Author: Matthew Adair

How to Gain Confidence by Calculating Your Coast FIRE Number
Have you ever wondered if you really need to keep saving for retirement?

Believe it or not, you may be closer than you think to achieving your retirement goals.

That’s a very powerful realization.

Think about the options you can create for yourself if you no longer need to save a hefty chunk of your paycheck for retirement.

We recently explored some of these options while talking about the money mindset hack known as Coast FIRE.

Today, we’ll look at some specific examples of how to calculate your Coast FIRE number so you can see how you stack up.

By calculating your Coast FIRE number, you may just find that you have more options than you ever thought possible.

Let’s explore.

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.

Your Coast FIRE number is not the same as your FI number.

As we’ll explore below, your Coast FIRE number is different from your FI number (what I sometimes refer to as your magic retirement number).

Your Coast FIRE number is the amount you need saved up today to stop saving anymore for a traditional retirement. You still need to earn money to fund your current lifestyle.

Your FI number is the amount you need saved up today to retire and live completely off your investments for the rest of your life.

You’ll see below that your Coast FIRE number is usually significantly lower than your FI number.

This is especially true the further away you are from traditional retirement age. That’s because you have a longer time horizon for compound interest to do its thing.

In fact, the reason Coast FIRE is such a powerful money mindset hack is because the Coast FIRE number seems much more attainable.

This of it like this: have you ever felt that it seems impossible to save millions of dollars for retirement?

The truth is you don’t have to come up with all that money on your own. Your job is to aggressively seed your retirement accounts early on so compound interest can do the heavy lifting.

By funding your retirement accounts early in your career, you don’t need millions of dollars. You actually need way less.

Calculating your Coast FIRE number will drive this point home.

Photo by Courtnie Tosana on Unsplash

How do I calculate my Coast FIRE number?

There are some great online calculators available to figure out your Coast FIRE number.

You simply plug in a few variables, like your current age, desired retirement age, and anticipated spending in retirement. It couldn’t be easier.

The Fioneers and WalletBurst each have easy-to-use calculators that I recommend. There are plenty of others, but these two are simple to use.

What’s nice about each calculator is that you can play around with the inputs to explore various scenarios. You can also see how your Coast FIRE number is significantly lower than your FI number.

The WalletBurst calculator has a helpful graph for visualizing your progress towards Coast FIRE.

The Fioneers calculator has a nice feature where you can input other sources of passive income, like income from a rental property.

As we know, adding just one rental property to your investment portfolio can massively shrink your magic retirement number and accelerate your journey to financial freedom.

If you’re thinking about rental property investing to supplement your retirement income, check out my recent post:

Shrink Your Magic Retirement Number With One Rental Property

Note: The Fioneers’ calculator is a Google Sheet you can download, but you need to enter your email address first. You do not need to enter an email address to use the WalletBurst calculator.

Using these calculators, let’s take a look at a few examples.

Let’s explore three different scenarios where knowing your Coast FIRE number can be very useful:
1. Clarke is 35-years-old and ready for a new job.
2. David is 40-years-old and worried about paying for college.
3. Dorothy is 28-years-old and just paid off her student loans.
In each of these examples, we’ll assume a standard retirement age of 65 and an annual rate of return of 10% (on par with the historical results of the S&P 500).

We’ll also factor in a 3% inflation rate (the historical average in the United States).

Finally, we’ll assume a safe withdrawal rate of 4.7% in light of the updated “4% Rule.”

In case you missed it, Bill Bengen, creator of the 4% Rule, just released a new book with some fun news for all of us saving for retirement.

Bengen’s updated research shows that it’s safe to increase your withdrawal rate in retirement from 4% to 4.7%.

Bengen’s new book is called A Richer Retirement: Supercharging the 4% Rule to Spend More and Enjoy More.

Let’s dive in.

Coast FIRE Example 1: Clarke is 35-years-old and ready for a new job.

Clarke is 35-years-old and is ready for a career change.

His job at a prestigious law firm has taught him a lot and he’s made good money. But, the stress and the hours are starting to take a toll on his personal life and on his health.

He’s ready to pivot.

Because he was making good money, Clarke maxed out his 401(k) retirement plan for the past 8 years. He now has $400,000 saved up. He also currently adds $5,000 to his various retirement accounts each month.

His goal is to have $200,000 annually to spend in retirement.

Based on the above variables, Clarke’s Coast FIRE number is $559,009.

At his current saving rate, he will reach Coast FIRE in three years. That means that at the age of 38, he will no longer need to fund his retirement.

He could then pursue a lower paying, lower stress job without sacrificing his retirement years.

Note: Clarke’s FI number (magic retirement number) is significantly higher: $4,255,319.

That’s a big number and can seem intimidating. His Coast FIRE number is more encouraging to think about.

Yes, he’ll have to keep working to fund his current lifestyle. But, he can choose to work a lot less.

What if three years still seems too far away for Clarke?

Using the Coast FIRE calculator, Clarke learns that if he ups his retirement contributions from $5,000 per month to $8,000 per month, he will achieve Coast FIRE in two years.

That’s powerful information. If he boosts his saving rate even more, he can pivot even faster.

Armed with the knowledge of his Coast FIRE number, Clarke has a newfound motivation to stick it out at his current job for just a bit longer.

Photo by Jan Tielens on Unsplash

Coast FIRE Example 2: David is 40-years-old and worried about paying for college.

David had a kid about a year ago and is freaking out about paying for college. He knows that it’s important to prioritize his own retirement before prioritizing his kid’s college.

David has $300,000 saved for retirement. His goal is to spend $150,000 annually in retirement. He currently has $6,000 available to invest each month, whether that’s for retirement or college.

Let’s help David out by using the Coast FIRE calculator.

Plugging in these variables, we see that David’s Coast FIRE number is $588,029.

Notice how David’s Coast FIRE number is higher than Clarke’s, even though he plans to spend less in retirement. That’s because he has a shorter time horizon and less currently saved.

This is another reminder to start investing early and often.

Even so, David is in great shape for retirement. At his current pace, David is 5 years away from reaching Coast FIRE. His daughter will only be six-years-old at that point.

That means that David will still have 12 years to prioritize saving for his daughter’s college, all while knowing that his retirement is covered.

This knowledge makes David feel much better. He’s no longer worried about paying for his daughter’s college at the expense of saving for retirement.

Coast FIRE Example 3: Dorothy is 28-years-old and just paid off her student loans.

Dorothy is 28-years-old and is in the early stage of her career as a lobbyist in Washington D.C. She lives with 3 roommates outside of town and keeps her expenses very low.

Dorothy has her whole life ahead of her so hasn’t thought too much about the specifics of retirement.

But, she knows enough to think and talk money with her friends and family every once in a while.

In one of these conversations, she learned about Coast FIRE and was interested in calculating what her number is. Dorothy thought about how amazing it would be to pursue a life on her own terms without worrying about retirement.

Dorothy just finished paying off her student loans. Because she was focused on her loans, she currently has only $10,000 saved for retirement.

She now plans to roll the $5,000 per month she had been using for loan payments into her retirement account.

Because she was so far away from retirement, Dorothy thought it was best to error on the side of caution with her annual spending projections.

So, Dorothy estimated that she would need $250,000 annually in retirement, much more than both Clarke and David figured.

Based on the above, Dorothy’s Coast FIRE number is $435,153. She can achieve Coast FIRE by the age of 38!

Dorothy’s Coast FIRE number is significantly lower than Clarke’s and David’s, even though she plans to spend way more in retirement.

Of course, this is because she is getting started so early.

Knowing that she can fund her entire retirement in just 10 years, Dorothy makes it a priority to do so.

By the age of 38, she will be free to pursue any line of work she chooses without needing another dollar to fund her seemingly extravagant retirement.

That makes Dorothy very happy.

Use a Coast FIRE calculator to figure out your own number.

The above examples show how knowing your Coast FIRE number can be so liberating.

When you calculate how much you’ll need to retire, you may be surprised at how close you actually are.

If you’ve been avoiding making big life decisions because of anxiety about retirement, knowing your Coast FIRE number can be a huge help.

Clarke, David and Dorothy calculated their Coast FIRE numbers and were able to come up with manageable plans.

Each person is on track for a desirable retirement, all while creating options for themselves earlier in life.

Having options is a great thing.

Have you calculated your Coast FIRE number?

Were you surprised how close you actually are to achieving your retirement goals?

Let us know in the comments below.
August 24, 2025
Why Coast FIRE is a Powerful Money Mindset Hack
Are you working a job you don’t like because you’re worried about saving enough for retirement?

Well, what if you already have more than enough saved for retirement?

Would that give you confidence to think about switching jobs? Maybe to a job that pays less but better fits your life goals?

Think about it.

If you didn’t have to save another dollar between now and retirement age, would that give you more career freedom?

Would you start looking for that job you really want instead of the job that pays the most?

To explore these questions, let’s look at the money mindset concept known as “Coast FIRE.”

@thinkandtalkmoney
Overview of the Coast FIRE 🔥 movement. #thinkandtalkmoney #coastfire #finiancialindependence #financialfreedom
♬ original sound – Thinkandtalkmoney

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.

That’s a powerful feeling.

You can take a pay cut for a better job with Coast FIRE.

Let’s say you earn $200,000 and save 20% of your salary ($40,000) for retirement.

Once you reach your retirement goal, you no longer have that $40,000 obligation. You have achieved Coast FIRE.

With that extra $40,000, you have options. You could:
1. Live it up and spend the money on stuff you don’t care about.
2. Repurpose the money towards another financial goal.
3. Switch to a more attractive job that may only pay $160,000.
Whatever you choose, the point is that you have options.

If your job is slowly killing you inside, Coast FIRE provides the money mindset to explore other jobs.

It’s no secret that lawyers typically work long, stressful hours. That’s why burnout amongst lawyers is unfortunately a common occurrence.

For example, you may have begrudgingly taken a high-paying job out of law school to pay down your loans faster. By the way, there’s nothing at all wrong with that.

Now, with your loans gone and your retirement savings in good shape, maybe you’d like to explore a less stressful job.

Maybe you’re ready to pursue that less lucrative career that was the reason you went to law school in the first place.

Maybe you’re ready to stay at home with your kids and live off of one spouse’s income.

Of course, burnout is not limited to lawyers. Many professionals today are experiencing burnout.

Have you been putting off that career change? Does this sound too familiar?

Coast FIRE allows you to find a job that fits your life better knowing you don’t need to make as much money.

Photo by Rod Long on Unsplash

Financial Independence Pivot Early (FIPE)

If you’ve been a follower of Think and Talk Money, you know I don’t like the term “FIRE.”

The problem for me is that the FIRE end game is suggested right there in the name: become financially independent so you can retire.

If you’re anything like me, you didn’t pay all that money to go to law school just to retire in your peak-earning years. There’s plenty of meaningful work still to do.

It’s not uncommon for people to hear about financial independence and immediately think that’s only for people who want to quit their jobs and retire on a beach somewhere.

I don’t think that’s what financial independence is about at all.

Financial independence is all about creating options.

When you’re financially independent, you can make decisions based on your core values instead of making decisions based on money.

You can pivot.

That’s why I believe in FIPE not FIRE.

I prefer to think about pivoting, not retiring.

Pivot means to adapt or improve through modifications and adjustments.

That sounds appealing to me.

Retire means to withdraw, to retreat, to recede.

None of those things sound appealing to me at all.

Retiring sounds like moving backwards. I’m not working so hard to achieve financial freedom so I can move backwards in life.

With FIPE, financial independence is still the primary goal. But, the endgame is not to withdraw or retreat.

The endgame is to adapt and improve how you spend your working hours.

Financial independence is for people who want to be empowered to take more control of what they do with their working hours.

It’s not about quitting work entirely.

It’s about the freedom to pivot to other work, if you want. I’m convinced that humans are meant to be productive. We are social creatures who at our core want to be contributing.

That doesn’t mean we have to be or want to be employees. But, it does mean that we want to do something meaningful with our working hours every week.

That’s why I believe in the power of pivoting, not retiring.

That’s what FIPE is all about.

And, that’s what Coast FIRE allows you to do.

Financial independence is about much more than retiring early.

FIRE emphasizes saving more and spending less until you reach the point where your passive investments generate enough income to allow you to quit your job.

I love this part of FIRE: the idea of creating enough income streams so that you have the freedom to do what you want with your time.

I share the primary goal of saving more money and spending less to achieve more life freedom.

By the way, I call this Parachute Money. I like to view each income stream as a separate parachute string. The more parachute strings you have, the safer it is to make a big change in life.

The problem becomes when people are so focused on achieving FIRE that they sacrifice too much of their current lives.

Yes, you’ll achieve FIRE faster if you save 90% of your salary.

But, what kind of life are you left with in the meantime?

Coast FIRE is less about the grind and more about enjoying the process.

The goal is still to be financially independent, even with the recognition that it will take longer to get there.

Photo by britt gaiser on Unsplash

FIPE and Coast FIRE work well together.

FIPE and Coast FIRE are similar because they are for people who are looking for change but are not looking to retire.

By having enough saved up for retirement before you make that change, you’re giving yourself a layer of protection.

You’re giving yourself the freedom to explore better work situations for your personal situation.

That’s why Coast FIRE and FIPE work well together.

Both money mindsets actually encapsulate the entire purpose of financial independence in the first place:

To create options.

Read Die with Zero by Bill Perkins

If you don’t like the idea of Coast FIRE and foregoing future retirement contributions, you need to read Die with Zero.

No money mindset book has led to more passionate conversations with my friends and family members than Die with Zero.

First, Perkins encourages us to think about whether we are working too many hours.

In Perkins’ view, the problem is that we are sacrificing the best years of our lives. Instead, we could be creating lifelong memories.

In that same vein, Perkins makes a strong case that many of us are saving too much for retirement.

Also, Perkins questions the conventional wisdom of waiting until we die to pass money onto our kids. Instead, he suggests helping our kids earlier in life when the money will be more meaningful.

Read Die With Zero. This money mindset book will motivate you to book that vacation you’ve been putting off.

Also, read A Richer Retirement by Bill Bengen.

Bill Bengen, creator of the 4% Rule, just released a new book with some fun news for all of us saving for retirement.

Bengen’s updated research shows that it’s safe to increase your withdrawal rate in retirement from 4% to 4.7%.

If you are retiring today, it gets even better. Bengen’s research shows that you can safely withdraw around 5.25%.

Bengen’s new book is called A Richer Retirement: Supercharging the 4% Rule to Spend More and Enjoy More.

If you’re not sure about how much you need to save for retirement, Bengen has the answers. He’s done the research and done the math.

His conclusions will give you the confidence to select a magic retirement number that works for you. Once you reach that number, you don’t have to worry about saving more for retirement.

Coast FIRE will open your eyes.

Coast FIRE is a powerful money mindset hack.

When you reach Coast FIRE, you no longer need to save for retirement.

That gives you a lot of options, including switching to a job that better suits your lifestyle.

If you feel like you’re far away from retiring, Coast FIRE is the money mindset hack to start making you feel better about your progress.

In our next post, we’ll do some math together to figure out what your Coast FIRE number is so you can measure your progress.

Are you interested in creating options to pivot instead of retire?

Have you thought about Coast FIRE in the past?

What about FIPE?
August 22, 2025
Shrink Your Magic Retirement Number With One Rental Property
“Wait- how much do I need to save for retirement!?”

Have you ever felt that way after learning how much money you think you need to retire?

I’ve certainly felt that way in the past.

The prospect of saving millions of dollars in order to retire can seem impossible, especially when you’re just starting out.

You may have even wondered, “How do people even come up with these retirement numbers?”

The most common answer to that question is the “4% Rule.”

Using the 4% Rule, you can calculate your magic retirement number and determine how much money you need to save for retirement to maintain your current lifestyle.

The 4% Rule suggests that you can safely withdraw 4% of your investments in year one of retirement. Then, you can safely withdraw 4% plus an adjustment for inflation in subsequent years.

If you do so, you can expect your money to last for 30 years.

Today, we’ll take it one step further.

Let’s explore how owning even a single rental property can further reduce the amount you need to save for retirement.

The results may shock you- in a good way.

@thinkandtalkmoney
4% rule plus a rental property=chef’s kiss for retirement #thinkandtalkmoney #rentalproperty #retirementplanning #4percentrule
♬ original sound – Thinkandtalkmoney

How to use the 4% Rule to forecast your magic retirement number.

First, let’s look at an example using the 4% Rule to forecast your magic retirement number.

In some fun news, Bill Bengen, creator of the 4% Rule, just released a new book showing that it’s safe to increase your withdrawal rate in retirement from 4% to 4.7%.

Bengen’s new book is called A Richer Retirement: Supercharging the 4% Rule to Spend More and Enjoy More.

If you’re at all interested in FIPE (Financial Independence Pivot Early), Bengen’s book is a must read.

Bengen’s research is significant because it means you can safely retire with even less money. That’s because the higher your safe withdrawal rate, the less you need squirreled away to maintain your lifestyle.

In light of Bengen’s updated research, we’ll use 4.7% as our safe withdrawal rate.

Let’s say that your lifestyle costs you $10,000 per month, or $120,000 per year.

To figure out how much you would need in investments to cover your current lifestyle for 30 years, divide $120,000 by .047.

Current Spending / 4.7% (.047) = Magic Retirement Number

$120,000 / .047 =$2,553,191.49

Based on the updated 4.7% Rule, you need $2.55 million to maintain your current lifestyle in retirement.

By the way, under the original 4% Rule, you would need $3 million in investments ($120,000 / .04 = $3,000,000.00).

See why people are excited about the updated 4.7% Rule?

Does saving $2.55 million for retirement seem like an impossible task?

Saving $2.55 million for retirement may seem like an impossible task.

If that’s your initial reaction, be sure to check out my ongoing series on investing. We cover everything you need to know to start investing with confidence.

You may be surprised to learn that If you start investing early and often, reaching $2.55 million is actually not that hard.

Even so, there’s another way to massively shrink your magic retirement number: owning rental properties.

Why would anyone want to own rental properties?

There are four main reasons why I invest in rental properties:
When these benefits combine, real estate investors can generate significant wealth over the long run.

Photo by Jay on Unsplash

Before we look at an example of how owning rental properties shrinks your magic retirement number, here’s a quick breakdown of each of the four main benefits.

For a more detailed description of each benefit, you can read my series on investing in real estate here.

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.

With these benefits in mind, let’s see what happens when we add a single rental property to your portfolio.

How owning a single rental property lowers your magic retirement number.

Let’s continue our example from above where your current lifestyle costs $120,000 per year. We learned that means your magic retirement number is $2.55 million based on the 4.7% Rule.

Now, let’s add a single rental property into the mix.

Let’s assume that you own a rental property that cash flows $2,000 per month. That’s a total of $24,000 per year.

Remember, your cash flow is the profit remaining after paying your mortgage, taxes, insurance, and any other costs.

To learn how to properly run the numbers on a potential rental property, click here.

With $24,000 per year generated by your rental property, you don’t need your investment portfolio to fund your entire $120,000 lifestyle.

Instead, your investments only need to generate $96,000 per year ($120,000 – $24,000 =$96,000).

So, let’s plug $96,000 into our magic retirement number formula:

Current Spending / 4.7% (.047) = Magic Retirement Number

$96,000 / (.047)=$2,042,553.19

By adding a single rental property to your portfolio, you’ve lowered your magic retirement number by half a million dollars!

You now only need $2.04 million to maintain your current lifestyle in retirement.

Photo by Mathew Schwartz on Unsplash

What happens to your magic retirement number if you pay off your mortgage?

This example shows how your magic retirement number drastically shrinks with the addition of just a single rental property.

Keep in mind that in this example, we assumed that you have a mortgage on your rental property. That mortgage obviously reduces your cash flow.

But, what if you paid off that mortgage before you retired?

Let’s finish our example by assuming that you have a 30-year fixed rate mortgage and your payment is $3,500 per month. And, you make it a goal to pay off that mortgage before you retire.

Once the mortgage is paid off, you can add that $3,500 to your monthly cash flow.

That increases your monthly cash flow on this property from $2,000 to $5,500. Annually, that’s $66,000 in cash flow.

Continuing our example, you now only need your investment portfolio to generate $54,000 per year ($120,000 – $66,000 =$54,000).

Look what happens when we plug $54,000 into our magic retirement number formula:

Current Spending / 4.7% (.047) = Magic Retirement Number

$54,000 / .047 =$1,148,936.17

By paying off the mortgage on this single property, you’ve now reduced your magic retirement number by $1.4 million dollars!

You now only need $1.15 million to fund your current lifestyle in retirement.

Have you considered adding a rental property to your overall investment portfolio?

The point of this post is to show you how owning even a single rental property can reduce your magic retirement number.

Think about what would happen if you owned two rental properties. Or, what about three rental properties?

If you can handle the job of being a landlord- which I’m betting is easier than your job as a lawyer or consultant or doctor- owning rental properties is a great way to accelerate your journey to financial freedom.

After seeing the math, you may want to consider adding a rental property (or two) to your overall investment portfolio.

Are you intimidated by the thought of saving enough for retirement?

Have you done the math with the 4.7% Rule to see how much you really need?

Have you considered adding a rental property to your portfolio to shrink you magic retirement number?

Let us know in the comments below.
August 19, 2025
Is the 4% Rule Actually More Like the 4.7% Rule?
Bill Bengen, creator of the 4% Rule, just released a new book with some fun news for all of us saving for retirement.

Bengen’s updated research shows that it’s safe to increase your withdrawal rate in retirement from 4% to 4.7%.

If you are retiring today, it gets even better. Bengen’s research shows that you can safely withdraw around 5.25%.

Bengen’s new book is called A Richer Retirement: Supercharging the 4% Rule to Spend More and Enjoy More.

If you’re at all interested in FIPE (Financial Independence Pivot Early), Bengen’s book is a must read.

What is the significance of raising the safe withdrawal rate from 4% to 4.7%?

If you are years away from retirement, you may be wondering, “Why does it matter if you withdraw 4% or 4.7% in retirement?”

There are two ways to answer that question.

Number 1: the higher the safe withdrawal rate, the more you can safely spend in retirement without running out of money.

That sounds fun.

You know what’s even more fun?

Number 2: the higher the safe withdrawal rate, the less money you need to save before you can retire.

That means you may be even closer to retirement than you previously thought.

That sounds like even more fun, right?

We’ll take a look at the math in a moment.

The title of Bengen’s book says it all: “spend more and enjoy more.”

Here at Think and Talk Money, enjoying our money is one of our primary objectives.

We are not interested in building the biggest bank accounts just so we look good on a spreadsheet. We are interested in building a life where we are in control.

That means spending money on what is important to us. It means spending more time with the people who are important to us.

So, how does a higher safe withdrawal rate help us?

Let’s explore that by first reviewing the 4% Rule

What is the 4% Rule?

The 4% Rule suggests that you can safely withdraw 4% of your investments in year one of retirement. Then, you can safely withdraw 4% plus an adjustment for inflation in subsequent years.

If you do so, you can expect your money to last for 30 years.

Without getting too technical, the 4% Rule is based off of research looking at historical investment gains, inflation, and other variables.

As an example, let’s say you have $1 million in your portfolio.

