Broker Check
Transcript from Dad Cents podcast Episode 8

Transcript from Dad Cents podcast Episode 8

May 12, 2021

Please note: the following transcript has not been edited for accuracy and proper grammar. If you'd like a more formal copy, please reach out to us. We'd be happy to help!

Announcer 0:02
Welcome to dad cents a podcast for folks looking to grow their financial future. This podcast is hosted by Jason Fuchs, a dad, a husband and managing director of sage path financial advisors. Jason's goal is to help you grow your financial future, the right way. Now, your host, Jason fields.

Jason Fuchs 0:25
Greetings everyone, if you're new here, I'm Jason Fuchs, married to Amber's father to a two and a half year old girl jewel. I'm also the managing director of sage path financial advisors. And at Sage path. We're here to help you grow your financial future, the right way. Ladies and gentlemen, welcome to the show. Thank you so much for being here. I appreciate all of you. Joining me is my all around incredible wife, Amber. Hey, Amber. Hi, Jason. How's it going?

Amber Fuchs 0:53
Going? Great.

Jason Fuchs 0:53
Good. Thanks for being here.

Amber Fuchs 0:55
Thank you for having me.

Jason Fuchs 0:56
You're welcome. Ladies and gentlemen. You've heard amber on dad since before, but I'm going to introduce her in a different light shortly. There's a side to Amber, we haven't covered. And I'm really excited to do that today. More to come. Ladies and gentlemen, as many of you know, Amber, as you know, the housing market is booming in some areas right now. And I'm wondering, anyone out there wrestling with the idea of buying investment property trying to create a little bit of income, or perhaps you're currently holding on to investment property, already collecting income? I received a question from one of our dozens of listeners regarding that very topic. And we're going to get to the bottom of it today. Should you sell or rent your house, investment property, etc. And I'm also wondering, as a business owner, are you aware of the various retirement plans available to you? And did you know it's imperative that you choose the right one? Those are two financial topics we'll get into later with our guest Amber. Remember, I'm answering financial related questions in each episode. How do you get those questions to me? Well, I'm so glad you asked. The best way to do that is through email Jay Fuchs at Sage path FA comm You can also call me at 904-366-9388 no answering machines, no answering messages, no telephone prompts. You call me. You get me. All of that info can be found in the description of the podcast. I would like to take a moment now and introduce our guests. My wife amber Fuchs. where to start. Amber's entrepreneur experience executive with 21 years in the retail industry, Six Sigma extraordinare. Analyzing and visualizing data through Microsoft Power BI. Amber has been with several big name companies. You might be familiar with a few hex anyone remember that name? I know. Belk Michael Kors, Smithsonian, Venus right here in Jacksonville. Amber is the founder of YOLO luxury consignment, sustainable fashion through consignment of luxury goods. We're going to cover that in more detail here shortly. Amber, she's also an alumni of Virginia Tech. Hey, me, too. Go Hokies. Yes, she volunteers for the BTC patrol or excuse me, BTC turtle patrol, protecting our little turtles here in Jacksonville. She's also a volunteer with the Florida Fish and Wildlife Conservation Commission working with marine mammal and sea turtle response teams. More importantly, though, amazing mother to our daughter jewel, and incredible wife who I'd be lost without Amber. Welcome to dad cents.

Amber Fuchs 3:43
Thank you, man. That's a wonderful introduction. I love that

Jason Fuchs 3:46
you look real good on paper, and in person. But I can say that,

Amber Fuchs 3:51
yeah, cuz you're my husband.

Jason Fuchs 3:52
Anybody else? Sorry. That's me only.

Amber Fuchs 3:56
You do a lot. Man that it seems like I do a lot that the way you spelled all of it out there. Yeah.

Jason Fuchs 4:03
So what's cooking now? What are you working on now that you're most excited about?

Amber Fuchs 4:07
Oh, man, I have a lot of things that I'm working on right now. I think with YOLO cons constantly sourcing new product and trying to figure out what the next evolution of the business is going to be. Okay.

Jason Fuchs 4:22
So let's talk about it. Let's let's talk about your journey to the start of YOLO.

