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- [00:01]
Podcast Host
This episode is brought to you by Rumchata, a delicious creamy blend of horchata with rum. It's best enjoyed over ice or in your coffee, delivering vacation vibes anyway, or anywhere you drink it. Find out more@rumchata.com drink responsibly Caribbean rum with real dairy cream, natural and artificial flavors. Alcohol 13.75% by volume 27.5 proof Copyright 2025 Agave Loco Brands, Pojoaquee, Wisconsin. All rights reserved. You're about to make a trade which you do you listen to. Is it get optioning those options.
- [00:38]
Robert
Or.
- [00:39]
Podcast Host
Let'S do a little research.
- [00:41]
Robert
Learn more@finra.org TradeSmart Austin, we finally did it. We've officially launched the first ever multi asset investment opportunity in partnership with Republic and the Cashmere fund that includes SpaceX, Perplexity and Xai all wrapped up into one investment. After months and months of work behind the scenes, we've finally been able to get this opportunity across the finish line. So Austin, I'm so stoked. Tell everyone what we've created.
- [01:13]
Austin
We've created a very, very interesting opportunity that is open to any of our listeners to consider here and learn about. So as you guys know, there are publicly traded companies on the stock market and there are privately held companies that are not traded on the stock market. Now anyone can buy and sell stock in the public ones, right? They're on the stock market. Go to public.com, make some trades, but only those with deep connections are able to buy and sell stock in the private ones. Investors in those companies have to be invited. For example, Robert, you were invited to invest into Elon Musk's company XAI. A couple years ago it was at a 5 billion billion valuation, which at the time seemed pretty crazy. But now it's trading at a rumored $200 billion valuation which is a 40x return in just two years. That's the type of stuff that happens with these private companies, right? They have these crazy potential insane upsides. And after months and months of hard work working with the lawyers and Republic and the Cashmere Fund and brokers and everybody around the scenes, we finally now been able to offer these types of investments to the rich habits podcast listeners, newsletter, subscrib, or just anyone else that supports the show.
- [02:28]
Robert
So with as little as $7,500 committed, your money will be invested in the likes of SpaceX, Perplexity and Xai, as well as 38 companies inside of the Cashmere Fund, including Mr. Beast, Beast Industries, Katy Perry's Desoi, Graza, Acorns and many more. This has been something we've been working on behind the scenes now since August and we're thrilled to be able to unlock an asset class of precede to pre IPO privately held companies to the world.
- [02:59]
Austin
So if you want to invest alongside Robert and myself in this opportunity to have SpaceX, Perplexity, Xai, Mr. Beast, Graza, Acorns, Katy Perry, like exposure to all of these privately held companies with your $7500 which is how much I'm investing. Robert's investing right. Diversification is the name of the game. Click the link in the show notes below. Go to Republic R E P U b l I c.com republic not to be confused with just public but republic.com you'll probably see it popped up there. You'll see our faces on the on the website. But anyone that's accredited is invited to invest in this. We are so excited to unlock this asset class, Robert. And yeah, it's going to be great. So let's, let's keep it there. We'll come back, remind you guys about it in every episode going forward. We have $10 million of allocation so we're not too sure how long that's going to last. We've already filled up many percentage points that in just the last couple of hours since launching this on Wednesday, October 22nd. You're watching this now on Monday. I'd imagine a lot of that has been filled up by now. So if you want to join us, you're invited. Click the link in the show notes below. So Robert, let's now jump into this episode and what we're talking about. So give us the breakdown. What is this episode all about?
- [04:12]
Robert
The top five financial accounts you need to set up before 2026. 2026 is just around the corner and if you haven't set up the right financial accounts by then, you could be leaving thousand thousands of dollars on the table next year. And here's what most people don't realize. We're sitting at a major inflection point. The 2017 Tax and Jobs act is going to sunset. Retirement contribution rules are changing under the Secure Act 2.0. Student loan policies are shifting. And if you wait until December of 2025 to scramble and open these accounts, you're going to miss out on free money, tax breaks and years of compounding growth. So today we're breaking down the five essential financial you need to have in place before we flip the calendar to 2026. This isn't theory, this is your financial infrastructure and without the right accounts, you're literally leaving money on the table every single month. So, Austin, let's get into it.
- [05:12]
Austin
Before we dive into the specific accounts, I think it's important for us to talk about, like, why this actually matters. So why should someone care about opening up the right accounts in 2026?
- [05:22]
Robert
Your accounts are your financial infrastructure. They're the foundation. Everything else is built. If you don't have the right ones. You're not just missing opportunities, you're actively losing money. Let's say you're not contributing to your 401k and you're missing out on a $500 employer match every year. That doesn't sound like a lot. But over 30 years, at a 9% average return, that's over $76,000 you just left on the table because you didn't open one account.
