Rich Habits Podcast - 125: The Habits That Made Our First $1M

Starting point is 00:00:00 Hey everyone and welcome back to the rich habits podcast, a top five business podcast on Spotify, brought to you by public.com. Today's episode shares the habits that we've relied on throughout our lives to grow our net worth into the millions. My name is Austin Hankwitz and I'm joined by my co-host Robert Croke. Robert is a seasoned entrepreneur with lifetime revenues of over 300 million and I'm a multimillionaire in my late 20s with a background in finance and economics. As the show name might suggest, every episode we talk about rich habits as they relate to business, finance, and mindset. So, Robert, what are we going to be talking about in today's episode? Before we dig in, I want to share a really special announcement. Many of you may not have heard yet, but we are introducing our new Friday episodes. Friday

Starting point is 00:00:47 August 1st is our inaugural episode, and we couldn't be more excited. These new Friday episodes are all about the stock market, the economic news, the biggest headlines and happenings that happened the week prior. So Monday through Thursday, Monday through Friday, we'll be breaking down all that fun stuff. Be sure to tune in to these new Friday episodes starting August 1st. And if you're a solopreneur, a side hustler, an entrepreneur, small business owner, and you have a question about earning more money or something to do with your business, these episodes are focused on answering those types of questions. So be sure to send us an email at rich habitspodcast at gmail.com or DMS on Instagram at

Starting point is 00:01:24 Rich Habits Podcast. Now, Robert, let's dig into this episode. In this, This week's episode of the Rich Habits podcast, we're going to explain the three habits we've used throughout our careers to build our own net worth into the millions and most importantly, keep it there. A lot of people figure out how to make money through brute force, but don't implement simple rich habits to either make it easier on themselves or to ensure they keep growing their net worth over time. This episode, I think, is going to be really impactful for a lot of you listening because we recently conducted a public. whole inside of the Rich Habits Network, which is our community for our biggest fans, link in the show notes below. And it came back stating that 84% of those participants, which were a couple hundred inside the Rich Habits Network that filled it out, claimed to have already built their base. So 84% of those people have already invested at least $100,000 into the markets, and now they're

Starting point is 00:02:23 working toward becoming millionaires. So this episode is for the person who already has your accounts, you've already got your investments, your strategies, right? Like you are doing the things strategically, but you might need some additional guidance as it relates to rich habits that will allow you to, over time, reach that millionaire status. So let's kick this off with our first habit that allowed Robert and I to become millionaires, which was meticulously tracking your earnings, your spending, your savings, and your investments. Robert says it best. What doesn't get tracked gets spent.

Starting point is 00:02:57 So if you're someone who has already built their base, now you're trying to go from a couple hundred thousand to a couple million or more, you might feel like it's time to take your foot off the gas and coast. Yes, you're right, building wealth is now a lot easier because, you know, you're making 10 or 15 or 20 percent on your money in the stock market. And if you have 100, $200,000, $300,000, you're now making tens of thousands of year of portfolio income. So your money is working harder for you compared to only having maybe a couple thousand or $10,000,000, invested. but that same intensity and focus that you had to develop to get you to where you are today needs to be implemented until you reach that $1 million.

Starting point is 00:03:35 For example, I have a Google Sheet Workbook that tracks every single month's worth of earnings, expenses, savings, and investments for me back until like 2021, right before I was a millionaire. And it broke down all of that stuff. That's the level of tracking that I'm talking about that is going to propel you into millionaire status. The income that you make, of course, is important. my income skyrocketed over the last several years. But if I spent everything I made, I would have never had money to save and invest. And so what we're trying to say is income's important. You can make $10 million a year. But if you aren't tracking that income, if you aren't tracking your expenses,

Starting point is 00:04:12 tracking your savings, tracking your investments, you're still going to be broke. It doesn't matter how many millions you might make with your income. Broke people react, wealthy people forecast. We want you to be a wealthy person that is forecasting into the future. This is so, critical because people figure out how to make money all the time. But what we see day in and day out in the DMs, our emails and the Rich Habits Network is people that haven't figured out how to get ahead. They live beyond their means. They let lifestyle creep happen. And it's because they're not meticulously tracking their earnings and their spending. One of my favorite things to say to the masses that listen is you either have an income problem, a spending problem, or both. And many times,

