Rich Habits Podcast - 70: Finding an Extra $2,000 / Year to Invest

Episode Date: June 24, 2024

In this episode of the Rich Habits Podcast, Robert Croak and Austin Hankwitz flip things around. Instead of talking about setting your family up for generations or optimizing your tax situation, they instead wanted to cater an entire episode around the person who's living paycheck to paycheck and trying to dig themselves out of a hole. Personal finance is personal. We all have a unique relationship with money. Some people have it in abundance, others work countless hour every week to earn it. Regardless of your situation, we hope this episode can help you find an extra $2,000 / year to either begin paying down that high-interest credit card debt or kick-off your investing journey. ---Don't forget to subscribe to the new ⁠⁠Rich Habits Newsletter!⁠⁠ 2,900 of you already have since it's launch only 5 weeks ago :) thank you!---Sign up for Blossom, the social investing app: ⁠https://blossomsocialapp.page.link/richhabitspodcast---⭐ Download our FREE Budgeting Template – ⁠⁠⁠⁠⁠⁠⁠click here⁠⁠⁠⁠⁠⁠⁠⭐ Earn 5.1% on your savings with a High-Yield Cash Account – ⁠⁠⁠⁠⁠⁠⁠click here⁠⁠⁠⁠⁠⁠⁠⭐ Trade stocks, options, music royalties and crypto on Public – ⁠⁠⁠⁠⁠⁠⁠click here⁠⁠⁠⁠⁠⁠⁠⭐ Get a $35 bonus when you start saving & investing with Acorns – ⁠⁠⁠⁠⁠click here⁠⁠⁠⁠⁠⭐ Automatically buy stock where you shop with Grifin – ⁠⁠⁠⁠⁠⁠⁠click here⁠⁠⁠⁠⁠⁠⁠⭐ Protect your family with term life insurance from Suriance – ⁠⁠⁠⁠⁠⁠⁠click here⁠⁠⁠⁠⁠⁠⁠⭐ Use code “Spotify” for 15% off our 4-module video course – ⁠⁠⁠⁠⁠⁠⁠click here⁠⁠⁠⁠⁠⁠⁠⭐ Optimize your portfolio with Seeking Alpha – ⁠⁠⁠⁠⁠⁠⁠click here⁠⁠⁠⁠⁠⁠⁠---👤 Explore everything Austin does – ⁠⁠⁠⁠⁠⁠⁠click here⁠⁠⁠⁠⁠⁠⁠👤 Explore everything Robert does – ⁠⁠⁠⁠⁠⁠⁠click here⁠⁠⁠⁠⁠⁠⁠❓ Ask us questions for our Q&A episodes – @richhabitspodcast on Instagram📬 Inquire about working together – [e-mail]---Hankwitz Group LLC has an existing business relationship with NEOS Investment Management LLC. The opinions expressed are those of the author, and the author owns several NEOS ETFs.

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freaks multiply at a rate that would make a rabbit say, yo, chill. But Laura shopped on Amazon and saved on cleaning spray, countertop wipes, and fly traps. Hey, fruit flies, your baby boom ends here. Save the Every Day with Amazon. Hey everyone and welcome back to the Rich Habits podcast, a top five business podcast on Spotify. My name is Austin Hank Wits 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

a 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. So, Robert, what are we going to be talking about in today's episode? Yes, in this episode of the Rich Habits podcast, we are going to flip the script. And instead of talking about the secrets of the wealthy and how to optimize your annual taxes, we're going to focus on our listeners that are just scraping by.

We want this podcast to not only be a way to teach Americans how to set their families up for generational wealth, but also how to get started investing in the first place. In the biggest pushback, we hear on a daily basis from our listeners and in Instagram DMs is, I don't have the money to invest between groceries, daycare, summer camp car payments and everything in between i just don't have that two hundred dollars a month to get started towards investing for retirement so if this is you listen up this is the episode just for you because look life gets in the way and we just have to figure it out and we're here to provide you a plethora of ideas to help you find that extra one hundred dollars or two hundred

a month in your budget allowing you to begin saving and investing towards retirement in a really, really meaningful way. You know, Robert, before we started recording, I was telling you a little bit about what sort of sparked this idea for the episode. Last night, I did a late night run to my local 7-11 for some ramen. And the guy behind the counter was super nice, really nice guy. He was listening to some sports podcasts and I told him about rich habits and stuff. And then I was thinking, like, I wonder What other listeners we have that are working the late nights at the gas stations or the 7-Elevens or wherever, you know, and they're just scraping by, right? They're really trying to get ahead. They're trying their hardest, but they just can't find that extra $100, $200, $300 a month to move the needle for them in retirement investing.

