Author: Matthew Adair

Your Saving Rate is the One Thing You Can Truly Control
On your journey to financial freedom, there is only so much you can control.

The reality is, like most things in life, much of our financial journey is out of our hands.

If your gut reaction is that I’m wrong about that, that’s OK. I get it. I used to be in denial, too.

Really smart people, like Think and Talk Money readers, don’t want to acknowledge that they aren’t in complete control of their financial lives.

To illustrate my point, here are just a few things that you can’t control on your way to financial freedom:
1. You can’t control the returns you’re going to get in the stock market. It’s reasonable to project 10% average annual returns based on historical performance. Also, we use 10% merely as a projection for planning purposes. But, there’s no guarantee anybody will earn 10% per year.
2. You can’t control whether a real estate investment appreciates. We all certainly hope our properties increase in value over time. We do our best to target areas where appreciation is likely. But, once again, there’s no guarantee.
3. You can’t control if your employer is going to give you a raise. Of course, you can work hard. Also, you can outperform all the metrics. You can go above and beyond to deliver massive value to your company. However, when it’s time for your annual salary review, it’s not up to you how much all that is worth.
So, am I wrong about any of that?

Gee, thanks for the doom and gloom, Matt.

I know, I know. Not what you want to hear.

Don’t be discouraged. All is not lost.

There is one crucial element that you can control on your way to financial freedom.

Today, we’ll focus on the one crucial element that you actually can control on your way to financial freedom.

It’s such an important concept that Mr. Money Mustache’s blog post from years ago is still a classic: The Shockingly Simple Math Behind Early Retirement.

Even more so, it’s such a powerful concept that you won’t find a personal finance blog, book or podcast that doesn’t emphasize its importance.

What is the secret?

What is the one thing you can control above all else?

The one thing you can truly control is your saving rate.

If you ignore every piece of investment advice out there and focus on your saving rate, you are going to be in great shape.

Let’s examine why.

What is a saving rate?

Your saving rate is simply the amount of money you save each month divided by the amount of money you make.

Saving rate = Money Saved / Money Earned

Just like staying on budget with two simple numbers, you can monitor your progress with this simple formula.

I find it helpful to measure your saving rate based on your monthly income and savings. This way it matches up with your Budget After Thinking.

I also find it most useful to express your saving rate as a percentage. To see your saving rate percentage, all you need to do is multiply your saving rate by 100.

Saving rate % = (Money Saved / Money Earned) x 100

Moving forward, when I refer to saving rate, I will be talking about your saving rate percentage. It’s more informative to see what percentage of your money you are saving, rather than an amount with no context.

What I mean is this: if someone asked me if saving $10,000 per year was a good target, I wouldn’t be able to comment with more context.

If that person was making $75,000 per year, I would say that seems OK. That’s a saving rate of more than 13%.

On the other hand, if someone told me they were making $750,000 per year, and only saving $10,000, I would recommend that person revisit their Budget After Thinking.

That’s a saving rate percentage of only 1.3%.

That’s… bad.

Photo by Chris Leipelt on Unsplash

What can I learn from tracking my saving rate?

Tracking your saving rate will help you understand if you are making progress over time. It’s not about comparing yourself to someone else.

Whatever your current saving rate is, the goal is to seek personal improvement. Just like with tracking your net worth, the purpose is to see if you are making personal progress over time.

When it comes down to it, there are really only two ways to improve your saving rate.
1. You can spend less, and save more, of the money you’re currently making.
2. You can make more money and save most of that money, all while keeping your expenses the same.
Combining those two ideas is even better. Like we just said, make more money, spend about the same.

Use the excess money you make to fuel your Later Money goals.

If you can do that, your saving rate and your net worth will steadily climb. You’ll experience that your Later Money goals are closer to becoming reality than you think.

Why it’s important to focus what you can control, like your saving rate.

My point here is show you how dramatically one decision can accelerate your progress towards your goals.

Each additional amount saved is one step closer to financial freedom.

Sometimes, we all need to ask ourselves:

“Is spending more money right now on things I don’t really care about going to make me happier?”

“Do I even want to go out to more restaurants? Or fancier restaurants?”

“Do I despise my home/my car/my wardrobe so much that I must replace it immediately?”

Only you can answer these questions.

Maybe you’ll realize that your life is pretty good right now as it is.

You might just decide that you don’t need the extra money at this moment.

You’d rather use the money as fuel for what you really want in life.

Here’s an example showing the importance of your saving rate.

Scott Trench, author of one of my favorite money wellness books, Set for Life, is a big advocate of improving your saving rate.

In a recent episode of his BiggerPockets Money podcast, Trench emphasized just how important your saving rate is using a simple example.

Let’s use that example to explore how improving your saving rate can accelerate your journey to financial freedom.

Assume that you earn $100,000 per year (after taxes for simplicity).

You are a pretty good saver and save 20% of your income, or $20,000. For most people, targeting a saving rate of 20% is pretty solid.

Of course, if you save 20% of your income, that means you spend 80% of your income, or $80,000 per year:
- Take Home Pay: $100,000
- Annual Spending: $80,000
- Annual Savings: $20,000
Based on the above, we can project how long you will have to work to fund one year of your life.

Because you spend $80,000 per year and you save $20,000 per year, you would have to work four years to save enough money to fund one year of your lifestyle:

$20,000 saved x 4 years = $80,000 saved (1 year of spending)

In other words, you would need to work four years to buy one year of financial freedom.

Not bad, huh?

But, look what happens when you improve your saving rate.

Photo by Alexandr Podvalny on Unsplash

What happens if you double your saving rate from 20% to 40%?

Now, let’s see what happens if you double your saving rate to 40%. That means you are saving $40,000 per year and only spending $60,000 per year.

The result is that you now only need 1.5 years of work to fund one year of financial freedom:

$40,000 saved x 1.5 years = $60,000 saved (1 year of spending)

Notice that two things are happening at the same time when you increase your saving rate.

First, you are saving more money each year. That’s a good thing.

Second, you are spending less money each year. That’s another good thing.

The result is that when you spend less money, you need to accumulate less money to fund your lifestyle.

It’s a double whammy. In a good way.

Should we complete our example by taking it one step further?

Let’s say you have a 50% saving rate. That means you save $50,000 per year and spend $50,000 per year.

How long do you have to work to buy one year of financial freedom?

Only one year.

$50,000 saved x 1 year = $50,000 saved (1 year of spending).

Now, that’s cool.

It’s motivating to think of your saving rate in terms of years to financial freedom.

So, what’s the takeaway here?

It can be extremely motivating to think of your saving rate in terms of how long you have to work until financial freedom.

Each incremental amount that you save means you’re boosting your savings at the same time you’re reducing your spending.

When you pull both of those levers at the same time, you accelerate your progress towards financial freedom.

This thought process is especially helpful for people who feel that math is not their thing. It doesn’t get much simpler than viewing savings in terms of buying financial freedom.

The cool part is that once you hit a 50% saving rate, you can essentially buy a year of financial freedom for every year that year work.

Keep in mind that that this simple illustration ignores any investment returns you may get from your savings.

Don’t worry, those investment returns will generally reduce the length of time you need to work even more. Check out Mr. Money Mustache’s post for more on that point.

Setting aside investment returns, the purpose here is to drive home the point that the more you save, the faster you’ll reach financial freedom.

That’s why it’s so important to focus on your saving rate. You can’t control everything, but you can certainly work on your saving and spending.

Have you ever calculated your saving rate in terms of how quickly you can achieve financial freedom?

Does this example motivate you to save even more?

Let us know in the comments below.
September 16, 2025
How to Use the Sapphire Reserve for Free Flights
One of my biggest financial challenges when I was in debt in my twenties was how to pay for travel.

My thought process could be summed up as “do fun things now, worry about it later.”

I did have some great trips, like going to Madrid and Rome with my brothers. I certainly don’t regret taking those trips.

In hindsight, I would just pay for things a bit differently.

Instead of recklessly paying for the trips with credit cards, I would have learned how to responsibly use credit card reward points.

That’s what I do today, even though I’m in a much stronger financial position than I was 10-15 years ago.

For some context, my family of five has settled into a predictable travel pattern for the past five years or so.

We aim to take annual trips to Florida (escape the Chicago winter), Colorado (all the fun things) and California (visit my sister).

Planning these trips well in advance gives me the advantage of strategizing how to pay for them, especially the expensive flights.

The thing is: I can’t remember the last time I paid for any of these flights with cash.

Instead, I use my Chase Sapphire Reserve points.

Why I’m happy I learned how to responsibly use my Sapphire Reserve points.

Redeeming credit card points for travel has been a major factor in allowing me to stay on budget and continue fueling my investments.

Have you heard?

It’s expensive to take a family on vacation.

But, I’m of the mindset that it’s also extremely important and a whole lot of fun.

So, instead of skipping out on travel, I use my credit card points to offset the cost.

Airplane tickets these days can be around $500 per person. By using my credit card points, I easily save $10,000 per year on flights.

Over the past five years, that totals $50,000. That’s enough money to fully fund my son’s future college tuition in his 529 savings plan.

To get all these points, you may be thinking that I must have 10 credit cards and constantly stress about which one to use for every purchase.

Nope.

I have just two credit cards.

Here’s how I do it.

Never spend money on your credit cards just to earn more points.

With all credit cards, the more you spend, the more you earn. That’s true whether you are accumulating points or utilizing shopping or travel credits and other discounts.

Before we go any further, please remember the first rule of responsible credit card usage:

Don’t spend money just to earn rewards. That’s a recipe for financial disaster.

Using the Sapphire Reserve to get free flights is no exception to this rule.

Photo by Nathan Dumlao on Unsplash

To read more about the responsible use of credit cards, check out my series on credit here.

A good place to start is my post on 10 credit card tips for lawyers and professionals.

If you’re currently working hard to pay off credit card debt, you can also check out my top 10 tips for paying off debt on a budget.

If you don’t already have it, now is a great time to consider the Sapphire Reserve.

