Tag: financial freedom

Step-by-Step Guide to Buy Your First Rental Property
Whenever I teach personal finance to law students, I begin by asking the class what they hope to learn.

Without fail, I get a response that goes something like:

“I want to invest in real estate, but I have no idea where to even begin.”

If you’ve ever felt the same way, you’re in the right place.

@thinkandtalkmoney
I own 11 rental properties and counting. thinkandtalkmoney.com
♬ original sound – Thinkandtalkmoney

Today, I’ll walk you through my step-by-step guide to buy your first rental property.

If you can follow these steps (in order), you will be in great shape to acquire your first rental property.

And, if I can be of any assistance as you begin your search for a rental property, please feel free to connect via socials or by replying to one of my weekly emails.

You can sign up for my email list here. I personally respond to every email.

Step-by-Step Guide to Buy Your First Rental Property
1. Use common sense and your own life experience to develop your target criteria.
2. Pick an initial location that matches your criteria.
3. Learn the common, important attributes of properties in your area.
4. Study the average rent for units in that area.
5. Ballpark how much you’ll need to spend for an attractive property.
6. Work with a real estate broker to test your findings.
7. Contact a mortgage broker and determine your budget.
8. Return to your search and do basic deal analysis.
9. Start touring the properties that look good on paper.
10. Determine if the numbers will work in your area.
1. Use common sense and your own life experience to develop target criteria.

Don’t believe anyone who tells you he has a one-size-fits-all solution for evaluating properties. Every market is different. What works in Chicago won’t necessarily work in Los Angeles.

That said, there is certainly some advice that applies across the board.

For starters, 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.

2. Pick an initial location that matches your criteria.

There are potential investment properties in every part of the country. Before you start looking at individual properties, you first need to select an area you want to invest in.

Based on your own life experiences, you are probably already drawn towards certain parts of the country. You may even have a good sense for different neighborhoods within certain cities that match your general criteria.

From there, you should do some preliminary research online to confirm what you think you know about specific areas.

For example, I know through my own life experiences that many recent graduates from the Midwest move to Chicago after college. The question then becomes: where do these young professionals tend to live in Chicago?

To find out, I might Google something like “best coffee shops (or restaurants/bars/nightlife) in Chicago.”

Likewise, if you’re targeting families, you might search for “best schools” or “best parks.”

Performing this kind of basic research is how my wife and I stumbled upon the Logan Square neighborhood in Chicago.

The truth is that when we first started looking for rental properties in 2017, we knew very little about Logan Square, even though we both always lived in Chicago or the Chicagoland area.

So, we did some basic internet research on where young professionals want to live in Chicago. It didn’t take long to land on Logan Square because we kept finding articles like this from TimeOut: “It’s official: Logan Square is one of the coolest neighborhoods in the world.“

Combined with our personal experiences, these types of articles gave us confidence to take a closer look at Logan Square.

Now, we have 10 apartments in Logan Square.

Photo by William Bout on Unsplash

3. Learn the common, important attributes of properties in your area.

Once you’ve picked an area to focus on, use an app like Redfin or Zillow to create a broad search for that area. You should filter your search based on the criteria you established above.

Take some time to casually study the listings in that area. At this point in the process, don’t worry about running the numbers. You’re still in learning mode.

If you study enough listings in a particular location, you’ll start to notice certain features that separate the premium properties from the mediocre properties.

For example, you may notice that the more attractive properties all have in-unit washer/dryer. Or, you may learn that the attractive properties all seem to have wood floors and stainless steel appliances.

Your goal is to understand the common and important property attributes in that area because those are the features potential tenants will expect to find.

Think of it like this: you don’t want to buy the only property on the block that doesn’t have in-unit washer/dryer. Even if you buy that property at a good price, you’ll struggle to find good tenants if the expectation is to have in-unit washer/dryer.

It’s not an exhaustive list, but here are some of the key attributes we’ve learned are important to young professionals renting in Chicago:
1. Location, location, location. 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.
When we shop for a rental property, we look for as many of these features as possible. We don’t expect to check every box because it’s nearly impossible to find a property that has all of these features (at least at a price that makes sense).

4. Study the average rent for units in that area.

Before you commit to a particular area, you need to know what kind of rent payments you might expect.

You can usually find rental information directly on the listing. You may see the actual rent for that property or the projected rent. For this part of the process, this estimate is good enough to get a basic sense of what you may be able to charge.

Word of caution: it’s not unheard of for these rental estimates to be exaggerated in the listings.

As you get to know your market better, you’ll know whether the projected rent is accurate. Plus, you’ll have a real estate broker on your team who can validate the numbers. More on that below.

Finally, studying the average rent goes hand in hand with the previous step of learning the important attributes of rental properties in your area.

For example, you may discover that a renovated 3 bed, 1 bath apartment with in-unit washer/dryer and a parking space rents for around $2,500. Similar units without parking may go for $2,300. Units that have not been updated may rent for $1,800.

Your mission is to differentiate between the property attributes that seem to increase the potential rent in your area from the attributes that don’t add much value.

For instance, we’ve learned that dedicated parking spots are important in Logan Square. However, renters don’t seem to care very much if the parking spot is in a garage or a parking pad.

For that reason, we don’t care too much whether a rental property has a garage, as long as there is dedicated parking available.

5. Ballpark how much you’ll need to spend for an attractive property.

By this point in the process, you’ll have a good idea of what constitutes an attractive property in your target area. You’ll also have a good idea of what these properties rent for.

Next, you can ballpark how much you’ll need to spend to purchase one of these attractive properties.

When I refer to attractive properties, I mean one that has most (but probably not all) of the features that you are looking for and still commands a decent rent. By “decent rent,” I mean not the absolute highest and also not the lowest for the area.

Additionally, the property should be priced reasonably for the market. That means it likely won’t be the most expensive property or the cheapest property.

The goal here is to have a general idea of how much good properties cost in your target area. With this information, you can then decide if it’s an area you want to target, or if you want to explore other locations.

One point that’s worth repeating: don’t expect to find a property that has every one of your key features. If you’re waiting on such a property to hit the market, you’re likely to be disappointed for one of two reasons.

First, you’ll likely end up overpaying for that property. If you overpay, you’ll struggle to earn cash flow. As investors, cash flow is crucial.

Or, you won’t ever buy a property because your expectations are too high. Investing in real estate is all about trade-offs. The fun part of the gig is deciding what trade-offs make sense.

Remember, you’re not searching for your picture-perfect, dream home. You’re searching for an asset that puts money in your pocket.

6. Work with a real estate broker to test your findings.

Now that you’ve educated yourself on your target market, it’s time to seek out the assistance of an experienced real estate broker.

A good broker will talk with you about what you’ve learned and offer additional guidance on your target market.

Also, a good broker will:
- 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.
Don’t make the mistake of jumping right to this step without completing steps 1-5.

It’s important to have done your homework on your target market before talking to brokers. That’s because you need to know enough to have informed conversations with potential brokers.

You don’t have to know all the answers. But, you have to know enough to ask the right questions.

And, you have to know enough to recognize if your broker is giving you misguided advice.

Photo by Aron Visuals on Unsplash

7. Contact a mortgage broker and determine your budget.

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.

That’s why 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.

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.
In sum, a good mortgage broker understands exactly what you’re trying to accomplish with each purchase. You can be straight with him and he can be straight with you.

8. Return to your search and do basic deal analysis.

Now that you have a real estate broker and a mortgage broker on your team, you can start to analyze deals that match your criteria in your target area.

Don’t let this part of the process intimidate you.

In fact, running the numbers on potential deals should be easy:

Running the Numbers on RE Deals Should be Easy

Rest assured, you’ve already done the hard part of educating yourself on the key assumptions you’ll need to make to properly analyze deals.

Now, you just need to plug those numbers into a simple spreadsheet or online calculator.

For a step-by-step example on how to run the numbers, check out my post here.

9. Start touring the properties that look good on paper.

After running the preliminary numbers on properties that match your criteria, you should have a smaller list of properties that seem like real contenders.

These are the properties that you should tour.

Again, you want to make sure you don’t jump ahead to this step without having completed the other steps.

That’s because it’s impractical (if not impossible) to tour every property that appeared in your initial search. By running the numbers first, you can weed out the properties that would be a waste of time to see in person.

After touring a property, you should then update your preliminary analysis based on what you learned.

For example, maybe you learned that the bedrooms are smaller than advertised. Maybe the finishes aren’t as nice as in the pictures.

The point is that after seeing a property in person, you may determine that you previously overestimated what the unit will rent for.

You also will have a better idea of what you think the property is worth.

A final word here: some investors are content buying properties without touring them in person.

Personally, I would never buy a property without walking through it first. I want to see for myself what condition the property is in and make my own assessment of what it could rent for.

10. Determine if the numbers will work in your target area.

The final step is to put together everything that you learned in steps 1-9 to determine if it’s a good idea to invest in your target area.

If you like what you’ve learned, you can stay disciplined and wait until you find an attractive property to offer on.

On the other hand, you may find that your initial target area is not ripe for investment.

That’s OK. It’s certainly better to find that out before you commit hundreds of thousands of dollars to a poor investment.

Before my wife and I settled on Logan Square, we went through this process and ruled out a number of other promising neighborhoods.

By putting in the effort to complete steps 1-9, we learned that the math simply did not work in certain parts of the city.

In some neighborhoods, the properties were just too expensive to earn positive cash flow. Then, in other areas, the rent was not high enough to justify the purchase price or high taxes.

In the end, we determined that Logan Square had the right combination of attractive properties and decent rents.

Step-by-Step Guide to Buy Your First Rental Property
1. Use common sense and your own life experience to develop your target criteria.
2. Pick an initial location that matches your criteria.
3. Learn the common, important attributes of properties in your area.
4. Study the average rent for units in that area.
5. Ballpark how much you’ll need to spend for an attractive property.
6. Work with a real estate broker to test your findings.
7. Contact a mortgage broker and determine your budget.
8. Return to your search and do basic deal analysis.
9. Start touring the properties that look good on paper.
10. Determine if the numbers will work in your area.
Like any new skill in life, implementing this step-by-step guide takes some time and effort in the beginning.

The upshot is that if you can follow these steps, you’ll get that first rental property and have the skills to acquire additional properties when you’re ready.

If I can be of any assistance as you begin your search for a rental property, please feel free to connect via socials or by replying to one of my weekly emails.

You can sign up for my email list here. I personally respond to every email.
December 2, 2025
Don’t Blame Your Income if You Are a Lawyer in Debt
If you’re a lawyer, you make plenty of money.

It doesn’t matter if you’re in big law or working in the public sector.

And, if you’re a lawyer in debt, your income is not the reason why.

I know lawyers who make a lot of money and are in a lot of debt. I also know lawyers who make modest salaries and have no debt.

Income is not the problem.

The problem is what you are doing with that income.

You may tell yourself that more income would solve all your debt problems, but it won’t.

Not unless you understand how you got into debt in the first place and are ready to do something about it.

Today, we’ll look at my three theories why lawyers end up in debt.

@thinkandtalkmoney
Let’s change those poor financial habits. #thinkandtalkmoney #badhabits #financialfreedom #financialliteracy
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Looking at each of these explanations can help us understand and avoid common pitfalls that lead us into debt.

