Q&A: How to Find Old 401(k)s, Driving a $57K Truck, & Graduating w/ $250K in Student Loan Debt
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00:26That was easy.Hey everyone and welcome back to the Rich Habits Podcast, a top 10 business podcast on Spotify.My name's Austin Hankwitz.I'm joined by my co-host Robert Croke.And this episode is our question and answer addition, which means we take your questionsfrom inside of our rich habits network, from our email address, rich habits podcast at gmail.com,or even via Instagram DM at Rich Habits Podcast.We've got a ton of really awesome questions.
00:56You guys are just eating up these Q&A episodes every single week.and we cannot be more excited to be here to deliver another banger episode for you all on a awesome Thursday.Yes, but just a quick heads up, interest rates are falling.But you can still lock in a 6% or higher yield with a bond account at public.com.That's a pretty big deal because when rates drop, so can the interest you earn on your investment.A bond account from public.com allows you to lock in a 6% or higher yield with a diversified portfolio of high yield and investment-grade corporate bonds.So while other people are watching their return shrink,you can sit back and enjoy regular interest payments.
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02:09All investing involves risk.Visit public.com slash disclosures slash bond slash account for more information.All right, Robert, with that being said, I'm excited to jump into our first question frominside of the Rich Habits Network, and this one's coming from Leslie K.Leslie says, do you guys have any perspective on creating wealth while being smart about vacationat the same time. For example, have you ever thought about buying a vacation home and then renting it outwhen you're not using it? What are some ways that I can combine vacations and business travel?Robert, you're the real estate, Airbnb kind of expert here, so I'll let you kick this one off.
02:43Leslie, great question and just always understand that taxes in these situations are nuanced.You're going to hear a lot of fake gurus out there that are going to tell you you can just do it,you can write it all off, don't do that. Make sure you understand the tax.laws as it relates to your situation because we always say personal finance is personal and i want to makesure you're careful where would i start pick an area you have to understand your buy box number onewhat are you looking to buy what is the cost what is the size what market is it in that is your buybox number two figure out your funding are you personally funding this with cash are you using a specialloan are you getting a conventional mortgage what are you doing to purchase this vehicle because
03:29Again, being a vacation rental, you need to define in your buy box what it is.That's very important.And then thirdly, I would say is make sure you use good tools.Because if you're buying a property, it's $500, $600, $1 million, you want to make sure thatyou're using good tools.So one of the research tools we use is AirDNA.It's a good way to help you find the cops, the competitive numbers of other properties inthat area similar to the one you're looking at.
03:56So just make sure you set yourself of.by understanding your buy box, your funding, because a lot of people are like, oh, well, I'm, you know, approved for $1.2 million.That doesn't mean you need to spend the whole thing.Just make sure you understand those two things and then use really good tools.Now, once you have the property, then you're going to really want to dig in and do your research and make sure you understand all of the hacks to make it as profitable and passive as possible.So that's going to mean cameras, ring doorbells.It's going to mean you're going to need a good property manager unless you're going to do it.yourself, you're going to want to make sure that you have a good cleaning crew that's handled and
04:33that is priced accordingly. All of these things are going to come into play because if you're doingshort-term rental on this while you're not using it, there's going to be a lot of upkeep and a lot ofdaily maintenance to operate the business and make sure you understand that before you get into it.I don't exactly have a perspective on this, but my friend Jacob bought a Airbnb cabin in thewoods of, I think, Severeville, Gatlinburg, Tennessee, stuff like that. And he doesn't exactly use itas a way to, like, vacation while also make money via Airbnb. He bought it specifically for Airbnb. I don'teven think he vacations that much over there. But I know that some of the trials and tribulations thathe went through in this process was, one, finding that good property manager. I think he's on
05:17property manager number three right now. And something I remember him sharing with me was that thestruggle to find the property manager is too many people, you know, in his experience,give the property manager autonomy over pricing, which then in his situation, they would likedo surge pricing and then like lower the pricing, all these are the different things to tryand like attract new people to stay there. And sometimes they'd lower the pricing so muchwhere Jacob would lose money that month on the Airbnb. And so just again, I don't know much aboutthis. I'm not doing this. I don't have any perspective. But Leslie, as you are sort of going through thereps and figuring this out. Make sure that you are taking notes and taking action as it relates to
