138: Your Year-End Money Checklist — Don't Ignore These

Summary

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Rich Habits Podcast – Episode 138 Summary

Title: Your Year-End Money Checklist — Don't Ignore These
Date: October 6, 2025
Hosts: Austin Hankwitz & Robert Croak

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Episode Overview

In this actionable episode, Austin Hankwitz and Robert Croak break down the “year-end money checklist” – a set of critical financial moves to make before December 31st. Designed to help maximize savings, pay less in taxes, and set yourself up for a richer 2026, they lay out no-nonsense strategies used by the financially savvy. The episode is jam-packed with specifics: maximizing retirement accounts, using up your pre-tax health funds, making tax-savvy charitable donations, and performing a full financial review. The hosts also field listener questions on side hustles, debt relief, and student loan repayment.

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Main Discussion Points & Insights

1. Why a Year-End Checklist Matters ([01:28])

• Robert: "Think of December 31st as your financial finish line... If you cross it without making these three moves, you could be leaving so much money on the table."
• The hosts stress that these are specific, actionable steps—not generic advice—to save thousands before midnight December 31.

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2. Max Out Retirement Accounts ([02:59])

Key Takeaways:

• 401(k) and IRA contributions for 2025:
  • $23,500 Maximum to a pre-tax 401(k) if under 50; $31,000 if 50+.
  • $7,000 for IRA; $8,000 if 50+.
• Every retirement dollar contributed reduces taxable income “dollar for dollar.”
  • Robert: “If you’re in the 24% tax bracket and you contribute an extra $5,000 before December 31st, you just saved yourself $1200 in taxes.” ([03:46])
• You don't need to do a lump sum—talk to HR about adjusting your contributions over the next few paychecks. ([04:11])
• The deadline for 401(k) is Dec 31st; for IRAs, it's tax day (April 2026)—but don't wait!
  • Austin: “If you got the cash now, you should do it now... As we think about January, ‘new year, new me,’ you’re into some new routines, you might forget.” ([04:43])
• Step-by-step: Log into your 401(k); check your YTD contributions; calculate remaining room; adjust paycheck contributions.

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3. Spend Your Flexible Savings Account (FSA)—“Use It or Lose It” ([06:15])

Key Takeaways:

• FSAs expire at year end—any unspent money vanishes.
  • Austin: “Americans forfeit over $400 million a year in these flexible spending account funds every year because they forget to spend the money.” ([07:08])
• Common eligible expenses: prescriptions, OTC meds, first aid, glasses, dental, sunscreen, even some mental health services.
• Action Step: “Log in to that flexible spending account, check the balance... have a plan to spend it before year-end.” ([07:43])
• Pro Tip ([08:21]):
  • Some employers have grace periods into January or allow $500 carryover—Check your plan specifics, but don’t count on it.

HSA vs. FSA:

• HSAs do not have use-it-or-lose-it and can be invested over time—no end-of-year rush.
• Actionable Advice: Spend FSA by 12/31; no panic necessary for HSA.

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4. Charitable Giving—Do Good, Cut Taxes ([11:15])

Key Takeaways:

• Donations are tax-deductible if you itemize—but only if they’re made by Dec 31.
• Smart strategy: Instead of cash, donate appreciated stock to avoid capital gains and get a larger deduction.
  • Robert: “If you donate the stock directly to charity, you get to deduct the full $5,000 and never pay capital gains tax. So the charity sells it tax free.” ([12:33])
• Bunching donations: Combine two years of giving into one to exceed the standard deduction and maximize itemized deductions.
  • Use a Donor Advised Fund to get all the tax benefit now, and distribute grants over time.
• Special for retirees (age 70½+): Qualified Charitable Distributions (QCDs)
  • Up to $105,000 can be donated directly from IRA—never shows as income, so no taxes.
  • “If you have a traditional IRA and you’re required to take a distribution, you can donate up to $105,000 directly from your IRA to charity. That money never shows up as income, so you’re not paying taxes on it.” ([14:46])

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5. Review and Action Steps

• Wealth means maximizing what you keep: “The government and your employer are basically offering you free money through retirement matches, tax deductions, pre-tax retirement accounts...” ([15:45] - Austin)
• Robert: “Wealthy people... are intentional with their money. They make smart choices, consistently, and they don’t leave money on the table.” ([16:20])

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Notable Quotes & Memorable Moments

• Austin: “Most people spend weeks planning New Year’s Eve... but they won’t spend a few hours mapping out some financial moves that could literally put thousands back in your pocket.” ([02:21])
• Robert: “Episodes like this can literally change the trajectory of someone's life and family's life because they're taking advantage of what's already out there and easy for them to implement.” ([17:48])
• Austin: “It’s not that we’re sharing some crazy tax loopholes that Elon Musk uses… What we are doing is we’re just making sure people have full information.” ([16:58])

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Q&A Highlights

1. Vending Machine Side Hustle ([19:19] – [25:15])

• Jared asks about buying a $21k vending machine business.
• Advice: Value is typically based on one year of revenue. Margins often 25-50%. Focus on profit, not revenue, and consider machine placement and condition.
• Robert: “Don’t worry so much about the age of the machines. Worry about the actual numbers... The value for you is finding a vending route... that has really good route stops.” ([23:25])
• Austin: “For this to be successful long term, you have to be very handy… vending machines break all the time.” ([25:15])

2. Debt Consolidation Program ([25:51] – [32:40])

• Abby asks if enrolling in AmeriCorps (a debt-negotiation firm) was a good move.
• Austin: These programs take a fee and often you could settle for less on your own—consider using tools (like ChatGPT) to write negotiation letters yourself.
• Robert: “Exhaust all efforts first before you pay someone else to help you with your problems. Because the fees are normally egregious.” ([30:50])
• Budgeting and Increasing Income: Consider higher-paying side jobs if the current side hustle isn’t earning enough.

