Q&A: We Have $80K in Cash and Want a 1–2 Year Sabbatical. Is It Enough?

24:38And Joe, do you remember on a previous episode when we said that we were going to have a new website up and it would be up in like October?

24:43Paula Pant:No way. It's up. Say it ain't so. It is so. Wow. Ahead of time, as we record this, it is an even October. Yes. As of the time of this recording, it is end of September. So look at that. We were thinking mid-October, actually. This is the type of construction project you really like, Paula. Right? Seriously. Ahead of schedule. When does that happen? Check out our brand new website, affordanything.com slash voicemail. All right. We're going to take a moment to hear from the sponsors who make this show possible. When we come back, we're going to hear a question about Roth conversions during a sabbatical.

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26:38Welcome back. Our next question comes from Anonymous. Hi, Paula and Joe. This is Anonymous from Texas. I'm trying to figure out what is the best way to organize my finances now that I finally have the courage to take a sabbatical after listening to one of you and Joe's previous episodes. Me and my partner are in our mid to late 30s. We have been DIYing our finances from information we have gathered from the internet so it's not the most sophisticated. coordinated jointly we have 392 000 in our 401k and 189 000 in our roth and we max out the roth every year we are considering converting our 401k to roth during these low income years we have 394 000 in taxable brokerage account and we'll have about 80k in cash we own a 315 000 paid off home and move to a rental for the sabbatical period i'm thinking of investing half of that into the brokerage and saving the other half for down payment for our future home, likely after my one to two year sabbatical.

27:39Here's my question. Most of our investments are spread between VFIAX, VIGAX, and VGIX. I recently added some VITAX. We have no bonds and I'm worried if I'm lacking in diversification, but I am not interested in managing rentals. We both love to travel and that would be a big hindrance to our lifestyle. We both would also love to have the option to retire early in our mid forties or fifties. If that is our goal, Should we wait to convert our 401k and do it when both of us retire? Will our current portfolio be too volatile? Should I rebalance everything? What are the implications of converting during early retirement years if we also want to take advantage of the$98 ,000 tax-free withdrawal from brokerage during our early retirement years?

28:17Any other suggestions or ideas that you would like to impart will be greatly appreciated. Thank you for all that you guys do. Anonymous, thank you for the question. Do you have a name for her, Joe?

28:29Paula Pant:I do. There is a fairly new season of maybe my favorite show on TV, Paula. It's called Trying. And for anybody who likes the vibe on Ted Lasso, Paula, even you know about Ted Lasso. During the pandemic, I watched the first season. Yes. But I couldn't get into it, honestly. You couldn't get into it. Well, for people that like that, you know, life is good kind of vibe, it is even better, I think, than Ted Lasso. It's on Apple TV. the two main characters are this couple that are trying in episode in the first season to adopt a child but truly what you find out over the course of the season and this is a little bit of a spoiler but not a huge one is these are people just trying to be good people and you realize about halfway through the first season you're like oh it's about trying to adopt a child it is not it's about trying to put your best foot forward and be a be cool but anyway the woman in the couple is Esther Smith, played by Esther Smith.

29:29Paula Pant:She's a fantastic comedian, great actress. So I thought we'd call her Esther. Excellent. Esther, I hear two questions inside of here. I hear a question about money management during the sabbatical. And then I hear a question about planning for early retirement, which will be in at least 10 to 15 years from now, because you're in your mid to late 30s, earlier time, and it won't be until mid to late 40s or 50s. So we'll say 10 to 15 years at the earliest. So I want to answer these separately. And let's start with the sabbatical because that is the most imminent thing. So you have$80 ,000 in cash.

30:11The sabbatical will be one to two years. The cash that you have, and I don't know what your annual spending is,$80 ,000 might be enough to cover one year's worth of expenses. If this ends up being a two-year sabbatical, it sounds to me as though you don't have enough cash to be able to cover all two years. Part of the challenge of answering this question is I don't know how much you are planning to spend. I don't know what your spending is going to look like.

30:39Paula Pant:Yeah, that was my first question, actually. Yeah. Because the spending is going to be the most important piece. Right. Regardless, it seems as though you don't have enough cash to be able to cover your expenses during the sabbatical, which means you're going to have to start selling out of that taxable brokerage account. Given that reality, I would be hesitant to earmark half of that brokerage account as a down payment on the next home and then invest the other half. since you're going to need funds from that brokerage account for the sabbatical. The first thing I would do is I would earmark how much of that taxable brokerage account are you going to need to cover your sabbatical expenses?

