Robert Krok (3:02)

For me, I think the biggest takeaways were build a community and you really have to, like, become one with your audience. I know that sounds cheesy, so that was one of the biggest parts. But if you're building your personal, your business brand online, you really need to lean with value and authenticity and everything else will fall into place. That was the biggest takeaway for me, but it was. It was a really incredible experience to be around Gary, Vee, John who, and all of these other cool people that really know the world we live in 100%.

Austin Hankwitz (3:34)

Now, with that being said, let's jump right into the episode. Robert, what are we going to be talking about in today's episode?

Robert Krok (3:39)

In this episode of the Rich Habits podcast, we're talking about why your New Year's money resolutions will probably fail. Now, before you get mad at us in the comment section, it's not because we think you're lazy or. Or because we think you lack discipline, but your New Year's resolutions will probably fail because you're likely setting them up wrong in the first place. Every January, you write down a financial goal for the year, like save $10,000 or pay off $15,000 in debt or even max out my 401k, all of which are great goals, but also completely useless without the right systems in place by February or March, April, these goals are long forgotten. You, you've broken your budget and now you're beating yourself up and telling yourself, hey, I'll try again next year. I failed on these goals and I didn't do what I wanted to do.

Austin Hankwitz (4:28)

Now, the problem, Robert, that people do not realize is that goals alone don't work without the right systems in place to back them up. Right goals are outcomes. Save $10,000 is an outcome. But outcomes are the results of systems and rich habits. So without the right systems in place, a goal is just a wish. Wealthy people do not succeed because they set better goals than you. Wealthy people succeed because they build better systems than you. They focus on daily, weekly, and monthly behaviors that produce the outcome they're trying to achieve automatically.

Robert Krok (5:07)

So in today's episode, we're breaking down why your money goals miss the mark. How to reverse engineer your money goals into daily, weekly, and monthly habits, and how to build a system that runs on autopilot. Because you don't rise to the level of your goals, you fall to the level of your systems.

Austin Hankwitz (5:23)

You're right. In today's episode, we're breaking down why your money goals miss the mark. So let's start there. Let's talk about why money goals usually fail. Goals are outcome focused, not behavior focused. I think we've all heard the phrase personal finance is 80% behavior in 20% head knowledge. You're fixating on the end result, which you do not control, instead of focusing on those daily actions which you do control. And most of this starts with that mindset. Shift away from being a consumer and into being an investor. We talk about that all the time here on the show. Taking control of your money, beyond just writing down your goals on a piece of paper starts with understanding. Wait a second, I'm not just part of the system. I can control the system. So let's say, for example, Robert, that your goal is to pay off $15,000 of debt in 2026. That's great. That's an awesome goal. But what's the actual plan to achieve the goal? Well, mathematically speaking, you would need to find $1,250 a month in your budget to allocate to off this debt. And to find that money, you need to incorporate specific behaviors, right? Like meal prepping, maybe canceling subscriptions, taking on some overtime at work, or starting that side hustle to earn more income. But most people, unfortunately, just skip straight to the outcome and hope that they figure it out along the way. Goals don't work if you don't have the right systems to back it up. So, Robert, walk us through how people can begin to build systems.

Robert Krok (6:48)

So instead of just setting goals, set a goal, then build the systems that will enable you to achieve the goal automatically. So, for example, a goal is, say, $10,000 this year. You want to save $10,000, but the system is automatically transferring $425 to savings the day after every paycheck. Another goal max out my 401k. Whereas a system is increase my 401k contribution by 1% every time I get a raise. You see the theory here? It's all about setting up these systems. Because goals are outcomes, systems are behaviors, and behavior is what we're here to help you control. So instead of asking what do I want to achieve, Ask what kind of person do I need to become to be able to achieve those goals? That is the distinction. This is identity based behavior change and is much more powerful than outcome based goals. When your identity shifts, your behaviors follow. So if you see yourself as someone who saves money, spending $200 on something unnecessary feels wrong because it conflicts with who you are and your new identity.

Austin Hankwitz (7:53)

So let me just reiterate a couple things that you said, Robert. Goals are outcomes, systems are behaviors. If we want to achieve goals, if we want to have an outcome, we have to change our behavior. We have to implement a system. And so essentially saying an outcome of I want to save $10,000 this year, that's a great goal to have. But the system, the behavior to implement to achieve that is to transfer some money automatically every time you get paid, maxing out the 401k, like cool. It's a cool outcome, it's a cool goal to have. You have to implement a system, a behavior that's going to allow you to achieve that. So now you're thinking, okay, wait a second, Austin, you told me about the goals. I understand what systems are. But how do I reverse engineer these systems and make these systems actually work for me in my money goals and my daily habits? Here's how you do it. Step one. You of course want to start with that outcome. What is the goal you are trying to achieve? So let's say for example, in 2026, your big money goal is to save 12.