Starting point is 00:04:55 people will still make six figures, multiple six figures, but live paycheck to paycheck because they're not meticulously tracking their earning and their expenses. And when I started early on in my journey, I noticed that none of my friends, this was when I was like 21 or 22. Every paycheck, I put aside $25. Every single week, $25 went into my mass financial mutual fund account back then, and they were all like, what are you doing? And I'm like, I am putting this away for a rainy day later on. And I did that meticulously, probably not as much as Austin does, but I definitely tracked my expenses. I was very, very aware of where my money was going. And that allowed me to build wealth much earlier than anyone I hung around with. And by 24 years old, I had already

Starting point is 00:05:43 reached millionaire status. And it was just fantastic to be setting myself up that way so early on. And all of you can do the same if you follow these strategies. and habits that we're laying out today. So let's jump into rich habit number two that allowed us to become millionaires and get that first million dollars. And that is drifting through life. So many people don't have a plan early on. So they drift through their lives, especially in their 20s and 30s, and never take the time

Starting point is 00:06:13 to learn and initiate the rich habits needed to even get started on building wealth, let alone actually achieve it. And I think this is the biggest hurdle most people need to over. in order to get on track and not sit on the sidelines. Austin and I realized early on in our careers that everything around us was built by people no smarter than us. People just like us were building all these great things and we started happening to life and not the other way around.

Starting point is 00:06:42 We began implementing the mindset that can change what we don't like and we can mold our surroundings to what we prefer and our daily lives can become our dream lives. So we very, very much have free will in this situation. And in my opinion, there really are three keys to leading a great life. Knowing what you want, figuring out how to get it. And number three, which is most important, working to keep it. Working very hard to keep it. And that is so, so incredibly important in your journey.

Starting point is 00:07:15 You know, it takes a lot of, for some people, counseling, a lot of therapy, a lot of conversations to figure out what drifting through life means and doesn't mean to you. I know a lot of people have different relationships with money. If it is you didn't have it all growing up, or you had a lot of it growing up, or you don't feel like you deserve it, or maybe you feel as if I deserve this money, why can't I earn it? Right, there's a lot of different relationships people have with money.

Starting point is 00:07:44 But I think the most important thing to consider when it comes to drifting through life is what Robert alluded to in the beginning, which was that we started happening to life. not the other way around. So if you are someone, which again, you've built your base, you're working, you're moving in the right direction. But if you're someone who wants to become a millionaire or a multimillionaire, you have to happen to your life. It is no longer going through the motions, graduating high school, going to college, showing up to class, graduating, going to my nine to five

Starting point is 00:08:14 job, being told what to do every day, then I'll get that promotion, then I'll make this money, then we go on a vacation. That is the drifting through life that we're trying to encourage you to begin happening to. You need to have a plan. It's not always a plan of monetary or, you know, relationship. Like, it can be a plan of anything you want, but ensuring that you understand, like you lock in and you understand you have the mindset of, this is my life, right? Think about it like this. If your life was a movie right now and there were a hundred people watching up until this point, what would they be screaming at their television for you to go do? Because it's so obvious. Is it to go see your parents? Is it to go get that job? Is it to go try? Is it to go try.

Starting point is 00:08:53 that new thing, like what is that obvious thing that people would just be screaming, telling their television, oh, why doesn't they, why don't they go do that? They should go do that, right? That's the type of drifting through life. We want you to understand that, like, you need to have this mindset of, I have free will. Life comes from me. I make my decisions. I know where I'm going. We don't walk and think like we used to. We have dreams and goals and aspirations now. Like, that is what I'm building for my family, from my legacy, right? Having that type of mentality is, how you will go from a couple hundred thousand to a couple million over the course of your career because the people that don't have that mentality, life happens to them and then they make excuses

Starting point is 00:09:33 as to why they, you know, got shorted or, you know, something bad happened to them. We can't control what happens to us, but we can control how we react to it. There's a winner's mentality and a loser's mentality. And loser mentality is things happen to them. They get festered up, they have all these, you know, feelings and they get so upset and they come up with excuses as to why they can't achieve things because all this stuff keeps happening to them where winners the same things happen to them they feel those things they get upset but then they say okay nobody cares i gotta go do this anyway right i still got to go do this thing because that is what