- [05:51]
Austin
And, Robert, that's just one account. You now multiply that across an hsa, a Roth, ira, brokerage accounts. Right? The compounding can add up pretty fast. So today we're going through the five accounts that you need to have set up before 2026, and we're going to tell you exactly why each account matters, what they do for you, and how to think about prioritizing them. So be sure to stick around to the end. So, Robert, let's talk about the foundation. Kick us off with the first account.
- [06:17]
Robert
The first account is a High Yield Savings account, or an H Y S A. This is your emergency fund. And if you don't have one yet, this is the first thing you need to open today. High Yield Savings Accounts are paying anywhere from three to four apy. That's not going to last forever, but while rates are high, you need to take advantage of it. Compare that to a traditional checking account that pays you basically a big nothing burger. You're leaving free money on the table every single month. You don't do this, so act fast.
- [06:48]
Austin
And the goal here is really simple. You want to keep three to six months of expenses in your High Yield Savings account because this is not your spending money. This is not your investing money. This is your the car just broke down, or I just lost my job, or I'm having a really rainy day. Money, right? It needs to be an account that's separate from your checking accounts. You don't just go spend it, but it's also earning interest in easy to access in case of an emergency. So if you're just getting started, do not overthink this. Go open an account on public.com. start earning that 3.8% APY they make it incredibly simple. They are consistently one of the highest paying savings accounts out there. But if you don't use public, that's fine with us. Does not matter. Just go try it. Go. Maybe go with Ally or Wealth Run or something else that makes sense to you in your situation. Doesn't matter what you use. What matters is that you're actually using a high Yield savings account for your emergency fund.
- [07:41]
Robert
Like Nike said, just do it. So many people that I talk to have tens of thousands of dollars sitting in a traditional checking account or savings account making zero. Don't be that person. Get the money to the High Yield Savings Account. Get the free money. We love public, but anywhere is fine. Just make sure you do it.
- [07:59]
Austin
Now our second type of account that you need to have are your retirement accounts. Think 401, Roth IRA and traditional IRA. So here's why this specifically matters for 2026 when the tax Cuts and Jobs act sunsets, tax brackets are likely going to go up a little bit. Which means if you're planning to contribute to a Roth ira, which means you pay taxes now and then you withdraw the money tax free in retirement, it might be a little bit more expensive to do that in 2026 and beyond compared to right now. So opening and funding a Roth IRA now while those tax brackets are still lower could save you thousands, perhaps tens of thousands of dollars over your lifetime.
- [08:38]
Robert
Let's break down the accounts quickly. If you have an employer sponsored 401k, you need to be contributing to it because most employers offer a match, usually 3% to 6% of your salary. That's free money. And if you're not contributing enough to get the full match, you're literally saying no to a guaranteed 50 to 100% return on your money.
- [08:59]
Austin
And then there's the Roth IRA. We've talked about this one for so long. It's such a powerful wealth building tool. You contribute after tax doll. All the growth and withdrawals in retirement are completely tax free, which I like that. No taxes sounds good to me. For 2025, up to 7,000 is how much you can contribute, or 8,000 if you're over the age of 50. And if you're under 30 and start maxing this out right now, you could easily have a million dollars in this account by the time you retire in your mid-60s.
- [09:27]
Robert
And if your income is too high to contribute directly to the Roth ira, look into the backdoor Roth IRA strategy. It is a completely legal way to get money into a Roth. Even you're above the Income thresholds, we won't go deep into that today, but just know that it exists.
- [09:44]
Austin
So the bottom line is if you don't have some sort of retirement account already working for you, if it's a 401k, if it's a Roth IRA, if it, you know, you gotta have some sort of retirement account rocking and rolling, you're contributing to consistently. So the first type of account we talked about was the high yield Savings account. The second type of accounts, here are the retirement accounts. You need those heading now into 2026. Open the account, doesn't matter which kind it is, and you' oh, Austin, I don't have money to put into it. Of course you do. You've got 10, 25, $50 a month. Like that's better than nothing. Starting somewhere is what's important. Just getting started, period, is what matters.
- [10:22]
Robert
We talk about it all the time. And that is exactly why I love doing this. It's all about taking action. And account number three is one of the most underrated accounts in personal finance, the health savings account, or you've seen it, called an hsa. And here's why this is so powerful. An HSA has a triple advantage. Let me say that again. Triple. You contribute pre tax dollars, the money grows tax free and you can withdraw tax free for qualified medical expenses. There are no other accounts in the tax code that gives you that.
- [10:56]
Austin
And here's a little secret for you, Robert. If you can afford to pay for those medical expenses out of pocket throughout your life, you can actually just let your HSA grow over time and invest into it like a retirement account. Then after the age of 65, withdraw from it for any reason, not just medical reason, any reason. And you only pay income tax just like you would with a traditional ira. So you get the pre tax and then it's taxed later in retirement. So it's essentially like a shadow stealth retirement account if you think about it like that, which I think is pretty interesting. So if you're healthy and you're not tapping into it, an HSA is essentially this shadow stealth retirement account that you should be taking advantage of. Now the catch is you need to have a high deductible health plan, which means for 2025, your deductible needs to be at least $1,600 for individuals or $200 for families.
