136: The Easiest $678K You’ll Ever Make

Summary

Rich Habits Podcast — Episode 136: The Easiest $678K You’ll Ever Make

Hosts: Austin Hankwitz & Robert Croak
Date: September 22, 2025

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Episode Overview

In this engaging and action-packed episode, Austin and Robert focus on a commonly overlooked drain on personal wealth: recurring subscriptions. They reveal how seemingly harmless small charges add up to significant losses—both in monthly leakage and in missed opportunities for investment growth. By walking listeners through a three-step subscription audit, they demonstrate how reclaiming an average of $194 per month and investing it could grow to over $678,000 in 30 years. They also field listener questions covering retirement strategy, investing for risk-averse parents, and the classic rent vs. buy housing dilemma.

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Key Discussion Points & Insights

1. Subscriptions: The Hidden Wealth Drain

• Americans are losing hundreds to thousands per year on unused or forgotten subscriptions.

• Psychology at play: Businesses leverage behavioral economics to make it harder for you to cancel (e.g., charm pricing, psychological ownership).

  “The average American has five to six paid subscriptions that they aren’t even aware of. That’s where your retirement savings are leaking out $9.99 at a time.”
  — Robert Croak [01:39]

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2. The Data on Subscriptions

• Massive growth: Subscription economy has increased 435% in the last decade ([03:34]).

• Everything as a service: From car features to meditation apps— “BMW tried to charge a subscription for heated seats.”
  — Austin Hankwitz [03:34]

• Psychological ownership (the endowment effect): Unsubscribing feels like losing a personal possession.

• Breakage: Companies profit from users who pay but don’t use (e.g., gyms banking on the majority never showing up).

  “Once benefiting from a subscription becomes part of your routine... your brain treats losing it via unsubscribing like an actual loss.”
  — Robert Croak [03:55]

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3. Pricing Psychology Tricks

• Charm pricing: Why $9.99 feels cheaper than $10, invented in the 1880s and still effective.

• Real-world impact: $9.99/month × 10 subscriptions = $1,200/year → if invested, significant long-term returns.

  “Contrary to what some financial influencers say, little leaks do actually sink ships.”
  — Robert Croak [05:58]

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4. How to Audit Your Subscriptions: 3-Step Blueprint

Step 1: Discovery Phase

[07:01]

• Pull last three months of statements to catch all (monthly, quarterly, annual) charges.
• Make a spreadsheet: Service name, monthly cost, last usage, value rating (1–10).
• Pro tip: Search email for “subscription renewal” or “autopay” receipts to catch hidden payments.

“You will be shocked what you end up finding, especially if it’s on PayPal or maybe you’re paying through a cash app.”
— Austin Hankwitz [07:43]

Step 2: Ruthless Evaluation

[08:40]

• Dollar per use: Monthly cost ÷ actual uses.
• If unused for 60 days: cancel immediately—no exceptions.
• For essentials: Consider sharing with family/friends to split costs.

“If you haven’t used it in 60 days, it goes into the cancel immediately pile. No exceptions.”
— Robert Croak [09:15]

Step 3: Optimization Strategy

[09:58]

• Negotiate: Call and say, “I’m thinking about canceling,” — works for cable, insurance, big-ticket subscriptions.
• Seek annual pay discounts (10–20%), but only on things you actually use for a year.
• Key: Invest reclaimed money.

“Seventy percent of the time they’re going to offer you a discount to stay because they know their customer acquisition cost is way higher than keeping you.”
— Austin Hankwitz [10:28]

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5. The True Long-Term Cost of Subscription Creep

• Average monthly untracked subscription spend:

  • People think they spend $79/month, but actually spend $273/month ([13:48]).

• Investing that difference ($194/month):

  • Over 30 years at 12% returns = $678,000.

• The main lesson: “Little leaks do sink ships”—redirecting even small sums leads to big outcomes due to compounding.

  “The $194 a month, if you invested that into the S&P 500… you would have over $678,000, hence the title of our episode.”
  — Austin Hankwitz [14:23]

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6. Mindset Shift: It’s Not Just Lattes

• Debunking the myth that only “big” expenses matter—small recurring charges add up more than “skipping avocado toast.”

• Practice intentional spending and regular audits.

  "Building wealth isn’t just about making money. It’s about keeping more of the money you make for yourself."
  — Robert Croak [16:51]

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7. Actionable Playbook: What To Do With Money Saved

1. Open a Roth IRA on any brokerage (they recommend public.com for simplicity).
2. Deposit the savings (e.g., $194/month) automatically.
3. Invest in broad index funds like VOO (S&P 500) and QQQ (Nasdaq 100).
4. Stay consistent: Let compounding work for you.