Starting point is 00:10:07 i am here on this earth to do i think that is so incredibly impactful the movie analogy reminds me of a commercial when i was in college and it said it was a navy commercial i think it was army or Navy and it said, if someone wrote a book about your life, would anyone read it? And it really spoke to me because I never wanted to lead a life of mediocrity and not becoming something that I felt I was capable of doing. So I think it's just really, really impactful for people to understand what's important to them, what is their life, what does it look like in their own minds and in their own hearts? So I love that takeaway. And walk us through the next one because this one is really, really cool and thought-provoking as well. Well, when it comes to leading a life of mediocrity,

Starting point is 00:10:53 I think something people fall victim to is the imposter syndrome, right? That also has to do with drifting through life. Oh, that person can follow their dreams because they came from this type of family or, you know, their cousin hooked them up with this idea, or, you know, they went to this specific school or they're, you know, friends with these specific types of people, but I don't have that. I never had that. That's not who I, am right i have that imposter syndrome of i don't deserve this that's not who i am i can't achieve that and when it comes to drifting through life imposter syndrome happens to all of us obviously happen to robert happened to me happen anyone successful it's like what wait a second like what am i doing here am i really

Starting point is 00:11:34 a millionaire making these decisions and and building this thing like the rich habits podcast hit number one on spotify's business chart after like nine months like whoa are we have a bigger podcast than these people like that's crazy but like you get over that and you realize you deserve to be here you worked hard to be here, right? So like ensuring that you have that positive relationship and again, counseling therapy, there's a lot of stuff that goes into that. But the mindset of I am, I will, I can, I can do that positive mindset. Everything around you was built by people that are just like you and anything you want to do you absolutely can do. You just don't know how to do it yet. If you can realize that, you can do anything. You just don't know how to do it yet. Like the world is

Starting point is 00:12:15 yours for the taking. Mm-mm-mm-mm. Love it. So let's start. now jump to our third rich habit that allowed Robert and I to become millionaires, which is practicing frugality and being really intentional with our money. This one sort of goes back to the first point about sort of tracking your spending and your earnings and your savings and investments, but it's now more focused on keeping your money, right? Let's say you're someone that you're into year three, year five, year seven, and you're really close to becoming a millionaire or you are a newly minted millionaire, which I'm sure a lot of you are now. After the stock market's hitting

Starting point is 00:12:43 all-time highs and things of that nature listening to our show, having a lot of money doesn't mean you need to spend a lot of money. I have millions of dollars. Robert has millions of dollars, but we don't spend millions of dollars. Now, I'm going to be wrong, I did just spend $90,000 buying my dream boat. And I've always dreamt of having a boat. I saved up nine months for it, and I paid for it in cash, right? So it was like very much a smart financial decision, while I also invested a couple hundred thousand dollars throughout that same period of time. So like I wasn't silly about it. But I guess what I'm trying to say here is once you have money, you shouldn't just spend it because you have it. You should spend it because what you're you should spend it because what

Starting point is 00:13:18 you're spending it on makes you happy. And the best way to keep that money is to ensure that you remain frugal throughout your life. And notice we said frugal. We didn't say cheap. Make sure you're not spending hundreds or even thousands of dollars each month on something that doesn't make you happy. I do not go out and buy shoes every month. Some people are shoe, we actually got a question, I think, on Thursday from a guy that sold his 49 pair shoe collection to pay off some debt, I think it was. So it's like, there are people out there that love shoes, they love purses, maybe it's watches, maybe things that like, that's their thing and they love buying it. It just makes him so happy, but they can't afford it or they just do it because everyone else tells them

Starting point is 00:13:56 and that's what they feel like they should be doing. I had that conversation with myself years ago. What is something that I enjoy spending money on? For me, that's good food. I just spent like $450 on a dinner with Robert last week when he was in town and it was awesome. And I love eating awesome food and having great conversations with people I love. And so like that to me is what I want to spend money on. So I guess the whole point of this habit is being. frugal, understanding the difference between living on less than you make, being frugal versus just being cheap, but also being intentional with your money once you have it. You have money. Doesn't mean you should go just spend it all. I want to really illustrate what I think most people

