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This week we welcome special guest Paula Pant from Afford Anything. We discuss real estate investing, running an Airbnb, favorite travel destinations, and more in this episode of the Personal Profitability Podcast.
Eric Rosenberg: Ladies and gentlemen, boys and girls, children of all ages, welcome back to the Personal Profitability Podcast. As always I am your host, Eric Rosenberg and I’m excited today for episode number 30, the big 3-0, the dirty thirty.
We have another special guest for you here today. I know you guys are all probably wondering like, how is every guest special? Because I work hard to find some of the most awesome people out there. And if there were someone who represents of all the cool things that unicorns and rainbows, that is the person we have on the line. I’m speaking, of course about none other than Paula Pant of Afford Anything. Say howdy, Paula to everybody.
Paula Pant: Howdy! How’s it going? I’m glad to be here.
Eric: Thank you, yeah. So Paula, if anyone is not familiar with Paula yet, so she, I met actually at the, I know FinCon comes up a lot on this podcast, I met her at the very first FinCon in a trendy Chicago suburb called Schaumburg. I don’t know if you could really call it trendy but its home of one of the largest malls in the United States out of Minnesota. That’s its claim to fame. They have a really big mall in Schaumburg.
Paula: I didn’t know that.
Eric: Actually right after FinCon, one of my buddies who lives in Chicago, picked me up and we walked around the mall because had a little time to kill before we went to the airport. So I’ve now been to America’s biggest and second biggest, I think, malls. Little tidbit of Chicago suburb history or claim to fame.
Paula has a site called Afford Anything which is totally well named for her motto. Paula has a very similar philosophy to me of ‘don’t get so frugal that you’re hurting your life. Go make more money and figure out how to live the life you want.’ That’s Paula’s shtick.
If you wanna throw out an elevator speech, if I missed anything, tell people a little bit about you and your background and your site.
Paula: Sure. Exactly as you said the idea behind the site is to really focus on earning and investing. A little bit about myself is that I am a recovering penny-pincher. So back in the day I used to be obsessed with penny pinching. I used to be obsessed with frugality. We didn’t have a whole lot of money starting out. We were immigrants. My family and I immigrated to the States when I was a child; I mean I was like a baby, I was in diapers. But you know, we always got by but we lived a very TJ Maxx sort of life.
And I just carried those lessons of frugality with me into my adulthood and I eventually realized that being obsessed with penny pinching was actually hurting me. And ironically it was actually harming my net worth because I was devoting so much time and energy focusing on frugality that I wasn’t turning my limited attention to figuring out how I can earn more and how I can then invest those earnings.
Once I started doing that, once I pointed the needle in that direction things got much better. I began earning more, I developed a big rental property portfolio, so now I’m a real estate investor. My whole life changed once my mindset changed.
Real Estate Investments
Eric: Speaking of real estate, that’s actually the first thing I wanted to ask you about. I’m actually considering becoming a real estate investor myself though we’re moving down to California which real estate costs a little bit more than it does here in Portland which isn’t even cheap here.
When you were starting out, I know it’s hard enough to save up for a down payment for a house let alone a down payment for an investment property, what were your steps starting out? How did you decide on real estate? What did you do to really get the ball rolling?
Paula: Sure. What I did was that for the first house that I purchased, instead of buying a single family home, I bought a triplex, which is a building which has three units in it. My partner Will and I moved into one of the units and then rented out the other two. And actually we took it a step further. We moved into one of the units with roommates and then rented out the other two.
Eric: There’s little of that frugality coming through.
Paula: Yeah, exactly, exactly. So that was how we were able to do it. Now officially, any building that is four or fewer units qualifies as residential. So you can buy a building with four or fewer units as a primary residence if you live in one of those units. If it’s five or more units, if it’s a building that has five or more units it qualifies as commercial so the financing is a lot harder.
Eric: So for people who aren’t familiar with that…I don’t know if you know if you knew this, I used to be a bank branch manager. And one of my jobs is deciding if people got a mortgage.
Eric: Yeah. So for people who have no background in real estate, just elaborate on that for another moment more. So when you get a mortgage loan, if you’ve never gone through the process before, they look at your credit history and all these factors, your income. And then they look to see can you really afford this property; generally requiring a 20% down payment though sometimes you can do less and get private mortgage insurance.
With commercial properties, as Paula said, five units or more, a lot of those leniencies towards having less to put down and somewhere they might say, oh well your credit score’s not quite there. All that gets thrown out. If it’s an investment you have to really, really have your ducks in a row and a lot of cash.
Eric: End Eric elaboration, continue Paula story.
Paula: You know, I’m glad you brought that up because I realized that I just threw out the phrase ‘primary residence’ without actually explaining what that means and why that’s important.
