Rich Habits Podcast - 116: How to Retire Early (Seriously)

Episode Date: May 5, 2025

In this week's episode of the Rich Habits Podcast, Robert and Austin share the step by step blueprint on how anyone can retire early.---The FIRE Funds (FIRS and FIRI) were two ETFs focused on growth and wealth preservation in retirement. Unfortunately, Tidal Financial Group dissolved these ETFs. They are no longer trading on the stock market, and if you owned them (like we did) your shares have been redeemed for cash in your brokerage account. We apologize for the inconvenience this might have caused you. Read more here. ---Sign up for Public and take advantage of their up to $10,000 bonus when you transfer an existing portfolio to their platform, click here! ---Analyze your portfolio and join over 250K+ investors on Blossom, click here!---🚀 Sign up for the Rich Habits Network so you don't miss out on the next big investment opportunity,⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠click here!⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠—⭐ Download our FREE Financial Planner –⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠click here⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⭐ Download our FREE Budgeting Template –⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠click here⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⭐ Earn 4.1% on your savings with a High-Yield Cash Account –⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠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]---Investors should consider the investment objectives, risks, charges, and expenses of the ETF carefully before investing. For copies of our prospectus or summary prospectus, which contain this and other information, visit us online at www.fire-etfs.com or call [phone]. Please read the prospectus and/or summary prospectus carefully before investing. Duration: Duration measures how long it takes, in years, for an investor to be repaid a bond’s price through its total cash flows. Investing involves risk. Principal loss is possible.  Distributed by Foreside Fund Services, LLC.---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.

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That was easy. Spotify, it's Jay Shetty. Are you one of those media strategy people? Scrolling through spreadsheets, searching for an audience that pays twice as much attention to your ads than they do on social? Let me introduce you to fans. And they're here with me on Spotify. Trust me, I know fans. They don't skip.

They stay for hours. They don't move on. They manifest. They're not a demographic group. They're fans. Spotify advertising. You're among fans. Hey everyone and welcome back to the rich habits podcast, a top 10 business podcast on Spotify, brought to you by public.com.

My name is Austin Hankwitz and I'm joined by my co-host, Robert Croke. Robert is a seasoned entrepreneur in his 50s with lifetime revenues of over 300 million and I'm an entrepreneur in my late 20s with a background in finance and economics. Since quitting my full-time job in corporate finance a few years ago, I've built a seven-figure media business and actively advise some of the most well-known fintention. companies around the world. Now, as the show name might suggest, every episode, we talk about rich habits as they relate to business, finance, and mindset. However, we try and bring you two unique perspectives, one from an industry veteran, which is Robert and the other myself, someone who's still in the process of building wealth and figuring it all out. Robert, what are we going to be talking about in today's episode? In this week's episode of the

rich habits podcast, we're going to share with you all the step-by-step blueprint on how anyone listening can retire early. Retirement means a lot of different things to different people. For example, I'm approaching retirement age myself, but I've actually been retired for over a decade now. But that doesn't mean I'm sitting on a beach, sipping coronas, hanging out all day because I love what I do and I love being able to continue working on the projects that are near and dear to my heart that I'm passionate about. So this episode will be that blueprint you need and will show you exactly what to to retire early. You might not like the answer. You might need to make changes in your lifestyle or your retirement expectations, but we're going to tell you how to retire early regardless.

This episode will be the blueprint of sorts, and it's broken down into six sections, which each section will be building upon the previous one. So let's dig in to section one, which I like to think about as the foundation. Now, fundamental to a sound financial footing is knowing where your money is going on a monthly basis, and by having a budget, you can see both your sources of income, as well as what you're spending your money on. Now, I know this sounds really elementary, but I'm willing to bet that more than half of you listening right now, don't actually have a written budget with every single monthly expense included inside of it. You need to do this. It will change your life. I cannot say that enough. Having a written budget

where you've got every line item of what you expect to spend for the next month, right? This is going to come out in the month of May. So you need to have your June, your July, your August budget figured out. It takes a couple months to get to the groove of things and figure out what things actually are and how much money you're spending. But once you actually overcome those expectations, I swear it's like taking the limitless pill. I mean, you just see the world differently. Now, once we've built our budget, we're going to begin paying for our essentials. This is rent, groceries, utilities, income earning expenses like transportation related.

You have to go to work to make money. You should probably buy the bus ticket or pay for the Uber or your car payment, right? You got to go do that. Insurance is also essential. That could be car insurance, housing insurance, rent insurance, health insurance, life insurance. Now, once we've paid for our essentials, we're going to do minimum payments on all of our debt, student loans, credit cards, vehicles, things of that nature. and most importantly, stop going into high interest debt.

That's simple. So keep track of all your expenses. This is going to help you understand what you're spending your money on and where you can begin to trim fat if needed. This is the literal foundation of a positive relationship with money with a long-term goal of retiring early. If you master this foundational layer of knowing everything that comes in, everything that goes out,

understanding what is essential and non-essential in my daily life, world is your oyster when it comes to financial freedom. So what I hear in the foundation phase of this, and that's a great breakdown, is just getting people to understand, no matter how rudimentary it may seem, most people don't do it and don't stick with it. But it's also all about not living beyond your means. In this first phase of building your foundation, you need to have that heart to heart with yourself, your better half, and the whole family and understand where you're at and make sure you're on the right path to build that foundation as early as possible. So let's get into section number two that I think is really important is the emergency funds.

