Rich Habits Podcast - Q&A: Paying for Infertility Treatments, Living at Home at 28, & Launching a Consumer Product

Episode Date: October 17, 2024

In this week's episode of the Rich Habits Podcast, Robert Croak and Austin Hankwitz answer your questions!---👉 Join us October 17 at 4p ET for our Q4 Markets Forecasting webinar with NEOS Investments! ⁠Register for free!⁠---🔥 Lock in your 6% or higher rate using a ⁠Public Bond Account!⁠ Act fast to lock in a higher rate before the Fed cuts them even lower! ---🚀 Sign up for the Rich Habits Network so you don't miss out on the next big investment opportunity, ⁠⁠⁠⁠click here!⁠⁠⁠⁠---⭐ Download our FREE Budgeting Template – ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠click here⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⭐ Earn 5.1% on your savings with a High-Yield Cash Account – ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠click here⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⭐ Trade stocks, options, music royalties and crypto on Public – ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠click here⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⭐ Automatically buy stock where you shop with Grifin – ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠click here⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⭐ Protect your family with term life insurance from Suriance – ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠click here⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⭐ Use code “Spotify” for 15% off our 4-module video course – ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠click here⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⭐ Optimize your portfolio with Seeking Alpha – ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠click here⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠---👤 Explore everything Austin does – ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠click here ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠👤 Explore everything Robert does – ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠click here⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠❓ Ask us questions for our Q&A episodes – @richhabitspodcast on Instagram📬 Inquire about working together – [e-mail]---Disclosure: A Bond Account is a self-directed brokerage account with Public Investing, member FINRA/SIPC. Deposits into this account are used to purchase 10 investment-grade and high-yield bonds. As of 10/17/24, the average, annualized yield to worst (YTW) across the Bond Account is greater than 6%. A bond’s yield is a function of its market price, which can fluctuate; therefore, a bond’s YTW is not “locked in” until the bond is purchased, and your yield at time of purchase may be different from the yield shown here. The “locked in” YTW is not guaranteed; you may receive less than the YTW of the bonds in the Bond Account if you sell any of the bonds before maturity or if the issuer defaults on the bond. Public Investing charges a markup on each bond trade. See our ⁠⁠Fee Schedule⁠⁠. Bond Accounts are not recommendations of individual bonds or default allocations. The bonds in the Bond Account have not been selected based on your needs or risk profile. See ⁠⁠https://public.com/disclosures/bond-account⁠⁠ to learn more.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.

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This episode is brought to you by L'Oreal Group. Beauty is a powerful force that moves us. That's why L'Oreal Group has built a business that is inclusive at its heart with 100% of its brands, championing diversity. With 25,000 professional opportunities for people under 30 worldwide and 54% of leading positions held by women, diversity is a strength that helps Loreal Group create the best beauty products for all people. Visit Loreal.com to learn more. Hey everyone and welcome back to the Rich Habits podcast, a top five business podcast on Spotify. As you all know, every Thursday, we come out with our question and answer edition of the show.

You all submit questions via email at richhabitspodcast at gmail.com, via Instagram DMs at Rich Habits Podcast or inside of the Rich Habits Network, which is our sort of private community now where we have almost 500 members that we talk to on a daily, weekly, and monthly basis. It's been a lot of fun over there. But this episode is answering all those questions. Now, before we jump into the questions, I want to remind everyone that today, October 17, at 4 p.m. Eastern Time, we are hosting another free webinar alongside the managing partners of Nios investments. These are the guys that created the SPY, QQQQQI, IWMI ETFs. They have over $5 billion in assets under management.

They've been working on Wall Street for decades. and the whole premise of this webinar is to get the expert opinion as what to expect in Q4, October, November, December. How is the election going to impact things? What's going on with the Fed cutting rates? Is inflation staying low? How is the underlying economy doing? Is the unemployment rate going to go up, right?

All the things that are going to help drive the stock market up down, left and right, and in circles. We'll be touched on and talked about during this webinar. Again, it's completely free, so be sure to join us today, Thursday, October 17. at 4 p.m. Eastern time. There's going to be a link in the show notes below. Yes, I am so excited for today's webinar. And don't forget to go back and listen to the episode with Harley Finkelstein. It was incredible, so informative, especially for all you entrepreneurs out there that are building new businesses, building side hustles, and trying to figure it all out. It was awesome. Also, just a quick heads up, folks, 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 rates you earn on your investment. Now, unlike a high yield savings account, a bond account 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 returns shrink, you can sit back with regular interest payments. But you might want to act fast because your yield is not locked in until you invest. The good news, it only takes a couple of minutes to sign up at public.com. Lock in a 6% or higher yield with a bond account only at public.com forward slash rich habits. Brought to you by public investing, member FINRA plus SPIC, as of 101424, the average

annualized yield to worst across the bond account is greater than 6%. Yield to worst is not guaranteed, not an investment recommendation. All investing involves risk. Please visit public. com slash disclosures slash bond dash account for more information. Major shout out to public.com for always supporting the Rich Habits podcast. Robert and I could not be more thrilled that Public supports the show and is an easy way for all of our listeners to start investing and diversifying their portfolios with the T-bills a couple years ago. Now it's the Bond account.

