Loading summary
Transcript41 lines
- [00:00]
Austin
Study and play come together on a Windows 11 PC and for a limited time, college students get the best of both worlds. Get the unreal college deal everything you need to study and play with select Windows 11 PCs. Eligible students get a year of Microsoft 365 Premium and a year of Xbox Game Pass ultimate with a custom color Xbox wireless controller. Learn more@windows.com studentoffer while supplies last ends June 30th terms at aka mscollegepc
- [00:31]
Robert
when
- [00:31]
Austin
you need to build up your team to handle the growing chaos at work,
- [00:35]
Robert
use Indeed Sponsored Jobs.
- [00:37]
Austin
It gives your job posts the boost it needs to be seen and helps reach people with the right skills, certifications and more. Spend less time searching and more time
- [00:45]
Robert
actually interviewing candidates who check all your boxes.
- [00:48]
Austin
Listeners of this show will get a $75 sponsored job credit@ Indeed.com podcast that's Indeed.com podcast.
- [00:55]
Robert
Terms and conditions apply. Need a hiring hero? This is a job for Indeed Sponsored Jobs.
- [01:00]
Austin
Hey everyone and welcome back to the Rich Habits Podcast Question and Answer Edition. These are our Thursday episodes where every Thursday we sit down and we answer your questions sent to us on Instagram at Rich Habits Podcast or emailed to us at rich habits podcastmail.com as if we were going through whatever you're going through. You all are always sending us the best questions we've got. I think Robert six or seven here for today's episode and I'm super excited to dig in. Just as a quick reminder, if you are sending us a question, don't give us a detailed breakdown of your life and say what should I do next? Or what tips do you have for me? Or give, you know, that's not a question. That's like an open ended just like. Well, I don't know what. Like if you have a question, say here's my situation, here's the pertinent information as it relates to my question and and here is my question itself. That's the easiest way for us to answer your question. If you're someone that just brain dumps all your stuff and say what do I do? How should I think about, you know, my investing portfolio? It's like it's just too broad.
- [02:07]
Robert
Robert Definitely specificity and age is very important so we know where you're at in your financial journey. But that is so true. Sometimes we get these 500 word diatribes without an actual question in them. So just be specific, give us your age and give us that pain point you want help with.
- [02:26]
Austin
Now before we jump to our first question coming from Chad, this episode of the Rich Habits Podcast is brought to you by Public the investing platform for those who take it seriously. On Public you can build a multi asset portfolio of stocks, bonds, options, crypto and now generated assets which allow you to turn any idea into an investable index using AI.
- [02:47]
Robert
And it all starts with your prompt. From renewable energy companies with high free cash flow to to semiconductor suppliers growing revenue over 20% year over year, you can literally type any prompt and put the AI to work. It screens thousands of stocks, build a one of a kind index and lets you back test it against the S&P 500, all with just a few clicks.
- [03:08]
Austin
Generated assets are like ETFs but with infinite possibilities. They're completely customizable. They're based on your thesis, not someone else's. So go to public.com rich habits to transfer your portfolio today. That's public.com/rich habits paid for by Public Investing.
