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- [00:00]
A
Hey everyone and welcome back to the Rich Habits Podcast, a top five business podcast on Spotify. My name is Austin Hankwitz and I'm joined by my co host, Robert Kroke. Robert is a seasoned entrepreneur in his 50s with lifetime revenues of over $300 million. And I'm an entrepreneur in my late 20s with a background in finance and economics. Since quitting my full time job in corporate finance a few years ago, I've built a seven figure media business and actively advise some of the most well known fintech companies around the world. As the show name might suggest, every episode we talk about rich hab as they relate to business, finance and mindset. However, we try and bring you two unique perspectives. One from an industry veteran, which is Robert, and the other, myself, someone who's still in the process of building wealth and figuring it all out. So Robert, what are we going to be talking about in today's episode?
- [00:46]
B
Well, first and foremost, I think I want to address that. We need to change the opening line to you're just figuring it all out. I'd say you pretty much have it figured out. You're crushing it. You're a great co host and you've really taught me a lot over these last couple years. So we're definitely going to make that. Our New Year's resolution is changing our opening statement because I think you've come so so far just since I've known you and it's time to upgrade that line. But in today's episode of the Rich Habits podcast, we're going to be sharing with everyone our three best tips to build generational wealth in your 40s and 50s. So many people feel, especially in their 40s and 50s, that wealth has passed them by and we are here to tell you it has not and lay out all the blueprint for you to succeed with money. As your hair starts to gray like mine and it's go time to figure all those things out and we are here to lay it out for you.
- [01:42]
A
Specifically, we're going to address three of the most important things you need to do in order to get back on track financially and set you and your family up for financial freedom in retirement. Most of you listening still have 20 or more years of investing ahead of you, which means there's so much you can still do and accomplish before retirement. So let's figure out how to catch up and build wealth in our 40s and 50s.
- [02:03]
B
Robert and when it comes to building generational wealth in your 40s and 50s, if you feel like you're behind in Your retirement savings. You either have an income problem or you have a spending problem. So let's first address the income problem. So number one is increasing your household income. And we're going to walk you through it, start to finish. So many of you might feel like you're scraping by financially and you're either spending too much or you're making too little. And luckily for us, we can fix both of these problems. The first step to take when evaluating your monthly household income is to audit that honest budget. You always hear us talking about how much all in is being deposited to your bank account and how much of that are you spending every single month. So once that's done, our goal Is to find 15 to 25% of that household income in your monthly budget and begin setting that aside for investing. Now, I'm sure that some of you listening right now saying, I don't have 15 to 25% of my income to save, which means it's time to increase your take home pay and we're going to walk you through it.
- [03:16]
A
I think just that right there is the solution, right? Finding that margin in your budget. Because that is how we build wealth. We find margin and we invest said margin. To your point, you either have that income problem or you have a spending problem problem. Assuming you've audited this monthly honest budget that we've all created and you've realized that you might have an income problem, it's time to fix that. Well, good news for us, it's 2025, which means there are countless ways to increase your monthly income. Now of course, some of the most obvious ways include Side Hustles, which we've actually published countless episodes about one of which is called Side Hustles for Busy People. It's a really great episode. Go listen to it, it's awesome. But when it comes to career enhancement and progress in your own professional fields, consider doing a specific certification in your field that could help you maybe negotiate a raise. This could be a free certification. I know that MIT and Stanford and Harvard have all of these free classes online for people as it relates to computer science, as it relates to hr, as it relates to everything in between. Go see what could happen if you got those certifications, took those classes, and then went back to your employer and said, hey, I think I might now qualify for this raise or this new position or this new title in the company. Also, job hopping to an another field that would allow you to make another 15 to 20% more is another solution to this. I mean, at the end of the Day, everyone, unfortunately. And I was in this situation myself. Robert is. I felt like I had so much loyalty to the company I was working for that even if someone was waving a 15 or 25% pay raise in my face, I'd be like, no, I like what I'm doing here. You know, I'm secure. I don't want to take on any risk like that. And I don't blame you if you're a risk averse person. But I think at the end of the day, if there's a way that you can say, okay, I work for ABC company making $82,000 a but if I went to go work for XYZ company in the same city, maybe even the same building complex, I can now go make 94,000 a year. I mean, that's a pay bump that's meaningful, right? That's that 10, 12, 15% we're talking about. And then number three here is laying out a clear path to rising in your career, which sometimes means going back to school. Now, Robert, I never liked school. I wasn't really good at school. But going back to school to maybe get that executive mba, go and get that, you know, master's degree of whatever you need to do at an affordable price, lay out a strategy that says, okay, I'm 43 years old, I'm 47 years old. I'm gonna be working for the next 20 years. Right now I'm a senior manager, but I want to get up and become a director. I want to be a VP. I want to be a senior VP by the time I'm in my 50s. What do I have to do to get there? Do I need the mba? If not, then that's great. How can I, you know, lateral around and climb the corporate ladder? Do I need certifications? If I do need those, I need to go find schools that offer them. Maybe Robert and I know my company did this. They will pay for you to go back to school, assuming you work at the company for like three or four more years after that. So there's a bunch of different ways that people can grow in their long careers. The professional careers here, still in their 40s and 50s, that allow them to, you know, increase the household income by 15, 20, 30% over the next couple of years, which will have a meaningful impact on your ability to build wealth for retirement.
