Q&A: Buying a $600K Beach House, Newly-Married Finances, & Employer Matches

Summary

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Rich Habits Podcast: Q&A – Buying a $600K Beach House, Newly-Married Finances, & Employer Matches

Hosts: Austin Hankwitz and Robert Croak
Date: April 9, 2026

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Episode Overview

This Q&A episode dives into detailed, practical financial advice from listener-submitted questions. Austin (an energetic entrepreneur eager to learn) and Robert (a seasoned decamillionaire) offer guidance drawn from real-life experience and “rich habits.” Topics include buying vacation homes, 401(k) match mistakes, rolling over old retirement accounts, strategies for young savers, house hacking, getting out of credit card debt, and investing in volatile markets. The tone is supportive, direct, and full of actionable tips for a broad audience.

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Key Discussion Points & Insights

1. Buying a $600–900K Beach House: A Deep Dive into Readiness

[03:58–10:33]

• Listener Situation: Married couple, debt-free primary residence (~$250K), $600K invested ($500K retirement; $100K brokerage), $45K cash, ~$180–230K annual income, saving/investing $4–5K/month. They want to buy a $600–900K beach house at 40.
• Compound Interest Outlook: Without additional investments, current portfolio doubles every 7 years (Rule of 72), reaching ~$2.4 million by age 54.
• Robert’s Take:
  • Paid-off home is a huge advantage. Taking on a mortgage for the beach house is manageable given high savings rate and current cash on hand.
  • Tip: Start earmarking a portion (e.g., $2,000/month) of current investments towards the beach house fund.
  • Capital Appreciation Matters: If the Kill Devil Hills market is hot, consider buying sooner to avoid losing out on rising prices.
  • Lifestyle Balance: “Enjoy your life. You guys have done a tremendous job…” ([07:34] Co-host/Robert)
• Austin’s Approach:
  • Cut excess retirement contributions to match level; redirect that margin to down payment and mortgage savings. "You will retire millionaires, full stop..." ([09:40] Austin)
• Alternative Path:
  • Start with a less expensive property and upgrade in 5–10 years.

Notable Quote:
"Taking on the mortgage for this home would barely make a dent in your current situation..." ([06:30] Robert)

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2. Lost 401(k) Employer Match: What Can Be Done?

[10:34–15:00]

• Listener: Kylie, 24, engineer, Florida. Thought she was enrolled in employer 401(k), wasn’t—lost two years' worth of employer match.
• Robert’s Advice:
  • IRS Self Correction Program (SCP): If you can prove you tried to enroll, HR may be able to retroactively apply matches via a qualified non-elective contribution.
• Austin’s Guidance:
  • “Don’t be discouraged. If you’re 24, you’re starting from a great place.”
  • Max out employer match, then Roth IRA, then back to additional 401(k) contributions—a “match beats Roth beats taxable” hierarchy.
  • Mistakes happen: “Listen, we all make mistakes. This is a simple one. Hopefully it can get fixed... But if not, that’s okay. You just move on and you just keep investing from where you are right now.” ([14:21] Austin)

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3. Rolling Over a 403(b): IRA Limits and Backdoor Roth Concerns

[15:00–22:13]

• Listener: Eric, high earner ($650K/yr), $160K in HYSA for real estate, $10K in old 403(b), doing backdoor Roth annually.
• Austin’s Clarification:
  • No limit applies to 403(b) rollovers—entire $10K can be rolled into IRA in one go.
  • Important: Rolling into a pre-tax/traditional IRA triggers the pro-rata rule, causing tax headaches for backdoor Roths.
  • Recommended Path: Roll 403(b) directly to a Roth IRA, pay taxes now while income supports it, and avoid pre-tax balances in any IRA.
• Robert’s Real Estate Insight:
  • Don’t jump into big deals first. Start with duplex/triplex/quadplex in an up-and-coming or affordable market.
  • “Find your buy box, define your budget, and don’t be afraid to start small.” ([21:33] Robert)

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4. When College Isn’t the Path: $40K in a 529 & Young Career Moves

[24:02–26:20]

• Listener: Cole, 18, $40K saved for college but not planning to attend.
• Robert’s Advice:
  • Thanks to Secure Act updates: roll over up to $35K from a 529 to a Roth IRA, penalty and tax-free. Fund Roth IRA in increments up to the annual limit each year.
  • Use remaining funds for trade school, certification, or marketable skills (e.g., AI-driven courses, electrician).
• Austin’s Career Wisdom:
  • Don’t stress out about choosing the “perfect” path at 18; try things, be okay with mistakes.
  • “If you are able at the age of 18 to start implementing rich habits… they will follow you until you’re 28, 38, 48. And you will be richer than you could ever imagine.” ([30:54] Austin)
• Notable Quote:
  • “Ten years ago we were telling everyone to code. Now… go become an electrician or a plumber… that it's going to take a lot longer and a lot more difficult for robots to take over those trades.” ([25:43] Co-host/Robert)

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5. Newly-Married, House Down Payment vs. Investing

[30:54–39:34]

• Listener: Trey, 21, newly married, $6K/month income, saving $3-4K/month for home ($90K+ in 2 years), $10K gift, basics invested (SIMPLE IRA, Roth).

• Austin:

  • Stay focused: If down payment goal is on track, invest the $10K (unless it was explicitly meant for the house).
  • Use it to max Roth IRAs for both partners.

• Robert’s “Wrinkle”:

  • Instead of a single family home, use a low-downpayment mortgage (Fannie Mae 5% down, for example) to buy a duplex/triplex/quadplex.
  • House hack: Live in one unit, rent others, build wealth and lower living costs.
  • “Start house hacking first, then get to the dream home down the road.” ([34:17] Robert)

• Cash Flow Caution: Run math to ensure future rent covers mortgage if you move out (“bad news bears” otherwise).

• Tertiary Markets: Don’t lock into expensive cities—wealth can be built in more affordable places.

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6. Crushing Credit Card Debt: What NOT to Do

[42:47–52:15]

• Listener: Anonymous, $5,900 credit card debt at 28% APR (from Christmas, lifestyle), $0 savings, $20K invested in stock market (Robinhood), option to borrow from whole life insurance (5.8%), also has $32K in a 457(b).
• Austin:
  • Cancel whole life insurance (“That’s not an investment. That’s called a scam.” [43:28])
  • Use Robinhood funds and any whole life policy cash value to pay off high-interest debt. Don’t touch retirement accounts.
  • Credit card payments go mostly to interest; minimums barely hit the principal.
    • “It is not at all paying off the principal. You have to go in there yourself and make a principal-specific payment.”
  • Underlying issue is lack of a budget; credit card debt is a symptom. Immediate action: download a budget, cut costs, and plan for annual expenses like Christmas.
• Robert:
  • “You can’t out-invest high-interest debt.” ([45:39])
  • Stop spending on credit. “Stay at home on weekends, grill out… You can’t live beyond your means forever if you ever want to retire with dignity.” ([50:40])

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7. Investing in a Volatile Market (Roth IRA Worries)

[52:44–53:39]

• Listener: Sabrina, worried about putting $5,000 into a Roth IRA during current market volatility (and geopolitical turmoil).
• Austin:
  • Don’t try to time the market. “What happens right now is not going to matter in 20 years.”
  • Just fund the Roth IRA, buy index funds (e.g., VOO), and let compounding work.
• Robert:
  • “No one can time the market… become an investor, be up and running, be consistent and let it ride because you will make money over time.”