According to the 4% Rule, you can safely withdraw $40,000 in year one (4% of your portfolio), then 4% adjusted for inflation in each subsequent year, and not run out of money for 30 years.

Using the updated “4.7% Rule”, you can safely withdraw $47,000 in year one.

This simple example shows how you can take your current retirement savings and project the amount you can safely spend so your money lasts 30 years.

Photo by ÁLVARO MENDOZA on Unsplash

The 4% Rule also works in reverse.

By that I mean you can use the 4% Rule to ballpark how much money you’ll need in retirement to maintain your current lifestyle.

We’ll look at exactly how to do that below.

In either case, the 4% Rule is an effective and easy way to start thinking about a magic retirement number.

How to use the 4% Rule based on your current savings.

We mentioned above that the 4% Rule works two ways.

First, you can take your current retirement savings and calculate how much you can safely spend so your money lasts 30 years.

If you have $1 million invested, the 4% Rule says you can safely spend $40,000 annually and expect your money to last 30 years.

Here’s how the math works:

Current Savings x 4% (.04) = Annual Retirement Spending

$1,000,000 x .04 =$40,000.00

Using the 4.7% Rule, the math looks like this:

$1,000,000 x .047 =$47,000.00

That’s a useful calculation, especially if you’re nearing retirement age and just want to know how much you can spend each year.

But, what if you don’t exactly know when you want to retire?

Your main priority may not be to retire by a certain age. Instead, your aim may be to retire with enough money to maintain your current lifestyle. You’re determined to continue working for as long as it takes.

To calculate that magic retirement number, you can once again use the 4% Rule. This time, in reverse.

How to use the 4% Rule based on your current spending habits.

The second way to use the 4% Rule is to start with your current spending habits to project how much money you’ll need to maintain that level of spending in retirement.

This may seem obvious, but to do so, you’ll first need to know your current spending habits.

If you don’t know how much you’re currently spending on a monthly basis, take a look at our budgeting series here.

The good news is that once you’ve created a Budget After Thinking, this next part is easy.

To calculate your magic retirement number based on current spending, simply follow these steps:
1. Add up the amount your’re spending each month in Now Money and Life Money.
2. Take that number and multiply it by 12 to see how much your lifestyle costs per year.
3. Divide that yearly spending by .04
That’s your magic retirement number.

Current Spending / 4% (.04) = Magic Retirement Number

Now, let’s use some real numbers to help illustrate how to use the 4% Rule to project your magic retirement number.

Here’s how to use the 4% Rule to forecast your magic retirement number.

Let’s look at an example using the 4% Rule to forecast your magic retirement number.

Let’s say that you reviewed your Budget After Thinking and learned that you spend $6,000 per month in Now Money and $4,000 per month in Life Money.

Combined, that means your lifestyle costs you $10,000 per month, or $120,000 per year.

To figure out how much you would need in investments to cover your current lifestyle for 30 years, divide $120,000 by .04.

Current Spending / 4% (.04) = Magic Retirement Number

Under the original 4% Rule, that means to maintain your current lifestyle of spending $120,000 per year for 30 years, you would need $3 million in investments.

In other words, your magic retirement number is $3 million.

Photo by Towfiqu barbhuiya on Unsplash

If that number seems impossibly high to you, the updated 4.7% Rule should make you feel a little better:

Current Spending / 4.7% (.047) = Magic Retirement Number

$120,000 / .047 =$2,553,191.49

Based on the updated 4.7% Rule, you now only need $2.5 million instead of $3 million to maintain your current lifestyle in retirement.

That’s fun news.

Use the 4% Rule as an easy projection tool, not an actual withdrawal rate.

Whether you want to use the 4% Rule or the updated 4.7% Rule, keep in mind that these are projection tools.

I view the 4% Rule as a tool to ballpark your magic number, as opposed to a strict withdrawal rate once you actually retire.

I point that out because there’s some debate in the personal finance community as to whether 4% is still a safe withdrawal rate in today’s economic environment.

For our purposes, I’m not too concerned about that debate.

Once you get to retirement, your actual withdrawal rate may be higher or lower than 4% depending on a variety of factors. Put another way, you will need to adjust how much you withdraw each year based on factors outside your control.

Regardless, the 4% Rule is a great way to start thinking about how much you’ll need to save for retirement. Attaching an actual number to your retirement goals is extremely helpful.

Like Bengen argues in A Richer Retirement: Supercharging the 4% Rule to Spend More and Enjoy More, the point of saving money now is to spend it and enjoy it later.

For people who are used to saving aggressively during their working years, it can be hard to switch to a spending mindset.

Whether you’re nearing retirement or still have years to go, A Richer Retirement: Supercharging the 4% Rule to Spend More and Enjoy More will help you find that balance.

Have you read A Richer Retirement: Supercharging the 4% Rule to Spend More and Enjoy More? What did you think?

Will you update your retirement planning based on the new 4.7% Rule?

Let us know in the comments below.
August 17, 2025
Capital One Settlement: A Reminder to Evaluate Your Bank

How long have you been with your current bank?

Do you even remember why you opened an account with that bank in the first place?

For many of us, we opened our first “adult” bank accounts in our 20s. We probably just picked the closest bank to our apartment. I doubt many of us (myself included) put much thought into who we banked with.

Because it’s human nature to resist change, I’m guessing many of us have never thought about whether that bank is still a good fit at the current stage of our lives.

In light of Capital One’s massive class action settlement based on allegations that it deceived its customers, now seems like as good a time as ever to revaluate who we bank with.

More on the settlement below.

First, a little personal context about why I’m thrilled that Capital One is not getting away with its deceptive scheme.

I banked with Capital One for many years.

For a long time, I used Capital One for all my savings accounts. When I started law school in 2006, there was a Capital One cafe right next to my school.

You could get a cup of coffee for $.75 and talk to a banker at the same time. It was a cool concept and convinced me to bank with Capital One.

I told everyone about how great Capital One was. I had Capital One savings accounts and a Capital One credit card. You could say I was a huge Capital One fan.

Key word: was.

In November 2023, I had been a loyal Capital one customer for 17 years. This was during the time period when interest rates on savings accounts were rising dramatically.

Many banks were advertising rates as high as 4% or 5%, which were higher than most of us had ever seen.

One day that November, for whatever reason, I logged into my Capital One account to see what rate I was earning.

I was sure it would be in the 4% range, and probably closer to 5%, since Capital One was a leader in online banking.

When my statement loaded, I was shocked.

0.30%!

Shocked probably isn’t the right word. I was disgusted.

0.30% in 2023 might as well have been 0.0%.

I refused to believe that a bank that I had banked with for 17 years could do this to a loyal customer.

What the heck happened?

Well, Capital One, unbeknownst to me, switched my savings from its high interest platform into an account with the much lower interest rate.

At the same time, Capital One was still advertising and offering top rates to new customers.

When I discovered the sneaky switch, I immediately closed all of my accounts and transferred my money to a new bank. I no longer have a Capital One credit card, either.

It wasn’t the amount of interest I lost out on that bothered me.

This all happened during that time when my wife and I were aggressively acquiring properties, so we never had a lot of money sitting in savings for an extended period.

So, my anger wasn’t just about the interest.

For me, it was about the principle. I don’t want to have any relationship with a bank that would do that to its customers, especially long-term customers like me.

I did a quick search in my inbox and found a Capital One statement from December 2022 showing a 0.30% interest rate. That means Capital One had deceived me for at least a year before I caught on.

I have to admit that writing this post is reopening old wounds. Although, learning about the settlement definitely helps.

Photo by POURIA 🦋 on Unsplash

I am happy to report that Capital One did not get away with it.

It wasn’t just me who was getting ripped off by Capital One.

I am one of the many people that Capital One switched out of high interest rate savings accounts into inferior products.

These deceptive practices were subject of a federal lawsuit brought by the Consumer Federal Protection Bureau.

Additionally, disgruntled customers filed a class action lawsuit to recoup the interest that people like me missed out on.

All is well that ends well, right?

I am pleased to share that Capital One agreed to a $425 million class action settlement for its deceptive practices.

A court hearing for final approval of the settlement has been scheduled for November 6, 2025.

If you are, or were, a Capital One 360 Savings account holder at any time from September 18, 2019, through June 16, 2025, you are automatically eligible for benefits. You do not need to fill out a claim form.

Note: if you’d like to update your mailing address or receive an electronic payment, you can do so here.

What are the terms of the settlement?

According to the Notice of Settlement:

Capital One shall pay $300 million, to be used to make pro rata payments to settlement class members relative to the approximate amount of interest each settlement class member would have earned if their 360 Savings account(s) had paid the interest rate then applicable to the 360 Performance Savings account.

Translation: if you had a Capital One 360 account, you are going to be paid “some” of the interest you were owed.

The reason I say “some” is because of the word “relative” in the above paragraph from the notice.

Capital One allegedly cheated customers out of $2 billion in interest. The settlement is for $425 million. Based on that discrepancy, it does not appear we will get all of the interest we are owed.

Hopefully, I’m wrong about that and we all receive the full interest we are owed.

Disclaimer: I am not involved in the settlement negotiations and this is not legal advice.

If you remained a customer, you will receive an additional settlement amount:

The second component consists of $125 million, which will be paid by Capital One as additional interest payments to settlement class members who continue to maintain 360 Savings accounts (presently approximately 3/4 of the settlement class). In order to accomplish such additional interest payments, Capital One shall maintain an interest rate on the 360 Savings account of at least two times the national average rate for savings deposit accounts as calculated by the FDIC.

Translation: If you continue to bank with Capital One, you will receive some additional money. How much you’ll get is complicated.

By the way, I am happy to learn that customers who stayed with Capital One despite its deceptive practices will earn some additional money.

In the end, regardless of how much we receive, this news makes me very happy.

I don’t really care about the payment at this point. I’m happy that Capital One isn’t getting away with its deceptive practices.

And, I’m happy that news of the settlement serves as a good reminder for all of us to evaluate our current banking arrangements.

Even with the settlement, I still won’t bank with Capital One again. I cancelled my accounts as soon as I learned that the bank was ripping me off.

Maybe I’m being childish, but I still refuse to give my business to a company that blatantly deceives its long-time customers.

Photo by Johnyvino on Unsplash

Why do stories like Capital One’s deceptive practices matter?

The lesson here is that we all need to regularly evaluate our banking relationships. There is no such thing as “set it and forget it” when it comes to our money.

You could say stories like this are good reminders to regularly think and talk about money.

The last thing any of us needs is to be tricked by our own banks. The more we talk about what’s going on, the better chance we will catch these schemes before it’s too late.

The point is: no matter how much you trust your bank, keep an eye on your accounts.

No, I am not so cynical that I think all banks are out there intentionally ripping us off.

However, massive scandals like this are not the only red flags to look out for. Banks notoriously have hidden fees and confusing rules.

If you are not paying attention to your money, you may be unknowingly paying fees or missing out on better opportunities. It’s up to each of us to regularly evaluate whether our bank is continually providing us with the services we need.

Are you a current or former Capital One customer?

If this is the first you’re hearing about Capital One’s deceptive practices, will you continue to bank with them?

Let us know in the comments below.

August 15, 2025
Stop Feeling Guilty and Annoyed About Spending Money
No matter how far along you are on your personal finance journey, you will always need to make choices on how to spend your money.

I recently wrote about how I felt annoyed when I wanted to buy a new bike and new golf clubs.

You have to make decisions like this whether you make a lot of money or very little money.

The more money you make, the harder these choices can be. When I was in my 20s, traveling and a social life were my biggest spending challenges.

Now that I’m in my 40s, it’s making good spending choices for not only me, but my wife and three kids.

The other day, I confessed that I was annoyed because my goal to pay off debt was keeping me from buying a new bike or new golf clubs.

What I’ve realized since then is that I also felt guilty about spending money on myself when I could better spend that money on my kids.

I felt guilty because my five-year-old wants to learn how to ride a bike. I should buy her a bike and teach her to ride before I splurge on a new bike for myself, right?

With powerful feelings like annoyance and guilt, how can we make good spending decisions even as we make more money?

Don’t ignore key personal finance fundamentals even as you start to make more money.

What I’ve learned as my career and family obligations evolve is that it’s easy to forget the little things I used to focus on when money was tight.

This recent experience reminded me that I need to step back and focus on personal finance basics.

I’m not alone in needing a reminder from time to time about personal finance fundamentals, like budgeting. I talk to plenty of people who tell me that they kept a budget in their 20s but not so much in their 30s and 40s.

They share with me that even though they’re making more money, it seems like they have less and less money to spend.

I totally get it because I was the same way. I tracked every penny I made in my 20s until I learned how to stay on budget with two simple numbers. Recently, I haven’t been as diligent.

My recent dilemma with the new bike and golf clubs reminded me to go back to the fundamentals.

The benefit is that by remembering the basics, I can help myself by taking the anxiety and guilt out of these types of spending choices.

So, what are the fundamentals I’m referring to?

After I wrote that post about the new bike and golf clubs, I reviewed my top 10 budgeting tips for lawyers and professionals.

My Top 10 Budgeting Tips for Lawyers and Professionals
1. See the ball go through the hoop.
2. Don’t cancel your social life.
3. Talk to your friends about your life money.
4. Keep on traveling.
5. Spark and cut.
6. It’s OK if you occasionally exceed your spending.
7. Make a game out of it, like the $500 challenge.
8. Buy it if you want it, but not right away.
9. You don’t have to go big or go home.
10. Plan ahead for budget busters.
Photo by Heidi Fin on Unsplash

These budgeting strategies helped me realize that I can choose to spend money on what I want and shouldn’t feel guilty or annoyed.

The key is understanding how a certain purchase fits into the rest of my overall spending.

On this occasion, 3 of my top 10 budgeting tips stood out and helped me with what to do about the new bike and golf clubs.

Let’s take a look.

6. It’s OK if you occasionally exceed your spending.

What should you do if you overspend one month? Don’t get discouraged and give up. Before all your hard work goes to waste, take the next month to course correct.

If you overspent by $300 in August, make it a priority to underspend by $300 in September.

Is this easier said than done?

Well, sure. It’s always easier to say you’re going to do something. The hard part is following through. It will take discipline to get back on track. What will drive that discipline?

Once again, it’s your ultimate life motivations that we’ve talked so much about (and will always continue to talk about). Without that clear vision of your ideal life in front of you, no budget will ever last.

Don’t panic. Course correct. Stay on track.

Even though I didn’t buy the new bike or golf clubs, if I chose to do so, I could course correct the next month.

Going over budget for just one month is fixable. The key is to not blow my budget multiple months in a row.

If I did that, I would end up digging a hole so deep that it would be a major challenge to get back to good spending levels.

8. Buy it if you want it, but not right away.

Just because I didn’t buy the bike or golf clubs yet doesn’t mean I can’t buy them in the future when the time is right.

I always think of my mom when I see something that I want to buy but know I shouldn’t buy it right away.

About 10 years ago, my mom bought me a jacket for a birthday present. It was the exact jacket I wanted. How did she know, I asked her. “You mentioned it when we were downtown four months ago.” Four months ago!

I shouldn’t have been surprised. My mom has one of those steel trap memories.

If you only met her for five minutes and then saw her again two years later, don’t be surprised when she asks about your consulting gig, your trip to New Orleans, and that blue dress that she really liked.

I learned from my mom’s gift strategy and modified it to help myself resist the temptation to make impromptu purchases. I don’t have her memory, but I do have a phone with a notes function.

When I see something that I might want to buy, I do my best to resist the temptation of buying it immediately and make a note in my phone. After a couple weeks, if I still want that thing, I buy it.

More times than not, I no longer want whatever it was that tempted me in the moment.

If I still want the bike or golf clubs a few weeks from now, I can still buy them. By waiting, I also might benefit from end-of-the-season sales and can shop around for the best offers.

10. Plan ahead for budget busters.

Budget busters are any inconsistent expenditures, good or bad, that can derail your planning.

Good budget busters might include trips, weddings, and holiday/birthday gift shopping.

We can also add a new bike and golf clubs to the good budget busters category. These certainly count as irregular expenses but can wreck our budgets if we don’t properly plan for them.

Bad budget busters include unexpected car repairs, home repairs, or medical expenses.

Note, budget busters are inconsistent; they are not unexpected. These expenditures are 100% predictable every year, we just don’t always know when they will surface.

Photo by Alexander Grey on Unsplash

Planning ahead for budget busters is crucial to staying on track.

To do so, open up a savings account, preferably at a different bank than your checking account. This helps isolate those funds so those dollars don’t disappear.

As part of our really lost boy’s Budget After Thinking, you’ll recall that we had a separate line item for budget busters in both our Now Money (bad budget busters) and Life Money (good budget busters).

I encourage you to do the same. Each month that you don’t spend your budget buster money, transfer it to your savings account so it’s there when you need it.

One more bonus tip for dealing with budget busters.

We talked above about how to course correct when you exceed your budget in one month. On the flip side, what should you do when you’ve had a great month and underspent?

I recommend you transfer the amount you underspent to your budget busters savings account. Don’t let that hard-earned money sit in your checking account.

Those dollars will disappear. By transferring them to savings, those dollars will be at your disposal when needed.

Instead of buying the bike or golf clubs now, I can transfer some funds in my savings account and wait to go shopping until I have enough saved up.

Don’t ignore your budget even if you’re far along on your personal finance journey.

My experience with the new bike and golf clubs served as a great reminder to revisit personal finance fundamentals, like budgeting.

If you haven’t thought about your spending choices in a while, now is a good time to do it.

The 10 budgeting strategies mentioned above have worked for me in the past and continue to work for me today.

If you review those top 10 strategies, I hope you see that making good spending choices does not have to make us feel annoyed or guilty.

It just takes a little mental energy, exerted ahead of time.

When making good spending choices becomes part of your everyday life, you can eliminate the guilt and anxiety that comes with tough choices, like buying a new bike or golf clubs.

Have you been in a similar situation where you wanted to buy something but were worried about how it fit into your overall budget?

What did you decide to do?

Let us know in the comments below.
August 12, 2025
Debt is Really Annoying When you Want to Buy Fun Things
Debt can be really annoying.

I’ve been having that thought a lot recently while on vacation with my family.

Let me explain.

With three young kids, I haven’t focused much on personal hobbies lately. However, being on vacation has allowed me to focus on some fun stuff, like biking and golfing.

The annoying part?

Hobbies can be expensive.

I went for a great bike ride the other day. It was challenging and fun. I felt accomplished and fit. These are feelings I’d like to replicate as much as possible.

So, when I got home, I started looking for a new bike online.

The next day, I played golf. Same thing happened. Had a great time. Hit some good shots. Felt encouraged and excited about my golf game slowly improving.

So, I went home and started shopping for new golf clubs.

Whether it was biking or golfing, I realized how important hobbies are for all of us. I had fun and distracted myself from the stresses of life.

I was tempted to buy a new bike or new golf clubs as a way to motivate myself to continue those hobbies.

But, I’m not going to buy the bike or the golf clubs.

At least not until I accomplish my 2025 money goals.

Which brings us back to why I’ve been thinking lately about how annoying debt is.

My main 2025 money goal is to eliminate HELOC debt.

At the beginning of the year, my wife and I talked about our money goals for the rest of the year.

After talking it through together and weighing all our options, we came up with these three goals for 2025:
1. Our first goal is to continuing paying down our mortgage debt. We used HELOCs to help us acquire some of our properties. Now that we’ve determined that “enough is enough,” we’re focused on paying back these loans.
2. Our second goal is to build up our emergency savings. We mostly ignored our emergency savings between 2017 and 2024. It was risky and led to some touch-and-go moments that we’d like to avoid moving forward.
3. Our third goal is to boost our contributions to our kids’ college savings accounts. We use what’s called a “529 college savings plan.” 529 plans are state-sponsored, tax-advantaged investment accounts. We use Illinois’ 529 plan because we receive a tax break as Illinois residents. Just about every state offers a 529 plan. They are a great way to save for college.
With our plan in place ahead of time, we know where every dollar is going before we earn it. This takes the anxiety out of trying to figure it out after the money has already hit our bank account.

With less than half of the year remaining, we’ve made great progress on our goals. But, we still have a ways to go.

We still have HELOC debt to pay off. And until that debt is gone, I’m not buying a new bike or new golf clubs.

It’s important to me that I stay disciplined and stay on track with my goals.

Even though I’m happy that I used HELOCs to build my real estate portfolio, I’ve felt how heavy that debt load can be.

Now that the end is in sight, I don’t want to jeopardize my progress by buying expensive toys that I don’t really need right now.

I can still go biking without a new bike. I can still play golf without new clubs.

Most importantly, I know that the emotional high I’ll get from buying something new will dissipate quickly. And, I’ll still have that debt to carry around.

So, for now, I’m passing on the bike and the golf clubs. I did make a note in my journal that these are things I might like to buy when the time is right.

Until then, I’ll continue to prioritize my money goals and work to eliminate my HELOC debt.

Photo by Michael Jasmund on Unsplash

Student loan delinquencies continue to rise.

According to the Federal Reserve Bank of New York, student loan delinquencies continue to rise:

Missed federal student loan payments that were not previously reported to credit bureaus between 2020Q2 and 2024Q4 are now appearing in credit reports.

Consequently, student loan delinquency rates continued to rise. In the second quarter of 2025, 10.2% of aggregate student debt was reported as 90+ days delinquent.

You may not have HELOC debt like me, but the odds are that as a young lawyer or professional, you have student loan debt to pay off.

You may have to make spending choices like I did with the new bike or new golf clubs.

Debt from student loans and financial freedom go hand-in-hand for most professionals. Maybe a better way to put it is that student loans can be a major obstacle on your path to financial freedom.

Of course, the more education you’ve received, the more student loans you likely have.

Whether you have student loan debt from college or graduate school, it’s important to have a plan to pay that debt off.

All debt acts as a roadblock to financial freedom.

Student loans are no different.

They’re a weight that we carry around long before we even make the first repayment. Sometimes that weight feels so heavy, it’s hard to imagine it ever going away.

And as much as we wish we could, we can’t ignore our student loans.

It was easy to forget about student loans during the pandemic. Now, student loans are once again a major financial obstacle for many lawyers and professionals.

One way or the other, we have to get rid of them.

And when we do get rid of them for good, there might not be a better personal finance feeling in the world.

Personally, I’ll never forget the day I made my last payment and shared the news with my future wife and family.

To help you have that same feeling of accomplishment, I wrote about my top 10 student loan tips for lawyers and professionals.

You can check out the full post here.

Top 10 Student Loan Tips for Lawyers and Professionals
1. Locate all your loans.
2. Sign up for automatic payments.
3. Do not miss a payment.
4. Consider using Debt Snowball or Debt Avalanche.
5. Make an extra monthly payment.
6. Create a BAT that generates fuel for your student loans.
7. Make more money and use that money for your loans.
8. Take a tax deduction and use your tax refund for your loans.
9. Consider a loan consolidation.
10. Look for ongoing scholarship opportunities.
Have you ever felt how annoying debt can be?

Whether it’s HELOC debt or student loan debt, all debt can feel really annoying. Debt can stop us from doing the things we really want to do in life.

I don’t regret taking out student loans. I also don’t regret using HELOCs to build my real estate portfolio.

