The Pay Cut Price of Freedom

26:56And so I told her, hey, for $50 a month, you now have the opportunity to give a guaranteed$300 ,000,$400 ,000, however much the payout was, to a charity of your choice, right? So why not, right? So in cases like that, where it's a very old policy or where you have a huge net worth, in those edge cases, these types of policies can make sense. Also, if you want to be cryonically frozen, if you want to be cryonically preserved rather than being buried or cremated, I think that's a very edge case. But that could be a case where a whole life policy makes sense if you don't have the assets to pay for cryonic preservation out of your estate.

27:39Other than those very tiny edge cases, I think for the most part, whole life and universal life don't make any sense at all. And most people, yourself included, are better off staying in term life. I would say that for 99 % of the afford anything community, if you think about buying a universal life policy, take two aspirin, wait for the fever to go down and then get back on the term train. I think the three words are, oh God, no. Oh God, no. Yep. Yeah. Yeah. So avoid, avoid. Steve, can we get a sound effect of some type of like an alarm, like me.

28:23That's not an exit. Stay away from that door. Exactly. Exactly. You want to start investing in a brokerage account where you want an initial investment of$1 ,000 and ongoing contributions of$500 a month. Now I'm listening. Yeah. Beautiful. Beautiful. But then you said something else as well. You want to continue saving$1 ,000 a month in a high yield savings account. Now you already have$60 ,000 in savings and your current monthly expenses are at the most$5 ,000 a month. You said your expenses range between$4 ,500 a month to$5 ,000 a month. So the$60 ,000 that you have in savings already represents 12 months worth of expenses.

29:08Why do you need any more money in savings? You already have one year's worth of expenses in a savings account. I don't see any reason to keep any more money in cash savings unless there is a particular big ticket item that you want to buy in cash in the next year or two, but that does not seem to be the case. You talked about upgrading your home within the next three years, but you have a mortgage. You're not a first-time home buyer, so you're not trying to save up for a first-time home buyer's down payment. I don't see any reason to keep building the cash coffers. That money, the$60 ,000, the one year's worth of expenses, that's great.

29:45Hold that there. Beyond that, everything else can go into investments, not into cash. I hear a lot of different competing goals, which happens, by the way, especially for people starting late. I'm so excited that they're on this train. They're on the saving train. But just the further you get into life, the more you have all these demands. You have all of these things. I mean, wanting to start a family, the house thing, the car thing, and the long-term savings all at the same time. Are you kidding? This is real-life adulting, right? And I think what this demands is and what I highly advocate is take out a piece of paper and let's timeline out all these things and put them against each other.

30:27Because truly, I think, Kerry, what you need to know is how much do each of these different goals demand? We talked about salesmen trying to talk you into monthly payment. Let's be a salesperson for ourself and talk ourselves into, well, my retirement goal has a monthly payment demand of X amount of money per month. And then I'm going to get that goal. When you talk about retiring in your 50s, same thing goes with the next car, not this car, but your next vehicle. Like, I love the idea of putting aside money for the next vehicle so you're not making the same decision. Then maybe you can even pay cash for it, let's say.

31:04So all these different goals that you have, I would put them on paper and then I would figure out what the monthly payment is on each of those and then take your existing budget, which it sounds like you really have a handle on. You talk a lot about we've got this much cash flow going here, this much cash flow going there. Then I think you're going to be very happy with where your cash flow goes because you're going to know that all of those goals in the timeline are covered. And I don't have to worry about the long term. The long term is taking care of itself while my brain is fully focused on this growing family that you've got coming in the near future.

31:38Right. Exactly. It's an exciting time for them. Right. It is. And of course, your budget, your entire financial picture is going to change significantly when you start growing your family. Your expenses are going to change dramatically. And so a lot of these other goals that you're talking about may shift depending on how large that family is. I mean, you talked about growing your family, but is that one kid? Is that three kids? That's all going to make a big difference in the way that these things play out. But the good news is, you know, you've got – you're in your late 30s and you already have$200 ,000 in home equity.

32:23I mean, I would argue that you're not starting late. Like, I know plenty of people in their late 30s who have never owned their first home yet. That's incredibly common. You're in your late 30s. You're already homeowners. And you have$200 ,000 in home equity. And you have$30 ,000 in an IRA. And you max out your HSA accounts. And you have pension retirement plans. That to me does not sound like a late start at all. That to me sounds like an on-time start or perhaps even an early start. I mean, do you know how many people are 40, 45 years old and rent their primary residence and don't have much saved for retirement?