Chase is currently offering a sign-up bonus of 125,000 points for the Sapphire Reserve, the largest bonus ever offered.

That translates to $2,562.50 in value, according to The Points Guy.

I recently wrote about why I’m keeping the Sapphire Reserve in my wallet, even with the higher annual fee:

Is the New Chase Sapphire Reserve Worth the Annual Fee?

The bottom line is that I will still earn a ton of points each year, not to mention the other benefits, that the Sapphire Reserve will remain the primary card in my wallet.

Check out my post to learn how I evaluate credit cards and how I came to the no-doubt conclusion that the Sapphire Reserve is still worth it for me.

Is there value in keeping both your Sapphire Reserve accounts open?

After I wrote that post, a number of readers (with spouses, partners, kids, etc.) reached out asking if there is value in keeping separate Sapphire Reserve accounts.

It was such a good question that I wrote a full post addressing it:

Is There Value in Keeping Both of Our Sapphire Reserves?

The short answer is that my wife and I each had Sapphire Reserve cards before we got married. We eventually closed one of the accounts and kept the other one open.

Today, we still each have a physical Sapphire Reserve card through the “authorized user” option on just the one account.

Keeping just one account between the two of us saves a bit of money, but more importantly, keeps things much easier for us.

As I mentioned, I value simplicity right now.

I recommend most couples with two accounts do the same.

Nonetheless, there may be valid reasons why you would want to keep both accounts open.

For my complete thoughts, and the reasons why you might want to keep both Sapphire Reserve accounts open, check out my post here.

I have two credit cards in my wallet: the Sapphire Reserve and the Freedom Unlimited.

At this stage in my financial life, I value simplicity as much as anything else.

That’s why I only use two credit cards.

I use the Sapphire Reserve for travel (4 points per dollar spent on airlines and hotels) and dining (3 points per dollar).

Then, I use the Freedom Unlimited for everything else.

The Freedom Unlimited earns 1.5 points across the board for every purchase. In contrast, the Sapphire Reserve only earns 1 point per dollar spent in non-bonus categories.

Same as me, my wife only carries the Sapphire Reserve and Freedom Unlimited. That means we can combine points to maximize our rewards.

Together, we have a simple approach and still earn plenty of points.

Now, let’s talk about whey the Sapphire Reserve and the Freedom Unlimited are the perfect combination for your wallet.

Why it’s a great strategy to have the Freedom Unlimited and the Sapphire Reserve.

If you have the Sapphire Reserve, the Freedom Unlimited is the natural companion for your wallet. These two cards work extremely well together to maximize travel rewards.

Here’s why.

As mentioned above, the Freedom Unlimited earns 1.5 points across the board for every purchase. For that reason, this is my default card for just about all spending other than travel and dining.

But, there’s a catch.

If you only have the Freedom Unlimited, the points you earn must be redeemed as cash back or through the Chase travel/shopping portals.

As a rule of thumb, cash back rewards like this are not as valuable as transferring your points to a travel partner.

Let’s emphasize that point for a moment: the best use of your credit cards points is almost always to transfer those points to a travel partner.

This is true for Chase, American Express and any other credit card that offers point transfers.

But, we just said that you cannot transfer your Freedom Unlimited points to travel partners.

That’s where the Sapphire Reserve comes in.

Photo by Alexander Schimmeck on Unsplash

You can combine your Freedom Unlimited points with your Sapphire Reserve points.

If you have the Freedom Unlimited and the Sapphire Reserve, you can combine your points.

This is the key to the whole strategy.

With the Sapphire Reserve, you earn Ultimate Rewards points. You can transfer Ultimate Rewards points to certain travel partners, like United. Each point translates into one United mile.

Then, you can use those United miles to book airfare directly through United’s website.

This is my preferred method for getting maximum value out of my credit card points.

To recap the strategy:
1. Use your Freedom Unlimited for all spending other than travel and dining.
2. Combine your Freedom Unlimited points with your Sapphire Reserve Ultimate Reward points.
3. Transfer your Sapphire Reserve points to a travel partner of your choosing, like United.
And, that’s all there is to it.

One final note: Make sure to send your Freedom Unlimited points to your Sapphire Reserve account, and not the other way around.

As soon as I have enough Sapphire Reserve points, I transfer them to United and book a flight.

I’ve found that the best use of my points is to transfer them to United for free flights. There are other options for travel partners, but with flights being so expensive, this is the best use for me.

To take it a step further, my personal strategy is to purchase flights as soon as I have enough points.

That’s because points tend to be worth less as time goes on.

For example, a roundtrip ticket that costs you 30,000 points today might cost you 35,000 points the next time you look. You can think of it the same way you think of inflation reducing the purchasing power of your cash.

Just last week I transferred my Sapphire Reserve points to my United account to purchase flights to visit my sister in California.

Once I build up my point balance again, I’ll look to book another flight.

My brother-in-law is getting married in Arizona next year. I’ll probably book those flights next.

Do you use your Sapphire Reserve points for free flights?

Now you know exactly how I use my Sapphire Reserve, combined with my Freedom Unlimited, to get free flights.

With just these two credit cards, I’ve been able to pay for all of my family’s flights for the past five years.

It takes a little bit of effort to maximize your credit card rewards, but the payoff can be well worth it.

With the money I save on travel every year, I have a better chance of staying on budget and hitting my investment goals.

That’s a win-win situation.

Do you have the Sapphire Reserve? What about the Freedom Unlimited?

How do you use your points?

What are your favorite redemption options?

Let us know in the comments below.
September 12, 2025
Should You Invest in Chicago Real Estate Right Now?
Anyone who knows me knows that I love Chicago.

I was born in Chicago, lived most of my life in the city, and have never lived more than 35 miles outside the city.

I love Italian beef.

Of course, I love the Cubs.

I even love O’Hare Airport because I can use my Chase Sapphire Reserve points for free flights anywhere in the world.

Why am I talking about my love for Chicago?

Because I regularly get questions like this from newbie real estate investors:

“What markets are the best markets to invest in right now?”

Or:

“Should I invest in Chicago rental properties?”

I’ll never tell you what you should or shouldn’t do. We all need to do our homework and take responsibility for our choices.

But, I can give you some insight as to why I invest in Chicago.

Whether you have any interest in Chicago or not, you should get some ideas on how to evaluate markets for yourself.

Let’s get to it.

What real estate markets are the best markets to invest in right now?

This question comes up a lot when people start thinking about investing in real estate.

The thing is: there’s no right answer.

You might talk to 10 different investors with 10 different ideas on the best markets. No two investors evaluate a market (let alone a specific property) in exactly the same way.

Some investors rely heavily on analytics. Even amongst these investors, you’ll get a difference in opinions. One investor may prefer quickly appreciating markets. Another investor may target cash flow.

I like investing in Chicago because it’s a strong cash flow market. Cash flow is king, after all.

Other investors prefer to trust the “feel” of a neighborhood over data. These investors typically invest locally and have an intimate knowledge of each block in the area.

Through life experience, they have a good sense for what properties in their area will perform well.

Personally, I combine both approaches. I look to local data and trust my common sense and life experiences.

One of the reasons I prefer to invest in my local market of Chicago is because I’ve lived here my whole life.

Not only that, I lived for years in the primary neighborhood I invest in.

I know where the best restaurants and coffee shops are. I’ve experienced what the commute is like. There’s not a park or a playground that you could name that I haven’t been to with my kids.

I keep tabs on developments and improvements in the area. I talk to friends and other local investors.

Plus, I try to be a good steward for the buildings I own. They were built long before me and will be here long after I’m gone.

Because I am personally connected to the neighborhood, I feel a certain pride and responsibility to do my part.

Add it all up and I believe that I have a hometown advantage over outsiders who look at data but don’t know the neighborhoods and the tenant pool like I do.

Photo by Aveedibya Dey on Unsplash

The funny thing is most national investors want nothing to do with Chicago.

If you read enough blogs or listen to real estate podcasts like I do, national investors have tended to shy away from the Chicagoland area.

There has been a preference to invest in faster appreciating metros, like in the sun belt area.

By the way, I’m totally cool with national investors targeting other parts of the country. That leaves more opportunities for me.

Before you blindly follow what “everyone else” is doing, I encourage you to do your own research and trust your own instincts.

Here’s an example to illustrate what I’m getting at.

If I asked you what housing markets currently have the fastest selling homes, what would you guess?

Phoenix?

Charlotte?

Tampa?

Dallas?

Nope.

Milwaukee is first.

Chicago is second.

Be honest, did Milwaukee jump to your mind? What about Chicago?

My guess is you ignored the Midwest entirely.

If that was your initial thought, you might be surprised to learn that the Midwest has 12 of the fastest selling metros in the country.

On top of that, 6 of the 12 fastest selling metros are in the Midwest.

Here’s a breakdown from a recent report from Realtor.com on the fastest selling metros:

Even as the national housing market slowed to a crawl in August, a handful of metros, half in the Midwest, defied the trend with the fastest-selling homes in the U.S.

The typical U.S. home waited for a buyer for 60 days, a full week longer compared with a year ago, according to the August 2025 Housing Market Trends report from Realtor.com®.

Yet in Milwaukee the median for-sale property remained unsold for just 32 days—roughly half the national days-on-market figure for August, making it the fastest-selling metro among the top 50.

Notably, of the 12 metros with the lowest median days on market (below 40), six were located in the Midwest, three in the Northeast, and three in the South.

As an investor in, and resident of, the Chicagoland area, it did not surprise me that Chicago is the second fastest selling market.

Anecdotally, I have plenty of friends and family currently looking for homes. There is very little inventory and high demand.

That means quality homes sell quickly and for a premium.

If you’re not overpaying, you’re not playing.

I don’t need studies like this to convince me that the Chicago market is hot.

That’s not good news if you’re a new investor trying to break into Chicago.

However, if you already own property in Chicago and are ready to sell, you should be able to make a hefty profit.

How about another recent study highlighting why investing in Chicago may not be a bad idea?