We want to see you set aside three months worth of expenses. For most of you, that's going to be about $10,000 to $15,000, but this is your emergency fund. This is going to take you anywhere between 9 to 18 months to build from scratch if you haven't already started. And for some of you, it may be shorter. for others it may be longer, but it shouldn't take you more than 18 months to build because you're going to take this very seriously. You're going to get it dialed in and you're going to follow the plan of what we're laying out today, this blueprint for early retirement. Now, if you're having trouble building it, you need to evaluate your non-essential spending and reduce where necessary. This looks like

eating out, restaurants, streaming services, subscriptions, switching wireless providers to save some money until you're on your path to building that up. This is the buffer between you and everyday life that's going to allow you to breathe easier and set yourself up for success leading into section three of this podcast. So we now have our foundation laid. We know everything that's coming in, going out. We know what our essential spending is,

our non-essential spending. We cut back on some non-essential spending to build up that emergency fund. We have $10, $12, $15,000 set aside. a buffer between us and life. So now it's time to move on to Section 3, which is figuring out debt and investing. So we've said this phrase a hundred times now. Match beats Roth, beats taxable. We want to ensure after you've built up that emergency fund of three months of expenses, providing a little bit of a buffer between you and your life, that you're now on

track to start building wealth. The only way you're going to retire early is if you got some wealth. So let's go build it. Wealth is built in two ways. by paying off debt or by investing in the stock market. We prefer that you pay off your high interest debt first before investing in the stock market because you cannot out-invest high-interest debt. Here's that example for you. Let's say you've got $10,000 in credit card debt at 30% interest. You're paying $3,000 a year of interest to the bank on that credit card debt. Let's now say instead of paying off the credit card debt, you had $10,000 in the stock market. On average, the stock market goes up by 10% a year. So by not paying off the debt with that $10,000 you had invested, you made $1,000 in the stock market, but you racked up

$3,000 of interest. That's a $2,000 net negative. Y'all see the math there? Pay off the high interest debt. You cannot out invest it. So once that's paid off and you have no more high interest debt, now let's get aggressive with building wealth so we can retire early. And before I talk through that. I just want to make sure we're on the same page. High interest debt is double digit percentage points, maybe even 8, 9% on the low end. But if it's, you know, 4%, 5% like most student loans are, that's not a high interest debt. We'll figure that out later. All as well. Instead of paying that off, we'd rather see you invest, but we'll get to that. So now let's get aggressive about building wealth so we can actually retire early. Does your employer offer a 401k match? If yes, we want to see you

investing up to the match because the match is free money. We also want you to head over to public com and open up a Roth individual retirement account, contribute the maximum amount of money on an annualized basis to that account, which is $7,000 and then invest that money after it's contributed into the index funds and ETFs we talk about like the S&P 500, the NASDAQ, the Dow Jones, and everything in between. Up to the match for the free money, max out the Roth IRA, back to to the 401k if you have autonomy and you can choose your investments like the S&P 500, not like target date funds. And if not, then we want you to be investing anything more you have in a taxable brokerage account, which we call the bridge account also on public.com.

So let's use some real numbers and really break this down. Let's say your household income is $120,000 a year. That's about $100k a year take home. So if you're contributing 3% matched to your 401k, that would be. be around $7,200 a year towards your 401k, including the match. Then another 14K contributed towards your Roth IRAs for you and your spouse. That's 17.6% of your take home pay getting invested, which is a really, really good place to start. So this $21,200 in annual investments between you and your spouse could turn into $1.7 million over just 20 years. So instead of retiring at 65, you could now retire at 55 with this $1.7 million. But maybe instead of starting at 35 in this

example, you could start at 30 because you listen to this podcast and you take notes and take action. And that now turns into $3.3 million invested by the age of 55. And that is truly a great place to be at that age for retirement. This also assumes you make the same amount of money for the rest your lives, and that's not going to happen. So you'll be making more over time and you can keep adding to these funds. But this is just a blueprint to help you figure out how to get there. And maybe you're doing some of this inside of your bridge account, right? We've talked about the bridge account. Let's say you're investing all this money inside of this bridge account, this taxable brokerage account on public.com. As a reminder, a married couple filed jointly can cash in on

