Rich Habits Podcast - Episode 98: Getting Rich, Not Looking Rich, in 2025
Hosts: Austin Hankwitz and Robert Krok
Release Date: January 2, 2025

Introduction

In the inaugural episode of 2025, hosts Austin Hankwitz and Robert Krok revisit a fan-favorite topic: "Getting Rich, Not Looking Rich." With a blend of veteran insights and fresh perspectives, they outline six actionable steps listeners can implement immediately to secure financial success in the new year.

Notable Quote:
Austin Hankwitz [00:00]:
"Welcome to 2025. We're not going to act rich, we're not going to look rich. We're going to actually get rich in the new year."

1. Implementing Sinking Funds to Avoid Credit Card Debt

The duo emphasizes the importance of sinking funds—separate savings accounts designated for planned expenses. By allocating funds monthly, listeners can avoid resorting to high-interest credit card debt for foreseeable costs like holidays, car maintenance, or personal spending.

Key Points:

• Definition: A sinking fund is a savings strategy for upcoming expenses.
• Application: Allocate a portion of each paycheck to cover recurring costs such as Christmas gifts, car repairs, or beauty treatments.

Notable Quote:
Austin Hankwitz [02:10]:
"If it's going to cost $400 and you get it done every four months, set aside a hundred bucks out of your monthly budget into a sinking fund."

Robert Krok [03:36]:
"Avoid the cycle of running the crowd credit card and then paying it down for months and months."

2. Maximizing 401(k) Contributions and Roth IRA Investments

Investing is pivotal for wealth accumulation. The hosts advocate for maximizing employer-matched 401(k) contributions and fully funding Roth IRAs to benefit from tax-advantaged growth.

Key Points:

• 401(k) Matching: Ensure you contribute enough to receive the full employer match—“free money” that accelerates retirement savings.
• Roth IRA: Aim to max out contributions ($7,000 for 2025) and invest in diversified assets like the S&P 500.
• Investment Strategy: After securing the match and Roth IRA, further investments can be directed to taxable brokerage accounts.

Notable Quote:
Austin Hankwitz [05:46]:
"Free money is free money. And then after you've done that match, call it 2, 3, 4%, take all the other money you have and put it in that Roth IRA."

Robert Krok [07:20]:
"The Roth IRA is the most powerful investing vehicle out there for any individual investor who wants to build a big beautiful nest egg for their retirement because all the contributions grow tax-free."

3. Adjusting Tax Withholdings to Optimize Cash Flow

Instead of waiting for large tax refunds, the hosts encourage adjusting paycheck withholdings to receive more money monthly, which can then be invested or used to pay down debt.

Key Points:

• Tax Refunds: Large refunds indicate over-withholding; reducing them frees up monthly cash.
• Action Steps: Contact HR to modify tax withholding settings, ensuring more take-home pay throughout the year.

Notable Quote:
Austin Hankwitz [09:25]:
"2025, we're not doing that this year. We're going to call our HR department and tell them to change our withholding down a little bit so our paychecks are a couple hundred dollars more every single month."

Robert Krok [10:48]:
"By contributing to my Roth IRA or by following a budget, or by freezing my credit, I'm doing small things consistently that compound over time."

4. Freezing Your Credit to Prevent Identity Theft

Protecting one's credit is essential for financial security. Freezing credit reports makes it difficult for identity thieves to open fraudulent accounts in your name.

Key Points:

• Process: Freeze all three major credit bureaus—Equifax, Experian, and TransUnion.
• Benefits: Enhances protection against identity theft without affecting credit scores.
• Additional Support: Services like Aura and LifeLock can assist with credit monitoring.

Notable Quote:
Robert Krok [12:02]:
"Freezing your credit report prevents someone from trying to open credit cards and other revolving credit type accounts under your name."

Austin Hankwitz [13:11]:
"It’s completely free. So here's a couple ways that you can freeze your credit."

5. Setting and Planning Financial Goals

Goal-setting is crucial for maintaining financial focus and measuring progress. The hosts stress the importance of defining clear financial objectives and creating actionable plans to achieve them.

Key Points:

• Consistency: Automate investments to ensure regular contributions.
• Portfolio Rebalancing: Regularly assess and adjust investment portfolios to align with goals and market conditions.
• Budget Auditing: Maintain an honest budget that accounts for all expenses, ensuring that savings and investments are prioritized.

Notable Quote:
Austin Hankwitz [16:26]:
"Make financial goals and build a plan around those goals that will allow you to hit them."

Robert Krok [18:27]:
"Quality habits make you a better person, make you healthier, make you be more financially sound."

Q&A Highlights

Question 1: Inheriting $200,000 at Age 25
Submitted by Michael S. via Instagram DM

Advice:

• Allocate Wisely: Use only a small percentage (e.g., 10%) for personal enjoyment, while investing the majority.
• Investment Vehicles: Max out Roth IRA, set up brokerage accounts, and consider cryptocurrency for long-term growth.
• Emotional Considerations: Take time to process the inheritance, seek professional advice, and protect against lifestyle inflation.

Notable Quote:
Robert Krok [25:55]:
"Take 10%. If you're getting 200 grand, take 20 grand of it and have a ball. But please, please take the rest and invest it."

Question 2: Ethical Investing
Submitted by Philip B. via Rich Habits Network

Advice:

• Personal Alignment: Invest only in companies whose values and leadership align with your own.
• Sector Exclusions: Avoid industries like airlines, cruises, tobacco, and marijuana if they conflict with personal ethics.
• Case Example: Robert declines to invest in Walmart due to past negative experiences.

Notable Quote:
Robert Krok [33:18]:
"I would rather not make money from companies that I don't agree with what they do or their business practices."

Question 3: Book Recommendations for Young Investors
Submitted by Donna M. via Rich Habits Network

Advice:

• Recommended Reads:
  • Own Your Money by Michaela Aloka
  • The Little Book of Common Sense Investing by John C. Bogle
  • The Richest Man in Babylon
  • Think and Grow Rich by Napoleon Hill
  • Rich Dad, Poor Dad by Sharon Lechter

Notable Quote:
Robert Krok [36:31]:
"Rich Dad, Poor Dad by Sharon Lechter. It's incredible and it's a really, really good book for someone just starting out."

Conclusion

Austin and Robert wrap up the episode by recapping the six key action items:

1. Use Sinking Funds
2. Maximize 401(k) and Roth IRA Contributions
3. Adjust Tax Withholdings
4. Freeze Your Credit
5. Set and Plan Financial Goals
6. Maintain a Consistent Investment Strategy

They reinforce the importance of small, consistent actions that compound over time, leading to substantial financial growth and security.

Notable Quote:
Austin Hankwitz [21:57]:
"These small steps toward financial freedom every day, week, month, year will allow me as an investor to reach it much faster than my peers."

Robert Krok [22:42]:
"Quality habits make you a better person, make you healthier, make you be more financially sound."

Upcoming Episodes and Final Remarks

The hosts tease their next episode on "Three Favorite Investment Categories for 2025" and encourage listeners to subscribe, leave reviews, and engage with their community resources.

Notable Quote:
Austin Hankwitz [37:43]:
"We are just a build build build machine and we're so excited for all of you that support us each and every week."

By adhering to these strategies, Austin and Robert aim to empower listeners to achieve genuine wealth in 2025, emphasizing actionable steps over superficial appearances.