Rich Habits Podcast - Q&A: Investing for a Newborn, $100K in Cash, and Utility Patents

Episode Date: November 10, 2023

In this episode of the Rich Habits Podcast, Robert Croak and Austin Hankwitz answer your questions! They touch on how to save for a house, investing for newborns, college tax write-offs, patenting a new product, and much more. ---Be sure to check out Public's new ⁠⁠⁠High Yield Cash Account paying 5.1% APY.⁠⁠⁠ This is higher than anything else on the market and is FDIC insured up to $5M. ---Earn 5.1% APY using a Public HYCA, ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠click here!⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Opt-in and share your email, ⁠⁠⁠⁠⁠⁠click here!⁠⁠⁠⁠⁠⁠Learn more about our ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠4-module video course!⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Download our FREE Budget Template, ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠click here!⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠To learn more about Robert: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://stan.store/RobertJCroak⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠To learn more about Austin: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://stan.store/austinhankwitz⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Contact: [e-mail] ---Hankwitz Group LLC has an existing business relationship with NEOS Investment Management LLC. The opinions expressed are those of the author, and the author owns several NEOS ETFs.

Welcome back to the Rich Habits Podcast, a top five business podcast on Spotify. My name is Austin Hankwitz, and as always, I'm joined by my co-host Robert Croke, and you're tuning in to this week's Q&A episode, which means we take your questions and we answer them. You can send us questions via email at richhabitspodcast at gmail.com. You can join our Discord group in the show notes below and ask a question that way. Or you can send us an Instagram DM at Rich Habits Podcast on Instagram, and we'll definitely try our best to get back to you. And if you're not following us on Instagram, why aren't you doing that?

We have great clips, great content. We're always doing a little story action. Go check us out there. But, Robert, I am so excited about today's episode. We have a bunch of awesome questions teed up. Yes, but before we jump in, I want to take a moment and really just talk about mindset and perspective. We've been down a little bit of a bumpy road these last couple months in the markets. And I don't know about you, Austin, but my inbox is inundated with people saying, what are we going to do?

what are we going to do? What do we do? And it's just really something I want to touch on today to everyone following along and listening. I think it's just so important for everyone to understand, are we in a recession, are we not in a recessions? What's going to happen with student loan debt? What's happening with the stock market is to get everyone to just take a break. Breathe for a second. Realize that the markets go up, the markets go down, but guess what? If you have good information and you follow along and you take notes, you're always going to win because you understand. the fluctuations and the ups and downs of every market cycle. So I just wanted to take everyone, let's usa, let's breathe a minute,

and just take that moment to understand that that's why we preach dollar cost averaging, making sure it's time in the market, not timing the market. Because if you take all of this, in all of this information, and you really hone in and make all of this automated, it's almost sleepy how easy you will become wealthy and financial. I think the key word there was automated, right? At the end of the day, we want everyone to know what's happening the next month already, right? We're filming this Tuesday, November 7th. This episode will be live Thursday, November 9th. I already know what I'm going to do with every dollar that I make

between now and December and how that's going to get allocated to my savings and my investing and my mortgage and things like that. I have mental clarity. And in times of uncertainty, if it's the stock market, if my friend loses their job, if I'm seeing the bad headlines on CNBC or the great headlines even, I'm all good because I'm controlling the controllables. I have a plan and I know where I'm going. So to your point, Robert, automating, understanding and how to create that plan and not just create it, but automate it is so important. That is so incredible. I think we should just end the internet right now, shut it down and everyone just listen to that and there's nothing else to do. I love it. Okay. With that being said, let's jump into our very first question. So our first

question comes from Katie I. Katie says I was recently laid off for my job where I have $15,000 invested into a 401k. I just became a mother as well. Congratulations, Katie, praying for a happy, healthy baby. But I'm trying to figure out if I should roll my 401k into a Roth IRA or a traditional IRA because I don't like the offerings. There's no VOO, there's no index funds. And I'm paying $300 a year just to keep the 401k plan. Good question. Robert, what's your take? For me, I would say, roll it over and take the tax hit now. Katie, I think it's a smart play that you're considering what to do here, and we appreciate you asking us.

