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- [00:01]
American Express
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- [00:29]
Austin Hankwitz
By American Express hey everyone and welcome back to the Rich Habits podcast, a top five business podcast on Spotify brought to you by public.com my name is Austin Hankwitz and I'm joined by my co host Robert Kroke. Robert is a seasoned entrepreneur in his 50s with lifetime revenue of over 300 million and I'm an entrepreneur in my late 20s with a background in finance and economics. Since quitting my full time job in corporate finance a few years ago, I've built a seven figure media business and actively advise some of the most well known fintech companies around the world. Now, as the show name might suggest, every episode we talk about Rich Habits as they relate to business, finance and mindset. However, we try and bring you two unique perspectives, one from an industry veteran, which is Robert, and the other myself, someone who's still in the process of building wealth and figuring it all out. So Robert, what are we going to be talking about in today's episode?
- [01:20]
Robert Kroke
In this episode of the Rich Habits Podcast, we're going to share with you how we build automation with our money and how you can too. Automating your money is a very important skill to learn when it comes to wealth building because it enables you to take the emotion out of the equation and solely focus on your investment strategy. It also prevents you from sitting on the sidelines and trying to time the market. Because when you're automating your money, you're investing without even thinking about it. So I want you all to hear this loud and clear and really take it to heart. By automating your money, building wealth is inevitable.
- [01:56]
Austin Hankwitz
By automating your money, building wealth is inevitable. I love that phrase. I love that term. I think we should put it on a T shirt. Yes, but at the end of the day it's entirely true, right? Because if you've automated your investing, your budgeting, your spending, it's all automated. Then all you have to do is project how much you can continue to invest, how much more you can invest, and what that's going to turn into throughout your life. So that is a wonderful phrase. Automating your money sounds complicated. It sounds intense, intimidating. But we promise this episode we're going to break things down in a super simple format. We have three easy to implement strategies that will allow you to automate your monthly spending, your saving, and your investing. So if automating your money is something you want to dig into and try To Master in 2025, this episode's going to be the playbook.
- [02:47]
Robert Kroke
Yeah. And I think it's really important for everyone to understand. This might sound complicated, like Austin said, but I promise you, once you get through this episode and if you take notes and take action, life is going to get a lot easier and you won't have all that fear around when to invest, how much to invest, because you're going to have a plan, you're going to automate it, and it's just going to make it so much easier. So let's get into, number one, automating your bills. What does that mean? When it comes to automating your bills, having complete clarity into your monthly spending across all of your accounts, credit cards and subscriptions is paramount. The easiest way to start automating your bills is to, of course, create your honest budget using using the link in the show notes below. And once it's created, you need to calendar your payments so there's no surprises. This is a key, key element to this strategy to make sure you're doing it right and you keep consistent. So listen very closely. I want you to open up a Google Sheets or a notepad or anything you use for your note taking and write down every single date that you know a bill is due. This now allows you to have full clarity before the month even begins as to what you'll be spending. Write down things like your streaming subscript subscriptions, your car insurance, cell phone bill, utilities, and everything else you're paying over and over on a monthly basis. This is really important. You will now have full visibility into when money will be leaving your checking account. This will not only prevent overdrafts, which can be very, very expensive, but also prevent surprises that might cause you to swipe a credit card during the month or sell your investments to cover a bill. And we don't want to see you do that because we want to have it dialed in so you know where all your money is going throughout the month and you can prepare ahead of time to make sure you have enough money on hand. So now that you have complete visibility, it's time to put all these bills on autopay. Having them on autopay one ensures they get paid on time and you're not liable for late fees and penalties. But two, you know, week to week, where your money is going. So, you know, now, to better prepare for upcoming investments or sinking funds, this is also very important to keep track of.
- [05:01]
Austin Hankwitz
So I guess what you're trying to say here, Robert, is that the key to automating your bills is to one, understand exactly when that bill is due and then to put that payment on autopay. My girlfriend did this recently. I think this was like a big thing for her in 2024. She sat down and she said, okay, I've got Wi Fi, I've got my car insurance, my cell phone bill, you know, I've got all these subscriptions, whatever she's spending money on, even groceries, right? So it's like I've got these things that I have to pay for every single month. I go grocery shopping every Sunday. My auto insurance is on the 14th, my Wi Fi is on the 7th, right? And sitting down, having a calendar in front of you and saying, okay, if I get paid on the 15th and the 1st, and I've got $4,000 in my checking account and I know that my Wi fi bill of $90 is on the 4th, then I'm going to have, you know, $90 less of whatever, you know, I started the week with. So having that visibility and having that clarity week to week, month to month, as to what your money is going to be doing, in my opinion, gives you relief. I always have to know how much I'm starting the month with, how much I'm ending the month with. Like, I love to know that. But also, too, to your last point, this allows me to say, okay, what margin do I now have for investing? Maybe I have a little bit more than I thought or I have a little bit less than I thought. And if it is less, what side hustle can I implement to maybe get that up a little bit? Having this part of your money management system automated in 2025 is going to work wonders from a wealth building perspective. Because spending is half the problem when it comes to building wealth, right? It's spending and it's investing. So once you get the spending part figured out, now you can focus entirely on the investing.
