Rich Habits Podcast - Q&A: $270K in Probate Court, Private Credit, & 7% Mortgage Rates

Episode Date: September 24, 2026

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Hey everyone and welcome back to the Rich Habits Podcast question and answer edition. These are our Thursday episodes where we answer your questions as if we were going through whatever you might be going through. You can ask us questions on Instagram via DMs at Rich Habits Podcast or you can email us your questions at Rich Habitspodcast at gmail.com. We get hundreds of questions every single week. So if we don't answer your question in one of the episodes and it's a burning question that you need answered, consider joining us in trialing the Rich Habits Network, our community for our biggest fans where we always answer the questions over there. And always be patient because we do get a ton of messages every single month.

And we are here to help all of you as much as we possibly can in these episodes. They're just so much fun. And we're really glad that the audience as well really enjoys these episodes because personal finance is personal and someone else's question may help you in your journey as well. So we really appreciate you guys following along for these episodes. 100%. So our first question is an email from Jake V. Jake says, howdy gentlemen? My name is Jake and I'm a big fan of the podcast. Because of you all, I recently began investing. I'm 28 years old and I make a base salary of 80,000 a year, but after overtime and bonuses, I will make about 100,000. I have 16,000 in an emergency fund, 25,000.

in a Roth IRA invested into QQ and VO. 7,000 invested in a 457B, which is managed for me. I know I probably should be managing it myself, but that's where I am right now. I spend about $2,400 a month on my mortgage and expenses for my house that I owe $330,000 on. I have a paid off truck, and the only other major monthly debt is a student loan that cost me about $125 a month at 6% interest, and apparently it's forgivable after 120 qualifying payments. But here's my question. I'm going to be receiving $270,000 in probate from the death of a family member by the end of this year. I intend to max out my Roth IRA for the year, and I also plan to

increase my paycheck withholding so I can maximize my 457B. I'm curious what your thoughts are on what I should do with the remainder of the money. Should I put it all in a bridge account? If so, do I spread it out among different ETFs, diversify it maybe into different asset classes, Any tips you guys have would be greatly appreciated as I'm blessed to be getting such a boost in my wealth-building journey and want to make the most of the funds I'm receiving. Thanks so much, Jake. Robert, I'll let you kick this one off. Yeah, Jake, congrats. 28 years old.

You're in the driver's seat. If you do things well with this money, this $270,000, you will be a multi, multi-millionaire in retirement. And I would say, first, you handled this question very, very well. I agree with everything. Yes, max out the Roth. Yes, max out the 457B, all of those things. But let's back to train up a second. The first and most important thing you have to do is exactly what you've posed in this question

and not let everyone know you got the money. Don't go out and go willy-nilly buying a new truck, getting jet skis, doing all these crazy things. I'm not saying you can't reward yourself because you are 28 years old. But please, please, please at least put 80, 90% of this money away and get it. saving and invested towards your future. That's the number one thing. So for me, it's pretty simple. You've already laid the groundwork and done a really good job here. So I would get that traditional brokerage account set up and running. And yes, I would diversify into the funds we talk about. But with your age, I do like the idea of having some diversification further out into other asset

classes. You could think real estate. You could think precious metals. You could look at maybe GLD or SLV, maybe throw in some copper with ICOP in there, but definitely the ETFs we talk about, definitely a traditional brokerage account. And I love the idea that you're thinking diversification for the long term. Austin, what did I miss? No, I think it was a great breakdown. First off, sorry to hear that someone in your family died. I know that that is a really, really hard thing to navigate, especially when you are given

a lump sum of cash and you're like, how do I best honor this person while ensuring that I'm also doing the right things for myself. So just empathize that you're going through that. So yeah, you've got the $270,000. You subtract out $24,500, which is going to be what you need to max out, that $457B. You subtract out another $5,000 because I think you said that that was the remainder for the Roth IRA this year. So now you're left with about $240,000. And for the heck of it, let's just also subtract out about $10,000 for the student loans. I don't know how much you owe on these student loans, it should be between 10 and 15,000, but let's say you subtract that out as well. You'll up for about $230,000-ish,000, depending on what's in this student loan.

Let's pretend it's 220,000 and these student loans are bigger than I'm thinking. If you take that $220,000 at 28 years old, you park it in the S&P 500, which historically has done seven and a half to nine percent annual returns after inflation, right? Because we've got about a three and a half percent inflation right now. So 7.5 to 9% after inflation. And you have it sit there in compound without adding anything else to it, Robert, between the ages of 28 and 65. At age 65, in today's buying power, you'll have $3.5 million. So that is a wonderful way to honor this person that has blessed you with this money.

And I think keeping it simple is the goal here. The goal is to say, okay, my name's Jake. If I just take this $220,000, $230,000. And I just put it in the S&P, the NASDAQ, and the Dow Jones. I don't worry about Bitcoin or IPO investing or private credit or real estate syndication. I don't worry about any of that stuff. I just say, let me build my base. Let me just secure my future in American capitalism with this $220,000 or $230,000.

