Rich Habits Podcast – Q&A: Cashing Out The College Fund, Discretionary 401(k) Match, & Shopping Financial Advisors

Hosts: Austin Hankwitz & Robert Croak
Date: October 30, 2025

Episode Overview

This Q&A episode of the Rich Habits Podcast features Austin and Robert answering listener questions about complex financial decisions: what to do with a college fund when plans change, evaluating a unique 401(k) match offer, switching financial advisors, buying your first home as a young adult, retirement planning, and getting started as an investor. The show emphasizes practical advice, the importance of building financial ‘base’ before big moves, and the value of habits over flashy decisions.

Key Discussion Points & Insights

1. 529 Plan Dilemma: College Fund Repurpose

Listener: Jim G.
Context: 50-year-old small business owner, son opts out of college, $100k in a 529 plan saved.

• Austin clarifies the mechanics of a 529 plan: Contributions can be withdrawn tax- and penalty-free. Taxes and a 10% penalty are only applied to investment gains if used for non-educational purposes.
  • [07:10] “Withdraw your contributions completely tax free, penalty free. Everything's fine... you're only paying taxes and penalties on that gain that's being made.” – Austin
• Strategic withdrawal: Austin suggests withdrawing contributions slowly, ideally during low-income years for the son to minimize tax impact.
• Beneficiary flexibility: The plan’s beneficiary can be changed (e.g., to siblings, nieces/nephews, or even back to the parents) to maximize educational use and mitigate penalties.
• Investment Allocation: The proposed 60% VTI, 30% QQQ, 10% Bitcoin portfolio is endorsed as solid and aggressive for a young investor.
  • [08:53] “Yes, the allocation of 60, 30, 10. Perfect. Rock and roll.” – Austin
• Robert agrees with focusing on penalty avoidance and flexibility:
  • [07:57] “Maybe they just take out the contributions, get those invested, leave the gains in there so there’s no penalties…down the road there might be another solution of where this money goes by switching out the beneficiary.”

2. Discretionary 401(k) Match Requiring Company Stock

Listener: Anonymous
Context: Employer only matches 401(k) contributions if invested in company stock; listener worried about concentration and missing out on free money.

• Robert recommends due diligence on company stock:
  • [10:31] “Look at the last three to five years of performance with that company's stock... you don't want to be in a situation where you are leaving money on the table, especially because you said you feel like you've been behind a little bit on retirement.”
• Austin clarifies investing order and risks:
  • Match > Roth > Taxable—maximize free money up to the match, especially if you can diversify later or rebalance into safer investments if the plan allows flexibility.
  • Beware being forced into underperforming or high-fee funds.
  • [13:06] “If there's no match and there's no autonomy...then what's the purpose of investing in this anyway?”
• Red flags with forced stock investment:
  • [14:33] "It seems like a red flag...they’re basically forcing them to invest in the company’s stock so they can get them their match. That seems crazy to me."

3. Moving Financial Advisors and Reducing Fees

Listener: Matt C.
Context: Late 30s, net worth approaching $1 million, dissatisfied with high-fee advisor.

• Robert encourages shopping around and demanding transparency:
  • [16:30] “Go meet with other people, ask them about past performance...really deep dive it...Because remember, a lot of financial advisors want to protect your money. They don’t necessarily want to grow it.”
• Austin empowers DIY investing and cost focus:
  • Manage investments yourself with low-cost ETFs if the allocation strategy works for you but products are too expensive.
  • Create a spreadsheet or outline of the asset allocation; replicate with low-cost funds after transferring accounts.
  • [18:19] “You are smart enough to manage this money by yourself...congrats, you’re now saving a ton on expense ratios and fees.”
• Process for switching advisors is simple:
  • [21:06] “Migrating your money from one advisor to another...is a simple docusign...never stay with an advisor you’re not happy with just because you have fear of moving. It's very simple.”

4. Should a 26-Year-Old Buy the Family Home?

Listener: Anonymous
Context: 26, $21k in brokerage, $85-90k salary, wants to buy grandmother’s $700-$750k house.

• Robert and Austin's resounding advice: Don’t buy now.
  • [22:52] “My take is do not buy this house. You don’t have your base built...you’re going to be housebroke almost immediately...rent for a couple more years, then buy a house that’s affordable for your budget.”
  • [23:47] “Try and get $100,000 invested by the time you’re 30...then you can buy a house from a place of authority, from a place of strength, not desperation.”
• Long-term focus: Build financial stability (base/investments) first before taking on leverage/homeownership.