In another recent report from GOBankingRates, Chicagoland dominated a list of the top 50 “safest, wealthiest” places to live in the country.

A Chicago suburb was the number one city on the list. Also, Chicagoland claimed 12 of the top 50 suburbs in the country. That’s just about 25% of the top spots on the entire list.

In total, 7 of the top 10 suburbs were located in the Midwest:
1. Western Springs, Illinois
2. Lexington, Massachusetts
3. Winchester, Massachusetts
4. Whitefish Bay, Wisconsin
5. Huntington Woods, Michigan
6. Ottawa Hills, Ohio
7. Winnetka, Illinois
8. Kenilworth, Illinois
9. University Park, Maryland
10. Upper Arlington, Ohio
Photo by Chris Dickens on Unsplash

So, what’s the point?

When I see data like this, it gives me confidence in my investments in the Chicagoland area.

Having 12 of the top 50 “richest and safest” suburbs in the entire country nearby reassures me that Chicago is still a major economic hub. That means lots of good paying jobs and economic diversity in the area.

That, in turn, leads to a deep tenant pool of young professionals who want a part of the action. These young professionals want to rent apartments in trendy areas, such as I where I invest.

Do reports like this mean Chicago is definitely a good market for you to invest in?

I can’t answer that for you.

What I can tell you is that I certainly plan to keep investing here.

Historically, Chicago’s real estate market is often described by experts as a “mature market.”

That means property values have steadily risen over time, but you don’t typically see major swings in value in either direction.

In other words, you may not experience 30% annual appreciation, as was experienced in places like Tampa and Phoenix during the pandemic.

At the same time, you won’t see double digit declines, like we’re currently seeing in some other cities.

This reality played out during the pandemic years. Chicago’s market did not appreciate as fast as other areas nationally. However, as those markets cooled off during the past couple of years, Chicago has stayed red hot in comparison.

In fact, for the past couple of years, Chicago has been one of, if not the, fastest growing markets in the country (alongside New York).

So, what does all this data suggest?

Should you rush off to invest in Chicago?

There’s no right or wrong answer.

I’m certainly not trying to convince you to invest in Chicago.

It would be better for me if national investors continued to shy away so I can scoop up more undervalued properties in good neighborhoods.

The bottom line is that as investors, we are all making the best decisions we can based not only on the available data, but also our own common sense.

I would certainly avoid relying on AI or a single Google search to find “the best markets.”

Keep in mind that within every major market, there are numerous submarkets. You may not realize that if you only looked at city-wide data.

As much as I love the city, I would not invest in every Chicago neighborhood. I focus on 4-5 neighborhoods that I know well.

The data didn’t lead me to that conclusion. Living in different neighborhoods and experiencing daily life convinced me where I should invest.

I support my investment choices with the available data, but I don’t ignore my common sense and personal experiences.

When you are choosing between markets, do your own research.

But, don’t ignore your common sense.

Investors, how do you balance the data with your own experiences?

What factors are the most important to you?

Let us know in the comments below.
September 11, 2025
Don’t Give Up When Being a Landlord Feels Heavy

There comes a time for every rental property investor when the job of being a landlord starts to feel like too much.

It all starts to feel too heavy.

You’ll want to quit.

You’ll convince yourself that it’s much easier to be a passive stock market investor.

When that moment as a landlord comes for you:

Don’t quit.

The long term benefits are too good.

Remind yourself why you bought a rental property in the first place.

I know there are tough moments. I’ve been there. Many times.

In fact, my wife and I had a couple of experiences recently that pushed us close to that point of quitting.

With the passage of enough time to reflect, I’m happy and proud of us for sticking with it.

We’re still on track to achieve financial freedom quicker than we ever could have without our rental properties.

Today, I’ll share a couple of experiences I’ve recently had as a landlord that had me thinking about quitting.

If you’re a landlord, I’m sure you’ve had moments just like these.

Here’s a look back at our recent experience leasing out two apartments.

This past lease renewal season started off looking very strong. We were thrilled that 80% of our tenants signed on for another year.

That left only 2 apartments to turnover.

This was great news because vacancy is a rental property investor’s worst nightmare. Every week that an apartment sits empty is money down the drain.

Vacancy can eat away your entire year’s profits. That’s why we usually offer current tenants the chance to renew at the same rent.

When you do the math, it almost always works out than continued occupancy beats the prospect of higher rent plus vacancy.

When you have an empty rental unit, doubt creeps into your mind. You start telling yourself that you’ll never find a new tenant and your place will sit empty forever.

I know, I know. A bit extreme, right?

But, I’m telling you. That’s where your mind goes. Any landlord out there knows what I’m talking about.

So, when 80% of our tenants renewed for another year, we were very happy. We assumed that meant we would have an easy leasing season.

As it turns out, that was not the case.

Here’s what happened in each of these two apartments.

For one apartment, we received an odd request.

Before these tenants decided to leave, they made an odd request.

As a side note, this apartment was the unit where my wife and I lived for about five years. We brought two babies home to that apartment.

It’s located in the first building we ever bought and will always hold sentimental value for us.

OK, back to the story. This past spring, we actually thought the former tenants would renew for another year. That would have meant 90% of our units would have stay leased for another year, a major win.

When we first approached these tenants about renewing, they indicated that they wanted to stay. They were great tenants, so we were happy.

Then came a unique request.

These tenants were students and wanted to live at home for the summer. They asked if they could keep their stuff in the apartment but not pay rent for July and August since they wouldn’t actually be living there.

We’ve had all sorts of requests from tenants over the years. Keeping an apartment without paying rent for two months was a new one.

I understood the request from their perspective. Rent is a major expense. They didn’t need an apartment for the summer. They liked the apartment, but it was hard to justify paying for something they didn’t need.

The problem from our perspective is not hard to spot. If we agreed to their offer, we would be left with the equivalent of 2 months of vacancy.

Losing out on 2 months of rent payments is the equivalent of foregoing 17% of the total rent for the year.

We thought about it. And as tempting as it was to not have to find new tenants, that arrangement was not going to work for us.

Photo by Kaffeebart on Unsplash

Turnover is a chance to make property improvements.

After they moved out, we took the opportunity to refresh the apartment. We knew this would take some time and result in at least a few weeks of vacancy, but the apartment needed some love.

So, we replaced the flooring and painted the entire apartment. We did some needed repairs in the bathrooms (i.e. caulk, grout, new shower rod).

Plus, we made a point to tackle any deferred maintenance throughout the apartment.

We used a contractor for the work, so our involvement was limited to paying the bills and supervising the projects. Not exactly time intensive, but not exactly cheap either.

When the work was finished, we lined up a number of showings and had the apartment rented out after a few of weeks of effort.

In total, the apartment was vacant for 6 weeks.

What did we learn from this experience?

On the positive side, we now have a rehabbed apartment and fresh tenants. Plus, the apartment was empty for only 6 weeks instead of 8 weeks.

On the negative side, it was stressful to get the apartment fixed up and re-leased.

To state the obvious, it’s not fun spending money to fix up an apartment without a signed lease in place. Every week that goes by, money is going out without any money coming in.

During that phase, you can’t help but doubt yourself as a landlord.

Did we make the wrong choice?

Should we have let the former tenants stay, even if that meant automatically sacrificing two months of rent?

If we had gone that route, we would not have spent any money this year turning over the unit.

We also would have had a less stressful leasing season. We would have saved a lot of time and mental energy if we didn’t have to worry about this unit.

On the other hand, the apartment would still have needed a facelift as soon as it was empty. At some point, we were going to have to do the rehab. Now, that project is behind us.

We also have great new tenants who seem more likely to stay for an extra year or two.

In the end, I’m happy with the decision we made. That doesn’t mean it was right or wrong, but we made it through a unique challenge.

I’m good with that.

Photo by SAJAD FI on Unsplash

The second learning experience involved letting our tenants out of their lease after two months.

In our other vacant unit this past spring, the former tenants bought a condo so needed to move out. They had lived there for two years and were wonderful tenants.

This unit was located in a different building from the one we just discussed. The building is in a terrific location and the units are in great shape.

We’ve never had any trouble finding tenants. This year was no different.

After three showings and very little effort, we happily signed a lease with new tenants. As a bonus, the former tenants had moved out early, so we were able to fill this unit with zero days of vacancy.

All was well… until it was not.

Let’s just say that after about six weeks, it was apparent that the relationship with our new tenants was not working out. The tenants were not bad people, but it was clear that we could not meet their expectations.

Instead of living through a difficult year with these tenants, we offered them the chance to break their lease, without penalty. They accepted our offer and moved out two weeks later.

We all remained civil and amicably split up. The tenants left the apartment in good shape and we all avoided unwanted confrontation.

We re-listed the apartment and found a wonderful new tenant after one showing.

In the end, we lost out on three weeks of rent between leases but now have a very happy new tenant.

Upon reflection, I’m confident this was the right decision for all parties involved.

The tenants could find a place more to their liking, and we could start over with a new tenant.

So, what’s the takeaway from our experiences with these units?

As a landlord, you are running a business. It won’t always be easy.

You have to make business decisions, even when there’s no clear right answer.

Sometimes that means foregoing profit and dealing with confrontation.

In each of these instances, I’m happy with how things worked out. In the first instance, I sacrificed some of my profit this year to improve my asset.

For the second apartment, it was clear that the relationship was not working. Even though we lost some money in the process, all parties involved should now be happier.

These are tradeoffs I would readily make again.

Even with stress like this, I’m not ready to give up on being a landlord.

Compared to my day job as a lawyer, this is nothing.

Should you become a landlord?

The truth is my wife and I know so many people who have owned rental properties but did not like being landlords. There’s nothing wrong with that. It’s not for everyone.

If you’ve been in, or are currently in a similar boat, I hope these experiences resonate with you.

In the end, as stressful as it can be to run a business, this is also what makes being a landlord fun.

What do I mean, fun?

When you are a landlord, you are a business owner. You get to make the final decision. It’s your business and you are in control.