“It all starts with small steps, Robert: just taking the small steps, finding the margin in your budget and then using that to not go, ‘Oh, I now can afford a new pair of shoes...’ No, you are using this money to build wealth.”
— Austin Hankwitz [18:21]

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Listener Q&A Highlights

KW (Early 50s, Strong Savings, Heavy in Cash):

• Situation: Paid-off house, 401k & SEP IRA, large cash/CD holdings.

• Advice: Move away from “risk off”—reduce cash in CDs/high-yield savings (keep enough for 3–4 months expenses only). Allocate more aggressively into ETFs, stocks, maybe some crypto or precious metals.

  “You don’t want to be sitting on the sidelines. So heavy in cash through the High Yield Savings and the CD.”
  — Robert Croak [22:41]

Ogie (Parents Are Risk-Averse, Both Age 60):

• Situation: War refugees, low risk tolerance, large emergency fund, several 401ks.

• Advice: Encourage gentle exposure to bonds and treasury ETFs (CSHI, BNDI), and cash-flowing options. Educate by showing long-term S&P returns and the safety of diversification. But ultimately—respect their risk tolerance and autonomy.

  “You can lead a horse to water, you can’t make it drink… Give them the tools and resources, educate them, but you can’t force them to do anything.”
  — Austin Hankwitz [27:46]

  "Be tolerant, be patient, educate them and I’m sure you’ll make a big difference for their future."
  — Robert Croak [28:22]

Jared K (30s, Renting, Considering Buying):

• Situation: Strong income, ~200k+ net worth, saving for a home but unsure whether to rent or buy.

• Advice: Explore house hacking—a duplex/triplex using Fannie Mae 5% down, live in one unit, rent others to keep net housing cost low. But: Don’t be “house poor”—be sure to understand total cost of ownership and don’t forsake investing for illiquid real estate.

  “Make sure you totally understand the total ownership cost, not just the mortgage and the insurance..."
  — Robert Croak [34:11]

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Notable Quotes & Memorable Moments

• “Little leaks do actually sink ships.” — Robert Croak [05:58]
• “Charm pricing… has been around since the 1880s… items priced at $39 actually sold better than $34, even though they’re more expensive!” — Austin Hankwitz [05:23]
• “Death by a thousand cuts is still death.” — Robert Croak [15:24]
• “It’s not about giving up your Netflix or your Spotify—if you love it, keep it. But be intentional.” — Robert Croak [15:54]
• “Small action turns into big, big outcomes—specifically $678,000 of an outcome I love.” — Austin Hankwitz [16:16]
• “Don’t listen to the fake gurus... Small investments consistently can build wealth.” — Robert Croak [18:57]

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Timestamps for Key Segments

• [01:39] — Subscription drain: The hidden monthly cost
• [03:34] — Growth of the subscription economy
• [05:23] — Psychology of charm pricing
• [06:55]/[08:40]/[09:58] — Step-by-step subscription audit
• [13:48] — Average subscription spend and the real cost
• [14:23] — Investing canceled subscriptions: Path to $678k
• [16:51] — Mindset shift and intentional spending
• [18:21] — Investing the money saved: The actionable playbook
• Listener Questions/Q&A: [20:38] — KW | [25:40] — Ogie | [30:50] — Jared K

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Conclusion & Takeaways

• Audit your subscriptions—reclaim dollars leaking out monthly.
• Automate investing the savings—compound wealth over decades.
• Be intentional, not restrictive: Keep what brings you value, drop what doesn’t.
• Take action—just an hour of work today could add hundreds of thousands to your retirement.

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Final Word:
“Building wealth isn’t just about big investments; it’s also about plugging small leaks. Audit those subscriptions, deploy the savings, and let compounding work its magic.”
— Rich Habits Podcast, Episode 136

Transcript

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[Austin Hankowitz]

Learn [e-mail] hey everyone and welcome back to the Rich Habits podcast, a top 10 business podcast on Spotify brought to you by public.com by the end of this episode, you'll know exactly how subscriptions are secretly draining your wealth and how to audit your recurring charges so that you can turbocharge your retirement investing. My name is Austin Hankowitz and I'm joined by my co host Robert Krog. Robert is a seasoned entrepreneur with lifetime revenues of over 300 million and a multi millionaire in my late twenties with a background in finance and economics. As the show name might suggest, every episode we talk about Rich Habits as they relate to business, finance and mindset. So Robert, what are we going to be talking about in today's episode?

[Robert Krog]

In this episode of the Rich Habits Podcast, we're diving deep into something that's costing our listeners hundreds, maybe even thousands of dollars every single year without them even realizing it. And that is subscriptions. The average American has five to six paid subscriptions that they aren't even aware of. That's where your retirement savings are leaking out $9.99 at a time.

[Austin Hankowitz]

And that is not by accident. These companies have spent millions figuring out exactly how to hack our brains. So today we're pulling back the curtain on their playbook. Why $9.99 feels so much cheaper than 10. The psychological reason you keep your gym membership that you haven't used since January and course, our three step subscription audit that we think a lot of you are going to benefit from by the end of this episode.