33:14and really only in their 40s start looking around and saying, well, what's this 401k thing? Maybe I should pay attention. Yeah, for people wondering, because it doesn't sound like Carrie has a lot of money in 401ks, the cash flow that that pension is going to produce represents a ton of money. Carrie, I'd say congratulations, because I don't think that you had a late start. I really don't. And the fact that you see it that way tells me that you have high expectations of yourself, which is great. People who are high achievers have high expectations of themselves. That's what motivates strong achievement.

33:58So I think it's great that you have set a high bar for yourself, but I also would want to congratulate you and encourage you to congratulate yourself on everything that you've built. This year, give a gift that goes far beyond the moment, an Invest 529 account. Whether it's a child, grandchild, or someone just starting out, you're helping them safe for education that can open doors for a lifetime. Invest 529 is a tax-advantaged way to help save for college, trade school, or even apprenticeship programs. It's flexible, easy to start, and you can contribute any amount, big or small. Because the money can grow tax-free, it's a gift that can really build value over time.

34:42So instead of giving something that gets used up or set aside, give the gift that can change a life. Start an Invest 529 account today. Go to invest529.com to learn more and get started. Investments involve risk. Results vary. Consult with your financial and tax professionals. Administered by Commonwealth Savers Plan. 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?

35:18What 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. But to do that, you're going to need a website, a payment system, a logo, a way to find new customers. And that can be really overwhelming and it's a big workload. That's where today's sponsor, Shopify, comes in. Shopify is the commerce platform behind millions of businesses around the world and 10 % of all e-commerce in the U.S., ranging from household names like Mattel and Gymshark to brands that are just getting started. If you need a website, Shopify's got you from the get-go with beautiful ready-to-go templates.

35:54You can get help with everyday tasks like writing product descriptions, generating discount codes. Shopify can help you find your customers with easy-to-run email and social media campaigns. And they have award-winning 24-7 customer support. Turn those dreams into and give them the best shot at success with Shopify. Sign up for your one-month,$1 per month trial period and start selling today at shopify.com slash paula. Go to shopify.com slash paula. Shopify.com slash paula. This idea about being late in retirement savings, this idea is contagious because our next caller is Tim, who is 28 and describes himself as late on retirement savings.

36:41Let's hear from Tim. Hi, Paula and Joe. My name is Tim. I'm 28 years old, and I have a question as it relates to a retirement savings plan for both high earnings and self-employment. For context, I will be marrying my fiance in May of this year, so we will plan to file jointly for the 2024 tax year. She makes roughly$140 ,000 a year in W-2 income, and I make between$100 ,000 and$130 ,000 a year in self-employed income. We have minimal student loan debt, own our own cars, and rent for housing. Last year, we both maxed out Roth IRAs. My fiance contributed to her employer-sponsored Roth 401k and I contributed to my individual Roth 401k I have for my mental health therapy practice.

37:26We do not currently have access to HSAs. My question is what use of retirement accounts accounting for tax treatment would be best for us? I'm not exactly sure what our income will be in retirement, but given our current income and anticipated withdrawals in retirement, it would be lower than now, but not drastically as we would like to continue our current lifestyle. This would support continuing contributions to Roth 401ks, but I'm also interested in building out more of the tax triangle to prepare for future uncertainties. I'm just not sure if this is that year for us or if we're ready to transition into that.

38:02Would you put our planned 15 % of pre-tax income into Roth 401ks or would you strike a balance and have my fiance contribute to Roth and me to traditional to get some tax deductions now. If it helps in decision making, we're late to retirement savings due to years of low income and medical training. Last year would have been our biggest contribution year by far, but I'm wondering if contributing to Roth 401ks is the move because we are still not close to funding our later years yet. We have no dependents and we can stomach a full tax bill given our expenses and lifestyle. However, extra tax savings could be helpful in saving for newer cars and a house in the next five years.

38:44It looks like we also will not be contributing to an IRA this year unless we reach a max on our 401ks because of income limits on Roth IRAs and deduction limits on traditional IRAs in 2024. If you think this is a mistake, I would love to hear your feedback. You have both taught me so much about finances in your podcast, and I can't thank you enough. Bye. Tim, I'm thrilled to hear that we've both taught you a lot. Thank you so much for the question. I'm going to jump right in with my take, and Joe, I would love to know whether or not you agree, but I can give you my take very quickly. Oh, I disagree.

