Episode Details

Most financial advice assumes the best-case scenario — stable income, predictable markets, life going according to plan. In 2022, as inflation spiked, interest rates doubled, and crypto platforms imploded, Brad and Jonathan ask a different question: What if you planned for the worst instead?

Brad and Jonathan dissect what it means to truly afford a house when rates and job security can shift overnight, and why the crypto crash exposed a fundamental misunderstanding about ownership. The conversation centers on calculating mortgage affordability using after-tax income, stress-testing financial decisions against life's curveballs, and the critical difference between holding crypto on an exchange versus self-custody.

Key Topics Discussed:

[00:01:02] Current Financial Climate

• Rapid rise of inflation and its impact on financial planning
• Assessing personal financial limits amidst market volatility

[00:14:18] Understanding Mortgage Payments

• Evaluating affordability based on after-tax income rather than gross income
• Planning for worst-case scenarios instead of assuming the best

[00:22:05] Housing Market Analysis

• Current state of mortgage rates and housing affordability
• Strategies for maintaining home affordability despite rising rates

[00:55:08] Crypto Market Update

• Recent events in the crypto market, including the collapse of Luna and Celsius
• The significance of self-custodying assets to avoid counterparty risk

Key Quotes:

• "Identify your fears and manage the risks effectively." [00:00:00]
• "Ensure your ability to maintain home affordability." [00:24:14]
• "If you don't control your keys, you don't truly own your crypto." [00:56:30]
• "Always prepare for the worst-case scenarios." [00:15:28]
• "Adapt your financial plans to life's uncertainties." [00:18:08]

Related Resources:

• The Tail End by Tim Urban [00:02:07]
• Episode on Housing Affordability (Episode 381) [00:13:30]
• Episode on Cryptocurrency Basics (Episode 323) [00:56:30]

Key Insights:

• Consider your financial stability and long-term planning when buying a house amidst rising interest rates
• The current crypto market environment highlights the necessity of managing risk and understanding asset custody
• Calculate mortgage payments against after-tax income to ensure manageable debt levels [00:20:10]
• Self-custody your crypto assets for greater control and security [00:56:30]

▶ Listen Next: Ep. 385 — Time is Your Ultimate Luxury | Essential Listening

Support the Show
We work hard to keep ChooseFI ad-free for a clean listening experience. The easiest way to support us is to use our Top Recommended Cards page when signing up for your next travel rewards credit card.