3. Student Loan Repayment vs. Investing ([32:40] – [37:16])

• Savannah has $176K in student loans, is a new OT making $100K, and wonders if she should aggressively pay off loans or minimize payments and invest.
• Austin’s Rule: Don’t aggressively pay off student loans until you’ve invested at least as much as you owe. Prioritize investments to let compounding work.
• Robert: “I’m a big fan of kicking the can down the road [with student loan debt]...There is a world where we might see a real new program...with lower interest rates.” ([35:50])
• Real-world example: By investing early, you can use compounding to build wealth faster—even while making minimum payments on loans.

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Timestamps for Key Segments

• [01:28] - Year-end financial checklist overview
• [02:59] - Maxing out retirement accounts
• [06:15] - FSA & HSA use-it-or-lose-it tips
• [11:15] - Charitable giving strategies and tax tips
• [19:19] - Listener Q&A – Vending machine side hustle
• [25:51] - Listener Q&A – Debt consolidation/negotiation program
• [32:40] - Listener Q&A – Student loan repayment vs. investing

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Final Thoughts & Action Plan

• Three year-end moves: Max out pre-tax retirement accounts, use up FSA funds, and plan charitable giving by December 31.
• Check every account, review balances, consult employer for grace periods, and act now—not in the New Year rush.
• Use these legally available strategies to keep more money, reduce your tax bill, and set yourself up for financial wins in 2026 and beyond.
• Don’t leave free money on the table—act intentionally and consistently.

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Hosts’ Closing Message:
Austin and Robert urge listeners to take these straightforward steps, not just for tax benefits, but to take back control, grow wealth, and preserve it for purposeful use. “Prove to yourself you’re serious about building wealth—take action on these three moves before December 31st, and your future self and your family will thank you.” ([16:20])

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Transcript

[Austin Hankwitz]

You're about to make a trade. Which u do you listen to? Is it get optioning those options or.

[Robert Kroke]

Let'S do a little research.

[Austin Hankwitz]

Learn [e-mail] TradeSmart Tonight on NBC, Jimmy Fallon and Bozma St. John host the incredible new competition show. I hire 10 creatives from all walks of life. They will be battling it out to see who can impress the world's biggest brands.

[Robert Kroke]

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[Austin Hankwitz]

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[Robert Kroke]

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[Austin Hankwitz]

We're spending millions of dollars.

[Robert Kroke]

I'm so excited to embark on this.

[Austin Hankwitz]

Adventure with all of you. May the best idea win on Brand with Jimmy Fallon tonight on NBC. 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 what moves you need to make by before December 31st to keep more money in your pocket, pay less in taxes and set yourself up right for 2026. My name is Austin Hankwitz. I'm joined by my co host Robert Kroke. Robert is a seasoned entrepreneur with lifetime revenues of over 300 million and I'm a multimillionaire in my late 20s 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, walk us through what we're going to be talking about in today's episode.

[Robert Kroke]

In this episode of Rich Habits podcast, we're talking about something that could literally save you thousands of dollars if you set it up correctly in the next few weeks. Think of it as your year end money checklist. Think of December 31st as your financial finish line and if you cross it without making these three moves, you could be leaving so much money on the table. And we're not talking about vague advice like save more, budget better. We always talk about those things, but we're talking about more specific, actionable move that money savvy people make before the calendar year flips to 2026. Maxing out retirement accounts if you want to save on taxes, using up FSA funds before they disappear forever, making strategic charitable donations and doing a full financial review so you're not scrambling in January.

[Austin Hankwitz]

That's right, Robert. Most people spend weeks planning their New Year's Eve and what they want to do to ring in the new year. But they won't spend a few hours mapping out some financial moves that could literally put thousands of dollars back pocket or save them from a massive tax bill come April. So some of the opportunities that we're talking about do expire on December 31st. So once that clock strikes midnight, those savings are gone forever. So you need to lock in, get some of these things done. By the end of this episode, we're going to tell you exactly what you need to be doing before midnight December 31st. You can maximize wealth, minimize taxes and be a happy, happy person. So Robert, let's dig into the first one.