31:22Paula Pant:Yeah, this for me was really a push and pull question, right? Because you have these two competing goals. And so, you know, we're going to go back to exactly what we told Amelia. I think you need to timeline these out and see how much they cost so that we know how much drain there's going to be from the portfolio that you're going to use for the sabbatical. And that will be how you're able to solve the retirement question. Right. So, I mean, let's just use some hypothetical numbers. Let's say, because they've got 394 ,000 in the taxable brokerage. Let's just say that they pull out that 94 ,000.

31:57They leave 300 ,000 that they don't need, but they've got 80 ,000 in cash plus 94 ,000 from the taxable brokerage, and that's enough to cover, I'm just making up numbers here, but let's just assume hypothetically, that's enough to cover their expenses for a two-year sabbatical. If that's the case, then that remaining$300 ,000, keep half of it invested because it's already in taxable brokerage, and loosely think of the other half of it. Think of the other$150 ,000 as a down payment fund, but loosely think of it in that category while maintaining flexibility that this is just sort of cash that you have on hand, that it's$150 ,000 that you're putting into cash or cash equivalents, you're putting into T-bills, you are maybe putting into tips.

32:47You are not investing that$150 ,000 because you plan on spending it within the next two years. and loosely you plan on spending it for the down payment on a home, but if other needs pop up, it'll be just dry powder available for that. I'd be comfortable with that. What do you think of that, Joe?

33:05Paula Pant:Yeah, 100%. Yeah. Earmark the part that you need for the sabbatical. Pull that off to the side. Bucket. Segregate it out. Sequest it away. Just using these hypothetical numbers. Let's say that's$94 ,000. The remaining$300 ,000. Half of it can stay invested. half of it turns into cash or cash equivalents. And then the half that is cash or cash equivalents is just dry powder that you can use as needed. That's how I would manage money for the sabbatical. And then you still have the money that's in your 401k and your Roth IRAs, which gives you a head start on that retirement. But if you do want to retire early, if you do want to retire in the next 10 to 15 years, then after your sabbatical is over and you go back into higher income earning years, you're going to need to pretty aggressively start saving into those retirement accounts.

33:55I do think making Roth conversions during your sabbatical is a fantastic idea. And to the extent that you can do that, now there will be a tax bill, and that's going to have to be part of that planning. Again, I don't know how much you're planning on spending generally, but when you talk about the money in a taxable brokerage account, the tax bill that you're going to pay for those Roth conversions will have to be part of that planning. Yeah.

34:18Paula Pant:And I do like if she's able to do it, to take the sabbatical and be able to pay the tax. I do like doing the conversions. Yes. Big fan of doing the conversions because you have this golden opportunity during these low income years, these sabbatical years, make the most of that opportunity to make as many Roth conversions as you can. And part of Esther's question was, do I make them now or do I make them during the early retirement years? To the extent that you can, do it as soon as you can. Because right now, the way that the money in the pre-tax account is invested, this money is going to be split between you and your uncle.

34:58Paula Pant:Uncle Sam. Yeah. Like when I was talking to retirement tax expert, Ed Slott about this, Ed Slott had the great joke and he's not even your real uncle, Paula. He's not even your real uncle. If he's your real uncle, you might want to split some of it with him, but he's not. So the quicker that you stop dealing in your uncle in your returns, I think the better. Right. So to your question, do not wait to convert your 401k. Do it as soon as possible. That covers that question. To your question about will your current portfolio be too volatile? I'm actually not worried about the fact that you don't have bond exposure.

35:37Paula Pant:I'm not either. Yeah. 0%. I didn't catch what one of the ticker symbols afforders. I'll apologize. It drives me crazy. Because then I got to go look up with a, I don't have them memorized. I've got 5 million ticker symbols in my head. I mean, there's the fun ones, right? For some of your favorite stocks, like HOG for - HOG? Yeah. Do you know what H - Wait, which one is HOG? Harley Davidson. Oh, cool. Before they merged with Six Flags, F-U-N. was Cedar Fair, who owns Cedar Point and a bunch of those companies. Southwest Airlines. LUV. LUV, love. Yeah. I remember some of those. Yeah, so you remember the fun ones.

36:19Is Budweiser, is that BUD? BUD, yeah.

36:22Paula Pant:Yeah. So I always have to look these up. So your VFIAX is the Vanguard 500, so the SP500. Then the Vanguard Morningstar Growth Index. And then you said a V-I-G-A-X and then I caught V-G-I-X and I'm not sure if that's it. She said V-I-T-A-X and then - V-I-T-A-X. She said she's added recently. Recently. But she's got V-I-G-A-X and then I missed the next one because it's like V-G-I-X, which is also Vanguard Morningstar Growth Index Institutional. So I'm not sure if she just owns like one in a 401k maybe where it's institutional shares and one that's, I don't know. But it looks like she's got large company growth and large companies, which will include growth.