Then it was some cryptocurrency, some other collectibles. I mean, one-stop shop right here for your portfolio with Public. Yes, we love Public. And we've been talking about it for years now. It's one of my favorite platforms, and I just think they crush it by always staying ahead of the curve and offering everyone these easy ways to really maximize their gains with various products. So I love it. So our first question comes from Amir.

Amir says, hello, Austin and Robert. My name is Amir, and I have a pretty general question. You both often discuss maximizing the IRA and the 401K contributions for retirement. But I don't quite see the benefits of accumulating wealth for when I'm 60 or even 70, as the laws may change them. Why not take risks to retire early? I'm currently making $85,000 a year and my first job in the United States,

which I started three months ago. All my savings are invested in real estate in my home country, and I haven't decided whether to bring that money to the U.S. or not. My question is, wouldn't it be better to invest in a small, cash-producing business like a laundromat

rather than putting money into an IRA for a future I can't predict in terms of health or enjoyment? Or alternatively, should I invest directly, in the stock market to grow my wealth and pay taxes while I'm still young enough to enjoy it. For context, I'm 34, I'm renting, I have no debt, and I have a net worth of around $300,000, which is all invested abroad out of the United States. Thanks a lot for your great podcasts, and I look forward to hearing your insights. Robert, do you want to kick this one off? Yes, I love this question. Amir, you're on the right track. You know, back in the day when I was

coming up and I was 34 years old, I was very aggressive and I invested a lot more money in small businesses like you're speaking of. And I didn't balance it out enough in my opinion in retrospect with having the Roth maxed out, with having the bridge account maxed out as much as I could every year. So I think you're on the right track, but you have to also ask yourself, what if you take all of this money from the 85K per year? You invested in a laundromat. Maybe you invest it in a landscaping business and you start buying pieces of all these small businesses. And what if they don't make money or worse, they go out of business. Then your money goes to zero and it could be two, three, four, five years worth of your investment capital goes to zero, which in the stock market, in the ETFs and index funds that

we talk about, the likelihood of going to zero is almost zero. Because with the stock market, like we talk about the NASDAQ and the S&P 500, generally there's going to be some volatility, but they go up and to the right over time. So that's where I'm at on this. I think you could do both. I wouldn't bet the farm on small businesses only and individual stocks. I would really hedge my bets by having some money into these funds we talk about and making sure that you are balanced enough to where you can take some shots in investing in these small businesses, but not with all of your funds because I just think that's too risky. You never know what's going to happen.

And you just always want to make sure that you have some diversification. I think what's also important to remember, Robert, and people don't. don't exactly take this into consideration unless they're told it. They're explicitly understand this concept. The stock market, unlike a laundromat business, unlike real estate, unlike, you know, private investing via startups or whatever else, right? The stock market is 100% liquid. If tomorrow, I needed to liquidate my entire portfolio and I needed to take out $100,000, I can do it. I absolutely can do it, right? I can sell my stocks and get my money out tomorrow. If you needed to sell your laundromat, right?

If you needed to, now sure, your laundromat theoretically could be valued at two, three, four times owner's profits. And so, like, in your brain, there could be a specific, you know, valuation or price on this laundromat. But if you wanted to tap into that, right? If you wanted to sell that, it's going to take you months, if not maybe a year or two to even sell this laundromat. And so, Amir, I just want to remind you that, one, the concept of liquidity is very powerful, especially when the thing that you're investing into the S&P 500 in this case over the last two years is up 53%. Right. That means if you invested $100,000 into the S&P 500 on January 2nd of 2023 when the stock market opened, it would now be worth $152,000. And the best part, if you needed the money tomorrow, you can sell all $152,000 of that right now

and it be deposited to your checking account the very next day. Right. So that is what's so powerful about investing in the stock market is you're getting the best of both worlds right now. Not only are you seeing the awesome gains, especially if you're investing your money correctly, but you also get liquidity. Now, the other side of this equation to Robert's point, and I really agree with him here, why not both, right? It's like you don't have to be so exclusive to, okay, should I be taking risks at a younger age to maybe retire early? Of course you should, absolutely, right? You're 34. I see that you're renting. Maybe there's a world where you want to buy a house one day in the United States. We really encourage you to do that. But, you know, there's absolutely a world where you can take risks, you can start new things, you can listen to Monday's episode