05:55kind of the trials and tribulations that both Roberts gone through, what I've seen my friends gone through.So when you do actually execute upon these ideas, not only do you have all the notes and everythingyou need to do it correctly, but you're also maybe surrounding yourself and getting plugged intopeople in your community or people in the communities that you're buying this property in that arealso sort of doing this vacation rental arbitrage investment idea that you've kind of come up with here.I guess I'm trying to get at is it takes a lot of research, a lot of patience, and don't go intothis blindly, right? Because that's how people lose $50,000, $50,000, I think they can make itrich quick on Airbnb. Also, with that being said, Leslie, want to remind you, this is for you a way
06:37to do vacation and maybe make a little bit of money. This is not just make money. So think about itthat way, right? Balance the sort of ideology between I want to buy this so that I can go on vacation asmuch as I can. I can enjoy this property as my own. And maybe some of the money I make while rentingit out can offset those expenses incurred. And I want to add one more thing that you sparked in my brain,and that is use a localized expert. So many of the fake gurus out there tell you you can do it allfrom the web and you don't have to visit the property. You don't ever have to go. That's ridiculous.Use a localized expert because they will know what is going on with the area regulations. Is thereanything in the works that they're going to take away short-term rental rights in this area?
07:22Is the HOA getting ready to change the rules the next quarter to where it's not allowed anymore?You need to be ahead of this so you don't buy something, start enjoying the benefits of it,and then it gets taken away, and then you either have to sell it or turn it into a long-term rentalin which then it might not pencil out numbers-wise.So just make sure you do your research.If you're not sure about something and you're part of the Rich Habits Network, DM me,put a question in the Q&A, and we'll make sure to help you.Our next question comes from Vaughn P.
07:52Vaughn says, hey, everyone, how's it going?I could use some guidance on a challenge I'm facing with my old 401k accounts.Over the years, I've had a bit of history of job hopping.And now I'm trying to track down and access the 401Ks from my previous employers.I'm not sure the best way to backtrack through these jobs and connect with the right peopleor institutions to get this all sorted out.Has anyone ever had experience with tracking down multipleold 401k's. If so, what steps did you take and are there any tools or resources that have
08:22helped you streamline the process? Any advice or tips would be very much appreciated. So, Vaughn,I only have one instance where I had to go find an old 401k. I worked for a healthcare companybefore I became a podcaster with Robert here and I worked there for about three years. Icontributed to my 401k while I was working there so I obviously knew where the money was and how to get itand transfer it into my Roth. However, I'm doing a little bit ofGoogle search in here for you, Vaughn, and there's a couple tips that have popped up for me that I thinkyou could really, really use. The first one being, search the Form 5500 directory. So all employers thatprovide 401K plans to their employees are required to fill out a Form 5500 every year with a DOL. So a simple
09:07search of the DOL's 5500 database may be able to provide you with additional contact information. And then thesecond tip, which was pretty interesting, and this could be especially easy if you use thingslike turbotax or you kind of keep your taxes with you, is just look at your old W2 forms,right? Because in your tax form, it's going to say, did you contribute to a 401k plan, right? And didyou take that money and use it to offset your taxable income? If that's the case, you now know,one, you contributed to a 401k and two, what employer you worked at when you were contributing there.And so if you're able to pull up those different tax forms in the past Vaughn, that could be a really great place to start.If you use TurboTax, for example, I know they've got a ton of sort of directories and sort of a library there of all your tax forms over the years.
09:56At least that's what it is for me.So it should be a very, very easy search.Yeah, the only thing I have to add to that, Vaughn, is you can go to the National Registry of Unclaimed Benefits.You can go in there.You can type in your Social Security number and it'll pop up in your state if you have anything that's outstanding that you havecollected yet or migrated yet. And then there's another way that's an app that's out there that I looked upand it's called Meat Beagle, just like the dog. And that is another one. It's a paid service,but I'm sure the costs are pretty nominal considering what they do. Those are two ways that I know of.
