Rich Habits Podcast - 1: Becoming the 1st Millionaire in Your Family

Episode Date: February 28, 2023

In this episode of the Rich Habits Podcast, Robert Croak and Austin Hankwitz share three steps to take if you want to begin working toward becoming the first millionaire in their family: investing early and often, changing your mindset, and learning a new skill. ---Be sure to check out Public's new ⁠⁠⁠High Yield Cash Account paying 5.1% APY.⁠⁠⁠ This is higher than anything else on the market and is FDIC insured up to $5M. ---⭐ Download our FREE Budgeting Template – click here⭐ Trade stocks, options, music royalties and crypto on Public – click here⭐ Automatically buy stock where you shop with Grifin – click here⭐ Protect your family with term life insurance from Suriance – click here⭐ Use code “Spotify” for 15% off our 4-module video course – click here⭐ Optimize your portfolio with Seeking Alpha – click here---👤 Explore everything Austin does – click here 👤 Explore everything Robert does – click here❓ Ask us questions for our Q&A episodes – @richhabitspodcast on Instagram📬 Inquire about working together – [e-mail]---Hankwitz Group LLC has an existing business relationship with NEOS Investment Management LLC. The opinions expressed are those of the author, and the author owns several NEOS ETFs.

Hey everyone and welcome to the Rich Habits podcast. My name is Austin Hankwitz and I'm joined by my co-host Robert Crock. Robert is a seasoned entrepreneur in his 50s with more than $200 million in company exits under his belt while I'm just a 20-something year old trying to figure it all out. As the show name might suggest every episode, we will be talking about rich habits as they relate to business, finance, and mindset. However, what's going to be cool about this is you're going to get two unique perspectives, one from an industry veteran, Robert, right, the guy who's got all the exits under his belt. He's been around the block a couple times, a couple decades, rather. And then from myself, someone who's in his 20s trying to figure it all out. So, Robert, what's on the agenda today? What are we going to be talking about in today's episode? Absolutely. So in this episode, we're going to be talking about becoming the first

millionaire in your family, specifically the three actionable ways to achieve this. And we're going to be talking about investing, mindset changes in time sucks. I know becoming a millionaire might seem unattainable, but I promise you we will break this down an easy way to understand for anyone that's listening right now to get started toward achieving this goal in 2023. Okay, so I heard investing, I heard mindset change, and I heard time sucks. So let's start with investing. What is your sort of thesis on investing as relates to becoming the first millionaire in your family? Starting early and often. I feel like so many people are just afraid to get started because they hear all this stuff on Instagram and TikTok where you got to have $30,000 or $50,000 to get started.

It's really all about learning where to start, and we're going to teach that and help with that, and just starting early and often, whether it's $50 a month, $100 a month, it's just getting in the game. Getting in the game. I like that. So from my perspective, I remember we're kind of zooming out here. When I was in high school from this idea like early and often, you might have heard of Dave Ramsey, right? He's this old bald guy that talks about the baby steps. And something that was cool, though, is I don't know if you knew this or anyone listening to do this, but the state of Tennessee where I reside right now in Nashville, but I grew up in a small town called Kingsport.

And the state of Tennessee, however, has the most bankruptcies per capita in the entire country, right? So Dave Ramsey. Does Dave live there? Yeah. So Dave Ramsey, who is a headquartered here in Nashville, Tennessee, he heard that stat and he said, you know what, let me take my baby steps and partner with different schools around the state and try and introduce financial literacy to, you know, high schoolers at an early age. This idea of early and often really resonates with me because when Dave Ramsey's course,

when I went through it when I was like a junior in high school, the big thing that stuck out to me was there was this example of someone who started investing, I think it was like $50 or $100 a month at 18, right? He was working his job. He was saving money aside every single month. But he started working at, or I'm sorry, investing rather at 18 years old. And then he stopped at 35. And he still ended up with more money in retirement.

than the guy that started at 35 and was investing twice as much as him and invested all the way until like 65, right? So to your point of investing early and often is really powerful because of something called compound interest, which is essentially earning money on your money, right? So what happens here with compound interest is let's say that I invest $100 and I just, let's just use very simple terms here, right? $100 and I get maybe a 10% return. So my money turns into $110. So what's cool about compound interest is now you're investing $110 the next year. And so 10% on 110 is $11. So first you made 10, now you're making 11.