with Harley and figure out how to be an entrepreneur and what really drives you. But don't do those things and completely forget about the Roth IRA and completely forget about the 401K and completely forget about the vehicles and strategies that we talk about on a weekly basis that will all but guarantee you to retire wealthy if you consistently invest over the next, call it 30 years of your life into this machine that we call American capitalism, aka the S&P 500. So I think it's a balance. I don't think they're mutually exclusive by any stretch of the imagination. And I also just want people to understand how important it is to have liquidity,

especially with the returns that we're seeing in the stock market. I think that is a great bow to put on my answer because liquidity is so incredibly important. And I see it every day where people don't even consider liquidity. They say, well, I'm going to go invest in this real estate deal. or I'm going to go invest in this restaurant deal. And all of that sounds great if you're getting distributions, but that does not mean you're liquid. Many times in real estate,

you might have your money tied up for five, six, seven years, and you can't touch it. I have that situation right now with an LP where I invested $250,000 into an oil refining company. That was supposed to mature in seven-day years. It's been 15 years and my money is still locked up. That is not a good place to be. That's why you want to have diversity and you want to make sure you don't have all your eggs in one basket because then if you need the money for a great deal, a health issue, or any reason you'd want liquidity, you don't have it.

And it's just really a tough situation. So I'm really glad you brought that up. Now our next question comes from Anna. Anna says, good afternoon. My name's Anna. You've answered a couple of my questions on the podcast before and I've been a big supporter ever since. I'm currently working with my parents running our family construction business. Lately, we've run into many employee issues and issues with general time scheduling and cost-effective

ideas. I have so many thoughts on how to improve the company, but I am shot down, left and right. I've worked here for five years doing all aspects of the job, and I've even increased our installations by over 100 projects per year. I know what I'm doing, and I need advice on how to handle employee conflict, along with ownership conflict. I have lost two lead employees, and now two more part-timers are threatening to leave due to the working conditions. However, my parents who own the business won't change they don't agree with what the employees asked however I do I'm at the point where I need to choose disobeying or even disrespecting my parents or letting them ruin the company they've spent

30 years creating that I hope to inherit one day thanks for all your help Anna Robert this is right in your wheelhouse I love this and I don't admire your situation and I went through it earlier on in my career with my mother we took over my grandparents restaurant and bar and we renovated it under the guise that we would do it my way. And that lasted about six months. I went on vacation and I came back and she took away the fresh chicken, the homemade pasta. She bought all this store bought stuff because it was cheaper to get profits up. And she really decimated the business because she wasn't listening to how I was doing things. And in your case, it's even more difficult

because you are in the trades. The construction business I've been in for over 20 years is very difficult. because you're always going to have people coming and going and even key employees may not stay because it's so easy for them to get their side hustle going by meeting all of your clients and then your clients going to them and saying, hey, can I just hire you to do this side job rather than going through the company? Or hey, how about you just do the work next time with the crew and we won't tell anyone? It is an endless battle. I went through it right before COVID with my construction company where I had two of my key people started taking my customers from me because they could offer lower pricing. So it's a very difficult situation. We would gladly, or at least I would

gladly take a look at your business plan, but I think it really comes down to having the hard conversation with your parents. They may be stubborn. They're set in their ways. Like you said, they've been doing this for decades, but you can look at it and you can approach them in a way that's professional. Maybe you put together your business plan or a PDF that says, here's where I feel what we're doing wrong. Here's how I believe I can improve on that. But you have to be able to give me some leeway to be able to make these changes. Because the problem is many companies are successful despite the ownership. And so you might have a gold mine right in front of you if you can get your parents to listen. So I think the first step is having the hard conversation with them, almost in a disobedient way. because they have to understand where they lack in knowledge or keeping up with the times of how to change that culture and how to be able to keep people.