So Eric, as you know, when you apply for a mortgage you can either apply for a mortgage for your primary residence, which means it’s the place that you’re personally going to live full time, the place where you sleep and wake up and live your day to day life.
Eric: The place you call home.
Paula: Exactly, exactly. You could also get a second home mortgage or you could get a mortgage for an investment property. Generally speaking a mortgage for either a second home or particularly for an investment property is generally speaking, going to have a higher interest rate. They’re gonna be a little harder to get. They’re gonna scrutinize you a little bit more. The quote-unquote, I don’t know if I wanna call it standard, but when you see the word mortgage the first thing that most people think about is actually the primary residence mortgage. So that’s the thing that, that’s the model that you’re used to. And that’s the benefit of buying a duplex or a triplex or a fourplex.
If you’re interested in starting out as a real estate investor is that you can buy one of those with the same ease as you would if you were just buying a house for yourself, a single family home for yourself.
Eric: One trick I’ve heard from, I know, our friends over at BiggerPockets, that’s a big real estate site, some of our friends over there they stories about how when they get they buy one property that they live in so it can be their primary residence and they can get that best mortgage rate.
But one thing that’s kind of cool down the road, if you move out and keep the property they don’t say, oh well you don’t live there anymore so your interest rate’s going up. Once the loan’s locked in, the loan’s locked in.
Eric: You can move but you have to actually move and live in another house. That’s a way to get a second property if you can afford it.
Eric: …while keeping the first one. You can do that, I think, up to 8 mortgages, is the rule that they cut you off at, something around there.
Paula: Depending on the banker, it’s either four or eight, between four to ten depending on who you’re talking to.
Eric: And if you are in a relationship with a spouse sometimes if you don’t get those mortgages as joint mortgages you could double that number because you can each have that mortgages. But then they look at your income separately. It gets complicated but….let’s bring it back down to that first one.
So you got a triplex and lived in there with a roommate and had two tenants. What was that experience like?
Paula: The good part about it is that, I would say that it’s like 90% good but then 10% there’s some pitfalls that you should be aware of. The 90% that was good is that if you are just starting out as a landlord or as a real estate investor, living in the property that you also manage, living in your investment property, it facilitates that learning curve and it really facilitates those training wheels because unless you really do your homework in advance which I probably should have done but I didn’t you know, unless you….for most people who are starting out you’re not gonna have any systems. And Eric, as you know, as anybody who’s ever run a business knows, your business becomes much, I don’t wanna say easier, but more streamlined once you have systems and processes in place.
Eric: It’s more efficient.
Paula: Exactly. It becomes more efficient. That’s exactly the word that I was looking for.
Eric: It’s my favorite business word – efficiency.
Paula: And so, if you’re a beginner real estate investor you’re not necessarily going to have those efficiencies in place. The fact that you will live in the property makes it kind of compensates for those inefficiencies because you don’t have to waste time commuting there. You’re already there. So if there’s anything that you need to deal with you’re there. You’re right there to keep an eye on it and to deal with it. And then over the course of doing that, that’s when you learn the landscape and you figure out what those systems and processes should be and it really kind of gel it in place as a business.
That’s what I like about it is that it gives you….it really facilitates that; that beginning period, that trial period.
Eric: Were there any big surprises? Did you ever get a call from your neighbor/tenant at three in the morning that a pipe broke or something like that?
Eric: Or was it generally a pretty good experience living and landlording in the same location?
Paula: One thing that I’ll say about it, the kind of the downside to it…I think there are two major downsides. One is that any little thing that goes wrong, if it’s something that’s so small that a tenant wouldn’t normally call their landlord about it, they would come to you. Especially if they’re your roommates. I didn’t really get this from the other units but our roommates would come to us for any little thing. The type of thing that you just wouldn’t call your landlord about.
Like for example, this one time my roommate was like, oh I think the dryer’s broken because it just doesn’t seem to be drying very well. And I walked over there and I looked at it and nobody had cleaned out the lint trap. And that was all there was to it. I was like, yeah you just need to clean out the lint trap.
Eric: It also helps prevent fires.
Paula: Yeah, exactly. That’s part of just what comes with the territory when your roommates are also your tenants. There’s a little bit of that expectation that you’re kind of like their 24-hour on call concierge or handyman. That is one of the drawbacks of it.
The other big drawback is that you get emotionally invested both in the property and in the tenants to a degree that can be a little bit unwise. You want to over-improve it beyond what would be justified because it’s your home and you feel emotionally attached to it so you wanna make it nicer that it “needs to be.”