It’s true that I wouldn’t be where I am today without my education and my rental properties.

Still, I have to make choices with my limited dollars. I took on the obligation of paying back my debts, and until I do so, fun things are going to have to wait.

When I finally do buy that bike or those golf clubs, it’s going to feel even better knowing I didn’t sacrifice my goals to get them.

Have you made certain spending choices because of debt?

How did you think about and eventually decide whether to move forward with that purchase?

Let us know in the comments below.
August 10, 2025
The Best Ways to Come Up with a Rental Property Down Payment
Coming up with the down payment is probably the biggest impediment to lawyers and professionals who want to buy a rental property.

If you’re serious about acquiring a rental property and are worried about the down payment, these tips will help get you moving in the right direction.

Each of these strategies involves some sort of trade-off.

There are no short cuts.

In the end, the trade-offs are well worth it. Owning real estate is one of the best way to accelerate your journey to financial freedom.

Let’s take a look at my list of the best ways to come up with a down payment for a rental property.

@thinkandtalkmoney
It’s no secret that in order to buy a rental property, you first need available money for the downpayment. But how? #thinkandtalkmoney #downpayment #hummingbird #financialfreedom #personalfinance
♬ original sound – Thinkandtalkmoney

1. Increase your saving rate.

Do you know what your current saving rate is?

Your saving rate is simply the amount of money you save each month divided by the amount of money you make. I find it most useful to express your saving rate as a percentage.

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

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

In a moment, I’ll show you the math on how to quickly improve your saving rate whenever you earn a pay bump.

You might be surprised to learn how many lawyers and professionals out there make a lot of money and maintain a very low saving rate.

If your current saving rate is under 20%, you have a lot of room to improve.

It’s not uncommon for people striving for financial freedom to have a saving rate of 50% or more.

By the way, when I first start tracking my saving rate in my 20s, I had a negative saving rate.

I was spending more than I was earning. If you’re currently in that position, it’s not too late to make some changes.

If you’re serious about coming up with the money for a down payment, your saving rate is the place to start.

2. Revisit your Budget After Thinking.

If your current saving rate is under 20%, it’s time to look closely at your Budget After Thinking.

If you haven’t created a budget before, the first step is to track your spending for three months. The goal is to find out where exactly your money is going.

You may learn that you’ve been victim to the disappearing dollar.

Once you have a decent idea where your money is going, the next step is to look for areas where you can reduce your spending.

Ask yourself, “what spending is truly important to me and what spending can I cut?”

As you start spending less and your saving rate improves, every additional dollar should go in a separate savings account earmarked for a future down payment.

Photo by Jakub Żerdzicki on Unsplash

3. Don’t spend your pay bump.

Most lawyers and professionals have the opportunity to earn bonuses, commissions and raises throughout their careers.

When you receive one of these pay bumps, don’t spend the money.

Pretend like you never got it.

Deposit this money right away into a separate savings account labeled “Down Payment Savings.”

Here’s an example of how much your saving rate can improve when you don’t spend your pay bump.

Let’s assume that before your raise, your take home pay was $70,000 per year after taxes and retirement plan contributions.

Let’s also assume you were putting $1,000 per month towards your down payment savings.

Using our saving rate percentage formula above, we see that:
- Money Earned = $5,833 per month ($70,000 / 12)
- Money Saved = $1,000 per month
- Saving Rate = $1,000 / $5,833 = .17
- Saving Rate Percentage = 17%
17% of your take home pay for a down payment is pretty good.

Now, let’s see what happens if you earn a $20,000 raise and save your entire raise for your down payment.

With your raise, your annual take home pay has now climbed to $84,000, or $7,000 per month.

Look what happens to your saving rate percentage when you add the full raise to your down payment account instead of spending it:
- Money Earned = $7,000 per month ($84,000 / 12)
- Money Saved = $2,166 per month
- Saving Rate = .31
- Saving Rate Percentage = 31%
You more than doubled your monthly down payment contributions and improved your saving rate to 31%!

Not spending your pay bumps is one of the fastest ways to accumulate enough money for a down payment on a rental property.

This is exactly how my wife and I saved enough money to buy our four rental properties. It’s how we’re going to buy our next rental property.

Whenever we earn a pay bump, we pretend nothing happened. We tell ourselves the money isn’t ours, yet. We put it in a separate savings account right away.

Once we have enough to buy another rental property, we’ll go shopping again.

4. Take on a partner.

Many beginner real estate investors don’t have the money for a down payment on their own. One solution is to take on a partner.

There are a lot of lawyers and professionals out there who want to invest in real estate but don’t want the hassle of finding a deal and being a landlord.

That’s where you come in.

You can offer to do all the work and your partner can put up the initial money. Then, you both share in the profits.

If you go this route, make sure you’ve done your homework on evaluating potential properties. When you approach a potential partner, it’s important to demonstrate that you know what you’re doing.

5. Ask Mom and Dad for help getting started.

A recent study showed that half of parents provide their adult children with regular financial support.

If your parents are in a financial position to assist you, it might be worth having the conversation with them about partnering up on a deal.

The same as working with any other partner, your job is to do your homework and illustrate to your parents why buying a rental property is a sound investment.

If you show them that you’re serious about reaching financial freedom through real estate, you’ll have a better chance of convincing them to partner with you.

The advantage of partnering with your parents is that you should be able to get better terms than you would on the open market.

Some people are too proud, or too deferential, to ask their parents for help. I understand it can be a sensitive topic.

I also strongly believe that we all benefit when we talk about money with our loved ones. Even if your parents are not in position to help you directly, they may have other ideas to help you get started.

Talking about money is not taboo. If you can’t talk about money with your parents, who can you talk to?

6. Get a side hustle.

If you’ve successfully created a budget and still need to generate more fuel, have you thought about a side hustle?

Some lawyers and professionals reading this won’t even allow themselves to consider a side hustle. They automatically think, “I’m way too skilled or busy to even think about another job.”

In my personal finance class, we spend a lot of time challenging that notion.

Very few people- and I mean very few- are too important or too busy to take on a side hustle.

For most of us, it’s an excuse.

You may think you’re one of those “too important” people.

I would challenge you to assess whether you’re confusing “too important” with “too stressed” or “too tired” or “too cool.”

Is continuing to worry about money really better than spending a few hours a week earning extra money doing something you love?

The ideal side hustle is something you enjoy doing that can earn you extra money at the same time.

Some examples of side hustles my students have come up with in class include:
- Home Baker. Make homemade treats with your kids and sell them to parents who don’t have the time.
- Bartending. Entice your friends to come to your bar by offering cheap drinks. You get to hang out with them and get paid at the same time.
- Fitness instructor. Instead of paying $48 for the spin class you love, become the instructor and get paid to lead the class.
- Dog Walker. If you love dogs and don’t currently have one of your own, what better way to fill that void in your life while making money. The same applies to babysitting.
- Part-time Property Manager. Is there a better way to learn the business and make some money on the side than being a part-time property manager?
Photo by Annie Spratt on Unsplash

7. Use a HELOC.

Using a HELOC to buy investment properties is one way real estate investors scale quickly. I’ve used a HELOC to help buy investment properties three separate times.

A Home Equity Line of Credit (HELOC) allows you to borrow money, in the form of a loan, against the equity in your home. Equity is the value of your home less what you owe on a mortgage.

Think of a HELOC as a second mortgage on your property. Just like with a primary mortgage, when you open a HELOC, the bank charges interest and is protected by the equity in your home.

You can use a HELOC as you would use cash, including for a down payment on a rental property.

Once your HELOC is open, you can use the funds as you would cash.

All you need to do is link your HELOC account to your primary checking account. You can make transfers into your checking account, as needed, up to your full HELOC credit limit.

With a HELOC, once the transfer hits your checking account, you can spend that money just as you would any other money.

This is a huge advantage if you want to use a HELOC as a down payment to buy an investment property.

That’s because lenders heavily scrutinize where you are getting the funds you plan to use to close on a property. HELOC funds are almost always allowed to be used for a down payment.

On the other hand, cash advances from credit cards are typically not allowed for a down payment on a conventional loans.

For a deep dive into how I’ve used HELOCs three separate times to help buy rental properties, check out my post here.

8. Consider a low down payment loan.

There are numerous loan options available that require low down payments, or even no down payments.

Here are some of the more common low-down payment loans:
- 3% Conventional Loans. These are loans backed by the federal government and include Home Possible and HomeOne loans. I used a Home Possible loan to acquire my first rental property.
- FHA Loans requiring as low as 3.5% down. FHA loans are also backed by the federal government and require a down payment of as low as 3.5%.
- VA Loans and USDA Loans. These are both excellent loan products offering low down payments for those whoa re eligible.
Besides these government-backed down payments, there are various private loan programs available that offer low down payments.

With all of these loans, keep in mind that there are eligibility requirements that limit the accessibility of these programs. There are also additional fees and costs that need to be considered.

The key is to do your homework and work with a mortgage broker who is well-versed in the available options for your personal scenario.

Have you considered any of these options to help acquire a rental property?

Coming up with the down payment is probably the biggest impediment to lawyers and professionals who want to acquire a rental property.

If you’re serious about acquiring a rental property and are worried about the down payment, these tips will help get you moving in the right direction.

Remember that buying and holding rental properties is a long-term game. If it takes you a couple of years to save enough for a down payment, that’s OK.

The best real estate investors understand that owning rental properties is not a “get rich quick” strategy.

Stay patient, save money, and your portfolio will grow immensely over time.

Have you used any of the above strategies to acquire rental properties?

What other strategies have you used?

Let us know in the comments below.
August 8, 2025
Dreaming About Rental Properties but Ignoring Money Mindset?
Do you dream about owning rental properties so you can generate semi-passive income while spending more time with your family?

@thinkandtalkmoney
Nothing else matters if you don’t have the right money mindset. #thinkandtalkmoney #moneymindset #personalfinance
♬ original sound – Thinkandtalkmoney

I want to hear about those dreams. What would you do with that time?

Travel?

Exercise?

Read?

It’s so motivating for me to learn what you would do with that kind of freedom.

At the same time, it’s my job to remind you to not ignore key personal finance fundamentals while you’re dreaming about the future.

When it comes to buying rental properties, this is especially true.

Let me explain.

If you’ve been keeping up with the blog, we’ve now learned how to run the numbers on potential real estate deals.

In fact, I showed you that the analysis is not actually that hard. Your job is simply to account for the fixed costs and make informed predictions for the speculative costs.

Then, we did the math together on an actual property in my target zone. By using a real example in Chicago, my goal was to further convince you that running the numbers should be easy.

Finally, we talked about how to evaluate a rental property when the initial math looks bad. The truth is most rental properties are not going to immediately look like great investments. It’s our job as investors to negotiate and look for potential.

By this point, you may be thinking that buying a rental property sounds great, except for one big problem:

How are you supposed to come up with the money for a downpayment?

Great question.

It’s such a great question that it requires us to take a step back.

Before evaluating rental properties, you need to evaluate your personal finances.

It’s no secret that in order to buy a rental property, you first need available money for the downpayment.

Unless you plan on taking on partners or getting the money from family, coming up with a sufficient downpayment is a major challenge.

Yes, there are loan options available that require a smaller downpayment. We’ll soon talk about some of those options. I’ve used loans like this in the past.

Still, a “smaller downpayment” does not mean “no downpayment.”

So, how can you come up with a downpayment?

For a downpayment, you need to have available money.

To have available money, you need a budget that actually works.

To have a budget that actually works, you need honest, powerful life goals.

Does this sound familiar?

It all comes back to money mindset.

When was the last time you checked in on your money mindset?

If you take a look at the Think and Talk Money homepage, you’ll see six main category tabs across the top of the page:
- Money Mindset
- Budgeting
- Debt
- Credit
- Investing
- Real Estate
Each one of these categories builds upon the previous categories.

It all starts with money mindset.

A strong money mindset is the foundation of the personal finance journey. Maintaining a strong money mindset requires constant and intentional thought.

Photo by Pietro De Grandi on Unsplash

I revisit my money mindset every week by taking a quick look at my Tiara Goals for Financial Freedom.

It may seem overly simplistic, but money mindset is what separates people who reach financial freedom from those who struggle to get ahead in life.

Don’t believe me?

Budgeting is really not that hard. We all understand the basic concept: spend less money than you earn. Still, most of us can’t do it.

The same applies to debt and credit. We all know to avoid debt. We know to use credit responsibly. So, why don’t we do it?

Investing can seem complicated at first. Is it really that hard? Entire books and websites have been created to show you how to create massive wealth through simple index funds.

What about buying rental properties? We did the math together. Analyzing deals is not that hard. The impediment for most people is coming up with the money for a downpayment.

You may be in a similar boat right now. You want to buy a rental property but you’re discouraged because you don’t have the downpayment saved up.

It’s not just about how much money you make.

Buying rental properties is not just about how much money you make. Plenty of lawyers and professionals make a lot of money and struggle to come up with any excess money to invest.

Sadly, the struggles don’t just relate to coming up with money for investments.

Lawyers as a profession have long struggled with mental health issues. I first learned about these challenges during law school orientation. Today, I see it in practice.

Being a lawyer is a hard way to make a living. When you work as a lawyer, the hours are intense and stress levels are consistently high.

In 2023, the Washington Post analyzed data from the U.S. Bureau of Labor to determine what the most stressful jobs are. The study confirmed that lawyers are the most stressed.

Of course, lawyers are not alone in struggling in this regard due to long, stressful hours.

The same study showed that people working in the finance and insurance industries were right up there with lawyers as being highly stressed.

Well, what can we do about it?

How can we address these struggles?

Where can we find money for a downpayment?

I have some thoughts.

How motivated are you to truly get ahead in life?

Are you truly motivated to get ahead in life?

Have you worked on your money mindset and found the motivation to actually create a budget that generates savings?

If you’ve successfully created a budget and still need to generate more fuel, have you thought about a side hustle?

When I mention side hustle, is your initial reaction that you’re too busy or important?

Some lawyers and professionals reading this won’t even allow themselves to consider a side hustle. They automatically think, “I’m way too skilled or busy to even think about another job.”

In my personal finance class, we spend a lot of time challenging that notion.

Very few people- and I mean very few- are too important or too busy to take on a side hustle.

For most of us, it’s an excuse.

You may think you’re one of those “too important” people.

I would challenge you to assess whether you’re confusing “too important” with “too stressed” or “too tired” or “too cool.”

Is continuing to worry about money really better than spending a few hours a week earning extra money doing something you love?

Setting that conversation aside, the ideal side hustle is something you enjoy doing that can earn you extra money at the same time.

Some examples of side hustles my students have come up with in class include:
- Bartending. Entice your friends to come to your bar by offering cheap drinks. You get to hang out with them and get paid at the same time.
- Fitness instructor. Instead of paying $48 for the spin class you love, become the instructor and get paid to lead the class.
- Dog Walker. If you love dogs and don’t currently have one of your own, what better way to fill that void in your life while making money. The same applies to babysitting.
- Home Baker. Make homemade treats with your kids and sell them to parents who don’t have the time.
How about this idea for aspiring real estate investors: part-time property manager?

My wife and I recently needed some help with apartment showings. We reached out to one of our favorite young people in the world to see if she’d be interested.

A chance to make some money on the side and learn a new skill?

She jumped on board without hesitation.

We’ve known her for years and were not the least bit surprised. She’s exactly the type of person who will no doubt be successful in whatever she chooses to do.

There is always a way to make more money.

The point is there are always ways to make more money by doing things you like to do anyways. Even if you’re busy. You just have to exert some mental energy to figure out how.

Then, when you make that extra money, put it to work for you. Make all your hustle worth it.

At that point, we can talk about investing or buying real estate.

Unfortunately, most people don’t want to go through this process.

Photo by Timo Stern on Unsplash

Too many lawyers and professionals come to me and primarily want to talk about investing or buying real estate.

They want to skip the foundation and jump right to the more exciting stuff.

Most of the time, these are people who have never kept a budget. Or, they have massive student loan debt with no real plan to pay it off. Maybe they have a good W-2 job but no other sources of income.

When I start exploring their situations with them, it’s clear they haven’t thought much about the personal finance building blocks.

When they mention how hard it is to save for a downpayment, they haven’t considered looking for a new job that pays more or starting a side hustle.

Before jumping right to owning rental properties, these are the personal finance obstacles that need to be addressed.

If this sounds like the situation you are in, your ongoing mission is to generate more cash to fuel investments.

The fun part is once you’ve discovered your motivations and established strong habits, you will consistently have money available so you can invest month after month for the rest of your life.

My wife and I would not own five properties today if we didn’t first learn personal money wellness.

My wife and I would not own five properties (11 rental units) today if we had not first learned money wellness fundamentals.

I don’t just mean we wouldn’t have had money available to invest, although that is certainly true.

I also mean we wouldn’t have the skills and knowledge to successfully run our real estate business.

If you’ve ever wanted to be a business owner or investor, working on personal finance skills now is critical.

Robert Kiyosaki put it best in Rich Dad Poor Dad, “It’s not how much money you make. It’s how much money you keep.”

If you knew someone that made $1,000,000 per year, and at the end of the year, had only invested $20,000, what would your reaction be?

What if you knew someone who made $100,000 per year and invested $20,000? Did your reaction change?

How often do you think about your money mindset?

Do you tend to think more about the “fun stuff” (investing, real estate) than the fundamentals (money mindset, budgeting, debt, etc.)?

Let us know about your money mindset in the comments below.
August 5, 2025

How to Analyze a Property When the Initial Math Looks Bad

Most rental properties that you evaluate are not going to immediately look like great investments.

Does that mean you should just give up?

No way.

It’s up to us as real estate investors to research, negotiate and buy properties only at the right prices. Or, to buy properties that have untapped potential.

Ideally, we can do both.

The other day, we ran the numbers on an example property in Chicago that had caught my eye in.

Through that example, we learned what costs to include in our initial analysis to quickly determine if a property was worth pursuing further.

Today, we’ll look at the next step of the evaluation process.

Specifically, we’ll focus on what we can do when the initial math on a potential property doesn’t look very attractive.

Now, let’s get to it.

Our example property is a small multifamily building in Chicago.

Our example property is a five-unit apartment building listed for $1,800,000 and located directly in my target zone in Chicago.

Remember, this analysis is for educational purposes only. You are responsible for running your own numbers on any potential deal.

Here’s the listing description from my preferred listing site, Redfin:

Fully Gut Renovated 5-unit building, a prime turnkey investment opportunity in the best Logan Square Location Possible. Double Vanities, Fully built out walk in closets, in unit W/D, tankless hot water heaters, thin shaker kitchens and full height quartz backsplashes are just a few of the features that make this building feel more like condo living. Perfectly situated just steps from the Logan Square Farmers’ Market, residents can enjoy an eclectic mix of trendy bars, restaurants, cafes, and shops right at their doorstep. Renovation done with full plans and permits, include a new roof, windows, insulation, drain tile system with sump pump, back deck, and still warrantied appliances!

This property passed my initial screening, so we ran the numbers to see if it would be a good investment.

Here’s what the initial numbers looked like:

Asking Price: $1,800,000

Monthly Rent: $13,840

Mortgage Payment (Principal and Interest)	$8,982
Taxes	$1,429
Insurance	$400
Utility Bills	$350
Property Upkeep	$200
Preventative Maintenance	$200
Vacancy Rate (5%)	$692
Unexpected Repairs (5%)	$692
Property Improvements (5%)	$692
Total Monthly Cost	$13,637

Monthly Cash Flow (Rent – Costs): $203

It took me less than five minutes to do this initial evaluation.

A few notes on the above numbers:

For the mortgage payment, I estimated a 25% downpayment, which is common for investment property loans, and a 7% interest rate.
Taxes are a major cost that can make or break any deal. Make sure you are familiar with how taxes are assessed in your market. For example, in Chicago, property taxes are reassessed every three years. That means taxes go up every three years.
Many property listings will indicate the prior year’s taxes because they are lower. This particular listing has the prior year’s taxes, which I know are soon going to change for the worse. For now, I’ll run the numbers with the current taxes but would definitely account for higher taxes before moving forward with this deal.
Property insurance is a real wildcard these days. Insurance costs are going up everywhere. You’ll need to talk to a good insurance broker for an accurate estimate. I used my experience in the neighborhood with similar properties to make a reasonable estimate.

The initial math on this property did not look great.

In the end, I concluded that this is a beautiful property in a great location but would not be a good investment for me.

The reason is simple: I invest for cash flow. For me, this property is way too expensive for only a couple hundred dollars of monthly cash flow.

More specifically, I am not interested in shelling out a down payment of $450,000 (not to mention more for closing costs) to earn $2,400/year in cash flow.

At a price point of $1.8 million, I would only be interested if this property had a monthly cash flow of at least $4,000 per month.

For another investor, it’s possible that this would still be a good investment based on appreciation and debt pay-down. For me, that’s a big risk I’m not willing to take with that kind of money.

So, what now?

Is that the end of the analysis?

Cross this property off the list and move on?

Not even close.

This is when the fun starts.

person using laptop to evaluate a rental property using real numbers. — Photo by Kaitlyn Baker on Unsplash

What to do if you don’t like the results of your initial evaluation.

Most of the time that you evaluate properties you won’t love the initial results.

You should expect that to be the case.

Think about it from the seller’s perspective. Ask yourself: why is the seller putting this property on the market?

Obviously, the seller is trying to make a profit. Maybe the seller is a developer or flipper who just completed an expensive rehab. He might even have investors who paid for the project that now expect to be paid back, at a profit.

The seller wouldn’t be doing is job if he didn’t try to find a buyer at a high asking price. He can always lower the price later on.

Also, you can think of it another way.

If a seller owns a wonderful property that is making tons of money every month, how motivated is he to actually sell?

He may list the property at a high price just to see if anyone will bite.

In our example, if the seller was cash flowing $4,000/mo, he’d probably just keep it.

And, if he had that kind of cash flow coming in, he may just list it at an astronomical price because he doesn’t really need to sell it.

Sure, there are exceptions. Some sellers don’t want to be landlords and others might just want to cash out. But, I don’t see very many of these situations.

When these situations do pop up, you need to act fast because other investors will take notice.

The point is these are just a few reasons why you will rarely find great investment properties based on your initial evaluation.

Don’t give up.

Your job is to figure out if a property has untapped potential that would make it a good investment.

Now, let’s return to our example to see what I mean.

Is the property overpriced?

The listing price is only the start of the negotiation.

The listing price may just be too high. In recent years, the listing price has oftentimes been too low, leading to bidding wars because of high demand and limited supply.

Your job is to find a price that works for your cash flow needs. The seller may not accept your price, and that’s OK. You may need to move on.

Let’s explore putting a price on our example property where it would be attractive for me.

Keep in mind that I would want a monthly cash flow of $4,000 to move forward on this property.

With that target in mind, I can return to the online calculator on Redfin to see at what price this property might make sense for me.

Playing around with the calculator, I learned that I would need the price to drop to $1,100,000 to get around $4,000 in monthly cash flow (holding all other costs constant).

That’s about a 40% price reduction.

Do you think the seller would go for that?

Not a chance.

Depending on your market, sellers may be willing to negotiate the price. But, if you come in too low, they won’t take you seriously.

