah. Okay. Yeah. I guess we're operating off of different definitions of the word understanding because if you think about a tree, I often liken knowledge to a tree.

52:23So are we talking like tree trunk level understanding or are we talking leaves and branches understanding?

52:29Paula Pant:You're talking leaves and branches. No, no, I'm talking tree trunk. I think 5 % of people have tree trunk, like core. You mean where they understand the entire tree? They understand everything? Yeah, yeah, yeah. See, I'm even having trouble understanding the analogy. Right. So the tree trunk is like the core of the tree, whereas the leaves and branches are the visible component. Okay. The more salient component. Okay. I can see, you know, maybe 50 % or so having the leaves and branches understanding, but only 5 % having the tree trunk. Yeah, I think your number could be right. It could definitely be right there.

53:03Paula Pant:But I think 30 % of people just don't even know that there's a tree in that forest. They don't even know where the tree is. Can't see the forest for the trees. I got no idea. Like, I thought it was a lake. I had no idea that was a tree. But that number scares me. I mean, that's a big enough, either way you take that, it's a big enough deficit in our understanding of that tool. Mine comes from the number of people when I was a financial planner that were in limited partnerships or were in these closed end REITs, you know, which is kind of a similar construct to a syndication, a little different, but similar that your money's locked up.

53:45Paula Pant:it's a little more transparent, but there's nothing you can do about it. You still have no liquidity, even though they have to give you numbers along the way and they have to revalue it. These companies can revalue the shares in a lot of magical ways that might never come to fruition. But I would see a full 30 % of people in that market that would go, oh, they just told me it was like I was buying shopping malls or they told me I was buying nursing homes or I was buying ski resorts. That sounded really cool. Well, did you ever think about the fact you can't sell off the bathroom of your ski resort to get money?

54:21Paula Pant:You can't take the ski shop and just peel it off when you need 20 bucks. No, I never thought about that. They just said that, hey, look at ski resorts aren't going out of business anytime soon, so I should own some. Which is funny because ski resorts are really struggling with - Right, with snow. Yeah, with snow. With the base product. Exactly. Yeah, exactly. With the one thing that you really need at a ski resort. Well, but they still got the mountain. They still got the mountain. Yeah. Nepal has mountains and we have no ski resorts. No ski resorts. You know who's got the tallest mountains in the world?

54:56You know who's got Mount Everest?

54:58Paula Pant:Oh. Us, Nepal. Yes. And you also know who doesn't have ski resorts? Also us, Nepal. Okay. So I'm going to make a new syndication. Yeah. I want$50 ,000 from everybody. Cause there's this huge opportunity in the market of orders. We can build some ski resorts in Nepal. Think about the opportunity. I'm going to, I'm going to make a graph and it's going to go up into the right. Oh boy. Yeah. Like the slope of a mountain right before you ski right back down. Yes. We're going to call it money mountain. We're going to make mountains of money. Yeah. Yeah. Yeah. Joe, are you familiar with the concept of an avalanche?

55:39avalanche of money when we clean up on this deal.

55:43Paula Pant:Imagine skiing down Everest. Or on a porno. We've got 10 out of the 14 tallest mountains in the world. Listen to all these flexes in the last like five minutes. We do. You know what we don't have? A ski industry. You know why? Because we don't have our act together. Because we don't have venture capitalists who are thinking about this all the time. Thank goodness. Thank goodness. We don't have an environment that is friendly to investment. But you also have not exploited the natural beauty of your country. Oh, no, we certainly have. Everest is covered in trash. Well, that's true. Covered in trash.

56:20Paula Pant:But Annapurna was not. Yes. Annapurna was not. All right. Kip's like, wow, you really went off the rails on that question. Kip, so if you were a tree. If you were a tree. All right. Well, Kip, thank you for the question. Congratulations again on the life that you have built. All right. We're going to take one final break to hear from the sponsors who make the show possible. When we return, we are going to hear from a caller who is planning on retiring five years from now at the age of 53.

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1:01:14Welcome back. Our final question today comes from Jesse. Hi, Paula and Joe. Love the show. My wife and I are trying to figure out where our next savings dollars should go. If you were in our shoes, would you keep maxing out Roth IRAs or start funding a taxable brokerage account for more early retirement flexibility. What trade-offs are we facing by not having a taxable account? We plan to retire in about five years around age 53. Right now, we contribute enough to my Roth 401k to get the full match, max out our HSA, and max both Roth IRAs. Our balances are roughly$350 ,000 in traditional IRAs,$475 ,000 in Roth IRAs, $250 ,000 in a Roth 401k, and$95 ,000 in our HSA.