Because I truly believe throughout all of my companies right now, culture is almost as important as pay, even though people are complaining that they can't make a living wage or the times are tough. But people want to go to a job where they're respected and they feel cared for as equal, in my opinion, to the money itself. So that's where I would start. I would really look at it from a cultural perspective and an educational perspective with your parents and see how it goes. And if you need any help from there, DM me in the school community and I'll do what I can do. I think the only piece of advice I could share to Anna here is that as a fellow entrepreneur business owner, I don't have a construction business with all these employees. I've got a much smaller business here. But if one of my employees was just completely saying, hey, this doesn't work, this is what you should do.

you know, hey, Austin, you need to change these things. I'm stuck in my ways. I don't want to do any of that. But if that same employee to Robert's point said, hey, here's the problem. Here's a proposed solution. Here's how this proposed solution. Here's how it's a proposed solution. Then I'd have a much higher propensity to hear them out, right? So maybe your parents and their defense are like stuck in their ways, they think, you know, this proposed solution, how it's implemented and what, you know, goes on over the coming years, then I'd have a much higher propensity to hear them out, right? So maybe your parents in their defense are like, stuck in their ways, they think, think that you've got this idea or two and they're like, I don't know about all that. I don't know how it's going to impact the business. Right now, we're making a little bit of money. I don't want to change anything, right? They kind of feel like if they, you know, they move at all, things could change for the worst. And so I wonder if there's a world where you could show them, you know, hear the solutions. Here's how those solutions might impact these profits and the customers and marketing, everything else that goes into this business and what might, you know, transform into a great solution over time. I don't really have a perfect answer, but in their defense, that's

maybe what's happening? I just think, and that's a great takeaway, Austin. I just think that in my experience and use this how you will, the more I empower my key people, the better off I do. And that's something you need to get your parents to understand. If you're in there grinding it out, finding ways to increase business, increase profitability, better processes, you need to get your parents to understand to let you have some empowerment so you can thrive. It has worked very well for me over the years. And I just think that's the best strategy moving forward. So good luck. Our next question comes from Christian. Christian says, hey guys, I recently found your podcast on Spotify and I binged eight episodes just yesterday. I was actually considering going down the

Dave Ramsey route since a friend used it to pay off more debt than I currently have. But after listening to your content, I'm rethinking my approach. I'm Christian. I'm 28 years old. I work in marketing. I make $82,000 a year. I have no 401k. I have no Roth IRA. And I only recently started saving money. I owe $83,000 in student loans with monthly expenses of about $2,000. I could reduce that to $1,500 by paying off some of my smaller debts. I have a take-home pay of about $5,000 a month, and I only started earning this much as of recently because I was making $45,000 for the last couple years and I didn't really have anything left over. However, I still live at home. I help my parents with the bills, which is much cheaper than living on my own. As a one-bedroom apartment around

here is $2,000 to $3,000. I'm considering moving out weigh me with some roommates, but my goal is to invest in real estate and generate about $6,000 a month in passive income eventually so I can quit the 9 to 5 grind. My main dilemma, though, is whether to stay at home and aggressively pay off my debt before moving out or move to a new city and focus on building connections. Staying home to pay off my debt seems like the responsible long-term play, but moving out also feels more exciting and can open up some new opportunities. I'm looking for advice on what you do in my situation, specifically how to balance paying off debt, moving out, and planning for the future. I feel like I'm really behind

compared to others that are my age and I really want to catch up. What is the best path forward for me? All right, Robert, I'll take this one first. So Christian, really, really proud of you for making now $82,000 a year. That's awesome. You've gone from 45 to 82. You should feel really, really excited and proud of yourself for just absolutely doubling for the most part your income, right? That's going to be a really, really big help. Now, I'm on the fence about you living at home at 28 years old to save money. In my opinion, I think that everyone should eventually, you know, call it before 28, move out of their parents' house, be on their own. There's some sort of dignity that comes with doing your own laundry and making your own food every day and having to take out your own trash and be a responsible

young adult, right? So I definitely think that you should move out as soon as you possibly can. However, with that being said, you are in a really good spot right now. Your monthly expenses are about $2,000. You take home about $5, which means $3,000 a month year can be saved to either pay off your student loans early, which I think we certainly should do. But more importantly, start investing, right? The big thing that you said here, you have no 401K, you have no Roth IRA, you have none of these things. Dave Ramsey would tell you, don't even invest toward those things. Go focus on your student loans.

And at let's call it $3,000 a month, it's going to take you three years to pay off your student loans. Now, in my opinion, I think that you can kind of do a sort of hybrid approach, which is what Robert and I really, really encourage your listeners to think about here. My girlfriend's a great example of this. She has student loan debt. She's got like $30,000, $35,000 worth, but she also now has $20-something thousand in her Roth IRA at 26 years old because she's balancing, paying off the debt while also investing. And so, Christian, I want you to do the same thing. I want you to do three things specifically. So the first thing I want you to do is build an emergency fund.