- [06:38]
Robert Kroke
Yeah. I want to tell a quick story, and I know I talked about this in the Rich Habits Network, but I had a client and a friend who owned multiple businesses, and I'm not going to say his name or the year that this happened. It was a few years ago. But he wanted me go through and Audit everything with him and figure out why he wasn't making any money. And because he wasn't planning ahead, he wasn't budgeting, and he did not have any automation. In the year that I helped him, he had over a hundred thousand dollars in overdraft fees throughout all of his accounts for these businesses. And right there was the big glaring thing. And that is why this part of this episode is so important. A lot of people are reactive with their money rather than proactive, and they get themselves in trouble because late fees on payments, overdraft fees and checking accounts, all of this adds up. And no matter what the fake gurus tell you, little leaks sink ships. And it's so important. And the more automation you have and the more preemptive planning you have, better off you'll be, whether it's your personal account, your investment account, or your business accounts, to have this in place.
- [07:44]
Austin Hankwitz
One of my favorite quotes that I think you might have shared a while ago was broke people react. Wealthy people forecast right 100%. Having these bills automated in this calendar figured out for when stuff is due. You can forecast months and years ahead of time. And it is wonderful for wealth building. So let's jump into our second way to automate your money in 2025, which is by automating your 401k confl contributions. As we know, Robert, 78% of Americans are offered a 401k and half of those offer a match to their employees. So we are very big believers in investing up to that match to get the free money. In case you're new around here, the equation in sort of order of operations is very simple. You invest up to the match to get the free money. And then everything above the match, you then take and you max out that Roth IRA. You invest that into the S&P 500, the NASDAQ and other awesome index funds. If you have Autonomy over your 401k and you can choose the investments inside of it, aka it's not bonds and target date funds, then you go back and try and max out that 401k. And if you still have money left over, that's where the bridge account comes into play. And you do that on public.com so that's kind of how we think about the priorities here. But the priorities start with automating those 401k contributions, assuming you have a match. Now, we could not make an episode about automating your money in 2025 without mentioning how important it is to automate your 401k contributions. I know for example, Robert, when I started working at a job out of college, I didn't contribute to my 401k. I don't think for the first like six or seven months. But once I went to our HR person I was like, hey, can you help me set this up? They were one, super impressed that I was a 20 something year old trying to invest in my 401k. But two, I only did it for like two years, two and a half years after I quit, right? And once I quit I had like 20, $22,000 in this account. Like that's awesome. It didn't feel like I was actively investing. It didn't feel like I was, you know, budgeting in a perfect way to, you know, saved a couple grand here and there. It was just automated. And sometimes having that automation for people is the only way they're going to be investing because it's like take it out of my check before I even see it, right? If I see it, I'll spend it. So make sure that you are automating your 401k contributions. But you only want to do this assuming you do not have high interest debt. Remember Robert, we cannot out invest high interest debt. You've got 9, 10, 20, 30, $40,000 of credit card debt at 30, 40, 50% interest or a title loan or you know, whatever's going on, right? You've got these crazy interest rates. Pause the 401k investing, pay off the high interest debt and then go back to the 401k match. That's the best way to do it.
- [10:27]
Robert Kroke
And I want to touch on a few things and that's a great breakdown for this section of Automation is to get people number one. Remember, you're just going up to the match. You want to get that free Money because most 401ks are going to underperform the other strategies. We talk a daily basis. So I want to make sure we understand that, but also understand the reason automation is so important. We've talked about this till we're blue in the face over the years, is because if you have the money sitting in your checking account and your checks are deposited in there and there's no automation, you see that money, you believe that it's available to you. So you get bored on a Saturday you go to the farmer's market. On Sunday it's raining and you can't go outside, so you go to the mall and guess what, you spend the money. Because it wasn't automated, it wasn't spoken for. We don't want you to ever have money just constantly sitting in checking accounts or savings accounts making no money. And that is why automation is so incredibly important. Because like Austin alluded to, over time, it just builds and compounds and it seems like the easiest money you've ever made because it was taken out of your hands before you could get on it and spend it on something you don't need or something that's a depreciating asset. So please, please really pay attention in this episode because automation is your friend for the long term.
- [11:46]
Austin Hankwitz
I love that breakdown. Robert, I want you to say that one more time about the spoken for. Say that one more time. That was good.