Of course, it’s expected that young lawyers will have student loan debt. While student loan debt may be considered good debt, the problem is that it can spiral into other forms of bad debt.

For example, student loan debt becomes the excuse for why we fall into consumer debt:

“I have to pay my loans this month, but I also want to eat out with my friends. I’ll just use my credit card.”

This is exactly what happened to me at the beginning of my career as a lawyer, and what I want to help you avoid.

If you fall into bad habits early, the problems only magnify when your income rises and your potential to spend rises.

The key is to eliminate the bad habits before they become bad habits. If it’s too late for that, now is the best time to correct those bad habits before the situation spirals.

Before we get to my theories why lawyers are in debt, realize that you’re not alone if you are a lawyer in debt.

Unfortunately, the data shows that debt is all too common in today’s world. Let’s begin with some scary stats about debt.

Here are some scary stats to help explain why lawyers are in debt.

According to the Federal Reserve Bank of New York, total household debt in the United States grew to $18.04 trillion by the end of 2024.

That’s such a big number, it’s hard to know what to do with that information.

Let’s break it down by the type of debt:
- Credit card balances increased by $45 billion from the previous quarter and reached $1.21 trillion at the end of December 2024.
- Auto loan balances increased by $11 billion to $1.66 trillion.
- Mortgage balances also increased by $11 billion and reached $12.61 trillion.
- HELOC balances increased by $9 billion to $396 billion.
- Other balances, reflecting retail cards and other consumer loans, increased by $8 billion.
- Student loan balances increased by $9 billion to reach $1.62 trillion.
While these numbers are still too big to comprehend, one powerful conclusion is hard to miss:

In every category, the amount of debt increased from the previous quarter.

This pattern of increasing consumer debt has been consistent for some time now.

HELOC balances have increased for eleven consecutive quarters.

Credit card balances have increased or remained the same for 10 of the last 11 quarters.

Let’s look closer at credit card debt for a moment.

According to a recent survey looking at credit card debt in 2024 by Bankrate.com:
- 48% of credit card holders carry a debt balance, an increaseof 9% since 2021.
- 53% of the people have been in credit card debt for more than a year.
- The main causes of credit card debt are unexpected medical bills (15%), car repairs (9%) and home repairs (7%).
According to another Bankrate.com survey, 33% of Americans report they have more credit card debt than emergency savings.

These last couple stats help us understand why so many people fall into debt in the first place.

Some of it has to do with the failure to have emergency savings. When we don’t have savings, the first place we turn is to our credit cards.

Even more has to do with the failure to keep our spending in check, or living below our means.

Photo by Giammarco Boscaro on Unsplash

Why is it so hard for lawyers to live below our means?

“Live below your means.”

“Money doesn’t grow on trees.”

“Don’t break the bank.”

We’ve all heard these common money phrases. If you were to ask someone older than you for one piece of personal finance advice, I’m betting you’ll hear one of these lessons.

Let me know if I’m right about that in the comments below.

There’s a reason these phrases are so common. They’re simple and easily reflect some of our core personal finance principles:
- Live below your means = keep more of the money you earn.
- Money doesn’t grow on trees = think about the limited resource that is money before it disappears.
- Don’t break the bank = don’t exceed your budget.
Most of us understand that it makes sense to spend less money that we earn, right?

How many of us remember rolling our eyes as kids after our parents wouldn’t buy something we wanted because money doesn’t grow on trees?

I’ve started using this line with my own kids.

Does anyone truly disagree with these lessons? If so, I’d be very appreciative to hear your perspective in the comments below.

Why is it that we can all agree with these core personal finance lessons and at the same time choose to ignore them?

For example, we intuitively know that we should live below our means, but nearly half of us carry a credit card balance.

On top of that, hardly any of us are completely satisfied with our savings.

It’s not that we want to have high debt and low savings.

So why is this the reality for so many of us?

Here are my three leading theories.

1. We fall into debt because we are simply careless.

When I struggled with debt at the beginning of my career, it was basic carelessness.

I didn’t have any idea how to budget or make intentional choices with my money. I had never thought about why or how to be good with money.

Like many people, I failed to create a budget and assumed that my W-2 income was plenty. I ignored emergency savings and never even thought about creating Parachute Money.

The saddest part is that I didn’t even realize that I was slipping backwards. I had no idea because I didn’t track my net worth or saving rate. I worked hard all year long and just hoped things would work out.

By the way, if this sounds familiar, you should know by now I’m not judging anyone. I’ve been very open about my money mistakes.

We all deserve a chance to learn about and talk about strong personal finance habits. That’s why I’m on a mission to flip the script: talking money is not taboo.

2. We don’t plan ahead for emergencies.

So, being careless with money is one common reason lawyers fall into debt. Another common reason is that bad things happen in life.

This might include medical emergencies, home repairs or car troubles. It’s not our fault that these things happen. But, it is our fault if we’re not prepared in advance.

While these events are unfortunate, and maybe even tragic, they are not unexpected. We all need to expect that bad things will happen.

Preparing for the unexpected is part of every solid organization’s planning.

In government, planning ahead means having a “rainy day fund.”

When managing properties, planning ahead for big repairs means having a “Capital Expenditures” or “Cap Ex” fund.

For our personal finances, planning ahead means having an emergency fund.

Whether it’s government, business, or personal finance, the goal is to have options other than taking on debt to get through challenging circumstances.

3. Blame the Kardashians.

Besides carelessness and emergencies, there’s another powerful force that contributes to rising debt levels across the world.

This force is nearly impossible to ignore. It’s become a part of our daily lives, whether we want to admit it or not.

What is this powerful force that contributes to our rising debt levels?

The Kardashians.

OK, not just the Kardashians, but they’re kind of the mascots.

The era of social media and on-demand entertainment has made it harder than ever to avoid temptation. It’s everywhere we look.

Blaming the Kardashians realtes to another timeless, common money phrase: “Keeping up with the Joneses.”

The Kardashians are the modern day Joneses.

Once upon a time, “the Joneses” represented your neighbors, people you could observe from a distance on a regular basis.

The idea behind the phrase is that you can see what your neighbors are spending money on and are either consciously or subconsciously tempted to do the same.

If your neighbors buy a new car, you buy a new car to keep pace.

If your neighbors vacation in Australia, you research diving tours at The Great Barrier Reef.

When you notice your neighbors hosting a backyard BBQ party with lots of happy looking people, you decide to host a party the next weekend.

As humans, it can be difficult to ignore the temptation to keep up with our neighbors.

Whether we like it or not, we are concerned with our social status. Part of our self-worth gets tied to comparing ourselves to others.

Who better to measure up against than the people in our neighborhood who we probably have a lot in common with?

Photo by Campaign Creators on Unsplash

Keeping up with the Joneses is compounded in the professional setting.

This same idea is oftentimes compounded in the professional setting, like at law firms. It is not uncommon to compare ourselves in the same way to our colleagues at the office.

This is especially difficult for lawyers. Fair or not, society generally expects lawyers to make a lot of money and have nice things.

If a partner at your firm joins a country club, wears fancy clothes, or sends her kids to private school, you may feel pressured to do the same.

It’s easy to get caught up in expensive tastes when you’re expected to fit in, even if you don’t have the money to spare.

One of my favorite personal finance books, The Millionaire Next Door, discusses this concept in detail.

I highly recommend you read this book if you are struggling with comparing yourself to others.

So, what’s the solution for lawyers in debt?

Deactivate social media? Cancel the internet?

Nah. If you did that, you’d miss out on epic Instagram reels like this one where I share my top five favorite personal finance books.

Instead, the first part of the solution is to recognize when you’re making careless money decisions based on what you think other people are doing.

Making money decisions based off of your neighbors, let alone the Kardashians, is the fast road to debt.

You have no idea why or how another person is spending money. For all you know, it’s all for show and that person is barely getting by.

Do you really want to blindly follow this person’s choices? Wouldn’t it be better to confer with people you trust to help you think through money decisions?

The second part of the solution is to recognize that everywhere you look, companies are clamoring for your dollars.

Not an exaggeration: nearly $2 Trillion (with a ‘T’) of marketing dollars are spent worldwide each year with one goal in mind: to separate you from your money.

If you let that reality sink in, you’ll hopefully pause the next time you’re about to spend money on something you don’t actually care about.

You make plenty of money as a lawyer. Your income is not the reason you’re in debt.

As a lawyer, your income is not the reason you’re in debt.

You make plenty of money. The issue is what you do with that money.

This is where we circle back to money mindset.

You need to have a competing force in your life that’s strong enough to overcome all the noise.

I’m referring to your ultimate goals in life. I mean the reasons you wake up every morning to get to the firm or stay up late to finish a brief.

Why are you working so hard?

When you can answer that question, you’ll know what your ultimate goals are in life.

With those goals in the forefront of your mind, it’s much easier to make consistent, intentional money decisions.

Most importantly, you’ll stay on budget and avoid sinking into debt.

You’ll also be much happier when you stop worrying about what random strangers are spending money on.

If you’re a lawyer in debt, are there other explanations for how you got there?

Let us know in the comments below.
October 14, 2025
A Reminder About the Intersection of Money and Life

By now, you should know that I love Chicago.

It’s where I’m from, where I’ve chosen to raise my family, and where I primarily invest in real estate.

Last night was a good night for Chicago sports fans.

My favorite team, the Chicago Cubs, won a playoff series for the first time since 2017.

While watching the game at home, I couldn’t help but think of how different my life is today than it was in 2017.

Back then, I had season tickets and rarely missed a game. My wife and I were just about to get married. Life was good and about as easy as can be.

From a financial perspective, we were pretty boring.

By the way, being boring with money is not a bad thing.

When it comes to money, boring is good.

Back in 2017, my wife and I each made good incomes as attorneys. More importantly, we were happy saving a lot of the money we earned.

We rented an apartment and had minimal expenses besides travel and our social lives.

At that time, we had a good amount of savings because we were planning to buy a house after the wedding.

Our only investments were in retirement accounts, like a Roth IRA and 401(k). We didn’t own any real estate.

Life’s a bit different for me now.

I don’t have season tickets anymore. We don’t travel as much.

We have three kids and different financial priorities.

Life is better than ever, but maybe not as easy as it was in 2017.

OK, what does all this have to do with baseball?

Last night at home, while watching the Cubs pull out a stressful victory, I started thinking about these things. I wasn’t in the crowd like in 2017, but I knew exactly how the fans were feeling.

Each pitch was tense. The crowd went nuts after every Cubs hit or strikeout by a Cubs pitcher. Whenever the San Diego Padres had a rally going, every Cubs fan was nervous.

In the end, the Cubs pulled out the victory and thousands of people now have memories they’ll never forget.

There’s nothing better than playoff baseball. I love it and hate it at the same time.

Watching the game, I thought of some of my favorite baseball memories. It was a good reminder of why it’s so important to think and talk about money.

We say it a lot around here: money is only a tool. When used properly, you can use money to build lifelong memories. You can create stories that you’ll remember for the rest of your life.

Stories like the ones I have from 2016 when the Cubs won the World Series.

