Rich Habits Podcast - 92: How to Unlock Bitcoin's 27% "Dividend Yield"

Episode Date: November 25, 2024

In this week's episode of the Rich Habits Podcast, Robert Croak and Austin Hankwitz sit down with Troy and Garrett from NEOS Investments to learn more about their newest covered call ETF (BTCI).---🔥 To learn more about the inner workings of BTCI, ⁠click here!⁠---☀️ With ⁠Frec⁠, direct indexing and tax-loss harvesting your investments have never been easier. ⁠Click here⁠ to learn more about their platform!---💥 Managing your personal finances have never been easier. Go to ⁠monarchmoney.com/habits⁠ for 30% OFF your first year!---⚡️ Join 495 other listeners and sign up for the ⁠Rich Habits Network⁠, click here!---⭐ 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.

Hey everyone and welcome back to the Rich Habits podcast, a top five business podcast on Spotify. My name is Austin Hankwitz and I'm joined by my co-host Robert Croke. Robert is a seasoned entrepreneurs in his 50s with lifetime revenues of over 300 million 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. So, Robert, what are we going to be talking about in today's episode? Yes, in this week's episode of the Rich Habits podcast, we're thrilled to welcome Troy and Garrett, the managing partners of Nios' investments. Not only has Nio spent a long time supporter of the show, but they also make some of the most exciting income-focused ETFs in the industry. And as Bitcoin hits all-time highs, we're really, really excited to discuss their newest ETF, the Nios Bitcoin high-income ETF, BTCI. It's great to have you both back on the show, and I'm so excited to dig into this one. Thanks for having us, Robert. Robert, I'm also

really, really excited for this conversation. I've been very public about how much money I have invested into NEOS ETFs. And for those of you who are unaware, I've got over $120,000 of my hard-earned money invested into SPYI and KukaQI. So before we narrow the focus down to BTCI, how about we get some intros from Troy and Garrett? Let's start off with what does NEO stand for, as well as maybe a quick rundown of the different ETFs that you guys have in your suite of ETFs. And especially, let's talk about their tax efficiency, how the yield is generated, and why it's important to have some of these funds in a well-diversified portfolio like myself. Sure. So I can start a little bit about NEOS investments. We are a global asset manager and we focus on quantitative methodologies to creating

yield-enhanced or risk-mitigated investment solutions. So think about your core building blocks that build your portfolio, equities, fixed income, different alternatives. We want to take those types of product allocations that you have today and overlay ways to generate a much higher degree of tax-efficient and monthly income and lowering some of the volatility and risk associated, but letting you the investor choose the types of exposures or areas that you want to expound your investment views on or that meet with your own financial goals. Neos today has a lineup of actually eight products. Of course, we're excited to talk about the most recent one, which is our Bitcoin product,

BTCI, and a few minutes, but some other products that we brought out in the earlier days that some of today's audience might know or others. And our SPYI, it's our S&P 500 high income ETF. QQQI is our NASDAQ-100 high income. IWMI is our Russell 2000 high income. And then on the fixed income side, we actually have some things for the lower risk allocations in your portfolio, which would be CSHI. It's a one to three month Treasuryville product.

We have BNDDI a core fixed income. We're adding additional income on top of your core fixed income exposure. We also have YBI, which, is a actively managed high yield strategy with an enhanced income overlay to it. And so when we think about our overall product sets, we want to fit within your equities, your fixed income, your alternatives, and allowing you the investor to expose your views on the asset allocations you're looking for or the income amount you're looking to receive. So in simple terms, it sounds like you guys create ETFs across the gambit between the S&P 500, the NASDAQ, some Bitcoin,

some bonds, like all across rates. Like, how do you build a well diversified portfolio? You've got diversification inside of it. And then you guys offer ETFs that align with that diversification, but you sprinkle on some tax-efficient income on top of it. That's right. That's awesome. Now, I'm definitely, you know,

participating in the upside of holding SPYI myself, getting paid out about $1,200 a month just by holding it, which is really consistent and really tax-efficient. So it's exciting to see that complement the rest of my portfolio. So let's now talk about cryptocurrency. right? What is the new Nios Bitcoin high income ETF BTCI? What does it yield and why are people buying it? So I think for us when we wanted to, we really, as Gower was kind of alluding to, we look at ourselves as a solutions provider. So as you just discussed, we have all these different ETFs that kind of go from equities to fixed income to ultra short duration and now alternatives with our Bitcoin high income ETF.