Let's call it three months of expenses because you are living at home. So things are pretty cheap right now. So go put $6,000 or $7,000 aside. Put that in a high-yield savings account on public.com. And that's going to be the buffer between you and unpredictability that comes with life. The second thing after you've done that, which again, that's two months of savings for you, right? So after two months now, it's January. The first thing you're going to do is open up that Roth IRA and you're going to start

maxing it out. That is about $600 a month that you'll be investing into this Roth IRA. You're going to be investing it to V-O-O-V-T-I-Q-Q-Q-Q, right, the S&P-500 at large, and that's going to continue to grow for you throughout your life. And now the third thing I want you to do, after you're, you know, maxing out the Roth IRA, after you've begun to have this emergency fund is now if you want to put a little bit extra toward paying off these student loans, right, you're at about probably $800, maybe $900 a month in payments. If you want to double up your payments and do maybe, you know, $1,500 or $1,600 a month, so begin to, you know, snowball these student loans down. That could be a cool idea. But just don't make the mistake of following this Dave Ramsey ideology of going all in on paying off debt and not

taking advantage of the number one thing you have right now at 28 years old, which is time, time in the market. Compound interest is a beautiful thing. You are not too late. You're only 28 years old. you've got 40 more good years of investing ahead of you before any sort of nice retirement. And in 40 years, every dollar you invest right now is worth $30 in the future because of compound interest. I love this. You crushed it. Again, we need our mic drop, our foam mic drops. I would add one thing. It's a little different. Only because 29 years old was one of my best years in my entire career as far as advancement financially and growth. I would stay with your parents for one more year. I would get the Roth going.

I would get the emergency fund going. Get all of that set up and started so you can let time and compound interest help you. So that is the one thing that I would do differently is I would suck it up, do one more year with the parents, and get as much money put away in that and keep making the regular payments on the student loans because, as you all know, we don't agree with Dave Ramsey's method when it comes to paying off debt. we think that good and low interest debt is fine in your wealth building journey. So that's the only change I would make is to look at maybe putting off the networking and all the fun and all of that and moving to a cooler city for maybe six months to a year. So you could get those other things up and running because compound interest is your friend. And the sooner you get that started, the better. My fear is if you move out now, yes, you're going to feel better.

Yes, there's going to be more networking. and the network effect may help you earn more money, which it probably will in the long run. But in the beginning of this stage, you need to get the Roth moving and you need to get money saved and invested, period. My fear is if you move out with buddies, you get to a new city, you're going to start partying more,

you're going to start going out and doing cool stuff. That's going to eat up a lot of your free cash flow, and you're not going to get started. That's my take. 100% agree. And also it's like Christian, you are 28 and you work in marketing. You absolutely should have your own little agency, right?

You should be doing social media marketing for small businesses around you. Maybe you do website design. Maybe you do social media posts and management. Like there's a ton of different things that you can be doing right now. I mean, go find 400 of your favorite content creators on YouTube, Instagram, Twitter, and whatever other platforms you want and DM every single one of them saying, hey, let me help you repurpose your content on LinkedIn, right? LinkedIn's a big thing right now. Everyone's trying to figure it out. Or let me help you repurpose your content on Twitter, right?

Your big Instagram or you're a big YouTuber. Like, let me help you cross post some stuff. We pay people hundreds of dollars a month to help us do that because we don't have time to do those things and these people do it great. Why aren't you one of those, you know, people that could help? There's a ton of different ways to make money in marketing. We're rooting for you and we really, really believe that call it two, three, three, four years from now, you're going to have, call it, $30, $40, $50, $80,000 invested in the stock market that's only going to continue to double every seven years. You're going to retire a multimillionaire in your 60s and 70s, and we cannot be more excited for you. All right. Our next question comes from Lisa.

Lisa says, hi, Austin and Robert. Thank you so much for all the information and inspiration you provide. I've learned so much since starting your podcast, and my husband and I have made several improvements with how we manage our money. We are both in our mid-40s and have two young children. We're in the process of buying a house and selling our current one. The price difference is less than $100,000, and we have a good amount of equity in our current home, where we only owe $55,000 on the loan.

I have two questions. Question number one, should we use all the equity and put it into the new house or take some out and invest it? And then question number two is, should we consider a 15, 20, or a 30-year mortgage when we do this? For more context, since 2023, we've now maxed. out our Roth IRAs every year. We have about 500,000 in our 403Bs, and we have a three-month emergency fund and contribute money to our 529 plans for each child. Thanks in advance for answering

our question. Robert, do you want to take this one? Yes, I think it's a great question. I'm a little light on details to understand, because when I hear that we have 500K in a 403B, what else do you have? It says that you've been contributing and maxing out the Roth, which is great. So you've got some decent money put away there. I'm always of the ilk if I can make more money with my money that I'm always going to borrow. And so in this situation, if getting this new home, I don't think it makes sense to put all of your equity into the new home because you're still likely going to get an interest rate right now or in the next couple months when you would do this purchase. That is more affordable and is going to be lower than what you would make by investing that money. So let's say you get a

six and a quarter percent interest rate, but the S&P 500 is going to make you 12, 15 percent in the next couple years, then I always want that positive arbitrage on my money to go to me and not someone else. So I'd be careful there using all of the money from the sale and putting it into the new house because at the end of the day, you have to always remember that that money in the house, equity or not, is dead money until you sell the house, the next house. So I always like to make sure that I have as little of my own money into the house. is possible if I can borrow at favorable rates. Okay, so Robert, can you walk through sort of the math on that, right?

