Rich Habits Podcast - Q&A: $18 MILLION Settlement, Afraid of AI & Paying for Weddings

Episode Date: August 13, 2026

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Hey everyone and welcome back to the Rich Habits Podcast question and answer edition brought to you by public.com. These are our Thursday episodes where every Thursday we put ourselves in your shoes and answer your questions as if we were going through whatever you're going through. You can email us questions at rich habits podcast at gmail.com or you can DM us your questions on Instagram at rich habits podcast. Our first question comes from Chris M. Chris says Austin and Robert, a friend turned me to your podcast and I've listened to every single episode. Now, I refer your podcast to my other friends. Thanks so much, Chris. That's awesome, man. Chris says I'm invested in stocks and real estate rental properties. Q4 of last year, I put $100,000 into a fun money account with stocks and ETFs.

Thanks to you, I've upped my company match to a max of a 14% contribution to my Roth 401k based on all income and all of that is getting invested in the S&P 500. Cool, let's go, dude. Chris says we say, just invest toward the future, but what happens when we all don't have jobs? We say money compounds, but does it account for a world where most human jobs are replaced by robots? Who will be investing and driving stock prices up then? How will landlords get paid? If universal basic income comes from the government, how do we maximize margins of rent minus mortgage? How will this all really work? I'm kind of in a paralysis right now about it. All my new savings is just sitting in a 4% high yield about two times my annual salary. I'm 37 years old and I don't know what next step to

take because I can't stop thinking about a world where robots control everything. Thank you for what you do, Chris M. Wow, what a message from Chris Robert. So first off, Chris, take a deep breath. What does Robert say? Usa, you know, it's all good, right? That is decades away, in my humble opinion. I know we've seen some cool, you know, humanoid robots do backflips and like box each other and do the crazy stuff with Boston Dynamics and China stuff. But that is so far away from any reality. Those are programmed. That's not autonomous. There's like, there's a very like big, I think, education gap right now, Robert, between what humanoid robots can do versus what, you know, humanoid robots are thought to have been capable of. So like what they can do is they can move some

boxes, they can fold some laundry, they can take some trash, they can do this stuff completely autonomously because those robots have been trained over millions of hours of watching other humans do those things like they can do that stuff. Yes. Now you flip that on its head and you think, wait, I thought humanoids were going to like take all of our jobs and be plumbers and be working in the factories and building homes and like doing all that stuff like i saw this one humanoid robot do a backflip and i thought like you know whatever yes a lot of humanoid robots are capable of doing those things like truly capable right now but only if they're straight up programmed like you can just program a robot arm to move or a finger to pinch or like whatever like you can program a robot or anything

else for that matter to do those things but the difference here is that is a program versus autonomously looking at something, thinking about the situation, and then taking action. That, that autonomous humanoid robot future is the one that a lot of people are thinking maybe lives today because they've seen the robots do some stuff. We are, I would say, at least five to ten years away from a true autonomous robot that's like super, super capable. You know, figure, Apptronic, Tesla's optimist, like they've done some really cool things. And they've like, they've made some hype videos, but I think that's a lot of what they are, is they're hype videos to show you what the future can look like. So maybe Robert, help talk Chris off the ledge of

not investing, encourage him as to what he should be doing here with two times his annual salary sitting in a high-yield savings account at 37. Yeah, I think you did a great job, Austin, but Chris, you need to usea, you need to relax, you need to keep doing what you're doing, because at the end of the day, we see these things come about, these big technological revolutions that come about every 10, 20, 30 years. Everyone thinks it's doomsday. And actually, if you think about it, when was all the big doomsday prepper stuff happening like 15, 20 years ago, Austin,

where everyone was like, we have to build bunkers, we have to hoard food, we have to hoard batteries in toilet paper, and nothing ever happened. You know, we had Y2K where everyone was really nervous for a year and a half about what was going to happen there. And then it seems like these big swings in technology just kind of integrate themselves into our lives and you don't really notice that much change.

Remember when we used to go to a gas station and someone pumped our gas? That went away. Remember when we'd go to the grocery store and someone would wait on us and now we self-checkout? All of these things just kind of seamlessly happen as technology moves. And I for myself and everyone listening would not be afraid

of AI taking your job. Now I wouldn't turn a blind eye to it either because at the end of the day there is going to be a big movement in AI and humanoid robotics and all of these things, but it's going to take a lot of the menial jobs away that no one wants to do

and then it'll start to move up the food chain into legal and clerical and business and all these other things. But to speak to your biggest issue right now, Chris, I agree with Austin. We're five, 10 years away where there's going to be any real meaningful change in most people's lives. So you need to keep investing, not sitting on the sideline,

and keep doing what we talk about every single week for every single year. Because at the end of the day, let's say in the dystopian future, that there is a universal basic income for all. In the United States, who knows if it'll be global. So there's universal basic income for all. And let's say that AI and humanoid robotics makes everything more efficient, less expensive. It gets the cost of farming down and the cost of everything down, manufacturing down, and all of a sudden our cost of living goes way down because of that. You see so many of the

experts in this field talking about this age of abundance. What if those two things happen? We enter the age of abundance. We get universal basic income. And then all the money you had built and saved before that is just churning away and it's just multiplying over time. So life's going to be fine, Chris and anyone else listening that is nervous about this. Keep doing what you're doing because you don't want to sit on the sidelines living in fear and then let all of these tremendous gains and growth pass you by. I couldn't agree more. And I also just really want to encourage Chris that, you know, chat GPT was released November of 2022.

