Hack Your Wealth

#25: If you plan to pay for kiddo’s college education, then get ready to potentially nearly double what you spent from 0-18.

Right now, the average cost of public in-state 4-year university (tuition, room, board) is $21k per year. Private universities, $49k per year.

When I was in college, it was $12k/year public, $32k private (in today’s dollars)…

So, given how expensive college is (esp private), it’s natural for parents to feel anxious about how to afford college for their kids.

“Will we qualify for enough financial aid?”

“How much will we have to dip into our retirement nest egg?”

“Will we need to have a hard conversation with our kid that we can’t afford her dream school?”

These are common worries parents of college-bound kids grapple with.

Getting a handle on college expense and financial aid is crucial to ensuring you have enough saved to afford it. And it behooves you to start planning WAY in advance so you actually have enough time to optimize your assets, income, and financial situation for the best possible aid package.

So in this week’s podcast, I invited Paula Bishop, a college financial planning consultant and CPA who helps families strategize their college finances, to share tips and insights about college financial aid.

We talk about:

• How the financial aid process works (including timelines)
• What assets and income get reported on FAFSA vs. CSS Profile to compute EFC
• Key differences between FAFSA vs. Profile
• Special situations: rental properties, business owners, divorced parents
• How to appeal financial aid awards
• Why your funding strategy should shift after January of your kid’s sophomore year

Do you plan to pay your kid’s college expenses? What optimizations to family finances should parents be doing to make the cost of college more manageable? What other questions do you want answered about financial aid? Let me know by leaving a comment.

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Links mentioned in this episode:

• Paula Bishop, CPA​
• HYW private Facebook community

Intro/Outro: Old Bossa by Twin Musicom.

#24: Whether you retire early, take a sabbatical, or just take vacay, when you travel abroad there’s often multiple great opportunities to turbocharge your 4×4 FIRE framework “save” pillar.

One: overseas destinations often have lower cost of living compared to home, so you save on daily spend.

Two: when booking overseas flights, you can often arbitrage your miles & point redemptions for outsized value (we covered some juicy strategies in Episode 17).

Today, we deep dive on a third way: hacking your expat taxes.

In this week’s podcast, I talk with expat tax CPA (US) Grace Taylor about how to be strategic with tax optimization as an expat.

What you’ll learn: 

• Key tax issues affecting expats – whether you’re a company employee, digital nomad, or early retiree
• How the foreign earned income exclusion works
• How state residency rules interact with expat tax strategies (and how to optimize)
• For digital nomads: strategies for using an LLC/S-Corp to optimize taxes
• Key rules re: foreign tax credits

Have you ever filed taxes as an expat? Was your tax bill lower vs. non-expat years? What other questions about expat taxes and FEIE do you want answered? 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!

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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:

• Gracefully Expat
• HYW private Facebook community

Intro/Outro: Old Bossa by Twin Musicom.

#23: Like learning how to optimize your taxes/wealth?

Then heads up, because Opportunity Zones may be really relevant to you.

In a nutshell: It’s a government investment program designed to spur economic development in certain geographic zones; in return, it provides a way to snag huge tax breaks and tax-free investment gains.

Think of it as a turbocharge for your 4x4 FIRE framework “save” & “invest” pillars.

But the O-Zone program is not well-understood or even well-known by most investors.

So this week, I invited David Sillaman, one of the pioneers in Opportunity Zone fund creation, to the podcast to explain key rules and benefits of the program.

We talk about:

• Goals of the program and tax benefits to investors
• Where Opportunity Zones are located and how to view an O-Zone map
• Rules on contributions, deferred capital gains tax, and tax-free investment gains
• What type of investments inside Opportunity Zones qualify for favorable tax treatment
• How to research Qualified Opportunity Funds

Is this program attractive to you as an investor? What questions do you still have about it that you want me to answer? 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
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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:

• Ozfunds.com
• Eazy Do It
• Map of opportunity zones
• HYW private Facebook community

Intro/Outro: Old Bossa by Twin Musicom.

