Tag: financial independence

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
Why It’s So Important to Learn Personal Finance
When I graduated law school in 2009, I never thought about money.

Within a year, I had racked up $20,000 in credit card debt ($30,000 in today’s dollars).

And, that was on top of my student loan debt.

My salary at the time was $62,000. This was a problem.

After all these years, I still ask myself, “How did I let that happen?”

The answer, I now realize, is actually pretty simple.

I never learned about personal finance.

I wasn’t thinking about money. And, I certainly wasn’t talking about money.

It wasn’t until later that I learned that I had made every common money mistake in the book.
- Rented a fancy apartment with a garage parking spot that I didn’t need?
- Paid for Cubs season tickets I couldn’t afford?
- Traveled coast-to-coast? Traveled overseas? Put it all on credit cards?
Check… check.. and check.

It’s not that I intentionally decided to get into debt. Frankly, there was nothing unusual about me at all.

I generally wanted to make good choices. I am a relatively smart human. You are, too. You’re reading a personal finance blog with the entire internet at your fingertips.

Maybe you’re like me, and it hadn’t occurred to you that money was a thing you needed to learn about.

I didn’t know the first thing about money when I began my career.

When I graduate law school, I blindly assumed that I would earn a high enough income that I didn’t have to worry about money.

As I fell deeper and deeper into debt, I realized what a huge mistake that was.

Maybe that’s why I still remember the day so clearly when I realized I was financially heading in the wrong direction.

It was an ordinary Monday. I had grabbed my mail on the way out the door as I headed to my job at the courthouse. When I got to my desk, I opened my credit card statement and was stunned by what I saw.

$20,000 owed ($30,000 in today’s dollars) one year into my career.

I was ashamed. I was supposed to be smart. Responsible. Trustworthy.

How could I be so foolish?

Looking back, I shouldn’t have been so hard on myself. I had never learned about personal finances.

It would be like getting upset today that I’m bad at playing the piano when I never learned how to play in the first place.

I’m certain that if I taken a personal finance course, or read a personal finance blog, I wouldn’t have made the same mistakes.

I would have saved myself a lot of worry, frustration, and time if I had a basic personal finance education.

I also would have learned that so many others were struggling with consumer debt like I was. There was no reason to make it harder on myself by keeping my debt a secret and struggling alone.

I unnecessarily did it the hard way, but I figured out personal finance.

At that moment when the full weight of my debt hit me, I made it a priority to turn things around.

At the time, I didn’t know the solution.

But, I had been trained to do research in law school so I could find answers to hard questions. So, that’s what I did.

Along the way, I realized that the fundamental and basic personal finance principles are, well, basic.

George S. Clason wrote “The Richest Man in Babylon” nearly a century ago. His collection of parables set in ancient Babylon is legendary.

Everyone should read it. His advice is simple and excellent: spend less than you earn. Save. Invest.

The same fundamentals are as true today as they were then.

Easy, right?

Not exactly.

Photo by Unseen Studio on Unsplash

Personal finance education should be a constant in your life.

Money is about continuous mindset and choices.

The basic concepts are easy enough to understand. Consistently making good choices is hard.

Even as I was racking up credit card debt, I could have aced 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?”

I knew that I was supposed to spend less than I earned. That didn’t stop me from overspending.

Knowing the right answer is not the same as actually doing the right thing.

The law students and lawyers I teach are smart people. Like me back in 2010, they generally know the right answers. They don’t need me to tell them to spend less than they earn.

I help them get to the next level by building a strong money mindset. Then, we work on the habits and skills that will allow them to consistently use money as a tool to control their circumstances.

It’s not enough to learn the basics of personal finance and then stop. As your life changes, you need to regularly evaluate your personal finances so your money stays in line with your values.

That’s why it’s important to make personal finance education a constant in your life, whether it’s through a blog, a course or coaching.

Too many of us choose to struggle with money alone.

For some reason, though, most of us choose to deal with money on our own. Alone, we struggle with anxiety about credit card debt and guilt about splurging on things we love.

This has never made sense to me.

Making good choices with our money is essential to a healthy and meaningful life.

Why don’t we talk more about these things with our friends and family?

That’s what I’m trying to change.

I’m done with this stigma that we shouldn’t talk about money.

I want us to get comfortable with the idea of going to our friends and loved ones to talk about money, just as we would talk about anything else.

There should be no embarrassment or shame in it. We’re all dealing with the same challenges.

By talking about money, we can help each other turn those challenges into opportunities.

If we can alleviate our money stress, perhaps we can reverse the trend of lower happiness levels among young people today.

Talking about money is not about numbers.

We’ll have plenty more to say about how to talk money. For now, let’s agree that talking about money is not about prying into how many dollars we each have in the bank.

We can benefit by talking about our money mindset, habits, and strategies, while still keeping certain information private.

Let’s also agree that talking money is a “no judgment” endeavor.