1:02:10We likely only have the capacity to fund either the Roth IRAs or a taxable account, not both. Thanks so much.

1:02:20Paula Pant:Jesse, let's imagine that your question were a tree. Oh no. Is it an evergreen or a deciduous?

1:02:33Paula Pant:Jesse, nice job of saving. Paula, I've got some thoughts for Jesse, but I do think that Jesse, when it comes to tax diversification, my friend, you've done a nice job because on one hand, you've gotten The bird in the hand, which is tax savings today with some of your money, with a good chunk of your money, and you still have flexibility later on, which is great. So I think you built yourself a fine engine for retirement. Yeah. Okay. Joe and I have not discussed our answer beforehand. I know what I'm going to say. I'm so curious, Joe, if we have a matching answer. I almost want to write it down and then do a big reveal.

1:03:14Paula Pant:I'll be honest. Like a cue card. I'll be honest. Go ahead and share it. Fund the Roth IRA because the contributions that you make to a Roth, you can take out at any time. So the gains that you make, you'll have to keep in. Those are age limited, time restricted. But the base contribution that you make to a Roth, you can take that money whenever you want. So you still preserve that flexibility. So go with the Roth. That would be my default answer. But I want to do one thing before I do what Paula suggests, which is I don't know what your lifestyle needs are until the time when you can get at this money without having to use any of the special exemptions that are out there.

1:03:55Paula Pant:So if you're only going to need what's called the basis, the money you put in, well, then certainly I think tax sheltering it, Paula, is the way to go. Like you nailed it. But if I need more than that, or I'm close to that line, that's when I switch my answer to be the brokerage account. The taxable brokerage. Given that they're retiring at 53, so they're only six and a half years behind turning 59 and a half. And that's assuming that they retire on the day that they turn 53, right? So if they retire at, let's say, 53 and a half, we're talking about a six-year gap. Her math skills are so incredible.

1:04:36Paula Pant:Trees and math skills and mountains. You know, and if they retire at the age of 53 and a quarter, but what if they retire at 53 in seven and a half months? What then? What if they wait till they're 54 and a half, Paula? Ooh. Oh, now you're, now you're just one more year syndroming. Yes. Right? Yeah. That's not good. Yeah. No, don't want to do that. All right. So point is if they retire at 53, than they have between six to six and a half years that they need to solve for. Yeah. Which means even if they need more than the basis, they've got a variety of options. They can SEPP 72T. You know, they can.

1:05:20Paula Pant:They can. There's just the pain in the ass factor versus just putting it in the brokerage account. So that just, Paula, I think there's one missing variable that we don't know, and it's that. How much are you going to spend? And once we know it, Paula's got the answer. unless it's over that. And then you fill in with the brokerage. Right. Wow. That was a quick answer. It was quick. Well, we spent enough time talking about ski resorts with trees and people not knowing syndication. Yeah. Don't put too many trees in your ski resort. You might know that's dangerous. But Jesse has planted a nice retirement tree.

1:06:00He has. Yes. People often use an oak tree as a symbol of retirement. I don't know why oak specifically, but that seems to be really popular among financial planning firms. If you just start paying attention to the logos that financial planning's - Always. It's always an oak tree. Maybe the acorns thing, the acorn analogy, acorn to an oak tree. I don't know. It's just a really overdone financial planning trope.

1:06:27Paula Pant:And logos are always hunter green or deep blue. Yes. Yeah, exactly. Right. But for obvious reasons, I think there's a neuro-linguistic programming thing going on there. Like, have you ever seen a financial firm with like a red logo? Yeah. Alert. Danger, danger, danger. Or a bright yellow. You know, I would do, we're actually talking about the Afford Anything rebrand because we're due for a website refresh probably in the next year or so. Purple and yellow. Those are going to be our colors. Oh, cool. Yeah. Majestic. Yeah. I mean, like bright purple and yellow. Like I'm talking New Orleans style.

1:07:05Paula Pant:With mountains in the background? No, no mountains. No mountains. And oak trees. No, zero oak trees. No, but it's purple and yellow. Those are our colors. Anyway, Jesse, back to your question. Already?