Starting point is 00:14:33 get backwards. And they think that rich people spend crazy amounts of money all the time. And it really is incorrect. I have found in my many, many years on this planet that broke people spend money without even thinking about it. Whereas the wealthiest, people I know are very intentional with their spending because they understand the opportunity cost of spending it. Like Austin alluded to buying shoes all the time. I know so many people that when the money is sitting in their accounts, they just feel they should just go spend it because it's sitting there, whereas wealthy people always

Starting point is 00:15:05 have a target. They have something they're working towards. They're making their money work as hard for them as they work to get it. And that is why the name of this podcast is rich habits, because we are here to help you all learn those habits that have made me very wealthy, Austin very wealthy, and that we've learned along the way from other wealthy friends and business associates because it's so important. And I think that's why you see these stats all the time that, you know, these athletes and musicians that get these multi-million dollar signing bonuses end up broke in a couple of years

Starting point is 00:15:38 because they don't have the knowledge and the rich habits built in to be able to understand how to create wealth from that influx of money. And it's the same thing with lottery winners. As soon as they win the lottery, they go broke within two or three years because they never learned how to build from it and keep wealth. And that is why this episode is really, in my opinion, very impactful for people that are in the middle. You've had some success. You've made decent money. You've built your base.

Starting point is 00:16:08 And now it is time to double down and really get moving so you make sure you can retire gracefully. So to summarize, you need to meticulously track your money, right? You've done that for a while now. That's how you got your first 100,000 invested. It's time to continue keeping that same focus and determination until you hit 1 million. Number two, you need to take control of your life. Stop drifting through life. Stop letting life happen to you. You go start happening to life itself. And then finally, once you do reach this milestone of becoming a millionaire, you need to continue practicing frugality, being intentional with your money as you are right. now. Do those three things and wealth is inevitable. So now before we jump to our Q&A section of this episode, want to give a quick shout out to this episode sponsor, public.com. Public.com is the investing platform for those who actually take it seriously. There's no gambling, no day trading.

Starting point is 00:17:02 I'm talking about those people that are serious about investing toward their financial future. If that's you, it's time to learn more about public.com. On public, you can build a multi-asset portfolio of stocks, bonds, options, crypto, and more. And that's the not all. Public's artificial intelligence isn't just a feature that's built into the platform, but it's woven into the entire experience. From portfolio insights to earnings called recaps, public gives you smarter context at every touch point of your investing journey. And for a limited time, you can earn 1% match on all IRA deposits, IRA transfers, and 401k rollovers. Let me say that again. One percent match on all IRA deposits, transfers, and 401k rollovers.

Starting point is 00:17:45 Fund your account and five minutes or less at public.com forward slash rich habits paid for by public investing, full disclosure in the podcast description. So let's kick off this Q&A with Brad R. Brad says, hello, Austin and Robert. I love listening to your podcast and appreciate all you both do. A little bit about myself. My name's Brad. I recently turned 34. I'm living in a moderately expensive cost of living area in the Midwest. Not married. Don't have any kids. But I do work in health care. and I have a well-paying job of about $175,000 a year. I currently have $240,000 invested in my 403B, $46,000 in my Roth IRA, $50,000 in a brokerage account, $25,000 of Bitcoin, and a few thousand invested in a health savings account. Like you guys say, I max out my Roth IRA every year,

Starting point is 00:18:31 and I invest into my 403B. Thankfully, my employer offers decent investment options, so I do not have to get stuck in target date funds. I own a home, and my monthly mortgage payment is about, $1,400. I still owe $165,000 on that mortgage, and if I were to sell it, I could probably get $420,000. The interest rate is 2.5%. So here's my question. It's been a goal and honestly a dream of mine to someday have a summer lakehouse or a cabin somewhere that I can spend my weekends at. I'm not in a rush to make a hasty decision on this goal, but I want to understand how to approach this idea. I want to stay consistent in my investing in the hopes of someday having the option to retire early, but I also, I also also have that mindset of wanting to enjoy life and do things while I'm still young and can afford it. How can I get to a point either now or down the road where this dream can become a reality and it still makes sense financially? Thanks in advance, Brad. Robert, you want to kick this one off?