And same with the tenants, as a business principle of course you should never rent to somebody whom you’re not willing to evict if it were necessary. If you have a tenant who is not paying rent or who’s breaking the rules, you don’t want to evict them but you should in the same way that a boss would never want to fire an employee but must always be willing to do so should the situation require it. The same is true for a landlord. The landlord obviously never want to evict a tenant but you need to be willing to do it should that be necessitated.
Eric: Some circumstances with financials and protecting your property. When you’re the landlord it’s your own money on the line.
Paula: Right. Exactly.
Eric: Totally understand that.
Paula: But the problem is when your tenants are your roommates or your building mates you are friends with them like you know, you watch Game of Thrones together, you go drinking together sometimes, you have meals together and so it becomes a very different relationship and it really crosses that boundary between professional and personal.
And that is actually in my opinion or in my five years of experience, because I ultimately ended living there for five years, that was the biggest drawback to…sounds like a ridiculous drawback like the drawback is that you make friends but yeah, that is the drawback, the drawback is that you make friends.
Eric: It makes sense. It’s hard in a lot of situations not just in the landlord situation you mentioned career. Any business relationship, you wanna be friends with the people you work with but at the same time business is business.
I used to do….a few jobs ago, I was in a treasury department doing big capital leases and we do this 20 million, 30 million dollar a month type of deals and then our vendors who we did the leases through, we were paying four, five percent interest to would come to us so excited wanna take us on trips and buy us these fancy dinners that we weren’t allowed which is I understand why that is, but those are the people that you want to become friends with and then you have to turn around the next month and say, ‘hey I need 5 basis points’, which 5 basis points doesn’t sound like a lot if you’re….for non-finance people that means .05%. A basis point is .01%. But when 5 basis points is ten million dollars, those are hard conversations. So definitely as a landlord, think walking up to your roommate and saying, hey I need my seven hundred bucks or my thousand bucks, it’s not always a fun situation.
Paula: Yeah, exactly. And I would have tenants, like building mate/tenants, who would for example want to use their security deposit for the final month’s rent. And I’d be like, no I’m sorry you can’t do that. And they’re like, ‘why are you planning on keeping my deposit?’ And I’d be like, no but your security deposit cannot be used as rent. And they would be, like to them they were like, ‘but I thought we were cool, I thought were friends.’
Eric: ‘You don’t trust me?’
Paula: Yeah, exactly. That is the drawback. That’s probably one of the things I was most excited about when I ultimately did move out of that triplex was hey cool now I can just be purely on a personal relationship, I’m sorry, purely on a business relationship with the people who live there.
Eric: Do you still own the triplex?
Paula: Of course, yes. In fact I own seven units now; Will and I both own, we own seven units together.
Eric: I know you’ve moved around the country a bit. There’s been some Colorado, there’s been some Georgia, there’s been some Nevada. Where is that triplex? When did you get started on your journey?
Paula: The triplex is located in Atlanta. All seven of my units are located in Atlanta. And that’s by design even though I personally have moved around a lot, I don’t want to have to…I have a business that is based somewhere which means that all of my team, my electrician, my plumbers, my property managers, everybody is based in one geographic location.
So if I were to start buying properties in multiple states I would have to have multiple contractors and suppliers in all of these different locations, meaning I would kind of have to reinvent the wheel every time I went to a different geographic locale.
So by concentrating all of my investments into one location or one metro area I know who my favorite window supplier is. I know who my favorite wholesale carpet supplier is. I don’t have to figure out who that’s going to be in a different state.
Eric: Do you have plans to buy any additional properties in the Atlanta area? Are you happy with what you have? Are you thinking about adding things where you are? It sounds like that’s a no. Do you have any plans for your real estate business?
Paula: You know it’s funny that you asked that. On my blog AffordAnything.com, I write a monthly income report, or I guess more accurately I should call it a cash flow report, where I showcase exactly how much money I brought in as gross income, how much I spent including mortgages, including debt servicing and then what the net cash flow left over is.
And when I started, if you read the monthly income reports, you’ll see that I typically bring in about $4000 to $5000 per month-ish in net cash flow after all expenses including PITI, Principal Interest Taxes and Insurance, on the mortgage. So that was a bit of a long tangent but where I was going with that is that when I started investing in real estate that was my goal. My goal was to be able to produce about $50000 per year in net passive cash flow from all of the real estate investments. And now I hit that goal and like any person who’s hit the goal that they originally intended I’m like, ha! I hit my goal!
Eric: What’s my next goal?
Paula: Yeah. What’s next? So I don’t know because I’ve reached the goal that I originally intended so now I guess I need to find a different goal.
Eric: That’s why we can be friends because we both have that goal-driven mentality. And every time I hit my goal I feel kind of lost when I hit a goal. I’m like, oh what am I gonna do now? It’s time to go to Europe or something. I don’t know why that’s always my fallback. I guess I should go to a trip to Europe.