1:07:21What I like about what you've built is, you know, we talk here about the tax triangle. you've got a perfectly built tax triangle. So the tax triangle, of course, is that split between tax-deferred, tax-exempt, and taxable accounts. And you've got with tax-deferred and tax-exempt with your traditional and your Roth, you've got a beautiful, those two corners of the triangle are really well done. So I understand why you're thinking, well, wait a minute, shouldn't we build out the taxable corner of the tax triangle? Like my assumption is that's where this question is coming from. But the only reason to build out the taxable corner of the tax triangle is to preserve flexibility.

1:08:05And given that you can tap the contributions in your Roth IRA at any time you want, and not just the new contributions, but, you know, the existing contributions, you've got 475 ,000 in a Roth right now. there must be years and years and years of accumulated contributions. You can tap the nominal value of those initial contributions whenever you want. Given that you have that available to you, I don't see any particular reason to skip out on the tax advantages of a Roth in order to build the taxable corner of the triangle. So Roth it up. And you also ask, what trade-offs are you making by not having a taxable brokerage account?

1:08:49Again, the only reason you'd have taxable is for flexibility. And all of the contributions that you've made to your Roth IRA, both in the past as well as in the future, that gives you that flexibility right there. So I don't really see it as a trade-off. Unless you need more than that amount, it's not a trade-off. I guess I'm trying to poke holes in my own argument. I guess if there is one trade-off, it would be that if you were to pull money from the contribution bucket, you simply have less money that continues to grow tax-exempt over time. But that would still be true if you were to make those contributions to a taxable.

1:09:35So it's a bummer, but it's not a trade-off because that would be true in either case.

1:09:42Paula Pant:I actually think that, Paula, you might be overthinking this a little bit, which is fine. This is what we do. But I think that you've done a great job of saving. You know, there's the - Wait, I'm overthinking it? Yeah. Why? I think this can be a very, very simple answer. I know, but - It is what we do here. We give people options and it's okay. It's great. Yeah. I hate being like, your answer is this, we're done. You know, like I'm really trying to think through the pros and cons, but when it comes to making Roth IRA contributions, I see all pros. And I mean, maybe one, Joe, to your point. One potential con.

1:10:22Yeah, but even I think the likelihood of the con being a con, the likelihood that the amount of money that they're going to need exceeds the contributions that they've made, given that they have nearly half a million dollars already in a Roth IRA. And I don't know how much of that is contribution and how much of that is growth, but they must have spent decades making Roth IRA contributions.

1:10:48Paula Pant:You know, and this is interesting because, so now I'm going to overthink it. Ooh. Yeah. See, this is what happens when you spend time with Paula. You end up going, you stand in front of the ice cream stand, you're like, but I could go for strawberry, but you know, I kind of like the chocolate, but there's also good points for vanilla. But as I think about this, you know, his basic, if I go to the basic question, He only has enough money to fund the Roth. And he's talking about how much money to fund the Roth with, which then by definition takes my reticence out of the picture. Because if he only has enough money to do that anyway, that means the only thing that he's going to, the only thing he'd be able to spend in any plan would be that amount of money.

1:11:39Paula Pant:You know what I mean? I mean, if his plan exceeded spending that much money, then it'd be a flawed plan. Oh, you're saying no matter how you slice it. If that's the amount that he can save, if he puts it in the Roth, he's going to be able to get all that money back. Right. And if he's planning on spending more than that, then we start questioning the plan because his burn rate is too high. Exactly. Exactly. Exactly. Yeah. So no matter how you slice it, putting it in the taxable wouldn't make sense because he's still contributing the same amount no matter what. And by putting it in the taxable, he just misses out on tax advantage growth.

1:12:15Paula Pant:Yes. Now, unless it's this very small sliver in the last few years, but as Paula already did the math and he doesn't have that many years to go with her genius math skills, we know that the interest on that money is not going to be high anyway. The return's not going to be that high. So if it happened to be that he wanted to spend the interest on that money as well. The returns on that money, you mean? Yeah. Which because he's so close is not going to be a material number. Right. Then you're putting it in the Roth. So now I have overthought it to the point that - You've overthought it, but you've added clarity to the answer because now both of us firmly have the answer of put it in the Roth, no exceptions.

1:13:03Yeah.