You're locked. Everything's cool. Now the fun part means, okay, cool. My future is a lock. I've got $3.5 million in retirement now. And that's just going to be my reality. Now, as I make more money, because you mentioned, hey, I'm making, you know, 80,000, 100,000, that's going to be 150, 200 as your career goes on. I now have the option, the flexibility to say, yeah, I've got an extra $2,000. Let me go make one of these, you know, real estate syndication investments. Let me go join the Rich Habits Network to do a pre-IPO investment. Let me go, you know, diversify into some cryptocurrency like Bitcoin or let me also go. So having your future secured by, this $220, $230,000 investment today gives you the optionality to get a little bit more flexible in the future because if that $2,000 investment ends up going to zero or something happens

where the Bitcoin comes down or like whatever's going on, it's all good because you have $3.5 million waiting for you in retirement. Does that make sense, Robert? It makes total sense. And I'm going to go back and click back on my thoughts on this that so many people earlier in life don't realize the blessing. You mentioned blessing that it is, even though it comes from tragedy of getting a big lump sum like this. It could come from a car accident.

It could come from a lot of different things, but it's one of those things if they really truly understand the power of compounding and they let that money just ride and ride and ride for decades, then it's just a magical, magical thing. But too many people, when they get money early on,

they continually level up their lifestyle. they continually dip into that money and never give it a chance to grow. So I hope here for this situation that Jake lets it grow and that he can just be a multi, multi-millionaire in retirement. Thanks for your question, Jake. Our next question comes from Glenn H. Glenn says, first, thank you guys for what you do. I've been listening to the Rich Habits podcast for over two years and I've learned a lot from you both. Thank you, Glenn. And everyone else that's been listening for years now. We're so grateful to have so many of you come back every week. Glenn says I'm 45. I'm completely debt-free with paid off house worth 400,000, I've got 340,000 in my 401k, 50,000 in my Roth IRA, and 35,000 in a high

yield savings account. My expenses, because I have no mortgage, are only $2,300 a month. I recently took a $55,000 a year job as I get back into corporate life, but my goal is to retire around 55 years old. You guys have talked about the importance of having a bridge account for early retirement, so I want to get your thoughts on using a Roth IRA as part of that bridge account. I've contributed about $30,000 of my own money to the Roth IRA so far. I plan to contribute roughly $7,500 a year for the next five years and then take advantage of catch-up contributions after age 50. Would you intentionally build Roth contribution basis as part of your bridge strategy, since those contributions can generally be withdrawn tax and penalty-free, or would you

prioritize a separate taxable brokerage account and leave the Roth untouched. Great question. Make this one super simple. Leave it untouched. Right? We always say not to borrow from future you to pay for the present. And normally when we say that, that means don't cash out the 401k to buy a boat, or don't cash out the 401k to go on a vacation, or don't tap into that, you know, retirement fund to do something now. But theoretically, Robert, in 10 years from now, the today will be him at 55. And he's essentially saying, let me cash out of some of my retirement to pay for today so I could bridge my four and a half year gap, five year gap between where I am and when I can access the rest of my retirement accounts. And we just don't believe in that.

And again, I've always thought your retirement account, and maybe this is just because, like, you know, my upbringing or like my own relationship with money or my parents' relationship with money and people that I've known that have, like, not saved and invested enough and they've had to, like, navigate, you know, a small social security check, like all this stuff, right? but it's like the retirement account is your nest egg. This is your nest egg. This is what you got. This is what you have to get you from 60, 65 years old until the end of time. And we're all living longer, which means you might be around for 20, 25, 30 more years, God willing, into this retirement that you have to live on this nest egg. And yeah, at 55, you know, your nest egg might be a good

amount of money and the 4% rule and it might, you know, be this thing. But if you're cashing out your Roth IRA contributions because you're right they are tax and penalty free that's tens of thousands hundreds of thousands of dollars that you're taking out of this account that is not going to compound for you in your favor over the next 10 15 20 25 years as you continue to age right I mean you're gonna live into your 80s maybe 90s now with modern medicine and I just don't think it's a good idea Robert for people to say I'm gonna take money from my retirement in the future so I can fund my lifestyle today and I think you know Robert I said this first

last week and you're like, ooh, that's a good one. You can borrow for school, right? You can borrow for college with student loans, but you can't borrow for retirement. Like, there's no, there's no mechanism if you just borrow money for retirement. Like, you've got to have the autonomy and the authority and you've got to take action today that allows you to have money in retirement as this nest egg, and that's what you got. Yeah, I agree totally. And I love that statement when you say it. And it really makes me think, and I believe Mel Robbins is the one credited for this, but she always says, no one's going to be there to save you. So I always want to make sure people understand. When you think about your retirement account, I try to look at it is money that's unavailable