Having that autonomy is a nice change of pace for most W-2 employees.

Still, you may be faced with tough decisions. You may not know what to do in the moment. It’s helpful in those moments to have people to talk to so you can make the best decision possible.

I happen to like being a business owner. However, it’s not for everyone.

If just thinking about making decisions like these stresses you out, I would not recommend that you become a landlord.

If you can handle the job, you can benefit immensely.

Landlords- have you been in situations like this before? How did you handle the stress of the job?

Let us know in the comments below.

September 8, 2025
Did You Win the $1.787 Billion Powerball Jackpot!?

No!?

Me neither.

It looks like there are two winners, one from Texas and one from Missouri, who will split the massive payout.

It’s simply an astonishing amount of money. Congratulations to the winners!

I can’t be the only one thinking that money like that could easily be a blessing and a curse, right?

Hopefully, the winners take their time and come up with a plan to not only make sure the money lasts, but that they use it in a meaningful way.

Well, just because we didn’t win doesn’t mean we can’t take advantage of this opportunity.

In the spirit of the massive jackpot, I started thinking about what I would do in a more realistic scenario.

Specifically, I asked myself:

What would I do if I woke up tomorrow with $178,000 in my checking account?

I know it’s not as exciting as thinking about what you would do with $1 billion, but I think it’s more important because it is actually realistic.

Yes, I said realistic.

I truly believe that if you are a high-earning professional, like a lawyer, consultant, or real estate investor, it will happen.

There will come a point in your career (hopefully multiple points) where you earn a one-time windfall of $178,000.

For example, it may come in the form of a bonus, a commission, or profits from a sale.

When that time comes in your life, you want to be ready.

The last thing you want to do is waste that golden opportunity. You may never get another chance to materially impact your life so much in one shot.

So, let’s have some fun and plan out what we would do if we wake up tomorrow with an extra $178,000 in our bank accounts.

Here’s exactly what I would do.

The first thing I would do with $178,000 is pay off high interest debt.

I think of a bonus like this as a one-time “Get Out of Jail Free” card.

With $178,000, the first thing I would do is pay off any high interest debt that I have. High interest debt includes credit card debt, personal loans, and any lines of credit.

My main financial goal this year was to pay off the rest of the HELOC we used to buy our last rental property. That’s my first move with this windfall.

Once the debt is eliminated, I’ll be free to pursue more fun life goals. And, I’ll feel better without having that debt hanging over my head.

Photo by Steve Sawusch on Unsplash

Next, I would set aside $15,000 to $20,000 for fun money.

I would use about 10% of the money for fun right now. That comes out to approximately $15,000 to $20,000.

That is the equivalent of a really nice vacation or two. Or, it could be new furniture for the house, new gadgets or toys (like a bike or golf clubs), or anything else that brings me joy.

I’m a firm believer that we have to enjoy the journey while we’re on it. Having eliminated all high interest debt, I’ve earned the privilege to have some fun with a responsible portion of this money.

The strange thing is that for people who are dedicated to achieving financial freedom, spending money can be very difficult.

The temptation is to save and invest every possible dollar. As tempting as that may be, I encourage you to resist the urge to “live in the spreadsheet.”

This is a chance to do something for yourself that brings joy and happiness. Whatever that is for you, take advantage.

Otherwise, what’s the point in working so hard in the first place?

Next, I would revisit my Tiara Goals for financial freedom.

Let’s say after paying off high-interest debt and setting some money aside for fun, I have $100,000 remaining.

What you do with the remaining $100,000 will vary depending on where you currently are in life and what your main priorities are.

This is why I always talk about the importance of having your ultimate life goals written down and consulting them regularly.

I refer to my ultimate life goals as my Tiara Goals. Before I save and invest the remaining $100,000, I’m going to look at my Tiara Goals for inspiration.

With my Tiara Goals in mind, my top priorities right now are to eliminate HELOC debt, pay for my three kids’ college, and build my emergency fund.

Each one of these priorities align with my Tiara Goals and help me get closer and closer to true financial independence.

Because I have been aggressively acquiring real estate for the past seven years, college savings and emergency savings have been secondary goals.

Now that I’m not presently in the market for more rental properties, I can prioritize saving for college and emergencies.

With this windfall, I can make significant headway to satisfy both of those goals.

I would then use $67,000 to fund my son’s college education.

I recently used an online calculator to figure out how much money I would need to invest right now in my son’s 529 savings account to fully fund his college.

For my calculations, I targeted the premier in-state university where I live (the University of Illinois). I assumed a 10% average annual rate of return on my investment and a 5% annual increase in tuition.

I learned that with an investment today of $67,000, I could fully fund my son’s in-state tuition.

The key is to let that money grow for the next 15 years to take advantage of compound interest.

What an accomplishment that would be to not have to worry about his future college. I could cross that item off the “to-do” list once and for all.

So, with the next $67,000 of my windfall, I would fully fund my kid’s in-state tuition.

Disclaimer: if you’re doing this math for your own three-year-old, keep in mind that I’ve already begun to fund my son’s 529 account. The $67,000 is the difference that I need to add today in order to hit my goal. If you do the calculations yourself, you might come up with a different number.

With my son’s college tuition taken care of, I would move onto my next goal, which is to fund my emergency savings account.

Before we get to that, you may be wondering why I targeted the in-state school for my projections instead of aiming for a more expensive private school.

Why did I target in-state tuition?

It’s not that I don’t want my kids to have the option to attend a more expensive private school.

It’s that I have other goals that I want to accomplish in my life at the same time I’m saving for college. I view the in-state tuition target as a reasonable, minimum goal to strive for.

And, if my kid chooses to attend a more expensive private school, I plan on having additional ways to pay for it.

For example, my overall financial plan includes owning rental properties even after my kids go to college. I can use that rental property income to help pay for college.

Additionally, I plan on still earning income through a primary job. I can use that income to help pay for their college.

Between now and then, I can invest in more rental properties, a traditional brokerage account, or any other investment vehicle of my choosing.

I’ll still have the option to use that money to pay for college. The benefit is that I’ll have more flexibility.

Plus, you never know. Maybe my kid will earn a scholarship. Maybe my kid does not end up going to college.

Having different investments besides a college savings plan means that I’ll have options.

Photo by SLNC on Unsplash

I would save the remaining $33,000 in an emergency savings account.

Finally, I would take the remaining $33,000 and put it into a high-interest savings account.

I have no immediate needs for this money. I have income coming in from a variety of sources, including my primary job, my rental properties and my job as an adjunct professor.

However, it’s been a goal of mine for a few years to bump up my emergency savings. It’s been a risk not having much saved up for emergencies, and I’m taking this chance to eliminate that risk.

Because I’m not currently in the market for more real estate, I can save this money for emergencies instead of worrying about a down payment for my next acquisition.

With my emergency savings account more adequately funded, I can better protect myself should disaster strike.

That’s why I’m putting the final $33,000 in my emergency savings account.

How would you use $178,000 today?

So, that’s how I would use a $178,000 windfall today.

It’s not as fun as thinking about $1.78 billion, but it’s a more realistic thought experience.

In case you’re wondering, if I had more money to invest at this point, I would focus on my baby girl’s college. I would use the same methodology that I used to plan for my son‘s college.

No matter the amount of money, it’s good to have a plan ahead of time. As a high-earning professional, the odds are that you will earn a significant bonus like this at some point in your career.

It might not be $178,000, but the thought process will work no matter what the amount is.

The takeaway is that it’s always a good idea to have a plan before you earn the money.

Enjoy some. Save and invest the bulk of it.

What would you do with a windfall like this?

Let us know in the comments below.

September 7, 2025
Financial Independence is Not About a Life of Deprivation

Stop me if you’ve heard this advice before:

“Cancel all your subscriptions and save $1,000 a year!”

“Cut out your morning coffee if you really want to be wealthy!”

“Buy your Christmas presents in January when the sales start!”

Because of advice like this, there’s a common misconception that people who want financial independence have to lead a life of deprivation.

Nope.

I refuse to believe that.

Financial independence about so much more than that.

Financial independence is not reserved for people willing to cut their spending to the bone.

It’s for anyone willing to make intentional money decisions, including the decision to earn more money and not cut spending.

How did financial independence become synonymous with deprivation?

As my three-year-old asks during story time, “And, then there’s a problem?”

Yes, son, there’s a problem.

Too many people believe that financial independence is only about cutting spending.

That’s a big problem that is holding people back.

See, most of us lawyers and professionals work a ton of hours. We are already making major sacrifices.

To throw in major reductions in spending on our way to financial independence is not a worthwhile tradeoff.

Life is too short. None of us are guaranteed tomorrow.

I learned this lesson a long time ago by representing clients with mesothelioma, a sudden and fatal cancer.

That’s why I never encourage anyone to cut out spending on things and experiences that make them happy today.

Does this mean we should all go out and spend every dollar we make?

Of course not.

No matter what, you’ll always need to live within your means.

If you are spending more than you’re earning, you’ll never be financially independent.

However, if you earn decent money and invest it the right way, you will reach financial independence.

And, you don’t need to stop spending money on the way.

FIRE has taken on an unintended meaning.

One of the problems in the personal finance space is that many people first learn about financial independence in the context of FIRE (Financial Independence, Retire Early).

Unfortunately, there’s a stereotype that FIRE is only for people willing to aggressively lower their expenses.

In other words, the mistaken belief is that people who practice FIRE can only survive if they cut out most of life’s luxuries.

Even though this misconception fails to capture the true spirt of FIRE, the damage has already been done.

Too many people who I speak with get so discouraged by hearing “cut, cut, cut!” that they lose all interest in pursuing financial independence.

It’s not that these people are financially irresponsible. They mostly live within their means and save for important goals.

At the same time, they want to enjoy everything that life has to offer. And as mentioned above, I don’t mean enjoy life “years down the road.” They work hard and want to spend money to enjoy life today.

For people like this, FIRE’s perceived focus on deprivation is unappealing.