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Notable Quotes

• "Taking on the mortgage for this home would barely make a dent in your current situation..."
  ([06:30] Robert)

• "You will retire millionaires, full stop. I mean, it's obvious… you have done such a great job of turbocharging your retirement accounts.”
  ([09:40] Austin)

• "Listen, we all make mistakes. This is a simple mistake. Hopefully it can get fixed… But if not, that's okay. You just move on and you just keep investing from where you are right now."
  ([14:21] Austin)

• “You can’t out-invest high-interest debt.”
  ([45:39] Robert)

• “If you are broke, it’s okay to act broke.”
  ([51:14] Austin)

• "No one can time the market, Sabrina. I promise you that. All the smart people that say they can, they can’t. Just get the money in..."
  ([53:39] Robert)

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Memorable Moments

• Counterintuitive Wisdom: Buy less house, first house hack, then move up—wealth-building by resisting instant gratification.
• Young Listeners Empowered: Multiple times, the hosts lovingly encourage 18- to 24-year-olds not to fear “mistakes” or nontraditional paths; rich habits now mean massive impact later.
• Credit Card Reality Check: Blunt, real-world explanation of how minimum payments trap people for life; clear call to budgeting and honest self-assessment.
• Transparent, Human Tone: Both hosts are approachable, candid about their mistakes, and remain supportive regardless of financial “missteps.”

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Timestamps by Question

• Beach House Decision: [03:58] – [10:33]
• 401(k) Match Mistake: [10:34] – [15:00]
• 403(b) Rollover/Backdoor Roth: [15:00] – [22:13]
• 529 for Non-College Path: [24:02] – [26:20]
• Newlywed House vs. Investing: [30:54] – [39:34]
• Credit Card Debt Solution: [42:47] – [52:15]
• Roth IRA in Volatile Market: [52:44] – [53:57]

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Final Takeaways

• Know why you’re making big money decisions; don’t default to what’s “typical.”
• Never let embarrassment over mistakes prevent you from taking new action.
• Budgeting and living below your means is non-negotiable for wealth.
• “Rich habits” start early but are reinforced by consistent, intentional choices at any age.
• Invest for the long term; don’t let news cycles or market volatility shake solid plans.

Resources and tools referenced (most free):

• Budget templates (in show notes)
• Honest, line-by-line expense evaluation
• Utilizing new 529-to-Roth rollover laws
• Prioritizing “match beats Roth beats taxable” with retirement accounts

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If you haven't listened, this episode is a gold mine of practical advice for all ages and stages of money management. The hosts' blend of directness and encouragement is as actionable as it is relatable.

Transcript

[Austin]

This episode is brought to you by indeed. Stop waiting around for the perfect candidate. Instead, use Indeed sponsored Jobs to find the right people with the right skills fast. It's a simple way to make sure your listing is the first candidate. C. According to Indeed data, Sponsored Jobs have four times more applicants than non sponsored jobs. So go build your dream team today with Indeed. Get a $75 sponsored job credit@ Indeed.com podcast terms and conditions apply. K Pop Demon Hunters, Haja Boy's breakfast meal and Hunt Tricks Meal have just dropped at McDonald's. They're calling this a battle for the fans. What do you say to that, Rumi? It's not a battle. So glad the Saja boys could take breakfast and give our meal the rest of the day.

[Robert]

It is an honor to share.

[Austin]

No, it's our honor.

[Robert]

It is our larger honor.

[Co-host]

No, really, stop.

[Austin]

You can really feel the respect in this battle. Pick a meal to pick a side

[Robert]

and participate in McDonald's while supplies last. Hey everyone and welcome back to the Rich Habits Podcast Question and Answer Edition. Robert Every Thursday we're coming. We're coming back to answer your questions as if we were in your shoes. You can ask us questions on Instagram at Rich Habits Podcast. You can ask us questions via email at rich habits podcastmail.com and we've got I think six or seven questions today. A ton from Instagram. Switched it up on y'. All. We normally favor those email questions on these Q and A episodes and other episodes go for the Instagram but we switched it up. We've got I think six of these seven questions are coming from Instagram. So shout out to the 40,000 of you out there that are following us on Instagram. Super, super grateful.

[Co-host]

Yeah, I love these episodes and over time it's just so fun to record them because the questions get more at scale. Everyone's got different issues with their finances and it's so great to see all walks of life, all ages, just jumping into our DMs and asking us how we can help. So I love bringing value to all of you that watch the podcast every single week. So let's jump into it now before

[Robert]

we jump to the episode, got to give a shout out to public.com, the investing platform for those who take it seriously. Because on Public you can build a multi asset portfolio of stocks, bonds, crypto options and now generated assets which allow you to turn any idea into an investable index using AI.

[Co-host]

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[Robert]

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[Co-host]

Full disclosure in the podcast description and

[Robert]

don't forget Join the wait list for their agentic brokerage I don't know if y' all saw that announcement, of course we had Yannick Mulling, the co CEO to talk about it on the show a couple weeks ago. Public.com is now the world's first agentic brokerage. It's really really cool and you've got the wait list. You could do it on your phone, do it on your computer, whatever. I also posted about it on X. They gave me 10 people that I could get skipped off that wait list and really get the product in their hands. Already 92 of you replied to my tweet. So if you're not yet following me on X at AustinHan, you might get stuff like that in the future. Definitely go do that. But yeah, agentic Brokerage. It's really interesting.

[Co-host]

Yeah, what a cool feature. I love the Public. We've been with them and working with them and using Public for years now. Always seem ahead of the curve by introducing new tools and new offerings to keep people on the right side of things and keep them ahead of the market. So I really enjoy that.

[Robert]

Robert let's now jump to our first question coming from Michael H On Instagram. Michael says, hey guys, I'll try to keep this brief. My name's Mike. My wife and I are completely debt free. Our house is worth $250,000 and it's paid off. We've got just over $600,000 in our investments. 500,000 are in retirement accounts and 100,000 are in non retirement brokerage accounts. We keep $45,000 in cash. The investments are about 80% in the S&P and the NASDAQ like you guys talk about about 10% into cryptocurrency and I've got some Amazon, some Nvidia and a couple other names you guys have mentioned. We make between 180 and $230,000 per year. We invest $4,000 per month, 2,800 to our retirement accounts and 1200 to our non retirement accounts. We also put 700 DOL our health savings account. Here's the thing. We want to buy a beach house in kill Devil Hills, North Carolina. And the price we want is between 600 and $900,000. We're turning 40 soon and want to know when this makes sense. I realize with compound interest we should hit $1.8 million in roughly 12 years. What are your thoughts on our situation? Can't wait to hear. Robert, this is cool. We got Michael and Michael's wife making a ton of money. 180 to 230 per year. They've got $600,000 invested. Rule of 72 is tell they do not add any more money to this. It will double to 1.2 million in seven years and then 2.4 million seven years after that. So 14 years from now you'll have $2.4 million. And you said you're about to turn 40, so by 54, that's $2.4 million. That's a really cool situation to be. Robert, how do you think about. Let's, let's, let's put ourselves in their shoes. How would you think through asking yourself, can I afford to purchase this beach house in North Carolina? Is it money invested? Is it income? Something else? How would you approach this situation?