- [03:26]
Robert
Full disclosure in the podcast Description so
- [03:29]
Austin
our first question comes via email from Chad D. Chad says hey Austin and Robert, I'm a huge with like 3 use fan of the podcast. I listen every single week and I can't thank you guys enough for how much you've helped me in multiple ways. Here's the thing. I'm an early stage entrepreneur out of Alberta, Canada and I'm currently working on an app idea, a mobile platform aimed at the massive DIY home improvement market. I don't want to give away too much on here because I feel like this could be something very big. I have a fully developed concept. I've built a fully working interactive prototype with the help of Claude Code and ChatGPT and I've even gone as far as registering it as a business to make it somewhat official. I'm obviously not looking to pitch you guys, but I am looking for some advice. I'm just at a stage now where I'm ready to officially build version one of my application, but that goes beyond my know how. I'm now trying to find the right developers and tech people that can fully take it to the next level, but I have no idea where to even start looking. And from listening to your guys podcast I feel maybe you guys can help point me in the right direction. Truly appreciate any advice you can share. Thank you so much for building the Rich Habits Podcast and the Rich Habits Network. Very cool Chad. Thank you so much for the kind words. I love this. As someone who you know Robert, you built Vest Funder recently. We've built Wall Street Favorites.com recently. I'm building a couple other fun Things behind the scenes like it's, it's never been easier to Chad's point to, to just have an idea and turn your idea into reality. That reality for a lot of people is an application on the App Store or the Google Play Store. Now for the last call it two decades that these app stores have been around, you've had to have someone that is a genius when it comes to coding and software engineer and like all this fun stuff, right? They have to be able to build and code from scratch. Now sure there's maybe some templates and some like easier ways to do that than others, but at the end of the day, you needed to have a degree in software engineering engineering and have some background in technical coding and things like that. But with the rise of Claude code, the rise of Chat GPT Codex and all of these other AI coding tools and agents, it's very easy to what is now called vibe coding, which essentially what it means to Vibe code is just like your Chat GPT or your Claude prompt that comes up that you can just type in plain English, hey, I want to build an app that does this. You can literally prompt it and then the AI will take your prompt and code it into an application. Now with that said, Robert, there's a ton of different platforms that people use at the moment to maybe build their apps a little bit more efficiently or maybe have a little bit extra, you know, wherewithal on it. And it's not just a HTML something or other Java. I don't even know what some of this coding language is, but I'm going to share a few of those right now. So all I do is go to Google and type in app building AI and I've heard of Replit R E P L I T dot com. Replit is a really cool platform that lets you build websites, mobile design slides, animation, applications, all this fun stuff. There's also lovable, there's also base 44. I mean there's literally so many of these AI applications that you can anything com anything thing.com is another AI app builder. I mean literally all of these are so cool and they're super affordable. So Chad, assuming you've not yet taken that step, that's the first step I would do, right? Because you don't want to go out and go spend $40,000 to get a developer developer team to build you an app that AI can likely get you 80 to 90% of the way there. Now Robert, I'm sure once Chad is to that point where he's got a cool Little working application. What advice do you have for him as it relates to finding perhaps some developers or some people in his that can look over the code and make sure that it is built for scale and not just going to break after 2000 people Sign up for it?
- [07:37]
Robert
Yeah, I think he's on the right track. And what a time to be alive. I think back to when I built an app, let's say 10 years ago. I think we spent $350,000 in developer fees just to get to a working prototype. And now people can do it for nearly free through these apps like Replit and Lovable and all these. A base 44 you mentioned is another good one, but I think a good, good starting point for him is to get engaged with those sites, but also get a contract in order. He mentioned ChatGPT and Claude. Get yourself a development contract in order. So anyone that's going to look over your information or your code or help you get to the finish line, you want to make sure that they understand if they're writing code or helping you edit code or any of that. You want to make sure that it is a contract between you and them or your LLC and their LLC that you own the code. This is your project and they can't take it and run with it and say something like that. They develop the code, so they're keeping the code. So that's the only thing I would add because you're right, these websites now, like Lovable, are just so great because you can be up and running for so little money and really be able to make a ton of money with a new app. You know, you think about just like what we built here, Austin, with Wall Street Favorites. It's already up and running and taking in a bunch of money because we built something that was needed and very valuable to the average investor. So love what you're doing, Chad. Get the contract in order. Check out these sites and pick one that's best for you from a cost perspective and a development perspective. And Chad, if you're looking to do some digging on where to hire these engineers, I would look at Arc Dev and Top Toll to. Those are two that have been around for a long time that I've heard people have used and they really do vet all of the developers so you don't get stuck in a situation where somebody's trying to take your money but doesn't really know what they're doing. So take a look at those as well, so maybe you can get some calls, set up with some of these developers ahead of time once you get the contract in order and make sure you have a good selection to choose from.
- [09:43]
Austin
Another great website that I've just found while doing some digging here is Bubble IO. That's another fun one there. So go have some fun here, Chad. You don't need to go spend $40,000 on a developer just yet. Build what you can by yourself and use your cloud code, your codex, all these different platforms and tools. It's going to cost you probably thousands of dollars versus tens of thousands of dollars that it would have cost to hire someone to build it from scratch. Great question Chad, and we are rooting for you. Our next question comes from Anna R. Anna says hi, my name is Anna. I've gone back and relistened to many of your previous episodes where you talk about layering your assets with a revocable trust and LLCs, but I have not had any luck. Would you mind referencing me back to an episode or maybe just even giving me some insights onto how to go about it? I'm a Colorado resident. I do not have any trusts yet. I do have three LLCs in my name and I'm looking at the moment to purchase a commercial property and would also like to include that in a trust along with a term life insurance policy. You have talked about using Wyoming registered agents. Is is that only for LLCs or would you also use that to form a trust? Can my current Colorado LLCs be transferred to a Wyoming registered agent or would new LLCs have to be formed? Any advice would be greatly appreciated. Robert, you are the structuring guy, so I'll let you talk structure.
