Q&A: Retirement Math That Actually Works; Cashing In on the World Cup; and Why Your Parents' Housing Advice Is Wrong
#599: Becky and her husband are about to semi-retire. But the four percent retirement withdrawal rule doesn’t make sense for them. Are there other financial frameworks they should explore?
Kris is excited about a potential boost in local real estate values when the World Cup comes to town. Will this have any significant impacts on his property?
Peyton’s parents are pressuring her to buy a house, but she’s worried this will cripple her early retirement goals. Is she right to be concerned?
Former financial planner Joe Saul-Sehy and I tackle these questions in today’s episode.
Enjoy!
P.S. Got a question? Leave it here (https://affordanything.com/voicemail)
For more information, visit the show notes at https://affordanything.com/episode599
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1:18:07
Tax Strategies You Might Be Missing, with Natalie Kolodij
#598: Tax day is approaching, and if you're like most people, you might be overlooking deductions that could save you money.
In our latest podcast episode, tax strategist Natalie Kolodij joins us to reveal common tax misconceptions and share strategies that could potentially lower your tax bill.
"The tax code is 70,000 pages," Natalie explains. "There's so much. So I really like to have people focus on a handful of things to be mindful of."
For W-2 employees who often have fewer tax advantages, Natalie highlights several overlooked deductions. If you live in a state without income tax (like Florida or Washington), you can deduct sales tax instead — especially on major purchases. Don't forget about personal property taxes on vehicles, boats or RVs either.
Medical expenses can be deductible, but only amounts exceeding 7.5 percent of your adjusted gross income. Natalie suggests consolidating elective procedures into a single tax year to maximize this benefit.
Charitable deductions offer surprising opportunities too. Miles driven while volunteering, expenses from fostering animals, and even home renovation materials donated to organizations like Habitat for Humanity can all qualify. Natalie also explains how "bunching" donations in alternate years can significantly increase tax savings compared to giving the same amount annually.
The interview tackles major misconceptions about selling your primary residence. While many believe living in a home for two years makes all gains tax-free, Natalie clarifies that any "non-qualified use" periods (like when it was a rental property) can still be taxable.
For small business owners and real estate investors, Natalie recommends tracking all business-related expenses — even seemingly minor ones like industry-related books or educational materials. She emphasizes the importance of proper record-keeping and having separate accounts for business expenses.
As we navigate tax law changes following the recent election, Natalie's advice rings true: maintain flexibility in your tax planning and consider working with professionals who specialize in your specific situation.
Timestamps:
Note: Timestamps will vary on individual listening devices based on dynamic advertising run times. The provided timestamps are approximate and may be several minutes off due to changing ad lengths.
(0:00) Intro to tax day discussion
(2:46) Common tax savings for W-2 employees
(4:12) Standard vs itemized deductions explained
(5:46) Often forgotten property tax deductions
(6:58) Sales tax deductions for no-income-tax states
(9:06) Medical expense deduction thresholds
(12:53) Charitable giving strategies and overlooked deductions
(17:51) Bunching donations in alternate years
(22:20) Home sale tax exclusion misconceptions
(30:44) Tax withholding changes and common mistakes
(44:35) Bonus payment tax myths debunked
(52:52) Finding the right tax professional
(1:02:02) Small business and real estate investor tips
(1:09:38) Best practices for tax record keeping
(1:15:14) Preparing for potential tax code changes
For more information, visit the show notes at https://affordanything.com/episode598
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1:31:42
Are We Heading for a Recession?, with Bob Elliott, former Head of Ray Dalio’s Investment Team at World's Largest Hedge Fund
#597: A recession is coming, and it might be worse than most people expect. That's the sobering assessment from Bob Elliott, former Head of Ray Dalio's Investment Team at Bridgewater Associates, when he joins us on the podcast.
Bob explains that several economic factors are converging to create challenging conditions. The combination of current trade policies, persistent inflation issues, and a Federal Reserve that's constrained in its response is creating significant economic headwinds.
Tariffs play a central role in this economic outlook. While their inflationary impact remains debatable, their growth-negative effects are more certain. When imported goods become more expensive, consumers have less money to spend on other things. This reduces demand across the entire economy.
Manufacturing and reshoring aren't simple solutions either. Bob points out that building new factories takes about five years, with payback periods stretching 30 years. This timeline explains why CEOs hesitate to make such investments, especially in an environment where policies change unpredictably.
This uncertainty has driven CEO confidence to its lowest levels since the 2008 financial crisis, further complicating economic prospects.
For individual investors, Bob offers surprisingly straightforward advice. Despite his sophisticated background managing billions, he follows a simple personal investment strategy: dollar-cost averaging and diversification. He even limits himself to reviewing his investments just once annually — typically the Wednesday before Thanksgiving.
This disciplined approach prevents overtrading and removes emotion from investment decisions — principles that apply whether you're investing regular income or handling a windfall.
Throughout our conversation, Bob emphasizes that the US economy fundamentally runs on consumer spending. When policies redirect money from discretionary spending toward necessities, the effects ripple throughout the entire system.
Want to hear more of Bob's insights on recession probability, investment strategy, and economic policy? Listen to the full episode now.