5. Planning to Retire: 403(b) Rollovers & Overseas Condo

Listener: Samantha L.
Context: 59, healthy retirement savings, spouse has bought problematic rental (condo in Philippines) with a HELOC.

• On the condo: Both hosts say decisively to sell.
  • [26:32] “Sell, sell, sell. We need the Jim Cramer button. I would get rid of it. You can’t manage it well from the Philippines.”
• 403(b) strategy: Roll over into a traditional IRA after retirement (age 60-62) for better control/autonomy and possibly a platform match.
• Concerns about marital communication and risk:
  • [27:39] “He might try to do something else like this with your 900k. So make sure you have protection here with him. At the very least, have an important talk...”
• General real estate warning:
  • [28:56] “You have to understand the total ownership cost and your benefits...before you make these investments.”

6. 18-Year-Old Starting Investing on Minimum Wage

Listener: Gabriel E.
Context: 18, studying cybersecurity, new investor, minimum wage ($12/hr), opened Roth IRA & brokerage.

• Austin’s step-by-step starter advice:
  • Automate Roth IRA and brokerage deposits, even if small
  • Focus on S&P 500 and Nasdaq 100 ETFs (VTI, QQQ/VUG)
  • Goal: Get to $100,000 invested over 7–8 years
• Robert’s advice: Prioritize income growth, not just investing:
  • [31:53] “You have to go make more money...You’re not going to get very far very fast making $12 an hour.”
  • Find higher paying job or start a side hustle in security/tech; invest all side hustle income.
  • Mix core low-cost ETFs with small allocations to Bitcoin/Ethereum/Chainlink.
• On career paths and setting priorities:
  • [34:55] “I feel like it brings me back to memories when I was 18...I had three jobs and everyone made fun of me. But guess what? At 22 I already had almost $30,000 saved and invested...”
  • [33:28] “Do everything you can at this young age to understand what direction you are going in...I'd much rather climb up the right wall slower, knowing that it is the right wall.”

7. Roth vs Pre-tax 401(k) & When to Start Real Estate

Listener: Felipe S.
Context: Early career, wants Roth 401(k) vs pre-tax advice; dreams of multi-family real estate but income still growing.

• Austin: Roth is generally preferable early on.
  • [37:42] “Generally speaking I always encourage people to go with the Roth variant...Younger the better when it comes to the Roth stuff.”
• Robert: Hold off on real estate until stable, higher income and base is built.
  • Focus on career—become an electrician, grow earnings
  • Build emergency fund, diversify with small crypto allocation
  • [37:42] “It would be worth it for you to wait two or three years rather than jumping into a real estate project right now and then going backwards financially.”
• Stay focused: Each stage (career→base→real estate) builds on the prior.

Notable Quotes & Memorable Moments

• On evaluating special 401(k) matches:

  • “What if it’s a mid sized company...forcing them to invest in the company's stock so then they can give them their match. That seems crazy to me. I don't like that at all.” – Robert, [14:33]

• On role of the financial advisor:

  • “If you're going to get eye surgery or heart surgery, you're not going to just go to the first person...you should do that with your money as well.” – Robert, [16:30]

• On career focus as a young investor:

  • “It doesn't matter how fast you climb up the ladder if the ladder is leaning against the wrong wall.” – Austin, [33:28]

• On delayed gratification in real estate:

  • "Staying focused on one thing at a time is the way that wealth is built." – Austin, [39:11]

Timestamps for Key Segments

• 529 Plan / College Fund Repurpose: [04:06] – [08:53]
• Discretionary/Stock-only 401(k) Match: [08:53] – [14:59]
• Switching Financial Advisors: [15:00] – [21:55]
• Can a Young Adult Buy a $700k Home? [21:55] – [25:02]
• Retirement Withdrawal & Overseas Condo: [25:26] – [29:44]
• Young Investor (“Gabriel E.”) Guidance: [29:44] – [35:30]
• Roth 401(k), Real Estate, Building a Base: [35:30] – [39:11]

Recurring Themes and Advice

• Build your financial base before taking big risks (house, real estate, etc.)
• Review costs and performance of all investments; replace high-fee products/advisors
• Don’t rush into complex investments (real estate, business) until income and savings are steady
• Always research employer plans/matches; beware concentration risk
• Your early investing years are best spent maximizing income and setting up habits—not chasing quick wins

Final Thoughts

This episode delivers practical, realistic, and sometimes brutally honest advice on some of the most important financial decisions people face at various life stages. Austin and Robert stress the importance of flexibility, low-cost investing, risk awareness, and above all, the power of focusing on simple, rich habits—no matter your starting point.