[Robert Krog]

Yes, you'll be able to identify and cut the fat from your monthly expenses. We're taking real money and putting it back in your pocket. Some of our Community members have found 200, 300 and even $500 per month that they didn't even know they were spending. And before you shrug off a couple hundred bucks a month in extra subscriptions that think about this, $200 a month, if it was invested over 20 years, would turn into over 200k in your retirement account. 300amonth turns into 292k and 400amonth turns into 390k in retirement. These are real numbers. These are the facts. But before we walk through our three step subscription audit, we think it's really important for all of you to understand the data behind these subscriptions. You're essentially playing some crazy psychological game with these trillion dollar companies. So Austin, walk us through it. Break it down. This is crazy. It's the real data and I can't wait to get into it.

[Austin Hankowitz]

Yeah, so the data tells us that the subscription economy has grown by 435% over the past decade. And we're not just talking Netflix and Spotify. Everything is a subscription right now. Your Microsoft Office, your meditation app, and even car features. I don't know if you guys saw this, but I remember in the day BMW tried to charge a subscription for heated seats.

[Robert Krog]

Yeah, they make it really easy for you to upgrade and add all of these crazy costs. But here's where it gets psychological. Companies know that once you sign up for a subscription, you're five times less likely to cancel it than you are to return a one time purchase. They're banking on what is called psychological ownership. So once benefiting from a subscription becomes part of your routine, like your Spotify or your Netflix, your brain treats losing it via unsubscribing like an actual loss. So for me, that one would be my poker go subscription that I haven't logged into for over two years and I just haven't made the time to cancel it myself at $9.99 a month. So don't do that.

[Austin Hankowitz]

Well, this is called the endowment effect, right? And it's very well known in behavioral economics. The moment you sign up for that subscription, your brain starts to think that that service is yours. And so by canceling it, it feels like you're giving something up, like it inside of your stomach. Like, oh my gosh, like I don't have access to this anymore. And sometimes you maybe only used it a couple of times. It's really interesting, the overlap between psychology and money.

[Robert Krog]

Yeah, I mean, these companies are billion multibillion dollar organizations that spend tens of millions of dollars figuring out the best way to convert you into a customer. So let's talk about that pricing psychology. Austin, why do you think everything ends in 99 cents?

[Austin Hankowitz]

Well, it's called charm pricing. Robert and I have done a little bit of homework here, and it's been around since the 1880s. But here's what's crazy. It worked back then and it still works today. MIT and the University of Chicago ran studies showing that Items priced at 39 actually sold better than items that were priced at $34. More expensive, and it sold even better. Our brains process that first digit so quickly that the $9.99 gets categorized as nine something when it' just $10. Right? So we see this at gas stations all the time.

[Robert Krog]

And with subscriptions, they definitely take this to the next level. They figured out that 9.99 per month sounds like nothing, but that's $120 a year. Stack 10 of those subscriptions together, which you probably have, and you're looking at a whopping twelve hundred dollars a year. So if you instead invested in the S&P 500 with just average returns, that would be worth $97,000 over the course of a 20 year period of time. Contrary to what some financial influencers say, little leaks do actually sink ships. So here's something that probably won't surprise you. 42% of consumers have forgotten about at least one subscription that they no longer use. But they're still paying for that gym membership from New Year's 2023. Still hitting your card, that language learning app that you use for two weeks, still charging you. And the list goes on and on and on.

[Austin Hankowitz]

Hey man, 42% have forgotten about at least one. I'm pro. I mean, geez, I guarantee both of us have forgot something. But companies, they call this breakage right back to the the psychological terms here. Just like gift cards that never get used. They're counting on you to forget about them. Some business models are literally built on the assumption that 40 to 60% of their subscribers are not going to use the service. I think Planet Fitness recently like sued or something about this for not only making it really hard for people to unsubscribe, but their entire business model is like, yeah, this many people didn't show up this month. How great is that? Stop forgetting. Let's save ourselves a few hundred dollars a month by implementing our three step subscription audit. Time to bring out that notepad and start taking notes. So step one is the discovery phase. You're going to pull up the last three months of your bank and credit Card statements. Not just one month, three months. Because some subscriptions bill quarterly or annually and you need to catch all of them. Now go make yourself a spreadsheet with four columns on it. Maybe you want to just get a piece of paper and do this, but write down the service's name. So, Spotify, Netflix, things like that. The monthly cost the last time you use the subscription, and then a value rating between 1 to 10. And be honest with that value rating, if you haven't used it in the last 30 days, the value of it's probably not a 10. So the Pro tip about this one is to check your email for receipts. Search for those keywords like subscription renewal, monthly, autopay, things like that. You will be shocked what you end up finding, especially if it's on a PayPal or maybe you're paying through a cash app or something like that. Like these subscriptions, they're hiding places. So go find them. And to Robert's point, this is going to help you unlock hundreds of thousands of dollars in retirement if you're able to invest this correctly.