And so as you put on top of that, it'll turn to 12. So you're making more and more money every single year on your money. Yeah, let me touch on that because anyone listening now or in the future, I mean, just really research. Google, what is compounding? Because it is the most powerful thing you can do with your money, because parked money is money that's losing money, money has to have velocity. And the key to it is once you start investing even that 50 or that $100 a month, you get that in your account and it's making money,

and then you're compounding by reinvesting the profits. This is so simple. And I think a lot of financial literacy and a lot of the influencers out there and the advisors, they make it sound so complicated. And that's why I do it differently for my content. I want people to realize that it's not complicated. And if you follow the steps we're laying out, you will be so thankful 10, 20, 30 years down the road because it's all about getting started and just not being fearful because this is a lot easier than people think it is. 100%. So let's start talking about this steps, Robert. So from my perspective, as someone who is trying to, still is trying to figure it out, but I got the investing stuff figured out, right? You get your paycheck from your employer, however much that money is.

It hits your bank account, right? Once the money is in your bank account, you say, okay, cool. we go open something called an online brokerage account. Now there's a ton of different places to do this. Robert, I'm sure you've got a couple. I've got a couple somewhere though that I really enjoy investing my money because of the sort of community aspect of it is called public.com. They're an online brokerage that if you can imagine like Robin Hood mixed with Twitter. It's kind of like that in a sense that you've got your brokerage, but you also have like your community of people who are talking about what's interesting to them. They've got a ton of different resources and tools as it relates to themes. There's different things you can tune into from like live

shows, like a lot of really cool content also around the investing. So they've got that. But more importantly, what I think is going to be important for those listening right now is you're able to look at other people's investments. So if you type in Austin Hankwitz on my public profile, you'll see that I've got stock in Monday.com, but I also have stock and index funds. So back to this step by step here as you go to an online broker, just Google online broker. You can go to public.com and go to anywhere you want. But open an online brokerage account and don't be freaked out when they ask you for your bank information because they have to pull the money somewhere. They'll ask you for your social security number because if you're going to be making money,

you've got to report it to the IRS, right? So don't get scared by that. They'll ask for your address, stuff like that. Make sure they can mail you the right documents. So that's where actually a lot of people get freaked out. It's like, whoa, whoa, why are they asking for this information? I don't understand. I just want to invest in stocks. It's okay. Take a deep breath. They're going to ask for it. Yes. It's all secure. All is good. Right. So you open the account. And so then it's like, all right, I got my money. I got my account. Now I'm going to deposit that money. into the account. Now here's the really important part here you got to now invest the money, right? So once the money's in the account, say it's $100 a month, maybe you turn on auto deposit or

something else here, you invest the money into index funds. So what's an index fund? An index fund is essentially the stock market, quote unquote. It's so there's something called the S&P 500, right? Think the 500 largest companies in the United States. Whenever you invest into an index fund, which is essentially like a way for you to kind of track the performance of those top 500 companies, you are essentially betting on that the United States is going to continue to have strong earnings, strong profits, capitalism, things of that nature, right? So by investing into the S&P 500, you have now a broad, diversified portfolio of 500 big, and I'm talking Apple, we talk Microsoft. I mean, this is Google, this is Salesforce, this is Tesla, this is every big

500 of them. I don't know all 500 up the top of my head, but. And let me touch on that real quick, because this is a very important point you're making, and I want everyone to make sure they pause on this. And that is so many people in my DMs, and I'm sure in your DMs and your comments are like, oh, why would I buy an index fund when I can just go buy a stock? And the problem here and the big takeaway for index funds and why you and I are big believers

and it's been a proven track record for decades and decades is an individual person, unless they're highly trained, is never going to outperform with their stock picks, what an index fund is going to do. So that's the key here, guys, is to realize that when you're buying that index fund, you are buying into the performance of the top 500 companies in the S&P 500, and you are letting someone else manage that, that it has far better tools and more experience than you do. So that's why we are always trying to guide people to really look at index funds as your starting base. And I mean, I have an index fund account, and I've had it for 20-some years.