[Co-host]

Yeah, they're in a great situation. But the number one thing, the green flag here for them, they don't have a current mortgage. Most people that want to buy lake houses and beach houses have a current mortgage. Then they're looking to add another mortgage and then that really shoots their debt to income ratio in the foot. But they have a paid off house. So right now their housing costs are much lower than the average person that wants to do this or asks us what to do. So I think they're in a great spot. They make plenty of money. They're putting away a ton of money every month. So for them to take on a mortgage, put down whatever, 10, 20% to get this deal done at that six, seven, $800,000 home, I think they're going to be fine because they already have cash sitting so they can use part of the cash so they wouldn't have to come out of their investments too much to be able to get ahead. But what I would probably do is because they're putting away so much money right now, every month I would start earmarking XYZ amount per month. Maybe it's $2,000 per month. To put towards this beach house and maybe wait just a little bit longer, maybe a year or two to get it done. But it depends on also the capital appreciation year over year in that market. Because let's say that this Kill Devil Hills is booming and it's really blowing up. You might want to buy it now, figure out where to pull the money from. Maybe you could pull some out of your crypto account or somewhere like that to be able to accomplish this purchase. Because if this is one of those areas that's really blowing up and the beaches are great, you might want to buy it now. Because if the capital appreciation is 10, 11, 12% a year, you don't want to leave that money on the table by waiting another year or two. So that's what I would do, but I definitely would buy the house. Enjoy your life. You guys have done a tremendous job and getting to where you are already. You've set yourself up, you've done all the right things and now it's time to enjoy it. Especially because you don't have a current house payment. So taking on the mortgage for this home would barely make a dent in your current situation of being able to invest that 4,500amonth.

[Robert]

I think that's a great breakdown. So they're investing $4000 a month, 2800 to retirement, 1200 to non retirement, and then 700 to the HSA. So 4700 total there. If I were in their shoes, there'd be a couple of things I would have as non degr negotiables and a couple things I'd call out as a little bit of leeway. The non negotiables. I want to make sure I'm investing up to the match in my retirement, right? So if they're doing, let's call it $200,000 per year and they get that 3% match, that means $6,000 per year gets contributed to their retirement account. Assuming it's 100% match, they're now contributing $12,000 per year to this half a million dollars, right? The 500k retirement 100k brokerage for, you know, non retirement brokerage. So I would do up to the match now that's 6,000 per year. That $6,000 is a lot less than the $34,000 that they're contributing right now. I would take the Delta between the 34 and the 6 and I would use that to now start saving for a larger down payment on this house. And then from that same delta, that comes out to about $2,300 per month. So from that 23, you do that for 12 months. That's, you know, $27,000. Then you have 55,000 and kind of, you know, continue to save and save until you have a decent down payment. But from that Same delta of 2300amonth, that's probably where I'm going to try and also find the wiggle room, the margin in my budget for this mortgage. Because again, you guys have done such a great job of turbocharging your retirement accounts. Half a million dollars in your retirement account, another 100,000 here. You will retire millionaires, full stop. I mean, it's obvious. And as you continue to contribute up to the match, I'm sure you're going to do some IRA stuff as well. Like you guys are going have millions of dollars. And so if I were in your shoes, and that's where I would be looking to identify, where in my budget can I afford to start saving more for a down payment? And where in my budget can I afford to have that monthly mortgage payment? It would come from the extra retirement contributions that you guys are making at the moment. Because again, just to reiterate, you will have millions in retirement with what you have at the moment if you do not contribute anything else. But you will continue to contribute through the 401k, I'm sure, some Roth IRA stuff, whatever else there. But that to me is. Is how I. If I were in your shoes right now, Michael, how I would be approaching the situation.

[Co-host]

I love that breakdown in other thing. I just want to add one more quick point, Michael. You guys are crushing it. You can always buy a beach house that is less expensive, maybe closer to the $600,000 range. Now build it up, enjoy it for five or 10 years. Then when you get to that two, $3 million and it's already up and running and you're really, really set for retirement, then upgrade the house later, something just to think about that you could do as well.

[Robert]

Yes, that's great, because I think a lot of people, oh, we have a 6 to $900,000 budget. That's a very wide budget range, right? 600K, 900K for a monthly mortgage payment, that's, you know, 120,000 versus 180,000 for a down payment, assuming 20%. So it's very, very different there. I would also lean toward the 600, 650k range if you can afford it. Again, you guys are 39, turning 40 soon, which means you're not 48. Y' all are young. Have yourself A little something. You deserve it. But as time goes by and you continue to build up these retirement accounts and everything happens. Totally agree with Robert here. In the future you can always upgrade the house by doing some renovations or maybe take that equity and put it into a larger home. Better sit there when you're in your 40s and 50s, things like that, you're going to be just fine. So our next question comes from Kylie on Instagram. Kylie says, hi Robert and Austin. I started listening to your podcast for a few weeks after my boyfriend told me to. I'm 24 years old and currently work as an engineer at a civil consultant firm in Florida. I have a question on contributing toward my 401k through my employer. After listening to you guys about the importance of knowing where every hard earned dollar goes, I decided to do a little bit of digging. My employer matches 100% of my contributions up to 3 of my salary and then 50% of my contributions beyond that up to 5% of my salary. I was always taught to contribute whatever the employer is matching to. At my company you can start contributing eight months after you join as a full time employee. For me that means I would have been able to start contributing in April of 2024. When that time came, I set my contributions through principal at that 5% for my Roth 401K and I thought I was good to go. But I was recently diving into the contribution amounts and quickly realized that nothing had never been contributed. There must have been some sort of miscommunication between my employer and I and I never actually enrolled. This means that I currently have no money in my Roth 401k and I lost two years of free money from my employer. I went ahead and re enrolled again, confirmed with my employer. Everything was good. So now my question is, is there any way I can do anything to make up for the past two years of lost matches from my employer? This was a shock to me and I'm hoping there was something I could do to catch up. Always appreciate your feedback, Kylie. Robert, what words of advice do you have for our friend kylie here? Our 24 year old friend Kylie.

[Co-host]

So Kylie, you might be in luck. Let me break it down for you. First and foremost I'm hoping you can prove to the employer that you attempted to do this. You filled out the paperwork, maybe you screenshot something, maybe you have an old email showing that you went into it or that you can reach out to HR and say hey, can you check the platform to see because you are going to swear to them that you did this. If you can, and you can prove that you attempted to sign up and something glitched, whether it was your fault or their fault, there is a program called the IRS self Correction Program, the SCP program that you can then have the employer go to say, hey, we had an error here, here's the dates and the timelines. We want to be able to issue these funds to her and this match for this period that didn't happen and get in the system and try to make it work. So there is hope, but hopefully you can prove that you did actually go in and fill out paperwork and something glitched and it never happened.