And so that's what got me excited to want to have an episode where we don't just talk about, to your point, the secrets of the wealthy and, you know, how to build your $100,000 and do this and do that, right? That's really daunting for a lot of people. and there's a lot of people out there listening right now that are on the complete other side of the spectrum. That's who we're talking to in this episode. Yes, this episode is very, very cool and meaningful for me as well because Elizabeth and I just had a conversation. I think it was a week or two ago and she was going through TikTok one evening talking about how we need to discuss the topic of the everyday person and their situation because of inflation, because of groceries and gas prices and all of this. that there are so many people out there that feel they can't get started on their journey to

investing because they're living paycheck to paycheck and scraping by. And so this is very, very important because I think one of the biggest mindset shifts people need to understand is they feel like they can't get started until they have a massive sum of money. And this episode is going to clarify and debunk that because I think one of the best things people can do is draw that line in the sand and get started, regardless if they're thriving or not, because then those two paths will cross each other at some point. As you're digging out and your investments are doing better and you're making money while you sleep, it's just such a great place to be. So I love this episode from that standpoint to let everyone know, don't listen to the fake gurus.

You can start with as little as $100 a month. And I promise you, down the road, it will become meaningful. and life-changing for your journey. Robert, I love that inspiration. So let's jump right into it, right? You know, we want to help people find an extra, let's call it $2,000 a year to invest with, right? That might be saving, investing, paying off high-interest debt, right? But finding that extra to maybe $3,000 a year to start making some money moves, okay?

And so the first way that Robert and I thought would be a cool tip for people to think about how to start that is by switching your wireless phone plan. Okay? I am victim to paying $100 a month to AT&T for my unlimited talk, text, and data, right? Just like how I thought everyone else in their 20s is supposed to do it. But turns out there is visible wireless, which is as cheap as $25 a month. I actually shared this with my dad, and he's on it, right? We used to have this little family plan going with AT&T.

We're $200 between the two of us. He's like, see you later, Austin. I don't need to do this anymore. I'm going to go save $75 a month, switch to visible wireless, and he's loving it, right? It's all the same towers as Verizon. He's got his data, his talk, his text, everything he needs. He's never disconnected. He's always right there.

I got him a little find my iPhone, right? So I always got him in my pocket. But I just want people to know that like not all the time is finding margin in your budget cutting back. Sometimes it's just finding alternatives that are checking the boxes, but just in a cheaper manner, right? The alternative to this AT&T could be a visible wireless or a mint mobile, right? But just like knowing that you don't always have to.

to think about cutting back and not spending. It's just how can I reinvent what I'm doing in a way that's going to help me find that extra 20, 30, 50, $50, $100 a month in my budget with the same value every single month, but I'm just doing it in a different way, you know? Yeah, and I think this speaks a lot to us always preaching to everyone of doing the honest budget because we see people every single day that have a very high debt to income ratio and then say, I don't have any money left over to invest. And this really speaks to, yes, it'd be great if you could just go out and make more money and have that extra money to invest. But in the instances where you can't, then you have to look from within and find those little leaks in your monthly expenses to be able to plug those

leaks like you did with your father and getting the less expensive wireless plan. I'm on Verizon and I know my plan was like $175 a month. So I went in last year. year and I was like, this is getting ridiculous. What can I do here? They went through the bill. They said, well, hey, you already have a business account. We have this new special. You can get two phones, because I was getting a new phone last year. You can get two phones, this plan, more data for $45 a month less. So it was a no-brainer for me. And that just speaks to the fact that even people at my financial level should keep their eye on the prize and watch their monthly budgets and pay attention because there's always ways, whether you're scraping by or you're thriving, to find ways to

cut costs to give you that extra money for whatever you might need it to be. So I really love this point and it's so important to illustrate many, many ways of how we can find this money that we need to get towards our investing. So I love it. 100%. So if you've not yet checked out visible wireless, Mint Mobile. I know there's like a bunch of other of these sort of budgets. Actually, visible wireless, like, it's straight up Verizon, right? So it's like not even budget. It's just cheaper. But go check some of this off out, right? If you are that person who's trying to find that $50, $7,500 a month extra in your budget, you're scraping by. You need some wiggle room. Maybe it's time to switch wireless phone providers. Now, speaking of switching and kind of

finagling the budget here, Robert, the next one I want to talk about is optimizing your subscriptions. because we mentioned this at the beginning of the year where I went and I had a apocalypse, right? I went and I cut all these random subscriptions that I just didn't know I had anymore. I got rid of the peacock. I was paying for two peacock subscriptions, Robert, it was crazy. I got rid of the DoorDash. I got rid of the Uber. I got rid of every dang company that offers a subscription today. I cut it out and I found an extra 30, 40, 50 bucks a month in my budget because of that. And, you know, for people that are listening right now and you say, no, I've already got to figure it out. I'm good. You know, whatever.

