Rich Habits Podcast - Q&A: Building AI Apps, Revocable Trusts & Commodity ETFs

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Starting point is 00:00:30 Hey everyone and welcome back to the Rich Habits Podcast question and answer edition. These are our Thursday episodes where every Thursday we sit down and we answer your questions sent to us on Instagram at Rich Habits Podcast or emailed to us at Rich Habitspodcast at gmail.com as if we were going through whatever you're going through. You all are always sending us the best questions. We've got, I think, Robert six or seven here for today's episode and I'm super excited to dig in just as a quick reminder, if you are sending us a question, don't give us a detailed breakdown of your life and say, what should I do next? Or what tips do you have for me? Or give, you know,

Starting point is 00:01:13 that's not a question. That's like an open ended just like, well, I don't know what, like if you have a question, say, here's my situation, here's the pertinent information as it relates to my question. And here is my question itself. That's the easiest way for us to answer your question. If you're someone that just brain dumps all your stuff and say, what do I do? How should I think about, you know, my investing portfolio? It's like, it's just too broad, Robert. Definitely specificity and age is very important. So we know where you're at in your financial journey, but that is so true. Sometimes we get these 500 word diatribes without an actual question in them. So just be specific. Give us your age and give us that pain point you want help with. Now before we jump to

Starting point is 00:01:56 first question coming from Chad. This episode of the Rich Habits podcast is brought to you by Public, the investing platform for those who take it seriously. On public, you can build a multi-asset portfolio of stocks, bonds, options, crypto, and now generated assets which allow you to turn any idea 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, build a one-o-kind index, and lets you back-test it against the S&P 500, all with just a few clicks.

Starting point is 00:02:37 Generated assets are 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 to transfer your portfolio today. That's public.com slash rich habits. paid for by public investing, full disclosure in the podcast description. So our first question comes via email from Chad D. Chad says, hey Austin and Robert, I'm a huge with like three U's fan of the podcast.

Starting point is 00:03:08 I listen every single week and I can't thank you guys enough for how much you've helped me in multiple ways. Here's the thing. I'm an early stage entrepreneur out of Alberta, Canada and I'm currently working on an app idea, a mobile platform aimed at the massive DIY home improvement market. I don't want to give away too much on here because I feel like this could be something very big. I have a fully developed concept. I've built a fully working interactive prototype with the help of Claude Code and ChatGBT, and I've even gone as far as registering it as a business to make it somewhat official.

Starting point is 00:03:39 I'm obviously not looking to pitch you guys, but I am looking for some advice. I'm just at a stage now where I'm ready to officially build version 1 of my application, but that goes beyond my know-how. I'm now trying to find the right developers and tech people that can, fully take it to the next level, but I have no idea where to even start looking and from listening to your guys' podcast, I feel maybe you guys can help point me in the right direction. I truly appreciate any advice you can share. Thank you so much for building the Rich Habits podcast and the Rich Habits Network.

Starting point is 00:04:09 Very cool, Chad. Thank you so much for the kind words. I love this. As someone who, you know, Robert, you built VestFunder recently. We've built Wall Street Favorites.com recently. I'm building a couple other fun things behind the scenes. like it's it's never been easier to Chad's point to just have an idea and turn your idea into reality that reality for a lot of people is an application on the app store or the google play store

Starting point is 00:04:34 now for the last call it two decades that these app stores have been around you've had to have someone that is a genius when it comes to coding and software engineer and like all this fun stuff right they have to be able to build and code from scratch now sure there's maybe some templates and some like easier ways to do that than others, but at the end of the day, you needed to have a degree in software engineering and have some background and technical coding and things like that. But with the rise of Claude Code, the rise of chat GPT codex, and all of these other AI coding tools and agents, it's very easy to what is now called vibe coding, which essentially what it means to vibe code is just like your chat GPT or your Claude prompt that comes up that you can.

Starting point is 00:05:22 can just type in plain English, hey, I want to build an app that does this. You can literally prompt and then the AI will take your prompt and code it into an application. Now with that said, Robert, there's a ton of different platforms that people use at the moment to maybe build their apps a little bit more efficiently or maybe have a little bit extra, you know, wherewithal on it. And it's not just a HTML, something or other Java. I don't even know what some of this coding language is. But I'm going to share a few of those right now. So all I do is go to Google and type in app building AI.