- [11:47]
Robert
If you qualify, the contribution limits for 2025 are 4, 300 for individuals and 8, $550 for families. And if you're 55 years or older, you can contribute an extra $1,000. Max this out if you can. It's one of the best wealth building tools nobody talks about.
- [12:06]
Austin
How cool is that though, Robert, if you think about it, right, like hey, I'm going to contribute, let's say, what's the individual again here? It was $4,300. So not only do I write off 43 against my taxable income, saving me probably 1500 bucks, right? So I get to save money on my taxes by contributing it. Let's say it's invested for seven years and it doubles now because the stock market doubles every seven years to 8, 600. So I've got 4,300 of profits and I can spend all 8, 600 on my kids braces and there's no taxes. Right? You know, I'm saying like, how cool is that? It's such a cool account that no one talks about. All right, Robert, let's talk about the fourth type of account people need going into 2026 and that drum roll. A normal taxable brokerage account. Give me that bridge account on public.com. this is your after tax investing account. And it's absolutely essential if you have financial goals that you want to achieve before 59 and a half years old. Right. Because retirement accounts are great. We love a good 401k and a good, you know, traditional or Roth, Ira, whatever. You might have a 403B or something like that, but they lock your money up until you're almost 60 years old. You want to buy a house, you want to start a business, you want to take a sabbatical maybe, or maybe even retire early, like what I want to do. You need money that you can access without the penalties. That is what a bridge account or this brokerage account is for.
- [13:29]
Robert
Yeah, you can invest in stocks, ETFs, index funds, whatever you want. And while you will pay capital gains taxes when you sell, we love the bridge account because the flexibility is worth it. Plus, if you hold investments for over a year, you're taxed at long term capital gains rates way lower than ordinary income tax rates. The key here is automation. Set up automatic contributions every month, even if it's just $100 or $200. And invest in diversified index funds that we talk about all the time, like VOO or vti. Don't try to time the market. Don't chase individual stocks. Just buy, hold and let it compound and you'll thank us later.
- [14:11]
Austin
And if you're younger and you're like, guys, you just named all these accounts, which one do I actually Go do first. Right. We phrase for it. Here we go. Ready? Match beats Roth beats taxable. Okay, up to the match with your employer, 401k, because that's free money. Who doesn't want free money? I like free money. Up to the match to get the free money. Match beats Roth. So next is your Roth IRA. Max that out $7,000 a year or 8,000 if you're over the age of 50 and invest that into the V&VTIs of the world like Robert just talked about. Then if you have Autonomy over your 401k, which could be you go back and max out the 401k, that's great. And you get some nice cool tax savings there on the upside. And then if you don't have autonomy, which is a lot of us, we go put it into the taxable account, which is exactly what this account is. Right. And Robert, it's important to remind people here like if you ever want to retire and not trade time for money for the rest of your life, you need to have a nest egg that's growing for you over time.
- [15:11]
Robert
And the easiest way anyone can begin investing towards their future is 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 up to 3.8% APY for your emergency fund.
- [15:31]
Austin
And for a limited time you can earn a 1% match on all of your IRA deposits, IRA transfers and 401k rollovers, which is a thousand dollars of free money for every 100,000 you roll over to the platform. So that old 401k that's still at your old employer you haven't move or change done anything with. Roll it over, get your 1% match and claim your money.
- [15:51]
Robert
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 disclosures in the podcast description.
- [16:02]
Austin
All right, Robert, let's round off with our 5th type of account that people need to have opened up before 2026.
- [16:10]
Robert
Account number five is a 529 college savings plan. Now this only applies if you have kids or you're planning to have kids and you want to save for their education. But if that's you, this is a huge opportunity. A529 is a tax advantage account specifically for education expenses. You contribute after tax dollars. But the money grows tax free and withdrawals for qualified education expenses are also tax free. Plus many states give you a Tax deduction for contributions.
- [16:41]
Austin
Isn't that cool? You get a tax deduction for saving for your kids college and you're using the profits from the stock market to pay for your kids books and tuition. Or maybe they go to trade school and you like, how cool is it? It's such a flexible account. I love it. Now here's the new rule that makes it even more exciting. Under The Secure Act 2.0, if your kid doesn't use all the money in their 529 account, you can roll up to $35,000 of it into their Roth IRA, which means that they now have $35,000 in their Roth IRA in their mid 20s. Let going to grow for them for the next 40 years. You know what 35,000 turns into after 40 years, Robert? Assuming a nine and a half percent return, well over a million dollars, right? This is generational wealth we're talking about here. So the 529 account, especially after the Secure Act 2.0 that that came into play, makes it just that much more advantageous.
- [17:32]
Robert
So if you have kids, open a 529. Now, even if you're just putting 50 to $100 a month into the account, that's going to compound over 18 years and make a huge difference in their life. And if your state offers a tax de, you're getting free money just for contributing.