[Robert]

Yeah, I just want to reiterate that part. If you are able to prove with email screenshots, signed enrollment forms that you think you might have showing that you did attempt to enroll back in April of 2024 and your employer just dropped the ball again, you could be entitled those qualified administrative oversight corrections where your employer may be required to make a qualified non elective contribution to your account to compensate for the missed match that you would have been able to receive if you were doing this correctly. So do a little bit of research on that one. Highly recommend figuring that one out. But let's now assume that you're SOL and you're really just starting. First off, you're 24, you're starting from a great place. It's not like you're 54. And these match contributions might have really moved the needle for you at the end of the day. Day. If you want to try and figure out how to perhaps bump your contribution up just a little bit more, you could do that. Personally, if I were in your shoes, I would do the, the phrase we have here, the strategy of match beats Roth beats taxable. So up to 5%, since you're getting, you know, match all the way up to that, even if it's that 50% for the last 2% max out, then that Roth IRA, then go back to the Roth 401K that you have. And if you have autonomy over your investments, if your budget allows it, I mean, you're a civil engineer, you're definitely making solid income. Contribute more, right? Maybe there's a world where you contribute an extra 1, 2, 3, 4% on top of the five, maybe you come out of a 10 or even a 15%, you know, salary contribution for 2026 or 2027 in the future that will absolutely help you begin to turbocharge your retirement savings. But Kylie, let me just reiterate this for you. You are in a great situation. You make great income. You are already thinking at the age of 24 on how to contribute to your Roth 401k. I'm sure you've already gone into principle and figured out how to put it in index funds and things that track the S P in the stock market over a long period of time. Do not let this error or miscommunication, however you want to describe it here, discourage you from investing and discourage you from future gains. Don't be thinking, oh my gosh, I'd have X amount of dollars more if I had just got the match or oh, I can't believe this. I'm not. I'm jaded toward investing now because of something like this. Listen, we all make mistakes. This is a simple mistake. Hopefully it can get fixed with the solutions Robert and I had shared. But if not, that's okay. You just move on and you just keep investing from where you are right now. Now, before we jump to our question from Eric, gotta give a shout out to generated assets. Again, this is an awesome tool from Public.com that allows you to take a prompt of anything. I want to invest into companies that have no exposure to the Strait of Hermuz and you can do that with generated assets. It will figure out what companies what'? It's like a Bloomberg terminal on steroids. It is so so cool. You could just tell it exactly what you want to invest into. The strategy, your idea, there's anything you want. Hey, I want to invest in companies that have been paying a dividend that has been growing by double digits over the last 10 years. It'll find those companies and do it for you. Or I want to invest in companies that are following the rule of 40 when it comes to SaaS. It'll figure out the companies that are growing plus free cash flow or Ebitda margins. Like however you want to think about it. It is incredible. Please go check out generated assets and use it for yourself. Don't just like oh this is Austin and Robert telling me go do something on public again. Like you need to figure out how to make this product generate real alpha in your portfolio. Because it's never been easier to outperform the stock market with the tools we have now on public.com so go to public.com rich habits and get an uncapped 1% match when you transfer your portfolio. So our next question comes from Eric on Instagram. Eric says, I have a separate at 403 from a previous employer totaling 10 grand. My question is regarding what should I do with this money, I looked into transferring this into a new 403B but my brokerage is only giving me the option to roll it over into an ira. That seems reasonable, but how do I go about this? If the contribution limit is only 7,500, would it even be possible to transfer the full 10,000 into an IRA? Also, more importantly, wouldn't I be able to do a backdoor Roth IRA conversion considering I haven't paid taxes on this money? I make $650,000 a year. I live in Florida and I've been maxing out my 403B backdoor Roth and putting 4,000amonth into my bridge account. I have 160,000 in a high yield savings which I'm planning to use to get into real estate. Any insights into my situation would be great. Thank you for answering my question. That is Eric on Instagram. Eric, you're in a great situation. You make a ton of money, you live in Florida and you're trying to figure out how to move some retirement accounts over. So let's just clear the air on a couple terms here. It's smart and totally warranted to be focused on that $7,500 per year IRA contribution limit. Because that is correct, it's a contribution limit. But this $10,000 in your 403B is money you contributed in the past. It's not net new dollars. So you can roll over all 10,000 of this from a 403 into an IRA. One fail, swoop, super easy rock and roll, no taxable event. Everything's just fine. And if you wanted to contribute another this IRA on top of the 10,000 you rolled over, you can do that too. Everything's just fine. That is, I mean there's no limits on rollovers. Now you mentioned the backdoor Roth IRA, which with your income at 650,000 makes a lot of sense. What you have to be careful of is the pro rata rule. What that means is if you have any dollars sitting in pre tax retirement accounts, IRA specific, right? So think individual not employer sponsored retirement accounts. But I'm talking about retirement accounts with your name on it, individual retirement accounts. And you and do this backdoor Roth ira, it is going to be a tax disaster. To do the backdoor Roth IRA successfully and without crazy tax mess, you have to ensure you have zero pre tax dollars sitting in any IRAs. So if I were you, I would figure out how can I roll this 403B over into a Roth IRA, right? You will have to pay taxes on that $10,000. But I mean you make 650,000 a year, you should be able to cover an extra 2 or 3,000 there. So again, again what we want to avoid is rolling this over to a traditional IRA pre tax dollars, because right now it's pre tax 403B pre tax IRA. You won't have any tax consequences and you can do that, but it will trigger the pro rata rule, which means, hey, you can't do the backdoor Roth ira. If you have pre tax dollars sitting in a ira. It has to be in an employer sponsored account. So if I were in your situation, I would take this 403B money, this $10,000, I would roll it over into a Roth individual retirement account, which you absolutely should be able to do. I would pay the taxes on this $10,000. And now you have 10,000 sitting in a Roth IRA and you can still do the backdoor Roth IRA just as normal. No pro rata rule. Weird messy consequences with taxes because all of your money is sitting in after tax retirement accounts. There's $0 now sitting in a pre tax retirement account. Specifically as an individual here.

[Co-host]

The only thing I want to add to this is the 160,000 that's sitting in high yield savings. Great job. And you say you're planning to use it to get into real estate. Love that. You're making a lot of money. You want to get some diversification. But make sure before you just jump into real estate you understand your risk tolerance and what your buy box is. I see so many people that want to get into real estate, but they don't really define what that means. Understand and define what it means in your buy box, your budget. Make sure you have all of your ducks in a row because you've done such a good job financially. I'd hate to see you put that 160,000 into a losing deal on your first attempt. So make sure, go into chat, GPT, Gemini, wherever you want, define your buy box and really dig deep to understand exactly what you want to do when you get started in real estate.

[Robert]

What winning real estate strategies would you recommend Eric to do? What, what real estate have you done recently that you think is just, it's, it's free money? What, what are you most excited right now in real estate? Where type of real estate? All that stuff?