$95,000 of long-term capital gains. per year and pay $0 in taxes on that money. Go look it up. It's real, right? That's how the taxes work with long-term capital gains. Not short-term. You'll have to pay taxes on the short term, but a long-term capital gain up to $95,000 married couples filing jointly of tax-free investment portfolio income here. And if you have $3.3 million invested because you're $55, you started at $30, you're taking out $95,000 a year to retire off of. That's less than a 3% withdrawal rate. You know, we've talked about the 4% rule. People think the 5%. We talk about Nios funds and all the other ways that you can make income, less than 3% withdrawal rate on these numbers. It is so, so awesome. Yeah, it really helps people

understand that you can reverse engineer what you want your life to look like in retirement and build backwards from there. And I think the 4% rule is a great way to understand those numbers. but let's get into section four which is one of my favorites to talk about and that is you either have a spending problem or you have an income problem or you have both for most of you out there you're spending six eight 10k a month to live your life and then you still complain about not having enough the less you spend per year the less you need in retirement and your nest egg to sustain that lifestyle that you want 5k per month is 60k per year spent your one point you're one point $1.5 million retirement nest egg theoretically should generate that same 60 to 70,000 per year for you to live

off of. So I know building a nest egg of $1.5 million sounds daunting, but we've just shared an example, an easy example that resulted in a $1.7 million nest egg in only 20 years and $3.3 million in just 25 years. And it is totally doable. I promise if you follow the structure of this blueprint and you stay consistent, it will work. Create a budget, get out of high interest debt, invest aggressively, live on lesson you make, and practice contentment. It's really that simple because it's all about consistency. People that retire early aren't living a flashy lifestyle with brand new cars and boats and five-star vacations all the time. They choose what they value in this world and they live and spend accordingly by following the structure we're laying out here today. This episode,

is so much fun to talk through because I know a lot of people are saying to themselves, you guys make it sound too easy. I'm never going to get millions of dollars in retirement. No, we literally just showed you, yeah, if your household income is 120 grand, which, yeah, it's on the high side, right? But maybe your household income is more than that. Maybe it's a little bit less. Tweek the numbers accordingly to your specific situation. And also, we assumed the 120k is what your household income is going to be for the next 20, 25 years. Have you ever heard of a raise? Have you ever heard of, you know, getting a new job to make more money, right? There's a lot of variables that will make this easier over time. But we laid out an example where you can contribute 3%

to your 401k. Get the match. That's $7,200 a year in this instance. And then you max out your Roth IRA. Your spouse maxes out their Roth IRA. Now you've got all this money invested every year. Maybe you guys have got a couple side hustles going on. And so you're investing more aggressively via public.com in a bridge account. Fast forward 20 or 25 years. And you're you're going to you guys. And you've got millions of dollars. You might not be retired at 32 because you're a tech billionaire, but like, that's not reality. Because the things you see on Instagram with the private jets and the internet money and all these crazy things that people are trying to tell you, that's not reality. The reality is you're on a long journey of a life full of contentment and hope and realism

and excitement that you will be able to retire, maybe in your 40s, your 50s or your 60s, but it is an early retirement. And most importantly, I want to realize. I want to, reiterate, retirement is different for everyone. For Robert, it means he gets to do fun real estate projects. He gets to do the podcast with me, all these cool things that he's doing because that's what makes him happen. He's passionate about that. For other people, maybe retirement truly is sitting on a beach. Or maybe it means working part-time as a barista. Or maybe it means teaching a middle school gym class. I don't know, right? Retirement means something different for everyone. And so understanding where you are, what means a lot to you and what you're excited about as a human being is how you can retire

as early as possible make a plan stick to the plan the phrase goes adults devise a plan and stick to it children do what feels good in the moment the biggest takeaway for me for this episode is getting people to understand build the life you desire not the life you perceive other people think you desire i think that's a critical critical juncture of everyone's life because personal finance is personal. And just make sure you understand what is it you really want for the rest of your life. What are your goals? Some people just want to have a farmhouse with a nice little garden. Some people want to live on a beach. Some people want a condo on a lake. It doesn't matter. It's what's important to you. And we hope that this episode helps you figure it out

and really put it down, use the blueprint and follow through with it. So years down the road, you can look back and remember this episode and think that you took notes, took action, and built the life that you really desired. Robert, I could not agree more. Now, before we jump into the Q&A section of this episode, we actually wanted to bring on someone who's really making waves in the early retirement space. His name is Mike Venuto. Mike is the chief investment officer and co-founder at Tidal Financial Group. And he's really doing some cool stuff as it relates to the fire movement, financial independence retire early. So we thought it'd be a good idea to welcome him onto the show. Mike, thanks so much for joining us. Thank you, Austin. Thank you, Robert.

Excited to be here talking about early retirement. Let's dig straight into it, right? This whole episode has been about early retirement and the foundational strategies that people need to be following as it relates to actually being able to retire early. Now, you all over at the title financial group recently introduced two new ETFs, F-I-R-S and F-I-R-I as a simpler way for people trying to retire early to have a clear two-step investing plan. So can you walk our listeners through how that plan came to be and what that plan is and how they can use these ETFs to stick to that plan? So here at Title, we help people launch, grow, and operate ETFs. Today we service 200 plus ETFs, $30 billion. We love doing it. And what we saw was a lot of people were using them for

income in retirement or to build a nest egg. So we decided to embrace the fire movement and make two ETFs, one that's about building wealth, creating a nest egg, and one that's about distributing income while preserving capital. We built these ETFs by using primarily our client's ETFs on the title platform. So we call them fund of funds or ETFs of ETFs. FIRS is the wealth builder. It's designed to help you build wealth and save and beat inflation. And it's different than your traditional index based, you know, large cap US stocks. It's much more diversified. We own bonds. We own stocks. We own cash alternatives. We own gold, which has helped a lot this year. So it's a diversified approach to saving. The other portfolio is FIRI for fire income. It's designed to get you at least

a 4% distribution while protecting the preservation of your capital. And it's doing that also through diversification. So Mike, what I'm hearing is you've got the FIRS ETF, which is the wealth builder ETF. So if you're someone who's trying to build up that retirement nest egg, this is the ETF to do it alongside of and through. And then once people have that nest egg that is in the hundreds of thousands, if not millions of dollars, and they're ready to actually begin realizing some of that as income, they switch over to the FIRIETF, which has all these different instruments that will produce the income on a pretty consistent basis. Exactly.

