Q&A: “My Husband is Not Reliable with Money. Should We Split Finances?

31:16Just in case. My question is, where? I see that Fidelity has a youth account for teens age 14 to 17, but I'm not sure what happens after he turns 18. Is it big fees? We decided we could always pivot then if we need to. He is also planning to ask his parents where they invest, so maybe there is an option to get a no-fee account there. I'm concerned that he won't earn enough to invest a consistent$50 a month or$100 a month needed for a low-fee account usually. Do you have any advice for us? Do you think a broker will let him open an account where I have investments as his aunt? I'm so excited to get him started, and now we just need to know.

31:55Where? all right paul see what i mean oh my goodness on i am flattered i am honored the first of all the fact that you have been uh a student in your first rental property since the beta days wow that that was that was what was that 2019 um so i am honored that you have been a student for five years that you've been part of the afford anything community for so long. That's incredible. Thank you so much. And I can't run for president because I wasn't born in the United States. You have to be a native born U S citizen to be president. Oh, one star. We're going to give this system one star. Do you remember the amend for Arnold?

32:44The amend for Paula amend for Paula

32:51that'd be so great would you really want to run to be president well I mean I've done nothing in politics uh so far in my life so well some people Paula say there's a lot of people in Washington who also have done nothing in politics for their entire life let's get to her question which is Yes. What account should her 15 year old nephew put his money into? Great news for Ans, Paula, which is that kids often have different rules than adults do. So minors have different rules specifically. And depending on what state your nephew is in, it's called an UTMA account, Uniform Transfer to Minors Act, or an UGMA account, Uniform Gift to Minors Act.

33:37Whether it's money that they were given or money that is theirs, these types of accounts are meant to specify that this is money in a kid's name. The transfer or gift also includes rules that people are yelling at their device. Well, Joe, that's not it. No, it isn't it. There's more, which is money that gets transferred to somebody who is a minor. There's also rules around how that works. And just to give Paula, our audience, a little fun history lesson on this, the reason these rules exist at all is that before they existed, you found people in the 1970s, 1960s, whatever a common tax loophole was, you give a bunch of money to your kid who's generally in a lower tax bracket than you are in most families.

34:26You then do whatever financial transactions you want to do that are going to be taxable while it's in the kid's name. And then you take the money back away from the kid and give it back to mom or dad. And so it was a huge tax dodge. And so these rules exist to stop tax dodgers. And they say, basically, money that's in a kid's name, this is exactly how it can be spent. It can't be spent on food, clothing, shelter for that child. It has to be spent benefit of the kid in other things, but specifically not those things. and then the child is in control of that money. And what's cool is, by the way, Paula, when the child is no longer a minor, that account then flips to be just an adult account and a regular account like the rest of us have.

35:13So when it comes to small contributions, you will find, and it's going to be different for every institution, but you will find you can make much smaller contributions because these companies get that and they love the fact that they're getting your nephew when he's young because like you, they want to encourage not just a new customer, but want to encourage financial literacy and the fact that he's excited about this. So the account minimums are smaller, the minimums to get into the different positions are smaller. But what I would look up would be specifically that. And all of your big time asset managers do this.

35:53So if you like Vanguard, Vanguard has accounts for minors. If you like Fidelity, Fidelity has those accounts. You like T. Rowe Price, whoever you like, they're going to have these accounts, but specifically look up, and it just depends on your state, whether it's UGMA or UTMA, put that in your search engine, and that will give you everything that you need to know about that. But it's going to be a lot easier than you think. Let me tell you the downside here. Every, every strategy has an Achilles heel. And if you don't think your strategy has an Achilles heel, got to keep looking because every single one does.

36:35I just want to warn you. And by the way, this is not a big deal, but if your nephew is eligible for financial aid, money that's in a minor's name is expected to be spent on college in most instances before they get any financial aid. So money in a child's name, money in an UGMA or UGMA account counts 100 % against financial aid you would get when it comes to calculating expected family contribution. And I get it. There should be a financial burden on somebody who is looking to build a different asset, which is their education. So if you have a strategy for your nephew, which includes him getting financial aid, this money will directly drop the amount of financial aid that he receives in the future.

37:27Joe, I'm curious why you would recommend Upma or Ugma as opposed to a custodial Roth IRA. Well, her goal was to have money that was his, right? Right. Right. Money that was specifically his. So if he's in one of these UGMA or UPMA accounts, then he has the money earlier. If it's a custodial IRA, IRA money is a tax shelter. So then that money is going to be for a different reason. He can't spend that money on a house, on a car. I mean, he might be able to, but he's going to have to go through a bunch of hoops to get money out of that IRA. If it's specifically for retirement, go for it. If it's specifically for the long, long, long-term goal and you want it to not have anything to do with short-term money, absolutely 100 % go for the custodial IRA.

