Rich Habits Podcast - 35: Building Generational Wealth in Your 20s & 30s

Episode Date: October 23, 2023

In this episode of the Rich Habits Podcast, Robert Croak and Austin Hankwitz share their three best tips for building generational wealth in your 20s and 30s. Specifically, they explore the idea of private equity / small business ownership, cryptocurrency, and artificial intelligence. ---Be sure to check out Public's new ⁠⁠⁠High Yield Cash Account paying 5.1% APY.⁠⁠⁠ This is higher than anything else on the market and is FDIC insured up to $5M. ---Earn 5.1% APY using a Public HYCA, ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠click here!⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Opt-in and share your email, ⁠⁠⁠⁠⁠⁠click here!⁠⁠⁠⁠⁠⁠Learn more about our ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠4-module video course!⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Download our FREE Budget Template, ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠click here!⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠To learn more about Robert: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://stan.store/RobertJCroak⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠To learn more about Austin: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://stan.store/austinhankwitz⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Contact: [e-mail] ---Hankwitz Group LLC has an existing business relationship with NEOS Investment Management LLC. The opinions expressed are those of the author, and the author owns several NEOS ETFs.

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My name is Austin Hankwitz and I'm joined by my co-host Robert Croke. Robert is a seasoned entrepreneur in his 50s with more than 200 million in company exits under his belt 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 fintech companies around. the world. 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 today's episode of the Rich Habits podcast, we'll be sharing our three best tips to building wealth in your 20s and 30s. Assuming you're young, hungry, and ready to go to work, these three tips could drastically change the trajectory of your financial future. If you're 40 or older, you're more than welcome to try these three strategies. However, these tips are most successful for people who are very tech savvy, have the opportunity to work countless hours per week,

and are very hungry for success. And just to remind everyone, right, not only are we going to be sharing with you all the specific strategies, but we're also going to be providing the additional resources in the show notes below that will hopefully get you started, keep you inspired, and help you stay on track. That's what the Rich Habits podcast is all about. We don't just give you the sauce, but we also give you the specific platforms, the websites, everything you need to actually execute on these strategies and ideas. So, Robert, kick us off with number one. Number one is buying those boring small businesses. We all hear about it. Boomers are retiring at record numbers. So all of these small

Many of these boomers do not have succession plans for these small businesses, and what does that mean for you? It means opportunity, opportunity, opportunity. So many, tens of thousands of businesses are going unsold right now every single year because boomers are retiring and they don't have a plan in place to sell these businesses. So we are here to tell you that we think this is one of the top three best opportunities in the market right now to create wealth is owning those are. built, already cash flowing businesses, but you're going to go in, you're going to find one that's suitable for you. You're going to implement modern technologies, think sales tactics, proper marketing, really good web and SEO strategies, automation. You're going to use all the modern tools we have at our disposal, and you're going to really increase the profitability

and revenues of those businesses and really build those businesses up. And what I like about this from someone who already has a portfolio of small businesses, as you're building and building and building, you can also be looking at exits. Maybe you buy a business that's doing $1 million a year with maybe a 10 or 12% margin. You build it to $3,4 million, maybe with a 20 or 30% margin,

then you could exit that business alone and really sell it for a large multiple. So this is one of my favorite strategies of how to build wealth faster than maybe some of the other sectors out there because the market is ripe with opportunities right now. And just to give a clear example of what I think a modern technology or new strategy could be after you buy one of these boring businesses, as you all know, I live in Nashville, Tennessee. I was getting my car wash at some random car wash around town, and they said,

if I give them my phone number, they will give me a free car wash. So I'm like, okay, here's my phone number. Now let me get my free premium car wash. Two days later, I get a text message from the car wash saying, hey, here's a quick discounted offer if you want to get your car washed in the month of November or December, right? It wasn't that same month. So it was like, I had to remind myself, I need to go back to that car wash in the future to get this discount, which I did, right?

