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Want to make a little money on the side? You can use that old chestnut of ‘buy low sell high’ to your advantage. There are a ton of people making money selling on Amazon and eBay using retail arbitrage.  If you want to learn how to make money selling on Amazon we’ll teach you how to get started with retail arbitrage. Forty percent of Amazon sales come from third-party sellers. Their merchandise stored in Amazon’s warehouses. So clearly, there is money to be made. We talk to a master at selling on Amazon, Jordan Malik is not only an award-winning Amazon seller, he’s written a best-selling book on how to make eBay and Amazon selling work for you. Buying & Selling? No, It’s Retail Arbitrage Arbitrage is defined as, “The simultaneous purchase and sale of an asset in order to profit from a difference in the price.” Which is a fancy way of saying, buy low and sell high? The general idea is simply of finding products for a good price, maybe something on clearance which you are able to sell for profit. Most people seel through Amazon, because well, they are you can find anything online at a great price. For example, maybe you see a hair product on clearance at Walmart for $1.75 which is regularly selling on Amazon for $18.99. Clearly, you can make a huge profit here. So you buy it, send it to an Amazon warehouse using FBA and they ship it to you when it sells. Yes, it does entail a little more work than that but you get the idea. Let’s go a little deeper, shall we? What Are You Selling? If this sounds good to you so far, give Amazon selling a try. Start small, though. Go through your own things and sell a few on eBay and a few on Amazon. This will enable you to familiarize yourself with the way both sites work before you decide to jump in. It has the added bonuses of getting rid of some of your clutter, freeing up storage space and making you a few bucks with no outlay. Just checking what’s already selling on Amazon will show you what types of products are doing well. Choose a category and then Best Sellers. Monitor best sellers for a few days or even a few weeks to help make your decision. Within those items, choose some things you have some familiarity with. Video game consoles might be trending well but if you don’t know anything about them, you won’t know what you’re buying and won’t be able to answer seller questions. Jordan sold books for a time and was making $2000 a week at it! Books are a good category for a few reasons; they’re small, light, and fairly sturdy which makes them easy and inexpensive to pack and mail. Books are also readily available and cheap. Some libraries even give them away for free. Thrift shops are another good place to buy books, some are even selling them by the pound. Jordan recommends not falling in love with selling in just one category, though. You love books but so do a lot of other people. Be diversified in what items you sell. Sell on eBay or Sell on Amazon? If you have a “one of a kind” item, your Magnum PI lunch box, for example, eBay will be better. They also take some things that Amazon doesn’t sell, like used clothes and some used baby items. eBay is also better for large items, like cars and furniture. It’s more work to list things on eBay and more time consuming than to sell on Amazon. Amazon does a lot of the work for you because they have so many items, if they have something you want to sell already listed, you can skip things like uploading photos and writing detailed descriptions. Where To Buy Your Inventory Jordan doesn’t use wholesalers. It can tie up a lot of your money and unless you find a relatively unknown one or negotiate an exclusive contract with them, there is too much competition to make it worth his while.

The wage pay gap between men and women has been a major focus of attention. In 2015, full-time female workers made only 80 cents for every dollar earned by men. We have all heard the stats, many times, yet still, the gap has barely moved in last decade. Although women obtain undergraduate and graduate degrees at higher rates than men education hasn’t been enough to move the needle. Today we have Allegra Brantly on the show, a negotiation expert who coaches women on getting fair pay and the raises they deserve. She believes that complaining about the wage gap will not close it, the only way women are going to get paid what they are worth is to ask for it. It’s time we stop undervaluing ourselves and get paid what we’re worth. Not just women, men too. According to Allegra, the wage gap can cost a full-time working woman a ton of money over the course of her lifetime. She will need to work an average of ten plus more years to get equality. And her savings need to stretch longer because of women on average live longer. Allegra wasn’t always the ask for what you want kind of gal. She has accepted job offers with salaries much less than she deserved. Her personal need to make more money pushed her to ask for what she wanted because it was the only way she was going to get it. Now that she has navigated this terrain successfully she wants to pass her knowledge on to women in her life. Inspire them to see their full value as an employee. So, how do you do this? Know your numbers To able to negotiate your salary, you first must know what an employee like you is worth. Research your fair market value. See what other people make in your field in your city. Glassdoor and Linked Salary are great for this. See what the range is and ask for the top of the range if you can prove that you deserve it.  Never accept an offer without negotiation. Never accept an offer below market range. Also, it’s ok to talk about your salary. Discussing your salary with your co-workers is your right as an employee. Although it is taboo, it is allowing employers to keep your wages down. Know who you are negotiating with And what motivates them. Try to get to know your co-workers and boss the best you can. Be in the know with what’s going on within the company. Figure out what your negotiation partner values, needs, and what their priorities are. You want more money but how will it help them. The more knowledge you have on their interests and how they operate, the more negotiation power you have. It’s important to have a sense of how they like to be approached. Stating rather than asking Obviously, don’t go in there demanding they pay you more but you still need to be strong and confident. As uncomfortable as it might feel, you’ll need to be self-promoting. Lead with your research and be upfront with your worth and what people in this role are making. Let them know you want to get the raise you deserve so you can feel confident that it’s a mutually beneficial relationship. Allegra suggests asking for a raise once a year. Think about it, in a year you would have learned a year’s worth of skill sets, became more efficient in your role, became more familiarized with the company and mor...