For me when I hit my last goal that was what took me over to the point where I could go full time. Last year I said my goal is $40000 in revenue and I hit it and I turned to my wife and I said, wow I did it. What do we do now? And I quit my job.
I made quite a bit more than $40000 going forward because I walked away from quite a bit more than $40000.
I know that feeling. I’d love to maybe a year from now or so we can do a Paula Pant interview number 2 and see what you’ve decided.
Paula: Yeah, definitely. I would love to know that too.
Eric: I’m curious. We’re both curious together.
Paula: Yeah exactly.
Earning as an Airbnb Host
Eric: One thing that I know you had a couple, a great series of blog posts about was how you view some of these investment properties as airbnb investments to let people come in. If you’re not familiar with airbnb, it’s using a person’s hotel or someone’s apartment or house as a hotel. How did that work? Could you share something about how you decided to get into that and how that worked out?
Paula: Sure. So I travel a lot. I’ve been to 35 countries and when airbnb became popular I started, my initial experience was just as a guest. So I would travel and I’d stay in these airbnb places and of course as an entrepreneur naturally once I did that I began thinking ha I wonder if I could make money as an airbnb host.
Because I’m a landlord, because I have all these rental units I decided that I would use one of the units. And again I chose one of the units in my triplex so that I could be on site to manage. But I decided to use one of the units in the triplex as an airbnb unit and I committed to doing it for at least a year so that I could see what that experience would be like. And I did it very publicly. I documented everything and said alright this is how much money I would earn. I estimated that at the time I could have rented out that unit for about $1100 per month if it were on a long term 12 month lease. So I said alright if it were a long term 12 month lease I could probably rent it out for $1100 a month and my specific expenses, I wouldn’t have any specific expenses just for that unit per se, I would have the mortgage of course for the whole house and repairs and maintenance for the whole house but as an airbnb host you have an additional expenses that a landlord doesn’t have. You’ve got …
Eric: Toilet paper
Paula: Yeah exactly. You’ve got what I broadly lumped as consumables. So toilet paper, dish soap, moisturizing cream, dish detergent, all of those consumables. You’ve got cleaning fees because you have to hire a cleaner every time that there’s a turnover. I chose to do some additional landscaping beyond what I would have just done as a landlord so that when the guests arrive they had a very positive first impression. You pay additional taxes in the city of Atlanta which is where my property was. I had to pay an additional 16% sales and occupancy tax because of the fact that it was a short term less than 30 day duration of stay.
Eric: Not similar to the tax you’d pay in a hotel, right?
Paula: Exactly, exactly. A “hotel tax” which is that’s 8%. In Atlanta the way that broke down was its 8% sales tax and then an 8% occupancy tax.
Paula: So those were of the additional expenses that I incurred directly as a result of being an airbnb host that were kinda additional overhead that a landlord wouldn’t have. And so what I did was I just broke all of it down and I said, alright well here is… and I didn’t know if given all of those expenses and given a higher vacancy rates/lower occupancy would it be profitable to run this as an airbnb or would it possibly just be more profitable to stick it on a 12-month lease? That was the question that was in my head and I didn’t know the answer and so I thought let’s just run an experiment, let’s do it for a year and let’s see what happens.
So I did that and I documented it all at AffordAnything.com and the eventual outcome was I did earn more money as an airbnb host. I earned over the span of a year about an extra $7000 I believe as an airbnb host after all of those additional expenses. I netted an extra $7000.
But there was also a lot more work involved. Real estate at this point I systematized it to the point where it is very passive. And on my monthly income report I also document exactly how much time I spent. And it’s less than 5 hours a month for $5000.
Eric: That’s a pretty good return on your time invested.
Eric: I’ve got to get into this real estate game.
Paula: It didn’t start out that way but it just came as a, you know at this point…
Eric: Over time we build expertise and get those efficiencies.
Paula: Yeah and you build systems and you build checklists and you build processes. And that’s what allows you to make it passive and make it….and you build a team, of course, that handles a lot of the day to day work.
Real estate, I’ve gotten it to the point where traditional 12-month leases, I’ve gotten to a point where it’s very passive and very hands-off. And airbnb just could not be passive. It’s not. It’s a job. It’s not a passive investment.
And I think the best way to really explain the difference between the two is that when you are a landlord, you’re a buy and hold real estate investor. You’re in a commodities business in a sense. You are in the real estate industry. Whereas with airbnb, you’re in the hospitality industry. Hospitality is a very different industry than real estate.
