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Afford Anything | Make Smart Money Choices

Ask Paula -- Should I Loan Money to Friends? Stay Sane While Repaying Debt? ... and More

Afford Anything | Make Smart Money Choices

Paula Pant | Cumulus Podcast Network

Entrepreneurship, Investing, Business

4.73.6K Ratings

🗓️ 10 April 2017

⏱️ 49 minutes

🧾️ Download transcript

Summary

#72: Spaghetti is a major part of my life. I eat it, of course, as many people do. I also spill it all over my pants, despite the fact that I’m 33 and should’ve learned the rules of gravity by now. But most importantly, I use spaghetti as a metaphor for my business. If I’m not sure if something will work or not, but I want to experiment with an idea, I tell myself that I’m just “throwing spaghetti at the wall.” Maybe it’ll stick; maybe it won’t. Either way, I have permission to try, permission to fail, and permission to get pasta stains all over my drywall. This week, I’m starting a new spaghetti-throwing-experiment on the podcast: I’m going to broadcast “Ask Paula” episodes every-other-week, followed by interviews with guests every-other-week. This allows me to handle the awesome volume of questions that are flowing in (which I LOVE), while still enjoying intriguing conversations with fascinating people. This every-other-week thing is just an experiment; I’d love to hear what you think. Do you want more “Ask Paula” episodes? Or should I return that segment back to its original once-a-month placement? Or am I overthinking this and I should really just get on with the show notes for this week’s episode? Assuming you’re like, “Option C, Paula — get on with the show notes!,” here they are. ___________   Our first question comes from David, who asks: Could you ever find yourself in a situation in which you could justify helping a friend by paying off their credit card, and in exchange, they pay you a modest but respectable interest rate? Here’s his situation: His friend holds $6,000 in credit card debt, with carries an interest rate ranging between 11 to 17 percent. This friend also holds $30,000 in student loans. Yikes! David, however, is debt-free, maxes out his retirement accounts, and holds cash savings of $56,000. He’s thinking of loaning his friend around $3,000 of this money, which she could use to pay off the 17 percent loan. In exchange, David would get a decent-but-not-outrageous return, perhaps in the neighborhood of 7 percent-ish. Should he do this? If so, how? Should he sit down with a lawyer? Next, Amy asks: We’re carrying debt, although fortunately it's low-interest. We're paying it off, and we're doing the best we can; this debt will be gone in a few years. How do you stay patient and calm, when progress is happening at a snail's pace? Later, Alexa says: I’ve realized that I haven’t followed my true passions, which are travel and dance. I’d like to save money for a few years, and then pursue these twin goals. What should I do with the money that I’m saving for travel? Should I keep it liquid or in stocks? Should I put it in a taxable account or a retirement account? Lyra asks: I have 5 goals: repay debt, save an emergency fund, help my son pay for college, save for retirement, and buy a rental property. How do I split my money between these five goals? Next, Kim asks: What are the pro's and con's of portfolio lending for an investment property? I keep getting hung up on the "balloon payment," in which you need to repay the full loan after a particular period of time. How would you qualify for a refinance, given that you need a portfolio loan in the first place? Finally, Daan wants to know: I’m a Dutch citizen who moves to a different country every 2-3 years. Is real estate a viable option for me?   For more information, visit the show notes at https://affordanything.com/episode72 Learn more about your ad choices. Visit podcastchoices.com/adchoices

Transcript

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0:00.0

You can afford anything but not everything.

0:11.5

Every decision that you make, every dollar that you spend, every hour that you spend,

0:15.7

every ounce of energy that you spend on something inherently comes at the expense of something

0:21.5

else.

0:22.6

Every time you decide to do or buy X, you are inherently stating that that X is more important

0:29.3

than A or B or C or D or Y or Z.

0:33.4

And so once you realize that, once you realize the inherent trade-offs and the inherent opportunity

0:37.8

cost that comes with everything that we do, the question becomes number one, what do you

0:43.7

value?

0:44.7

What do you prioritize?

0:46.7

And number two, how do you align your day-to-day actions with those priorities?

0:52.4

Because it's one thing to think that something is important to you and it's another thing

0:56.2

to act accordingly.

0:57.8

My name is Paula Pant, host of the Afford Anything Podcast, where we explore these questions

1:02.3

in depth.

1:03.7

And if you've been listening to me for a while, you know that typically, on the first Monday

1:08.6

of the month, I answer questions that y'all have sent in in a segment that I call Ask

1:13.6

Paula.

1:14.6

Well lately, I've been doing a bunch of these Ask Paula episodes, I did three of them

1:18.6

in a row.

1:19.6

There are some of my favorite episodes to record and you all have been sending me a lot

1:23.7

of questions.

...

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