37:09Paula Pant:So you're going to have some overlap between those two funds. If I were going to buy the growth index, I would pair it with the value index so that you get both sides and then you can emphasize growth or value, whichever one you want to do. And then the information technology index is also going to have some overlap. So the thing that worries me more about the bonds is diversification, Paula. There's no international holdings. I mean, some of these companies will be international conglomerates, but they're based in the US. No international, no small companies. No small cap. Yeah. That's the first thing I noticed was no small cap.

37:49Yeah.

37:49Paula Pant:So those, you know, I do worry that there's some overlap between these three funds. Yeah. I'm not worried about lack of bond allocation. And I myself had, until recently, I had an all equities portfolio. You know, you're young, you're in your 30s. If you're ever going to be all equities, this is the age, this is the time to do it. Even if she wants to retire, she said, you know, 45, I'd still go with the all equity portfolio. Yeah. And I think to a certain extent, I mean, your income is, I'm sure I'll get some flack for saying this, but your income is quote unquote, a bond allocation in a sense, like your income is like a, what is a bond allocation?

38:30It's an income stream, you know? And so your income is your income stream, particularly when you're young and you're in your income earning years. I don't think a bond allocation is as important as a lot of people make it out to be.

38:43Paula Pant:There is a downside of having an all equity portfolio. We should talk about that because in a perfect world, I think all equity works, but the problem with an all equity portfolio may be you. And let me explain what I mean. As you have more money in equities and you avoid bonds, you're going to raise the portfolio volatility. It's going to go bigger. It's going to go down bigger. Just in the normal course of a day, you're going to have more up and down than if you have some bonds in the portfolio. I don't think that's going to blow you up because of the fact that if you want to beat inflation, you have to be in the companies that historically create the inflation, right?

39:24Paula Pant:Because if they're creating inflation, their share price will beat inflation. I want to be in those companies. The problem comes when it's so volatile that you wreck your strategy and you sell. And I never see people bail on their strategy at the right time. It's always at the wrong time. Joe, what you're talking about is the distinction between risk capacity and risk tolerance. Risk capacity is logistical. Risk tolerance is psychological. So Esther, logistically, you're totally fine to be in an all-stock portfolio. You're in your mid to late 30s. You've got at least a good 10 to 15 working years ahead of you, minimum.

40:06Yeah, logistically, you're fine to be in all equities. It's just psychologically. Can you handle it? Can you handle it? And if the answer is yes, because I don't know your risk tolerance, But if the answer is that yes, psychologically, you're good with it. Awesome. Keep on keeping on.

40:22Paula Pant:The way to get an idea, because the question people might be asking is, well, okay, how do I know? So let's take this Vanguard Technology Index Fund, V-I-T-A-X. To know if I can handle the volatility of that fund, I go to Morningstar.com, which people can hear me pounding on the keyboard right now. And I put in that ticker symbol in the top. They always want you to sign in. You don't have to sign in to get any of this information. by the way. And what I said, that ticker symbol was V-I-T-A-X. V-I-T-A-X. Yep. So I put that in and it gives me the Vanguard information technology index fund. And you know what I'm going to do?

40:59Paula Pant:I'm going to share my screen for people that are live with us so that people can, I know you're welcome. Wow. Okay. So for those of you listening via audio, head to YouTube. So the Vanguard Information Technology Index Fund, across the top of the Morningstar page, right underneath the name of the fund and its star rating, you then have the quote, chart, fund analysis, performance, strategy, sustainability, and risk. We want to go to risk. So we click on risk. And what it's going to show us is risk versus its category, which is other information technology indexes, and return versus category. So the reason why this is a five-star fund is because it takes below average risk, but it gets similar returns to what's in the category.

41:46Paula Pant:We're not interested in that right now. What we're interested in much more than that, Paula, is this number, standard deviation. So standard deviation is, and I'm just going to keep this very, very 101. And if you know standard deviation, you're going to know that I'm directionally accurate, but it's a little deeper than this. this investment will swing 22.24 % in any given day up or down. So if this fund is plus 22, that's a normal year. If it's minus 22, that's also a normal year. Now, what I don't like doing, what I didn't like doing when I was a financial planner was saying, how do you feel about negative 22 %?

