Kevin wanted to achieve FIRE (Financial Independence, Early Retirement) and believed his motivation came from witnessing the financial trauma of the Great Depression. He wondered if others were motivated for similar reasons.
Colleen and her husband own seven rental homes that have paid off. Now that they’re about to retire, there are disagreements over what to do with some of the equity.
Anonymous wanted to learn more about using an HSA account, and Susan was curious about investment tax liens.
My friend and former financial planner Joe Saul-Sehy joins me on today’s show to answer these questions. enjoy!
Do you have questions about business, money, trade-offs, strategies for financial independence, travel or investing? Leave it here and we’ll answer them in the next episode.
Kevin Ask (at 03:47 min): I thought a lot about my motivations for pursuing FIRE.
I believe one of the main motivations was that I was a teenager during the Great Depression. I have seen friends and family members have precarious jobs, and some have even lost their homes. I want to be financially free so things like this don’t happen to me and my family.
I’ve noticed that a lot of the people who are interested in the FIRE movement are millennials like me, some of whom have suffered similar trauma from the Great Recession.
Do you think many people pursue FIRE for similar reasons? If not, what are your thoughts on the motivation behind FIRE’s persistence?
Colleen asked (at 20:13): My husband and I own seven single-family rental homes with freedom and clarity. They, along with our personal home, are worth about $4 million.
We also have about $2.5 million in retirement savings invested in the S&P 500.
Given the huge increase in property values over the past few years, I would like to sell at least one rental home. For the one I’m considering, our annual net cash flow is about $10,000 and I believe we’ll be netting about $400,000 after taxes and settlement costs.
We can reinvest this $400,000 in passive real estate funds that we have invested in for years, paying about 10% per year.
Well, just by selling the house, we could get closer to $40,000 in annual cash flow instead of $10,000.
We’re going to retire at the end of 2022, so cash flow is very important. Also, we’re not interested in doing a cash-out refinance because we’re 100% debt free and we want to keep it that way in retirement.
My husband is hesitant to sell because he likes to have real assets that we can control and he thinks our area will likely increase in value for many years to come. He said, “Why are we selling cash flow to appreciate real estate when we don’t really need it?” But I just keep thinking about those untapped interests.
Anonymous asked (at 30:54 min): I recently heard about the benefits of opening an HSA (Health Savings Account).
Do you think opening a business is a financially sound and sensible decision?
What are the advantages of an HSA, and are there any tips to maximize the benefits of an HSA account, such as triple tax savings?
Susan asked (at 39:47 min): I read Rich Dad, Poor Dad, and then I read the 16% rule.
I’d really like to hear your thoughts on tax lien investing and any tips or advice you may have.
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