[Co-host]

Yeah. So I'm gonna flip this on its head a little bit. I think Eric should start out small. So many people have a lot of money and they go big and they go buy a 3 million dollar apartment building. With 14 units or something like that, you have to learn first to get your feet wet, get your name out there, get the right contractors, find a couple handymen, find a good manager. I would start small with a duplex, triplex or quadplex, or maybe a small apartment building that's in an up and coming area. Those do really well. Because if you find somewhere that's really gentrifying but the prices haven't caught up yet, you can go buy, you know, maybe an eight unit or a 12 unit apartment complex for $1.6 million, clean it up, fix it up, put some value adds into it and raise the rents 50 or $100 a month and really put the cash flow on, you know, on hyperspeed. So that's what I would do if I were Eric. What markets are doing really well and what type of real estate, you ask? There are so many different sectors. I think tiny home communities are crushing it right now. Mobile home communities are crushing it right now. If you want to invest in those types of things, but also anything related to affordable housing or like I alluded to, finding areas that are up and coming, but the prices haven't caught up yet. Because if you can do that, let's say you find a single family home, Eric buys it, but it's in a neighborhood that allows an adu and he adds an adu. So he's forcing that appreciation, but also the cash flow. These are all ways that you can invest and start out small, but still capitalize on what is hot right now and what's working. I would not do storage facilities. Those are way over saturated. So be careful there. There's a lot of them for sale right now because they're not doing that great. So I would be careful there. But everything else I mentioned is a great place to start.

[Robert]

You heard it here first, Eric. You know exactly what to research, what to look into, and we're rooting for you, man. Our next question comes from Cole B. Cole B. Says, I have a question. I'm 18 and I have a college fund with $40,000 in it. I don't think college is for me. And I want to know what you all think I should do with this $40,000 to set myself up for future success and maybe even start a career. Cole, you're in a great spot. You got got $40,000, likely in a 529 account or some sort of, you know, college fund. So, Robert, what would you do if you were in Cole's shoes and you realize at 18 years old you've got this liquidity, but you don't want to go to college.

[Co-host]

Yeah, I love this situation for Cole because what you can do because of the updates to the Secure act in 2024, I think it happened, you can roll over those 529 funds into a Roth IRA. I believe the cap is 35,000 as long as you're the beneficiary and there's no penalties and there's no taxes upon that rollover. So you could do that. You could get your Roth IRA up and running if you don't already have one. You could then invest in some of these funds we talk about like voo, qqq, aiq, some of those and you'll be up and running. Or you can also use some of these funds completely penalty free if you wanted to use them for other educational purposes. Maybe you want to take some AI driven courses to really become an expert, expert in AI or robotics. Maybe you want to go to a trade school and get your electrician certification so you can become an electrician, since that's going to be a great trade moving forward for decades to come. But you have a lot of options here without making you use the money for traditional college.

[Robert]

What would you do at 18 years old right now if you were in coal shoes?

[Co-host]

I'd probably do the trade school because if you could get a free ride to just go, go become a plumber, an electrician, maybe you could become like a IT specialist that focuses on data center growth because that's a huge category. For the next three, four, five years I would probably go to trade school because they are going to be the new millionaires. Ten years ago we were telling everyone to learn how to code. Now we're telling everyone, you don't need to learn how to code, go become an electrician or a plumber or something like that, that it's going to take a lot longer and a lot more difficult for robots to take over those trades.

[Robert]

So it sounds to me like Cole needs to roll over 20, maybe 30,000 of this 40,000 in his 529 to his Roth IRA, which again, you can only do up to the contribution limit per year. So 7, 500 this year, probably 7, 500 next year, just like figure out what that looks like. But over the Next, call it 3, 4, 5 years, get 20, 30,000 rolled over into your Roth IRA invested into Voo and QQQ and that money should turn into several hundred thousand, if not low millions, adjusted for inflation. When you are 67 years old, assuming you contribute no more Money. So congrats on being a future millionaire. And then use the other 5, 10, $15,000 in your perspective, Robert, to go learn more about plumbing, electrical, H Vac, stuff like that. And then hopefully work in maybe some data centers. I think that's a good, a good way to think about this. I'm just trying to think because we've heard this term halo, which are these heavy assets, low obsolescence sort of businesses that are essentially not going to get displaced by AI. And as you think about your career, Cole, I would think about what are those businesses which again, just use AI to help you understand what they are. But two, how do you begin to work at those businesses? Is it a H Vac, Is it plumbing? Is it electrical? Maybe it is something completely different. I mean, there's always these people that are building homes and getting these homes frames and then, you know, inspected and like all these other different things. And I just. There is so much to learn at your age. There's also like, for example, like, I just think about people that are doing irrigation installation for sprinkler systems. And I mean, I have no idea if humanoid robots are ever going to be able to do that in my lifetime. Like, just think about these types of physical businesses that. And again, you're 18 years old, dude. You have so much time to figure this out and be completely ahead of everyone else when it comes to money. So here's what I would do if I were you. Do that rollover we talked about. Go scoop chicken at Chipotle or Cava or whatever, making 15, 18 bucks an hour. So like you're actually working and getting some stuff done. But while you're doing that, work part time, right? Live at home, whatever, but get a job. Don't just sit around all day the other 20 to 40 hours a week that your brain needs stimulation and you're working and you can think of. That's when you do the research for the next month or two, maybe between now and the end of summer. Like, what is it that Cole wants to do to ensure that in the next two or three years Cole is working for an H Vac company, or Cole is doing housing or data center or industrial inspections. Or maybe Cole is doing this stuff where he's installing sprinkler systems or like whatever that might be. Just spend some time doing this research because you're in this awesome situation where you have enough money to not have to worry about retirement in the near term, per se. I'm sure you're living at home. So now you can kind of scoop chicken and make a little bit of money doing that and just kind of pay your bills, gas, stuff like that, and have the next three or four months to really figure out where you want your career to be. And the last piece of advice I'd give you, Cole, is that your first choice is probably not going to be the right one. You're probably going to do something. You're going to realize two years in, you made a mistake and you're going to be like, I can't believe I've got. I spent all this time, energy and focus on wanting to be an H VAC guy when I knew I should have been a plumber. I knew I should have worked on cars. I knew I should have done something else. But Cole, you're so young, you will make mistakes and there's absolutely an opportunity to say, dang it, that didn't work out, let me go try something else. Maybe you're gonna be 32 and that's when you really figure out that you want to be a chef, right? Who knows? But that's the mindset I'd have into this, is let me go try things, let me go learn things. And then not really put so much pressure on myself to make the perfect right decision at 18 years old. Because I, I'm 29 years old right now and I'm still figuring out what I want to do when I grow up.

[Co-host]

I love that takeaway. And it's the pressure part for me because we live in a society, right? So many fake gurus are on the Internet telling people to go do their own thing and quit your job and do all that. Yet you think about electricians and plumbers and some of these other trades that aren't going to be taken over by Humanoid Robotics. They're going to make a hundred and some thousand dollars a year. You get weekends off. Most of the time you have nights off. Entrepreneurship is hard when you build your own thing. It is hard. And I'm not saying you shouldn't look at that. But so many people, if you can build a skill set to have a high paying job and have nights and weekends off so you can have your little boat and your jet skis and go have fun, do that for a while. Because like Austin said, you don't need to figure this out when you're 18 or even 28, you've got a whole life ahead of you and you need to learn what works for you and build off of that.