39:24Already I disagree. Totally, 100 % disagree. All right. Here's my take. It's super quick. Number one, if you are in your 20s, you do not get to describe yourself as late to retirement savings. Okay, I have to agree. Damn it, I got to agree. And I think that it is wonderful that in the FIRE movement, we drill into people so much like start early, start early, start early. You're 14. Why haven't you started yet? But if you are, and this is, Tim, this is not directed at you. This is everyone who's listening. Repeat after me. If you're in your 20s, you don't get to describe yourself as late. You could be 29 and 11 and a half months.

40:05And if you open a retirement account for the first time at that age, you are not late. So that's number one. Number two, put as much money into Roth accounts as possible. Max out every possible Roth option available to you. And then for the money that you cannot put into a Roth account, that money you can put into tax deductible accounts or taxable brokerage accounts later. But first and foremost, put as much into a Roth as possible. And the reason for that is as follows. Number one, by virtue of making Roth contributions, you are effectively making additional contributions above and beyond what you would put into a tax deductible account.

40:55And here's what I mean by that. So if the raw dollar amount is the same, right? If just for the sake of using round numbers and a simple example, scenario A, you put$10 ,000 into a Roth. Scenario B, you put$10 ,000 into a tax deductible account. In both scenario A and B, you're putting the same raw dollar amount. We'll use 10 ,000, but the number does not matter. This would be equally true if it was$1. It would be equally true if it was$25 ,000. So long as the raw dollar amount contribution is equal, then what you are doing by virtue of making a Roth contribution is you are contributing more of your total compensation this year.

41:44And because you are contributing more of your total compensation, you are in effect making a bigger contribution, even though the raw dollar amount is the same. And that's why it's advantageous to put as much money into a Roth as possible. Now, where this wouldn't be the case, there are some people out there in the world who will make an adjusted contribution to their Roth accounts that is equal to what their take-home pay would be if they had made a tax-deductible contribution. meaning the effect on their take-home pay is the same, but the raw dollar contributions that go into the two accounts are different.

42:32Now, if that's the case, then you lose the advantage of the Roth. You do gain the advantage of having that tax triangle diversification, but you lose the special advantage that a Roth offers you in that a Roth effectively offers you the opportunity to make a bigger contribution than you otherwise would have or could have if you only use tax deductible accounts. So I said this is going to be a quick answer. Wow, if that was quick. But yes, for that reason, my answer is put as much money into a Roth as possible. And then for anything that you can't put into a Roth, then target the deductible. Oh, so annoying that I have to agree.

43:16So annoying. I have to agree. I don't like it. I don't like it, but I have to agree. But let me talk to this, Tim, because you referenced the tax triangle, which is having money in different tax buckets for people that are new to the community, which is something I've advocated for a long time. and it is having some money that's pre-tax. That's one part of the triangle. Money goes in pre-tax and when it comes out, you're going to pay tax. That'll be like your pre-tax 401k, a traditional IRA that you wrote off, that kind of thing. And then you have the Roth IRA. We talked about life insurance earlier, universal life, where you can take money out of those policies tax-free.

43:56Roth IRA, you can take it out tax-free. Municipal bonds, the interest in many cases is tax-free. Most cases tax-free. So you get this tax-free treatment. That's another tip of the triangle. The third tip is no special treatment at all. You just have, you don't have to worry about all these shelters and about getting your hand slapped because you hit the account at the wrong time and ended up getting a penalty from the IRS or from an insurance company or whatever. So those are the three different tax treatments. We mentioned that a lot. And Tim, I'm glad that you picked up on the fact that we mentioned that.

44:30It was a response to the fact that a huge number of people that used to put money only in pre-tax positions. And my whole tax triangle thing was like, whoa, whoa, whoa, wait a minute, hold on. You're getting into this huge trap where now you're going to pay tax on all the money coming out. And what the tax triangle was meant to represent was flexibility. Tim, at 28 years old, you're already thinking about flexibility with the tax triangle. I will tell you that's right if you're in your 40s or your 50s. If you're 28 years old, I think the supreme, most flexible thing you can do is what Paula just said, which is putting money in that Roth because that piece represents not a lot of great tax stuff today, but it's the best tax treatment ever tomorrow.