38:17But if it's flexible, his money, and he can decide later whether he puts his money in an IRA or not, then use the UGMA up account because that'll give him more flexibility. See, I like the custodial, assuming that the 15-year-old is on board, I like the custodial Roth IRA idea because then he takes his earned income, which he's making right now at the age of 15, puts it into a custodial Roth IRA, and then fast forward 60 years, he'll be 75 years old, taking out all of the capital gains, all of that growth, tax exempt. I mean, wow. Wow. 60 years worth of growth. Well, if Anz decides to do this, we had an expert on talking about working with kids and money.

39:04And what was fascinating to me, Paula, is that the way a lot of parents talk about money with kids is they talk about the stick. Do not get into debt. Do not take out excess credit cards. Do not use other people's money. He said that kids hear that, but they still make the same dumb mistakes after they hear that he found almost no efficacy in in giving them these lessons. There was almost none. The place where kids got really excited was when he used a Roth IRA and the rule of seventy to show them how this little bit of money would make them a millionaire with almost no effort. And they got really excited.

39:44So, so what I would say is if you did decide to go that route, couple it with a rule 72 lesson, um, which shows money doubling over time. And, uh, and that will also give them the bad news a little less going, listen, you have to let this money sit, which often, you know, a 15, 16, 17 year old doesn't want to hear about when I'm 70. but when you tell them you're a millionaire from this, or you're going to have most of the money toward it or whatever the amount of money is, then it gives them the positive reason to let that money sit. And they're much less likely then to wreck their own strategy because they know what that money's there for.

40:23Right. Exactly. So yeah, if the 15 year old is on board with putting money aside for retirement, I personally, I like the idea of putting this money into a custodial Roth IRA. because then you get all the benefits of a Roth IRA for longer. I mean, to put money into a Roth IRA when you're 15 is, you know, with compounding growth, it's that last doubling that matters. Even if you put money in at the age of 25, you're still one doubling shy of what you would have gotten if you would put that money in at 15. I love your enthusiasm for that, Paula. But you know what I love even more? is just as Anz enthusiasm for having this conversation at all.

41:08Exactly, exactly. Oh, and Anz then to also directly answer your question, every major institution is going to have a custodial Roth IRA. So again, pick your favorite, Schwab, Fidelity, Vanguard. And probably between those ones, don't you think it's much more, if Anz is going to be the one helping her nephew direct this, between those three, frankly, I would do the one that Anz is more comfortable with because if Anz has navigated the Fidelity portal, as an example, she knows how to make this easy and get things done at Fidelity. Every one of these institutions has their own quirks. But when it comes to their usability, I don't think it matters.

41:48Yeah, I really don't. I think the biggest thing that matters. Exactly. So the three big discount brokerages are Schwab, Fidelity, and Vanguard. Of the three, you cannot go wrong. people often ask me which one is the quote unquote best. And there are some people out there who really want a specific answer. What I often tell people is, hey, you know what? Vanguard is a co-op. It is member owned, which means it does not have shareholders that it has to satisfy, right? If you have a Vanguard account, you are one of the owners of Vanguard. So if I had to pick one of the three, starting from scratch, I'd pick Vanguard.

42:32But that said, my donor advised fund is at Schwab, right? My ordinary checking account, my day-to-day checking account is at Schwab. I love them both. And as I mentioned earlier, when talking about on strategy with her nephew, everything has an Achilles heel. And what's the complaint you hear about Vanguard is the user experience online is not as good. Exactly, yeah. Their user interface, personally, I think it's not intuitive, right? Their user interface is just not that intuitive. Schwab and Fidelity, so much more intuitive. Exactly, exactly. But the low fee stuff is at Vanguard. Well, it's really, it's at all of them.

43:20You know, it's at all of them. So oftentimes, this is what happens on the show is I will say, these are the three discount brokerages, pick any one of the three. And then oftentimes, I'll hear from the community, like, please, just I don't want to pick from three, give us one, right? People who want a definitive answer say, don't give me three, give me one. So then I'm like, fine. If you want one, Vanguard. Vanguard. But then, and then I hear from people who are like, oh no, my account is at Fidelity. Should I switch? Right? Yes. No, don't switch. If any of those three are amazing, any of those three, you can eaty, meeny, miny, moe it.

44:04Right? I almost feel like people, when they want that short answer, they almost do yourself a disservice. Because frankly, it isn't which one you choose. It's the why. rationale behind it. Yeah. Because Paula, you could give me a huge why and I can figure out why we disagree about something because I know the right. Exactly. Exactly. So yeah. So any of them are great. They're all low fee. You're not going to get pushed into a higher fee account when he turns 18, a significantly higher fee account. All of them are famous for being rock bottom when it comes to account fees. So in terms of picking a brokerage that the 15-year-old can keep for the rest of his life, any of those three are going to be great choices.

