Rich Habits Podcast: Episode Summary Episode: Q&A: Land Contracts, Cashing Out Retirement for Bitcoin, & $500K in QQQI Hosts: Austin Hankwitz and Robert Croak Release Date: June 19, 2025

Introduction to the Q&A Format

In this engaging Q&A episode of the Rich Habits Podcast, hosts Austin Hankwitz and Robert Croak delve into a variety of listener-submitted questions related to personal finance, real estate investing, retirement strategies, and more. The hosts emphasize the personalized nature of financial planning, highlighting that "personal finance is personal" with each individual's journey being unique (01:16).

1. Structuring Land Contracts and Seller Financing for Investment Property

Listener: Vin
Question: Vin inquires about offering a rent-to-own lease and seller financing for an investment condo in Austin, Texas. He seeks advice on structuring these agreements to optimize profits while minimizing tenant management anxiety.

Robert's Insight (04:24):

• Legal Assistance: Engage a real estate lawyer to draft a land contract, ensuring all terms are clearly defined.
• Amortization Schedule: Calculate payment terms, including principal and interest over a short-term period to maximize profitability.
• Interest Rates: Suggest charging between 6-9% to enhance profitability while remaining attractive to buyers.
• Compliance Checks: Ensure there are no "due on sale" clauses with the current mortgage and confirm HOA regulations permit such agreements.

Austin's Follow-Up (07:42):

• Balloon Payments: Explains that at the end of the contract (e.g., three years), buyers would likely secure a traditional mortgage, allowing Vin to receive his proceeds.
• Alternative Exit Strategies: Highlights potential terminations if market conditions improve, providing flexibility and enhancing seller benefits.

2. Diversifying into Real Estate with Platforms like Arrive, Fundrise, and Yield Street

Listener: Leslie K.
Question: Leslie seeks advice on using real estate investment platforms to diversify her portfolio before purchasing a multifamily property.

Austin's Breakdown (09:00):

• Arrive: Focuses on individual real estate deals, allowing investors to choose specific properties.
• Fundrise: Acts as a robo-advisor, automatically distributing investments across various real estate sectors.
• Yield Street: Offers diversified yield opportunities across multiple asset classes, including real estate.

Robert's Addition (12:48):

• Investment Stages: Categorizes the platforms based on investor experience—from beginner (Arrive) to more sophisticated investors (Yield Street).
• Dollar Cost Averaging: Reiterates the benefits of spreading investments over time to mitigate market volatility risks.

3. Rollover Roth IRA: Public.com vs. Vanguard

Listener: Edwin K.
Question: Edwin is contemplating rolling over his Roth IRA from Merrill Guided Investments to either Public.com or Vanguard, expressing concerns about the longevity of Public.com compared to Vanguard.

Robert's Reassurance (14:34):

• SIPC Insurance: Confirms that both Public.com and Vanguard offer SIPC insurance, ensuring up to $250,000 in cash and $500,000 in securities protection.
• Incentives: Highlights Public.com's $150 bonus for rolling over funds, making it an attractive option despite being newer than Vanguard.

Austin's Clarification (15:30):

• Insurance Details: Emphasizes that SIPC coverage safeguards investments across reputable brokerages, alleviating concerns about platform longevity.
• Bonus Benefits: Encourages taking advantage of Public.com's promotional offers to maximize initial investment benefits.

4. Managing a Large Traditional IRA and Backdoor Roth IRA Challenges

Listener: Jim (James K.)
Question: Jim, with $1.1 million in a traditional IRA, is struggling with executing a backdoor Roth IRA due to the pro-rata rule and seeks strategies to continue contributing to a Roth IRA.

Austin's Strategy (19:00):

• Solo 401K Conversion: Suggests transferring the traditional IRA funds into a Solo 401K to eliminate traditional IRA balances, thereby enabling future backdoor Roth contributions without the pro-rata complication.
• Incremental Conversions: Recommends only converting allowable amounts annually to manage tax liabilities efficiently.

Robert's Support (20:17):

• Platform Recommendation: Endorses Kerry.com for setting up a Solo 401K, praising its efficiency and usability.

5. Cashing Out Retirement Funds to Invest in Bitcoin

Listener: Roger F.
Question: Roger contemplates withdrawing from his 403B to purchase Bitcoin, despite the penalties and taxes, questioning whether the long-term upside justifies this move.

Robert's Advice (21:24):

• Avoid Early Withdrawal: Advises against withdrawing early due to the 10% penalty and tax implications.
• Alternative Exposure: Recommends exploring Bitcoin ETFs within the 403B to gain cryptocurrency exposure without incurring penalties.