Eric: Definitely. I could see that distinction. Did you try to build any systems around the airbnb thing or…
Paula: I did. My single biggest failure as an airbnb host was my inability to find a reliable person who could facilitate each turnover. If I could have found that, that person, that one key person, I think I could have it a lot more hands-off. But the problem is I couldn’t find that reliable…because you don’t just need a cleaner you need a general project manager. So for example, if a guest says, ‘hey I need more X’.
For example this guest checked in and on our listing we allow parties of up to, I think, four to stay at the unit but we only had one bed. So if more than two people were staying then we would bring out an air mattress for the additional third or fourth person. We had this one particular guest who booked, they made a reservation for two people and then they showed up as a party of three or four and so when they arrived they were like, we need an extra…we need that blowup mattress. But they didn’t tell us that in advance and this guest we happen to be out of town when they came so we didn’t have that mattress prepared for them.
For instances like that where you really need not just a cleaning person but a manager who can then say, oh okay well here I’ll bring you the mattress and I’ll air pump it and I’ll set it up. You need somebody who can do that. Someone who’s reliable and who’s also cost effective.
And I wasn’t able to find that. Now there are platforms that offer ‘digital management’ meaning that they will facilitate email like electronic correspondence with the guests but there is…digital management is not a problem like those companies are solving the wrong problem.
Eric: You need the person who’s on the ground who can be there and help when you need a person, sounds like.
Paula: Exactly. And so traditional vacation rental properties charge a premium that is so high that it’s not profitable for airbnb landlords. There’s not enough margin to pay a traditional vacation rental management company. So there’s not enough margin for that and the airbnb management industry hasn’t yet matured enough to the point where they have boots on the ground managers in…they may have those in major cities like New York or San Francisco but certainly in a city like Atlanta, that isn’t there yet.
I do think that industry will mature eventually so maybe a year from now or two years from now when we come back to this podcast it might be the case at that point there’s a, you know, that need has been filled but at this point there’s just no boots on the ground management that is available at a price point that makes sense for an airbnb host.
Eric: Everyone who’s listening who’s been trying to figure out how to make your first dollar on the side, Paula just gave you an idea. Write that down.
Eric: Become an airbnb manager. There is a way to make your first dollar.
Paula: Yeah. I would gladly pay for that.
Eric: So you’ve already got a customer too. It’s two for one. If you’re in Atlanta go to Afford Anything and hit the contact form. No, I’m kidding. I’m just kidding.
Developing Business Efficiencies
Eric: Change gears a little bit, you said you’ve travelled to 35 countries. You’ve been all over the world. How has your career and your business management incorporated into that and allowed for that? And what do you do when travelling to make sure everything still run alright?
Paula: Okay. So are you referring to real estate specifically or business as general?
Eric: I’m getting more general.
Eric: You can talk about your other businesses as you answer if you’d like.
Paula: Okay sure. I guess well I’ll start with real estate just because it’s what we’ve been talking about. The strategic reason that I chose buy and hold long term real estate investing as opposed to let’s say flipping houses or wholesaling or some other strategy is because buy and hold could be passive. You develop systems, you develop checklists, you develop processes and then you put a team in place that executes on that.
So I never get the 2 A.M. my-pipes-are-broken phone call because there are other people who get those calls. If that call were to happen it wouldn’t come to me as the owner. It would come to the people who are paid to get those calls.
Eric: Then I’m guessing at the end of the month you get a statement or they call you for permission if it’s a repair over a certain amount, something like that.
Paula: Exactly, yes. I have property managers, I’ve given them carte blanche, is that the term? I’ve basically given them a blank cheque to make any decision that is $600 or less without consulting me.
Eric: Okay. That type of arrangement is pretty common in property management.
Eric: I’m just sharing for other people who aren’t as familiar.
Paula: Yeah, exactly. And I have a contractor also I have been working with for a long time who…Actually in one of my most recent blog posts I actually took a screenshot of a text message that I sent him and posted it because I want people to see the type of relationship that I’ve built. I just sent him a text message. I knew that the tenant had been…we have a water heater that’s kinda old and the tenant had complained about some water heating issues.
And so I just sent him a text message. It took me two minutes where I said, hey I know that thing is old when you go there to check it out please check its age and its condition and you have my permission to make a judgement call as to whether or not it should be replaced. If you think that this thing is kind of on its last legs then let’s just proactively replace it with a new one. I’m not….and this goes back to what you and I were talking about earlier about not penny pinching. I am not gonna try to penny pinch and say, maybe we can squeeze another six months of life out of this water heater.
Eric: Then you’ll end up in a stressful situation, right?
Paula: Exactly, exactly. So why try to penny pinch and eek another six months or a year out of something that’s on its last legs. Like, no. Be proactive, replace the darn thing and then you’re never gonna have to worry about it.
