5 Questions: Making Money, REI and Timing the Market

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We love listener questions, and we have good ones. Here are 5 questions about making money, REI, and timing the market.

We get all kinds of great questions, and it can be hard to choose just five, but everyone is interested in making money, we have a ton of questions about real estate investing, and timing the market is something we covered years ago so wanted to revisit it for our newer listeners.

Question One:

My name is Marcos, and I’m terrified of the future. I want to be financially free while chasing my passion, but how do I make money? How do I get out of the rat race?. So I came across your podcast. I just finished listening to the timing the market episode, and I get it, BUT I’m also confused.

These are my concerns: Is reading market charts and coming up with investment strategies and finding patterns just speculation? Is all that stuff just trying to time the market? I know you guys did an entire episode on dollar cost averaging but can you go a little more in depth? – Marcos M

If you want to avoid the rat race, you have two choices, create your own business or save a considerable portion of your salary. LMM was created for just this reason. Mr. Money Mustache took the savings route to early retirement, saving and investing half of his take-home pay.

Don't give up what you want most for what you want now.

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How do you know when you’re ready to retire? 

As soon as this income is enough to pay for your living expenses while leaving enough of the gains invested each year to keep up with inflation, you are ready to retire.

Doing a technical analysis of an investment that you’re planning to buy and hold is not timing the market, it’s doing proper due diligence. Buying a stock based on a trend and hoping to sell it off right away for a quick buck is timing the market. It’s a lousy strategy for casual investors and will almost always fail.

We did an episode on dollar cost averaging. It sounds more complicated than it is. It just means dripping a big pile of money into the market over time rather than dumping it all in at once.


Question Two:

What is worth spending money on and what can you cheap out on? – Spencer

Most of us can’t afford to buy the best of absolutely everything, so we have to make choices about what to spend more on. The primary determinant is your priorities, what do you care about? If you care about eating good food but don’t care about clothes, cheap out on the clothes, so you have more for the food.

Another consideration is what you use every day. You sleep every day, so a good mattress is worth spending more on. If you drive every day, spending enough to get a reliable car is important.

Keep in mind that buying the cheapest version of something can be a false economy. If you buy a cheap kitchen knife that breaks after a few months, you have to buy a new one. It’s better to do a little research and find a good quality item that will last.

Quality doesn’t necessarily mean the most expensive option, but it’s almost never the cheapest option either.

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Question Three:

I was wondering what it was like for you guys buying your first rental property on Rootstock. My husband and I have been trying to buy one on Rootstock and keep losing, and it seems the longer it takes to get the first one, the more frightening it gets.

I was wondering how Laura handled it (I’m making the assumption that Andrew had no problem running off the cliff into rental properties). We have a lot of people who think we are crazy, and I feel like while we were both ready to buy a property in the beginning, my husband had kind of gotten off the board. Did you have this problem, or did Laura just let Andrew do his thing? – Jennifer from Oklahoma City

Roofstock is a place to buy turnkey rental property. It makes the process of finding, buying, and owning rental property much simpler. Andrew and Laura didn’t know about Roofstock when they bought their first rental but after discovering it, bought two more properties back to back.

Both were 100% on board, that is a must. Even if the property makes money for 29.5 of the years you own it, if your spouse wasn’t on board, that six months the property lost money will be thrown in your face during every money argument.

Each of them understood the risk. They agreed that they wouldn’t compete for a property and drive down their return, so it took some time to find the right one. They knew the possibility of huge returns were commiserate with the risk.

Those with rental property horror stories likely didn’t do any analysis, didn’t run the numbers to determine if a house were a good investment.

Get your husband on board if you can, spend time looking for the right property and be willing to lose out on a deal because you’re not willing to bid the price up.

Question Four:

I’m looking for some tips for someone in my situation, a poor college student. I don’t make a ton of money and have more and more student loan debt every semester. I am wondering where I should be putting my money. Should I look into creating an emergency fund, a Roth IRA, a Betterment account, etc.? – Simon

Your priority should be to save $1,000 for an emergency fund in a high yield savings account. After that, start paying off your loans with the money you’re earning while still in college. Every dollar you can pay off before you graduate is one less dollar (and many more dollars in interest) that you won’t have to pay later.

You probably can’t pay off all of the loans before graduation but starting now will really give you a big advantage once you graduate.

Once you’re done with school, continue living like a college student. Don’t upgrade every aspect of your life because you’re making a full-time salary now. Just doing this for a couple of years can mean retiring years earlier than your peers.

After graduating, you can consider refinancing your remaining student loans for a lower interest rate which will save you money and allow you to pay the loans off faster.

Once you’re debt-free, max out your retirement accounts because of the tax advantages. After you’ve done that, start investing with Betterment.

Question Five:

There was one podcast about making more money where Andrew kept saying to Thomas that it was soo easy to make $100 online, or an extra $100 online per month. I wanted to know what ideas you guy suggest. – Lisa

Take an inventory of your skill set. What are you good at? Can you write, design websites, translate, use Quickbooks? Whatever you’re good at, there is likely someone on a freelancing site like Upwork or Guru looking for that skill.

If your skills don’t quite translate to what people are looking for on those sites, what do you know a lot about? If you know fashion, resell clothes on Poshmark. Do you know books? Resell them on Amazon. Can you brew beer? Make a course and sell it on Skillshare.

None of that appeal? Here are 57 more ideas. 

Thanks, Everyone!

Thank you to everyone who sent in questions. If you’re wondering, hundreds of other people are too and doing these 5 questions episodes allows us to help more people.

Show Notes

Southern Tier Pumpking: The first pumpkin beer of the season!

Southern Tier Pumpking: Rum barrel aged.

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And if you have any questions or topics you’d like us to talk about, email us at listenmoneymatters@gmail.com. All the tools and resources we usually mention on the show are available at listenmoneymatters.com/toolbox.

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Candice Elliott - Senior Editor
Candice Elliott is a substantial contributor to Listen Money Matters. She has been a personal finance writer since 2013 and has written extensively on student loan debt, investing, and credit. She has successfully navigated these areas in her own life and knows how to help others do the same. Candice has answered thousands of questions from the LMM community and spent countless hours doing research for hundreds of personal finance articles. She happily calls New Orleans, Louisiana home-the most fun city in the world.
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