to me. My retirement account grows and grows and grows. I don't touch it. I don't even consider it money that I'm able to touch. I think that's the key thing. You've done a really good job at 45 years old, getting yourself to where you are. But I don't want you to get too tricky trying to move things around. I would just take, do what you said, build that taxable brokerage account that bridge account, build that up so you have the money to allow you to be able to retire early and you'll be just fine. Now here's a good question though, Robert. And I want to hear from your perspective as someone who is now above the age of 59 and a half and you can actually without penalty and like these things like touch these accounts. In your brain, you just said like,

hey, I don't want to touch these accounts. Like yeah, but you're also old enough to touch the accounts. Like what for you personally, like have you thought through, you know, when would you begin to feel comfortable when you're 70, 75, 80, 85. Because I know you want to live for a long time and your health is great. I'm sure you're going to be around for another 20, 30 years. So like, how have you thought about that? Yeah, it's a great question. I've thought about it that I feel like for me, it's probably 70 because I feel very young. I'm very healthy. I have the wherewithal that I believe I'll be able to live another 30 healthy years of life. And so with modern medicine and everything you alluded to, so for me, I still look at those accounts as I don't touch them.

and everything else because I am a high earner still and I have all these other investments and I have a lot of different income streams coming in. For me, there is no world where I feel it's time to, you know, let my foot off the gas just yet. I'm having way too much fun with you and the rich habits podcast and the rich have its network. But I think for anyone else, if they want to slow down and they have the ability to do so, it's just like you said, don't borrow from your future because we are going to live longer. I think the whole mindset of, oh, you know, people are going to start to die off at 74 years old or 80 years old. I think that's going to go by the wayside a lot in the near future, especially for healthy people. And we're going to need more money for the future and for family and your kids and all that. So for me, I'm in the same boat.

I could take money right now and look at that as available income, but I just don't. And I believe for me that 70 year mark is the sweet spot. I think that's great. And as someone listening who's trying to navigate that, right, like the question and framework you should be thinking is, and I think this is important, right? Robert is still earning active income. Right? Like Robert's like, you're like not retired, obviously. And so it's like the only reason this goes back to a podcast episode we just published, you know, the other week, which is like the only reason someone needs this money as if they're not earning active income and they have to depend on their portfolio income. And so like obviously you don't have to do that yet. You're planning to potentially do that

around the, you know, the age of 70. And we're talking about, you know, this question from Glenn H where Glenn's like, hey, 55 years old is when I want to stop working with my active income and start depending on my portfolio income. And so like that's like the switch in your brain that someone that's listening right now needs to make is like, as you think about your financial planning into the future, when do I genuinely want to stop earning active income and start. leaning on my portfolio income to fund my lifestyle. Once you know that age range or like, you know, physical condition or health condition, like that is when everything begins to get a lot more clear for you and your financial journey. I think that's a great distinction.

And that is why we talk all the time in the rich habits network, getting people to understand buying assets, owning pieces of other businesses, because if you did want to retire early and you weren't going to be making that active income, you would still have all this income coming in from your various investment sources. So what a great call out there. You know, I'm going to go on a tangent for a second. So my fiancee Ireland, she had a nail in her tire. And it was just right in the middle of the tire, easily to get plugged, like all that fun stuff, right? But I don't have an hour and a half, two hours of my day, my busy day to go do that myself. I, of course, know how to plug a tire. Like, I'm not saying I don't know how. I've done it before in the past. I did it several times in

high school when I drove over nails and whatever. But I was like, let me see if someone can just mobile come to the house and do this. Robert, you're talking about side hustles and like owning businesses and stuff. I asked chat GPT and chat GPT offered like four different places here in Nashville that have the mobile tire repair that are going to come to your house and plug your tire. So I called the very first one and this nice gentleman's like, hey, here's what we charge, here's what we do. I was like, okay, great, not going to lie. I've got a couple other, you know, competitors here I want to call and get pricing line. Just want to make sure that I got like what you're quoting me is pretty competitive. And then I'll give you a call back and we'll go from there. He's like, great. The next number I call, the same

gentleman picks up. And I was like, hey, I'm looking for this. And he goes, hey, I was just talking with you. And I was like, this is a different phone number. He's like, oh, yeah, like, I've built out a system where I've got like three or four different businesses in Nashville, but they all route to me. And I own, like, he's essentially like built a way to like make it seem like there's different businesses that compete with each other. But he owns all of them. And it's just a big dispatch thing. And so I was like, wow, okay, great. So I paid him 100 bucks. Guy came to the house. He was in an within like 30 minutes and like it was all good and it was great for me because i mean i just it was a perfect use of time and money and i feel like everything was cool but i just wanted to inspire hopefully

someone listening like a side hustle a business something like that it doesn't have to be a billion dollar ai company it doesn't have to be a venture-backed startup it could just be tire repair in your local town that's a mobile it could be mobile dog grooming or mobile dog walking there's a a guy that comes with one of these sprinter vans that's got a two treadmills in the back of it and he hooks dogs up to him and they go for like walks for people like there's so many cool different ways that people can start businesses start earning extra money and own equity to your point robert in assets that go up in value over time and they continue to compound up into the right while you sleep like there's so many different ways to do that and i know that was sort of a tangent

but i wanted to share that cool experience i had over the weekend no i think it's ultimately important because you're right. Everyone is so conditioned to thinking they have to start the next Facebook or silly bands or something like that to get ahead. If you're out there right now and you feel like you're treading water and you want to start investing but you just don't have the additional cash, start a side hustle. Even if you make $6,000, $800,000 a month with that side hustle and you put that all towards investing, you will still become a multimillionaire over time. Now before we jump to our next question, Got to give a shout out to public.com, the investing platform for those who take it seriously. On public, you can build a multi-asset portfolio of stocks, bonds, options, cryptocurrency,