45:19And I agree with some of these people that think about this all day, every day. There's so many people out there that in a very nonpartisan way, hey, just look at the way that the tax rate now versus the debt that the United States has. And for our people in the United States that are listening, we're going to have to raise tax rates. It's just math. Something's going to have to change. While we don't know what's going to happen with your income in the future, we do know that tax rates will be most probably higher if we're ever going to solve the debt problem, if you're a U.S.-based investor. So for those of us in the USA, putting money in that Roth position makes even more sense, even though to your point, Tim, you don't know what you're going to make in the future.

46:08So, Paula, I'm 100 % with you. I don't know that the tax triangle applies as much as you're 28 years old, Roth, Roth, Roth, David Lee Roth, all the way to the bank. Even if tax rates don't increase, even if tax rates were to stay the same, right? I mean, I think there's a low likelihood that they will significantly decrease. Tax rates are already, historically speaking, quite low relative to what tax rates were back in the 1970s. Tax rates historically are relatively low. It's unlikely that they will decrease any further. So they are likely to either stay the same or go up. And to your point, if it stays the same, it's already a good deal.

46:53Yeah. The Roth IRA is already a great deal. So without even having to look into the crystal ball, which both you and I hate doing, it's a good deal. But to your point, knowing that there's more leverage on the go upside, there's more pressure on the go upside than there is on the go downside, the odds are even more in your favor, to quote the Hunger Games. May the odds be ever in your favor. We have to go with the Hunger Games. For those of you playing bingo at home, Joe just filled in the Hunger Games square. Love it, Tim. Love it. Yeah. Damn it. You're not starting late. Yeah. You know, the thing about if you don't mind me taking a moment to be Grandma Paula over here.

47:38Let's do it, Grandma. The thing about being in your 20s is that you're so young that you don't yet have the experience to realize how young you are. And so I remember when I was 24, I was like having a meltdown about turning 25 because I'm a 25, that's quarter life. And that rounds up to 30. And I can't go to college parties anymore because then I would be the 25 year old at the college party. Right. And so I remember thinking like, wow, I'm turning 25. That's so old. And similarly, you know, there's that same experience around turning 30. You're like, 30, that's unimaginable. But life is long.

48:26It's really long, right? I think that popular cliche of life is short. I mean, there's an element of truth to that, but it's also equally true that life is really freaking long, if you're lucky. And in the grand scheme of things, if you're in your 20s or 30s or even your 40s, you're a baby.

48:52This past weekend, I was down in Arizona with a bunch of personal finance bloggers and podcasters. And Mr. Money Mustache, who is well known in the financial independence community, he and I were talking about this. And I said to him, I was like, you know, they say 40s is the old age of youth and 50s is the youth of old age. And he was like, maybe that's how it used to be. But 50 is the new 40. So he said, you know, I think 50s is the old age of youth and 60s is the youth of old age. And I'm like, yeah, you know what? I can see that. It's changing. I can totally see that. Yeah, exactly. But I also wonder, this is what I wonder.

49:36I wonder if people like him and I get older, like we prefer to think of it that way. I prefer to think of it as the old age of youth because I'm still young and spry, right? So is it that or is it truly changing? Well, I think two things are happening. One is there are advancements in medical technology and increases in lifespan such that there are a lot of people who are listening to this podcast who are likely to live to the age of 100. Hopefully both of us included. It is true that in aggregate, average life expectancy in the United States is actually decreasing, which is horrible but true.

50:16But it's also true that life expectancy outcomes are increasingly K-shaped. And while in aggregate, overall life expectancy is decreasing, largely due to the obesity epidemic, as well as fentanyl and other causes of early mortality, K-shaped life expectancy distributions means that there is a percentage of the population that will live substantially longer than Betty White did, who died at 99. Yeah, it's a disturbing statistic, isn't it? Right. Well. The disturbing piece is the difference between the haves and the have-nots. Correct. I look at the research from Ken Dykwald, Gail Sheehy. if you go back and look at those numbers, people born maybe 15 years ago that will live to be 130 years old, and those numbers aren't being disproven anytime soon.

51:14But even the more recent research that for a segment of the population, it's way cheaper to eat in the center of the grocery store than it is around the edge of the grocery store. And for that reason, we have to fill ourselves with things that are decreasing the life expectancy. And I find that highly disturbing. But for a portion of the population, if you're lucky enough to be able to eat around the edge of the grocery store, the healthier foods, then you really need to deal with the biggest problem in financial planning land, which is longevity. Exactly. Exactly. There are going to be some wild retirement planning implications around.