Today the guys talk to Eric Bowlin, a successful multi-unit real estate investor from Texas about how he created his real estate empire by the age of 30. He accidentally got into real estate back in college when he and his wife decided to buy a house near the University. They purchased a 3 unit building, living in one unit and renting the rest. One night while watching a movie with his wife, he heard a knock on the door. It was one of their tenants there to pay rent. At that moment he realized that I would become a real estate investor. That was the easiest money he had ever earned in his entire life. At that moment he realized that I would become a real estate investor. That was the easiest money he had ever earned in his entire life. Eric now owns 26 units making him about 130K per year and he and his family have achieved financial freedom. He sacrificed a lot to get to where he is today, and never stopped planning, preparing, and learning. Eric talks to a many people who have said “I’ve always wanted to invest in real estate, but…”  and he wants to help educate others on what real estate investing actually is and move past the misconceptions. You don’t need a ton of money to buy property. Of course, you need some capital to get started in real estate investing, but not as much as you think. There are many turn-key companies like Roofstock that have affordable properties with excellent returns. Investing is not land lording. Investing is actually buying and holding the property for rent and (hopefully) appreciation. You do not have to be a property manager, you will hire one so don’t get all wrapped up in the “I don’t want to fix leaky toilets” mentality. And, real estate investing isn’t flipping. Flipping homes for profit is a completely different business. Real estate isn’t really that risky. Yes, it is an illiquid asset but otherwise, it is a quite stable market. If you take the time to learn the ins and outs of the real estate market you will make good decisions and investments with great returns. Spend a lot of time finding a good market to invest in. It probably won’t be in your own neighborhood so you’ll need to do your market research on demographics, crime, schools, vacancy rates, and percentage of renters in a neighborhood. If you looking to invest in real estate but looking for something a little more hands-off checkout Fundrise or RealtyShares where you can invest in crowdfunded real estate projects.

Veterans financial challenges are different from those faced by civilians. Too many come home from service with a lack of knowledge on how to handle their personal finances. Many also struggle to find jobs and need some guidance on how to navigate their new life in the civilian world. Financial literacy is desperately needed for veterans, and today our guest works to help service families secure economic future they feel good about. In honor of Veterans Day, the guys talk to Douglas McCormick about economic empowerment of veterans.