44:48So just pick your favorite. And you can pick based on ownership structure, which would be Vanguard. You can pick based on intuitive user interface, which would be either Fidelity or Schwab. But any of them is equally as good as any of the others. So thank you, Anz, for that question. And thank you for the nomination to the executive office. We got at least one write-in vote. Amend for Paula.

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46:41That's go.boldin.com slash afford. Go take a look. It could make a big difference in how you think about your financial future. Bolden is for informational and education purposes only and does not constitute investment advice. You know, when you're a kid, you dream about being an astronaut or working with wildlife or all these cool things. And then when you grow up, you think about not just what you want to do, but also you think about this other layer to it, which is how do I want to impact the world? What legacy do I want to leave behind? And how do I want to do that through my work? For a lot of people, that's when you start dreaming about owning your own business.

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48:30Our final question today is a question that asks me to reveal a bunch of details about myself. So maybe this will actually undo my presidential candidacy, right? You know, TMZ is listening, Paula. Exactly. Perez Hilton is on the case. But before we get to that question, or we're going to get to that in just a moment, before we get to that, we're first going to play a comment. Now, this comment comes from a listener named Melanie, who is calling in with a comment related to a discussion that we had about exchange-traded funds or ETFs on episode 494. Let's hear from Melanie. Good afternoon. My name is Melanie, and I've been listening for probably over a year.

49:23Great work, guys. Thanks for all that you do. I'm currently listening to episode 494. Or I'm probably halfway through the podcast and we're talking about investing and someone mentioned that there isn't a way to automate buying ETFs. Well, I wanted to let you know that there is through Vanguard, but it's a pilot that they have just started, but they only send it out. I don't think it's open on everybody's page. I got an email and I said, hey, we want you to know we have a pilot program coming out where you can do automatic investments into ETFs. Click this link and I'm logged in and I now have that option to set it up for weekly, monthly.

50:11There may be even a bi-weekly. I set up a monthly. And the first transaction hit last week. I think I set it up on a Monday to start once a month, but starting on that Wednesday. and on Wednesday it executed my trade for VTI. And so now I don't have to think about it. At least once a month, some ETFs are going to be purchased. Now, obviously, if I want to purchase a bigger amount, then I'll go in and do that manually. But at least I don't have to remember, oh, I've got money coming out of my bank account going into that account. Okay, now I've got to go to Vanguard and actually buy the ETFs. I don't have to do that often unless I'm buying a bigger amount.

50:50At least I know that once a month there's going to be an execution. So I just wanted your listeners to know that. Thanks a lot for all you do. Have a great day. Hope I wasn't rambling too much. Melanie, thank you so much for that comment because, Paula, I think this is something that I brought up during that discussion, which was that exchange-traded funds are the less expensive way to go. And it's because of the more recent architecture. Mutual funds have been around for a long time. Exchange-traded funds, not as long. because of that being the more modern product, generally your best bet if you're investing all at once.

51:30But if you're trying to do this month by one thing, you can't do it. But I think something we had said that even if we didn't, Melody brings up a great point, which is that as innovation marches on, it was only a matter of time. And although it still isn't widely available, even when we had this discussion, you can see that this is coming. And what I love about this, and by the way, thank you for that comment, Melanie. Yeah, thank you, Melanie. And I'm very excited that it's coming because I do think it is a better path for most investors. There is going to be a smaller tax that you pay in a non-IRA account because exchange-traded funds are allowed to exchange positions versus have these huge capital gains tax that sometimes a mutual fund will have.

52:21They're cheaper by a smidge than a mutual fund, but heck, if it's the same thing and it's less expensive, let's do it. So I really, I really like that. Melanie brings up kind of a side point here, Paula, which is that, you know, it will be worth it for people to redo where they're saving to. If this becomes a big thing, it will be worth it. Much like when Roth IRAs came on board in the 1990s, it was well worth it for people that started those Roth IRAs immediately to be in on the ground floor. I mean, imagine people that were just starting to save then and they were able to do all Roth IRAs. I'm sure there's somebody sitting in the audience right now that has 100 % of their IRA money in Roth IRAs.

53:08And they're sitting in a sweet, sweet, sweet spot right now with all this money that they don't have to share with their uncle, who's not really their uncle in Washington, right? I love that. This is why it's not having a plan that it's planning is because even if your goals don't change, the world around you continues to change. Another example is something that Fidelity and Vanguard and BlackRock and others are working on, and it's available to some investors. You can take an index like the S &P 500 and you can cut out the companies you don't like can make a polypant index, which is S &P 500 minus this one thing, these three companies that annoy the hell out of me for whatever reason, or maybe it's plus a company.