one. It's really all about everyone thinks there's this get rich quick formula like, oh, I'm just going to go buy these three stocks and I'm going to crush it. And that's just not a good strategy, especially when starting out. Totally agree, right? At the end of the day, it's like, let me, let me just invest in the stock market, right? And when I say the stock market, I've got air quotes going on right now, the stock market is the S&P 500, the 500 largest companies in the United States. On average, over the last 94 years, the S&P 500 has returned 11. a half percent before adjustment for inflation and eight and a half percent after adjusted for inflation right so eight and a half percent every single year money on money like on average right so there's more

that you know there's ups there's downs but long-term vision here so back to your point here robert invest early and often take that money from your paycheck deposit it into an online broker uh you can look me up on public.com we'll actually include a link for you to just click on this and it will open up a brokerage account for you with public you can type in austin hankwitz or robert croak and see the funds that we're holding so you get inspired as to what you want to buy and you just deposit and you put it on auto deposit and you do that every single month right so invest early and often all right next one here robert is i want to uh learn more about this mindset you mentioned changing mindset what does it mean to have a different mindset as you want to become the first millionaire in your

family yeah this is a very important point and a lot of people struggle with this and it really just comes down to training yourself and your mindset to not have a a consumer spending-based mindset and more of an investor-based mindset. And what that means to the average person out there is when you get money, you get your paycheck and you're excited at just depositing your account. The key takeaway is instead of thinking, how can I spend this money, I want you to start thinking, how can I invest this money? That is the key mindset shift that will make you a multi-multi-millionaire down the road because so many people, when they have that extra $200, $300 from their paycheck after they've paid their rent and their car payment and their

groceries, they're like, yeah, I'm going to go to the mall, I'm going to buy these shoes, I'm going to buy this purse, I'm going to buy the new iPhone, whatever it is. It's really getting people to make that one mindset shift away from being a consumer-based mindset to an investor-based mindset. Totally agree, Robert. So now here's what I think is important as it relates to mindset. is a lot of people, to your point, you know, they want to, the consumerism, they want to do, listen, we have a massive wealth gap in the United States. Obviously, we know that there's billionaire, where you all know what's going on with Elon, but, like, right, that's a thing.

And from my perspective, I think the only way we're going to be able to shrink this wealth gap in a meaningful way is to get as many people as possible in the investor class. So what I mean by that is instead of saying to yourself, oh, I just got paid, I want to go buy that new iPhone, or I want to get some new Nike shoes, or I want to be a new Nike shoes, or I want to get that Lulu Lemon or whatever it is, what you should be thinking is, oh, I just got paid. How can I own stock in Apple? Because, you know, Apple iPhone. How could I own stock in Nike? Because the Nike shoes. How can I own stock and Lou Lemon? Because I'm going to go buy those leggings, right? As many people as possible into the investor class, because that is the only way to begin a building wealth on a long-term

basis that is, I mean, that money that you were building wealth with is, eventually will outpace your active income from your job. Yeah, and 100%. And that's a great point. And one of the challenges that I give people all the time is to help them balance getting away from the consumer-based mindset into the investing-based mindset is that if they're going to go buy the shoes, let's say they're going to go buy a pair of Nike shoes, what I challenge them to do, if the shoes are $200,

don't buy the shoes unless you can invest $200 in Nike stock. If you're going to go buy the new iPhone, don't buy the new iPhone until you have enough to invest the same amount in the stock. Because then that way, that's a great bridge for people to get them out of the consumer-based mindset and into the investor-based mindset. So that's one of the challenges that I offer people all the time and I've had such good response from it

because it just puts it in their mind that they can't always be thinking about how to spend their money. they really need to be pacing it, spending and investing, because let's face it, we're all going to go buy the shoes, but you shouldn't be buying the shoes first if you're not investing alongside of it. And so I just want to kind of piggyback on that real quick, Robert, because I think a lot of people, I mean, you go look at Apple stock right now. It's 150 bucks, right? Nike, I don't know what it is, Lula Lemon, probably hundreds of dollars, right? A lot of people might be intimidated by the fact that some of these single, like, oh, one share of stock is 150 bucks.

