Listen on the Podcast

Do you have IRS problems or maybe worried that your tax situation may not be as good as you thought?

Or, are you a victim of identity theft and the IRS is telling you owe money you really don’t owe?

Today on the show I am bringing on IRS and tax expert Ben Golden to walk us through his own personal story with IRS troubles and what he learned along the way.

First off — you’re not alone. Whether you owe the IRS or you are trying to prove you don’t owe the IRS, what are your options?

What can you do right now?

What should you be doing right now?

And what are your rights when it comes to managing a situation with the IRS?

I will be asking our IRS expert Ben Golden all of this and more when it comes to dealing with the IRS.

Thanks so much for listening to the show and if you feel the content of this podcast was helpful, please subscribe to the podcast where you listen and leave a review!

Today’s show was brought to you by OneAZ Credit Union — my very own credit union I have been proud a member of since 2011. 

If you live in Arizona and are looking for a large credit union with a local, customer-focused feel for your personal or business banking needs, look no further than OneAZ Credit Union.

Listen on the Podcast

When it comes to driving a new car, you have three basic options. You can purchase the car outright, you can purchase the car through an auto loan or you can lease the car. But, with the average price of new cars hitting $40,857 in January 2021, most people don’t have the ability to plop down the whopping forty grand for a new car.

Therefore, car shoppers are driving off the car lot with either an auto loan or a lease. But before you start shopping around for your next car, it’s important to understand the difference between the two options so you make the best decision.

Car Lease vs Auto Loan?

The simplest way to separate an auto loan and a lease is by understanding that an auto lease allows you to DRIVE the new car, whereas an auto loan allows you to DRIVE and BUY the car.

Of course there’s a lot more to it and to tell the whole story let’s start off with the auto loan.

The Auto Loan Payment

Since an auto loan is created to buy the vehicle, the loan payment is based on the following:

• Vehicle Price
• Sales Tax 
• Additional Fees
• Down Payment
• Interest Rate (APR)
• Loan Term

Let’s break down an example of a typical auto loan and then the auto loan payment:

The Auto Loan Breakdown

Add the following together:

• Vehicle Price = $40,000
• Fees at Closing = $1,500
• Taxes = $3596

Subtract Down Payment

• Down Payment (20%) = $8,000

Total Loan Amount: $37,069

Next the Monthly Loan Payment

After taking the auto loan makeup from above, we will assume a 4% APR over a 60-month loan term.

• Monthly Payment: $693
• Total Interest: $3,891

Total Cost Including Interest: $48,960

The Lease Payment

The factors that make up a lease payment are different than an auto loan. If you remember, you make a monthly lease payment to drive the vehicle and a monthly car payment to drive and own the vehicle.

Therefore, the total monthly lease payment will be made up of three different monthly payments:

1. The monthly depreciation
2. The monthly interest
3. The monthly taxes

The Auto Lease Breakdown

To start off with the monthly car lease payment, let’s first begin with the monthly depreciation.

The Depreciation

The value of the vehicle that is lost during the lease term is known as the depreciation.

To calculate, simply subtract the residual value by the capitalized cost.

Lease Terms: The capitalized cost is the cost of the vehicle minus the down payment. The residual value is the value of the car at the end of the lease term.

To get the monthly depreciation amount, divide the difference between the capitalized cost and the residual value, by the months in the lease term.

(Capitalized Cost — Residual Value) ÷ Lease Term in Months

($37,000 — $23,000)  ÷ 36 months = $389 monthly depreciation

The Interest

When factoring the interest, a car lease uses something different than what you might be used to. Instead of an interest rate expressed as a percentage, the lease payment uses a money factor.

Money Factor: The money factor is used to calculate the total interest on the lease. You can convert the money factor into the actual percentage by multiplying the money factor by 2,400.

To get the interest payment, you will need to add the capitalized cost and the residual value together. Then simply multiply by that by the moneyh factor to get the monthly interest amount.

(Capitalized Cost + Residual Value) X Money Factor = Monthly Interest Payment

($37,000 + $23,000) X 0.00167 = $100

Note: In the above example, you can get the interest rate of 4% by multiplying the money factor (0.00167) by 2,400.