Starting point is 00:06:02 And I've heard of Replit, R-E-P-L-I-T dot com. Replit is a really cool platform that lets you build websites, mobile, design, slides, animation, applications, all this fun stuff. There's also lovable. there's also base 44. I mean, there's literally so many of these AI applications that you can. Anything.com. Anything.com is another AI app builder. I mean, literally all of these are so cool and they're super affordable. So, Chad, assuming you've not yet taken that step, that's the first step I would do, right? Because you don't want to go out and go spend $40,000 to get a developer or developer team to build you an app that AI can likely get you 80 to 90. percent of the way there. Now, Robert, I'm sure once Chad is to that point where he's got a cool little working application, what advice do you have for him as it relates to finding perhaps some

Starting point is 00:06:56 developers or some people in his network that can look over the code and make sure that it is built for scale and not just going to break after 2,000 people sign up for it? Yeah, I think he's on the right track. And what a time to be alive. I think back to when I built an app, let's say, 10 years ago. I think we spent $350,000 in developer fees. fees just to get to a working prototype. And now people can do it for nearly free through these apps like Replit and Lovable and all these. A base 44 you mentioned is another good one. But I think a good starting point for him is to get engaged with those sites, but also get a contract in order. He mentioned ChatchipT and Claude. Get yourself a development contract in order. So anyone that's going to

Starting point is 00:07:41 look over your information or your code or help you get to the finish line, you want to make sure that they understand. If they're writing code or helping you edit code or any of that, you want to make sure that it is a contract between you and them or your LLC and their LLC that you own the code. This is your project and they can't take it and run with it and say something like that they develop the code so they're keeping the code. So that's the only thing I would add because you're right. These websites now, like Lovable, are just so great because you can be up and running for so little money and really be able to make a ton of money with a new app. You know, you think about just like what we built here, Austin, with Wall Street favorites, it's already up and running and taking

Starting point is 00:08:26 in a bunch of money because we built something that was needed and very valuable to the average investor. So love what you're doing, Chad. Get the contract in order. Check out these sites and pick one that's best for you from a cost perspective and a development perspective. And Chad, if you're looking to do some digging on where to hire these engineers. I would look at Arc dev and TopTol. Those are two that have been around for a long time that I've heard people have used. And they really do vet all of the developers so you don't get stuck in a situation where somebody's trying to take your money but doesn't really know what they're doing. So take a look at those as well. So maybe you can get some calls set up with some of these developers ahead of time.

Starting point is 00:09:07 Once you get the contract in order and make sure you have a good selection to choose from another great website that I've just found while doing some digging here is bubble dot I.O. That's another fun one there. So go have some fun here, Chad. You don't need to go spend $40,000 on a developer just yet. Build what you can by yourself and use your clod code, your codex, all these different platforms and tools that's going to cost you probably thousands of dollars versus tens of thousands of dollars that it would have cost to hire someone to build it from scratch. Great question, Chad, and we are rooting for you. Our next question comes from Anna R. Anna says hi, my name is Anna. I've gone back and we listened to many of your previous episodes trying to find where you talk about layering your assets

Starting point is 00:09:52 with a revocable trust in LLCs, but I have not had any luck. Would you mind referencing me back to an episode or maybe just even giving me some insights on how to go about it? I'm a Colorado resident. I do not have any trusts yet. I do have three LLCs in my name and I'm looking at the moment to purchase a commercial property and would also like to include that in a trust along with a term life insurance policy. You have talked about using Wyoming registered agents. Is that only for LLCs or would you also use that to form a trust? Can my current Colorado LLCs be transferred to a Wyoming registered agent or would new LLCs

Starting point is 00:10:33 have to be formed? Any advice would be greatly appreciated. Robert, you are the structuring guy, so I'll let you talk structure. Yeah, so how we do it and how we've been doing it for 25 years is, yes, LLC is the base layer. Then you want to have a holding company in the middle of that. The holding company is going to hold all of the title and equity into each LLC. And then on top of that, we use what is called a revocable trust. Not irrevocable.