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So go to public.com slash rich habits and transfer your portfolio. That's public.com slash rich habits and get started on those generated assets. You all know we love public, and this is paid for by public investing. and full disclosure in the podcast description. Our next question comes from ROMA. Rom says, Hi, Austin and Robert. My name is Rom.

Thank you for all you do. I'm a longtime listener of the show, and this is the only podcast I listen to on my commute to work. A little bit about me is I'm 37. I'm married with two kids, with the goal of retiring early, ideally in my mid-40s. I'm an accredited investor.

I have a Roth IRA, a 401K, a bridge account. I've invested into several ETFs, many of the ones that you talk about, and I own a couple rental properties. My question is about investing in private credit, as I've heard of the percent.com platform. I know you all talked about private credit a long time ago, and I started investing through percent to diversify a bit away from stocks and real estate and more into private credit. But I guess my general questions are this. What percent of my net worth should be invested into private credit? Do you have any specific recommendations for the types of private credit products, if it's a blend of, note, an individual note, highest coupon rates, things like that. And then finally, for my money inside of private credit, should I consider an exit strategy in three to five years and then redeploy the money back into my bridge account? Or is this something that I should be investing in in my 40s, 50s, and 60s? Great question, Rom. Let's start with defining what is private credit.

And then we'll talk about how much your net worth perhaps should be in this, types of private credit and finally how you should think about it over the next three to five years. Private credit is pretty simple. So there are small businesses, medium-sized businesses all the time that can't go to the public markets like an alphabet or a meta and offer bonds, right? I think you guys might remember Alphabet raised like $80 or $90 billion earlier this year with a big bond raise, a big debt raise, right? And everyone's happy to loan Google money out of 7 or 8% interest rate. That's all cool. But I don't know, Max's cookie shop won't be able to do the same thing. So what does Max's cookie shop do? They have to go borrow money from a bank, maybe some investors or institutional lenders, things like that at a 8, 10, 12, 14% interest rate.

Private credit, how I understand it, like the ones you see on percent.com, is you are pooling your money with other investors. So when Max's cookie shop says, hey, can I borrow $50,000 at a 10% interest rate, you and the other investors here are like, sure, here is $50,000, give us a 10% interest rate on our debt that we are going. giving you here. So like you're taking on debt, you're going to pay us interest, and then eventually you're going to pay us back the loan. We make 10% rock and roll percent.com, how I understand it has maturation between, you know, six and 36 months. There's, I think, flexible as low as maybe eight or nine percent interest that you can earn up to like 14, 16 percent for more risky, you know, borrowers, things like that. So just there's a lot of little mechanisms there. You have to understand specifically as it relates to private credit. But generally speaking, you're lending money and they're

you the money back with interest. Like instead of going to a bank, right, you are the private person giving them money. It's private credit. Kind of cool. How much of your net worth should be in private credit? Good question. So, yeah, there is private credit that, I mean, according to percent.com, and this is coming from someone who's not used percent. I'm not sponsored by percent. Or out of no affiliation here. Their website says 14 percent, 13 percent average interest after losses. I think the after loss is part's really important because what happens if Max's cookie shop goes out of business and Max is like, sorry, dude, I'll have you all have money. I can't pay you back. So like just know that like private credit is not just a risk free 12, 13, 14 percent. There does come the volatility of lending

anyone, any type of money, which is, you know, the fact that they don't pay you back. If I were in your shoes, I would allocate, you know, a percentage of my satellite portfolio to this type of asset class. So remember, the core satellite portfolio strategy is that 65 to 85% or more of your portfolios invested into index funds and ETFs like the S&P 500. I'd go up into the right over a period of time, whereas the satellite portfolio is essentially saying, hey, this is the smaller section, the 15 to 35%, that is more on the diversified part of my portfolio. I've got some single stocks like meta or alphabet, but I also have some Bitcoin and some pre-IPO investments and some private credit investments. Now, I would probably, like to give you a framework here, want to find yourself

into the low to mid single digit range of my net worth in this type of stuff because, and again, there is always the chance that it goes to zero. Like Max's cookie shop might not pay you back the debt they owe you. Therefore, your investment to Max's cookie shop, or rather your loan to them, which is an investment from your portfolio, could go to zero. And so I just, I would aim for that low to mid single digits. Now as it relates to the blended note, the individual note, like all that stuff, if there's a way, and I've not done a deep dive on percent.com, but if there's a way where you can get like exposure to 20 different small businesses and not just one Max's cookie shop, Martha's Bakery and Terran's Barbershop, that could be really cool. And you can