That’s when I met Phil and April.

My nice friends, Phil and April.

Throughout that World Series run, we sat next to the nicest couple in the world, Phil and April.

Phil was a diehard Cubs fan. April was more reserved.

Both were smart and very friendly. They were enjoyable people to sit with.

We chatted baseball, mostly. Pitching changes. Send the runner. Question the manager. That sort of thing. Completely normal, unremarkable stuff.

Until Game 5.

Game 5 was played on a crisp, October evening. Jackets and beanies weather in Chicago. Phil and April were sitting next to my brother and I, as usual.

Mike Napoli was playing first base for Cleveland. Around the 3rd inning, a jerk four rows in front of us taunted Napoli with a crude, juvenile insult.

It was apparent the jerk was doing his part to keep Old Style in business for another year.

None of us liked what this jerk yelled.

Phil especially didn’t like it.

Phil was nice…and tough.

Phil did what the rest of us were thinking but were too scared to do ourselves.

Phil stood up. In so many words, Phil sternly recommended that the jerk knock it off and show some class.

The jerk turned around, aggressively scanning the crowd for the man who had publicly shamed him. The jerk had that unmistakable look in his eye that meant, “Let’s dance.”

My brother and I were a bit worried for our nice… and all of a sudden tough…friend, Phil.

Phil’s wife, April, did not look worried. She sat there like nothing strange was happening. Almost like she had seen this movie before.

When the jerk locked eyes with Phil, he immediately saw that Phil was not backing down. If anything, Phil looked a little too eager.

Well, the jerk was sloppy, but he had enough sense to recognize that he wanted no piece of Phil. He wisely turned back around and sat down quietly.

That was the last we heard from the jerk that night.

Our nice (and tough) friend, Phil had restored order.

Photo by Dastan Eraliev on Unsplash

Phil’s on TV!

On the day of the Cubs’ championship parade, my brother called me excitedly, “Phil’s on TV! Phil’s on TV!”

It didn’t register right away who he was talking about.

When I turned on the TV, sure enough, there was Phil, our World Series friend. I was so confused. Phil was giving an interview on set with the Cubs announcers.

Our nice (and tough) friend, Phil? On TV?

I turned up the volume and listened to Phil talk about his experience watching the Cubs win the World Series. Maybe I was hoping he’d mention his nice friend, Matt. (He didn’t.)

I still couldn’t figure out why Phil was on TV.

Why won’t they just put his name on the screen already!?

It wasn’t until the end of the interview that I learned who Phil was.

All I could do was laugh.

Our nice, and confirmed tough, friend Phil is better known as World Wresting Entertainment (WWE) champion and icon, CM Punk.

Oh, and his wife?

WWE champion and bestselling author, AJ Mendez.

Unknowing watching the Cubs win the World Series with two celebrities with a combined 3.5 million Instagram followers?

Yup, that’s a story I’ll be telling for a while.

A memory I wouldn’t trade for anything.

As much fun as the World Series was, my favorite Cubs memory actually took place during the 2015 season, the year before they won the World Series.

It was during the 7th inning of Game 4 of the NLDS. This was the game where the Cubs knocked the rival St. Louis Cardinals out of the playoffs.

In the 7th inning, with the Cubs up 5-4, Kyle Schwarber hit one of the most epic home runs in Cubs history, landing his moonshot on top of the new right field video board.

It was such a feat, the ball is now enshrined where it landed.

The entire stadium was rocking so loud, you could feel the ground shaking beneath your feet. Every fan was jumping up and down, hugging anyone close enough to touch.

We were all dancing like nobody was watching. That moment was pure happiness.

I was there with my mom.

A lifelong Chicagoan, she too was jumping up and down and high-fiving all the other diehard fans in our section.

After the game, we met up with my wife at a restaurant and relived the victory over Champagne.

That day with my mom and my future wife is one of the best memories I have.

Photo by Oliver Sherwin on Unsplash

What does this have to do with money?

What does any of this have to do with money?

When I say money is a tool to create stories and memories, this is what I mean.

My brother and I still joke about our nice friends, Phil and April. I wouldn’t trade that memory with my mom for anything.

These are the types of experiences that I want more of.

These memories, and the desire for more like them, continue to motivate me today.

I want to be good with money, not so I can stash it in the bank, but so I can use that money to create joy for me and my family.

Beyond that, watching the crowd at Wrigley Field last night reminded me of why I started a personal finance blog.

It excites me to try and help people make intentional money decisions for meaningful experiences with meaningful people.

Talking money is really just talking life.

You may not be a baseball fan, but this conversation illustrates a foundational concept of Think and Talk Money.

Yes, we discuss money.

But, we’re really talking about our lives and our experiences.

Money is just a tool to help us.

And before you get cynical on me, of course money is not required for good experiences. That’s not the point.

What I’m suggesting is that if we’re all spending so much of our time each week at work, shouldn’t we spend some time thinking about the money we earn so we can maximize experiences like I had with my mom?

Think and Talk Money is all about awakening that thought process so we can use the tool of money to fuel meaningful lives.

You might not use that tool to get Cubs tickets.

But, what if you started thinking about money as just a currency that you trade to get your time back so you can do more of what you want with who you want?

Whatever it is that you’re after in life, thinking and talking about money will help get you there.

Have you used money as a tool recently to create stories and memories?

Let us know in the comments below.

October 3, 2025

How Does Your Net Worth Compare to People Your Age?

Pop quiz!

What is your net worth?

Kudos to you if you can answer that question quickly and relatively accurately.

Knowing your net worth indicates you are likely making intentional choices with your money. You likely are more concerned with how much money you keep, not how much you make.

It also likely means that you have a plan and are well on your way to financial independence.

Well done!

If you know your net worth, you might be wondering how you measure up to people your age.

That’s what we’re going to look at today.

First, let’s discuss why it’s important for all of us to track our net worth.

Download TATM Net Worth Tracker™️

Why is it important to track your net worth?

By tracking your net worth, you can quickly see if you are making good money decisions or need to make adjustments.

I recommend everybody, no matter where you are in your financial journey, track your net worth.

By the way, tracking your net worth is not a major time commitment.

It takes me less than 30 minutes each month to track and discuss what I consider to be one of the most important metrics in personal finance.

That’s all the time it takes to know if I am progressing towards my most important financial goals.

If you don’t know your net worth, now is the time to start tracking it.

The easiest way to do it is by using the TATM Net Worth Tracker™️.

This is the template I’ve been personally using for years and have shared with hundreds of law students and lawyers.

For a step-by-step guide to tracking your net worth, check out my post here:

Why You Need to Track Your Net Worth Every Month

Just like budgeting with two simple numbers, tracking your net worth is the best, and easiest, way to measure your money progress.

There’s no better way to learn how much money you’re keeping after a month of making money.

Think of tracking your net worth in terms of keeping score during a basketball game.

If you don’t know the score of the game, you don’t know if your strategy is working. You don’t know if you need to make adjustments before time runs out.

The same applies to tracking your next worth. The point is to educate yourself on your current financial situation so you can make adjustments while there is still time.

How do I know if I need to make adjustments based on my net worth?

Speaking of making adjustments, it can sometimes be helpful to look at datasets to see how you measure up to the rest of the population.

So today, we’ll look at two potentially helpfully net worth metrics.

First, we’ll look at the average net worth of Americans by age.

Then, we’ll look at the average net worth by age of the Top 1%.

The goal is to give you some benchmarks so you can assess where you’re currently at. Then, you can decide if you want to make any adjustments.

In other words, the point is to educate yourself so you can make intentional choices for your own situation. The point is not to start comparing yourself to your neighbors.

OK, let’s get to it.

green plant in clear glass cup indicating that net worth grows over time. — Photo by micheile henderson on Unsplash

Download TATM Net Worth Tracker™️

What is the net worth of Americans by age?

Below is the average and median net worth of Americans by age based on research from Empower.

Keep in mind these studies are not perfect.

It’s not an easy task to track and study net worth across a wide population. Not everyone tracks her net worth, let alone makes it easy for outsiders to track it.

Use these figures as a rough guide to help your own decision-making. Just don’t get too caught up in the exact figures.

Net Worth by Age

Age	Average Net Worth	Median Net Worth
20s	$121,004	$6,609
30s	$307,343	$24,247
40s	$743,456	$75,719
50s	$1,330,746	$191,857
60s	$1,547,378	$290,447
70s	$1,444,413	$233,085
80s	$1,342,656	$233,436
90s	$1,212,583	$205,043

High school math refresher: The average is calculated by adding up all values in a dataset and dividing by the count. The median is the middle value of a dataset with an equal number of values above and below. Averages can be skewed by extreme values, so the median can give you a more accurate picture.

Here are some observations about the average net worth of American by age:

Net worth tends to increase with age. No surprise there, right? As our careers progress, we tend to earn more and invest more money.
Net worth tends to peak in our 60s. This also makes sense. When people reach retirement age, they start to draw down their portfolio. They’ve spent decades accumulating wealth and eventually it’s time to spend that savings.
Notice the effects of compound interest. From the 20s to the 30s, we see that the median net worth nearly quadruples. That’s a 400% increase! However, it equates to a median net worth increase of only $18,000.
Compare that to the change from the 50s to 60s. We see that the median net worth increases by only 50%, but the result is an increase in nearly $100,000.
The takeaway is that when you have more money invested, smaller gains result in higher earnings. You could say, “the rich get richer.”

What is the net worth by age of the top 1%?

Next, let’s take a look at the average net worth by age of the Top 1%, thanks to an analysis of Federal Reserve data by DQYDJ.

Remember, these are only rough figures. Use this data to help you strategize based on your current financial situation.

Net Worth by Age of the Top 1%

Age	Top 1% Net Worth
18-24	$653,224
25-29	$2,121,910
30-34	$2,636,882
35-39	$4,741,320
40-44	$7,835,420
45-49	$8,701,500
50-54	$13,231,940
55-59	$15,371,684
60-64	$17,869,960
65-69	$22,102,660
70-74	$18,761,580
75-79	$19,868,894
80+	$16,229,800

Are these dollar amounts lower or higher than you expected?

If these dollar amounts seem unattainable, remember that 99% of us will never hit these marks. Don’t get discouraged. You’re doing great work if you’re anywhere close to these numbers.

Did you notice that the trends in the Top 1% net worth data are very similar to the average net worth by age data we previously looked at?

We again see the net worth of the Top 1% peaking in the 60s.

We also see the same effects of compound interest.

This data reinforces the point that investing favors people who start early, even if the results do not materialize for decades. It takes time for compound interest to work its magic.

young man and older man standing at bottom of stairs representing the importance of tracking your net worth. — Photo by John Moeses Bauan on Unsplash

Tracking your net worth is the best way to measure your personal financial progress.

By now, you should have an idea of where you stand compared to the rest of the population.

If you don’t know your net worth, you can easily figure it out using the TATM Net Worth Tracker™️.

Here’s a preview of what the TATM Net Worth Tracker™️ looks like.

To give you an idea, here’s what the TATM Net Worth Tracker™️looks like:

The TATM Net Worth Tracker makes it easy to quickly calculate and visualize your net worth without needing to share your private information with any third party apps.