They are designed for those two purposes, an accumulation phase and a distribution phase. So I really like that. And something that's interesting to me right now is the lack of volatility your FIRS ETF has experienced year to date. Because if you look at it, the stock market was down over 15% from recent all-time highs. and the F-I-R-S-E-T-F was down only a fraction of that. So what is the underlying strategy and how are you implementing that to allow you to weather the storm so well during these times of higher market volatility? It's been a great run this year for us, right?

As of the recording of this, we're actually in the green for the year, and you can't say that about very many things. Wow. So the idea is based off of what's called the permanent portfolio theory. And this was written by Harry Brown, who was a politician and a market theorist from the 70s. His brain was shaped by the 70s, that high inflation concepts. And his thesis was if you think about investing in economic regimes being inflation, deflation, recession, prosperity. And then you equate those four.

So you buy stocks for prosperity. You buy cash alternatives. and hedges for recessions. You buy gold and Bitcoin and various different commodities in real estate for inflation, and you buy longer-term bonds for a deflationary environment. So this year, we have been trying to keep rebalancing to that 25 percent due to the volatility we've had. Obviously, two or three weeks ago when there was a lot of volatility, the equities dropped below that 25 percent. That's a signal for us as active managers to go and bring it back to the 25 percent, take a little off the gold, take a little off the bonds that had done well, and get us back there.

That's why we've been able to mute the volatility of the market because we're not just 6040, they like to say 64 bonds and stocks, right? That's not working that great because bonds have had a rough time too this year. But gold has done extremely well. Bitcoin has done extremely well. Cash alternatives and some of the hedges that we have in the portfolio have done extremely well. So what you're saying is you essentially have a pizza, and that pizza is cut up into four slices, right? A quarter, a quarter, a quarter, and a quarter. So a quarter of that is invested into equities like index funds, the S&P 500, things like that. Another quarter is invested in things like gold and silver, which is done very well. The other quarter is invested

into like long-term bonds and things that do well during deflationary times. And then the final quarter is invested into more recessionary focused things like cash alternatives and some dry powder. So what you're saying is you always have this portfolio a fourth, a fourth, a fourth, a fourth and a fourth. And over a long period of time, you want to make sure that you keep that sort of waiting to be 25% to all of those different things. And like, for example, now, when equities have pulled back in 2025, that 25% waiting for your equities portion has shrunk to maybe 20% in value because prices have gone down. But now the gold side of the equation has gone up so much. You're starting to trim back on the gold a little bit, put it into the equity. So it's always a rebalance sort of portfolio here, a permanent portfolio,

and it's optimized for whatever the market cycle really is. That's absolutely right. What is also important, though, is the active management is rebalancing, but it's also picking the best ETFs. So when we rebalanced recently, we did reduce some of the gold, and we added to Tom Lee's granny shots, ETF, things that are going to do better than just the overall equity market when things rebound. Oh, that's so cool, right? So like, for example, I'm looking at this ETF that you guys, you know, the granny shots one that you just kind of added and increased inside of this FIRS. And it's got Netflix, it's got Costco, it's got Microsoft, Crowdstrike, all the names that we know and love are inside of this. So you have exposure to those things

over a long period of time as you continue to kind of wait and rebalance your FIRS ETF. So here's my other question. Where do these types of ETFs fit inside of a regular investor's portfolio. Like, I know a lot of people listening right now are saying, I want to retire early, and they might be on that path. But other people might just be hanging out and saying, you know what, I'm going to retire when I am and I'm just going to live my life and do my thing. I wish I had more FIRS in my own portfolio. I've definitely got a good chunk, but I mean, you guys are in the green this year and I'm not. My portfolio is down about 5.5%. So I'm curious, like, where does FIRS and FIRI fit inside of like a normal person's portfolio? So let's go back

to that accumulation phase. If you're starting your accumulation phase and you're thinking it's going to be 20 years before I hit my fire number, I'm ready to retire, you don't really need FIRS unless you don't like the volatility, right? Unless you're not able to handle 20% drops like we've just gone through. If you've got the stomach for a 20 year time horizon, fine. Now, you're five years from retirement. That's a different story. I don't care what your stomach fortitude is. you don't want your number being pushed out two or three more years. So we think of it as a way to complement investing in broad-based U.S. equity, low-cost ETFs out there.

