Hey, ba fam, it's Mandy Money here aka Mandra Listen, y'all. I want this to be the year when you finally learn how to be the badass negotiator that you have always wanted to be. Whether you are plucking up your courage and trying to ask for a raise where you currently work, or you are ready to negotiate a damn good, juicy offer from a new job, I am here for you. I have got a five step signature salary negotiation strategy that I only teach in my free virtual Nail Your
Negotiation Masterclass. I've got one coming up in just a couple of weeks. You can sign up and save your spot at Nail Your Negotiation dot Com. That's Nail your Negotiation dot Com. I can't wait to see y'all there.
It's time for the ba qa A the ba qa?
What to say?
The ba qa with Tiffin A the ba qa.
There's no man today.
Instead, we are making it a happy money, happy life week. Okay, We've got my friend Jason V. Tug in the stew. That's the studio for those of you who are not as cool. If you did not listen to the regular Brown Ambition episode on Wednesday with Jason.
It is amazing. We do breath work.
We talk about his new book, Happy Money, Happy Life, which is available at Happy Money, haappylifebook dot com. It is an amazing, amazing, amazing episode. So go listen. I asked Jason stand the stew Jason and help me to answer some finance questions and Jason agreed.
Thanks Jason, Oh, thank you so much. This is exciting.
Let's do this well real quick because I forgot. I'm like, if you didn't listen, you might not know who Jason is.
So.
Jason is a wellness advocate and best selling New York Times reviewed author of two books. He's the founder of Frugal phrga L and is an award winning creator of the Road to Financial Wellness product project. Jason is a certified Diversity, Equity and Inclusion Expert, holds the Psychology of Financial plays in certification, and is a certified Yoga instructor and breathwork specialist. Jason focuses on holistic a holistic approach where money isn't the goal, but money is a.
Tool to help achieve the goal.
He's been featured on the TED Next Stage, Y'ahoo Finance for Forbes, Business Insider, New York Times, to name a few. So we have a real financial educator, but one a man after my own heart. Not just personal finance, but holistic wellness in the room. So okay, first question, Jason, that came into the room.
Let me see. Oh my gosh, Okay, this is from Paula. Hey, Paula, straight up, now tell me if you really want to love me. Some of y'all don't know. That's Paul Abdul.
You too young, Hey, ladies and Jason, I'm tackling my debt and looking to start investing soon. I work for a public agency that offers a four fifty seven B which is basically like and an retirement account at her job. It's a nonprofit retirement account. Or I'm guessing a public agency retirement account and have been contributing a small amount each paid period. Would you recommend contributing to this plan or opening up a wroth ir to contribute to Thank you so much for your insight.
What do you say, Jason?
Well, I think when it comes to retirement planning, I'm a big believer in taking advantage of your employer accounts, especially if there is a match an employer match, and so she mentioned that she's contributing a small amount and already thinking about the roth IRA. I think that's that's a good line of thinking. But I want you to maximize your contribution to that employer plan first before you start adding into in terms of like your your goals.
And that has a lot to do with the employer match, and that has a lot to do with also lowering your potential tax liabilities. And so those are two things that I would suggest.
All right, So I am on like especially with I'll say this that, like, if you have an employer program, which is awesome, to Jason's point, if you contribute to your employer's retirement account. Let's just say you have one hundred thousand dollars, right, and you contribute I don't know, six thousand. Great, So then the government says you didn't make a hundred thousand, right Jason. It says you made one hundred thousand minus six, so you made ninety four thousand.
That's what we're taxing you on.