Emotions impact every financial decision we face and sometimes it causes us to make choices out of fear or greed. Today on the show the guys talk to Dr. Daniel Crosby, a psychologist, behavioral finance expert and asset manager. He is the co-author of the New York Times bestseller Personal Benchmark: Integrating Behavioral Finance and Founder of Nocturne Capital. In Daniels’ latest book, The Laws of Wealth, he talks about principles for managing your behavior and how emotion and psychology influence our financial decisions. What is behavioral finance? The concept of behavioral finance is a fairly new idea that looks at behavioral, psychological theory together with economic explanations for why people make irrational financial decisions. Why do so many smart people making the wrong choices with their money? Daniel wants to find out what causes some people to behave illogically when it comes to finance and how to build investment portfolios based on unvalued investments created by investor’s emotional behavior. Daniel works as a sort of a financial therapist and asset manager centering his work on helping his clients stay away from making irrational emotion-driven mistakes. Investors can often be their own worst enemy and are to blame for poor investment returns. Volatility in the market can cause investors to act unpredictably at times – not in their best interest. You control what matters most You can’t control the stock market but what you can control is human behavior. Over the last 30 years, the market has returned about 11% a year while the average investor has only held about 4% because of emotional decision making when markets are going up and down. “Be Fearful When Others Are Greedy and Greedy When Others Are Fearful” – Warren Buffett Investing needs discipline and rationality. Being in control of that takes planning and executing. Take your power back and gain control of your situation no matter is going on in the markets. Set up systems for yourself and follow simple rules of thumb so you mitigate potential harm to your financial lives. Daniel believes you cannot do it alone. People who work a financial professional tend to do 3% better than people who don’t. Advisors don’t have all the answers, but they can help you not to make emotionally driven mistakes. Do you want to be average? Two of the well-known investment styles are growth investing and value investing. Growth investing is investing in stocks that have shown higher than average growth over the previous years, compared to the market average, and show promise to continually grow into the future. They are riskier than average stocks but have the possibility to multiply in value. The other is value investing strategy. Value investors like Daniel actively seek stocks they believe the market has undervalued. He believes many of these stocks get overlooked due to human behavior and fear. He finds pockets of disproportionate value which are created by human behavior. The strategy has been used by Warren Buffet for many years. Daniel takes a quantitative approach to choosing his investments basing his choices on the The 5 P’s – Price (valuation), properties (quality), pitfalls (risks), people (what are the insiders doing), push (momentum/potential growth). Risk is not a squiggly line Risk is different for everyone when it comes to investing, and that’s why Daniel believes in personal benchmarking. He helps his clients create a personalized definition of risk and using their top motivations to make better decis...

This week the guys tackle five questions from the audience on windfalls, real estate, and building credit. Question One First off, let me start by saying I’m loving the Investment Property series you guys are doing. I totally want to get into this, just need to figure out how to save for that first down payment… My question is this…you guys talked about saving 15% a month for the reserve account to cover vacancy and break fixes…Let’s say you own a great property, and you don’t have to dip into the reserve account much for a long time. Is there a point where you cap it and stop contributing to the reserve account? Aaron via Email You won’t want to keep all of the property earnings in your reserve account because in the unlikely case you do get sued – say goodbye to that money. Part of our strategy is to choose insurance policies with high deductibles so for fixes and updates that are not major will pay out of pocket. By not making small claims, our monthly premium low.e are keeping the reserve account up to our deductible. We don’t want to use the insurance unless we have to to keep our monthly payments low going forward. What we are keeping in our reserve account is the amount of our deductible. So, if let’s say our deductible is $10,000, we want to be able to cover anything below that therefore we keep $10,000 in our reserve account. There will be big fixes eventually if you hold the property for many years so plan for significant expenses. If you know, you have to replace the AC unit or roof in the next year, plan for that by putting extra money aside in the reserve account the months leading up to it. Question Two Could you walk me through your decision to go with Roofstock as opposed to Memphis Invest or some other traditional turn-key company? My wife and I have spoken with Memphis Invest, and it seems like they run a tight ship and have an excellent reputation in the REI community. Were you simply looking for higher returns than their markets offered? I’m drawn to the fact that the properties are completely rehabbed before being rented, and they seemingly do an excellent job of reducing risk within their property management (minimum of 2-year leases, very in-depth vetting, etc.) Joseph via Email Memphis Invest is an extremely high-quality operation and great company. For us, the properties Roofstock offered were more what were-were looking for as a beginner investor. The homes were cheaper with Roofstock so we were able to try it out without investing a significant amount of money. As new investors, homes with Memphis Invest were just more than we wanted to spend on a property. We also wanted to spread around the risk by investing in multiple properties rather than putting all our eggs in one basket. This strategy has worked well for us making our average returns are higher with the less expensive properties. Question Three Is there anything I can do credit-wise/savings-wise/career-wise to increase my likelihood of getting approved for a mortgage loan? Nyequita Smith via Email Getting approved for a mortgage is all about your attractiveness to creditors. To improve that you’ll need to increase your credit worthiness. Try for more on time payments. If you only have one credit card and then you only have one on time payment a month regardless if it $3,000 or $30. Get more credit cards and put really small things on them like Netflix, Hulu, coffee, etc. Pay each of them off every month. This is a simple way to increase your number of time payments and credit score. Increase credit utilization. Call your card companies and request to increase your limit. When you have more available, your percentage utilize is lower. If you are maxing out your cards everything it doesn’t look good to creditors. If you increase your limit and only using a small amount ...