[Robert Kroke]

Retirement accounts, number one, is all about retirement contributions. And this one is huge because it's one of the few legal ways to reduce your taxable income yearly. If you haven't maxed out your pre tax 401k or IRA, you've got until December 31st to make it happen. So you got to mark that down and stay on top of this. So let's break down some of the numbers. In 2025, you can contribute up to 23,500 to your pre tax 401k if you're under 50 and 31,000 if you're 50, 50 or older. And for IRAs, the annual contribution limit is $7,000 and $8,000 again if you're over 50 years old. So now here's the key. Every dollar you put Into a traditional 401k or traditional IRA reduces your taxable income dollar for dollar. That's the key here. So if you're in the 24% tax bracket and you contribute an extra $5,000 before December 31st, you just saved yourself $1200 in taxes. So that's $1200 you're not sending the IRS all because you're integrating rich habits before the end of the year.

[Austin Hankwitz]

And here's what most people miss, right? You don't have to do this in a lump sum, right? So if you're behind on these contributions, talk to your HR department or your payroll provider and see if they can increase your contribution percentage for the last few paychecks of the year. Even if you're only getting an extra 1, 2 or 3,000 dol into this account, that's real tax savings come tax time in April. Now here's an important note. This deadline of December 31st only really applies to these pre tax 401ks and employer sponsored retirement accounts for individual Retirement accounts, those traditional IRAs. In this instance, you actually have until tax day of April 2026 to make some contributions for that 2025 tax year. But Robert, here's my perspective. I wouldn't wait because if you got the cash now, you should do it now as we think about January New Year, new me, you're into some new routines you might forget, some unexpected expenses. You probably have a holiday spending hangover, right? So you're trying to recover from what happened between December 15 and January 1. I don't think you're going to do a good job of oh, I'll just make sure it gets done by tax time. Miss me. With that, let's instead get our money invested in the year of 2025 contributed compounding and working for us before. So we're not going to do one of these last minute Kobe Bryan clients from downtown to try and get it in before our tax accountant is drilling us for more info.

[Robert Kroke]

Yeah, we covered this last night in the Rich Habits Live and it really is. I feel like most people check out for the year and start that holiday party season like November 15th and then they run up the credit cards, they go do all these parties, they go travel around for the holidays, see family and friends, do all of that. So the holiday hangover is real. But here's the plan. Log into your 401k account, look at how much you've contributed year to date. If you're not maxed out, calculate how much more you can contribute before the end of the year. Then adjust your paycheck contributions immediately. And please don't wait.

[Austin Hankwitz]

That's a great breakdown, Robert. I love that. Not just the show, we're sharing some ideas but we're giving them the step by step. Right? That's exactly step by step what you need to do. So that was the first move to consider to try and save some taxes. Now let's walk into the second one here which is your flexible savings account and your health savings account and using those strategically between now and the end of the year. These are your use it or lose it accounts, specifically the FSA or that flexible spending account. If you have one of these with your employer, you need to pay attention because this money literally disappears if you do not spend it by December 31st. So flexible spending accounts are pre tax accounts that you fund throughout the year to pay for medical expenses. Seems pretty straightforward. The problem is most employers have a use it or lose it rule. So if you don't spend the full balance by that deadline, which in Most cases are December 31, that money goes back to your employer and is gone forever. Fun fact. Not even that fun. Just a fact. Americans forfeit over $400 million a year in these flexible spending account funds every year because they forget to spend the money. Literally insane. Robert, this is Your money, it's taken out of your paycheck, you're just handing it straight back to your employer. So here's what you need to do right now. I need you to log in to that flexible spending account, check the balance. If you've got a hundred, five hundred, maybe a thousand dollars sitting in the account, you need to have a plan to spend it before the end of the year. Now the good news is these FSA funds can be spent on more than just doctor visits, right? You can use them for prescription medicines, over the counter pain relievers, first aid supplies, sunscreen, contact lense lenses, glasses like what I'm wearing on my face. Dental work, maybe even some mental health services can get covered with this flexible spending account. So if you have a balance, you need to spend it, which means go stock up on the stuff you're going to buy anyway. And if you have a doctor's appointment that you know is going to come up, you need some dental work. Need to get your eyes checked. Sometimes you can prepay on those appointments in advance. So you're able to use this money before the end of the year.

[Robert Kroke]

Now let's talk about Health Savings Account. These are different HSAs don't have a use it or lose it rule. So your money rolls over year after year and you can invest it just like a retirement account. So if you have an hsa, you don't need to panic. But if you have an fsa, you definitely have work to do. And you need to make sure you get to those deadlines and spend that money. So here's a pro tip. Some employers offer a grace period into January or allow you to carry over a small amount of usually around $500. But be sure to check the specifics for your plan's rules because you don't want to count on it and lose that money. The safest move is to spend it before December 31st.

[Austin Hankwitz]

That's a great pro tip, Robert. Now your action plan here. Check that FSA balance today. They got that money. Make a list, eligible expenses, Go spend it. Go start buying sunscreen. You can always use more sunscreen. You're always going to need it. Don't let that money go to waste. Robert. Speaking of not wasting money, I think it's really important that everyone understands this reality that if you are not investing toward building a nest egg to have in retirement, you will be working for the rest of your life. The only way you will ever be able to stop trading time for money is to have portfolio income that is growing for you over Time.

[Robert Kroke]

The easiest way anyone can begin investing towards their Future is on public.com you know, we love Public and 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 3.7% APY for your emergency funds.