Amber Fuchs 4:27
Oh, wow, the start of YOLO that actually goes way back. One of our founding principles and our mission is making these luxury goods more accessible to everyone. Wonderful. And part of that is the feeling that you get when you acquire one of these luxury pieces. And I always try to share what I felt when I got a firt my first luxury handbag and that was when I turned 30 years old, which was a really long time.

Jason Fuchs 4:58
It's like three years ago, three years ago.

Amber Fuchs 5:01
I really no. But it was actually something my parents gave to me. They gave me my first ever coach handbag. Oh, thank you

Jason Fuchs 5:11
hoping Steve.

Amber Fuchs 5:12
Yeah. And it was all other beautiful bag. I still have it. But it, it made me cry. Because I felt that acquiring that made me feel like I could take on the world. Nothing was beyond limits to me. Yeah, I could achieve anything. I had this bag that gave me like that extra boost of confidence, and really made me feel like I was able to go and take on the world like a fancy superpower. Yeah. And that is the feeling that I want everyone to have access to feeling with YOLO

Jason Fuchs 5:50
Wow, I love that. That's so neat,

Amber Fuchs 5:53
that that's what YOLO really is all about. And that's that feeling is where it really all started. Okay. So you know, since that, that time of getting that I have had different ideas over the years for different businesses that I've been interested in. And the evolution of thought of where I wanted to start my own business has changed over the years. But I knew actually when I when I bought my first Louis Vuitton bag, what I really wanted to do, and that was because I got my first Louis Vuitton bag at a consignment store. Oh, okay. Yes. And I have experienced that. Okay, have Yeah. And I experienced that feeling that same feeling of like feeling so accomplished. And just that tremendous sense of pride.

Jason Fuchs 6:45
I'm wondering though, that experience was probably a little different than the experience with your parents. I mean, we all love getting nice, meaningful gifts from our parents, of course, when you do something that big on your own, I imagine that had such a huge impact on you,

Amber Fuchs 7:00
oh, it had such a did, it had a huge impact on me. And for me, it was something that I never knew if I would be able to acquire or not. But being able to purchase it via consignment made it more accessible for me, because it's such a great value. And so yeah, you're right, doing it on my own, but also finding it in the consignment shop, it did, it had a different meaning to me a deeper meaning to me. And that's really when I had that aha moment of like, this is what I need to do. That's me what I need to do. Okay, and so that was probably about maybe close to 10 years ago. Okay. And so, and it's, it's 2021. Now, that was maybe 10 years ago, something like that. And I ended up founding YOLO and 2019. So in between then and 2019. It was really more about me overcoming the fears and thoughts of why I shouldn't start it. Yeah,

Jason Fuchs 8:02
yeah, starting a business is not easy. It's not easy.

Amber Fuchs 8:05
And I know when you and I first met, I told you about this dream and this vision that I had.

Jason Fuchs 8:10
Oh, so excited. It was one of the things that that had me so interested in you.

Amber Fuchs 8:15
Oh, thank you. I never knew that. That's cool.

Jason Fuchs 8:18
I waited till dad since.

Amber Fuchs 8:23
But, you know, you I saw you found your own company. And you helped me a lot you like see you do that really inspired me to to make that push and actually make it happen. But also, realistically on the you know, just the logistic realistic side, you were able to help me figure out what exactly I needed to do, like, get an LLC. All the logistical stuff. Yeah, realities and such. You had been through it before I saw you do it. You helped me figure out and navigate those first real steps of converting this idea on paper into reality.

Jason Fuchs 9:00
Yeah, Florida makes it pretty. I wouldn't say easy to start a company, but they do provide you with some great resources there. There are just a lot of steps and a lot of things you have to do to formerly create that business.

Amber Fuchs 9:15
Yeah, absolutely. It was it was two years ago when I really, you know, turned idea lightbulb in the air into something real. Yeah.

Jason Fuchs 9:25
And if I'm not mistaken, I remember I pushed pretty hard to start it. I mean, you took this wonderful idea. And I was so impressed because you laid out this phenomenal business plan. I mean, you put a lot of time and effort into it. And I was so impressed with what you laid out. I just I thought you got to do this. Yeah, thank you. It's my pleasure. All you but I appreciate your kind words. Thank you.