Because it's like, let's say again, $300,000 house. They owe $55,000. So let's say after fees and stuff, they have $220,000-ish thousand left. They want to go buy a house that's now $400,000. So you're saying maybe take a hundred of that as a down payment on the $400,000 house. Now they have a mortgage of $300,000 at six-ish percent. So let's call it $2,500 a month that they'd be paying in a mortgage. mortgage here versus where if they took an additional 120, maybe their mortgage would come down to

2,800 a month. So like walk me through how all of this works in the situation where they kind of split up the investing. And also with the investing, are you saying they just put it in a bridge account, right? That money is now just sitting elsewhere. Yeah, I love that. You're right. I think the bridge account, I just look at it this way from rudimentary math. If I'm going to get $200,000 from this sale, rather than dumping all $200,000 into the new home, I would rather see them split it up to where 100,000 or 120,000 goes into the bridge account and then the $100,000 goes into the new home to offset the increase of price of $100,000 roughly. Because where I see the numbers going is they're going to have some capital appreciation in the new house, probably

three to five, maybe six percent. But over here in the market in that bridge account, let's say that that earns 10, 11, 12 percent a year. This is just a greater arbitrage on their money in my opinion having some over here and having that bridge account established versus tying up all of the money in a new house because then again it becomes illiquid they don't have access to it they can't use it for anything and i just always want to see the difference and right now yes rates are still high but i believe in the coming months we're going to see those rates start to drop a little bit more and from that i think the better play is to split up the equity that they get back and put it in both because then that way they're not increasing their monthly expenses, but they're also making more on this side

with the bridge account. Gotcha. That makes a lot of sense. I'm right there with you. I think that's great explanation and a great way to approach it, especially, you know, they're in their 40s, they've got half a million dollars, you know, all this equity they have in their house. They might even be close to being net worth millionaires, but again, want to remind people the difference between being a net worth millionaire and someone who can retire early is access to that capital. I guess what we're trying to say is having that money sitting in a bridge account that you can touch without penalties, pretty important, especially if you want to retire early one day. All right, folks, listen up.

Time could be running out to lock in a 6% or higher yield on public.com. You can lock in a 6% or higher yield with a bond account. But remember, your yield is not locked in until the time of purchase, so you may want to act fast. Lock in a 6% or higher yield with a diversified portfolio of high yield in investment-grade corporate bonds only at public.com forward slash rich habits. Again, that is public.com forward slash rich habits. Now, our next question comes from Omar. Omar says, hey guys, I love your podcast and I've been listening since episode six.

You all have come a long way and I hope to see more episodes. My name is Omar. I'm 22 and I only make about $48,000 a year and I've had an idea for a product but I just don't know where to get started. How do I get started in design? Do I make the product with my own hands? Do I get someone professional to help me bring it to life? How much will it cost me?

How do I start selling it? I want to turn my life around and build this business from scratch. And I'm asking this because I know Robert has mentioned he's had silly ban. So maybe I'm asking for the process of how I went from idea to starting it and scaling it. Thanks in advance. Robert, this one's all you. I love it. And Omar, congrats.

We all have ideas and you're 100% correct. It's all about execution. So let's start from the beginning. First and foremost, I get yourself a dollar notepad, some sort of a buying. and I would start putting all your research in there, all your notes, maybe you have a folder on your laptop and just really flush it all out. You need to figure out what is your name going to be? What are your competitors?

You're going to want to go to Amazon and make sure you're going to want to go to Google. You're going to want to find out the market because if this product is as good as you think, you want to make sure that the market share is there for you to really thrive through this. And when you ask, should I bring on an expert? I always say, yes, I'm the expert. I've been doing products for 30 years almost now. And I've made tens and tens of millions of dollars through consumer products. I think it's one of the best ways to build well.

But you want to get that help because here's why. You could figure it all out on your own. You could go to YouTube. You could go to Google. You could do a lot of research. But the thing you want to consider first and foremost in the beginning is speed, especially if it's a trending idea or something. that needs to be done sooner than later because you don't want to have an idea that's fantastic

and you take two or three years to bring it to life because you did it all on your own. So I would look first and foremost, do your research, figure out the market, figure out the pricing, figure out all of that first and then put together a business plan. It doesn't have to be really, really detailed. It just needs to outline the opportunity so someone like me could look at it and say, wow, this has legs or not my thing. Because you want to have something visual that people could look at and be able to understand the opportunity.