Starting point is 00:19:27 I would love to. Brad, you are crushing it. 34 years old. You have all your bases covered. You've already built a considerable net worth for 34 years old. Just, I want to say congrats. everyone just really needs to put the work in and get to where you are at that age. So here is my takeaway from this. Don't take your foot off the gas. You can start earmarking money to go towards this dream house, this lakehouse. And I love that idea. I'm looking for a lakehouse myself right now.

Starting point is 00:19:57 I've owned them in the past. But the number one thing you want to do is not take your foot off the gas and go backwards financially. A lot of people say, oh, I want to buy this lakehouse in three years. They start earmarking $1,000. a month or $500 a month for the lakehouse, but then they just put it in a savings account. And that doesn't make sense to me. I would put aside an account that could be a traditional brokerage account, it could be a high-yield savings account, or something where you're still earning on your money, but

Starting point is 00:20:24 you are earmarking that money to go towards whatever the budget is and the down payment you'll need to buy that dream lakehouse. I love the concept. I'm doing the same thing right now. But just make sure that the money is actively earning. because let's say you set it for two, three, four years down the road or longer. If it's two years or less, I would do high yield savings. And if it's over two years and more like three, five or seven years,

Starting point is 00:20:49 I would definitely get that in one of your accounts, preferably making real money through some low-cost ETFs or stocks or whatever it is you're investing in because you want to make sure you're optimizing the earnings along the way while still earmarking it for this purchase. I like that answer a lot. So, Brad, here's my framework. Your net worth, if I did my math, right, is somewhere around $650,000.

Starting point is 00:21:13 You make $175,000 a year pre-tax, which means post-tax, you're probably close to about 140, and you should be investing 15 to 20% of that per year, like clockwork. So let's call it $20,000 to $30,000 of that 140 that you earn post-tax is getting invested every single year. In my opinion, if you are consistently investing that 15 to 20% of your take-home pay, if that is maxing out the Roth IRA, beefing up the 403B because you can, you know, you have autonomy there. If it's the brokerage account, right, the bridge account, if it's maybe some Bitcoin, right, but like, if you are consistently investing 15, 20, maybe even 25 because you're a psycho, right, that'd be awesome, percent of your take home pay toward your retirement

Starting point is 00:21:57 investing and you're doing that consistently and you can afford a monthly mortgage payment of a house like this and you can afford to like, say, for a down payment, go for it. If you can check the boxes, do the, hey, I'm doing it, right? I'm investing. I'm not in debt. I'm making sure I'm working toward an awesome big retirement. I'm making all this money. And I can also afford a $2,200 month payment for a cabin on a lake or something. If you're going to afford to do both, then you're good to go. So like what Robert said, make sure you save up for a decent down payment, 10, 15, 20%, preferably 20-ish, closer to that because interest rates are kind of high and you get rid of PMI. But then also you're at this point now where it's like, cool, your next. You're next.

Starting point is 00:22:37 net worth is 650,000. You are probably five to seven years away from becoming a millionaire, right? Just consistently investing this 20, 30, 40,000 a year like you are. This lakehouse or cabin will appreciate in value as has your primary residence. So let's call it by 40 or 45 years old here. You are a millionaire and you've got this awesome lakehouse and you're consistently still investing. Like, you will have so much money. By the time you're in your late 50s and early 60s, you won't even know what to do with it. So Brad, that's my framework, ensuring that you can consistently continue to invest and hit these saving and investing goals on an annual basis, as well as saving and spending for a lakehouse. If you can do both of those things, then you can afford the

Starting point is 00:23:18 lakehouse. Right. That's how I'm thinking about it. Now, on the flip side, maybe affording the lakehouse at $2,000 or $2,200 a month for the mortgage means that $12,000 a year that you love to spend on that big, lavish vacation with your friends or like whatever that money was going to before, right? You got to have those tradeoffs. This comes back to the intention now. We talked about. But that's what money is. It's money. Money is making decisions that make you happy. And if a lakehouse makes you more happy than maybe going on a big vacation once a year or twice a year, then like, then that's the decision you're making. So our next question comes from Tyler L. Tyler says, hey guys, I've been listening to the show for a few weeks now and I love the content.