[Austin Hankwitz]

And for a limited time, you can earn a 1% match on all IRA deposits, IRA transfers and 401k rollovers. That's $1,000 of free money for every 100,000 that you roll over into their platform. Which means if you're taking our advice here, you want to, you know, contribute a little bit here, save some taxes, go use public to do it. Go get the free 1% match.

[Robert Kroke]

We always talk about public and I love it for you, Austin, because your new account that you put together, that new portfolio of small has been crushing it. And I just really love to see, you know, all of what public has to offer and you can fund your account in five minutes or less. Head to public.com rich habits and claim your 1% match today. Paid for by Public Investing and full disclosure in the podcast description.

[Austin Hankwitz]

Yeah, I'll put a screenshot on on screen here. The the small cap portfolio that Robert's alluding to. We, we started building a little something in the Rich Habits Network for fun. If you are part of the Rich Habits Network, you know what I'm talking about. If you don't know what the Rich Habits Network is, go check it link in the show notes below. It's up 18 and a half percent in the month of September, which is pretty exciting. So we went from 28, 29,000 to now we're just about 36. All right, Robert, let's now talk about the last financial money move people can make to save on taxes and put more in their pockets at the end of this year.

[Robert Kroke]

Yes, number three is all about charitable giving. And before you tune out thinking this doesn't apply to you, stick with me here because even if you're not giving away huge sums of money, there are smart strategies here that can save you on taxes and help causes you care about most. So let's start with the basics. If you itemize your deductions, charitable donations are tax deductible. That means if you donate $1,000 to a qualified charity and you're in a 24% tax bracket, you're saving $240 on your taxes while doing a really good thing. But here's the key. The donation has to be made by December 31st to count for the 2025 tax year. Most people think of charitable giving as writing a check to their favorite nonprofit, and that works. But there are smarter ways to do this, especially if you're giving larger amounts. One strategy is donating appreciated stock instead of cash. Here's how that works. Let's say you bought stock in Palantir a few years ago for a total of a thousand dollars, and today it's worth $5,000. If you sell that stock and donate the cash, you're going to pay capital gains on the $4,000 of gain. But if you donate the stock directly to charity, you get to deduct the whole the full $5,000 and never pay capital gains tax. So the charity sells it tax free. It's a win win for everyone. And this is one of the most underutilized tax strategies out there. Most people have never heard of it, so make sure you're taking notes and taking actions here, even if you're only donating small amounts. So if you've got stocks or ETFs sitting in a taxable brokerage account with big gains like most of you do that follow the show. Donate those instead of your cash, you get the full deduction, you avoid the capital gains tax, and the charity gets the same amount of money.

[Austin Hankwitz]

Yeah, Robert, we had Steve Latham on the podcast. I think it was like a year or two ago, but he created the company donatestock.com so go check out donatestock.com we're not affiliated with them. It's just a great tool if you want to donate your stock to a charity. They make it really seamless on how that happens there. So great strategy. Appreciate you calling that one out, Robert. Another strategy is actually bunching your donations. So let's say that you donate $5,000 a year to various charities. You're not itemizing because your total deductions don't exceed the standard deduction. So Instead of donating 5,000 this year and 5,000 next year, you could bunch the two years of donations into one 10,000 total. Let's say in the year of 2025. You can itemize this year, take the standard deduction next year and come out ahead on taxes. And if you're really strategic, you can use something called a donor advised fund. This is like a charitable savings account. You make a big donation to the fund this year, for example, get a big tax deduction now and then you can recommend grants to specific charities over time. Great way to bunch your donations together and still spread out your giving over a long Period of time. So you get to enjoy the tax write off in one year, but you don't have to deploy all of that capital to the places you want to donate to in that same year. So it kind of spreads things out a little less pressure on you, but you still get the tax benefits.

[Robert Kroke]

Yeah. I love these strategies and episodes like this because it really lays out a blueprint for people to help them understand better all of the things they can be doing with their money. And we always say it's not what you make, it's what you keep. And that's what this episode is all about. Getting the benefits, doing good things with your money with these charitable donations, but also really keeping more for you in retirement. And here's something that applies to people that are 70 and a half or older, and that is called a qualified charitable distribution or a qcd. So if you have a traditional IRA and you're required to take a distribution, you can donate up to $105,000 directly from your IRA to charity. That money never shows up as income, so you're not paying taxes on it. And this is huge for retirees who don't need the money from their required minimum distributions. So instead of taking the distribution, paying taxes, and then donating the cash, you skip the tax step entirely and send it straight to the charity. So here's the plan. If you're going to donate this year, do it before December 31st. And if you're giving larger amounts, look into donating appreciated stock or setting up a donor advised fund. And if you're over 70 and a half, talk to your financial advisor and definitely check out the QCDs.

[Austin Hankwitz]

Robert Building wealth isn't just about making more money. It's about being smart with the money you already have. And that means taking advantage of the tax breaks, employer match, and every opportunity that the system gives us. Right. The government and your employer are basically offering you free money through retirement matches, tax deductions, pre tax retirement accounts, all the stuff that we kind of know and are familiar with, but we're not exactly sure as to how strategically and tactically apply this information. Well, that's what this episode just did. And if you use them and you do it right before December 31st, you could potentially save thousands of dollars.