Timestamps:
Note: Timestamps will vary on individual listening devices based on dynamic advertising run times. The provided timestamps are approximate and may be several minutes off due to changing ad lengths.
(0:00) Introducing Bob Elliott, former head of Ray Dalio's investment team at Bridgewater
(2:56) Bob discusses high probability of recession due to growth-negative policies
(7:00) Tariffs likely growth negative in short-term despite long-term manufacturing goals
(14:20) Transition from global supply chains to parallel and redundant manufacturing systems
(19:50) Four economic levers: tariffs, tax policy, monetary policy, and government spending
(26:15) Stock market reacts to short-term expectations despite positive long-term outlook
(34:15) Bond markets performing well as growth slows; potential recession duration of 1-1.5 years
(45:40) Long-term productivity growth creates wealth despite short-term volatility
(53:15) Dollar-cost averaging and diversification recommended for individual investors
(59:15) Bob discusses founding GiveWell to identify highest-impact charitable giving
(1:11:10) Bob explains Unlimited Funds, making hedge fund strategies accessible to everyday investors
For more information, visit the show notes at https://affordanything.com/episode597
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1:27:59
First Friday: Tariffs Grab Headlines, But These Financial Changes Nobody Is Talking About Will Impact You Too
#596: Yesterday, the White House rolled out the biggest tariffs in a century, sending markets into their worst decline since the pandemic. While headlines focus on supply chains and inflation, there are important economic stories you're not hearing about.
During the first half of this month's First Friday episode, we dig into what nobody's talking about. And in the second half, we grapple with the headlines.
Student loan rules just changed again. The government added new limits to Public Service Loan Forgiveness. Right now, 9.2 million people — one in five borrowers — can't keep up with payments. Many folks don't even know payments started again after that four-and-a-half-year break.
S&P just dropped a new report that backs what smart money already knows: index funds crush actively managed funds 90 percent of the time. Even with all those tech stocks dominating the market, you still come out ahead with simple indexing.
You know who's gobbling up the mortgage market? Rocket Companies. They just bought both Redfin and Mr. Cooper. They'll handle one of every six mortgages in America. They've positioned themselves at every step of the homebuying journey — from when you search for homes on Redfin to financing and monthly payments for the next 30 years.
The White House just made a surprising move with Bitcoin. They're setting up a Strategic Bitcoin Reserve to hold coins long-term. They're also creating a separate stockpile for crypto they seize in legal cases. Pretty clear signal that Bitcoin stands apart from other cryptocurrencies.
In the second half, we dive into those significant new tariffs making headlines.
The S&P 500 dropped 4.8 percent on Thursday — we haven't seen a drop like that since the pandemic. The new rules put at least a 10 percent tariff on everything coming into the country. Then come the "reciprocal" rates: 20 percent for European goods, 27 percent for items from India, and a combined 65 percent for Chinese imports.
We bring in Bob Elliott to make sense of this situation. His credentials are impressive — he spent 13 years at Bridgewater Associates (the world's largest hedge fund), served as head of Ray Dalio's investment team, and graduated magna cum laude from Harvard.
During the 2008 crisis, he directly advised the Treasury, Federal Reserve, and White House.
Bob offers a reality check about bringing back manufacturing jobs: you can't build factories overnight. These investments take years, and companies hesitate to make 30-year commitments when policies change every few months.
Bob breaks down four economic forces all hitting at once: tariffs jacking up prices, government cutting spending, tax policies on hold, and the Fed moving like molasses. Put them together? Yikes. He doesn't sugarcoat it — the short-term outlook looks "pretty negative."
For more information, visit the show notes at https://affordanything.com/episode596
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59:18
Q&A: The Scary Shift from Saving to — Gulp! — Actually Spending Your Money
#595: Eva is finally closing in on her financial independence goals, but she’s grappling with how to make a smooth transition from accumulation to decumulation. What should she consider?
John has noticed a game-changing omission from recent discussions about traditional versus Roth IRAs. Is this as big of a deal as he thinks it is?
An anonymous caller is excited to convert his primary residence into a rental property. But he’ll only make a profit if he first sells some equities to pay down the mortgage. Is this a good idea?
Former financial planner Joe Saul-Sehy and I tackle these questions in today’s episode.
Enjoy!
P.S. Got a question? Leave it at https://affordanything.com/voicemail
For more information, visit the show notes at https://affordanything.com/episode595
Learn more about your ad choices. Visit podcastchoices.com/adchoices
You can afford anything, but not everything. We make daily decisions about how to spend money, time, energy, focus and attention – and ultimately, our life.
How do we make smarter decisions? How do we think from first principles?
On the surface, Afford Anything seems like a podcast about money and investing.
But under the hood, this is a show about how to think critically, recognize our behavioral blind spots, and make smarter choices. We’re into the psychology of money, and we love metacognition: thinking about how to think.
In some episodes, we interview world-class experts: professors, researchers, scientists, authors. In other episodes, we answer your questions, talking through decision-making frameworks and mental models.
Want to learn more? Download our free book, Escape, at http://affordanything.com/escape. Hosted by Paula Pant.
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