rock and roll that way and have a little bit more diversified approach to how you're doing the private credit. That's what I would do. And then finally, how you should consider an strategy in three to five years. You know, I would just, again, treat it like you would treat a satellite section in your portfolio. I mean, if you are getting 8, 10, 12 percent annual returns, rock and roll. That's cool. Like, I hope that that is what's taking place here. Because remember, and I think this is the most important takeaway from any investment in your satellite portfolio that's not the S&P and the NASDAQ. You always want to be thinking about the opportunity cost. The S&P and the NASDAQ happened to go up by about 10% a year, right? Call it seven and a half to nine percent adjusted for inflation.

inflation. So every dollar that you are not investing in the S&P and the NASDAQ is money that you're technically losing out on because it could have been invested in the S&P and the NASDAQ. And so whatever's in this satellite, you know, section of your portfolio, including private credit, you just have to know and be cognizant of the opportunity cost of what that dollar could have been if it was invested into a completely liquid, completely normal thing like the S&P and the NASDAQ. I think that's a great breakdown. And I just want to add a couple things for everyone listening. Don't get too fancy too soon. Private credit can be great. Yes, there are upsides. You can make a lot of money through this, but if you don't have that base built or hundreds of

thousands of dollars or millions of dollars, I would not suggest you dabble in private credit lending just because there are a lot of pros and cons. But I think the cons outweigh the pros here, especially if you don't have millions of dollars because you have to remember, these are very illiquid. Sometimes you don't really know where you're at on a specific investment because there's a lack of clarity around the profitability of that cookie shop that Austin alluded to. So make sure you understand what you're doing in this instance and don't get caught up in the numbers you see on one of these websites where it says you're going to make all these incredible returns. And make sure you're prepared to understand exactly what you're getting yourself into because do I do private credit lending? I do from time to time. Am I an expert? No, but I also don't like to get too fancy with my money because then I feel like I lose

control of it, and which is what Austin alluded to of keeping it simple, stupid in many instances. So just make sure if you go down this road and for this particular question, you understand what you're getting yourself into and also understand that that liquidity window that you stated may sound good, but may not always come true because you don't control the liquidity on these investments. Yeah, and I think another call out is just like the fees. I know percent is pretty transparent with their fees, which is good. Obviously, our friend Rom here is using percent, but maybe someone's listening and there's a banker that's talking about private credit. I mean, there's private credit has blown up in the last five years in popularity after interest rates

from the Fed started to go up so aggressively in 2022. And so it's just gotten really popular. And so if you are approached for private credit or maybe your financial advisors, like, listen, I got this private credit thing going on. Like it should just be thought of as a part of a well-diversified portfolio. It's not the end-all be-all strategy. It's not what you should bet the farm on. Private credit is just another asset class inside of a well-diversified portfolio that's going to allow you to build wealth over a long period of time.

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and robert people like why y'all talk about ultra i've used ultra for so long guys i austin reef got me on ultra shout out austin i love ultra pouches they're awesome when we found out they want to work with the podcast i said count me in so ultra pouches i've used them for a long time go check out ultra pouches rich 15 at take ultra.com. So our next question comes from an anonymous listener. They say, Hey, Robert and Austin, love the podcast. My girlfriend and I are planning to get engaged soon, and we're trying to decide between renting an apartment or buying a condo when we move in together in about a year. Ultimately, our goal is to be in a strong financial position to buy a starter home in roughly four years when we expect to move closer to family and start having kids. For context,

we're both 23 years old, making about 80,000 a year, so about 150 to 160,000, come bind. She just started working, so she has minimal savings and investments. I currently have about 46,000 saved across my Roth 401k, Roth IRA, HSA, and 529, plus 21,000 in a taxable brokerage account. I also have 15,000 in a high-yield savings account, with 10,000 of that reserved as a six-month emergency fund. The remainder could be available for a down payment. If saving for a down payment, I could save an additional 20 to 25,000 over the next year by pausing contributions to my brokerage account while still getting my employer's 401k match and maxing out my Roth IRA and my HSA. My girlfriend estimates she can save about 15,000 with a similar strategy while paying her parents

back for college, which is the only debt we have between the two of us. So we can get about a two bedroom apartment for just over 2,000 a month and continue to invest aggressively for the next four years, or we could pause our extra investing for a year to save for a down payment on a condo, hoping the equity we'd build over three years would leave us with a larger down payment to put toward a starter home. Love to hear your thoughts on which option makes the most sense, given our goals. All right, cool situation. Congrats on wanting to get engaged. I hope you guys do that very soon. Two quick callouts. $10,000 for a six-month emergency fund sounds super light. That's like $1,800 a month of expenses. I would beef that up to be $15,000, $20, $25,000 because that is

like what your expenses would be when you got, you know what I'm saying? I just don't understand why that six-month emergency fund is so small. Maybe I'm missing something there. So just beef that up to what you think it should be or make it a three-month emergency fund. I mean, you guys have two stable jobs. I don't know if you need six months of cash just sitting, right? That should be fine. And the other thing about this question I want to call out before I just toss it over to Robert here is that you're saying, I hope in the equity we build over three years would leave us with a larger down payment to put toward a starter home. I don't think much equity is being built in a condo in a three-year period of time. HOA goes up. Normally insurance could get kind of tricky there.