- [11:51]
Robert Kroke
It's just really all about, you should not have money that is just sitting there because so many people have 10,000, 20,000. I see people with hundreds of thousands of dollars just sitting there. And it's not spoken for. I like Austin, my money is spoken for before it ever even hits my account. Because I have a plan every month. What am I investing in? Where is this money going? What are my bills? So I know exactly, because I don't want money sitting idly by because park money is dead money. And we want your money. Always making money while you sleep.
- [12:23]
Austin Hankwitz
I am 100% in agreeance there. And to your point, you're right. I've already figured out. It's January 22, the day that we're filming this, and I've already figured out what I'm investing and how much I'm investing and what I'm doing in the month of March. I already know exactly how much is going to get deposited. I already know exactly how much is going to get invested, where it's getting invested, what ETFs I'm buying. You know, everything. I already have it spoken for. So the only way I have that clarity, of course, goes back to automating my bills, calendaring my payments, things like that, and making sure I'm on the same page about that with my honest budget. But having that money and that clarity allows you back to this first sort of quote that we had, which is forecasting. We can now forecast past days, weeks and months ahead, allowing us back to this original point as well to jump on an investment opportunity that might come our way or begin to build a sinking fund, to go buy a multifamily or, you know, go start something new or do something like that. So it's just having that money spoken for. I want everyone to write that down and just like, make sure your money is spoken for before it even hits your account. I love that.
- [13:23]
Robert Kroke
Yeah. One of my favorite things that we discuss and pass along to our millions of followers is make your money work as hard for you as you work to get it. That should be a T shirt as well, because if people understood that, they wouldn't just let it sit in their account so they could look at it. They would have it making money while they sleep.
- [13:42]
Austin Hankwitz
Totally agree. Now, this third way to automate your money in 2025 is probably my favorite, and that is the investment plan from public.com an investment plan from public is a collection of stocks, ETFs and cryptocurrencies that you can automatically contribute to on a recur basis. Robert, you were talking about this earlier how you had someone ask, hey, you know, I've got all these different brokers. I got these accounts, like, how can I just, like, set it up where it just does it automatically? You know, the 1st and the 15th of the month, it takes a hundred bucks and it goes, right? Fundrise does this for Robert and I, we got a hundred bucks. It just goes every single week. It just. They do it automatically. Investment plans by public is how you can do this automatically in your public broker. So you say, I want to invest 100 bucks every Monday toward this specific strategy. And public.com will automatically withdraw that amount of money from your checking account and then invest it accordingly. Now, the cool thing about this is you have full autonomy as to how this money is invested, right? So you can, if you want to choose from their catalog of plans, which covers a wide range of styles and themes and risk tolerances and everything in between. Or you can do what I prefer to do and build your own investment plan from scratch, using up to a total of 20 stocks, ETFs or cryptocurrencies. So, like, for example, you can go, all right, I want to make an investment plan, 100 bucks a week that goes into voo, vgt, vti, moat, and then I also wanna have some go to Bitcoin, Ethereum, and Chainlink. And I also wanna have some go to, like, Palantir, Tesla, Nvidia, and Amazon. You can do that. The total numbers there are under 20. And you can just have a plan go. You click the right percentage weightings for whatever names you want. Maybe you want like 80% of it to go to Voo and the other 20% to be evenly divided. Like they do all the guesswork for you. So there's no hassle, there's no complication when it comes to this. You don't have to ask yourself okay, I got 100 bucks. How many shares of this do I have to buy? How many, you know, crypto do I get on that? Like it's all done automatically, which I think is really, really cool. Kind of allowing you now to just sit back and invest.
- [15:44]
Robert Kroke
Yeah. And like I talked about earlier, what this really does with this automation is prevents people from sitting on the sidelines. So many times people hear a news cycle or they hear a hype cycle and they're not sure when to invest and they end up sitting on the sideline for months. Months. Because it's not automated. Austin and I, we don't look at day to day prices. We don't care. We know what our investment thesis is and we know what we're investing in. So we don't care what the daily or weekly prices are because we're dollar cost averaging through our automations of our investments. And not everything is going to be automated. There are going to be some things where you maybe get a bonus and that wasn't automated in the equation. But as long as you have a plan for it, you will utilize the money properly. So here's my favorite part, getting back to public is you can invest based on your risk tolerance as well. So for example, if you're someone saving for a down payment on a house and want to be investing the money along the way, then you can select from one of their predetermined plans that includes diversified bonds and other low risk investments to prevent you from dealing with any volatility or fears of a market downturn. And they also offer thematic investing as well. So if you're someone that wants to be a little more risk on through AI or bioscience or manufacturing or anything else in your portfolio, they've already built an investment plan around that theme for you and you just deposit the money, let public do the work and just be in the market. Dollar cost averaging through the automation and you will continue to win over time.