10:30Meat Beagle I've never used, but the unclaimed search I have done and it has worked very, very wellfor myself and clients of mine. That's all I can really add to this one. To the point of theunclaimed benefits. My dad actually went to that website and typed in his information. And he was givenlike $850 because something to do with a refund on some old like car insurance. He never pickedup. I don't know. So I mean, I think I even have like, you know, maybe 30 or 40 bucks in there.I haven't gone through the process of claiming it because it is kind of a big process. But if you've notyet tried to claim old benefits or, you know, claim some money that's due to you. You should definitely,if you're Vaughn or not listening right now, go check out these websites because it is.
11:10is pretty cool. It's like a little treasure hunt.Yeah, when my mother passed away, I was told about it through my lawyer, and this was years and years ago.I went there, and I think I got like $2,800 in things that were expired, that were just laying around that she never collected.So it was quite interesting. It's a really great resource.So our next question comes from Chuck C.Chuck says, Hi, Ohio Senator, Robert.I have a question that I have been thinking about for a long time, and I still can't make a decision.I'd love to hear your thoughts.
11:38My parents gave me all of their savings of $700,000 and let me invest it for them.They are retired and have yearly income of $17,000.They don't have any debt and currently live in their owned house, which is worth $200,000.However, they do want to live closer to me as I live in California, but houses here are very expensive,so it's impossible to swap their current house for one in California.So here are a couple options that we have been considering.One, we could rent a place, which would be $2,500 to $3,000 a month in rent.I could pay the rent while investing the $700,000 into conservative and cash flow options like SPYI.
12:16Two, I could buy a property with cash, but that would use all of the $700,000.I would also need to pay about $20,000 a year for insurance, property taxes, and upkeep.Or option number three, we could buy the property with a mortgage, however, that would eat into some of the $700,000 as the down payment.but I could invest the Delta and make a little bit of cash flow to help pay for some of that.I think option one is the best from a cash flow perspective, but would love to hear your thoughts.Robert, we want to kick this one off?Yeah, I think 100% Chuck.It's number one for the win.
12:49I mean, just doing basic math, if you invest the 700K, get them a nice place for $2,500 or $3,000,the $700,000, let's say at 10% is going to make you $70,000 a year.and even at $3,000 a month, you're at $36,000 a year in rent.So you're going to be building and building now.You're not going to be able to have them live off the 4% rule.That's for sure.But that's okay because I would hate to see you tie up all of that money in a property,buying at the top of the market, potentially where you are in California,
13:23and then find yourself stuck in that situation.I like number one the best.I think for the long term, you know, if the markets are ripping and you make12, 14% a year and you're using, you know, some of that money to pay for their expenses.I think it's better than you coming out of pocket or worse using all of the money and payingcash for a house because then you have zero wiggle room because all the cash is tied up.And the only way to get it is either sell the house or do a he lock.I don't like those options in this situation.
13:53So for me, it's number one for the win.I agree.And before I even think about, you know, selling a $200,000 house, which you didn't mentionwhat you do with that money.So we're really talking about a potential $900,000 here because they don't need to have a house and then also look near you guys.So before you do any of that, though, really want to encourage you or they want to remind you, plane tickets are pretty affordable.They could keep the $200,000 house.You can have your parents come out and fly out every other week if you wanted to, every single week if you wanted to,
14:20and you would still be saving a lot of money here.You have the whole $700,000 invested, right?You can pay for some of the plane tickets without interest earned there.and there's a ton of different ways that you could arrange this where they don't live in California,but they're still seeing the kids, their grandkids, they're hanging out with you guys,they're staying away for three or four or five days at a time.Just don't forget that plane tickets exist.Now, if they really do want to live in California with you, I agree with Robert here.