42:31Paula Pant:People go, oh, that's fine. Because it's just a number, Paula. No, take the money you have in the fund, take 22 % of it away. If you have a hundred thousand dollars in this fund, I say, how will you feel when you lose$22 ,000? And I tell you, that's just what it does. That's just the normal flight path of this fund. You go, oh my God, that'd be horrible. You don't have the risk tolerance for that fund. That's what I want to do to get a feeling for the fund. Go to morningstar.com. It's free. Put in the ticker symbol of your investment. go to risk, look at standard deviation, and that will start to give you an idea of how bumpy the ride's going to be.

43:11Paula Pant:And you can ask yourself in real dollars, can I handle it? Right. Esther, to your diversification question, my bigger concerns are small cap and international. We did an interview with Paul Merriman. I absolutely love that guy. He's done a lot of research around how to create a portfolio that's not too overly complicated. It doesn't have too many funds, but it has a bit of small cap. And actually he even starts with like, just put a bit of value in there, put a bit of small cap in there. And then if you're so inclined, you can, you may or may not even want to throw some international in there, but like he keeps it simple and does like the most important diversification only.

43:55So he has a model four fund portfolio, a model eight fund portfolio. Many of my investments are along Paul Merriman's model portfolios. Yeah.

44:05Paula Pant:I love Paul too, because what he's doing with those portfolios is moving you closer to the efficient frontier. He's making your portfolio more efficient. He studied how these asset classes work in tandem with each other. And yeah, just an amazing guy. He also has at his Paul Merriman website, a free course you can take, Paula, like an investing 101. one. And I highly recommend if you're new to investing, you dive into Paul's work. Number one, because it's fantastic. But number two, he also finds an entertaining way to take you through it. So it's not hard. It takes this thing that people might think is drudgery and makes it really fun.

44:46Yeah. Well, Esther, I think we've covered it. Have we done it, Joe?

44:52Paula Pant:I think we did make one mistake. What is that? Well, I just realized that Esther Smith and the show trying, I like watching with the captions on because these people have such a heavy British accent that sometimes I don't, I don't get the joke, but then I see the subtitle and, and I get it. We should have changed the names. Oh, you think, you think our, our British friend from across the pond should have been Esther. Our UK friend should have been Esther. But anyway, you know what though? We're all one world. Yeah. Yes, absolutely. So Esther, love, love what you've done. Love the amount of saving that you've done.

45:33Paula Pant:You've done a great job of saving your house already being paid off. Wow. Yeah, exactly. That's, that's especially a paid off home in your mid thirties. Wow. That That is incredibly impressive. Congratulations to you on everything that you've done. Yes. If you need a goal and you want to pay off mine, that would be great. Joe, you just took out an extra mortgage in order to build out a new room. I did because the cost of money was so low. And at that time, I had my emergency phone, which I didn't want to touch. And I really didn't want to touch my stock portfolio. So I did the thing that I often tell people not to do unless there's a lot of know yourself.

46:12Paula Pant:I took the low cost of money and left my money invested, which over the life of that loan has paid handsomely. And I'm actually getting ready to pay it off. Yeah, I'm going to pay it off early. So it was a great year of using somebody else's money. Ah, excellent. And I enjoyed it because when I come visit, I can hang out in that room. It is the, I've got a great house, but it's the best room of my house. it is it really is it's this 400 square foot like bonus room that is just it's got the biggest fireplace you've ever seen it's got these gorgeous windows it's this indoor outdoor space yeah we put sliding doors that connect to the rest of the house and sliding doors that connect to the outside so in a couple weeks when it actually starts to get nicer here paula we'll be able to open up our entire house to the outside with screens and it'll just be a Great place to sit, watch a football game on a weekend, hang out, chat with Paula.

47:10Paula Pant:Have a good time. Yeah. Awesome. Well, I'll be visiting more often. Excellent. All right. Well, thank you, Esther. Thank you for the question. We're going to take one final break to hear from the sponsors who make the show possible. And when we come back, we're talking politics, which we normally don't discuss on the show, but we got a question about it. And we have some nuanced thoughts. That's up next.

48:27Thank you.

48:41welcome back our final question today comes from larry hello paula and joe this is larry from georgia and i have a different kind of question that it's not about a personal financial situation but i believe the discussion would be of interest to many listeners it has to do with objectively grading the economic success of politicians So this might apply to both state and national levels, I think. It's kind of frustrating to me that we often judge the success or lack thereof of politicians based on emotion or political spin that we hear from either party. It's like when the recent jobs report provided great numbers, the other party claimed the numbers were rigged.

