Rich Habits Podcast - Episode Summary

Podcast: Rich Habits Podcast
Hosts: Austin Hankwitz & Robert Croak
Episode: Q&A: Going Broke Paying For College, Outsmarting Term-Life Insurance & Living Abroad
Date: September 4, 2025

Episode Overview

In this engaging Q&A episode, hosts Austin and Robert take on seven listener-submitted financial questions spanning topics such as balancing retirement with real estate investments, strategies for funding college without going broke, optimal investing approaches for lump sums, the real value of term life insurance, student loan payoff priorities, navigating low-income seasons abroad, and foundational financial steps for college freshmen. Both hosts blend their insights—Robert as an experienced entrepreneur and Austin as a rising financial educator—to demystify financial decision-making and encourage mindful, habit-driven wealth building.

Key Discussion Points & Insights

1. Balancing Retirement and Real Estate Investing at 33

[03:07 - 09:05]

• Listener's Situation: 33-year-old federal law enforcement worker aiming to retire at 51, contributing to multiple retirement accounts and aspiring to diversify into rental properties, with some debt (car loan, small credit card balance).
• Key Advice:
  • Protect Your Retirement Base: Robert warns against depleting core investment accounts (Roth, 401k, etc.) to fund real estate. "You don't want to deplete your base... Because remember, investment properties, everyone should own them, but they are tying up your money for the long-term and there is no liquidity." [04:25]
  • Dedicated Down-Payment Fund: Build an additional savings specifically for real estate investment down payments to avoid derailing retirement progress.
  • Handle Debt: Austin stresses paying off high-interest credit card debt first—use existing cash or even liquidate brokerage or crypto holdings if needed.
  • Realistic Rental Analysis: Austin highlights how opportunity cost and actual expenses can make many real estate investments less attractive in the short-term—ensure the numbers work over the long haul.
  • Prioritize Investing Minimums: Always get employer retirement matches and max out Roth IRAs before redirecting surplus cash toward real estate funds.

Robert [04:25]: "So many people, they build up the Roth, they build up the traditional brokerage, and then...they take from all of those accounts...and they're back to zero."

2. Should You Go Broke Funding Your Kid’s College?

[09:05 - 16:45]

• Listener's Situation: John, 53, supporting a child through an expensive private college, with $200k invested, moderate pension, low mortgage, and a desire to retire with grace.
• Key Advice:
  • Side Hustle Caution: Robert argues most people in this situation should favor reliable part-time work over risky entrepreneurial ventures: "I'm not about telling people to be entrepreneurs if they don't have a big enough safety net going into retirement." [11:22]
  • Retirement Before Tuition: Austin recommends having a tough conversation with your child and prioritizing parental retirement: "Put your mask on before you help other people put their mask on." [13:33]
  • College Strategy: Encourage lower-cost avenues, like community college and state schools, to avoid overwhelming debt for both generations.
  • Real Example Projections: Investing $1,000/month for 14 years can net over $1 million at retirement; sacrificing this to cover four years of college could leave you short or reliant on your children later.
  • Financial Reality Check: Both hosts emphasize resizing college ambitions if the numbers "don't math."

Austin [13:33]: "You have to focus on your own retirement, your own financial well-being...If you don't, then fast forward...maybe you're now a burden to your children financially."

3. Deploying a $300k Windfall at Age 35

[16:45 - 24:50]

• Listener's Situation: PR, age 35, receives $300K pre-tax from acquisition, owns and rents out multifamily property, ponders more real estate vs. boosting ETFs.
• Key Advice:
  • Increase ETF Allocation: Both hosts argue for increasing allocation to diversified ETFs (core/satellite approach), dial back individual stock risk, and let boring compounding do its job.
  • Pause on More Real Estate: No need to jump into more physical property unless you reach higher investment milestones ($500–750K in markets first).
  • Resist 'Fancy' Temptations: Austin observes high earners often overcomplicate investing; the wealthy simply "diversify and let it build."
  • Dollar Cost Averaging: Invest the windfall steadily over time, not all at once.

Robert [21:37]: "When you're just getting started out, you're not a multimillionaire, you shouldn't be so heavily weighted in individual stocks."

4. Term Life Insurance—Should You Reduce Coverage?

[24:50 - 29:53]

• Listener's Situation: Eric, with 12 years left on a $1M term policy, reduces coverage to $250K to invest savings; wonders if this is smart.
• Key Advice:
  • Keep Coverage High: Austin warns against sacrificing meaningful life insurance to save on premiums and invest the difference, citing risk to dependents if the worst happens.
  • Becoming Self-Insured: Only consider dropping substantial coverage when your investments can self-insure your family's needs.