- [11:12]
Robert
Yeah, so how we do it and how we've been doing it for 25 years is yes, LLC is the base layer. Then you want to have a holding company in the middle of that. The holding company is going to hold all of the title and equity into each llc. And then on top of that we use what is called a revocable trust. Not irrevocable, revocable. Do your research so you understand the difference and make sure you get a CPA or someone that's really good with this type of planning, like an estate planner or a fiduciary that can help you with this or but that is how we do it. Separate LLC for every property then into the holding company. Then the revocable trust owns all of it and then you being the beneficiary of the revocable trust. Now some people are going to tell you, oh, you can put five properties into each LLC, 10 properties. You don't need the separate LLC. I disagree with that. I like to know that if something happens to one llc, they're not going to get access to the assets of multiple properties because you never know what's going to happen property to property. So that's a how I would do it. Do you need to transfer these LLCs to Wyoming to be able to use the registered agent services of Wyoming? You do not. You can leave them as Denver LLCs, Colorado LLCs, and still use a registered agent service in Wyoming. But again, do your research so you make sure you're getting the right outcome for what you're desiring to do. Because Wyoming does have some beneficial services. But make sure you understand. A lot of people say, oh yeah, I just register everything in Wyoming. I get all the tax breaks of Wyoming. I don't have to do this. And that that is not true. Because you have to understand if you're a foreign agent and you don't have the business operating there, you don't live there. Make sure you understand the benefits of each state without just assuming from some fake guru that's telling you what to do on the Internet. Make sure you check to set it up correctly so you don't get yourself in trouble.
- [13:16]
Austin
That's a good call out. Robert, the reason that we've talked about Wyoming registered agents in the past, specifically I think it's called Buffalo Registered Agents is who I use is because the anonymity. If someone gets a hold of the name of your llc, which is super easy to do, and it's in the state of Tennessee or Florida or anywhere else, they've got your first name, last name, they've got maybe different types of members in the llc, they've got the different addresses that are on file for the llc and if that's your home address or your office address, now they know you know what's going on there. Where with Wyoming, what we've learned in the past is that it's really, really hard to get specific information as it relates to that. Even if you are operating in a state like a Tennessee or a Florida like Robert and I are. So what I've done is I've got my LLC in the state of Tennessee operating and rocking and rolling there. But I use that Buffalo registered Agent in the state of Wyoming for the anonymity purposes. I think it works great. So super affordable. Buffalo Registered Agents. Not an ad, but that's who I use. They've been great. Now Robert, here's a follow up I've got for you. So she's Saying that she has three LLC in her name, doesn't have a trust. So maybe is it time for her to put those three LLC in a holding company and then does the holding company go into the trust or do all LLC in the. How does that sort of work?
- [14:37]
Robert
Yeah, so she wants the holding company to own each LLC in the holding company, then the revocable trust is going to own all of the assets in the holding company and so on and so on. It's really all about layering. You mentioned something really important and that is the anonymity. I go through frivolous lawsuits all the time. Not as much in the last few years but, but back in the day because the more you're building and the more you're doing, people assume when they see you have money they're going to come for it. And so when you get this additional layering, it's just really good as a protective mechanism because you don't want to make it easy on them. And that's why when you talk about these registered agents, even if you don't do it in Wyoming, have a registered agent that is not you, it's not your husband or your wife and it's not somebody with your same last name because you don't want to make it easy on people to try and sue you or get money out of your personal assets. That's why this layering is so important. I think the registered agent aspect of layering is one of the easiest things and cost effective things to give you that protection long term because you don't want build millions of dollars in personal assets and have somebody be able to get access to that. Because we want to remember the old saying control everything, own nothing. Because you don't want to make it easy on anyone trying to come after your assets.