[Robert Kroke]

Remember, wealthy people aren't wealthy because they make all the right investment picks or because they got lucky. They're wealthy because they're intentional with their money. They make smart choices, consist, and they don't leave money on the table. That is one of the biggest messages Austin and I put out in these podcasts every single week is to give you guys the blueprint, all the options, so you can take advantage of all of this, just like we do and just like all the other wealthy people that we work with. So go prove to yourself that you're serious about building wealth. Take action on these three moves before December 31st, and your future self and your family will definitely. Thank you.

[Austin Hankwitz]

All right, Robert, I love these breakdowns. These episodes, I think are really helpful. And you know, it's not. It's not that we're sharing some crazy tax loopholes that Elon Musk uses. Right. I'm not. We're not doing that. But what we are doing is we're just making sure people have full information, right, if they want to have some, some larger 401k contributions because they're in a big tax bracket and they're really trying to pull that down. Here's what you can do. If you have an FSA with your employer and you didn't really know it was user or lose it, well, now hopefully you do. Maybe you want it. You know, you're sitting on $60,000 of capital gains on a stock your grandfather gave you. Well, if you donate it, you could probably use that as a wonderful way to support a ca you love as well as offset some taxable income. There's a lot of different bits and pieces to not just building wealth, but preserving it and using it for purposeful things in our, in our lives. And, and I hope this episode helps a lot of people come to those conclusions.

[Robert Kroke]

Yeah, definitely. I love that recap because, you know, I do all these one on one calls to help people and, and give them guidance and education. And I'm always shocked by how many of financial advisors and people out there that are wealth advisors don't teach people anything. They just say, here's what we're going to do. But they don't give them all of the advantages that we share and we try to educate people on with this podcast. So episodes like this can literally change the trajectory of someone's life and financial life and family's life because they're taking advantage of what's already out there and easy for them to implement into their portfolios.

[Austin Hankwitz]

All right, Robert, now before we jump into the Q and A section of this episode, investors, you need to listen up. If you've been itching for some in person events in 2020, you are in luck. Our awesome partners over at Blossom Social are hosting their third annual 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 Kroke]

And they're hitting seven cities still this year, including la, Vancouver, Calgary, Chicago, Montreal, and Toronto hosted at the Rogers center for the baseball fans. Yes, where the Blue Jays play, and New York hosted at the NASDAQ center in Times Square. So you guys know how much we love Blossom as an online social network and they're all about connecting investors online. Well, now's your chance to see what the community is all about in real life at these events, so make sure to check it out.

[Austin Hankwitz]

And Robert, I'm on the website right now. I'm seeing Chicago and Los Angeles are the last two stops still available. New York is still available. It's actually happening tomorrow, October 3rd, but it's sold out. So, so nothing to do there. But you can go visit the CBO in Chicago, which is where that's taking place, and then the LA Pier Hotel or La Pier Hotel, whatever that is in Los Angeles on October 15th is, is is still taking place. So you've not run out of time if you still want to go get some tickets. They've hooked us up with a 15% coupon code rich habits 15 all uppercase one word, one code there. Go use that at checkout link in the show notes below or visit blossomsocial.com forward/2025 investortour wish we could make some Robert, but our our schedules are just a little too busy for running around the country like this. All right, Robert, let's jump into our first question coming from Jared C. On Instagram. Jared says hi Robert and Austin, I'm reaching out for help. For three months I've been researching different business types to purchase as a side hustle. With the potential to expand and grow, among the most successful are vending machines, ATMs, car washes and laundry businesses. I'm considering buying a vending mach listed on Biz Buy Sell. The business has six machines at four different locations and they currently do not profit share with those locations. It is priced at $21,000. I've researched the cost of buying new machines and they range between 3 to 8,000. That said, the asking price of 21,000 seems high for older dated machines to me. So here's my question. Can you please give me some of your advice on how to assess the business and make sure that this is a fair asking price? I have deliberately not contacted the seller so I might hear from you two. First love your grateful for your help. Keep killing it Jared. Yes Jared, here's what you got to do, my friend. In my experience, vending machine businesses are valued at one year's total top line revenue. So the 21,000 has nothing to do with the age of the machines, how new or how old they are or anything like that, or how many locations, how many machines. It only has to do, in my opinion. I don't know anything about this business beyond what you just told me in this Instagram dm. All it has to do is with the fact that this company likely generates about $21,000 a year of revenue. Right? That's revenue, that's not profit. Think about margins of anywhere between 25 to 50%, depending on the types of candies and sodas and your gas, to, you know, run around and do this and to pay people things like that. How do I know if it's a good business or not? I would ask for some financials. I would also, if I were you, I would spend a Saturday visiting one or two of those machines and just hanging out for two or three hours at each one doing some diligence to see, see if people are actually going up to them, how quickly they sell out, what types of candies they're selling, how fast, or how much you can buy at a Sam's Club or a Costco or an Amazon. What do those margins begin to shape up as? And sometimes if the seller is a nice person, they're going to tell you everything they do. They'll give you the whole blueprint. They'll say, yeah, this machine's been kind of tricky. But, you know, for example, I had a friend who had a lot of vending machines here in Nashville, and they had a vending machine in the boys his dormitory at Vanderbilt University. And he crushed it with honey buns. He's like, these guys eat honey buns. Like, it's nothing. I mean, they're going through so many honey buns, I got to restock every two days. And so he's like, so that's the thing we're doing. Every vending machine owner has like a plan. They know it sells, right? They know. So talked with them. Let them know that you're interested. Let them know you're always negotiate the price. Ask them why 21,000 is it last year's, you know, revenue? Like, what are the margins? Like, really walk through the numbers here. But understand, like, okay, if spending $21,000 this year to buy this vending machine route, how much of that is going to turn into profit in my pocket, likely anywhere between 6 to 7,000, maybe closer to 5, depending on the margins. And now you got to think, okay, how long is that going to be for me to completely get a return on my investment? And what's the opportunity cost of not putting that 21,000 into something like the stock market that's up 15% this year, or gold that's up 45% this year, or, you know, whatever else the opportunity cost. You want to benchmark that against Austin.

