Hack Your Wealth

#75: Real estate investing might seem like something only wealthy people can do.

It’s expensive, down payments can be high, and you may feel you don’t have enough income to afford it.

Maybe you think: “I can’t even afford a house to LIVE in…how would I afford a house to invest in?”

But the plain truth is: there are lots of average Joes who do it…and who build a lot of wealth from it!

Today’s podcast guest is one such (inspiring) example.

John and Rosalina Steiner reached out to me (after following the podcast!) to share their real estate investing story. I found it compelling and wanted to share their insights and wisdom with you, too. Hope you enjoy listening to their story as much as I did!

We chat about:

• How and why the Steiners started investing in real estate in the first place
• Their 25-door real estate portfolio breakdown – what type of units, where they’re located, how many have mortgages
• How they financed the down payments and loans for each property
• Why they chose the neighborhoods they invest in
• Why they self-manage, and their best tips for managing tenants effectively
• Their views on Section 8 and how they manage Section 8 tenants
• Why they never plan to stop investing…even though they’re 65!

Check it out here:

https://hackyourwealth.com/real-estate-investing-with-middle-class-income

Do you wish to invest in real estate but feel like you don’t know how to get started? What’s the biggest factor you think holding you back? Let me know by leaving a comment.

Don't miss an episode, hit that subscribe button...

If you liked this episode, be sure to subscribe so you don’t miss any upcoming episodes!

• Apple Podcasts
• Overcast
• Spotify
• Stitcher

I need your help, please leave a listener review :)

If you liked this episode, would you please leave a quick review on Apple Podcasts? It’d mean the world to me and your review also helps others find my podcast, too!

Links mentioned in this episode:

• John & Rosalina Steiner
• Multifamily real estate investing: how to build a $175M portfolio in 7 years with Andrew Campbell (HYW029)
• Schedule a private 1:1 consultation with me
• HYW private Facebook community

 Intro/Outro: Old Bossa by Twin Musicom.

#74: This week, I chat with Caroline Ceniza-Levine, a career coach now early retired, whose own spouse wasn’t on board with early retirement for many years before she finally convinced him to get on the FIRE train.

We talk about tips and advice for how to convince your spouse about early retirement – and all it entails...

We discuss:

• Caroline’s own path to FIRE – from music, to strategy consulting, to corporate, to coaching, to FIRE
• Her spouse’s main concerns when it came to early retirement
• How she got her spouse on board, what she would have done differently, and her advice for others who are struggling to convince their partner about early retirement
• Plus: how Caroline handles healthcare / insurance as an early (pre-Medicare) retiree, her passive rental real estate portfolio breakdown and how she manages her rentals remotely

Check it out here:

https://hackyourwealth.com/retire-early-with-spouse-working

Have you ever been at odds with your spouse about early retirement? What were their main concerns? Were you able to change their mind – how? Let me know by leaving a comment.

Don't miss an episode, hit that subscribe button...

If you liked this episode, be sure to subscribe so you don’t miss any upcoming episodes!

• Apple Podcasts
• Overcast
• Spotify
• Stitcher

I need your help, please leave a listener review :)

If you liked this episode, would you please leave a quick review on Apple Podcasts? It’d mean the world to me and your review also helps others find my podcast, too!

Links mentioned in this episode:

• Costa Rica FIRE
• Money issues in marriage: why spouses fight about money, how to fight with empathy, and how to convince your spouse to FIRE (HYW065)
• Schedule a private 1:1 consultation with me
• HYW private Facebook community

   Intro/Outro: Old Bossa by Twin Musicom.

#73: One big reason the tech industry attracts a lot of talent: you get partly compensated in stock, and if you’re early enough at a company that IPOs, your stock options or RSUs can make you a millionaire multiple times over when the company goes public.

Google created >1000 millionaires at IPO. Facebook too. Microsoft has created >10k millionaires. Amazon probably even more.

But with stock compensation, your taxes can quickly get complicated. You need thoughtful tax planning to make sure you don’t pay more in taxes than needed. As with other types of income, what matters isn’t what you earn – it’s what you keep.

So this week, I spoke with Shane Mason, whose CPA firm specializes in advising entrepreneurs and tech workers, to share tips and strategies on stock option and RSU tax planning.

We discuss:

• The different types of stock-based compensation and tax regime applicable to each
• Deep dive on Incentive Stock Options + AMT + AMT “refund” rules
• How an 83(b) election works, and pros/cons of doing it
• Key tax planning strategies applicable to stock compensation (e.g. timing strategies, optimizing tax buckets)

Check it out here:

https://hackyourwealth.com/stock-option-rsu-tax-planning

Do you earn stock-based compensation? What tax planning best practices have you followed? What do you want to know more about when it comes to stock tax planning? Let me know by leaving a comment.