Starting point is 00:23:56 You've helped me figure out what to do with my investments within my Roth and my 401k. So I really appreciate it. I'm curious to get your thoughts on this. I have a good amount of restricted stock units from my employer. I've been previously selling them as they vest on a quarterly basis for the last three years and then using that money to pay off my high interest debt. I've got most of my high interest debt paid off. I've got 7,000 left on a car at 2% interest. And my wife's student loans total about 60,000, but that's low interest as well. So what do I do with these RSUs? Every quarter, I get about $4,000 to $5,000 deposited into my checking account and then I figure out what to do from there. My initial thoughts were to use this money to max out my Roth IRA, but would be curious to hear what you guys recommend instead.

Starting point is 00:24:39 For context, my wife and I are dinks in our mid-30s, making about $200,000 per year, 60,000 in our retirement accounts, 15,000 in our emergency fund. I wish there was more at our age, but we're focused on paying off debt and purchasing our first home, and now we're heavily focused on growing our investments. So any insights would be greatly appreciated. Robert, you want to kick this one off? I will, but I think I'd rather. hear your approach here because they're more in line with your age than mine. And I'd really love to hear your insights first because this is a tricky one. Sure. So you guys are in your 30s making 200,000 a year as a household, which means you guys are taking home about 160. I always assume about a 20%

Starting point is 00:25:20 effective tax rate. So we're taking home about 160, which on a monthly basis here is about $13,000. You need to be investing 15 to 20% of that every single month. So 15% of that's $2,000 a month, right? $2,000 a month, bare minimum between you and your wife needs to get invested. Now, that can get invested via a Roth IRA. You'll max that out pretty quickly. That can get invested via a bridge account, maybe a 401k at work here, right? There's a ton of different ways to do that. So the framework that we give people is you invest up to the match for your 401k, get the free money, then max out that Roth IRA, because you have full autonomy over those investments. If you have autonomy over your 401k like our friend Brad had on his 403B and you can choose your investments,

Starting point is 00:26:03 go back to that 401k and beef that up now even more. And then if you still have money to invest, go park it in your bridge account on public.com. So that's sort of how we think about it. Ty and your wife here, you guys are making a ton of money. You're in your 30s. You have no kids. You're literally like in let's go get rich mode. And I love that for you guys, right? Heavily focused on growing your investment. So let's do that. Maybe let's figure out how to live on five or six, maybe $7,000 a month. And the other six or $7,000 a month can get invested, right? You guys are investing $6,000 a month for 12 months. That's $72,000 a year that gets invested into these markets. And that money is only going to continue to grow over time as you guys

Starting point is 00:26:44 continue to move on in your careers and get more invested. So what would I do with the RSUs? I would continue to sell the RSUs. I would take the after-tax dollars. I would put them in a Roth IRA until each you and your wife have maxed out your Roth IRA contributions for the year of $7,000. You'll do that fairly quickly here with these RSUs. Beyond that, I would put the money in public.com on a bridge account. I would invest those into the index funds and ETFs we talk about like V-O-O, V-G-T, VTI, I, QQQ, Q, Q, Q, things of that nature. And then I would just continually get aggressive and stay consistent, right?

Starting point is 00:27:21 You guys are at this point now. You've got $60,000 in your accounts. It's amazing. Let's get that to $250,000. That's only two or three years away. So there is a clear path for you guys to become multi-millionaires by the time you're in your 50s and 60s. But to your point, you guys were focused on paying off some debt, the emergency fund, the savings, the house, all that fun stuff. And I'm glad you focused on that because you can't out-invest high-interest debt.

Starting point is 00:27:45 Now you guys got your first home. That's cool. I hope you were smart about that. But yeah, y'all in your 30s with 60 grand, it's time to get aggressive. Like, let's get that base built and let's really make sure we're moving in the right direction for our 40s and 50s. Yeah, I think that's a great takeaway and covers all the bases. You know, the only thing I would consider here is I would not worry about paying down the car debt at 1.9% interest. I would pay the minimum payments as long as they'll let you on that because a car is a depreciating asset and there's no reason to pay that off with such low interest rates.