#22: Bob Dockendorff, a lawyer, tax expert, and financial planner who focuses on tax efficiency in his wealth management practice, talks shop with us about tax loss harvesting strategies.

What you’ll learn in this episode:

• Tips for maximizing tax “alpha” in your portfolio
• Common mistakes investors make when tax loss harvesting
• How wash sales work
• Why it’s so hard to execute tax loss harvesting even when the benefit is clear and you know you should

Links mentioned in this episode:

• Robert Dockendorff
• Tax loss harvesting and tax gain harvesting step by step
• Morningstar Tax Cost Ratio
• Tickers mentioned in this episode: SPY, FCNTX, VOO, VT
• HYW private Facebook community

Intro/Outro: Old Bossa by Twin Musicom.

#21: The US tax system vastly favors leisure over labor. It favors people who just own things and sit around and collect rents over people who actually do work for a living.

How is this so?

Because rents and returns on capital assets are taxed WAY more favorably than wages from labor. So favorably, in fact, that you can actually make 6 figures income and pay zero taxes.

Every year.

For the rest of your life.

This would never be possible with labor wages.

So in this week’s podcast episode, I’ll show you how our tax system is structured in a way that allows you to make over 6-figures in income with zero tax liability.

What you’ll learn in this episode:

• Why and how our tax system creates this opportunity
• What are the scenarios in your life where you can take advantage of this
• Exactly how it works step by step
• And the best way to optimize this loophole

Links mentioned in this episode:

• IRAs, Roth IRAs, and how to get the tax benefits of BOTH (HYW004)
• How to take a year off, earn 6 figures, harvest capital gains, do Roth conversions…and pay zero taxes on it all (updated for 2020)
• TurboTax TaxCaster
• HYW private Facebook community

Intro/Outro: Old Bossa by Twin Musicom.

#20: I recently went through a medical billing hassle that was such a PITA that I decided to do a special podcast episode about it because it has such direct impact on saving money on healthcare.

So in episode 20 this week, I talk about how medical billing and health insurance claims work.

Using my own experience as an example, I share tips on how to be vigilant about health insurance so you save yourself from unpleasant surprise costs.

What you’ll learn in this episode:

• Why it is so difficult to get transparent healthcare price information in the US
• How medical billing works and why it can lead to some very big unpleasant surprise costs
• What CPT codes and ICD 10 codes are, and exactly how they are used to determine how much you vs. insurance pays
• A 5-step checklist of actions to take so you never get stuck with surprise medical costs

Links mentioned in this episode:

• Health savings account rules
• HYW private Facebook community

Intro/Outro: Old Bossa by Twin Musicom.

#19: This week brings another solopreneur interview. In episode 19, I talk with Paul Stevens-Fulbrook, a high school science teacher in England whose side hustle is an education blog for teachers.

What you’ll learn in this episode:

• How his blog serves teachers at different stages of their teaching career
• How he got the idea
• How much he’s currently earning (and where the revenue is coming from)
• How he grew his traffic using Facebook (plus how he landed in “Facebook jail”)
• What his day currently looks like balancing side hustle vs. classroom job
• The importance of staying focused on a few important things to not spread yourself thin

Links mentioned in this episode:

• https://teacherofsci.com
• Ezoic (ad broker)
• Do You Even Blog Podcast (Pete McPherson)
• Brandon Gaille podcast (Blogging Millionaire)
• Income School YouTube channel
• Backlinko (Brian Dean)
• Neil Patel
• HYW private Facebook community

Intro/Outro: Old Bossa by Twin Musicom.

#18: I discuss how to get aligned with your significant other / fiancé / fiancée / or even spouse when it comes to money and finances.

Specifically, I share 17 questions to discuss with your partner to get aligned on money and finances.

This is important for any couple. But it’s absolutely critical once you start to seriously contemplate marriage.