This is one of the reasons I don’t like to use the word FIRE around here. I prefer FIPE: Financial Independence, Pivot Early.

Photo by Jason Hogan on Unsplash

Have you noticed in the blog that we talk more about investing than cutting expenses?

If you’ve been a consistent reader of the blog, you likely noticed that we haven’t talked much about cutting back on spending lately.

We’ve been focused on creating wealth through investing, whether your preference is to invest in stocks or real estate.

I certainly encourage people to generate as much fuel as possible for their investments, especially early in their careers.

That way, you can benefit from long-term wealth generators like compound interest and appreciation.

Generating more money to invest, of course, involves making spending choices. These types of choices are the essence of the budgeting process.

However, instead of focusing on cutting your expenses to the bone, I recommend you create a reasonable Budget After Thinking that you can actually stick to.

If you eliminate all the fun stuff, no budget will last very long.

In a lot of ways, this advice is like dieting. Sure, you can lose 10 pounds in a few weeks if you eliminate every indulgence. But, how long is that diet going to work?

I recommend that you have a budget that you can stick to long term. Then, commit yourself to fighting lifestyle creep as you start making more money.

If you can do those two things, you don’t have to dramatically cut your expenses.

Yes, you have to keep your spending within reason.

No, you don’t have to cancel all your subscriptions.

Focus on earning more, not just spending less.

A good friend of ours just made $750 by doing one property showing. In total, she probably worked an hour to earn that money.

Compare that to the advice of cutting out your daily coffee ritual. If you consciously deprive yourself of coffee every day for an entire year, you could save about $1,000.

What would you rather do?

Work just a little bit more with a side hustle of your choosing, or cut out something that you enjoy each morning?

Do you really have to think that long about it?

Of course, you already know which option I’m pursuing.

Photo by Becca Tapert on Unsplash

I am a big fan of side hustle.

I’ve had side hustles for just about my entire career as a lawyer.

My first side hustle was as an adjunct professor at a local law school, teaching just one class. I eventually turned that into teaching four classes.

In the meantime, I also launched a rental property business with my wife, now managing 11 units in Chicago and Colorado.

We’re doing this with three young kids at home. I’m not bragging. My point is that I roll my eyes whenever anyone tells me he is too busy to make extra money.

By the way, earning more money does not only apply to side hustles.

There are always ways to make more money within your primary job.

For example, can you earn a larger bonus by performing better?

Can you ask your employer for more responsibilities and a corresponding raise?

Or, can you earn additional money by generating business for your company?

Lawyers, like most professionals, have the ability to earn more money if they generate business. That means bringing in clients.

How can you find these clients?

You can make it a priority to go to more events where you might meet potential clients.

You could launch a blog or create other content to help people find you and know what you do.

Either one of these pursuits could be your side hustle.

There are endless opportunities for anyone that is motivated and is looking to earn more money.

And when you earn that additional money, you’re on your way to financial independence without having to sacrifice the things that make your daily life enjoyable.

OK, but I don’t even like coffee.

I know, I’m picking on coffee. Coffee is an easy target, but it’s just one example.

Maybe coffee is not your problem. Let’s say that you’ve cut out family vacations.

Family vacations can be expensive. There’s no doubt about it.

But instead of eliminating vacations, what if you could find a way to earn an extra $5,000? That could turn into a really nice family vacation.

For some people, this is a no-brainer. They find a way to earn more money.

Other people will simply skip the family vacation because it’s too expensive.

At this stage in my life, I’m not willing to do that. I have three young kids. I already feel like they’re growing up too fast.

A year ago, my daughter wouldn’t let go of my hand when I walked her to school. Now, she’s “too cool” to waive goodbye to Daddy.

The idea of skipping out on family vacations does not appeal to me at all. I know that there will come a day when I would really regret that choice.

Instead of eliminating family vacations, I would rather find a way to make more money.

You can have anything you want; you just can’t have everything.

Warren Buffett famously told his kids that they could have anything they wanted. They just couldn’t have everything.

That sums up my approaching to spending. If there’s something I truly want that doesn’t currently fit in my budget, I would prefer to earn more instead of giving up on having that thing or experience.

I might get there through a side hustle. I might get there through investing. If it’s something I value enough, I will get there one way or the other.

If you focus on your income, not just cutting expenses, you can continue your journey to financial independence without giving up these things that make life special.

Or, you can cut out the coffee and vacations, if that’s your preference.

I’d rather challenge myself to make more money so I don’t have to make those sacrifices.

Do you think financial independence is only for people willing to aggressively cut their spending?

Or, do you agree that financial independence is for anybody willing to work for it?

September 5, 2025
When Money is Tight, Think Even More About The Future
“Money is tight.”

“I’m worried about today. I’ll deal with tomorrow later.”

“If I cut out vacations and saving for retirement, I can make it work.”

Have you ever heard money excuses like this before?

I recently had a couple of great talks that got me thinking about comments like this. These talks led me to think about common money mindsets we sometimes have when we’re worried about paying for things today.

For many of us, the natural inclination when money is tight is to ignore the future and focus on today.

The pattern goes something like this:

Go to work, pay the bills, keep food on the table.

Wake up and do it all over again tomorrow.

Dream about life-enriching experiences and retirement later.

The problem with this money mindset: how are you ever going to break the cycle?

How are you ever going to progress towards financial independence so your life is not stuck on auto-pilot?

My challenge to you?

When money is tight, think long and hard about the future. Think about what comes next.

Use a challenging period in your life as motivation to do things differently.

It helps to picture yourself 10 years from now. Imagine you don’t do anything differently.

Same Job. Same bills. The cycle continues.

Do you like what you see?

If you do, no need to read any further. Keep doing what you’re doing.

If you don’t like what you see, let me share another perspective with you.

Let’s use the future as motivation to make the hard decisions today.

That way, you can spend your money (and time) on the things and experiences that bring you happiness in life.

How do we break the cycle?

It all starts with revisiting our spending choices and our Budget After Thinking.

Budgeting is about having a plan ahead of time.

The art of budgeting is to know what you want to do with your money before it hits your checking account.

Otherwise, it’s too late. Those dollars will disappear.

In fact, the word “budget” is synonymous with “plan”.

Some dollars will be used to pay your ordinary life expenses, some dollars will be used for all the things in life you love, and some dollars will go to your financial goals.

That’s all there is to it.

When it comes to budgeting, I divide my money into three primary categories:
1. Now Money
2. Life Money
3. Later Money
Now Money

Now Money is what you need to pay for basic life expenses.

These are expenses that you can’t avoid and should be relatively fixed each month. If you have expenses for kids, pets, and other fixed life expenses, be sure to include them in your Now Money category.

Photo by Glenn Carstens-Peters on Unsplash

Life Money

Life Money is what you are going to spend every month on things and experiences in life that you love.

This bucket includes dining out, concerts, vacations, subscriptions, gifts, and anything else that brings you joy.

We can’t be afraid to spend this money. This bucket is usually what makes life fun and exciting. The key is to think and talk so you are spending this money consistently on things that matter to you.

Later Money

Later Money is what you are saving, investing, or using to pay off debt.

This bucket includes long term goals, such as retirement plan contributions (like a 401k or Roth IRA), college savings for your kids (like a 529 plan), emergency savings and paying off student loan or credit card debt.

This bucket also includes any shorter term goals, like saving for a wedding or a downpayment for a house.

Most fun of all, this bucket includes any investments you make to more quickly grow your wealth, like investing in real estate or the stock market.

Later Money is the key category that fuels your ultimate life goals, like financial independence. The more you fuel this category, the faster you can reach your goals.

Your budget is really just about finding fuel for the best things in life.

This is where we circle back to the importance of having a clear understanding of what we want out of our money.

Money is just a tool.

Ask yourself:

“Is your current spending aligned with how you want to use your money to fuel your goals and ambitions?”

If not, you can make incremental adjustments as you progress towards your ideal spending alignment.

The idea is to continuously add more fuel to our Life Money and Later Money. Why?

These are the buckets that represent the things we love the most (Life Money) and our most important life goals (Later Money).

When money is tight, resist the urge to cut these expenses from your budget. These are the expenditures that oftentimes give meaning to life and allow us to build a future on our terms.

Instead, focus on the Now Money bucket as much as possible.

For some ideas on how to do that, check out my Top 10 Budgeting Tips for Lawyers and Professionals.

You can make small adjustments, which are usually easier and faster to put in place. These adjustments might include dining out a bit less, cutting out a concert, or cancelling a gym membership or subscription you don’t use.

You can also make big adjustments, like moving to a cheaper part of town or getting rid of you car.

Small or big, the key is that when you make these adjustments, you repurpose that money in a thoughtful and intentional way. You’re now starting to align your budget with your money motivations.

These adjustments will give you options in the future.

With each thoughtful decision, you’re progressing towards your best money life. Most importantly, you’re learning about yourself and developing lasting habits. You won’t get discouraged and give up on budgeting.

Photo by Ian Chen on Unsplash

What do you really want out of life?

Creating a Budget After Thinking is really all about one question:

What do you really want out of life?

When you prioritize Life Money (experiences) and Later Money (financial freedom), each dollar you spend or invest brings you one step closer to that ideal life.

If you are totally consumed with Now Money, you’ll struggle to build the life that you really want.

I started thinking about what my ideal life would look like when I wrote down my Tiara Goals for Financial Freedom in 2017.

By that point in my life, I had paid off my student loan debt and was about to get married.

My soon-to-be wife and I had good money coming in, but I never truly thought about what I wanted in life. Sure, I had thought about things like having a family and being able to take vacations.

But, I never carved out time to purposefully think hard about what I actually wanted. I had never asked myself what truly motivates me.

I never allowed myself to dream about financial freedom.

The truth is, I don’t think I had ever visualized a life that wasn’t dominated by a full-time job.

Up to that point, my whole life had revolved around getting an education and then getting a job. I never pictured a world where I might not need a full-time job to provide for myself and eventually my family.