49:21The stock market has been up nicely, but so has inflation and home prices. So one indicator may be good and another one not so much. So I was wondering if you could suggest a more objective way to evaluate how the president or Congress or governor of a state measures up as far as economic indicators go so that we as voters can point to the Paula Joe economic composite or whatever it would be. So that we can confidently say that overall, this politician or a group of politicians has done a good job or not so good a job on the economy. And this would, of course, just be one component of an objective view of how they've done overall with other things like foreign relations and national security also coming into play on a national level and crime rates and jobs and education standards on a statewide level.

50:10So I appreciate your consideration. Thanks for all you do to educate us on many economic topics.

50:17Paula Pant:The PJ indicator. The PJ indicator. I love it. Yes. Larry, thank you for the question. The first thing I would say is that the ability for any particular politician to actually, particularly in the short to medium term, to impact the economy, to impact economic outcomes. Like there are so many factors that play into economic outcomes. The stock market is based on corporate earnings. What is the stock market? The stock market is the aggregate value of all of our publicly traded companies. How is a company valued? A company is valued at all of its future earnings discounted back to present day. So how well the stock market is doing is a function of how well all of the companies in there are doing and how much money those companies expect to make.

51:18Now, is that affected by policy? To a certain extent, yes. To the extent that regulations and red tape, and then on the other side, like opportunities that are funded by maybe stimulus measures, yes, those have an impact, but those are pieces of the overall impact. So if you ask why is any company, whether it's Lululemon or NVIDIA or Budweiser, right? Why are they performing in the way in which they are? Why are their future earnings projected to be what they are? It's a whole cacophony of factors that go into it. And any political leader has some influence over it, but not a ton. Similarly, the bond market.

52:03Bond market responds to inflation worries. It responds to the debt. It responds to the deficit. It responds to... The Fed. Yeah, it responds to what the Fed is doing. Like the bond market responds to all of these, this huge cacophony of factors that again, any given politician can exercise a bit of influence, but not a whole lot. And then meanwhile, you've got wars, you've got natural disasters. Let's say there's a big natural disaster in a part of the world that impacts agriculture, that's going to have an impact on the food supply. You've got to, let's say if there's a big natural disaster somewhere that impacts oil production, right?

52:48Those are all going to have, or there's a disease that impacts the beef supply, the cattle supply. All of those are going to have an effect on inflation, on prices. The economy is, it's like the human body. It's like this very delicate balance of all these different inputs that any given political leader can exercise some influence over, but not a lot, particularly the immediate impact is going to be fairly limited.

53:26Paula Pant:You know, and that's the frustration is that some of the things that any government does will have a short-term immediate effect. And other things have a much, much more long-term effect. As an example, we can actually play up two things happening right now, Paula. We can talk about inflation and we can talk about tariffs. So the response to tariffs was swift in the stock market and it was definitely negative. April 2025. Yeah, definitely. At least so many investors said this is not the way to handle it. And while the Trump administration maintains clearly that they think that is the way to handle it, the stock market has voted with dollars that it isn't.

54:15Paula Pant:The Trump administration also, though, spends a lot of time blaming Joe Biden and saying a lot of these problems are not from us. They're from Joe Biden. If we go look at some of the inflationary things that have happened, Paula, while it may not have been Joe Biden, it certainly was during Joe Biden's administration. and the printing money that happened after Biden took office. Because inflation takes a longer period of time. We went through a period initially after printing a bunch of money and a lot of Fed easing that, man, everybody had money. Remember, we were all paying off our debt. Everybody was paying off their debt.

54:51Paula Pant:They had tons of money. Life was good. Then the next thing that happened was - That was the Reddit GameStop thing. The meme stock craze, right? happened because in part, we were at a moment in history when people had a lot of liquidity, a lot of liquidity. So what does a company do when they find out you have money? They raise prices. Duh. I mean, if you've got a bunch of money, I want to get it before the other company gets it. So it takes a while for the next shoe to drop, which is companies raising prices. And now look at where we're at now. We have more debt. The average person is more credit card debt them before.

55:22Paula Pant:We're starting to see issues in auto loans. We're starting to see the debt pile on as now we have higher prices and we have inflation, but it takes a while for inflation to hit. So you're always going to have these administrations that are pointing at the other people to Larry's point. So it is very difficult to know what lays at this administration's feet versus a prior administration's feet. Yeah. And the thing is, I think we assign too much both credit and blame to a given party, to a given political leader, to a, you know, we assign loads of credit and or blame when in fact we are obsessing over outcome when what we should be focusing on is process.