We really wanted to have something in the space specifically around Bitcoin where we could provide. income through an option strategy while holding some underlying long Bitcoin exposures, whether that's through one of the ETPs that are out there or synthetically through an option strategy. And we look at it as if you could hold some Bitcoin and there are times when Bitcoin kind of just trades sideways and it doesn't do much. And if you could still earn some income during those times, we're looking to provide that income. And then when it does move higher like it did over the past couple of weeks after the election, we really want to be able to participate with that upside. while you are selling calls deep out of the money and bringing in income to distribute,

you will eventually, you know, cap out part of your portfolio. But the nice part about our rules-based strategy is we're not overlaying on 100% of the portfolio. So a lot of the portfolio can still participate with the upside of Bitcoin while still providing that real income on a monthly basis. We just had a distribution. The fund went X today. It distributed just over 2.3%. So figure an annualized yield of over 27%.

Wow, 27%. I mean, and to that point, too, to the upside, you know, participatory. I just pulled up BTCI right now on my computer. The price of BTCI, which is again, that upside participation went up 23% over the last month. So not only can investors expect that, let's call it, 27% distribution yield on an annualized basis, but you also experience the ups and downs that come withholding Bitcoin. Exactly. Yes, we wanted to make sure that while you're holding it, while you're holding our product, you're getting that income on a monthly basis, that when we do have these runs higher, specifically around events like we just had, we want to make sure that you

you can participate in. They are not just really capped out close to where you brought the income in. So for us, having that price appreciation is really important. And as you said, you know, it's had a nice run over the past few weeks. And that's how we kind of managed a portfolio to, you know, ensure that it could participate with the ups and downs of Bitcoin while still providing that income. That's amazing. Yeah.

And so everyone knows I've been in crypto for many, many years. And recently I shared some crazy screenshots to the Rich Abbots Network. And they really were losing their minds, seeing me. you know, buying Ethereum and Bitcoin for, you know, I showed some screenshots of me buying a hundred Ethereum at $17 each and buying $10 Bitcoin at $2,600 each and stuff like that. So personally, it's been an incredible to see the institutional adoption of Bitcoin and cryptocurrencies as a whole. So what are your thoughts on Wall Street's relationship with Bitcoin?

How far it's come and how much of an impact on your confidence it made in creating of BTCI, the ETF. As probably most your listeners of Wall Street's always looking for the next opportunity to provide some type of investment product or ability for individuals to make money off of different asset classes. And so I think the biggest issue was just a regulatory hurdles to get through to one, institutionalize the security aspect and the structure behind it to be able to create a financial product.

And once the SEC, the regulators got comfortable with how they could ultimately safeguard investor assets, you know, within crypto. Then you saw obviously the opening and the adoption for ETFs and different financial products to be available to the masses and to the retail. And so I think overall, it took a while to get there, but we really got off the cliff earlier this year with the approval of all the spot Bitcoin ETPs. Now you've seen Ethereum. And so I think that's opened up the ability for these financial products to have options and different derivatives on them, which allow us to create the products that we like to. I think this only going to continue. And so as we see certainly new president-elect and an administration that's

very much more pro-supportive on digital assets and crypto and taking down some of the red tape or, you know, hurdles for investors to be able to access these types of products. Like I think that's only going to continue. And how deep it goes on different coins and digital assets, not sure, but certainly getting kind of these core, more institutionalized, you know, cryptocurrencies to be out into the masses and allowing asset managers such as ourselves to overlay our expertise as different products for them to choose from. I think we only see that growing given the structural shift and obviously the new president elect and what's being voiced so far on regulatory changes.

Yeah, I agree. And I think it's so important when you think when BlackRock says the water is safe, then I think the water's pretty safe. And so moving forward, we just have so much adoption and all the big boys are jumping in. including you guys. It shows us that we have a path, finally, and we have a place to go and that this is going to work. Now, are there going to be bad actors? Yes. Are some crypto is going to go to zero? Yes. But that's in any growing sector. So I'm super excited about it for sure. And I think beyond that, too, Robert, what's so exciting is we've been so vocal about how important it is to have five to 15 percent