The Taxes

Lastly, we will need to add in the taxes. This will vary depending on where you live, but for this example we will use a tax rate of 8.6% (Phoenix, Arizona).

To get the monthly tax payment, you will need to add together the monthly depreciation and the monthly interest amount. Then simply multiply this by the tax rate to get the monthly tax amount.

(Monthly Depreciation + Interest) X Local Sales Tax Rate = Monthly Tax Payment

($389 + $100) X 8.6% = $42

The Total Lease Payment

Now that we have figured out the three separate payments, lets add them together to get the total lease payment.

• Monthly Depreciation: $389
• Monthly Interest: $100
• Monthly Taxes: $42

Total Monthly Lease Payment: $531

The Verdict?

The reason drivers lease cars is because they compare only the initial down payment and the monthly payment. When doing this, the lease will appear to be the automatic winner.

However, there are some downsides to leasing a car that not many realize.

The biggest drawback is you never actually own a car. This means you always have a monthly payment.

Another drawback to leasing is at the end of the lease there are added fees that can sneak up on you. These fees include excessive mileage fees, wear and tear fees, and dipsostion fees.

Disposition Fee: This is a fee charged by the lease owner when you return the vehicle. This fee covers costs for cleaning, reconditioning and getting your leased vehicle ready to sell. 

Generally speaking, the most expensive way to drive a vehicle is through an auto lease. As you can see, the majority of the lease payment is made up of the depreciation and this is because depreciation happens rapidly through the first 3-4 years of the car’s lifespan and then levels out.

When leasing a new car, you are paying the highest depreciation amount and once you’re done with the vehicle, you will return it without having any ownership of the vehicle.

In the end, the lease owner comes out ahead by having the leasee pay down the majority of the depreciation and then selling the vehicle after you are done with it.

I leave you with this: “Poor people tend to ask how much now and how much per month. Wealthy people tend to just ask how much?”

Thanks so much for listening to the show and if you feel the content of this podcast was helpful, please subscribe to the podcast where you listen and leave a review!

Today’s show was brought to you by OneAZ Credit Union — my very own credit union I have been proud a member of since 2011. 

If you live in Arizona and are looking for a large credit union with a local, customer-focused feel for your personal or business banking needs, look no further than OneAZ Credit Union.

Listen on the Podcast

On the show today I am breaking down the Cash-Out Refinance strategy.

Many people are noticing a high uptick in the value of their homes, and with this uptick in value comes an increase in home equity.

So what can you do with the equity in your home, how does it work, and what are the risks?

In this episode I am going to break down:

• How to calculate your home’s equity
• How much of the equity you can actually tap into
• The process of of a cash-out refinance
• Reasons for going with a cash-out refi
• The risks the banks forge to tell you about

How to Determine Home Equity

The equity you have in your home is equal to the appraised value of your home minus any first or second mortgage, or any other liens you have on your home.

Example of Home Equity Calculation

Thanks so much for listening to the show and if you feel the content of this podcast was helpful, please subscribe to the podcast where you listen and leave a review!

Today’s show was brought to you by OneAZ Credit Union — my very own credit union I have been proud a member of since 2011. 

If you live in Arizona and are looking for a large credit union with a local, customer-focused feel for your personal or business banking needs, look no further than OneAZ Credit Union.

Listen on the Podcast

On the show today is America’s #1 Money Mentor, Chris Naugle.

I’ll be honest — I brought Chris to have a conversation on a topic we don’t agree on…infinite banking.

If you haven’t heard of infinite banking before, you’re perfectly normal. It’s not a very popular term in the financial world and most financial gurus like Dave Ramsey and Suze Orman are completely against it.

But, what I’ve learned over the years in this world of personal finance is not every guru is always right.

Therefore, I decided to say “yes” to my guest today so I can ask him the hard questions about…

• How infinite banking works
• Why it is (or is not) a scheme
• The risks
• Do you have to wealthy to utilize infite banking
• Are there better alternatives

Now, we will dive into infinite banking in depth, but here is the sceanrio/example he used inside the episode:

👉 You deposit $1,000 into a whole life cash value life insurance plan (yes, you read that correctly…and I was cringing when he said it).

👉 The life insurance plan pays out 4% guaranteed return plus non-guaranteed dividends. The dividends in this scenario were 2%. Therefore, your return is 6%.

