Q&A: Living at Home at 29, Tax-Deferred Annuities, & Amazon RSUs

Summary

Deep Dive into Financial Strategies on the Rich Habits Podcast

In the May 29, 2025, episode of the Rich Habits Podcast, hosts Austin Hankwitz and Robert Croak engage listeners in a comprehensive Q&A session. This episode delves into a range of financial topics, offering actionable insights and personalized advice based on the hosts' extensive experience. Below is a detailed summary capturing all key discussions, notable quotes, and conclusions from the episode titled "Q&A: Living at Home at 29, Tax-Deferred Annuities, & Amazon RSUs."

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1. Navigating College Tuition: To Borrow or Pay Out-of-Pocket?

Listener: Jay
Timestamp: [03:14]

Jay's Situation:
Jay, a 22-year-old student living with his parents, is financially stable with no high-interest debt and a paid-off car. He pays his community college tuition out-of-pocket and plans to transfer to a university for his bachelor's degree. He is apprehensive about taking on student loans due to the fear of accruing significant debt.

Robert's Advice:
Robert emphasizes the importance of researching student loan interest rates and evaluating the return on investment (ROI) of the chosen degree. He advises, “Make sure you fully flush out what are you going to school for” ([04:17]). Robert suggests that if student loans have manageable interest rates (e.g., 5.5% or lower), they can be a viable option, especially if the degree leads to a high-paying career that justifies the debt.

Austin's Insight:
Austin commends Jay for his strategic approach of starting at a community college to minimize expenses before transferring to a four-year university. He adds, “If you can graduate with no student loan debt and you're now making $60,000 a year without a payment in the world... you are setting yourself up for an awesome situation” ([05:47]). Austin highlights the long-term benefits of investing early and avoiding debt to build substantial wealth over time.

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2. Optimizing Investments for a High-Earning Young Adult

Listener: Christina C.
Timestamp: [07:30]

Christina's Situation:
Christina, a 29-year-old living at home in New York, earns $94,000 annually. She has $14,000 in student loans at 4.3% interest and a $19,000 car loan at 7.5% interest. Her investments include a maxed-out Roth IRA, $109,000 in a Roth 401(k), $76,000 in a bridge account, and $77,000 in a high-yield savings account. Christina seeks advice on taking her wealth-building efforts to the next level.

Robert's Recommendations:
Robert advises reducing the high-yield savings balance, which he believes will underperform, suggesting moving $30,000 to a traditional brokerage account for better growth opportunities. He also recommends diversifying investments further by adding individual stocks and allocating a small portion (about 5%) to cryptocurrencies like Bitcoin ([09:48]).

Austin's Strategy:
Austin suggests house hacking as a strategic move for Christina to transition from living with her parents to achieving financial independence. He explains, “House hacking at your age is a wonderful idea” ([11:42]). By investing in a multi-family property with a low down payment, Christina can offset living expenses through rental income, effectively reducing her housing costs while building equity.

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3. Cryptocurrency Investment Strategies: ETFs vs. Direct Holding

Listener: Jeff Z.
Timestamp: [12:15]

Jeff's Question:
Jeff seeks advice on investing in cryptocurrency through ETFs, specifically questioning the efficacy of Grayscale’s GBTC ETF and whether he should increase his exposure through ETFs or invest directly in cryptocurrencies.

Robert's Analysis:
Robert critiques GBTC for its high expense ratio (1.5%) and its structure, which doesn't offer a one-to-one correlation with Bitcoin’s performance. He recommends alternatives like BTCI (NEO’s Bitcoin High Income ETF) and IBIT (iShares Spot Bitcoin ETF), which have lower fees and better tracking of Bitcoin’s value ([14:57]).

Austin's Perspective:
Austin advises a straightforward approach: own Bitcoin directly rather than engaging with complex or speculative ETFs. He emphasizes the importance of simplicity and long-term holding, stating, “Investing should not be an action sport” ([16:00]). Austin encourages systematic purchasing of Bitcoin through platforms like public.com, advocating for a consistent investment strategy without overcomplicating the process.

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4. Investment Strategies for Midterm Financial Goals

Listener: Beau
Timestamp: [19:35]

Beau's Situation:
At 33 years old, Beau is saving to purchase a house, boat, or cottage within the next 10-15 years. He seeks investment strategies that balance growth and risk, distinct from long-term retirement planning.

Robert's Guidance:
Robert advises Beau to focus on building his traditional brokerage account with low-cost ETFs such as VOO, QQQ, and VUG. He emphasizes the flexibility these investments offer for midterm goals, allowing Beau to access funds without penalty when needed ([21:07]).

Austin's Strategy:
Austin outlines a consistent investment plan where Beau invests regularly in the S&P 500 or similar ETFs over the 15-year period. As the goal approaches, he recommends gradually shifting investments from higher-risk assets to more secure ones to preserve capital, ensuring funds are available when needed for major purchases ([22:41]).