51:56Tim could have a hundred years to go. Exactly. Exactly. And so that, to your point, is why 50 is the new 40 and 60 is the new 50, right? That is why among people who are healthy as they enter their 50s and their 60s, 50 is still youthful. 50 may be the old age of youth, but 50 is still youth. And 60 is, you know, the youth of old age, right? Because people in their sixties are running marathons. That didn't used to happen. Not in the numbers that it does today. People in their sixties are running marathons and they're deadlifting and they're squatting and they're benching. You want to hear something really cool?

52:42I take part in a local nonprofit. I love doing things in my hometown because I work online with people across the world every day. So it's really fun to get involved. And I'm part of this, this trail building effort called partnership for the pathway in Texarkana. Well, our biggest event, Paula is a half marathon that we put on. We had the half marathon as we record this just a couple of weeks ago, a gentleman, I'm just going to call him out because he's a bad-ass Frank Bright ran our half marathon this year, won the 60 and over division. And he's 80 Paula, he's 80 years old and he won the 60 and older division.

53:22Frank Bright from Shreveport, Louisiana. You are a badass. And by the way, just getting to meet this guy and everybody who knows him, he is not what we used to think about 20 years ago as an 80-year-old. He's a vibrant, he doesn't look 80. He doesn't act what you think of as quote 80. This guy's out there doing stuff, taking part in the community. He's running half marathons. It's crazy. I love that. So exactly what you're talking about, Frank embodies. And we're seeing more Franks show up all over the world. I couldn't even run a half marathon. My favorite text. I can't even run a 5k. My favorite text from you was when you had to run like two blocks and you're like, this is awful.

54:07Worst two blocks of my life. You're like, this is what you do for fun. What kind of sicko are you, Joe? I could hear you calling me names as you're running to get to the microphone on time. That was the best text ever. I should have kept it.

54:26At any rate. So, Tim, you are not starting late. And to everyone else who's listening who's in their 20s or even your 30s, start now, of course. Start investing for retirement today. But don't kick yourself about not having started prior to today because in your 20s and even in your 30s, you are still very, very young. instead of bemoaning the fact that you didn't start earlier, which is where that comes from, I go back to Dr. Ellen Langley. It's a useless emotion. Make the best out of what you did. And what you did was you called up the Afford Anything podcast and you're rolling. Like that truly is where you're at.

55:07And it's great. Make the most of that. So thank you, Tim, for the question. And the answer became a lot more philosophical than I had imagined it would be. including a long discussion on running. Right.

55:26It was a marathon of an answer. Even Frank Bright's like, how did I get in that answer? Where did I come from? All right. Well, our final question today comes from a 40-year-old with four kids named Matthew. Hi, Paul Angeo. I'm hoping that I can get your insight on how I can manage and move across country. My wife and I are 40 years old with four children aged 10 through 3. I've comfortably reached Coast Fi and should be able to walk away from work in about 15 to 20 years without accounting for Social Security income or putting in more to our retirement accounts, although I still contribute. We've decided that our Afford Anything is to move from Florida to the Pacific Northwest.

56:15I'm an intensive care nurse and should be able to readily move jobs. As a rough goal, I hope to be making about$120 ,000 a year after the move. We have$10 ,000 in cash on hand and should be getting another$7 ,000 back on our income tax return. I have three monthly loan payments, a$500 a month payment at 5 % with$20 ,000 outstanding, a$600 a month payment at 6 % with$25 ,000 outstanding, and a$200 a month payment with$6 ,000 outstanding at 0.9%. If we can find a home close enough to work, I'll be able to sell my current car and get rid of the$600 debt payment. Our target area is the suburbs of Portland, Oregon.

56:55Rentals would likely cost us around$2 ,500 a month. Purchasing a home that would just meet our family's needs would be around$425 ,000 for an acceptable place to live, and$500 ,000 or more for one that we feel would really make everyone in the family happy. I should be able to purchase a home using a VA loan with little down and below market rates of about 6.5%. Real estate websites estimate that our home is worth$400 ,000 and we owe another$170 ,000 on our mortgage at 3.5 % with$1 ,400 monthly payments. By those same websites and neighborhood comparables, we estimate that we could rent it out for as much as$2 ,700 a month.