Amber Fuchs 9:50
Yeah. Well, it was I mean, I think a lot of people would express this. And you probably had the same feeling but it It is something that's always in your heart, but converting it to a reality. It takes a lot of time. It takes a lot of time to

Jason Fuchs 10:08
really get started. And you've done such a great job. I mean, YOLO is growing so fast. It's, it's really exciting to share that with you.

Amber Fuchs 10:15
Yeah. Thank you.

Jason Fuchs 10:16
It's my pleasure. So we've talked about where kind of how YOLO started, where is YOLO? presently focusing on anything in particular, is anything working or not working? I mean, share your successes with us.

Amber Fuchs 10:32
Yeah, absolutely. So my initial vision for YOLO was to open a store at some point down the line. Remember that. And so Currently, we are online, we have an online boutique at WWW dot YOLO. Luxury consignment calm. We're also more time www dot YOLO. Luxury consignment calm. Great, thanks. We also have social media presence at Facebook and Instagram. Fantastic. And, you know, I think much like many people in the past year over 2020 into now have had to pivot on what their business plan was or is and what it will be. And so I don't really see a physical store presence in the foreseeable future for YOLO. That has definitely changed. Some of our product mix is changing. I think I was talking with you about that recently about, I really want to have a men's accessory category. But the nature of that may be changing based on some of the successes or opportunities there.

Jason Fuchs 11:41
COVID kind of made the decision for you. I mean, we had talked about you opening a physical location. But then when COVID came in, you really had no choice. So you were so good and so successful at pivoting 100% online. And now it seems like you're at the point where you might not need that physical retail space,

Amber Fuchs 12:01
right? No, absolutely. You're right. And it was interesting, then, the way all of that played out, because I had a physical area, and in the geo an actual location that I was targeting, oh, yeah. And it doesn't really even exist anymore. So I mean, because of COVID, it's not like the idea has gone away completely, the place that I was targeting doesn't even have that opportunity any longer. So you know, talk about having to pivot that it was really just wiped out. But, you know, I do think that these days, real estate in retail is just a more challenging opportunity than ever. Yeah, I think that a lot of people really enjoy it. And I think that there's a need for it in different facets across the board. I don't foresee retail, physical locations ever going away, you know, but what it does, and what it means is different. So, you know, for me, I was able to make that transition to be online exclusively for the foreseeable future. But because I think people really enjoy that on in person, being able to touch and feel having those moments. So especially when

Jason Fuchs 13:18
they're looking at luxury handbags, definitely something I'm sure you want to hear, see and feel

Amber Fuchs 13:24
right in person. Absolutely. So you know, some of what I've done to pivot on that is I can arrange for in person, face to face, like zoom calls, where I can show one on one if someone wants to see the product. That's neat. I like that.

Jason Fuchs 13:42
So So somebody can actually schedule an appointment with you for a particular product. Yeah. And live, you will present that product to the individual. Absolutely. That is amazing.

Amber Fuchs 13:53
Yeah. And so that's really like, as close as we can virtually right to allow

Jason Fuchs 13:58
someone Yeah, that's neat. I like that. But it's not only just the fact that they get to see the product, it's the fact that you're taking time out of your schedule, to personally present that product to someone. I mean, that is phenomenal service.

Amber Fuchs 14:10
Well, I love it too. You know, that's one thing that I miss about not having a physical location is one of the things I love is the experience of a customer human interaction, having that interaction, but for me, it is all about that moment. And that feeling and I want to be

Jason Fuchs 14:28
going back to why you started YOLO it's hard to give that feeling when it's done through a website or through your social media, right? Ah, okay,

Amber Fuchs 14:38
I love people's stories. I want to hear about why they're interested why they're intrigued what this may mean for them. Yeah, and and that moment for them. So while it's a great benefit for them to be able to have that one on one conversation and and be able to physically see the product as close as possible online. It's also a great benefit for me.

Jason Fuchs 15:03
Yeah, that's really neat. Yeah. So do you see a physical store location or something similar? on the horizon for you, though,

Amber Fuchs 15:11
I don't see a physical. For walls location, I do want to do pop up events, okay,

Jason Fuchs 15:21
um, like one or two walls,

Amber Fuchs 15:23
maybe one or two. Or maybe, you know, I'm thinking maybe walls on wheels falls on wheels.