If I were to move forward with this property, I would need to find ways to improve the math besides just the price. Still, I might be able to get it for below the asking price.

For our example, let’s assume the seller would agree to knock 10% off the purchase price.

Here’s what the numbers look like at 10% reduced purchase price.

Offer Price: $1,620,000

Mortgage Payment (Principal and Interest)	$8,083
Taxes	$1,429
Insurance	$400
Utility Bills	$350
Property Upkeep	$200
Preventative Maintenance	$200
Vacancy Rate (5%)	$692
Unexpected Repairs (5%)	$692
Property Improvements (5%)	$692
Total Monthly Cost	$12,738

With monthly rents of $13,840, that means this property is now cash flowing $1,002/mo.

We’re heading in the right direction, but I think we can do better.

Besides negotiating the purchase price, what if we can shop around and improve our mortgage?

Start with the purchase price but see if you can further to reduce the overall cost.

For example, can you shop around for a better mortgage?

Let’s assume you can find a loan with a 6.75% interest rate instead of 7%.

With a 6.75% interest rate, your mortgage payment drops from $8,083 to $7,880.

Now, your cash flow increases to $1,211/mo.

You can start to see how this part of the analysis works.

The point is to reduce the costs of owning this property to improve your cash flow.

What other ways can you reduce the costs?

You should go through this process with each cost associated with the property.

Maybe you can find insurance for less than $400/mo.

Or, maybe you are willing and able to handle more of the maintenance responsibilities yourself.

The idea is that each time you reduce your monthly costs, your cash flow goes up.

If you can reduce the costs enough, a property may start looking appealing to you.

two people meeting with laptops as they run the numbers together for a potential deal. — Photo by charlesdeluvio on Unsplash

On top of reducing the costs, can you can earn more income from this property?

At the same time you look to reduce the costs, you should look to see if you can earn more income from a property.

In other words, can you earn more rent per month than the current rate?

This is where you’ll need to study the neighborhood to see what similar apartments are renting for. Your broker should be able to help you with this.

In our example, let’s assume that you do your research and determine that the apartments are under-rented.

In fact, you learn that each of the 5 apartments could earn $200 more per month.

Adding that additional $1,000 per month brings our total cash flow to $2,211/mo.

Now, this property is starting to look more enticing.

You might be surprised how many sellers under-rent their properties.

Over the years, my wife and I have been successful in finding properties that have been severely under-rented by the previous owners.

We don’t renovate properties ourselves because we are busy professionals with full-time jobs and a family. We try to find properties that have bee nicely rehabbed but are currently under-rented.

You may be surprised to learn that a property flipper doesn’t always know the local market as well as you. It could be that he is just in a hurry to get a property rented out so he can sell it and move on to the next job.

If you become an expert on market rents in your local area, you can be the one who benefits.

A few years ago, my wife and I purchased a three-flat in our local area. It was about a half-mile from where we lived at the time and was on our regular walking route. We took an interest in the rehab and followed its progression closely.

When the property was completed, I saw the rental listings online. It was a beautiful property in a great location. I was shocked when I saw the units were listed for only $1,700/mo.

This was my local area and I knew these units could easily go for $2,500/mo, if not more.

When the property hit the market a few months later, we pounced and had it under contract the next day.

When the original tenants chose to move out at the end of their leases, we quickly found new tenants happy to pay $3,100/mo.

Sometimes sellers just don’t know what they have.

Don’t fool yourself into thinking a property is a great investment by unrealistically changing the numbers.

After reading this post, you can hopefully start to see how to run the numbers to make a potential property more attractive.

In our example, we tweaked the purchase price, mortgage rate, and rental income to improve the cash flow enough to make this deal potentially attractive.

After going through an analysis like this, you may be ready to make an offer. Just don’t get your hopes up too high.

Sellers won’t always negotiate.

Properties won’t always be under-rented.

Many of your offers will end up getting rejected.

Don’t quit.

There will always be another property out there.

If you can’t get a property with numbers that work for you, it’s time to move on to the next one.

No matter how much you love a property, don’t fool yourself into thinking it’s a great investment if it’s not.

Readers, have you made offers on properties that you knew were undervalued? Did you successfully cash flow on a deal that did not look great on paper at first?

Let us know in the comments below.

August 3, 2025

How to Easily Evaluate a Rental Property with Real Numbers

For beginners, running the numbers on a potential real estate deal can seem complicated.

It doesn’t have to be.

If you’ve been practicing good budgeting habits with your personal finances, this part should actually be easy.

The key is simple: more needs to come in than goes out.

When you have more coming in than going out, that means you have positive cash flow.

For lawyers and professionals acquiring rental properties to accelerate our journeys to financial freedom, we don’t need to overcomplicate things.

What we need to know is whether a property is going to put more money in our pockets than it takes out.

Today, we’ll look at a real example of how I quickly and easily evaluate potential deals in my primary market.

If you haven’t already, check out my previous post on evaluating real estate deals for a detailed explanation on why I focus on the below elements.

As a quick refresher, let’s first look at the fixed costs and speculative costs involved in evaluating rental properties.

There are fixed costs and speculative costs involved in evaluating a rental property.

Whenever you evaluate a rental property, there are some fixed costs and some speculative costs involved. This holds true whether you are a beginner or an experienced investor.

It’s helpful to differentiate between the fixed costs and the speculative costs. In a lot of ways, we can control the fixed costs, but we cannot control the speculative costs.

Fixed costs generally include reoccurring monthly bills that are relatively constant.

The main fixed costs you’ll want to know when evaluating a rental property include:

Mortgage payment (Principal and Interest)
Taxes
Insurance
Utility Bills
Property Upkeep
Preventive Maintenance

Speculative costs include those unpredictable, irregular costs that do not occur every month and maybe don’t even occur every year.

I separate the speculative costs into three main categories:

Vacancy Rate
Unexpected Repairs
Property Improvements

Vacancy rate refers to the percentage of available units that are unoccupied at a particular time. When running the numbers on a prospective rental property, I recommend adding in the cost of 5% vacancy.

When you own rental properties, things are going to break and require money to fix. If you target properties in decent condition, I recommend saving 5% of the monthly rent for unexpected maintenance.

If you don’t improve your property over time, you risk your unit becoming unattractive. Again, if you target decent properties to begin with, I recommend saving another 5% per month for property improvements.

With these costs in mind, we can now quickly and effectively run the numbers on any available property.

Let’s take a look at a property that recently became available in my target market of Chicago.

I regularly check available properties in my target area in Chicago.

I have a searched saved on the Redfin app for multifamily properties within a certain price range in my target areas of Chicago.

That makes it easy to scroll through the listings a few times every week to keep myself educated on my local market.

I do this for a few reasons, regardless of whether I’m actively shopping for a property.

white ceramic sink near brown wooden table indicating a nice rental property but do the numbers check out. — Photo by Huy Nguyen on Unsplash

First, I want to know what new properties come on the market. I’m interested to see if developers and rehabbers are still drawn to my area.

I also check to see how much properties have sold for recently so I can stay on top of market conditions. For example, I’m curious if sellers are accepting below-asking-price offers and how long properties are staying on the market.

I’m also looking to see if there have been any price reductions on properties that previously caught my eye.

All of this simple research helps me move quickly when an attractive property becomes available.

This research has also helped me develop a list of basic requirements I look for in a rental property.

Before running the numbers, a property has to match my initial requirements.

Before I run the numbers on any property, it has to satisfy some basic requirements. This is not an exhaustive list, but here are some of the most important factors my wife and I evaluate when considering rental properties in Chicago:

Location, location, location. In Chicago, proximity to the L and social life (coffee shops, restaurants, bars, etc.) are crucial. Most of the young professionals we rent to are still in the “going out” phase of life. They want to live in fun neighborhoods so they can enjoy themselves when they’re not working. They typically stay in our apartments for 2-3 years, oftentimes before buying a place of their own and “settling down.”
Taxes. Property taxes can eat away your cash flow. We have high property taxes in Chicago across the board, but taxes vary widely from neighborhood to neighborhood. I look for properties in areas that have more attractive taxes.
Big bedrooms. One of the most common questions I get when I do apartment showings is, “Can I fit a king size bed in here?” People love big beds these days. This can be a challenge considering Chicago’s standard 25-foot wide lot. I look for properties with a minimum bedroom size of 10 x 10.
Outdoor space. Young professionals want to have outdoor space, even if they never use it. When I was a renter, I always wanted an apartment with a balcony for my grill. It didn’t matter to me that I only used it a handful of times each year. Maybe having outdoor space made me feel more grown up?
Parking. Even though Chicago is a very public transit-friendly city, people still like having cars. Because most young professionals aren’t using their cars every day, they want to keep it safe in a dedicated parking space.

If a property becomes available that meets these requirements, I’ll then run the numbers.

Only after confirming that a potential property meets these requirements do I actually run the numbers.

There’s no reason to waste time on a property that may project well in a spreadsheet but will cause me nothing but headaches as a landlord.

The other day, a new property popped up that caught my eye: 2501 N. Sacramento Ave.

It’s a five-unit apartment building listed for $1,800,000 and located directly in my target zone.

Here’s the listing description from Redfin:

Fully Gut Renovated 5-unit building, a prime turnkey investment opportunity in the best Logan Square Location Possible. Double Vanities, Fully built out walk in closets, in unit W/D, tankless hot water heaters, thin shaker kitchens and full height quartz backsplashes are just a few of the features that make this building feel more like condo living. Perfectly situated just steps from the Logan Square Farmers’ Market, residents can enjoy an eclectic mix of trendy bars, restaurants, cafes, and shops right at their doorstep. Renovation done with full plans and permits, include a new roof, windows, insulation, drain tile system with sump pump, back deck, and still warrantied appliances!

It’s not always the case, but in this instance, the pictures seemingly match the description of a beautifully renovated property. Of course, we can confirm the quality of the work when we tour the property.

So, this property passed my initial screening. Now, I can run the numbers to see if it would be a good investment.

By the way, I target gut-renovated properties because I have a full-time job as a lawyer and don’t have the time to dedicate to a major renovation project.

Let’s plug in the numbers to see if this would potentially be a good investment property.

Just because a property looks nice and is in a great location does not mean it’s a great investment. As investors, it’s our job to make sure the numbers work out so more money comes in than goes out.

Using the cost categories above, we can pull most of the information we need directly from the listing.

For example, Redfin (like most sites) provides a useful payment calculator where you can adjust the downpayment, interest rate, taxes, etc. for any property based on your personal situation.

Home office vibes perfect for running the numbers on a rental property. — Photo by Paul Calescu on Unsplash

Here are some tips before you get started:

It’s a good idea to talk to your mortgage broker ahead of time to learn what mortgage rate you will likely qualify for and what downpayment you’ll need.
Remember, this is an initial evaluation. Before you make your final decision on a property, you’ll need to confirm these numbers with your real estate team during the due diligence period.
Try to be conservative with your projections. When you otherwise like a property, the temptation is real to modify the numbers so it looks better on paper.
You’ll notice listing agents may try to enhance a property’s value by suggesting “potential rent” or “market rent” instead of the actual rent. Don’t fall into this trap and end up with a nice-looking property that makes no money.

OK, let’s look at the numbers on this property for educational purposes only. You are responsible for running your own numbers on any potential deal.

2501 N Sacramento Asking Price: $1,800,000

Monthly Rent: $13,840

Mortgage Payment (Principal and Interest)	$8,982
Taxes	$1,429
Insurance	$400
Utility Bills	$350
Property Upkeep	$200
Preventative Maintenance	$200
Vacancy Rate (5%)	$692
Unexpected Repairs (5%)	$692
Property Improvements (5%)	$692
Total Monthly Cost	$13,637

Monthly Cash Flow (Rent – Costs): $203

It took me less than five minutes to do this initial evaluation.

I can see that based on these numbers, the monthly cash flow is $203. We’ll talk about what that means in a moment.

A few notes on the above numbers:

For the mortgage payment, I estimated a 25% downpayment, which is common for investment property loans, and a 7% interest rate.
Taxes are a major cost that can make or break any deal. Make sure you are familiar with how taxes are assessed in your market. For example, in Chicago, property taxes are reassessed every three years. That means taxes go up every three years.
Many property listings will indicate the prior year’s taxes because they are lower. This particular listing has the prior year’s taxes, which I know are soon going to change for the worse. For now, I’ll run the numbers with the current taxes but would definitely account for higher taxes before moving forward with this deal.
Property insurance is a real wildcard these days. Insurance costs are going up everywhere. You’ll need to talk to a good insurance broker for an accurate estimate. I used my experience in the neighborhood with similar properties to make a reasonable estimate.

So, what have I learned from running the numbers on this property?

First, this is a beautiful property in a great location. If I made my decision based only on the pictures and the location, this would be a winner.

Unfortunately, the numbers tell a different story.

This property would not be a good investment for me. I invest for cash flow. For me, this property is way too expensive for only a couple hundred dollars of monthly cash flow.

At a price point of $1.8 million, I would only be interested if this property had a monthly cash flow of at least $4,000 per month.

Now, your preferences and goals may be different. Maybe you’re more focused on the other benefits of investing in real estate, like appreciation and debt pay-down. In that case, you may view this deal differently.

So, is that it?

Cross this property off the list and move on for good?

Not necessarily.

In our next post, we’ll explore ways to make this property a more attractive investment.

We’ll take a look at how the numbers change if we can successfully negotiate the purchase price, find a better loan option, and improve the monthly rent.

Real estate investors: let us know what you think of this property as a potential investment.

Would you be interested in moving forward at these numbers?

August 1, 2025

Running the Numbers on RE Deals Should be Easy
For beginners, running the numbers on a potential real estate deal can seem complicated.

It doesn’t have to be.

If you’ve been practicing good budgeting habits with your personal finances, this part should actually be easy.

The key is simple: more needs to come in than goes out.

When you have more coming in than going out, that means you have positive cash flow.

Today, we’ll discuss what information you need to forecast positive cash flow. My goal is to make this part of the process as simple as possible.

I’ve read full books dedicated to evaluating the numbers on real estate deals. If you want to take a deep dive, I recommend Real Estate by the Numbers: A Complete Reference Guide to Deal Analysis by J. Scott and Dave Meyer.

But, the truth is that most of us lawyers and professionals targeting rental properties as a supplemental income stream don’t need that kind of depth.

Sure, if you’re targeting large multifamily properties or hoping to make rental property investing a full-time pursuit, you’ll absolutely want to pick up a book like Real Estate by the Numbers: A Complete Reference Guide to Deal Analysis.

For the rest of us acquiring rental properties to accelerate our journeys to financial freedom, we don’t need to overcomplicate things.

What we need to know is whether a property is going to put more money in our pockets than it takes out.

In other words, we want to buy assets, not liabilities. When we’re tracking our net worth each month, we want to see that a rental property is helping.

So, the question is: how do I know if I’m buying an asset and not a liability?

Let’s take a look.

There are fixed costs and speculative costs involved in evaluating a rental property.

Whenever you evaluate a rental property, there are some fixed costs and some speculative costs involved. This holds true whether you are a beginner or an experienced investor.

Fixed costs generally include reoccurring monthly bills that are relatively constant.

Speculative costs include those unpredictable, irregular costs that do not occur every month and maybe not even occur every year.

It’s helpful to differentiate between the fixed costs and the speculative costs. In a lot of ways, we can control the fixed costs, but we cannot control the speculative costs.

Regardless, we need to account for both in our deal analysis.

Here are examples of fixed costs when evaluating a rental property.

The clearest example of a fixed cost is your mortgage payment. If you take out a 30-year fixed-rate loan, you’ll know exactly what your monthly mortgage payment will be for the next 360 months.

You’re required to pay that amount each month, that’s why it’s a fixed cost. Easy enough.

I also include insurance costs and property taxes in my fixed costs. These are fixed costs, at least for 12 months at a time, that you are required to pay each month.

You’ll oftentimes see the acronym PITI to reflect the above basic elements of a mortgage payment:
- Principal
- Interest
- Taxes
- Insurance
It’s safe to also include utility bills, like water, trash, and common electricity, in your fixed costs since there shouldn’t be much variation month-to-month in these expenses.

The same goes for landscaping, snow removal, and pest control. I refer to these fixed costs as property upkeep.

The final category of fixed costs includes preventative maintenance, like regular HVAC tune-ups.

Photo by Aykut Eke on Unsplash

Yes, it’s true that the cost of insurance, taxes, utilities and other bills will go up over time. But, you usually don’t see dramatic increases in these fixed costs year over year. At least, in ordinary times. Plus, rents also go up, which offset the higher costs.

To recap, the fixed costs you’ll want to know when evaluating a rental property include:
- Mortgage payment (Principal and Interest)
- Taxes
- Insurance
- Utility Bills
- Property upkeep
- Preventive maintenance
If your goal is monthly cash flow, there’s no excuse for ignoring any of these fixed costs when evaluating a rental property.

Here are examples of speculative costs when evaluating a rental property.

Speculative costs are, by definition, harder to forecast. Even for experienced investors, the best we can do is guess at what these costs will be.

I separate the speculative costs into three main categories:
- Vacancy Rate
- Unexpected Repairs
- Property Improvements
What is vacancy rate?

Vacancy rate refers to the percentage of available units that are unoccupied at a particular time. Obviously, vacancy is bad for rental property investors because we are not collecting rent from the unoccupied units.

To calculate your vacancy rate, simply divide the amount of weeks (or days or months, if you prefer) in a year by the amount of weeks (or days or months) your rental unit was unoccupied.

Then, multiply that number by 100 to see your vacancy rate as a percentage.

If you have multiple rental units, add your units together to get your total vacancy rate, like I show you below.

Vacancy Rate = (Weeks Unoccupied / Total Weeks) x 100

For example, I have 10 rental units in Chicago. This past spring, we had eight lease renewals and two leases end.

We filled one of the two units without a single day of vacancy. The other unit resulted in six weeks of vacancy so we could tackle some needed repairs. More on that below.

This means that I had 6 weeks of vacancy spread over 10 rental units. To calculate my vacancy rate, I can take 520 (10 rental units x 52 weeks in a year) and divide that by 6 weeks:

(6 weeks of vacancy / 520 weeks) x 100 =1.154%

Now, what do we do with this information?

This is where the guesswork comes in. That’s because there’s no guarantee that next year I will have a vacancy rate of only 1.2%. In some years, we have 5 or 6 units to turnover. We may have 24 weeks of total vacancy instead of 6 weeks.

The best I can do is speculate what my vacancy rate will be moving forward.

I wish I could tell you that a 1.2% vacancy rate is a good forecast. In reality, predicting 5% vacancy is a better idea. That allows for about 3 weeks to turnover a vacant unit, reasonable estimates in decent markets.

So, when running the numbers on a prospective rental property, be sure to add in the cost of 5% vacancy.

As an example, if a potential property brings in $6,000/mo in rent, subtract $300/mo to account for 5% vacancy.

What are unexpected repairs?

Remember the leaky toilet?

When you own rental properties, things are going to break and require money to fix.

Predicting how much money you’ll need for these unexpected repairs depends on a variety of factors.

If you are handy and don’t have to pay a plumber to fix the leaky toilet, you’ll save money on these kinds of repairs.

Likewise, if you have a new construction property instead of a 100-year-old property, you’ll likely need to do less repairs.

The bottom line is you’ll have to make educated guesses how much you’ll need to save for these kinds of repairs.

This is actually one of the main reasons I recommend beginner investors don’t quit their day jobs. It’s a powerful advantage to have income coming in from your primary job to help cover any major, unexpected expenses.

If you target properties in decent condition, I recommend saving 5% of the monthly rent for unexpected maintenance. With our prior example of $6,000/mo in rent, you should deduct another $300/mo for unexpected repairs.

You shouldn’t need to use that 5% every month, so that balance should build up until you need it.

What are property improvements?

I mentioned above that we took 6 weeks to improve one of our vacant units. The floors were in rough shape and the apartment needed a full paint job.

By the way, these are two relatively easy jobs that can add a lot of value to a property.

Since we were in great shape with our other units all being occupied, the timing was right to spend a bit of money and lose out on a bit of rent.

In the end, we spent about $5,000 and have brand new floors and a nice looking apartment. We didn’t have to spend that money, but we risk our units becoming unattractive if we don’t keep them fresh.

Photo by Elena Mozhvilo on Unsplash

How should you account for this type of property upkeep?

Again, if you target decent properties to begin with, I recommend saving another 5% per month for property improvements. That’s another $300/mo subtracted in our deal analysis based on $6,000/mo in rental income.

Too many beginner real estate investors skip these speculative costs in their deal analysis.

It’s tempting to ignore these speculative costs when you otherwise like a rental property. You might see monthly rents of $6,000/mo and fixed costs of $5,000 and convince yourself that this is a great deal.

By ignoring the speculative costs, you’ve ignored the additional $900 for vacancy, unexpected repairs, and property upkeep that this property will cost you.

Those extra costs might make this property unattractive.

You can easily find most of the information you need to run the numbers online.

It has never been easier to access the key numbers you need to know when evaluating a rental property.

Sites like Redfin and Zillow typically have all the information you’ll need for your initial evaluation.

One of the most useful features of these sites is the mortgage payment estimator. You can quickly see whether the PITI payment is going to exceed the amount of rent you can reasonably expect.

Because of high interest rates and high property costs, most deal analysis I’m doing today ends right there.

Of course, if the PITI payment is too high, you can play around with the asking price to see at what cost the property might be worth pursuing. Just don’t forget to take into account the other costs discussed above.

Note: above, I specifically wrote “initial evaluation.”

Before closing on a property, you’ll want to confirm the numbers in the property listing are accurate and not being exaggerated.

For example, you’ll want to get verification from the seller on the actual monthly rent. As part of the due diligence process, sellers are required to turn over the current leases.

Sometimes you’ll see listings where the rent is listed as “maximum monthly rent” or “potential rent.” That means the seller is suggesting the apartment could rent for that much, but there is no lease in place for that amount.

I’m always skeptical of listings like this. If it was so easy to obtain the maximum monthly rent, why didn’t the seller get leases for that amount? If they did, they could surely expect a higher sales price.

Always confer with your real estate broker on what the rents are in your market. And don’t forget, a five-star real estate broker should be able and willing to teach you how to run these numbers.

Likewise, you’ll also want to verify with your mortgage broker exactly what your monthly payment will be based on current rates and your qualifications. The same goes for verifying what your actual insurance costs will be.

Did you notice that I did not include a cost for property management in the above?

If you are pursuing your first rental property or have a small portfolio, I recommend you self-manage.

Most importantly, you need to learn how to be a landlord.

There’s no better training than first-hand experience. If you do end up hiring a property manager someday, you need to know how to “manage the property manager.”

There’s another good reason why beginner investors should self-manage.

Unfortunately, it’s hard to find good property managers who are willing to work with small investors. It’s a near certainty that your property manager will not care about your property as much as you do.

Plus, because of the cost involved, a property manager will likely suck up most of your monthly cash flow.

While it varies by market, in major cities you can expect a property manager to charge between 8% and 10% of the monthly rent. It’s hard to cash flow with that kind of drag on your profits.