- [15:58]
Austin
And then as it relates to the term life insurance policy you're looking for, we work with Shiriance S U R I A n c e.com/rich habits they've done my term life insurance policy. They've done thousands of others that have listened to the show here. They are so good at term life insurance. Check them out. Sureance.com Rich Habits Anna, you're gonna love it. When you think about your term life insurance policy. You should think anywhere between maybe 10 to 15 times your annual income is how much your policy should be. And again, the purpose of term life insurance is so that if something happens to you and your income goes away for your family, they can take the nest egg that that policy that's going to Pay them out a million million, invest it in the stock market and then use the distributions, the portfolio income, the dividends from that to fund their lifestyle in your absence. Great question, Anna. And I love how thoughtful you are about your structuring. Our next question comes from Calvin S. Calvin says. Hey Robert and Austin, I appreciate the phenomenal financial and investing advice you guys always provide as well as the usual market updates on Fridays. I'm in a situation where my fiance's grandmother has $170,000 just sitting in a bank account uninvested. She's been asking me to give her advice on how to invest her money. For context. She's 92, so I was planning on having her do a heavy concentration of cash than a good bit in treasuries and CDs. However, she says that she wants to invest the money for me and my fiance and that she doesn't plan on using any of it. With this in mind, do you guys think it'd be a good idea to focus a lot of it the index funds you talk about or maybe diversify it into something else right now under her name or just have her continue to hold this money house cash to later be passed down when she unfortunately passes away? Would appreciate any advice. Thank you guys so much. What an interesting situation from Calvin. Okay, here's the weird part. Calvin, this is your fiance's grandmother, not your grandmother. And I appreciate that you guys are engaged but you're not yet married. So this in my opinion is a. Calvin's on the sidelines and fiance is the one that's going to be having these conversations and making some of these decisions here because I can appreciate wanting to help out, you know, the in laws. I do that a lot myself with Ireland, despite us not like being married just yet, but at the end of the day it's a really tricky situation when it goes from like yeah, you should probably get this invested to yeah, let me sit down and click the buttons for you because you're 92 and you probably don't have, you know, an account to log into. So I got to call the brokers and I got to do like that's a completely different thing that I don't yet know if that's a good idea for doing. Now to answer your question plainly, assuming this wonderful 92 year old woman who has $170,000 sitting in a bank account uninvested, that is rocking and rolling and she genuinely wants to ensure that this money is not going to get spent and is given to your fiance upon her death and she's asking you and literally saying yes, that's where this money's going to. How do you want it to be invested if that's the case? To answer your question very plainly, yes, just put it into index funds like voo, qqq, dia, just ride the wave. Like that's all that has to happen here. Nothing fancy, no diversification into this or that or Bitcoin or gold. None of that. Just make it super simple and easy here. But I don't yet know if you've got the authority or the social approval or like I feel like this is just kind of a weird situation to be in and I would, would probably just let it chill in cash until it is actually yours legally. I don't, I just. This gives. This makes you just feel uncomfortable.
- [19:54]
Robert
Yeah, definitely a slippery, slippery slope because they're not married yet. So be very careful because you don't want to be ostracized because you tried to help and something backfired. So I agree with everything Austin said. And the only thing I would add is look into getting someone to get a payable on death certificate instituted with this money because if she wants it to be passed down to your fiance, which then is you, if you guys get married, you want to make sure it's protected from going into probate, like all of her assets. So look into what's called a pod, a payable on death certificate. But as far as how to invest it, be careful. You don't want to be into anything volatile. Maybe look at some high yield savings, some treasury bills, Maybe even some CDs or some corporate bonds that are some short term bonds maybe. So you're getting some revenue and earnings from it and it's growing, but you're not risking it in general because again, it's not your world yet to be able to tell her what to do here.
- [20:57]
Austin
Or just put it in a high yield savings account on public. Right, Just go put it in their high yield cash account, earn your 3 or 4%, whatever it might be and you'll make, you know, a couple thousand dollars a year so it's not just sitting and getting destroyed by inflation until it actually becomes your money. But I love the idea of the podc. And yeah, I just want to emphasize again, very slippery slope here by trying to take control of money that's not yours, especially of a very elder person. Like there's some really weird stuff that goes on with like elder abuse and like, like what if the family thinks that you were behind their back and out like, dude, weird stuff. I would let this one ride. This is your fiance's, you know, grandmother. Let her be the one to communicate and do some of this stuff. Very, very, very good question though. Thank you Calvin for tuning in. Now Robert before we jump to our next question coming from Luis on Inst, this episode of the Rich Habits podcast is brought to you by Aura ETFs and their US Defense ETF trading under the new ticker DUT as geopolitical tensions rise and governments around the world continue increasing defense spending, many investors are looking for ways to gain exposure to one of the fastest growing sectors in the global economy. Military defense aerospace in CyberSecurity.