This is a way to put away some of that money for your nest egg that you can feel more comfortable about and survive the volatility. Once you're past that accumulation phase, then you can start to take some of your broad-based U.S. equity or some of your FIRS and move it towards income. so that we can kind of update that 4% rule, right? That 4% rule assumes that you're going to be taking from principle. With FIRI, we tried to create something where you're taking from distributions and not so much from principle.

Yeah, that's great. And before we get into my last question, I want to go back and talk about this permanent portfolio theory. I'm a big fan of some of the oldies. Last night, I brought up a bunch of things from inside one up on Wall Street by Peter Lynch. And it's just like, I don't understand why more people aren't talking about this theory because obviously it's working in these tumultuous volatile markets right now. So why do you think more people aren't looking at this four pieces of the pie and breaking them up evenly to offset volatility in

times like this? Why aren't more people implementing this strategy? The last time that this strategy really helped was 2008 because bonds did really well and gold did really well. A strategy in this concept would have had a pretty decent year. It wouldn't have been positive, but it wouldn't have been down the 45s and things like that. Since 2008, we've had this strange bull market in both stocks and bonds that has been call it who what's the nice word. Everybody's saying mean things about the Fed nowadays.

I don't want to jump on that bad wagon, but there's been a government-induced bull market. So a lot of people who are in the new fire movement have never really lived through a real bear market. And diversification hasn't been your friend until a year like this, where, you know, the bingo card is full of things that we didn't expect. And when that happens, you have gold at record highs, you have Bitcoin rallying, you have bonds selling off than rallying.

So that's why a lot of the things that we're doing in here are working. I think that the attention it's getting lately is because people are starting to recognize the value of diversification. again. Yeah, Austin and I talk about it daily, and we also mention active management. We just strongly disagree with people that think they can set it and forget it and put all their money in a target date fund for 30 years and not pay attention to what's going on. So I really like this strategy, especially in times like this, because you can easily with the active management adapt around it. And so I think it's a really strong kind of component and strategy, and I'm glad we're

talking about it and introducing it more to our audience just as another alternative to what they can be doing to help them retire early. So let's get to my last question and that is the 4% rule. We've talked about this in the episode and have shared countless times with our listeners what this is over the years. But how are you generating that kind of income for your FI-R-I investors on a consistent basis and walk them through why the 4% rule is? so important for retirement, whether it's early or not. So I'm going to start with the second part first, right? So the 4% rule really allows you to figure out when is my accumulation phase done?

Because it assumes that you can take that number and divide it by 20 and come up with, hey, this is how much I can take out of it and have a comfortable retirement, right? It's kind of a reverse engineering. I think that that's a little bit antiquated and I think a lot of the fire movement has moved to higher numbers than that, right? Because in a higher interest rate environment like we live in today and with all the derivative and option income that's available, people have moved a little further away. So our approach was let's build an income barbell, which means let's build a really safe diversified portfolio full of hedges that protects the principle. And then let's build a much

higher yielding one using option income and mortgage-backed securities. I have a whole portfolio in there that's actively manages of loans to veterans. I love putting these pieces together. So I take those two and I say, this one's yielding eight, nine right now, and this one's yielding three. How much of the safe one do I need versus the more risky one? And to get to that target 4%.

So it's just a barbell that's rebalanced to an at least of 4%. That hopefully allows us to maintain principle and distribute income that's useful to invest. So if anyone's super interested with the F-I-R-S-E-F, F-I-E-T-F, and everything that Mike has been talking about here, their website is fire-dashethefs.com. We'll also have something linked out in the show notes below. But Mike, thank you so much for joining us as we talk through how to retire early with our audience. Thank you. Yes, Mike. Thank you so much. We just love always trying to give people the hacks,

give them the best stuff, find all the best options out there so people can just really make educated decisions and help find themselves in a position where they can retire with dignity. That's the number one goal here. And we appreciate you stopping by shedding some light on these ETFs and really breaking it down for people that are looking to retire early if they can. Wonderful. Yeah. I think the most important thing to leave people with is investing really is about time. And it's not timing. It's not when do I get in? When do I get out? It's about staying in and compounding and it's our hope that the protections and the volatility dampening and diversification of these products help people stay in and don't panic.

Totally agree. Thanks, Mike. Thank you. Great conversation with Mike. I feel like I learned something new every time I talk to him. And I can really appreciate that they've built a ETF that has those like four quadrants, right? No matter the market cycle, we've sort of got you covered here.