56:11the question to ask yourself is, are the underlying policies sound and not what is the current outcome? Again, to take this back to the analogy of the human body, the question that I would ask, does a person have healthy habits? Are they eating healthy? Are they exercising? Is their exercise, some combination of cardiovascular plus strength training plus stretching, are they abusing drugs or alcohol or not? Do they smoke cigarettes or not? Do they have good sleep hygiene? Those are all of the inputs that we can put into the human body. Those are all of the controllable factors. That doesn't necessarily mean that in the short term or even in the medium term, you will necessarily have great outcomes because there are a whole lot of factors that go into your health, some of which you can control, some of which you can't, some of which are random, some of which are accidents, and some of which have very long-term effects so that over the span of a year, two years, three years, maybe 10 years, you see the long-term cumulative effects.

57:30but in the, you know, in six months, you might not really see much result, much in the way of results. So what matters are the inputs and what matters is the process. And that, that's what's important to judge as opposed to the immediate outcomes.

57:48Paula Pant:Often when I was in a financial planning meeting, Paula, people would bring a question like this into the meeting. They would come in, they'd sit down, they'd go, I want to talk about what's going on in Washington. The Fed just raised interest rates, a quarter point, inflation is out of control, blah, blah, blah, blah, blah. This is why I love the, another reason why I love the timeline. There's so many reasons I love the timeline. But on the timeline, I would look at where we are today and how much money for each of these goals we needed. And I would go, Hey, Paula, I understand we can talk about Washington.

58:17Paula Pant:We can get into interest rates, but today it says you need$385 ,000 in your 401k to reach your$3 million goal, you know, 25 years from now. How much do you have now? Where are you at? Are you above 385 or below 385? And then you would immediately get off all this crap we can't control. And you would look up your 401k on your phone. You would then look up all your different investments. We'd be adding them up. And we find out that we're behind by$20 ,000 from six months ago or were ahead by$20 ,000. Number one, we focused on what did you do? Not what did the government do? What did the Fed do? What did inflation do?

58:56Paula Pant:But what did you do? And then the second thing we did was then we solved for what are you going to do the next six months? If you're behind by 20 ,000, are we going to hope that the market makes it up? Are we going to save more money? Are we going to get more aggressive with our investments? Are we going to lower the goal? Are we going to change the goal to get rid of this deficit? If we're ahead by 20 ,000, are we going to stop saving today? Are we going to push the goal up? Are we going to defer that decision till later and just celebrate the fact that we're ahead and stay ahead? What are we going to do?

59:28Paula Pant:And I love what you said about focusing on the inputs, because the more that we focus on what am I doing and not what all these other people are doing. Now, I do love, Larry, what you're saying. and I love this game for the podcast because A, I got to tell that story, but also B, because I think we all do it. But B, I think that it narrows to what you said, Larry, which is the one thing we can do is vote and we should vote. And what drives me crazy is when I see these elections and I see that a person won by a margin that was slimmer than the number of people that didn't vote, that were registered to vote.

1:00:07Paula Pant:And these people that decided not to vote could have changed the election. They could have changed everything. So we need to exercise our right to vote. Can I tell you what influenced my thinking, Paula, on this issue? What is that? I read a book around the turn of the century. Ooh, in the year 2000. Right. There was a book, let me look up exactly when it came up, but it is a wonderful book and it holds up today. I go back and I reread it to see if I still like it. It's called Adventure Capitalist. And it was written by a gentleman named Jim Rogers. And this really, for the last 26 years, has really influenced my worldview.

1:00:52Paula Pant:Jim went on an epic car ride, actually a Guinness Book of World Records car ride, where he took his car and he went around the world. Because he's a finance guy, Jim goes into all these different economies and he talks about what's going on with their economy. And he talks about the politics of the economy, the politics of the country. So at the time, what's funny is around the year 2000, get this, everybody was worried about Russia. As he's going around the world, he's like, we don't need to worry about Russia. I'm in Russia, but there are some things about Russia. But in terms of world economic power, it was fading at the time.

1:01:29Paula Pant:He said, the place we need to look is China. China is where everything's And of course, in the year 2000, we were all worried about Russia. I mean, people worried about China. That has completely changed. Jim was not wrong. But what was very interesting was he looked at policies around the world as an outsider. And my reading of those policies, because I don't live in those countries, I got rid of all the political baggage that we get here. You know, we so often agree with the political party that our parents had and that we grew up with. We have this view. And if so-and-so said it, then I either love it or I hate it.