That's cool, but just like take the 5, 10, 15 minutes to make sure that you find them all, write them down in your notes app with a little dash that tells you how much per month you're paying for it. Because Robert, as someone that might see, you know, Uber 1, 10 bucks a month or DoorDash, 10 bucks, like, that's cool. I got 10 bucks. But then once you look in your notes app and you see that you're paying $142 a month across 19 different subscriptions and you haven't bought a door dash in two months,

you haven't gotten an Uber in the last three weeks. So you know what I'm saying? Like that's when you can take a step back, have that bird's eye view and say, okay, do I need Peacock, Netflix, you know, HBO Max and Spotify, all four of them? Maybe not, right? So just do yourself the favor. I know you think you might have it figured out, but just go in there, take the 10, 15 minutes, write every single one of those out, how much they cost, and just give yourself the

opportunity to make some cuts. Yes. And for all of the people out there, you know who you are. some of the fake gurus and some of the other people that say, well, this is all lack mentality thinking because you should just make more money and not worry about the $20, $30, $50 a month things. Well, guess what? Little leaks do sink ships. And I have two instances recently that I realized when we were talking about this months ago.

One was a software that we have not used in almost three years for one of my companies that was still being taken out of my debit card from that company. company's account, $89 a month. $89 a month. So I got rid of that finally. And then also I had a poker subscription for a poker site where I could watch the replays of these tournaments. I have not played any live poker in over two years. And that subscription was $10 a month. So $120 a year. That's gone now. And I looked up. I hadn't opened it since like September of 2022. So this really illustrates what we're talking about. Yes, it would be great. If you could be great, if you could just make more and more and more money and not worry about your expenses. But that's not

reality and that's not how people build wealth. So when these fake gurus tell you, we'll just go make more money because saving $20 a week by not going to Starbucks or $50 a month by cutting your subscriptions back is not going to make a difference, they're just wrong and you should block them and not listen to them. Because not everyone has the opportunity to just go make more money. If it were that simple, everyone would be rich. But what you can do is, look from within your current life and your current finances and find that $100, $300 of savings to then get you started in investing. And this is so, so important for everyone to understand.

And speaking of finding that, you know, looking inner and finding that, Robert, I actually made this big move. I think it was like beginning of last year, like January, February. M1 Finance has a credit card. They call it the owner's rewards card. And you get like 10% cash back on. on subscriptions like Netflix and Spotify and like 5% cashback on like Chipotle, McDonald's and like some airlines, right, and two and a half percent cash back at all these gas stations.

And so I was very conscious about if I'm spending money, I want to make sure that I'm always cross-referencing, right? I've got the Netflix, it's on this card. Spotify, on the card. Every time I go get gas, I'd use the card, right? And so like, just by being conscious enough to sort of optimize how I'm spending the money and how I'm, you know, sort of paying on these monthly subscriptions through the this specific credit card and there's a ton of credit cards that are out there. Go do some research.

Find the one that works best for you. Groceries is like whatever else. I don't know. But like this saved me by getting cash back $1,000 over the last 18 months. Right. I did the math. It was like $997 over 18 months. And you're like, oh, that's not that much money. Awesome. Yeah, it is. That's like 70 bucks a month, dude. It's like if you're scraping by and you have to pay these things anyway, have to go buy the groceries. You have to go shop here and, you know, do these things anyway by just using a different card. for the transaction can find you that extra $25, $75 a month in cash back. That is then that extra margin to begin investing, paying off the debt, saving things that we talk about.

Yeah, one of the things that was kind of a favorite moment of mine in 2023 earlier on in Rich Habits history was when we talked about a rule that I implemented in my life about eight years ago. And this is similar to what we're talking about in this. So I do want to mention it. And that is look around your house because everyone has that. set of golf clubs they haven't used in three years they have that you know exercise bike they haven't used in two years they have some camera from five years ago that still has value all of those things cleanse yourself take those things get them on facebook marketplace get them on offer up

get those things out of your house as well because that is another good practice that if something hasn't been used in a year get rid of it use that money towards paying down a credit card or putting towards investing. These are just small steps that you can do an hour here and an hour there that will get you on your way towards financial freedom and so important to take seriously and implement into your daily lives. I love it. Now, as you guys listening know, Robert and I think it's really important to invest. We're investors ourselves. I've been an investor for a decade now and Robert's been an investor for several decades. And this episode, sponsor Blossom allows us to not only invest, but share those investments with other people.

Yes, and Blossom is a social investing app built around transparency. So you simply sign up for a free account, connect your existing online brokerage accounts like Fidelity, Robin Hood, Vanguard, Charles Schwab, and get started. Unlike anonymous platforms like Reddit and Twitter, Blossom users link their existing brokerage accounts to the app so that all of the holdings and portfolios share within the feed are verified by actual data leading to richer discussions and decisions. It's never been easier to join a community of like-minded investors focused on building long-term wealth together. And you guys are probably like, Austin, what are you talking about, man? I got on Blossom.