Austin [25:34]: "It's a very short-sighted way of thinking about this...I would really encourage you to flip-flop this back, have that million dollars on your life over the next 12 years."

5. Is Now A Good Time To Buy Into the Market?

[28:39 - 31:29]

• Listener's Follow-Up: Eric asks about timing the market.
• Key Advice:
  • You Can't Time the Market: Robert is unequivocal—dollar cost average, never try to time.
  • Long-Term Focus: Austin underscores the importance of not worrying about market fluctuations if you don't need the cash soon.

Robert [28:57]: "No one in the world can time the markets, nor should you try. The biggest message we have is dollar cost average..."

6. Student Loans vs. Investing for Early Career Professionals

[31:40 - 37:17]

• Listener's Situation: Faith, age 26, low living expenses with $26K student debt at 5% interest, unsure whether to invest or pay loans.
• Key Advice:
  • Boost Income Long-Term: Austin encourages seeking ways to increase future earnings, not settling for early post-grad pay.
  • Invest Before Extra Loan Payments: Max out Roth IRA, invest to at least the level of your debt before hacking away at student loans (5% is not considered "high interest").
  • Intentional Money Habits: Robert notes the benefit of positive arbitrage—investing for average market returns typically beats accelerating low-ish student loan payments.

Austin [33:41]: "Before you pay off any major debt...you want to have the same amount invested at least."

7. Investing During a Low-Income Gap Year Abroad

[37:17 - 39:10]

• Listener's Situation: Billy, 23, moving to Germany with Fulbright, earning modestly for a year.
• Key Advice:
  • Enjoy The Experience: Robert and Austin say don’t stress about investing aggressively while abroad; surviving and enjoying the opportunity is priority.
  • Invest Small if Possible: Even small contributions into a Roth will compound significantly over decades—referenced their "How to 70x Your Money" episode.

Robert [38:12]: "This is a dream situation. I think you should enjoy the ride, enjoy the journey...and just ride it out."

8. Best College Credit Cards & Investing Platforms for Freshmen

[39:10 - 45:15]

• Listener’s Situation: Christine asks which credit card and investing steps are best for her son entering college.
• Key Advice:
  • Secure Credit Card Options: Discover It and Open Sky are both recommended “starter” cards for building credit; Austin adds Citi Double Cash for cashback perks.
  • Responsible Credit Use: Only purchase planned, necessary expenses (e.g., a single subscription or tank of gas) and pay off in full each month.
  • Start Investing Early: Open a Roth IRA and taxable brokerage account, even with small monthly contributions, to encourage a long-term, investor mindset.

Robert [41:07]: "A lot of investing isn't about timing it perfectly or being the smartest...It's all about consistency and how soon you can get started."

Notable Quotes & Memorable Moments

• On Real Estate Investing:
  Robert [04:25]: "Investment properties, everyone should own them, but they are tying up your money for the long-term and there is no liquidity. So keep that in mind."
• On Funding College:
  Austin [13:33]: "You have to focus on your own retirement, your own financial well-being...If you don't, maybe you're now a burden to your children financially." Robert [16:06]: "The math ain't mathing. All I can think about in my head right now is the song Living on the Edge."
• On Windfall Investing:
  Austin [22:10]: "The more money you make doesn't change how smart you are when it comes to investing."
• On Timing Markets:
  Robert [28:57]: "Never sit on the sidelines waiting to time the market. You can't do it. The algorithms can't do it...just invest."
• On Student Loans:
  Austin [33:41]: "Before you pay off any major debt...you want to have the same amount invested at least."
• On Gap Years:
  Robert [38:12]: "This is a dream situation. I think you should enjoy the ride, enjoy the journey..."
• On Young Investor Mindset:
  Robert [41:07]: "A lot of investing isn't about timing it perfectly...It's all about consistency and how soon you can get started."

Timestamps of Important Segments

• [03:07] – Retirement vs. rental property investing
• [09:05] – Funding college vs. retirement
• [16:45] – Investing a six-figure lump sum
• [24:50] – Term life insurance reconsideration
• [28:39] – Whether to wait for a “better” market
• [31:40] – Student loans or investing priority
• [37:17] – Investing during low-earning gap year
• [39:10] – Credit cards and investing for college freshmen

Conclusion

Austin and Robert provide practical frameworks for every stage of wealth-building—from avoiding investment “base depletion” and resisting ego-driven complexity, to prioritizing retirement over endless financial support for grown children, and building good credit and investing habits for the next generation. Their advice is clear: focus on protecting your core investments, avoid unnecessary risks or over-complication, pay yourself first, and don’t stress about market timing or perfection—just be consistent and intentional with your financial habits.

Follow-up:

• Submit questions via Instagram (@RichHabitsPodcast) or email
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