of your total, you know, portfolio allocated to Bitcoin. And we've been so vocal for the last two years about that, right? How important it is to be dollar cost averaging into this asset class because over a long period of time tends to outperform the S&P 500. Now, let's dig into the people that maybe just want to own Bitcoin, right? There are people out there that want to own Bitcoin directly. They want to have their cold wallets. They want to be sort of these Bitcoin maximalists and maybe aren't interested in the ETFs. So what type of investors are you hoping are interested that do resonate with BTCI? Is it the investor that wants the income? Are they thinking more about the stability of the returns? Who is that like perfect investor for BTCI? Now before you answer that question, let's take a moment to hear from this

episode sponsor, Monarch Money. This episode of the Rich Habits podcast is brought to you by Monarch money, which by the way received the award for best budgeting app of 2024 by the Wall Street Journal. Monarch is the modern way to manage your money. Whether you need to stick to a budget, track your investments, or collaborate with your partner, you'll get clarity. confidence and peace of mind for your finances with Monarch Money. Specifically as it relates to collaborating with your partner. Austin, Monarch Money makes it simple to set shared money goals, access a Joint View dashboard to track your progress,

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monarchmoney.com slash habits. That's M-O-N-A-R-C-M-O-N-E-Y.com. slash habits to get 30% off your first year. And we appreciate them supporting the show and all of our listeners. All right. Let's now see what they have to say. I think it's anyone looking for exposure to the space. Maybe they don't want to have that cold wallet.

They're not ready to kind of take that leap into owning Bitcoin directly, but they want to get some income while they're holding the product. So it's really coming down to someone looking to be in the space, maybe wants a little bit less of a volatile ride with the options. you could probably dampen the volatility of the product versus the underlying Bitcoin a little. So I think it's someone really looking for the income but wants to be maybe Dav will start to own in the space and see how it works out for them. I think makes a lot of sense, right? As someone who owns SPY and so much of it, what's really cool about that is do I have hundreds of thousands of dollars invested into the S&P 500 via VOO?

Yes, I do, right? So like, give me the volatility that comes with that. But I think that's what's so fun about building a well-diversified portfolio from scratch, something that Robert and I really talk about, which is like active management of our portfolios, I'm able to allocate 10, 15% of my portfolio into this more stable income-focused tax-efficient ETF that is SPYI, as well as BTCI and sort of have that strategy laid out for me that says, okay, I know that every $100 invested here can turn into X amount of income. So how do I now allocate this additional income?

Do I want to go buy more of the existing ETF? Do I want to use it as a income stream to supplement my lifestyle? Do I want to use it as a way to maybe dabble in the dark arts of single stock investing or anything else that's out there? So there's a lot of really fun ways that people can build these portfolios. And I think BTCI does a really good job of really rounding out the edges of having some crypto exposure with some tax-efficient high income on a monthly basis. And I'd like to touch next on there's a lot of confusion for Bitcoin, you know, because people, always see that it moves in cycles. You know, we see the big bull runs. We see the big retracements and pullbacks. And in my opinion, I feel we're going to see less and less of that

as more and more of the big firms get involved and all these ETFs are created. So do you think with the emergence of all these crypto ETFs that that will cool off the volatility and the retracements in the coming years? Because I feel like this is kind of our last super cycle. And then it's just going to become, you know, more stable over time. We'll still see volatility, but just not as much. What are your thoughts on that? Yeah, I would agree with you, Robert. I think if you think about any asset class or anything new, when there's only a smaller subset of investors that are in it, you can definitely see much larger price fluctuations. I do agree. I think as it's become more institutionalized and you have more financial products and more investors as a whole within the

space, when you start to get one of those retracements or those selloffs, there's a lot more people that want to take advantage and buy that dip or that sell-off. So just naturally as you have more buyers and more investors in the market, I think that will help substantially, you know, obviously a slightly lower volatility because you're going to get people that want to be buying the dips, buying those types of sell-offs. That's overall healthy, right? That's actually a good thing, generally speaking. Bitcoin's volatility is actually so high even still today relative to the S&P 500, just to give like the audience an idea. All these have volatile. If you just think about the number, the S&P's volatility index is roughly 17 today, right?