We have all had different experiences that have shaped our relationship with money.

It’s important not to pass judgment, especially when talking to our significant others. Your conversation won’t last very long if you ignore this advice.

Each session I’m with my students, I learn from their experiences and money mindset, same as they learn from mine. I encourage them to continue the conversation outside the classroom with their loves ones.

When my students report back, they tell me how empowered they felt after starting these conversations. The more we can talk money, the less we’ll feel alone. We’ll all make better choices because of it.

Photo by Lesly Juarez on Unsplash

Talk about money mindset with your significant other, family, and friends.

If you want to know where to begin the conversation with your loved ones, start with money mindset.

Money mindset touches every aspect of personal finance, so it’s the natural place to start.

I didn’t realize the power of money mindset until I wrote down my Tiara Goals for financial independence on a beach in 2017.

People tend to skip this step. They want to jump straight to investing and real estate before learning about money mindset.

But, why focus on investing if you and your significant other are not aligned on what those investments are for?

The same logic applies to budgeting. While very few people enjoy the budgeting process, it’s a crucial step to generate fuel for our savings and investments, which ultimately fund our major life goals.

The progression matters. Only after we’ve learned about budgeting, saving, and how to responsibly use debt and credit cards should we focus on investing and real estate investing.

Talking about money is not taboo.

There’s no reason to embark on your journey to financial freedom alone.

Read a personal finance blog. Take a personal finance course.

Talk about money.

Share your accomplishments and struggles with your friends and loved ones. You’ll only be better off for it.

If I can be of any help on your journey, please don’t hesitate to reach out.

Don’t forget to subscribe to my email list for all the latest money topics I’m thinking about.
October 31, 2025
That’s a Wrap: Another Successful Personal Finance Seminar
I just wrapped up another personal finance seminar with a great group of law students. After two full days of leading class, my voice is hoarse and my body is sore.

And, I had so much fun.

Can’t wait to do it again!

@thinkandtalkmoney
I’m writing about everything I taught myself here: thinkandtalkmoney.com
♬ SUPA GOOD!!! (from Dog Man) – Yung Gravy

Here’s a recap of the ground we covered.

If you’re interested in learning more about my personal finance course for law students and young lawyers, please reach out.

I’ve taught law students and lawyers, both in-person and virtually, and would be happy to discuss how I can help you or your group.

My favorite part of class is when my students share their Tiara Goals.

We spent the first portion of class talking about money mindset. Without the right motivations, none of the other tools matter.

Without a doubt, this is always my favorite part of class.

When I say I’m on a mission to convince you that talking money is not taboo, I think of my students sharing their goals.

I get so energized by hearing their goals. My students report the same sentiment after learning what drives their friends and peers.

Over the years, my students have shared countless impactful stories. As unique as these goals can be, it’s remarkable how most of us want the same things in life.

Year after year, I hear the same motivating forces:
- Spend more time with my family.
- Travel and enjoy experiences around the world.
- Stay healthy and fit.
- Provide for my children and my aging parents.
- Work for a cause I believe in.
- Have time to volunteer.
- Enjoy more hobbies like baking, golf, jogging, sewing, and pickleball.
I also regularly hear one thing that my students, and the rest of us, don’t want:
- I don’t want to be stressed about money.
Isn’t it telling that year after year, most of us want the same things in life?

I’ve yet to hear anyone say that they dream about working endless hours and not taking their PTO.

Be specific, but not too specific, when you think about financial freedom.

When we talk about what we do with financial freedom in class, I encourage my students to get specific without being so precise that the goal becomes restrictive.

When we’re thinking about goals related to financial freedom, the idea is to focus more on big-picture, core values.

There will be a time and a place to strategize how to get there. The point here is to help define what you’re even trying to get in the first place.

For example, instead of “spending more time with family,” I would suggest something like, “never miss my child’s soccer game or dance recital because of work.”

Instead of “travel around the world,” I would suggest “at least one overseas trip of at least 2 weeks per year.”

Adding that little bit of specificity will help you visualize what you’re striving for with your money decisions.

Don’t get discouraged if you think you are not close to financial freedom.

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.

If you haven’t ever actively thought about what you would do with financial freedom, hopefully hearing about what my students shared in class will encourage you to do so.

Don’t forget to write down whatever you come up with.

I suggest you share your version of Tiara Goals with your friends and loved ones. It’s OK to keep some of your goals private.

By sharing, you will get the benefit of them cheering you on. You’ll also hopefully encourage them to share their goals with you, which can be very inspiring.

Budgeting is all about generating fuel for your ultimate goals in life.

Following our chat about money mindset, we launched into budgeting.

The essential purpose of making a budget is to generate fuel for your ultimate goals in life. This fuel is what feeds your savings, pays off debt, and grows your investments.

It’s not easy to track every penny. It’s not enjoyable to realize that your dollars are disappearing on stuff you don’t care about. But, these are crucial steps on the way to financial independence.