- [17:16]
Austin Hankwitz
And let me be clear Robert, public offers these investment plans, but so do a lot of other brokers. I'm sure, like Fidelity has something like this. I know M1 Finance does. I'm sure maybe Robinhood does, I don't know. Right. But like it doesn't matter what brokerage you use. Obviously this podcast is presented by public. So we're going to h highlight an awesome product that public offers because we believe in it. But what's more important than using a public investment plan to automate your investing is that you're just automating your investing. To begin with regardless what you're using, the principle of this strategy is to automate your investing. If it's weekly, bi weekly, monthly, whatever you're doing, you're investing into your Bridge account or your Roth ira, whatever it is, it is completely automated and all that money is spoken for before it even enters your checking account. You know it's going to get auto invested on the 14th or the 27th or the 9th or whatever it is. It's going to automatically be invested perfectly across everything that you've already described. Or maybe you're saving for a down payment. And by doing this you can sort of start buying up some bonds or T bills or things like that and automatically save for something. But the key term here is to automate everything. If you do not automate it, your emotions are going to get in the way. To Robert's point, before you might get scared about a hype cycle in the markets or maybe some, some, you know, guy on Twitter is talking about how something's overvalued and you don't want to buy the S and P anymore, whatever it might be. If it's automated, you don't have to worry about emotions. You don't have to worry about analysis paralysis or anything like that. So if you do not already have your Money automated in 2025, let this be your reminder to sit down and figure out what the auto pay is on your bills. Have this be your reminder to go set up that 401k contribution for the first time. Or have this be a reminder to start using investment plans on Public or whatever other auto invest feature you use with your personal online broker.
- [19:05]
Robert Kroke
And just keep in mind, we love Public, they're a sponsor and we use them personally. But there are some platforms that are great but do not allow the automation like Public does. So just do the research on what you feel comfortable with and which platform does what you need it to do for this automation and then select that accord.
- [19:24]
Austin Hankwitz
But it doesn't matter what platform you use. What matters is that you're investing and you're automating your money in 2025. Now before we jump into this episode's Q and A section, let's take a moment to hear from this episode sponsor Masterworks. Now here's something from bank of America that I found pretty incredible. They said in just two years. So by 2026, ultra high net worth individuals could be devoting approximately 11% of their portfolios to fine art and collectibles.
- [19:51]
Robert Kroke
And this is a generational investing change. That Same report says 56% of collectors now consider their art as a part of their wealth management strategy, including 98% of younger collectors like Millennials and Gen Z. And it's important to keep an eye on multiple asset classes like we talk about all the time, because we always preach diversification and we have our own investments in art. And we've both been using Masterworks art investing platform to diversify for four or five years now.
- [20:21]
Austin Hankwitz
Both Robert and I invest with Masterworks, the sponsor of today's episode, and we even interviewed their founder and CEO Scott Lynn here on the Rich Habits podcast. So go listen to that episode if you haven't already. It is a wonderful one. Over the summer they crossed over a billion dollars in capital raised. They normally offer paintings that range from about half a million to $20 million. But on Masterworks, you don't need to spend millions of dollars to invest in artwork or even be an art expert.
- [20:49]
Robert Kroke
Exactly. Masterworks has offered investments in open over 450 works, with investors realizing annualized net returns including 17.6%, 17.8% and 21.5% on works held longer than one year. Masterworks actually just crossed 1 million users and you can join them at Masterworks Art front slash Rich Habits, which is also in the show notes of this episode.
- [21:15]
Austin Hankwitz
As with any investment, past performance is not indicative of future returns. Investing involves risk sale returns are not inclusive of unsold works. Important regulation A disclosures can be found@masterworks.com CD highly recommend checking out Masterworks. We love using them. It's so cool to diversify into the Basquiats, into the Banksies, and all the the really cool things that they offer on their platform. All you need is a couple thousand dollars. So if you've already built your base and you're ready to start diversifying, start with Masterworks. It's a wonderful place to start. They've got some really, really cool things to offer and they've got a wonderful customer service team.
- [21:49]
Robert Kroke
They really do. So let's get into our questions.
- [21:51]
Austin Hankwitz
So our first question comes from Matt N. On Instagram at Rich Habits podcast. He sent us a dm. He says, hey Austin and Robert, I was never taught how to properly handle money. While my parents did their best, it was never really a priority in my family. I'm now 28 and I recently got a job that makes $99,000 a year. However, I have a credit score below 550 and I currently have $14,500 of debt. I did just recently sell my truck and I've been Aggressively paying off my debts. My issue is though, that I can't get approved for a car loan due to my bad credit and I travel a lot for work. To make up for not having a car, I've been renting one bi weekly. I do not have any credit cards at the moment. I only have closed debt in student loan accounts. I stress frequently about money and I want to make sure that I'm doing the best I can to get out of my current situation. Do you have any advice or guidance on the best way to get out of this situation? Robert, you want to kick off?