👉 Then you immediately borrow from the life insurance plan $900, while your $1,000 remains inside the plan earning 6%. You borrow the $900 at 5%, earning a 1% spread.

👉 Next you take the $900 that you are paying 5% while earning 6% on your $1,000 and you use it to pay off high interest debt, to save, or to invest.

In theory, this looks great on paper. But, I had a lot of questions and concerns with this strategy and kudos to Chris Naugle (my guest) for answering every question I throw at him.

Mentioned in the Show

Learn more about Chris Naugle and Infinite Banking Here.

Watch the Free 90-minute webinar with Chris

Free Book: Mapping Out the Millionaire Mystery by Chris Naugle

[Watch] Dave Ramsey on Infinite Banking

Follow Chris on all social channels @thechrisnaugle

Thanks so much for listening to the show and if you feel the content of this podcast was helpful, please subscribe to the podcast where you listen and leave a review!

Today’s show was brought to you by OneAZ Credit Union — my very own credit union I have been proud a member of since 2011. 

If you live in Arizona and are looking for a large credit union with a local, customer-focused feel for your personal or business banking needs, look no further than OneAZ Credit Union.

Listen on the Podcast

Investing in Multifamily Real Estate

There are so many strategies to building wealth and we try to explore all of them on this show.

Today I am interviewing an expert in multifamily real estate investing – Gino Barbaro.

Gino, and his partner Jake, are both experts in multifamily real estate investing and have achieved.

They are NOT from the financial world…meaning they didn’t get a PhD in finance and then build their wealth. Nope, Gino was a pizza restaurant owner and Jake was a pharmaceutical rep…which just shows us that everyday people like you and I are learning AND actually building wealth.

Jake and Gino also have an entire website with multiple podcasts dedicated to showing you how to get started in real estate.

Thanks so much for listening to the show and if you feel the content of this podcast was helpful, please subscribe to the podcast where you listen and leave a review!

Today’s show was brought to you by OneAZ Credit Union — my very own credit union I have been proud a member of since 2011. 

If you live in Arizona and are looking for a large credit union with a local, customer-focused feel for your personal or business banking needs, look no further than OneAZ Credit Union.

Listen on the Podcast

Why People Don’t Like Cash Envelopes?

Cash envelopes are great and I have used and recommended cash envelopes for years. The reason — cash envelopes immediately stop your overspending habits.

The Cash Envelope Method Explained

At every payday, you will go to your bank and pull out cash for each category in your budget. This may look like groceries, entertainment, shopping, or whatever categories you choose. Then you fill your envelope with the amount of cash you have allocated for each category.

Now that you have envelopes full of cash, it’s time to spend. For example, let’s assume you go to the grocery store at the beginning of the month and your grocery budget is $600 for the month. The first week you spend $150 and the cash comes out of that envelope. The next week you spend $200 and the following week you spend $100. So far you have spent $450. The last week when you get go to the grocery store and you hit the checkout with $170 worth of groceries — you have to put $20 worth of groceries back because your envelope only has $150 left.

And this is exactly why the envelope system works so well.

The Problem with Cash Envelopes

Cash envelopes are great, but in today’s digital world they are very archaic. If you’re out and about and you forget your envelopes at home or your spouse has the envelopes and you need them. Also, there is the issue with losing your cash envelopes and thus losing hundreds of dollars at a time. On top of that, you start with dollar bills and then soon enough you paper envelopes full of coins and they start to tear.

And why do I know about all of these cash envelope issues — because I’ve been there and done that. It still worked great, but it could be a lot better.

Enter Digital Envelopes with Qube Money

It’s really simple: What if I had a debit card and a bunch of digital envelopes where I could quickly move money in and out of envelopes? And what if I could safely manage this without the worry of losing my cash inside my envelopes.

This is exactly why Ryan Clark created Qube Money.

Qube is a bank, but not really a bank. Your cash at Qube Money is FDIC insured up to $250,000 through Qube’s partner bank, Choice Financial Group.

Go to Qube Money

Once you open an account with Qube, you will be sent a debit card from Qube. This card is empty — there is no balance on the card.

In your Qube app (or desktop) dashboard you can create digital envelopes just like you would with actual envelopes. Then, when it comes time to spend money, you simply open your app and slide the money from each envelope to your debit card and spend away. The balance in the envelope will automatically update and you’re no longer overspending.