I very much designed my business in such a way that I’m proactive about repairs and I’m proactive about maintenance. And I have a really good team in place and as a
Favorite Travel Destinations
Eric: Do you have any favorite place you’ve travelled to? I know it’s hard to have a favorite but if you had to pick one.
Paula: You know I guess I have favorites that are category specific. So if it was like favorite major city or favorite for the beach or favorite for meeting locals.
Eric: Let’s hear them. Let’s hear all those three.
Paula: Okay. Favorite for meeting locals is Myanmar.
Eric: My sister will be there in two weeks so I will tell her that.
Paula: Oh, excellent! So Myanmar, for the listeners who aren’t familiar, it’s also known as Burma and it’s not heavily touristed yet. I think it’s going to become that way.
Eric: I think it’s gonna follow in the footsteps of Thailand and Vietnam and Cambodia and Laos.
Paula: Yeah. There are a lot of tourists who would do the South East Asia circuit so they will travel to Thailand, Laos, Vietnam, Cambodia. They’ll do that loop.
Eric: My sister’s doing Thailand and pegged on Myanmar as a second location. She’s not doing the others.
Paula: Oh nice, nice. Yeah. So Myanmar is becoming more popular but as of now it’s not that heavily touristed which means you still get a more authentic experience there. You’re not going to like, you don’t feel like you’re in Disneyland.
Eric: It’s a Southeast Asia Disney.
Paula: Exactly, exactly. Also because of all of the British influence there, a lot of Burmese people speak English so you’re kinda off the beaten path in a Southeast Asian country where you can speak English with a lot people and therefore can connect with them on like a human to human level or a person to person level.
Eric: It’s like the opposite of Paris. Sorry, Paris.
Paula: You know I was actually surprised by the number of people I found in France who spoke English. I think maybe because I had been hearing my whole life that I wouldn’t find people so my expectation was kind of that I would find nobody so then any time I found somebody who was friendly and willing to speak English I was like, ‘Wow!’
Eric: You see when I went to Paris, I found a bunch of people who I’m sure spoke English and just didn’t want to with the tourists. That was the impression I got.
Anyway enough on Paris. So Myanmar is your favorite place to connect with the people. Your favorite beach?
Paula: Okay. If you go to Indonesia there is an island called Flores. You go to that island and off of the coast of Flores there’s a kind of coastal town called Labuan Bajo, take a boat out to the place called Seraya Island. It is way off the beaten path because most people who are going to Indonesia would go to Jakarta or they’ll go to Bali. Those are kind of the more heavily touristed spots.
Just by virtue of going to Flores you’re already kind of off the beaten path and then when you go to an island off the coast of Flores, you’re really in the middle of nowhere. And the beach is gorgeous. I mean it is super remote so don’t go there if you looking for like MTV’s Spring Break. Go there if you just wanted outdoor natural, natural world beach experience.
Eric: Sounds very serene.
Paula: Yeah, it is. It’s beautiful.
Eric: I once went to… I was on a cruise with my family and we stopped in Tortola which is, it’s a pretty big island. I kept thinking Pirates of the Caribbean which they go to Tortuga which I don’t even think is a real place.
We went to Tortola and then took a shuttle boat, I don’t know what you call it, a boat to Virgin Gorda which is, it’s a little ways away I don’t remember, a half hour or hour or so on the boat. Then we took a, it felt very unsafe, uncovered, it was like riding the back of a big army truck or something all the way across the island. That was actually the first place I’d ever been in a car driving on the left side of the road which is kind of fun. It’s a British island.
And on the far side of Virgin Gorda they took us to this super remote beach that there were some tourists and then out guide if you want the really good beach you go take that path and be back here in four hours or whatever.
We took that path and went on quite a hike and ended up at this place there were maybe one or two other people in the entire beach outside of the four of us and my family and same kind of experience. It was just fantastic.
And then I later found out that they shot Sports Illustrated swimsuit issues there. I was like, ‘Oh man I came on the wrong day.’
So the other one you said, favorite beaches, favorite place to meet people and favorite city. Favorite big city?
Paula: Oh man. Jeez I don’t know if I should have said that because this one, I’m gonna have to throw several cities in here.
Eric: Okay, let’s do it.
Paula: Okay. I actually really like Bangkok. I know not a lot of…I haven’t heard many people who say that because a lot of people would go to Thailand and then leave Bangkok right away but I actually really liked it. It was large, there was lots of stuff going on. There’s this beautiful park called Lumpini Park that’s right there in the center and it’s just, that was my…it’s amazing.
If you do go to Thailand and you have the time, don’t just piece out right away. Take the time. Go explore Bangkok because it has a lot to offer.
Eric: Every time I hear the word Bangkok I think, you know that old 80’s song? One Night in Bangkok?
Paula: Oh no. I don’t think I know that.