Once you input the amounts for each cell in the appropriate column, a graph automatically populates so you can visualize your progress.

You’ll also be able to quickly see exactly how your net worth has changed since the beginning of the year:

That’s all there is to it.

Now, you know your net worth.

Once you know your net worth, what can you do with this information?

If you’re happy with how you measure up, that might mean you’ve reached a level of financial independence where you have options in life.

Having options in life means that you’ve achieved the ultimate goal: FIPE (Financial Independence, Pivot Early).

When you reach FIPE, you are free to pivot to a new challenge, if that’s what you want.

On the other hand, maybe you looked at this data and learned that you are not as far along on your financial journey as you had hoped.

Don’t panic.

The benefit is that you can now make adjustments.

What kind of adjustments can you make after learning your net worth?

When you track and study your net worth, you can make adjustments while you still have time on your side.

For example, you may decide that it’s finally time to boost your saving rate.

After all, your saving rate is the one thing you can actually control on your way to financial independence.

Or, you might take a fresh look at your Budget After Thinking to find ways to generate more fuel for your investments.

And, it might mean saving and investing that one-time windfall instead of spending it on stuff you don’t really care about.

Whatever decisions you make, knowing the average net worth by age can help point you in the right direction.

It takes me less than 30 minutes per month to track my net worth using the TATM Net Worth Tracker™️.

It takes me less than 30 minutes each month to track and study one of the most important numbers in personal finance.

Each month, I’m only looking for progress compared to what my net worth was previously.

If my net worth increases over time, it means I am heading in the right direction.

It means that I am continuing to fuel my Later Money goals. I am paying down debt. I’m letting my investments do their thing.

If my net worth is not increasing, it means I need to figure out why and consider making adjustments.

Sometimes my net worth decreases because the markets are heading down. If that’s the case, I don’t do anything. At this stage in my life, I can afford to wait while markets tick back up.

If the issue is that my debt is increasing, or I didn’t fuel my investments that month, I know I need to make adjustments.

By studying my net worth each month, I can catch these setbacks before they become a continuous problem.

Do you track your net worth?

Are you happy with how you measure up?

If not, are you prepared to make the necessary adjustments?

Download TATM Net Worth Tracker™️

September 28, 2025

How Much Money Did You Actually Keep This Week?
The alarm clock goes off at 6:30 a.m.

You groggily brush your teeth and hop in the shower.

The hot water feels nice. Should I skip work today?

Then, reality sets in. What time is my first meeting today?

Shower done. Now, what to wear? The blue shirt? Again?

Let’s go, let’s go! Pick up the pace! The kids need to get dressed and eat breakfast.

Why are we always so rushed before school? Tomorrow, I’ll wake up earlier.

The train will be here in 10 minutes. “Bye kids! Bye Honey!”

I gotta get across the tracks! Speed walk!

Phew. Made it.

30 minutes to catch your breath before work starts.

What day is it today? Tuesday?? It’s only Tuesday?!?!

I’m tired.

@thinkandtalkmoney
How much money did you actually keep this week? #thinkandtalkmoney #personalfinance #richdadpoordad
♬ original sound – Thinkandtalkmoney

Do you ever notice the people on the train?

Does this routine sound familiar to anyone?

At least you’ll have something to show for it come pay day.

Wait, you go through all that effort every day and you’re not saving a good portion of your paycheck?

Let’s talk about that.

When I take the train downtown, I can’t help but notice my fellow passengers.

Some people are already cranking away on their laptops. Some are even on conference calls, which always surprises me.

Why don’t they care that everyone is annoyed with them? Do the other people on the call know that they’re talking to someone on a train?

But, I digress.

Some passengers are reading books. A good portion of passengers are doomscrolling. Just about everyone has headphones in.

It’s not that people look unhappy. They just seem to want to be somewhere else.

Do you have similar observations?

Most people don’t have a plan.

It’s at times like these when I start to wonder how many of these people have a plan.

I’m not talking about a plan for lunch or for getting to the gym after work.

I mean a plan for how to spend their time and their money.

Ideally, this plan would be based upon spending time on meaningful pursuits with meaningful people.

My guess is most people have never really thought about this kind of plan.

Instead, it’s go to work. Get a paycheck. Pay the bills.

Same thing tomorrow. That’s as far as the plan goes.

This routine may be enough for some, or even most, people. If that’s enough for you, there’s no shame in it. Holding down a steady job and providing for your family are accomplishments to be proud of you.

But, let’s be real.

You’re reading a personal finance blog.

We spend a lot of time talking about financial freedom and creating options.

You wouldn’t still be reading if you didn’t feel there was more to life than the daily train ride, right?

You may not know how or when to get off the train, but you’re interested in finding out if it’s possible.

Well, it’s definitely possible. But, you need to break the cycle and commit to a plan.

Here’s a question to help you get started.

How many hours do you work to make money?

Photo by Volodymyr Hryshchenko on Unsplash

Let’s say you work 2,000 hours per year to make money (40 hours per week, 50 weeks per year).

We won’t even count all the hours you spend getting dressed and riding the train.

Also, we will pretend you’re not looking at your emails in the evening, on weekends, and on family vacations.

We definitely won’t count the hours you’re staring at the ceiling fan worried about tomorrow’s challenges at work.

OK, so you’re working 2,000 hours (plus) per year to make money.

My question is:

How many hours per year do you think about what to do with that money?

Let that sink in for a moment.

You work a lot of hours. I’m guessing many of those hours are stressful.

Yes, you get paid money in exchange for those hours.

But, do you still have any of that money?

Do you care more about making money or keeping money?

Think back on how much time, energy, and sacrifice you dedicated to making that money.

Hopefully, you saved and invested a good portion of that money.

The problem is that most lawyers and professionals work incredibly hard, make good money, and don’t keep enough of it.

They somehow find 2,000 or 3,000 hours per year to work.

But, they won’t set aside even a few hours per month to think about what to do with all that money.

This is why I am passionate about money wellness.

Most people spend the vast majority of their lives worried about making money and practically no time at all thinking about what to do with that money.

No, I’m not suggesting that you need to think about money for 2,000 hours per year.

What I am suggesting is that even a little bit of time each week spent thinking and talking about money is just as important as the time you spent earning it.

That’s how you break the cycle of mindlessly riding the train to work and start progressing towards financial freedom.

It’s not how much money you make. What matters is how much you keep.

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 who made $1,000,000 per year, and at the end of the year, had only saved $20,000, what would your reaction be?

Sadly, this is how most people behave with their money.

They inherently know that they should be saving more, but they come up with excuses. They assure themselves that they’ll start saving more next year.

On the other hand, what if you knew someone who made $100,000 per year and saved $40,000?

Did your reaction change?

This is the kind of person who will actually achieve financial freedom and have choices in life.

It all comes down to how much you keep, not how much you make.

It’s why your personal saving rate is so important.

Don’t forget, your saving rate is the one thing you can truly control.

Photo by Superkitina on Unsplash

What is a saving rate?

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

Saving rate = Money Saved / Money Earned

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

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

Tracking your saving rate will help you understand if you are making progress over time.

It’s not about comparing yourself to someone else. Whatever your current saving rate is, the goal is to seek personal improvement.

Just like with tracking your net worth, the purpose is to see if you are making personal progress over time.

How can you make progress with your saving rate over time?

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

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

If you can do that, your saving rate and your net worth will steadily climb.

You’ll realize that you’re closer to getting off the train than you think.

How much money did you keep this week?

When you get your next paycheck, pay attention to how much of that money you actually keep.

Once you pay the mortgage/rent, car payment, and credit card bills, is there anything left for you?

If your saving rate is low, this exercise should make you mad.

Seeing 95% of your hard-earned money disappear as soon as it comes in should inspire you to make some adjustments.

Those adjustments may be small at first. Over time, you’ll experience that it feels better to keep money than to spend money.

Keeping money leads to options.

Spending money leads back to the train.

Have you ever observed your fellow commuters in the morning? What are your takeaways?

Do you have a plan to get off the train, should that be your choice?

Let us know in the comments below.
September 26, 2025
Your Saving Rate is the One Thing You Can Truly Control
On your journey to financial freedom, there is only so much you can control.

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

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

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

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

Gee, thanks for the doom and gloom, Matt.

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

Don’t be discouraged. All is not lost.

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

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

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

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

What is the secret?

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

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

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

Let’s examine why.

What is a saving rate?

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

Saving rate = Money Saved / Money Earned

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

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

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

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

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

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

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

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

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

That’s… bad.

Photo by Chris Leipelt on Unsplash

What can I learn from tracking my saving rate?

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

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

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

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

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

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

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

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

Sometimes, we all need to ask ourselves:

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

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

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

Only you can answer these questions.

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

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

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

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

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

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

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

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

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

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

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

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

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

Not bad, huh?

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

Photo by Alexandr Podvalny on Unsplash

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

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

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

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

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

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

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

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

It’s a double whammy. In a good way.

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

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

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

Only one year.

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

Now, that’s cool.

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

So, what’s the takeaway here?

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

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

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

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

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

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

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

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

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

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

Does this example motivate you to save even more?

Let us know in the comments below.
September 16, 2025
Did You Win the $1.787 Billion Powerball Jackpot!?

No!?

Me neither.

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

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

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

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

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

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

Specifically, I asked myself:

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

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What I’m doing if $178,000 hit my bank account today. #thinkandtalkmoney #lottery #personalfinance #financialfreedom #529plan
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I know it’s not as exciting as thinking about what you would do with $1 billion, but I think it’s more important because it is actually realistic.

Yes, I said realistic.

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

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

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

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

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

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

Here’s exactly what I would do.

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

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

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

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

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

Photo by Steve Sawusch on Unsplash

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Why did I target in-state tuition?

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

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

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

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

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

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

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

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

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

Photo by SLNC on Unsplash

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

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

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

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

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

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

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

How would you use $178,000 today?

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

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

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

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

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

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

Enjoy some. Save and invest the bulk of it.

What would you do with a windfall like this?

Let us know in the comments below.

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

Stop me if you’ve heard this advice before:

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

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

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

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

Nope.

I refuse to believe that.

Financial independence about so much more than that.

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

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

How did financial independence become synonymous with deprivation?

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

Yes, son, there’s a problem.

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

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

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

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

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

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

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

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

Of course not.

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

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

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

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

FIRE has taken on an unintended meaning.

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

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

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

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

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

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

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

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

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

Photo by Jason Hogan on Unsplash

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

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

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

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

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

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

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

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

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

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

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

Yes, you have to keep your spending within reason.

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

Focus on earning more, not just spending less.

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

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

What would you rather do?

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

Do you really have to think that long about it?

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

Photo by Becca Tapert on Unsplash

I am a big fan of side hustle.

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

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

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

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

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

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

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

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

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

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

How can you find these clients?

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

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

Either one of these pursuits could be your side hustle.

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

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

OK, but I don’t even like coffee.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

September 5, 2025
How to Think About Investing in Both RE and the Stock Market
Let’s say that you have $200,000 that you want to invest.

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

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

You have an important question to sort through:

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

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

The way I see it?

Why not do both?