57:36To paraphrase the old saying about when is the best time to invest, the best time for us to have moved was 2019. The second best time for us to move is now. How can I make this happen? Should we rent our current house or sell it outright? We are committed to living at least two years at our next location. But if we sell, I'm very concerned that we will be priced out of ever returning to Florida. We very much prefer to own the house that we live in. Though if we have to rent for the first year or two, I would be willing. Thank you for any insight that you have. Matthew, thank you for the question.

58:09And I love the goal. Congrats on having a vision and being committed to pursuing that vision. That is the afford anything ethos. So I love what you're doing. To jump right into the answer to your question, I love the idea of holding on to your home in Florida for a couple of reasons. Number one, you're committed to living in Portland, Oregon for at least two years. You do not know what you're going to do after two years. You may return to Florida. If you want to return to Florida in two years' time, it makes sense to hold on to the home just for that reason alone. The transaction cost of buying and selling a piece of real estate is enormous.

58:55And the fact that you are going to be away from a given piece of real estate for only two years is functionally an extended vacation. You don't sell your home for an extended vacation. So if you're going to go to Portland, spend two years there, and then potentially come back, hold on to it so that you don't have to bear the transaction costs of selling this home and buying another one. Now, in addition to that, and obviously I don't think that people as a general rule should base their life decisions around interest rates, but it is true that the home that you have in Florida has a mortgage at a 3.5 % interest rate, and that is not an interest rate that you are likely to ever recoup at any point in the near future.

59:34Now, I do not, and this is, I'm saying this for the sake of everyone listening, I do not advocate the tail wagging the dog. Do not make major life decisions based on interest rates alone. But Matthew, in your particular case, there's a reasonable likelihood that you are coming back to Florida two years from now, regardless. And so holding onto a home that has a three and a half percent interest rate makes even more sense. And again, I want to give the disclaimer, if you had left a voicemail that said, we're never, ever, ever, to paraphrase Taylor Swift, we are never, ever, ever getting back together, right?

1:00:09If you had left a voicemail that said, we are never, ever, ever going back to Florida. And also we hate the idea of being landlords. Should we hold on? In that case, yeah, sell the home, get rid of the three and a half percent interest rate, right? If you neither want to go back to Florida nor want to be an out-of-state landlord. Sure, right? That's where life decisions say this home is no longer a fit. But in your case, that's not your situation. In your case, you may move right back into that home in not that long. Two years goes by in a flash, right? So in not that long of a time period from now, you may move right back into that home.

1:00:50don't give it up. I don't disagree with any of that. I think that the three and a half percent interest rate is compelling. I also think, Paula, I want to play a different game, not for him, but for everyone else in the community. Often we'll see people sell this house. And in this particular environment, I think there's a big opportunity you're missing when you do that. We talk a lot, we talk in the real estate game about seller financing. This would even be an opportunity to say that he didn't think he was coming back. I guess it'd be an opportunity. You have to look at how your mortgage is structured.

1:01:25But if you did a seller financing deal with somebody to buy that house and gave them a current interest rate of 7%, 7.5%, if they can't get a conventional loan and they need a loan through you, you can really work, I think, that distance. There could be some arbitrage here. So let's say he didn't want to be a landlord. He didn't think he was coming back. I would explore that option, a seller financing option where I will sell it to them. I will use the money you pay me to make my mortgage on the property as I'm selling the property to you on a sort of a land contract kind of basis. Once again, you're going to have to work on how does that really work?

1:02:08But I think this is a weird time where a lot of people listening could go down that road if they're making the move and not coming back. Right, right. Now, he mentioned that he can also access a VA loan with a small down payment and a below market interest rate. And so that would be a great option for a home in Portland if you were to choose to buy one. But I think it's a great idea to spend at least for the first six months that you're in Portland. At least. Rent for the first six months. See whether or not you like living in Portland. See if the reality of living there matches up to your expectations or matches up to your imagination.

1:02:45right? Because there's going to be a difference between what you think living in Portland is like versus what it's actually like. Well, and even if it is great, Paula, how many times have you moved to a town and your expectation of this is the area town I want to live in, and then you realize six months later, like, oh, wait a minute, there's this other area I really like better that I didn't even know existed. I love that. I think it's the biggest mistake people make is moving to a new city and just arbitrarily buying right away. Yeah. Yeah. Cause that, that, that cost, the upfront cost of buying real estate is so high that, you know, that's, it's really difficult to undo.