Jason Fuchs 15:31
So explain what you mean there.

Amber Fuchs 15:33
Um, I mean, I have a vision, which isn't really fully fleshed out yet. But I would love to be able to have something where I can bring like an idea of a mobile store to a location. Wow, okay, not just actually entering into someone else's store for a pop up event, or even a someone else's home pop up event. And I think those things, what kind of things would be fabulous.

Jason Fuchs 16:00
So you will actually host a pop up event at someone's home?

Amber Fuchs 16:03
Yeah, absolutely. Okay, we

Jason Fuchs 16:05
got to get to that finish your story first. But I'm intrigued by that.

Amber Fuchs 16:09
Okay. So yeah, the I think the idea that I have in my mind is kind of building some sort of store. Whether it's in like a trailer or other some other kind of vehicle. That's a fit fixed within the the vehicle that I can take to a place. Nice. That's fascinating. Yeah. Okay. That's, you know, just the new world thought process. Yeah, literally

Jason Fuchs 16:35
pop up. Yeah. That's so neat. Cool. Okay. So talk to us about this home, pop up event thing you're talking about.

Amber Fuchs 16:45
So I, I actually love this idea too. Because with consignment, you know, a lot of what I do and where I get my inventory, is from taking people's personal items, humans, yes. That they are no longer using and I'll sell it on their behalf and we both get a benefit.

Jason Fuchs 17:05
Okay, so if I have somebody something I want to sell, for example, a handbag purse, something of that nature, I would give that to you, and you would resell it.

Amber Fuchs 17:14
Correct. Okay. All right. That's neat. Yeah. So that that's the nature of consignment. And so having a pop up event in someone's home means that I could go and not only bring a bunch of items that I have an inventory to show to people and allow them to have that touch and feel moment. But they could also bring their items to me. Oh, that's neat. Okay, could take in inventory at the same moment as bringing inventory. That is nice. Yeah. Okay. So I think that doing pop up events in in someone's home where you know, they could invite their friends and family or anything else like that, to have a fun evening. That those type of moments would be a really cool opportunity to have that one on one interaction of also bringing items in as well as looking at items. That's really

Jason Fuchs 18:04
neat. I like that. Yeah. So have you done any of those events yet?

Amber Fuchs 18:08
I have not done any yet. I have one coming up soon in the next month. Okay. And so the other fun thing that I'm incorporating into that is I'm calling my events currently. And again, this may evolve over time. Who knows? We'll see what the world brings. I'm calling those events bags and bubbles.

Jason Fuchs 18:28
Oh, that's neat.

Amber Fuchs 18:31
So you know, we might have a wine tasting a champagne tasting something to go along with it and represent the bubble opportunity. Hmm. And yeah, so that'll be my first event is a bags and bubbles event.

Jason Fuchs 18:44
Men. If you're looking for a gift to get your wife, this could be something really neat hosting an event in your home for your wife. She could bring her friends. She could bring her handbags, they could bring their handbags. What a what a neat idea.

Amber Fuchs 18:57
Thank you.

Jason Fuchs 18:58
Yeah, I like that.

Amber Fuchs 18:59
I think it's fun. And I think like to your point, it's, there's something for everybody. Somebody is bound to either love bags or bubbles or both.

Jason Fuchs 19:07
Yeah, everybody wins. Or they'll just sit in the corner and sock.

Amber Fuchs 19:12
Oh, I hope.

Jason Fuchs 19:15
I'm teasing. So you have a lot of things that you're working on right now. And congratulations to you on your success. I mean, absolutely incredible. Thank you. You're welcome. You're welcome. We see the success and the growth of YOLO. But what I'm wondering is, what is your idea of success? Oh, wow.

Amber Fuchs 19:36
That's a great question. Um, for me, my idea of success is striking the right balance between work life, home life, work life, spiritual life and feeling well rounded. To me, that's what success is because I, I really love YOLO I could, you know, soak up and put a ton of time into YOLO. But that's not the only thing in my life that I love. And so for me, it's really finding the right balance of all of the different elements of my life.