[Robert Kroke]

I think that was an incredible breakdown. And I just want to add a couple things. Things don't worry so much about the age of the machines. Worry about the actual numbers. You're spot on. You want to get three years of financials, and here's why. Not so much because of the profit. You want to find out if the locations and placement of these machines are solid and if they're pretty straightforward as far as consistent with their sales. Because what you don't want to find is when he placed the machines five years ago, sales have dropped off every single year in the locations or some of the locations, because the value for you is finding a vending route or anyone that's looking at this type of business that has really good route stops. So the locations of all the machines are constantly selling well. Now to talk about profits, let's say that this route does $21,000 a year. Austin is spot on. You need to understand the opportunity cost because all the fake gurus on the Internet are going to tell you, you, oh, my business does $500,000 a year. What you bring in means nothing. It's what you take home. Net to you is the most important part. And if you bring home $7,000 a year on this $21,000 investment, which is probably spot on, you have to understand and deduce, is it worth it for my time to manage pickup, gas, wear and tear time and everything to be able to keep an eye on these machines and do all the work. Work you have to decide because only you know if that is worth it for your time or if you think you can update the machines, have better selection and, and keep growing it, that, that's a different matter. But that's what I would look at is three years of financial. Is it growing, is it stable, and is it worth your time for the amount of profit you're going to get from those sales.

[Austin Hankwitz]

Last thing I'd share is in my experience with vending machines, because I've done a lot of research on them and I've, I've worked with people who've done this and they can work very well, if you do it right. But my experience, for this to be successful long term, you have to be very handy, because turns out vending machines break all the time. And if you are not someone who's handy, this is not going to work out for you, Jared. Literally, like, these things will break and you got to figure it out. And there's not a lot of people out in this world that are making YouTube tutorials about how to fix a specific, you know, vending machine that you bought from Japan. Like, there is people that are going to show you on YouTube how to change the oil in your Honda Civic, right? So it's like, like, you got to be able to troubleshoot. You got to be able to be handy and figure this stuff out. So our next question comes from Abby E. Abby says hi. I'm a single income, single family household here in the bay area. I'm 40 and currently carrying $50,000 of debt. I recently enrolled in a program called AmeriCorps that negotiates with creditors on my behalf to reduce interest and balances. It's a four year plan, and while it does hurt my credit in the short term, I felt like it was the best option given our situation. I own a home home, live mostly paycheck to paycheck, and run a small health and wellness side hustle to cover household necessities. Looking back, I wish I'd been able to invest earlier, but right now my focus is becoming debt free. I really enjoy your podcast. It motivates me to get my financial life on track. Do you think enrolling in a program like this was a reasonable move for someone in my situation? Do you have any advice or perspective that would be great. I also have already taken a HELOC out on my home. We are single income because my oldest child has health issues requiring one parent to be home all the time. Abby, I am so sorry to hear about your oldest child's health issues. You know, it just puts in perspective like nothing in this world is more important than our health. It really is. I mean, you can have all the money in the world, but if, if you have all the fame and fortune and all the cool things that people idolize in this world. But if you do not have your health, you have nothing. And I'm just so sorry to hear that you're going through that, Abby. So here's what you enrolled in. To my understanding, these sort of like, credit card debt, debt consolidation negotiation programs, what they're doing is, let's say you've got this $50,000 of credit card debt. Amera Corps is going to say, okay, you pay us $500 a month, every month for the next four years for a grand total of $24,000. This 24,000 is, yes, lower than the 50,000 of debt you have. And then with that 24,000, they will one, take a fee for themselves to do this, and then two, what they're going to do is they're going to then credit card issuers and they're going to negotiate your, your debt, your defaulted debt, credit card debt. And hopefully they're going to say, okay, we're going to give you, you know, let's say $20,000 to completely wipe out Abby's $50,000 of debt. And they're going to say, no, we want more or less, whatever. But let's say 20,000 of this, 24 is going to be used to, to settle these credit cards, which is, yeah, that's $30,000 less of the credit card debt you had. But here's the thing, though. You're paying into this for four years, $24,000, which in my opinion is like, you know, would I rather just take that money and try and settle it myself? Would I rather just say, hey, you know, credit card issuers jump in a creek. I don't care what you're doing, you're not going to get it until it's 10 cents on the dollar. Right? 5,000 is what I'm going to settle for. Like, there's a lot of different ways to think about this. I've Abby, never been in your situation, so I can't tell you exactly how to handle this. But what I've heard about these Amer corpses and like, debt consolidation, negotiation companies are not great things because what you're doing essentially is paying just as much in some cases to them over this period of time. And they are essentially pocketing and arbitraging a massive difference between what you could have settled for. So let's say 5,000, right? 10 cents on the dollar versus what you actually ended up paying them, which is, you know, net to them, you know, 24,000 out of your pocket. So it's a really tricky situation. Unfortunately. There's a lot of misinformation and miscommunication online about how these work. Some people think like, oh, I'm just going to consolidate my credit card debt. It's going to be great. Whatever, it's all done. But in actuality, your credit still goes to crap because you're not paying your credit cards anymore. You now have paid 24 something thousand dollars out of pocket, when in actuality, maybe you could have done this yourself for 5,000. Right? That's a $19,000 difference. Right? There's all these, like, little things that could have happened. You've already enrolled in it. I have no idea what this means for you when it comes to, like, obligation to pay and the stuff, things like that. But here's what you need to do, regardless. I need you to get on an honest budget. I need you to live on as little as you possibly can. And I know you've got this. This health and wellness side hustle, and maybe it's making money, but the 10 to 15 hours a week that you're using to try and build this side hustle, to try and make some money, I want you to compute and calculate what that means on an hourly ROI on your time, and if it's $8 or $10 or $12 an hour on your time to try and make revenue for this business. Pause. Go throw boxes at Walmart or Target or go flip burgers at burger King or McDonald's or, you know, give chicken to people at Chick fil A for 15, 18 an hour and have that, like, locked in versus fingers crossed. I can try and make some money with my side hustle, because this isn't a I'm gonna try and have a side hustle time. You guys are in desperation mode, and you need to put yourselves in a situation where you can earn as much money definitively. Right? Trading time with, you know, working hourly, versus, like, oh, if I only worked a couple more hours on the side hustle, I might get another sale.

