105: The 5 Financial Accounts You Need to Have in 2025

Summary

Rich Habits Podcast Episode 105: The 5 Financial Accounts You Need to Have in 2025

Release Date: February 17, 2025

In Episode 105 of the Rich Habits Podcast, hosts Austin Hankwitz and Robert Krok delve into the essential financial accounts individuals should establish by 2025 to secure a prosperous and dignified retirement. This comprehensive guide outlines a step-by-step blueprint, emphasizing the importance of each account and how they interconnect to build a robust financial foundation.

1. Introduction

Austin Hankwitz and Robert Krok kick off the episode by highlighting the necessity of diversifying both personal style and financial investments. They draw a parallel between having varied wardrobe options and maintaining diverse investment accounts to ensure financial flexibility and security.

Notable Quote:

Austin Hankwitz [00:00]: "Your style is better with options. Your investments could be too."

2. The Five Essential Financial Accounts

a. High Yield Savings Account

Foundation of Financial Health

The duo underscores the High Yield Savings Account (HYSA) as the cornerstone of financial stability. This account serves as an emergency fund, safeguarding against unforeseen expenses and preventing the need to liquidate investments prematurely.

Key Points:

Emergency Fund: Recommended to cover three to six months of expenses.
Purpose: Acts as insurance, allowing investments to remain intact during financial crises.
Recommendation: Public.com's High Yield Cash Account offers over 4% APY, no lockup fees, and excellent customer support.

Notable Quotes:

Robert Krok [02:32]: "This is the make or break foundation that you need if you want to be successful with your money in your lifetime."
Austin Hankwitz [04:33]: "That is an insurance policy against your investments to make sure that your investments can stay invested."

b. Retirement Accounts (401k and Roth IRA)

Building Wealth for the Future

Retirement accounts are presented as the next layer after establishing an emergency fund. Emphasizing the importance of investing early and maximizing employer matches, the hosts discuss strategies to ensure a comfortable retirement.

Key Points:

401k: Contribute up to the employer match to capitalize on "free money."
Roth IRA: Max out contributions ($7,000/year) to benefit from tax-free growth.
Investment Strategy: Focus on index funds and ETFs like VOO, VTI, SPY, QQQ, SCHD, and VUG for long-term growth.

Notable Quotes:

Robert Krok [07:21]: "This is the vehicle for you to build wealth tax-free for life."
Austin Hankwitz [08:33]: "We're going to max out the Roth IRA... to ensure you no longer have to trade time for money in retirement and retire a millionaire."

c. Bridge Account (Taxable Individual Brokerage Account)

Enhancing Investment Flexibility

The Bridge Account offers autonomy, allowing investors to access profits without the restrictions of retirement accounts. This account complements retirement savings by providing additional investment opportunities.

Key Points:

Autonomy: Withdraw profits at any time without penalties.
Investment Options: Similar to retirement accounts, focusing on ETFs and index funds.
Platform Recommendation: Public.com for its user-friendly interface, no fees, and fractional share options.

Notable Quotes:

Robert Krok [09:12]: "This account does not have the same restrictions as your retirement accounts do on early withdrawals."
Austin Hankwitz [10:11]: "Public is a FINRA registered SIPC insured US based company with a customer support team that actually cares."

d. 529 Account

Planning for Education and Generational Wealth

The 529 Account is tailored for parents aiming to fund their children's education. Beyond covering tuition, it offers the unique benefit of rolling over unused funds into a Roth IRA, fostering generational wealth.

Key Points:

Purpose: Save for educational expenses such as tuition, trade school, etc.
Rollover Benefit: Up to $35,000 can be transferred to a child's Roth IRA upon turning 18.
Long-Term Growth: Potential to grow significantly, supporting retirement and financial independence.

Notable Quotes:

Austin Hankwitz [14:17]: "When your child turns 18 years old, you're allowed to roll over up to $35,000 from this 529 account to your child's Roth IRA."
Robert Krok [15:45]: "It's a huge, huge pro tip... to help people build wealth and get their children's wealth jump started."

e. Crypto Account

Embracing Digital Assets

Acknowledging the growing significance of cryptocurrency, the hosts advocate for incorporating a crypto account into one's financial portfolio. They recommend reputable platforms and prudent investment practices to navigate the volatile crypto market.

Key Points:

Long-Term Stay: Cryptocurrency is expected to remain relevant with increasing legislative support.
Platforms: Coinbase is recommended for its ease of use.
Investment Strategy: Start with established cryptocurrencies like Bitcoin, Ethereum, Solana, Chainlink, XRP, XLM, and Ando Finance. Allocate 5-10% of investable capital to mitigate risk.

Notable Quotes:

Robert Krok [16:22]: "It is time to learn in 2025. I promise you it is not too late to get into cryptocurrency."
Austin Hankwitz [17:59]: "Bitcoin at least is here to stay... if you want to get left behind, do that. But we believe that you shouldn't."