- [17:47]
Austin
All right, Robert, so we've talked about the five accounts, right? The High Yield Savings account, the retirement account, the HSA account, the taxable account, and now the 529 account. If I was someone listening right now, I would feel overwhelmed, maybe a little bit of anxiety thinking about all these things in account. So let's give them an action plan.
- [18:06]
Robert
Yeah. So item number one, we're going to keep this super simple. Open the accounts you don't have. Start with the emergency fund and retirement accounts because those are non negotiable. You have to do it as soon as possible. Don't get lost in the Christmas holiday season and don't do this. Step number two, automate those contributions. Set up an automatic transfer from your checking account to your savings, retirement, HSA and brokerage accounts. Pay yourself first. And step number three, review your accounts annually. This is so important. At least once a year, look at your contribution limits, check if you're maximizing employer matches and adjust as needed.
- [18:45]
Austin
So if you're feeling overwhelmed, just listen, take a deep breath. Don't do all five of these at once. How about you start with one or two? Go open up the High Yield Savings Account. This week on Public, maybe a Roth IRA the next week also on public. But building the habit of like, hey, what's my money doing for me? Am I paying myself first? I love that you talked about that, Robert. Let's dig into that for a second because we hear, you know, hey, you got paid from your employer. Cool. My money's going to go to rent. My money is going to go to this thing I want to do with my friends. I'm going to the bar car, I'm paying, I'm buying the shoes. I'm going. Pay yourself first and then go do those things. Talk about the importance of that.
- [19:18]
Robert
Yeah. So many people don't realize that your money has to have a job. You know, I've been saying for years and years, anyone that'll listen is make your money work as hard for you as you work to get it. And by assigning a place, putting automation to your money and not letting it sit in your checking accounts, you will find so much more money available to you do to be able to invest in these five accounts. Because if it just sits in your account and the weekend rolls around, your buddies hit you up to go to a concert or you go to a farmer's market or to the mall, you're just gonna blow the money. And that's why I love to tell people and make sure they understand, get your money working as hard for you as you work to get it. It's so critically important in your wealth building strategies.
- [20:01]
Austin
And I think another one of my favorite things that you say is what doesn't get measured doesn't get managed right? So if you're not measuring the money coming in and out of your account, if you're not using an honest budget and, you know, keeping eyes on all this stuff, you're never going to be able to manage it accordingly. So all we're saying here is that these accounts are the infrastructure for building wealth. Without them, you're going to end up paying more in taxes, you might miss out on some free money, or you could lose years of compounding growth. So get them set up before 2026 so you're not scrambling or paying more than you should. And you know, we've heard this phrase a lot, but I'm going to say it again here, Rober. The best time to open up an account and start investing was 10 years ago. The second best time is today.
- [20:46]
Robert
100%. Wow, what a great episode. I just love breaking these things down because I feel like anyone that takes action is going to be shocked in a Year, two or three years. How much more money they have in these accounts, working hard for them just because they took these simple steps and got it done.
- [21:04]
Austin
You know, Robert, I've actually been contributing to a 529account account for my niece and nephews for the last, I think, two or three years. It's been. I'm gonna log into this account right now in real time. I only contribute, like, 150 bucks a month. I had to go to Vanguard is where I did it on. So, like, you know, no gatekeeping here. I went to Vanguard's website, and what I ended up doing was they had a minimum deposit of like 3,000. So I had 3,000 made the deposit, and then I. It was like 150 bucks a month. It's invested in the S P and it's invested in some growth stuff. Right. So, like, essentially, the Voo and Vug ETFs is kind of how it's broken out here. 80, 20 split between Voo and. And Vug there. It's got $11,000 in it here, Robert. And this has been, like, just three years. So, like. Yeah, to your point, you kind of put this stuff on Autopilot. Oh, yeah. 100 bucks, 150 bucks, whatever. Yep. That's what I do every month now. Every month. It's all good. It's gone. It's in the budget. I'm not worried about it. Automation. Right. Come back three years later to 11 grand. So, like, that's the type of stuff we're talking about in the moment. It doesn't feel like any traction's being made, but then you look at the accounts. If it's an HSA, if it's a brokerage, if it', Roth, if it's a 401K, a 529, whatever it might be, you come back two, three, four, five, six years later, and you're like, whoa, I've been making some, like, real progress on this.
- [22:18]
Robert
Yeah. So many people. We see it every day in our world on Instagram and TikTok and even X, where all of these people shout to the mountaintops that saving money, $10, $20 here a week, and investing doesn't make a difference, and they just need to make more money. And I just think it's ridiculous because the math doesn't add up. We did an episode, we talked about. $1 in your early 20s turns into $70 in retirement. So anyone listening out there that doesn't think. Compounding is this magical kingdom you're. You just have to understand the power of it. So don't listen to the fake gurus telling you that this 50 or $100 a month can't make a difference, because what Austin just illustrated is proof the money will start to really pile up, even if you're only starting out small now.