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

@thinkandtalkmoney
Happy to provide the geniuses a place to live. #thinkandtalkmoney #realestateinvesting #rentalproperty #genius
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Today, we’ll explore why you may want to invest in the stock market and own rental properties.

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

Real estate is my favorite asset class.

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

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

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

People will always need a place to live.

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

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

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

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

1. Rental property cash flow is king.

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

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

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

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

2. Long-term wealth through appreciation.

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

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

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

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

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

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

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

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

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

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

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

4. Real estate investors earn massive taxes benefits.

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

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

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

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

Yes, you read that right.

I’ll say it again, just to be clear:

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

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

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

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

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

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

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

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

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

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

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

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

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

Photo by Vlad Hilitanu on Unsplash

What is Parachute Money?

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

Pretend your life is like flying on an airplane.

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

All you need is a parachute.

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

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

Then, you look at the second parachute.

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

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

Why is having Parachute Money important?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

That decision can start to feel overwhelming.

Photo by Ali Kazal on Unsplash

Deciding between various asset classes can feel overwhelming.

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

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

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

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

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

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

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

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

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

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

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

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

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

Which asset class did you invest in first?

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

Let us know in the comments below.
August 29, 2025
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
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
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
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
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.

@thinkandtalkmoney
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
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.

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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
Invest in Real Estate and Other People Pay Your Debt

Imagine that you have the chance to own something that might be worth a lot of money down the road.

To buy this thing, you will need to pay 25% of the purchase price. The other 75% of the price will be paid by someone else.

Your job is to take care of that thing and keep it for a long time. It won’t be easy, but if you can handle it, you’ll wake up years from now owning something outright that is very valuable.

So far, this sounds pretty good, right?

Of course, there’s a catch. That person paying for 75% of the item will want to be paid back. He’ll want to earn interest, too.

You might be thinking that this opportunity doesn’t sound so promising anymore. Having to pay off that debt might be enough to convince you not to move forward with buying this thing.

You’re smart to be thinking about the debt. I could understand if the prospect of paying back a debt like this didn’t appeal to you. Who really wants to use their own hard-earned money to pay off debt anyways?

Fair enough.

But, what if I told you that other people are going to pay back that 75% (plus interest) on your behalf?

Even more, while those other people are paying back the debt, you still get to benefit from owning the item.

Does that change how you’re viewing this opportunity?

Maybe now you’re thinking that this is too good to be true?

Nope.

This is exactly how real estate investors generate long-term wealth. They buy a property using a loan and then pay back that loan using other people’s money.

This example leads us to the next main reason I invest in real estate:

Other people pay off my debt.

When you acquire the right rental properties, your tenants will pay monthly rent and that rent can be used to pay off your loan.

That means you can pay off that loan without using any of your own money.

As your loan balance shrinks, your net worth increases. As your net worth increases, you are creating wealth for you and your family.

Along the way, you can reap the benefits of monthly cash flow and appreciation. That means your net worth increases even more.

That’s a powerful combination to generate long-term wealth.

If this concept sounds like something you may be interested in, read on.

Before we talk more about debt pay-down, let’s review two of the other main reasons I invest in real estate.

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.

Photo by Frames For Your Heart on Unsplash

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.

Now that we’ve reviewed how cash flow and appreciation work together to generate long-term wealth, we can look at the additional benefits of debt pay-down.

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.

Each time I make a mortgage payment, part of the payment goes to interest on the loan and part of the payment goes toward the principal. This concept is known as amortization.

By the way, this is how real estate investors use Good Debt, also know as leverage, to generate wealth.

You may be totally against debt of all kind. That’s OK. Debt certainly carries risk. I’m not here to convince you that debt is a good thing or a bad thing. I’m just showing you how it works.

For more on the difference between good debt and bad debt, check out my post here.

What is loan amortization?

Amortization is the process of paying back a loan over time in predetermined installments. While your payment amount remains the same, the composition of that payment changes over time.

In the early years of paying off a mortgage, the vast majority of your payment goes to the interest. With each additional payment, more of the money goes towards the principal.

When you take out a mortgage, your lender will give you an amortization table that shows you exactly how much of your monthly payment goes towards interest and principal for the duration of the loan.

For example, if you take out a 30-year mortgage, you’ll receive a chart that shows 360 payments (12 monthly payments for 30 years). You can then look at any month in that 30-year period to see how much of your payment goes to interest vs. principal in that month.

Photo by Naomi Hébert on Unsplash

If you’re so inclined, you can also use an online calculator, like this one at calculator.net, to create an amortization chart for any loan you have.

I’ll admit, looking at the amortization chart is the least fun part of any real estate closing.

Seeing debt payments as far out as 30 years is a bit scary. It’s hard not to think of all the things that can go wrong during such a long time period. That’s why I prefer to think of amortization in general terms instead of specifics.

Generally speaking, I know that some of my monthly payment goes to interest and some goes to principal. The longer I pay back the loan, the more of my payment goes to principal. That’s good enough for me.

With a fixed-rate loan, your monthly payment remains the same.

When you have a fixed-rate mortgage, your payment remains the same for the duration of the loan.

At the same time, because of inflation, rents tend to go up over the long run. Rents may also go up if market conditions improve or if you have forced appreciation through enhancements to your property.

When your rental income goes up, and your debt obligation remains constant, that means more cash flow for you.

For example, say your monthly mortgage payment is $2,500 each month for the next 30 years. And, let’s say you currently earn $3,000 in monthly rent payments.

Over time, your rental income should gradually increase. Some years in the future, you may be earning $4,000 or $5,000 per month in rental income. All the while, your monthly mortgage payment remains $2,500.

You can use that extra income, after covering all other expenses, to pay for your immediate life expenses, pay off your loan faster, or invest in other assets.

It’s for these reasons that having a fixed debt payment over a long time horizon is one of the biggest advantages to investing in real estate.

Think of it this way. Just like with your personal Budget After Thinking, you can make significant strides towards financial freedom when your income increases and your expenses remain fixed.

What do you think of investing in real estate so other people can pay off your debt?

Now, you know three of my main reasons for investing in real estate: cash flow, appreciation, and debt pay-down.

Regarding debt pay-down, each month my tenants pay rent, I can use that income to shrink my loan balance.

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.

So, on top of monthly cash flow and appreciation, debt pay-down is another way to generate wealth through real estate over the long run.

That’s three ways to make money off of a single investment.

Not bad, huh?

If you’re a real estate investor, let us know how you’ve used debt to increase your net worth.

June 22, 2025
Money Question: What Would I do with $10 Million?

In a recent post, I asked: If you woke up tomorrow with $10 million in your bank account, would you do anything differently?

I ask a version of this question whenever I teach my personal finance course to law students.

Asking what you would do with $10 million is just another way to ask what you would do with financial freedom.

Attaching a specific dollar amount to the question helps make financial freedom seem real. It turns the aspirational concept of financial freedom into actual numbers.

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In a recent post, I asked: If you woke up tomorrow with $10 million in your bank account, would you do anything differently? I ask a version of this question whenever I teach my personal finance course to law students. Attaching a specific dollar amount to the question helps make financial freedom seem real. Many thanks to one of our blog followers, Ian, for turning the question around and asking me what I would do with $10 million! #thinkandtalkmoney
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Many thanks to one of our blog followers, Ian, for turning the question around and asking me what I would do with $10 million!

It’s been some time since I put some real thought into this question. I’m happy to have gone through the thought process in crafting this post.

If you haven’t already, I encourage you to do the same and think about exactly what you would do if you woke up with $10 million.

Before I share my answer, I want to highlight some other reader responses to the question, which should shed some light on my decisions.

Let’s get to it.

🚨If you know anybody who would benefit from thinking and talking about money even just a little bit, please share the Think and Talk Money blog with them! I post 3 times every week. 🚨

Disappearing on a beach.

The most common response to what people would do with $10 million involved some version of:

Invest the money and then disappear on a faraway beach.

In a way, the “disappear on a beach” response illustrates what many of us are striving for with financial independence. By that, I mean the goal of having enough money to then not have to work if we don’t want to.

Photo by Maarten van den Heuvel on Unsplash

Personally, I share the goal of becoming financially free, but I’m not looking to retire early and disappear. After all, I believe in FIPE not FIRE.

I think jetting off to the beach would be nice at first but then get old pretty fast. That said, I can certainly appreciate the desire to take some time away from life’s daily stressors.

Invest and then buy a shotgun.

One reader, Sean, shared a pretty sensible plan:

Put $9 million in the S&P 500, pay off debt with the rest and buy a nice shot gun.

It’s hard to argue with this plan. Of course, it’s never a bad idea to pay off debt or invest in the S&P 500.

I think it’s also important to treat yourself, within reason. I’m not in favor of earning financial freedom if it means being afraid to spend money on the things that make you happy.

While I don’t know the first thing about shotguns, I’m guessing they represent a hobby of Sean’s. I’m certainly in favor of spending on hobbies, experiences, and activities that bring you joy.

Well done, Sean.

The struggle between “should” and “want.”

Finally, Zach shared a sentiment that many of us struggle with when it comes to money decisions:

I know what the answer should be but I’d really like to buy a house and a couple of the cool cars I’d always ogled over growing up.

Zach’s comment stood out to me in the way he phrased it. He knows what he should do, which in his mind is different from what he wants to do.

Zach’s one sentence comment sums up a money struggle that many of us have.

We know what we should do, but we’re constantly fighting what we want to do.

I would challenge Zach, and anyone else feeling this way, to take some time thinking about what you truly want out of life. I did this when I wrote down my Tiara Goals for Financial Freedom while on a beach in Florida.

If you put some real thought into it, you might find that material possessions are actually not that important to you. Rather, buying your freedom is so much more valuable.

I would want to know more about Zach’s desire to buy a couple of cool cars. Maybe, like our previous reader wanting a shotgun, having cool cars is a hobby for him that brings much joy.

However, I have my doubts that’s what Zach meant. The way he phrased it (“cars I’d always ogled over growing up”) leads me to believe he wants these cars to show off.

Here’s the problem with that type of spending.

Buying a couple of cool cars would likely only give you a short-lived burst of happiness. Sure, it would be fun to drive them around at first. Maybe it’d also be fun to have your friends over and show off what you just bought.

But, studies routinely show that the burst of happiness from material possessions like cars only lasts for so long.

When that initial burst fades away, you’re stuck with the hassle of owning multiple cars that you probably wouldn’t even drive much. Your friends would stop caring before too long.

Add in the cost of insurance, maintenance, and garage space, and these cool cars will be a major drag on your financial freedom.

By the way, there’s nothing at all wrong with buying a house. You need to live somewhere. Just keep it reasonable.

Otherwise, you’ll end up working long hours for a lot of years just to keep the house. That might not be a trade off you want to make.

What I would do with $10 million.

Without further ado, here’s exactly what I would do if I woke up with $10 million tomorrow.

1. $50,000 to go on an African safari with my wife.

My wife and I have three kids at home ages five and under. With a newborn, even date night can feel like an epic adventure. My wife does so much for all of us, that this is the easiest decision I’ve ever made.

With the first $50,000, she and I are packing our bags for Africa and leaving the kids with Grandma. Since this would be our first big trip in six years, we’re balling out without worrying about the cost.