Starting point is 00:11:04 Do your research so you understand the difference. And make sure you get a CPA or someone that's really good with this type. of planning like an estate planner or a fiduciary that can help you with this. But that is how we do it. Separate LLCs for every property, then into the holding company, then the revocable trust owns all of it. And then you being the beneficiary of the revocable trust. Now some people are going to tell you, oh, you can put five properties into each LLC, 10 properties, you don't need the separate LLCs. I disagree with that.

Starting point is 00:11:36 I like to know that if something happens to one LLC, they're not going to get access to to the assets of multiple properties because you never know what's going to happen property to property. So that's how I would do it. Do you need to transfer these LLCs to Wyoming to be able to use the registered agent services of Wyoming? You do not.

Starting point is 00:11:56 You can leave them as Denver LLCs, Colorado LLCs, and still use a registered agent service in Wyoming. But again, do your research so you make sure you're getting the right outcome for what you're desiring to, to do because Wyoming does have some beneficial services, but make sure you understand. A lot of people say, oh, yeah, I just register everything in Wyoming. I get all the tax breaks of Wyoming.

Starting point is 00:12:23 I don't have to do this and that. That is not true because you have to understand if you're a foreign agent and you don't have the business operating there, you don't live there. Make sure you understand the benefits of each state without just assuming from some fake guru that's telling you what to do on the internet. make sure you check to set it up correctly so you don't get yourself in trouble. That's a good call out, Robert. The reason that we've talked about Wyoming registered agents in the past, specifically,

Starting point is 00:12:51 I think it's called Buffalo Registered Agents as who I use, is because the anonymity. If someone gets a hold of the name of your LLC, which is super easy to do, and it's in the state of Tennessee or Florida or anywhere else, they've got your first name, last name, they've got maybe different types of members, in the LLC. They've got the different addresses that are on file for the LLC. And if that's your home address or your office address, now they know what's going on there. Where with Wyoming, what we've learned in the past is that it's really, really hard to get specific information as it relates to that even if you are operating in a state like a Tennessee or a Florida like Robert and I are. So what I've done

Starting point is 00:13:33 is I've got my LLC in the state of Tennessee operating and rocking and rolling there, but I use that Buffalo registered agent in the state of Wyoming for the anonymity purposes. I think it works great. So super affordable, Buffalo registered agents, not an ad, but that's who I use. They've been great. Now, Robert, here's a follow-up I've got for you. So she's saying that she has three LLCs in her name doesn't have a trust. So maybe is it time for her to put those three LLCs in a holding company? And then does the holding company go into the trust or do all LLCs in the company? How does that sort of work? Yeah, so she wants the holding company to own each LLC in the holding company. Then the revocable trust is going to own all of the assets in the holding company and so on and so on.

Starting point is 00:14:20 It's really all about layering. You mentioned something really important, and that is the anonymity. I go through frivolous lawsuits all the time. Not as much in the last few years, but back in the day, because the more you're building and the more you're doing, people assume when they see you have money, they're going to come for it. And so when you get this additional layering, it's just really good as a protective mechanism because you don't want to make it easy on them. And that's why when you talk about these registered agents, even if you don't do it in Wyoming, have a registered agent that is not you. It's not your husband or your wife.

Starting point is 00:14:52 And it's not somebody with your same last name because you don't want to make it easy on people to try and sue you or get money out of your personal assets. That's why this layering is so important. I think the registered agent aspect of layering is one of the easiest things and cost-effective things to give you that protection long term because you don't want to build millions of dollars in personal assets and have somebody be able to get access to that because you want to remember the old saying control everything, own nothing because you don't want to make it easy on anyone trying to come after your assets. And then as it relates to the term life insurance policy you're looking for, we work with Shuriance, S-U-R-I-A-N-C-E dot com slash rich habits.

Starting point is 00:15:40 They've done my term life insurance policy. They've done thousands of others that have listened to the show here. They are so good at term life insurance. Check them out, shirience.com slash rich habits. Anna, you're going to love it. When you think about your term life insurance policy, you should think anywhere between maybe 10 to 15 times your annual income is how much your policy should be. And again, the purpose of term life insurance is so that if something

Starting point is 00:16:07 happens to you and your income goes away for your family, they can take the nest egg, that policy that's going to pay them out a million or $2 million, invest it in the stock market and then use the distributions, the portfolio income, the dividends from that to fund their lifestyle in your absence. Great question, Anna, and I love how thoughtful you are about your structuring. Our next question comes from Calvin S. Calvin says, Hey Robert Nostin, I appreciate the phenomenal financial and investing advice you guys always provide, as well as the usual market updates on Fridays. I'm in a situation where my fiance's grandmother has $170,000 just sitting in a bank account uninvested.