I had read about the concept of being financially free, but it always seemed like a possibility for other people, not me.

Writing this years later, I feel sad for that version of myself for having such limiting beliefs.

Whenever someone tells me she doesn’t make enough money to dream about the future, I think about those same limiting beliefs I used to have.

That’s the cycle I’m hoping to help people break.

When money is tight, think about the future.

When it comes to spending choices, resist the urge to cut the things from your budget that make life what it is. That might mean money spent today on memorable experiences, like vacations.

Or, it might mean money saved and invested to provide yourself more options down the road.

The key is to break the thoughtless spending cycle that can make your life feel like it’s stuck in place.

Create a Budget After Thinking that prioritizes what you truly value.

Money might still be tight, but you’ll know you’re spending on things that matter.

You’ll know that you’ll have options in the future.
September 2, 2025

How to Use Two Simple Metrics to Compare Investments

If you had $200,000 saved up, should you invest in the stock market or in a rental property?

In our previous post, we explored why you may want to consider investing in both the stock market and in rental properties.

However, without the proper tools at your disposal, the choice between investing in stocks or investing in real estate can be tricky.

Fortunately, there are a couple of quick and easy ways to analyze the strength of a rental property as compared to investing in the stock market.

Today, we’ll dive into two metrics that investors use to quickly compare investments across asset classes. The two metrics are known as:

Cash-on-Cash Return on Investment (CoCROI)
Return on Investment (ROI)

With just these two metrics, you’ll be able to quickly compare the returns of a potential rental property to the typical returns of the stock market.

You can also quickly compare two different rental properties.

Then, you can decide what’s the best investment for your personal situation.

One note before we begin:

Don’t worry if math is not your thing. There are plenty of online calculators like this one that will do all this math for you.

The key is to understand what the math is telling you. That way you’ll know what to do with the information that the online calculators pump out.

So, before you go running off to one of the online calculators, stick around and see how the math works and what it all means.

Now, let’s think about your options with that $200,000 you’re sitting on.

The S&P 500 historically earns 10% annually.

Before looking at our two real estate metrics, let’s establish a baseline comparison with the stock market.

The S&P 500 has historically earned an average annual return of 10%.

By investing in an index fund that tracks the S&P 500, like I do in my 401(k), I have a pretty good chance of earning consistent returns in the long run.

Sure, there may be ups and downs. And, there are no guarantees the S&P 500 will continue performing at 10%.

But, check this out:

Since 1996, the S&P 500 has ended the year in positive territory 23 times and negative territory only 7 times.

In other words, the S&P 500 has generated positive returns three times more frequently than it generates negative returns.

And even with those 7 negative years, with the exception of 2000-2002, the S&P 500 returned to positive territory the following year.

What this all means is that while the S&P 500 will drop occasionally, the down periods are historically short-lived.

Because of this historical consistency, I feel comfortable using 10% as a baseline to compare other investments with.

Note that predictable returns does not mean guaranteed returns.

There are no guarantees in the stock market or with any other asset class.

To recap: the S&P 500 has historically provided an average annual return of 10%.

While not guaranteed to continue in the future, 10% average annual returns represents a safe projection for our calculations.

That means we can use 10% as a baseline investment return to compare other potential investments to.

With this baseline in mind, we can now move to our two real estate metrics.

a calculator and a pen on top of paper to show you how to use CoCROI and ROI to evaluate different investments. — Photo by Aaron Lefler on Unsplash

Calculate your Cash Flow.

The first step in evaluating any real estate deal is to calculate the expected cash flow.

For a detailed explanation on how to analyze real estate deals and calculate cash flow, check out my post here.

To keep in simple, cash Flow is whatever money you have left over after paying all expenses. Think of it as your monthly profit.

Today, we’ll use an example of a hypothetical property that is listed for $1,000,000.

Here’s a quick snapshot of how you might calculate the cash flow on this property:

Asking Price: $1,000,000

Monthly Rent: $9,000

Mortgage Payment (Principal and Interest)	$4,500
Taxes	$900
Insurance	$300
Utility Bills	$300
Property Upkeep	$200
Preventative Maintenance	$200
Vacancy Rate (5%)	$300
Unexpected Repairs (5%)	$300
Property Improvements (5%)	$300
Total Monthly Cost	$7,300

Cash Flow = Income – Expenses

$1,700 = $9,000 – $7,300

This hypothetical property has a monthly cash flow of $1,700.

That means it has annual cash flow of $20,400, a number that we’ll need for our next calculation.

So, is this property a good deal?

That brings us to our first metric, Cash-on-Cash Return on Investment.

What is Cash-on-Cash Return on Investment (CoCROI)?

Cash-on-Cash Return on Investment (CoCROI) measures how much cash flow a property earns in one year relative to how much money was initially invested.

The formula looks like this:

CoCROI = Annual Cash Flow / Total Cash Invested

With this simple metric, we can compare the return of a potential rental property to the returns of any other investment, like an S&P 500 index fund.

Then, we’ll have some useful information to decide if this is a good deal.

Keep in mind that CoCROI does not factor in appreciation, debt pay-down, or tax benefits. That analysis comes with our next metric.

To continue our example above, we know the annual cash flow on this property is $20,400.

Let’s assume our down payment is 20% of the purchase price, or $200,000.

In addition to the down payment, we paid $10,000 in closing costs and invested another $5,000 to clean up the property before renting it out.

In total, our initial investment is $215,000.

Let’s plug those numbers into the CoCROI equation:

CoCROI = Annual Cash Flow / Total Cash Invested

.095 = $20,400 / $215,000

The CoCROI on this property is .095 or 9.5%.

Does a 9.5% CoCROI automatically mean this is a bad deal?

Back to the important question: is an initial investment of $215,000 to earn $20,400 in annual cash flow a good idea?

What does the math tell us?

We now know that the return on this property in the first year falls just short of the S&P 500’s 10% annual return.

Does a 9.5% CoCROI automatically mean this is a bad deal?

Not at all.

The answer will depend on what your preferences and goals are as an investor.

Keep in mind that CoCROI is a projection tool designed to measure the expected return on this rental property in just the first year.

Because of all of the variables at play, use CoCROI to help you compare investments. But, don’t make your investment choices based solely on the CoCROI.

Also keep in mind that CoCROI is a quick and easy way to compare the initial investment on one rental property to another rental property.

If you’re evaluating a lot of properties, you can quickly see which ones give you the best initial return on your money.

To recap, CoCROI is a great way to quickly compare the returns on different investments in the first year.

However, what if we wanted to evaluate the long-term investment potential on a property?

For example, what if we plan to hold a property for 10 years?

By holding a property for 10 years, we’ll ideally profit through appreciation and debt pay-down, not just through cash flow.

Let’s learn how to factor in those profits by calculating our overall Return on Investment (ROI).

Data reporting dashboard on a laptop screen to show you how to use CoCROI and ROI to evaluate different investments. — Photo by Stephen Dawson on Unsplash

What is Return on Investment (ROI)?

Return on Investment (ROI) factors in cash flow, appreciation, and debt pay-down. It also factors in the sales expenses associated with selling a property after a defined holding period.

Put it all together and ROI is a great way to project the overall returns on an investment over time.

The ROI formula looks like this:

ROI = (Total Profit / Total Investment) / Years

Let’s continue our example to calculate the ROI on this property over a 10-year period.

The first step in calculating ROI is to total up the cash flow.

We already know that this property will earn $20,400 in annual cash flow.

Over 10 years, that means we will earn $204,000 in total cash flow.

Remember, cash flow is only part of our total profits.

Next, we need to calculate the equity we will earn through appreciation and debt pay-down on this property.

Next, figure out the expected appreciation and debt pay-down.

To calculate the rest of our total profits, let’s start with some basic assumptions.

First, let’s assume that this property will appreciate at 3% annually.

Using an online calculator like this one, we learn that our property will be worth $1,343,916 in 10 years.

In other words, since we bought the property for $1,000,000, we have earned $343,916 in appreciation over those 10 years.

Next, we need to calculate how much our loan balance has decreased over those 10 years. This is known as loan amortization.

Recall that our initial loan was for $800,000 because the property cost $1,000,000 and we put 20% down.

Again, we can use a simple amortization calculator like this one to do the math for us.

Assuming a 6.5% interest rate and a 30-year loan, we will have $678,209 remaining on our balance after 10 years.

Since our loan balance started at $800,000, this means that we have earned $121,791 in debt pay-down over those 10 years.

By adding the appreciation and debt pay-down together, we learn that our total equity in this property after 10 years is $465,707.

If we add up our total cash flow, appreciation, and debt pay-down, we see that our total income on this property is $669,707.

Don’t forget to factor in the costs of selling the property.

When we sell this property, we will incur some costs that we don’t want to ignore in our analysis.

Let’s assume that we will pay 6% to real estate agents, 2% in closing costs, and another $15,000 to fix up the property before selling.

In total, that adds up to $107,513 in costs associated with selling this property.

When we subtract the sales expenses from our total income, we see that our total profits on this property after 10 years are $562,194.

Now that we know our total profits, we can calculate the ROI.

How to Calculate ROI.

We now have all of the pieces we need to calculate the ROI on this property.

As we added up above, our total cash flow, appreciation, and debt pay-down, combine for a total income on this property of $669,707.

When we subtract the sales expenses from our total income, we see that our total profits on this property after 10 years are $562,194.

We also saw above that we made a total investment of $215,000 (our down payment plus closing costs) to acquire this property.

Now, we can plug this information into the ROI formula.

ROI = (Total Profit / Total Investment) / Years

.261 = ($562,194 / $215,000) / 10

ROI or Total Return: 26.1%

In the end, this property generates a total annual return of 26.1%.

So, what should you do with your $200,000?

Is this property a good deal?

Would you be better off investing in an S&P 500 index fund and earning 10%?

Using CoCROI and ROI can help you make that decision.

As an investor, you may be thrilled with a 9.5% CoCROI or 26.1% ROI.

