Rich Habits Podcast

Hosts: Austin Hankwitz & Robert Croak
Episode: Q&A: Donating $8M, Borrowing $36K For A “Career Start” Loan & $6M In Single Stocks
Date: September 25, 2025

Episode Overview

This lively Q&A edition features Austin and Robert tackling listener-submitted questions across a range of personal finance topics. The episode’s central theme is practical wealth management through the different stages of life: from building foundational habits in your 20s, to mid-career decision-making, to legacy planning in retirement. The duo dives into real listener scenarios involving multi-million dollar portfolios, real estate strategies, debt decisions, the intricacies of giving, and optimizing investment accounts. Their trademark blend of conversational tone and actionable advice is on full display, with Robert’s veteran experience and Austin’s analytical approach creating a balanced, insightful resource for listeners at every financial stage.

Key Topics & Discussion Points

1. Transitioning Single Stocks to ETFs in Retirement Accounts

[03:26–09:24]

Listener Scenario: Jackie (late 50s, millions in the market, SEP IRA) wants to shift from individual stocks to ETFs without incurring capital gains taxes.

Insights & Advice:

• No Tax on Inside-IRA Transactions: Sales and rebalancing within SEP IRAs (or any IRA) are not subject to capital gains taxes; taxes only apply on withdrawals, not trades.
• Withdrawal Taxation: Taxes are due at ordinary income tax rates at withdrawal, not on investment activity within the account.
• Advisor Red Flags: Both hosts urge a conversation with Jackie’s financial advisor, questioning the motivation to avoid ETFs or index funds, suspecting fee-driven or non-fiduciary motives.
• Quote:

  "You can literally sell all those single stocks that are up hundreds of percentage points, cash in on that profit, and not owe a dime on the transaction itself, but only owe taxes on the money you withdraw from the account."
  —Austin [08:12]

• Second Opinions: Robert stresses importance of multiple opinions when selecting advisors and understanding fee structures:

  "If you’re going to get heart surgery, you get multiple opinions...Yet people will take all of their money, give it to someone and not even understand their strategies." [09:24]

2. Renting vs. Buying in St. Petersburg, FL

[10:17–14:32]

Listener Scenario: Fernando (26, young family, $180K household income, moving to St. Petersburg, FL) debates buying a home (single family or duplex) vs. renting first.

Insights & Advice:

• Rent to Learn the Area: Robert, a local, advocates renting first to familiarize with neighborhoods, amenities, and the real estate market before buying.
• Investment Property Strategy: Austin prefers multifamily for initial investment but emphasizes that if buying a single-family, make sure it "makes sense for you as a family, not just as an investment" [13:32]. Avoid negative cash flow.
• Quote:

  "Just make sure that if you’re going to do single family, it’s a place that you feel good about and comfortable living in for five, seven, ten years."
  —Austin [13:32]

3. Optimizing Real Estate & Investing for Early Retirement

[15:11–22:07]

Listener Scenario: Mr. & Mrs. W. (teachers in their 40s, net worth $1M+, two homes) consider selling their primary residence to pay off a rental and invest the rest for early retirement.

Insights & Advice:

• Real Estate Equity Not Working Hard Enough: Hosts note the low cash flow to equity ratio of the rental property; stock market returns likely higher if equity was invested instead.
• Retirement Goal Framing: Retirement means your portfolio must supplement your income—a paid-for house minimizes expenses.

  "If I were in y’alls shoes, I’d sell the primary residence, pay off the rental, then invest the rest. You’d have more in seven years from a wealth perspective than just cash flowing the rental."
  —Austin [18:37]

• Market Timing Caution: Robert advises waiting for mortgage rates to drop a bit to maximize home sale proceeds, as rates influence home prices.

4. Legacy, Giving, and Philanthropy in Retirement

[22:07–32:36]

Listener Scenario: David (76, NW $11.6M, wants to give away $5–8M, son well-off, unsure how to start giving meaningfully).

Philosophical & Practical Approaches:

• Reflect on Meaningful Causes: Both advise looking at what’s had a positive impact during one’s life (schools, churches, community organizations) and focusing giving efforts there.
• Direct, Impactful Giving: Austin encourages targeted donations (e.g., scholarships, equipment, specific projects) rather than general funds.
• Tax-Smart Giving: Instead of cash, consider donating appreciated stock directly (donatestock.com) to avoid triggering capital gains.
• Quote:

  "I like to be able to see the impact of my giving... If you just blindly donate, sometimes these organizations just lump it all together, and it might not make the same impact as you hoped."
  —Austin [31:07]

• Set Up Structures: Robert suggests a revocable trust and estate planning to avoid probate and ensure wishes are carried out.
• Due Diligence: Vet charities for efficiency (minimize overhead, maximize impact).