Starting point is 00:16:49 She's been asking me to give her advice on how to invest her money. For context, she's 92, so I was planning on having her do a heavy concentration of cash than a good bit in treasuries and CDs. However, she says that she wants to invest the money for me and my fiance and that she doesn't plan on using any of it. With this in mind, do you guys think it'd be a good idea to focus a lot of it on the index funds you talk about, or maybe diversify it into something else right now under her name, or just have her continue to hold this money house cash to later be passed down when she unfortunately passes away. Would appreciate any advice. Thank you guys so much. What an interesting situation from Calvin.

Starting point is 00:17:31 Okay, here's the weird part, Calvin. This is your fiancé's grandmother, not your grandmother. And I appreciate that you guys are engaged, but you're not yet married. So this, in my opinion, is a Calvin's on the sidelines, and fiancé is the one that's going to be having these conversations and making some of these decisions here. Because I can appreciate wanting to help out, you know, the in-laws. I do that a lot myself with Ireland, despite. us not like being married just yet. But at the end of the day, it's a really tricky situation when it goes from like, yeah, you should probably get this invested to, yeah, let me sit down and

Starting point is 00:18:09 click the buttons for you because you're 92 and you probably don't have, you know, an account to log into. So I got to call the brokers and I got to do like that's a completely different thing that I don't yet know if that's a good idea for doing. Now, to answer your question plainly, assuming this wonderful 92-year-old woman who has $170,000 sitting in a bank account uninvested, that is rocking and rolling, and she genuinely wants to ensure that this money is not going to get spent and is given to your fiancé upon her death. And she's asking you and literally saying, yes, that's where this money's going. How do you want it to be invested?

Starting point is 00:18:47 If that's the case, to answer your question very plainly, yes, just put it into index funds like V-O-O-Q-Q-Q-Q-Q, DIA, just ride the wave. Like that's all that has to happen here. Nothing fancy. No diversification into this or that or Bitcoin or gold. None of that. Just make it super simple and easy here. But I don't yet know if you've got the authority or the social approval. I feel like this is just kind of a weird situation to be in.

Starting point is 00:19:13 And I would probably just let it chill in cash until it is actually yours legally. I don't. I just, this makes you just feel uncomfortable. Yeah, definitely a slippery, slippery slope because they're not married yet. So be very careful because you don't want to be ostracized because you tried to help and something backfired. So I agree with everything Austin said. And the only thing I would add is look into getting someone to get a payable on death certificate instituted with this money. Because if she wants it to be passed down to your fiancé, which then is you if you guys get married,

Starting point is 00:19:52 You want to make sure it's protected from going into probate, like all of our assets. So look into what's called a POD, a payable on death certificate. But as far as how to invest it, be careful. You don't want to be into anything volatile. Maybe look at some high yield savings, some treasury bills, maybe even some CDs or some corporate bonds that are some short-term bonds, maybe. So you're getting some revenue and earnings from it, and it's growing, but you're not risking it in general. because again, it's not your world yet to be able to tell her what to do here. Or just put it in a high-yield savings account on public, right?

Starting point is 00:20:29 Just go put it in their high-yield cash account, earn your three or four percent, whatever it might be and you'll make, you know, a couple thousand dollars a year. So it's not just sitting and getting destroyed by inflation until it actually becomes your money. But I love the idea of the POD. And yeah, I just want to emphasize again, very slippery slope here by trying to take control of money that's not yours, especially of a very elder person. Like, there's some really weird stuff that goes on with, like, elder abuse and, like, what if the family thinks that you went behind their back and out, like, dude, weird stuff.

Starting point is 00:21:00 I would let this one ride. This is your fiance's, you know, grandmother. Let her be the one to communicate and do some of this stuff. Very, very, very, very good question, though. Thank you, Calvin for tuning in. Now, Robert, before we jump to our next question coming from Luis on Instagram, this episode of the Rich Habits podcast is brought to you by ORA ETF, and their U.S. defense ETF trading under the new ticker, DUTY.