53:56You can have a completely individual index that fits who you are, but is still indexing, which is this cool thing. There's a mutual fund family called Dimensional. Dimensional has, I believe, three Nobel prize winners on their staff. Dimensional does this already. Their philosophy, Paula, is you don't know who the winner is, which is why you index, but you know what? You look at the S &P 500, fairly easy to pick out a few that probably won't be the winner, which is why when you look at over the long term, one of the few fund families that has done exceedingly well versus an index, it's dimensional.

54:37It's also why it's hard to sell to get into those funds. But now you can do that yourself. You can look at the S &P 500 if you're nerdy enough and go, no, I don't think that's a winner. I don't think that's a winner. Now, there's plenty of downsides to go with that, Paula. But just the fact that the innovations at the point that we can think about this is pretty kick ass. It blurs the line. So what I'm hearing is that the line between active and passive investing, the line between selecting investments versus going into what we've traditionally thought of as an index is getting fuzzier and fuzzier until perhaps at some point in the future, the delineation will be difficult.

55:14Yeah, it is exciting and scary altogether, which means that it comes down to what you talk about on this show all the time even more. It's going to be your behavior. You know what I'm hearing right now? And so this is a kind of a theme, I think, in a lot of domains, increasing convergence. So if ETFs are becoming more customizable such that you can, let's say, take an S &P 500 index fund, which represents 500 companies and 503 stocks, because some of those companies have multiple ticker symbols. So 503 ticker symbols are currently represented in a standard S &P 500. And if you can add or subtract, if you can make it 506, right, or if you can make it 498, right, that means that there is this level of customization, which starts to then converge closer to what people who buy individual stocks do.

56:18Now, when it's just a minor deviation like that, you're only in that very first step of convergence, but it clearly is pointing directionally towards a trend of increasing convergence. And what's interesting about that, I was having this conversation yesterday at dinner with a friend. We were discussing how the law, this is a completely separate topic, but we were discussing how the law distinguishes between a private individual versus a public figure when it comes to privacy, when it comes to the ways in which the media handles the privacy of that individual. And that is a really interesting area of the law right now because we're in the era of social media and the era of podcasting in which the delineation between a private individual versus a public figure is far fuzzier than it used to be.

57:15In the 1970s, in the 1980s, it was far more clear who is a celebrity and who is not. These days, there's much more of a gradient. I saw just last week, a woman, another woman getting fired from her job at a hospital because of a TikTok video. Interesting. So is she a celebrity or is she a private individual works at a hospital. And I was thinking more about how big does your following have to be? How many listeners do you have to have? How many YouTube subscribers do you need to have before you cross that threshold? Right? Is it the blue checkmark threshold? Is it, you know, again, is it recognizability on a sidewalk?

57:58And if so, to what extent? When we live in an area of gradient and we live in an area of convergence, these questions become not only increasingly important, but also simultaneously far harder to answer and far more nuanced. At any rate, all of that is to say that that discussion that my friend and I were having last night at dinner about the convergence between private and public life reflects, Joe, what I'm hearing you say with regard to an increasing convergence between active and passive investing strategies. this is why for me more does not equal better all the time because as a guy who helped people with money for a long time this creates a bunch more noise in your head it creates a bunch more am i doing the right thing like you were talking about oh i got my money fidelity should i move it to vanguard oh gosh please don't please you're you're fine where you are and now people are going to hear oh i can take the sp500 i can customize it what could possibly go wrong there Paula.

59:05The problem right now isn't that indexing works. The problem is people will buy indexes and then they will hear news on the radio or on one of the news stations and they will sell their position because they're worried how it's going to affect things in the short term and they will buy back. We say out loud that we index because passive wins and then all the studies out of all these big account holder shows that we still day trade our passive funds, which is frustrating. It's still even more than ever. This gift of choice can also be a burden. In any event, Melanie, thank you for calling in and telling us about your experience with this pilot program.

59:55The future is now, Paula. Right. And thank you for sparking this discussion. It's time for you to quit delaying, Paula. Speaking about moving from private life into the public spotlight. I'm so excited. Oh, here we go. All right. The next and final question today invites me to divulge more than I typically do. And ironically, the person who asked it is anonymous. Of course. so uh joe would you like to give this anonymous caller a name back to this breakpoint documentary there is a player who is very much a pot stirrer named nick curios a wonderful australian tennis player but but he does things that other tennis players don't do and i think that this caller is doing something nobody's done they're turning the lens back on you yeah we don't typically get questions about me.