We're coming up here on four years, right? It's August 10th as we film this year, 2006. November's right around the corner. So it's been almost four years now since this AI stuff has come out. Yes, there's been some really cool advancements in the last four years, right? Websites can be made with AI. There's AI agents. You can code now. Like all these cool things have happened with AI. But like on a true day-to-day basis, I would argue that like not much has changed. To Robert's point, you still look. go get gas. You know, there's still farmers out there. There's still plumbers. There's still, like, we still have the lawyers. We still have the accountant. So, like, don't get me wrong. I'm very

bullish on AI and the agent's ability to not maybe not replace, but truly augment. And like, if you are someone in law school right now, or you're trying to go be an accountant right now, like, be thoughtful of this stuff because I've used AI for law advice and accounting advice and, you know, other things like this. And it's very capable, right? So like, don't get me wrong. Like, this stuff is only going to get more capable, but it's been four years and we're still, you know, we're still here. We're still chugging along just fine. And so I firmly believe another four, eight, 12, 16 years can go by before we see some crazy, oh my gosh, everyone's unemployed because this AI monster with 19 different arms is like, you know, running the world.

And it's like all this stuff, right? Like it's just, it's a lot of fear mongering. And unfortunately, Fortunately, as we think about Dario from the CEO of Anthropic, right, he's been one of the biggest fearmongers because he wants this legislation. He wants regulation. He wants the AI technology to be regulated by Washington so that he can regulate out Anthropics competitors, right? Like that's been like the biggest conspiracy for the last year or so. I know he was one of the ones calling for AI is going to replace 50% of this job in one year. Well, that hasn't happened. Right. So like just. Chris, I think you might be watching too many Instagram reels, maybe watching a little bit too much TikTok about this. Like there's a lot of fearmongering out there. I think the most important thing you can do is to focus on what you can control. And that's one of the biggest themes we have of the Rich Habits podcast is focus on what you can control. I can't control the stock market. I can't control, you know, who's in the White House.

I can't control inflation. I can't control any of these things. But what I can control is how much money I contribute to the stock market. what skills I learned to earn more money, things of that nature. Portfolio construction, right? All these different things. Like, focus on what you can control because that's all you can do. And then once you do that, oh, I promise you, over a long period of time, by focusing on the

progress you've made on the things that you control, you are going to start to feel and look a whole lot better. If you look back here at 37, now you're 39 and you're like, yeah, I can control that I can contribute X amount per month in the stock market. or I've, you know, rebalance my portfolio to this, or I've, you know, done this or done these things. Like, I feel really good about that. I'm proud of myself because that's what you can control. A lot of people, I think, unfortunately, get all riled up, Robert, when they say, oh, my gosh, the Federal Reserve didn't cut interest rates.

Donald Trump did this. Joe Biden did that. My, you know, inflation is this. The jobs report that. And they get very emotional about all this information. Yes, it's smart to take the information. Try and distill it down and make educated decisions with your money. but that's the whole point, the educated decision with your money, not the feeling some type of way that something that's out of your control is somehow impacting you.

Yeah, and the only other thing I'll add to this in Austin, since the day I met you, we've talked about this and I've been talking about it for decades. Own assets. If you're afraid of what's going to happen in the crypto market or the stock market or where all of it's going to go, own assets. Look at where the world is going in three to five years and start investing. in that. And that could be wherever you think the money and the people are going to go to, that's where you want to be investing because that way you own assets of your own and you can control your destiny rather than worrying about what's going to happen in the stock market day to day. So our next question comes from Adam S. Adam says, hey guys, Adam here, long time listener. You guys have changed my life. Thank you. Thanks so much, Adam. Adam says I'm a 24-year-old engineer in

rural Minnesota making 77,000 a year before taxes. I have a $15,000, $1,000, emergency fund in a high-yield savings account, an additional $35,000 in earmarked cash within a high-yield savings account for things like a wedding, a ring, a house, a boat, and big hunting trips that I plan to spend this money on in the next one to five years, and I maxed my Roth IRA in HSA every year, which has about $35,000 and $5,000 in them respectively. I currently contribute $1,500 a month to my bridge account on public.com, which has $40,000 in it, and I can contribute almost nothing to my Roth 4-1K because my company does not have a match. So my question's this. I know you all talk about the order of which to invest, but after doing some research, I'm not sure

if I should start considering a tax drag associated with contributing the $1,500 a month to my taxable bridge account, compared to just contributing the money to my Roth 4-1K with no match. Should I split up these contributions? Should I not contribute to my 401K? Should I max out my 401k? It seems like there's a major trade-off between locking money up, yet sheltering in. from taxes and having the money accessible in the next 20 years. I have the goal to create an amazing life from my future family and retire my future wife and myself early in travel, build a hobby-based business, and really enjoy my life. Thank you so much. I love this question, Adam. So let's like walk through essentially what's happening here. We say match beats Roth beats taxable, which essentially

means, hey, if you have a match from your employer to contribute up to that match, it's call it 3% per year, or 5%, whatever that number is. So you contribute 5% of your salary. So you contribute 5% of your salary, to your 401k, no matter what that 41K is invested into, right? And you take that free money. Next, you focus on maxing out that Roth IRA. The Roth IRA is tax-free gains. It's after-tax contributions, but you are now rolling in this money in retirement because you owe nothing to nobody and you have full autonomy as to how that money is invested. So that's why we love the Roth IRA so much. So match to Roth. And then what we say is if you have, autonomy in that 401k that you contributed to up to the match if you have autonomy in that 401k

feel free to contribute more to that 401k because you now have the ability to direct that money to the index funds in ETFs that we talk about some people don't have autonomy and they're stuck in target date funds or bonds or some underperforming asset class that doesn't make any sense which means if you do max out your 401k but it's invested into underperforming assets one you're underperforming the markets dramatically, but two, we'd much rather see that money, despite the tax drag, be invested into a taxable brokerage account on public because by investing the money properly, one, you're probably outperforming that tax drag in relation to, you know, your underperformance with the 401K, but two, you have access to that money.