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Starting point is 00:23:14 thing involves risks, principal loss is possible, distributed by Foreside Fund Services LLC. Major shout out to ORA ETFs again for sponsoring this episode. Go check out the D-U-T-Y-E-T-F. Now, our next question is from Luis D. Luis says, hey guys, my wife and I have started listening to your podcast and we're talking more about retirement planning because of it. She's 36, I'm 32, and I've been fortunate that lately my profits in Hutt 8 have helped me reach 100,000. $9,000 in my portfolio. My dream has always been to have one full Bitcoin, so I've been thinking about allocating that $109,000 toward it. We don't have any other investments, and I understand you normally recommend establishing a base first of that $100,000 before I put money elsewhere. So should

Starting point is 00:24:05 I focus on reinvesting this $109,000 into the index funds and ETFs you talk about? We have about $20,000-ish-dollar of student loan debt. That's all the debt we really have. Emotionally, I know that I want to ride crypto since I've got this long-term belief and I want to take this money and put it all into Bitcoin. But if you were in my shoes, would you do that? And if not, what would you do? Robert, you can kick this one off. Luis, I think you need to get the base built. Because right now, yes, HUD-Aid is doing well.

Starting point is 00:24:35 They are pivoting away from being a Bitcoin mining company like Clean Spark and like riot platforms. And they're utilizing their infrastructure for good in the AI. sector and the energy sector. So you've done well with it, but you need that diversification. You should take some of this money, if not most of it, get it out of that stock, leave a portion of it, but get some of those gains out of it, get it into the VOOs and the QQQs, maybe keep some in AIQ since you like a little more risk. That's what I would do because we always want to see of your base because right now you have no other investments you mentioned. So all of your net worth is riding on Hut 8. That is a really.

Starting point is 00:25:14 recipe for disaster because you're too risk on in one very risky stock. So that's what I would do. Start taking, you don't have to take it all out at once, but I would get money out of that, get it into VOO, get it into QQQ, and start taking a little more risk off approach. And if you like it, it's a great sector. Keep a little bit of HUD 8, but I would get that base built elsewhere first so you can sleep at night, make money long term, and have it be less risk on. I love that breakdown, Robert. I think our friend Louise here should sell the position,

Starting point is 00:25:50 have the $109,000 of cash, set aside what's necessary for, I'm assuming long-term capital gains, which is probably going to be close to a 15% effective long-term capital gain rate there. Maybe even take $20,000 from this to pay off the student loan debt and then take that monthly payment and you can now start investing that. That's probably $3 or $400 a month depending on how much you started with. Now you've got roughly maybe $7,000,000. or $80,000 invested into the VOO's QQQs and DIAs of the world. And you have no student loan debt. So now you can take that $3, $500 month payment that it used to be.

Starting point is 00:26:27 And then that now goes into this brokerage account. So you're always building a little bit more and you're investing more, more, more. That's exactly what I would do. I'm not a fan of having your entire portfolio sit into a single stock. Now, I'm not going to be wrong. Concentration worked in your favor here. You made a ton of money, which like, congratulations, but concentration risk is real. And by moving out of that and diversifying into the index funds and ETFs we talk about, you are moving away from sort of gambling to compounding, right?

Starting point is 00:27:00 Compounding works over a long period of time. Gambling is very sporadic. And by having all your money in one single stock is more on that gambling side than the compounding side is when it comes to investing. 100%. I had a conversation about this exact topic this morning with a friend who asked me point blank, how much are you up on Micron? Because he knew that I bought Micron back in the $20 to $40 range. And I've been DCAing along the way.

Starting point is 00:27:28 And I didn't share the number because I've done quite well with it. But you don't want to be so risk on that you're betting the farm on one stock like you are here with HUDA. Well, it was a great follow up, Robert. How much of your total invested portfolio does Micron make? despite being now this massive, you know, green run-up rally in your portfolio, where our friend here, it's their entire portfolio, but I'd imagine it's nowhere near even a quarter, a tenth of 5% holding of your whole portfolio. So like how do you reconcile that sort of weighting? Yeah, it's by taking profits along the way. And right now, Micron is 6%. So it's a little above that

Starting point is 00:28:08 range of 5% that we talk about in my total portfolio, but definitely nowhere near danger zone. So that's just something always to consider is make sure you're taking profits along the way because you don't want one stock like this case being so bloated in your portfolio that you don't have enough diversification if that one company goes bad. Now our next question comes from Gabriel C. Gabriel says, hi guys, I continue to be a fan and I have another question. I'm incredibly grateful to be a medical student without any loans. due to full scholarships from college and medical school. Wow, that is awesome. Good for you.