Learning how to create a budget that you’ll actually stick to is so important that we practiced implementing a Budget After Thinking in class.

Debt and credit are essential parts of a healthy financial life.

After focusing on the fundamentals of budgeting, we moved on to debt and credit.

Most of us have (or will have) some form of debt, whether it’s credit card debt, student loan debt, or mortgage debt.

With the right tools, we can attack that debt and eliminate it as quickly as possible.

Just as important, we can appreciate how we got into debt in the first place so we don’t make the same mistakes again.

When we talked about credit in class, we emphasized that credit impacts our largest purchases in life, like buying a home or a car. For that reason, it’s essential to understand how our credit history impacts our credit score.

From there, we explored why credit cards are a privilege.

I am a big fan of using credit cards responsibly to earn free travel. If you don’t overspend and pay your bills in full every month, credit cards can be a useful tool.

Student loans are front of mind for most law students and young lawyers.

Of course, no personal finance seminar geared towards law students and young lawyers would be complete without addressing student loans.

This year, we focused on the changes to federal student loans. We learned how to navigate paying back loans while advancing some other important financial goals, like investing.

Building wealth through investing.

Following our conversation on student loans, it was time to talk about building wealth through investing.

When it comes to investing, the key is to let compound interest work its magic.

With time on your side, you can concentrate on low fees, the proper asset allocation, and consistently fueling your investments.

Using an online calculator, we saw how even seemingly small contributions to our investments will make a huge difference over the long run.

This point demonstrates why we begin with budgeting before we talk about investing. Remember, one of the main purposes of your budget is to create money for your investments.

Every dollar that you invest rather than spend early in your career will lead to massive wealth if given enough time.

Real estate is my favorite asset class.

Finally, we discussed real estate, a topic that I am very passionate about.

We learned how to analyze when the time is right to buy a home (and when not to buy a home). We then saw how having a strong money foundation is key to qualifying for the best mortgages.

From there, we moved on to real estate investing. With real estate, investors benefit from cash flow, appreciation, debt pay down, and tax breaks.

For people pursuing financial independence, there may not be a more powerful strategy than buying a small multifamily property, living in one of the units, and renting out the others. This strategy is known in some circles as “house hacking.”

With this one decision, you can eliminate your housing costs entirely, which is traditionally the largest expense in our budgets.

That means you can repurpose the money you had been spending on housing to other goals, like paying off student loan debt.

At the same time, you have a long-term asset that you can keep for years after you decide to move out. That asset can kick off monthly cash flow, which can be saved for other investments or used to pay for current living expenses.

Money is nothing more than a tool.

In the end, I encouraged my students to recognize that money is nothing more than a tool that can be used to build a life on our terms.

When we learn how to use money in this way, we control the circumstances. The circumstances don’t control us.

Being good with money involves consistent choices. I can’t make those choices for you, but I can give you the tools to properly think through and evaluate whatever dilemma you face.

I left my students with one final request: keep the conversation going with your loved ones and friends.

Talking about money is not taboo. We can all learn so much from each other if we are just willing to share and listen.

There’s no reason to struggle with money decisions alone.

Our journeys towards financial independence should not be solo missions.

We can achieve financial wellness together.

All we need to do is think and talk about money.

If you’re interested in learning more about my personal finance course for law students and young lawyers, please reach out.

I’ve taught law students and lawyers, both in-person and virtually, and would be happy to discuss how I can help you or your group.
October 27, 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.

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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
Spend Money Based on Your Wealth Not Your Income

Let’s say you are fresh out of law school working in big law.

At the current salary scale, that means you’re making $225,000 in salary, plus another $25,000 or so in bonuses. We’ll call it $250,000 in total compensation.

That’s a lot of money.

It’s so much money, in fact, that you convince yourself you can make some lifestyle changes.

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Spend Based on Your Wealth, Not Income #thinkandtalkmoney #networth #wealth #financialfreedom
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For starters, you figure it’s time to leave the old law school roommates behind and move into a nicer, but smaller apartment by yourself.

Even though the tradeoff for living by yourself is paying more in rent, you justify it because your income is so high.

Besides paying more in rent, you can’t help but order in more meals now that you’re earning a high income. Plus, you’re working long hours, afterall. Who has time to cook?

Even though you survived on frozen chicken breasts in law school, that won’t cut it anymore now that you’re a practicing attorney.

Finally, you start taking Ubers to get around town. It’s only $15 per ride, and you make more than $20,000 per month.

Even though you took the bus or the “L” home in law school, you can afford a ride! Uber it is!

Does this sound familiar to you?

Maybe it sounds completely ridiculous?

Personally, this story is all too familiar.

When I graduated law school, I spent money based on my income instead of my wealth.

As soon as I started making money after law school, I started spending on things I really didn’t need.