How would you feel if you made $3.75 million in bonuses a year? It hard to imagine but our guest has done it. And he wrote a book about it! Today we have a chat with Sam Polk, author of For the Love of Money. For most people, that amount of money would be enough to live a more than a comfortable lifestyle for many years. I can’t even begin to imagine what that would feel like, but if I had to guess, I would say it would probably feel pretty damn good. For today’s guest, 3.75 million just wasn’t enough. Today we have Sam Polk on the show to talk to us about his book For the Love of Money. The guys go deep on what life on Wall Street was like, money addiction and redefining success. Meet Sam Polk At only 30 years old Sam Polk was doing very well in his career working as a senior trader on Wall Street. He was offered an annual bonus of $3.75 million and was not happy with it because it wasn’t enough. At that moment he knew he had lost himself in his obsessive pursuit of money. He was addicted to it, and no matter what the amount was, it would never be enough. He knew he had to make a change and decided to walk away from it all – the power, the money, and may other self-destructing behaviors. For the Love of Money For the Love of Money is about Sams’ journey to find out what he really wanted and where he fits into the world. He still wanted success but wanted to do something that contributed to humanity. Sam came to the realization that fulfillment comes from doing work he cares about. Sam wants to help others truly find out what they believe is important. Figure out where your puzzle piece fits in the world, not just where it makes money. After leaving Wall Street behind, Sam moved to Los Angeles where he lives with his wife and daughter, and soon son. He is now the co-founder and CEO of Everytable, a company that sells fresh, delicious meals at prices everyone can afford. If that wasn’t enough, he is also the founder of Groceryships, a nonprofit that helps low-income families struggling with food-related illnesses like obesity and diabetes. His mission is to create businesses are for solving problems but not by funneling profits to those at the top. Through his companies, he wants to “be part of creating a new economy that harnesses the dynamism of capitalism and also fosters the connectedness of a true democracy in which every vote and every voice count the same.” If you want to read more about Sam Polk, you can find him at http://sampolk.me/

We like to check in with our listeners and see how their financial life is going. Today we will take a look at This Financial Life with Corey. We will show him how to make more money by starting a music teaching business. Corey lives in the Boston Area, and he sure is a hustler. He currently, works six different jobs throughout the year and has been saving as much as he can to improve his financial life. One of his gigs is teaching private lessons on trombone, and he wants to expand that to make it a full-time business. Right now he has two students but doesn’t know how to grow his side gig. On this episode, Andrew and Thomas will go through the steps of legitimizing and marketing a side project like Corey’s. Corey’s Financial Life Corey neglected his finances for many years, ignoring his debt, forgetting payments and spending money recklessly. After spending the good part of his four years at college majoring in video games, parties, and girls, he left with student loan debt, no degree and depression. At 22, his financial situation was pretty bleak. He spent a summer without a job making the debt and depression even worse. Corey ended up in a mental hospital over Thanksgiving weekend where he experienced a sort of a financial epiphany.  When he was released, he knew he could never let himself get that low again. Corey is taking the first steps to improving this financial life. He is getting his spending under control with a  30-day money crunch so he can save a meaningful amount of money. What he is still struggling with is being too emotional about finances and getting too close-minded when it comes to ways to improve his situation.