- [06:30]
B
Yeah, and I'm all about loyalty as a business owner. I want people to be loyal to me, but you also have to make sure that that loyalty does not get in the way of your financial freedom. So many people are loyal to a company at fault to where they're loyal to them for 10, 15, 20 years, where their upside potential economically isn't there in their, you know, bonus package or maybe equity or stock sharing or whatever may be there. So you have to always be aware of that. Like you said, you know, always be moving up, whether it's with your company or moving on to another company, because loyalty only gets you so far, especially with some bosses. There are some business owners out there that just do not care about company culture and that is a problem. So make sure you understand the upside potential, but also if you believe you deserve more money before you go, take another job for that 10 or 15% raise. It's always good, if you like your current position, to give your current boss a wake up call. Go into the office, either written in an email or a letter, sit down, ask for 10 minutes, give them the letter and say, hey, I've had a great run here. I need to make more money. I'm giving you a chance. I have another offer right now. If you can beat that offer or match that offer, I would love to stay. If not, no harm, no foul, because I once lost a key person over $3 an hour and this was back 12 years ago. And I did the math for him after it was too late and he already took the job. And I said, your commute here is like eight minutes a day. Your new commute is 30 minutes each way. I said, so between the gas, the wear and tear, all of the other things, the tolls, you're not really getting a raise. And I wish you'd have given me another chance. And so just make sure you think all of that through when you're going through this phase of your career, because you have to make sure that you're progressing in your financial journey and not letting someone else do it for you that owns the company and not sharing it with you. So I want to make sure everyone.
- [08:40]
A
Understands that something I thought that was really beneficial. And Robert, you kind of touched on it here. If you have that positive relationship with your manager. Like for example, when I worked at this old company, I had a wonderful relationship with my manager. I give him all the kudos, all the praise. He's a wonderful human being and a wonderful manager. And at one point I said, hey, can we carve out like an hour of your time so that we can sit down and like go through, hey, I'm this 22, 23 year old right now as an analyst, but I want to become a senior Analyst. I want to become a manager. I want to become a director. What things do I need to accomplish over the next 18 to 24 months that will allow me to deserve that title? And we laid out what those things look like. I accomplished all of those things and I was on track to become that next title, but I quit my job to go do this instead. But what I'm trying to get at here is if you are well in your career and you're feeling good about where you are and you know that you can move up a little bit, and that's going to really give you the pay bump we're talking about. Sit down with your manager or your direct superior and say, hey, what can I accomplish over the next 18, 24, 36 months that will allow me to move up in my role to become the vp, become the svp, whatever it might be. And unfortunately, sometimes those roles only come up, up when existing employees leave the company. If you are deserving of a new title, like a VP or a senior vice president or director, whatever it is, and you deserve that title, go find that title at a different company. Right? Because, Robert, to your point, I mean, sometimes these people stay around loyalty to a fault for a long time, and they, they are the directors and the VPs and the senior vice presidents, and they'll be there for 20 years. And so you're next in line now for 20 years. Go stand up for yourself and go make that new career move that's going to put. Put real meat and potatoes on your dinner table every single night.