That's including all sorts of conversations around the Fed and interest rates and, you know, new presidential elections and stuff. So you're seeing the S&P volatility at 17. Bitcoin is 60, right? Oh, wow. So you still have a volatility index of, on average, 60. It's not 80, maybe where it was three years ago in Bitcoin, but 60 is still exponentially higher than what you're seeing. in just broad-raised equity markets. So I think overall, the institutionalization, the more buyers coming in, more financial products

to people support that, totally agree will reduce some of the volatility. But I think you're left with good volatility, as opposed to maybe some bad volatility of things that I would say are just much more sporadic because it was a more emerging, you know, asset class and something that not all people would have access to. Because to your earlier question, people that do the research and the work, getting Coinbase set up or cold wallets and understand where my money is and am I comfortable and it's going to be safe. Now that they can buy it in their Schwab, Robin Hood, you know, public.com, right accounts, that's just giving the ability for much more wider audience than comfortability. Yeah, I agree.

And either way, I guess what's your opinion on? How does that lead to the great value proposition for BTCI? The fact that you can keep getting the steady income, even though Bitcoin frequently fluctuates. Talk to the audience about that because I want to make sure they hear this because many of them are still saying they're too late on crypto or they just simply don't understand the upside potential of crypto and Bitcoin specifically long term. And I think BTCI really solves this problem because you're going to have that income regardless of the fluctuation. So walk them through that a little bit. Yeah, I agree with you. I think to people listening who say I'm too late to buying any kind of Bitcoin, it's had its move.

I don't know if it'll continue. I think the nice part about BTCI is while it's sitting here, you can still earn income on a monthly basis off of the volatility of Bitcoin that Garrett just walked through. So for those times when we do have those big rallies and we do see Bitcoin eventually move higher again, you could participate in a lot of that upside the way the structure of this rules-based strategy works. But in the meantime, you could still bring in income and have a nice income stream off of

your investment into BTCI. So really to us, as you know, all of our strategies here are income producing. We focus on the active option management of all of our products. And what it comes down to is really sourcing that income from the different volatility markets, as Garrett was walking through, whether it's the S&P 500 with SPYI or the NASDAQ 100 with QQQI, for Bitcoin having so much more volatility embedded into it, you can bring in a lot of income, hence the higher yield that you're seeing on a product like this. Something that I think is really interesting about this is, and Robert, you probably can resonate with this. I certainly can. When I was dollar cost averaging into Bitcoin aggressively, right, call it tens of thousands of dollars in 2023. You know, I've since invested well over 100,000 into Bitcoin over the last 18 to 24 months. But to, you know, this point of dollar cost averaging, it really sucks when the price doesn't do anything, but you continually put more money into it, right? It's like, what am I doing this for? Because with some single

stocks or even ETFs, like, they can stay the exact same, but they pay their investors' dividends quarterly, right? So, like, I do see a return of my investment, even if the stock stays the same. But with Bitcoin, I mean, I'm over here buying it like 24, $25,000. It's just been there for months and months. I'm like, man, what is this actually going to work, right? When's this going to pay off? I think that's what's so exciting about BTCI is, like, for those investors that get frustrated when it comes to dollar cost averaging and not seeing results in a one, two, three, four, sometimes five-month period in time that comes with, you know, long-term holding of certain asset classes, having that monthly income to look back at and say, wow, I just got paid $3,000 this month because I own so

much BTCI or wow, I just got paid $47 because of my BTCI position, right? Whatever that looks like for you as an investor. I think that is just what really helps round some of the edges when it comes to getting frustrated with investing and not having to wait for that perfect moment and listen to like, well, Robert Nosson keeps saying it's going to go up. hasn't done nothing yet, man. I'm just, I don't know what to do, right? I think it's kind of this perfect balance for those investors that do want to see some immediate returns, some immediate results with their investment, as well as, again, to Troy and Garrett's point of that awesome upside

potential because they do have such long exposure to the asset class. Yeah, but I think that speaks to patience is the key in investing. The people that try to get rich quick are the ones that try to time the market. They're always in and out. They're chasing, chasing, chasing. And their returns never ever beat the market and certainly don't keep up with what we teach. And so I think it really, what was F. Scott's Fitzgerald's famous quote, the victor goes from the spoils. And I think that's a perfect situation here. And that's why we love what you guys are doing is because I believe we are opening people's eyes up to,