Starting point is 00:28:43 It must be really smart. Since my financial journey started five years ago, I've been able to invest consistently and now have $60,000 in my Roth and $30,000 in my investment brokerage account. My question is, when I eventually become a doctor and invest in a 403B for the match, those holdings are typically limited with the S&P performing the best. Would you recommend that portfolio holding my S&P diversification while using my RRRDV? Roth, which is more flexibility for growth ETFs, especially now with time on my side looking at 40 years of growth. Okay, okay, I understand the question. Here's what they're asking. Gabriel's pretty much saying, like, hey, listen, I'm going to be able to invest into essentially

Starting point is 00:29:22 just index funds in my 403B. I want index funds and thematic ETFs in my overall investment portfolio. Since I'm investing into a ton of index funds in my 403B, would it make sense that since I can't invest in thematics in that 403B, that I invest in the thematic ETFs instead inside my Roth IRA exclusively. So essentially all Roth IRA in thematic ETFs, all index funds in 403B. I lean no. I lean do both, right? There's no reason to just have like these thematic VGTs and AIQs in your Roth IRA. I think having half your Roth IRA still being those index funds is a great idea because I don't know what happens if the 403B, I don't know, right? There's a lot of weird things that could possibly happen in some weird future.

Starting point is 00:30:14 But having both, right, index funds in the 403B, some index funds in maybe a quarter of or half the Roth IRA and then the other half maybe is in some of these thematics. I think that's totally fine. Also, just get a taxable brokerage account. You're going to be a doctor probably making $3,000, $600,000 a year. Go get a taxable brokerage account on public. And that could be your thematic ETFs. And all of the Roth can still be those index funds that we talk about. So it really is just dealer's choice here, Robert.

Starting point is 00:30:41 What I don't want to happen, though, is our friend Gabriel to, like, overthink the situation and really try and, because we talk about this all the time. You can perfectly optimize every little perfect thing. Like, yeah, it's possible, but like 99% of people aren't going to perfectly get every single waiting and name and everything correct. What matters much more than perfectly optimizing your situation, your holdings, all this stuff, is getting like 85 to 90% of the way there by just investing into index funds and compounding ETFs consistently over a long period of time. If you just do that, you are going to be a

Starting point is 00:31:18 multimillionaire, Gabriel. Yeah, especially being a high earner. If you have limitations, which you will in the 403B, sure, do the S&P 500 and then get the rest of your diversification in those other funds that Austin mentioned and in that traditional brokerage account. that is outside of your raw. So I love it. I think you're dialed in. Just don't over complicate it. You don't need to have four, five, six ETFs,

Starting point is 00:31:43 rocking and rolling in the various accounts. Follow what Austin said, and you'll do great. So our next question comes from Alex. Alex says, hi guys, Alex here from Miami. I just recently started listening, and I love the podcast. I'm looking to diversify my forms of income, and you've mentioned Funrise. Can you guys elaborate as to, one, what Funrise is,

Starting point is 00:32:04 two, how it works, and three, how it can fit into someone's portfolio of income streams. It's good question. So, Alex, what is Funrise? Funrise is an online platform like a Robin Hood or a public that instead of depositing cash and choosing publicly traded equities, fundrise, you deposit your cash and choose what type of reits, real estate investment trusts you want to invest in. to. Now, instead of publicly traded reits, like VNQ, which is an ETF of all the, you know, Vanguard REITs or whatever, they have their own reits. They're Midwest, their Southeast, their

Starting point is 00:32:45 Northeast, their Sun Belt Reits. Like, they make REITs, real estate investment trust, you think better than as like, you know, investment vehicles, ETFs, I guess, right? They make REITs comprised of specific themes all around the country. How it works is they take the, I think they've got $7 billion, $8 billion of, you know, real estate right now across the country, they take all that real estate. If it's multifamily, maybe it's commercial, maybe it's warehouse, maybe it's single family, maybe it's build for rent. Like there's a bunch of different like types of real estate that they have. And then they essentially say these types of real estate is more steady stream. These types of real estate are more