About a year after I graduated, I moved into an apartment by myself. I started spending more freely. I took taxis (no Ubers back then) when I could easily have hopped on the bus or walked.

What made it worse in my case was that I was not even making big law money. At the time, I was a judicial law clerk making around $70,000 per year.

It was because I was careless with my money that I fell into credit card debt so quickly after beginning my career as an attorney.

On top of my poor spending choices, I had student loan debt. Because I had debt and hardly any assets to my name, my net worth was less than zero dollars.

That means I had negative wealth, even though I was earning a decent income.

This is all background for the main question behind today’s post:

Do you spend money based on your income or based on your wealth?

Let’s revisit our fresh big law attorney who’s earning $250,000 per year.

Earlier, I said “That’s a lot of money.”

And, it is.

But, what I should have said was, “That’s a lot of income.”

See, earning a lot of money is not the same as having a lot of money.

There’s a key difference.

Income is temporary. There’s no guarantee that your income will always be there. People lose their jobs all the time. People also switch careers, which can result in lower income.

Wealth is your financial foundation. When you have money, meaning you don’t spend it, you can build wealth.

Of course, when we talk about wealth, we are talking about all of your assets minus your liabilities. This is your net worth.

When your liabilities are greater than your assets, you have a negative net worth, like I did when I graduated law school. By the way, the same is true for most people when they graduate law school.

A high income is not a bad thing, but it can be a wasted thing.

A high income means you have a lot of money coming in.

That’s not a bad thing, but it can be a wasted thing.

What you do with that money is what determines your wealth and financial progress.

If you use your high income to acquire assets, you are winning the game. The same goes for paying off your liabilities.

If you use your high income to buy expensive things, you’ll be stuck in place. At the end of the year, you’ll likely be in no better shape than someone making a fraction of what you make.

That’s why I prefer to think about how much money I keep each year, instead of how much I make.

Photo by freestocks on Unsplash

But, I thought high earners deserve to splurge!

You may think that a new lawyer earning $250,000 per year should be splurging on life’s finer things.

Would your opinion change if you acknowledged that lawyer’s net worth is a negative number?

Think about it: most new lawyers leave law school with hundreds of thousands of dollars in debt. They also have little to no assets. That means they have a negative net worth.

Should someone with a negative net worth really be splurging on a fancy apartment?

If that person is looking to build a solid financial foundation, the answer is obviously, “No.”

This person should continue living like a law student and spending in accordance with his net worth, not his income.

I recommend you use your high income to acquire assets and eliminate liabilities.

Don’t get me wrong. I am not suggesting that earning a lot of money is a bad thing.

Having a high income is a major benefit.

In fact, I recommend that all of my law students take the high paying job right out of school, if they can get it.

A high income means you can pay off your debt faster. It means you can build up your emergency savings and fund your investment accounts sooner.

There can be no doubt that a high income can accelerate your progress to financial freedom.

You just need to use that income to acquire assets and eliminate liabilities.

As you take those steps, you’ll see your net worth climb, and you’ve earned the right to start spending more.

We all know that it’s bad to live beyond our means. The problem is we don’t evaluate our means properly.

You don’t have to be a personal finance expert to know that living beyond your means is a bad idea.

Most of us intuitively understand that we should live within our means. Actually doing so can prove to be more problematic.

Part of the explanation may be that we don’t think of our spending in terms of our net worth.

We may not appreciate that if we are spending extravagantly while our net worth is still low, or even negative, we are living beyond our means. It doesn’t matter what our income level is.

That’s why I recommend you spend based on your level of wealth (your net worth) instead of your income.

Of course, this lesson applies to all of us, not just recent graduates.

This is challenging for lawyers and professionals who feel compelled to keep up with the Joneses.

When you’re making $750,000 per year, you may think you need to buy the $100,000 luxury car. Or, you may not hesitate to spend $10,000 to upgrade your family’s plane tickets to first class.

But, can you really justify that level of spending when your net worth does not match up with your income?

What happens if that income goes away?

Instead, you should prioritize saving and investing until your net worth justifies that higher spending threshold.

Photo by Shutter Speed on Unsplash

Spending money based on your wealth does not spending from your wealth.

When I say spend money based on your wealth, I don’t mean that you should spend from your wealth.

In other words, this is not a post on spending down your wealth in retirement.

Rather, what I mean is that you should consider your net worth before deciding how much of your income you are comfortable spending.

For example, if you earn $250,000 per year from your job and have a negative or low net worth, you should continue living like a law student.

If you earn $250,000 per year and have a net worth of $1M, you would be justified in splurging from time-to-time.

If you earn $250,000 per year and have a net worth of $10M, you shouldn’t worry about spending extravagantly with all of that income.

Why not worry about spending so much?

The reality is that your investment earnings on $10M will far exceed your $250,000 income from work.

Even a 5% investment return on $10M would earn $500,000 per year, double what you earn from your job. You actually might start thinking about why you still have that job in the first place.