In my opinion, take the tax hit now while the account is smaller. Roll it over and then don't touch it again and just keep building that account until you retire. It's all tax-free and you'd be in a great, great financial situation. But Austin, I know you like to dig a little deeper tactically, so let's break it down. 100%. So couldn't agree more, right? Do the Roth IRA?

Roll that over? Now, to Robert's point, pay the taxes down. What are those taxes? Well, they're going to be anywhere between 10 and 37% depending on your tax bracket, but let's say you're about in the middle. Call it 20%. So 20% taxes on a $15,000 roll over like that is going to be $3,000. So let's say you do this rollover sometime in 2024, right? You're anticipating, you're doing your research, you do it next year. You do this rollover within the calendar year of 2024, which means that you're going to owe $3,000 to Uncle Sam in April. of 2025, right, the following tax season. Now, you've got this $15,000 from your 401k,

and you're going to roll it over into the Roth, but now you've got to pull out that $3,000 or so and set it aside to make sure that you're not blindsided by that tax liability. What I do, personally, if I ever have an anticipation of a tax liability as I park it in a high-yield savings account like Wellfront, it's paying 5% right now, which means that you can earn, call it $150 or so, on that $3,000. in the meantime while you're waiting to pay Uncle Sam. $150 isn't going to make you a millionaire, but $150 is $150, Robert. I love it. I love it. Let's get to the next question, but great job, Katie, and I think you've got some studying up to do, and let's make this happen. All right, Robert,

this question, actually, they called you out, so they want you to answer it. Jenna M says that I'm developing an improvement to an existing product, something that solves a couple problems, and what I think is going to be a simple solution. I've dug through existing utilities. patents and I'm pretty sure there's nothing like this that is in existence. I've built some prototypes and I would love to secure a utility patent and bring it to life. But it's so new to me, I'm not sure what to do. Would you recommend getting a patent attorney to help? Is it smart to do utility and design patent? What's the play by play? Jenna, this is the best question we've had in a little while and this is a very slippery slope on this one. So I'm going to give it all to you from my 25

years of experience and dealing with product development and patents. Here's what I would do, and we could spend hours on this, but I'll keep it short and sweet. I would get the design patent first and foremost because it's a lot more affordable to do. You can get it done quickly and you give yourself a decent level of protection. Number two, the utility patent could come later, but you might want to consider pausing it or at least starting it while the design patent is already in play because of the fact is sometimes these patent, these utility patents, might take two to three years to get approved or denied. And so the nice thing about a design patent, you're up and running, you have protection, and you can really flush out the concept

and see if it's a winner before you spend all that money on the utility patent. And keep this in mind, I've had products in both stages with the design patent approved and the utility patent filed and people still knocked me off, still came after me, still knocked the price down on my product and flooded the market with fake knockoffs, so it's not a one-all-be-all protective mechanism, but it certainly helps.

So the takeaway here is do the design patent first. Get the product to market so you can start seeing and flush out the market and see if the need is there. And then once you know and see, wow, this is going to be a big winner, then you can take some of that earned income from the product, and dump it into the utility patent to protect yourself for the long term. Because it's not like the old days where you can come out with a product and just crush it for years and years.

You will have knockoffs like that if the idea is really good. So I hope that helps. Okay. So what about the question about the patent attorney? How do you get your design patents? How do you get your utility patents? Do you have an attorney? You have a, like what's the play-by-play from that perspective, too?

Love it. Thank you. So, yes, I have several patent attorneys, depending on what, type of product it is. We do all of our design drawings and house. Don't ever, ever, ever reach out to someone on Alibaba with your idea. You want to make sure you're fully protected first because you will lose control of your own product. I've seen it happen time and time again. So I would say yes, flush out a good patent attorney. Make sure you have a design agreement with whoever is doing your CAD drawings or your design drawings. Have an agreement with them as well before you ever release the

concept, even if it's a napkin drawing, protect yourself. Because what you don't want to do is have this multi, multi-million dollar idea that gets caught up in the vapor and you lose control of it. So yes, on the attorney, find a good one. Protect yourself with whoever the initial designer is for your cat and your drawings with a design agreement with them that you own 100% all rights to the product and the drawings. Because they might say, well, the drawings are mine, you own the product. Don't let that happen. Very, very important. Now, I guess my last follow-up question is like, how much does that normally cost? I've never got a, you know, a utility patent or a design patent. I know attorneys can get expensive. What's like the rough ballpark there?