I am a big advocate of using money as a tool to build memories. How could I do better than taking a dream vacation with my wife?

2. Pay off my house.

My goal is to be financially free. A big part of that is not having any debt. That’s why the next chunk of the $10 million is going to pay off my house.

I could certainly make more money long-term by investing in the stock market or purchasing more rental properties. But, with $10 million at my disposal, I don’t need any more money. I know when enough is enough.

I love my house and my community and would rather know that I can stay here with my family for the long run.

3. Pay off my rental ski condo.

In 2021, my wife and I bought a ski condo in Colorado. We currently rent it out for most of the year.

If I had $10 million, I would pay off the mortgage on the ski condo, stop renting it out, and spend a lot more time out west with my family.

Photo by Jon Flobrant on Unsplash

As I mentioned, one of my main goals in life is to create as many experiences and memories as possible with my family.

Paying off my condo would allow all of us to spend more time together doing the things we love, like skiing, hiking, biking, and swimming.

Best of all, we could do these things while sharing our condo with our extended family members.

4. $250,000 in a high yield savings account.

Everyone should have an emergency savings account. I would put $250,000 into a high yield savings account and turn to this money as my first line of defense in case of emergencies.

After eliminating my mortgage debt on my primary home and my ski condo, $250,000 would be enough to fund my life for about 2 years. That’s a lot of runway and provides peace of mind.

5. $300,000 total in my kids’ 529 college savings accounts.

Besides eliminating debt, my other major financial goal right now is to save enough to pay for my three kids’ college. To cross this goal off my list once and for all, I would put a combined $300,000 into their 529 accounts.

I landed on $300,000 by playing around with an online calculator, like this one. $300,000 should be enough to reach my goal for each kid.

6. 70% of the rest in a total stock market index fund.

I am an index fund investor, through and through. I have no interest in trying to beat the market or time the market.

I’m perfectly happy with earning around 10% per year, which is the historical annual average return of the S&P 500.

So, I would put 70% of the rest of my money in a total stock market index fund. I prefer Vanguard’s popular offering, VTSAX.

If you’re wondering why I’m not putting all my money in “safer” asset categories, like cash or bonds, it’s because I still have a long investment horizon in front of me.

I plan on investing for decades to come. I’m OK riding out the market swings that come with investing in stocks. I also want to keep up with inflation so my purchasing power remains strong in the future.

7. 30% in a total bond market index fund.

While I would mostly be invested in stocks, I would be highly motivated to preserve more of my wealth. Like I mentioned before, enough is enough.

Investing in bonds is a good way to de-risk your portfolio, even if it means earning less each year.

For that reason, I would allocate the remaining 30% of my money to a total bond market index fund. I would choose Vanguard’s VBTLX.

I would not pay off my rental properties or quit my job.

You may have noticed I did not mention paying off my rental properties or quitting my job.

My rental properties are all on very low-rate mortgages and generate strong monthly cash flow. These properties are performing beautifully as is.

I don’t see any good reason to mess with a good thing. I could always re-visit if circumstances changed.

With $10 million, why am I not quitting my job and jetting off to a beach?

The truth is I really like my life right now. I don’t see any good reason to make sudden, major life changes.

I like the people I work with and the work that we do for our mesothelioma clients.

On top of that, I like where I live and am not really craving any major purchases. I would probably get some new furniture for the house. Maybe I’d plant another tree or two in the backyard.

Plus, because I’m still earning an income in this scenario, I can continue to use my income to fund my life. That’s why I didn’t account for daily spending in my plan for $10 million.

In fact, I’d have more income available because the $10 million is more than enough for my long-term savings and investment goals.

I could use the money I had been saving for these goals for more present day spending. I’m not sure I would, but I could spend more freely, if I wanted to.

So, there you have it. That’s exactly what I would do with $10 million right now.

What do you think of my plan?

Would you do anything differently?

Let us know in the comments below.

June 14, 2025
Real Estate has Accelerated my Journey to Financial Freedom
I invest in real estate for one reason and one reason only:

To accelerate my journey to financial freedom.

Through monthly cash flow, debt pay-down, appreciation, and tax benefits, I’m convinced that owning rental properties is the fastest way to reach financial freedom.

We’ll soon discuss each of these advantages in more detail. For now, here’s a quick overview:
- Cash Flow: After paying all the bills each month, whatever is left is considered cash flow. You can use this cash flow however you want.
- Appreciation: Real estate tends to increase in value over the long-term. If you hold real estate long enough, you should benefit from appreciation. This also means that your net worth grows.
- Debt Pay-down: If you have a mortgage on a rental property, your tenants are the ones paying down that mortgage each month. That means your net worth grows because your debt is shrinking.
- Tax Benefits: The tax code favors real estate investors. Whereas W-2 income is heavily taxed, many real estate investors pay little in taxes (and sometimes nothing in taxes). Some of the biggest reasons for this are depreciation and lower tax rates for capital gains.
With these four major advantages in mind, you can hopefully start to see how investing in real estate will accelerate your journey to financial independence.

Additionally, you may have noticed that investing in real estate provides both immediate and long-term financial benefits.

Let’s focus on that point for a moment.

Investing in real estate offers immediate and long-term financial benefits.

To be truly financially free, you need to cover immediate life expenses and prepare for future life expenses.

In terms of your Budget After Thinking, your Now Money and Life Money are considered immediate life expenses. Your Later Money is for future expenses.

Rental properties can help you in each budget category. The monthly cash flow and tax benefits will cover your Now Money and Life Money needs. Debt pay-down and appreciation offer significant upside for your Later Money.

I’ve been hard-pressed to find any other asset class that provides as many benefits for both for the here-and-now and the future.

There’s another major reason I believe in the power of investing in real estate.

It has to do with one of my ultimate life goals: to create more time to spend with my family. This is one of my major life goals, in part, because of what I’ve learned in my career as an attorney.

What I’ve learned about time and family as an attorney.

I graduated law school at age 24 and spent the first couple of years of my career clerking for an appellate court judge.

To this day, I tell my students that clerking for a judge is the best job for recent graduates. I recommend that all my students apply for judicial clerkships.

When my clerkship ended, I joined my current law firm where I continue to represent people with mesothelioma, a rare and terminal cancer caused by asbestos.

If it wasn’t for what I’ve learned from my mesothelioma clients, I would have never started investing in real estate.

Let me explain what I mean.

I’ve learned invaluable life lessons from my clients with mesothelioma.

Most of my clients are in their 70s and 80s. That’s because mesothelioma is a disease that takes decades to manifest. A person can be exposed to asbestos in his 30s and not get sick until his 70s.

A significant part of my job has been meeting with my clients in their homes after they have just found out they have incurable cancer. Before we ever get around to talking about the case, we inevitably end up talking about life.

During these conversations, I do most of the listening. You can imagine what I’ve learned about life in these moments. It is not a stretch to say that many of my core beliefs have been shaped by these powerful experiences.

When I listen to my clients talk about life, certain themes continue to surface.

One major theme I hear from my clients is the importance of family. They’ve taught me the importance of creating experiences and memories with loved ones, usually involving family vacations or time spent with friends.

Photo by Natalya Zaritskaya on Unsplash

Like my clients, I want to create as much time as possible with my family and friends. When I look back on my life, I want to look back on all the experiences and memories I’ve created.

With rental properties, I can earn money without being physically present. And while investing in real estate is not completely passive, it provides tremendous upside without requiring all of my time.

That means I can spend more time with my wife and three kids while still making money.

Because of what I’ve learned from my clients, there’s nothing more important to me.

I started investing in real estate in my mid-30s.

By the time I reached my mid-30s, I had paid off my student loan debt. I had successfully saved up for an engagement ring and a wedding. Newly married, my focus shifted to saving up for a downpayment on a home.

At the time I started saving up for a home, I had no idea that I could use my savings to invest in real estate.

It wasn’t until I went to a Cubs game with a good friend of mine, The Professor, that I learned about real estate investing. This is when my journey to financial freedom really accelerated.

See, The Professor had a beautiful condo with an incredible rooftop deck near Wrigley Field. During the game, he told me he was selling the condo and moving into a 4-flat with his fiancee in an up-and-coming part of town.

Huh?

Why on earth would you give up your amazing condo? And move to a random neighborhood I’d maybe been to one time in my life?

I thought The Professor had lost his mind. Back then, I had no idea what a 4-flat even was. I couldn’t even point to his new neighborhood on a map of Chicago.

The Professor set me straight.

Photo by Maria Ziegler on Unsplash

He walked me through the numbers. He explained that he was going from paying $3,000 per month for his condo to receiving $700 per month on top of living for free in the 4-flat. That’s a $3,700 difference per month!

I immediately thought about the experiences and memories that I could create with my wife if we had an extra $3,700 per month to spend.

I already knew what my clients would say about the opportunity to create such memories.

It almost sounded too good to be true.

I did my homework and bought my first investment property less than a year later.

During my talk with The Professor, he introduced me to BiggerPockets.

If you haven’t heard of BiggerPockets, it is a treasure trove of online resources to help real estate investors of all levels.

At BiggerPockets, you can listen to podcasts, read blog posts, and ask questions on the forums. You can also choose from a wide selection of incredible books on real estate investing.

One of my favorite BiggerPockets books is Chad “Coach” Carson’s book, Small and Mighty Real Estate Investor: How to Reach Financial Freedom with Fewer Rental Properties.

Coach Carson’s message is right there in the title: you can use real estate to efficiently reach financial freedom. He makes a compelling argument to use real estate to build a life, not the biggest bank account.

Being introduced to BiggerPockets was a game changer for me. I believe in the motto, “Trust but verify.” With BiggerPockets, I could do my own research and decide for myself if real estate investing was for me.

Over the next few weeks, I read everything I could about investing in real estate. When I wasn’t reading about real estate, I listened to podcasts.

It didn’t take long before I was convinced that I wanted a 4-flat of my own.

I am using real estate to accelerate my journey to financial freedom.

To me, investing in real estate is all about fast-tracking my journey to financial freedom. It has not always been easy, but it’s definitely been worth it.

I’m fortunate that my career has introduced me to so many wonderful people.

I am convinced that I would not have been as motivated to act if it weren’t for my conversations with my mesothelioma clients. If nothing else, I know that talk with The Professor about real estate would not have resonated with me the same way.

Fast forward to the present day, I now own 10 apartments in Chicago and a rental ski condo in Colorado.

Coming up in the blog, I’ll share with you everything I’ve learned about investing in real estate along the way.

As always, reach out if you have any questions or leave a comment below.
June 10, 2025
What if You Woke up Tomorrow with $10 Million?

If you woke up tomorrow with $10 million in your bank account, would you do anything differently?

@thinkandtalkmoney
What would you do if you had $10 million in your bank account right now? #thinkandtalkmoney #financialfreedom #whatwouldyoudo
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I ask a version of this question whenever I teach my personal finance course to law students. I’ve also asked this question to a lot of my friends and family members.

Whether in class or with friends, this question is a great conversation starter. It’s not so much about the dollar amount as it is about the money mindset that goes along with that amount.