[Robert Kroke]

That's an incredible breakdown. And Abby is in a difficult situation. She's not alone. A lot of people end up in this place where they're further and further in credit card debt. She's got the HELOC on top of it, which compounds this because she can't use that to pay off the 50k, because I'm assuming the HELOC has already been spent. So it's. It's a tricky situation. And I agree with you. 100, Austin. If you're not making more than what you could make at a regular job with your side hustle and you're expending all of this time and energy, I would pause it. I would go figure out a way to get as much money as I can immediately to be able to get rid of this debt. And then I would also look at the bylaws and the terms and conditions of America Corp's contract that you have with them and see if there's a way out. And for any of you that are in this situation, exhaust all efforts first before you pay someone else to help you with your problems. Because the fees are normally egregious. You could go to ChatGPT for free right now and say, chatgpt, I have high interest credit card debt. Can you write a letter for me that would be highly effective with my credit card companies to help me settle for a much lower amount than what I owe? Oh, and what are the five bullet points that I should include in this letter? That right there would take you five minutes and it will guide you legally of the best ways to try and settle these debts on your own so you're not paying someone else to settle the debts. All the information you need to fix this is out there. You just need to do the work and then also reevaluate, do a budget like Austin said, because obviously you're living beyond your means and spending more than you meant make. And that is a recipe for long term disaster. So I hope that helps.

[Austin Hankwitz]

Our final question comes from Savannah on Instagram. Savannah says hi, my name's Savannah. I'm a new grad occupational therapist with my grace period ending soon. So any student loan advice would be greatly appreciated. I'm currently on the income based repayment plan, which means I will pay 10% of my discretionary income every month for the next 20 years and then any balance after that that is forgiven but taxable. So the big question, I'm unsure if I should try and pay my student loans off as soon as possible or pay the minimum amount on my payment plan. I have $176,000 of student loans. I pay $400 a month on my car payment. I've got four and a half years left on that and then $500 a month on rent. My salary is $100,000 a year. 21,000 of that is at a 9% interest rate, 59,000 at an 8%, 54,000 at a 7%, 35,000 at a 6% and then 7,000 interest rate. Love your podcast. Any advice is appreciated. Just a girl in healthcare. Try not to feel too overwhelmed. Thank you for your advice. Well Savannah, thank you for working in healthcare. We need more people like you. You are absolutely crushing it as a occupational therapist. I've got a couple friends that are doing that as well and making 100k. You are just, you're doing it girl. So congratulations, you deserve that salary. Here's what I would do. You got a hundred thousand dollars a year after taxes, 80,000 a year. Let's call it $6,500 a, a month that you're taking home after taxes to your bank account. So 500 of that goes to rent, 400 that goes to your car. Now we have $5,600 left. I would take anywhere between 35 and $4,500 every single month and use it to start investing. I want to get as much money as I possibly can invested before I start paying off the student loan debt aggressively. Like, that's our rule of thumb is like, you know, we want you to be out of student loan debt. We want you to pay back what you borrowed. We think that's what people do. Do I, I did that, like pay off your student loans, but don't do it until you have the same amount or more invested in the stock market. So making 100,000 a year with 500 bucks a month in rent and 400 car payment. Okay, perfect. So you got 5,600 bucks. Take 3,600 of that every single month. So leaving you an extra $2,000 to live on beyond, you know, what you just shared with us, that's $43,000 a year that you can start investing. Do that for three years, four years. Now you've got 130, 50, $70,000, and you're still in your mid-20s. You're doing the, the slow, you know, payback plan, whatever. And now you can say, okay, cool, I've got 150, 170, $200,000 invested in my Roth IRA, my bridge account, whatever you want to do there. Now I'm going to start to pay off the student loans. Maybe, you know, five years later, you're now making 160,000 a year, 150,000 a year. So now you got a little bit more wiggle room in your budget. There's a lot of different ways to, to think about this. I believe you should pay him back. I believe you should pay him back after you have the same amount or more invested in the markets and growing for you. Watch the episode we made Talking about every dollar invested in your 20s turns into $70 in retirement. So $3,600 a month that you're investing turns into a quarter million in retirement. Put that in perspective. Robert, what's your take?