Starting point is 00:33:24 opportunistic. These types of real estate and they kind of like build their own little strategies and buckets. And they then take the money that people deposit to their platform and invest it into the bucket that corresponds most aligned with their investing, you know, risk tolerance and preferences, right? So maybe you want to be opportunistic in the Sun Belt or maybe you want to be more steady stream in the Midwest or like whatever. And so you can kind of choose your buckets and your strategies there. How it fits in someone's portfolio goes back to like our original diversification thesis, right? 65 to 85% of someone's portfolio should be the index funds and the ETFs we talk about. The other 15 to 35% right, the core satellite is the satellite section, which is the diversification.

Starting point is 00:34:10 And that means real estate like Fundrise, but that also means precious metals. That could mean commodities. That can mean venture investing, like 15, 20% of someone's portfolio and diversified across a bunch of different asset classes, I think is a great strategy. And that's how I run my own portfolio. And that's where Fundrise fits in. Maybe that makes up five or six or seven percent of someone's portfolio is in Fundrise, and it's diversified into Midwest steady state income reeds or whatever, right? So like you get to choose like what that looks like for you with Fundrise, but that's how it fits.

Starting point is 00:34:49 So like that's what it is. That's how it works and how it fits into someone's portfolio, including mine and Roberts. Yeah, I think the big takeaway is Austin and I have worked with and invested in Fundrise for years. I recently launched a company called Vest Funding. We'll put a link in the show notes, similar to fundrise, but we do individual deals in a reg a structure. So it's another way to diversify into and select your own projects within the platform of how you want to invest. But I think we need to back up just a little bit here. You want to diversify your forms of income.

Starting point is 00:35:21 And like Austin alluded to, it's more than just real estate. It is precious metals. It is other forms. You can invest in wine and whiskey. You can invest in timber. there's a lot of ways to diversify, but it all comes down to understanding your risk tolerance because personal finance is personal and understand what is your goal and your buy box. My buy box is always to have precious metals, crypto, but also real estate in my portfolios,

Starting point is 00:35:48 just like Austin. So understanding that is the key, then you can select where to invest your money accordingly. Well, I mean, let's be real, Robert, if you're looking for income, the best way to earn tax-efficient income is NEOS funds, like full stop. So if our friend Alex from Miami here is like, I want to diversify and have different streams of income, maybe there's the SPYI and QQQI sort of ETFs there from NEOS, they're going to pay you as the indices go up. But there's also I-Y-R-I, which is their real estate ETF. There's also I-A-U-I, which is their gold ETF. There's B-T-C-I, which is Bitcoin income. I mean, that's how you can really diversify your income across to Robert's point,

Starting point is 00:36:35 these different sort of, you know, precious metals, you got some crypto, you got some real estate, you got some commodity. Like, they're all over the place. They do a really, really good job of making it easy for people like you, myself, Robert, to go in there and say, hey, I want energy specific income. I want real estate specific income. I want some Bitcoin, you know, whatever. So shout out Nios funds for doing all that.

Starting point is 00:36:54 But really good question, Alex. And our last question comes from Sharon T. Sharon says, hey, guys, I love the show. Austin, Robert, you two run the best business and finance podcast out there. Thank you so much. That's awesome to hear. We appreciate it. Sharon says, I had a question about commodities inside a growth-focused brokerage account.

Starting point is 00:37:13 How many commodity ETFs are actually appropriate for a portfolio? I currently hold gold, silver, and copper. I'm also curious whether a traditional gold ETF like GLD makes sense or if a fund like the Neosk gold ETF I-A-U-I-U-I with their monthly distributions is a better fit. I'd love to hear your thoughts and how to think about commodity exposure and whether income-focused gold ETFs belong in a brokerage account looking for maximum growth. No. In a brokerage account looking for maximum growth, maximum growth, income-focused funds do not belong

Starting point is 00:37:46 there because income-focused funds, the way they generate that income, is with covered calls by selling short calls against their portfolio. And essentially, you're capping your upside by doing that. You're trading upside potential for income to. today. And so if you are saying, my name's Sharon, and I'm looking for maximum growth, then income-focused funds are not where you find it. But commodity ETFs, that's a good question. So how many commodity ETFs are actually appropriate for a portfolio? Probably less than five. That's where I go. Robert, you know, gold, silver, maybe some uranium. I like copper.