14:47I think option one's the best way to go.Of course, no one wants to have a rent payment in retirement.I get that because your parents right now have a $200,000 sort of house that'spaid for so they don't have these unexpected increases in rent or little fines here and there thatthey could expect to incur whatever they are renting, but they also now aren't close to you withthat house. So being able to move close to you, have rent of $2,500, $3,000, maybe a little bit more,have them be in a nice area. That could be a really advantageous way to hang out for the nextcouple years. And maybe they do keep the $200,000 house and rent for a little bit and maybe they
15:27move back eventually? Like, do they really want to be in California until they die? I don't know what'sgoing on here, but I do know that spending $700,000 in cash all on a house while also having tocome up with $20,000 a year with property taxes and things like that is not a very good idea.I really agree here that renting a place is probably the best move. And then perhaps eventuallyif there's a world where, you know, they could get a condo or maybe there's a small area somewherein California that they're able to just buy.Who knows, right?That could be a long-term goal, but it seems like renting right now is the best option.
16:01And I have one more wrinkle to put into this.We don't know what your current living situation is,but California has become very favorable to ADUs.And so keep in mind, you might live in a jurisdiction,and if your yard is big enough,or you could move and add an ADU for your parents,then you would be in a really, really great situationbecause you could probably build the ADU and get it all up to code and beautiful for your parents for about 200K in California.
16:31And then they'd be right in your side yard.But while not being in your primary home, this could be another great opportunity for anyone that's looking to have like a mother-in-law suite or the parents to live with them.So take a look at additional dwelling units because it could be a great option for you in your area.So our next question comes from Jen.Jen says, hey Austin and Robert.I had a meeting with a financial planner, and they told me it's more important to pay off my student loans than buy a house right now.I owe $108,000 on my student loans, and I make $80,000 a year.My partner makes $55,000 a year.
17:05I feel like my student loans will never get paid off fast.I want to know your opinion and advice on this for your next podcast episode.Also, thank you all so much for providing me with so much guidance.I'm a first-generation American, and my father had a hard time trusting any government due to what he went through.He always kept money in cash.I've been translating your podcast for him.He is now open a high-yield savings account and is investing.He is incredibly grateful for you both.
17:28Well, Jen, that is so cool to hear for your dad.Thank you so much for translating and just humbled that people like you exist to shareour podcast with anyone who's interested in learning about personal finance and investing.So as it relates to paying off the student loans before you buy a house.Oh, gosh.That's a tough one, right?So let's kind of take a step back.Robert and I both agree that you should not pay off your student loans before you start investing.
17:55Investing is different than buying a house. Don't going to be wrong.But I'm a full-fledged believer that having your 30, 40, 50, 100, 150,000 in student loans,it's okay to pay on those while also investing in your Roth IRA because chances are that student loan is at 4%, 5% interest.And that Roth IRA, this year it's up 20%.Last year it was up 28%.I mean, 10, 12, 15% is what to expect in the markets.So it's totally cool, in Robert and I's opinion, to invest while paying off your student loans.Now, buying a house, in my opinion, is a little bit of a different story because I think that two things.
18:32One, renting right now is cheaper than the monthly mortgage rate.We know this.That's a fact.You go to Redfin, you go to whatever the data is.The average rent right now in America is like $1, $1,500.The average mortgage in America right now is about $21, $2,200.So renting right now is cheaper than paying a mortgage.And when it comes to buying a house and getting that mortgage,
18:53you have to have that 5, 10, 15, 20% down payment.And if the median house right now, let's call it as $400,000,we're talking about a $40, 50, 60, $80,000 down payment.I would much rather see you take $40,000, $40,000, $80,000, $8,000,and not put that down on a house,but free yourself of the student loan payments,which right now I'd assume are about $11 to $1,200 a month of payments for you.And then could you imagine how much extra wealth you could build now that you have an extra $1,200 a month to invest.
19:23So if you have to have the student loans paid off, which we all know is going to be the case,I would like to see it paid off, in my opinion, before you go buy a house, but not before you start investing.You should start investing.Do not delay that.Every dollar that you can invest in your 20s is going to 4, 5, 6, 7x by retirement age at 65.And then finally here, what I want to encourage you to check out is the save plan.Robert and I were invited to the White House back in March to learn more about the Biden-Harris administration's save plan.It's a really interesting way to go about a little bit of student loan relief in the beginning if you feel like you're drowning right now.