I don't see anything. Well, no, let me tell you because when you signed up, I promise you, you were prompted with different subjects that you wanted to see on your feed. I was prompted and I chose dividends, I chose passive income, and I chose options. And so those are the communities I now see on my Blossom feed. They also offer a one-stop shop dashboard for tracking all of your investments. So if you're someone who has, you know, a Robin Hood account and I'm one finance, a public, a Schwab, you can sync all of those into Blossom and track the performance of all those holdings in one app. They also have a dividend tracker, which is cool, a dividend forecaster, letting you know when you could expect to get paid some of that passive income from your stocks.

They've got sector breakdowns and just so much more. And remember, Blossom is not an online broker. You're not investing into stocks on Blossom. They're simply a social app network for investors that want to connect with other investors. And did we mention they have 120,000 active users across both Canada and the U.S. currently? So go sign up for Blossom using the link in the description of the show notes and we'll see you there. Now, Robert, the last point I think a lot of people, including myself, right, this was something that I I took for granted. I heard people say this a lot as a way to save money, but I never really did it until I had to do it. And that was shopping my insurance, specifically my auto insurance and my homeowner's insurance. Right. So sort of what happened here to me is I, you know, woke up one day. I got my state farm, I think who it was, sent me a bill for $1,600 because I pay for my homeowners insurance like in a lump fee, right, just once there. And I got this $1,600 homeowner's insurance bill. And I was,

I was like, wait a second, that's not right. So I called him, I said, hey, guys, my homeowner's insurance bill last year was $1,100. Why is it now $1,600 one year later? Oh, inflation, man, you know, it's just the, it's inflation. And I'm like, 60%, 50% inflation? Like, that doesn't seem right. So I shopped around, right? I called Allstate.

I called a bunch of these other ones. I ended up going with Allstate. And I actually got a cheaper bill, same coverage. Everything's the same, cheaper than what I was paying to begin with, which was really cool. So now I'm paying like under $900, $800, $800 a year for my homeowners insurance with Allstate. And then I was able to bundle my auto with them as well. This isn't an ad for Allstate, but it's like I was able to meaningfully save hundreds of dollars a year across my homeowners and my auto insurance by just switching my insurance provider. And so after I saw how much money I was saving, I told my girlfriend that she should

go talk to the guy, the same Allstate guy that I found. And she's like, all right, sweet. Talk to him. Now she's saving $40 a month on her auto insurance because she switched, right? And again, not a thing for Allstate. You could go find somewhere else, whatever works for you, but just shop your insurance. I think a lot of people make the mistake of like, oh, I'm going to stick with him. They've been a family friend. I love, you know, Bill over here at whatever. And he always gives me a good price. Yeah, shout out to Jim Klein from Farmers or whatever it is in Kingsport, Tennessee. He was our family friend for a long time, too, until he raised 50% prices on us. So sorry, Jim, I had to go somewhere else. But yeah, man, it's just you guys got to shop your insurances.

You know, this really comes back to, again, another point we've talked about in the past. I agree how I do things like this because I obviously have a lot of insurance policies and a lot of things to take care of every year and every month is I try to do it quarterly where I face the bear. You know, I go and I go, okay, today's the day where I'm going to go through everything and I'm going to look at everything and see where we can carve out some savings and find some free money. So I do it quarterly just because I have so many things going on with all the businesses and looking at what is our credit card processing costs, what is our bill? what is our business insurance all of these things but it also speaks to another little hack that

i like and a lot of people don't do this is when you're buying the higher ticket items online and you're going shopping just like you would for insurance leave it in the cart a lot of people don't realize most well done websites nowadays for high ticket items if you put that item in the cart and you leave within a few days usually within a few hours a few days you're going to get a retargeted email that says, hey, we'd love to have you back. If you come back, you can get that item for 10, 20, 30% off. That's just another simple hack people can do to find free money on the things they have to buy anyway. So don't be afraid to shop and make sure you're shopping around and comparing apples to apples when you are shopping. So have your current policies in front of you so you can make sure the

deductibles and everything are the same. And find those ways to get that extra money out of your current income and out of your current budgets. And you'll thank us later because you'll be shocked at how much money you'll find throughout the year. I love it. You know, Robert, between the $50, $75 a month of switching your phone plan, we're talking about $6, $700 a year, optimizing your subscriptions by either getting the cash back, $20, $30, $50 a month, right? That's another $500, $600 a year or even canceling subscriptions that you don't use anymore. Maybe that's another $100, $200 a year. And then even shopping the insurances, right that saved me $600 it's saving Ireland my girlfriend $500 a year right there's all these different ways that our listeners right now who are scraping by who think the world's against them groceries are expensive

inflation child care car payment everything under the sun is beating against them these are the ways that they can find $1,000, $2,000 maybe $3,000 of margin in their annual budget to use to pay off that high interest credit card that's been around their neck for a couple months or start investing toward their retirement for the first time inside of a Roth IRA, they buy the VOOs and the QQQs of the world for the first time. And they see their account balance now going from zero to 100 to a thousand, right? How cool was it, Robert? I'm sure you remember when you first started investing, seeing your brokerage account have that first $1,000, that first $10,000 inside of it. I mean, I felt like I was on top of the world, dude.