These numbers are just for illustration purposes. Still, the idea is that your spending decisions should factor in your net worth at least as much, if not more so, than your income.

Don’t ignore your wealth when it comes to spending.

Whenever you are evaluating your current financial position, especially your spending decisions, I recommend that you focus on your wealth at least as much as your income.

Income is temporary. It can go away at any moment.

If you are fortunate enough to earn a high income, use that high income to acquire assets and pay down liabilities. That means you’ll have to avoid spending extravagantly until your level of wealth can justify it.

Wealth is foundational. Yes, there will be drops in the markets and your net worth can decrease. That is to be expected.

However, if you focus on spending in line with your net worth, you’ll naturally adjust your spending if your net worth temporarily drops. When it rises again, you can justify spending more. The key is to be flexible.

If you can think in these terms, you will build a strong financial foundation that will give you choices down the road.

At the end of the day, financial independence is all about choices.

The people who create choices for themselves will be the ones who don’t have to worry about money as they move through life.

They will be the ones with true wealth that supports extravagant spending, if they choose.

That’s not a bad thing.

Do you know people who spend money based on their income instead of their wealth?

Why do you think people fall into that trap?

Let us know in the comments below.

October 7, 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.

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

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

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

Have you ever heard money excuses like this before?

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

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

The pattern goes something like this:

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

Wake up and do it all over again tomorrow.

Dream about life-enriching experiences and retirement later.

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

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

My challenge to you?

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

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

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

Same Job. Same bills. The cycle continues.

Do you like what you see?

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

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

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

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

How do we break the cycle?

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

Budgeting is about having a plan ahead of time.

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

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

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

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

That’s all there is to it.

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

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

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

Photo by Glenn Carstens-Peters on Unsplash

Life Money

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

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

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

Later Money

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

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

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

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

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

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

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

Money is just a tool.

Ask yourself:

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

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

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

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

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

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

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

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

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

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

These adjustments will give you options in the future.

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

Photo by Ian Chen on Unsplash

What do you really want out of life?

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

What do you really want out of life?

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

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

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

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

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

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

I never allowed myself to dream about financial freedom.

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

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

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

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

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

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

When money is tight, think about the future.

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

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

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

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

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

You’ll know that you’ll have options in the future.
September 2, 2025
How to Gain Confidence by Calculating Your Coast FIRE Number
Have you ever wondered if you really need to keep saving for retirement?

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

That’s a very powerful realization.

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

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

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

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

Let’s explore.

What is Coast FIRE?

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

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

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

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

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

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

Coast FIRE does not mean complete financial independence.

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

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

That’s OK.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Calculating your Coast FIRE number will drive this point home.

Photo by Courtnie Tosana on Unsplash

How do I calculate my Coast FIRE number?

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

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

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

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

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

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

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

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

Shrink Your Magic Retirement Number With One Rental Property

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

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

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

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

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

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

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

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

Let’s dive in.

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

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

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

He’s ready to pivot.

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

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

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

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

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

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

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

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

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

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

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

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

Photo by Jan Tielens on Unsplash

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

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

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

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

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

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

This is another reminder to start investing early and often.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

That makes Dorothy very happy.

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

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

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

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

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

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

Having options is a great thing.

Have you calculated your Coast FIRE number?

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

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

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

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

Think about it.

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

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

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

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

What is Coast FIRE?

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

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

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

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

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

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

Coast FIRE does not mean complete financial independence.

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

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

That’s OK.

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

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

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

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

That’s a powerful feeling.

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

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

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

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

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

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

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

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

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

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

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

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

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

Photo by Rod Long on Unsplash

Financial Independence Pivot Early (FIPE)

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

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

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

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

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

Financial independence is all about creating options.

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

You can pivot.

That’s why I believe in FIPE not FIRE.

I prefer to think about pivoting, not retiring.

Pivot means to adapt or improve through modifications and adjustments.

That sounds appealing to me.

Retire means to withdraw, to retreat, to recede.

None of those things sound appealing to me at all.

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

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

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

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

It’s not about quitting work entirely.

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

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

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

That’s what FIPE is all about.

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

Financial independence is about much more than retiring early.

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

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

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

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

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

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

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

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

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

Photo by britt gaiser on Unsplash

FIPE and Coast FIRE work well together.

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

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

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

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

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

To create options.

Read Die with Zero by Bill Perkins

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

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

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

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

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

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

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

Also, read A Richer Retirement by Bill Bengen.

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

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

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

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

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

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

Coast FIRE will open your eyes.

Coast FIRE is a powerful money mindset hack.

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

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

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

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

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

Have you thought about Coast FIRE in the past?

What about FIPE?
August 22, 2025
Is the 4% Rule Actually More Like the 4.7% Rule?
Bill Bengen, creator of the 4% Rule, just released a new book with some fun news for all of us saving for retirement.