20:02But in order, what I want you to do is build up a $5,000 emergency fund.Once you've done that, I want you to start investing into your Roth IRA.You don't have to max it out every year, but I'd like to see that.And then if you want to put any extra cash now to these student loans, I would do it that way.Unfortunately, it seems like your student loans are going to be around for a while at $108,000.But the good news is you and your partner make $135,000 a year,which means you could probably pay this off in three or four years if you're pretty steadfast about it.I'm going to go a little bit different route, but I think that's a mic drop moment for Austin,
20:36but I'm going to add a little bit more of color to this.So, Jen, here's what I would tell the financial advisor.Don't do either. I don't want you to pay off the student loans and I don't want you to buy a house. I think they're both mistakes right now. Here's why. You've got an election coming up. You've got the save plan that's in the works. There's other talks of loan forgiveness for college students. All of that is kind of the ace in the hole that might come and you might get relief on this $108,000 debt. Once you pay it, I doubt you'll ever get it back because it's already paid off and there's not going to be a mechanism to give you your money back. It just wouldn't work. So in my opinion,and I agree 100% with Austin, I would get your base built. That's all we can ever tell you. You'reyoung. Get the base built so your money is working hard for you. You guys are good earners, so you don'thave to worry about digging and scratching to make these payments. And like Austin alluded to,the markets are at 15, 20% right now, whereas these student loans are at 5, 6%, probably,maybe four. So that positive arbitrage of your money should go into your pocket and not Uncle Sam's. I
21:41promise you you'll thank us a few years down the road you want to get that base built so you've gotthe emergency fund and you get going and keep making the payments on the student loans maybe addsome additional payments but don't pay them off and let time and compound interest do its jobfor you i promise you you'll be in a lot better shape 10 20 years down the road and then the last thingi would say is if you're going to still look at a property maybe you're willing to put it off forone or two years so you can get that base built up look atbuying a duplex, a triplex or a quadplex, have you guys house hacked for like two years? Because then you'llhave that property up and running, making you money and giving you tax benefits all while you're
22:25still getting into a place that you own without sinking all of your capital into a primary home.And you can do this with the Fannie Mae 5% down mortgage as long as you live in it. And that would be agreat way for you to keep your money working for you and only put five percent.down on a property. I think that's a great plan. And the only thing I want to add is to set the expectation that building your $100,000 base on average takes seven and a half years. So don't feel bad if you don't have 100K invested in two years like Robert alluded to. We know you guys are earning a lot of money. But give yourself some slack. You're in your 20s. Go on vacation. Enjoy yourself. There's a lot to be excited about. But what an awesome question. And again, Jen, thank you so much for sharing the podcast with your family. All right, folks, listen up. Time to be running out to lock in a 6% or higher yield atpublic.com. You can lock in this 6% or higher yield at public.com with a bond account. But remember,your yield is not locked in until the time of purchase. So you might want to act fast. Lock in a 6%or higher yield with a diversified portfolio of high yield and investment grade corporate bonds. Onlyat public.com forward slash rich habits. So our next question comes from Macy Kay. Macy says,
23:36Hi, hi, Austin and Robert. My boyfriend who listens to your podcast religiously sent me send meepisodes and it's really made me interested in investing. Also, when I was a kid, I was obsessed withsilly bands, so I thought who better to trust than Robert? I'm 22 years old and currently a seniorin college. I'm going to graduate with no student loan debt because my dad has generously had enoughto pay for my tuition, but I plan to go to optometry school afterwards. I've saved up about $13,500,and that's sitting in a high yield savings account, I make $920 a month for my on-campus job, and I have a792 FICO credit score. I want to invest into a Roth IRA, but here's my reservation. Optometryschool is going to cost about $160,000 to $200,000, and it's essentially a full-time job, so they
24:21recommend me not working. Additionally, I need to buy a car, and I'd like to be paymentless,which means I'd do it with cash. Long story short, I'm worried I won't have enough money that Icould spare to invest while I'm in school. I was wondering what you two recommend I'd do. Also,if you have any previous episodes and resources that I might have missed that are similar to this,please share them with me.What a great question by Macy K.One, Macy, you're crushing it.I cannot explain to you how wonderful of a job you've done.