- [22:13]
Robert
Yes, Austin, DUT Y is designed to provide targeted exposure to companies supporting America's national defense infrastructure, including advanced military technologies, defense manufacturing, cybersecurity and space related defense innovation. We've been talking about space for a long time, so this is a really cool etf. And what makes Duty different is its mission driven structure. Aura ETFs has committed to donating 10% of the ETF's revenue to charitable organizations supporting American veterans, aligning investor capital with support for those who have served with a minimum commitment of $150,000 during the fund's first year of operations. I know that was a lot, but that is really awesome.
- [22:59]
Austin
That's great. Wow. Shout out to Aura ETS for donating at least $150,000 to our awesome American veterans. For investors seeking exposure to the long term growth of America's defense and national security ecosystem, the Duty ETF A Different Approach to Defense Investing so to learn more about the U.S. defense ETF, visit U.S. defense ETF.com investors should carefully consider the investment objectives, risks, charges and expenses before investing. For prospectus or summary prospectus containing this and other information about the fund, please call 888-824-4467 or visit usdefensetf.com Please read the prospectus or summary prospectus carefully before investing.
- [23:44]
Robert
Investing involves risks. PR loss is possible. Distributed by Foreside Fund Services, LLC.
- [23:52]
Austin
Major shout out to Aura ETFs again for sponsoring this episode. Go check out the Duty ETF now. Our next question is from Luis D. Luis says, hey guys, my wife and I have started listening to your podcast and we're talking more about retirement planning because of it. She's 36, I'm 32 and I've been fortunate that lately my profits in Hut 8 have helped me reach $109,000 in my portfolio. My dream has always been to have one full Bitcoin so I've been thinking about allocating that $109,000 toward it. We don't have any other investments and I understand you normally recommend establishing a base first of that hundred thousand dollars before I put money elsewhere. So should I focus on reinvesting this 109,000 into the index funds and ETFs you talk about? We have about 20 ish thousand dollars of student loan debt. That's all the debt we really have emotionally. I know that I want to ride crypto since I've got this long term belief and I want to take this money and put it all into bitcoin. But if you were in my shoes, would you do that? And if not, what would you do? Robert, you can kick this one off.
- [24:59]
Robert
Luis, I think you need to get the base built because right now, yes, hut 8 is doing well. They are pivoting away from being a bitcoin mining company like Clean Spark and like Riot platforms. And they're utilizing their infrastructure for good in the AI sector and the energy sector. So you've done well with it, but you need that diversification. You should take some of this money, if not most of it, get it out of that stock, leave a portion of it, but get some of those gains out of it. Get it into the VO's and the CU QS, maybe keep some in a IQ since you like a little more risk. That's what I would do because we always want to see of your base because right now you have no other investments you mentioned. So all of your net worth is riding on hut 8. Hate that is a recipe for disaster because you're too risk on in one very risky stock. So that's what I would do. Start taking. You don't have to take it all out at once, but I would get money out of that, get it into voo, get it into QQQ and start taking a little more risk off approach. And if you like it, it's a great sector. Keep a little bit of hut 8. But I would get that base built elsewhere first so you can sleep at night. Make money long term and have it be less risk on.
- [26:15]
Austin
I love that breakdown. Robert, I think our friend Luis here should sell the position. Have the $109,000 of cash set aside. What's necessary for I'm assuming long term capital gains which probably going to be close to a 15% effective long term capital gain rate there. Maybe even take 20 ish thousand dollars from this to pay off the student, student loan debt and then take that monthly payment and you can now start investing that. That's probably three or four hundred dollars a month, depending on how much you started with. Now you've got roughly maybe 70 or $80,000 invested into the VOOS, QQQS and DIAs of the world. And you have no student loan debt. So now you can take that 3, 4, $500 a month payment that it used to be and then that now goes into this brokerage account. So you're always building a little bit more and you're investing more, more, more. That's exactly what I would do. I'm not a fan of having your entire portfolio sit into a single stock. Now don't get me wrong, concentration worked in your favor here. You made a ton of money which like congratulations. But concentration, risk is real. And by moving out of that and diversifying into the index funds and ETFs we talk about, you are moving away from sort of gambling to compounding. Right? Compounding works over a long period of time. Gambling is very sporadic. And by having all your money in one single stock is more on that gambling side than the compounding side is when it comes to investing 100%.