Yeah, back then, and I remember vividly when I first set it up, my cousin Tim got me started and it was mass financial. and I was taking $20 a week out of every paycheck. Back then, I was a W-2 employee, $20 a week out of every paycheck. And when I was ready to buy my first piece of real estate, it was a fourplex. I had all the money I needed in that account for the down payment, the closing costs, and some of the renovation costs, all starting from $20 a week. Yet every single day, we have people out there that tell us, you know, oh, if you don't have

tens of thousands of dollars, don't even bother getting started. with investing, don't listen to those people. I promise you, they may be wealthy and they may have done well for themselves, but they're not looking out for your best interest. And they're just going to try and sell you on a $10,000 course rather than help you actually find your way financially. And then one more thing I want to add to this point when we're talking about shopping your insurance, don't forget, shop everything, shop your lawyer, shop your accountant.

Because let's say you own a small business. if I took a hundred of you or a thousand of you listening right now and I sat down and I went through your write-offs yearly of what you're writing off and what you're claiming out of your business, I bet I would find a lot of missing write-offs where you're not writing off the portion of your home that you work out of for your home office or you're not writing off your gas mileage that you use for work or you could be transferring your cell phone bill like we talked about into the business name and then using that as a write-off. So shop everything to find out what's best for you.

And don't just believe in what Uncle Bill says because, you know, he set you up with the insurance guy or the CPA years ago and it's a family friend. You have to do what's best for you in your financial journey because they're not going to be there to pick up the pieces as you get out of scraping by. And it starts today. Listen, Robert, we are halfway through summertime. July is right around the corner. A lot of people are getting some fomo because they're seeing. the vacations, they're seeing all the fun new toys, the boats, the jet skis people are buying. And for those people listening right now that are grinding it out, they're working the long

hours at the 7-Eleven at night, they're working the long hours at the hospital as a nurse or whatever they're doing to grind it out to get themselves out of debt, to finally start investing. I just want y'all to know that we are proud of you. We are so excited for you and we are rooting for you every single day. And we hope this podcast can serve as motivation for you guys to hit those financial goals. and we want to hear about those financial goals after they get hit. Send us a DM on Instagram. You know, at Rich Habits Podcast, be aware of scammers.

Hey, guys, I just, you know, paid off this credit card at $2,000. I'm so excited. Hey, guys, I finally started investing in my Roth IRA because of you. I'm so excited. We love those emails. We love those DMs. So keep them coming. We can't wait to see you guys all succeed.

And what a fun episode this was, Robert. Yeah, I love it. And I want to make sure. And we should talk about how could we build something that's like a leaderboard where it's like for the year we have people write in with their wins and then we tally their wins in the leaderboard and kind of share it. Maybe we do a whole episode at the end of the year where we share everyone's wins and everyone that is engaged with us because it would just be so cool. I get letters every single week. I get DMs. I get emails of someone that says, you've changed my life and my family's

life. Here's what I've done different this year because of you and the difference that it has made. And that is so rewarding for me. And I'd like to integrate that in a more visual manner for rich habits. So we've got to figure that out. That would be fun. That would be really fun. And maybe whoever hits number one, the leaderboard gets like a massive prize, like a vacation or a new car.

Yeah, I mean, something because it all comes down to one phrase that I've been saying for many, many years. And now we've adapted it through rich habits is that is take notes and take action. So many people out there will follow the podcast. They'll follow our lives. They'll join our private communities. And they get all of this incredible information to change their lives with, but they don't take action.