like people need to know that they're buying into a condo like condos don't appreciate the same as single family homes so if i were you i would not go into this with a time horizon of three years whatever you buy real estate from my experience and robert i want you to talk about this a lot here is like you need to have a five to seven year time horizon on that you know purchase for yourself here that single family home that condo whatever you're living in to ensure that you're giving yourself enough flexibility where the equity can go up the mortgage can go down and when you sell this you're going to have to pay for you know, some repairs. You're going to pay the commissions to the real estate agents.

Like a lot of other unforeseen things have to get paid. So you've got to have that longer time horizon to make sure that you even have the equity in the money after that five or seven year period of time to ensure that you're not coming out of pocket when you close. But Robert, take this one away. Yeah, this is a difficult one. So please anonymous listener and anyone else that's in this situation, don't take this the wrong way. The very first sentence is we plan to get engaged soon. But everything else about this question in this scenario, is built on this premise that you're already married.

You're not married. You are thinking about getting engaged. You're going to get married, hopefully, and all of it works out. But right now, you have to look out and say, okay, wait a second. We have a plan, but we have to do this plan separately because you said which option makes the most sense.

I don't think either option makes the most sense. You have to keep building your net worth. She has to get her net worth built, and you can be doing it concurrently to say, hey, when we get engaged and when we get married, this is what we're going to do collectively. But until then, here's the better mouse trap, in my opinion. You do your thing, you do her thing with a plan. But what I would do if you have a three or four year window, I would get the base built.

I would get yourself dialed in. I would not save for a condo. I would save money and have it invested in a high-yield savings account. And each of you buy a duplex or a triplex before you get married. Don't immediately go into a condo like Austin said they don't appreciate like single family homes or like duplexes or triplexes. You could buy one in each of your name before you move in together. She lives in one. You live in one for a year so you qualify.

Then when you get married, use the income from those two properties to pay for the single family primary home. But until you're engaged or until you're married, you can have all the beautiful rosy plans you want, but you still have to remember. things change, things could go wrong, and you don't want to be basing everything on a plan that might not work out, but you are on the right track. And I love everything you're doing here, but you still have to be careful and make sure you're building for your future separately until you become one. I love that breakdown. I could not agree more. I love that you all are talking about this. I love that you all are planning your future, your financial future. Like that is a healthy relationship. That's what you should be doing. And to Robert's point,

You can do those things while still keeping things separate until you have to make the move here. So to answer your question plainly, trying to decide between renting an apartment or buying a condo, rent the apartment. Rent the apartment. You're saying that the apartment rent is going to be about $2,000 a month. That's awesome. Live in an apartment. Do that for two, three, four years. And then say, okay, great. Fast forward six years into the future. We are married. We've been living an apartment for, you know, three, four years now. Everything's hunky dory. We've been doing this additional $20,000, you know, pausing some contributions over here while still investing, right, that's the key, still maxing out the Roth IRA, still getting the 401K, all that fun stuff. And now you're saying,

okay, we've got, you know, call it six figures for a cool down payment on something. Or maybe you took Robert's advice and you're doing the duplex, the triplex or the quadplex and you're doing that then. Like, there's a bunch of different ways to think about this. But what you're not going to want to do, is jump right into a condo and make these decisions while you're still both single in the eyes of the IRS and the eyes of the government. Yeah, I want to linger on this for a minute because this is a great example of why, through my experience, I suggest these things. One of my dearest friends to this day, this was about 15 years ago, met a woman. He was very far along in his financial journey. She was not. They moved in together. He paid for nursing school. He paid for all the bills.

He paid for everything for, I think it was four or five years. She got the nursing degree. She got the dream job. Everything was great. They're ready to plan the family. And then she just simply left it. And he had no legal boundaries or no contracts in place. So he spent well over six figures on this relationship with the goal of being married and having

kids. And then poof, it disappeared because he looked at it as one when that wasn't the case. So just, I'm not trying to be a Debbie Downer, but make sure you guys understand that you need to protect yourself first. And then you can have all the plans. the world is just make sure you do it right. 100%. Have combined, do everything when you're married.