you know, these new opportunities to beat benchmarks, have income from your ETFs and be able to make money two ways. And I just think that's what makes it so awesome that we get to share with our audience all of these incredible products that you guys are producing, you know, for the last few years. And it's just an exciting time because I feel like it's we're always just releasing the cheat code to them of, look, if you want to get wealthy, here's the way to do it. Here's the way to make more money. And it's a lot better than a mutual fund or a target date fund or a CD. I'm right there with you, Robert. So, you know, as we kind of wrap things up here, I'm curious, is there anything you want to say directly to your fellow. you know, Nios, ETF investors, right? You'll have billions of assets under management. I'm sure millions of that is coming from people who listen to the Rich Habits podcast. So one, that. And then two, what does 2025 look like for Nios? Is it new ETFs? Is it new asset classes? Like, what are you all focused on? Yeah, first and foremost, thank you. Right. Thank you for your trust, your partnership. It means a lot to us, Troy and I've spent our whole careers focusing on the space. And this is what we're incredibly passionate about. Our whole team of roughly 20 people here are passionate about delivering

these great yield-enhancing products and delivering the performance tool. So we just appreciate your commitment, the trust to it. You will always know that we're always here. Our heads are down. We're focused exclusively on this space because we love it so much. We put a tremendous amount of our own capital and our friends and our family in it. So, you know, thank you for, you know, your trust and commitment. And I'll let Troy talk a little bit about 2025 for us. Sure. No, thank you. Thank you both. And thank you to the community. I think for 2025, as Garrett said earlier, we have eight ETFs in the marketplace now. We're really excited about those. We have have two more in registration right now, which are filed out there. One is a 20 plus year

ETF with added income. Think of it as a CSHI, but with 20 year longer duration. And then we have a real estate high income ETF that's filed out there right now. So we're hoping to get those out in the next couple of months. And then after that, we're looking into, yes, we're going to continue to expand. As we talked about earlier, we're a solutions provider. So we're not looking to bring out a ton of ETFs all at once. We thoughtfully bring out our products when there's a demand and a need and we feel like it could fit into our overall lineup. But you could rest assured they will all have options, income, and be monthly distribution

products. So we're really looking forward to finishing off a great year of 24 and really looking forward to what we're going to be bringing out in 25. That's amazing. Troy, Garrett, thank you so much for joining us on this week's episode of the Rich Habits podcast. I am so excited for BTCI. I cannot wait to own more of it.

I love the monthly distribution. The 27% tax-efficient annual yield there is insane. Cheers to all the success you all have seen. I know you introduced QQQI, you know, earlier this year. And I think it's well over half a billion dollars in assets under management already. SPYI is over two billion in assets under management. You guys are just a rocket ship. And it's so cool to be a part of your journey. Thank you, Robert. Also in the audience. We appreciate the opportunity to come on today. And thanks for everything. Thank you. Robert, that was an awesome conversation with Troy and Garrett. I love that they are so open to joining us here on this podcast. I think a quick takeaway that I got was kind of back to this idea of Wall Street being so thumbs up on these Bitcoin ETFs and, you know,

being so passionate and excited about introducing this new asset class to the masses, right? BTCI is a great example of that. We've talked about Ibit. We've talked about, you know, some other Bitcoin ETFs. But I think the biggest differentiator with BTCI is that income, right? That 27% annual yield, it's tax efficient, it's really, really cool, and I'm excited to have it in my portfolio. What was maybe a big takeaway for you? I think it's really helping our audience understand that for the people that are sitting on the sidelines and maybe feel like they're too late or they haven't bought crypto because they don't know how because they're afraid to open a wallet or they're afraid to get a Coinbase account, is knowing that they can go to something like BTCI,

get the income because of the strategy they use, but then also have the exposure to Bitcoin, So I just love that because the more adoption we can create through these products like BTCI, the more growth we're going to see. But also it just gives people more diversity in their portfolio. So I love it. And obviously the Nios guys have been very supportive of us. And they just create incredible products. And so for me, that's the biggest takeaway.

And the fact that they create the products as they see the need. So these products are very well defined on where the markets are going and what is needed for the retail investor. So that would be my biggest part. And not just creating these products, but creating products that are successful, right? They've got billions, like plural, billions of dollars of assets under management across their different products. So they're definitely doing something, right? So really excited that they join us on this episode. Everyone, go check out neosfunds.com slash BTCI. If you want to learn more about the Nios Bitcoin high income ETF. They've hit the ground running. It's all the