You are not prohibited from withdrawing that money if you decide to, you know, retire early or do whatever you need to do with this money to fulfill your lifestyle personal finances personal so in your situation adam i think yeah you kind of forgot about the if you have autonomy in the 401k despite having no match right that's fine right so essentially you had no match so skip step one step one for you now turns into roth IRA and then back to that 401k if you have autonomy if you have autonomy yeah dude put money in that roth 401k do what you got to do make sure it's invested correctly but off to the races if you don't have autonomy and they put you in target date funds and underperforming this or cash or bonds or whatever it might be, then yeah,

I would focus more so on that taxable brokerage account on public because that's going to outperform over a long period of time. The other thing I want to mention for you here is that I have the goal to create an amazing family for my life and retire my future wife and myself early in travel. To retire early and travel, aka before the age of 59 and a half, you need to have money that's accessible to you. That is the taxable brokerage account. So if you want to have to have a have a bunch of money in your 401k that's, you know, sheltered from taxes. It's after tax contributions. Like, you know, because you said Roth 401k, rock and roll. That's totally fine. Just know, you can't withdraw that money before the age of 59 and a half without a penalty. And so it's kind of like this,

you know, balancing act between how much money do I want to have in my taxable brokerage account, which is why we call it the bridge account, because it's going to bridge you from where you are right now, let's say at 30 or 40 or 50 years old, two, right, it bridges you to that 59.5 year old age where you can start tapping into those retirement accounts. So it's really useful and it's great. But Robert, what advice do you have here for our friend Adam? I mean, you killed it, Adam.

I just want to first say you're doing a tremendous job. Austin, your breakdown is really, really good because so many people don't understand why we push the bridge account. And you say it multiple times here, I want to have this money in the next 20 years. I want to retire early. You need those funds in the bridge account to be able to do that so you're not tapping into the retirement accounts and putting yourself in a weird spot.

But I want to back up for just a second. I want to cover the fact that I feel that Adam has too much money earmarked in cash in this high-yield savings when he already has the $15,000 in the high-yield savings for the emergency fund. And Adam says that he's saving it for the wedding, the rent, the house, a boat, hunting trips. All of that sounds great, but you say one to five years. If it's one to two years for all of those big moments, great.

Keep rocking and rolling. But if it's three to five years, I think it's way too much money sitting in another high-yield savings account for these kind of undetermined dates of when you're going to use these funds. So I would really consider carving that back, that $35,000, maybe to $10,000 or $15,000, and get the rest invested if you believe these timelines are going to be three, four, five years rather than one or two years because I think you're just a little too loose with it right here and that money is going to underperform and you're going to leave a lot of money on the table by not doing more with

it. Yeah, I can I can respect Adam for wanting to like, you know, prepay for future expenses. But when it comes to prepaying for a future expense that's five years away, you can prepay for that by parking it in the S&P 500. That's how you prepay. That's how you save for an expense five years into the future. Now, if you want to propose and your proposals in six months and you want to go buy that ring, yeah, I'm glad that cash is sitting in a high-yield savings account and it didn't go down when the NASDAQ went down 11% in the month of July, right? So, like, that's why we have money sitting in cash high-yield interest-bearing accounts for these future expenses that are near-term, because we can't predict what the markets are going to do in a six, 12, 18 month period of time.

But we can predict that the market, I'll make the bet right here, Robert. I bet that the S&P 500 is higher in five years than it is right now, right? So like that's how we want to be thinking about three, four, five year periods of time, Adam versus a short six or 12 month period of time with a hunting trip that you might have coming up next April or a wedding, you know, ring you have to buy or a boat that's you know, $8,000 on marketplace that you've been saving up for, whatever, right? Like, there are near-term expenses and there are long-term expenses. And for the near-term, totally fine for that high-yield savings, but the long-term, Robert, is so correct in this that you have to

have that money compounding for you over a long period of time, because that's the name of the game here, Adam. Let me give a quick example. With Adam putting this in high-yield savings, let's say three, three-and-a-half percent, versus putting it in V-O-O, the S&P 500 that you mentioned. And let's say that the difference there is seven, eight percent a year. That's a That $25,000 in VOO for five years could be another $10,000 in Adam's pocket and Adam's family's pocket, which could be the difference in getting the boat essentially for free versus parking the money in cash or the high-ield savings. So make sure you understand that arbitrage of the difference, Adam. If it's over two years, get that money invested and you'll thank us later.

That's a really great breakdown. Speaking of wedding, our anonymous listener writes in and says, good morning. please leave me anonymous me my fiance just put our deposit down for our wedding venue we're going to get married October of 2008 and we are feeling a little bit nervous about the payments we have to pay $4,200 every three months until October 2028 I work in law enforcement and make 90,000 a year pre-tax is this something that we can afford thank you so much for your help robert i'll you kick this one off yeah this is a crazy one anonymous listener because based on this math, you have 27 months of payments. So if you took 27 months of payments starting from now, and you divided that by how many it's every three months. So if you divided

that by three, so you have nine payments at $4,200, $37,800. But you tell us you're making $90,000 a year pre-tax. So let's say post tax after this $90,000, you're making $65, $66,000 a year, but you're telling me you're going to spend half of that. I think that's just crazy and way too much to spend on this wedding. But again, I don't know the rest of your situation. If you have $2 million in your portfolios already and you own a couple rental properties and you're making $90,000 a year, then go for it. But if you're just in a pretty standard situation,

and you're going to spend that high percentage of your total net income over the next 18, 24, 36 months. I think it's just crazy. And I would really, really consider cutting that back down, changing directions and doing something a little less expensive to stay within your budget. Because right now, with as much as you're spending, you're basically cutting out your ability to invest for the next two, two and a half years. And that is money that would be compounding for decades and decades.

that goes away because you're trying to do a really expensive wedding. Yeah, and that's the sad part. $40,000 for a wedding is not an expensive wedding. It's unfortunately average right now, you know, and that's the payment just to the venue. And that doesn't include my, I mean, I'm planning a wedding right now. The venue is one thing. Then you also have to pay for the food and the alcohol and decorations and the flowers and all this stuff. And the bachelor trip.