- [10:22]
B
And I'm going to go one more time with this because this is incredible. And this is why I love these episodes of Just Nothing is scripted. We're just riffing and going through our thoughts of how these things can be better for everyone. Elizabeth did this to me last week. She brought up one of our key employees that works in the social media in the marketing department. She said, hey, I feel like he's been looked over. I feel like he deserves more. He's really crushing it for us. I know you don't work with him directly, so you don't see it on a daily or a weekly basis. And I was like, wow. I said, okay, we need to do this. And we gave him a raise and a bonus on the spot. And I literally texted him in that moment telling him and giving his praise without any prompting from him. And it's just so true that we don't realize sometimes our manager or our boss or our regional manager, we may not even be getting looked over. Because it's intentional. They just might be so busy that we get lost in the shuffle. And so I think this is a great conversation for everyone because sometimes you can find that money you need right in front of you and you just have to ask for it. So let's round this point out with kind of another part of this is there are just countless ways in your 40s and 50s to make that extra 500 to $1,000 a month. And so don't just sit on the sidelines at 44 years old and say, okay, this is what I'll be doing. This is what I'll be making for the next 20 years. Do the market research, figure out what's next for you, and build a clear plan to execute. Because we live in one of the greatest periods of human history to be able to build these side hustles and build these niche jobs, to be able to make extra money to put towards your financial freedom.
- [12:07]
A
Couldn't have said it better myself.
- [12:08]
B
All right, so let's get into talking point number two, putting your money to work. You followed step one. You're finally ready to put this new money to work. But it's not just the new money, it's your existing money that isn't working properly for you. So let's dig into that and what that means. There really are two things to consider when it comes to making your money work as hard for you as you work to earn it. Earning interest and paying interest. We all know what it means to pay interest. We're talking about debt. And if you're in your 40s and 50s and struggling to get rid of high interest credit card debt, pause everything else you're working on and investing toward or saving for it and get out of this high interest debt. Hear me clearly. You will never build wealth by paying 35% interest on credit cards or 60% interest on a title loan debt. And like we always say, you can't out invest high interest debt. And this is a great, great illustration of that. And we recommend trying the debt avalanche method when it comes to paying off the debt. So be sure to check that out via Google, do your research and implement.
- [13:20]
A
That strategy when it comes now to earning the interest. Do not overcomplicate it, Robert. So many people make the mistake of trying to find that perfect investment strategy so they can get the extra half a percent or the extra 1 or 2% in their portfolio, when in actuality, if they just got the ETFs and INDE funds we talk about, they'll be just fine. Over the long term, there are three places you want to continually be earning your interest. In a High Yield Savings account, in a retirement account, and in your bridge account. The High Yield Savings account's pretty straightforward. That's essentially your emergency fund. But make sure your savings is earning something. There's T bills, there's high Yield savings, high Yield cash account, all these different things that you can do. But just make sure that your emergency fund is earning you money. It's not just sitting in cash and withering away. Your retirement account is also pretty straightforward. You've probably heard of something called a 401k. Just make sure that you're not making the mistake of letting the funds remain invested in these underperforming target date funds or mutual funds or whatever. I just helped my friend Hunter. It was so funny, Robert. We were watching the Tennessee Vanderbilt football game at a bar on Saturday, and he goes, hey, man, can you just like, look at my 401k? And I was like, yeah, I'd be happy to. And he shows it to me. It's like $30,000. It was up 2% this year, 2% in 2024. And I was like, hey, man, I don't mean to be the bear of bad news, but like, you gotta fix this. So I educated him. He's like, what's wrong? I'm investing my 401k. So I educated him as though, what's going on? The differences and everything. So he's on the right track now, but he's not the only one, I guarantee you. Some people listening right now are going to look at their 401ks year to date, in their 40s and 50s, where they still have 20 more years ahead of them. And it's going to say 2, 5, 6, 7%, when in actuality it should say 22, 25, 27%. Because you want to be benchmarking and tracking the S&P 500. You want to own the ETFs and index funds that we talk about. Voo, VG, VTI and QQQ. Real simple. 1, 2, 3, 4. Now, finally, the bridge account. This is your normal taxable brokerage account. That's inside of public.com. it's going to be a way for you to access your investment portfolio before the age of 59 and a half without paying penalties and fees. We suggest having the same ETFs and the same index funds in that account as well, because that's what American capitalism is.
- [15:34]
B
So a quick pro tip also on that note is that I see so Many people all the time that just have way too much money sitting in their checking or savings account. And you don't need to have 60 or 90,000 in your checking or savings account. We talk about this all the time. You need two, three, four months worth of your monthly expenses put away, which could be 25 or 30 thousand dollars for your family. And everything else needs to be active. We always tell you to make sure your money is working hard for you as you work to get it. And this is a great illustration to make sure that you don't have your money sitting idly by in your account while you're leaving so much money on the table by not investing it. So you have to do these things. You have to get out of debt, you have to start investing, and you have to start living on less than what you make because no one is going to do it for you. And I promise you, at the end, no one is going to save you. You have all these friends and family and cousins and uncles, but guess what? If you want to find out how close you are, go try to borrow money or tell them you're moving and you'll find out how close you are with those people because they will be gone in a second. And that's why you have to listen and follow along to everything we discuss in the Rich Habits podcast and the Rich Habits Network to make sure you take care of yourself and set yourself up for financial freedom.