And now I use that car wash every single time that I want to get my car detailed and washed and vacuumed, right? So by implementing this new advertising, marketing, drip campaign strategy, not only did they make a future customer out of me that comes back every single time, but they also know how to get in touch with me if they want to send me special deals and offers, right? Imagine by doing that to tens of thousands of people on an annualized basis for one car wash. Like to Robert's point, think about just how big you can scale this potential 500,000 or a million dollars in revenue car wash to two, three, four million. And as you're able to do that, potentially increase those

margins along the way. Now, if you want to see an extremely well articulated example about how Graham Weaver, one of the most successful private equity investors out there, has done this for himself to scale to $15 billion in business equity. There's going to be an interview linked below in the show notes. He walks through if someone had a challenge of like go from $0 to $1 million, like go earn your first million dollars. He walks through how he would go buy a car wash, how he would scale it into dozens around the country.

And he gives a little bit of an antidote of what he personally did at 25 years old by buying label printing companies, right? So he built a track record of himself doing that. He bought four or five and really scaled them before he went out and raised a small fund from investors. And then I sort of snowballed that into what it is today, this $15 billion sort of empire. But it sounds daunting. It sounds scary. It sounds like, oh my gosh, what do I do?

Think about owners financing. Think about what Robert just talked about as it relates to scaling and advertising and improving margins and efficiency. And work your ass off once you own that, right? If you have a car wash, you want to be the best car wash in the world. If you have a laundromat, you want to be the best laundromat in the world. If you have insert small business idea here, make it the best one in the world that every single person that in your town wants to come to and be a customer. Totally. There are tens of thousands of small businesses out there right now that you drive by every single day, many of which might be for sale now or will be for sale at some point if the owners do not have a succession plan in place. So always keep that in mind that there are so many ways to build wealth.

and we believe by integrating new modern technologies into already cash blowing businesses, this is one of the best tactics to use. Buying a small business, scaling it using efficient technology that, of course, the 20-year-olds and the 30-year-olds listening right now are already aware of is step one. What's a second great way, Robert? Let's go into my favorite topic, cryptocurrency. And before anyone comes for me, I'm going to keep it in here. We're going to always be talking about cryptocurrency because I think everyone should have a piece of their investable capital and cryptocurrency.

It is the most disruptive technology. It is changing the world right before our eyes. Every single day we see a new story talking about PayPal, Amazon, Microsoft, Meta. Everyone is integrating the blockchain and the associated cryptocurrencies into their business models. And it just is the way of the future. Blockchain is disrupting all of the markets that we work in every single day. Whether it's real estate, shipping, cross-border payments, it doesn't matter. So I want everyone that's listening to please understand, follow along, do your research, and really get into crypto.

I'm not saying you have to go all in. I'm just saying have a portion of your investable assets in cryptocurrency because I think it is one of the best asset classes for the next 10 years. and it's very critical that you understand it and know where to invest in it, like Bitcoin or Ethereum or Chainlink. Everyone has seen the news with BlackRock, Fidelity, Arc investments, all looking to get their Bitcoin ETFs, their spot ETFs approved in the coming months. And this alone is going to be game-changing for the cryptocurrency markets.

So I just want everyone to be aware of it. Keep it on your radar and make sure your dollar cost averaging it. in, at least in the big boys, the blue chips of the industry, because I think it's going to be one of the greatest wealth transfer opportunities of the next five to 10 years. I couldn't agree more, right? And I think, unfortunately, a lot of people in their 20s and 30s might discover, you know, a website that, like, coin market cap, for example, it's got a list of the top 200 cryptocurrencies by market cap on there. And they'll go find one that's up 40% you know, in the last week or like, you know, whatever and get really excited about it and say,