Taking action is the most important thing you can do, even if it's in small steps. This whole episode is about getting you out of scraping by. And so it's very important that no matter how you do it, you need to do it early and often and get some money put aside to be able to invest and grow so you have money. money working for you over the years. So that's why I love this episode so much. Well, speaking to take an action, Layla, who the first person that's asking us a question here in the question and answer segment of the show, if you have a question for us, Rich Habits Podcast on Instagram, shoot us at DM, or email us at rich habits podcast at gmail.com. Layla says, I want to thank you

guys for this podcast because ever since March, I started listening and I did the following. I moved my savings account from Ally to wealth front to get a higher APY. I had an IRA but didn't have it invested into anything. Now because you guys, I'm invested into VTI, V-O-O-Q-Q-Q-Q-Q and SPY, and I'm up $5,235 since March. How awesome. Shout out to Layla for all the cool stuff she's done because of the podcast. I know it really wasn't a question here,

but we wanted to pull this in to remind you guys a couple things. one, if your high yield savings or if you just have any savings, it's sitting in a checking account or whatever it is, and it's not parked in Publix high yield cash account or on wealth front or one of these high yield savings accounts paying 5% or higher, you're leaving hundreds, if not thousands of dollars a year on the table. Do something about it. Go to public.com slash rich habits. Open up that high yield cash account. Get the $25 bonus by using habits in the promo code, right? You're going to be just fine. Second thing, Robert, and I think a lot of people make this mistake, and we talked about it.

We giggled about it, actually, when we were right in this episode. And that's people that forget to invest the money. They deposit the money into the retirement accounts, but they forget to invest the money. My friend Century did this recently. I think it was like $12,000 that was sitting in a Roth IRA. It was like two or three years old. And she's like, Austin, come check out my investments. You'd beat so proud of me.

And I looked at it. I was like, wait, Century, this is just cash. You haven't actually invested it. And so this is a reminder for everyone. And if you're just getting started here, maybe this is your first couple episodes of listening. Once you've opened up the Roth individual retirement account, you then need to deposit money into it. After the money is deposited and has cleared and is now cash in this account, you need to take that cash and invest the cash by purchasing shares of ETFs called V-O-O-Q-Q-Q-Q-Q-Q and VGT. Maybe V-I-T, if you want.

Do those things. Layla did it. She's up all this money. We're proud of her and we're super excited. I love these questions and this is more of a statement and a rah, rah, ra moment. But it really is one of the favorite part of my day and my week when people tell me they finally did something. Because at the end of the day, once you start and you get that feeling of free money because you invested your money and it's doing well, it becomes addictive. And then it's easier and easier for you to go, wow, this is so amazing.

That $1,000 turned into $2,000 or that $4,000 turned into $9,000. It really then starts to help people realize to get their money working. I always say that parked money is dead money and it couldn't be more truthful because so many people just have money sitting in their savings and go, oh, I didn't know what to do with it. Well, you do now. You follow the Rich Habits podcast. You're part of our community. Hopefully you've joined the newsletter.

We have an amazing newsletter and you are taking action. And through that action helps you create wealth sooner and we will help you. you find your way, we will educate you to the path of financial freedom. And it all starts today for any of you that are in this scraping by moment. Now, our actual first question is going to come from Jeremiah. Jeremiah says I'm 22 years old. I make $29 an hour living in Portland, Oregon. I have $7,000 in physical gold, $5,500 invested into the ETFs you talk about in my Robin Hood account, $6,000 into a 401k that doesn't get a match, and $30,000 in a savings account. I have no debt. What should I do with my money? I don't have a Roth IRA and I live in an ADU and I pay

$1,000 a month for it. Robert, kick us off here with what an ADU is, what a Roth IRA is and why Jeremiah should get one, and then how much he should be putting into that Roth IRA, what he should invest into. I mean, you got the whole question to yourself. Yeah, Jeremiah, thanks for writing into us. This is a perfect question for this episode. First, an ADU is an additional dwelling unit. this is going to become more and more prevalent and a great investment opportunity for those of you a little further along because it provides housing that is more affordable to people. So with Jeremiah, instead of him going out and getting a one-bedroom apartment somewhere that's going to be 1750 a month in Portland, he is living in this ADU for $1,000 a month. So kudos to you. That is a great financial

move. And then secondarily, what is a Roth IRA and why should everyone from the day they turn 18 years old have one. It's because when you put that money in the Roth IRA, it is not an investment. It is a vehicle for you to invest through and have tax-free growth for the rest of your life. So it's very, very important. That's why we tell everyone you should have a Roth IRA in the mix of your investment thesis and all of your portfolios. So that's next. To take the rest of this, 30K in savings, I think that's a huge mistake. Unless it's high. yield savings, you don't need it 22 years old and where you're at financially 30K sitting in savings. I would keep maybe two, three months of expenses and get the rest at least into

high yield savings, treasury bills, or use it to start and max out the Roth IRA for the first year. And then also at your age, I would look at maybe not having 7K in physical gold. I think that's a lot for gold not moving as much as we would like to see it move year over year. It's done well the last two years, but over a lifetime and you're only 22, I think you would make a lot more money getting some of that money into maybe some cryptocurrencies, getting into the VOOs and the QQQs we talk about to really maximize your gains over the coming years and decades. That's what I would do. That's where I would start. Yeah, Robert, I think in the maybe two or three episodes ago, we talked about how, yeah, the three financial concepts you need to know. I think it was