information's over there for you guys to check out. Now, before we jump into the Q&A section of the show, Robert, I think it's time for this monthly update on our FREC investment. As you guys know, we took $20,000 of our hard-earned money. We deposited it into FREC.com. That's F-R-E-C.com. And what they do is they allow you to direct index the S&P 500 and a bunch of other indices out there and automatically participate in tax loss harvesting efforts. So since we deposited our money on June 6th of 2004. Our $20,000 investment is now worth $21,853. We have an all-time performance of 10%, right? So we've got a 10% return on our investment there. But most importantly, we've tax loss harvested $978, right? That's $978 of money that we didn't now make in 2024 while our investment continues to go up in

value, which brings the total return of our investment, if you include that tax loss harvesting, to nearly 15% since June, which just outperforms the S&P dramatically. It's just so cool to see, Robert, there are so many ways for our audience members to, you know, if it's BTCI, if it's FREC, if it's whatever else, to just optimize the money that they're already investing, right? People get so overwhelmed with where do I put this money, how do I do this, what's the Roth, what's the this, what's the that? But if you just listen to the show, if you just do what Robert and I are doing. I mean, you guys are going to be set up for success. And that goes with FREC. That goes with BTCI and everything else we talk about here. So definitely go check out

freck.com if you've not already for your direct indexing needs. It is a wonderful, wonderful way to track the S&P 500 while also getting some of that free tax loss harvested money. And I think that's the coolest part about what we've built with the Rich Habits podcast and now the Rich Habits Network is we're kind of peeling back the layers. There's no gay kids. keeping. We are showing people live what we do with our own money, how we put our money where our miles are, and what the returns are. We share our wins, our losses, although there haven't been any losses in a few years, so it's been great. And I think that is the critical point is we try to break down all of the financial topics they are in all the ways to build wealth and break it down

into bite-sized nuggets so everyone can take action because that's the key. We can teach all we want if people aren't executing on them, they're not taking action, then we're not doing a good enough job. So I love it. I love that we get to share all of these nuggets, as everyone says, each and every week. And, you know, they can pick and choose what fits for them, because like you always say, personal finances, personal. And our jobs are just to educate, break it down, and show you what we think are the best strategies to build that financial freedom. So I love that I get to wake up every single day and do this with you. It's been an incredible ride for this past couple years. And when we see a new strategy or a new idea or a new something out there, we go straight to the horse's mouth. We say,

hey, Troy, Gary, you guys just introduce this stuff. What is BTCI? Come on the show and talk to us about it, right? Or with Jay Jacobs with Black Rock's Ibit, hey, what is this Bitcoin ETF? Bring it over here, right? Let's talk about it. Same thing with Masterwork. Same thing with Capital One. Same thing with Titan. Same thing with Frack. Right. We want to be able to go to the horse's mouth straight to the source as your sort of ambassador for our listeners, right, and say what's going on, what should people care about, and let's shoot our friends straight here because we need to know what's important and what's not. So we're just so grateful and we can't wait to continue to do this with you guys here. With that being said now, let's now jump to our question and answer portion of the podcast.

Now our first question comes from inside the rich habits network and it comes from Philip B. Philip says, I love the rich habits network, the tools you all provide and the podcast. All of it is simply so awesome. I'm 60 years old and plan on retiring in about four years or so, and do not need to be super aggressive to meet my freedom number as my current net worth at the moment is $4 million. But I was wondering if either of you had any suggestions on dividend ETFs. I'm looking to allocate a portion of my portfolio to be a little less aggressive and a little more asset protective in nature, which is why I think dividend ETFs would be the solution.

I'm also interested in what percentage of my portfolio would you suggest in this category, as my other investments are all the ones you all have suggested. What a great community. I love being a part of this. Thanks in advance. So, Robert, I'll kick this one off, right? We just spoke with Troy and Garrett about SPYI and QQQI. I think these are both some incredible income focused ETFs. As you all know, I have over $120,000 of my hard-earned money in SPYI and KQQQI. I love the passive income that comes with it. I get paid every single month. It is just mailbox money for me. right now. And what's cool about that, too, is in times of volatility, Philip, you know, let's say the price of the S&P 500 goes down, if we have like some sort of a pullback or again, volatility.

The monthly income sort of supplements that price drop. So let's say you invested $100,000 into the S&P 500 and it goes down by 1%, 1⁄2% over the course of four weeks or one month. Now your $100,000 investment is worth about $98,500 or $99,000. Well, if you just buy the S&P 500 straight up with V-O and not SPYI, then that would be the case. You'd be sitting at 98,500 or so. But now because you have SPYI, the price would still come down just about the same, but you would get that monthly income of, let's call it, $1,11, which now brings your total return back up a lot closer to that original investment, right? So in times of volatility, especially you mentioned asset protective in nature, SPYI and QQQQQI. and these NEO's funds, I think are really, really important. Yeah, and I think another one we should touch on Austin is DGRO.