Yeah, so a design patent, you can get done for $3 to $500. It's going to be rudimentary, but it's going to give you some coverage. A utility patent with attorney fees could be $15, $20, $25,000 and up. So that's why you want to have the different stages of what to do here and the different levels of protection. The biggest mistake I see with a lot of people is they will go out, come up with a product idea, let their passion take over because they think it's the next silly bans, and they go out and they spend $100,000 on drawings, lawyers, and everything, prototypes, get it done without any testing or understanding if the market even wants the product. And worse is when you take two years waiting on those patents and your lawyers and all the work. And then by the time you get the

product out there, the craze or the phase of why that product could be popular is gone. So it's all very, very tricky. And, you know, anyone that wants more information on this, reach out to me and I'm always there to help. I love it. Good stuff, Robert. Thanks. So our next question comes from Terry B. Terry says, how would you recommend managing and consolidating all the various investment platforms and services. For example, would software like QuickBooks help me manage my Fundrise, Coinbase, and public account? I'm thinking about this from an estate planning perspective. So I'm going to kind of give you a quick rundown what I think Terry's asking Robert, right? What I'm hearing is Terry has, probably like a lot of us, four, five, six, seven different sort of websites and platforms that

Terry's contributing to and investing with if that's Fundrise or Wealthfront or VinoVest or public. And Terry is kind of like, hey, I got a lot of stuff to keep trying. of here. How am I really going to keep track of this? So Robert, that's my interpretation. If that's the case and you believe so, what's your answer? Yeah, this is a great question and a huge problem because there isn't a great solution that's an aggregator for all of those platforms and information. For me, I use a spreadsheet. I know it's kind of antiquated. And, you know, I update it like every three, four, six months. For me, so much of my investments are automated, except for my angel investments and real estate and restaurant stuff.

So it's very automated, so I don't need to check it as much. But I do get up every single morning and I look at all of my bigger main accounts, see where they're at, see what adjustments I'm going to make. Am I adding some different positions this week like we've been adding with Chainlink and Bitcoin this week a lot? But other than that, for Terry's question, I use a spreadsheet. I have not found a solution. QuickBooks definitely doesn't do it.

And I think it's just all about figure. out a way that works best for you to track them and automate as much as you can. Really good answer. I'm definitely in the same boat, right? On one side of the equation, I use Google Sheets because you can do like the Google Finance function that will automatically update like a price feed of publicly traded companies, which makes it really easy. So we have to track your portfolio on a, just on automatically any given time. I also have a separate spreadsheet that I guess like that spreadsheet plugs into where I track the actual balances of like my Roth IRA and my retirement accounts and my crypto accounts and

my fund rise accounts. And like every month, I'm like sitting down on a Sunday and just like going through one by one. Wait, wait, way, way, way, way. Every month? You're a psychopath boy. Every month. Every month, man. I like to know where I'm at. I like to sit down and get it done. I wish I could do that. I let me, we'll get back to you, Terry. Hold on. I wish I could do that on my public live a few weeks back. We were talking about after the episode about seven sources of income that the average millionaire has and all of these people ganged up on me and they're like, how many sources of income do you have? And I wasn't trying to be coy or gatekeep. I didn't know. So I went back and figured it out and you and I talked about a little bit. And, you know, I have like 28 sources

of income right now that come from various places and they're not all large sources of income. Trust me, I wish they were. But I look at them as all buckets. And so, to aggregate all of those buckets into one place would be great. But I think the spreadsheet you alluded to, Austin, is the best way that I know of right now. But definitely, I hope that helps a little bit. 100%. Yeah, Terry, if I were you, especially from an estate planning perspective, right? I have a safe somewhere, not going to say where it is, somewhere in that's safe for the logins, right, to all of my accounts.