1:02:01Paula Pant:Well, you don't have the opportunity when you read this book. You go in and Jim just tells you, here's what they're doing. You're like, wow, that's kind of dumb. That just doesn't seem right. What's cool is you go around the world, you see your emotions, but the kick in the pants is then he comes back to the United States. And then he shows you our policies after he went around the world looking at everyone else's policies. And then you realize that some of the things that are going on in other countries obviously happen here too. And the one big takeaway for me is I follow government statistics.

1:02:33Paula Pant:I watch government statistics. I love Paula's episodes on government statistics. I am very wary of any government statistics. Very. I used to be a little wary after reading Jim Rogers book. I am very wary and not just of the statistic, but how the current regime is going to use that statistic, which kind of is Larry's point. So Larry, I highly recommend going and reading this old book, Adventure Capitalist. It holds up today. It's a fun, if you like travel and you like finance and you like what now is a history walk at the time it wasn't, but now it's this walk back in time and you could kind of have a lens of 26 years later, highly recommend it.

1:03:14I have not read that book, so I can't comment on it, but I will say one of the books that changed my life is Seven Habits of Highly Effective People. Didn't change mine at all. I never quote that book. Joe quotes that book as often as he says the word timeline.

1:03:29Paula Pant:If there were like an afford anything bingo, it'd be the center square. Yeah, exactly. One of the seven habits and one of the key concepts that he talks about in that book is your locus of concern versus your locus of control or influence. He talks about how there are all of these issues that we could be concerned with, including major political or macroeconomic issues that are just, they are concerns, but they are outside of our control. And then inside of that circle, inside of that big, big circle of concern, there's a smaller circle. And that smaller circle are the things that we can directly influence, like very, very directly control.

1:04:16So like nuclear war might be a concern, but there's nothing that the majority of us can really do about it. Versus what's directly within our control is making sure that the elderly people in your family are well taken care of in their senior years. And if we stay inside of the things that we can directly control, the things that we have very, very direct influence over, if we make a practice of staying inside of that, then over time, by virtue of doing that, that circle grows because the people in life who gather the most influence, the most power, the most resources are people who are relentlessly and ruthlessly focusing only on the things that they can directly control.

1:05:09Because by virtue of doing that, your leverage, your impact goes a lot further. and that has a compounding effect. And as that compounding effect grows, then the things that you can influence gets bigger and bigger and bigger. That circle of influence gets bigger and bigger.

1:05:26Paula Pant:It's a powerful concept. Yeah, that changed my life. Well, and I think that's really the point of the exercise of when people would come into my office too. We can control what you do. Yeah. Fun exercise, Larry. Yeah. Yeah. Thank you for the question. I love these questions where we get to talk ideas. We get to bat around in the world of ideas. Like there are so many podcasts out there that are, that make money by making you angry. The outrage media. Oh, we should do that. Joe's like, I got to pay off my bonus room. Larry, you suck. No, Larry, you do not suck. You do not. Larry, you're great. Larry, don't listen to Joe.

1:06:16Joe's just trying to pay off his bonus. Joe's trying to pay off his second mortgage.

1:06:19Paula Pant:Every show needs a bad guy. I could be the bad guy. What kind of ridiculous questions were these today? But, you know, the outrage media, like I've actually seen people like I watch their faces. They listen to something and they have this reaction of, you know, like, And you can tell that they've just listened to something where somebody has framed something in such a way that it's made them angry. And any time that someone has framed something in that type of a way, it's probably a one-sided and simplistic framing. I have learned over time to beware of framing. When I get done with some commentary that I'm like, wow, they nailed it.

1:07:03Paula Pant:I really then need to think about what I actually learned. because sometimes I can give you a great idea. Before we knew that he was in the Epstein files, Peter Attia, right? That's a great way to start a sentence. I know. I know. Well, because I'm about to start with Peter Attia. Peter Attia used to be something different than people know him as today, right? Right. I thought you were going to say Dan Ariely. But I would listen to Peter Attia talk about my health and wellness. And I get done, Paul, and I'm like, oh my God, that's great. And then I think about it and I go, wait a minute, He's telling me to drink less and sleep more.

1:07:37Paula Pant:I already knew that. Like I already 100 % knew it. Now, sometimes the framing can help me actually change the behavior. You know what I mean? Right. Because it's framed correctly, it helps. But over time with Peter Atiyah, I kind of began rolling my eyes because I was like, yeah, yes, Peter, I do need to sleep more. I do need to sleep better. I need to focus on that more. Thank you, Larry, for your excellent question. Excellent question, Larry. It's the next person who's going to be awful. And you could be that next person. So affordanything.com slash voicemail. What a segue. Would you like to be the awful one on the show?