5. Car Extended Warrantees & Sinking Funds

[33:03–34:58]

Listener Scenario: WK, owner of a 2015 Nissan Rogue, wants advice on third-party extended warranties.

Insights & Advice:

• Skip the Warranty: Both advise against extended warranties for older vehicles, recommending setting aside $1,500–2,500 in a high-yield savings "sinking fund" for repairs.
• Keep Control:

  "Just have $1,500–2,500 set aside. Something bad happens, you use that money, replenish, and you’re back to the races."
  —Austin [34:27]

• Robert Recommends: $100/month into a high-yield account does the job.

6. Should Military Cadets Take Advantage of 0.75% Career Start Loans?

[34:58–38:16]

Listener Scenario: Addie, junior at USAF Academy, can borrow $36K at 0.75% interest; asks how aggressive she should be investing the funds.

Insights & Advice:

• Skepticism on Debt for Investing: Austin is cautious, calls such loans to military "predatory", doesn't recommend borrowing to invest unless ultra-safe.
• If Already Taken, Be Conservative: Since Addie already has the loan:
  • Keep in high-yield savings for safety, or
  • Invest very cautiously into broad ETFs, but do not use the money for high-risk or illiquid investments (e.g. real estate).
  • Avoid tapping retirement accounts with this money.
• Quote:

  "I would not use that money to get into real estate, because if you lose the money, you still owe it and it’s going to put you further in debt."
  —Robert [37:48]

7. Should I Pay Extra on My Mortgage or Max Out My Roth IRA?

[38:16–41:49]

Listener Scenario: Meg (23, new homeowner, $50K income, unable to max out 401(k)), asks where to direct extra money: mortgage principal or investing.

Insights & Advice:

• Playbook:
  1. Contribute to 401(k) up to the match ("match beats Roth beats taxable").
  2. Next, max out Roth IRA ($7,000/year, ~$580/mo).
  3. If you still have money left over, go back and add to your 401(k).
  4. Still more left? Funnel into a taxable "bridge" account.
• Mortgage Prepayment: Only consider if interest rate is very high (>6%). Otherwise, prioritize Roth for compounding.
• Quote:

  "At 23, maxing a Roth IRA and having a home? This is millionaire status by 40."
  —Austin [40:42]

Notable Quotes & Memorable Moments

• Compounding and Growth:
  "The only way anyone can retire is to become financially free, where your passive income can completely supplement your lifestyle."
  —Austin [22:07]

• Advisor Skepticism:
  "No one with that much money should be in individual stocks and just mutual funds. There’s no world that people should not have index funds and ETFs in their portfolio."
  —Robert [06:43]

• On Giving:
  "Sometimes at your juncture in life, people look at what are the charitable functions I can do? Or do you want to set up a trust...But just make sure you understand that you don’t want to give away so much because we are living longer lives."
  —Robert [24:23]

Timestamps for Key Segments

• Q1: Rebalancing to ETFs in an IRA — [03:26–09:24]
• Q2: Rent vs. Buy in St. Petersburg, FL — [10:17–14:32]
• Q3: Sell Home to Pay Off Rental & Invest — [15:11–22:07]
• Q4: Legacy Giving and Donating $8M — [22:07–32:36]
• Q5: Extended Car Warranty or Sinking Fund? — [33:03–34:58]
• Q6: Military “Career Start” Loan Investing — [34:58–38:16]
• Q7: Homeowner: Pay Down Mortgage vs. Roth IRA — [38:16–41:49]

Episode Tone & Style

Austin and Robert blend technical knowledge with empathy, aiming to demystify financial decisions and habits without jargon or judgment. Robert’s experience as a decamillionaire and Austin’s youthful, accessible style make the show welcoming for all levels.

For First-Time Listeners:

This episode is an ideal introduction to Rich Habits' ethos: skeptical of high-fee products, transparent about risks, and always focused on helping listeners make smarter, more deliberate financial choices. With a focus on real stories and actionable frameworks, it's a masterclass in practical personal finance—delivered with warmth and humor.

For more Q&A or to submit your own question, email richhabitspodcastmail.com or DM @RichHabitsPodcast on Instagram.