That is the I-Share's core dividend growth ETF. We both like that. I don't think we talk about it enough, and it's been doing really well also. Also, I think we should mention SCHD. We both own that. That's been a good one as well. I just really love the Nios funds, but definitely S-C-H-D and D-G-R-O are great ones to look at as well. Robert, I love those suggestions. I couldn't agree more. I think what's so important about dividend growth investing, like as a portfolio strategy and why I do it myself, is because this idea of yield on cost. A great example of this is Warren Buffett. Back in the day, decades ago, this guy went out and he bought hundreds of millions of dollars worth of Coca-Cola stock. Well, since then, Coca-Cola, he still owns the same amount of stock, but Coca-Cola every year has been raising their dividend. And so, I mean, I think,

goes like he bought $400 million worth of Coca-Cola stock several decades ago, and now every single year he gets paid $400 million in cash dividends because of the stock that he owns, right? So he has a hundred percent yield on cost. Lowe's has a very similar story here. If you bought one share of Lowe's stock back in 1995, about 30 years ago, you would get paid 127 percent of what you paid for that stock back then because of how much they're raising their dividends every year. So, for example, if you bought the low stock today, your yield on that stock would be 1.7%. But because lows, for example, has been growing their dividend, for example, they grow it on average 17% per year, that 1.7% yield quickly turns into 2%, 2.5%, 4%, 4%, 10%, right?

And so it's a way for people to start making more and more money passively over time while also owning stocks that go up in value. Well, and that's why it's so important to understand how to actually build wealth. And usually it's by having a plan. And when you have a plan and you stick with it and you will allow compound interest in these investments we talk about to take place, it's just the best strategy to let your money grow on itself and just wake up every year and every decade with more and more of it because you're not in there, in and out of investments trying to time the market and spending your gains all the time. You just leave it go and you keep building on it. And I think it's just so important for people to understand.

So great question, Philip. Love having you in the community. Philip's been around for a long time. And I'm so glad to see you crushing it. Well, back to this idea of having a plan, Robert, like that's the Rich Habits podcast, right? We love being able to share our plans, our personal anecdotes, our personal experiences, our unique perspectives on everything as it relates to personal finance. and investing. It's just it's so fun to be able to do this and help people that not just have like,

you know, we talked about this a little bit in a live stream. I think it was a week or so ago within the Rich Habits Network. And someone was asking like, hey, what type of audience do you guys normally have? Like, I'm trying to figure out if this network's for me. Like, do I stick around? Like, what's going on? And it's interesting because Philip, you mentioned he's been around for a while. He's got a $4 million net worth, right? He's a multi-millionaire who's still trying to figure out how to best optimize his investments. We're on the other side. We also have the people, their 20s and 30s who are just getting started and might have a negative net worth. So it's just so fun because the diversity of our audience is so great between net worth to net worth to life

experience to education to income. Like we talk about everything and I think it's so fun. Yeah, definitely. Well, it just goes to show that someone with a $10,000, you know, investment portfolio and someone with 10 million, everyone has questions. You know, I've been a multi-millionaire for decades now And I still learn every single day from a lawyer, someone with more money than me. I learn from you. And it's just great because it's kind of like golf. You never really master it. And you're always learning and it's always changing.

And that's what makes it so exciting. So our next question comes from Daniel S. Daniel says, what classifies as a dip? Last week on the live stream, you all talked about how to buy a dip. We saw a crazy run up after the election. And you all suggested that we might have some sort of a correction. over the coming weeks or months, and if we do have that correction, use it as an opportunity to buy the dip. But what classifies as a dip? Is a 3% reduction in a stock price a dip? Is a 10%

reduction in a stock price a dip? How do I figure out what a dip really is? Robert, I'll let you kick this one off. Yeah, I think it's different for every sector of investing. You know, Austin and I talked about this when we saw this question, and it's a great question because I think the way to look at it is when you're comparing like the high flying magnificent seven stocks, these big moving growth stocks, I think when you look at those where they're making, you know, one, two percent a day and you're seeing these big upticks, I think with something like that, if you see a 10% dip, a 12% dip, that's something to really notice and take heed and warning of. But then when you look at these blue chips that are the stable stocks like the lows that we talked about, that make less and have