[Robert]

But if you are able at the age of 18 to start implementing rich habits in the sense that you start investing consistently just a little bit. Right? You work hard every single week. You don't spend more money than you make. Right? If you can start implementing these types of habits in your daily life at the age of 18, they will follow you until you're 28, 38, 48. And you will be richer than you could ever imagine. Because learning to do the right thing at a young age is the easiest way to just be rich when you're older. I wish someone shook me by my shoulders and said, austin, do these things specifically, and I didn't have to go make all the mistakes along the way. But that's part of the life. You're going to make mistakes too, Cole. Everything's going to be fine. So our next question comes from Trey on Instagram. Trey says, hey, guys, I love the show. I'd appreciate your input on my situation. I'm 21 and I've been married for less than a year. My wife and I bring in 6,000amonth and we're planning to buy a house within the next two years. Right now we're saving 3,000amonth in a high yield savings account toward that goal. Soon we'll have an additional 1,000amonth freed up that we can either save or invest. We're also being gifted $10,000 and we're unsure whether to put it toward the down payment house fund or invest it for long term growth. For retirement, I'm contributing $300 a month to my simple IRA with a 3% employer match. My wife currently has 4,000 in her Roth IRA and we are planning to open up a Roth IRA for myself as well. Given all of that, how would you recommend we split our money between saving for a house and investing for the long term? That's a really good question. So let's do some math here for our friend Trey. So Trey is saving, let's call it 4,000amonth because they said soon we'll have this additional thousand freed up. So at 4,000amonth, you guys are saving $48,000 per year toward this house down payment fund, which over the course of two years, it's about 100 grand. Right? Let's, we can round it down, let's call it $90,000. But $90,000 at a 20% down payment buys you a $450,000 home. I don't know exactly in what part of the country you all live in. You said that you plan to, you know, next two years. So 90,000, 450 median home in greater Nashville area, assuming you don't go buy a mega mansion, is like again, that 4 to 600k range. So I feel like you guys, over the next two years by doing this 4,000amonth, will have enough saved to buy this home, which tells me I can then take this $10,000 and I'm being gifted. Invest it and rock and roll. That's what I would do, do. If I'm on track here to save 90,000 over the next two years, I'm, I'm on track to accomplish my goal. And someone gave me a $10,000 gift. If that person, let me be very clear, if that person said, I want you guys to take this money and use it as a down payment on the house. You use it as a down payment on the house. You don't go use it to put it in your Roth IRA or go buy a Jet Ski or, you know, whatever going on. You do what they gave you the money to do because you do that out of respect. So do that if that's what it's for. But if it's straight up, hey, congrats, you guys got married or something, here's $10,000 and it's a, a willy nilly 10 grand to do whatever you want with. I would use it to max out my Roth IRA for 2026 at 7500. I would then use the remaining 2500 to contribute to my wife's Roth IRA. And congrats, you guys now have some good money in retirement and you're on Track to save 90 to $100,000 over the next two years. What I miss, Robert, I don't think you missed anything.

[Co-host]

I'm going to put a little wrinkle into this. I think you should take the $10,000 that should go directly towards the house. Everything else would go towards your investment accounts. But I wouldn't go buy a house right out of the gate. I would buy a duplex, triplex or a quadplex, live in one unit for one to two years, use the Fannie Mae 5% down mortgage, and then you could get a four or $500,000 house for 20 or $25,000 out of pocket versus exhausting a lot of money and waiting two or three more years. So that's the only thing I would add is don't buy too much house out of the gate. Consider house hacking and using this 5% down mortgage because you don't have your base built yet and I don't want you spending a big portion of all this great Money you're putting aside on a dream home because you're 21 years old, you're going to change what you want, things are going to change in your lives. And I would rather see you have a modest home to start that's a duplex or a triplex or a quadplex, then build towards the dream home. Because once you move out of that, that in a year or two and buy the dream home, maybe it's three years, then that rent from that triplex will pay for a lot of the dream home. That's the only thing I would change. I would start house hacking first, then get to the dream home down the road.

[Robert]

So with that, then Robert, you would be assuming that they would buy the same 450, $500,000 piece of real estate, but instead of it being a single family home, it's going to be a duplex, maybe a triplex if they can find one. And then they would only put 5% down on it versus 20% down on a single family home. Maybe talk more about how important it is when it comes to house hacking to think about their sort of monthly payment in total versus the renters and how to maybe do some math around that and think through maintenance and things of that nature.

[Co-host]

Yeah, I love it. And just to give everyone a backstory, I bought my first property at 22 years old. It was a four plex, it was actually a three plex that I converted into a fourplex. And it was amazing because back then, and I'll, and I'll round this up to now, now I lived in the biggest apartment and I rented the other three. And for pretty much the eight years I lived there, I ended up staying there for eight years. I loved it. They paid my, my entire payment, my entire mortgage was paid by them. Now I had to pay for upkeep and insurance and other things, but in this scenario now the same thing applies. Let's say you move a tenant in and the average rent in this area is $1400 a month for each side of this duplex. Well, if they pay, let's say it even ends up only being 30 or 40% of your payment. But you're still making the upside appreciation on this property. It's going to let you build more wealth now rather than coming out of pocket 20% plus closing costs and everything else. That's why I think everyone should start out house hacking. Because too many people that have $26,000 saved and invested for retirement go buy a house, drain all that money and then they're starting Back at zero with a primary home. Whereas with house hacking, there are so many other advantages to it on top of lowering your monthly living cost down, which is one of the hardest things keeping people out of the wealth building game right now is living costs. So that's why I believe everyone, especially at 21 years old, should consider house hacking to save the money, capital appreciation. And then think about this. When you move out of that property, let's say in two years, you buy the dream home. You're crushing it. Your base is built. Then you have two sources of income coming from that to go towards your bills and your investments. And that's why I would start there and keep building.

[Robert]

I think that last part is really important to double click on. So, Trey, make sure if and when you actually do go buy a duplex or a triplex or make it a quadplex or whatever. And I think a lot of people are thinking this too. Robert. Robert. Cool. Robert, you bought real estate 40 years ago for 12 strawberries like every other person that was, you know, we get that. So I think it's important to, you know, acknowledge that real estate's very different now than it was 40 years ago. But, Trey, if I were in your shoes, I would run the math and ensure that, to Robert's point, if you do have an end goal of like, leaving the duplex, triplex, quadplex, and actually allowing it to be rented all two or three or four units, that it cash flows without you supplementing the mortgage to live there. Because nothing would suck more than saying, my name's Trey. I bought this triplex. The monthly mortgage is, I don't know, let's just call it something round, like $6,000. And two people pay me 1500 a pop. So that's 3000 to 6000. And then Trey pays the other 3000. So now Trey's paying three, and then his two tenants are paying 1500. So that's, you know, covers the whole mortgage of 6000. But if Trey left now, he's only making $4,500 on his $6,000 mortgage. And so it doesn't cash flow and it's a bad investment, like bad news bears, whatever you end up doing. Also run the numbers to ensure that in two, three, five years from now when you end up moving out, that it doesn't have to just be completely supplemented by you, but that it will somehow cash flow and that there's, you know, comparable rents and, you know, there's things you can do to ensure that it will cash flow without you living in the Units as well.