3. Q&A Section

The episode transitions into a dynamic Q&A segment, where listeners' queries are addressed with practical advice.

a. Annabella's Question: Rolling Over a 401k

Scenario: Annabella is considering transferring her $20,000 401k from Charles Schwab into a Roth IRA to gain more investment autonomy.

Advice:

Robert Krok [23:59]: Recommends rolling over to a Roth IRA to benefit from tax-free growth and greater investment control.
Austin Hankwitz [24:38]: Agrees, suggesting consulting an accountant to manage potential tax implications.

Notable Quote:

Robert Krok [23:59]: "I'd rather see you pay the taxes now than kick the can down the road."

b. Aaron's Question: Launching a Brand

Scenario: Aaron seeks guidance on turning his design and invention ideas into a viable brand, specifically in fitness merchandise.

Advice:

Robert Krok [25:58]: Offers a step-by-step approach:
1. Secure website and social media handles.
2. Utilize platforms like Fiverr for design work.
3. Open accounts with online brokerages for wholesale pricing.
4. Create samples using screen-printed transfers before large orders.
5. Focus on marketing strategies, including influencer partnerships.
Austin Hankwitz [28:29]: Shares personal experiences and emphasizes the importance of setting aside profits to avoid over-investing in inventory.

Notable Quotes:

Robert Krok [25:58]: "Study the competitors, study the big streetwear brands... there's a lot of cool things."
Austin Hankwitz [31:13]: "Every time you make a sale... set aside like 10% of your profit."

c. Yonko's Question: Micro-Investing Apps

Scenario: Yonko inquires about the effectiveness of micro-investing platforms like Acorns and Stash for long-term investment goals.

Advice:

Robert Krok [32:28]: Endorses micro-investing as a supplementary strategy, highlighting automation and consistent investing without emotional interference.
Austin Hankwitz [33:45]: Recommends Griffin alongside Acorns, stressing that while beneficial, micro-investing should not replace primary investment accounts.

Notable Quotes:

Robert Krok [32:28]: "Acorns is what I use and have used for years... I strongly suggest everyone uses micro investing as part of their portfolio."
Austin Hankwitz [33:45]: "We definitely encourage this micro investing type habits and automation with your money."

4. Conclusion

Austin and Robert conclude the episode by reinforcing the significance of each financial account discussed. They encourage listeners to take actionable steps towards setting up these accounts, emphasizing that such proactive measures are essential for achieving financial freedom and dignity in retirement. Additionally, they urge audience engagement through comments and reviews to further enhance the podcast's reach and impact.

Notable Quotes:

Robert Krok [34:42]: "We're really breaking down what is the blueprint to build wealth and be able to have that dignity and that financial freedom everyone desires."
Austin Hankwitz [35:29]: "We are so grateful that you come back every single week to listen to what Robert and I have to say... Thanks everyone and have a great start to your weekend."

Key Takeaways

Establish a High Yield Savings Account as the financial foundation to cover emergencies and protect investments.
Maximize retirement accounts like 401ks and Roth IRAs to build wealth tax-free for retirement.
Utilize a Bridge Account for additional investment flexibility and immediate access to funds.
Invest in a 529 Account to plan for children's education and facilitate generational wealth transfer.
Incorporate a Crypto Account to diversify investments and capitalize on the growing digital asset market.
Leverage Micro-Investing Apps like Acorns and Griffin as supplementary investment strategies.
Engage with the Community by seeking feedback, sharing experiences, and utilizing recommended tools and platforms.

By following this structured approach, listeners are equipped to build a comprehensive and resilient financial portfolio poised for long-term success.

Summary

Rich Habits Podcast Episode 105: The 5 Financial Accounts You Need to Have in 2025

Release Date: February 17, 2025

1. Introduction

Notable Quote:

Austin Hankwitz [00:00]: "Your style is better with options. Your investments could be too."

2. The Five Essential Financial Accounts

a. High Yield Savings Account

Foundation of Financial Health

Key Points:

Emergency Fund: Recommended to cover three to six months of expenses.
Purpose: Acts as insurance, allowing investments to remain intact during financial crises.
Recommendation: Public.com's High Yield Cash Account offers over 4% APY, no lockup fees, and excellent customer support.

Notable Quotes:

Robert Krok [02:32]: "This is the make or break foundation that you need if you want to be successful with your money in your lifetime."
Austin Hankwitz [04:33]: "That is an insurance policy against your investments to make sure that your investments can stay invested."

b. Retirement Accounts (401k and Roth IRA)

Building Wealth for the Future

Key Points:

401k: Contribute up to the employer match to capitalize on "free money."
Roth IRA: Max out contributions ($7,000/year) to benefit from tax-free growth.
Investment Strategy: Focus on index funds and ETFs like VOO, VTI, SPY, QQQ, SCHD, and VUG for long-term growth.

Notable Quotes:

Robert Krok [07:21]: "This is the vehicle for you to build wealth tax-free for life."
Austin Hankwitz [08:33]: "We're going to max out the Roth IRA... to ensure you no longer have to trade time for money in retirement and retire a millionaire."

c. Bridge Account (Taxable Individual Brokerage Account)

Enhancing Investment Flexibility

Key Points:

Autonomy: Withdraw profits at any time without penalties.
Investment Options: Similar to retirement accounts, focusing on ETFs and index funds.
Platform Recommendation: Public.com for its user-friendly interface, no fees, and fractional share options.