- [23:06]
Austin
Robert we got a ton of cool questions coming at you from our Instagram DMs habits podcast gmail.com we love answering the questions. But before we jump into the Q and A section of the episode, got to give a shout out to NEOS investments. NEOs offers ETFs that seek high levels of monthly income with a keen focus on tax efficiency while providing core portfolio exposure across equities, fixed income, real estate, cryptocurrency and cash alternatives like t bills. Their ETFs may be especially interesting for investors looking to generate some tax efficient monthly income inside of their investment investment portfolios. Their funds may serve as a compelling income focused alternative or even complement to many of the investments already in your portfolio.
- [23:53]
Robert
So if you're looking to add passive income focused ETFs to your portfolio, consider learning more about NEOs ETFs@neosfunds.com and as with all investments, investors should carefully consider their investment objectives, risks, charges and expenses of NEOS Exchange Traded Funds funds before investing. To obtain a prospectus containing this and other important information, please visit neosfunds.com and please read the prospectus carefully before you invest. An Investment in NEOs ETFs involves risk, including possible loss of principal. There's no guarantee the NEOs ETFs will make monthly distributions and the amounts may fluctuate from month to month. Cryptocurrency is relatively new and the market has its own specific risks. NEOs ETFs are distributed by 4 Side Fund Services, LLC.
- [24:40]
Austin
See Love US some disclosures there. Robert all right, let's jump into our first question coming from Christina. Christina says, hi guys, my name is Christina and I love the Q and A portions of your episodes. They allow for learning from others and you too give the best advice. Big fan of the show. So here's my question. Is there a general rule of thumb for when to refinance a home? Do you recommend a certain percentage of interest rate reduction before doing it? Our household income has reduced recently due to a sale, job compensation plan change, we have a second child on the way and daycare is outrageously expensive. We have a 6.7% interest rate on a 30 year fixed mortgage with a monthly payment of $4,100. We could really Use the extra cash flow from refinancing, hopefully in late 2026. So my question is, how do we know when the right time is to refinance our mortgage? Robert, you are a real estate guru. Walk us through your thoughts as to when it makes sense or a general framework you use use to determine when is it worth it or not to refinance a home mortgage.
- [25:44]
Robert
Yeah, this is a great question and many people struggle with understanding the totality of the math here. And in this instance, Christina and anyone else that's considering, just look at it, that if you can get 75 basis points to 1 percentage, you're doing great because that probably gets you above that break even point to where it makes sense long term to do a refinance. So let me give you a general rule of thumb. If you were to, let's say refinance and you were to get a 1% reduction in the rate, your closing cost, for example, would be around $5,000. And your monthly savings, depending on how much you refinance, would be around $165. So if you were to take that math, it would take you 31 months to break even to see the savings in the future on the payment. Payment. And right now my biggest problem with this logic in this situation is I don't think you're going to be able to refinance and save enough considering you're already paying 6.7%. And it would be tough to save a percentage, a full percentage point right now to be able to reduce your current mortgage payment enough to make a difference in your household net income. So I hope that helps. I'd love to give you better answers if you could get 2 or 3% off and save 5 or 6, $600 a month, which would help your cause. But unfortunately I don't think the math will work in your favor currently.
- [27:13]
Austin
Yeah, Christina, this one's tough, right? Because you know your monthly mortgage is 4,100 bucks and you're like, how do we get it down to 3,500 or 3,000, right? Or like, how do you get it down? You have a mortgage rate of 3% instead of 6.7. And our reality is I don't think mortgage rates are going to be in the 4% percent range at all anytime soon. Right. We're thinking maybe fives next year if we're lucky. But I don't know it all. It all depends on the 10 year yield, which is a misconception. A lot of people think it depends on the Federal Reserve cutting interest rates Nothing to do with that. The framework that I use is refinancing. Your mortgage comes with an upfront cost, a couple thousand dollars, right? So your monthly payment is 4,100 bucks. My general rule of thumb is if you can recoup over the next 18 to 36 months your entire upfront comp cost in monthly mortgage payment savings because of a lower interest rate, then it makes sense. So that's kind of the framework I like to use. Like, when does it make sense? It makes sense when you can like recoup on your cost to refinance over the next 18, 24, maybe 36 months, depending on your situation. It just seems like you guys are pinched for cash. And unfortunately that means either one a career change. Maybe you're really good at sales, like go do sales for someone else that has a better compensation plan. Or you know, it seems like if you're, you're making great money and the compensation plan change is like actually affecting you pretty badly, maybe there's a world where you can do what you're doing for a competitor, right? Maybe they have a better compensation plan then. So there's a lot of different ways to think about this. But just know, Christina, we're rooting for you and we hope that our sort of framework around the mortgage refinancing helps your situation. So our next question comes from Lex on Instagram. Lex says, hi, Austin and Robert. We'd love your take on our situation as we try to make smart long term decisions for our family. We're both 49. We met later in life and had a child in our mid-40s who is now 4 years old. Years old. My husband earns $200,000 a year in a stable corporate role with good benefits taking home 8, $400 a month. I've built a strong career in communications and consulting. But after a layoff in 2023 and a consulting slowdown in 2025, I've