1:00:55We get questions about the individual and their life. Yeah. And the way that Nick plays good tennis is he knocks other tennis players off their game with antics and with things. But you know what, Paula? I think what we're about to see is that the way to beat Nick is the big time professionals just still go at it. So Nick, you're about to see Paula bring it oh dear in her hand you're not gonna knock her off her game i've been working with her long enough paula the bar's high you're going to back me up here but anyway nick curios is this tennis player so let's let's call this color nick all right then our final question today comes from nick hi paula i have a bit of a personal question for you given some of the life changes and successes that you've experienced recently including moving to new york city completing your fellowship in business and economic journalism the role that you played in a recent Netflix documentary and the general growth in the Afford Anything business, would you be willing to share a bit about your current personal financial planning goals?

1:01:58I'm sure that you have a framework that will communicate how you're thinking and making decisions, but some double-click questions I'm wondering are, how do you think about personal financial risk currently? And is it different than what it looks like three years ago? Are you looking to expand your real estate portfolio today? Why or why not? How are you shifting your broader investment portfolio over time, if at all? and how and where do you see your time, energy, and focus allocations changing? And can you comment on which of those changes have been intentional in nature? I realize that these are deeply personal questions, so feel free to ignore any and all of them.

1:02:31I would love to hear what you're thinking about these days. Thanks. Paul, it's funny that this idea of personal financial risk, I find all these questions interesting, but do you view personal financial risk differently than you did just four years ago? Well, his question was three years ago. And what struck me about specifically three or four years ago, that was the pandemic. And I will say during the pandemic, my brain broke, as I think a lot of ours did. During the pandemic, I was far more conservative. And in particular, back then, there was a lot of uncertainty around jobs, around income.

1:03:11I mean, early 2020 was when businesses were taking, including Afford Anything, we were taking PPP loans because we weren't sure if we were going to still have revenue come in. And so my concern back then was not about myself. It was about the team here at Afford Anything because, you know, and we don't have a huge team, but we've, you know, we had a couple of W-2 employees, like W-2 paychecks with health benefits. and I was worried about making sure that we were going to be able to bring in enough money to pay the salaries for the people on our team, you know, and even also independent contractors too.

1:03:56When you have independent contractors who have been working with you regularly for, for years, that's not morally and ethically a tap that you ever want to turn off suddenly. And so anyway, in 2020, particularly in the first six months of 2020, My overwhelming financial priority at that time was to make sure that we could pay our team. And so to that end, I was much more cash centric, right? I wasn't concerned about long-term growth. I was concerned about making payroll. What's shifted these days is that the economy in 2024 is incredibly strong. I've talked about this on the show before, a disconnect between popular consumer sentiment and economic data.

1:04:52The economic indicators all point to an incredibly robust economy. Inflation is under control and has been under control for several months. Unemployment is at a 50 to 60 year historic low, meaning employment is incredibly high. We've avoided a recession. Remember all of the discussion that people were having back in the day about are we going to have a hard landing versus a soft landing? That's a moot question. So we have avoided a recession. We have gotten inflation under control. We have high levels of employment. We are standing on the precipice of huge productivity gains brought on by AI.

1:05:42and biotech, which is an area that we have not really covered in depth on this show yet that I want to do an episode on at some point in the future. There is so much innovation happening, which points to strong, strong indicators of positive economic progress. I think there is an enormous case to be bullish. And so when I think to your question about how do I think about personal financial risk and how has that changed, I don't think about risk in my portfolio, in my investment portfolio when it comes to stocks, bonds, etc. I have been in a barbell allocation, meaning heavy equities allocation and then cash on the other side.

1:06:33I don't invest in bonds. I have been in a barbell allocation for years, and I continue to remain in a barbell allocation. But when I think about personal financial risk, I think about how much risk is afford anything subject to? How much risk is this company and its team subject to? Which is another way of asking, how fast can we grow? And I am a conservative business owner. I grow more slowly than I need to, I think often to a fault, because I want to make sure that I have the cash coffers as well as the logistical, operational, and administrative capacity to be able to handle that growth. And if I think that for one reason or another, I'm shy or deficient in one of those two areas, whether it's I don't have enough money or I don't have, for whatever reason, enough focused attention organization to be able to operationally or logistically manage growth.

1:07:35If either of those are in a state of deficiency, then I do not grow. I simply maintain. That is very much the opposite of the Silicon Valley spirit of move fast and break things. Now, do I necessarily think that that's the right move? I don't know. We as a company have held ourselves back by virtue of moving too slowly. But would I rather err on the side of survival? Yes. As I listen to you, Paula, I think that for me personally, because I also have a tendency to move slower than sometimes looking back that I should have, it's hard for me to be confident if I'm not making moves that I 100 % agree with.

