Rich Habits Podcast - Episode 131: "How to 70X Your Money"

Date: August 18, 2025
Hosts: Austin Hankwitz & Robert Croak

Episode Overview

In this episode, Austin and Robert break down the simple—but often overlooked—math behind how investing early can multiply your dollars dramatically by retirement. Focusing on the power of compound interest, they reveal how even "small" spending decisions in your 20s, 30s, and 40s cause huge opportunity costs later in life—literally turning a $1 purchase into hundreds or thousands of lost retirement dollars. The hosts back up their advice with numbers, motivational quips, and listener Q&A about debt, investing strategies, and prioritizing savings.

Main Discussion Points & Insights

The Power of Compound Interest (00:00–04:36)

• Compound Interest is Exponential:

  • Austin uses the classic snowball rolling down a hill analogy:

    “Every turn of the snowball, it causes it to grab more snow. That more snow now grabs more snow and now the surface area grows and grows and it's grabbing snow all over and it grows exponentially.” (01:17, Austin)

  • Robert stresses why most people miss out:

    “Our brains think linearly and not exponentially. Let me say that again. Linearly, not exponentially.” (00:55, Robert)

• Every Dollar Spent in Youth = Massive Missed Gains:

  • At a 9.5% real return (S&P 500 average minus inflation), a dollar spent at 20 becomes $70 by 65.
  • “Your $3 beer is really costing you $220. Your $13 cocktail is really costing you $910. That $16 avocado toast is really costing you $1,120 in retirement.” (02:22, Robert)

The Decades: Breaking Down the Math

Wasting Money in Your 20s (01:41–04:36)

• Every dollar = $70 at retirement
  • Even $32/week becomes $2,250 by 65—a weekend’s fun, generations of difference.
• Not about depriving yourself but recognizing "opportunity cost."
  • “We're not saying that you should stay home and not have any fun…But you need to understand what every dollar could turn into if you instead invested it.” (03:53, Austin)

Wasting Money in Your 30s (04:36–08:46)

• Each dollar = $26 at retirement
  • A decade’s delay dramatically slashes growth.
  • “A dollar invested in your 20s turns into 70 in retirement. A dollar invested in your 30s turns into only 26 in retirement. That's a big difference, right?” (05:55, Austin)
• Car payments:
  • “The average American has a $775 per month car payment…That's $9,300 per year. Fast forward 35 years, it's now worth a quarter million dollars.” (06:09, Austin)
  • Buying used and cutting payment to $400/month = extra $127k per year in retirement.

Wasting Money in Your 40s (08:58–10:58)

• Now, every dollar = $10 at retirement
  • The danger of “lifestyle creep”: bigger mortgage, keeping up with the Joneses.
  • "Their monthly payment many times exceed 40, even 50% of their household take home pay. And... they're literally investing nothing towards their future when arguably this is the time it matters most." (09:10, Robert)
• Mortgage math: Extra $1,000/month = $120,000 missed for retirement.

Key Takeaways & Notable Quotes

• The Exponential Cost of Delay

  • “Just by pushing off investing for 10 years, you are losing so much steam and compound interest throughout your life.” (05:29, Austin)
  • “Everyone else is broke. You're not. You're building rich habits.” (07:08, Austin)

• Starting Small Beats Starting Late

  • “I don't care what you have to put away. It's all about investing early and often and staying consistent.” (12:59, Robert)

Listener Q&A Highlights

Molly (15:35): Best Use of $40,000 in Savings at Age 24

• Situation: $60k salary, $40k savings, some student loan and car payment, maxing out 401k and Roth IRA.
• Robert:
  • Congratulates discipline; recommends putting savings to active work—“basket of ETFs, maybe some precious metals, a little bit of cryptocurrency.”
• Austin runs the math:
  • "$40,000 invested into the markets, growing at 9 1/2% per year from 24 to 65 is $2,016,701 at 65…you just have to be smart with it.” (17:13, Austin)
  • Start with Roth IRA, put in $7,000 to get match, split rest between S&P and Nasdaq ETFs until $100k base, then diversify more.

Brady (19:18): Should I Use Savings to Pay Tuition Or Invest?

• Situation: Junior in college, considering loans so he can invest now and “not miss out on compound interest.”
• Austin:
  • If you can invest $28,000 from ages 20-24, it'll become $1.4 million by retirement.
  • “Every dollar turns into 70 for you right now in retirement.” (20:42, Austin)
  • Advises to balance reasonable student loan levels (<starting salary’s worth) with maximizing Roth IRA contributions to get compounding rolling.

Akon (23:28): Should I Sell Stocks to Pay Off $20k Credit Card Debt?

• Situation: $44,000 in stocks, $20k high-interest credit card debt.
• Robert: Firm and clear:
  • “You cannot out invest high interest debt.” (24:36, Robert)
  • “Sell what you need to sell, set aside money for the taxes, get this high interest debt paid off…then begin investing in the proper fashion.”
• Austin: Stress the importance of emergency funds:
  • “Have $15k or $20k in a high yield savings account…so the money we do have invested can stay invested and grow for us.” (26:12, Austin)

Actionable Mindset Reminders

• "It's not what you make, it's what you keep." (27:41, Robert)
• “Be intentional with your money…these numbers are real. This is the math.” (10:58, Robert)
• “Opportunity cost is everywhere…hundreds of thousands, if not millions of dollars, if you had just said, you know what, I don't want that right now.” (27:41, Austin)

Timestamps for Important Segments

• 00:36 — Why compound interest matters; linear vs. exponential thinking
• 01:41 — Real-life examples: What every dollar "wasted" becomes by retirement
• 05:55 — Drastic drop-off: 20s vs 30s investing
• 06:40 — Car payment: The hidden $250,000 opportunity cost
• 08:58 — 40s and the costliest mistakes: Lifestyle creep, housing, mortgage math
• 15:35 — Listener Q&A begins: Molly’s $40k savings strategy
• 19:18 — Brady: Loans vs. investments in college
• 23:28 — Akon: Pay off $20k high-interest debt vs. hold stocks
• 26:12 — The importance of emergency funds

Tone & Style

Conversational, practical, motivational, and at times blunt—aimed at making “rich habits” accessible regardless of age or net worth. Both Austin and Robert use real numbers, personal anecdotes, and positive reinforcement to drive home the power of early action and mindful investing.

Memorable Moments

"Your $3 beer is really costing you $220." (02:22, Robert)
"Every dollar you spend in your 20s is worth $70 at 65 years old, had you invested it." (02:09, Robert)
“It's not about depriving yourself of fun—but knowing the opportunity cost of your choices.” (03:53, Austin paraphrased)
“You cannot out invest high interest debt.” (24:36, Robert)

Summary:
This episode emphasizes the exponential value of starting investments early, providing eye-opening calculations on opportunity cost across decades. Through practical examples, listener Q&A, and memorable “money math,” Austin and Robert deliver a clear message: small choices today can lead to massive wealth tomorrow through the magic of compound interest—if you start now.