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

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

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

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

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

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

There are two ways to answer that question.

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

That sounds fun.

You know what’s even more fun?

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

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

That sounds like even more fun, right?

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

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

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

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

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

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

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

What is the 4% Rule?

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

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

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

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

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

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

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

Photo by ÁLVARO MENDOZA on Unsplash

The 4% Rule also works in reverse.

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

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

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

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

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

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

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

Here’s how the math works:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Photo by Towfiqu barbhuiya on Unsplash

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

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

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

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

That’s fun news.

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

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

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

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

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

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

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

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

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

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

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

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

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

How long have you been with your current bank?

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

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

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

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

More on the settlement below.

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

I banked with Capital One for many years.

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

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

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

Key word: was.

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

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

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

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

When my statement loaded, I was shocked.

0.30%!

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

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

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

What the heck happened?

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

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

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

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

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

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

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

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

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

Photo by POURIA 🦋 on Unsplash

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

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

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

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

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

All is well that ends well, right?

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

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

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

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

What are the terms of the settlement?

According to the Notice of Settlement:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Photo by Johnyvino on Unsplash

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

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

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

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

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

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

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

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

Are you a current or former Capital One customer?

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

Let us know in the comments below.

August 15, 2025

How to Easily Evaluate a Rental Property with Real Numbers

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

It doesn’t have to be.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

I separate the speculative costs into three main categories:

Vacancy Rate
Unexpected Repairs
Property Improvements

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Here’s the listing description from Redfin:

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

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

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

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

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

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

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

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

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

Here are some tips before you get started:

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

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

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

Monthly Rent: $13,840

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

Monthly Cash Flow (Rent – Costs): $203

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

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

A few notes on the above numbers:

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

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

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

Unfortunately, the numbers tell a different story.

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

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

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

So, is that it?

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

Not necessarily.

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

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

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

Would you be interested in moving forward at these numbers?

August 1, 2025

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
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 on My Mind: Read The Simple Path to Wealth
The Simple Path to Wealth by JL Collins is the best 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.

Who is JL Collins?

JL 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.

Photo by Jack Skinner on Unsplash

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.

I’ll share those simple rules with you at the bottom of the post. Before I do, here is a bit of context about each time I read his book, first in 2019, then again in 2025.

Seeing those dates, you may already be wondering if world events between 2019 and 2025 changed his philosophies.

Let’s find out.

I first read The Simple Path to Wealth in 2019 as a DINK.

I first read The Simple Path to Wealth in 2019 and just finished the updated version. Even if you’ve read the original version, I highly recommend you read new edition released in 2025.

Here’s why.

When I read the original version in 2019, market conditions and the world economy were in very different places than they are in 2025.

Back in 2019, the stock market had been closing out one of the best decades in history. As reported by US News:

From a market’s perspective, the 2010s will forever be remembered as an era of slow but steady gains on Wall Street, and a period of sustained growth for investors and their retirement accounts.

By the end of the 2010s, the market had been on the longest bull run in history. It was such an epic run that it was fairly common for most people to see big gains in their portfolios without much effort or knowledge.

On a personal level, my life was also very different in 2019. My wife and I were enjoying married life before having kids. We had just purchased our first rental property in a trendy Chicago neighborhood.

On top of that, we were DINKs (“Dual Income No Kids) and able to save aggressively for our next investment.

We were considering another rental property, but I first wanted to learn more about the power of investing in the stock market.

This is what led me to read The Simple Path to Wealth the first time.

Side note: If you are currently a DINK, or will soon be a DINK, please pay extra attention here.

Don’t waste this powerful opportunity to supercharge your investments.

When you’re in a relationship where you have two incomes coming in and are sharing financial responsibilities, you have the opportunity to supercharge your Later Money goals.

This is what my wife and I were able to do, even if we didn’t know what a DINK was. We each had good incomes coming in and our monthly expenses were low.

Also, we didn’t have to worry about childcare. We were young so the odds of unexpected medical care were lower. All things considered, it was pretty easy to keep our Now Money to a minimum with plenty to spare for Life Money.

This allowed us to fuel our Later Money goals. We had money in the bank and seemingly endless choices.

And, I didn’t want to screw it up.

Reading The Simple Path to Wealth was a way to educate myself in hopes of not screwing it up.

I read the new version of The Simple Path to Wealth in 2025.

Fast forward to 2025. I read the new version o The Simple Path to Wealth because I was curious if Collins’ viewpoint had changed due to major world events, like the Covid-19 pandemic.

I was also curious to see whether his advice would still resonate with me now that I’m a seasoned real-estate investor and have a personal finance blog.

Well, I’m happy to report that Collins’ message hit me stronger today than it did in 2019.

If anything, Collins’ lessons are even more applicable today than they were in the 2010s when markets were soaring.

In the new edition, Collins discusses how recent world-changing events, like the Covid-19 pandemic and international wars, actually strengthen his long-time recommendations.