If your portfolio grows or your circumstances change to the point where you can no longer self-manage, be sure to factor in this major cost to your deal analysis.

Buying a rental property does not require an advanced degree in math.

If you’ve been reluctant to buy your first rental property because of that math involved, hopefully you now see that it doesn’t have to be that complicated.

You need to account for certain fixed costs and predict some speculative costs.

There are countless online calculators to help with the math. You can also use a basic spreadsheet.

Plus, your real estate team can help you with running the numbers.

In an upcoming post, we’ll run through some examples of how I run the numbers on potential rental properties.

Experienced real estate investors: what did I miss?

Beginner investors: what else would you like to know about running the number?

Let us know in the comments below.
July 29, 2025
Does Being Good with Money Make You a Greedy Dragon?
Have you ever been called a “greedy dragon” before?

I hadn’t either before this week.

I recently posted a video on socials talking about how lawyers and professionals should not let leaky toilets prevent them from investing in rental properties.

Apparently, this video struck a nerve with the trolls.

I was called a “bottom dweller”, a “demon”, and my personal favorite, a “greedy dragon.”

I like dragons. So, that last one actually felt like a compliment.

Why does being good with money wake up the trolls?

There’s no shortage of internet trolls out there. And, there’s nothing special about me that caught the attention of the trolls this week.

Haters are going to hate. Trolls are going to troll.

But, there’s an important money lesson to be learned here thanks to the trolls.

You see, these are the types of comments you get from people with limiting money beliefs. They’ve never thought about how money can be used as a tool to build a life of purpose.

Instead, they only think of money as a dangerous weapon to be wielded for evil purposes. They automatically think that people with money are greedy.

The saddest part is that these people would rather exert their energy attacking people than improving their own situations. These are the type of people who are likely to always be controlled by money, instead of the other way around.

Now, I’ll give credit to the internet trolls where credit is due. At least these trolls are not hiding their limiting money beliefs.

That’s a good first step that many of us can benefit from.

You don’t need to stoop to the level of internet troll to have limiting money beliefs. These kinds of attitudes towards money are way more common than you think.

One of my main goals in starting Think and Talk Money is for all of us to confront our limiting money beliefs so we can take control of our lives.

If your relationship with money up to this point has held you back, you’re in the right place by reading this blog.

Another good idea is to read a good money mindset book.

A good money mindset book with help you think of your Money Why.

Money mindset books can help you because they explore the emotional side of money. They will force you to think about money in a way you never have before.

The best money mindset books don’t just talk about the numbers and math of personal finance. That not only makes the books more interesting to read, it also makes them so much more practical in the real world.

Personally, I am striving to build the best life possible for my family. To do that, I need to learn more than just the numbers.

That means I need to be good at not only making money, but also using that money to build a life on my terms. That requires finding a balance, which can be tricky.

To help strike that balance, I’ve studied how others have done it. Then, I can take what I learn and implement those lessons into my own life.

Here are my favorite money mindset books, in no particular order:
- Rich Dad Poor Dad by Robert Kiyosaki
- The Psychology of Money by Morgan Housel
- Think and Grow Rich by Napoleon Hill
- The Richest Man in Babylon by George S. Clason
- Your Money or Your Life by Vicki Robin and Joe Dominguez
- The Millionaire Next Door by Thomas Stanley and William Danko
- Die with Zero by Bill Perkins
- Millionaire Milestones by Sam Dogen
- The Simple Path to Wealth by JL Collins
Being on vacation with family gives you plenty of chances to think about your Money Why.

I highly doubt the average internet troll spends much time thinking about his Money Why.

I’ve been on vacation recently and have had a lot of reminders of my Money Why. Of course, I’ve known my Money Why since I wrote down my Tiara Goals for Financial Freedom on a beach in 2017.

Photo by Cory Bjork on Unsplash

My number one goal is to be with my wife and kids as much as I want. The weird part is I wrote down that goal before I was even married or had kids.

Yes, I want to provide for my family financially. But my Money Why is more than that. I don’t want to just provide money, I want to provide time. I want to be present and share experiences.

To accomplish that goal, I need to be good with money.

If I’m good with my money, I can achieve financial freedom.

With financial freedom, I can choose how to spend my time. That means I can choose who to spend my time with.

To the Internet trolls, these goals make you a greedy dragon.

What do you think?

Is traveling with three young kids a vacation or just “parenting in a new location?”

Anyone who’s vacationed with young kids knows that it comes with all sorts of challenges. I’ve heard vacationing with young kids described before as “just parenting in a new location.”

There’s some truth to that. Figuring out sleeping arrangements, meals, and activities to keep the kids entertained can be a headache. It’s hard not to think that it would have been easier to just stay at home.

Between the occasional meltdown and the tears, it’s fair to wonder why go through the hassle?

I’ve had these thoughts creep into my head recently while on vacation with my family.

Then, I realized why us parents do it.

It’s to see your five-year-old try over and over again before finally reaching the Little Mermaid diving toy on the bottom of the pool for the first time.

The pure joy on her face when she popped out of the water with the toy in hand is an image I hope I never forget.

It’s to watch your three-year-old play with grandma and grandpa and hearing, “Grandpa, close your eyes!” as he completes his next prank to earn an eruption of laughter.

It’s observing your wife at the playground as she manages a baby in a stroller while simultaneously encouraging her daughter on the swings and helping her son as he climbs too high.

How she does it, and keeps a smile on her face, I’ll never know.

It’s the little moments like this that make it all worth it.

Is being good with money a requirement for these types of memories?

Nah. But, if being good with money gets me more of these memories, I’m all in.

It’s important to think about your Money Why regularly.

Saying that I want to be good with money is not the same thing as saying that I want to be rich.

Funny enough, people who are good with money oftentimes feel rich regardless of what their net worth is.

Photo by Zoshua Colah on Unsplash

On the flip side, people who make a lot of money but are not good with money often feel like they’re struggling to get by. As CNBC explained after talking with financial psychologists:

Whether you’re aiming to save more cash or boost your overall earnings, it’s important to ask yourself what you hope to achieve by obtaining more money, Chaffin says. Otherwise, if you don’t change your internal money beliefs, you may still feel anxious about money even if you hit millionaire status.

The takeaway is that it is pointless to make money without stopping to think why you want that money and what you’re going to do with it.

If you’ve never thought about money that way before, here are three powerful reasons to get you started:
1. Money can give you choices.
2. Money can give you personal power.
3. Most importantly, money can give you time.
Money is nothing but a tool that you can manipulate to get what you truly want out of life. The thing is, you have to actually think about what you want if you are going to use that tool effectively.

Being good with money does not make you greedy.

Being good with money does not make you a greedy dragon.

Money is nothing but a tool. You can use that tool to build a life on your terms for you and your family.

For my money, there’s no better pursuit than that.

Do you want to be good with money?

What kind of life are you hoping to build?

Let us know in the comments below.
July 27, 2025
Being Good with Money is About Consistent Choices
Having taught personal finance to law students and young lawyers since 2021, I’ve picked up on a common theme.

At the conclusion of class, my students tend to be motivated and excited to get good with money.

This makes sense because we spend a lot of time thinking and talking about what our ideal lives look like. Then, we learn how to use money as a tool to build those lives.

In the weeks following class, I usually hear from several students who want to follow-up about topics we cover in class, like side hustles or investing in real estate.

I’ll meet each student for coffee downtown and give them some feedback on their ideas. I love these money talks over coffee.

My students’ excitement to take control of their money and their lives is contagious.

Their excitement rubs off on me. I leave these conversations motivated to check in on my own money strategies and goals.

When our chat is wrapping up, I always encourage my students to keep me posted on their journeys. I invite them to check-in every few months so I can help keep them accountable and to adjust any plans we’ve put in place.

Unfortunately, less than 10% of my students ever follow-up after these initial meetings.

After a while, I figured out what was going on.

See, every now and then, I’ll run into one of these former students at a lawyer event or hanging around the courthouse. I’ll ask them about work and life and eventually about the money plan we talked about.

That’s when I usually hear something like, “I’m still thinking about that side hustle. I just put it on the back burner for now. I’m going to do it someday.”

Do you see the problem?

As a wise man once taught me, “someday” means “no day.”

Photo by Yuliia Martsynkevych on Unsplash

Financial freedom is about consistent, intentional choices.

Ask anyone who has reached true financial freedom how they did it, and you’ll pick up on something right away.

You’ll quickly realize that people who reach financial freedom got there by making consistent, intentional choices with their money.

They came up with a plan and they stuck with it.

They didn’t say “some day.”

Achieving financial freedom is not about being the highest earner or the best investor.

It’s about consistency.

There are endless ways to make money. The same goes for investing that money.

You can reach financial freedom as a lawyer who invests in index funds.

Just the same, you can be a consultant who owns rental properties.

Or, an engineer who buys laundromats.

The point is the avenue you choose to build wealth is less important than the consistency of your choices.

For example, if you commit yourself to investing 20% of your salary in index funds, you will be well on your way to financial freedom.

But, if you can’t follow through on your plan for more than a few months, you’re never going to get there.

Of course, we’ve all experienced this tendency in various areas of life. The easiest examples to think of relate to fitness and healthy eating.

How many of us have said we’re going to commit to working out five days a week or eating vegetables every meal, only to give up after a couple months?

It’s not that we want to give up, just that the rest of life gets in the way. We tell ourselves that we’ll return to healthy living someday, which actually means no day.

When it comes to your money choices, don’t let the rest of life get in the way. Money is such a powerful tool when wielded properly and consistently.

Don’t waste this powerful tool.

To help make consistent choices, think about why money matters.

To help you make consistent money choices, the first step is to think about a simple and powerful question: why does money matter?

For me and many others, money is about financial independence, which translates to the power to choose.

When we have the power to choose, we have the power to live a life that conforms to our personal values. That means we can live on purpose, not on auto-pilot.

What does it mean to live on purpose?

It means that we can choose to spend our working hours doing what is meaningful to us. It means we can choose to spend more time with the people who are meaningful to us.

My favorite part during my personal finance for lawyers class is when my students share their motivations with each other. We all learn so much from these honest conversations.

It’s why I believe talking about money is so important. We all benefit from knowing that we’re not alone in our money worries. We can be inspired by hearing what our friends want from their money and their lives.

The more you think and talk about why you want to be good with money, the clearer your motivations will become.

To help you get started, here are three powerful reasons why I want to be good with money:

1. Money can give you choices.

This may seem obvious, but when you have money, you have choices.

You can choose where to live. You can choose who you work for or can work for yourself. On a daily level, you can choose how you eat, exercise, relax, and travel.

This holds true whether you make $50,000 or $250,000. Of course, your options may be different. The point is that when you’ve made good money choices, you’ll at least have options.

2. Money can give you personal power.

This is another way to say that money gives you control of your life situation.

If you are in a bad relationship, a bad job, or just need a change, money gives you the personal power to do something about it. When you don’t have money, you may be stuck.

3. Money can give you time.

When you have enough money to be truly financially independent, you have earned the freedom to do whatever you want with your time.

As I mentioned earlier, you can spend your working hours at a job that is meaningful to you. And, you can spend more time with people who are meaningful to you.

It’s been said many times, “time is our most precious resource.”

When you have money, you can buy your time back.

Photo by Constantin Panagopoulos on Unsplash

What would you do with financial freedom?

Years ago, I asked myself this important question. I wrote down my answer and called it my Tiara Goals.

If you haven’t ever actively thought about what you would do with financial freedom, now’s the time to do so. It is extremely motivating.

Even when you feel like financial freedom is only a distant dream for you, it’s important to actively think about what you want out of life.

I’d even suggest that the further away you feel from financial freedom, the more important it is to think about what it would mean for you.

When you’re at your lowest point, visualizing what you would do with financial freedom is a helpful escape.

Don’t forget to write down whatever you come up with.

Here are my 7 Tiara Goals for Financial Freedom:
1. Be with my wife and kids as much as I want. Dad never missed a game. Mom never missed a game. Nana never missed a game.
2. Not be forced to commute to work on Friday or Tuesday or whatever day, if I need that day for myself.
3. Choose how to spend my working hours (representing clients, teaching, volunteering, building a business, etc.).
4. Continue to study and learn constantly.
5. Take at least one big trip every year.
6. Never turn down an exciting or smart opportunity because I can’t afford it.
7. Work alongside people that value my contributions.
Keep in mind that I wrote these goals before I had kids and before I was even married. This was also years before the pandemic when working from home was a foreign concept to most of us.

I think it says a lot that I was thinking about these things way back then.

Being consistent means thinking just a little bit about money every week.

My goal is to help you think even a little bit about your money choices every week. That way, your money life remains in balance with the rest of your life, and you can continually evolve and adapt your choices as your life changes.

I want to encourage you to think, and to talk, and to choose. If all I do is help you and your loved ones think more purposefully about your money, Think and Talk Money will be a success.

Maybe your goal is also financial independence, or the power to choose and to live on purpose.

Maybe it’s something else entirely. Whatever it is, discovering your motivation is the crucial first step.

It’s so important that I’ll encourage you to think about that motivation every week.

I’ve learned that money is something that we all need to think about as a regular part of our lives. Not that we should only think about money. Or that we need to obsess over money. Simply that we can’t ignore money.

How sad is it when we realize our hard earned money has just vanished? That at the end of each month, we have less money?

If this sounds familiar, you’re not alone. There are a lot of smart people who need somewhere to turn learn about money. Or, maybe just a reminder to actively think about their money.

You don’t have to struggle with making continuous money choices alone.

Most of us could use someone to talk to or something to read to help us learn about personal finance.

I hope Think and Talk Money can be that place for you.

I can’t, and won’t, tell you what to do with your money. It’s your life, after all. But, I will strive to help you think and talk with purpose about your money.

The basic money concepts are easy enough to understand. Consistently making good choices is hard.

Most of us could ace a quiz that asked, “Is it a good idea to spend more money than you earn every month and plummet deeper and deeper into debt?”

Knowing what to do is not the same as actually doing it. Remember, someday is no day.

That’s why it helps to not be afraid to talk about money. For some reason, most of us choose to deal with money on our own. I’d like to change that.

There’s a stigma that we shouldn’t talk about money. I’d like to change that, too.

That way, we all have a better chance of making intentional, consistent choices with our money.

Have you been excited about money in the past only to lose that excitement not long after?

Have you tried talking about money with your friends and family to help you stay motivated? If not, what is holding you back?

Let us know in the comments below.
July 24, 2025
Stop Fearing Toilets with a Good Handyman on Your RE Team
“You really want to be a landlord? You don’t want to fix leaky toilets at 2 a.m.!”

If you decide to invest in rental properties, this is one of the first comments you’ll hear from the haters.

Mind you, these haters who are so scared of the imaginary leaky toilet are not landlords. I’ll go a step further and would wager that none of them have ever even seen a leaky toilet before.

Instead, they probably heard a story one time and decided that being a landlord was too hard.

The sad part is that they have shut themselves out from one of the best asset classes (and my personal favorite) for achieving financial freedom.

The other comment you’ll regularly hear?

“I can’t be a landlord. I’m not handy.”

Guess what?

I’m not very handy either. And, I have 11 rental units in two different states.

@thinkandtalkmoney
You don’t need to be scared of leaky toilets when you have a good handyman on your real estate team. You’ll also learn that you don’t need to be handy to be a landlord. #thinkandtalkmoney #handyman #realestateinvesting #realestateinvestor #financialfreedom
♬ original sound – Thinkandtalkmoney

The truth is that you do not need to be handy to be a landlord.

In reality, you don’t need to be handy to be a landlord.

And, you definitely don’t need to fear the 2 a.m. leaky toilet.

Oh, this is not to say that things aren’t going to break and need attention at the most inconvenient time.

Every landlord has those stories. I’ve certainly had my fair share.

One example seems on point.

A few years ago, my family and I were living in one of our rental apartments.

One evening before leaving for vacation the next day, we were sitting around when my sister-in-law pointed at the ceiling and exclaimed, “What is that!?”

Well, “that” was a huge, previously undiscovered, water spot in my ceiling.

Turns out the toilet in the unit upstairs was leaking. (See, on point.)

The water gradually spread into the wood floors of the upstairs unit and the ceiling of my unit. It also dripped all the way down the plumbing stack to the lower level carpet in the bedroom where my two little kids slept.

What did I do about this catastrophe?

I called my handyman and got on a plane the next morning.

By the time we returned, the wood floors, ceiling, and carpet had all been repaired and there was no sign of damage.

When you have a good handyman on your real estate team, you don’t have to worry about things like this.

One of the biggest myths of being a landlord is that you need to be handy.

Have you noticed that we’ve been talking about investing in real estate for a couple of months now and I haven’t once mentioned leaky toilets or the need to be handy?

That’s because there are so many other parts of being a landlord that are more important than your skills with a hammer.

To name just a few more important skills: running the numbers on potential deals, selecting good tenants, keeping good records, dealing with tenant complaints, and paying the bills on-time.

Plus, for most of us lawyers and professionals who want to own rental properties, we have other time commitments. Even if we have the skills or enjoy doing repairs ourselves, it still makes sense to hire a professional.

That’s why every good rental property investor has a good handyman on his team.

Before we talk about what to look for in a handyman, let’s take a look back at the other key members of your real estate team.

Your Spouse is the Most Important Person on Your RE Team

The most important person on your real estate team is your spouse. Make sure you each understand the financial, time, and emotional commitments involved.

Owning rental properties should not be a solo adventure. The entire experience is better when you have someone to share it with.

Isn’t that true for most things in life?

If you’re considering your first rental property, don’t fool yourself into thinking you’ll be earning passive income.

Before you buy a rental property, I encourage you to talk to your spouse first. Make sure you both are on the same page.

No, you do not have to have an equal division of labor.

Yes, you each have to commit to the good and the bad that comes along with owning rental properties.

If you both can make that commitment, you have the best shot at owning your properties for a long time and reaching that ultimate goal: financial freedom.

Photo by Colourblind Kevin on Unsplash

Build Out Your RE Team Starting with a Five-Star Broker

Once you and your spouse are on the same page, it’s time to start building out the rest of your real estate team.

Start building your real estate team by finding a great broker. Your broker is like a five-star hotel concierge who can make your entire experience so much better.

During your search for a great rental property, a good broker will:
- Educate you about the market you’re investing in.
- Send you properties that match your goals.
- Tour properties with you to help identify any red flags.
- Negotiate on your behalf to ensure you get the best possible price.
- Connect you with other key members of your team.
- Steer you away from making poor choices.
But, you don’t just want a good broker. You want to work with the best brokers as a rental property investor.

The best brokers will do all of things for you during the acquisition process. But, that’s just the beginning.

The best brokers are in it for the long run and will help you navigate challenges as they pop up. That might mean helping with marketing and showing your property.

More importantly, that means continuing to give you advice and tutelage as you learn to be a landlord.

How to Evaluate a Great Mortgage Broker for your RE Team

With a five-star real estate broker on your team, it’s time to find a great mortgage broker.

A great mortgage broker is like a tour guide who is the local expert and knows the ins-and-outs of the neighborhood. She has an intimate knowledge of the local food scene based on years of experience.

She’ll show you the hidden gems and recommend what to order at each restaurant based on your personal preferences. She can educate you as to what’s in certain dishes and why you may like to try them.

She’ll also steer you away from the tourist traps and prevent you from going to the wrong places to ensure you have the best experience possible.

Recommendations? Education? Preventing mistakes?

Love all those things.

And, this is exactly what a good mortgage broker will do for you.

A good mortgage broker will:
- Recommend the best loan for your goals.
- Stop you from borrowing more than you really can afford.
- Help get your loan approved.
- Explain the numbers.
- Not let you refinance until the time is right.
Take your time finding a good mortgage broker. It’s important to work with someone who does more than just promise the best rates and terms.

With your spouse, a five-star real estate broker, and a great mortgage broker on your team, it’s now time to fill out the rest of the key positions.

Be Sure to Have an Experienced Accountant on your RE Team

I invest in real estate for the massive tax benefits.

In fact, the massive tax benefits are one of the four main reasons why I invest in real estate. The other three reasons are cash flow, appreciation, and debt pay-down.

I’ve previously written about how I earn rental income and legally pay close to nothing in income tax on my rentals each year.

How is that possible? Am I some type of tax wizard?

Of course not.

But, I do have a tax wizard on my real estate team.

OK, more accurately, I have a Certified Public Accountant (CPA) on my real estate team.

Your accountant is so integral to your financial success that he is the next person you need to have on your real estate team.

The federal government has long encouraged investment in real estate. People need places to live, work, and socialize. The government long ago decided to reward investors who take on the risk of providing these opportunities.

These incentives come largely in the form of tax benefits.

The challenge for real estate investors is to actually take advantage of all these tax incentives.

That’s where your accountant comes in.

Because I work with an accountant, I don’t have to be a tax expert. I just have to know enough to have intelligent conversations and make decisions when the time comes.

My accountant makes sure I get all the tax benefits for owning rental properties.

Photo by Annie Gray on Unsplash

What to look for in a good handyman.

Here are some of the things I look for:

1. A handyman who responds to my messages promptly.

The last thing you want is a handyman who is flakey. When something needs fixing, you need someone who answers your call or messages you back right away.

Most repairs are not urgent, meaning your handyman does not need to drop everything right away to tend to the issue.

But, it’s important that you let your tenant know that you’re on it and someone will be around in short order to address the problem.

2. A handyman who Is not too big for a small job.

It’s much easier to find a handyman to do a full kitchen renovation than to replace just the kitchen sink. Obviously, the bigger the job, the more money to be earned.

As a landlord, you need someone who can handle the small jobs. These come up more frequently than the bigger projects and are often necessary to keep tenants happy.

We recently had a tenant message us that the kitchen sink was leaking. My handyman got over there the same day and fixed the leak for $80.

This is the type of guy you need on your team.

3. A handyman who makes a good impression with the tenants.

Your handyman will inevitably have to interact with your tenants. You want someone who makes a good impression. That means someone who is professional, courteous, and respectful of the tenant’s space.

It is also very helpful if your handyman can explain to the tenant what the repair involves and what to do if there are still any issues.

4. A handyman who does not run up the bill.

Handymen tend to charge by the hour because they don’t usually know the extent of the repair until they begin working.

While there’s nothing wrong with charging by the hour, you can imagine how someone untrustworthy might take advantage of this billing arrangement.

With more experience as a landlord, you will start to have the same type of repairs come up regularly. Based on that experience, you’ll know when a handyman is running up the bill on you.

5. A handyman who comes recommended from other landlords.

Like anything else in life, a good recommendation goes a long way. It is always a good idea to work with someone who people you trust can vouch for.

The trust factor works both ways, too. If your handyman knows that you are reputable and come recommended, he is more likely to take your calls and go into business with you.

6. A handyman who has worked on rental properties.

When we first started shopping for a rental property, our real estate broker taught us about “condo quality” vs. “rental quality.”

Condo quality is nicer, more expensive, and tends to be for people buying a home for themselves.

Rental quality is more affordable and comes with the expectation that things will break and need to be replaced.

When it comes to a handyman, you want some who understands the difference. It makes no sense to overpay for quality that you just don’t need in a rental unit.

This has nothing to do with the skill of the handyman, just the wherewithal to make “rental quality” repairs in rental units.