1:08:25Number two, that aren't going to keep me up at night because the risk level is higher than my personal risk tolerance. Like I've realized just how much less risk tolerance I have than I used to think that I have. Because as I've made some moves, some moves that end up being rash in hindsight, you know, those cause me a lot of consternation. So I spent a lot of time on that Sun Tzu piece that I spoke about earlier, that the best battle is the one that isn't fought. How can I move in such a way that I don't fight the battle? And in some ways, yeah, maybe afford anything, move too slowly. But on the other end, if because of that, you wake up confident every day and you wake up able to feel good about where you're at, then slow wins the race.

1:09:12We have a mutual friend, Nomadic Matt. He's a travel writer. We can never find him. Yeah, he's very nomadic. But he recently posted that he was celebrating, I may be misquoting the exact number of years, but it was something to the effect of 16 years of creating content around travel. I mean, he was there in the early days of the internet, right? In the early days of blogging. He also, in his post, wrote something similar where he said, you know what, to have survived for 16 years, running a full-time online business for 16 years with a small team of employees, to have survived for 16 years doing that is a rare feat.

1:10:03Nick, to answer your question, I optimize for survival even when that comes at the cost of growth. And so that, to answer your question about how I think about personal risk, that is how I handle personal risk. Now, what that means as a business owner is that I take on less risk in other areas of my investments so that I can concentrate risk inside of afford anything to the greatest extent possible. For example, all of my rental properties, I have paid off. They're completely free and clear. On the surface, there are a million people on Twitter who are going to tell me, well, it makes no sense.

1:10:47It made no sense to pay off mortgages that had a very, very low interest rate because why would you pay off a 4 % mortgage? Well, the reason that I did it is because I want to afford anything to survive. And that's the cost of making sure that afford anything survives. That's a decision that I made for the sake of making sure that I have minimized my debt, my bills, my cash flow output in other arenas of my life. so that if I need to spend an extra five grand a month on something that this business needs, I have that money available. Well, obviously, Paula, I'm not in your head, but from the outside looking in, there's something else going on too, which I learned from some coaches that I've hired, which is the business has to also work for you and what you want out of life.

1:11:48Because when you mentioned growth, You know, there are many entrepreneurs that are just beating their chest because they have so many employees and they have so much top line revenue, but they're also working a bajillion hours a week. They have a massive team and the actual ROI on that extra time and effort versus the ability to be nimble and do what you want and be able to extract the joy from it. But often when it comes to running a business, people talk about the only currency is money. But it's simply not true. There's the currency of time. There's the currency of happiness. There are these other currencies.

1:12:33A big aha I had from these coaches was growth for growth's sake can often be horrible for an entrepreneur. Your ability to take off and go to Mongolia, China, and spend a couple days in Cairo is a direct result of the fact that you set this up in a way that you were able to do that. And that goes back to what I was saying about not having the operational capacity to grow. So I mentioned my two deterrents to growth. One is if I don't necessarily have the cash. The other is the operational and logistical capacity. What I mean is me putting in the time that it takes in order to push us to get to the next level.

1:13:13And in the moments or during the eras when I can't do that or when I choose not to do that, it's because I have some other more pressing priorities that have decided take center stage in my life. It's just another framework of saying what you said, Joe. There are times when I intentionally go into maintenance mode because there are other elements in my life that I want to focus on. And then there are times when I go into growth mode. But when I go into growth mode, I know that other things are going to take a backseat. There's a theory, it's called the four burners theory. So this is a framework that came from the writer James Clear, who's a former guest on this podcast.

1:14:09You can find our interview with him just by going to affordanything.com and searching for James Clear. But the four burners theory takes the analogy of a stove. You've got four burners, and each of those burners represents a quadrant of your life, family, friends, health, and work. You can prioritize two of the four burners, right, by moving those to the front two burners, but that necessarily means that the other two go on the back burner. The four burners theory states that you are always consciously choosing which of these two are going to go on the back burner. Now, that might sound sad because you never want any of those four.

1:14:54Those four are all important. You never want any of them to be on the back burner. but you can look at it not as a permanent condition, but as a constant rotation of the pots and pans on that stove. Right. So maybe in the span of one day, right. Maybe there's one day where two of those four are on the back burner and the next day they get moved to the front. Or maybe it's over the span of one week or one month or one quarter, right. Determine your time period accordingly. But the moments when I've chosen not to grow are the moments in which I know that I'm in an era where maybe health or relationships are on the front burners.

1:15:39This is where I'm fascinated with people like our mutual guest, Laura Vanderkam, or a woman like Laura Martin at Google, and how you organize your day and how you organize your time. another mutual friend of ours, Steve Chu and I talked about this, that he decides, Steve decides to organize his day so that he spends time in the morning working on his work. And then the afternoon is family time. He does that by day, but he has a friend, Paula, that works in seasons, will, will spend four months going pedal to the metal on the business full well, knowing that then he's going to spend the next three to four months, not thinking about the business at all.