So that's what Jason means about that you get tax like, you get a tax break now because when you contribute, you get the tax break now. And then when you go to pull money out later when you're sixty five and a half plus, you will pay taxes on the back end, but not on the front end. Right, But with a Jason right, that's the opposite correct that you don't get the tax break now because you basically put in money with the roth ira now after tax money,
she already paid taxes on it. But when you go to pull out your WROTH when you're older, then, because you pay taxes up front, you don't have to pay taxes on what you contributed or the growth of that. You know, like let's just say you put in one hundred thousand off your lifetime, it grew to two hundred thousand, you don't have to pay taxes on that two hundred thousand. So there's no right or wrong, and that like contribute could tribute because you know, to Jason's point, it's almost
like a seesaw. You want to get some tax breaks now, but you also want to get some tax breaks later. So typically what I say is that, like, if you have an employer account, get your match on and if you are close to maxing out what you can technically make to contribute, because everyone can't contribute to a roth IRA.
I think it was like one hundred and thirty nine thousand dollars.
I'm not sure what the max is right now, Like, you can't make over a certain amount of money and contribute to a roth iray. There's backdoor ross, but we're just talking plain regular personal finance that up to a
certain amount of money. They don't want individuals contributing to a roth ira, you know, So if you are like at one hundred thousand, I might be seesaw because you could have both at the same time, contributing to my employer account but then also contributing to like my roth ira to make sure that, like you know, before it's too late for me to max.
Out on my roth IRA. So either way, go ahead.
To Jason's Yeah, no, that's a good point because you need there's a strategy around that. So you want to make sure that you're employing kind of like before the tax before taxes and after taxes, and there's there's a lot of nuances when it comes to that. But I think you're at the point where if you're thinking about roth iras, look at maximizing again to the point of
where your employer matches. So you want you want to contribute there and then also look at at the roth Iray piece of it, because you do what you do, want to mix a mixture on that as well, and so that is that's that's what I've done in the past in terms of maximizing my four to one k contribution in addition to contributing to a roth iray. Because if you're roth ira your six thousand for this year grows to one hundred thousand thirty forty years later. You
don't pay taxes anymore. I mean, like, how amazing is that? And that's the opposite is true for the four to one k that's pretax or the four fifty seven that's pre tax. So it's like it's it's those things like really figuring out what your goals are and understanding that that there is no right answer. It's just how are you looking at the tax strategy and the impact to your page.
So yeah, the only wrong answer is to not contribute. We don't want that, you know, But.
Yeah, so we are up that a little bit to a lot more, okay, Paula. So if you are enjoying this ba qa with my friend Jason V. Tug of Happy Money, Happy Life, the book. We're gonna throw a break real quick and stay here because we'll be right back.
And we're back, and we're Brown. So we're in the studio with Jason V.
Tug of Happy Money, Happy Life and his company Frugal Financial Educator but wholeness Educator overall. I have Jason and the stew and I asked him to stay and answer some questions with y'all, and so we're gonna take another one. If you actually want your question answered, you can go to Brownhambis podcast dot com and click like to Ask Us Anything button and you know, send us a message.
That way, you can slip into our DMS on It's the BA podcast I Believe on Twitter and brand Ambision podcast on Instagram and slip into the DM and ask questions. That way. You can give us your real name, you can give us a fighting name, you can say anonymous, and we will honor all of that. But ask your personal finance questions, your career questions, and your business questions. We will answer all of those, all right, So we're going to take another money question. Hi, Tiffany, Mandy, and Jason.
The Jason is silent, but I'm putting it in there.
I wanted to get.
Your input on the idea of using equity from my home to purchase a property for the intent of long term rental. What are your Recommendationonson, Jason, You've owned some like have you owned some rental property?
I have not owned rental property, but I do read up on it, and I do have family members that have rental property, and this question comes up all the time. So hearing this, I think I have a viewpoint on it. So one, having equity in your property, that's a great thing. And so you definitely want to do the calculations to make sure that the investment that you're making with this
rental property is going to pan out for you. And so if you're looking at tapping the equity of your primary residence, your home, your space for a rental, you want to make sure that it will eventually lead to a positive financial result. And I have seen many situations where it does not. Then all of a sudden, it
endangers your primary residence. And so the other answer I would say is that it does make sense because if you're looking at you don't have the down payment or it's a sizable equity, and you could buy this rental
property in cash. There is a lot of upside when it comes to that, and again it depends on the amount that you're looking to borrow against your home and where this property is, and if you've done the homework in terms of like what the return would be when you're renting this property out.