How many would-be rental property investors have been scared off by the imaginary leaky toilet?

If you have been reluctant to become a landlord because of the hypothetical leaky toilet, hopefully this post has given you something to think about.

Being a successful landlord has nothing to do with being handy.

Don’t let your fears about potential repairs stop you from exploring this powerful asset class.

If you’re a landlord, what is your best “leaky toilet” story?

Was it enough to give up on being a landlord?

Let us know in the comments below.
July 22, 2025
Be Sure to Have an Experienced Accountant on your RE Team
I invest in real estate for the massive tax benefits.

In fact, the massive tax benefits are one of the four main reasons why I invest in real estate. The other three reasons are cash flow, appreciation, and debt pay-down.

I’ve previously written about how I earn rental income and legally pay close to nothing in income tax on my rentals each year.

How is that possible? Am I some type of tax wizard?

Of course not.

But, I do have a tax wizard on my real estate team.

OK, more accurately, I have a Certified Public Accountant (CPA) on my real estate team.

Your accountant is so integral to your financial success that he is the next person you need to have on your real estate team.

Why is it so important to have an accountant on your team?

The federal government has long encouraged investment in real estate. People need places to live, work, and socialize. The government long ago decided to reward investors who take on the risk of providing these opportunities.

These incentives come largely in the form of tax benefits.

The challenge for real estate investors is to actually take advantage of all these tax incentives.

That’s where your accountant comes in.

Because I work with an accountant, I don’t have to be a tax expert. I just have to know enough to have intelligent conversations and make decisions when the time comes.

My accountant makes sure I get all the tax benefits for owning rental properties.

Before talking further about accountants, let’s review the first three members that you’ll want to have on your real estate team.

Your Spouse is the Most Important Person on Your RE Team

The most important person on your real estate team is your spouse. Make sure you each understand the financial, time, and emotional commitments involved.

Owning rental properties should not be a solo adventure. The entire experience is better when you have someone to share it with.

Isn’t that true for most things in life?

If you’re considering your first rental property, don’t fool yourself into thinking you’ll be earning passive income.

Before you buy a rental property, I encourage you to talk to your spouse first. Make sure you both are on the same page.

No, you do not have to have an equal division of labor.

Yes, you each have to commit to the good and the bad that comes along with owning rental properties.

If you both can make that commitment, you have the best shot at owning your properties for a long time and reaching that ultimate goal: financial freedom.

Build Out Your RE Team Starting with a Five-Star Broker

Once you and your spouse are on the same page, it’s time to start building out the rest of your real estate team.

Start building your real estate team by finding a great broker. Your broker is like a five-star hotel concierge who can make your entire experience so much better.

During your search for a great rental property, a good broker will:
- Educate you about the market you’re investing in.
- Send you properties that match your goals.
- Tour properties with you to help identify any red flags.
- Negotiate on your behalf to ensure you get the best possible price.
- Connect you with other key members of your team.
- Steer you away from making poor choices.
But, you don’t just want a good broker. You want to work with the best brokers as a rental property investor.

The best brokers will do all of things for you during the acquisition process. But, that’s just the beginning.

The best brokers are in it for the long run and will help you navigate challenges as they pop up. That might mean helping with marketing and showing your property.

More importantly, that means continuing to give you advice and tutelage as you learn to be a landlord.

Photo by Medienstürmer on Unsplash

How to Evaluate a Great Mortgage Broker for your RE Team

With a five-star real estate broker on your team, it’s time to find a great mortgage broker.

A great mortgage broker is like a tour guide who is the local expert and knows the ins-and-outs of the neighborhood. She has an intimate knowledge of the local food scene based on years of experience.

She’ll show you the hidden gems and recommend what to order at each restaurant based on your personal preferences. She can educate you as to what’s in certain dishes and why you may like to try them.

She’ll also steer you away from the tourist traps and prevent you from going to the wrong places to ensure you have the best experience possible.

Recommendations? Education? Preventing mistakes?

Love all those things.

And, this is exactly what a good mortgage broker will do for you.

A good mortgage broker will:
- Recommend the best loan for your goals.
- Stop you from borrowing more than you really can afford.
- Help get your loan approved.
- Explain the numbers.
- Not let you refinance until the time is right.
Take your time finding a good mortgage broker. It’s important to work with someone who does more than just promise the best rates and terms.

With your spouse, a five-star real estate broker, and a great mortgage broker on your team, it’s now time to fill out the rest of the key positions.

Seek out an accountant with real estate specific experience.

I mentioned earlier that the key way the government incentivizes real estate investors is through tax deductions.

To accomplish its goal, the government allows real estate investors to deduct certain rental property expenses from their income.

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.

The key is to work with someone who has significant experience specific to rental property investing.

The truth is there are numerous tactics and strategies that apply to real estate investors that don’t apply to all businesses.

An accountant who may be ideal for a restaurant owner or law firm might not be a good fit for real estate investors.

This is not a knock on accountants, either. In this day and age, professionals in all industries tend to specialize in niche areas.

For example, I am a lawyer who specializes in helping people with mesothelioma. You wouldn’t hire me to represent you in a divorce.

If you broke your foot, you wouldn’t go see a brain surgeon.

You get the idea.

When seeking out an accountant, be sure to work with one who has experience specific to real estate investing.

How can you tell if an accountant has experience specific to real estate investing?

When my wife and I were searching for an accountant, it became very clear to us that not all accountants work with real estate investors.

For instance, most accountants are well-versed in common rental property expenses. These common expenses may include mortgage interest, property tax, operating expenses, depreciation, and repairs.

We met with plenty of intelligent accountants who understood these basics.

Photo by Scott Graham on Unsplash

But, we wanted more than just basic help. We wanted help in crafting a long-term strategy for achieving financial freedom through real estate.

When you start meeting with accountants, ask them how many real estate investors they work with. Ideally, you’ll find an accountant who works with a number of investors similar to you.

You’ll also want to find an accountant whose style matches yours. Some accountants are more aggressive and some accountants are more conservative.

For example, say you own a vacation condo that you rent out sometimes and use personally other times. You may get different advice from two accountants on what counts as a rental property deduction for that condo.

It’s ultimately up to you to find an accountant that matches your style.

Find an accountant who answers your phone calls.

Maybe this goes without saying, but you want an accountant who answers the phone when you call. As investors, we never know when an opportunity may pop up that we need timely advice on.

You might be surprised how many real estate investors don’t have an open line of communication with their accountants. I think it’s a mistake to only consult your accountant after you’ve gone ahead with a decision.

As one example, a few years ago, I thought about buying an 8-unit apartment building with a number of partners. It seemed like a good way to earn some cash flow with only a small amount of my own money in the deal.

Before I moved ahead with the deal, I called my accountant. We had a long chat about all the additional complexities involved from a tax perspective.

He took the time to educate me so I could make a good decision. In the end, I walked away from the deal.

If I didn’t have a good relationship with my accountant, I might have made a big mistake.

A good accountant will help you reap the massive tax benefits of investing in real estate.

As a real estate investor, you don’t have to be an expert in every part of the business.

There’s no better example than when it comes to taxes.

Find a good accountant who is willing to educate you and strategize with you. You want more than just someone to prepare your tax returns.

When you have a good accountant on your real estate team, you’ll move that much faster towards financial freedom.

What other traits should real estate investors look for in a good accountant?

Let us know below.
July 20, 2025
How to Evaluate a Great Mortgage Broker for your RE Team

Ever been on a good food tour in a foreign country?

Stay with me.

We recently talked about how the most important person on your real estate team is your spouse. Make sure you each understand the financial, time, and emotional commitments involved before you buy your first rental property.

Once you and your spouse are on the same page, it’s time to start building out the rest of your real estate team.

Start by finding a great real estate broker. Your real estate broker is like a five-star hotel concierge who can make your entire vacation so much better.

With a real estate broker on your team, it’s now time to find a great mortgage broker.

To continue our analogy, if your real estate broker is the hotel concierge, your mortgage broker is a trusted tour guide.

Have you ever visited a foreign country for the first time and been excited, but a little bit nervous, about what’s in store for you? There’s so much to see and do, but you don’t speak the language and are a bit anxious to venture out on your own.

Fortunately, you have an expert tour guide lined up to meet you at the hotel and lead you on an memorable adventure.

Think about how the concierge and tour guide each help you in different ways.

The concierge does not actually join you for each experience on your vacation. He helps you plan an itinerary and makes the arrangements before setting you on your way.

He knows his role and leaves it to the specialists, like tour guides, to lead isolated parts of your trip.

For instance, the concierge may help you book a food tour around London with an experienced tour guide. My wife and I did this years ago and had a wonderful time.

The tour guide is the local expert who knows the ins-and-outs of the neighborhood. She has an intimate knowledge of the local food scene based on years of experience.

She’ll show you the hidden gems and recommend what to order at each restaurant based on your personal preferences. She can educate you as to what’s in certain dishes and why you may like to try them.

She’ll also steer you away from the tourist traps and prevent you from going to the wrong places to ensure you have the best experience possible.

Recommendations? Education? Preventing mistakes?

Love all those things.

And, this is exactly what a good mortgage broker will do for you.

Why it’s important to have a good mortgage broker on your team.

Mortgage lending is big business. Just about every person out there needs a mortgage to buy a home or an investment property. As a result, there are a lot of banks and companies out there who want your business.

To be sure, not all mortgages are created equal.

And, not all brokers, banks, and lending companies are created equal.

Your job as an investor is to find a mortgage broker who truly has your best interests in mind.

That means working with someone who wants what’s best for you and your family, not what’s best for him and his family.

Plus, because rental property investing is a long-term game, you want someone on your team who’s also in it for the long run.

What should you look for in a good mortgage broker?

During your loan process, you will be talking to your mortgage broker a lot.

Refer back to the tour guide analogy. During the tour, you are essentially dependent on your tour guide. If you’re going to depend on someone, you probably want to like that person.

The same goes for your broker during the mortgage process. You will be dependent on your broker to make sure your loan gets approved.

Make sure you find someone that you mesh with.

Here are some of the qualities you should look for in a good mortgage broker.

Photo by Priscilla Du Preez 🇨🇦 on Unsplash

A good mortgage broker will:

Recommend the best loan for your goals.

There are numerous mortgage options out there. Selecting a mortgage is not a “one-size-fits all” kind of thing. Your broker should be well-versed in all the options and make recommendations based on your priorities.

Stop you from borrowing more than you really can afford.

There’s a difference between what you might get approved for and what you can reasonably afford. A good mortgage broker will help you understand the difference.

If you’re tempted to take out more than you should, your mortgage broker should help reign you back in.

Help get your loan approved.

Your mortgage broker’s primary job is to match you with a lender and loan product to meet your needs. The underwriters will have the final say in whether your loan gets approved.

If you haven’t had the pleasure, you’ll need to provide the underwriters with documentation about your income, savings, investments, and so much more.

While it’s ultimately not up to your broker to approve the loan, he can serve as an advocate on your behalf. He can help get the underwriters the information they need to approve your loan. Don’t underestimate the importance of this part of the job.

Explain the numbers.

This is especially important for rental property investors. After all, you’re buying a rental property to make money. All mortgage brokers can show you how much that property will cost every month.

The best brokers will take it a step further and show you how much you can expect to cash flow from that property each month. Then, you can decide if it makes sense to buy a property based on the numbers.

Not let you refinance until the time is right.

It’s tempting to refinance at the first moment rates drop. There are costs involved with refinancing that can oftentimes eat away at any savings from refinancing. A good mortgage broker will stop you from doing so until the moment is right.

Be patient as you look for a great mortgage broker to work with.

Take your time finding a good mortgage broker. It’s important to work with someone who does more than just promise the best rates and terms.

Plus, if you shop around enough, you’ll learn that there’s not much variation in the rates from one provider to the next. Rates are mostly dependent on economic conditions outside the control of mortgage brokers and lenders.

That’s why your mission is to stay patient and find a mortgage broker that you are comfortable with.

When my wife and I were first getting started, we were told by a few different people that we had to work with this one particular mortgage broker. He was the best, apparently. His website was full of accolades and awards.

We decided to give him a shot. We called his office and set up an introductory phone call for later in the week.

At the scheduled time, he didn’t call. When we emailed him, he apologized and explained something came up with his kids.

OK, no problem. That’s understandable. We rescheduled.

At the rescheduled time, he again didn’t call. That was enough of that. We moved on. Maybe he really was great at his job, but he didn’t seem to care too much about us.

We found a good broker years ago and have never looked back.

In the end, it all worked out for the best. My wife and I met with a number of brokers before connecting with the guy we still use today. We’ve used him for all our Chicago purchases and multiple refinances.

As a side note, I firmly believe that when you find someone good for your team, you commit to that person. Commitment leads to trust. And, trust leads to the best outcomes. This is true for anyone you work with, not just mortgage brokers.

Photo by NordWood Themes on Unsplash

On top of being a mortgage broker, our guy is an experienced rental property investor. If you want to buy a rental property, I recommend you work with someone who also owns rental properties.

At a minimum, find someone who has ample experience working with investors.

For instance, with our first purchase in 2018, our broker recommended a conventional loan (at the time called “Home Possible”) that I had never heard of before.

The loan allowed us to put 5% down, instead of the normal 20%, which meant we could more quickly buy our second property. This one recommendation allowed us to buy two cash-flowing rental properties within 6 months.

This is just one example of how a good mortgage broker can help accelerate your real estate goals.

Find a broker for your real estate team who understands your goals.

Our broker understands exactly what we’re trying to accomplish with each purchase. I can be straight with him and he can be straight with me. It’s refreshing.

We’ve had in-depth conversations about the numbers on every property we’ve considered. Importantly, he’s prevented us from borrowing more than we can afford.

And, whenever the underwriters ask for so many documents that I am about to lose my mind, he steps in to make it all better.

Same as us, this is exactly what a good mortgage broker will do for you.

What has your experience with mortgage brokers been like?

What else do you look for that I didn’t mention above?

July 17, 2025
Build Out Your RE Team Starting with a Five-Star Broker
Owning rental properties should not be a solo adventure. The entire experience is better when you have someone to share it with.

We recently talked about how the most important person on your real estate team is your spouse. Make sure you each understand the financial, time, and emotional commitments involved.

Isn’t that true for most things in life?

Whether it’s a project you’re working on or a vacation you’re taking, it’s better when you do it with other people.

Owning rental properties is no different.

If you’re considering your first rental property, don’t fool yourself into thinking you’ll be earning passive income.

For me, the benefits of owning rental properties significantly outweigh the downsides of being a landlord.

It’s a tradeoff that I would happily make again and again… as long as I have good help along the way.

That help starts with a real estate broker.

If you find the right broker, he will guide you in building a rental property portfolio that you’re proud of.

Let’s take a look.

Start building your team by finding the best real estate broker.

Start building out your team by finding a real estate broker (or real estate agent) who matches your style and understands your goals.

Think of your real estate broker as a concierge at a five-star hotel in a foreign country.

My wife and I went to Australia years ago. It was probably the best trip we ever took. We started in Sydney and eventually made our way up the coast to the Great Barrier Reef.

While in Sydney, we took a couple of day trips to the Hunter Valley wine region and the Blue Mountains. We climbed Harbour Bridge and saw some animals at a zoo we had never seen before.

We met some amazing people and had some wonderful meals.

All of these experiences were arranged through the concierge at our hotel.

Before we ever left Chicago, we coordinated with the hotel’s concierge. He asked us what our priorities were, sent us options to consider, answered our questions, and then made all the arrangements.

The decisions were ultimately ours, but the concierge used his expertise and what he learned about our priorities to help us make the best decisions. Importantly, he steered us away from making poor choices.

We would have been completely lost without his guidance.

Just as the concierge helped us navigate Sydney, your real estate broker will help you navigate the rental property experience.

Your broker will wear many hats in helping you find a great rental property.

During your search for a great rental property, a good broker will:
- Educate you about the market you’re investing in.
- Send you properties that match your goals.
- Tour properties with you to help identify any red flags.
- Negotiate on your behalf to ensure you get the best possible price.
- Connect you with other key members of your team.
- Steer you away from making poor choices.
These are all invaluable services that a good broker can provide.

But, you don’t just want a good broker. You want to work with the best brokers.

The best brokers will do all of things for you during the acquisition process. But, that’s just the beginning.

The best brokers have one other trait in common.

The best brokers remain a key part of your team (life?) long after the transaction has concluded.

Getting a good rental property is just step one. Keeping the property is just as, if not more, important.

We’ve talked about how owning rental properties is a long-term game. You want a broker on your team who’s in it for the long run to help you navigate challenges as they pop up.

That’s why you want a broker who is willing to help you keep that property for the long run. That might mean helping with marketing and showing your property.

More importantly, that means continuing to give you advice and tutelage as you learn to be a landlord.

For that reason, if you are going to buy a rental property, I recommend you work with a broker who also owns rental properties.

Photo by Dane Deaner on Unsplash

I recommend you find a broker who is also an investor.

There are different factors to consider when buying a rental property compared to buying a primary residence.

A property could be a great home but would be a poor rental.

When it comes to working with a broker, you want somebody on your team who has personally experienced the challenges in owning rental properties that lie ahead.

Real estate brokers who are also investors are better equipped to teach you if tenants will love or hate a certain rental apartment.

Here’s a very basic example to illustrate this point:

I use the garbage disposal in my home multiple times every day. I never really thought about it before, but the garbage disposal is a wonderful invention. I’ll go as far as to say that I love my garbage disposal.

However, in my rental properties, I refuse to install garbage disposals.

In rental properties, garbage disposals constantly break because tenants are not always careful about what they put down the drain. Each time a garbage disposal clogs or breaks, that’s a costly repair. It’s just not worth it in a rental property.

I first learned to avoid garbage disposals in my rental properties years ago from my broker.

Yes, it’s a small consideration overall. You’re not going to pass up on a wonderful property because of a garbage disposal.

But, each property you look at will have countless little elements like this that need to be considered.

A broker who is an experienced rental property investor will have a better eye for these types of things.

Find a real estate broker can help make a list of the most desirable features for renters in your market.

My wife and I have worked with the same broker in Chicago for almost a decade. He’s been a mentor and a friend. He has helped us in countless ways, including putting together a list of features we look for in every rental property.

It’s not an exhaustive list, but here are some of the most important factors we evaluate when considering rental properties in Chicago:
1. Location, location, location. In Chicago, proximity to the L and social life (coffee shops, restaurants, bars, etc.) are crucial. Most of the young professionals we rent to are still in the “going out” phase of life. They want to live in fun neighborhoods so they can enjoy themselves when they’re not working. They typically stay in our apartments for 2-3 years, oftentimes before buying a place of their own and “settling down.”
2. Taxes. Property taxes can eat away your cash flow. We have high property taxes in Chicago across the board, but taxes vary widely from neighborhood to neighborhood. I look for properties in areas that have more attractive taxes.
3. Big bedrooms. One of the most common questions I get when I do apartment showings is, “Can I fit a king size bed in here?” People love big beds these days. This can be a challenge considering Chicago’s standard 25-foot wide lot. I look for properties with a minimum bedroom size of 10 x 10.
4. Outdoor space. Young professionals want to have outdoor space, even if they never use it. When I was a renter, I always wanted an apartment with a balcony for my grill. It didn’t matter to me that I only used it a handful of times each year. Maybe having outdoor space made me feel more grown up?
5. Parking. Even though Chicago is a very public transit-friendly city, people still like having cars. Because most young professionals aren’t using their cars every day, they want to keep it safe in a dedicated parking space.
There are certainly other factors we consider, but these are some of the first things we look for thanks to the guidance of our real estate broker.

Photo by Jaye Haych on Unsplash

A good real estate broker is absolutely critical if you’re investing outside your home market.

I live in the Chicago area and own a rental property in Colorado. Everything we just talked about becomes even more important when you invest outside your home market.

In your home market, you have the benefit of relying on your daily experiences to help select the right property.

I rented apartments in Chicago for 15 years before I bought an apartment building. That gave me a huge advantage when looking for a good rental property.

I didn’t have the same level of intuitive knowledge in the Colorado market.

Even if you have personal experiences in certain out-of-state markets, your knowledge will never match that of your hometown. No matter how many times you’ve visited a place, it’s not the same as living in that place.

That’s why having a good broker on your team becomes even more critical when you’re investing out-of-state.

I’m happy to say that our real estate broker in Colorado is the best there is.

And if you ever tell him I said that, I’ll deny it and say I was hacked.

Our Colorado broker spent hours and hours educating us about the local market when we were shopping for a rental property.

Even though my wife and I had vacationed in the area for years, we didn’t know the first thing about real estate in the area.

Before we considered any specific units, we had numerous conversations with our broker about our goals and preferences. He helped us pinpoint locations and features that we had not previously through about.

I still have the pages of notes I took during these conversations, which I reviewed constantly during our search.

If you are going to shop for properties outside your home market, be sure to find a good broker first.

The most successful rental property investors have a team of professionals working with them.

It’s not an exaggeration to say that having the right people on your real estate team can make or break your investing experience.

Having a good team in place, starting with your real estate broker, will help you avoid mistakes and stay motivated so you can keep your properties long-term.

I’ve seen too many investors sell their rental properties after a couple of years because they didn’t have the right people on their team. They end up making preventable mistakes and give up because being a landlord is too hard.

Unfortunately, that means they give up their properties long before getting the benefits from cash flow, appreciation, debt pay-down, and tax advantages.

If you’re going to take on the challenge of being a landlord, you might as well hold your properties long enough to reap the benefits.

And, you should take all the help you can get along the way, beginning with a great broker.

You will not regret having a great broker on your team.

My wife and I have been incredibly fortunate to work with two top-class brokers, first in Chicago and then in Colorado.

Thinking about it now, our brokers are similar in that they have been teachers and mentors to us.

Before you start looking for your first rental property, be sure to work with a great broker. Don’t just settle for the first broker you meet with.

This may take some time. Years ago, my wife and I met with six different brokers in Chicago, who all came highly recommended.

We were patient, asked a lot of questions, and went with the person who matched our style and who we felt comfortable with. The time we took during this process was well worth it.

Like a five-star hotel concierge, our brokers have made our investing experience as smooth as possible.

Without their guidance, I highly doubt we would have bought, and still own, five properties today.

Have you worked with a real estate broker before?

What should new rental property investors be on the lookout for?

Tell us about your experience in the comments below.
July 16, 2025
Money Questions: How to Handle the New Student Loan Changes?
When we last talked about student loans a few months ago, here’s what I had to say:

Have you noticed all the attention on student loans lately?

To say there is some confusion and uncertainty would be an understatement.

I don’t have any better idea than you do about what may happen in the student loan landscape.

No matter what happens, the way I see it, you have two options,

The first option is to do nothing, get angry, and blame everyone else.

The second option is to take ownership, get prepared, and educate yourself about the student loan system so you’re ready for whatever comes next.

If you’ve chosen the second option, you’re in the right place. That means you’re determined to not let outside factors you can’t control hinder your progress towards financial freedom.

Well, we now know what comes next.