That's how it should be, right? You should be one household income, one household net worth, one household debt. It's a household once you're married. But until you're married, you got to just keep those blinders on and keep doing what's right for you. Now, before we jump to our next question, Robert, we were just talking about having money sitting in a high-yield savings account. The Federal Reserve just raised interest rates for the first time in three years,

which means all of our high-yield savings accounts are now earning more money, earning interest on your emergency fund, so it's not withering away to inflation, which, by the way, is at 3.5% right now, right? That's their entire purpose. And as we always say, Robert, making your money work for you as hard as you work to earn it has always been the goal. But the problem is that most businesses don't have access to an interest-bearing account,

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Opening account takes less than five minutes and learn more about Waldo at waldo. com. Click the link in the show notes below and do what the big companies do with their cash. And use code rich habits when you sign up and you will receive a one, percent deposit match up to $1,000. Go see full terms and conditions at waldo.com. But if you use rich habits at sign up, Robert, and you deposit $100,000 because you've got that in your business account and you want to start earning some interest on it for the first time, you will get up to that 1% match or a free $1,000 against that $100,000 contribution,

like deposit. But again, here's the cool part. No minimum deposit. So, like, you could put $2,000 in there and rock and roll, like whatever. Like, businesses are all shapes and sizes. they all have liquidity needs. Robert and I were talking about this personally. Why isn't there a high yield savings account for businesses? Where are the four or five percent yields for businesses? Because they're the ones that need it most instead of these Fortune 500 companies that use all the

crazy stuff with the treasure, all that stuff, right? This is for the everyday person. We love waldo.a.i. They're a very powerful tool. And again, rich habits at sign up for a 1% deposit match up to $1,000 worth of that match. It's awesome. Go check out waldo.a.i. So our final question comes from Grant why. Grant says I like the debate you guys had in last week's episode about real estate. I'm 22 living in Minnesota and I'm thinking about whether I want to keep renting or buy a small house to live in. I've been doing some research online and it seems like a lot of people are split and maybe even leaning slightly more toward renting now because the average interest rate on a mortgage is now above 7%. I would love to hear what your opinions are

on the rent or buy debate. I still love the podcast and I listen to every single episode. Robert, this debate's been, you know, around for a while, but it's never been more important because interest rates, I know, we've been talking about this for years, right? But like, when we were talking about it, interest rates were 5%, 5 and a half percent, which is like, yeah, go like, it's cool. Five percent mortgage, like that's fine, right? But like, I'm doing a jumbo mortgage for this house I'm buying and my interest rate that I was quoted is like 7.3%. The S&P 500 does 7.5%. So like, holy smokes, what's going on here? here. Robert, walk us through why interest rates are so high and what your take is on the debate

rent versus mortgage. Yeah, this is a big topic and I think it's very important for people to understand, but I want to start with why I think if you're looking to have a single family home, renting makes more sense. And that is a term called total ownership cost. So many people when they're looking at rent versus buying, they say, all right, mortgage rates are really high right now. they're over 7% for the 30 year. And they say, all right, well, this payment on this house is going to be 3,300, and I can rent for 3,000. So I'm only going to lose $300 a month, but I'm going to own my property. And that's just not the math.

People need to do a better job of understanding the total ownership cost. What is the insurance? Is there HOA? What is the PMI? What are all the other lawn care, pool care, any of these other things? So it gives you a better understanding of the disparity between. renting versus buying. And I agree right now, Austin. I think anyone that's looking to just get started and they don't have their base built and they don't have hundreds of thousands of dollars, I think they

should rent because then they're all in cost is determined. They know what it is and they don't have to worry about all of these additional fees that most people don't calculate because most people are house broke right now in the United States because they borrow what they're allowed to borrow instead of considering how much they can actually afford, and it puts them in a place of disparity because they can't invest every single month like we want them to because they're living beyond their means. So I think if you're going out and you're looking for a place to live,

whether you're single, married, or getting married, I would rent first to you get your base built way up because interest rates are very high right now. I think the 30-year ticked to 7.17%, which is ridiculously high at the time. And I think it's important to understand that difference of the total ownership cost because we don't know when these rates are going to come back down because the Fed just raised the rates 25 basis points. And even though the Fed is not directly tied to mortgage rates, it's definitely an indicator that we probably will not see mortgage rates go back down to 3, 4 percent anytime soon. I remember when the Fed started cutting interest rates, I think it was September of 2024.

for. You know, they had their dot plot and everything and, you know, they projected end of 2026, like interest rates were going to be, you know, the federal fund rate was going to be somewhere like, I think, in the high twos or something. And now our federal fund rate is going to eclipse 4% here. So double that. But it's just like, you know, you can try and think about and hypothesize what the future is going to hold and you can try and do all this planning. But nine times out of 10, right, reality is just a little bit different. And so the advice that I would want to offer someone is buy a single family home when you can afford to buy a single family home. That advice is very different than the action I took in 2019 when I bought my townhome.

I had about $11,000 down. It was a $278,000 townhome. My interest rate was 3.2 or 3.3%. The mortgage was like $1,200. Right? Like it was a very different time back then. Now, interest rates are 7% or higher. PMI, I feel like is crazy.

Insurance are much higher these days, too. Don't find yourself in a situation where this American dream of buying a single-family home and if I don't own a single-family home, I'm not really living. I'm not really doing it right. Like, that is a false reality. I'm building and we'll close on a single-family home here in the next, like, you know, month and a half or whatever our closing date is. And it's been something that I've saved several hundred thousand dollars for for a down payment.