1:03:22So it's much better to use the flexibility of at least six months. Right. Right. Exactly. So yeah, when you move to Portland, rent for a minimum of six months, maybe even a year, get to know the place, have an idea of what you want, and then use the VA loan to buy a place in Portland. And then, And then you can have two places, maintain the place in Florida, have a new place in Portland, collect rental income on whichever one you're not living in at the moment. Enjoy below market rate interest rates on both. I think in Portland, it's all about knowing which of the coffee shops you want to live close to, right?

1:03:58Isn't it? I'm sure there's a variety of factors, but that may be one of them. Yeah, I think that's a big one. I know there's a lot of home team people. People get really passionate about their coffee in Portland, which is always one of my favorite things about going to Portland is trying out the different coffee shops because there's some awesome coffee shops in Portland. And then you go down to the Columbia Valley and you see all those waterfalls or over to Willamette Valley and try out all the great wines. Joe, it sounds like you're going on a food tour. Okay, I'm moving with you. I'm moving with you.

1:04:34I know it's not you and your family, just your kids. You're going to need an extra bedroom for me because I'll go there with you. I have this love affair with the Pacific Northwest, too. I'm glad my son lives in Seattle for that reason. Seattle's a great – if I ever lived on the West Coast, I would live in Seattle. So, so fun. Well, and Matthew, going back to some of the other numbers that were in your question, you know, you are hoping to make$120 ,000 annually after the move. You've got$10 ,000 saved in cash. I'd like to see that number get boosted a little bit. You mentioned that you're getting an income tax return that should give you another$7 ,000 back.

1:05:14I'd like to see you add that to the cash coffers. And the more that you can boost the cash savings, the better. Beyond that, the debts that you have sound totally reasonable. I mean, one of your debts has a 0.9 % interest rate, so only make the minimum payments on that. There's no reason to accelerate paying that one off. The other two debts have a 5 % interest rate and a 6 % interest rate. Both of those are not onerous. And as you said, you could potentially sell your current car and get rid of the debt that has a 6 % interest rate with a$600 per month payment. So if you can do that, even better.

1:05:54But generally speaking, the numbers that you laid out sounds healthy. It sounds good. I'd just like to see you boost your cash coffers a bit and ideally, if possible, sell that current car to get rid of that car payment. beyond that, you're Coast Fi and you're about to start collecting some rental income from your place in Florida. So that will, at a minimum, allow you to continue growing equity in your Florida home, even as you and your family go off on this adventure in Oregon. Bam. Yeah. Congrats. And thank you for the question. All right, Joe, we did it again. I love these questions this week.

1:06:37I love the questions on all the episodes, but I especially love these. A little more philosophical. There's a lot of people experiencing some pretty big life changes this week. And I think for a lot of us, it's just making sure we've got some of the numbers figured out so we can get behind these big life choices that we're trying to make. Right. Exactly. The heart of financial planning is truly life planning. That is for me the fun. I mean, the math, I know there's lots of people that get into the math. I love the math as the means to an end. Joe, where can people find you if they would like to hear more of you?

1:07:16You can find me Monday, Wednesday, Friday on the Stacking Benjamin Show, often on Friday with our good friend Paula Pant, who is amazing at trivia. not she's amazing in so many ways except for our trivia question um and you know like here we i really enjoy talking to very smart people about the philosophies behind money and we've got a couple great interviews paula that are that are coming up on the show we're going to be speaking with former Pepsi CEO, Grace Puma, and the former Nike president of Consumer Direct, Christiana Smith-Shee, about really having a better existence at work. You know, a lot of us want to love our work.

1:08:08We want to do great things at work. So two people who kind of know what they're doing, talking about better work. And then also noted investor, Peter Maluk. Peter Maluk, who a long time was affiliated with Tony Robbins. And so Peter Maluk, who's done phenomenal things with money, going to talk about great money management and really having a great mindset with money coming on the show. So three great mentors, Paula, coming up on Stacking Benjamins. Oh, that's wonderful. Thank you all for tuning into the show. If you enjoyed today's episode, please share it with a friend or family member. It's the single most important thing you can do to spread the message of good financial health.

1:08:54Please subscribe to our show notes, affordanything.com slash show notes, so you can get updates of new episodes along with timestamps of all these questions. And please chat with other members of the community at affordanything.com slash community. Thank you again for tuning in. My name is Paula Pant. I'm Joe Salcihai. And we will catch you in the next episode.