@thinkandtalkmoney
The One Big Beautiful Bill Act, signed into law July 4, 2025, included changes to the federal student loan system. Since then, a number of readers have reached out. 📌 I shared my thoughts on the biggest changes that will impact Think and Talk Money readers, like lawyers and professionals, in a recent post. #thinkandtalkmoney #studentloans #bigbeautifulbill #federalstudentloans #personalfinance
♬ original sound – Thinkandtalkmoney

The One Big Beautiful Bill Act, signed into law July 4, 2025, included changes to the federal student loan system.

Since then, a number of readers have reached out for my thoughts.

Today, we’ll cover some of the biggest changes that will impact Think and Talk Money readers, like lawyers and professionals.

The bottom line is, regardless of how you feel about the changes, you still have two options.

You can either do nothing, get angry, and blame everyone else.

Or, you can take ownership, get prepared, and educate yourself.

If you’ve chosen the second option, let’s get started.

The basic concepts of paying off student loans has not changed.

The two biggest changes for student loans relate to the (1) repayment options and (2) the amount that can be borrowed.

Understanding the changes shouldn’t be too difficult:

You now have less repayment options and can borrow less money overall from the federal government.

We’ll talk about the specifics next.

Before we do, always remember that paying off student loan debt is really not that different from paying off any other form of debt.

As significant as the changes might seem, the basic concepts of paying off student loan debt remain the same.

If you’d like to review the basic concepts of paying off student loan debt, check out this post:

The Time is Now: Student Loan Basics

Also, keep in mind that the recent changes apply only to the federal loan system. There will be side effects for the private loan system, but the federal system is getting all the attention right now.

For example, even before the new law, people commonly needed both federal and private loans because federal loan amounts were capped and college and grad school are expensive.

Once you took out all the federal loans you were eligible for, private loans became necessary to fill whatever funding gap remained.

This remains true today, just with a reduced cap on federal loans.

The point is that while the student loan landscape has certainly changed, the fundamentals remain the same.

So, while you may need to adjust your strategy, there’s no getting around that paying back student loans felt heavy before and still feels heavy today.

And, if you’re feeling the weight of your student loans, check out my top student loan tips for lawyers and professionals:

10 Student Loan Tips for Lawyers and Professionals

OK, on to the changes.

There are now only two federal loan repayment options.

Previously, the federal government offered seven loan repayment plans. There was a standard repayment plan and six other options to help borrowers pay back their loans while still affording their other monthly expenses.

Now, there are only two repayment options.

Option 1: The standard repayment option.

First, borrowers can still use a fixed-payment repayment plan known as a standard repayment plan.

This means borrowers can pay back loans in equal monthly payments spread over a defined period.

The previous law set the standard repayment period at 10 years. There were also graduated and extended options that reduced a borrower’s monthly payment but extended the years of required payments for up to 25 years (30 years, in some cases).

Similarly, the new law provides for a standard repayment plan. Borrowers may choose to make fixed payments for periods ranging from 10 to 25 years, depending on the size of the loan to be paid back.

Photo by Edwin Andrade on Unsplash

Option 2: The income-driven option (RAP).

In addition to changes to the standard repayment plan, the new law made significant changes to income-driven repayment plans.

Now, borrowers can enroll in a single income-driven repayment plan, which is known as the Repayment Assistance Plan (RAP).

Previously, income-driven repayment options included:
- SAVE: Saving on a Valuable Education
- PAYE: Pay as You Earn
- IBR: Income-Based Repayment
- ICR: Income-Contingent Repayment
These plans determined your monthly payment based on how much you made and your family size.

Each option has now been replaced by RAP. One of the ideas behind RAP was to simplify the various income-driven repayment options into one combined plan.

With RAP, borrowers will pay 1% to 10% of their monthly income for up to 30 years. After 30 years, the remaining loan balances will be forgiven.

Notably, that’s a longer time period before loan forgiveness kicks in. Under the previous income-driven repayment plans, borrowers were off the hook after either 20 or 25 years. Now, borrowers will have to pay their loans back for 5 to 10 years longer before they are forgiven.

In addition, monthly payments depend on Adjusted Gross Income instead of discretionary income. This means monthly payments will increase for many borrowers.

There are new borrowing caps for some federal loans.

As mentioned above, the new law did not introduce the idea of caps on federal loans. Rather, it reduced the maximum amount for certain loans and eliminated other loan types.

The first change relates to Parent PLUS loans, which are loans for parents of undergraduate dependent students. The new caps for Parent PLUS loans are $20,000 per year and $65,000 total.

The next change relates to Grad PLUS loans, which are loans for higher education degrees. Basically, Grad PLUS loans are going away.

Instead, graduate students will have to take out Direct Unsubsidized Loans.

The significance is that Grad PLUS loans allowed students to borrow enough to cover the full cost of attendance for graduate school, minus any other financial aid received.

Now, professional students, like law students or medical students, may borrow $50,000 per year and $200,000 total.

Additionally, non-professional graduate students, like teachers, may borrow $20,500 annually and $100,000 total.

Why does all this matter?

Anyone who has paid for college or graduate school should immediately recognize the challenge here.

To oversimplify, college and graduate school is expensive.

These new limits mean that most students (or parents of students) will need private student loans to help pay for higher education.

Generally, private loans have less protections and are more expensive than federal loans. Private loans also can have tougher eligibility requirements, meaning less people may qualify for loans.

Add it all up and paying for higher education becomes more difficult for a lot of people.

Public service loan forgiveness remains the same, for now.

One last point to highlight sine there’s been some confusion on whether public service loan forgiveness changed.

So far, the answer is no.

As of now, public service loan forgiveness remains the same. People working eligible jobs and making loan payments for 120 months can still have their loans forgiven.

Say tuned as changes are most certainly coming. The likeliest change is going to be a reduction in the types of jobs that are eligible for loan forgiveness.

What can you do about these changes to federal student loans?

With these main changes to federal student loans in mind, the question is: what can you do about it?

Fair question.

Photo by Robert Bye on Unsplash

The way I see it?

The changes happened.

The train has left the station.

So, let’s spend our energy thinking about strategies.

Look, I completely understand that anyone with loans, or soon to have loans, is feeling frustrated right now. Rightfully so.

“Frustrated” may be the wrong word. Please feel free to insert whatever word you want into that sentence that better captures your emotions.

I also wouldn’t blame you if you felt like yelling at the clouds for a few minutes.

But, once the frustration is out of your system, you still have two options.

You can either do nothing, get angry, and blame everyone else.

Or, you can take ownership, prepare, and educate yourself.

In today’s environment, there is no excuse for failing to educate yourself and coming up with a strategy for your personal situation.

Countless websites focus on the student loan industry. In just the past couple of weeks, there have been hundreds of articles and blog posts written on the changes.

If you stay mad and don’t take action, you have only yourself to blame.

It is up to each of us to take ownership over our personal finances.

From where I sit, the student loan changes are just one example of what we all have to deal with on our constant journeys towards financial freedom.

Laws change. Tax breaks change. Circumstances change.

It’s up to each of us to stay on top of the changes to continue moving towards financial freedom.

How do we stay on top of the changes, whether it’s student loans or anything else?

We can think and talk about money. I assure you that others feel the same way that you do right now. Talk to your people. Then, come up with a plan.

For starters, you can make reading a blog like this one part of your regular internet routine. As a reminder, I post three times every week on important money and life topics for lawyers and professionals.

You can also sign up for my weekly newsletter here.

Additionally, you can also pick up a good money mindset book, like The Simple Path to Wealth or Millionaire Milestones.

If you’re still frustrated, the biggest mindset shift is to stop hoping other people, including the government, fix your money problems for you.

By the way, this is advice I could have used recently, as well.

I foolishly got my hopes up with the new legislation.

Recently, I was not immune from getting my hopes up that the government would provide a big boost for my personal finances.

Personally, I wasn’t too concerned with the student loan changes because I paid off my loans already and my kids are still at least 13 years away from college.

However, I followed the bill closely because of the SALT proposals.

If you’re unfamiliar, SALT allows people who itemize their federal taxes to reduce their taxable income by the amount they pay in state and local taxes.

As a real estate investor and mesothelioma lawyer, SALT is very relevant to my personal finances.

I own four properties and earn W-2 income in Illinois, a high property tax state with a 4.95% state income tax. Plus, I own a property in Colorado.

I am in the category of people who would benefit from a high SALT cap or no cap at all.

At various points in the legislative process, there was possibly going to be no SALT cap, or a very high SALT cap, or no SALT deduction at all.

It was constantly changing. I was hooked.

In the end, SALT won’t have much impact for me at all. I’ll end up saving some money in taxes this year, but it could have been much more.

Unfortunately, I made the mistake of getting my hopes up that SALT was going to be a great boon for my family.

The lesson is that I wasted a lot of mental energy worrying about what the government might or might not do.

I should have used that energy to work on my blog, help my clients, or engage with my kids.

These would have all been better uses of my time and energy.

Take control of your money, whether it’s student loans or anything else.

I encourage you to take control of your money decisions, whether that means learning about the student loan changes or any other parts of the legislation.

The changes happened. More changes will come in the future.

Now, it’s up to each of us to strategize and plan accordingly so we can stay on top of our finances.

Were you impacted by the federal student loan changes?

What about any other changes to the legislation?

Let us know how you’re coping in the comments below.
July 13, 2025
Your Spouse is the Most Important Person on Your RE Team

If you’re considering your first rental property, don’t fool yourself into thinking you’ll be earning passive income.

The bottom line is owning rental properties is a job. It’s not a full-time job. It’s not even a regular, part-time job. But, it is a job.

There will be tenant issues, work orders, money spent, and tough decisions to be made like in any other business.

For me, the benefits of owning rental properties significantly outweigh the downsides of being a landlord. It’s a tradeoff that I would happily make again and again.

But, I wouldn’t be saying that if my wife wasn’t also fully committed.

Before you buy a rental property, I encourage you to talk to your spouse first. Make sure you both are on the same page.

No, you do not have to have an equal division of labor.

Yes, you each have to commit to the good and the bad that comes along with owning rental properties.

If you both can make that commitment, you have the best shot at owning your properties for a long time and reaching that ultimate goal: financial freedom.

Before building out the rest of your real estate team, get on the same page with your spouse.

Owning rental properties should not be a solo adventure. The entire experience is better when you have someone to share it with.

Isn’t that true for most things in life?

Whether it’s a project you’re working on or a vacation you’re taking, it’s better when you do it with other people.

Owning rental properties is no different.

In fact, the most successful rental property investors have a team of professionals working with them.

Having a good team in place will help you avoid mistakes and stay motivated so you can keep your properties long-term.

It’s not an exaggeration to say that having the right people on your team can make or break your investing experience.

I’ve seen too many investors sell their rental properties after a couple of years because they didn’t have the right people on their team. They end up making preventable mistakes and give up because being a landlord is too hard.

Unfortunately, that means they give up their properties long before getting the benefits from cash flow, appreciation, debt pay-down, and tax advantages.

If you’re going to take on the challenge of being a landlord, you might as well hold your properties long enough to reap the benefits.

And, you should take all the help you can get along the way.

There is plenty to say about building out your real estate team. And soon enough, we’re going to talk about the key professionals that can help you run your rental property business successfully.

But, that’s all for another day.

Before we get to any of that, we need to talk about the single most important member of your team:

Your spouse.

The same holds true whether you have a significant other, partner, girlfriend, boyfriend, or anyone else you share your life wife.

Don’t worry about analyzing the numbers and finding the perfect deal. The rest of your team came wait.

Start with your spouse.

Here’s why.

Your spouse is the single most important person on your team.

To be a successful rental property investor, your spouse needs to be on board.

Even if you are going to be the one actively running the business, you won’t get very far if your spouse is not as committed as you are.

Before anything else, the first thing you need to do is sit down with your spouse and talk about why you really want to own rental properties.

That’s because owning rental properties is all about commitment.

It’s a financial comment, a time commitment, and most of all, an emotional commitment.

With these kinds of commitments involved, it’s essential that your spouse understands the full scope of what you’re both getting into as rental property investors.

Here’s what I mean.

Photo by Rod Long on Unsplash

Owning rental properties is a financial commitment.

This one should be obvious. Owning rental properties is a major financial commitment. It takes capital to buy properties and capital to maintain them.

When you choose to invest your hard-earned money in rental properties, that means you’re not spending that money elsewhere.

That might mean sacrificing retirement savings. It could also mean having less money to spend on your dream home. Or, less money to spend on vacations.

The point is that before you make the financial commitment, your spouse needs to be on board with why you’re making these sacrifices.

I’m fortunate that my wife and I have been on the same page with our rental properties since Day 1. Neither one of us needed any convincing once we did our homework and learned what was possible.

Today, we both understand why we’re still doing it: owning rental properties speeds up our journey to financial freedom.

It took some major financial sacrifices to get here, but we made those sacrifices together.

As the most obvious example, we delayed buying our “forever home” until I was almost 40 and we already had two kids.

Instead of buying a home in a nice neighborhood to raise our kids, we used our savings to buy rental properties. We were doing something different and it was important to be committed to our plan.

It wasn’t easy to see our friends and family members buy beautiful homes in wonderful areas. We definitely noticed more than a few confused looks when we would have people over to our small apartments in the city.

At times, we both wondered whether we were making a mistake.

As it turned out, the trade-off was well worth it.

Owning rental properties is a time commitment.

Make no mistake about it, owning rental properties is a time commitment.

We’ve talked about how owning rental properties means having a job. For lawyers and professionals, this means having a second job on top of a primary job.

Even with the best team and systems in place, there’s no getting around the fact that owning rental properties will always be a time commitment.

What does the time commitment look like? What does this have to do with your spouse?

Depending on your availability and skills, the time commitment will vary from one landlord to the next.

You might be the type that heads over to the property every weekend to mow the lawn. To take it one step further, maybe you’re the type who has the skills to handle all maintenance requests yourself.

Or, you might handle all showings and tenant issues personally.

The truth is that in the beginning, many rental property investors do all of the above themselves.

Rental property investors think of this time commitment as “sweat equity.”

Sweat equity is what you contribute to your business but don’t exactly get paid for. When cash flow is tight, as it is for most beginners, we make up for it with sweat equity.

The more jobs we take on ourselves, the less we pay out to other people.

The tradeoff is that the more sweat equity you put into your properties, the less time you have to spend at home with your spouse.

If your spouse is not on board with you being away from home, it’s going to be difficult to succeed as a rental property investor.

If you have young kids, it’s even harder. When one spouse is at the rental property, the other spouse is usually alone with the kids. Anyone with kids knows which of those two jobs is harder.

For example, there have been entire weekends that I’ve spent fixing up one apartment or another.

By the way, if you’ve ever wanted to take a tour called “The World’s Worst Drywall Repairs,” I’ve got you covered.

If it’s not repairs eating up your free time, it could be analyzing new properties, doing apartment showings, meeting with contractors, or basic bookkeeping.

With all these time commitments, I’m lucky that my wife and I are on the same page when it comes to our rental property business. We split up these tasks and cover for each other when one person is busy with other responsibilities.

Yes, you can outsource these jobs. We outsource as much as we can. But, there are certain jobs that you’ll always need to, or want to, handle yourself.

Photo by Charles Forerunner on Unsplash

As just one example, we do all our showings ourselves.

Finding the right tenants is the most important job in owning rental properties. If we outsourced this particular job, we could end up with tenants who could cause us major stress for the next year.

Regardless of the recipe that works for you and your spouse, have the conversation before investing in rental properties.

Make sure you each understand the time commitment involved.

Owning rental properties is an emotional commitment.

The financial commitment and the time commitment are only the beginning.

Most of all, owning rental properties is an emotional commitment.

Without having a spouse on the same emotional wavelength as you, it will be very hard to succeed as a rental property investor.

When you own rental properties, there will be stressful times and you’ll want to lean on your spouse for support.

There will also be moments to celebrate, and you’ll want to share those moments with your spouse.

If your spouse is not on the same wavelength as you, these moments can feel very lonely. The lows can feel much lower and the highs don’t feel quite so high.

Without someone to commiserate with and celebrate with, you’ll be more likely to give up.

My wife and I have endless stories about our experiences as landlords that very few other people would truly appreciate. We can each list off the jerks we’ve rented to and the biggest headaches we’ve encountered.

We once offered a lease renewal to a tenant at her same price. She responded that she would be happy to stay for another year if we simply replaced the kitchen countertops and appliances, added an additional bedroom and built out some new closets.

Ummm, we’ll pass.

My wife and I can laugh about these moments because we’re both emotionally committed to the journey. Living through these experiences together has helped us stay the course.

Unfortunately, I’ve met a number of real estate investors over the years who tried to go it alone. I think that’s a mistake. Oftentimes, these investors don’t stay invested very long.

It’s not because they bought bad properties or had bad tenants.

The problem was they never prioritized the most important person on their real estate team.

When challenges arose, they didn’t have a spouse to lean on.

When you’re spouse is on board, investing in real estate is a rewarding challenge.

It’s all about the journey, right?

When times get tough in our real estate business, my wife and I lean on each other. When we miss out on evenings with the kids or nights out with friends, we remind each other what it’s all about.

We remind each other that we wouldn’t be where we are today if we didn’t start buying rental properties in 2018.

We both realize the commitments involved, whether it be our money, our time, or our emotions. If we weren’t in this together, there’s no way we could run our rental property business as well as we do.

Before you buy a rental property, I encourage you to talk to your spouse first. Make sure you both are on the same page.

No, you do not have to have an equal division of labor.

Yes, you each have to commit to the good and the bad that comes along with owning rental properties.

If you both can make that commitment, you have the best shot at owning your properties for a long time and reaching that ultimate goal: financial freedom.

Did you talk to your spouse before buying rental properties?

Do you run your rental property business with your spouse?

What lessons have you learned along the way?

July 11, 2025
Fix Your Personal Finances Before Investing in Real Estate
When my students ask me a question about how to start investing in real estate, I tend to respond with a question of my own:

“How much savings does your personal budget generate each month?”

Yes, I know. It’s so annoying to answer a question with a question.

This particular question usually leads to a double dose of annoyance from my students.

My students are first annoyed that I ignored their question about real estate. They didn’t come to me to talk about something boring, like budgeting. They want to know about the exciting stuff, like becoming a real estate investor.

What I’ve noticed is that after this initial annoyance fades away, another form of annoyance sets in. My students get annoyed because they can’t actually answer the question.

They realize they have no idea how much money they’re saving each month because they don’t have a personal budget.

That’s a problem.

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Investing in real estate means running a business. Money comes in and money goes out. To be successful, you have to make sure that more money comes in than goes out. The same logic applies to your personal budget: if you want to get ahead in life, more money needs to come in than goes out. #thinkandtalkmoney #realestateinvesting #realestateinvestor #personalfinance
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Not having a personal budget is a problem for anyone who wants to be a successful real estate investor.

Investing in real estate means running a business. Money comes in and money goes out. To be successful, you have to make sure that more money comes in than goes out.

This is obvious stuff, right?

The same logic applies to your personal budget: if you want to get ahead in life, more money needs to come in than goes out.

The problem is most people have a hard enough time managing their personal finances. How are they going to handle managing business finances?

That’s why I ask my students, “If you haven’t mastered this idea with your personal budget, are you sure you want to take on the stress and risk of an investment property?”

It would be much easier to simply invest in an index fund, like VTSAX. At least in that case, you don’t have to manage a business budget. You just have to do your best to constantly add money to your investment account.

It’s usually around this point when my students start nodding in understanding.

Before investing in real estate, make sure your personal finances are in order.

My goal here is not to dissuade you from investing in real estate. I am a big proponent of rental property investing.

I’ve said it before: I think every professional or lawyer can benefit from owning rental properties.

My only goal is to help you avoid the mistakes that crush so many beginner real estate investors. One of the biggest mistakes I see is people taking on a major financial commitment (and time commitment) without starting from a strong foundation.

If you’ve been following along on the blog, you likely noticed the progression in topics we’ve covered.

You’ll see links to each one of these topics featured on the top of the Think and Talk Money homepage:
- Money Mindset
- Budgeting
- Debt
- Credit
- Investing
- Real Estate
We initially covered each of those topics in order from top to bottom. First, we talked extensively about the mental side of money. Without having your money mindset in the right place, nothing else matters.

We then spent a lot of time talking about personal finance fundamentals, like budgeting, saving, and handling credit and debt responsibly.

Only after having our personal finance foundation in place did we talk about more fun concepts like investing and real estate.

There’s a reason we’ve covered these topics in this order.

If your money mindset is not in the right place, you won’t be able to stay on budget.

If you can’t stay on budget, you’ll likely fall into debt.

When you’re falling deeper and deeper into debt, it doesn’t make a lot of sense to prioritize investing.

Photo by Towfiqu barbhuiya on Unsplash

Why bother with real estate if any profits are just going to disappear?

Let’s focus on that last point for a minute.

What sense does it make to invest if you’ve never proven to yourself that you can use those investment gains responsibly?

I never want to see people take on the challenge of investing in real estate just to have any profits disappear because they don’t have a strong personal finance foundation in place.

Imagine someone does the work to find and sustain a good rental property that generates $1,000 per month in cash flow.

It’s not easy to earn that much. It takes time and effort, not to mention the risk involved.

If that same person blows the $1,000 he earned on things he doesn’t care about, what was the point?

Why take on the risk and do the work if the money will all be gone by the end of the month?

Unfortunately, this is how many people go through life. They work hard, make good money, and then have nothing to show for it.

I don’t want that to be your fate. I want you to have a plan for your money before you earn it.

That means sticking to a budget that consistently moves you closer to living freely on your terms.

Most of us don’t know where our next dollar is going.

The reason most people never get ahead with their finances is because they don’t have a plan for where their next dollar is going.

Their income hits their checking account, they spend it on this or that, and pretty soon that money has disappeared. They haven’t used the money to advance any of their priorities. It’s just gone.

To me, this is one of the most important money mistakes that we need to fix right away. We definitely need to fix it before we take a chance on investing in real estate.

If not, you’ll just be making the same mistakes, just with more money to lose.

Having a plan for our money, before we earn it, is essential if we want to reach our goals. With a plan, we can eliminate the disappearing dollars with confidence that our money is being used to serve our purposes.

How do you create a plan for your money before you earn it?

You need to have a budget.

If you don’t currently have a budget that results in excess money at the end of each month, I encourage you to start there before thinking bout real estate.

How to create a Budget After Thinking.

The key to budgeting is to eliminate disappearing dollars by creating a plan for Now Money, Life Money, and Later Money.

Your Later Money is what you’ll eventually use to accelerate your journey to financial freedom by investing in stocks or buying real estate.

1. Now Money

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

These expenses include housing, transportation, groceries, utilities (like internet and electricity), household goods (like toilet paper), and insurance.

These are expenses that you can’t avoid and should be relatively fixed each month.

2. 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.

3. 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.

Photo by Kelly Sikkema on Unsplash

When you have strong fundamentals in place, money becomes fun.

Being good with money doesn’t have to be stressful. Once you have the fundamentals in place, you’ll start to see how each dollar you earn gets you one step closer to financial freedom.

Before you think about investing in real estate, make sure that your personal finances are in order.

Owning rental properties means running a business. When the money comes in, you want to make sure it doesn’t go right out.

Otherwise, the effort, stress, and risk of owning real estate is not worth it. Any dollar you earn is likely to disappear as quickly as it comes in.