And that could come from simple drawings. You can go to Fiverr. You can go online and ask around. I'm sure you know someone that does graphic design. Or you could open a Canva account and do the drawings yourself and learn how to use Canva. It's very simple. The U.S. is very easy. So I would start with the research, figure out the opportunity, figure out the

competition and get all of your details in order. And one of the most important things is make sure you don't start going to Alibaba or some of these manufacturing sites and sharing the idea with them. So many people make this mistake. They say, hey, I want to make this XYZ gadget and you share it with them because if the idea is good enough, they could run with it and you'd have no legal recourse. And that's where as you get further and further along, talk to me on that. this because we're going to want to make sure you have design contracts in place, manufacturers contracts in place, maybe get a design patent early on once you flush out the opportunity. There's a lot that goes into this and it's going to take a lot longer and more

money than you think. So you want to probably bring in a professional so you can do this right, do it quickly, and protect yourself. I think the only other advice I'd give you is be as lean and scrappy as you possibly can. You mentioned Jill, they make $40,000, $45,000 a year here, $48,000, rather, which means you don't really have that much capital to perhaps invest into this. Going back to our episode on Monday with Harley, I mean, one of the first things he said is, you know, a lot of people have these ideas and they want to go. And so they take on all this debt or they go buy all these, you know, equipment and, you know, materials. And they take on on high interest debt or a small business loan at 7, 8, 9, 10, 12%. And if it doesn't work out,

they're now screwed. Harley said something that was really cool, which is the cost of failure is nearly zero now, which means that you can go out and try this. You can go out and build this from scratch and get really lean and mean about it and only be out two, three, seven, eight hundred dollars maybe to get a prototype or just to, you know, get people's perspective and idea. And, you know, something else I also want to encourage you to think about is, again, back to that episode, Harley talked about how, you know, if his wife wanted to start a sunscreen company, she already has all these groups of other moms, right, that she could lean into. And like that was her unique experience and like the alpha that she had on that situation.

Figure out, Omar, what is your alpha on this situation? Do you have group chats with a bunch of your friends that maybe they can give some feedback on? Are you maybe a big, you know, proponent of Twitter and people like to see what you say online? Are you, you know, what is your alpha in this situation where you can come to the table that will give you the best odds of success versus just, starting from scratch, building in a category, I have no experience in, fingers crossed that it works, right? That's not what we want to do. I've never built a product. I've never, you know, sold something physical like that out there. And I know there's much more to it than just that. But I hope Robert and his advice did help, though. I want to add one more thing. And this is a really

cool story for our listeners and especially Omar here. You guys know I love developing consumer products. I do it every day as part of my career. And to kind of illustrate Omar's situation, A friend of mine had an idea for a product. He didn't have the money to develop it. He bootstrapped it. Like Austin said, he was very scrappy. He made three prototypes at a garage down the street in his small town where he went in there and said, hey, I got a hundred bucks.

Can you make these for me? And he took those three prototypes that he spray painted himself. He made a $30 banner and he went to a tool show with the product. Now, I was like, oh my God, this is crazy because it was so crude. And they're just, he didn't have it all together. Well, in that three-day tool show, he sold the idea to a larger company for $11 million. He had less than $1,000 invested, but he had the tenacity and the guts to go for it, be scrappy, get it out there. And the idea was so good.

It's still on the market today. He got paid $11 million for his idea. So just keep that in mind as you're building or as you're thinking. everyone has great ideas for products and services. It's those that execute and have the tenacity that win in the end. Wow, that's just so cool. Congrats to that guy. Omar, we're rooting for you, man.

We hope that it works. And once you have that prototype, or if you have a website and you're selling these things, send us the website, we'd love to support your small business. So our final question comes from Olivia. She says, here's our situation. My husband and I are in our early 30s. We have unfortunately struggled with infertility and are planning on spending $30,000 to $50,000 over the next year on fertility treatments.

While I struggle with this price tag, having a family is something we desperately want. We are looking for advice on how to best pay for this expense. We are fortunate enough to have $150,000 in a brokerage account and another $3,000 a month in our budget every single month in surplus. We normally take this money and put it into this brokerage account, but we could do other things with it. We also have $15,000 in our HSA. I'm wondering if we should use the $3,000 surplus we have monthly first,

then tap into our brokerage account. However, I worry about capital gains and taxes, as we have had this account now for seven years, contributing monthly but have never withdrawn from it. Or should we instead tap into our HSA and use up to the $15,000, although I'm hesitant to do this as I know how valuable the triple tax advantages. Another option is to slow down or even stop our retirement contributions over the next year to increase our cash flow by over $2,500 per month. Additional information about our situation includes this.