episode 68. We talked about how 75% of the lifetime of returns in the S&P 500 came from reinvesting dividends. And when people talk about they hold physical gold, my mind goes to, okay, the price of gold goes up, but gold doesn't pay you a dividend like an Apple or a Microsoft does or an Nvidia. And so if we know that 75% of the total return, the lifetime return of the S&P 500 for the last 100 years has come from taking those dividends and reinvesting them back into the S&P 500, then with physical gold not paying you a dividend, you might be leaving a lot of money on the table. So Jeremiah, if you want to have some gold, be my guest. But you want to have $7,000 of gold, maybe sell half of it and use that, put it in your Robin Hood account, or maybe use that $3,500 as a kickstart to fund

your Roth IRA. You know, you can deposit. it up to $7,000 into your Roth IRA in 2024. And so once you've deposited that money, you can open one up on M1 Finance, Betterment, Wealthfront, Fidelity, Schwab. Just Google Roth IRA, find the one that works for you. Buy the ETFs we talk about, V-O-O, VGT, QQQ, but then once you get that 7,000 in there, deploy it, right? Don't make the mistake of letting it sit there. And then, yeah, keep some physical gold, maybe keep some crypto. I don't really care. But what I think we want you to also know here is that your 401K is not matching you. And so what's cool about 401ks and why we like 401Ks is because of the match.

But that's the only thing we really like about them because nine times out of 10, they're not really investing into the cool things that we know and love like index funds. They invest into these random target date funds and other random things that underperform over a long period of time. But if you can get that match, I mean, match is free money and that's going to outperform any investment, right? And that's why we say match beats Roth, beats traditional. But if you're not getting that match, then there's no reason to invest to the 401. And I'd also imagine your 401k is not even invested into the S&P 500, right? So that's not even a good thing. So that's $6,000. Let it ride. Let it, you know, just kind of go up in value. If I were you, I'd focus on

maxing out the Roth IRA immediately. Once it's maxed out, I would start getting more money into that Robin Hood account, put it in the ETFs we talk about. And then to what Robert was saying, you know, there's no reason to have $30,000 in savings. Maybe you need $15,000, maybe $20,000. Or maybe you're saving up for a house. Like, I don't know what you're doing. But I definitely don't want you sitting on a bunch of cash that's just in a checking account. Like if you do sit on cash, like make sure it's working for you in the public high-yield cash account. And I want to bring up something back into crypto. And this was a headline that was circulated yesterday. And so I'm going to put it in my form and make it simple for everyone listening and following along today. And that is Kathy Woods

didn't interview. And her math based on her team's research and the growth of Ethereum in cryptocurrency is that they believe that Ethereum will have a $20 trillion market cap by the end of 2032. Okay. So we're eight years away. So if you take that math of a $20 trillion market cap and you divide that by 120 million Ethereum tokens in circulation, that would bring one Ethereum to $166,000 in change in the next six to eight years. So even if we were to cut that in half and you could invest $20,000 and for exit in the next 6 to 8 years in Ethereum, why would you not have a piece of your money in cryptocurrency as one of the best places to have growth in the coming two, three, four, five years? So I wanted to read that

off as kind of a final takeaway off of Jeremiah's question here, just because it's so important to make sure you're diversified, especially at your young age, where you can have a little higher risk tolerance and be able to have some money in cryptocurrencies just for the potential of these massive upsides. Yeah, no going to be wrong. I've got my fair share of Ethereum and Bitcoin. I don't know if 20 trillion is going to come true. That's twice as much as Apple, Nvidia, and Microsoft combined, but if it does, we'll be very rich people, Robert. That is very true. I just look at it that whatever, you know, her team could say or the Michael Sayler's of the world say, even if it gets to half of what they predict, we're still in really good shape.

And the illustration was is that you can't leave your money sitting, making nothing or a couple points. You need to have your money optimized. And that is why we are here every single week to provide you the best possible strategies we can, whether you're just getting started or you already have $10 million. We want to help you grow that in a, meaningful way, and that's why I wanted to make this illustration. Speaking of optimizing your money, this episode of The Rich Habits podcast is brought to you by Nios Investments. Nios offers ETFs that aim to offer monthly income while providing core portfolio exposure across equities, fixed income, and cash alternatives like T-bills. Their ETFs may be particularly interesting for folks

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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. Robert, let me be very clear. I want everyone listening right now to know this. I have tens of thousands of dollars invested into these ETFs. I love these ETFs. I get paid thousands of dollars a year in passive income because of them. If you want to get paid hundreds, thousands of dollars a year in passive income, depending on however much you have invested. This is the easiest way to do it. They're so tax efficient. I love their ETFs. I love their management team. They're the most consistent ways of making passive income my portfolio. I just bought a bunch of it from my retirement account too. Robert, I'm so excited. So yeah, go check out Neos funds,

SPYI, QQQQI. We love them. Now our final question comes from Matt. Matt emailed us and say, hi, Austin and Robert. I just want to say, I love the show. It's made a huge impact on my life. You're truly exceptional in explaining things in an easy to digest way, which allows me to take action. So here's my question. I'm 38 and I've built my base using index funds, ETFs, all the fun stuff you guys recommend. I'm also invested into crypto and fine wine and I have 75% equity in my primary house. Performance this year and the S&P 500 and the NASDAQ has been quite great. But my question is, should I be adding bonds to my portfolio as a way to hedge against downturns at some point in the near future?