[Robert Krog]

And step number two is ruthless evaluation. So we use what we call the dollar per use calculation. So take that monthly cost and divide it by how many times you actually used it last month. So that $15 gym membership sounds cheap until you realize you only used it twice. That's $7.50 per use. So you could have just paid that one day pass, probably save yourself some money. And this is for people that are actually still using the gym membership. Not all of you that are watching that haven't used it in months. And these are the little leaks that are going to get you over time. So now here's our rule. If you haven't used it in 60 days, it goes into the cancel immediately pile. No exceptions. But what if I would have used it later? You won't. And if you do, you can always sign up again, probably with a customer discount code. That's going to save you money anyway. So for the subscriptions you keep and do use, ask yourself this. Could I share this with someone? Netflix, Spotify, Family, even some software subscriptions allow multiple users. Split that cost and boom. And instant 50% savings. I know people that do this with their YouTube TV subscriptions and it works wonders. So you definitely want to start integrating this step as well.

[Austin Hankowitz]

Which, by the way, when did YouTube TV become over a thousand dollars a year? That is just. That's bonkers. Let's now rock and roll to step three of our three step subscription audit, which is the optimization strategy. We're talking all things optimization here. So for the subscriptions you are keeping, we're going to negotiate a little bit, we're going to call them up and we're going to say the four magic words. I'm thinking about canceling. This works very well for your credit card annual fees. I've not done this, but I know friends who have actually called American Express and they got their annual fee waived for whatever it was and definitely do that. It also works for insurance and Wi Fi and cable companies, even cell phone bills. 70% of the time, they're going to offer you a discount to stay because they know their customer acquisition cost is way higher than keeping you even here at a discount. Now, it might not work for Netflix because they're a trillion dollar company, but. But it could work with that $200 a month gym subscription that you don't really use that often. For example, maybe you call your cable Internet provider and you get a $20 off per month promo because you use the four magic words. That's $240 that you can save on an annualized basis for your cable Internet that you were going to have to pay for anyway. Right? That 240 bucks is very important, especially if it gets invested. That's the whole thing. I guess the last optimization tip here, Robert, is look out for those annual pay. Right, because most services offer a 10 to 20% discount if you pay on an annualized basis. But make sure you're only doing this for services that you know you're going to use for a whole year. Your Netflix. Sure. I mean, I've been a Netflix subscriber for a long time now. If they gave me a 10 or 15% discount, count me in. The mindfulness app that you downloaded on your phone and they're offering you a 20% discount for the yearly. No, you're not going to use that. Don't trick yourself.

[Robert Krog]

Yeah, I love that breakdown, Austin. And it's just so important because so many of these influencers out there talk about getting rid of that $10 a day of coffee or staying home. And, you know, not having that $14 avocado toast isn't going to help your financial situation. And it's just wrong. The math doesn't math. So I love this episode because it really just shows how small changes in your financial plans can make such huge differences down the road. And that's why we always talk about compound interest, investing early and often and all those things. And I think that's a great highlight.

[Austin Hankowitz]

In this episode about it. Like this $240 just by, you know, negotiating a bill. Now you've got another, you know, maybe three or four subscriptions or maybe you split your YouTube TV subscriptions of $500 a year. Like we're talking about what could turn into hundreds if not thousands of dollars a month that now you invest that over the next five, 10, 15, 20 years. We're talking about hundreds of thousands of dollars. Speaking of investing, it's very important that everyone understands this reality. Investing toward your financial future is the only way you will ever be able to retire, period. So if you want to stop trading time for Money in your 9 to 5 or your hourly job, you need a nest egg that's growing for you over time.

[Robert Krog]

And the easiest way anyone can begin investing towards their Future is on public.com they make it incredibly simple to build a multi asset portfolio including ETFs, stocks, bonds, crypto options and more. They also offer access to industry leading yields of up to 4.1% APY for your emergency fund.

[Austin Hankowitz]

And for a limited time, you can earn a 1% match on all IRA deposits, IRA transfers and 401k rollovers. That's a thousand dollars of free money for every hundred thousand you roll over into their platform. Which means that old 401k that's making a couple percentage points you got hanging out at your old employer. Roll that over, go get your 1% match and get your bag.

[Robert Krog]

Yes, fund your account in 5 minutes or less. Head to public.com rich habits to claim your 1% match today. Paid for by Public Investing. Full disclosure in the podcast description. So let's put all of this in perspective with real numbers. The Average American spends $273 per month on subscriptions. But when surveyed, they think they only spend around $79 per month. The gap is $194 per month. That's $2,328 per year you don't even realize you're spending.