On the other hand, you may not be interested in doing the work and taking on the risk involved with owning that rental property.

Remember, we are making projections based on a number of variables. Nobody can predict exactly how an investment will perform.

In the end, only you can answer this question based on your personal preferences.

The point in doing the math is to provide additional data points so you can make the best decision possible.

There’s no right or wrong answer.

August 31, 2025

How to Think About Investing in Both RE and the Stock Market
Let’s say that you have $200,000 that you want to invest.

Up to this point, all of your investments are in the stock market, mostly through tax-advantaged retirement accounts like a 401(k).

However, you’ve recently started thinking about buying your first rental property.

You have an important question to sort through:

Should you buy your first rental property or just keep investing in the stock market?

This is a common dilemma for all real estate investors, not just people thinking about buying their first rental property. Personally, I’ve been thinking about this question quite a bit lately.

The way I see it?

Why not do both?

Why not build your overall investment portfolio to include both stocks and at least one rental property?

Today, we’ll explore why you may want to invest in the stock market and own rental properties.

If you’ve been on the fence about buying your first rental property, this post will help you think about why it may be a good idea.

Real estate is my favorite asset class.

It’s no secret that real estate is my favorite asset class. Without my four rental properties, my journey to financial freedom would look much different.

I’m confident that real estate will remain a powerful asset class moving forward.

That’s because no matter how much the world changes with AI, quantum computing or any other new technology, I know one thing will always be true:

People will always need a place to live.

At this point in my life, I know that I’ll never become a brilliant coder or software engineer solving the world’s hardest problems.

But, I can provide the geniuses a place to live.

That’s why I’m comfortable with the majority of my net worth being in real estate right now.

By investing in rental properties, I can make money in four different ways:

1. Rental property cash flow is king.

With cash flow, you can cover your immediate life expenses. For anybody hoping to reach financial freedom, it is essential to have income to pay for your present day life expenses.

For my money, cash flow from rental properties is the best way to pay for those immediate expenses.

If your present day expenses are already covered, you can use your cash flow to fund additional investments.

That might mean buying another rental property or investing in another asset class, like stocks.

2. Long-term wealth through appreciation.

Appreciation simply refers to the gradual increase in a property’s value over time.

While cash flow can provide for my immediate expenses, appreciation is all about the long-term benefits.

Like investing in stocks over the long run, real estate tends to go up in value. The key is to hold a property long enough to benefit from that appreciation.

To benefit from appreciation, all I really need to do is make my monthly mortgage payments, keep my property in decent condition, and let the market do the rest.

3. With rental properties, other people pay off my debt.

When I buy a rental property, I take out a mortgage and agree to pay the bank each month until that mortgage is paid off. At all times, I remain responsible for paying back that debt.

However, I do not pay that debt back with my own money.

Instead, I rent out the property to tenants. I do my best to provide my tenants with a nice place to live in exchange for monthly rent payments.

I then use those rent payments to pay back the loan.

As my loan balance shrinks, my equity in the property increases. Equity is just another way of saying ownership interest.

When my equity in a property increases, my net worth increases.

4. Real estate investors earn massive taxes benefits.

When you earn rental income, you must report this income on your tax return. Rental income is treated the same as ordinary income.

However, the major difference between rental income and W-2 income is that there are a number of completely legal ways to deduct certain expenses from your rental income.

Common rental property expenses may include mortgage interest, property tax, operating expenses, depreciation, and repairs. We’ll touch on a few of these deductions below.

With all of these available deductions, the end result is that most savvy real estate investors pay little, or nothing, in taxes on their rental income each year.

Yes, you read that right.

I’ll say it again, just to be clear:

Most savvy real estate investors legally pay nothing in taxes on their rental income each year.

Even though I love owning rental properties, I still invest in the stock market.

While there are certainly real estate investors out there who are 100% committed to real estate, I’m not one of them.

Even with my passion for rental property investing, I have a significant portion of my net worth in the stock market.

For one reason, I enjoy having some totally passive income streams. Compared to being a landlord, there is essentially zero work involved in being a passive stock investor.

For another reason, I see the value in having multiple, diverse streams of income to help protect me against life’s uncertainties.

Plus, like many of you, my investing journey began with my employer-sponsored 401(k) plan.

401(k) investing is easy and relatively straightforward. With automatic contributions from my paychecks, I don’t even need to think about funding my account.

As a W-2 employee since 2009, without even thinking about it, I’ve invested regularly in the stock market and enjoyed the benefits of compound interest.

As my career progressed and my family grew, I added investment accounts to my portfolio.

Besides my 401(k), my favorite investment accounts include a Roth IRA, 529 college savings accounts for my three kids, and a Health Savings Account.

In conjunction with my rental properties, I view each of these different investments as part of my overall strategy to reach financial independence.

Combined, I refer to these different investment and income streams as Parachute Money.

Photo by Vlad Hilitanu on Unsplash

What is Parachute Money?

Parachute Money is one of my favorite concepts in all of personal finance.

Pretend your life is like flying on an airplane.

For whatever reason, you decide you need to get off this airplane. You decide to take control and make a change. You’re ready to jump.

All you need is a parachute.

You have a choice between the only two parachutes on the plane.

The first parachute has only one string (or line) connecting the canopy to the harness . You think to yourself, “This doesn’t seem very safe. What if that one string breaks? That would end very badly for me.”

Then, you look at the second parachute.

The second parachute has 10 strings. You say to yourself, “OK, this one looks much safer. If one string breaks, the parachute still has nine other strings to keep me safe. Even if something goes wrong with one or two strings, I would glide safely to the ground.”

It’s obvious which one of these parachutes to choose, right?

Why is having Parachute Money important?

The central idea of Parachute Money is to create multiple sources of income so you are not beholden to any one source.

Picture each source of income as a string on your parachute. The more strings on the parachute, the stronger it is.

With Parachute Money, if one of your sources of income dries up, you are more than covered with your other sources.

Likewise, the more sources of income you have, the stronger your personal finances are.

Parachute Money includes your primary job, any side hustles, any income generating assets, and your emergency savings account. It also includes the income of your significant other, if you share finances.

The key to Parachute Money: protect yourself with as many investment and income sources as you can.

That’s why I own stocks and own rental properties.

Should I buy a rental property or stick with the stock market?

Lately, I’ve been asking myself this very same question, “Should I look into buying a fifth rental property? Or, should I invest that money in the stock market?”

There are certainly lifestyle considerations that go into this question beyond just the strength of the investment on paper.

For example, owning rental properties means taking on a job. On the other hand, investing in the stock market is mostly passive.

If you’re not ready for the job of being a landlord, then you should stick with investing in stocks.

Setting lifestyle considerations aside, we all have limited dollars available to invest. And, we work hard for those dollars.

When we choose to put those hard-earned dollars to work for us, we want to make sure we’re getting a good return on our investment.

It’s hard enough deciding where to invest your money once you’ve decided on the asset class. Take real estate, for example.

Even if you know you want to buy a rental property in a specific area, there might be hundreds of potential properties available.

Picking the right property is not easy and requires some careful analysis.

How much more difficult does the decision become when you’re not even sure if you should invest in real estate or invest in the stock market?

That decision can start to feel overwhelming.

Photo by Ali Kazal on Unsplash

Deciding between various asset classes can feel overwhelming.

With so many investment choices out there, it can be difficult to choose where to invest your money. That’s why it’s useful to have a way to compare one type of asset class to another.

Then, you can consider investment opportunities in different assets classes and make informed choices on where to invest.

Fortunately, we can use two simple metrics to help with this analysis:
1. Cash on Cash Return on Investment (CoCROI)
2. Return on Investment (ROI)
Real estate investors have long used these two metrics to decide if a potential property is a good deal compared to investing in the stock market.

In our next post, we’ll take a close look at each of these metrics. We’ll learn how each of these metrics can help you compare a rental property investment to typical stock market returns.

Don’t worry if math is not your favorite thing.

These two numbers are easy to calculate with an online calculator. The key is to make sure you understand the underlying principles and variables that go into the calculations.

Are you comfortable investing in rental properties and the stock market?

I like to invest in rental properties and the stock market to protect myself from economic and life uncertainties.

I don’t want to be all-in on only one asset class.

So, I view my rental properties and my stock investments as parachute strings working together to protect me should my airplane start going down.

Because I’m comfortable investing in both rental properties and the stock market, I need a way to help choose between options across those asset classes.

In our next post, we’ll learn how to do just that.

Do you invest in the stock market and in rental properties?

Which asset class did you invest in first?

Is part of your reasoning for investing in both asset classes to add layers of protection to your overall finances?

Let us know in the comments below.
August 29, 2025
Coast FIRE Will Help You Realize When Enough is Enough
What are you chasing in life?

Professional accolades?

Tens of millions of dollars?

The ability to retire someday?

Do you even know?

Most lawyers and professionals have a complicated relationship with their careers. That’s a topic for another day. Suffice it to say, the relationship evolves over time.

In the beginning, we’re mostly satisfied to have a decent job. We’re proud of what we’ve accomplished to get this far. We can put our skills to use and start living like adults.

This phase typically lasts until we develop confidence and realize that we’re pretty good at our jobs. We know that we can take on more responsibility and perform more challenging work.

At this point, we begin to work harder than ever. Oftentimes (but not always), we make more money.

We tell ourselves that we’re doing important work. We even start to earn recognition and receive awards from professional groups.

The thing is: we haven’t ever questioned why we’re doing it and what we’re chasing.

Somewhere along the way, our work becomes our identities.

Is your job the most important thing in your life?

How would your spouse or kids answer that question about you?

When your job is the top priority in your life, your health, relationships, and personal interests all take a back seat.

Many of us prioritize our jobs above all else until we get around to retiring in our sixties or seventies.

We never stop to think about whether there’s another way. We’re stuck on autopilot.

Earn a paycheck, buy nice things, save for retirement.

It’s that last part that we oftentimes use as justification for working so much: saving for retirement.