You had to go plan that, right? So, like, there's, unfortunately, weddings are expensive, Robert. And I think that there's, like, I don't know. the answer to this because some people on one side like I've got a friend I just went to a wedding in Pittsburgh they got married and like they planned a wedding in like three months there was a ceremony at a church there was a reception on a rooftop at a bar downtown a restaurant downtown it was beautiful it was awesome there were no florals it was more candles everything was handmade to save money and DIY I'd be surprised if that whole event was 10 grand I mean it was and that was it and that was it

And then the next day they hosted everyone. Well, first off, they actually, the ceremony was on a Friday. So I'm sure they saved some money there too versus like having a Saturday. But, you know, on the next day, that Saturday, they just hosted everyone at their house and just like catered some really good food and hung out. And so like you can get married and like host and have a fun time. Like it was a wonderful, you know, time. So many people were there. It was probably 60, 70, 80 people. Like it was awesome. And I guarantee you it was 10, maybe $15,000 for the whole weekend. Where compared to other people like myself, who, are getting married and planning to spend a lot more than that on a wedding and a big extravagant event and a black tie this and like there's levels and what I think to your point makes the most sense is to think about it as a percentage of your annual income. If you're making $90,000 a year right now, your post-tax take-home pay is probably, let's call it $70,000 a year on the high side. Robert 65 is probably closer. But let's Let's call it $70,000 a year. So you're now taking home $70,000 a year. And so you're going to take, of the $72,000 a year, 16,800, all of 2007 and, you know, whatever that is minus the 42 because it's Q3 there. So 12,600 in 2008. Right. So like, let's call it as a percentage of this number. We're talking about 24% of your take home pay on an annualized basis is going toward just paying for the vent. of this wedding. That's tough. That's tough, right? Like, I would much rather, of course everyone would,

would rather you see that money saved and invested. Like, that's a wonderful, Robert, if you're telling me you're saving and investing 20, 25% of your annual take home pay in the stock market and your retirement accounts, like, you're on fire, right? You are like really, really up there compared to your peers. But unfortunately, this 24%, 25% is going to have to be used to like go pay for this expense that some people would, argues a one-day thing. Other people would argue is it's the best day of their lives. So it all comes down to personal finance is personal. Of course, we'd love to see you save and invest this money. But I also lean toward like, I'm very much looking forward to like my wedding day being the

coolest best day of my life and making lifelong memories with countless people that I love. And I think that's also really important to me. And so I'm spending money on that. And I'm like, I'm being intentional. I think that's like the term here to. use. But if our anonymous listener here is saying they want to be as intentional as possible, and their intentionality is we want to spend a ton on our wedding despite only making $90,000 a year pre-tax, that's your decision. That's your choice, of course. But Robert and I think that that's on the high side. And we would encourage you if you can, that's just for the venue too, but we would encourage you to earn more money, right? Instead of finding, because you've already

locked into this venue, you probably already signed a contract. They're going to charge your credit card, like breakup fees with venues are expensive. Like, how do we now make our anonymous listener as a couple here and their spouse? How do they now earn maybe this $16,800 more a year, right? How do you go earn a thousand dollars more a month to our anonymous listeners so you can pay for this wedding between now and October 2028 without having to sacrifice the ability to save and invest into the stock market and your emergency fund and your Roth IRA? and your 401k.

I mean, you're in law enforcement, so you've got the pension, right? Like, there's a lot of cool things going on here behind the scenes that I don't want you to miss out on and to do so. How do we go earn the difference? Yeah, the only thing I'll add to this,

and it's not to be a Debbie Downer of any of you that just got engaged you're considering getting married is there is a lot of pressure when buying diamond rings to get engaged and get married. There is a lot of pressure of what the level of your wedding should be

because everyone is going to see, everything's going to be on the internet, you want to impress all of your friends from afar and all of that. But at the end of the day, you have to remember one thing. It's one day of your life. You want it to be magical. Yes, but you don't want to pay for it for years to come. So many people, they go in over their head.

Austin, you're a different example because you can afford to spend what you're going to spend, whereas a lot of people, they're borrowing money, they're putting it on credit cards, or whatever they're doing to be able to pay for this extravagance for. other people rather than themselves. So I just want to make sure everyone understands. Do a wedding that works within you and your family's budget. And don't worry about what other people think because at the end of the day, they're broke and they're probably putting a lot of their wedding expenses on credit cards and other types of debt. I want to make sure none of you do that. I cannot agree more. The sooner you stop caring about what other people think about you,

your money, your situation, the better off you are going to be. 100%. Into our anonymous listener here that's getting married in October of 2028, maybe you all want to just, you are so excited about this and this is your, like, this is your Super Bowl, which is how we're treating it. My fiance and I, like, we want a wedding that's like memorable and like, we're so excited about it. This is our Super Bowl.