- [27:43]
Robert
I had a conversation about this exact topic this morning with a friend who asked me point blank, how much are you up on Micron? Because he knew that I bought Micron back in the 20 to 40 range and I've been DCA along the way and I didn't share the number because I've done done quite well with it. But you don't want to be so risk on that. You're betting the farm on one stock like you are here with hut 8.
- [28:08]
Austin
Well, this is a great follow up, Robert. How much of your total invested portfolio does Micron make? Despite being now this, this massive, you know, green run up rally in your portfolio where our friend here, it's their entire portfolio, but I'd imagine it's nowhere near even a quarter, a tenth of 5% holding of your whole portfolio. So like how do, how do you reconcile that sort of waiting?
- [28:32]
Robert
Yeah, it' by taking profits along the way. And right now micron is 6%. So it's a little above that range of 5% that we talk about in my total portfolio, but definitely nowhere near danger zone. So that's just something always to consider is make sure you're taking profits along the way because you don't want one stock like this case being so bloated in your portfolio that you don't have enough diversification if that one company goes bad.
- [28:58]
Austin
Now our next question Comes from Gabriel. See, Gabriel says, hi, guys. I continue to be a fan and I have another question. I'm incredibly grateful to be a medical student without any loans due to full scholarships from college and medical school. Wow, that is awesome. Good for you. You must be really smart. Since my financial journey started five years ago, I've been able to invest consistently and now have $60,000 in my Roth and 30,000 in my investment brokerage account. My question is, when I eventually become a doctor and Invest in a 403B for the math match, those holdings are typically limited, with the S and P performing the best. Would you recommend that portfolio holding my S P diversification while using my Roth, which is more flexibility for growth ETFs. Especially now with time on my side, looking at 40 years of growth. Okay, okay, I understand the question. Here's what they're asking. Gabriel's pretty much saying, like, hey, listen, I'm going to be able to invest into essentially just index funds in my 403B. I want index funds and thematic ETFs in my overall investment portfolio. Since I'm investing into a ton of index funds in my 403B, would it make sense that since I can't invest in thematics in that 403B, that I invest in the thematic ETFs instead inside my Roth IRA exclusively? So essentially, all Roth ira in thematic ETFs, all index funds in 403B. Eileen. No, Eileen, do both. Right. There's no reason to just have like these thematic VGTs and AIQs in your Roth IRA. I think having half your Roth IRA still being those index funds is a great idea because I don't know what happens if the 403B. I don't know. Right. There's a lot of weird things that could possibly happen. Some weird future. But having both, right? Index funds in the 403B, some index funds, and maybe a quarter of or half the Roth ira, and then the other half maybe is in some of these thematics. I think that's totally fine. Also, just get a taxable brokerage account. You're going to be a doctor, probably making 3, 4, 5, $600,000 a year. Go get a taxable brokerage account on public, and that could be your thematic ETFs, and all of the Roth can still be those index funds that we talk about. So it really is just dealer's choice here. Robert. What I don't want to happen, though, is our friend Gabriel to, like, overthink the situation and really try and because we talk about this all the time, you can perfectly optimize every little perfect thing. Like, yeah, it's possible, but like 99% of people aren't going to perfectly get every single weighting and name and everything correct. What matters much more than perfectly optimizing your situation, your holdings, all this stuff is getting like 85 to 90% of the way there by just investing into index funds and compounding ETFs consistently over a long period of time. If you just do that, you are going to be a multimillionaire, Gabriel.
- [31:50]
Robert
Yeah, especially being a high earner. If you have limitations, which you will in the 403B. Sure. Do the S&P 500 and then get the rest of your diversification in those other funds that Austin mentioned and in that traditional brokerage account that is outside of your Roth. So I love it. I think you're dialed in. Just don't overcomplicate it. You don't need to have 4, 5, 6 ETFs rocking and rolling in the various accounts. Follow what Austin said and you'll do great.