It has all my private keys for my crypto. It's got all the instructions where if I was to be hit by a bus tomorrow, what my A. could do to access my money, access my crypto, as well as, you know, just be able to enjoy it as beneficiaries. And so if I were you, Terry, I would have some sort of document that you write up with all your logins, all your private keys, all your everything. So from an estate planning perspective, there's a central hub, a central location that says go to this website, type in this username, this password, it will get you in. Go to this, you know, crypto account, type in this, login for it. And if you need to move the money, here's the private key.

whatever it looks like. Robert, I feel like you probably have done something similar. Yes, I definitely have a treasure map. We talk about it all the time with my cousin Tim because he would be the one to unravel, you know, all things Robert Croke. And so we definitely have a treasure map to make sure that everything is very well protected. So definitely I agree with everything you said, Austin. And I think, you know, in Terry's instance, you just have to put in the work and create a system that works for you since there is no one-stop shop aggregator app that works. That's what I would say. Treasure map.

I like that. I'm going to start saying that one. A treasure map sounds better than Blueprint because, God forbid, anything happens to me. I want to make sure that all of the goodness is put to use if something were to happen to me. 100%. So our next question comes from Evan B. Evan says, thanks so much for the podcast. I think you've touched on this before, but I'm looking for a little bit more insight.

I'm trying to think about my future children and how to set them up. I know opening a custodial Roth would be a good idea, but would only make sense if they're making an income, and I'm looking for more solutions as to when they're born. Is opening up a 529 something I should be considering? How do I think about that? And are there any tax implications? Okay. So, Evan, yes, touch on this before.

Happy to touch on it all the time because I actually love the 529. I opened one up, personally, Austin Hankwitz, on Vanguard's website. They required me to have a minimum contribution of 3,000. to open it up so just be prepared for that save up for it do whatever you got to do so I deposited the $3,000 and I made myself the beneficiary but I opened it up for my nephew right so when I did that it prompted me to invest the money now instead of putting it into a target date fund like it might suggest and things you know we don't like that what I did instead is I put it inside of the S&P 500 and into Vanguard's technology

ETF VGT VGT has outperformed the S&P by like 250 percent over last 10 years and the S&P's up like 180, 200 percent in that same time period. So having a little bit of both is going to be great. That's what I did personally. I invest $150 per month toward that because I know by the time my nephew turns 18 and is ready to go to college here in 17, 18 years, assuming the same historical return of call it 8 to 9 percent and I continue to invest $150 per month toward that. They're going to have $90,000 to spend toward tuition and other schools.

based expenses upon entering college. Now, if they don't want to go to college, right, here's the kicker, that's totally fine. They can go and jump right into the workforce and they now have the opportunity to roll over $35,000 of that $90,000 into their own Roth IRA. And that leaves, what is it, $60,000-ish thousand dollars left, $55,000, that money can now be used for my niece and my other nephew and all of his little brothers and sisters, right? So that's what's so cool about a 529. It's like it's just it's so flexible. Oh, oh, Robert, tax implications. I need to do a little bit more research on this. I'm not positive, but I think Robert might know the answer. Yes, so basically the tax implications are as follows for the nine states that don't have income tax. They also don't

have any tax deductions for the 529 accounts. So that's all you have to be wary of is depending on what state you're in is that if you're in a state with no income tax, then you won't have the tax deduction on the 529 account, other than that, it's pretty straightforward. Really good question, Evan. And I know you had a follow-up question here as well in this email saying, I also am thinking about opening up a custodial taxable brokerage account. And if that's a good idea for a newborn, you also mentioned, though, that you've never done this before for yourself. I'm, like, weirdly big believing in to take care of yourself before you take care of others. So if I were you, I would forget, out how to begin investing on your own, right? If that's a Roth IRA, if that's 401k at work,

like, what does that look like for you? Just listen to our episodes. We break it down pretty easily. Actually, we just made an episode, I think it was last week, called Investing the Rich Habits Way. So go listen to that one here, Evan. And once you've already begun investing for yourself, and you've done the 529, and if you still have extra money left over, then sure. Figure out the taxable brokerage account for your newborn and rock and roll with that. You will have to pay taxes on gains. That's why it's called taxable. But definitely take care of your. yourself in your own future before you think about like trying to, you know, you don't want to be that mom or dad who's mooching off their kids because they didn't set money aside for their own