You have a budget, great! But what about your budget categories? Setting them up without losing your sanity can be a tall order. Having a budget is only the first step. You need to set up budget categories that are detailed enough to show you where your money is going but not so detailed that you go nuts trying to keep track of them all. Budgets are Personal Finance 101 No matter how little or how much money you have, everyone needs a budget. Every other aspect of successfully managing your finances are built on knowing how much money you have coming in, how much is going out and where it’s going. But there are so many ways to budget that it can be confusing. How many budget categories is too many? How many is too few? If a budget is too complicated, you’re unlikely to stick to it. You want a system that is simple and straightforward. The 50/30/20 method fits the bill. 50/30/20 This budgeting method is simple. You allocate your total budget at these percentages. We’re going to break down what expenses fall under each. And to be clear, the numbers you’ll be using are post-tax, so the amount of money you get in your paycheck each month, not how much you earn. And we recommend Mint for budgeting. It’s free and easy to use, and once you get your account and budget categories set up, Mint does most of the budgeting work for you. You can certainly just use 50/30/20 as your categories for the most straightforward system ever, but unless you have your finances on 100% lockdown, you probably need to expand out a bit. 50%: The Essentials The 50% represents the essentials in your budget, expenses like housing, utilities, transportation, insurance premiums, and groceries among them. That these expenses are essential doesn’t mean we can’t reduce them though. We’ll cover that. Housing is the most significant expense for most of us so how much of the 50% should be devoted that and what exactly does “housing” encompass? “Housing should comprise 35 percent of your take-home income. That includes the mortgage or rent, all home repairs and maintenance, property taxes, utilities such as electricity, gas, water, and sewer, and homeowners or renters insurance. In short, it includes every housing-related expense.” That is one take on it, but it’s pretty unrealistic. I think it’s more realistic to budget that 35% just for your rent or mortgage payment. It might mean you have to tighten up in other areas of the 50% but housing isn’t cheap, and unless you take on a roommate, live really far from your place of work in the case of city dwellers or can live with your parents rent free, there aren’t a lot of ways around the high cost of housing. 30%: The Fun Stuff The 30% is to be budgeted on nonessentials, things that you spend money on but could live without (although the living might be pretty miserable). This percentage includes things like meals out, leisure activities, clothes (clothes are a necessity, yes, but presumably you haven’t been running around nekkid to this point, so you already have some), hobbies, and grooming. 20%: The Important Stuff This is the category too many people overlook, but it’s the most important. The 20% is for debt repayment, (if you have any) saving and investing. It’s easy to leave this category out and just tell yourself whatever is left over at the end of each month is the money you’ll put towards these things. But the problem is, when you don’t dedicate money to these areas up front, there is no money left over. Money that isn’t assigned a job tends to disappear without a trace.

Personal Capital is a free service that allows you to track all of your investments in one place. Read on for our Personal Capital review and why we recommend you add it to your financial toolbox. I remember going into a Travel Agency with my mom to plan our family vacations. We knew where we wanted to go but we didn’t know the details like what we would see on our trip, where we would stay or how we would get there. At the time the easiest way to plan a trip involved talking to an expert or consulting colorful pamphlets. When websites like Expedia or Orbitz bust onto the scene they solved an important problem – information imbalance. The Travel Agent existed simply because they had access to information the average person didn’t and they were willing to make phone calls and book a trip for you. With all of this information at our finger tips and the automation of most of the booking process we now gladly book vacations ourselves. We also save money by cutting out the middlemen (the Travel Agent). Personal Capital solves that very same problem for investors – information imbalance. There are practically infinite choices for you to park your money. Vanguard’s Total Stock Market Index Fund (VTI) has over 3,700 stocks that it invests in and across the world, there are over 45,000 companies listed on the stock market. Not to mention there are Bonds, REITs and a whole slew of other things you could invest in. So what is Personal Capital? You’re about to be impressed. Personal Capital is a free research and analytical tool that empowers the average investor to make the best possible decisions with their money. In a world of well-funded highly sophisticated, this tool goes a long way towards leveling the playing field. If you’ve been a fan of Listen Money Matters for even a short time, you are probably tracking your spending in Mint. But how are you tracking your investments?  Personal Capital gives you that fifty-foot overview which has made us such fans of Mint. (Shameless plug: If you don’t know Mint yet, check out our book, Mastering Mint, and get to know this smart budgeting tool.) While Personal Capital is a pretty important tool for every investor, it’s absolutely necessary for people who contribute to 401ks / TSPs and DIY investors. In my Personal Capital Review, we’re going to break down all of the tool’s components and explain why they matter and how to use them. The goal is for you to be able to roll off this review and become productive immediately. Tracking Your Returns You might have heard this quote from Peter Drucker, “If you can’t measure it, you can’t manage it.” Peter was a famous management executive and pioneered how people are organized across corporate and government organizations. A cornerstone of his philosophy was the importance of data and using it to drive decision making. How can you make a decision if you don’t have any information which to base it on? I’ve found that the detailed metrics available to me in my Personal Capital account help me to make very, very educated decisions. Smart decisions. Decisions that make more money. Investing is no different. How can you decide to change your investing approach or stay the course if you don’t know how you’re doing? Even if you used no other feature of Personal Capital, you should use it to track your investment performance across all of your accounts. Mint does let you track investments too but if you’ve ever used it then you’...