That’s because asking what you would do with $10 million is just another way to ask what you would do with financial freedom.

Attaching a specific dollar amount to the question helps make financial freedom seem real. That’s because it turns the aspirational concept of financial freedom into actual numbers.

With those numbers in mind, you can more realistically think about what your life could look like if you were financially free.

That’s why I love the question. I find it very interesting to talk to people about what they would do with financial freedom.

Why I love talking about financial freedom.

If you hear $10 million in the bank and think of spending it on mansions, boats, and cars… this is not the blog for you.

I want to talk about using that $10 million to buy something way more valuable than material possessions: your freedom.

When you are financially free, you can choose to do work that is meaningful to you without worrying about how much it pays. You can also choose to spend more time with people who are meaningful to you.

I am striving for both of those things on my journey to financial freedom.

By the way, $10 million is just an arbitrary number. Maybe your number is $3 million or $8 million or $15 million. For this conversation, use whatever number represents financial freedom to you.

The amount may differ based on your age, spending habits, debt level, dependents, etc.

The idea is to pick a dollar amount that is high enough that you wouldn’t have to work anymore unless you wanted to. In its simplest form, that’s what financial freedom means.

I’ve found that when I have this conversation, $10 million is a good, round number to get people thinking about what they would do with financial freedom.

So, today we’re going to ask ourselves if we would do anything differently if we woke up with $10 million in the bank.

To help get the wheels turning, let’s start with some simple math to see what having $10 million in the bank really means.

What does $10 million in the bank really mean?

Let’s do some simple math using the 4% Rule to help frame the question.

The 4% Rule suggests that you can safely withdraw 4% of your investments each year and 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. I view the 4% Rule as a useful tool to ballpark your magic retirement number.

The 4% Rule is a great place for us to start thinking about what you could do with $10 million.

Here’s what the formula looks like using $10 million as our current savings:

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

$10,000,000 x .04 =$400,000.00

This means that according to the 4% Rule, you could spend $400,000 annually and expect your money to last 30 years.

This is a useful calculation that puts into perspective how much money $10 million really is. You can essentially view having $10 million in the bank as the same as having a job that pays you $400,000 per year.

The major difference is you don’t have to get out of bed in the morning to receive this $400,000.

Note for simplicity’s sake, we’ll set aside the tax implications of investment income v. W-2 income for this hypothetical.

One other note: if you had $10 million in the bank, you don’t have to spend $400,000 per year. Rather, the 4% Rule suggests you could spend up to that amount and not run out of money for 30 years. If you spend less than 4% each year, your $10 million will last longer.

How much can you spend each month with $10 million in the bank?

To help you picture your life with $10 million in the bank, we can break down that $400,000 annual spending amount even more.

I like to know how much I could safely spend on a monthly basis if I had $10 million in the bank. Knowing the amount I could spend monthly helps make the $10 million more digestible.

That requires just a bit more very simple math:

$400,000 annually / 12 months = $33,333.33

So, if you have $10 million in the bank, you should be able to safely spend about $33,000 per month.

Photo by averie woodard on Unsplash

Now, you can view that number in the context of your Budget After Thinking. You might learn that you’re spending way less than $33,000 per month. Or, you may be spending way more.

Either way, it puts that $10 million into smaller, more digestible numbers.

To recap, we now know that $10 million in the bank means we can spend roughly $33,000 per month and not run out of money for 30 years. The important question then becomes:

Would you make any changes to your current life if you started each month with $33,000 in the bank without having to work?

Let’s explore what your answer may say about your current work situation.

Would you still work your current job if you had $10 million in the bank?

If you had $10 million in the bank, would you continue to work your current job?

If your answer is “Yes,” that’s a great sign that you enjoy your work and the people you work with. You also most likely have motivations for working that go beyond earning money. That’s a really nice position to be in.

By the way, I know a good amount of people in this boat. Even with $10 million, they wouldn’t change a thing about their work situation.

If your answer is “No,” it’s worth thinking about why you wouldn’t keep working your job. Is it the people? The hours? The lack of stimulation? Overall stress?

$10 million in the bank should be enough to leave your job for new pursuits. You can start to ask yourself what you would do for work if you didn’t have to work for money.

I also know a lot of people in this boat. If they had $10 million, they would be out the door tomorrow.

Why am I talking about new pursuits instead of shutting it down completely?

With $10 million in the bank, your initial thought might be to just shut it down completely. For people of a certain age or people with health considerations, that certainly could be the right choice.

Setting those reasons aside, I do not believe in retiring early. I’m convinced that humans are meant to be productive. We are social creatures who at our core want to be contributing.

I think this especially holds true for high achievers who have put in the work and made sacrifices to become financially free in the first place.

That’s why I don’t believe financial independence has to mean retiring. It’s also why I don’t like the popular acronym, FIRE: Financial Independence, Retire Early.

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

I don’t like what the word “retire” implies.

If you look it up, you’ll see that the word “retire“means to withdraw, to retreat, to recede.

None of those things sound appealing to me at all.

Each word implies moving backwards. I’m not working so hard to achieve financial freedom so I can move backwards in life.

Instead, I like to view my financial freedom journey as FIPE:

Financial Independence, Pivot Early.

I believe in FIPE not FIRE.

When you have financial independence, you have options. You can make decisions based on your core values instead of making decisions based on money. You can pivot, if you want.

One of the ways you can pivot is by taking more control of what you do with your working hours. It’s not about quitting work entirely and wasting away on a beach. As nice as that might sound right now, it will get old fast.

That’s why I believe in FIPE not FIRE.

I encourage you to think about how you might use $10 million to pivot instead of to retire. Could you use that money to buy yourself the freedom to pursue more meaningful work?

So, what would you do with $10 million in the bank?

The point in asking about $10 million is to help you think about your current choices and whether it’s time to make some adjustments.

Having this conversation with your friends and family will teach you a lot about your current situation. Remember, talking about money is not taboo.

In these conversations, pay attention to what you learn about yourself and how you presently spend your time.

Even though $10 million may seem like a distant dream, you don’t need to have that much money to start your own financial freedom journey.

You can start making choices today to put yourself in a better position to pivot, if you so choose.

Maybe you wouldn’t change a single thing about your career choices. Or, maybe you would be out your employer’s door tomorrow.

In the end, thinking about what you could do with $10 million in the bank will help you lead a more intentional life.

So, let us know in the comments below.

What would you do with $10 million in the bank?

June 8, 2025
How to Prioritize Investment Account Types While in Debt
Recently, we’ve been talking about some tricky money questions related to investing.

We first looked at whether it makes sense to invest while you’re in debt.

We then looked at whether to prioritize investing for retirement or for your kid’s college.

These are questions that commonly come up when I’m teaching law students and young lawyers. Of course, these questions are best answered when we consider both the emotions and the math of money.

Today, we’ll look at a third question that comes up regularly:

How should you prioritize certain investment account types, especially if you’re still paying off debt?

@thinkandtalkmoney
Airport walks ✈️💭 401k? Roth IRA? Savings? Debt? Don’t know how to prioritize where to put your money first? I break it down here: https://thinkandtalkmoney.com/how-to-prioritize-investment-account-types-while-in-debt/ #thinkandtalkmoney #401k #rothira #savings #debt #financialfreedom
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This is another great question.

If you’re wondering what I mean by different investment account types, you can read about my four favorite account types here.

Below are my thoughts on how I would choose between different investment account types while paying off debt.

Let me know if you agree or would prioritize a different order in the comments below.

1. Invest just enough to qualify for your employer match.

Your first goal should be to invest enough in your 401(k) plan to qualify for the employer match.

Many employers today offer a match to incentive employees to contribute to their 401(k) plans. To qualify for the match, you must be participating in your company’s plan and make contributions yourself.

The match is usually a percentage of your overall salary, usually between 3% and 6%.

For example, let’s say your salary is $100,000 and your employer offers to match your contributions up to 5% of your salary.

That means if you contribute $5,000 (5% of your salary), your employer will contribute an additional $5,000 (5% match) to your account.

In other words, your $5,000 automatically turns into $10,000.

Think about that for a moment.

That’s a guaranteed 100% return on your contribution. You put in $5,000 and you automatically get another $5,000. You won’t find a guaranteed return like that anywhere else.

That’s why if your company offers a match, it’s a no-brainer to take advantage of that match.

For this reason, an employer match is often described as “free money.”

I don’t like the term “free money” because it implies that you have not earned that money as an employee for your company. I prefer to refer to the company match as a bonus you’ve rightfully earned.

The key is to accept that earned bonus by ensuring you are meeting the minimum requirements to qualify.

Whether you think of it as free money or as a bonus you’ve earned, make sure you contribute enough to your 401(k) plan to qualify for the employer match.

2. Pay off all credit card debt.

After you hit the employer match, and before you think about further investments, you should pay off all credit card debt.

Note that credit card debt is in a category of its own because of the extremely high interest rates that accompany credit cards.

Currently, the average credit card interest rate is 20.12%.

The S&P 500 has historically averaged a 10% annual return.

That gap is so large that it’s a good idea to pay off your credit card debt before turning to further investments.

Think about it like this: with credit card debt, you are guaranteed to pay a penalty of around 20% until you pay off that debt. When investing, you can reasonably hope to earn around 10% interest.

Because the penalty you’re paying is twice the rate you’re hoping to earn, the smart move is to eliminate that penalty.

For help on paying off your credit card debt, check out my top 10 tips here.

Why not pay off your credit card debt entirely before investing in your 401(k)?

You may be wondering why I recommend qualifying for your employer match before paying off credit card.

Even with such high credit card interest rates, there’s a good reason to prioritize qualifying for your employer match. We touched on that reason above.

Let’s revisit our example. With an employer match, if you contribute $5,000, your employer will also contribute $5,000.

As we said, that’s like earning a 100% guaranteed return on your money. A 100% guaranteed return is too good to pass up.

No other reasonable investment option offers a 100% guaranteed rate of return. You can’t even reasonably hope to match the 20% penalty that credit card companies charge.

That’s why eliminating your credit card debt should be your next priority after receiving your employer match.

3. Allocate 75% of available funds to other loans and 25% to investments.

Once you have paid off your credit card debt, I recommend putting 75% of your available funds to loans and 25% to other investments.

When I say loans, I am referring to student loans, personal loans, lines of credit, and HELOCs. Note, I am not referring to primary mortgage debt.

It’s not uncommon for law students to have hundreds of thousands of dollars in debt. The same is true for students in medical school and business school.

It’s not just people with student loan debt who face this question. As one example, perhaps you’ve used a HELOC to buy investment property, like I have.

There’s a reason credit card debt is in a separate category from other loans, like student loans and HELOCs.

Unlike credit card debt, student loan debt and HELOC debt typically come with lower interest rates.

The current lowest federal student loan interest rate is 6.53%.

The current average HELOC interest rate is 8.27%.

Your loans may have even lower interest rates. Regardless, the odds are that your interest rate is below the historical 10% average annual return of the S&P 500.

While it’s never a bad idea to eliminate debt, there are some good reasons why you should invest even though you’re in debt.

We explored these reasons and why I recommend a 75/25 ratio in my recent post on investing while in debt:

A Tricky Money Question: Should You Invest While in Debt?