[Co-host]

And one more thing I want to talk about as well is so many people get stuck on, I have to live here when there could be a tertiary market 20 minutes away where housing and properties are highly inexpensive. That's why where I'm from, Toledo, Ohio, even to date, you can make 60, 70, $80,000 a year in Toledo, Ohio, and thrive because you can buy a duplex, even a larger duplex in Toledo, Ohio, for under $200,000 in a good neighborhood, near the parks, near good schools, and it's more affordable. So I think that's important for the broader message here. Yes. Is San Francisco impossible to buy a duplex? Yes. Is downtown Nashville and Miami impossible? Yes. But there are all these tertiary markets that are just outside of there. And we do live in a commuter society now where most people work from home, so you can have that home be a little bit further out in a place that is more affordable so you can build your wealth early and often.

[Robert]

Yeah, Robert, I completely agree. I'm. I'm. I'm in a tertiary market from Nashville, and I'm looking at it right now. There's a. There's a duplex for sale here. Looks beautiful. $494,000. Right. And I'm sure there's a world where with the right numbers down, the right rents, like, something like that could work. So I completely agree not to be so nailed down. Do I have to live in this specific location or whatever it might be, like, sacrifice a little here to make a little bit over there. Or, you know, it was. It was great advice my old boss gave me when I first graduated college and started working in Nashville, because I wanted to live downtown. I wanted to have the nice apartment. I wanted to do these things, but it was very expensive. And I asked him his perspective on that, and he said, well, if you're living downtown and you're spending a lot of your, you know, monthly income to live downtown, you live downtown. You don't have extra money in your budget to go on vacations, to go on those road trips, to go, you know, do these other things. Like, you are being very intentional with your spending to live in that area. And so I think that goes for a lot of people listening where they live right now. They might have, oh, but I love San Francisco. Oh, I love this part of, you know, but I'm right on the beach. Of course I can't leave, like, whatever. That's totally fine if you want to be there. But you have to be intentional and understand that, like, I'm spending money to live here that I could be saving so much more if I wanted to live 30, 45 an hour away from where I live right now in a much more affordable location.

[Co-host]

That's a really good way to look at it and a great breakdown. But also I want to add that so many people that I know, let's go back to Ohio. Currently they have to live in the certain neighborhood, the certain school district, they have to have the certain cars, they have the hoas, they have the private schools, all this stuff. Then they wake up and the kids are finally grown at 55 years old and they have no savings because they live beyond their means because they had to do what everyone expected of them rather than what's doing best for them and their family for the long term. So make sure all of you contemplate everything we just discussed to understand you have to live according to your income and your debt to income ratio, not according to your friends because they're all broke. Trying to keep up with the Joneses.

[Robert]

Well Robert, speaking of keeping up with the Joneses, we've got this question from an anonymous listener. They say, hey guys, please keep me anonymous. I'm in a bit of a dilemma right now and I'm not sure what to do. I've got $5900 worth of credit card debt at 28% APR. Are all of this is debt from Christmas and going out with my friends on the weekends. I always pay my credit card on time and make a little bit more payments than the minimum, but it feels like it goes up every single month. My credit card just keeps going up and up and up and I don't understand what's going on. Unfortunately, I don't have any savings set aside. All of my money is on Robinhood invested in the stock market. I've got $20,000 in there and I'm afraid to do anything with it because it took me so long to get to this point. I do have a custom whole life insurance policy that I, I can borrow $4,400 against. If I should do that. Maybe I, I put that and use it to pay off my credit card. The interest rate on my whole life insurance loan would be 5.8% which is a lot lower than my credit card. I also have a 457 plan through my job with 32,000 in there. Should I take money out of that? I don't know what to do. Well, anonymous listener, we got your back. Everyone finds themselves exactly where you are. Christmas hair hit. You spend the the credit card Travel, gifts, all that stuff. Weekends, they get away from you. I get it. It's okay. Everyone finds themselves in credit card debt sometimes some way. Do not beat yourself up over this. There is a plan out. Here's the plan. Step number one, cancel your whole life insurance policy. You are paying hundreds of dollars a month for this whole life insurance investment, whatever, indexed universal life, whatever they want to try and scam you with here, saying it's going to get invested, whatever, whatever. If it's, if it's invested into your money, why do you have to borrow it? Right? Why do you have to pay interest on your money? Right. That, that, that's not an investment. That's called a scam. So our anonymous listener please number one, cancel the policy. Forfeit whatever you got to forfeit, Take the cash value and put that back in your pocket if there is any cash value and use that to start paying off these credit cards. But that is the first thing I would do now to ensure I do that correctly. I would go to shuriance.com rich habits and I would first search for a term life insurance is between 10 and 20 times my annual income. So maybe 500,000 to a million dollars of a term life insurance policy that you pay $30 a month for instead of $300 a month for this scam life insurance policy with this whole life provider. And that is how you get insured for death. Okay, so like do that first and foremost. Now you're thinking, okay guys, I got a little bit of cash value. I still got this credit card stuff. I don't understand why it keeps going up. Robert, explain to our friend here why it seems that despite paying the minimums and a little bit more, their credit card B continues to tick higher. And our favorite phrase as it relates to investing with credit card debt, you

[Co-host]

can't out invest high interest debt. Number one thing right now, if you look at the s and P500, we talk about it all the time, it's down 3 or 4% for the year right now. Not good. But if you look at your credit card apr 28% you're never going to out invest that. So in my opinion, the first thing I would do for anonymous listing listener, I would take the money out of Robinhood or from the cash value that you get back from the life insurance policy. I would pay off the credit cards and do this. Don't go out on weekends and put it on credit cards. If you don't have the money set aside after you've done your Roth ira, after you've done your budget, you've paid all your bills, because that's what people do that stay broke their entire lives. They think, I have this credit, I'm going to use it and I'm going to go out and have fun. And you never get out of this rat race. That's first and foremost what I would do. Because you have this high interest debt that you're going to keep using every single time you need it. And you're never going to get ahead because you have 20,000 over here on one hand, not making anything, but you're paying 28% on this hand. And you could wipe that 28% out right away by taking the money from the cash value and the 20,000 that's in Robinhood, 100%.