Austin Hankwitz (8:53)

So step two now is to break it down to the smallest action possible. Because that small action is what you're probably gonna do and comprehend, right? So 12,000 a year is actually just a thousand a month or just $250 a week. Now the real question isn't how do I save $12,000. It now turns into how do I save $250 a week? Because 250 a week is much more manageable than 12,000. So step three now is to identify those specific behaviors, right? That system going to allow you to achieve your goal. What weekly actions can produce $250? Is it meal prepping every Sunday? Is it shopping for groceries at Aldi? And maybe using AI to help you Come up with some cost effective meals. Is it canceling subscriptions? Is it not eating out for lunch every day? Right. What are the systems and behaviors that you can build around yourself that's going to allow you to achieve this outcome and make these behaviors very specific? Right? Save money is vague, but transfer $250 to a savings account every Friday. Now that's specific, right? Pack lunch at 8pm the night before I have to go go to work. That's specific. You want to be as specific as possible. Step four here is to automate everything by setting up an automatic transfer to a savings account, you will automatically be able to achieve this goal. And step five, and I like this one the most, Robert, is track the behavior, not the outcome, right? Did you actually transfer that money this week? Did you pack lunch for five days? Because if you're packing lunch every day, you're going to save that 250, right? That's going to contribute to the, to the outcome you want to achieve. Did you try a new che dinner meal? Because chat GPT helped you come up with something. Did you track your consistency? Right. Track the behaviors? Because we know if you stick to these behaviors, the outcomes will follow.

Robert Krok (10:38)

I love that breakdown. And it really comes back to the root of a lot of the message we've been talking about for years, and that is people being more tactical with their money. And this episode is really powerful because it gets people to understand that these little changes that seem like nothing can really add up to a ton of compounding and get you to your financial goals. Because if your money is just in your account and it doesn't have a plan, we just don't like that. I want to see every dollar have a job. And by being tactical and having your budgets and all of these things in order, it puts you in a much better place overall, especially four or five years down the road. And to add to that, the pro tip for all of you, especially if you're new around here, is habit stacking. I've been talking about this one forever and that is taking a habit you already do and stack a new financial habit on top of it. So what does that look like and what does that mean? So for me, I always like to tell people if I'm going to buy something online, I want to transfer the same amount that I spent into my investments. So let's say you go buy that new pair of Nike shoes you've been wanting to have their 200 bucks. You then transfer 200 into a stock or one of your ETFs so that way you're not living like a consumer, you're living and investing like you should be an investor. Number two for me is after dinner every day, spend five minutes reviewing your day's spending, whether you're single, married, with a boyfriend, girlfriend, whatever the situation is. I think this one is critical because it prevents you from getting out of hand going on a binge spending for a couple week during the holidays and then go, holy moly, what do we do now with all this credit card debt? And the last one for me, that I think is really fun for everyone to practice. And after you go out with friends and you hit the bars, the restaurants, that concert you didn't plan to go to, I like to balance that out the next weekend with three events to be able to offset and balance that spending. Then you're anchoring the new behavior to something you've already been doing with a new financial habit, which means you'll actually stick to it.

Austin Hankwitz (12:42)

Yeah, I feel like this term like habit stacking, it's kind of like buzzy. But I mean at the end of the day we've been talking about this for a while, right? Like oh, if this, then that, right? You talk. We've seen this for like years now, Robert. Oh, if I go buy something from Nike, I'm just gonna go buy the Nike stock, right? Just don't go shop at Amazon. Like every time you swipe that credit card for your a hundred Amazon purchase because you just needed that new lamp or whatever it was, right? Go take that same hundred bucks and put it in Amazon stock. Like so, like having these habit stacking actions. Really powerful, very, very powerful because you're already doing the things. It's not like it's a new habit you're trying to implement or stick to and it's you're some of this stuff. So just put something on top of it.