retirement, right? I love this conversation around this question and I just witnessed it firsthand of a gentleman that I knew in Louisiana, very, very wealthy for many, many years and his kids all received $10,000 a month in salary stipend as just a monthly bonus that they got every single month, all of them for years, if not decades. And then this lovely, lovely gentleman, the last few years of his life, he went broke and none of his kids came and moved in. None of them came to help him. And none of them helped him financially. So he was in a situation where he almost couldn't keep up with his home and his in-quick care help because of the fact that he went broke. And this was such a tragedy. And I wanted to help more, even though I barely knew this

and I was glad I never met his kids because I was so pissed about this that he did wonderful, wonderful things for them for decades. Then when he was in need, they didn't come to help. So that is why you always have to make sure you take care of yourself first because no one's going to be there to help you in a lot of instances. Yeah, Evan, definitely not saying that your newborn is going to be that inconsiderate, but definitely make sure you take care of yourself 100%. Really good question, Evan.

This question of the Rich Habits podcast is brought to you by Grit Capital. go check out gritcap.io. It's an awesome newsletter. You gain a financial edge in just five minutes. It's where Robert and myself get our market insights from a former $100 million plus portfolio manager and her team. So if you're not yet reading the newsletter, go read their newsletter. Now, the question comes from Alia. She's actually a finance content creator. If you don't follow her, you definitely should. Go check out financially free Lee on Instagram. She says, I have a question for the podcast. I've got 100,000. $1,000 in a high-yield savings account. I thought I was going to buy a house last year,

but now I want to try living in a different area, which means I don't want to settle down just yet. I feel like I'm going to probably want to buy a house in about three years when I have kids, but I hate that the money is just sitting in this high-yield savings account only getting 5%. Do you have any suggestions as to what I should do with it, knowing that I do want to buy a house in about three years? Robert, I'll let you kick us off. Well, you know where I'm going to go with this, Austin. I'm always a believer of being in the markets because you can't time the market. It's time in the market, not timing the market. And so for me, I would say Leah should leave 20,000 of that in the high yield savings.

I would probably then take, if we take 20 out, I would probably take 20 of the next 20, and I would put that into treasury bills right now. And then I would probably say I would take 20 and put it into a blended portfolio of kind of the larger cryptocurrencies that we love, chain link, Bitcoin, Ethereum, maybe those three, maybe add in a couple more like XRP, XLN. So that's 60,000. That leaves you 40,000 left. I would get that into a really good portfolio of index funds like we talk about VOO QQ, VGT. I'd throw a little moat in there, M-O-A-T, and then maybe some AIQ. And yes, I do realize the markets are a little unstable right now, but I just think with a three-year window, it's a great place to be. And that would be good diversity that is certainly going to beat that 5% that you're going to get

in a high-yield savings. Yeah, I mean, at the end of the day, it's trading certainty of 5% a year, five and a half percent a year, with uncertainty of potential, you know, I mean, you're to date, we're up 15%. Last year, we were down 20%. So you got this kind of uncertainty around that. If you want to buy a house in three years, what I would do is I would put about 65,000 to 75,000 of that and keep it in these like treasury high yield savings accounts. Make your 5 to 5.5% right?

Then the other call it 25 to 35,000. I think I would park it into an asset like SPYI that is guaranteed to pay out 12% over the next 12 months because they do their covered call option strategy, only because I think that in case of uncertainty, and if we do see like the stock market goes down 6, 7, 8, 9, 10% next year, you still have that 12% of like sort of guaranteed income that can offset that decline just in case. I think that's what I would do. Because to Robert's point, you definitely want to, I have three years.

That's a long time to not be invested, especially with this kind of money. But I don't know if I'm dabbling in cryptocurrency and, you know, VGT and stuff like that. Those things are all over the place for sure. if you want a little bit of certainty out. That's a lot. Well, I'll tell you what we can do right here, right now on the Rich Abbott's podcast, is we can take Austin's takeaway with the 100,000, my takeaway with the 100,000. We place a time sensitive bet that in three years from today, we see who wins and it's a steak dinner,

it's a jet ski, it's a Rolex, whatever Austin wants it to be. And we place that bet based on our unbridled answers that we just riff right off of your question and see where we're at. Not going to lie. I do want to steak dinner. So let's do that. All right. There you have it. Everyone listening and following along, mark your calendars. And I'll let you know what steakhouse I choose. Okay. Our next question comes from Cora M. Cora says, hey, I find your podcast. I love it.