oh my gosh, I found my get rich quick scheme. I'm jumping in all on this and they go all in and then it goes, you know, goes kaput and they're like, oh my gosh, you just lost my money. We're not saying that. We are not saying to go all in on some random cryptocurrency that your uncle Bill found on the internet and is telling you to buy. What we are saying is we believe it's a freaking crime that people don't have Bitcoin in their portfolios, right? Everyone should have 5 to 15% of their net worth invested into those big boys. Bitcoin and Ethereum. I really like Chainlink. Robert mentioned it's one of my favorites so I have a portion of my portfolio into chain link as well but don't overcomplicate it buy some bitcoin buy some ethereum and forget about it dollar cost average into

this asset class like you would any other asset class if that is stocks ets or other collectibles so you're not buying into one point it might be the top or the bottom you want to definitely dollar cost average to smooth out that volatility because we all know cryptocurrency has volatility and just stay invested because something people might not know right now is that and maybe do but cryptocurrency has a boom and bust cycle right it gets really hyped up the prices go all the way up and then it's euphoria and then it crashes back down i would argue right now we're pretty much in the bottom half of that i don't think we've started that euphoria phase by any stretch of the imagination and i think it could start in the next 12 18 24 maybe 36 months at the latest but i'd imagine over the next

24 months cryptocurrency is going to really see a big push in the right direction and personally right we can only talk from experience. Personally, as a 27-year-old, I am investing into this asset class and I plan to profit from it over the next two to three years. Yeah, and just to really kind of cap off this section, I just think it behooves everyone to do your own research. Get in there, start reading, start following along, understand it better, and realize that it's in that kind of too big to fail place. Are there going to be cryptocurrencies that go to zero? Absolutely. But are the big, big, you know, we call them blue chip cryptos going to thrive? Absolutely.

You don't get companies like BlackRock and Fidelity and Arc and major banks and countries behind these types of projects if they don't believe in it for the long term. Because instead of like us where they're putting in a couple thousand, they're putting in hundreds of millions and even billions of dollars into these technologies. And they're not going to be wrong. These people move markets. And in this instance, you really can follow the money and thrive. So as a way to make money and a lot of it, it's just really important to understand this sector.

Get in, get involved, and really learn where it fits you the best. What part of this big, beautiful machine do you fit in the best to make out and carve out your future? I couldn't have said it better myself, Robert. Now, our final strategy and or tip to building some insane wealth in your 20s and 30s is artificial intelligence. We hear it in the headlines. Everyone's kind of over it, right? Oh my gosh. I thought that was just a fad. What's going on? Why are you guys still talking about it? Right. Listen, this one is so important. If you're able to understand this and scale this, you'll be able to generate hundreds of thousands of dollars in profit. For example, I follow a guy named

Joe on TikTok, who's in his 20s that has figured out that there was a demand for fitness courses and meal plans within a specific niche on Pinterest. I'll link his profile. I'll link his profile. file out in the description below. And essentially what he does on TikTok is document his journey of like, hey everyone, I have this idea, I think it was like last November, of using chat GPT for creating these digital products. And I'm going to go sell it and figure it out, come along for the ride. It's like a documentation sort of TikTok account. Now, by using chat GPT and other AI products, he's created digital courses that dive deep onto fitness exercises as well as specific meal plans. He markets these courses on Pinterest using their native Pinterest ads platform. And after costs and taxes,

he has profited $361,000 in 2023 alone. Think about that. 20-something year old who figured out how to use AI to build a product and then leveraged an existing advertising platform through Pinterest to sell the product. Now he has $361,000 extra dollars in his bank account. Right now, no offense to Joe, Joe's a really smart guy. But he's not special. You can absolutely do this too. Maybe it's fitness and meal plans or maybe it's candle making, maybe it's scheduling, maybe it's productivity hacking or gaming or pickleball or whatever else, right? There are so many specific niches that people are searching for to learn more about. So maybe identify them using Google trends. It's super simple to see what people are searching for on a weekly, monthly, or even daily basis on that platform