[Austin Hankowitz]

So the $194 a month, if you invested that into the S P 500, the NASDAQ, these index funds and ETFs, we talk about average 12% returns over a 30 year period of time, which by the way, the S P's averaged 11.88% since inception. So these are real assumptions here. You would have over $678,000, hence the title of our episode. Let me say it again. The 194amonth that you are canceling your subscriptions. You're being smart here. You're, you're just auditing what you are spending on a monthly basis. That 194 invested for 30 years at 12% is $678,000. That is the real cost of subscription creep. Not just the monthly charges, but the hundreds of thousands in compound interest that you are going to be missing out on by just keeping that poker go Robert Subscription around.

[Robert Krog]

I know, I know. And here's what kills me though. People will drive across town to save 10 cents per gallon on gas, but they won't spend the 30 minutes that it takes to audit their subscriptions that could help them save hundreds of dollars per month. It's because subscriptions feel small and manageable, but death by a thousand cuts is still death. So listen guys, look, we're not anti subscription. If Netflix brings you joy, keep it. Spotify keeps the Rich Habits podcast rolling. Keep it. That's worth every single penny. But be intentional. Every dollar you save on subscriptions you don't use is a dollar you can invest in your future. Also, it's just good practice to know where your money is going every single month. So if you're squandering away hundreds of dollars a month on subscriptions you don't use, where else might you be experiencing leakage?

[Austin Hankowitz]

100% right? The company is spending millions, if not tens psychological research to keep you subscribed or counting on your inaction. But that's not our thing here at the Rich Habits podcast. It's take notes and take action. These companies are betting you're not going to take the hour, that all it's going to take is an hour to audit your subscriptions using our three step subscription audit that we just laid out for you in this episode. So go prove them wrong. Your future wealth depends on it. Small action turns into big, big outcomes. Specifically, $678,000 of an outcome I love.

[Robert Krog]

When we break these simp down and really enlighten people to understand that these little leaks do sink ships and dreams. So I love this episode and remember everyone that's listening. Building wealth isn't just about making money. It's about keeping more of the money you make for yourself. And there's no easier place to start than with the subscriptions silently draining your bank accounts every single month. Wealth isn't built just in the stock market or real estate. It can also be built in the boring daily decisions that you make, like canceling those subscriptions that you forgot about. And don't use those decisions compound over time into real wealth, especially when you invest the money that you saved.

[Austin Hankowitz]

I'm Worried some people here are going to listen to this episode and be like, cool, I'm now $194 richer a month. What do I do with it? Here's the quick playbook. Go open up a Roth Individual Retirement Account on any broker you want. We prefer public because we think they're the easiest way to start investing. We love their ui, we love their support team. It's great. Then deposit the 194 into Roth IRA via cash. Once the cash is in there, invest the 194 into Voo and QQQ. You can go 50, 50 on it if you want. You can go more Voo, more QQ, doesn't matter. But these are the 500 largest, most profitable companies in the United States through the Vanguard S&P 500 VOO, and then also the 100 largest listed companies on the NASDAQ exchange via Invesco's QQQ. You so actionable insights here. Right? You are taking this money that you're saving, you're putting it in your Roth IRA. You're investing it now over 30 years. Right. You're doing this every single month that you're saving this money. 194. 194. Maybe you put you round it up to 200. How about that? Maybe you find another 200. Now it's 400. Now you're really rich. It all starts with small steps, Robert. Just taking the small steps, finding the margin in your budget and then using that to not go, oh, I now can afford a new pair of shoes this month, or, oh, we're going to go eat out for 200. It's going to be great. And no, you are using this money to build wealth.

[Robert Krog]

Yeah. It just all comes down to making your money work as hard for you as you work to get it. You've heard us say that thousands of times over the past few years. And it really is so critical. And it's just. I want to hammer home this one point another time before we go to the next portion of the show. And that is understanding that small investments consistently can build wealth. So don't listen to the fake gurus and the people that tell you you have to have $50,000 or 20,000 DOL even get started, because they're wrong and they just don't know what they're talking about and they don't understand consistency and compounding. So I hope this helps a whole bunch of you get it together, do the audit and start building wealth consistently.

[Austin Hankowitz]

100%. Now, before we jump to our Q and a section of this episode got to give a major shout out to Blossom Social because they're hosting a couple interesting events around the United States. In Canada, our awesome partners over at Blossom Social are hosting their third annual Investment Investor Social Tour where hundreds of DIY investors across North America meet up in person for an evening of food, drinks, networking, education and fun.

[Robert Krog]

And they'll be hitting seven cities this year including la, Vancouver, Calgary, Chicago, Montreal, Toronto hosted at the Rogers center for you baseball fans, yes, where the Blue Jays play and New York hosted at the Nasdaq center in Times Square. So it's going to be a blast. You guys know how much we love Blossom as an online social network. They're all about connecting investors online. Well, now's your chance to see what the community is all about in real life.