had no income since May. We bought our home in 2023, unfortunately, right before my layoff. And the home's value is 1.3 million. We owe 1 million on it. It's a 3.4% mortgage with an 8% HELOC, which means the mortgage and together is $6,600 a month. We have roughly $300,000 of equity in the home. We have a $600 a month car loan, $800 a month student loans, $800 a month credit card and other living expenses of just under 2,000amonth. We've already burnt through our emergency fund and we're now selling stocks out of a $30,000 brokerage account to make ends meet. Our combined 401ks are worth around 650,000. We love our current community and our daughter's school, but the cost of living is steep. We're open to renting or even relocating, but we value stability for our daughter. I've been applying in networking constantly while balancing childcare. It's the first real dry spell I've faced. I've worked since I was 14 and it's hard not to contribute financially. I've explored everything from becoming a Pilates instructor to acquiring a small business to launching an app and right now I feel like I'm just spinning my wheels. We'd love your perspective on whether to hold onto our home and write out this period or sell it and reset in a lower cost area. We also want to how do we protect our long term wealth while covering short term needs and any short term financial moves that you think that we should prioritize? We both have worked really hard to build a life that we love, but we feel stuck between playing defense and taking bold action. Lex, I am so glad that you reached out to us because I've got, I've got the solution. Here's the solution. And we read this actually ahead of time and I was like, okay, this will be fun to think through. But then it didn't hit me till after I read it the second time. Here live. Your husband earns 200,000 a year year in his stable corporate role. But he's only taking home $8,400 a month. That means he's taking home 100,000 of his 200,000 salary. Where's the other $100,000 a year going? Because at a effective tax rate of 20%, you're still talking about $60,000 a year. $5,000 a month of after tax dollars. That is going somewhere. Where is it going? Is he contributing to his 401ks? He doing, you know, different types. You mentioned good benefits. I don't know what's going on behind the scenes here, but you need to pause all of that and you need to make sure that that 5,000amonth is coming home to you guys. You don't need to be putting in a 401k. You don't need to be putting it into a life insurance policy through your work. You don't need to be putting, don't need to be doing any of that stuff. You need to make sure that $5,000 a month extra is coming home to you now we're talking about 13,400amonth. That changes your life. The second thing I want to talk about is I empathize of having a dry spell and not being able to do 2023. Time to get a job, though. Time to go wait tables. Time to go throw boxes at Walmart for 18 bucks an hour. Time to go scoop at Chipotle time. Like, go get a job. That's. I mean, I'm trying to be nice, but I'm also not because you've been kind of like, like it's been two years. Like, let's just go get a job. I understand that you might want to, you know, go make the 120k that you were making before. As the corporate person, I was the president of the company. I hear you. Hopefully that comes around in your future. But we are in crisis mode. In crisis mode doesn't mean I've got the flexibility to save out for that one cool dream job at the dream location that I want to work at. It means, sure, I'm applying to those things, but I'm also now doing doordash every single day, or I'm also working at, you know, Walmart for six hours and doing part time here at Publix or whatever it might be to make that 12, 15, 18 an hour. That's going to help us get across the finish line. Because again, you guys are in crisis mode. You've spent through the emergency fund, you're cashing out the investments, you're doing everything and you're saying, hey, we don't even sell the house. Like, we can't do this anym. I think there's about $60,000 a year that could be headed toward your husband if you play your cards right. And there's another probably 30,000 a year, maybe more that you could contribute. So now we're talking about a $90,000 a year difference. $90,000 more a year hits your bank account. You're not in this situation anymore.
- [33:11]
Robert
That's a great breakdown. And I'm going to add a little more pain to it. Your situation is pretty traditional. You guys have a $1.3 million home, and I think you're living beyond your means. To me, it just feels like a very typical house situation. Even if you were making money, I would need to see you make over a hundred thousand to add to the 200,000 to make this make sense. Because if you think about it, right now, your monthly payment and HELOC is $6,600 a month. But your husband's only bringing home $8,400 a month. There's no world that that makes sense. So I would consider selling the home, getting what you can out of it. I don't know what neighborhood it is it's in or what city it's in and what the capital appreciation is year over year. Housing market is suppressed right now and could stay that way for quite some time. So I would look at selling the home, becoming a renter for a couple years to you guys, get back on track and do exactly what Austin stated. You have to go get income. I know you're taking care of the kids. That's very admirable. But what about a consulting job online? What if you consider something that's much less pay but you could do from from home while you're still taking care of the children? That is another option as well. But right now you have to seriously consider downsizing your expenses or getting additional income because you can't keep going at this pace because you're going to start draining your retirement accounts and you will no longer be able to preserve that wealth that you guys have worked so hard to build. So I hope this helps. Don't look at renting or getting a lesser job as a bad thing. Who cares about what people think? You have to care about your family and care about your future, especially at your age right now, because you guys are at a great inflection point to where if you don't get back on track, you're going to slowly drain these savings in your retirement accounts, and you don't want to be in that situation.