Eric: There was a musical called Chess. And it was a song in the musical Chess and the only one that, only song that probably made its own. People have heard of. When we hang up check that song out its super fun and you’ll get a chuckle out of it. It’ so 80’s.
Paula: Okay. Cool.
Eric: It goes, ‘one night in Bangkok and….’ People don’t wanna hear me sing. They wanna hear you talk so let’s talk some more.
So next favorite big city?
Paula: So I really enjoyed Paris, of course. It’s beautiful it’s like a fairy tale.
Eric: My favorite thing in Paris, as hard of the time as I give for the language barrier I had there, I went to a few… you know everyone raves about The Louvre, and I think Louvre was beautiful and amazing on its own but the Musee d’Orsay which is right next to The Louvre, it’s a big tourist museum also but a lot less than The Louvre. If you go into to the Musee d’Orsay and you have to find your way all the way to the very top which the Musee d’Orsay is an old train station, so it’s a really long cool building, and the whole top level is the greatest and most wonderful impressionist art exhibit I’ve ever seen in my life. I was just floored. It was like, you turn a corner and there’s like, ‘oh there’s another Monet’, ‘oh there’s another Renoir’, ‘oh there’s Whistler’s Mother, I thought that was American.’ I had a little proud moment. Haha! In your French art museum and there’s an American painting.
Paula: Speaking of art museums, the Van Gogh museum in Amsterdam…
Eric: It was closed when I was in Amsterdam.
Eric: It was the same trip I went to Paris. The red light district was open and running but the Van Gogh museum was not.
Paula: It is worth going back just for that. I was never a Van Gogh fan until I went to that museum and now I’m just obsessed.
Eric: His work is just fantastic.
Eric: I interrupted you mid-Paris. Keep going.
Paula: Oh yeah. Favorite cities were at least cities that I enjoy and appreciate. Bangkok, Pairs, Tokyo is really cool.
Eric: It’s really high on my list. I have a friend who was just there last week. He was telling me over the weekend how he was raving about how great Tokyo is. He says, I got to with that sushi.
Paula: I’ve actually been wanting to go back to japan because Japan was the first foreign country that I ever went to without my parents. So when I was 18, it was the first foreign country that I went to as an adult by myself and it was really the country that sparked my love for travel.
Because prior to going to Japan my whole life I had, I mentioned that my family were Nepalese immigrants and so when I was a child, I grew up in Ohio, and I would spend my school years in Ohio and then every other summer/every third summer I would go back to Nepal. I realized when I say that it sounds very worldly but really what it meant was that my worldview was no bigger than Ohio and Nepal. And I was like, oh the whole world must just be these two places.
Eric: Nepalese food is amazing. A lot of people have never had Nepalese food. Anyone who’s listening, if you ever see Himalayan or Nepalese food go eat it. Trust me. Thank me later. It’s fantastic. It’s like the best of Chinese food and the best of Indian food had a baby and it’s called Nepalese food.
Paula: Nice. That’s the best description I’ve ever heard.
Eric: Like soy sauce and curry – two of my favorite flavors unite. Everything I ate when I’ve been to Nepalese places, is always just, I’ve never been unhappy.
Paula: Nice, nice.
Eric: That’s my jealousy of all your time in like, if I were in Kathmandu I would just go eat everything. I’d do more than that but I’d have to eat everything.
Paula: Nice, nice. Cool. Alright so yeah, so Paris, Bangkok, Tokyo and actually if I can name one more, the old city of Jerusalem.
Eric: You know I used to live there for a short bit I spent month in the old city. I spent six months in Jerusalem and another separate trip, a month in the old city. I spent probably about a year in Israel altogether.
Paula: Nice, nice. You can talk more about it than I can because I was just there for, I was only in Jerusalem for a few days but I’ve just never seen anything like it. There’s just so much there.
Eric: There’s a lot to take in in a very small place. A lot of people don’t realize how small Israel is and how small Jerusalem is. It gets more than its fair share of news coverage, forty five times over every day but the city of Jerusalem is probably two, three million people. It’s no bigger than Portland where I live. It’s a lot smaller than Atlanta and the whole state is smaller than New Jersey or the whole country of Israel is smaller than New Jersey.
Yeah, there’s so much history. I go to Israel. I was trying to go every other year but when you get married and have kids that things seems to get longer and longer in between but it’s …now you brought up a soft spot in my heart, too.
Paula: Yeah, yeah. I really enjoyed it. I really wanna go back.
Eric: So next time you go give me ring first and I’ll tell you some fun spots to stop in that are a little more off the beaten path.
Eric: And that goes to any listener, too. Shoot me an email and I’m always happy to tell you anything Israel questions or anywhere I’ve gone.