- [22:45]
Robert Kroke
Yeah. Matt, you conquered one of the hardest things and that is you're making 100k a year. Now you need to get your budget in order because I don't get it. How is it that you're making 100k a year at 28 years old but you have all of this debt? It doesn't make sense to me and you got to fix it. But also, if you have parents around and they're helpful and they see that you have a good job, have them help you get a car. Don't go get a new expensive car car. Get something that's good enough for now till you get your base built to get the high interest debt cleared out and get your credit score up so you can get financing on your own. Because the problem is with you buying a vehicle and renting a vehicle on one of these bi weekly payment things, you're going to pay way, way too much for a car. And I know you need a car, but ask and see if your parents will help you. That's what I would do. So I would work on my credit score, get those debts paid down, down. See if you can get some help on a vehicle so you can get rid of what I assume is an egregious agreement on this current car and get your budget in order. Because if you're making $99,000 a year, you should not be having these problems. And you must have a spending issue and you need to get out of that right away.
- [23:55]
Austin Hankwitz
I like that advice, Robert. Yeah. So let's do some math, right? You're making 99,000 a year. Let's assume you're taking home like 80% of that after taxes. So you know, let's call it 79, $80,000 there. Divide that by 12. So you're taking home about 6,000, $6,500 hundred dollars a month after taxes. After, you know, health care and all that stuff. You definitely don't want to be contributing to your 401k, because we have a crisis going on right now, which is you got all this debt, you're renting. Like there's a lot of stuff you got to figure out. So if you are contributing to the 401k, I would pause that. But now let's assume you're living off of $3500 a month. $4000 a month, maybe $4500 a month. Let's be a little aggressive here. You're 28, you're living off $4500 a month. So you can save 1500 to $2000 every single month at this rate. I just looked up on Google cars for $5,000 or below on CarGurus.com and I got a 2009 Mazda 3 Sport hatchback in Hammond, Indiana for $4,995. It's got 126,000 miles on it, it's got a clean title, no accident reported to Carfax and two previous owners. Right? So this is how you get your car. You don't go into more car debt, you don't go into more debt. In general, you save up 5, 6, $7,000 over the next three months. And by the way, you're side hustling right now. Maybe that means you can borrow a friend, maybe you're renting a car, maybe you can drive, you know, Uber with it, maybe you can deliver doordash. There's whatever you can figure out for some side hustle money. But maybe even if you don't side hustle, we're talking about three or four months of saving two grand to go out and buy a car like this, a 5, 6, 7, $8,000 car with cash. And this completely allows you to sidestep that 550 credit score, right? You don't have to go into debt, no one's going to approve you. You don't have to worry about a 22% interest rate on a car loan. And now our only problem here, because you're making a great living, like Robert said. Now the only problem comes down to this 14,500 of other debt, which again, if you are aggressively saving, call it 1,500 to $2,000 a month. You can knock this debt out within six, seven, eight months. So call it by the end of this year, if not summer of next year. And now you are a 29 year old, maybe 30 at the time. You are making $100,000 a year. You don't have any high interest debt. You're not worried about the credit card Stuff. And now it's time to build the base. What a wonderful place to be. At 30 years old, you're making six figures. You're saving, you know, 500, 1000, 1500 bucks a month. You're doing the 401k, the Roth IRA. So, Matt, there's so much to be excited about for 25 and 2026. You're going to have so much money in your bank account. I promise you, by the end of the decade. It's not about where you are today, it's about where you're going. So by automating your bills like we learned in this episode, and by getting out of, you know, this high interest debt and by giving yourself some margin every month to start investing and automate your investing, you will retire a millionaire by 65. You've got 35 good years ahead of you of strong investing. I'm so certain of it. Man. There's a lot to look forward to. Now our next question comes from Fady B. On Instagram as well. Fady says, hey, Robert Nosson. Big thanks for all you guys do. I'm a new listener and my 2025 goal is to binge all of your past episodes while keeping up with the new ones. Super excited for everything you offer. My wife and I just got married in September. I'm a dentist and she's a physician assistant, and we bring in $24,000 per month post tax. I'm 29, she's 25. And we want to set our family up for success. We're already maxing out our Roth IRAs and investing the money into the ETFs you talk about, and we're investing up to our employ. However, we do have $500,000 of student loan debt. We're currently renting, but we hope to buy a house and start a family in the next three or four years. Renting longer than that just kind of feels like we're throwing money away. But buying a house too soon, especially with how overpriced houses are and the interest rate environment right now, could also be risky. We want to invest in further education for high income potential. And I plan to open my own dental practice in six or seven years. So balancing all of this feels overwhelming. What would you do in our position, Robert, what do you think about their $500,000 of student loan debt?