Buying a rental property is fun, but it certainly needs to be done with care and a ton of research. Since a rental property is a long-term investment, you want to make sure you review all considerations. You are putting a lot of money into a property for a down payment, so you need to arm yourself with all the information you need to make a profitable investment. This is week four of our real estate investments series. The guys talk in depth about buying a rental property, assembling your team and reducing risk. Are the local laws in your favor? EVICTION LAWS! Find out what the eviction laws are before committing yourself (and money) to a particular area. Of course, you don’t want to have to evict a tenant, but if someone is living in your place and not paying you to rent for months, you got to do what you got to do. How long does it take to evict someone? In places like NJ, it can take months to have someone legally evicted while you wait around losing money. How easy is it to raise the rent? There could be rent stabilization laws in place to don’t allow you to raise rents as you see fit. How likely is it that you can use their security deposit for damages? Getting answers to all these questions is super important. Start by looking for a place that are “landlord friendly states.” The top 8 states – Texas, Indiana, Colorado, Georgia, Kentucky, Mississippi, Arizona, Florida General Property Grade Location, location, location. The location is critical in buying a rental property. Each rental property you look at will have a grade, A through D. This will help you determine if the property is investment grade. It’s In summary, buying an “investment grade” property is about focusing on the key criteria that will keep your property occupied and stress-free. Here is the breakdown of the ratings. A Property: Newly built properties in the nicest areas. High-quality buildings that are newer (built within the last 15 years) They may include premium with top amenities attracting high-income families. You will also see much higher and much less maintenance, but it comes with a much greater down payment and lower returns. B Property: The slightly older property, but still nice. Might be not quite as nice of an area. Tend to have middle-class tenants. Rental income is typically lower than Class A and may have some small maintenance issues. For the most part, they are in good condition, live in ready and will some upgrades can be moved to a Class A C Property: Older properties, more than 20 years old and located in fewer desirable areas. Likely, they also really could use some work. However, for investors, these rentals have high returns D Property: Run down properties in bad areas. The area and the property can be described separately. It’s possible to have a run-down property in a great area. Harder to have a great property in a bad area, though. It’s important for an investor to understand that each class of property come with varying levels of risk and reward. Crime rates and school quality also need to be taken into consideration. We will soon have these ratings pulled into our Rental Property Tool, but the info is readily accessible. Understanding Vacancy Rates and Potential Tenants When buying a rental property vacancy is inevitable. The vacancy rate is the percentage of all available units in a particular area that is unoccupied at a given time. Look at the US Census data on vacancy rates in the area you’re seeking to purchase in. With 2 minutes of research,

Thinking about a 401k loan? A 401k is meant to fund retirement, but you can withdraw money from it earlier. There can be negative consequences if you borrow from your 401k but they are not as dire as we have been led to believe. Using the money to make or save money or to pay off high-interest debt can pay off. It goes against personal finance philosophy to take money out of a retirement account before retirement, but under the right circumstances, it is something to consider. 401k Recap By now most of you know what a 401k is but for those new to the site, this will get you up to speed. A 401k is an employer-sponsored retirement account. Employee contributions are deducted directly from your paycheck before they are taxed. The money is invested into one of the funds offered by the employer. If you’re lucky, your employer matches your contribution. This is free money. For the year 2017, you can contribute up to $18,000. Because that money is meant for retirement, withdraws are discouraged before you reach age 59 ½. If you withdraw money before that age, you will be hit with a 10% penalty. There are some exceptions.   If you are no longer working at age 55, if you are using the money to pay medical expenses, or if you have become disabled for example, you can withdraw the money penalty-free. Another way to access that money without the penalty is the subject of this podcast. You can borrow money against your 401k without being penalized. FYI: If picking funds in your 401k, 403b or TSP gives you anxiety, or you fear you’ve made terrible choices than you need Blooom. You’re welcome. Why a take a 401k loan? There are lots of good reasons to invest in a 401k. Not many people get a pension anymore so a 401k may be their only retirement plan. There is also a low bar to invest in a 401k. Your employer does the work; you just have to opt-in. You don’t have to know anything about investing to get started. Contributions are taken directly from your paycheck, so you never have a chance to spend the money. For some people, this is the only way they will save for retirement. The money goes in and grows tax-free. This can help reduce your taxable income and bump you down to a lower tax bracket. When you retire and need the money, most of us will be in a lower tax bracket than we were during our working years, so that is a tax saving. A 401k can also be a great place to borrow money from. How it works Borrowing against your 401K means, you are borrowing from yourself. Unlike borrowing from a bank, the interest you pay, you pay to yourself. The amount you borrowed is no longer invested so rather than getting investment gains; your “gain” is the interest you pay back. You can borrow up to $50,000 if you have a vested balance of at least $100,000 or 50% of the value, whichever is less. You indicate the account you want to borrow money from. Those investments will be liquidated. You will lose any gains those investments might make during for the duration of the loan. Depending on the plan rules, you may or may not be allowed to continue making pre-tax contributions. You have five years to pay back a 401k loan, then if the loan was used to buy a home that will be used as your primary residence. There is no early repayment penalty. Most plans allow you to repay the loan through payroll deductions, the same way you invested the money. Good Reasons to Borrow Against a 401k If you need money fast and for a short period, a year or less, borrowing from your 401k can be a good solution. You’ll have the money quickly sometimes within a few...