- [16:56]
A
I love it.
- [16:57]
B
Robert, let's get into talking point number three, and that is estate planning. Now it's time to look forward to the future for both you and your family. We're going to go rapid fire on some of our favorite estate planning strategies and structures that'll ensure your family is set up for life. Because it's all about at this phase in life, it's about structure and protecting the money you've saved and invested over the years and putting yourself in a good place to make sure that Uncle Sam doesn't come get it all. And we're going to go through that right now.
- [17:30]
A
So my first point here, Robert, is the 529 plan. We've talked about the 529 plan a few times, and essentially why it's so important is you're in your 40s and 50s, you likely have children, and those children are probably thinking about going to college or higher education. And so by going to a vanguard, for example, opening up a 529 plan, I think the minimum is now only $2,000. It was 3,000 when I opened mine A couple of years ago now. But by opening up this 529 plan, contributing money to it, that $3,000, and consistently contributing $150 a month between, let's say age zero, right when they're born, up until age 18, that total contribution is not going to be more than 15, $17,000, but it's going to grow over the next 18 years to be $95,000. So two things are now going to happen. Either. One, if your kid decides to go to college, they don't have to take on all the student loan debt, which is going to save them financially in the future. That's cool. Two, if they don't decide to go to college, maybe they want to start a business or go to trade school or whatever else. You can use some of this money to pay for those certifications and the tuition for that. But more importantly, when they turn 18 years old, you can take up to $35,000 of this 95,000, move it into the kid's Roth IRA, deposit it right then and there, invest it in the s and P500, and by the time your child is from 18 to 65, that 35,000 that was just deposited on their birthday will be worth over 1.3 dollars tax free. That is how you take 3 grand and 150 bucks a month for let's call it two decades and turn it into generational wealth for your children. Tax free million dollars in retirement. The 529 plan is undefeated. I'm already doing this for kids I don't even have yet. It is such a great idea. Make yourself the beneficiary like I have and just rock and roll on this plan.
- [19:17]
B
I love it in the 529 plan. I've learned a lot about in the last two years from you and it just really highlights. There's so many tools out there. And that's what's so cool about what we get to do every day, is laying out these plans not just from experience, but also educating through our financial musings and learnings over the years. So it's really cool to learn all these ins and outs like we did with Ankar Nagpal. Just really figuring out all the best tools to help people retire comfortably and with the right structure.
- [19:51]
A
Couldn't agree more. Now the next point I want to make too, talking about sort of legacy here, right? You want your children to be set up when you eventually are older and you pass away, making sure that they retire millionaires when you're long gone with the 529 plan legacy also includes term life insurance. God forbid anything happen to you or your spouse or whoever is making the money for your household here. But if you are the breadwinner and let's say you're making 100,000, $120,000 a year and in your 40s or your 50s here and something happened to you, you now need a pile of cash to be invested in the S&P 500 to then have 4, 5, 6% pulled off of it every single year that your family can live off of. Right. So you want to take 10 to 15 times your annual income. So in this example, let's call it one to one and a half million dollars out as a term life insurance policy. You'll pay probably 40 bucks a month for it. Get a 15, 20 year term, and if something happens to you, your survivors will now get this one and a half million dollars that they can put in the S&P 500 and make 10% a year off of, call it 120, $150,000. And now they're not scrambling fig funeral costs. They're not scrambling because they don't have to say, do we have to sell the house because we can't afford the mortgage because our mom's dead? Right. Like, there are all these things that happen upon death that I think people don't really think about. And having a term life insurance policy worth 1 to 2 million dollars is going to allow your heirs, your children, the survivors, the ability to just grieve your passing versus having to now be stressed out about money.