[Austin Hankowitz]

They've even hooked our listeners up with a 15 off coupon code, so just go check out the link in the show notes below or go to blossomsocial.com 2025 investortour and use rich habits 15 all capitalized rich habits 15. It's one word at check to get 15% off. All right Robert, let's now jump to our first question coming from KW. KW hits us up on Instagram which as a reminder, if you have a question for us, DM us on Instagram at Rich Habits Podcast or email us at Rich Habits podcast gmail.com Kw says hi Austin and Robert, this is Kw and I've been listening to you guys for the last year or so and I love your ideas. My wife and I are at a point where we're confused on what to do next. After listening to you all I feel as if we could do a lot more for building for our retirement, but I want yalls take we are in our early 50s. My wife works for a company making about 60,000 a year and contributes 15% to her 401k. Her account currently is valued at 420,000. I am self employed profiting about 100,000 a year and I contribute 16,000 a year to my SEP IRA through a brokerage firm which right now is valued at 225,000. We have a paid off house which is valued at 850,000. We have no other debt. We have 115,000 at a 4 1/2% interest rate in a CD and 140,000 in a high yield savings account. Can you please give us some ideas as to where we can disperse our money so that we can make it work harder for us? Thank you for all you do kw. Robert, I Feel like this question's right up your alley.

[Robert Krog]

Yeah, I love you guys are in a great situation. I feel you're too heavy in cash and too risk off. So my first glaring change that I would make is either when the CD matures, I would get that money working maybe in some crypto, some precious metals, in more of the. The funds that we talk about, like voo, aiq, qqq, some of that. But also I feel like you're really heavy in your High Yield Savings account as well, because with 140,000 sitting there making 3, 4%, I think that's too risk off also. So I would look to getting a traditional brokerage account moving. If you don't have one, get some of this money out of the High Yield Savings Account. Get that down to maybe three, four months of your monthly bills for your emergency fund and everything else. Get working in the market. Because being in your early 50s, if you really accelerate your growth with this 2, 3, $400,000 on top of the SEP and the 401K, you're going to see magical returns in the coming years. And you guys have another 15 good years of investing before you're fully retired. So that's what I would do. First and foremost, get a little more risk on, get some money into crypto, get some money into maybe some precious metals, these ETFs and index funds we talk about about. Because you don't want to be sitting on the sidelines. So heavy in cash through the High Yield Savings and the cd.

[Austin Hankowitz]

I love that breakdown. Robert, let's give them some. Like here are the real numbers, right? You've got $860,000 at your disposal to invest 420 plus 225, plus the 115 that's sitting in the CD, plus 100 of the 140 in your high yield savings. Want to keep 40? Be my guest. You guys are rich, you're fine. Go put 40,000 in your savings account. I'm cool with that. So now we're talking about 860,000 DOL. $60,000. The stock market doubles on average every seven years, right? That's that 8, 9, 10, 12% that we see in the S P 500 in the NASDAQ. If you guys are in your early 50s, you're 52 years old, maybe 53. Let's say you've got seven years until you're 60, and then another seven, you're 67. That's two more doubles of $860,000. That's three and a half million dollars by the time you're in your mid to late 60s ready to truly retire. I mean, you guys, if you wanted to, you probably could retire early depending on how much money you want to live off of, especially with a PA house. So I love where you're at. I love that you guys have built such a wonderful nest egg for yourselves. Now it's time to move away from the conservative type of investing of just collecting a little bit of interest to getting aggressive. Think precious metals, think the S P 500, the NASDAQ, the MOAT, VTI, VGT, VUG, AIQ. Right? All these index funds and ETFs that we talk about here on the show that, I mean just gold is up 40 this year. Like imagine if you just put your money in gold. So all I'm saying here is there's a of great ways to invest this money. If you want to put a little bit more into the SEP IRA, that's cool. Make sure your wife's 401k is invested correctly and not sitting in some silly target date funds. But beyond that, go open up a brokerage account on public and just deposit a couple hundred thousand dollars between your high yield savings and the CD and all the other fun money you guys make and you're going to be just fine.

[Robert Krog]

I love it. Yeah, there's just so much they can do to get better diversified, little more risk on and produce so much more money for retirement environment in the next 10 to 15 years.