Okay, so I consider this. So I have not done this, but I consider this. During the pandemic, when the home prices were Christie, I was going to do a cash out ref five, right, is that what's called cash back, cash out, cash out recap. So that's basically when you refinanced your home, almost like buying your home from yourself, and then take out the excess money.
They won't let you take out all of it. They're like, ur you tried it. I think they let you take up to sixty percent or something like that.
Yeah, you know, there's a percentage.
So so my home was paid off.
So basically I would go from no mortgage to a mortgage and then I was going to use that money to purchase another property, which that's not unwise, but to Jason's point, it would be unwise if you're purchasing a property that you're not sure am I going to get a positive cash flow because one, now your mortgage is going to be more expensive if you didn't have or you're going to have a new mortgage if you didn't
have one before. And then on top of that, there's this new property that has to pay for itself.
And let's just say you don't get a.
Tenant right away, and so you're gonna be paying basically two mortgages until you figure it out, you know so, but it is one of the benefits of home ownership is the ability to do so.
A home can be used as leverage.
So I want you to think of a lever as something that helps to open something much bigger than itself.
Like a doorknob is a lever to a door. You know, Like a door is huge.
And oftentimes very heavy, but this little doorknob, you know, you can use this doorknob to open this door. And a home can do that too, because when you own a home, you know, you actually you know, you can put down three and a half percent on one hundred thousand dollars property.
That's thirty five hundred dollars.
So that's this little lever to get access to all this money, which can be good but also dangerous. If you're not wise and so you know, to Jason's point, then you know if you're going to do this, which is it can certainly be a very wise tool to say I want access to another property and I can use my current property to do so. But you want to make sure that you know that you want do more research on what.
It is to rent. There are numbers, like calculations.
One of my friends, Christina is like a big investor in Saint Louis, and she's got like this number calculation that she does to see if this rental property is going to make financial sense and when one year, two year, five years, you know what I mean. And so you want to make sure that you're not just saying I think this has a good idea.
Let me move forward.
That you've done the numbers on the new property and it offsets the cost of the other property. You know, so you know, honestly, Paula, this is Paula. I can't remember this anonymous I think, I think, yeah, it's anonymous, anonymous, So honestly anonymous, I think that you know it's not a bad idea as long as you are doing running your numbers. That's with all things investing you have to run your number, run your numbers, fun the numbers. Let's
just take one quick last question, real quick. This is just a question for me for Jason. So, Jason, you left corporate. We get this a lot. You left corporate and you went to start your business. Give us maybe just a tip or two that for those people who are like especially now with so many people losing your jobs in the tech sector and it's just feeling so overwhelming, and many of them maybe they have this like business idea,
they're not really sure. What are some things that before they take the leak or unfortunately before they get let go.
What should people do to.
Prepare emotion only mentally, but also financially for the shift from working in corporate America to potentially working for themselves.
Yeah.