And if so, what sort of proportion should I be thinking about as well as what bonds do I buy? Keep up the great work. Your content truly makes a difference. Hell yeah, Matt. We appreciate the kind of words, man. Good question, Matt. My perspective is this. You're 38 years old.

You don't need to exactly be hedging the downside risk just yet. You know, I think you have another at least 20 years of investing ahead of you. And if you want to take a rewind and zoom out for the last 20 years of the S&P 500 or the NASDAQ, Of course, there were dips along the way, but we kept going higher after every one of those dips, right? Every one of those dips were just opportunities. And so if I were you, I would consider staying fully invested or even 90% invested into the S&P and the NASDAQ, right? I don't think that you should be sort of tweaking your portfolio to include bonds just yet, right? You're still very young.

However, I have bonds in my portfolio. You know, I think as the Fed cuts rates, bonds prices are going to go up. We talked about that with Troy, actually from Neos Investments. And those are the bonds I have, BNDI. Those are the bonds that are in my portfolio. I've only got about 3 to 5% of bond waiting in my portfolio. Again, back to this idea. I've got a long investment horizon ahead of me.

I don't need to be owning too much of bonds. I got a little bit of it, right? It's cool to have a little bit of stability, a little bit of income that comes in from that. But, you know, again, you're 38. I don't think you really need to be optimizing for downturns or trying to time the market. You know, you're still very young. If I were you, I'd be fully invested. ride the wave and enjoy the ride.

Yeah, I think that's a great way to look at it, Austin, especially given that Matt's 38 years old, the way I would look at it if he feels the desire to have some bond exposure, you know, what I would look at is have some bonds that maybe that ETF is the, equates to about one to two years of living expenses as a portion of your portfolio, so you could understand how much of a weighting you'd want in bonds. But other than that, I think at your age, you don't need to consider having much more than that. Because I think you're preparing more than you need to for a downside when you have a long investing life ahead of you.

So I agree with you, Austin. I think that's a great take. And if you're going to have that bond exposure, look at it from that perspective of one to two years of living expenses and no more than that. Yeah, I think a lot of people make the mistake of investing for a Black Swan event. They have all these hedges, all the cash, all the bonds, all these things. Oh, ho, ho, I was ready. You know, it happened four years after I got ready. And I left a lot of money on the table by not being invested.

But I was ready when it came. You know, it's like, dude, come on. Like, what are you doing? Like, it's okay. 2022, you know, the markets went down 25%. The NASDAQ was down 35%. Right? We saw that that happened.

That's fine. We are now at all-time highs. And the S&P 500 has now had 31 all-time high market closes. so far year to date. And the last time we got a soft landing was 1995, which was over, I think, 65 all-time high closes. So if that shows anything, then we have a lot of upside to have, right? So there's a lot to be excited about, in my opinion. And Matt, I wouldn't kind of psych yourself out by trying to hedge too much. You're very young. Ride the Wave. And it's all part of the plan. Yes. Thank you, Matt, for the question. Thank all of you that engage with us at the Rich

Habits podcast each and every week. We're so excited. Make sure to share. it with a friend. Tell your friends about the newsletter. Let's get this newsletter up to 100,000 subscribers. It's really simple to find it. And we appreciate you each and every week. We enjoy doing this, breaking down the toughest and some of the simplest investment strategies to help all of you along your path towards financial freedom. So we appreciate you each and every week. We sure do. And speaking of the newsletter, Robert, again, just Google Rich Habits newsletter. It's going to pop right up. And last week's newsletter, because they come out, every Thursday, right? So make sure you check your email inbox every Thursday for our newsletter.

You know, last week's newsletter, we talked about how Google and YouTube made like 200 billion in advertising revenue. Robert did a really cool breakdown of how Bitcoin's price action bottom two years ago, sort of what that dollar cost average looks like today. I did a breakdown on the stock buybacks that are happening right now in the S&P 500. More importantly, that are not happening because it's a blackout period. And you'd have known that if you read the newsletter and how that impacts the actual markets like we'd break things down in a very fun way and there's a lot to be excited about so again go check out rich habits newsletter we think you're going to love it and as always thanks for listening to every episode of the podcast have a great start to your week