This was very refreshing to learn because I have been following his advice and recommending his book for years.

In times of economic uncertainty, Collins explains, it’s even more important to have a plan for your money.

Once you have that plan, you need to stick to it, no matter what.

Collins provides the motivation and tools to stick to the plan.

Why is The Simple Path to Wealth such an important book?

When I teach my personal finance class to law students, I ask at the beginning of class what my students hope to learn.

One of the most common responses I hear every year is, “I want to learn how to invest in the stock market.”

OK, fair enough.

The truth is I’ve yet to find any resource better than The Simple Path to Wealth to teach us how and why to invest in the stock market.

What makes Collins such a good teacher?

In The Simple Path to Wealth, Collins uses basic, every day, language that we can all understand. This is his greatest gift.

Too many books on investing are so dense that they are useless to the average person.

Collins is different. He successfully blends his life experiences with the historical data, in easy to understand terms, to show us that investing is not hard.

For many people, especially people at the beginning of their careers, investing can seem intimidating.

As Collins explains, that’s because it’s big business for investment companies and banks to make investing seem hard and scary.

These companies spend billions of dollars marketing every year to convince us that investing is complicated. Their goal is to convince us to pay them lots of money to manage our money.

You don’t have to believe them. You certainly don’t have to pay them tons of money to invest in the stock market.

Collins will not only show you how invest on your own, he’ll also give you the tools to outperform the financial professionals.

What are Collins’ simple rules to live by?

Collins’ main message is that investing should not be complicated. When done the right way, it’s simple and effective. Hence, the title of his book.

Collins explains that each of us can achieve long-term wealth by following a few simple rules:
1. Spend less than you earn.
2. Invest the surplus.
3. Avoid debt.
Sound advice, indeed.

If you can live by these simple rules, the next question is what to do with your surplus money earmarked for investments.

Collins has a simple and effective plan for you that he details in his book.

What is Collins’ simple and effective plan for investing?

Collins’ plan is both simple and effective. He doesn’t expect you to just take his word for it, either. He has the research and historical data to back it up.

Make no mistake: just because something is simple does not mean it is ineffective.

So, what is Collins’ simple and effective plan to invest for long-term wealth?
1. Invest in low-cost, broad-based index funds. His favorite investment has always been Vanguard’s total stock market index fund, VTSAX.
2. Ignore the noise. Be mentally tough. Stay the course.
That’s it.

You don’t need fancy investments. You don’t need a financial advisor. All you need to do is commit to the plan.

If you’re thinking that this is too good to be true, you need to read The Simple Path to Wealth.

How can it really be that simple?

You might be thinking, how can it really be that simple? If all people had to do was invest in index funds, everyone would be rich.

That’s exactly Collins’ point!

Everyone could be rich if they follow these simple rules.

The problem is most people allow their emotions to get in the way and steer them off the path.

Collins does his best to help you deal with those emotions.

If you don’t believe that index fund investing will make you wealthy, look at this stat about the recently announced sale of the NBA’s Los Angeles Lakers:

A mind blowing stat:

Jerry Buss bought the Lakers for $67M in 1979, and just exited for 149 times his money at $10B in 2025

Sounds like a lot, right?

That is somehow less than he would have made simply indexing the S&P 500 over that time period ($13B)
— Ankur Nagpal (@ankurnagpal) June 19, 2025

That’s right. The Buss family would have an extra $3 billion today if they had invested in the S&P 500 instead of purchasing the Lakers in 1979!

Many thanks to blog reader, DJ, for passing this one along!

I know, I know. Owning the Lakers was probably a ton of fun. They also surely made money on the team along the way.

The point remains: investing in an S&P 500 index fund also would have generated massive wealth. And, that wealth would have come without the effort and the headaches of running a major professional sports organization.

I can picture Collins having a good laugh about stats like this.

Read The Simple Path to Wealth.

I recommend The Simple Path to Wealth to all of my students and friends who ask me about investing.

There is not a better book out there to make the concept of investing seem approachable for all of us.

Collins is clear and humorous. He’s also stern when he needs to be.

If you read this book, you’ll realize that becoming wealthy through the stock market does not have to be complicated.

It can be wonderfully simple.
- Have you read The Simple Path to Wealth?
- Are you convinced that investing can be both simple and effective?
Let us know in the comments below.
June 20, 2025
Invest in Real Estate for Wealth Through Appreciation

We previously looked at the main reason I invest in real estate:

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.

What if you don’t need your cash flow to cover your immediate life expenses? Maybe you have a full-time job that provides more than enough.

That’s even better. There’s no rule that says you have to spend your cash flow.

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.

The point is cash flow gives you options. Having options is never a bad thing, right?

That’s why cash flow is the number one reason I invest in real estate.

However, cash flow is not the only reason.

I also invest in real estate to generate long-term wealth for me and my family.

I am a buy-and-hold real estate investor.