Does Roofstock live up to their promises? In our Roofstock review, we dig into their selection of turn key rental properties and put our money on the line to find out. I’ll admit, I’ve been obsessed with rental properties for a few months now. It took me about that long to wrap my brain around it all. There is so much to think about and consider – the topic of turn key real estate investing is littered with “rabbit holes.” Now, before we jump in you may be wondering, “why would I ever want to get into rental properties?” If so you should probably start here: The Case for Real Estate Investment Properties. Eventually, after much research, Laura and I decided that we were going to get rental properties far away from the NYC area. In starting our search for turn key rentals, here were some of the biggest sticking points for us: * How could you possibly purchase a property sight unseen? Is the internet full of crazies? * How do I find properties in my price range that aren’t in a war zone and produce a respectable cash flow? I’m not exactly a well-connected real estate professional. * How can I be sure that I’m not being sold hot garbage by an “expert”? Is there any way to undo it all if I wake up the next morning in a cold sweat regretting my decision? * How do I evaluate and track the profitability of these properties? There are a lot of moving pieces in turn key real estate investing. * How do I make sure I don’t get stuck with “the worst property management company ever” and wind up with more work/stress than I bargained for? Few people say they love their management company, and that scares me. * How can I set it up such that I do the least amount of work possible, today and in the future? Simply put, I ain’t got time for that shit. * Does my ass need to be the only one on the line? Is there anyone that will stake their reputation on my continued success? In this review, we’re going to cover the above questions and go into extraordinary detail of our experience with Roofstock. After speaking with their CEO and many others on the team, we decided to go ahead and make a turnkey real estate investment with them. Twice. What is Roofstock and what do they bring to the table? Roofstock is a turnkey rental property marketplace. A core requirement for properties to be listed on their marketplace is that a property needs to be occupied by tenants who meet Roofstock’s strict screening guidelines. Since we’re investors and not real estate professionals, we only look at turnkey solutions. This is the target market for Roofstock, busy professionals who want high yielding successful rental properties without the time commitment or the need to put work in themselves. Unlike most places you’d go to find turnkey rental properties, Roofstock does not own any of the properties listed in their marketplace. Instead, their expertise is in evaluating, negotiating and closing property transactions. So they aren’t trying to sell you anything but instead are looking to add value to an existing and usually convoluted process. What originally got me excited about Roofstock was their inventory. It’s probably what gets everyone excited. Currently, there are over 100 properties available for sale, 20 awaiting listing and 75 with a sale pending. This dwarfs the size of any other turnkey seller Laura and I looked at. Most turnkey places have little to no inventory,

This week the guys get nerdy about the numbers and chat about how to calculate cash on cash return to see if a property will be a smart investment. Is This a Good Investment? If you’ve been talking about buying a rental property with friends and family, there was probably someone who told you some horror story about owning rental property. Before letting them scare you out of it, do the math. It’s important not to make an emotional decision when buying a rental property. Instead look at the numbers and have systems in place to protect you. Some of us are just not numbers people (including myself). Although real estate investment math isn’t calculus, there are a lot of calculations involved. Don’t worry; we’re here to help. Cash On Cash Return The cash on cash return is a simple way of measuring the performance of a potential investment property that is quick and easy. It can be a good starting point for quickly filtering potential investment properties. Cash-on-cash return = annual pretax cash flow / total cash invested. For example, if you put $100,000 cash into the purchase of property and the annual pretax cash flow is $10,000, then your cash-on-cash return is 10%. Cash-on-cash return is the actual return you will get at the end of the year your rental property after all property specific expenses are paid out like mortgage, taxes, insurance, HOA, etc. It’s a great metric to determine if a property will be a good investment right off the bat and a quick, easy way to compare different properties. Although cash on cash return is a useful back of the napkin evaluation, there are many other essential calculations to take into consideration. Yup, more math. We’ll Do The Math For You Unless you enjoy getting elbow deep in nerdy spreadsheets, we have something that will do all the math for you. Simple