Don't miss an episode, hit that subscribe button...

If you liked this episode, be sure to subscribe so you don’t miss any upcoming episodes!

• Apple Podcasts
• Overcast
• Spotify
• Stitcher

I need your help, please leave a listener review :)

If you liked this episode, would you please leave a quick review on Apple Podcasts? It’d mean the world to me and your review also helps others find my podcast, too!

Links mentioned in this episode:

• Brooklyn FI
• Schedule a private 1:1 consultation with me
• HYW private Facebook community

 Intro/Outro: Old Bossa by Twin Musicom.

#72: This week, I invited Bill Exeter to teach us about 1031 exchanges. He is the CEO of Exeter 1031 Exchange Services and has been doing 1031s for nearly four decades.

You might know at a high level that a 1031 exchange means deferring real estate capital gains taxes. But the details are important to avoid dumb mistakes that will disqualify you.

We discuss:

• Different types of 1031 exchanges
• Key criteria and deadlines + step-by-step process for executing a 1031
• How to optimize timing your buy/sell transactions
• Like-kind replacement property rules
• Domestic vs. foreign property exchanges
• What constitutes “Qualified Use” + holding period requirements
• State tax consequences
• Why investors can’t do 1031s themselves
• The role of a Qualified Intermediary, how to vet one, and how much they cost
• Tax impact of converting a 1031 property into owner-occupied housing, and vice versa
• Common mistakes that disqualify you from a 1031
• Proposed Biden administration changes to 1031s: likelihood of passage + actions you can take now to mitigate adverse tax impact

Check it out here:

https://hackyourwealth.com/1031-exchange

Ever done a 1031 transaction? What was your experience? Anything you would do differently next time? Let me know by leaving a comment.

Don't miss an episode, hit that subscribe button...

If you liked this episode, be sure to subscribe so you don’t miss any upcoming episodes!

• Apple Podcasts
• Overcast
• Spotify
• Stitcher

I need your help, please leave a listener review :)

If you liked this episode, would you please leave a quick review on Apple Podcasts? It’d mean the world to me and your review also helps others find my podcast, too!

Links mentioned in this episode:

• Exeter Group
• 1031taxreform.com
• How to avoid capital gains taxes when selling your house
• How the Home Sale Capital Gains Tax Exclusion Works (HYW033)
• Schedule a private 1:1 consultation with me
• HYW private Facebook community

   Intro/Outro: Old Bossa by Twin Musicom.

#71: Tax deed auctions provide an opportunity to buy tax-delinquent properties at a discount, wipe away existing liens and mortgages, and earn sizable profits in the process.

This week, I invited my friend Phil Kessler back to the podcast to teach us how this unique type of real estate investing works.

If you’ve ever wondered how tax deed auctions work, how to win them, and how to due diligence this type of real estate, then don’t miss this insight-packed episode.

What you’ll learn:

• How tax deed investing differs from tax lien investing
• How tax deed auctions work, how they differ from other foreclosure auctions
• The most important things to due diligence when it comes to tax deed properties, and how to due diligence them
• The most helpful online tools for property due diligence
• How to buy tax delinquent properties BEFORE they go to auction (and avoid competing against scores of other bidders)
• How redemption periods work, and which states have them
• How a quiet title lawsuit works, how much it costs, and what happens if a title dispute arises
• How tax deed auctions affect existing mortgages and liens, and how to verify the rules in your state

Check it out here:

https://hackyourwealth.com/tax-deed-investing

Have you ever bid in a real estate auction? What was your experience? What other questions do you have about tax deed investing that weren’t covered here? Let me know by leaving a comment.

Don't miss an episode, hit that subscribe button...

If you liked this episode, be sure to subscribe so you don’t miss any upcoming episodes!

• Apple Podcasts
• Overcast
• Spotify
• Stitcher

I need your help, please leave a listener review :)

If you liked this episode, would you please leave a quick review on Apple Podcasts? It’d mean the world to me and your review also helps others find my podcast, too!

Links mentioned in this episode:

• propertyonion.com
• The Deed Feed
• Velocity REOs
• RealAuction.com
• Grant Street Group
• CivicSource
• AAR Auction
• GovEase
• How tax lien investing works and how to buy tax lien certificates (HYW066)
• Real estate investing through house auctions and hard money lending with Ethan Gao (HYW032)
• Schedule a private 1:1 consultation with me
• HYW private Facebook community

  Intro/Outro: Old Bossa by Twin Musicom.

#70: Last time, we talked about the pros and cons of the “yield shield” and the impassioned views on both sides of that debate.

But what if you sidestep that entirely and generate your dividend yield through rental real estate instead?

Unlike stock dividends, which can be cut by company management, rents are arguably way more stable. Plus, real estate can be leveraged with a mortgage to juice a higher capital return.