Part of the problem is that we’ve been programmed to think that saving enough for retirement is a never-ending challenge.

We’ve been brainwashed to think that unless you save 10-20% of your paycheck for the rest of your life, you’ll never comfortably retire.

These fears are strong enough to push us to chase more money. To save endlessly for retirement.

Because if you don’t save enough, so we’re told, you’ll never get that lake house in Wisconsin you’ve always dreamed about. Instead, you’ll be living in your kid’s basement.

Now, don’t get me wrong. Saving for retirement is extremely important. It’s one of the bedrocks of personal finance.

But, saving enough for retirement is not an impossible goal. It is most definitely an achievable goal.

For many of us, it’s achievable earlier in life than we ever thought possible.

Once you accept the fact that you actually can save enough for retirement, you give yourself permission to ask, “When is enough is enough?”

This is where Coast FIRE comes in.

With the money mindset hack of Coast FIRE, you can tell yourself, “I have saved enough for retirement. Cross that major goal off of the list.”

Enough is enough.

With retirement taken care of, you can think about what else to do with your time and money.

That might mean staying exactly where you are: same job, same house, same vacations. If it ain’t broke, don’t fix it.

If it is broke, you can pivot.

You can start to dissect exactly what it is that you’re chasing in life.

Photo by Suzi Kim on Unsplash

What is Coast FIRE?

Coast FIRE is a subset of FIRE for people who are not necessarily trying to retire early.

Instead, the idea is to aggressively fund your retirement accounts early on so you have more options as your career progresses.

The reason you’ll have options is because once you hit your projected magic retirement number, you no longer need to fund your retirement accounts.

You can sit back and let compound interest do its thing. Your retirement years are covered.

With retirement covered, you don’t need to earn as much money. You can focus more attention on your present-day self. That might mean working less hours or working the same amount but in a different job.

This is the essence of Coast FIRE: knock out retirement planning early on to create more career flexibility later.

Coast FIRE does not mean complete financial independence.

When you reach Coast FIRE, you are not financially independent because you still need money coming in to fund your current lifestyle.

But, you need less money because you no longer need to save for the important goal of retirement. That means you have earned some financial freedom, but not complete freedom.

That’s OK.

Remember, the part that separates Coast FIRE from traditional FIRE is that early retirement is not the goal.

Instead, Coast FIRE means continuing to work until normal retirement age (like age 65) but having more freedom in what you do for work.

To put a bow on it: the main money mindset benefit of Coast FIRE is that you have options once you’ve already put away enough money for retirement.

With retirement taken care of, you can:
1. Switch to a lower paying job or lower stress job.
2. Become a stay-at-home parent and live off of one spouse’s income.
3. Start a business.
4. Grow your side hustle.
5. Take some time off to think about what you want to do next.
With Coast FIRE, each of these options feels safer because you’ve already fully funded your retirement.

Knowing when enough is enough.

Towards the end of 2024, I had a breakthrough moment thinking about when enough is enough.

Earlier that year, we had moved into our “forever home.” I had traded in my 20-year-old car for a new one. My wife and I were expecting our third child.

As it happens, I was reading an excellent book on real estate investing written by Chad “Coach” Carson.

His book is called Small and Mighty Real Estate Investor: How to Reach Financial Freedom with Fewer Rental Properties.

In his book, Coach Carson makes a compelling argument to think about when enough is enough.

His message was about acquiring more and more real estate, to no end, but also applies to any pursuit in life.

Reading Small and Mighty Real Estate Investor helped my wife and I conclude that at this point in our lives, we have enough.

If anything, we’re closer to having too much on our plates. We self-manage our 10 units in Chicago and work closely with a property manager in Colorado.

With our full-time jobs and kids at home, we’ve bitten off as much as we can chew.

Our portfolio generates enough income to help fuel our current goals. If we were to continue expanding, the headaches could end up outweighing the financial benefits.

We want to build a life full of experiences and memories. That means we need more time, not more money. Acquiring and managing more properties right now would take up a lot of time.

That tradeoff is not currently worth it to us.

Photo by Snappr on Unsplash

What would you do with your time if money was not an obstacle?

Whenever I think of Coast FIRE, I’m reminded of a conversation I had with a friend earlier this year.

We were having lunch at a downtown Chicago lunch spot that’s been serving up epic burgers since the 1970’s. My friend and I are both balancing careers as lawyers in Chicago with young families at home.

In between bites of a massive BBQ-bacon-cheeseburger, I asked him a question I like asking smart people:

“What would you do with your time if money wasn’t an obstacle?”

Without hesitation, he answered that he would work with his hands.

He likes working on projects around the house. He gets immediate satisfaction from completing a repair or making an improvement.

His answer was great and very relatable. My years as a landlord has taught me the same feeling of satisfaction in completing a project.

What stood out to me the most was how quickly he answered the question. He knew exactly what he would do if money was not an obstacle.

This simple question helps illustrate what I mean by Coast FIRE.

When you achieve Coast FIRE, you can afford to take a pay cut. You can choose to work a job that you enjoy for less money.

It’s not an easy goal to accomplish, but I can’t think of a better goal to strive for.

By the way, since having that burger with my friend, he left his old job for one that better fits his life goals. I’m thrilled for him.

Coast FIRE is not about giving up.

Some critics of Coast FIRE argue that it’s just a catch phrase for quitting on your career too early. They say the consequences of having a “bad retirement” are too severe.

The way I see it: having a “bad life” now in hopes of a “good retirement” later is not a worthwhile trade off.

You can certainly prioritize making the most money in life. That might mean continuing to earn and earn so you can invest in the stock market or purchase more rental properties.

But, at some point, you don’t need any more money. At some point, you need to know when enough is enough.

Coast FIRE is about exactly that: knowing when enough is enough.

Have you thought about when enough is enough?

Does Coast FIRE help you visualize that moment?

Let us know in the comments below.
August 26, 2025

Author: Matthew Adair

There is one crucial element that you can control on your way to financial freedom.

The one thing you can truly control is your saving rate.

What is a saving rate?

What can I learn from tracking my saving rate?

Why it’s important to focus what you can control, like your saving rate.

Here’s an example showing the importance of your saving rate.

What happens if you double your saving rate from 20% to 40%?

It’s motivating to think of your saving rate in terms of years to financial freedom.

Why I’m happy I learned how to responsibly use my Sapphire Reserve points.

Never spend money on your credit cards just to earn more points.

Don’t spend money just to earn rewards. That’s a recipe for financial disaster.

If you don’t already have it, now is a great time to consider the Sapphire Reserve.

Is there value in keeping both your Sapphire Reserve accounts open?

For my complete thoughts, and the reasons why you might want to keep both Sapphire Reserve accounts open, check out my post here.

I have two credit cards in my wallet: the Sapphire Reserve and the Freedom Unlimited.

Why it’s a great strategy to have the Freedom Unlimited and the Sapphire Reserve.

As a rule of thumb, cash back rewards like this are not as valuable as transferring your points to a travel partner.

You can combine your Freedom Unlimited points with your Sapphire Reserve points.

As soon as I have enough Sapphire Reserve points, I transfer them to United and book a flight.

Do you use your Sapphire Reserve points for free flights?

What real estate markets are the best markets to invest in right now?

Personally, I combine both approaches. I look to local data and trust my common sense and life experiences.

The funny thing is most national investors want nothing to do with Chicago.

If I asked you what housing markets currently have the fastest selling homes, what would you guess?

If you’re not overpaying, you’re not playing.

How about another recent study highlighting why investing in Chicago may not be a bad idea?

Do reports like this mean Chicago is definitely a good market for you to invest in?

Should you rush off to invest in Chicago?

Here’s a look back at our recent experience leasing out two apartments.

For one apartment, we received an odd request.

Turnover is a chance to make property improvements.

What did we learn from this experience?

The second learning experience involved letting our tenants out of their lease after two months.

So, what’s the takeaway from our experiences with these units?

Should you become a landlord?

What would I do if I woke up tomorrow with $178,000 in my checking account?

The first thing I would do with $178,000 is pay off high interest debt.

Next, I would set aside $15,000 to $20,000 for fun money.

Next, I would revisit my Tiara Goals for financial freedom.

I would then use $67,000 to fund my son’s college education.

Why did I target in-state tuition?

I would save the remaining $33,000 in an emergency savings account.

How would you use $178,000 today?

How did financial independence become synonymous with deprivation?

FIRE has taken on an unintended meaning.

Have you noticed in the blog that we talk more about investing than cutting expenses?

Focus on earning more, not just spending less.

I am a big fan of side hustle.

OK, but I don’t even like coffee.

You can have anything you want; you just can’t have everything.

Use a challenging period in your life as motivation to do things differently.

Now Money

Life Money

Later Money

Your budget is really just about finding fuel for the best things in life.

For some ideas on how to do that, check out my Top 10 Budgeting Tips for Lawyers and Professionals.

These adjustments will give you options in the future.

What do you really want out of life?

I never allowed myself to dream about financial freedom.

When money is tight, think about the future.

The S&P 500 historically earns 10% annually.

Because of this historical consistency, I feel comfortable using 10% as a baseline to compare other investments with.

Asking Price: $1,000,000

What is Cash-on-Cash Return on Investment (CoCROI)?

Does a 9.5% CoCROI automatically mean this is a bad deal?

To recap, CoCROI is a great way to quickly compare the returns on different investments in the first year.

What is Return on Investment (ROI)?

The first step in calculating ROI is to total up the cash flow.

Over 10 years, that means we will earn $204,000 in total cash flow.

Next, figure out the expected appreciation and debt pay-down.

If we add up our total cash flow, appreciation, and debt pay-down, we see that our total income on this property is $669,707.

Don’t forget to factor in the costs of selling the property.

How to Calculate ROI.

So, what should you do with your $200,000?

People will always need a place to live.

1. Rental property cash flow is king.

2. Long-term wealth through appreciation.

Even though I love owning rental properties, I still invest in the stock market.

Why is having Parachute Money important?