With digital envelopes, you get the benefits of the cash envelope system with the safety of digital banking.

**Qube Money works with both iOS and Android operating systems.

Go to Qube Money

Thanks so much for listening to the show and if you feel the content of this podcast was helpful, please subscribe to the podcast where you listen and leave a review!

Today’s show was brought to you by OneAZ Credit Union — my very own credit union I have been proud a member of since 2011. 

If you live in Arizona and are looking for a large credit union with a local, customer-focused feel for your personal or business banking needs, look no further than OneAZ Credit Union.

Listen on the Podcast

Thanks so much for listening to the show and if you feel the content of this podcast was helpful, please subscribe to the podcast where you listen and leave a review!

Today’s show was brought to you by OneAZ Credit Union — my very own credit union I have been proud a member of since 2011. 

If you live in Arizona and are looking for a large credit union with a local, customer-focused feel for your personal or business banking needs, look no further than OneAZ Credit Union.

Listen on the Podcast

Today on the show I am going to break down hard money lending.

Over the past few years I started hard money lending as a way to generate passive income and to diverisfy my investment portfolio. It’s been a great experience over the past few years and now I am sharing with you how it works, the risk, and how to get started.

What is a Hard Money Loan?

A hard money loan is an interest-only short-term loan primarily used in real estate with the loan being secured by property.

In a nutshell, you become the “bank” and collect a monthly interest payment from the borrower. Borrowers will use hard-money versus traditional financing from a bank for a number of reasons. Since most hard-money loans are short-term — a year or less — borrowers would rather bypass the slow underwriting process of a bank for quicker financing through a hard money lender.

How Does Hard Money Lending Work?

Hard money lenders tend to focus on the property versus the borrower when it comes to lending money. Because the focus is on the value of the asset instead of the value of the borrower, there isn’t an underwriting process for the lender to go through.

The lender protects themselves by using the property from the borrower as the collateral. In addition, hard money lenders require borrowers to put down 20% – 30% in order for the lender to have equity in the property if a deal were to turn for the worst.

In the event the borrower failed to make payments, the hard money lender could sell the property, even at a discount, to recoup their investment.

Steps to Hard Money Lending

Before starting out as a hard money lender, you will need to have a few things decided on first.

1. Determine the Amount and Where the Funds Will Come From

Most people don’t have thousands of dollars just sitting around, but if so, you could use the extra cash to use for lending.

If you don’t have the extra cash, there are other options as well. You could open a HELOC and use the HELOC funds to lend out. For example, you could borrow from your HELOC at 4% and lend out at 12% for an 8% profit.

Another option is open a self-directed IRA which allows you to take funds from your Traditional IRA and use them invest (lend) with private money.

**If you decided to use a self-directed IRA, you can skip down to step 5

2. Create an LLC

Many people will choose to hard money lend as an individual, but I would recommend creating a simple LLC for your hard-money-business. Almost all states allow you to create you LLC online and it’s usually less than $100 to create your business. I prefer an LLC versus an individual lending money as a way to protect your other assets during hard money financial transactions.

3. Open Up a Business Checking Account

Now that you have an LLC, you will open up a business checking account. This account is used for two main transactions: to deposit the monthly interest checks and to pay any expenses associated with hard money lending. A typical expense could be the interest you’re paying on the HELOC if you choose to go that route.

4. Determine What You Will Lend For?

There are many different ways you can invest using hard-money loans. Many investors supply a loan for a fixer/flipper, however there are other options as well. You could hard money lend for a bridge loan, a land development deal, a commercial loan, and a residential rental loan to name a few. Whatever you choose as your primary asset to lend for, always make sure you have collateral to protect your investment.

Once you have these 4 things in place, now you are ready to start lending.

5. Due Diligence

Remember, since you’re not doing any underwriting on the borrower, you must be prepared for due diligence on the property. Is the property worth what the borrower is buying it for? Will you have equity in the home with the down payment from the borrower? What are the current market trends and are you comfortable with the work that will be done on the flip and fix?