[Austin Hankowitz]

So our next question comes from Ogie. Ogie says, hey Austin and Robert, I love your podcast. I've been a fan of your videos on TikTok before you even started the podcast. Let's freaking go man. That's awesome. Ogie says, my question's all about my parents and investing. No matter how much I encourage them to put money in the stock market, they always say it's too risky. They are war refugees and have experienced losing everything in a blink of an eye. So I understand their fear. Right now. They're both 60 years old. They have no mortgage, no debt, no car payment. They've saved over a hundred thousand in an emergency fund and on top of that they have two 4:1Ks with more than $100,000 in each. And my mom has another 401K with 50,000. What is the best way to help them get invested in safer assets so their money can still grow but feel secure? Should I encourage them to roll over their 401ks into a public account that offers a 1% match and then allocate more into Treasuries and bonds? Or is there a smarter, safer way for them to be positioned in at this stage of their life? So, yes, go get that 1% match. Free money is free money. So what I'm seeing here is like, okay, you got a hundred thousand emerg fund, 300,000 across the other two, and then another 50. So you have $450,000 invested with no mortgage, no debt, no car payment. Amazing. Great place to be at 60 years old. Back to what we were just talking about with kw, right? If this money was invested correctly, it'll double every seven years. But you're more on the conservative side. So let's just say it goes up by 50% over the next seven years. So by the time they're in their mid-60s here, we're talking about about half a million in this account. Account. So, yeah, I mean, go put that money over in public. Park it. Maybe some, you know, Treasuries that could be paying 4%, some bond accounts that could be paying 6%. CSHI is an ETF that pays about 5%. BNDI is a bond ETF that pays, I think, about 6 or 7%. Maybe some of these Neos funds where they see that monthly distribution put to their account, they kind of feel a little bit better about investing and, you know, riding the wave. But listen, here's the deal. You can lead a horse to water, you can't make it drink. And Robert and I go through it all the time with the show, and I went through it all the time with my dad. He was not great with money by any stretch of the imagination. I had to teach him a lot about money. And I think it's called, like the. The baby powder syndrome, right? Where it's like you were putting talcum powder on this baby's butt, giving it a diaper. Now it's telling you how to invest, right? You just, it's. It's like you don't want to give too much weight to that. So, like, I guess what I'm saying is your parents are. They're their own individuals, and they're going to do something or they won't. And you can't get mad at them for not doing something or doing something. I mean, they are people too, right? There are people experiencing what it's like to be 60 years old for the first time, just like you're experiencing, you know, your life. And I, I respect you for wanting to help them, but at the end of the day, give them the tools and resources, educate them, but you can't force them to do anything and just be there for them when they need you.

[Robert Krog]

Yeah. My main takeaway for this is educate them. If you want to help, nudge them, show them The S&P 500 returns over the last 50 years so they can see see it in a longer time horizon. They will see that there's ups and downs and yes, there's volatility, but over time you're going to make a lot more money by having some money in the S P 500 or the NASDAQ. Also look at their emergency fund. Is it just sitting in a checking or a savings account or is it in a high yield savings account? If it is, that helps because you're going to get 4%. That's going to give you some income as well. But just take baby steps. Educate them and understand that they are at an age group that is much, much different than people from a risk tolerance of today because 30, 40 years ago they probably lost money and investment and since then they've been scared along the way. So just be tolerant, be patient, educate them and I'm sure you'll make a big difference for their future.

[Austin Hankowitz]

Now, before we answer our last question here coming from Jared K. Robert, I was looking at some reports, reports and according to an analysis by State street from a couple months ago, half of financial advisors are now allocating to alternative investments or strategies to manage portfolio risk in the markets right now. And over two thirds of millennials are investing in alternative assets. Right? That's over 66%. These advisors are saying that they're diversifying with alternatives because they want to reduce exposure to the public markets and find alternative sources of returns. And of course, there's a ton of different alternative investments that are out there.

[Robert Krog]

And obviously we're not experts, but that's kind of the point. We've both been using Masterworks art investing platform to diversify our portfolios for five years now because it's easy to do and you don't need an art history degree. That's right. Both of us invest with Masterworks, the sponsor of today's episode, and we've even interviewed their founder and CEO Scott Lynn on the show. With Masterworks, you don't need to spend millions of dollars to invest in multi million dollar art. They've offered investments in almost 500 works to date with over $1.2 billion of invested capital. They've also exited 23 works so far, with investors realizing annualized net returns including 17.6%, 17.8% and 21.5% on those works held longer than a year.

[Austin Hankowitz]

So join over 1 million Masterworks users at Masterworks Art Rich Habits, which is also in the show notes below. And as with any investment, past performance not indicative of future returns. Investing involves risk sale Returns are not inclusive of unsold works. Important regulation A disclosures can be [e-mail] CD so our last question again, Jared K here from Instagram. He says, hey guys, I listen to your podcast every week and I enjoy the great content you all put out there. I'm a 30 year old male and I'm single. I currently make 80,000 a year. I have 60,000 in a high yield savings account, 13,000 in a crypto wallet, 11,000 in a Robinhood account, 135,000 in my brokerage account, 85,000 in a 401k that I receive a full match on every week. I have no debt. I'm currently renting but rates just keep going up. Rent for me right now is seventeen hundred dollars a month. I don't know if I should just keep renting or buy a starter home, which in my market is anywhere between 180 to 300k. Would really appreciate some insight. Robert, you talk about house hacking a lot. Give Jared sort of the playbook as to what you would do if you had 60,000 in a high yield savings waiting for a down payment here. And he's making great money. He's got a lot of it here. What's his what'? The play by play for Jared.