and build a digital product using artificial intelligence around it and then sell it on Pinterest. I'll tell you, I have a different take from that, but this is a really good story and a good way to really encapsulate what AI is. So many people, like you said, are tired of talking about it and they think that AI is here and, you know, big deal. We know what chat GPT is, but guess what? We're just scratching the surface. In my opinion, one of the biggest things, if I were in my early 20s right now, I would go all in on AI. I would become an expert on how to build the best tech stacks for entrepreneurs and small business owners using AI, and then what I would do is I would create using AI, a DM strategy to DM all of these people like myself and like you, and say, hey, do you need help with your

tech stack for all of your growing businesses? Would you like to allow us a few minutes to give you a demonstration? Then I would demonstrate these services of how you can make my day more organized, more streamlined, and my business is more profitable, and that right there would be a service-based business that could make you millions. Because let me tell you, with as fast as all of technology is moving, artificial intelligence is here to stay, and it's going to be improving month after month year after year,

and most business owners and entrepreneurs and influencers are not going to be able to keep up with that. So that alone is one business model that I wish I had time to start, but someone young and hungry could do that with very little money and a lot of time and research and really crush the game and services because AI is so important like right now for me every single day. I use ClickUp. I use Otter AI. You hear me talk about Taylor Brands. When you're building like your brand guide and your logos for a new brand, Taylor Brands has incredible AI better than most that I've seen. But then also you can look at Adobe,

Mid-Journey. Let's say you want to create photorealistic art or fine art that you want to be able to sell prints on Etsy for. You could use Mid-Journey for that. There are just endless business models you can create all based around this technology and really crush it in the coming years. I'm so excited about AI in this sector, especially for those of you that are looking for kind of like that cheat code to wealth and really moving forward and making a lot of money quicker to streamline your wealth-building journey. Just to piggyback on that real quick, Robert, I feel like, as you were just mentioning this, I had an epiphany, super simple, kind of thinking back to what I did when I was in college and graduated college to make some extra money,

I built websites for dog grooming companies, right? So I had like a cookie cutter website. It was super simple. One, imagine doing that now with AI, so simple to build a website with AI. Find a niche, if it's a dog groomer, if it's a barbershop, like how many barbershops are in anyone's town listening right now? dozens, hundreds, like there are so many customers for you out there. Like, keeping with this barbershop example, how can you build out an artificial intelligence enhanced tech stack? So the solopreneur barber who's renting out a booth at ABC building company is able to take on more clients, communicate better with this clients, process payment, reminders. Like, there are so many different

opportunities ahead of you. You just have to realize, okay, these are the cool products that artificial intelligence does. How can I work backwards into helping other people achieve? and solve these problems with knowledge that they don't know, but I do know because I spent the time, energy, and focus in my 20s and 30s and whoever else is listening right now to actually learn these and build and sell around them. God, I love this. It gives me goosebumps because I just think of these thousands of businesses in every small town that have a website that's five years old with no updates. So they have no SEO. They don't have any kind of performance-based technologies in their website that's creating lead gens or its email automation or any of it.

And you could create a services-based business just around using the AI tools we discussed and absolutely crush it in your own region or nationally with these types of services. That's why I just love the idea of people that have the energy and the time going all in on AI and building something really great and meaningful and creating wealth in the meantime. I couldn't have said it better myself, Robert. artificial intelligence is here to stay. Now with that being said, let's introduce this episode's sponsor. This episode of the Rich Habits podcast is brought to you by Nios Investments. Neos currently offers three unique exchange traded funds, S-P-Y-I, B-N-D-I and C-S-H-I. All three aim to offer their investors

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you can learn more about Nios' ETFs by visiting Nios Funds.com. As with all investments, investors should carefully consider their investment objectives, risks, charges, and expenses of NEOS Exchange traded funds before investing. To obtain a prospectus or summary prospectus containing this and other important information, please visit NEOSF funds.com. Please read the prospectus carefully before you invest. Nios ETFs are distributed by Foreside Fund Services LLC. An investment in NEOS ETFs involves risk, including possible loss of principle.