6. Determine the Loan Terms

How long will you allow the borrower to make interest-only payments until the loan is due in full? Do you want to be paid monthly or at the end of the transaction? Is there a penalty if the borrower is late on payments and how long after lack of payment can the lender sell the property? Make sure to determine the loan terms ahead of time and place the terms inside the promissory note (see below) prior to lending.

7. Finalize the Paperwork

The good news is, most of the paperwork will be created by someoene else. For example, the purchase contract will be drawn up the real estate agent and the Preliminary Title Report will be provided for you by the title company.

If you are lending to someone you do not know at all, it’s a good idea to have them provide proper identification (usually two forms) and proof of funds for the down payment. Simply asking for a bank statement will help show the borrower has the funds to provide a down payment.

You will also need proof of insurance. This is extremely important and you cannot lend out a dime until you know you the borrower has the correct amount of insurance on the property. Ask for proof of insurance or a declarations page from the borrower.

As the hard money lender, you should provide the Promissory Note to the borrower prior to lending.

The Promissory Note is a financial document that contains a written agreement between the lender and the borrower to pay a defined sum of money, either mothly or at a future date. A promissory note typically contains all the terms pertaining to the loan, including the principal amount, interest rate, maturity date, and issuer’s signature.

You can create a Promissory Note using eForms here.

Need an Example of a Promissory Note?

The one piece of paper you will need to create is a promissory note. I have provided an example promissory note I use with my own hard-money lending.

I created this using the eForms Template for Promissory Notes.

Sample Promissory Note (PDF)

Thanks so much for listening to the show and if you feel the content of this podcast was helpful, please subscribe to the podcast where you listen and leave a review!

Today’s show was brought to you by OneAZ Credit Union — my very own credit union I have been proud a member of since 2011. 

If you live in Arizona and are looking for a large credit union with a local, customer-focused feel for your personal or business banking needs, look no further than OneAZ Credit Union.

Listen on the Podcast

One the show today I’m breaking down the differences between the different mortgage options and helping you decide which is best for you.

Should you go for a conventional loan or would you be better with an FHA loan? And now much mortgage do I need before I am required to move into a jumbo loan? Or what about qualifying for a VA loan or a USDA loan?

I will help you break down the answers to all these questions and more so you have a jumpstart when it comes time to apply for a mortgage or to refinance your current mortgage.

The Conventional Mortgage Loan

Conventional mortgage loans are the most common mortgage loan today. Unlike government-backed loans such as the FHA, VA and USDA loans, conventional loans are guaranteed by Fannie Mae and Freddie Mac. When the loan comforms to the standards set by Fannie Mae and Freddie Mac, the loan is said to be a conforming loan and is guaranteed by either Fannie or Freddie. The guarantee from Fannie and Freddie is good thing for lenders, which helps you the borrower obtain a convetional mortage.

Getting a Conventional Loan

• Minimum credit score of 620
• Minimum 3% down payment
• Private Mortgage Insurance if down payment less than 20%. PMI is automatically cancelled when the loan reachers 78% loan-to-value, usually between years 9 and 10 of the loan on a 30-year mortgage.
• Mortgage Terms from 10 to 30 years
• Can be used for primary residence, second home, investment property, and other real estate opportunities.

The Jumbo Mortgage Loan

Fannie Mae and Freddie Mac set standards for a loan to be a conforming loan. One of the standards is the loan amount, which in 2021 is a maximum of $548,250, or $822,375 in high-cost-of-living areas. Therefore, if you were looking to obtain a mortgage for more than the conforming limits, then you would need a noncoforming loan.

A jumbo mortgage loan, or a jumbo loan, is the mortgage loan required to obtain a loan outside of the conforming loan limits. Since the loan is not conforming, there is also no guarantee for the lender from Fannie Mae or Freddie Mac. Therefore, this loan creates more risk for the lender, and the risk is transferred to the borrower in the form of tighter restrictions in getting a jumbo loan approval.

Getting a Jumbo Loan

• Minimum credit score of 700, although some lenders may require even higher credit scores.
• Down payments will be higher than for conforming conventional loans. Often lenders will require 20% or more.
• Larger cash reserves, often being at least 6 months worth of mortgage payments in cash reserves.
• Added fees to obtain a mortgage. Often lenders will require up to 2 appraisals for the home.