- [32:18]
Austin
So our next question comes from Alex. Alex says. Hi, guys. Alex here from Miami. I just recently started listening and I love the podcast. I'm looking to diversify my forms of income. And you've mentioned fundrise. Can you guys elaborate as to one, what fundrise is, Two, how it works, and three, how it can fit into someone's portfolio of income streams? It's a good question. So, Alex, what is Funrise? Funrise is an online platform like a Robinhood or a public that instead of depositing cash and choosing publicly traded equities, fundrise, you deposit your cash and choose what type of REITs, real estate investment trusts you want to invest into. Now, instead of publicly traded REITs like VNQ, which is an ETF of all the, you know, Vanguard REITs or whatever, they have their own REITs, their Midwest, their Southeast, their Northeast, their Sun Belt REITs. Like, they make REITs, real estate investment trust. You think about them as like, you know, investment vehicles, ETFs, I guess, right? They make REITs comprised of specific themes all around the country. How it works is they take the, I think they've got 7 billion, $8 billion of real estate right now across the country. They take all that real estate. If it's multifamily, maybe it's commercial, maybe it's warehouse, maybe it's single family, maybe it's build for rent. Like, there's a bunch of different, like, types of real estate that they have. And then they essentially say these types of real estate estate is more steady stream. These types of real estate are more opportunistic, these types of real estate, and they kind of like build their own little strategies and buckets, and they then take the money that people deposit to their platform and invest it into the bucket that corresponds most aligned with their investing. You know, risk tolerance and preferences. Right. So maybe you want to be opportunistic in the Sun Belt, or maybe you want to be more steady stream in the Midwest or like, whatever. And so you can kind of choose your buckets and your strategies there. How it fits in someone's portfolio goes back to like our original diversification thesis. Right. 65 to 85% of someone's portfolio should be the index funds and ETFs. We talk about the other 15 to 35%. Right. The core satellite is the satellite section, which is the diversification. And that means real estate like fundrise, but that also means precious metals. That could mean commodities, that can mean venture investing. Like 15, 20% of someone's portfolio. And diversified across a bunch of different asset classes, I think is a great strategy. And that's how I run my own portfolio. And that's where fundrise fits in. Right. Maybe that makes up 5 or 6 or 7% of someone's portfolio is in fundrise and it's diversified into Midwest steady state income, REITs or whatever. Right. So like, like you get to choose like what that looks like for you with fundrise, but that's how it fits. So like that's what it is, that's how it works and how it fits into someone's portfolio, including mine and Robert's.
- [35:24]
Robert
Yeah. I think the big takeaway is Austin and I have worked with and invested in fundrise for years. I recently launched a company called Vest Funder. We'll put a link in the show notes similar to fundrise, but we do individual deals in a reg a structure. So it's another way to diversify into and select your own projects within the platform of how you want to invest. But I think we need to back up just a little bit here. You want to diversify your forms of income. And like Austin alluded to, it's more than just real estate. It is precious metals. It is other forms. You can invest in wine and whiskey, you can invest in timber. There's a lot of ways to diversify, but it all comes down to understanding your risk tolerance because personal finance is personal. And understand what is your goal and your buy box. My buy box is Always to have precious metals, crypto, but also real estate in my portfolios, just like Austin. So understanding that is the key. Then you can select where to invest your money accordingly.
- [36:26]
Austin
Well, I mean, let's be real, Robert. If you're looking for income, the best way to earn tax efficient income is NEOS funds like Full Stop. So if our friend Alex from Miami here is like, I want to diversify and, and have different streams of income, maybe there's the, the spyi and QQQI sort of ETFs there from NEOS. They're going to pay you as the indices go up. But there's also iyri, which is their real estate etf. There's also iaui, which is their gold etf. There's btci, which is bitcoin income. I mean, that's how you can really diversify your income across, to Robert's point, these different sort of, you know, precious metals, you got some crypto, you got some real estate, you got some commodities, like they're all over the place. They do a really, really good job of making it easy for people like you, myself, Robert, to go in there and say, hey, I want energy specific income, I want real estate specific income, I want some bitcoin, you know, whatever. So shout out neo's funds for doing all that. But really good question, Alex. And our last question comes from Sharon T. Sharon says, hey guys, I love the show. Austin, Robert, you two run the best Business in Finance podcast out out there. Thank you so much. That's awesome to hear. We appreciate it. Sharon says, I had a question about commodities. Inside a growth focused brokerage account, how many commodity ETFs are actually appropriate