Robert Krok (13:24)

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Austin Hankwitz (13:43)

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Robert Krok (14:14)

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Austin Hankwitz (14:34)

Full disclosure in the podcast description. All right, Robert, so let's now summarize everything and help people understand how to build these systems that are going to actually last past March or April of 2026. 1. Make the right thing easy and the wrong thing hard. Right? Set up up automatic transfers so saving is effortless. Delete the doordash app so there's friction between you and making that purchase. 2. Focus on consistency, not intensity. Saving $200 a month is a lot easier to understand and comprehend and digest than saying, oh, I'm gonna go save $2,400. Right? Like just making it bite size, having that consistency. Don't focus on the big intense picture there. Consistency compounds intensity, causes burnout. 3. Measure the inputs, not the outputs. Track how many times you executed the behavior, that system that you've been following. Because if you follow the system, the outputs, the goals, the outcomes, they will come automatically. That's what the system does. And finally, number four here is to design your future self. Right now you are motivated, you're feeling good. It's December. January is right around the corner. We're feeling excited about 2026. There's a lot to be excited about. But in March or April, are you going to be just as excited as you are now? That's when that fatigue kicks in a little bit. So make sure that your system so easy that even on your worst day you can still stick to it and execute upon your system. Just think about it like this. If it requires daily motivation, it's probably going to fail, but if it runs on autopilot, it'll likely work.

Robert Krok (16:04)

Yeah, I feel like we should build an app where it says if you do this, this is the outcome. If you don't do this, this is the outcome. So people could really understand these hundred $200 a month changes can really just compound like crazy over years and change their financial lives forever. And so what a great episode. I like how tactical this was because we also hear so many fake gurus out there. I won't mention names that are always talking about, you just need to make more money because $100 a month here, $200 a month in savings here, won't change anything in your lives. And this episode really spells out how dramatic the changes are if you do things right. New Year's resolutions fail because they're based on motivation, and motivation fades. Systems work because they're based on behavior and behavior compounds. I hope you guys are taking notes here. You don't need better goals in 2026. You just need better systems. So stop asking, what do I want to achieve? And start asking what kind of person do I want to become? And what daily behaviors does that person have? The person who builds wealth doesn't have superhuman willpower. They have a system that makes saving automatic, spending intentional and investing consistent. They don't rely on motivation. They rely on habits.

Austin Hankwitz (17:22)

And not just habits, Robert, rich habits. They rely on those rich habits. So forget about these big, ambitious goals. Focus on the tiny, boring behaviors that nobody really notices because that's where all of the margin and the alpha and the compounding comes from. You do it consistently until it's automatic. By the end of 2026, you are going to have made so much more progress than you thought. And it's not because you set a better goal than you did last year. It's because this year you built a better system. Remember, you do not rise to the level of your goals. You fall to the level of your systems. So just build better systems.

Robert Krok (17:58)

What a Mic Drop episode. I really love this and I am excited to see how everyone reacts because I want to bring this episode up next year on the same date and ask our audience, okay, how much of this did you do? How long did you stick with it? How consistent were you all of the above? And see the changes in their financial lives. I love it. Now, before we jump into the Q and A section, you've all heard us talk about the importance of diversifying your investments for a while now. And there could be an opportunity today in private market real estate, especially with the market timing right now.

Austin Hankwitz (18:33)

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Robert Krok (18:56)

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Austin Hankwitz (19:07)

As always, carefully consider the Fundrise Flagship Fund's investment material before investing, including objectives, risk, charters and expenses. This and other information can be found in the Flagship funds prospectus@funrise.com Flagship all right, Robert, let's now jump to the Q and A section of this episode. As a reminder, if you have a question to ask us, you can email us@rich habitspodcastmail.com you can DM us on Instagram at Rich Habits Podcast. Or you can join the Rich Habits Network, our community for our biggest fans, and ask us face to face. Every Tuesday night during our two hour long live streams, you jump on a Zoom call. About 250 people, y' all show up and we just, we just chat. It's great, it's a good time. But this question's coming from Mark and Mark says, hey, y'. All. Mark here from Atlanta. I discovered your podcast earlier this year and it's been a game changer for my investing journey. I have other questions for another time, but I wanted to get your thoughts on this one specifically. I have an account with Fidelity. Within that account, I'm managing my traditional ira. I'm contributing to the max in my Roth ira, contributing leftover funds weekly to my bridge account, and I have an emergency fund with $15,000 in it. My $15,000 emergency fund is invested into the ETF sGov. It generates a small dividend every month, and I'm currently reinvesting it back into the account. It'll probably produce six, maybe 700 a year on this 15,000. I had an idea of taking the small monthly dividends and investing them instead into Fxaix, which is the Fidelity S&P 500 fund. It's a small account, but it could turn more profit being reinvested back into the emergency fund. With sGov, the emergency balance itself remained the same. So my thought process would be to sell the oldest tax slots once a year and reinvest it back into SGOV within the emergency fund. What are your all's thoughts on this? Let's go. Okay, so, Mark from Atlanta, thank you for being a, a supporter of the show here. I love where your head's at because I do that. I, I do what you do, Mark. We are on the same wavelength, my friend. What I do do is I've got $30,000 in my high yield savings account on public.com. public.com is paying me every single month a nice little couple hundred bucks here or there, whatever it might be, right Maybe it's not even that. And then I take that money that I get paid from my high Yield savings account, which essentially you're doing the same thing with sgov. It's. It's a T bill. Right? So you're taking, and I'm taking that little monthly, you know, amount of money that we're making in our emergency fund. I transfer it, it into my actual brokerage account there on public, and then I invest it in the index funds and ETFs we talk about. In your situation, Mark, it sounds like you're talking about the same thing. You're going to take a little bit of money from this sgov, you know, income you're earning off these T bills inside of your, your $15,000 emergency fund here, which you went a different route, which is fine. It makes a lot of sense. I totally understand what you've done here. But you're saying, hey, instead of buying more sgov, why don't I just take that money and, and invest it into something that's actually going to grow more than 3 or 4% per year? I'm right there with you. I love the idea, Mark. You've got my blessing. And FX aix, I'm pretty sure, has a really, really low expense ratio, so it's not like you're buying the wrong thing.