- [35:11]
Austin
Yeah, I'm leaning towards selling the home, too. Right. Because at 6,600 bucks a month, even if you did get this extra 5,000amonth from your husband because you he's not withholding 50% of his salary, now we're talking about, you know, let's call it 13,005, and then maybe you're putting another 2 or 3,000 on top of that. So 15,000amonth after taxes. And you know, that would mean 40, 45% of it's going to your mortgage payment. Like you could afford it, but man, it's expensive. So instead of 66, like, what is there a world where y' all could have an apartment that's 28 or 31? That's kind of where my head goes. So not only will you be making more money because your husband is no longer withholding so much at work, but you're now opening up an extra couple thousand dollars from your rent payment versus your Current sort of mortgage HELOC thing going on right now. And I understand you value the stability. She's four. Not trying to say that's, that's here nor there. I don't remember what happened when I was 4. That's just my reality. Here's what I'm saying. I'd much rather y' all move while she's 4 instead of when she's 11. And you are really up to your eyeballs and you. This cannot work. We got to go somewhere. We got to figure this out differently because we stuck around for the five or six years we tried to make this work. We drained our accounts and now we don't have anything. And, and now she's got to not just leave her friends, but leave her friends when she's 11 and she's gone to, you know, way different situation then. So I love what you guys are working on here. I love that you guys are asking questions. We're rooting for y'.
- [36:34]
Robert
All.
- [36:34]
Austin
But I really think that your husband's about to unlock an extra 3, 4, 5,000amonth from, from his take home pay by not contributing to these accounts or whatever the different types of. Maybe he's doing the health plan. Let's do the bronze, not the gold, right? Let's figure that stuff out now before we grab our last question from James Robert. We've seen the markets right now. Stocks are stretched, valuations are pretty high right now. Handful of mega cap AI names are basically carrying the S and P. It's kind of like, it's kind of weird. You know, it kind of reminds me a little bit of like 1997, 1998, 1999.
- [37:08]
Robert
Exactly. Margin debt is climbing, speculative trading is back, and markets are priced as if everything is going perfectly. AI delivers, rates get cut, geopolitics stay smooth. But history shows that when markets are this one sided, future returns can disappoint.
- [37:25]
Austin
So what's an alternative asset option? Well, in my opinion, y' all should take a look at artwork. For the past three years, the art market has been in a down cycle. Sellers have pulled back, volumes have slowed, and prices have cooled. But now estates and major collections are starting to come back to market, creating opportunities at even more attractive valuations.
- [37:45]
Robert
And here's the thing. Art doesn't always move in lockstep with Wall Street. Over nearly three decades, post war and contemporary art outpace the S&P 500 with almost zero correlation. And unlike many other asset classes, supply is limited while demand is global.
- [38:02]
Austin
That's why billionaires, family offices and Increasingly, everyday investors have been diversifying into artwork for decades, and one of the easiest ways to do that is through our sponsor, Masterworks. They've securitized 500 works of art and already had 23 exits with net annualized returns, including 17.6, 17.8, and 21.5%.
- [38:25]
Robert
The best part with Masterworks is you don't need millions to get started. You can invest in shares of iconic works from artists like Picasso, Banksy and Warhol. Just call 929-545-6473 to skip the wait list.
- [38:40]
Austin
And as always, past performance is not indicative of future returns, and investing involves risk. You can always find important Regulation a disclosures@masterworks.com CD check it out and start building real diversification today. We talk about diversification all the time, Robert. Love me some artwork. We're both investors on Masterworks. Easiest way to add our work to your own portfolio. All right, our last question comes from James. James says, hey guys, my name's James and I recently discovered the show on Spotify as I'm driving Uber at night. Surprisingly, some of my riders thank me for the show and they even eventually subscribe to your channel. So to say, I'm a huge fan. I feel embarrassed to say that I actually was a finance major just like you. You, Austin. I still remember the materials, but lack of discipline has put me in a bad spot. Lesson learned from me. Even with your knowledge, if there's no discipline, you're bound for failure. Interesting. I like that. That's a good take. James says, here's my situation. I'm married with two young kids under the age of two, and I'm the sole breadwinner for the family. I do not have a strong base. I currently have a mortgage where I pay 2200amonth. I've got 22,000 of reckless spending and credit card debt, three cards with an average minimum payment of 277amonth with an APR of 28%. My car is fully paid and that's what I use to drive Uber. Most of my expenses go to groceries, credit card bills and a $2,800 affirm loan and some other household necessities. Now here's the fun part. Five months ago I lost my job and because of my lack of emergency funds, I was late for the last three months on my mortgage payments. I've met those obligations and paid them, but I was late nonetheless. Now I drive Uber almost 12 hours a day, and that's how I've been surviving those long hours took valuable time away from my family, which started to impact my marriage. What's reassuring is I have two 529 plans for my kids where I put some money in whenever I can. I moved my 401k from my old job to my IRA, diversified it the way you guys say. Thankfully, I just got a job offer starting at the beginning of November for $89,000 a year and I plan to max out my contributions now. Here's where I need help. Please guide me through a solid plan to erase all of my credit card debts. What is the most effective way that I can start wealth at my age? How do I strategically invest to financially thrive and have enough money left for my kids so they can go to college? Thanks in advance. I feel like that story is a roller coaster, right? It was like, I love you guys, Great show. Oh my gosh. But I lost all this and I failed and all this credit card debt. But I got a job again. All right, Robert, walk him through your quick thoughts here as to what you would do in James situation.