If you’re on board with investing while paying off debt, the question becomes: where should you invest that money?

That brings us to my next suggestion.

4. Max out your 401(k) plan.

Once you reach this step, you should have no credit card debt. You should also be applying either the 75/25 ratio to invest while you’re in debt, or have no other debt to pay off.

At this point, I suggest maxing out your 401(k) with your remaining available funds.

The reason I suggest maxing out your 401(k) is because these contributions are made with pre-tax dollars. In other words, you get a tax break today by investing in your 401(k).

To put it another way, you will save money on taxes every year you contribute to your 401(k) plan.

Don’t sleep on the impact of taxes on our money decisions. Over the long term, taxes can be hard to predict, but they should not be ignored.

Photo by Ch_pski on Unsplash

Nobody really knows what taxes are going to be like in the future. Yes, it’s a safe assumption that taxes will keep going up.

But, taxes have always been complicated. I’m guessing they will always be complicated. Even if taxes generally go up, there’s no telling the exact impact taxes will have on your personal situation.

That’s why I prefer to take the guaranteed tax savings now. I’m ok with the possibility of paying more in taxes decades from now. That’s especially true because I have plenty of good uses for those tax savings right now.

That’s why I recommend maxing out your 401(k) before moving on to my final suggestion.

5. Max out your HSA, Roth IRA and 529 plan.

Once you reach this step, you’re in great shape. Reaching this point means you have maxed out your 401(k) plan, which means you’re receiving an employer match.

It means you have no credit card debt. On top of that, you are paying down your other loans with a 75/25 ratio or have eliminated those loans entirely.

Now, you have options. You’ve earned the right to choose the best investment account type for your situation.

Besides a 401(k), my other favorite account types are a Roth IRA, a Health Savings Account (HSA), and a 529 account.

You can read all about my favorite investment account types in this recent post:

My 4 Favorite Investment Accounts for Long-term Wealth

Depending on your income, a Roth IRA may be the best account type for additional retirement savings.

If you’re healthy and can cover certain medical expenses, maybe you would benefit from an HSA.

Have kids and worried about paying for college? Maybe a 529 plan is right for you.

The point is you’ve earned the right to pick the best investment accounts for your present situation.

You really can’t go wrong with any of these choices.

What do you think of this plan to prioritize certain investment accounts while in debt?

What do you think about this plan to prioritize certain investment account types, especially if you’re still paying off debt?

Let us know in the comments below.

If you’ve already made it to step 5 and are looking for help with what to do next, the truth is that you have too many options to cover in this post.

To help you start thinking about your choices, you could:
- Invest in a traditional brokerage account;
- Invest in real estate; or
- Pay down your primary mortgage.
If you’ve already made it to step 5, reach out and I’d be happy to help you think and talk about your options.

The best way to reach me is to sign up for my weekly email and reply to any email.
June 5, 2025
What is the Best Money Mindset Book?
On my journey to financial independence, I’ve read close to 100 personal finance books. My favorite books motivate me to think about the relationship between life and money. I think of this type of book as a “money mindset book.”

@thinkandtalkmoney
What is your favorite money mindset book? If you need a summer read, I rank my top eight here: https://thinkandtalkmoney.com/best-money-mindset-book-my-8-favorite-picks/ #thinkandtalkmoney #moneymindset #summerreads #personalfinance
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In today’s post, I’ll show you my nine favorite money mindset books. These books share a common theme: they will inspire you to use money to build a life that you’re proud of.

One of the ways these books do that is by exploring the emotional side of money. In other words, they 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.

See, 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.

As a personal finance teacher, I can also share these lessons with my students.

And, that brings us to my favorite money mindset books.

Each one of these books has helped me develop my core life philosophies. Importantly, these books have helped me acquire and use money in alignment with those core beliefs.

Of course, when I review my Tiara Goals for Financial Freedom, I can feel the influence of each of these books on my most important values.

I recommend that you check out each of these money mindset books. You will learn not just how to acquire money, but also how to use that money to live your best life.

Let’s take a look at my favorites, in no particular order.

1. Rich Dad Poor Dad by Robert Kiyosaki

There’s a reason Rich Dad Poor Dad is the best selling personal finance book of all time. Its message is so powerful and simple that I’ve been recommending this money mindset book for years.

If you read Rich Dad Poor Dad, your entire money mindset will be changed. Kiyosaki brilliantly shares the stories he learned about money while growing up in Hawaii.

His Rich Dad was really his best friend’s dad, who was a very successful real estate investor and business owner. His Poor Dad was his actual dad, a highly educated and hardworking man who followed a traditional career path.

Using these two role models in his life, he makes a very compelling case that most of us go about life and money all wrong.

This is the money mindset book you want to start with.

Read Rich Dad Poor Dad. It’s the money mindset book that will light a fire under you like no other book I’ve read.

2. The Psychology of Money by Morgan Housel

In The Psychology of Money, Housel writes about how people make decisions with their money in the real world. Housel agrees with one of our main themes at Think and Talk Money:

Money is emotional.

We can all be shown data and spreadsheets and understand what we should do. But, that’s usually not enough to change our behavior.

Housel is here to help with that. In The Psychology of Money, he takes core personal finance lessons and translates those lessons into regular life concepts.

Additionally, Housel teaches us the different ways people think about money. Then, he offers his perspective on how we can make better sense of money through our own life experiences.

Read The Psychology of Money. This money mindset book will help you understand the relationship between money and happiness.

3. Think and Grow Rich by Napoleon Hill

Think and Grow Rich is another classic money mindset book that will shift your entire viewpoint on earning a living.

I first read this money mindset book in college when I learned my friend’s dad offered him $50 if he read this book.

$50 to read a book?

I needed to see what this book was all about.

At the time, I didn’t appreciate how much this money mindset book would change my life.

Originally published in 1937 and later updated, Think and Grow Rich, will convince you that you can be successful.

Initially, Hill studied innovators like Henry Ford and Thomas Edison. In the updated version, you’ll learn about modern figures like Bill Gates and Mary Kay Ash.

Photo by Susan Q Yin on Unsplash

Hill’s book is so good because of what he reveals about these legendary figures.

The secret?

There was nothing mystical about any of them. Before they became legends, they were just like you and me.

You can be successful in any walk of life if you just stop sleepwalking through life like everyone else and do something.

Read Think and Grow Rich. This money mindset book will motivate you to do that thing you’ve been saying you would do, but haven’t yet.

4. The Richest Man in Babylon by George S. Clason

The Richest Man in Babylon is a third classic money mindset book originally published nearly 100 years ago.

This book is a quick read. It’s ideal for anyone still not convinced that they have to pay attention to their personal finances.

Clason wrote a simple collection of fables set in the ancient city of Babylon. Each fable illustrates the importance of a key money habit, like saving and investing.

Through his stories, you’ll see how you can get ahead in life by practicing strong financial habits.

It’s not enough to just be good at making money. You need to be good at keeping that money, too.

Read The Richest Man in Babylon. This money mindset book will introduce you to the building blocks of a healthy financial life.

5. Your Money or Your Life by Vicki Robin and Joe Dominguez

Your Money or Your Life is the complete package when it comes to money mindset books.

Vicki Robin and Joe Dominguez are often credited for laying the groundwork for the Financial Independence Retire Early (FIRE) movement.

While I prefer the term Financial Independence Pivot Early (FIPE), I share their viewpoints on the relationship between money, work, and time.

Spoiler alert: when it comes to life and money, most of us are doing it all wrong. We chase money at the cost of our precious time.

First, you’ll learn to think of money as nothing more than a tool to build your ideal life. Next, you’ll learn how to specifically use that tool to achieve financial independence.

Read Your Money or Your Life. This money mindset book will motivate you to start valuing your time for what it’s really worth.

6. The Millionaire Next Door by Thomas Stanley and William Danko

It can be difficult to ignore the temptation to keep up with our neighbors. Whether we like it or not, we are concerned with our social status. Part of our self-worth gets tied to comparing ourselves to others.

One of my favorite money mindset books, The Millionaire Next Door, discusses this concept in detail.

To start, you need to adjust your perception of how real life millionaires behave.

You may be surprised to learn how most millionaires have made their fortunes. Also, you may be surprised to learn about their modest lifestyles.

Read The Millionaire Next Door. This money mindset book will help you if you’re struggling with comparing yourself to others.

7. Die with Zero by Bill Perkins

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.

8. Millionaire Milestones by Sam Dogen

In Millionaire Milestones, Dogen covers his journey from finance bro in New York in his 20s to present day life as a writer, investor, and husband and father.

What separates Millionaire Milestones from other personal finance books is that Dogen’s still on his journey.

Photo by Joel Muniz on Unsplash

He’s not a newbie, and he’s not preaching from the rocking chair on his patio.

Dogen’s presently raising kids. He’s focused on his website and his investments. Like you and me, he can relate to the present day challenges of personal finance because he’s still on his journey.

You can read my full review of Millionaire Milestones in my separate post here.

Read Millionaire Milestones. This money mindset book is the Goldilocks of personal finance books.

9. The Simple Path to Wealth by JL Collins

The Simple Path to Wealth by JL Collins is the best money mindset book on investing I’ve ever read.

It is a must-read for anyone trying to figure out why and how to invest in the stock market.

If you’re a new investor and don’t understand how to invest in the stock market, Collins will set you on your way.

If you’re a seasoned investor unsure what to do in times of economic uncertainty, Collins is here to help.

Maybe you just need a bit of motivation or a reminder of how simple it is to build long-term wealth. There’s no one better than Collins to provide that pep talk.

Collins is sometimes described as “the Godfather of Financial Independence” in the personal finance community. He has a popular blog where you can read more about his story.

The short version is that he wrote a series of letters to his then teenage daughter about money, investing, and life. He wanted to impart the wisdom he had accumulated during his lifetime and help her avoid the mistakes he had made.

Those letters eventually led to his blog, which then led to his bestselling book, The Simple Path to Wealth, first released in 2015.

Since then, Collins has been a thought-leaders in the financial independence community. He has inspired thousands, if not millions, of people around the world to accumulate massive wealth by following a few simple rules.

What makes Collins so transformative is his ability to make seemingly complex topics (like investing) into easily digestible and actionable information.

If you have any intention of becoming financially independent and haven’t read The Simple Path to Wealth, now is the time to do so.

I’ve read his book cover-to-cover twice and constantly refer back to his lessons.

Each time I read his book, I’m reminded how simple it is to reach financial independence if I can just follow a few simple tips.

You can read my full review of The Simple Path to Wealth in my post here.

Read The Simple Path to Wealth. It is quite simply the best money mindset book on investing I’ve ever read.

What is your favorite money mindset book?

So, these are the money mindset books that I recommend most often.

Wherever you are on your personal finance journey, there is something for everyone in one of these books.

If you have read some of these money mindset books in the past, I suggest you read them again. As our lives and priorities change, so does our relationship with money.

You’ll get something new and different from reading these books again. Personally, I didn’t fully appreciate these money mindset books until I was years into my career and knew what it felt like to work for money.
- Have you read these money mindset books?
- What money mindset books am I missing?
Let us know in the comments below.
May 26, 2025