And it's done well this year. It's been really cool to see. know, they're in the green and your boy is in the red. So I wish I had more of it. Well, but it also really speaks to us always trying to find the strategy that will work in any market. I was so excited to discuss that four quadrant theory and how it works so well in a market cycle like right now. And it's just really important for everyone to understand that is why we preach active management, keeping an eye on your money and understanding the different market cycles and how you can prepare for them. Austin and I have been talking about volatility for months now,

and this is just another way to really watch out for yourself and set yourself up well for retirement. Now, Robert, here's a question I have for you. Have you ever been looking for an online brokerage platform that was actually built during the century? Because if that's the case, you need to give public.com a try. I know you're already using public, but on public, you can actually invest in anything. stocks, bonds, crypto, options, and tons more. And if you're like us, Robert and I, right, we keep an emergency fund. And that means that we're taking advantage of their 4.1% APY offered by Public's high yield cash account. Yeah, we love Public and discover why NerdWallet gave public five stars for its ease of use and investment selection. Fund your account in five minutes or less and earn up to

$10,000 when you transfer investment. over to public. And for a limited time, public is offering a 1% match on all IRA contributions. So if you're finally investing towards your Roth IRA this year, do it on public and earn a free 1% match on all contributions. Paid for by public investing, full disclosures in the podcast description. I want to say that again because I want to make sure people heard that. Your Roth IRA that you're maxing out every year, if you have it on public, they will give you a match of 1%, right? So like, you know, we just gave this example of a 3% match at your employer. Like, Public's giving you a 1% match on your Roth IRA. That's awesome. That's a free $70 if you take

all 7,000 deposit it rock and roll. 70 bucks you didn't have before. That's what I'm doing. I'm taking advantage of it. Go max out your Roth IRA on public.com. Go move your portfolio over to public and take advantage of that $10,000 bonus that they're offering as well. You know, people ask us, Austin, Robert, why are you guys talk about public? It's because we love the platform. It's because it's the easiest way to introduce anyone to the investor class. We've had tens of thousands of people sign up for public because of this podcast that are now investing for the very first time in their lives. That is unreal. That is so powerful. These are people that are now working and inching toward hopefully an early retirement of their own. So like, I have no shame in

my game when it comes to promoting public. They are. are doing God's work. Our first question is coming from Mitch on Instagram. Mitch says, Hey, Austin and Robert. My name's Mitch, and I got a question for you guys. My fiance and I are getting married at the end of the summer and we're looking to combine our finances once we're married. We both make similar amounts of money. We have similar spending and saving habits. And we both have common saving goals. Because of this, we're thinking that we will just fully combine our finances and take everything and put it all into one account. We're trying to set ourselves up to be able to buy a house in the coming years and we're wondering if choosing a bank account with this in mind should affect

our decision. My thoughts are we'd likely get a better rate through a mortgage lender so I don't think the actual bank account matters all that much. What do you guys think and do you have any thoughts in general on combining finances with your partner? So I'm going to answer that last question first. I'm a big believer. And if you all are married, you guys are a unit in the eyes of the world and God and the country and the IRS, you all are married and you are together, then sure, combine your finances. I think it's a wonderful idea. You guys are on the same page about money. You guys are same savings goals. We all know the number one reason for divorce is money problems. And if you are on the same page and you got it all in the same account, same goals, same, like you guys are

rocking and rolling. That divorce statistic drops dramatically. Now, you actually, you have a lot of Does it matter what bank or something with a mortgage? No, that doesn't matter at all. Like, if you are using, I don't know, Bank of America and your spouse is using Wells Fargo or Chase checking or, I don't know, I use Bank of Tennessee. But let's say you're using these different things, like pick whichever one works for you. It doesn't really matter, right? And to your point, yes, like when you have a mortgage and you want to go buy a home in the coming years, you will go to a mortgage lender. You likely won't go to your bank. Those are two different things I just want to make sure that's called out.

I'm a big believer, combining finances, having visibility, sitting down once a month and saying, okay, cool, let's make a budget, right? I'm going to make $5,000 this month. You're going to make $5,000 this month. Take home, we now have $10,000 in the pot. What are we going to spend our $10,000 on collectively? Oh, let's go on a couple of dates. Oh, you want to buy a new purse.

Hell yeah, that purse is cool. Oh, I want to buy some new shoes. Heck, yeah, these shoes are cool. Or, hey, you've got 500 bucks to spend on whatever the heck you want to spend it on. I don't care. or whatever, right? But being on the same page and having these conversations is really healthy for a marriage and my humble opinion.

I'm going to almost agree with that unequivocally. I'm going to add a little bit to it, though. So many people believe they're on the same page because they had a wonderful, lovely pre-marriage conversation and then they get married and things over time change and can change. So I think you should take it one step further. Where you have a conversation that states exactly what your beliefs are and what you're agreeing to because I have found in my past experience that things change over time and you might find yourself drifting apart on this notion of being on the same page financially and you don't want

to have that resentment building up because one person is spending more than another. When I do one-on-one calls and consulting calls, I hear about it all the time. Someone in the relationship started gambling on sports. Another person took up golf and golfs four days a week and it's a very expensive hobby. All of these things can come about over time in these marriages. So just make sure that you have a really strong understanding, like Austin alluded to, spell it out and really have a serious conversation, not a passing conversation like, this is great. It's going to be wonderful because you want to make sure that you have that budget, you live within your means, and you can really, really set yourself up for financial success. Our next question comes from Blake on Instagram. Blake says

my dad has all his money tied up in paid off real estate. I just turned 19 and I want to get into real estate, but I don't think I can get a decent loan based on my age and lack of history of income. My question is, would it be smart for my dad to take out a loan against two of his paid off real estate investments to give to me and I would pay the mortgage? Is this a good idea? What do you think, Robert? I think if your dad is in that position, I would rather see him go help you get a mortgage, sign for the mortgage, give you a loan for the down payment just like a bank would to get you started, then have him go take collateral debt against properties that are paid off. I think you could do it either way and it would be fine. But in this instance, I would

rather see you building credit through being on a mortgage of something that you are defined as an owner on the deed to be able to help you get started rather than it just be debt against one of his properties and everything is in his name because it's not really helping you other than getting you started, but I'd rather see you on the paperwork to build your credit, build your experience in the transaction phase of everything rather than him just helping you through collateral debt. Yeah, Robert, I think my perspective is very similar. If anything, like, I don't know, hey, dad, what can I do to help out with your existing real estate? Or can I, maybe become a real estate agent and you're getting in on some of the deals before they hit the market.