To prevent that from happening, establish good money habits before you buy real estate.

In the end, you’ll be so happy that you did.

For any real estate investors out there, did you jump in before establishing strong personal money habits first?

What advice would you have for beginners thinking about investing in real estate?

Let us know in the comments below.
July 8, 2025
Use Common Sense to Help Identify Good Rental Properties
If you want to be a successful rental property investor, you need to buy good rental properties.

Good rental properties equal good tenants.

Good tenants equal less headaches.

Less headaches equal a longer holding period.

A longer holding period equals more cash flow, appreciation, debt pay-down, and tax benefits.

Add it all up and that equals more financial freedom.

And, it all starts with buying the right property.

How do I know if I’m buying the right property?

One of the biggest mistakes that beginners make is buying bad rental properties. The reality is that most properties that hit the market are not good rental properties.

I typically look at hundreds of properties online before finding any that are even worth walking through. Of the ones I walk through, less than 10% are worth buying.

Don’t waste your time by running the numbers on every property that hits the market. The numbers only tell part of the story, anyways.

Instead, the first step is to develop and commit to specific criteria for attractive properties in your market.

If a property does not meet your criteria, move on.

This will save you precious time, especially important if you are still working a full-time job.

It will also save you from the disappointment of visiting properties that looked good on paper but failed to meet your other requirements.

So, how do you develop a set of standards for quality rental properties in your market?

Use common sense and your own life experiences to develop criteria for your market.

Obviously, every market is different. Don’t believe anyone who tells you they have a one-size-fits-all solution for evaluating properties. What works in Chicago won’t necessarily work in Los Angeles.

However, regardless of what market you’re in, you can and should use common sense and your own life experiences to evaluate rental properties.

Don’t overcomplicate this part.

Before you do anything else, think about what you would personally want in a rental property.

Forget about complex formulas and deal metrics. We’ll get to the numbers soon enough.

Start with a basic question:

What would I want if I were a renter in this market?

Before anything else, write down a list of the most important features that you would want in an apartment. Then, use that list as a guide to finding the right kind of properties.

By the way, using your own common sense is one of the best parts about investing in real estate. You don’t need an advanced degree or a background in real estate.

We all have some idea of what makes a neighborhood a good place to live. The same goes for what makes an apartment a good apartment.

We may not always agree on what those things are, and that’s OK. It may be for a simple reason, like we are not targeting the same potential tenant pool.

The bottom line is you should absolutely use your common sense and life experiences to help formulate your investing strategy.

Ask yourself what you would want in an apartment. Don’t waste your time running the numbers on any property that doesn’t match your criteria.

I prefer to invest in properties that make sense to me.

Warren Buffett has famously said that he does not invest in companies or products that he doesn’t understand.

We can apply that same logic to rental properties. Invest in properties that inherently make sense to you.

If you are a buy-and-hold investor like I am, you are going to be dealing with a certain tenant pool in your market for years to come. You want to make sure that you understand that tenant pool so you can buy properties that will be appealing to them.

You also want to be able to effectively communicate with prospective applicants and current tenants. The best way to ensure that happens is by investing in markets that you understand.

Photo by Sawyer Bengtson on Unsplash

Work with a real estate broker and don’t be afraid to ask for help.

If you’re having trouble identifying the key factors to look out for in your market, ask around.

Talk to your colleagues and friends about what people in your target demographic look for in an apartment. Most of us tend to want the same things.

Of course, don’t underestimate the importance of working with a good real estate broker.

A good real estate broker can help you come up with a list of the most desirable features for renters in your market.

My wife and I have worked with the same broker for almost a decade now. He’s been a mentor to us and helped us come up with our list of key factors. More on that below.

He also knows exactly what we want in a property and doesn’t waste our time with properties that don’t match our criteria.

Having a good broker on your team is essential if you want to be a successful investor.

How I’ve used my life experiences to target rental properties in Chicago.

I invest in a Chicago neighborhood that typically attracts young professionals in their 20s and early 30s.

Why do I target young professionals in Chicago?

Well, I am one.

OK, fine.

I used to be one. Oof.

As a young professional in Chicago, I rented apartments throughout the city for nearly 15 years. Based on my own experiences, I have a good idea of what that demographic is looking for in an apartment.

I believe that gives me an advantage in targeting the right kinds of properties.

Plus, I teach nearly 100 law students each year and work with young professionals at my law firm. It’s a demographic that I’m comfortable with and still have a good understanding of what matters in a rental apartment.

Besides my personal experiences, why else do I target young professionals?

Generally speaking, young professionals earn consistent paychecks, are respectful to apartments, and are too busy to complain about minor issues.

All good things, as far as I’m concerned.

Location, location, location.

We’ve all heard the number one rule in real estate:

Location, location, location.

While a number of factors combine to make particular locations attractive, I’ll highlight one factor that’s very important to me in the Chicago market.

First, for a bit of context.

As mentioned earlier, I target properties in Chicago that would be attractive to young professionals.

Traditionally in Chicago, young professionals commute to office buildings in The Loop (Chicago’s downtown, central business district) via public transportation.

Yes, even in the “work from home” era, most young professionals living in Chicago commute downtown at least a couple days each week.

Since I know my ideal tenant likely commutes downtown, I look for properties that make commuting easier.

That means targeting properties near public transportation.

More specifically, I target properties within a half mile of the L (Chicago’s train system, short for “elevated.”)

Photo by Pablo Merchán Montes on Unsplash

I target properties close to public transportation because of my own experiences as a renter and because of what I’ve learned from potential tenants.

When I was renting apartments in Chicago, I always wanted to be close to the L. There’s nothing worse than walking 20 minutes to a train when it’s 10 degrees or 90 degrees outside.

It makes sense that now as an investor, I should target these same types of apartments close to public transportation.

Having done hundreds of apartment showings over the years, I’m confident that young professionals want to live close to public transportation.

I believe that the most desirable properties for young professionals are the ones close enough to an L station that people can walk there in 10 minutes or less.

Plus, coffee shops, restaurants, shops and other attractive offerings tend to be located near L stations.

So, in terms of location, proximity to the L is one of the most important factors for me.

No matter how attractive a property looks online, I’m not interested if it doesn’t satisfy this requirement.

What are some of my other top requirements for a rental property?

What I look for in a rental property may be different from what you look for. Use your own life experiences and common sense to decide if these elements would be beneficial in your market.

My wife and I have relied on our own life experiences, coupled with advice from our real estate broker, to come up with this list.

It’s not an exhaustive list, but here are some of the most important factors we evaluate when considering rental properties in Chicago:
1. Location, location, location. See above. Proximity to the L and social life (coffee shops, restaurants, bars, etc.) are crucial. Most of the young professionals we rent to are still in the “going out” phase of life. They want to live in fun neighborhoods so they can enjoy themselves when they’re not working. They typically stay in our apartments for 2-3 years, oftentimes before buying a place of their own and “settling down.”
2. Taxes. Property taxes can eat away your cash flow. We have high property taxes in Chicago across the board, but taxes vary widely from neighborhood to neighborhood. I look for properties in areas that have more attractive taxes.
3. Big bedrooms. One of the most common questions I get when I do apartment showings is, “Can I fit a king size bed in here?” People love big beds these days. This can be a challenge considering Chicago’s standard 25-foot wide lot. I look for properties with a minimum bedroom size of 10 x 10.
4. Outdoor space. Young professionals want to have outdoor space, even if they never use it. When I was a renter, I always wanted an apartment with a balcony for my grill. It didn’t matter to me that I only used it a handful of times each year. Maybe having outdoor space made me feel more grown up?
5. Parking. Even though Chicago is a very public transit-friendly city, people still like having cars. Because most young professionals aren’t using their cars every day, they want to keep it safe in a dedicated parking space.
There are certainly other factors we consider, but these are some of the first things I’m looking for when I look through listings on the internet.

These factors were important to me when I was a renter and are still important to the young professionals I rent to today.

While I don’t invest in other cities besides Chicago, I imagine these factors would also be important for young professionals everywhere.

What is your specific criteria for rental properties?

The fist step in purchasing good rental properties is having a set of specific criteria that match your needs and market.

Don’t overcomplicate it. Use your common sense and life experiences as a framework.

Run your criteria by your real estate broker and other investors in your market.

Only after you have come up with a list of important features should you worry about running the numbers.

Whether you currently own rental properties or are hoping to get started, what factors are most important in your market?

Let us know in the comments below.
July 6, 2025
Why do You Really Want to Own Rental Properties?

Before you start doing something, figure out why you’re doing it.

Someone smart probably said that at some point, right?

We’ve spent a lot of time recently talking about the main reasons why I invest in rental properties. We’ve also talked about the work involved with owning rental properties.

I’m a big believer in the power of real estate. I’ve also come to appreciate just how much work is involved in owning rental properties.

The reason I’ve spent so much time writing about the benefits and the work involved is to make sure you know exactly what you’re getting yourself into.

Once you fully understand and appreciate the benefits and the work involved, you’re ready for the next step:

Think and talk about why you want to own rental properties.

@thinkandtalkmoney
No city fines this time! #thinkandtalkmoney #landlord #landlordtips #realestateinvesting
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Depending on why you want to own rental properties, your strategy may be different than mine or someone else’s strategy.

The key is to figure out your “Why” before making costly mistakes, in terms of both money and time, that don’t help advance your goals.

Don’t skip this crucial step and jump right to analyzing deals.

The last thing you want to do is take on such a big commitment without truly knowing why you’re doing it.

To help you start thinking about a strategy, let’s review the benefits and also the work involved in owning rental properties.

You can read much more in my series on real estate here.

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.

Photo by Brandon Griggs on Unsplash

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.

Do not own rental properties if you want passive income.

Now that you know the benefits, let’s highlight just how much work is involved in owning rental properties.

At one point or another, you may have heard someone say, “I want to invest in rental properties for some passive income.”

Yes, we all want passive income.

No, investing in rental properties is not passive.

Think of owning rental properties as a way to earn “semi-passive” or “partially-passive” or “somewhat-passive” income.

Don’t think of owning rental properties as a way to earn “passive” income.

If you want passive income, you should be investing in index funds, like VTSAX. For more on investing in the stock market, you can check out my series on investing here.

For me, the benefits of owning rental properties significantly outweigh the downsides of being a landlord. It’s a tradeoff that I would happily make again and again.

How does the old saying go? “If it were easy, everybody would do it.”

Being a landlord is not easy. It’s definitely not for everyone.

But, then again, neither is financial freedom.

In the end, if you are willing to put in the effort, owning rental properties will accelerate your journey to financial freedom.

Do you still want to own rental properties after knowing the benefits and the work involved?

Now, you know the main benefits and the work involved with owning rental properties.

Like I said, owning rental properties is not for everyone. It takes time and effort to learn the basics.

Then, it takes more time and effort to do your research and develop a strategy.

At some point, you’ll need to take a chance and make a purchase. That means putting your hard-earned dollars at risk.

None of this will be easy.

But, it sure is a lot of fun.

And, there is a lot of upside.

If you still want in, I’m going to help you get started.

Photo by Aaron Sousa on Unsplash

Ask yourself: what are my main goals in owning rental properties?

Before you start analyzing deals, you need to think long and hard about what your goals are.

Depending on what your’e trying to accomplish, your strategy is going to be different.

For example, are you looking to move to an expensive neighborhood and just want to offset your ownership costs?

You may benefit from owning a home with a coach house, granny flat, or garden unit. You can then live in the primary unit and rent out the second unit to reduce your monthly costs.

Or, your goals might be to leave full-time employment and use rental property cash flow to fund your life. In that case, you’ll need a property that generates significant cash flow, possibly at the expense of personal comfort or long-term gains.

On the other hand, you may love your job and have no plans of leaving anytime soon. You’re not concerned about present day cash-flow. Instead, you’re looking for long-term gains through appreciation, debt pay-down, and tax benefits.

In this scenario, you may target markets that have shown strong growth but don’t necessarily cash flow.

These are just a few possible considerations. One of the things I love most about investing in real estate is how many options there are. It’s up to you to decide what options are most attractive for your goals.

This is why the first step is to think and talk about why you want to own rental properties.

Don’t ignore this first step. Spend some serious time thinking about what you’re trying to accomplish.

Because different properties may offer different benefits, you need to commit to a strategy before you start worrying about how to analyze specific deals.

Too many beginner investors skip this step and realize much too late that a property they bought doesn’t help achieve their goals.

My goal in owning rental properties is to accelerate my journey to financial freedom.

My wife and I invest in rental properties in Chicago and Colorado to accelerate our journey to financial freedom.

In order to be truly financially free, we need cash flow to cover our present day expenses. So, we’ve targeted properties in Chicago that generate strong monthly cash flow.

Don’t get me wrong, we certainly hope to benefit from appreciation, debt pay-down and tax advantages. That’s why we’ve chosen to invest in neighborhoods that we think are only getting better.

However, we view those long-term gains as more of a bonus. Our focus with our Chicago properties is on present day cash flow.

On the other hand, our Colorado property is a long-term play. It does not generate positive cash flow. That said, we use the rental income to help offset our ownership costs.

We are planning to keep our Colorado condo in our family for decades to come. Offsetting the ownership costs with rental income will help us accomplish that goal.

At the same time, we are hoping that our Colorado condo appreciates in value, making it a solid long-term investment. So, even though it does not generate cash flow for us, it still fits into our long-term plans for financial freedom.

One key point: just because my wife and I invest for cash flow doesn’t mean we are planning on leaving full-time employment.

I am a big proponent of all lawyers and professionals having multiple streams of income. I refer to these various income streams as Parachute Money.

Because my wife and I are earning steady paychecks, we’ve been able to use our cash flow for other investments. We have multiple income streams and are putting all those income streams to work. That’s one reason we’ve been able to scale our portfolio so quickly.

What are your goals in owning rental property?

You now know the benefits, the work involved, and some different strategies to consider regarding rental properties.

Now, it’s time to ask yourself why you want to own rental properties.

Once you figure out the “why,” you can then move onto the “how.”

So, if you’re considering owning rental properties, what is your why?

What goals are you trying to accomplish?

Let us know in the comments below.

July 3, 2025
Do Not Invest in Real Estate if You Want Passive Income
Turbo 200 Universal Capacitor 67.5MFD: $501.00

Add Puron-410A, Replace Valve, Freon Charging: $729.00

CO2 Drain Purge, Remove Water: $437.00

2 Ton R 410A Coil: $2,000.00

Total for A/C Repairs: $3,667.00

If you’re thinking that’s a rough year for air conditioner repairs, you wouldn’t be wrong.

Unfortunately, those are all repairs we’ve needed on different units in the past 10 days.

It gets better (worse?)… the average high temperature in Chicago over the past ten days has been around 90 degrees.

Still want to own rental properties?

@thinkandtalkmoney
Owning rental properties does not generate passive income. Being a landlord is a job. Even if you rely on a property manager, it’s still a job. #thinkandtalkmoney #realestateinvesting #realestateinvestor #passiveincome #financialfreedom
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Why would anyone want to own rental properties?

We’ve spent a lot of time recently talking about the four main reasons why I invest in rental properties:
When these benefits combine, real estate investors can generate significant wealth over the long run.

But, make no mistake:

Owning rental properties does not generate passive income. Being a landlord is a job. Even if you rely on a property manager, it’s still a job.

Before we talk about the job of owning rental properties, here’s a quick breakdown of each of the four main benefits.

For a more detailed description of each benefit, you can read my series on investing in real estate here.

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.

Photo by Bernie Almanzar on Unsplash

Rental properties do not generate passive income.

At one point or another, you may have heard someone say, “I want to invest in rental properties for some passive income.”

Yes, we all want passive income.

No, investing in rental properties is not passive.

Think of owning rental properties as a way to earn “semi-passive” or “partially-passive” or “somewhat-passive” income.

Don’t think of owning rental properties as a way to earn “passive” income.

If you want passive income, you should be investing in index funds, like VTSAX. For more on investing in the stock market, you can check out my series on investing here.

For even more, JL Collins literally wrote the book on investing in VTSAX. His book is called The Simple Path to Wealth and is tremendous. You can read my review here.

By the way, there’s nothing wrong with wanting passive income. For those of us on our journeys to financial freedom, passive income is what it’s all about.

It’s just that owning rental properties is not passive.

To be a successful rental property investor, you have to appreciate that it is a job.

Owning rental properties is like having another job.

It’s not a full-time job. In fact, there might be months that go by when you don’t actually do much of anything. Your main job is to be at-the-ready in case a tenant messages with an issue.

On the other hand, there will be 10-day stretches where you have three a/c units break requiring multiple service calls, tenant coordination, and $3,600 in repairs.

Granted, this 10-day stretch was just about the worst stretch for maintenance and repairs we’ve had as landlords. It just so happened to occur in the days leading up to me writing this post about being a landlord. Life’s funny, huh?

Still, talk to any landlord and they will have similar stories to share about the stress involved with being a landlord.

Photo by Jon Tyson on Unsplash

Most rental property investors who give up did not realize the work involved.

I’ve known countless rental property investors over the years.

In my experience, the ones who end up selling their rental properties after a couple of years did not appreciate that becoming a landlord means taking on a job.

Unfortunately, they sell their properties long before getting the benefits from cash flow, appreciation, debt pay-down, and tax advantages.

These landlords had likely been misled into thinking that owning rental properties was an easy way to generate passive income.

Look back at the top of the post for the four main reasons I invest in rental properties.

Cash flow, appreciation, debt pay-down, and tax benefits.

Did I say anything about easily earning passive income?

Don’t make the same mistake that so many unsuccessful landlords have learned.

If you’re considering your first rental property, don’t fool yourself into thinking you’ll be earning passive income. There will be tenant issues, work orders, money spent, and tough decisions to be made like in any other business.

This remains true even if you have a property manager. You’ll often hear real estate investors griping about “managing the property manager.”

The bottom line is owning rental properties is a job. It’s not a full-time job. It’s not even a regular part-time job. But, it is a job.

At times, it can be very easy. Other times, it’s very stressful.

If you can handle the job, you can generate massive long-term wealth for you and your family.

I accept that owning rental properties is a job and have benefitted immensely.

For me, the benefits of owning rental properties significantly outweigh the downsides of being a landlord. It’s a tradeoff that I would happily make again and again.

How does the old saying go? “If it were easy, everybody would do it.”

Being a landlord is not easy. It’s definitely not for everyone.

But, then again, neither is financial freedom.

Coming up, we’ll talk about tips on how to make your experience as a landlord as smooth as possible. You can also follow me on socials for current issues I’m dealing with as a landlord.

In the end, if you are willing to put in the effort, owning rental properties will accelerate your journey to financial freedom.

Are you a rental property investor?

Do you agree that owning rental properties is a job?

Let us know in the comments below.
July 1, 2025

Author: Matthew Adair

Coast FIRE does not mean complete financial independence.

Your Coast FIRE number is not the same as your FI number.

How do I calculate my Coast FIRE number?

Using these calculators, let’s take a look at a few examples.

Coast FIRE Example 1: Clarke is 35-years-old and ready for a new job.

Based on the above variables, Clarke’s Coast FIRE number is $559,009.

What if three years still seems too far away for Clarke?

Coast FIRE Example 2: David is 40-years-old and worried about paying for college.

Plugging in these variables, we see that David’s Coast FIRE number is $588,029.

Coast FIRE Example 3: Dorothy is 28-years-old and just paid off her student loans.

Based on the above, Dorothy’s Coast FIRE number is $435,153. She can achieve Coast FIRE by the age of 38!

Use a Coast FIRE calculator to figure out your own number.

What is Coast FIRE?

Coast FIRE does not mean complete financial independence.

You can take a pay cut for a better job with Coast FIRE.

If your job is slowly killing you inside, Coast FIRE provides the money mindset to explore other jobs.

I prefer to think about pivoting, not retiring.

Financial independence is about much more than retiring early.

FIPE and Coast FIRE work well together.

Read Die with Zero by Bill Perkins

Read Die With Zero. This money mindset book will motivate you to book that vacation you’ve been putting off.

Also, read A Richer Retirement by Bill Bengen.

Coast FIRE will open your eyes.

Let’s explore how owning even a single rental property can further reduce the amount you need to save for retirement.

How to use the 4% Rule to forecast your magic retirement number.

In light of Bengen’s updated research, we’ll use 4.7% as our safe withdrawal rate.

Does saving $2.55 million for retirement seem like an impossible task?

Why would anyone want to own rental properties?

1. Rental property cash flow is king.

2. Long-term wealth through appreciation.

How owning a single rental property lowers your magic retirement number.

What happens to your magic retirement number if you pay off your mortgage?

Have you considered adding a rental property to your overall investment portfolio?

What is the significance of raising the safe withdrawal rate from 4% to 4.7%?

The title of Bengen’s book says it all: “spend more and enjoy more.”

What is the 4% Rule?

How to use the 4% Rule based on your current savings.

How to use the 4% Rule based on your current spending habits.

If you don’t know how much you’re currently spending on a monthly basis, take a look at our budgeting series here.

To calculate your magic retirement number based on current spending, simply follow these steps:

Here’s how to use the 4% Rule to forecast your magic retirement number.

If that number seems impossibly high to you, the updated 4.7% Rule should make you feel a little better:

Use the 4% Rule as an easy projection tool, not an actual withdrawal rate.

I banked with Capital One for many years.

Shocked probably isn’t the right word. I was disgusted.

It wasn’t the amount of interest I lost out on that bothered me.

I am happy to report that Capital One did not get away with it.

What are the terms of the settlement?

Translation: if you had a Capital One 360 account, you are going to be paid “some” of the interest you were owed.

If you remained a customer, you will receive an additional settlement amount:

Translation: If you continue to bank with Capital One, you will receive some additional money. How much you’ll get is complicated.

Why do stories like Capital One’s deceptive practices matter?

Don’t ignore key personal finance fundamentals even as you start to make more money.

6. It’s OK if you occasionally exceed your spending.

8. Buy it if you want it, but not right away.

10. Plan ahead for budget busters.

Planning ahead for budget busters is crucial to staying on track.

One more bonus tip for dealing with budget busters.

Don’t ignore your budget even if you’re far along on your personal finance journey.

My main 2025 money goal is to eliminate HELOC debt.

It’s important to me that I stay disciplined and stay on track with my goals.

Student loan delinquencies continue to rise.

All debt acts as a roadblock to financial freedom.

Have you ever felt how annoying debt can be?

1. Increase your saving rate.

2. Revisit your Budget After Thinking.

3. Don’t spend your pay bump.

Here’s an example of how much your saving rate can improve when you don’t spend your pay bump.

Now, let’s see what happens if you earn a $20,000 raise and save your entire raise for your down payment.

4. Take on a partner.

5. Ask Mom and Dad for help getting started.

6. Get a side hustle.

Some examples of side hustles my students have come up with in class include:

7. Use a HELOC.

You can use a HELOC as you would use cash, including for a down payment on a rental property.

This is a huge advantage if you want to use a HELOC as a down payment to buy an investment property.

8. Consider a low down payment loan.

Have you considered any of these options to help acquire a rental property?

If you’ve been keeping up with the blog, we’ve now learned how to run the numbers on potential real estate deals.