- [41:15]
Robert
I love the roller coaster and congrats on the job. But please do not not put any money into this new employer plan because you don't want to be maxing out those contributions. Meanwhile, you have all this credit card debt, this affirm loan and everything else. I want you to work as many hours as you can at this $85,000 a year job and then when you get a chance, I want you to still be ubering because you can take all of that and get all of this high interest debt wiped out right away away. Then start contributing to this 6% match that you're going to get from your new job. Because the number one thing is we always talk about you can't out invest high interest debt and you have a lot of it. So that's the plan. That's where you're going to start. You're going to get in there, you're going to impress them, you're going to do a great job. But don't start the contributions until you wipe out all of these loans and credit card debt first.
- [42:10]
Austin
Let's talk more about that. Robert. No 529 contributions are more important than 28% credit. Credit card debt, no 401k contribution and the match that could come with it is no more important than paying off those credit cards. So here's what I would do. You're working eight hours a day at this job. We're making89,000 a year. You said you're working 12 hours driving Uber which means you got four more hours a day that you were used to working. Now that you can now start, you know, continue to go drive Uber for, make as much money as you humanly can until you pay off the 22, 000 of credit card debt. Here's the thing. I want you to go, so save a couple thousand dollars for just super small Starter Emergency Fund so you don't have to go more into credit card debt. Then you go all in on paying off this credit card debt. Once it's paid off, go beef up that couple thousand into 15, 20, 25,000, right? It's going to take you maybe a year or two to do that. Once that is complete and only once that is complete is when you're going to start investing again, right? I don't want you investing and paying off this and this over here and like too many things at once, that's what got you where you are today, right? You talked about not having a plan, no discipline, bound for failure. Like, this is the plan. Save a little bit of money over here on your public account. Use that as that, like Starter emergency Fund, pay off the high interest credit card debt, beef up that Starter emergency fund to 15 grand so you don't find yourself driving Uber 12 hours a day again. And then you start investing toward, you know, Match beats Roth, beats taxable. All the fun stuff we just talked about. Talked about. Really, really appreciate the question. James, we're rooting for you, my friend. Love the roller coaster of a question here. You crushed it and you're doing great.
- [43:48]
Robert
I just don't want everyone to think we're given too much tough love on this episode. But James, you have the background, you have the stick to itiveness. You can do this. You just got to set aside the funds, set aside the spending, however you got there, and just put your nose to the grindstone, be consistent and you'll be back on track in no time.
- [44:08]
Austin
And just know too, this is only a season of your life, right? You're going to fast forward four years and be in a completely different financial situation. You and your wife are going to be so deeply in love. Your kids are going to be, you know, thriving because their dad was in a season of his life where he just worked his face off for 18, 24 months and got them out of the bad financial situation they were in. And now they don't have to worry about not being able to afford something. Missing the mortgage, mortgage payment. You know, Dad's gone 12 hours a day. What's going, none of that anymore. So James, again, congrats on the job. We're rooting for you my friend. And for everyone listening. Don't forget if you want to invest into perplexity, SpaceX, Xai, Mr. Beasts, Beast Industries, Katy Perry's Desoi Graza, the olive oil company Acorns, the fintech company, like all of those are opportunities that are inside of this multi asset SPV that Robert and myself have built and is now launched onrepublic.com there's a link in the show notes below. Go check it out, read all the prospectus, read all the disclosures, understand exactly what you're getting yourself into. And yeah, we're really excited about it. Robert, we did it.
- [45:21]
Robert
It's incredible. I commend you and Christian for the tons of hours and all the work to put this together and get it across the finish line. The first ever multi asset investment opportunity and this is just incredible. And I'm so excited for our listeners and everyone in our ecosystem system just because this is different, this is new and it's incredible, incredible companies. So make sure you guys check it out on Republic. You'll see our faces if you scroll down and you can read all the really good information around this investment. And again, thank you all for stopping by every week, checking out the podcast, signing up for the newsletter and just hanging out with us.
- [46:00]
Austin
Thanks everyone and have a great start to your week. Sam.