Like there's a lot of ways, again, I'm not in real estate as heavy as Robert is and other people that listen to the show. But like, there are other ways that you can get into real estate without saying, I'm going to go in $500,000 of debt, right? Right. Like, be an agent, make some cash. Maybe you're a property manager. Like, you're doing things. You're 19 years old, dude. You're probably on Instagram or TikTok and seeing other 19 year olds making millions of dollars by on their private jets doing real estate deals in Miami or something crazy, that's not real life. Real life is you're going to grind face to

your 25, learn everything you can about real estate. Then maybe at 25 years old, the right deal falls in your lap. You get some creative financing and you have a home run opportunity. You knock it out of the park. And now that's your first foray into what real estate investing could look like for you. There's so many ways you can do this, Blake, but at the end of the day, be patient. Hopefully your dad can help you out when it comes to getting a mortgage. Yeah, that's my advice. Yeah, I mean, Blake, you're in a great situation. You have a father that understands real estate. He's crushing it in real estate.

You want to follow it in his footsteps. Go have the real conversation with them and say, dad, I'm ready. How can we do this? I want my first property to work on. Start small. He's going to give you a lot of great guidance and just get in the game. I mean, there's a lot of ways like Austin said to do this. And you've got a one up on almost everybody because you have a father who knows the business

and can help you right out of the game. the gate. Now before we jump into our last question, let's take a moment to hear from this episode sponsor, Blossom. Because investing is a lot more fun when you're doing it alongside like-minded people. From dividends to growth stocks, there's a community for everyone on Blossom. And remember, Blossom is not an online broker, but instead a social investing app built around transparency, a social media platform built specifically for investors. And transparency is key when it comes to investing. You all know how important that is, just because, you listen to our podcast. I've already connected my personal accounts to Blossom and I enjoy seeing

how everything is divided up and performing on a daily basis. Additionally, they have dual-lingal style educational video content for those of you that are still learning. They were recognized as a top 25 app for 2025 by the Apple App Store and for good reason. So if you've not yet joined Blossom, we really encourage you to do so. Over 250,000 people already have. It's a very easy way for you to find both your community of like-minded investors and also manage your portfolio in a really clean way. Click the link in the show notes below to sign up for Blossom or simply type in Blossom in the Apple App Store. So our last question comes from Jasmine on Instagram. Jasmine says, Hi Austin and Robert.

I'm Jasmine. Thank you so much for doing what you do. I really appreciate it. I have a question specifically for Austin. If you don't mind sharing, can you talk about how you went from making $70,000 a year out of college to becoming a millionaire in just five years? I'm making $80,000 a year at 24 right now as a software engineer. I have around 18,000 in my emergency fund, 10,000 in my Roth IRA, 3,000 in my brokerage account, and 1,000 in cryptocurrency. I'd really appreciate any advice and a play-by-play explanation of how you've been able to achieve

such an impressive milestone. Thank you, Jasmine. I appreciate the question. And I think, you know, we just talked about how transparency is key. I am a open book. How I went from making $70,000 a year as a analyst at a healthcare company essentially to, I think my income last year, my tax return was just shy of like 700,000 and this year it's probably going to be 8, 9, a million if I'm lucky. But my net worth, right, my assets minus my debt is over a million dollars, therefore I am a millionaire. The key to that was increasing my income, right? I was able to work from like 8 or 9 p.m. at night to about 2 a.m. on a side hustle, which was TikTok, it was a newsletter, it was live streams, it was a lot of consulting. It was a lot of things from like 2020 to about

2022 that kicked my butt. I eventually quit my job mid-2020. So I could go all in on being an entrepreneur like this, but I didn't quit my job until I was making much more through my side hustle than I was with my normal job as an analyst. So any piece of advice I could give is like, one document the process. The biggest hack right now is having a voice online, if that's on LinkedIn, if that's a newsletter, if that's on X, if that's on Instagram or TikTok or wherever else. If you have an audience, that audience is more valuable than you could ever imagine. So that's the first piece of advice. The second piece of advice is to double down on what you're really, really good at. And if you do that and you do it on something that makes you really happy,

it won't feel like work. So working from 8 p.m. to 2 a.m., analyzing earnings calls, and hosting live streams on the weekend because during the week, I was actually still at my job. Like, that didn't feel like work. That was awesome. I love talking about that stuff. And so if you're doing something that you really love, it's not going to feel like work at all. And then finally, surround yourself with people who really bode to your weaknesses, right? I found a co-founder within the first couple months of, like, starting this little business in the beginning. And he's way more organized than me. I'm not a very organized person. He's just very great. His name's Christian. He's the executive producer of the show.