The equity securities purchased by the funds may involve large price swings and potential for loss. A fund's income may decline when yields fall. Fixed income securities will decline in value because of an increase in interest rates. The funds may use derivative instruments to seek income, which involves risk different from or possibly greater than the risks associated with investing directly in securities and other traditional investments. Just want to mind, everyone, we are major fans of these ETFs. SPYI is a massive holding in my personal portfolio, and we both invest into SPYI. and CSHI, haven't yet dabbled in BNDI, but we'll see.

Everyone, definitely go check out Nios's ETFs. We give them two thumbs up. Now, with that being said, let's jump into everyone's favorite segment of the episode, our question and answer. Our first question comes from Genesis B. Genes says, I'm in the service industry as a bartender. I'm not offered a 401k or health insurance or anything like that. How do I best save for retirement?

What are my options? Really good question, and I'll give you two right off the bat. So if you don't have a 401K, this doesn't just go for like bartenders, This goes for anyone out there. Even if you have a 401K, you can do this, right? Open up the Roth individual retirement account, right? The IRA stands for individual retirement account. You as an individual are afforded the opportunity to invest toward your retirement in a tax-advantaged manner.

And you can do this by opening up a Roth individual retirement account. Okay? How do we do that? You can go to Google and type in Roth IRA and you'll be presented with a ton of different options. If it's Vanguard, Betterment, Wealthfront, Fidelity. I mean, the list goes on and on. Personally, if I were you, I would go to a betterment or a wealth front, which is a robo-advisor. And essentially what they do is there for the people who want to be completely hands-off.

They don't want to learn this stuff. They don't want to take the time. They just want to deposit the money and have it get invested on their behalf. If you want to be more hands-on, you're more than welcome to go to Vanguard or Fidelity and maybe even Charles Schwab and open up an account through them. And when you open up the Roth IRA through them, you have to not just deposit the money from your checking account. once deposited, you then have to buy the specific securities or ETFs rather to invest in, right?

V-O-O-O, V-T-I-T, QQQ, stuff like that. So that's what you should do, full stop. And you can do that even if you have a 401K, right? It's the individual retirement account. It's called that for a reason. And I'm going to add a couple more to this, Gen.S.B, coming from someone that's been in the restaurant and bar industry for a very long time. It is unfortunate that you don't get offered health insurance or 401K, but that's okay

because we have other solutions for you to make sure you build wealth and protect yourself financially. So the other items I would look at is look at treasury bills. You can go to public.com. There's a link in the show notes. And I would look at buying the treasury bills and putting some money into that monthly. Right now, treasury bills are paying out about five and a half percent. And so it's a really nice gain and it's very safe for your money. And you also don't pay taxes locally or state on your gains with treasury bills.

and I would also look at having a high-yield savings account. Wealthfront is a great one that Austin mentioned, because what I think would be good for you having this high-yield savings account is maybe look at putting a portion of your income in there so you can get your own individual health insurance policy, shop around, find one that suits you well. Without knowing your age, I still believe it would be important for you to earmark some of your funds for health insurance

because I think it would be a great way to protect yourself since you did mention it and find a policy that suits your budget. 100%. And open enrollment is right around the corner. It's something I'm personally going to be participating in for the coming year. So definitely earmark, you know, maybe $2, $400, $400 a month for that health insurance and make sure that that is a line item in your budget. Also, totally agree with Robert here.

You should have several thousand dollars saved in a T bill or some sort of high-yield savings account, not just for emergencies, but health emergencies, especially if the policy you choose has a high out-of-pocket deductible. Couldn't say it better myself. So our next question comes from Donna G. Donna says, you always say how good it is to have an IRA, but I want my children to liquidate their IRAs and take that money to go buy a house now since they're 30 years old. What do you think about this strategy?