for a portfolio? I currently hold gold, silver and copper. I'm also curious whether a traditional gold ETF like GLD makes sense or if a fund like the NEOS gold ETF iaui with their monthly distributions is a better fit. I'd love to hear your thoughts and how to think about commodity exposure and whether income focused gold ETFs belong in a brokerage account looking for maximum growth growth. No, in a brokerage account looking for maximum growth, maximum growth income focused funds do not belong there because income focused funds, the way they generate that income is with covered calls by selling, you know, short calls against their portfolio. And essentially you're capping your upside by doing that. You're trading upside potential for income today. And so if you are saying, my name's Sharon and I'm looking for maximum growth growth, then income focused funds are not where you find it. But commodity ETFs, that's a good question. So how many commodity ETFs are actually appropriate for a portfolio? Probably less than five. That's where I go, Robert, you know, gold, silver, maybe some uranium. I like copper. You know, there's also like FCX, you know, there's ICOP, I think is what you like. There's URA, I think less than 5 is my is is what my gut tells me when it comes to commodity ETFs inside of a portfolio. So it's like a group growth focused portfolio. But that's what I want to like. Also get super clear on here, Sharon, by putting commodity focused ETFs inside of a growth focused portfolio, you're essentially saying my name's Sharon and I think commodities are going to pop off, which, like maybe that's the case. Right? Maybe that's going to happen. Maybe that's true. But let's also be very, very clear here. A growth focused portfolio is optimized for companies growing their revenue as quickly and as aggressively as possible. Because as they grow revenue, if it's a SaaS company, an AI enabled company, an AI hardware company, a data center company, like whatever it might be, that's what gets these growth stocks to just go up and to the right is their high octane revenues through the roof, their growth, growth, growth, growth, growth, and eventually they'll turn a profit, whatever. But like that's what a growth focused investor focuses on. Commodity ETFs don't have earnings, they don't have dividends, they don't have growth, they don't like there's no metric underlying metric to sort of optimize for or bench rather to include it inside a growth focused brokerage account. I understand like commodities in a portfolio. I've got commodities, Robert's got commodities in our portfolio. It's great. But like conflating it with a growth focused portfolio and kind of like merging them into the same thing might just be like starting in the wrong place. I don't know. What do you think, Robert?
- [40:26]
Robert
Yeah, it's a tough question and I think you did a good job spelling it out because commodities I look at as diversification, not as much as growth. If it's just growth growth, I wouldn't hold all the commodity focused ETFs in there. But based on Sharon's desire here for growth, I think it's okay. But I would be more concerned. I don't think more than five ETFs make sense. So the five that I think about would be GLD, SLV, ICOP, URA like you mentioned. And then also GSG I think is a good one to get you some of the the other commodities that are out there in fertilizers and across the board other supplies that are considered commodities. But I would look at it of more of the percentage of this growth focused portfolio. I wouldn't let those five ETFs make up more than 10% of the total portfolio and then I think you'll be okay because commodities have done very well over the last five years. I think they'll continue to do well. They will have a lot of volatility. So you have to keep that in mind. Mind. But I would look at it as no more than 5 and no more than 10% of the total growth portfolio because otherwise you might as well own AI, infrastructure, energy and other more growth focused high beta stocks. That's what I would do.
- [41:44]
Austin
I love that answer. Robert Everyone, thanks so much for joining us on this week's episode of the Rich Habits Podcast Question and Answer Edition. Be sure to check out the Duty ETF. We're super, super excited that Aura ETFs is jumping on the show and they're talking about their fund and the they're, you know, donating 10% of the ETF's revenue with $150,000 commitment to American veterans. We love our veterans just had Memorial Day. Like oh my gosh, I love it. So go check out the Duty ETF. You've got questions for future episodes. DM us@rich Habits Podcast on Instagram or email us at rich habits podcastmail.com and don't forget 7 day free trial still going on inside the Rich Habits Network. Two hour video live streams every Tuesday. Eight hours of video coursework and you get all your questions asked and answered inside of our community.
- [42:34]
Robert
And don't Forget Wall Street Favorites.com 2.0 we just launched the new version. It is amazing. We keep adding more and more tools every month. So if you're looking to better understand are your stocks correct for your portfolio? What are the best stocks that are out there? All these cool tools schools. Wall Street Favorites is where you want to go. It is incredible. We're very proud of building it and you should definitely check it out.
- [43:01]
Austin
Thanks everyone for tuning in and we'll see you tomorrow for our episode of the Rich Habits Radar. Sam.