The FHA Mortgage

The FHA loan is a great loan for first-time-home buyers and for those with little or poor credit history. The FHA loan is a government backed loan, where the Federal Housing Administration (FHA) will insure the lender if the borrower were to default on the loan.

With the insurance from FHA, lenders are able to loosen restrictions for borrowers to help them obtain a loan.

Getting a FHA Loan

• Minimum credit score of 580
• Minimum 3.5% down payment
• Mortgage Insurance Premium is more expensive than Private Mortgage Insurance with a convention loan and will last either 11 years or for the life of the loan.
• Primary residences only

The VA Mortgage

The Department of Veterans Affairs guarantees a portion of the loan to the lender for veterans, active-duty military, and surviving spouses of veterans.

VA loans have many perks, including zero down payment and no PMI/MIP.

Getting a VA Loan

• Minimum credit score set by the lender
• No minimum down payment
• No Privatge Mortgage Insurance, but a one-time VA funding fee
• Primary residences only

The USDA Mortgage

The U.S. Department of Agriculture guarantees lenders via the USDA loan program for those looking to purchase a home in a rural area in America, and those who have lower income and poor credit.

The one key factor to a USDA loan is the term “rural”, which means a population limits between 20,000 and 35,000 depending on the area of the country. Also, USDA loans are the only loans to impose income limitations; meaning if you make too much you will not qualify for a USDA loan.

Getting a USDA Loan

• No minimum credit score, instead set by the lender.
• No down payment requried.
• Income limitations set to 115% of the median household income of the area for the mortgage.
• Geographical limitiations set to rural areas as defined by the USDA.

Summary

Before you sit down with your loan officer, listen to the entire episode and get a full understanding of how each loan works. The goal for this episode isn’t to be a mortgage loan expert, but to simply have an understanding of how each loan works before you meet with the mortgage team.

If you’re in the state of Arizona, I only recommend you visit OneAZ Credit Union for your mortgage needs. Tell them Money Peach sent you and they will take special care of you!

Do You Have a Budget that Actually Works?

The first step to any solid financial plan is to tell your money where to go instead of wondering where it went.

Here are the same budget templates I use and I will also walk you step-by-step with how to use them.

They’re all yours now!

Download Templates

Thanks so much for listening to the show and if you feel the content of this podcast was helpful, please subscribe to the podcast where you listen and leave a review!

Today’s show was brought to you by OneAZ Credit Union — my very own credit union I have been proud a member of since 2011. 

If you live in Arizona and are looking for a large credit union with a local, customer-focused feel for your personal or business banking needs, look no further than OneAZ Credit Union.

Listen on the Podcast

Who is Diania Merriam?

Diania Merriam is on the show today to share her story of reaching financial independence in her 30s.

After living in New York City in her 20s and racking up $30k in debt, Diania decided enough was enough and it was time to change her mindset about money.

What would it be like to reach financial independence? 

After making the choice to turn away from her old financial habits, Diania shares how she reached financial independence in her 30s.

She shares how she:

• Changed her belief about money and consumerism
• How she paid off $30k in 11 months
• The moment she paid off her last debt Watch Here
• How she saves 60% of her income!
• Taking a 2 month sabatical and to backpack 500 miles through Spain
• Starting her own conference for like-minded people

Diania is also the founder of the EconoME Conference , a conference in Cincinnati each year where like-minded people get together to share their new found beliefs around financial independence, financial freedom, and early retirement.

Want to Meet Up at the EconoME Conference?

The EconoME Conference is November 13th and 14th, 2021 in Cincinnati, Ohio and I want to meet you there!

If you are listening to this BEFORE April 11th, then grab your early bird tickets now. If you’re listening to this after April 11th, then use promo code MONEYPEACH at checkout for an additional 10% off your ticket price.

And this goes without saying: if you see me at the conference, please come up and say hello! I would love to meet up, talk money, and even have a beer if you’re up for it.

Hope to see you there!

Get Tickets Now

Thanks so much for listening to the show and if you feel the content of this podcast was helpful, please subscribe to the podcast where you listen and leave a review!

Today’s show was brought to you by OneAZ Credit Union — my very own credit union I have been proud a member of since 2011. 

If you live in Arizona and are looking for a large credit union with a local, customer-focused feel for your personal or business banking needs, look no further than OneAZ Credit Union.