Wealth is a platform that will help you research, evaluate and track rental properties. It not only will it calculate your cash on cash return, it will also help you understand your properties income, appreciation, and equity using our sexy graphs. Simple Wealth will help you calculate cap rate, NOI, gross yield, rent estimates, and vacancy rate. What does all that mean? Let us get into it. Key Numbers Here are some of the key metrics we use to evaluate rental properties so you can get a better understanding of how all the math works. Annual NOI (Net Operating Income) is income after property expenses. NOI is simply the annual revenue generated by an income-producing property after taking into account all income collected from operations and deducting all costs incurred from operations. NOI excludes any financing or tax expenses incurred by the owner/investor. In other words, the NOI is unique to the property, rather than the investor. Cap Rate is the annual return on investment without financing. Return if you bought the property in full, in cash. Gross yield shows the rate of return on investment. It is a good rule of thumb number you can use to compare properties quickly.  It is an easy calculation which is the monthly rent times 12 then divided by purchase price. Not the amount you would invest but the full cost of the home. Key Costs The purchase price is the biggest lever you can pull to make a property a better investment. Even negotiating 1k lower can significantly improve your cash-on-cash return.

Whether you are looking to move to Denver or Denmark, there are a lot of things you need to take into consideration before moving to a new city. When you are moving to a new city, everything is new and exciting, but it can also be a little scary. Preparing will help you get past that insecurity the unfamiliarity of a new city can bring. And overspending is almost always a result of under planning. One of our awesome listeners has been thinking of making a move to a new city and asked us for some tips on how he can prepare. Thomas has been planning a move to Denver and will share some tips and resources he in today’s episode. Financial Prerequisites Before you move to a new city, you want to have your finances in order. Get your debt situation under control and work on your credit score. If you are planning on renting, landlords look at that very seriously when considering a tenant. Make sure you have a job when you get there. If you’re moving because of a job, get a relocation bonus. ASK FOR IT! You’d be surprised what you can get if you ask. Creating a moving budget. This will show you how much money you will need to save up for all expenses including broker fees, security deposits, moving companies, possible storage, furniture and at least the first month’s rent. Step 1: Choosing the new location If you’re relocating because of a job or school, either for yourself or a spouse, apparently you’re skipping this step. For Thomas, he just wants to leave Iowa so he can have a new place to call home. Start by researching locations you might be interested in. Figure out what you want out of a new location and make a priority list with value scores. Don’t get caught up in what you might do when you get there. Make a list of real priorities and things you truly value. Maybe you don’t have a car, so you want a city to be walkable. You love hiking and the outdoors, so you need to find a place with the nice weather most of the year. Since it is more likely than not that you’ll need a job when you move, some of your top priorities should be: * What’s my industry like in this city? * What’s the probability that I can get a good job? * What’s the cost of living index, and will my likely salary be able to manage it? * Will I have to downgrade my current lifestyle because the new city won’t let my dollars stretch as far? Compare your cost of living now to what it will be on the move along with your new salary. Thomas has been using Numbeo to compare the cost if living between Des Moines to Denver. He figured out he will need $4,837 each month to get the same standard of living I’d get on $4,000 in Des Moines. Also, check out tax rate differences. If you have children or plan to have kids, then you need to consider schools and daycare costs in the area. Once you have all the info you need, start scoring cities you’re interested in based on your priorities.Check out city-data websites, forums, and Reddit to get the low-down from locals. Thomas has found this pretty helpful except for those few people who don’t want any newcomers in town. Once you have your shortlist, visit a city or two if you can. It’s probably not feasible for most people to visit every potential city, but if you can try to Air BnB it up for a few days in your top pick. You can tour some apartments and get a feel for the place. Thomas did this in Denver, and that was fantastic. It solidified the decision for him. Step 2: Start preparing Moving sucks, so make a plan for everything that needs to be done way ahead of time and work on it in little chunks. Pare down your life and get rid of stuff you don’t need or use. You are starting a new life so leave some of the old behinds.