24:50At 22 years old, you know what you want to do with your life, you want to be an optometrist.You've got $13,500 in a savings account.You're making nearly $1,000 a month working part-time on campus.You have a wonderful credit score.When I was in college, I was broke.I had no credit.and I had no idea what I wanted to do when I graduated.So you are the opposite of me.
25:10I'm just thrilled that you were doing such a great job, Macy.With that being said, here's my perspective.The first thing I would do is make sure that you have a starter emergency fund of $3,000 to $5,000.The last thing I ever want you to do is feel like you have to swipe the high interest credit card to get out of a pickle.So if you're at optometry school, if you're doing something else, just make sure that you've got that $3,000 to $5,000.offer between you and life. Please, please, please, Macy, have that $3,000 to $5,000 saved andinvested. I'll pause there and I want to hear it, Robert, thanks. So, great job getting to whereyou are. And the number one thing that I will say here, because of schooling is going to cost
25:52you so much money, is live so differently than all of your friends. So when you come out of theother side of this, you are not in $500,000 in debt. You can't get around the school costs. We knowthat and you can't get around having these fees for rent and car and car insurance and your cell phoneand all of that but what you can do is not let lifestyle creep trying to keep up with all your friendsthat are living on their credit cards get in your way people ask me all the time if you did itover how would you do it and i jokingly but i'm pretty seriously say i would live as cheap as i possiblycould i would rent a garage a spare bedroom i would buy a van and sleep in it whatever it isbecause I would have wanted to keep my expenses so, so low during that time.
26:40Because if you come out the other side of college, you get the job,you're already going to have this beautiful high income right out of the gate.And that $200,000 is going to seem like nothing.But if during school, you're going on the vacations,you're buying all the cool stuff that your friends are doing,and then you have $200,000 or $100,000 in credit card debt,it's just going to really bury you for a long time.coming out of it. So live below your means. Find a way to get a vehicle very inexpensively. Maybe
27:11your father can go buy it for you, a used car and let you pay $100 a month or something. And justreally find your way to not let lifestyle creep get in the way because I know it's easy to dowhen you're in your 20s. But if you can do that, I think you're going to set yourself up forincredible success later on. I love that, Robert. And I also want to remind you, Macy, that, you mentioned,hey, I won't have this money to invest. You might have $100.00. You might have $250, right? It's okay. You don't need tomax out your Roth IRA of $600 every single month. But putting $50 here, $112 here, $209 here in the Roth IRA while you're goingthrough school is going to do you wonders at your age, right? 22. Oh my gosh. I wish I was maxing out myRoth religiously back when I was your age. Now, something else I want to mention too, whenever you graduate and you're
28:02making $130, $150,000, $180,000 a year, do not forget you're a quarter million dollars in debt.Do not go out and buy the brand new BMW because you're now making all this money.Do not go out and buy the $900,000 house because you're making all this money.Do not go on those crazy vacations.You are a quarter million dollars in debt.And you need to probably buckle down and pay that off over a five, six, seven, eight year period of timebecause that quarter million dollars of debt that you will be in is a two to three, three,thousand dollars a month monthly payment. Imagine after you pay off this debt, if you can begin to start
28:38investing that two or three thousand a month. Now, this doesn't mean to not invest, right? After you graduate,go build your base, right? We want everyone to be investing. You do not have to, you know,laser focus on paying off student loans. That's not what we teach here. But what we do teach is thatyou probably shouldn't hang on to student loans for decades and decades and decades like peoplemake the mistake at doing. There was someone in the Rich Habits Network, Robert, that I saw. They werelike in their late 50s and like yeah I still have 42,000 in student loans and I'm like what do youdo then it's time to retire you can't keep this around so just make sure you're not in thatsituation macy but just by looking at you here how you've written out this awesome situation for
29:13yourself and built yourself an awesome situation from a financial perspective at the young age of22 years old I think you're going to be just fine so our next question comes from jonahjona says i've been listening to your podcast for a few months now and I greatly appreciate what youguys do. Thank you. Here's a bit of a backstory on me. I'm 21 years old. I have two kids and we areunmarried. She's 26. Our first is two and our second is now two months old. I make $65,000 a yearplus bonuses, plus they pay $1,000 a month for my vehicle in all work-related fuel since I do a lotof driving and I got a diesel to maintain a little bit of value. I have a public account with $4,000invested into ETFs and a few stocks that I really like. With that being said, I need to open a Roth
29:56I still owe about $57,000 on my truck, and the interest rate is 12%. My partner has a fully paid offcar. I need to start investing toward the 529 accounts for my kids, and I can do this through Vanguard likeyou all teach, and I want to start with about $150 a month with that. But here's my question.My interest rate is high. I'm only six months into the loan. Should I pay down the loan as much aspossible and then maybe try and refinance it at the one year mark, or just refinance it as soon as possibleto get rid of the 12%. Robert, what do you think?I think that's first and foremost, Jonah needs to not worry about the 529 accounts right now.You are not in a position, and I hate to say this, where you should be concerned with getting those started.