1:08:21Get roasted by Joe at affordanything.com slash voicemail. You can also see our new website.

1:08:28Paula Pant:Do you think I could do the Simon Cowell thing, you know, or the... Yeah. Yeah. Okay. You be Simon Cowell and I'll be Paula Abdul. Yes. Yeah. Yeah. Happy and great. And I'm like, what kind of questions that did you call first or think of a question first? Gordon Ramsey guest starring. I could be Gordon Ramsey. You can't handle calling it. All right. Well, Joe, where can people find you if they'd like to hear more Gordon Ramsey level financial advice? Oh, I got a great one. We record our Friday shows live on YouTube on Monday afternoons. If you want to get our newsletter, we call the 201 stackybedjamins.com slash 201.

1:09:08Paula Pant:You'll find out exactly the time, but generally it's about three 30 to three 45 in the afternoon, Eastern time. Do the math on your time zone. Here's the reason it's really cool. Not only do we have fantastic conversations with Paula Pant, Jesse Kramer, OG, and then a rotating cast of other people who are interesting that we bring into this. We have this trivia competition that lasts all year long between Paula, Jesse, and OG. And what's amazing is over the life of our trivia competition, Paula has perennially been in last place. Paula, before the episode we just recorded this week, was tied for first.

1:09:52Paula Pant:And Jesse Kramer was one point behind. Well, we had our friend Doc G from Earn and Invest on while Paula took a well-deserved week off. And Jesse Kramer won this week, meaning this year-long trivia competition on Stacking Benjamins that's super fun is going into the fourth quarter with a three-way tie. Whoa. So either listen to Stacking Benjamins or come join us live on Mondays on YouTube. Wait, so we are all simultaneously tied for first and last. That's right. and middle. Paula is still in last. It's a three-way tie with a total of three contestants. So we, all three of us are simultaneously tied for first, middle, and last.

1:10:37Paula Pant:It's incredible. That is actually kind of magical. It is incredible. That is kind of magical. Have we debuted the new trophy yet? You have to remind me before we go live, because I've forgotten about it for over a quarter. Like we totally have to. Can we debut it on this show? Can we, stacking Benjamin's listeners. It's sitting right over here. All right, let's do it. Do we want to do it right now? Yeah, let's do it. Okay, hold on. Okay, so as a background, Joe has had this like dollar store trophy that we've been using for the trivia contest for a while. I'd like to take the credit it for it.

1:11:13I designed and mailed a new trophy to Joe's house. Technically, I addressed the package to his cat, Cooper. So this package shows up at Joe's house in the spring, addressed to his cat. And he's like, what the hell? Did my cat order a giant box? What is this?

1:11:33Paula Pant:Actually, Cheryl said that. Yeah. Cheryl said, if you want the full story, Cheryl goes, what, what, what, what, Cooper? Why is there something to Cooper? And I go, that's got to be from Paula. It's got to be. And sure enough, it was. Can I tell you about this trophy? This trophy is so much better than the current trophy. And by better afforders, I mean, it sucks. It is absolutely horrible, which is our definition of great. So at the top, I'm going to show you the top. It has this little like bookworm, which of course, because you know more trivia than anybody else. And then there's all kinds of trivial things.

1:12:09Paula Pant:Now this looks like gold. Yeah. A globe. This looks like gold. Just to be clear, it is a low quality plastic.

1:12:18Paula Pant:Cause that's what we're looking for. It's got the icons of the globe and the calculator. And then this looks like it's a nice wood grain. It is not wood. It's low quality plastic that is brown. And then at the bottom, Paula had it engraved, you suck the least.

1:12:39Paula Pant:This is our new Stucky Benjamin's travel trophy for the winner of our yearly Friday trivia competition. When we were getting that engraved, Rima, who works on our team, she and I had a long discussion over whether or not the phrase you suck the least should have a period at the end of it or not. And it does. It does. Whoever voted for it does won. Yes. Period. It isn't you suck the least-ish. There's a definite period. There's a period. You suck the least. Yes. Period. And Paula might actually win this. So I might be mailing it back to her cat. I might be mailing it to Ezra.

1:13:24so tune into the stacking benjamin's podcast to find out who sucks the least

1:13:30Paula Pant:which is the tie you all suck equally right now

1:13:35so good oh man well um thank you so much for being part of the afford anything community thank you for being an afforder you you know the voicemail come leave your question afford anything.com slash voicemail. I'm Paula Pant.

1:13:52Paula Pant:I'm Joe Salcihai. And we will meet you in the next episode.