And so maybe that's it for them here also listening, October 2028, which is fine. But the advice that I want to double down on, I'm sure Robert. would agree with is like if you're going to go spend this $37,800 between now and October 2028. Let's go figure out how to make it. Right. Let's go figure out where it doesn't take from your contributions to your retirement accounts. It doesn't take from your saving and investing. Like, what's that side hustle? How much Uber can you drive? How much DoorDash can you deliver? How much pizzas can you? Like, what skills do you have? What can you do to make $1,000 a month between you and your fiancee here? Both of you here. 500 bucks a month.

month. What can you do? So each of you can make $500 a month between now in October 2028 and pay for this wedding with side hustles and an extra income versus taking it from retirement contributions or running up a credit card or doing something that's going to negatively impact you and your future. Now, Robert, before we jump to our next question, got to give a shout out to public.com, the investing platform for those who take it as seriously as we do here on the Rich Habits podcast. And you can see from our last answer, We take investing so, so seriously. On public, you can build a multi-asset portfolio of stocks, bonds, options, cryptocurrency, and now generated assets which allow you to turn any idea,

any idea you might come up with or see on the internet into an investable index using AI. And it all starts with your prompt. From renewable energy companies with high free cash flow to semiconductor suppliers growing revenue over 20% year over year. You can literally type any prompt and put the AI. to work. It screens thousands of stocks, builds a one-of-a-kind index, and even lets you back-tested against the S&P 500, all with just a few clicks. You can think of generated assets like ETFs, but with infinite possibilities. They're completely customizable. They're based on your thesis, not someone else's.

So go to public.com slash rich habits and transfer your portfolio today. That's public.com slash rich habits. Paid for by public investing, full disclosure in the podcast description. All right, Robert. So our next. question comes from Michael B. Michael B says, hey guys, just started listening to the podcast, and it has opened my eyes to questions that I didn't even realize that I should be asking. I thought I was doing the right thing by just investing, but now I'm questioning if my money is going to the right places. So please let me know your thoughts. I'm 36, married with two children. I have $25,000 in a Roth IRA that I invest $300 a month toward. I also have a 401k through

an employer with an employer match. I currently have $18,000 in that 401k. I also recently opened up a joint investment account for my kids that I'll contribute 200 a month toward instead of a 529 plan to provide some more flexibility. Aside from just increasing my contributions across the board, the two main questions are if my investments are in the correct places and if my recent move to Northwestern Mutual was a good choice. Uh-oh, here we go. I just transferred my Roth over to Northwestern Mutual and it's now invested into a Northwestern Mutual. and it's now invested into American Fund's 2016 Target Date Fund A with a 72 basis point expense ratio. My 401k is 27% in TD Bank Institutional Money Market and 73% into Vanguard Target Retirement 2050 Fund. Should these funds be redirected to other places?

Secondly, I thought I was doing the right thing by working with a financial advisor and I appreciate the life insurance and overall financial insight, but I'm wondering if I'd be better off with my investments being through public.com or some other platform where I can invest with less fees and more autonomy. I know I've left you with a lot of my overall financial picture, but there's my two questions at this time, and I'd really appreciate some knowledge that you guys could share on my situation. Thank you so much, Michael.

Robert, I'll let you start and I'll bring us home. Michael, Michael, Michael. I wish this question was, I'm considering moving all of my funds to these Northwestern Mutual new account under this advisory, but you already did it. So here's my takeaway. Northwestern Mutual is very insurance first investment later, and they do push a lot of mutual and Target Day funds. I don't like them. I think they underperform the market dramatically.

I think that they leave too much money on the table, especially when someone is younger like yourself at 36 years old. So for me, I think all of this is going to cost you tens of thousands, if not hundreds of thousands of dollars over the next 20 years of your investment horizon if you don't make the change back. Now, I'm not saying financial advisors are bad. My family owns a fiduciary firm and we crush it for our clients. But the difference is this is a set it and forget it. So these Northwestern Mutual agents can be on the golf course by 3.30 every day

sipping their whiskeys because they just want to make it easy and collect their fees. I personally do not like Target Date funds because they don't adjust for wars and COVID and changes in your lifestyle. It's a set it and forget it. And it's more of a we don't want to lose your money because we want to collect our fees. Not we want to make you the most money with your money over the next 20, 30 years. So for me, Michael, I would really look at unwinding this. You can do it on your own, especially with all the tools we have now. Once you get over a million dollars in net worth, then maybe consider going to a fiduciary company that's going to really do all the right things and help you make the most money because they win if you win.

But this is not the strategy. And I appreciate you bringing this to us. I wish it would have been preemptively. But that's okay because you can always make the changes that you need to make to feel. better and really get where you want to get financially for your wife and kids. I think that's great. I just get pissed off because I know and agree that, you know, our friend here, they said, I thought working with a financial advisor was doing the right thing.

Financial advisors aren't bad. This isn't a show to bash financial advisors. But this is a show to bash some products that, unfortunately, a lot of financial advisors sell to their clients because that's how they make the most commission. That's how they make the most money. And when you look at something like a target date fund, first off, gross, but second off, with an expense ratio of 72 basis points, at that 72 basis points in that Roth IRA, that's going to cost you well over $100,000, maybe $200,000 over the next 30 years of investing, depending on how much you invest, max it out, performance, stuff like that. But that's $150,000, let's say,

that you've paid to someone to underperform the markets in a target date fund. Like, it just, it makes so much more sense to me, Michael, for you to take this Roth IRA back, for you to roll it over into public.com, contribute up to the $300 or $600 a month, $625, I think, is the max there you can do to annualize it at $7,500 a month. But if you can only afford $300,000, I guess that's okay. I would much rather see you have autonomy. You're smart enough to do this yourself. You can choose the funds.

They're V-O-O-D-A-Q-Q-Q-Q-Q-Q-U-S. Right, that's the S&P 500, the NASDAQ, the Dow Jones, and the international stock market. You've got those four funds in your Roth IRA. You're doing 99% of what any other financial advisor could do for you. Sure, there's some financial advisors that are like, oh, I'll buy these strategies. We'll do these crazy things and like whatever.