1:16:19So Steve meets it out on a daily basis and his friend on a quarter by quarter or seasonal basis. I don't think that matters. I think what matters, though, what I'm getting at is just the intentionality to which you decide how to do that versus letting your calendar dictate to you the fact that you take control of the calendar and go, you know what? These are my non-negotiables. It's a huge part. You and I hear over and over when we interview these fascinating, wonderful people who've done so much in their life, the fact that they have made the conscious decision on the calendar is, I think, a big key to success.

1:17:04And Cal Newport talks about seasonality as well. Dr. Cal Newport, who was just on the show, his theory of slow productivity is one in which work is done seasonally, in which intervals of focused work are interspersed with intervals of deep rest. Nick, to go to another element of your question, you asked if I'm looking to expand my real estate portfolio, not aggressively. I would say that end of 2024 or more likely in 2025, I will probably start looking for a multifamily unit to add to my portfolio. The reason for that is because I have a dollar cost averaging approach to acquiring rental properties in which I'm not looking to buy a lot of properties all at the same time.

1:18:10I'm looking to buy one every two years, one every three years. I'm at that slow and steady position in which if I just acquire one property every two to three years and I do that consistently over a 20-year time span, I'm good. And I started doing this back in 2011. So I know that I can be consistent because I've already been at it for a decade. So if I just stay slow and consistent, again, over the long term, that's the approach that I have. And that's very different from real estate investors who are like, I want to go from zero to 200 properties in the next four minutes. You know, you hear a lot of that.

1:19:03You hear a lot of, frankly, bluster on the Internet because it's such a compelling headline. And for the people who are into that, cool. I'm glad you found the thing that you're into. Real estate has never been the center of my life. It's always been an accessory to it, a tool that enables me to pursue my passions, or more accurately, to follow my curiosities. I think passion is an overhyped cliche with negligible meaning, but curiosity is critical to follow. Back on the real estate thing, though, you know what happens too when you get so excited as a new real estate investor and you're going to bury your way to success and you buy six properties in a short amount of time.

1:20:01because you're super excited. Tell me how in the weeds you are six months from then. Right. So with real estate, being able to take on a project and give it the time and attention it deserves versus people have no idea the tsunami of headaches they create for themselves by not being slow and steady in that market specifically, beware what you wish for. Yeah. I think the deciding factor is, do you want to make this the center of your life? Do you want this to really occupy your mind full time? Or is this for you? Is it the equivalent of kind of putting your money in a Roth IRA? Your strategy is going to differ wildly depending on which of those two attitudes you have.

1:20:46For me, it's the equivalent of a Roth IRA contribution. And so that's why I know that if I buy a duplex or a triplex every two to three years, I'm adding on average one unit per year. I'm good with that. On average over a long term, if I add one unit per year, and if I do that consistently over 20 to 30 years of my life, and if I focus on pay down, which right now all of the properties that I currently hold are fully paid off free and clear, that's how you set up a very stable, secure, long term net worth. but it's not as clickable of a headline, which is why you hear about it less on the internet.

1:21:37Remember, the internet is not reality. What? I know, right? Nick, you also asked how am I shifting my broader investment portfolio over time. I'm not. I've always been in a barbell allocation, equities and cash, and I'm going to continue to maintain only equities in my portfolio, in my investable portfolio. You know, actually, I take that back. There is one shift that I'm making, which is I'm starting to look into investing in private businesses more. I have not made moves in that yet, but partial ownership in private businesses is an area of investment focus in terms of new growth. When I do my first deal there, I will let you know.

1:22:25I have so far analyzed and considered several deals, but have decided not to ink any of them yet. But I am a big fan of business ownership, particularly private business ownership, whether that comes from starting your own company or whether that comes from becoming a co-owner in an existing company. As to your final question, Nick, where I see time, energy, and focus changing, and if that's been intentional, yes, absolutely intentional. But it hasn't changed. It's Afford Anything all the way through. I'd say if there's any major shift, it's we're prioritizing YouTube a heck of a lot more than we ever have.

1:23:06We're, of course, moving this podcast to twice a week. We're prioritizing our newsletter, which you can sign up for, affordanything.com slash newsletter. We're prioritizing the newsletter. We are putting more of a focus on deep, rigorous study of economic and financial topics. You know, our first Friday monthly economic updates, for example. And we'll be leaning more into that. I'd like to do more episodes that are deep dives into a narrow subset of the world of finance and economics. And of course, to do more of something that necessarily means that you're doing less of something else. So we used to send specialized content to specific segments of our email list.