30:37You should be concerned with getting yourself started and getting your base built for yourselfbecause you have to be financially in a good spot before you can worry about doing the future things for the children.I know that sounds harsh, but I promise you you need to have that emergency fund.You need to have the Roth IRA.You need to have the base built.And right now you don't have that along with a high interest payment on your truck.So that's what I would do first.I would pause the 529s for a year or two.
31:08Get all of this dialed in.Get the Roth up and running.Get everything really, really in a good spot first.Then go back to the 529s.Now, as far as the truck refinancing, I would go ask around some local credit unions, some banks,see where you're at because,as interest rates come down and they will continue to do so in 2025.You might be able to carve off three, four, five percent on the truck loan,
31:33but I would do the research first because going and refinancing it to save a percent or twoisn't going to move the needle like you want.Those are the things I would do first and foremost.So I largely agree with what Robert said, man.You've got to have an emergency fund bill.You've got to start investing toward your Roth IRA.You've got to do these things that are setting you upfor long-term success, you and your family.
31:57$57,000 on a truck for someone who makes $65,000 is pretty crazy.You got to admit that.As someone who makes a lot more than you, I bought a $50,000 forerunner,and I keep driving that right now, right?I just want to put things in perspective here, right?You were making $65,000 a year.I was making $65,000 a year.My first couple years out of college, I bought a car that was worth about $18,000.
32:23It got me from point A to point B and I ended up selling it for a car that was worth seven because I didn't want a car payment anymore.I understand maybe you do a lot of driving.You got a diesel.Maybe do a lot of, you know, towing and stuff like that.I just think, and again, you said you got this $1,000 thing going on with your company.I don't know.But in my opinion, if you can get rid of a monthly car payment, especially at a 12% interest rate, you should definitely do that.There are absolutely reliable diesel trucks that you can buy on a Facebook marketplace, car gurus,
32:53trade or whatever else for the $15,000 to $25,000 range that are going to do the exact samething as your $57,000 truck that you have right now.I just saying that just makes me at my jaw drop.I just $57,000 is crazy.So, you know, to this idea of refinancing or whatever, it's like maybe you should sell it.Maybe you should sell it.Maybe you can't afford it, right?And if you do get a thousand dollar a month stipend from your job as it relates to fuel
33:22and your vehicle and stuff like that,I mean, why don't you get a car with a payment of $300 that is a, you know, $18,000, $22,000 truck that does the exact same thing?And then pocket the $700 difference from your job.And now you have $700 to, one, build your base, two, max out the Roth IRA or three, after you've done those things, to start investing into the $529 account for your children.So, you know, you mentioned you're 21 years old.There's no world that a 21-year-old making $65,000 should be driving.having a $57,000 truck without an emergency fund, without a Roth IRA, and only $4,000 invested.Full stop. I will die on that hill.