Like cool go have fun. But 99% of people need just a couple funds that track U.S. capitalism that's going to compound over the next 20, 30, 40 years into their retirement. And that's what you have to do here. The thing that makes me so mad, Robert, is this 401K, 27% in a money market. Why at the ripe age of 36 years old do you have essentially a third of your 401k sitting in cash? What? So that's what we're trying.

to help you understand here is like you're young you have 30 more years of investing 30 years go take all of your money put it in the s&p 500 the nasdaq the Dow Jones and some international stuff and forget about it that's all you got to do it's going to cost you maybe three to seven or nine basis points depending on the funds that you end up buying here they're very very cheap ones like spy ym i think it's two basis points qQQm is a really cheap one vxus i feel like is relatively cheap but like you're going to say so much money and fees by just doing that, not to mention the AUN fees that these people are going to charge you on top of the expense ratios of the expensive funds they're putting you in. I mean, you're probably going to save one and a half to two percent all in here annualized,

depending on what funds you choose and what, you know, they're charging you and stuff. So move your money out of there. You can do this. You're smart enough. You're capable enough. You can learn the plan. You can execute the plan. You can do this, Michael.

And I want to add one more example, Austin, because it really burns me up when I look at this. The average target date fund for that year, 2016, underperforms the S&P 500 over the last 10 years by 4%. 4%. So for anyone listening that's getting told to get into a target date fund and you're younger, look at it this way. For 20 years at 4%, that's 80% of returns you're leaving on the table. through this Target Day fund on top of the additional fees that Austin talked about, the AUM fees that are going to be on top of these high expense ratio.

So keep that in mind. This is in a what are the fees right now today? It's what is it costing you over the next 10, 20, 30 years of your investing lifetime in these underperforming assets? I just looked it up to 9% in bonds. Why in the world, if someone's going to, retire in 34 years from now that they need 9% of their portfolio in bonds. What risk are you trying to offset knowing that you don't need this money for 34 years? Like what like that's,

don't even get me started, Robert. We got to answer the next question here. That's right. We got Brian. Brian coming up here. Hello, Robert and Austin. I'm a new listener, 43 years old. My wife is 42. I don't really have any investments to speak of. My wife has around 50,000 in a retirement account, but it's not currently invested. We have $35,000 in credit card debt. We owe $375,000 on our home with no emergency fund to speak of either. I'm a disabled veteran receiving VA disability and Social Security. My annual income is $95,000 a year net after taxes, and my wife's income is $102,000 a year gross. We have three college-age kids and three kids in high school. Recently, I was awarded a settlement from the United States Victims of State Sponsored Terrorism Fund.

The award after lawyer fees is $8.6 million. My wife and kids are to deceive similar judgments next year. We anticipate that my wife's award will be around $4 million after lawyers' fees in each child will get between $1 and $2 million. My wife and kids, award numbers are just estimates. This is paid out annually in the first quarter of every year. The payments are between 0%, which is very rare, and 5%. The award money is not taxable. I'll break down the math for my award only since these are the true numbers we have now. And then Brian goes on to break down 0% up to 5% of that $8 million plus reward money there and kind of what those numbers are.

I could receive any of these amounts every single year. My wife would receive the same percentages based on her award amount as well, starting in 2028. The kids will receive the same based on their award amount. Our question is, given our situation described above, what would you do with the money we will receive each year from the settlement. Thank you so much for your input. I love your show and I'm excited to hear your advice. Thanks, Brian. Robert, kick this one off for us. Yeah, this is a tough one because even though these are massive numbers, they're going to be broken down in installments over years. And so where it gets tricky in this instance, when people see a much smaller number, so if we pick like the middle of the road, 3%, Brian would get $258,000 in that year. So then that smaller number, even though that's a really nice number and it's a lump sum, A lot of times people will squander it because they're thinking, oh, I got 258 grand. I'm going to go buy a $150,000 boat. Then next year they're like, we got $258 grand.

That year, I'm going to go upgrade the cars. And you continually blow that money, kind of like what we see, I think, with athletes and rappers and people get these lump sums when they get these signing bonuses. So the way I would look at this, I would first and foremost, because Brian and company are 43 and 42 years old, I would take the first three years of payments and try to invest every single bit of it or close to it. They could reward themselves, upgrade the bathroom, do whatever they want to do. But I would try to invest a high percentage of it in the first three or four years to get it compounding and get them to that multimillionaire status and net worth. because then that way later on as the payments are still coming in

until we get to these lofty numbers, then they can play around a little bit because they've already built a massive base to make sure that they never blow through this money. Where to invest it? With this much money, I would probably see a really good shop around for a good advisor to get their opinions.

Make sure they're a fiduciary so you're not getting put in these target date funds and you're not getting charged all of these commissions. Or do a lot of research on your own and keep a high percentage of this invested and get yourself diversified. Make sure you've got, you know, some dividend funds through Nios. We love that. Some income earning funds.

Make sure you have all the bases covered in the traditional funds like VOO, QQQ, AIQ, some of those. And really get yourself diversified in that first three, four, five years to make sure that that this money is generational and is around for all the kids. And even then, I would also look at for the check. children that are above 18 years old, I'd get their Roth IRA maxed out year one. And I would do that every single year for them until they get all of their money. Because you mentioned there were different estimates for them.

But just get diversified, get protected, and be bulletproof first before you go out and start spending it like it's never going to run out. That's a wonderful breakdown, Robert. I'm going to be a little bit meaner. Brian, you guys are taking home $15,000 a month, taking home $15,000 a month and you have no money. You're $35,000 in credit card debt despite $15,000 a month hitting your checking account every single month. I think that you all have a spending problem. I think you all do not have a budget.