Good question, Donna G. I think that that is not a very good idea because your children will only be able to keep 70 cents on the dollar for every dollar they take out, assuming a 20% effective tax rate. and a 10% penalty, right? So that's 30% of the whole amount that they're taking out go straight to the government for taxes and penalties. Not a good idea. So instead of liquidating their retirement,

something I say a lot, right, don't borrow from your future to do something today. To buy this house, maybe they should just consider a side hustle to generate more income that they can then park into a high-yield savings account or a T-bill that's going to help them grow, that savings faster. Maybe if they are sort of on track for a four, five, six-year kind of trajectory

to save up for that down payment. Maybe it's even a good idea to put that in the markets, right? The S&P is up I'm on 7 to 10%. You're to date so far, much more than that 5.5% that we're seeing in T-bills. So if they have a longer sort of down payment saving trajectory, they could definitely invest that. But I would definitely not take their retirement money, pay 30% of it to the government in the form of taxes and fees, and then use the other 70% to buy a house. That's not going to be a cash-flowing asset. It's really just a single-family house. It just doesn't seem like a good idea to me. Donna G. From my perspective, the answer is no, no, no. Leave the money that's there from the IRA. Please don't pay the penalties and the taxes on it. This is tax-free money at this point,

and it's going to be so important for them for their retirement plans. Here's what I would do. Similar what Austin said. Find a side hustle. Or stop adding to the Roth IRA for now. Put all that money somewhere else, whether it's in VOOQQ, a blend of index funds, high yield savings, somewhere where it's growing and use that money and that money only to go buy a property. But I don't think it's a good idea for their first property to be a single family home. Here's a better strategy, Donna, please take notes. Go out and enjoy the new strategy from Fannie Mae right now. Everyone write this down.

Fannie Mae has a new loan program up to a million dollars, up to four doors, lower requirements than an FHA or a traditional loan, and you only have to put 5% down up to a million dollars. It's a crazy program, and everyone should be taking notes and making sure to implement this in their investing strategy. So Donna, please have them follow this. Buy a duplex, a triplex or a fourplex. live in one unit. That way they don't have to put 20% down and take money out of the Roth,

enjoy the 5% down so they can afford to still have a property, and house hack this thing to death, because this is one of the best strategies for them without taking the hit in the Roth IRA. And trust me, you'll be so happy you follow this strategy. And just to remind everyone, right? Yes, interest rates are high right now, eight, nine, maybe even 10%,

depending on your unique situation. but interest rates are going to come down over the coming 24 to 48 months. So a high payment now doesn't mean a high payment forever. However, the last thing you want to do is put yourself in a situation where you can't afford your monthly payment as a homeowner. The water heater goes out. The AC unit goes out. Something happens with the roof, right?

If it's going to happen, it will happen, especially if you're a homeowner. So make sure to leave wiggle room in your budget as you go out and get this new mortgage. With that being said, to Robert's point, house hack the heck out of this thing. live in one of the units and then rent out the other three, two, or even one unit, depending on the type of property you get. And you're going to get to a point where maybe in four years down the road, interest rates are now maybe back to 4%, 5%. So you're going to now refinance that. You can maybe take even the equity that you've built out of this property and use that to go buy a single family home that you want to live in if you don't want to continue living in this quad unit. And then, you know, when you refinance that, your tenants are still paying you this high amount of rent.

And so you'll be able to now begin to cash flow this property beyond what you were doing before. So just take Robert's advice here. Don't liquidate the IRAs. Not a good idea. Don't pay that 30%. Go house hack or figure out a different strategy. Yes. Thank you.

Thank you. All right. Our last question comes from Olaundria B. Our laundry B says, my spouse and I are wondering if franchises are a good idea. Are they worth it? So I don't really know much about franchises. Again, I'm 27. Never really had an experience about that.

But that's why you listen to the Rich Habits podcast. We have both the industry veteran and the guy who's trying to figure it all out in real time with you here. So let's look to the industry veteran, which is Robert. Do you get his perspective on this question? Love the question, and the question is yes and no, because here's why. It's all about selection of franchise. Is it within your budget to own that franchise? And do you understand that by owning that franchise, even though you have the franchise systems and you have this kind of built for you automation around the business, you're still buying yourself a job.