Starting point is 00:28:14 And then the other thing is I would continue to really focus on getting your base built up because right now, yes, you're in your 30s. You're doing well. You're making a lot of money. but let's get that base up to a couple to $300,000 and really focus on that because then you can chunk away at the high interest debt or whatever the interest rate is on the student loans at $60,000 because that's something we're going to want to get rid of sooner than later unless it's below 4% interest, which I don't know. You didn't disclose that to us. But yes, I love what you laid out, Austin, and I think it's a great strategy. So before we jump into our final question, let's take a moment to hear from this episode, sponsor Blossom. You guys always ask us, what are y'all investing in right now?

Starting point is 00:28:56 And you know what? We don't like to gate keep. But we also don't like to blast our portfolio all over the internet either. You want to see it. You have to follow us on Blossom. You guys know we've been big fans of the Blossom app. It's a free social investing platform where people actually show you what they're investing in. And just to be clear, Blossom is not a brokerage.

Starting point is 00:29:14 It's a social network for investors. Think Instagram meets investing. And what we love is the transparency. You can literally see all the stuff inside a microcontour. portfolio and Roberts. You can track changes in real time and learn or discuss different strategies with investors on the platform. And the best part is the community on Blossom is long-term focused, not typical of what you see on other social media platforms, which tend to revolve around trading, FOMO, and whatever's hype at the moment. So if you're curious as to how we're building

Starting point is 00:29:43 wealth or you just want to level up your own investing habits, download Blossom. It's completely free. It's easy. We're both on there. Just search at Austin Hinkwitz or at Robert Croke official. Hit the link in the show notes below and join us on Blossom and let's build rich habits together. So our final question comes from Kyle J. Kyle says, Hey guys, my wife and I are in our early and mid-40s and we're on the road to be better with our money. We're currently working on building our emergency fund.

Starting point is 00:30:10 I have a little over $25,000 of high-interest debt across six different accounts that will hopefully be paid off in under two years, five of them in under a year while my wife has none. She just started a new job and she's going to be contributing to. meeting 6% toward her retirement account, about $350 a month, with a 9% match from her company. She'll have about $1,500 of discretionary funds available every month to live her rich life. Now, once I'm finished with my high debt elimination, I'll have an extra $814 a month to fund the emergency accounts.

Starting point is 00:30:42 Currently only adding $200 a month to these, and then once our emergency fund is fully funded, we'll begin investing. The question is, realizing our W-2 income is not going to cut it for retirement, what would be the best use of those discretionary funds outside of building our emergency fund in market investments. FYI, I attempted a property flip several years ago and it went terribly wrong. It was a $60,000 lesson of what not to do and we're afraid of diving back in. We want to be smart with our money this time. Sincerely, KJ and DJ. Kyle, I'm so excited for you. You are really, really focused, right? That is the first step of getting good with your money is to get focused,

Starting point is 00:31:20 understand where you're going and have a plan. It seems like you have an awesome plan. You're like, listen, $25,000 of high interest debt. Going to get that paid off. I'll have some money over here. We'll get rocking and rolling that way. Having a good time. Here's the problem with your email in your current situation. You and your wife, right? You and your wife. I heard a lot of mys, my account, my debt, her account, her discretionary, her rich life, her, my, her. I heard a lot of separation in this email. You're right. You guys will not be ready for retirement and retire wealthy having everything so separated. I do not believe in that at all unless there's abuse, addiction, or, you know, clear signs of we need separation because this is not working out. And by the looks of it, you guys are

Starting point is 00:32:04 not experiencing that. So here's what I would do. You mentioned you've got $25,000 of high interest debt, and you are trying to pay that off and your wife has no high interest debt. Your wife is contributing $350 a month. Her company is matching some of that. She's got $1,500 a month of discretionary income. Sounds to me like your wife is going to stop contributing to her 401k opening up $350. She's going to add that to the $1,800. So now we have $1,850 to throw at this $25,000 of high interest debt that you guys both

Starting point is 00:32:36 have because you're married, which means you're going to knock this out super fast. Two years, more like nine months. If you get your wife's discretionary income on a monthly basis in the picture here as well, like it should be. Then, oh my gosh, fast forward in nine months. Now we're summer of 2026. There's no more high interest debt. You are now investing 800 something a month.