less crazy growth, then I think you have to look at it as more that 5 to 7% correction is when you start to take notice and look at what should you do next? Should you take some profits off the top? Should you sell your position? Or should you just sit and hold and wait and see what happens? So I think those are the areas of concern for me and the percentages based on that. And that's how I look at it in my own portfolio. And by definition, Robert, I think that's important to discuss like what is a dip, like by definition as it relates to the indices, right? So the S&P 500, the NASDAQ, the Dow Jones Industrial average. By definition, if any of those indices pull back by 15%, that is classified as a correction, bare market territory, right, like a real thing to take notice of. I'm not saying you take that

same approach with single stocks. Sure, if Nvidia pulled back by 15%, I would say it's another day in the markets, right? Invidias all over the place. But if Apple or Lowe's, or Home Depot or, you know, Berkshire Hathaway, if those stocks pulled back by 15 or 20%, then I'm taking notice. Like, whoa, what's going on behind the scenes that I don't know about? So just there's a bunch of ways to think about it as it relates to buying a dip. As it relates to the indices, I think, you know, call it that 5, 10-ish percent range. I'm right there with you. But as it relates to single stocks, I mean, don't feel like you're missing out or even get too aggressive into buying the dip, even if it's pulled back by 15 percent or more.

I agree. Totally. Now, our final question comes from Nico. Nico says it's open enrollment at my company and I have a question on how to best use my HSA. My company offers an HSA healthcare plan and last year I put $3,000 into the account and I ended up using $1,000 of that account to pay my co-pays on physical therapy, my contacts, and my dental cleanings. But here's my situation. I don't have enough money in 2025 to max out my HSA at $4,200 and max out my Roth IRA at $7,000.

What do you guys think I should do? Should I max out my HSA or should I max out my Roth IRA? Because either one I choose will be to the expense of the other. Robert, this is a great question. And in my opinion, I think they should max out the Roth IRA because at the end of the day, the Roth IRA is tax free in retirement. Whereas the HSA, it's tax free if you use it for medical expenses throughout your life. But after you turn 65, you can start using that money on anything you want, however, you have to pay taxes on it.

right? So I think the Roth IRA is the way to go here. I would definitely favor maxing that out. You also said you only used $1,000 in 23. Therefore, it doesn't seem like you're going to spend $4,000 in 2025, right, unless something crazy happens with your health, which we pray it doesn't. But in my opinion, Robert, I think that Nico should focus on maxing out the Roth IRA. That's the end game. That's how you retire very wealthy, tax-free. That's what I'm focused on, at least. Yeah, I agree. And I think that's the proper strategy unless in this instance there's a pre-existing condition that they're concerned with and they might want to load up on the HSA because of that. If not, I think definitely the Roth IRA is the way to go. They also mention that they're 31. They rent in an expensive mountain town in the Rocky Mountains of the West, make $89,000 a year before taxes, and have a side hustle of writing articles for a magazine at $250 an article.

What do you think about that side hustle? That's pretty cool, huh? I mean, I think it's awesome. you know, and everyone says that, you know, copyrighting and writing and all that's going by the wayside because of chat GPT. And it's definitely nice to use these AI tools, you know, to benefit. But certainly I don't think writing's going anywhere anytime soon. And if you enjoy writing, that would be an incredible side hustle for sure. Well, everyone, thank you so much for joining us on this week's episode of the Rich Habits podcast. If you'll learn something about BTCI or the NEO's funds and you think it's something that your investment friends might want to know about, send this episode to them. We're all trying to learn together. We want this to be the core

resource that people can depend on twice weekly, all of 2024 and 2025. We have a ton of stuff in the works for 2025. We're growing the Rich Habits Network. The Rich Habits newsletter is often to the races and we're having a good time over there. There's just a lot to look forward to, Robert. I'm really excited about the year to come. And major shout out to the Nios team for joining us on this episode of the show. Yeah, I definitely love what we get to do each and every week, like you said earlier, helping people, helping them grow their net worth and their businesses and understanding their mindset issues and all of that. I love it and enjoy getting to do it every day and appreciate each and every one of you that follows along. Thanks, everyone. Don't

forget to leave us a review and we'll see you on next week's episode. Have a great rest of your week.