Rich Habits Podcast Episode 111: "How to Build a Winning Stock Portfolio, Automatically" with JJ Maxwell
Podcast Information:
- Title: Rich Habits Podcast
- Hosts: Austin Hankwitz and Robert Croak
- Guest: JJ Maxwell, CEO of Double Finance
- Release Date: March 31, 2025
- Description: A detailed exploration of building a successful stock portfolio using automated tools and strategies, featuring insights from JJ Maxwell on the Double Finance platform.
1. Introduction
Austin Hankwitz opens the episode by introducing the Rich Habits Podcast as a premier financial literacy resource aimed at empowering listeners to take control of their finances through effective habits. He highlights his background in finance and entrepreneurship, alongside Robert Croak, a seasoned entrepreneur with over $300 million in lifetime revenues.
Notable Quote:
- Austin Hankwitz [00:58]: “The name might suggest, every episode we talk about Rich Habits as they relate to business, finance and mindset.”
2. Introducing the Guest: JJ Maxwell
The hosts welcome JJ Maxwell, CEO and co-founder of Double Finance, an innovative investing platform. JJ explains Double's mission to bridge the gap between active and passive investing for retail investors.
Notable Quotes:
- JJ Maxwell [01:50]: “Double allows anyone to build their own stock index so you want to be heavier in AI, utilities, financials healthcare. You can build your own S&P 500 using your own rules.”
- JJ Maxwell [05:25]: “What we're trying to do with Double is build the world's best portfolio investing product. And we do that for just a dollar a month.”
3. Deep Dive into Double Finance
Austin Hankwitz shares his personal experience using Double Finance, detailing his investment strategy and impressive returns compared to the S&P 500. He emphasizes the platform's ability to backtest strategies and customize portfolios based on specific market sectors and investment criteria.
Notable Quotes:
- Austin Hankwitz [02:51]: “I just looked at my total return. It is 5.3% compared to the S&P 500's total return during the same period of time of 2.7%.”
- Austin Hankwitz [07:34]: “It's like a bucketed approach to investing. It's pretty cool.”
JJ Maxwell elaborates on Double’s unique positioning, offering thematic baskets and customizable strategies that cater to both novice and experienced investors. He highlights features such as direct indexing, automated tax loss harvesting, and dollar-cost averaging.
Notable Quotes:
- JJ Maxwell [05:25]: “Double lets you invest in baskets of stocks... but with Double, you don't just track the S&P 500, you can also customize it.”
- JJ Maxwell [08:21]: “Double makes it possible for people to build that and then we handle the automation and sort of the rebalancing of that over time.”
4. Automation and Tax Efficiency
The conversation shifts to the automation capabilities of Double Finance, particularly focusing on tax loss harvesting. JJ Maxwell explains how the platform optimizes tax strategies to maximize investors' after-tax returns.
Notable Quotes:
- Robert Croak [08:42]: “One thing financial advisors have though, are very cool tools to do exactly what we built here at Double.”
- JJ Maxwell [11:15]: “We look at tax slots individually to determine which ones to buy and sell as you're doing that migration.”
Austin Hankwitz underscores the importance of understanding tax implications and leveraging automated strategies to minimize tax liabilities.
Notable Quotes:
- Austin Hankwitz [31:23]: “Implement a tax loss harvesting strategy. Double Finance has their own tax loss harvesting strategies.”
5. Building and Customizing Stock Portfolios
The hosts and JJ Maxwell discuss the intricacies of creating a personalized stock portfolio. They delve into the platform's strategy builder, which allows users to apply various filters such as market cap, PE ratio, and return on invested capital to curate their investments.
Notable Quotes:
- Robert Croak [19:05]: “We have about 15 or 20 different filters... you can get pretty specific and pick, for example, the most profitable tech companies.”
- Austin Hankwitz [20:36]: “You can go in and say, hey, I want to invest in companies that have been paying a dividend for so many years...”
JJ Maxwell emphasizes the flexibility and user-friendliness of Double Finance, making advanced portfolio management accessible to everyday investors.
Notable Quotes:
- JJ Maxwell [20:47]: “Double makes it possible for people to build their own personal stock index and then we handle the automation and sort of the rebalancing of that over time.”
6. Listener Q&A
The episode features a comprehensive Q&A segment where Austin and Robert address listener questions about investment strategies, tax optimization, and portfolio management.
Example Questions and Insights:
-
Yunhun's Question [29:00]: Concerns about minimizing taxes on investment gains.
- Austin Hankwitz: Advocates for maximizing tax-advantaged accounts and implementing tax loss harvesting.
- JJ Maxwell [31:55]: Reiterates the importance of understanding short-term vs. long-term capital gains.
-
Kaylee F.'s Question [32:44]: Deciding between reinvesting company stock or using a securities-backed line of credit to fund a business purchase.
- Robert Croak [34:04]: Recommends leveraging securities-backed lines of credit to invest in profitable businesses, emphasizing the potential for higher returns and portfolio diversification.
- JJ Maxwell [37:37]: Suggests platforms like LoopNet and Biz Buy Sell for finding businesses to purchase.
-
AP's Question [38:07]: Managing cash reserves and investment allocations for future expenses.
- Austin Hankwitz: Introduces the concept of sinking funds for planned expenses.
- JJ Maxwell [40:57]: Advocates for minimizing idle cash and utilizing bridge accounts for liquidity.
Notable Quotes:
- Austin Hankwitz [31:23]: “Past performance is not indicative of future results. Do your own research. Invest at your own risk.”
- JJ Maxwell [32:28]: “If it's been over a year since you purchased it, you're in long term capital gains already and that's where you want to be to minimize your taxes on a winning investment.”
7. Conclusion
The episode wraps up with the hosts reiterating the benefits of Double Finance and encouraging listeners to explore the platform's capabilities. They highlight the importance of continuous learning and strategic investment to build long-term wealth.
Notable Quotes:
- Austin Hankwitz [27:28]: “The secret sauce is the empowerment to create strategies and backtest the performance.”
- JJ Maxwell [27:53]: “If you love this certain sector, you can really niche down within that sector.”
8. Final Remarks and Promotions
The hosts briefly mention sponsors and upcoming events, including the sold-out Grit Money Summit, while encouraging listeners to join the Rich Habits Network and participate in free trials.
Notable Quotes:
- Austin Hankwitz [43:41]: “Check out Double Finance. It's definitely interesting to us. It's something that I've been using since September and something I think I'll continue to use in 2025 and beyond.”
- JJ Maxwell [44:54]: “We are very, very blessed and very, very excited and just appreciate each and every one of you.”
Key Takeaways:
- Double Finance offers a versatile platform for both active and passive investors, allowing for customized stock indices and automated portfolio management.
- Tax Efficiency is a core feature, with automated tax loss harvesting strategies designed to maximize after-tax returns.
- User Empowerment through tools that enable investors to build, backtest, and adjust their portfolios based on specific investment criteria and market sectors.
- Strategic Investment advice includes leveraging tax-advantaged accounts, diversifying investments, and considering alternative income streams such as business acquisitions.
- Continuous Learning and Adaptation are essential for long-term financial growth, with platforms like Double Finance providing the necessary tools to stay informed and proactive.
Final Note: Investing involves risks, and past performance is not indicative of future results. Listeners are encouraged to conduct their own research and consider their individual financial situations before making investment decisions.