- [28:08]
Robert Kroke
Yeah, I mean, it's tragic, but it's doable because they're high earners. They have solved the problem of earning a lot of money and now they just have to wipe out some of that debt, but also kind of mitigate making sure that they're getting money put away into these bridge accounts and into these Roth IRAs days and making sure that they have some base built. And so for me right now, I would look at this entire situation that I think the plan is pretty strong. Don't buy a house right now, get some of that debt paid down, get the bridge account, get the Roths going so they're making money while they sleep and then look to set themselves up for later to be able to open that practice successfully in six to seven years. That's what I would do. And don't look at it as overwhelmed. You've already charted the plan out. You've very well stated the plan to all of us. We're sharing it with our audience. So you know where to go. And you just need a few little bit of guidance to be able to help you achieve it. So try not to look at it as overwhelming and try to look at it as a challenge. This is what I want to do. This is the financial way I'm going to do it and get there. But I think it all starts with sitting down and doing a really, really long meeting you and the wife, go through the entire budget, sketch it all out and understand how much can you carve out a month to get rid of this high interest debt, to get rid of all this other stuff and set yourself up for your financial futures. Because with $24,000 post tax every month, you should be able to put away a really good sum and knock all this out so you can set yourself up for the future.
- [29:47]
Austin Hankwitz
I like that advice, Rob. Robert, let's dig into the nitty gritty. So you're 29 years old and your wife is 25. I'm a very similar relationship with my girlfriend. I'm 28 and she's 26. We comfortably spend living in Nashville and enjoying our weekends and like all the fun stuff. We comfortably spend $7,000 a month. So I'm gonna assume you guys are also comfortably spending about $7,000 a month. You know, against this 24,000, you have 500,000 of student loan debt, which means you're spending about 5,000amonth paying back those student loans. So all in, you're spending or should be spe12k a month. That leaves you with about $12,000 a month of unallocated money. Now Robert and I are big believers in paying off high interest debt. I'm also, maybe not Robert, but I'm also a big believer in like paying off like big debts that are just kind of weighing down on you. So I want you to pay off the student loan debt, but I don't want you to do it until you have equal amount of money invested in the markets. If I were you, if I were in your shoes, I would take this $12,000 a month or like 150,000 year, and I would just deploy it in the markets for the next three years. So you'll have 450,000. It'll have grown to 500,000 by then. So you'll have $500,000 invested by the time you're 32 and by the time she's 28. And then you can say, okay, this 500K, it's going to grow for us. It's going to turn into millions of dollars over the next 10, 15, 20, 25 years. Now let's take that same, you know, 12,000, 13, $14,000 a month margin and start paying off this debt. And then once you pay off the debt, let's say that's three years later, you're now in your mid-30s, you're debt free, you're likely making more money at this point. So not only are you debt free, but you have probably at this point, 6 or 700,000 invested in the markets and you're bringing home 30k a month post tax. Now it's time to either really enjoy your life because you've got that financial future figured out with that initial lump sum you invested, go on the vacations, get the cool house, drive the nice car. I mean, you're a doctor, you worked hard for it. Like enjoy the life or maybe work hard toward retiring early. You know, at this point, if you're making 30,000amonth post tax, there's absolutely a world where you can get two to three million dollars invested by the time you're in your early to mid-40s and you can easily, easily retire off of that. So you have a really cool situation here. But the key to this situation is to pay off the student loan debt after you have equivalent amounts invested in the markets. Because, Robert, I want you to talk about this, right? The simple interest of debt versus the comp interest of an investment.
- [32:22]
Robert Kroke
Yeah, I want to go back a little bit first too and explain something, that there is always a chance. This is kind of the ace up the sleeve chance that the government is going to do more with student loan debt. And so that is one thing why I love your strategy of getting your base built, getting yourself set up so there's money making while you sleep, you're letting this compound interest continue to grow, which simple interest does not do. And you're getting yourself ahead before you start chunking down down the student loan debt. So I really love that strategy because at any given moment the government could say, hey, all student loan debt is going to be XYZ in the future and you might be able to save on the interest there. They might chop it in half. You don't know what's going to happen. So I love your takeaway, Austin, of getting yourself built up first while making the minimum payments on the student loan debt. Then start working towards paying that off.
- [33:15]
Austin Hankwitz
Totally agree, Robert. You guys are setting yourself up for financial success for sure. Other quick hits for the family have the 529 plan for the kids once they're born. Don't feel bad about renting right now. Renting is actually cheaper than owning a home. You can go Google it, it's cheaper in like 38 states. I'm assuming it's probably cheaper in yours as well. It's definitely cheaper here in Tennessee to rent than own a home. So renting, don't feel bad about that. Interest rates are high, you'll be fine. And then another idea is don't forget like you guys are young, young, you don't have to, I know you feel like you now that you're making all this money, you deserve to like go spend it on these cool vacations and travel and things like that. Do those things, but do it after you've started investing.
- [33:56]
Robert Kroke
Love it, love it, love it, love it.