It's a lot of money. I get it. Listen, let me show you something. Let me enlighten you to this new technology called fractional shares. So what happened back in like 2014 or 50, I don't know, Robin Hood, I think, pioneered it essentially. But what they did is they said, hey, you don't have to have $150 to buy one share of Apple. How about this? How about you just buy $5 worth of Apple stock?

It's the exact same. You own stock at Apple, but instead of owning $150 worth, you own $5 worth. It's a fraction of a share of stock. So as it relates to, you know, oh, you know, I want to. spend this money or buy or I don't have that much money to invest in one share it's too much for me don't worry everyone's got to start somewhere fractional shares will be your best friend now I do want to kind of stay on this topic here Robert because I think that there might be some people who are listening that's like listen I have to consume I have to buy like groceries I have to buy

maybe this or that like you know I'm a consumer I'm in my 20s I'm still kind of you know it's fun to do these things my friends are doing and I want to be like them right so what would you say to the consume the person right now who kind of has that, you know, some empathy to those that do have to consume and it does make them happy in things of that nature? I would say that the consumption part is fine as long as there's balance with investing as well, because I find that in my experience over 35 years of investing is that a lot of younger people go, oh, investing is an older person's game. So, and that is changing now because there's so much information out there and people are getting younger and younger and getting into the investment class. So I think that's just really it is saying,

no, I can be both because I can add a side hustle if I want. I can do this to make more money online when I'm at home at night or whatever it is you want to do. But I think that there's just so much great information out there now to get people to understand that investing and building wealth is not an older person game. It is right now today. I don't care if you're 12, 15, 18, or 30. It is today right now with a few tweaks in your mindset. So it's so funny you say 12. I was listening to the money guys yesterday. Shout to the money guys. If you're all listening right now. We're big fans. When you guys here in Nashville, we should all get lunch and hang out. But listen, they were talking about building wealth over a lifetime in the long term impact of that. And they quoted something that I

didn't know. But to this idea that you mentioned, you know, 12, 18, 64 doesn't matter. How old you were, Warren Buffett bought his first stock when he was 11 years. years old. Isn't they crazy? I don't even know what a stock was at 11 years old. Yeah, you're giving me the chills because this is great that you brought up Warren Buffett. Perfect timing. Because there is an old saying or a conversation with Warren Buffett, and someone in an interview asked him, why don't more people follow your investing strategy? And he said, because of modern society, no one wants to get rich slowly. And that just like, because at the end of the day, you know, we're on TikTok, we're on Instagram, there's all this information out

there. If you just buy this course for $999 will make you rich overnight. And it's just, it just doesn't exist. It's really all about learning, following people that can help you and guide you to give you real information and then taking action. And that can start at 12 years old. That can start. Actually, I'm doing a TikTok, you know, coming up in the next few days about that subject. But it's just really all about gets back to. starting early and often. So let's quickly recap then. So, so we talked about investing early and off and make that very step by step, right? Remember, you get your paycheck from your employer. You're going to deposit 50, 100, whatever you can afford into an online broker. We prefer

public.com. You're then going to invest that money, $50, $500 toward the S&P 500, specifically SPY or VOO. These are the two biggest index funds that track the S&P 500, and you're going to do that repeatedly every single month. So that's checking the early and often box. The second thing we're talking about here is changing the mindset away from consume, consume to consume to consume and own, right? You can still consume. It can be a great person. Like, do your thing. But it's also important to say, if I'm going to be, you know, the biggest, I swipe my MX every day. I might as well own stock in MX. I swipe my MasterCard every day. I might as well own stock and MasterCard. Right. And an easy way to think about that is looking at your bank statement. Look at the things you're buying. Are you shopping at

Walmart a lot, Target a lot, those are publicly traded companies. Are you swiping your master card, your Visa, your American Express? Publicly traded companies, right? Are you watching this on an Apple iPhone? Publicly traded company? So just to recap there, invest early and often, change the mindset. What's the third topic we're going to be talking about here, Robert? Getting rid of the time sucks. And people always take this the wrong way. Getting rid of the time sucks in your life and replacing that with healthy habits. So, and what I mean by a time suck, people will say to me, well, you talk about this, but you're on TikTok telling us, telling us getting rid of time sucks and TikTok is a time suck. But it isn't. If you look at a platform like