Jason Fuchs 20:19
Okay, so it's now one thing or another. It's everything working together. Yes. That's wonderful. Okay, fantastic. Wonderful. So what is the next big thing? our listeners out there should be on the look for?

Amber Fuchs 20:34
Well, definitely the pop up events, okay. More pop up events. You know, as the world is opening up more, I'll be open to more pop up events, okay, and more bags and bubbles or bags and bubbles? And how should people reach out to you they reach out to you directly for that? Should

Jason Fuchs 20:50
they go to the website? I mean, if somebody wanted to host a pop up event or was interested in what do they do?

Amber Fuchs 20:56
Yeah, they can reach out to me directly, they can go to the website as well. There's a contact forum on the website. They could reach out to me directly at info at YOLO, luxury consignment calm. And I am super active on all the social media platforms as well. So anybody could direct message me on any of the YOLO luxury consignment, social media platforms.

Jason Fuchs 21:22
And speaking of social media, you just hosted a live event on Instagram, if I'm not mistaken, right?

Amber Fuchs 21:26
I was a guest or a guest. Okay. Yeah. On Instagram Live last Friday. Yes. And that was on Marquis mentor.

Jason Fuchs 21:35

Amber Fuchs 21:35
that's pretty Instagram. Yep. Well,

Jason Fuchs 21:37
congratulations to you on your success. That's incredible.

Amber Fuchs 21:39
Thank you.

Jason Fuchs 21:41
Is there anything that you'd like to cover that maybe I didn't cover? And I'm not fishing for anything?

Amber Fuchs 21:47
No, no. Well, thank

Jason Fuchs 21:48
you again. And during our conversation of the growth that you've seen this tremendous growth that yellows had over the past year, it brought us to kind of a financial conversation, and we're not going to get into details on today's show about what we discussed. But you had a question regarding the type of retirement plans that were available to you. Correct? Absolutely. So mainly, just want to know, what is available to you as a business owner? My Correct, yes. Okay. So I think that's what we'll get into next.

Amber Fuchs 22:21
Okay, what do you think? Sounds good to me.

Jason Fuchs 22:23
All right, ladies and gentlemen, let's get into it now.

All right, ladies and gentlemen. So Amber, you had a financial related question as a business owner, right.

Amber Fuchs 22:37
Yes. I'm curious to know what type of retirement options are available to me. Fantastic. So

Jason Fuchs 22:43
as a business owner, it sounds like you're aware that you have retirement options that aren't available to the typical investor, correct? Yes. Okay. So I think it's important ambered choose a retirement plan that fits your business. Now ladies and gentlemen, the information I'm about to share with you it was pulled from an article published on our website, www dot Saige path FA Comm. If you can't find it, or if you'd rather I just send it to you call me email me text me. I'll get it to you. No worries. Now Amber, one survey found that a certain percentage of small business owners expect at least some of their retirement income to come from tax advantaged savings account. Can you guess that percentage? Oh,

Amber Fuchs 23:32
is it a small percent or a large percent?

Jason Fuchs 23:35
On the larger side?

Amber Fuchs 23:36
Okay. 87.