- [21:22]
B
Yeah, that is so true. I've been down that road already with my mom's passing and some other things like that. And that's for a who other episode. But I love that and I think it's a great strategy for everyone to consider. And then I would say the next one that is really, really important for someone like me and everyone listening that owns businesses is having your business and your real estate ownership structures in order. So many people that I deal with on a weekly basis, they'll have their home and their properties in their personal name, and they don't have their business in an LLC structured properly. And I think this is one of the biggest mistakes people make when building their, you know, financial freedom over years and years is they never take the time to get their business structure in order. And what I mean by that is having that LLC for every business and make sure that it's operated properly so it's legally operated in a way that lawyers and other people can't penetrate the corporate veil on those LLCs, then the next step is understanding having that holding company that has total ownership of all these LLCs. And then after that, the next really important step in structure is having that revocable trust that owns all of the holding company in, which then holds all of the assets in the LLCs. In my world, that's called layering, and you want to have that layering. So then you are protected from an inside attack or an outside attack, but also later on, if something were to happen to you, then you can structurally have everything protected and out of probate. So then that way your children or your heirs, whoever it is, left to, don't have to go through the rigorous nonsense of a year or two years of probate and all the money it will cost out of your assets to be able to pass it along properly to them. And I think that is such an important thing that so many people lack on. And I deal with it a lot of helping people structure their entire portfolio and all of their assets to make sure they're protected later on. So that leads us into talking point number four, which is the revocable trust versus the will. And what does that mean? And the basic essence of this is the revocable trust is how you structure and protect your assets while you're living. And the will is the designation once you pass. And there are a lot of pros and cons to the revocable trust over the will. And the most important one I've already covered, and that is the fact that by having the revocable trust for all of your assets, you will not have your heirs suffer by going through probate court and figuring out who gets what and what is left after all of the court fees and everything that it takes to go through probate court. So that would be the number one most important thing for me. But then also with the trust, it keeps all of your business private. And this is a very important thing for wealthier people, because you don't want the public in your business. Because, remember, if you go through probate that is public knowledge, it'll be in the papers. Everyone will know exactly what's going on. So those are two very important parts of the revocable trust versus the will.
- [24:38]
A
Right there with you. Robert, just want to reiterate. A revocable trust allows you control over your assets during your lifetime with provisions for after your death, whereas a will controls assets only after you die. And trusts can manage your affairs if you're incapacitated, whereas wills do not so revocable trust, way to go. I mean that is just right there with you. And then speaking of incapacitated power of attorney, if you don't have a power of attorney, probably a good idea to check that one out. I'm my dad's power of attorney. I can sign on his behalf with different things. He's 79 years old at this point. So if we're at the hospital, something happens, he can't respond. Right. I'm right there with him and can do all those things on his behalf, but definitely have a power of attorney. Have that person in your life that you trust, if it's a spouse, if it's a child, if it's someone in your family, have them as that power of attorney. So if something happens to you where you cannot make those decisions, you are not in a state of mind to make real big lifelong decisions that you know that that person's going to make the right choice for you versus, to Robert's point, you know, something being thrown around in probate. What if they would have thought this or thought that? Right. It's just get that out, do the power of attorney and have one for sure.
- [25:40]
B
Especially if you're in a family where there is some wealth to be considered and there are multiple siblings, you want to make sure that power of attorney is in the hands of the most responsible person that is going to do what's right for everyone in the consideration of what's happening and not just for themselves. This is very, very important for the future.
- [26:00]
A
So if you're in your 40s or 50s, we promise it's not too late. You might start to have some gray hair like Robert here, but that's okay. Gray looks good on you, Robert. You got, you know, your agent like fine wine, as they like to say. But at the end of the day, you're still young. You have so much time ahead of you to grow in your career, get your money right, start investing, grow your retirement accounts, earn interest, not pay it right. There's so many cool things you can still do throughout your life to not only build, well, wealth, but keep it and pass it on for generations to come. If it's the 529 plan making sure you have these trusts in place. There's so many things to consider and we hope this episode inspired you and can really guide you now to building generational wealth in your 40s and 50s.
- [26:37]
B
Well, this is a great episode because it really takes notion to our 30 year age gap. You know, you're in your late 20s and I'm, you know, in my late 50s. But there's so many things that can happen in that 30 year age difference difference. And it's so cool being able to now teach people in their teens, 20s, 30s, 40s, 50s and on up and show them the way of what is necessary, important so you can live a life of financial freedom and not have the fear going into retirement by not having all of your ducks in a row like we try to teach each and every week.