TikTok, I think it's one of the greatest platforms we've ever had access to for learning because there's so many really smart people out there that are very educated in their own right and their own categories that can teach us a lot. I learn every day from TikTok. That's where I met you, which is incredible. But it's all about replacing a time suck. So when you're on TikTok, instead of scrolling through meaningless videos of people dancing or cat videos or whatever it is you scroll through, replace that scrolling with following accounts that will help you learn in the specific fields like investing and building wealth. So then you're replacing that time suck with a learning period, which I think is just so important. But there's also the simple ways like everyone's

going to watch Netflix. We all have our shows. That's great. But if you can, let's say you check your time of how much you use Netflix every day. If it's three hours a day, take an hour off of that. I'm not telling you to quit it and do all work and no play, but just take three hours, narrow it down to two, take that hour so you have 30 hours a month and learn a new skill set. That skill set could be in a current field that you're good at. It could be in a brand new field that's something that's more for the future like AI or Chad GPT or something like that. Once you start replacing those habits with money-making habits rather than time-sucking habits, that's just going to help you propel yourself to the wealth journey

much faster than others. I love it. And sort of a personal story here, Robert, is how I began doing that myself. Before I was a creator, before anything, I had just graduated college. I was about 22 years old at the time. I just got my first full-time job working M&A for a healthcare company here in Nashville.

And I was working, I did get to work about 8.30, and I leave around like 6, 60, 6 to 6.30 at night, right? But then I found myself from about 9 to 10, 45, 9 to 11 every night just watching Netflix, just kind of turning into a vegetable, right? It's like, oh, I want to forget about how long of a day I had. Where instead I was like, I don't know what clicked in me, but sort of to your point here of getting rid of those time sucks. And instead spending that time learning a new skill, what I learned how to do was design websites.

So I went to YouTube and I typed in how to design a website on Squarespace or WordPress or what's the other one, Webflow, or like all these other different platforms that you can use to design custom websites and I ended up creating sort of this like cookie cutter design websites specifically for dog groomers here in Nashville Tennessee and so what I ended up doing Robert it was great I went to Yelp I typed in dog groomers 308 of them popped up and I was clicking on their websites trash bad website no pictures no description bad but so I made a list of seven or eight of them that I thought were really really bad that I could sell a website designed to for about $800 to a thousand

depending on the customability of it. And that's what I did. I knocked on their doors. I brought some templates, some mockups. I was like, hey, I don't have a dog, but I saw your website looks like this. I think this website would instead, you know, bring in more customers. You can show some really cool success stories. You can have a better contact us page, whatever it was, provide value to the business.

And, dude, I was selling two or three websites a month doing this. It was a blast. So that's a personal story as to how I took away at TimeSuck, learned a new skill, made a couple thousand dollars along the way. and obviously that's kind of snowballed into a whole business we have now. But yeah, that's my example. Do you have any other ideas on TimeSucks? I think, you know, we talked about copywriting before this episode.

We talked a little about you to chat GPT, some AI. Oh, oh, here's a good one. Thumbail design for YouTubers. You can just go to Fiverr.com, F-I-V-E-R-R dot com, and there's a bunch of freelancers on this website. You can click around to different categories to help inspire you on ideas, but I know thumbnails for YouTubers are a really big one as well. Yeah, and so for me, two of my favorites, and again, this gets back to the feedback that I have in my DMs, and a lot of it's more of the hater comments, well, that's just not meant for me or it's a tough economy out there. And all of that is just a victim mindset. So it goes back to mindset again. They're kind of intertwined. But for me, if you're a techie person, there's a million options. And if you're more of a labor person, there's a million options. There's so many ways to make money. We live.

in the greatest era of being able to build wealth in history, bar none, full stop. And so, like, I tell people all the time, like, find things in your market with a simple Google search like you did for doing the pet websites. Find things in your market that are underserved. A lot of us live in areas where there's a lot of new building, there's a lot of new neighborhoods going up, et cetera, et cetera. And so two of my favorites that are really inexpensive to get started is pressure washing and remote car washing. Nobody wants to wash their car and nobody wants to pressure wash their house or their deck or their pool, especially coming into spring. You can literally get started in a pressure washing business for $1,000. And so these are things that you can get

started for little to no money and get a business because pressure washing, I owned a pressure washing company for 14 years. Nobody ever wanted to do pressure washing. So it was a booming business for a very long time, and I only closed it because of COVID. But you can charge in most markets, $65, $75 an hour for pressure washing on up. That's just a great ROI. Even if you're just doing it on your own and you do one or two jobs a day, you can make an incredible income. Remote car washing. You go to your neighborhood with a little flyer you can make for $10. You get 10 or 20 clients that you can wash their car once a week, detail their car, especially in affluent neighborhoods. It's a tremendous business with very little money needed.