That means when I buy a property, I intend on keeping it for many years. Circumstances may change, of course, but my intention is to hold property for a minimum of ten years.

The reason I buy-and-hold for the long term leads us to the next major reason I invest in real estate:

Appreciation.

While cash flow can provide for my immediate expenses, appreciation is all about the long-term benefits. Appreciation is how I will generate long-term wealth for my family through real estate.

Today, I want to talk about what appreciation is and how it can significantly improve your net worth over time.

Let’s dive in.

What is appreciation in real estate?

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

For example, if you buy a property for $500,000, and some years later it’s valued at $750,000, your property has appreciated by $250,000.

That means through appreciation, your net worth has increased by $250,000.

Except for when you’ve forced appreciation (we’ll discuss below), you have earned that money through appreciation by doing very little. All you have to do is make your monthly mortgage payments, and let the market do the rest.

This is exactly how many Americans generate significant wealth over time.

Photo by Tierra Mallorca on Unsplash

How to target properties with a strong likelihood of appreciating is beyond the scope of this post. I’ll soon share with you my criteria, but there’s no one way to do it.

Entire websites and books have explored this topic. If I were just starting out, I would spend a lot of time on BiggerPockets.com.

For that matter, even as an experienced investor, I still spend a lot of time on BiggerPockets.

For now, remember one main point when it comes to appreciation:

Appreciation takes time.

Successful real estate investors know that appreciation takes time.

I’m not talking about speculators or gamblers. I’m talking about people who are interested in building long-term wealth for their families.

To build long-term wealth through real estate, you need to remember this main rule about appreciation.

It’s so important, it’s worth repeating:

If you can hold a property for years or even decades, you have a really good chance of that asset being worth significantly more than when you paid for it.

Your property may not appreciate at the same rate every year. Some years, your property may even lose value. That’s OK because you’re in it for the long run.

The hard part is just holding on long enough to realize the benefit of appreciation.

In this way, investing in real estate is like investing in stocks.

How is investing in real estate like investing in stocks?

Many of the same fundamentals apply to investing in real estate as to the stock market.

We just mentioned one of the biggest keys with either asset: the longer you hold that asset, the more that asset should eventually be worth.

With stocks, we’ve already spent a lot of time in the blog discussing why you need to invest early and often.

For more information on investing in stocks, you can read a variety of posts here.

When you invest in stocks early and often, you can benefit from compound interest and safely ride out down market cycles. The stock market does not always go up every year, but given enough time, it does always go up.

In large part, the same is true when you invest in real estate.

If you buy good properties in good markets, given enough time, your property should appreciate in value. Like with stocks, the key is your ability to hold on and ride out down market cycles.

Want to know the secret to riding out down markets?

Cash flow.

You saw that one coming, didn’t you?

Cash flow will help you ride out market cycles and benefit from appreciation.

When you own strong, cash flowing rental properties, the cash flow covers all the expenses.

That means you can stay patient in down markets because holding that property is not costing you any money.

To take it a step further, as long as your property is cash flowing, you can hold it for decades and generate massive wealth through appreciation.

Cash flow and appreciation working together is a powerful force. You can see why real estate investors get so excited about their investments.

When a property is performing, the cash flow allows an investor to hold that property indefinitely. During that time, the property becomes more valuable through appreciation.

It’s a beautiful partnership.

What is forced appreciation?

I mentioned earlier that there is one other form of appreciation worth talking about here: forced appreciation.

Forced appreciation is when you improve your property in such a way that it increases in value.

Common examples may include remodeling the kitchen or bathrooms or adding another bedroom. When you make these enhancements to your property, your property should increase in value.

This is what house flippers do. They buy a property in need of some work, do the improvements, and then aim to sell that property for a profit.

It’s not a strategy that I personally use, but it has worked for many people for many years.

The thing is, forced appreciation is not just for house flippers or investors hoping to realize a quick profit.

When done correctly, forced appreciation is another way to make money over the long-term for buy and hold investors, like me.

For example, in one of our rental buildings, we added in-unit washers and dryers. By doing so, our units now command a higher monthly rent, which in turn increases the value of the property.

As a final point, forced appreciation is one way investing in real estate is different from investing in stocks.

When you buy real estate, you are in control. You decide what improvements to make and not to make. Many real estate investors love having this type of control over their assets.

By contrast, when you own stock in a company, there is very little (if anything) you can do to impact how that company is run. Unless you have boatloads of stock in a particular company, you’re essentially just along for the ride until you sell your stock.

What do you think about generating long-term wealth through appreciation?

Now you know two of my favorite reasons for investing in real estate: cash flow and appreciation.

Have you invested in real estate and benefited from appreciation?

Did you force appreciation or hang tight and let the market do it’s thing?

Let us know in the comments below!

June 17, 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.

@thinkandtalkmoney
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
♬ original sound – Thinkandtalkmoney

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