I think for the last 43 years, you guys have just kind of been flying by the seat of your pants, and this looks cool. We're going to buy it very emotional with your money. That's how you end up in $35,000 of credit card debt, taking home $15,000 a month. So here's what has to be true for this money to be. a blessing and a generational, you know, transformational opportunity for your family. One, you all need to actually sit down and get right with your money. You need to have a budget. You need to say, my name is Brian. This is my wife. We take home this $15,000 a month and we know where every single penny is going. We know how much we spend on, because again, you have six kids. I get it. I'm not,

I'm not trying to say that, you know, 15,000, like, what I am saying is like, you guys have $35,000 of credit card debt and you take home $15,000 a month, despite having six children, three of which are out of the house, by the way, but despite having six children, like, there should be no world where you have no retirement, no emergency fund, and your $35,000 in credit card debt if you were prudent and intentional with your money. And that's, and that's okay that you're like, you've done this, like you're 43 of the like this this big opportunities and you can you can turn your life around at any any point even without this money but you have to make the decision today we are going to be intentional and

prudent and smart and responsible with the money we do have because if if you're not responsible with the money you do have right now more money is not going to solve your problems it's going to make them worse money is a magnifying glass and if you are irresponsible with your spending you are irresponsible with how you approach, you know, whatever. Like, like, money's only going to make that worse. That's why, you know, you've seen people that that come into a lot of money, they either squander it to Roberts point or they become jerks. And they're just like, because like, money's a magnifying glass. And right now, your situation, I don't want to magnify that. I don't want more debt. I don't want no money. I want you all to be very, very prosperous. And so here's the step by step I

would do. Brian and your wife, you both need to sit down and need to say, okay, for the last however many years, we've been spending like there's no tomorrow. Despite $15,000 a month coming in every month, we've been doing whatever that's ended up here at this $35,000. Let's now sit down and go look at the last three months of bank statements, credit card statements, debit card statements, everything that has left this household. Don't beat yourself up over it, but understand it. Why are we spending so much this. Where did this money go here? Was this truly an emergency that we had to swipe the credit card for or was it a want? Did we really need to spend this? Did we have to go on this vacation? Whatever it might be, but like understand where the money went. That's like step one. Step two is to now build a plan

that has this $15,000 a month, 100% fully covering every single monthly expense and investing into the future. Because if you can live off of $15,000 a month at $15,000 a month, that 42 and 43 years old with these children, this new money, the 258, 400,000, 100,000, whatever it is, like that Robert had mentioned, this new money is going to be the biggest blessing ever. You're going to be able to invest a ton, make a lot of change in your community. You're going to be able to, you know, set your family out for generations to come, which is great, and I'm sure you deserve this money. I'm not questioning that at all.

But what I am trying to really emphasize here is if you do not have your house in order before the money comes in, This new money is only going to make your house messier. Your spending's only going to get messier. And, you know, Robert and I talk about this all the time is like, and I know we had this conversation maybe a month ago and said the Rich Habits Network. As people get more money, they feel like they can get kind of wishy-washy with their spending. And like, we'll figure it out. We'll make the money off in the back end.

Like, it'll wash out. Everything's fine. Like, more money's coming in the future. But the most successful, the wealthiest people that I've ever met are so specific with their spending. They understand every dollar. They renegotiate their insurances every two years. They shop different wireless bills, like Wi-Fi. They're being as prudent with their money as humanly possible.

And Brian and your wife, you both need to be very, very, you need to get your house in order with your budget, you're spending. You have to understand all this before the money comes in in because I'm so afraid that once that money starts hitting your checking account, you're going to say, whoa, look at this Paragon boat we could buy. whoa, we could upgrade the mortgage here. Let's go buy a bigger house. We could go buy this vacation house or, you know, this thing is that, that thing is that. Technically, maybe you could afford it. But what happens when the next 0% gets paid out? I know you said 0% is, you know, a very seldom outcome. The payments are always between kind of that 1% and 5%. But maybe it's a 0% one year. And now you have to go backwards because you don't, you were counting on the income. You were counting your eggs before they hatched. And that's just, That's a problem that a lot of people have when they come into money, especially when it's, you know, an athlete and you got like this annual income or,

oh, yeah, I can always play that next football game to offset the debt I already spent, right? Just don't spend money before you have it and get your house in order before all this new money starts coming in, or it's going to be a very messy situation for you. And I'm going to add with one fact. Over 75% of lottery winners in America blow through the money and go broke within five years, over 75%. So take that with you. Our final question comes from Levi J. Levi says, my name's Levi, and I have a question for your podcast,

and I think many people in their 20s could benefit from your response. I'm currently 23 years old, making 140,000 a year doing marketing and recruiting for a healthcare company. I am fairly unhappy in my job, and I've been interested in buying a business, not a startup. Since I started working here three years ago, I've been maxing out my Roth IRA, investing 3% to my company's matched 401K, then putting the rest of my saved income, into index funds and ETFs. With the rest of my saved income each month,

I'm struggling to decide if I should start saving to buy a house so I can stop throwing $2,000 a month away to rent or if I should start looking for SBA loans to buy a business. Looking forward to your response, I love the show. Robert, what would you say the Levi? I would say Levi, you're doing a great job. You're 23 years old. You're up and running.

You're thinking all the right thoughts. But here's two things I want to correct in this and then we can break it down. Number one, I don't like the statement I'm throwing away two grand a month in rent because on average right now in America, it is much cheaper to rent than it is to buy a home. Now, I love real estate. Everyone knows that. I think everyone should own property. But in this instance, I would rather you see you get your base built first. Suck it up a little bit. You say you are fairly unhappy in your job. Well, guess what? You're crushing it in your job. I would keep that job for two, three years. at least get yourself to 26, 27 years old, get that base built of $100,000 we talk about, saved and invested in those same funds you already own because then you've got your base built.

Then before I go buy the dream home or the small business, I would house hack. Let's call it 26 years old, 27 years old. I would go out and use the Fannie Mae 5% down mortgage so that way you keep all that money rocking and rolling. I would buy a duplex, triplex or a quadplex. I would live in that for a couple years. Be rent-free so you're not throwing away any money. You're building equity in this property.