And then when you go to the online side of things, digital products, that's just endless. So for me, there's no excuse to not be able to make money. Even if you have a 9 to 5 job and you're going, how do I make extra money so I can accelerate my investing? There's no excuse. You can literally Google anything on earth task-wise, digital-wise, or whatever, and find a way to add income to what you're currently making. And so just to kind of piggyback on what you were saying there with the pressure washing business and these labor businesses, neighborhood specific ones, right? Join, I've seen this all the time. Join your local neighborhood Facebook group.

There's probably three or four hundred people in it. I've got one here in Nashville, right? And there are people's kids like, hey, Jimmy over here is 16. He wants to learn the value of the dollar. Let him cut your lawn. Pay him $10. Like, yeah, Jimmy, come to my house. I'll pay $10, right?

Same thing. And then also there's a website that I follow called Nextdoor. I think I might be owned by Ring. But next door is always people, hey, I got this idea, this business, want to do this or that. Like, you don't have to go spend hundreds of dollars on flyers or to go to Kinko's or whatever. It's just posted on your local Facebook page. And to your idea, Robert, you mentioned $1,000 for a pressure washer.

I think you can rent one from Lowe's or Home Depot for like $80 or $150. Like, you know, really low kind of barrier to here, people. So right now in the area where I live in Colorado, there are two brand new neighborhoods with thousands and thousands of homes. And I could hire, if I had time, I could hire 10 people today and just go through next door for those neighborhoods and keep those 10 people busy, probably full time, just doing handyman tasks. So the key takeaway for me is lose the victim mentality, lose the mentality that it's hard to make money, because that is all on you. You have to fix that point in your brain to get you to understand that this is

meant for you, you can do it, other people are doing it, and find those ways, whatever the niche is for you to be able to make money, because it's out there, you just have to learn to earn, and that's the key. I know that that's going to be a clip. So for the people watching right now and listening, I want you to reply to us or put something here in the comments or something letting us know the side hustles, the cool side hustles that you guys are doing. Are you flipping couches?

Are you pressure washing? Yeah. My buddy in Miami is making a killing right now, picking up dog poop for folks in condominiums, right? What is your side hustle? Let us know in the comments. All right. So I want to wrap us up here, Robert. We're coming up on time. So I think a really cool thing to do here is to quickly, you know, bang right through these three again. So all the top, invest early and often. You're going to get your paycheck. You're going to drop it into an online brokerage account like public.com. You're going to invest it to the S&P 500. That's V-O-O or SPY. And you're going to do that every single month. Change that mindset away from consume, consume, consume, to consume and own, right? You want to also own the companies you're consuming. And you don't want to also own the companies you're consuming. And you don't want to. want to be a victim, you want to be a victor. And then the third one here, the time sucks and learning a new valuable skill, right? So that might be watching Netflix a lot. That might be watching TikTok a lot or a YouTuber, whatever, video games, whatever you think

that time suck is. Don't cut it off completely. We're not asking you to be cold turkey here. But, you know, shave a couple hours or a couple hours a week, right, if that's what you can afford and learn something new. And I also want to emphasize these people here listening right now that this could be a six, nine, 12 month journey, right? Learning a new skill doesn't happen overnight.

You need to be patient with yourself about it. It took me four months to learn how to make a decent website by using these practicing and every single day. Right. So just be about it. Be disciplined and come back and be consistent. So really good episode, Robert. Thanks so much, man. I'm for our next one. So actually, for those listening right now, our next episode is going to be next Monday. And we're going to be debunking the top three financial tips that are tricking people and keeping them poor. We have three really, really controversial ones that you guys might think is a good thing. But we think, gets bad so come back for that episode it'll be right after this one and we'll see you then