[Robert Kroke]

I think you're spot on. And, you know, I love this strategy because if you look at the real material math, if her payment plan is based on 10% of her net income and she nets $80,000 a year, so she has to pay $8,000 a year for these payments collectively with these high interest rates, if she gets ahead of this, gets her base built, gets that 120, $150,000 saved and put away, it's going to make more than she has to pay out just by growing and compounding on itself. So it's going to leave her net these payments that she has to make for the student loan debt. So. And I'm also a big fan with student loan debt and I get a lot of guff for this, but I'm a big fan of kicking the can down the road because there is a world where we might see a real new program that says, hey, Moving forward in 2026, 2027, we're no longer going to allow these egregious 8, 9% interest rates on student loans debt. So we're going to let people roll it all up and it's going to be 4% interest, which then is going to knock down your growing balance with a lower interest rate. So I love your strategy there, Austin. And I think she can become net positive doing this strategy, but also she's letting compounding do its job to help her have a baseline of that 100k plus that we like people to have.

[Austin Hankwitz]

Yeah, I had a friend who's PT and she makes like 150, 000 a year. She's like late 20s, early 30s, no money ever invested because all she was trying to do is every spare dollar she had, she was like trying to pay off the student loans, 3 off the student loans. And then I think it was like 18 months ago, two years ago, I sat her down and I explained to her that like, hey, you're 27 or 28 or 26. However old she was, I was like, listen, do this. I think at the time it was called like a save plan where you can like defer your student loans for 12 months and like interest doesn't accrue or something like that. But like during that 12 month period of time, you were paying a thousand a student loans, take that thousand and go put it in your Roth IRA and then let that grow. And she did. And now her Roth IRA is in the tens of thousands that she wouldn't have had beforehand because she was just trying to focus on paying off the student loans. And you know, she would have finally paid them off by the time she was 40, which is like, congrats, you paid off. And I think in her case about $220,000 of student loans. But it's like, what if you took that same 220 and after tax dollars that would have hit your bank account and put it in the stock market over the same 20 year period of time. Time. So you just got to be smart with this stuff. Savannah, we're proud of you. You're doing great. Just be smart. Be smart. Be smart everybody. Thank you so much for tuning into this week's episode of the Rich Habits Podcast. It was an absolute blast walking you all through the three major things to do with your retirement account. Your donations, your fsa, your hsa, all the fun stuff. If you learned something, please consider sharing this with a friend. Please consider giving us a five star review on Spotify on Apple. If you've not yet subscribed to the show, hit subscribe button on Spotify, Apple, YouTube. There's like half of you that listen to the show that aren't even subscribed, which is crazy to us. So please consider subscribing. Thank you for coming back and if you want more access to Robert and myself, consider joining the Rich Habits Network. This is our community for our biggest fans. Robert. Every Tuesday night we're in there on a Zoom call having a two hour conversation via Zoom. I called our weekly live stream, opening up our playbook, sharing our portfolios, giving y' all the the deepest insights and updates as it relates to what we're doing with money. You were also unlocking investment opportunities. You guys can invest alongside of us into some really cool pre IPO companies. And it comes with eight hours of video coursework talking about retirement, investing, real estate, buying businesses, analyzing stocks, all the fun stuff. So be sure to go check out the Rich Habits Network. 7 day free trial is still in the show. Notes below.

[Robert Kroke]

Yeah, I love the network and I think anyone looking to level up, if you follow us on Instagram or YouTube or you watch the show show and you find value, the network is definitely for you because we do everything that we do here every single week on the podcast, in the community and in the network. But it's on steroids. It's completely just way deeper, a lot more great information. Plus the community has grown and there's so many incredibly smart people in the community. So it's a great place to be if you're leveling up and you're at a place where you can dedicate the time time to actually get in there, check out the modules, join the calls, take notes and really help yourself. Because we all have blind spots and weaknesses when it comes to building wealth and we're here to change that by providing as much value as we can every single week. So thank you for stopping by.

[Austin Hankwitz]

Thanks everyone and have a great start to your week. Ram.