We have a paid off home, valued at $430,000. thousand dollars we both drive paid off cars we both max out our Roth IRAs now valued at over 220,000 we both max out our Roth 401ks and four or three Bs valued at 346,000 we have a traditional 403B at 88,000 I'm vested with my company I have a pension for retirement I've got a couple hundred dollars in bitcoin and we have 40,000 dollars sitting in t bills on public.com we don't have any immediate plans for this but once we do have a family I hope to use that money to buy larger cars for us what would you do in our situation? I'll kick this one off, Robert.

So first off, if you wanted to pause your retirement investing, so you guys could now cash flow $5,500 a month, I'm all cool with that. You have literally hundreds of thousands of dollars. I mean, we're talking about over $600,000 here in your retirement accounts, in your early 30s. You guys are good. Pause that investing. Don't feel bad about it.

And make sure that other $2,500 is combined with that $3,000. So now you're looking at $5,500 a month. month here in surplus. I would do that probably for maybe six to nine months as you either do one of two things. One, you could use this money over the next, call it six to nine months and save up and pay cash for this fertility treatment. Or two, you can use the $40,000 today that's in the public T-bill account, use that to pay for the fertility treatment, and then rebuff up that account with this $5,500 over time. As you said, you have these paid off vehicles that are about 10 years old and you will need a new one eventually. That's my quick take. I have no experience with this. I'm really sorry you guys are

struggling with this, but Robert, what's your perspective? Well, unfortunately, I have the ultimate experience in this. When I was married, we went through the same thing. And so we set on the journey of in vitro and going through these fertility treatments. And six tries later and $183,000, we still were not able to start our family. So I only tell this story not to scare you or dissuade you, but to help you understand that there is no guarantee with these treatments that that 30 or 50,000 is the end of it. Many friends of mine during that period were also going through in vitro and some of them had to go through it three or four times to be able to come out of the other side with a beautiful, happy baby. So just keep that in mind as you're thinking about this. And

of what is the best option. I think Austin laid out a great plan, but just make sure you're aware and prepared that if you don't succeed on try one, two, or three, when do you say no and call it quits? I know that seems negative and kind of a tough thing for me to say to the audience here, but it is fact and it happens every single day

to great couples all around the world. And I personally lived through it for several years and it really was a difficult time emotionally for myself and my then wife. So just keep that in mind that if it was guaranteed and it was simple, great. Pay for it in cash and move on, but there are no guarantees with this process. So just keep that in mind. What do you think about the situation of using the public T bills to jumpstart this fertility treatment and then over the next nine months, you know, rebuffing that back up to that $40,000 range? Yeah, I like that. I think the money obviously has to come from somewhere and we want to

take it from the place that's going to do the least amount of negative damage to their retirement accounts and their overall net worth. So I think that's a good opportunity and a good option for them. And then, you know, let's hope that they get through it and it's positive and everything comes out great on the first try. And then they can just keep on rocking and rolling and build it all back up because they are in a great position. Olivia and your husband, we're praying for you guys. We hope you guys have a wonderful, beautiful baby. Thanks again for listening to the Rich Habits podcast. All right, Robert, I think this is another wonderful question and answer edition episode in the books for the Rich Habits podcast. Do not forget today, October 17, at 4 p.m. Eastern Time, we are hosting our Q4 forecasting webinar alongside the managing partners of NEO's investments.

If you've not yet registered to join us there, it's completely free. There's going to be a link in the show notes below. And Omar specifically, go back and listen to that episode with Harley. We think you might learn a thing or two about entrepreneurship. I love it. these episodes, I get so much joy out of them. I'm just so excited with the Rich Habits Network, the growth, the podcast, everything is just rocking and rock. Tens of thousands of people come back every single week, listen to the podcast, join the Rich Habits Network. I just really enjoy providing

great, valuable information to people each and every week to help them on their own financial journey. So it's a blast and I'm so proud of everything we've built. Me too, Robert. Thanks, Thanks, everyone, and have a... Are you one of those media strategy people clicking through slides, scrolling spreadsheets? Yes? Good. This is for you. Because on Spotify, there's an audience that's different. Locked in, loyal, invested.

They're called fans. Fans don't just listen to music. They feel seen by it, like it belongs to them. So when your brand shows up on Spotify, that's who you're talking to. And you're right next to artists like me, Lizzo. So, are you ready to talk to fans? Spotify Advertising. You're among fans.

Great rest of your week.