Jason Fuchs 23:38
That's a good guess. You're very close. You want to do another guesser? No. Okay. 87 is good. It was 79%. Okay. And that was according to a Gallup survey in March of 2017, a few years old, but believe it or not, that is the most current survey available. So if you have yet to develop a retirement plan for your business, ladies and gentlemen, or if you're not sure the plan you've chosen is the right one. Here are some things to consider. So Amber, you want to ask yourself, How much can my business afford to contribute? The cost of contributions may be managed by the plan type that you choose? Let's talk about the types of plans available. What do you think okay, okay. All right. Number one, a simplified employee pension plan might know that as a Sep, A Sep is funded by employer contributions, only Sep contributions they're made to separate IRAs for eligible employees. Number two, savings incentive match plan for employees of small employers say that 10 times faster. This is otherwise known as a simple IRA. And I'll never use the true meaning simple IRA is way better in my opinion. Anyway, simple IRAs a blend employee and employer contributions, employers that either match employee contributions up to 100% of the first 3% of compensation, or they contribute 2% of each eligible eligible employees compensation. You follow me? Yes. All right. Number three, a 401k. That's probably what we're all most familiar with. Now, a 401k is primarily funded by the employee, the employer can choose to make additional contributions, including match contributions, for example. Now, one question sometimes comes up, what plan accommodates high employee turnover? The costs of covering short tenured employees may be reduced by eligible to requirements, eligibility requirements and vesting. So with the simple or excuse me, with the SEP IRA, only employees who are at least 21 years old, and have been employed in three of the last five years must be covered. You follow me? Okay. This simple IRA must cover employees who have earned at least $5,000 in any prior two years, and are reasonably expected to earn $5,000 in the current year. Make sense? Yes. Okay. Now, the 401k. And the defined benefit plan must cover all employees who are over 21 years of age or at least 21 years of age. There's something fancy called the secure act. And under this act, these retirement plans, they're open for employees who have either worked 1000 hours in the space of one four year, or those who have worked at least 500 hours per year, for three consecutive years. Okay, follow me. Yep. All right. vesting an important term that we all need to be familiar with. Now vesting is immediate on all contributions to the SEP IRA, the simple IRA, and 401k employee deferrals while a vesting schedule may apply to 401k employee your contributions and defined benefits. Okay. Now, ladies and gentlemen, Amber, you're gonna want to ask yourself the following question. Do I want to maximize contributions for myself and my spouse, the SEP IRA and 401k. They offer higher contribution maximums and a simple IRA, for example, for those business owners who are starting late, a defined benefit plan may offer even higher level of allowable contributions. Now what if your priority is to keep administration easy and inexpensive? Something I'm sure you're looking for Amber's always, always simple and easy, right? The SEP IRA, simple IRA, they're straightforward to establish and maintain the 401k can be a little bit more involved. But complicated testing may be eliminated by using what's called a safe harbor 401k. Generally, the defined benefit plan is the most complicated, the most expensive to establish and maintain of all plan choices available. Sound good? Yes. questions, concerns?

Amber Fuchs 28:17
Simple and easy is the one for me.

Jason Fuchs 28:19
Fantastic. Now, ladies and gentlemen, we can make this simple and easy for you. If you'd like help with this reach out to me, I encourage you to head to our website, www that Sage path FA comm click the calendar link at the top of the page and request a complimentary Financial Review by scheduling a day and time that works for you. Or you can just email me and request that day in time for a Financial Review. We'd be happy to help and listen, if you have questions about this subject only what type of retirement plan is better for you? Let's talk about that. Instead. We don't need to get into a full Financial Review just for me to answer your questions. So the point is, I'm here. I'm available when you need me.

Amber Fuchs 29:02
Okay, wonderful.

Jason Fuchs 29:04
I think we should conclude today's episode with a bit of q&a, we think okay. All right. Let's jump into that now.

All right, ladies and gentlemen, welcome back to dad cents. Amber, I received the question from someone one of our listeners, and we're just gonna call her Sally to protect her identity. Sally asks, I'm debating on selling or renting my house, I did the math and with a property management company taking care of it, I'd profit $415 per month. Should I take that profit spend it? Should I take that monthly profit and invest it or should I just sell my house? Use the equity to purchase a new home or take that equity and invest it with you? What are your thoughts? Well, great question, Sally. I'm happy to help. There are a few layers to that question. The following explanation I'm going to give to answer that question, it comes from a piece that was included in a previous monthly market matters newsletter I send out nambour. I never send anything spammy, only valuable content, subjects and topics that you our listeners are most interested in. If you're interested in receiving that monthly newsletter, email me, call me I'll get it to you No worries. And hey, if it ever gets to be too much, you can't handle it, you want to be removed slugged me No, no hard feelings. So Amber, if I understood Sally correctly, she's asking if she should keep her property since she was receiving income. She's asking what she should do with that money, spend it or invest it? Or should she sell that property? Use the equity to buy a new home or maybe invest that equity in the stock market? I hope I got that right, Sally. Now, ladies and gentlemen, whatever your reasons for moving, figuring out what to do with your current home may not be as simple as listing it. Depending on your financial situation and your local housing market, you may be better off renting it out and selling it or vice versa. The decision of whether to sell or rent your house, it should not be taken lightly. So let's take a look at a few scenarios. We'll weigh the pros and cons of each to help determine which path to take that sound okay to you. Sounds good. All right, like

Amber Fuchs 31:23
choose your own adventure.