Austin's Recommendations (22:29):

• Investing Through Existing Accounts: Suggests utilizing Roth or traditional IRAs for cryptocurrency investments.
• Utilizing After-Tax Income: Encourages Roger to invest surplus income directly into Bitcoin rather than jeopardizing retirement funds.

6. Allocating $58,000 for Newly Graduated Couples Planning to Buy a House

Listener: Parker V.
Question: Parker and his fiancé, both recent graduates with minimal debt and $58,000 in savings, seek advice on allocating funds between an emergency fund, retirement accounts, and investments to prepare for a home purchase in three to six years.

Robert's Allocation Plan (27:45):

• Emergency Fund: Set aside three months' expenses in a high-yield savings account.
• Roth IRAs: Open and maximize contributions for both partners to benefit from tax-free growth.
• Investment Accounts: Invest remaining funds in low-cost ETFs and cryptocurrencies to enhance returns over the medium term.

Austin's Expansion (29:29):

• Budget Management: Emphasizes understanding post-tax income to maintain budget discipline.
• Investment Strategy: Advocates for a balanced approach with significant equity investments complemented by diversified assets like cryptocurrency.
• Future Planning: Recommends considering house hacking strategies and leveraging Fannie Mae options for mortgage benefits.

Robert's Added Insight (33:06):

• Pre-Marriage Strategy: Suggests purchasing a duplex before marriage to maximize income and investment growth upon combining finances.

7. Investing $500,000 in QQQI Within a Roth IRA for Passive Income

Listener: Ben W.
Question: Ben asks whether moving $500,000 into QQQI, reinvesting distributions, and later withdrawing tax-free at retirement is a sound strategy, especially considering market volatility.

Austin's Detailed Response (34:15):

• Investment Viability: Supports allocating up to 25% of a portfolio to Nasdaq-focused ETFs like QQQI, balancing growth potential with risks.
• Distribution Mechanics: Clarifies that QQQI distributions fluctuate based on share price, meaning market downturns will reduce payouts.
• Long-Term Perspective: Encourages continuous reinvestment and cautions against relying solely on QQQI for retirement income due to volatility.

Robert's Agreement (36:46):

• Complexity Management: Appreciates the thoughtful nature of the question and reinforces the importance of balancing growth with manageable risk.

8. Allocating an Extra $450,000 for a 51-Year-Old Couple's Investment Portfolio

Listener: Yatsana B.
Question: Yatsana and her husband, both 51, have an additional $450,000 to invest and seek advice on asset allocation, incorporating equities, bonds, and alternative investments.

Robert's Allocation Guidelines (38:55):

• Asset Breakdown: Recommends keeping bonds to 5-10%, equities to 40-60%, cryptocurrencies to 5-10%, and alternatives (real estate, precious metals) to 10-15%.
• Fund Selection: Prefers a streamlined portfolio of 5-10 well-chosen funds to maintain simplicity and efficiency, mentioning favorites like VOO, VUG, QQQ, SPYI, QQQI, and AIQ.

Austin's Contribution (41:03):

• Dollar Cost Averaging: Advises spreading out the $450,000 investment to mitigate the impact of market volatility.
• Core-Satellite Strategy: Suggests allocating 65-80% to core index funds and ETFs, with the remaining 20-30% diversified across various asset classes.
• Risk Management: Highlights the importance of maintaining growth potential given their investment horizon.

Robert's Final Thoughts (43:31):

• Investment Horizon: Encourages maintaining a growth-focused approach given their age and the remaining investment timeline before retirement.

Conclusion

Throughout this episode, Austin and Robert provide insightful, actionable advice tailored to a range of financial scenarios. From real estate strategies and retirement account management to diversifying investments and cautious engagement with volatile assets like Bitcoin, the hosts emphasize personalized, informed decision-making. They consistently advocate for a balanced approach, combining robust investment strategies with prudent risk management to build and preserve wealth over time.

Notable Quotes:

• Robert on Personal Finance (01:16): "Personal finance is personal. Everyone has a different strategy, different issues, different hardships that they go through in their financial journey."
• Austin on Investment Philosophy (29:29): "Make sure you got the Roth funded, max that out every year and then you'll have some more money left over."
• Robert on Asset Allocation (38:55): "When you have an extra $450,000, diversify it across equities, bonds, and alternatives to maximize growth while managing risk."

For those interested in exploring these financial strategies further, consider subscribing to the Rich Habits Podcast and joining the Rich Habits Network for exclusive content and community support.