Robert Krok (22:17)

No, I think it's a great breakdown and good coverage on your part. FX Aix, if I remember correctly, is 0.015 for their expense ratio, which is really good, and it tracks the S&P 500, so that's always a great place to be. The only thing I would add to what Austin said is without knowing your age, when you get to your desired amount for this emergency fund, then I would start taking all the rest of those funds in the traditional brokerage account and go straight into fxaix. That's the only change I would make. Without knowing your age and what your emergency fund goals are, it's a little tricky, but I would say when you get to that three, four, five months of emergency funds set aside, then I would make that subtle change and earn more on the money than you would with the T bills. That's the only change I would make.

Austin Hankwitz (23:05)

Yeah, I. Actually, that's a good call because I assumed the $15,000 emergency fund was fully funded. Right. Three months or so of expenses, 5,000amonth, it feels pretty average for people. So if you are, if that's, if that's your fully funded emergency fund, like, you don't need to add more money to it, you don't need, like, you're good. You need to be investing that money. So, yeah, I just want to reiterate. Robert said there. So our next question comes from Chad S on Instagram. Chad says, hey, guys, I love the show. So if I own two rental properties in my personal name, but I have an umbrella policy that covers my net worth entirely, would you consider that safe enough or should I still transfer those rental properties into an llc? These two rental properties used to be my primary residences. So if I transfer them into an llc, the bank could potentially call the note, which is at a 3% and a 6% mortgage rate. Looking forward to your thoughts and any additional information, Robert. I will let you kick this one off.

Robert Krok (23:56)

Yeah, Chad, this is a great question and the answer is yes, still transfer these properties into an llc. But before you do all of this, the first thing you're going to do is you're going to call your mortgage lender. You're going to say, hey, this is what I want to do. I'm going to continue to grow my portfolio, hopefully with you guys, but I want to get these out of my personal name and into LLC so I can have further liability protection. Because always remember that when you have a policy, an umbrella policy, 2 million, $3 million, there still are limitations with that policy. And if a good lawyer is going to come after you, they can use a business pursuit exclusion. And this can then sometimes allow them to still go after you personally for if someone fell down the stairs or something bad happened on one of your properties. So I would still do the LLCs. Start with your mortgage lender because a lot of times they'll let you do a quit claim deed and just transfer them over. Rock and roll. Keep going. Move them into the LLC and give yourself that additional protection and layering against personal liability.

Austin Hankwitz (25:02)

So, Robert, what's your perspective on. Let's say that their lender was not very nice and they were saying, hey, you want to transfer to an llc? We're calling the note, you got to pay us. Do you think I just get it refinanced? I mean, even if they refinance it, then what if it doesn't cash flow anymore, you know?

Robert Krok (25:18)

Yeah, this is a slippery slope because he does have really good interest rates, which they're much lower than they would be now, especially the 3% one. So it is a tough situation, but I would look at it to make it top of mind and a priority to figure out how to do it. It might not happen right now. It might take a couple of years. But as rates come down, you might want to look at the blended average and say 1 is 6 and 1 is 3. Rates have come down. I can get both of them at 4.75 or five and a quarter percent. It might make sense because all of your net worth can get wiped out in one fell swoop. Swoop if something bad happens and they get a charging order against you personally, even though you have the umbrella policy. Because the umbrella policy is going to have limitations in almost all situations.