Jason Fuchs 31:25
Choose Your Own Adventure. Get your books ready, ladies and gentlemen. All right, if your move is temporary, if your move is short term, if you plan on returning to it in the future, it may be wise to rent out your home that would provide security knowing there's a place for you to live. When you decide to return, it also may cost less than selling it and purchasing another home at a later date. On the other hand, if you're leaving the area for good, it might be wise to sell your home that would allow you to free up the equity you've built to use for a new home in the new location. And that leads to a question what if you need to access your home's equity, your ability to buy a new home may rely on accessing the current equity tied up in your current home for example, if that's the case, you should sell your existing home and use those proceeds towards moving expenses or the down payment on a new home in the new location. Or if you're renting, you could use that money towards your rent payments throughout the year. Some of you out there may have no interest in being a landlord. And that's warranted because managing a rental property can be time consuming. It can be challenging. I've managed properties in the past on my own. It's always an adventure to say the least I ended up hiring a management company because I wasn't in the area. And I just didn't want to do it on my own. I couldn't do it on my own. Now, Amber, you've kind of been in a similar situation. You've owned rental property at some point now.

Amber Fuchs 32:58
Yes, yes. And it never was intended to be a rental. But it was a similar situation to what Sally had where I was moving. And I wasn't sure I really wanted to let go of the property. So I decided to rent it out for a while. And I started by managing it on my own. And it got complicated real quickly. So I ended up having someone else manage it for me.

Jason Fuchs 33:21
Yeah. And then the experience after hiring, that management company was so much better. Oh,

Amber Fuchs 33:25
much better. Yeah, yeah.

Jason Fuchs 33:27
But at the same time they cut into the rental income, right? So it did subtract from the equity you're pulling as a result of that rental income. Yeah, absolutely. Yeah. There are additional responsibilities as a landlord. These include screening tenants, fielding issues, collecting rent, potential eviction issues, or maybe other obligations, or, like amber like me, will you hire a third party to take responsibility. And that leads to another scenario that you should be considering? If you want to buy a home while you rent the other one. Now, keep in mind that lenders will consider rental income when determining your financing. In some cases, a lender will only allow a portion of your rental income and that's typically up to 75% to be counted as an income source. What if you, ladies and gentlemen, expect home values will go up in your area? What do you do then? Well, there's no way we can predict the future performance of the housing market in your area in anyone's area. With some research and guidance, though, you might be able to make an informed prediction. If you expect that your home's current value increased with a few years or less. Perhaps it's better to rent it out now or sell it later to take advantage of the appreciation. Now another scenario that you want to consider, you may have to pay capital gains tax if you sell your home. If you decide to sell your home instead of renting it out, you might be able to exclude up to 250,000 $1,000 of capital gains from the sale or 500,000 if you're married and filing jointly. So what's the message here? If you're not married and you want to sell a house, go out and get married and then sell it. terrible advice. Clearly, I'm joking. But keep in mind, that house must have been in your primary residence for two out of the last five years. Unfortunately, you might be in a situation Ladies and gentlemen, where you are underwater on your mortgage. And now if you're underwater underwater, the loan balance is greater than the home's current market value. And you may not be able to afford to sell your home, it might be wise to turn your home into a rental property. In that situation, you'll be able to gain some equity before you sell it in the future potentially. Now there are costs to consider when renting versus selling Amber's I'm sure you're familiar with those. One of the most important considerations is whether the rental income you'd receive from your home is enough to cover the mortgage any expenses. Don't forget about the additional costs. Ladies and gentlemen, this is so important. Owning and maintaining a rental property comes with costs, you want the endeavor to be as profitable as possible. How do you determine how much rental income you can reasonably expect to earn? I'm so glad you asked and take a look at what other similar properties are charging. weigh that against the cost of owning and maintaining your property. So look at mortgage payments, maintenance, repairs, taxes, advertising, marketing, background and credit checks, vacancies, HOA fees, landlord insurance hiring a third party, the management company, for example. From there, you can gauge whether you'll be able to recoup your expenses. And then some remember, there are costs associated with selling your home as well. Home Improvements real estate commission that could be up to 6% of your home sale price, home staging, utilities, Home Loan payoff, closing fees, keep all of those costs in mind as well. A lot of stuff we just threw at our audience. You think amber?