I look forward to every new episode that comes out on Mondays. Thank you, Cora. We appreciate it. What are your opinions on the investment plans that public offers? Are there any that stand out to you? So everyone that's confused right now, let me break it down. Public.com is the online broker that we recommend. We love them. We use them. They're incredible. And that's also where you can buy the T-bills.

We talk about them a lot. But also, Public offers sort of these investment plans, these pre-packaged sort of investment strategies in a box, for lack of better terms, right? And what these do is they allow you to execute upon a strategy. Now, let me open up the investment plans in real time right now and share with you a couple strategies that they've created. So we've got high income dividends, The Magnificent Seven, artificial intelligence, aggressive, top ETFs, real estate, top stocks, technology, energy, core income, inflation protected bonds,

right? There's a bunch of these different sort of investment plans that's inside the public app. Personally, I've not invested into them just because I'm sort of weird about what I'm investing into. I have my own strategy in my mind. I have my own dividends sort of strategy with my crypto and my long. term retirement, stuff like that. So I've never like had to invest with them. However, I would be lying if I said I haven't been inspired by them, right? So they show you, obviously, with the

stocks and ETFs are inside of those investment plans. So what I like to do sometimes is I like to click on a plan that catches my eye, scroll around and say, oh, okay, so these are the top ETFs right now. These are the top stocks right now. This is, you know, obviously we know what the Magnificent Seven is, but this is the Magnificent Seven, right? These are the different high income real estate or things like that. So I look at it more as inspiration, but again, I'm a very hands-on investor. I know 90% of our listeners aren't that. So if you do like to automate the investment process like we talk about a lot, it could be a good idea for you to automate that process through the investment plans on public. So CORA, for example, if you're looking to do that,

you know, it might be a good idea to check out the top ETF's investment plan or, you know, maybe the core income investment plan or moderately aggressive investment plan is a bunch of different to check out. I do like it as a great way to automate in an easy way to pick the ETFs in stocks that can help you achieve a specific outcome. The ride that steals the spotlight every time it hits the road, that's the Volkswagen TIG one. Its sleek exterior makes a first impression you can't ignore. Step inside to find available full leather seats and wood accents. Under the hood, the available 201 turbocharged horse power engine gives it a fun to drive edge.

The refined Tiguan, you deserve more style. Visit vw.ca to learn more. SUVW, German engineered for all. Amazon presents Jeff versus Taco Truck Salsa, whether it's Verde, Roja, or the orange one. For Jeff, trying any salsa is like playing Russian roulette. with a flame thrower. Luckily, Jeff saved with Amazon and stocked up on antacids, ginger tea, and milk. Habaniero?

More like habanier, yes. Save the everyday with Amazon. Yeah, I'll take a piece on this, too. It's really a good strategy and public does a great job with it. We do at Crowe Capital as well, have portfolios that are pre-selected. And what that does, it really helps with the automation that Austin, and I speak about all the time, but it also helps people really define their risk tolerance. And what that means is, are you very, do you want to be very safe? Do you want to be very risky?

A lot of that depends on your age and your history with investing. And so these predetermined portfolios can really be great to give you definition, automation, and be able to really be fit to your investment thesis. And that's why they work really well. So I agree with Austin. Public is a great place to do it. Really good question, Cora. So our last question on this episode of the Rich Habits podcast comes from Alexis A. Alexis says, first, thank you all so much for what you guys are doing. Two thumbs up, Alexis.

Thank you. I want to help my parents invest. They're in their early 40s and have no retirement savings or plan. They do have a small emergency fund, but that's about it. What should I do? Robert, not to call you out, but you're a little bit older than me. You might have a different perspective. What's the answer here?

Well, first and foremost, you have to sit down with your parents. Go to the link in my bio or Austin's bio on Instagram or TikTok, grab the budgeting tool. Print a hard copy if you have to, depending on how old school your parents are, sit down with them and get a budget. Once you get that budget figured out and you see where you're at, then you're going to get the debt to income, kind of the total expense to income ratio figured out. So you know exactly where they're at. Are they cash flow positive every month? Are they living beyond their means and their cash flow negative? Where are they in this total journey?