Even if you are already married and haven’t gotten aligned on money yet, it’s better to do it now (especially before kids) rather than put it off.

It may be...not the most fun conversation. But it’s an investment in your relationship because finances are a leading cause of divorce: about a quarter of all divorces are because of money issues.

So, develop a curiosity mindset for the other person’s philosophy around money. It’ll be one of the best investments you can make in each other.

What you’ll learn in this episode:

• Why it's so hard to have completely transparent money conversations with your partner
• Why money and finances is not a single conversation...but a long series of them
• Why investing in this conversation stacks the marriage odds hugely in your favor
• How I have navigated money issues with my own spouse
• The 17 questions you should ask / get to know about your person, ideally before getting married, plus the rationale for each question

Links mentioned in this episode:

• 17 questions to ask your partner, ideally before getting married
• HYW private Facebook community

Intro/Outro: Old Bossa by Twin Musicom.

#17: Last week I talked about how I treat miles and points as a tax-free asset class in my portfolio.

That’s because they literally translate into thousands of bucks in savings. For every trip.

It’s one of the highest impact ways to boost your nest egg because those dollars stay compounding in your portfolio rather than getting spent.

That’s why for this week’s podcast, I invited Sarah Page Maxwell, a miles and points expert, to share strategies on how to maximize point redemptions specifically for free flights – especially international flights, since those have the biggest arbitrage opportunities for outsized redemption value.

Whether you’re booking long-haul economy or splurging for business class, today’s episode will train you to think strategically about award travel so you save big on your future trips…and boost your nest egg at the same time!

What you’ll learn in this episode:

• How the miles and points landscape has changed over the years and where the opportunities still are
• Strategies for maximizing your point redemptions
• What is considered a “good” redemption value (and why you shouldn’t just use the sticker price of a flight)
• How to pick the flexible point program that best matches your travel goals
• Tradeoffs for redeeming from an issuer’s own travel portal vs. transferring out to partners
• Tools for getting the latest scuttlebutt on redemption arbitrage opportunities/inefficiencies

Links mentioned in this episode:

• MileValue
• Milez.biz
• PointsBuzz
• Credit card churning subreddit
• FlyerTalk
• After our interview, Sarah also shared this resource: Where to credit. Tool to help you figure out where to best credit miles you earn when you fly. From Sarah: “Many don’t realize that just because you’re flying American doesn’t mean you have to credit the miles you earn to American. Credit them instead to a foreign frequent flyer program that hasn’t shifted to a revenue-based earning structure, but instead still awards miles based on distance flown. Simply put in what airline you’re flying and in what class, and it tells you how many miles you’d earning crediting to all the different partners.”
• HYW private Facebook community

Intro/Outro: Old Bossa by Twin Musicom.

#16: Anyone who likes traveling (by definition, FIRE adherents) should pay attention to how to optimize and maximize their travel rewards portfolio.

So in episode 16, I talk with Dave Grossman about how to do just that.

Dave is a travel loyalty program consultant and credit card rewards expert. He runs two travel rewards websites and has written a book on using miles and points to score free travel around the world.

Our discussion was chock full of tips, strategies, and insights, so this episode is definitely one you do NOT want to miss….

What you’ll learn in this episode:

• How travel rewards programs have evolved in recent years
• Key application strategies to think about for optimizing credit card travel rewards
• Optimal velocity for applying for new cards
• How the 5/24 rule is actually enforced
• Best practices for calling the reconsideration line
• Tips for meeting spend requirements
• How to incorporate business credit cards into your travel rewards strategy
• How to evaluate annual card fees
• Best practices for closing cards

Links mentioned in this episode:

• MilesTalk
• YourBestCreditCards.com
• AwardHacker
• FlyerTalk
• Plastiq
• Chase Ultimate Rewards
• American Express Membership Rewards
• Citi ThankYou Rewards
• Capital One rewards
• HYW private Facebook community

Intro/Outro: Old Bossa by Twin Musicom.