Separately, regardless of which strategy you use, how should retirees think about the “crossover” point beyond which sequence risk effectively disappears?

This week, in the final part of our 3-part series on asset allocation, we talk again with Karsten Jeske, CFA, about both these topics.

We discuss:

• How rental real estate can change your optimal asset allocation
• Whether a bond tent strategy is still relevant if you have rental real estate
• How to analyze the sequence risk crossover point after which you are guaranteed to outlive your savings
• How to visualize the relationship between “how much nest egg is left” vs. “how much retirement is left,” and how to know when you’re really “out of the woods”

Check it out here:

https://hackyourwealth.com/sequence-risk-analysis

Do you think rental real estate is a more effective “yield shield” vs. dividend stocks? Would you change your asset allocation with rental real estate? How will you know when you’ve crossed the sequence risk “crossover” point?

Let me know by leaving a comment!

Don't miss an episode, hit that subscribe button...

If you liked this episode, be sure to subscribe so you don’t miss any upcoming episodes!

• Apple Podcasts
• Overcast
• Spotify
• Stitcher

I need your help, please leave a listener review :)

If you liked this episode, would you please leave a quick review on Apple Podcasts? It’d mean the world to me and your review also helps others find my podcast, too!

Links mentioned in this episode:

• ERN's "When Can We Stop Worrying about Sequence Risk?"
• Asset allocation: Does the “yield shield” really protect against sequence of returns risk? (HYW069)
• Asset allocation: How to use a bond tent to reduce sequence of returns risk (HYW068)
• The shockingly un-simple math behind retirement safe withdrawal rates (Part 1) (HYW035)
• The shockingly un-simple math behind retirement safe withdrawal rates (Part 2) (HYW036)
• Schedule a private 1:1 consultation with me
• HYW private Facebook community

  Intro/Outro: Old Bossa by Twin Musicom.

#69: Last time we talked about using a “bond tent” strategy to reduce sequence risk in the years just before and just after retirement.

In FIRE communities, an alternate strategy that has become popular is the “yield shield.”

A yield shield strategy involves holding primarily investments that pay a high dividend yield.

The theory is: if the investment pays a dividend yield of 3-4% that might be all you need to cover your safe withdrawal rate. If you don’t ever have to touch the principal, sequence risk might disappear entirely.

But is it really that simple?

This week, in part 2 of our 3-part series on asset allocation, we continue our discussion with Karsten Jeske, CFA, about the pros and cons of a yield shield strategy. We start by wrapping up our glide path discussion from last week, then dive into a critique of the yield shield.

We discuss:

• How early retirees with kids should plan for key expense milestones during retirement that traditional retirees have already dealt with (college, buying a home, etc)
• Pros and cons of a yield shield strategy
• Whether investing in dividend kings or dividend aristocrats helps to address the cons
• The importance of looking at total return when analyzing the yield shield, and why a high dividend doesn’t translate into higher total return
• Reasons why the yield shield can fall short (and examples where it did)
• The right way to define success of a yield shield strategy
• Why Karsten doesn’t fundamentally believe the yield shield does better than a plain vanilla stock index

Check it out here:

https://hackyourwealth.com/yield-shield-critique

This yield shield critique has been very controversial in FIRE communities. Are you persuaded by it? Or do you believe the yield shield performs better? Why or why not? Let me know by leaving a comment.

Don't miss an episode, hit that subscribe button...

If you liked this episode, be sure to subscribe so you don’t miss any upcoming episodes!

• Apple Podcasts
• Overcast
• Spotify
• Stitcher

I need your help, please leave a listener review :)

If you liked this episode, would you please leave a quick review on Apple Podcasts? It’d mean the world to me and your review also helps others find my podcast, too!

Links mentioned in this episode:

• Dividend ETFs: VYM, NOBL, SDY, DVY
• ERN's Yield Shield critique
• ERN's critique of the dividends-only approach
• Asset allocation: How to use a bond tent to reduce sequence of returns risk (HYW068)
• The shockingly un-simple math behind retirement safe withdrawal rates (Part 1) (HYW035)
• The shockingly un-simple math behind retirement safe withdrawal rates (Part 2) (HYW036)
• Schedule a private 1:1 consultation with me
• HYW private Facebook community

  Intro/Outro: Old Bossa by Twin Musicom.

#68: This week, in part 1 of a 3-part series on asset allocation, I talk with Karsten Jeske, CFA, about how to implement bond/equity glide paths, both leading into retirement and in the initial years after retirement.

Getting your asset allocation right, and shrewdly changing its composition in the years just before and just after retirement is one of the most impactful things you can do to offset sequence of returns risk.

If you want to understand how to do this effectively, don’t miss today’s episode!