Then you're going to go from there and you're going to rework everything. Because remember, our goal is to get them to 15 or 20% of their net total income invested every single month. And once you get to that step and you know where you're at, then you'll know if they have to make drastic changes in their lifestyle or if they're already cash flow positive, you can squeak out that 15 or 20%. Then we just have to come up with an investment strategy that works best for them. Think Roth IRA, think treasury bills, maybe we get a little bit into crypto.

We get some money into a high-earned savings, but we want to get them into a balanced investing portfolio with at least 15% of their net total income. That's what I would do. That's where I would start. And you've got to make hard choices because if they are cash flow negative every month, you're going to have to help them make changes because otherwise they're going to be working the rest of their lives and you don't want that for your parents. I think tactically speaking, what could really help them is to go on the internet and just type in

like retirement calculator and show them, hey mom and dad, you all can afford to set aside $250 a month right now to invest in the S&P 500, which averages, let's call it 10%. Boop, boop, boop. You figure out what that turns into. They're in their early 40s. They want to retire at 65. So let's call it 20 years. And so, hey, mom and dad, $250 a month at 10% for 20 years is going to be $600,000 in retirement or

400,000. What are that number is, right? I don't know the exact number right now. But like, that's what I think could really begin to like maybe turn that light bulb on their head robbers. Like, wait a second. Only that much and I'll have this much more in retirement. Like that's a pretty cool deal. I kind of like this. Right. So not just kind of telling them and educating them about, like, hey, you've got this money in your budget potentially. Like here's what to do with it. Like how, you know, figure this out. So this is actually kind of funny. Right. Because at the end of the day, you got to think about like the diaper changing syndrome, right? These people change your diaper. It's kind of hard for them to take advice from you. Right. So maybe send them this podcast episode.

where they got Robert and myself. But think about this, right? So just say, hey, here's the calculator. Here's the amount of money every month. Here's the 10% return you can get in the S&P. Here's what that's going to look like in 20 years. How do we now put you in a Roth IRA where you're investing $3,000, $5,000 a year toward that retirement? And getting them in that mentality, you know, beyond the analysis paralysis, to Robert's point,

got to have that budget figured out, figure out exactly the number coming in, number going out. What's that total expense to total income sort of ratio? ratio there so you can invest that couple hundred know what that is and get after it and to what Robert said earlier automate the process if they're automating the process there's no analysis paralysis to lose you know to lose sleepover yeah I see it every day in the other side of my world in financial education along with the podcast and all the people I encounter every month and it's really crazy so many people wake up in their mid 40s and have never really taken investing serious and a lot of it happens 20s you're having fun you're not really investing 30s you let

lifestyle creep takeover, that rolls into your 40s, and then you wake up at 45 or 46, and you have an oh shit moment. And you realize when you see something on the news or something online of what the average millionaire has put away for retirement, and you don't have that. That's when you start to really get nervous. But if you don't take action and then all of a sudden you're 50, then you don't have the ability as much to let compound interest do its job and really help you create that wealth that you desire to be able to retire comfortably. So there's a lot of lot that goes into it and I really appreciate that you're looking out for your parents, but you're just going to have to sit down and have those hard, hard conversations with that. And at the end of the

day, they're in their early 40s, Robert. They're young. They have 20, 25, 30 more years of investing ahead of it. That's right. I mean, this isn't like someone who's 62 trying to figure it out before 65. They're in their early 40s. You have a long time and a long time for a compound interest to do its thing. Definitely have hope. There's a lot of things to be excited about for these parents. Definitely. I love it. Thank you all so very much for tuning in to this week's episode of the Rich Habits podcast question and answer edition. Again, email us, Instagram, DM, Discord. Any way you can get in contact with us to ask a question.

We're definitely going to try our best to get back to everybody. Don't forget to click the links below in our show notes. One, you're going to see our wealth building blueprint course. Two, you'll see that awesome budgeting tool that Robert mentioned. You'll also see an opportunity to go create a public account, go sign up for those T-bills, go try out the investment plans like we talked about with Cora. And of course, as always, check us out on our own social medias. And don't forget to follow the Rich Habits Podcast on Instagram.

And yes, thank you all so much for following along on this amazing journey that we've made it to the number one slot. Now we've bumped down a little bit for the Rich Habits podcast. We thank you from the bottom of our hearts. And we'll see you again soon. Have a great rest of your week.