[Robert]

So what we're going to do is we're going to take whatever cash value you might have with this whole life insurance policy after you've surrendered it. If you don't have any, that's fine. Just getting out of this policy is going to pay for itself. Take money from your Robin Hood account, assuming it's in a normal taxable brokerage account. It's not retirement money. And you're going to take that and you are going to use it to pay off this debt. I don't care if you got to pay a little bit of taxes on it. You could probably be a little strategic by selling things that might be losses or, you know, whatever you can figure out there to ensure there's not a big taxable hit on your, on your brokerage account, on Robinhood. But that, that's first and foremost how we're going to be thinking about this, my friend. Now, as it relates to sort of what I was alluding to there, Robert, whenever you have this minimum monthly payment. And this kind of goes back to our conversation with Max Lebchin from a firm which I think, you know, he's building a company that's doing so well about transparency as it relates to, you know, revolving credit versus installment loans and things like that. And this is just another example of exactly what he was explaining. The credit card companies make money off interest, and so they make money when you keep a balance. So if they can make it as obscure or confusing as possible to ensure that, yeah, you make the minimum, but like, you still have a balance, like, they're going to do that. It's in their favor to take money from you. They, they have shareholders, they've got the big buildings downtown they got to go build, right? So, like, what you need to be Thinking about here is not so much the minimum payment. This is not an installment loan where you have a monthly payment that if you pay it for a period of time, you pay off the debt. Credit cards are very different than that. Your minimum payment is just the minimum to service the interest only on the debt or a portion of the interest on the debt. So if you are someone that, that goes and, you know, racks up $5,900 worth of credit card debt at 28%, your monthly minimum payment is going to be 45, 55, you know, maybe $95. But that, that only services a portion of the interest. It is not at all paying off the principal. You have to go in there yourself and make a principal specific payment. You have to go in there and say, pay balance $5900. Wipe it out. Not, not pay minimum $92. See you later next month. Because all of that 92 is going towards servicing the interest of the debt, not the principal itself. Which is why you see, for example, your credit card just go up and up and up. You're like, I've been making my payments. Why does it keep going up? It's not an installment loan. They're trying to trick you to only pay them interest, which unfortunately, they've been doing to Americans for a very long time. So please take 5,900 from your Robinhood account, any cash value you might have when you surrender your whole life insurance policy. And then the biggest thing here is your credit card debt is a symptom to a larger problem. Your larger problem is you don't have a budget. You don't have an honest budget. You do not know where their margin is. You don't know exactly how much you need to save to ensure that you're not going into credit card debt. You don't know how much you need to be setting aside every month to ensure that next Christmas that comes around at the same time time every single year. You actually have money. You're forecasting, you're being proactive with your money. You're not reacting to, oh, Christmas is here. Got to go swipe the credit card for five grand, because I got to go see my family or, you know, buy these presents or whatever's going on. You have a symptom of a larger problem, which is you do not have a budget. You need to go download our honest budget. You need to write down every single category, every single line item, understand exactly what you're spending money on, start cutting things out of your monthly spending. That's going to allow you to take that margin. Begin investing. Begin building a sinking fund, an emergency fund, like all these things we talk about on the show. Please take your finances seriously, because 5,900 quickly turns to 20, and then 30,000, and then you find yourself in this hole, and it's just. It's just terrible. So please figure this stuff out. We think we've given you enough here to take control of your money, but we're rooting for you, our anonymous listener,

[Co-host]

and for everyone else watching and listening to this episode that's in this track trap. Get out of this trap as soon as possible. I know it's easy when you have all these credit cards and they keep offering you more. Well, guess what? You're a great customer because you use them and you don't pay them off, and they make a ton of money off you. Stop doing it. Stay at home on weekends, grill out, have your friends come over, maybe do a fun little night at one of your houses and buy a case of beer rather than paying $7 a beer at the bar. You can't live beyond your means forever. If you ever want to retire with dignity. And I hope this helps.

[Robert]

I think just to really reiterate that if you are broke, it's okay to act broke. I've got friends that were in credit card debt that made 50, 60, 70,000 a year. And when they say, hey, Austin, I'm not going out, I can't afford to do these things. But I'll meet you at your house and we can play some PlayStation 5. If you want to do some Rocket League, be a real friend and be like, sure, let's, like, come over. Let's hang out. Let's do things that do not put you further in financial harm. And if you're friends to our anonymous listener are like, oh, you're not coming out with us on the weekends, like, you suck, then they're not your real friends anyway, right? Like. Like, you have to be able to say, I am broke people. I must act like a broke person right now. And that's okay, because broke is not poor. Broke means you don't have any money. Poor is a mindset. And no one listening to this show should feel like they're poor, because we're only broke, right? If you're broke, that's okay. I've been broke. Robert's been broke. We've all been broke in our lives, but we have the mindset to be wealthy, and you need to have that same mindset. And if your friends don't share that with you, then Maybe they're not your real friends.

[Co-host]

I love that takeaway. And I can't remember what comedian this was like 30 years ago, but he said, I'm not poor, I'm broke. I can't pay for the stuff I already have. And that's just it. That's your whole thing is people stop living beyond your means to impress people because there's going to be no one to pick you up. You up. We can't say it enough. Please get a budget. We have a free one in the show notes. And get your affairs in order so you're not running up credit cards for $7 beers.

[Robert]

All right, Robert, we are almost up on time here. We've been pulling them along. Last question, super quick from Sabrina. Can you please advise what new investors should be doing during this time of market volatility with the current war going on? I've got 5,000. I want to invest in my Roth IRA, but I'm nervous with the volatility and everything happening. What should I do? You should take all $5,000, deposit it into your Roth IRA and in one fail swoop buy $5,000 of Voo and forget about it. Full stop. Roth IRA is a long term retirement account. What happens right now is not going to matter in 20 years when you're actually going to be using this money. What happened 20 years ago does not matter today when it comes to people that were investing 20 years ago. And what's happening now is not going to matter in 20 years from now, now, 30 years from now. I don't know how old you are, but I mean, I'm sure decades of investing in the stock market, Sabrina, don't overthink this. Deposit that 5,000, get it invested, let it grow for decades and you'll be just fine.

[Co-host]

Yeah, no one can time the market, Sabrina. I promise you that. All the smart people that say they can, they can't just get the money in, become an investor, be up and running, be consistent and let it ride because you will make money over time. And just people don't sit on the sidelines. That's the number one takeaway for me, everybody.

[Robert]

Thanks so much for tuning in to this week's episode of the Rich Habit podcast question and answer edition. We love that you come back every single Thursday to listen to Robert and I answer questions. If any of these questions resonated with you, please consider leaving us a five star review. On Spotify, on Apple, hit the like button, perhaps on YouTube or wherever you're tuning in right now. Any way to just give us a little bit of positive vibes. We would very much appreciate it. And don't forget on Spotify, every single episode episode, we've got the comment section and we've got polls. So we're asking you fun little cute polls here and there. Comment, answer the polls, do whatever you can. We love hearing from you all. It's our favorite thing. We get back to every single comment on Spotify as something we take a lot of pride into. So if you leave us a comment on Spotify, chances are we're going to get back to you there and we're just super grateful.

[Co-host]

And always remember, you all have friends and family members that have blind spots and financial issues. Maybe they're the ones with the high credit card balances or they're the ones sitting on the sidelines lines. Share the episodes Share and tell them about the Rich Habits Network and the Rich Habits Newsletter. All of these things are great resources to help you get to the next level and get your money in order.

[Robert]

Thanks everyone and we'll see you tomorrow for our Friday episode, the Rich Habits Radar. Sam.