1:24:05We're not doing that anymore. We're prioritizing the newsletter and everybody who is subscribed to getting our emails receives the newsletter. in the spirit of doing more of something means doing less of something else, in order to do rigorous deep dives into economic and financial topics, it means we do fewer interviews about anecdotal case studies. Oh, here's my story. Here's how I did this, right? A lot of other podcasts, particularly in the finance space, have a lot of those types of interviews. We've never really been a fan of that. If you look at the type of episodes that we produced back in 2017, 2018 versus today, we do almost none of that now and that trend will continue.

1:24:53So all of this is by design. I recently internally made a deck of Afford Anything's mission, culture and values because I wanted to set that out so that any new hires on the team can instantly know what they're getting into. In fact, I want applicants to know what they're getting into before they come on board so that they can know this in advance before they decide to join us. And what I stated is that our mission is to make intelligent, thoughtful, well-vetted, nuanced information about money and economics, including behavioral economics and related fields like psychology, neuroscience, metacognition, and probabilistic reasoning, accessible to the general public.

1:25:47The benefit that we aim to achieve is to guide our audience through the intellectual, psychological, and social frameworks of how to make smarter decisions. And we do so by teaching the skills of critical thinking and sharper decision making told through the lens of money. And so that's the mission that I set out and everything that I do, including how I manage my finances, including the decision to pay off the houses, all the rental properties, everything is in service to that mission. Thank you, Nick, for asking that question. It was nice to be able to talk about that. So you heard it here first, everyone.

1:26:31I'm sure you'll hear about it in the next day or two with Perez Hilton or TMZ. yeah exactly the tea is spilled

1:26:40well nick thank you for the question and joe we have done it again we have done it again what a wild kaleidoscope of calls i really hope we were able to help of course we i hope we were able to help everyone hope we were able to help lindsey at the top of the show though a lot and man the enthusiasm by which ans wants you to be president i share that enthusiasm Hashtag amend for Paula. The innovation that Melinda brought up that's happening, I think it's a good reminder to stay in touch and why you listen to shows like this one. So you can stay on top of it because sometimes it's not you, it's other things.

1:27:20And then to see what's going on in Paula's brain is always a treat. Well, thank you, Joe. Where can people find you if they'd like to hear more of you? Oh, good news. Monday, Wednesday, Friday is the Stack and Benjamin show. And we, from time to time, also have interviews. And one of my favorite people to talk to, he is so Gordon Ramsey. If you've never heard Scott Galloway speak about anything, Professor Scott Galloway is coming back to the show. I have received maybe more emails about Scott Galloway's first appearance than any appearance anybody's had. And he's back. So listen to the wise words of Scott Galloway.

1:28:00Very few people I'd rather talk to. He's so blunt. He is so 100 % salty blunt, and I love it. He's the guy who said that the entire GameStop, Wall Street bets saga was largely the result of guys not getting laid enough. Yeah. Yeah. That was his theory. Yeah. And by the way, what's funny about that is that he doesn't say that flippantly. He also talks about the big problem with young men in America. And at that time in particular is that we were all in shutdowns. Nobody could leave their home. So his theory was that all of that loneliness led to deciding to do a short squeeze that led to a gamma squeeze of short sold stocks such as GameStop and AMC theaters.

1:28:56Setting up the whole hedge fund David versus Goliath thing. Look at the amount that online gaming went up as well. Online gambling specifically. I mean, I'm not talking about playing World of Warcraft. I'm talking about DraftKings. Well, but sports betting ceased because there were no sports being played. There were no sports. So now I needed a new sport. So yeah, he has a unusual takes, which on the internet always play well. It's absolutely fabulous. So Scott Galloway is coming on, Paula, to answer your question. All right. And that is on the Stacking Benjamins podcast available wherever the finest podcasts can be found.

1:29:41Only the finest. White gloves. If you enjoyed today's episode, please subscribe to our newsletter. You can find it at affordanything.com slash newsletter. You can find me on social media. I'm on Instagram at Paula Pant, P-A-U-L-A-P-A-N-T. I'm on Twitter at Afford Anything. You can also talk to other members of this community by going to affordanything.com slash community. Please check out the sponsors of our show. We appreciate them for allowing us to bring financial literacy to you at no cost. You can find a complete list of sponsors plus all of the deals and discount codes that they offer by going to affordanything.com slash sponsors.

1:30:27Thanks again for tuning in. My name is Paula Pant. I'm Joe Salcihai. And we will catch you in the next episode. Lindsay, if you and your husband can help him set up what we think of as a two. You have balloons in your screen.

1:30:47I sent my computer back to do a factory reset. And it did this. I have no idea why that triggers balloons. I literally got my computer back yesterday. day. Oh my God. I know why Josh is obsessed with this, but anyway, man, mine doesn't do any of that.