So many people think by buying a franchise, it's turnkey, it's passive, you're never going to have to do anything, and people couldn't be more wrong and be more misleading to you, the potential franchise purchaser of what's going to happen. Look at it this way. Let's say you buy a franchise restaurant, pizza store, hair salon, tanning salon, whatever it is. There's always going to be pipes that break.

There's always going to be someone that leaves the door unlocked. there's going to be someone that's not there in the morning for the deliveries and the delivery driver leaves and God forbid you're a chicken franchise and your chicken just went an hour down the road because someone didn't show up. So as long as you understand the complexities of business ownership and the fact that yes, franchising can be great, it's still a business. It's not going to be passive. So my best tip to you if you're looking to buy franchises and you're going to build this as a part of your overall portfolio, own more than one. Find one that works and buy more locations because then you can afford a general

manager, a regional manager, and some of these key holders that take you out of the loop of the day-to-day issues. Because trust me, if you buy just one, you're going to be there all the time, no matter if you think you are or not, and you're going to have issues with operations. So keep that in mind because no matter how good the employees are, they're still just employees. And when someone forgets at 9 o'clock at night to lock the door, you're going to get the call. And when you call that manager or that key holder and say, hey, can you go lock it? Guess what? At 10 o'clock at night, they're not going to answer the phone because they know it's not something good.

So just always keep that in mind it in your perspective that franchising, buying franchises can be very profitable, but it can also be a money suck if they're not profitable. I could tell you of pizza store owners that spent $6,700,000 opening their location. and never to have the honeymoon phase where it blows up out of the gate and really grows and grows and grows. Sometimes these franchises open flat and never gain the momentum they need

and therefore causing you to lose money from day one. Not only are you losing your invested capital to build the franchise, but you're losing money on a weekly, monthly basis because it's not profitable. Make sure you weigh everything out when you're deciding on if to do it or not and what franchise, because it's more than you think,

and they're going to paint a beautiful picture of rainbows and unicorns for you, and I just want to make sure you have the total picture so you understand what you're getting yourself into. The ride that steals the spotlight every time it hits the road, that's the Volkswagen Tiguan. Its sleek exterior makes a first impression you can't ignore. Step inside to find available full leather seats and wood accents. Under the hood, the available 200.

101 turbocharged horsepower engine gives it a fun to drive edge. The refined Tigwan, you deserve more style. Visit vw.ca to learn more. SUVW, German Engineered for All. I love that perspective on franchises, Robert. I think that's something a lot of people need to know. However, now that I think about it, the only experience that I have, or even perspective, rather,

is I've got a friend named Blake, who was from my hometown. He's like two years older than me, so maybe he's like, well, I think actually he started this when he was probably my age, so 27. But he went out and created, or I guess rather franchised, a Scooter's Coffee, right? Very simple. They sell a couple coffees, but it's like one isolated, you know, product.

They're not like a McDonald's where they're selling a bunch of different things. But he franchised a Scooter's coffee in our small hometown. And now he's growing out to three different franchises across like the region there. So there's definitely those like, hey, this isn't going to work kind of situations. But, you know, it does turn out decent for people that I'm sure do a lot of research. And if you're looking to do that research, I know there's a guy, I think named like, franchise guy or franchise something on Twitter. I think his profile picture is like some McDonald's French fries. It's kind of funny. But go check him out. He's going to get you all that information

as it relates to franchises. He does a lot of really good research, first party data, stuff like that. I know he's on Twitter. He probably has like an email newsletter. So if you're really interested in the franchise route for wealth building, definitely go look to him as a resource. Everyone, thank you so much for listening to this episode of the Rich Habits podcast. We couldn't be more grateful that we are a top three podcast now on Spotify's business charts. We've consistently maintain this highly ranked spot. We're super, super grateful and very excited. Don't forget if you have a question, any perspective, or anything at all to share about the Rich Habits podcast with us. Shoot us a DM on Instagram at Rich Habits Podcast. Email us at Rich Habitspodcast at

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