I love this question because the first thing we'll tackle the financial aspect of it. You need a emergency fund or what I call the freedom fund. You need a fund that can cover six to nine months of your basic living expenses. So this doesn't mean six to nine months of your current income. This is six to nine months of your basic living expenses, housing, food, medicine, and
things like that. You need that in order for you to kind of just function and society and also for you not to have to run to find the next job. So for me, when I quit corporate, I actually had a sizeable fund and that had a lot to do with me not buying property. Instead of me putting in the down payment in the home, I had access money that I could use towards paying my monthly obligations. And so that is financially, you need to be set six to nine months of your basic living expense is saved
a way, not invested in the market. I'm one of those old school you need accessible liquid cash and that because emergencies happen right to not a matter of if when they happen, and if you are let go or if there are changes in your situation, you need access
to money to help you pay for these necessities. Now, preparing mentally and emotionally, I mean become leaving the corporate world and pursuing your entrepreneur goals, It's going to take a mental toll on you, and that has a lot to do with you like finally believing in yourself enough to kind of make this leap, and then when things doesn't go the way you've envisioned it, well, that's going to take a mental toll, and that's going to affect
your ability to kind of see the opportunities that presents itself. So one for anyone who is experiencing this transition, whether forced or chosen, I want you to prepare yourself mentally by what reassessing reevaluating your current skill set. That's kind of one of the key things. That's kind of like you're looking at your resume and going, how can I And this is interesting, right because I want to be an entrepreneur. Why do I need to redo my resume? Well,
you need to understand your skill set. You need to understand your experiences because you're gonna you're gonna uncover places and gaps and then you may now want to tap into your network of friends and entrepreneurs to help you fill in those gaps. So work on that and that's going to help you feel better about making this shift.
It's going to help you feel better about going after for the next job if you're looking at maintain you going from one job to the next stepending on your situation and emotionally too, I mean, allow yourself if you've been let go and there's a lot of people who been let go, and a lot of the people who are making the leaps on the base on their own faith.
Allow yourself the space and grace and time to grieve losing the job or shifting from being so career focused in the corporate world into the entrepreneurial purposeful path, because there is a grieving period when it comes to that, because our identity is so tied to it. So I want you to take a moment to rest, to reset, and let your body kind of readjust to the new
normal that you're trying to create. Because what I find is that people who have been laid off and they may get a severance package, or they may have unemployment benefits or a savings account, they jump right into a new job, or they jump right into entrepreneurship, and then they're feeling the same strains. They're feeling the same constraints, and so you need to take a moment of pause. So that's kind of one thing for your mental health,
your emotional being. Take a moment of pause. And typically that's doable because we have a financial safety net.
I love that, Jason, you have the best if you are wanting to holistically navigate your personal finances, Jason has this awesome book, Happy Money, Happy Life, where he guides us through how to do so through the lens of these eight dimensions.
Can you mention those eight dimensions, Jason?
Yeah, the eight happy dimensions their mental, emotional, physical, spiritual, social, environmental, occupational, and financial.
So Jason walks us through those dimensions and through the lens of personal finance. It's called Happy Money, Happy Life. You can purchase it at Happy Money, happylifebook dot com. Jason's awesome. If you have not listened to the prior episode, do it. That's your homework.
Jason. Where can they find you?
You know, we know where we can find your book, but where can they find you if they want to follow you or connect with you?
Yeah, you can find me on Instagram and Twitter. I'm active in those spaces at Jason v tug and also on LinkedIn awesome.
V tug, b I t ug.
His stuff will be the link to the book, Happy Money, happylifebook dot com and Jason's especially his Instagram where he's really active.
They'll be in the show and notes.
So give a hollefo dollar honey. Thank you, Jason, You're really awesome. Thank you for thank you for me and my friend.
Well, thank you so much. I'm honored to be your friends of me.
I was gonna say thank you for being a friend travel around the world.
Is that Golden Girl though, that's not going back again. But the hottest to.
You a pal and a hold that is Golden Girls. I remember I tried to put Mandy up on Golden Girls. She was like, who, I said, girl, get off my line? Maybe like Golden Girls.
I said, Golden Browns. Okay, the Golden Browns.
Golden Broth. Thanks again, Jason, BYBA fan. We will see you next week.
Hey, Ba fam, we could not do this show without your support or the support of our team behind the scenes. The Brown Emission podcast is produced by Cumulus Podcast Network. It's edited by the wonderful Emani Crosby and produced by Tanya Bustos. Dennis Stimplinsky is our in house tech guru, and I am Bandy Woodard Santos your co host, and I will see y'all next week.