Starting point is 00:38:19 You know, there's also like FCX. You know, there's ICOP, I think, is what you like. There's URA. I think less than five is what my gut tells me when it comes. a commodity ETFs inside of a portfolio, so it's like a growth-focused portfolio. But that's what I want to like also get super clear on here. Sharon, by putting commodity-focused ETFs inside of a growth-focused portfolio, you're essentially saying, my name's Sharon, and I think commodities are going to pop off, which like maybe that's the case, right? Maybe that's going to happen. Maybe that's true. But let's also be very, very clear here. A growth-focused portfolio is optimized for companies, growing their revenue as quickly and as aggressively as possible. Because as they grow that revenue,

Starting point is 00:39:04 if it's a SaaS company, an AI enabled company, an AI hardware company, a data center company, like, whatever it might be, that's what gets these growth stocks to just go up into the right. Is their high octane revenues through the roof, their growth, growth, growth, growth, growth, and eventually they'll turn a profit, whatever. But like, that's what a growth-focused investor focuses on. Commodity ETFs don't have earnings. They don't have dividends. They don't have dividends. They don't have growth. There's no metric, underlying metric, to sort of optimize for, or benchmark against rather, to include it inside a growth-focused brokerage account. I understand, like, commodities in a portfolio. I've got commodities. Robert's got commodities in our portfolio. It's great.

Starting point is 00:39:45 But, like, conflating it with a growth-focused portfolio and kind of, like, merging them into the same thing might just be, like, starting in the wrong place. I don't know. What do you think, Robert? Yeah, it's a tough question, and I think you did a good job. spelling it out because commodities I look at as diversification, not as much as growth. If it's just growth, I wouldn't hold all the commodity-focused ETFs in there. But based on Sharon's desire here for growth, I think it's okay, but I would be more concerned. I don't think more than five ETFs make sense. So the five that I think about would be GLD, SLV, ICOP, URA, like you mentioned, and then also G-S-D-D-S-D.

Starting point is 00:40:29 I think is a good one to get you some of the other commodities that are out there in fertilizers and across the board, other supplies that are considered commodities. But I would look at it of more of the percentage of this growth-focused portfolio. I wouldn't let those five ETFs make up more than 10% of the total portfolio. And then I think you'll be okay because commodities have done very well over the last five years. I think they'll continue to do well. They will have a lot of volatility. So you have to keep that in mind.

Starting point is 00:40:59 But I would look at it as no more than five and no more than 10% of the total growth portfolio because otherwise you might as well own AI infrastructure energy and other more growth-focused high beta stocks. That's what I would do. I love that answer, Robert. Everyone, thanks much for joining us on this week's episode of the Rich Habits Podcast question and answer edition. Be sure to check out the DUTYETF. We're super, super excited that ORA ETFs is jumping on the show and they're talking about

Starting point is 00:41:29 their fund and they're, you know, donating 10% of the ETF's revenue with $150,000 commitment to American veterans. We love our veterans. Just had Memorial Day. Like, oh my gosh, I love it. So go check out the DUTYETF. We've got questions for future episodes. DM us at Rich Habits Podcast on Instagram or email us at Rich Habitspodcast at Gmail.com.

Starting point is 00:41:50 And don't forget, seven-day free trial still going on inside the Rich Habits Network, two-hour video live streams every Tuesday, eight hours of. video coursework and you get all your questions asked and answered inside of our community. And don't forget wall streetfavorits.com 2.0. We just launched the new version. It is amazing. We keep adding more and more tools every month. So if you're looking to better understand, are your stocks correct for your portfolio? What are the best stocks that are out there? All these cool tools, Wall Street Favorites is where you want to go. It is incredible. We're very proud of building it, and you should definitely check it out.

Starting point is 00:42:30 Thanks, everyone for tuning in, and we'll see you tomorrow for our episode of the Rich Habits Radar.

Rich Habits Podcast - Q&A: Building AI Apps, Revocable Trusts & Commodity ETFs

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