- [27:12]
A
Right there with you, Robert. Now, before we jump into our question and answer section of the episode, I think it's time for our monthly update on the fractured portfolio. I'm sure you all remember, but we had mo from freck.com come on the podcast to talk about direct indexing and how you can do it and use Freck as a way to automatically tax loss harvest while tracking the S&P 500's performance. Now, Robert, we invested $20,000 of our own money on FREC back on June 6th. Since then, our 20,000 has increased to $22,551 because we're tracking the S&P 500. But more importantly, we've automatically tax loss harvested $1,006.89, which means we didn't do anything. And now we can write off $1,000 of losses against our investment portfolio. We're still tracking, Right? We're up. If you include this actual tax loss, we're actually up 18.5%, which is outperforming the S and P, which is pretty cool. It's just so fun, Robert, because we have these tools at our disposal and we're able to show people in real time. Right? It's like, hey, you jump in the water first and you tell me if it's hot or cold, then I'll jump in after you. Right? That's what we're here, Robert. So we jumped in first, we threw 20 grand at it. We're now up to 22,005,51 and we've tax loss harvested over $1,000.
- [28:29]
B
Yeah, I love it that we get to introduce all of these cool ETFs and stocks and cryptos and funds and different investment strategies. And we do it quite a bit. When you really think back over the two year history of the Rich Habits podcast, we've introduced a lot of really cool stuff. And then all of these people out there, by the thousands and tens of thousands of people, people, they get the benefit of us digging deep and really flushing out these investment opportunities and presenting it to them. And so it's so cool when we see these investment opportunities like Freck, and then they actually do really well. So it's been a fun ride and Freck has been great so far and I'm really excited to see what it does in a couple more years.
- [29:11]
A
So if you want to go sign up for Freck, head over to frec.com that's freckle, and you can go start direct indexing the S&P 500, the Russell 2000, the NASDAQ and all the other cool strategies they have. Automatically tax loss harvest. Maybe you too can tax loss harvest a thousand dollars. This is pretty easy stuff here. All right, Robert, let's jump into our first question coming from Scott P. Scott says I'm trying to consolidate some of my cryptocurrency investments because I just have too many of them without a significant amount in any of them. I've been doing really well with Bitcoin on Coinbase and Etha, which is the iShares Ethereum ETF, hasn't performed that well over the last couple months with my brokerage account. Now, after the episode introducing btci, I'm very interested in that etf. Do you all have a preference or a recommendation on one, what I should keep my crypto inside of, if that's a bitcoin etf, Bitcoin on Coinbase, whatever else. And then two, do I choose the ETF or do I choose the actual asset? And then also what about the fees? There's trading fees on Coinbase and I don't like paying $100 every time I trade with size. Robert, I'll let you kick this one.
- [30:20]
B
Off, Scott, It's a great question and one of the big things I want to talk about right here is you mentioned you don't have a lot in any of them. I see this all the time where someone will have a crypto portfolio with 30 different assets, but they have an average of $180 in each one. And the problem is, is that you're shooting darts at too many targets and when some of them do hit, you're not going to have enough money in each one of those cryptos to really make a difference for you financially. So in my opinion, starting out, let's say you have under $50,000 in crypto, I would say you'd be better suited to have eight, 10 or 12 cryptos all together and really focus in on having three of the best of breed in each sector. And I have no problem with that being on coinbase or crypto.com or public.com but you just don't want to have it spread all over the place if you can help it. Now if you prefer to have the ETFs like we said BTCI, that is fine as well. In my opinion though, if you really want to get the most bang for your buck, a major portion of your crypto should be in the actual underlying assets rather than the ETFs. And then as you build the portfolio then you could look to the BTCIS of the world world to gain some extra income and also lower your volatility. But I definitely would really try to focus it in, maybe get it all on Coinbase or Public and then just really add money to it and dollar cost average into that 8 or 10 that you believe in the most. And you've done your research on that, you think give you the most bang for the buck in this bull run.
- [32:00]
A
I'm right there with you, Robert. I think at the end of the day I've got now because I've added a couple, I've taken some advice from you and some friends and I've got 1, 2, 3, 4, 5, 8, 9 cryptocurrencies in my portfolio. With the new 4 or 5 I've added, I've got a cumulative of like 10 or $15,000 in them. So it's not too crazy. They're kind of those moonshot crazy ideas that I've seen you talk about and others online where the bulk of my portfolio is in the bitcoins, the Ethereums, the chain links, things like that. So I'm right there with you, Scott, if you want to have the ETFs in your portfolio, I think it's a great idea. I actually just bought some Ether myself today. We highly recommend the Ishares Etha Ethereum etf. I think there's a couple others out there, but I know the iShares one is legit. And to your point before about BTCI, I'm right there with you. We love BTCI. We had the Neos crew on the Rich Habits podcast a couple episodes ago to talk about BTCI's 27% distribution yield. That is so much money getting paid out every single month. You're making passive income with it while also tracking Bitcoin. So two thumbs up from us and.