Starting point is 00:32:56 She's investing $300,000, $800,000 a month. And you guys are as a unit, as a household, investing 15 to 20% of your monthly take-home pay. You're maxing out the Roth IRA. You're doing the 401k match. You're doing the bridge account. You're doing all these right things. and you will have a wonderful retirement. You won't have to worry about losing the $60,000 on flipping a house

Starting point is 00:33:17 or having to get creative with your investments like some sort of action movie. You guys are just going to do the basics for 20 more years and retire just fine. So I guess what I'm trying to say here is there's absolutely a path, KJ and DJ, where y'all too can retire with dignity, retire gracefully, and have probably millions of dollars in retirement, but you have to get on the same page with money. It's not her money. It's not my debt. It's our collective retirement money path, our financial journey now that we are married and we are together. We're a unit. Think about it like this. You guys have 20 years to come up with a million dollars. She should want to have your back just as much as you want to have her back to do the same thing. So, hey, honey, yeah, let's take my $350 a month and use that to pay off your high interest debt credit cards and my $1,500 to live my rich life that you actually said rich life. My $1,500. live my rich life, I'm going to use that to pay after other credit cards. Because the sooner

Starting point is 00:34:13 you get out of credit card debt, the faster now that we as a household can invest thousands toward our retirement so that when we're 65, we can have $1.4 million in our accounts and be rich. Right? So, that's the game plan. Combine, be on the same page, rock and roll. You guys, we got a lot to be excited about. You got a plan and I respect it. It's now time to tweak the plan a little bit, so you guys are more aligned on the direction of the plan. Wow, that was an incredible takeaway. So I have two additions. The Conquer part I love, but it can't be separately. She can't be living a rich life over here while you're over here struggling to pay off high

Starting point is 00:34:47 interest debt. Combine and conquer, not divide and conquer. That's what we need to see. And then number two, we say it all the time. You can't out-invest high-interest debt. You guys need to be solely focused as a household to get rid of it. Even if you have to chunk one down at a time, use the avalanche method or whatever method works best for you and get rid of that high interest debt so you can both get super active because

Starting point is 00:35:12 if you have high interest debt that's 25, 30%, and you're making 5% here, 10% there in the markets or high yield savings, you're losing ground. So just make sure you understand an Austin incredible takeaway. People need to have these hard discussions because if you're married, there is going to be dissension in the ranks. If she's over here living Lovita Loka and you're over here paying off your credit cards and struggling while she's living living the rich life, you have to combine your efforts, get this handled, and build for your future. And those are hard conversations. Maybe she feels like she deserves to be spent, you know, I work hard for my money and therefore I want to spend it how I want. You know, you find yourself in all this debt. It's

Starting point is 00:35:55 not my responsibility, right? Those are hard conversations. And the number one reason people get divorced is because of money. And maybe there's a world where you guys have marriage counseling. Maybe there's some sort of therapy that can be involved here. But at the end of the day, the people who have the most money at the end are on the same page the whole time. And you guys need to get on the same page. And just here's like a tactical example. $25,000 of high interest credit card debt at 30% is $625 a month. Your wife is contributing $350 a month to her 401k at work. You're losing $650 over here, but you're contributing $350 over here. That doesn't make sense. The math doesn't math. Use that money to pay it off so that $650 doesn't continue to incur in your daily lives.

Starting point is 00:36:36 We're proud of you. We're excited for you. We're grateful you listen to the show. But we are going kick you in the butt and we're going to tell you what to do and how to do it because we are rooting for you guys. We're rooting for you here. Just like we're rooting for everyone else listening to this show. Everyone, thank you so much for joining us on this week's episode of The Rich Habits Podcast. Do not forget to put on those notifications. Hit subscribe, hit follow, hit let me know when on that August 1st Friday, new Friday weekly episodes that's coming out. We cannot wait for that. And we look forward to having all 100,000 weekly listeners tuning in now to three episodes per week starting on August 1st.

Starting point is 00:37:12 And don't forget, if you find value in these episodes, join the newsletter. Check out the seven-day free trial for the Rich Habits Network. You can come in for $0,000, kick the tires, watch a live stream, check out the modules. and just always remember to share the episodes. Give us that five-star review. Help us continue to grow and provide as much free value as we can to all of you. Thanks, everyone. And I've agree.

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Rich Habits Podcast - 125: The Habits That Made Our First $1M

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