I've got seven figures plus still invested in the stock market. I've got my, you know, diversified everything. Like, this is cool. I'm ready to do this. I'm only ready to do this because I've spent so long making sure that I can afford to do this where I feel like some people get emotional about buying a home. And they force themselves into saying, oh, but I can afford that payment. Oh, I don't care about the interest rate.

Oh, I'm just going to do. The HOA is not going to go up. Insurance will never go up as taxes are never going to go up. It's going to be perfect. Oh, we can barely squeeze by, but we're going to do it because they said we can borrow the money and we can afford it. No, no, no, no. You do not borrow what they tell you you can borrow. You borrow what you can afford in that monthly budget to keep your all-in housing costs below a third of your take-home pay. If it doesn't work out where it's below a 30-year take-home pay, then maybe renting is the move. I mean, I've got friends here in Nashville who are renting for $1, $1,000, $2,000 a month. You can't touch a mortgage right now. were in Nashville without paying $6,000, $8,000 a month. Like, it is bonkers. Please, if you're someone that feels like you're behind because you don't own a single family home yet, or you don't own property, you don't own real estate. And you're like, oh, but the American dream has passed me by. Like, just know that it is not a smart investment right now to go put a lot of money into a single

family home at this 7% mortgage rates. Like, it's just, it's not a smart move. What's smarter is to have a lower monthly payment via renting and then take that difference, that margin in your budget and invest it in the S&P, invested internationally, invested into the Dow Jones, right? Invested into private credit maybe, right? Who knows? Right? But like get that well diversified portfolio trending in the right direction for you. And then, heck, maybe interest rates come down. Maybe you've got a large enough nest egg. We can have a larger down payment. So like there's a lot of different ways that you can own property in the future. But please don't get emotional about buying a home right now, especially as we're facing 7% mortgage rates. I think that is a great breakdown because I believe

there is so much societal pressure. And let's get one thing straight for everyone watching and listening. Austin and I believe everyone should own real estate throughout their lifetime and their financial journey. 100%. There are a lot of benefits. But if you're just starting out and you have the pressure of buying a single family home or even worse, a dream home, it is not an investment. Because most of the time you don't have the money already saved and invested in your bridge account and in your base to really accelerate your wealth building and you're taking all the money you've saved up and you're putting it towards this house then it's illiquid you generally won't have a lot of upside capital appreciation year over year maybe in some neighborhoods you will but also you're restricting your

ability to invest because you're probably living beyond your means so make sure you understand the difference i think renting versus buying is always a good choice choice, especially early on. Or, or if you really want to buy something, don't buy the dream home, buy a duplex, live in one unit, rent out the other unit so you're living affordably, take all the difference in the world and put that towards your investing strategies, and you'll be in a much better place in five to ten years. And here's my final piece of advice, and I wish someone gave me this advice earlier, which is when you buy or eventually go out and you buy that single family home, don't just think about how much you're paying for the single family

home for yourself, but also think about who's going to buy it from you in the future. Because all this equity you're getting, all like everything, like that's cool on paper, but that's, that equity is only worth what someone's actually going to give you money for. And so as you think about buying that 600,000, $800,000, $1 million home and it's your dream, whatever it might be, right? Just think about who's going to buy that home from you for 50%, 75% more in the next five, seven, 10 year period of time. Because if you can't think of who's actually going to buy it for more, because you're like, oh my gosh, like these prices are insane. I can't believe they're like this much now. It's like someone's going to think the exact same thing in three, five, seven, ten years from now. I just, I think that's, that's really important because

the only way people get money out of real estate, specifically that single family home is when they sell the real estate. And so you have to figure out who's going to buy it from you. And you have to at a higher price than you bought it out because the location's great or the, you know, whatever's going on. But yet think about that before you buy the home. That is a great call out. And I don't think it gets spoken about enough of people just go buy a home without thinking of the future aspects, especially if it's not the forever home.

And it's really simple for people to do this exercise, Austin. You guys can check population growth. You can check what is the historical property value appreciation year over year. in that zip code or in that neighborhood. So there's a lot of different ways you can see what the future values are going to be given a normal market. So really good call out Austin. Yeah, population. And then also what I'm getting really excited about too is because, you know, I'm building this house in Nolensville, Tennessee. They've recently expanded. They're adding a Publix. They just added a Kroger. They're doing the Nolensville Town Square. That's going to be done in two or three

years. So like I'm thinking about not just, you know, my home and like, you know, where I am geographically to like the airport in Nashville, but like what is the town you're in, right? That that small city you're in, whatever it might be. What are they doing around you that's going to cause more people to want to be there as well, which I guess goes to that population side of it. So it's just like, think about everything over the three, five, seven year period of time of owning a home because if you don't, and it's all done in the price that you buy it at. If you don't buy it for the right price, you're going to be paying for it later. Definitely 100%. What a great episode. Great episode, Robert. Great episode. Everybody, don't forget seven day.

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