- [33:57]
Austin Hankwitz
Now before we jump into our final question coming from Madeline on Instagram, I need to talk to my serious investors. If you are a serious investor, you need to know about public.com. that's where you can invest in everything. Stocks, options, bonds, cryptocurrency. They even offer some of the highest yields in the industry like a bond account that's paid paying 7% or higher right now and remains locked in even if the Fed cuts interest rates. Now what sets Public apart is how they give you the tools you need to make informed investment decisions. Their built in AI tool called Alpha doesn't just tell you if an asset is moving, it tells you why an asset is moving so you can actually understand what's driving your portfolio's performance every day, week and month.
- [34:37]
Robert Kroke
Public is a FINRA registered SIPC insured US based company company with a customer support team that actually cares. So bottom line, your investments deserve a platform that takes them as seriously as you do. Fund your account in five minutes or less at public.comfront/rich habits and get up to $10,000 when you transfer your old portfolio. That's public.comfront/rich habits paid for by Public Investing. Full disclosures in the podcast Description all.
- [35:06]
Austin Hankwitz
Right, so our final question comes from Madeline A on Instagram. Instagram Madeline says hey there. My name is Madeline and I'm 30 years old. I've always been exposed to a financial advisor and I have a few that I work with. I've had success and I love having a financial advisor to learn from, but I'm starting to build my wealth and I find more interest in podcasts such as yours. And I'm curious of what your opinion is on choosing to work with an advisor versus just investing on a platform like public Robinhood, etc. Myself, do you have a strong recommendation of using a financial advisor over self management? I'm in a great financial position and my thought is to maximize both to diversify. But if the fees through a financial advisor can be avoided, it may make more sense to just lean on my personal platforms. I'd love to Hear your advice. P.S. i really enjoy your podcast and I'm inspired constantly when hearing your conversations. Well, thank you so much Madeline Robert, you have more of a background in the financial advising space, so I'll let you kick this one off.
- [36:02]
Robert Kroke
I love this question from Madeline in and it's very important for people to understand, so give me a minute to really break this down. I think financial advisors are great and here's why. If you get the right financial advisor, not only are you Getting help selecting ETFs, index funds, stocks, cryptos, what to do, but you're also getting retirement. You're getting structure. Because structure for your estate and your wealth and your estate, your businesses and your real estate is so, so important. So there's a lot more that goes into getting a really good wealth planner than just giving you stock picks or ETF picks, but I also want everyone to really be careful who they select. You want to make sure you go with a company that is a fiduciary. This is very important. A lot of companies out there are no longer fiduciaries and so they can sell you whatever they want and they're not bound by law law to sell you what is best for your gains and your future because they can charge commissions, they can charge assets under management fees, all of the traditional things. So I'd prefer if you're looking for a financial advisor or a wealth advisor, you go with a fiduciary. But Also understand some of these advisors are just set it and forget it. They're going to put you in target date funds and mutual funds and annuities. So then your money is going to underperform the markets. I've been working with my family, Crow Capital for many, many decades now. And we as an independent, we're different because we're a fiduciary. So we can sell you whatever we think is best for you. And you need to find that for your financial advisor so you're not pigeonholed into some of these plans that are not going to work well for you. So let's talk about the fees for a second. Most financial advisors are going to charge around 1% of the assets under management. And then if they're a non fiduciary, they'll probably likely charge on top of of that commissions for the ins and outs of their purchases. So keep that in mind. Make sure when you go in and you're meeting with them, when you're making your decision, knowing their fees, make sure you totally understand the totalities of their fees. Because I see portfolios every single day. I talk to clients every single day and people that follow us and they'll say, I don't know what the fees are, I don't know what they charge and they don't know anything about their performance. The fees, fees. And you have to be careful because I've seen advisors out there charging two, two and a half percent to manage people's money, which I'd even be okay at 2% if they were doing a really great job and they were crushing the benchmarks. But in most instances, find the fiduciary, find out the fees so you understand them. Don't pay more than 1% if you can help it and make sure that they are performing well and getting you into all the vehicles that Austin and I talk about about and using the strategies we talk about on a weekly basis.