1:13:04Paula Pant:For people that don't know, she's pointing herself at see, see, see. No, I'm pointing at you being like, yeah, you, you, do you concur? I'm, I'm thinking about it. I'm thinking about it. I think I do. All right. Then Jesse put it in the Roth, no exceptions. I don't think we spent enough time comparing Jesse's retirement to a tree or a mountain, maybe next episode, Jesse. Maybe when he calls in to tell us how well it's gone. Yes. Jesse, call us back between six to six and a half years.

1:13:40Oh, no, wait. He's turning 53 in five years, right? So actually call us back in five years when you turn 53.

1:13:47Paula Pant:That's right. Yeah. Yeah. Because we're planning for between 11 to 11 and a half years out. That's right. So yes, Jesse, please give us a call back in five years and let us announce when you retire five years from now, please call us back and make that announcement. All right, Joe, I think we've done it. We've got to find at least one more analogy. Well, Joe, where can people find you if they'd like to hear you make analogies elsewhere in your life? A great place to find me and Paula most of the time is Monday afternoons on our YouTube channel because we do one of our three shows a week live. So the Stacky Benjamin show, the greatest money show on earth, because it is a variety show circus of headlines and some deep thinkers.

1:14:35Paula Pant:And this Friday episode with Paula, Jesse Kramer, and OG and Doug and I, and we dive into whatever is on the collective thoughts of the internet at that time. Really, I'm kind of just were looking at the Zeitgeist. So a couple of weeks ago, we did a great show about financial statements. Like you open up your app for your credit card. What's the first thing Paula looks at when she looks at the credit card? What's the first thing OG and Jesse look at? And it's cool because these people do it all the time. They're not necessarily pros at looking at your credit card statement, but because they do it all the time, it's nice to get these people's feelings and watch where they're similar and where they're different.

1:15:19Paula Pant:So we record those live on YouTube. And if you just subscribe to the Stack of Benjamin's YouTube channel, you'll get a notice that we're going live, but it's generally around 3.30 Eastern and do the math for where you are. So come join us. And the comment section, Paula, is always fun. Like the people chatting along with us is always a good time. Oh, that's great. I love that part. And you can hear Paula's amazing trivia skills as well. Well, Joe, thank you as always for spending this time with us. And thanks to all of you for being afforders. I have an announcement. I am hosting a webinar. You know, a lot of people are like, can you actually invest in real estate in the year 2026?

1:16:05Is it realistic? Given home prices, given interest rates, how is this possibly a thing? And if you have that question, I'm answering it on May 12th. I will be there live to answer the questions that you've got. The URL is affordanything.com slash rental2026. That's affordanything.com slash rental2026. Thank you so much for being an afforder. If you enjoyed today's show, please share this with the people in your life. Share it with. Oh boy.

1:16:45You know where this is going.

1:16:46Paula Pant:Your local ski instructor. To anyone who has one of those oak tree logos, once you start looking for them, you'll see them everywhere. Everywhere. Every freaking financial planning firm. It's like they all got together and collectively decided we're all going to use a freaking oak tree as our logo. Yeah. So share it with anyone you know who has an oak tree in their logo. Share it with your arborist. Share it with the people at the Fortune 500 company who know about a team within that company that you would like better. Share it with your buddy who's thinking about doing a real estate syndication.

1:17:26Share it with anyone who's read the book Die With Zero. Share it with the Catholic nuns in your life. Share it with the people who have long-term care insurance. Share it with the people who don't. Share it with anyone whose blood pressure has dropped recently.

1:17:42Paula Pant:Share it with the 5 % of people who understand the trees and the leaves of a real estate syndication. And share it with the 70 % of people who have a branch and leaf level understanding, but not a tree trunk level understanding. Share it with your venture capitalist friend who's interested in investing in Nepal. Hashtag do not recommend. Share it with all of those people and more, because that is the single most important way that you spread the message of F-I-I-R-E. Thank you again for being an Afforder. Remember, sign up for the webinar is affordanything.com slash rental2026. I'll see you there live on Tuesday, May 12th.

1:18:30Thank you again. I'm Paula Pant. I'm Joe Salcihai. And we'll meet you in the next episode.

1:18:41Yeah. Oh, I tried to shake a bottle of juice, but the cap was already loosened.

1:18:47Paula Pant:Paula wet her pants. Yeah, I did.