- [33:03]
B
We'Re going to see more and more incredible ETFs in the coming months. And so I think there's just always going to be this influx of new tools to offset volatility but then also provide income. So I'm right there with Austin. I agree and I think you're on the right track and BTCI is great as well. And just keep an eye on it. Make sure you understand your thesis and also make sure to take profits along the way.
- [33:29]
A
Our next question comes from Key S. Key says we're looking to put some single family rental properties into LLCs. One is in Alabama and the other is in Ohio. We got a quote from a firm for $6,000 to do this for us. It includes a Wyoming LLC parent company that provides asset protection and privacy as well as creating two LLCs, one in Alabama and one in Ohio to hold the investment properties within. The firm advised that the Wyoming LLC would not require filing any tax returns. And since we live in California, it would also avoid an 800 franchise tax. Personal we don't hold a lot of cash in our accounts, but we do have our bridge accounts and we have assets well over a hundred thousand dollars. However, I'm wondering if this is just overkill for our situation or is this something that we should do considering our wealth? Robert, we were just talking about this stuff. Do you think that it's time for him to kind of begin to structure some of these things together considering he's got, you know, a couple hundred thousand dollars maybe not yet. What's your perspective?
- [34:30]
B
Yeah, I always think that structure is important because I too you have been the victim of inside attacks, charge orders and all of the other things that come into play as to why business structure is so important over the years. So I think it is time to do it. Is $6,000 a little steep? I think so. If I use my attorney for doing all this, they generally charge me, I think, 6 or $700 per LLC and that includes the subscription agreement, the operating agreement, the ein and everything thing. So I would maybe take another go round at this and look around and see if you can find somebody more reasonable to do it because $6,000 does sound a little high for me. I think you should be able to get it done for three or four thousand, which then I think it's definitely worth the money because at the end of the day we want to make sure you have absolute protection on your assets because the more money you make and the more wealth you build, you're going to find people are going to come after you. So it's really good to have that protection early to make sure that they can't do what's called penetrating the corporate veil and coming after your personal assets.
- [35:37]
A
So let's linger on that for a second. So everyone Understands why Key is thinking about spending $6,000 for this. Right. So if you are someone who owns a rental property, right, like Key does in Alabama and Ohio, and let's say you're Alabama rental property residential, somehow hurts themselves and they're trying to blame you for it, they're going to go and look you up. They're going to say, I'm going to go sue Kee for everything he's got. And as part of that is this rental house and the Ohio rental house. If they're not structured in different entities. Right, because you still own them. But in this situation, Key, like you're thinking of doing, you don't own these houses. They're owned by these LLCs. Now, you control the LLCs, but you don't own them. So when they sue you, you're talking about this hundred thousand of assets. I understand having some maybe umbrella insurance or some policy around that to help you kind of stay protected there. But what Robert's saying is like, if something bad happens and they go back and try and sue you for something frivolous, they can't really impact your ability to own and keep these rental properties because you don't exactly own them anymore.
- [36:41]
B
Yeah, it's so true. And so many people really slack on their business structure. And that's why this is such an impactful episode, is really just drilling it into everyone's head. Protect what you own, otherwise someone will take it. I promise you, as you grow, it could be an inside attack, it could be an outside attack, it could be a crazy ex employee that comes after you and finds something and they go after your personal assets. And I've lived through it and it's cost me millions of dollars over the years and I just don't want to see any of you go through it. So I promise you, Key, this is a great question. Please follow through and get these things done. And everyone else listening. Make sure you do the same.
- [37:23]
A
Now, before we jump to our final question, let's take a moment to hear from another one of this episode's sponsors. Blossom Investing is more fun when you're doing it alongside like minded people from dividends to growth stocks. There's a community for everyone on Blossom. And remember, Blossom is not an online broker. Don't forget that they are a social investing app built around transparency.
- [37:44]
B
Yes, and transparency is key when it comes to investing investing. You all know just how important this is because you listen to our podcast. I've already connected my personal accounts to Blossom and I enjoy seeing how everything is divided up and performing on a daily basis. Additionally, they offer duolingo style educational video content for those of you still learning.