Then after that, use the income from that to buy the dream home down the road, let's say at 30 years old, 28 years old. That's the playbook of how I would do it. I wouldn't go buy a business yet because the problem is you don't have enough money put away right now. And if you buy that business and it doesn't work out and you go all in on that business, then you're back at zero at 24 years old or 25 years. old. We don't want to see that. So get the base built, house hack with the duplex, then buy the

dream home, then buy the business once you have more money set aside because every single person that tries to buy a business early on rather than create a business, they end up usually setting themselves back to three years because most small businesses fail. And that said to Levi, I understand your 23, fairly unhappy, but you're making great money here, you know, 140,000 a year. to Robert's point, let's grind. You're in your 20s. I mean, let's go on that half decade, five-year grind. I think that's a dream that every person in their 20s has is to make six figures at such a young age. Let's go work for five more years, put away as much money as humanly possible. Now you're 27, 28, 28, 29 years old. You've got hundreds of thousands of dollars saved across your Roth IRA, your 401k, and your bridge account. And now you can say, okay, I'm 28 or I'm 29 years old. I was fairly unhappy doing this marketing and recruiting stuff, what do I enjoy? Because I've already got this nice nest egg that's going to compound for me because I sacrificed for that three, four, five years. And now that I've sacrificed, I've got this wonderful nest egg, do I want to go work in engineering? Do I want to go

work in, I don't know, something else. Right. But like, whatever your thing is, you can still do that. You're still so very young. But to give yourself the most optionality, money gives us optionality, Robert. Money, that's really the only thing it does. It gives us the option to choose what outcome we want. And so if Levi here has a ton of money over here on the side in his, retirement accounts and his bridge account, he now has the option at 28 or 29 years old to earn $82,000 a year, but is extremely happy versus the 140, probably by the end of that, 150 or $60,000, because he's going to get promoted. He's a smart guy. Now, he has the option to earn less money, but be very happy because that difference is already saved and invested over in his nest egg and his retirement account.

So that's my advice I'd give to you, Levi. I completely agree with Robert as it relates to the rent stuff. I don't know if you checked mortgage rates recently, my guy, but they're pretty high. As someone building a house right now and I'm going through that process myself, holy smokes, I promise you renting at $2,000 a month is not throwing money away when your mortgage for any house, I'm sure, around you, $400,500,000. is the median pretty much nationwide. That mortgage is 3,200, 3,500, 3,800, not including HOA, insurance, property taxes, you name it. It's disgusting and it's a lot of money. So just hang out with the rent, do that thing. And then if you want to do some house hacking, some duplex, triplex,

quadplex action in the future, that's how I would approach real estate. But let's first get a nice big nest egg saved, giving yourself the option to do a better job that aligns with your interest and your goals and your career, making a little bit less money, if that's the case. But to do that, let's get through the next three, four, five years. Yeah, I did this exact playbook at 23 years old. I was working doing F&I finance and insurance for car dealership. I took a demotion at 23 years old back to being a car salesman

because I wanted the freedom to be able to take over a family business that I was buying out of probate. So I worked both of those jobs simultaneously, full-time nights and weekends everything and then at 24 I bought the the quadplex the four unit moved into it renovated it owned it for like 20 years so I lived this exact playbook and it worked out great get the base built get the duplex house hack then buy the business two things before you go suret-com slash rich habits to go find your term life insurance policy if you're listening to this episode, like many of you who are asking questions here, like our friend Brian, who has a wife

and a bunch of children, Brian, if you do not have term life insurance, go find it on suretons.com slash rich habits. There's going to be a link in the show notes below. The goal of term life insurance for anyone listening is if you die, this amount of money, 10, 15 times your annual income is about the size you need. This amount of money will be given to your spouse. Your spouse then puts that in the market and it replaces your annual income. And so that is how you can protect your family and say something, I've got term life insurance. Robert's got term life insurance. Like you need term life insurance if someone in your life depends on you for your income. The second thing to call out is the Rich Habits Network. If you've not yet joined the Rich Habits Network,

what are you waiting on? Robert, we surpassed last week 1,000 members inside of the Rich Habits Network. We are now like 1,011 or something like that. Like, it is, it's unbelievable how many people have joined us inside the Rich Habits Network and for good reason. We've got eight hours of video coursework. Robert and I are hosting two-hour live streams every Tuesday night. We have office hours for another hour on Friday where you just kick it with us and we just chat and talk about whatever's going on.

We're also investing into pre-IPO companies. We're actually investing right now into a BCI company. which is a brain computer interface. Think like Neurrelink with Elon Musk's Neurlink. It's a competitor to Neurlink. So we're investing in that company right now. We're so excited. It's our third time investing in this company inside the Rich Habits Network.

So if you're not yet joined, what are you waiting on? There's a thousand other listeners now inside the Rich Habits Network. Go join them. Yeah, I just had a DM from someone that newly joined, and they said that they've been watching the podcast for years. They've been watching what's going on in the Rich Habits Network for two years. And they finally jumped and got in and were so excited. I'm like, why did you wait two years?

They're like, I don't know. I just didn't know if it was for me. I'm like, the network is for anyone that loves this podcast and wants to learn more and advance your knowledge and your opportunities. I mean, the seven-day free trial should be the answer for everyone listening to try it because there's zero out of pocket. If you want to come in and kick the tires and see that it's as awesome as we say it is, that's what you should do because you can.

can always leave if you don't find the value that we think you're going to find. So I'm so excited about it. We're across that magical threshold of a thousand members, which is really, really cool for us. So make sure you check it out. Thanks, everyone for tuning in. And we'll see you tomorrow for our episode of the Rich Habits Radar. A career opportunity is waiting at PTW Energy Services. On August 18, meet the team at a hiring event for welders and fitters from 1 to 5 p.m. explore the next step, make a strong start, and connect with real openings in the field. on this day.