We discuss:

• The intuition behind bond tents and equity glide paths
• Pros and cons of a bond tent strategy (what you gain, what you lose)
• How to determine the optimal % peak allocation of bonds
• How long you should optimally stretch each glide path over (and why each side probably should be different durations)
• When is a longer vs. shorter glide path better in terms of returns and risk
• When is a bond tent NOT worth it and you should just stick with 100% equities

Check it out here:

https://hackyourwealth.com/asset-allocation

What do you think about the bond tent strategy? Let me know by leaving a comment.

Don't miss an episode, hit that subscribe button...

If you liked this episode, be sure to subscribe so you don’t miss any upcoming episodes!

• Apple Podcasts
• Overcast
• Spotify
• Stitcher

I need your help, please leave a listener review :)

If you liked this episode, would you please leave a quick review on Apple Podcasts? It’d mean the world to me and your review also helps others find my podcast, too!

Links mentioned in this episode:

• ERN's cashflow modeling spreadsheet
• ERN's posts on glidepaths: part 1, part 2
• The shockingly un-simple math behind retirement safe withdrawal rates (Part 1) (HYW035)
• The shockingly un-simple math behind retirement safe withdrawal rates (Part 2) (HYW036)
• Schedule a private 1:1 consultation with me
• HYW private Facebook community

  Intro/Outro: Old Bossa by Twin Musicom.

#67: Given how big of a shock the events of 2020 were for just about everyone on the planet, what changes to the tax rules happened as a result?

This week I invited Katelynn Minott, CPA and managing partner at Bright!Tax, to share key tax filing updates to be aware of when you file your tax returns this year.

What you’ll learn:

• Tax treatment of CARES Act stimulus checks
• Healthcare related tax updates (e.g., qualified medical expense deductions)
• Updates to retirement plan rules (e.g., contributions, withdrawals, inherited IRAs)
• Tips for reducing investment income taxes
• Education related changes (e.g., student loan payments)
• Charitable donation changes
• Commonly missed business deductions for self-employed / sole proprietors
• Tax issues and updates applicable to remote workers (e.g., state tax residency rules, foreign earned income exclusion for expats)

Check it out here:

https://hackyourwealth.com/2020-tax-filing

What other 2020 tax filing questions do you have? Let me know by leaving a comment and, if there are enough, I’ll send them to Katelynn for feedback!

Don't miss an episode, hit that subscribe button...

If you liked this episode, be sure to subscribe so you don’t miss any upcoming episodes!

• Apple Podcasts
• Overcast
• Spotify
• Stitcher

I need your help, please leave a listener review :)

If you liked this episode, would you please leave a quick review on Apple Podcasts? It’d mean the world to me and your review also helps others find my podcast, too!

Links mentioned in this episode:

• Bright!Tax
• Schedule a private 1:1 consultation with me
• HYW private Facebook community

Intro/Outro: Old Bossa by Twin Musicom.

#66: Investing in tax liens may sound scary and complicated. But as you’ll see from today’s podcast interview, with a little bit of research upfront, it can be as easy as buying toilet paper on Amazon. And the capital required to invest can be as little as a couple hundred bucks, making it a low-risk way (compared to buy-and-hold real estate) to try a new investing strategy.

This week, I deep dive on tax lien investing with Phil Kessler, a prolific tax lien investor who has extensively researched the tax lien investing laws of multiple states. He also creates a lot of educational content about tax lien and tax deed investing online.

We discuss:

• How tax lien investing works + how to make money from it
• Differences between tax lien vs. tax deed investing
• How tax lien interest rates are set + realistic rates you can expect
• What makes an ideal tax lien investment
• Due diligence checklist for analyzing tax lien deals (and how it differs from typical real estate investing due diligence)
• Tips and tricks for evaluating physical property condition, environmental risks, etc, when you can’t access the house
• How tax lien auctions work + winning bid strategies
• How tax lien investment funds work + tradeoffs of investing in a fund

Check it out here:

https://hackyourwealth.com/tax-lien-investing

Have you ever invested in tax liens? What’s been your experience? What other questions do you have about it? Let me know by leaving a comment.

Don't miss an episode, hit that subscribe button...

If you liked this episode, be sure to subscribe so you don’t miss any upcoming episodes!

• Apple Podcasts
• Overcast
• Spotify
• Stitcher

I need your help, please leave a listener review :)

If you liked this episode, would you please leave a quick review on Apple Podcasts? It’d mean the world to me and your review also helps others find my podcast, too!

Links mentioned in this episode:

•  Nationwide Environmental Title Research (directory of public records websites)
• Velocity REOs (drive to any property, take 10-15 photos for you)
• National Association of Counties (find tax sale info on county treasurer site)
• National Tax Lien Association
• RealAuction.com
• Grant Street Group
• propertyonion.com
• Schedule a private 1:1 consultation with me
• HYW private Facebook community

  Intro/Outro: Old Bossa by Twin Musicom.