as well. Robert knows him very well too. He's in the Rich Habits Network and everything. Like Christian is a rock star. And I would attribute a lot of the success that I've had over the last several years to Christian being my partner. So maybe find someone in your network that could help you build and turn something into something magical so that your income can increase so much. Once you're now making 100, 200, 200, 300, 400, 500, you know, hundreds of thousands of dollars a year, you pay your taxes, which sucks. But then after you pay those taxes, you invest the money. You put it in the S&P 500. You put it into your, you know, blue chip single stocks, maybe some cryptocurrency. That goes up in value. Maybe you buy some real estate like I did.

Maybe you invest in some startups like I did. And your net worth will balloon very, very quickly. So that's the whole thing. That's how I went from, you know, a guy working nine to five to now I'm a millionaire. I think I hit millionaire status like at 26, maybe. I turned 29 in about a week or two. So if that gives you some perspective. Wow. That was a great break. I can't really add much to that. I just look at it thinking back to what I was 23, 24 years old. For me, it was always about adding additional income streams and that hasn't changed, getting those side hustles, getting those other buckets of income.

But also, I am a voracious learner. I have to know everything if I can. So I think that's one of the key components for anyone listening is always try to learn more, build more skill sets to make yourself more valuable because that is the key. The more valuable you are, the more money you can require for your time and your services, but then also always be looking to improve on your income through side hustles, other investments and other businesses. And imposter syndrome.

I'm curious, Robert, I suffered from imposter syndrome and still do in the sense that like, whoa, someone wants to pay me $100,000 for a project. Like, I don't deserve that much money. I'm not that smart. There's no way I'm worth that, right? Now, like, once you do more and more projects and, like, you know, do more consulting gigs or you sell more services or, like, products or whatever it might turn into, you're like, oh, wait, maybe I do deserve this? Maybe I am pretty good at this stuff. Maybe I can build a business around this.

And so, like, I really suffered from imposter syndrome in the beginning. But Robert, I'm curious, like, do you have any piece of advice for Jasmine who's maybe 24? She's got the side hustle figured out. And she's really trying to now go from, call it zero to her first 10,000 a month in revenue for her business. Yeah, I think imposter syndrome affects everyone at some point in their career. And it's just really all about understanding your own worth as a person and really trying to calculate that. What is your ROI that you believe should be for your time?

Because your number one goal is to stop trading time for money as soon as possible in your career. I'm not saying quit your job. You have a great job. But I'm saying the more valuable you become, the higher your ROI is per hour. And the more that really kind of harkens against what you bring as value to other people. And once you understand how valuable you are to other people, then you can really understand your worth as a human for your services and what you are in your job.

And I think that's the most important thing to learn as early as possible. You know, I had a big ego early on because I always figured I wasn't the smartest person in the building, but no one would outwork me. And so I think that's important to understand. that for me all day long, I want people that are tenacious and hard workers because that is something that I think is more valuable than talent. So make sure anyone listening understands that. I could not agree more. I want to hit the retweet button on that one. You are, you're 24 years old, Jasmine or anyone else listening. Like you've got so much time. Yep. To work hard, wake up early,

work late at night, work the weekends, right? Time is on your side compared to the 46 year old person. who you're up against. It's so easy to get started and do it now, especially with AI and everything else. And we're so transparent on podcasts. There's a ton of other shows that people talk through the sauce. Like, this is just so much fun. You have all the resources in the world at your fingertips. And we really appreciate your question, Jasmine. Yeah, I think that tenacity and curiosity are the two most important traits that all of the most successful people I know have over intelligence. So many people think, oh, I'm not smart. enough when they're dealing with imposter syndrome. And in most instances, the smartest people I know

aren't the most financially successful because they overthink and they just are more arrogant about things. That's probably the biggest reason I've become so successful over the decades is because I am continually curious. How can I build a better mouse trap? How can I make more money? How can I make my followers make more money? So I'm always learning. And that curiosity and tenacity has done me so well. Well, speaking of making more money, I want to quickly shout out the Rich Habits Network. If you've not yet joined the Rich Habits Network,

what are you waiting on? There's a seven-day free trial going on right now. We just wrapped up our weekly live stream. Every Tuesday night, we hop on a Zoom call for two hours. You guys have our undivided attention. We answer questions. We talk about the markets. It's been a very fun time talking about the markets so far this year.

and we give you guys the playbook, the blueprint, everything as it relates to our own investing, as well as other opportunities, private real estate deals, private startup deals, everything gets shared inside this network. So if you want to join the Rich Habits Network with a seven-day free trial right now, you can do that using the link in the show notes below, not to mention the eight hours of video coursework covering everything from investing, retirement accounts, building your budget, building your credit, everything in between. And for the tens of thousands of you that come back every single week, watch the episodes, take notes, and really take action. We love you. We appreciate you. We love that you share the podcast to others. And we love getting

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