Eric: So before we go I wanna end talking about Afford Anything. We’ve talked a lot about real estate and travel and Afford Anything, that’s your baby and that’s… your face is front and center on the website online, that’s your thing.
Can you talk a little bit the Genesis of that and where you think it’s going in the future?
Paula: Sure, absolutely. So when I started Afford Anything I started it in 2011. And it was right after I had a…let me back up a little bit. So from 2008 to 2010, in 2008 I quit my job and I had at that point about $25000 in savings that it had taken me three years to build those savings. I was working as a newspaper reporter. My starting salary was $21000 a year. And by the time I quit that job I was at a salary of $31000 a year.
So I wasn’t making very much but I was super committed to saving money because I really wanted to go travel. During the evenings and weekends I would work side jobs and saved every dime after taxes. Every single penny of my after tax side hustle income money was purely going into a travel fund.
Over time, I built it up to $25000 and then I quit my job and just went and travelled for two years mostly staying in countries where the dollar exchange rate really worked in my favor. Instead of going to Europe at that time I was in Cambodia, I was in places where the US dollar really meant something.
Eric: Oh yeah
Paula: And so I did that for two years and I came back to the US and so many people, every time I would talk about it everyone would say, “I would love to do that but I can’t afford it.” That was the mantra that I kept hearing over and over.
Being a person who was making $31000 at the job that she had quit, that just didn’t, I just didn’t believe that. I didn’t buy that as an excuse. Because for the majority of middle class people that I was talking to, you know people who get pedicures and get their hair highlighted and eat at restaurants, you can afford it. And so I started Afford Anything…
Eric: You just have to make it a priority.
Paula: Exactly, exactly. The genesis of the blog was the idea that you can afford anything you just can’t afford everything. And so it began really as a blog about ruthless prioritization, decide what you value most and spend your money accordingly. So if travel happens to be thing that you value then make your other life decisions based on that.
That was the initial idea behind it. And over time as I myself have grown over the past five years, the blog has also kind of shifted so while that ruthless prioritization is still a major theme, I now also talk a lot about how that same concept applies to the way the way that you spend your time and energy. I tell people don’t devote loads and loads of time to clipping coupons and chasing buy one get one deals because your time and your energy are your most valuable assets. I mean, time is more valuable than money.
Eric: I totally, totally agree.
Paula: Exactly, exactly. Be very prudent. Be very careful about how you spend that time and think about it in terms of return on investment, you know. And of course, when you’re talking about time you can’t work for a 160 hours a week and wouldn’t tell anybody that they should. I’m certainly not…
Eric: I’ve done it for a couple of weeks ever and I don’t recommend it.
Paula: Right, yeah. So I’m not telling people, oh you should spend all of your time making money. That’s not what I mean by the return on investment. What I mean is, you know, if you are only going to spend forty hours a week working, because other non-financial aspects of your life like family or travel or whatever, you know, whatever it is that you value are also important. So if you’re only going to spend 40 hours a week working or being productive how are you gonna allocate those hours? And how are you gonna make them efficient? That’s a big part of what I talk about at Afford Anything is that kind of ruthless prioritization and how that seeps into every aspect of your life.
Eric: Great. Well I hope that was enough of a nail biter keeping people on the edge of their seat, they go and type in AffordAnything.com and check out everything Paula’s up to. It’s really a great site and I have to say a very good looking site too as someone who may been involved in building it. Paula is, everything she says on that site is really great and it’s genuine and honest just like this discussion. It really hits home and we all have a lot we can learn from Paula and everything she’s done.
So thank you so so much, Paula for being here, for being a part of it, for sharing your story. Aside from typing in AffordAnything.com into a browser, where else can people find you if they wanna connect with you?
Paula: That’s the main one. So I would encourage listeners to go to AffordAnything.com and sign up for my email list, which is free, and that way we can stay in touch. You can also find me on Twitter @AffordAnything or facebook.com/AffordAnything.
Eric: Well thank you so much everyone. Really do go follow up, check out Paula’s stuff and it’s always great to have another friend here on the podcast.
As always everyone, thank you so much for taking the time to sit with us, for listening to us. I was drinking a Sake, I know I didn’t say at the beginning to hit pause and drink your beer with me like I usually do.
Paula: Oh, no but that’s perfect for the Japan conversation.
Eric: That’s true. It was totally…I had just finished my Sake as we were talking about Tokyo. It was delicious and now I’m in the mood, now I feel like I need to go, there’s a non-stop from PDX to Tokyo so maybe I need to hop on that before I leave.
Paula: I think so.
Eric: Well wherever our travels may take us I hope everyone enjoyed this. And we’ll all be together again for the next one. And until next time, stay profitable.
This post was updated on June 24, 2019.