34:03I agree. I couldn't agree any further. You have to always build your base first.100%.I know we're being kind of harsh on you here, man. But Jonah, you got to clean this up. We're rootingfor you. We think you can do this. You got this, man. And congrats on the newborn, by the way.So our final question comes from Abdul. Abdul says, I'm a teacher in Pennsylvania with $150,000 in equityin my home and a salary of 110,000 a year. I've not been able to refinance due to credit issues and mycurrent mortgage payment is $4,000 a month. What should I do? Well, Abdul, congratulations on havingthe equity in the house and having the good job. I think the thing first and foremost you have to look at
34:41is get the credit issues fixed. You can go out there, find the information. Most of it's free. You can getyour credit up, work on it, get a plan together for that, and then also get your budget together.Because once you get a budget enacted and you know where you're at each and every month,then you can get yourself on track, start putting away that 10 or 15% a month and get it invested.So you can build that base and get yourself set up for financial freedom in the future.And then also look at, you know, where can you save some additional money every single month or look at a side hustle?Whatever you need to do to really build yourself up, but it starts with getting your credit in order.And I'm not saying credit is the end-all be-all, but you just don't want to have bad credit because it does limit you in the future and cost you more money for every time you try to borrow.
35:33So that's where I would start.I think that's a great perspective. Robert, I totally agree. Get the credit figured out, man.Once you get the credit figured out, you are now out of this pickle.This pickle wouldn't have happened if you had good credit, right?The credit problems and issues that you alluded to.Two things I want to share.The first thing here is maybe there's a world where you can get a housemate, a roommate of some sort.They could pay $12, $15, $18, $2,000 a month toward this mortgage alongside of you.
35:57That's going to alleviate your stress dramatically.I have no idea what your living situation is.You hit us with two sentences via Instagram DM.So this is what we got for you.And the second thing I would encourage you to do is to listen to Monday's episodeabout how busy parents can make more money every month with side hustles.Robert talked about the side hustles.We made a whole episode about the side hustles.
36:19So this is a way that busy parents or busy people in general can make $2,000, $700,maybe $1,000 extra a month in their spare time with side hustles.That $1,000 could be the difference maker for you between a $4,000 month payment and a $3,000,and it would just help alleviate so much.And I did some math here.55% Robert of this guy's take-home pay goes to his mortgage every month.That is tough.That is the definition of being house broke.
36:45If that doesn't work and it's just not looking good, don't be afraid to sellhouse, really. Don't be afraid to sell it. $150,000 in equity is a wonderful gain on any house.And you can absolutely, what's it called 1031 exchange that into your next property, Robert?Talk about that for a second.Yeah, he could 1031 exchange to a lower value house and only pay tax on the difference.And that would be a good way to help jumpstart your savings towards financial freedom.But there's a lot of different things to think about.But just understand your situation and what your goals are.
37:17Once you know what your goals are, then you just have to take.the action to be able to achieve those goals, which obviously you care and you're cognizant ofor you wouldn't have written this question to us. So we're here for you. We want to help you inevery way we can figure out the best strategy moving forward for you. Thanks so much, everyone,for tuning into this week's episode of the Rich Habits podcast, question and answer addition. Again,if you have awesome questions that you want answered immediately, you can sign up for the RichHabits Network using the link in the description below. We're closing it now, Robert, on 500 people.It's like 480 right now. It's crazy.
37:52500 people almost are a part of the Rich Habits Network.Hundreds of people join us every week with our private lives.It is so much fun.We're having a blast in there.I think just like 19 people just in the month of October have joined so far.It's incredible.Well, I'm definitely proud of us and I'm excited for the future.And the Rich Habits Network is definitely incredible.
38:12And we've just had such an outcry of so many people telling us their stories in these episodesand in these questions of how it changed.their lives. And so I'm very proud to be part of it and get to share our stories. You know,we have a 30 year age difference. And so I've found now that I'm uniquely qualified to help peoplethrough all my ups and downs and through your education of how we've been able to combine all ofthis information in a unique way to really break it down in a way that everyone can use it in thesebite-sized chunks to improve their own lives. And so it's a great honor each and every weekto work with you on Rich Habits podcast and the Rich Havits podcast and the Rich.
38:49Chabets Network. I look forward to the future. Thanks, everyone. And have a great rest of your week.
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