Notable Quotes:

Robert Krok [09:12]: "This account does not have the same restrictions as your retirement accounts do on early withdrawals."
Austin Hankwitz [10:11]: "Public is a FINRA registered SIPC insured US based company with a customer support team that actually cares."

d. 529 Account

Planning for Education and Generational Wealth

Key Points:

Purpose: Save for educational expenses such as tuition, trade school, etc.
Rollover Benefit: Up to $35,000 can be transferred to a child's Roth IRA upon turning 18.
Long-Term Growth: Potential to grow significantly, supporting retirement and financial independence.

Notable Quotes:

Austin Hankwitz [14:17]: "When your child turns 18 years old, you're allowed to roll over up to $35,000 from this 529 account to your child's Roth IRA."
Robert Krok [15:45]: "It's a huge, huge pro tip... to help people build wealth and get their children's wealth jump started."

e. Crypto Account

Embracing Digital Assets

Key Points:

Long-Term Stay: Cryptocurrency is expected to remain relevant with increasing legislative support.
Platforms: Coinbase is recommended for its ease of use.
Investment Strategy: Start with established cryptocurrencies like Bitcoin, Ethereum, Solana, Chainlink, XRP, XLM, and Ando Finance. Allocate 5-10% of investable capital to mitigate risk.

Notable Quotes:

Robert Krok [16:22]: "It is time to learn in 2025. I promise you it is not too late to get into cryptocurrency."
Austin Hankwitz [17:59]: "Bitcoin at least is here to stay... if you want to get left behind, do that. But we believe that you shouldn't."

3. Q&A Section

The episode transitions into a dynamic Q&A segment, where listeners' queries are addressed with practical advice.

a. Annabella's Question: Rolling Over a 401k

Scenario: Annabella is considering transferring her $20,000 401k from Charles Schwab into a Roth IRA to gain more investment autonomy.

Advice:

Robert Krok [23:59]: Recommends rolling over to a Roth IRA to benefit from tax-free growth and greater investment control.
Austin Hankwitz [24:38]: Agrees, suggesting consulting an accountant to manage potential tax implications.

Notable Quote:

Robert Krok [23:59]: "I'd rather see you pay the taxes now than kick the can down the road."

b. Aaron's Question: Launching a Brand

Scenario: Aaron seeks guidance on turning his design and invention ideas into a viable brand, specifically in fitness merchandise.

Advice:

Robert Krok [25:58]: Offers a step-by-step approach:
1. Secure website and social media handles.
2. Utilize platforms like Fiverr for design work.
3. Open accounts with online brokerages for wholesale pricing.
4. Create samples using screen-printed transfers before large orders.
5. Focus on marketing strategies, including influencer partnerships.
Austin Hankwitz [28:29]: Shares personal experiences and emphasizes the importance of setting aside profits to avoid over-investing in inventory.

Notable Quotes:

Robert Krok [25:58]: "Study the competitors, study the big streetwear brands... there's a lot of cool things."
Austin Hankwitz [31:13]: "Every time you make a sale... set aside like 10% of your profit."

c. Yonko's Question: Micro-Investing Apps

Scenario: Yonko inquires about the effectiveness of micro-investing platforms like Acorns and Stash for long-term investment goals.

Advice:

Robert Krok [32:28]: Endorses micro-investing as a supplementary strategy, highlighting automation and consistent investing without emotional interference.
Austin Hankwitz [33:45]: Recommends Griffin alongside Acorns, stressing that while beneficial, micro-investing should not replace primary investment accounts.

Notable Quotes:

Robert Krok [32:28]: "Acorns is what I use and have used for years... I strongly suggest everyone uses micro investing as part of their portfolio."
Austin Hankwitz [33:45]: "We definitely encourage this micro investing type habits and automation with your money."

4. Conclusion

Notable Quotes:

Robert Krok [34:42]: "We're really breaking down what is the blueprint to build wealth and be able to have that dignity and that financial freedom everyone desires."
Austin Hankwitz [35:29]: "We are so grateful that you come back every single week to listen to what Robert and I have to say... Thanks everyone and have a great start to your weekend."

Key Takeaways

Establish a High Yield Savings Account as the financial foundation to cover emergencies and protect investments.
Maximize retirement accounts like 401ks and Roth IRAs to build wealth tax-free for retirement.
Utilize a Bridge Account for additional investment flexibility and immediate access to funds.
Invest in a 529 Account to plan for children's education and facilitate generational wealth transfer.
Incorporate a Crypto Account to diversify investments and capitalize on the growing digital asset market.
Leverage Micro-Investing Apps like Acorns and Griffin as supplementary investment strategies.
Engage with the Community by seeking feedback, sharing experiences, and utilizing recommended tools and platforms.

By following this structured approach, listeners are equipped to build a comprehensive and resilient financial portfolio poised for long-term success.