- [38:51]
Austin Hankwitz
I like that a lot, Robert. I guess my perspective is like to start out, no one needs a financial advisor. If you are trying to start investing your first hundred dollars a month and you're trying to build your base and you're trying to just like go from 0 to 1 when it comes to building wealth, throw the financial advisor out the window. You don't need someone that's going to be putting you on these crazy different things like just go to public.com and buy Voo, go open up the Roth IRA, fund it with Voo, the S&P 500 and you're off to the races. And I would argue you can probably do that up to several hundred thousand dollars, maybe even a million, if you're comfortable with it. But I argue that it's also time to explore having a financial advisor. Once it's time to raise a family, once you want to start thinking about the college, the trusts, the different, you know, properties, maybe you've got some businesses. Maybe, maybe you want to make sure that you've got your taxes in order. Right. It just depends on, like, what that financial advisor can help you do from a whole picture perspective, in my opinion. If you are someone who's in your 20s, 30s, or even 40s, and you're trying to build your base, you got maybe a couple hundred invested, you got the 401k and you're just tugging along, having a good time, and you don't feel like you need to do any of that, like, that's cool, like you don't need to do those things. But if you are someone who has 1.9 million invested and you've got four kids and you've got two businesses and you've got a couple of rental properties, yeah, probably good idea to pay someone, you know, 10, 20 grand per year to have them in your corner to help you save on taxes. Make sure your legal stuff is figured out. Make sure your financial structure is figured out. Right. I think that's a good idea. So it's really a, you know, we say it all the time, personal finance is personal. Having a financial advisor is a personal decision. I've not yet made the decision to have a financial advisor. I'm confident in how I invest my money. I've got a little over a million invested in the markets right now. I do have an accountant. I do have, you know, someone that helps me with my taxes and my legal structure. Like, I've got those, like, people in my corner, but I don't yet have someone that's like a financial advisor. I think I'm just confident enough to do it myself now. I'm an anomaly. I got a degree in finance. I worked in finance for several years out of college. Right. So it's like I'm an anomaly in that aspect. The average person probably doesn't feel comfortable investing over a million dollars in the market. Markets. And you know, back to your point too, Robert, what's so important about financial advisors is they take the emotion out of investing, right? Call them up. Hey, hey, Larry. I need you to sell my stock and Google, it's going down. It's down 2% today. Financial advisor Says, no, I think you should keep Google. It's pretty good. We like it. Oh, okay. All right. I won't do it. Right. So they kind of talk you off the ledge when you get a little. A little risky there and get scared. But it's totally personal preference. Madeline, you said you're 30 years old. It really just depends on how much you have invested. Do you have kids? Do you. Do you have, you know, rental properties and businesses and, you know, do you need that support and that help? Or do you just have a public account that you want to fund with a couple hundred thousand dollars and a 401k? Right. It's totally up to you.
- [41:47]
Robert Kroke
Yeah. Personal finance is personal. You know, I deal with it every single day. And I just always look at it as the last anecdote that if you're a busy person, you're growing your money, you're growing your business, you're doing well. Having a financial advisor can be great, especially if they're good at it, because if they outperform the benchmark benchmarks by 2, 3, 4% a year and you're giving them back 1%, but you have total access to them, then that can be a great way to help you grow. But like Austin said, do you need it in the beginning? Absolutely not. I don't think you need it till you at least get to 250, $350,000 in invested capital and you're buying businesses and rental properties, because everything else you can learn right here, and you can do it on your own until you get up. And you need those tax strategies and retirement strategies and business structure strategies. All of that is where a real wealth advisor and financial advisor would come into play.
- [42:39]
Austin Hankwitz
You know, it's crazy. Robert, I met with a guy from Inside the Rich Habits Network earlier this week, and he's like, yeah, man, I just, like, I just want you to just, like, see how my money is invested here and just take a look at it. It was in his bridge account in Fidelity, and I was like, all right, cool. What's up? Let's do it. $4 million in a bridge account just hanging out. And he had it invested perfectly. It was all the nice ETFs. It happens, diversified. It was great. And he's like. So he's like, I don't believe in financial advisors. I want to do it myself. And I'm like, man, I thought you were going to show me some crazy penny stocks and some international, you know, indices. But you've got to figure it out, right? So, like, people do it. I'm one of them, he's one of them. But 99% of people don't. Right? 99% of people want the financial advisor at least in their corner. Worth paying 800, 900 $1,000 a month annualized there with that, you know, call it million or 2 million invested is worth having that. So thanks for your question. Madeline. Everyone, thank you so much for tuning into this week's episode of the Rich Habits podcast about automating in 2025. If you learned something, if this inspired you, share the episode with a friend, hit the follow button on Spotify. Subscribe to our YouTube channel. Follow us on Instagram. We post clips of the podcast over there. There's like 26000 of you that follow us over there already, which is awesome. We sometimes post like funny Instagram stories. So if you want to see some behind the scenes stuff, that's over there as well. But most importantly, know that every single week we're coming back with the fire, the heat, the knowledge bombs, all 2025. It's going to be a great year for the podcast. Podcast and we couldn't have done it without you. So keep coming back every week and we can't wait to continue to deliver more value through this podcast.
- [44:10]
Robert Kroke
And don't forget, if you have not signed up for the Rich Habits Network newsletter, you're missing out. It's free. Go to the link in the Show Notes. Go to the link in our bios. It is available. It is an awesome weekly newsletter and you will learn a ton there for free. You can read it at your own leisure, so don't forget that. And always share the podcast with a friend. Friend. Maybe they've got mindset issues. Maybe they're struggling financially. Share it with them. It could be the greatest gift to change their life. Like we're here to change your lives each and every week.
- [44:41]
Austin Hankwitz
Thanks everyone and have a great start to the week.