Austin Hankwitz (26:05)

There you go everybody. Lumbrella policy behind the scenes there for you. I've got an umbrella policy. It's pretty smart to have one of those, especially if your net worth begins to tick up higher, as I'm sure a lot of you listening to this podcast are experiencing because of the rich habits we've shared. Now, before we jump to our final question, got to give a shout out to NEOS Investments. NEOS offers etf' 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 tax efficient monthly income inside of their existing investment portfolios. Their funds may serve as a compelling income focused alternative or complement to many of the investments already in many investor portfolios.

Robert Krok (26:55)

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Austin Hankwitz (27:42)

Don't you just love financial disclosures? Robert well, I will say y', all, something really, really cool just happened today, December 3, 2025, which is if you all liked the NEOS Bitcoin High Income ETF ETF btci, you can now invest into the NEOS Ethereum High Income etf. N E H I N E H I just launched today. Super excited about that one. I'll absolutely be adding it to my own portfolio. And if you want to learn more about Neos funds or Troy or Garrett, the portfolio managers behind their their suite of ETFs with over $15 billion of assets under management, be sure to listen to episode 144 where we had a cool interview with them talking about market uncertainty and how to navigate it ETFs. So Robert, with that being said, let's now wrap up the episode with our final question coming from Sebastian. Sebastian said. Hey rich habits Team Austin and Robert, because of you all I have really whipped my finances into shape. I had over $20,000 of high interest credit card debt, but now I only have 10,000. I wanted to ask about my specific situation. I have $55,000 in a 529 account with BlackRock and I plan on rolling over up to $35,000 of that into a 401k. I'm not sure do with the remaining amount as it will be highly penalized if I withdraw it. Any advice would be amazing. Thank you all so much for everything you do. So Sebastian, thank you for the kind words. Listen, you were the one that paid off that credit card debt, not us. Like we're, we're rooting for you my friend. So let's break down the situation you mentioned $55,000 and a 529 and you want to roll over up to 35,000 of that because that is the lifetime maximum into a 401k. That's a super awesome move, especially if you can't use the 55 on else education related that's going to benefit you. But there's a couple quick things to keep in mind. So the first One is the $35,000 rollover comes with rules, right? The 529 usually needs to be held open for at least 15 years and you can only roll over contributions or earnings older than five years old. So if you check those boxes, rock and roll. Just make sure there's no surprises there from Uncle Sam. And for the money that's left over, you can keep it invested for future education needs. You can change the beneficiary to someone who will actually use it for education expenses. Or like you mentioned, I know you don't want to do this but you could withdraw it. You will have that 10% penalty which would suck. But it's only on the earnings portion, right? You might be thinking oh it's on everything I take out. Like no, it's just on the amount of money that is actually profit. So let's Say for example, of the 55 you contributed, I don't know, 22,500. Right. So half of it is contributions. The other other half is profit. If you were able to roll over 35,000 of that, that means that you rolled over more than what you contributed. So you rolled over all of your earnings. Right? All the profits. Now, technically speaking, the only money left, which is this 20,000, theoretically could all just be contributions and you wouldn't incur a 10% penalty anyway. Now you'd have to figure out all the behind the scenes on that, your contribution. Like, there's a lot to figure out there, but it really just depends, like, really do some research to better understand exactly what will be penalized if you do withdraw.

Robert Krok (31:06)

What a great episode in recap. Just so many cool questions. Today's questions were really, really dynamic. So it's, it's so fun to break these down and help everyone figure out personal finances, personal and really dig into each and every person's issues that they face on a daily basis. And just a quick reminder, we're still running the seven day free trial right now for the Rich Habits Network. So if you love what you see each and every week here, or you're new to the Rich Habits podcast, make sure you check out the seven day free trial. We have a lot of cool stuff happening in the network and we'd love to see you join.

Austin Hankwitz (31:40)

Absolutely. We've got over 830 people inside of the Rich Habits Network right now. Hundreds of you join us every single Tuesday night on our Zoom Call live streams. You're hanging out with us. We're giving you the biggest updates about our own portfolios, what we're investing in, what headlines caught our eye, as well as answering questions face to face with all those people who are there. So definitely check out the Rich Habits Network. Tons of cool perks over there. And as always, thank you so much for joining us on this week's episode of the Rich Habits Podcast. Be sure to leave us a five star review if you learned something and if you enjoyed the show. And of course, don't forget to share the episode with a friend. Thanks everyone and we'll see you on Thursday.

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