- [38:06]
A
If you've not yet joined Blossom, we really encourage you to do so. It's an easy way to find both your own community of like minded investors, but also manage and analyze your portfolio in a really clean way. They also have new features for custom stock charts and even sharing daily performance with your friends. Click the link in the Show Notes below to sign up for Blossom or simply type Blossom in the App Store. Now our final question comes from Ari. Ari says, which is more important to build up? If I only have a limited amount of money to set aside for it every month, is it one, the emergency fund or two, the Roth ira? If the answer is the emergency fund, do I just also invest the money that's in my emergency fund in the stock market so I can also grow that money? Like how do I approach this? Robert, I'll kick this one off very simply. Simply put, we have sort of like this order of operations. I think a lot of people make the mistake, Robert, of thinking they want to do nine different things at once, right? They want to pay off their mortgage, they want to invest, they want to grow in their career, they want to buy the rental house, they want to buy the new thing, they want to invest this and buy this and do this and all these like 19 different things. If you try and do 12 things at once, none of those 12 things are going to get done effectively. What you need to do is focus on one thing at a time. Now in this situation, one of those things is building up an emergency fund you want to have after you you've paid off your high interest debt at 35%, build up your emergency fund to call it 10, 15, 20,000 dollars. That 10, 15, 20,000 is not an investment, it is insurance. So you do not have to sell your investments, right? People make the mistake of investing their emergency fund. Let's call it invested $15,000. The S&P 500 went down by 35% in 2022. Congrats, you now only have about $9,000. And then also congrats, your parent just died, so pay 12,000 in funeral costs. Well, now you have to go borrow on your 401k or cash out of some stock options or swipe the credit card to find that extra 4, 5, 6, 7, $8,000 you need in the case of an emergency. Have you ever heard of medical bills? They're pretty high, right? Happens all the time. People get stuck with those. What we're trying to get out here is if you have that emergency fund of 15, $20,000, you can use that as insurance to say, oh, something popped up. That was $9,000. Here's my emergency fund money. Now I don't have to sell my investments. Now I don't have to do the short term capital gains or borrow from my 401k or swipe my credit card. Right. It's ensuring that your investments remain. So which one do you want to do first? You want to do the emergency fund. You want to build it up to three to six months of expenses. Only you know what that number is? For me, it's closer to 30 to $40,000. And then after you have that money sitting there, take all the same money you were using to build it up to now go invest and max out the Roth ira. Now let's say an emergency pops up and you, you've depleted your emergency fund. Stop investing in the Roth ira, hit pause for four or five months and then go replenish the emergency fund. Congrats, it's back up to where it was. Now go start investing again. Right. One thing at a time. If you do both, neither things are going to get done.
- [41:07]
B
Yeah, I agree, and that's a great takeaway. And I think the most important part of your answer, Austin, is too many people try to get too fancy with their money too early on and they try to chase every trend and every different way of making money and it just usually doesn't work. That's why we like to tell you guys, like, I really love the order of operations. Get the emergency fund set up, get the Roth IRA moving. Start simple, build your base. Then start diversifying more, getting more fancy. Because so many people try the fly by night, hustler, gambler, investing styles till they're about 35 or 37 years old, and then they realize it doesn't work. And the number one thing we can do to help everyone listening is getting you out of the mindset as the gambler and getting you into the mindset of the long term investor. I promise you, you'll thank us later once you flip that switch. So, Ari, great question. We hope this helps because we want to see everyone that follows us win and win big.
- [42:12]
A
Everyone, we're wishing you a merry, merry Christmas and a very happy new Year. We'll see you here very soon. We're not going to take any pauses or break the rich habits. Podcast keeps rolling even during the holiday season. And then also, Robert, I just want to take a moment to thank everyone again for all the support. Just reflecting back upon 2024 has been amazing. We now have 200,000 people that have us in their top five podcast rotation. We have 70,000 people that have us as the number one podcast they listen to out of every podcast every single week. That's so many people. So encouraging and we're so glad you're here. Cannot wait to continue the momentum in 2020 75.
- [42:50]
B
It's really mind blowing to think that the amount of people that watch us and we're their number one podcast can fill a baseball stadium in most football stadiums. And it really just goes to show that if you provide value and actionable information over and over again, that you're going to succeed. Because we stick to what we're good at, we stay in our lane and we make sure that our delivery is always the same same so people can take notes and take action. And I love every minute of it.
- [43:20]
A
And what's interesting is a surprising statistic. I saw our largest growing audience like segment cohort were those who are 55 and up. So this episode's really going to help a lot of those 55 and ups who are trying to build that generational wealth in the last, you know, 10, 15, 20 years of their career. So we're so excited. We're catering, we're doing everything we can to make sure that our audience has all the tools and resources they need. And don't forget, leave us a five star review. Share this episode with a friend that needs it and we'll see you on our next episode.