Amber Fuchs 37:18
That's a great answer to Sally's question.

Jason Fuchs 37:22
Do you have questions concerns? Anything I missed?

Amber Fuchs 37:25
No. Okay, no,

Jason Fuchs 37:27
Sally, hope we answered your question. And ladies and gentlemen. keep those questions coming. I really enjoy it. So let's go ahead and close this out. deciding whether you should rent or sell your home depends on both monetary and lifestyle factors. Will you return to your current location? Are you interested in being a landlord? No. And what about your financial situation? Ladies and gentlemen, this is a huge decision lean on me for support. We'll take a look at your overall financial situation, we'll map out the best decision for you. I've done this with several clients. And it's pretty neat. So during the process, I present several reports for example, just to name a few. What would my potential returns be if I sold my home and invested the equity from the sale of that home? What would my potential returns be if I took the monthly net profit from the rental income and invested in each month or wait with those potential returns outweigh the income i'd receive if I decided to rent out my property instead of selling. At Sage pass after an extensive analysis of weighing the pros and cons. We look at selling versus keeping and running out. Many times our clients decide to sell their property when our clients entrust us with their investment management needs. We are 100% dedicated to helping them pursue their goals and guess what we provide clarity, we provide excellent service throughout the journey. I hope this helps Sally. And like I said Ladies and gentlemen, please keep those questions coming. Amber. Please keep those questions coming. Okay, the email address, my phone number can be found in the description of the podcast. So Amber, I'd like to close out today's episode. If you're okay with that.

Amber Fuchs 39:21
I'm okay with that.

Jason Fuchs 39:23
For those of you who aren't ready, use me as a resource. Send me your email, we'll keep you updated on what we think you need to know. And again, valuable content of financial topics you are interested in, not me. And like I said, if it ever becomes too much, and you're just tired of it. Let me know. I'll take you off. No hard feelings. Amber, anything you'd like to add? No, this

Amber Fuchs 39:51
has been great.

Jason Fuchs 39:53
Well, it was a pleasure. Thank you so much for being here.

Amber Fuchs 39:55
Thank you for having me. Oh,

Jason Fuchs 39:56
it's my pleasure. Now again, one more time. What's the best way Wait for people to contact you.

Amber Fuchs 40:01
The websites always the easiest www dot YOLO luxury

Jason Fuchs 40:08
Ladies and gentlemen, check it out book your NES next. What is it bubbles in

Unknown Speaker 40:14
bags in bubble book your next

Jason Fuchs 40:19
book time with Amber, she'll come to your house with wine, champagne and bags.

Amber Fuchs 40:26
Oh boy,

Jason Fuchs 40:27
to all of our listeners out there. Thank you so much for being here. You could be doing anything right now you're here with us. We appreciate you make it a great day. And now, the disclosures, securities and investment advisory services offered through FSC securities Corporation FSC member FINRA s IPC s FSC is separately owned and other entities in our marketing names, products or service referenced here are independent of FSC FSC does not provide legal or tax advice. Like a traditional IRA withdrawals from a SEP IRA are taxed as ordinary income and if taken before age 59 and a half may be subject to a 10% federal income tax penalty. Under the secure act in most circumstances. Once you reach age 72 You must begin taking required minimum distributions that goes for a simple IRA as well. Under the secure act in most circumstances, you must begin taking required minimum distributions from your 401k or other defined contribution plan in the year you turn 72. withdrawals from your 401k or other defined contribution plans are taxed as ordinary income and if taken before age 59 and a half may be subject to a 10% federal income tax penalty. Like a traditional IRA withdrawals from a SEP IRA, a simple IRA and a 401 K plan. The content is developed from sources believed to be providing accurate information information and this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. Amber Fuchs, yellow Sage path and FSC are unaffiliated. This episode is sponsored by Donovan associates investment council Inc, sage path financial advisors located at 512 Road by lane, Neptune Beach, Florida 32266. information from this episode was obtained through FMG suite, LLC.

Transcribed by