[Robert Krog]

Yeah, Jared's crushing it. This is awesome. I love to see someone at 30 years old that has all their bases covered. And yes, I think it's a great idea. You're making really good money. You've got decent diversification. You have your base built. I love it. For you to go out and find a duplex, a triplex or a quadplex, live in one unit. Use the Fannie Mae 5% down mortgage which keeps most of your money in your pocket because you only have to put 5% down. You can buy up to 1.3 million doll, which I'm not saying you should do that. Keep it in your price range, keep it in your buy bucket. I like the fact that you're talking about a couple hundred, two, three hundred thousand dollars property. Do that, live in it for a year and then repeat and get yourself into the real estate game. I love this for you and for anyone listening that is younger but has their base built. Real estate is the next step to building wealth. So Jared, great job getting where you are Today. And I love this scenario for you and I think you should go for it.

[Austin Hankowitz]

100. Here's what you got to watch out for, that if you end up getting a duplex, triplex, whatever there that you have enough money to afford, what is the mortgage? Right. The Fed is cutting interest rates. We're going to see the rates hopefully begin to come down on mortgages soon. That's obviously not tied to the fed. That's the 10 year. But I guess what I'm saying is just make sure that you're not setting yourself to be house broke. I'd much rather see you renting $1700 a month and actively investing in a 401k and a bridge account and a crypto and a Robinhood, like all that stuff. I'd rather you be doing that than, than, you know, paying $4,200 a month. And like it's just a numbers equation. You just have to run the math. And right now it's never been cheaper to rent in relation to buying a home. I saw a stat on X a couple days ago that showed the disparity. It's never been higher. So maybe renting right now is the move. I understand your rent keeps going up, but of course you want to buy something and really settle down roots. I respect that's what I've done here in Nashville and I think it's a great idea. Just make sure you're not doing doing it in such a way where you're going to set yourself up for failure and not have enough to invest every single month.

[Robert Krog]

And I want to click back on that because you made up a great point, Austin, and that is Jared and anyone listening that is thinking about this strategy. Make sure you totally understand the total ownership cost, not just the mortgage and the insurance, the total ownership cost, especially if you're going to house hack. And the way you want to really look at this once you do have those numbers, numbers is go, okay, let's say you buy a duplex and the total payment all in with everything is going to be $2800. But you can rent one of the units for $1400. So then $1400 they're going to pay. You're going to pay $1400. So you're in line and actually lower with your currently paying and you get to enjoy home ownership and you get to enjoy the upside of equity and tax breaks and all of the above. So total ownership cost, make sure you understand it and you understand what the rental amounts are going to be for the units in the building you're looking to buy and you'll do just fine, Robert.

[Austin Hankowitz]

I couldn't have said it better myself. Everyone, we hope you enjoyed this episode on how to make the easiest $678,000 of your life by finding that $194 a month of subscriptions, canceling it, and go investing it via your Roth IRA or any other investment vehicle for all we care, into the S and P, into the NASDAQ and just that compound interest working for you over the coming decades. As always, thank you so much for tuning into this week's episode of the Rich Habits Podcast. If you've not yet checked out the Rich Habits Network, we have over 700 people now inside of the Rich Habits Network. We just hosted a live stream with over 220 people that joined us live on Zoom and we answered their questions, we gave them feedback. I mean this is it's exclusive access to Robert and I on a weekly basis. We're having so much fun over over there. So be sure to go check out the free trial to join the Rich Habits Network in the show notes below and the newsletter. Rich Habits Newsletter Go subscribe to that. You can go type in Rich Habits Newsletter on Google. I think we have like 60,000 subs now. It's crazy. We started with, I think it's doubled now just in the last year. People just keep sharing it with their friends. It's just we had a viral one happen recently. I mean like you guys are loving the stuff we're putting out and we're really grateful that you continue to come back and share these episodes with your friends and and just help us grow and get in front of as many people as possible so that they can retire with dignity.

[Robert Krog]

Yeah, 100%. We appreciate each and every one of you and the number one thing you can do to support us is like and follow our Instagram, our Spotify account, share the episodes with a friend and give us those five star reviews. It only takes you a few seconds, doesn't cost you a penny. So if you get the value and see the value we provide every single week, make sure you do that to help us out as well and we'll see you next time.

[Austin Hankowitz]

Thanks everyone and I'll have a great start to your week.

[Friend of Austin or Robert]

Yo, this is important, man. My favorite Lululemon shorts, the ones you got me back in the day, I love. Think they're pace breakers, the ones with all the pockets. Well, I just got back from vacation and I think I left them in my hotel room and dude, I need to replace these shorts. I wear them, like, every day with that Lulu hoodie you got me. Could you send me the link to where you got them? Thanks, bro.

[Austin Hankowitz]

Talk soon.

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