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5. Choosing Between Traditional TDA and Roth IRA for Retirement

Listener: Adam J.
Timestamp: [25:14]

Adam's Question:
Adam, a teacher in New York, is considering whether to continue with a traditional Tax Deferred Annuity (TDA) or also open a Roth IRA, especially with the upcoming option to contribute to a Roth TDA starting in 2026.

Robert's Advice:
Robert recommends prioritizing an external Roth IRA for greater investment control and better performance. He warns that employer-sponsored accounts often come with limited options and higher fees, which can hinder long-term growth ([26:48]).

Austin's Reinforcement:
Austin agrees, stressing the importance of maxing out Roth IRAs due to their tax-free growth and flexibility. She explains how additional Roth accounts complement employer-sponsored plans, providing a diversified approach to retirement savings ([27:55]).

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6. Managing Amazon RSUs: Sell Now or Hold for Growth?

Listener: Jordan W.
Timestamp: [30:54]

Jordan's Situation:
Jordan, a 25-year-old Amazon engineer earning $120,000 annually, has $40,000 invested in various assets and $30,000 in a high-yield savings account. He is contemplating whether to sell his Amazon Restricted Stock Units (RSUs) immediately or hold them for potential growth.

Robert's Recommendation:
Robert advises a balanced approach: sell half of the RSUs to invest in diversified ETFs like VOO, while retaining the other half to benefit from Amazon's future growth. He emphasizes the importance of diversification to mitigate risk ([30:54]).

Austin's Agreement:
Austin concurs, highlighting Amazon's strong market position and future prospects. She encourages Jordan to take calculated risks at his young age, suggesting that holding a portion of RSUs can lead to substantial wealth accumulation over time ([31:48]).

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Key Takeaways:

• Education Financing: Carefully evaluate the cost and ROI of student loans versus out-of-pocket payments based on career prospects.

• Investment Diversification: Balance savings with diversified investments, including stocks and cryptocurrencies, to optimize growth.

• Cryptocurrency Strategy: Prefer direct ownership of cryptocurrencies over complex ETF structures to minimize fees and maximize returns.

• Midterm Financial Goals: Utilize low-cost ETFs for flexible, growth-oriented investments while preparing to shift to secure assets as goals near.

• Retirement Planning: Maximize contributions to Roth IRAs for tax-free growth and greater investment control, complementing employer-sponsored plans.

• Equity Compensation Management: Adopt a balanced strategy for managing RSUs by diversifying investments while capitalizing on company growth potential.

Notable Quotes:

• Robert: “Make sure you fully flush out what are you going to school for” ([04:17])

• Austin: “If you can graduate with no student loan debt... you are setting yourself up for an awesome situation” ([05:47])

• Austin: “House hacking at your age is a wonderful idea” ([11:42])

• Austin: “Take some risk, have some fun” ([31:48])

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This episode of the Rich Habits Podcast serves as a valuable resource for individuals seeking tailored financial advice. From managing education costs and optimizing investment portfolios to strategizing for midterm goals and retirement, Austin and Robert provide clear, experience-based guidance aimed at empowering listeners to take control of their financial futures.

Transcript

[Austin]

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[Robert]

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[Austin]

And welcome back to the Rich Habits Podcast Question and Answer Edition. These are our Thursday episodes where we take your questions via email at rich habits podcast gmail.com or via Instagram dms@rich habits Podcast on Instagram. And we answer them. We answer them right off the top of our heads. There's no real scripting that goes on here. This is just our raw, unfiltered thoughts in real time as it relates to what you are going through. And we are super excited about this episode.

[Robert]

We're not taking something from Rock or Chat GPT in some highly crafted answer. This is based on our experiences and our feelings of what we think is the best strategy moving forward for people. And it really relates to our common message of personal finances. Personal. So I really look forward to these episodes every single week.

[Austin]

And what's fun about these episodes too, Robert, is like, sometimes we answer questions from people that also answer other questions someone else has in their own mind, right? So, for example, like, maybe we answer a real estate question or an entrepreneurial question or maybe something about about investing. And it's not like exactly one for one for someone's like, unique situation that's a listener right now. But it kind of helps give them enough guidance to learn or maybe trigger an idea or give them a little bit of leeway to figure out some more research on their own. So it's just like these episodes are my favorite. But before we jump into the episode, we gotta remind you guys that if you're looking for an online broker that was actually built during the century, you need to give public.com a try this episode of the podcast is brought to you by public.com on public. You can invest in almost anything, stocks, bonds, crypto options and more. And if you're like us and you keep an emergency fund, you should be taking advantage of their 4.1% APY that's offered by their High Yield Cash account.

[Robert]

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[Austin]

So our first question is coming from Instagram. Again, ask us a question via DMS at Rich Habits podcast on Instagram and it's coming from Jay. Jay says hey guys, I just want to start by saying I love the podcast and I love what you guys are doing. You guys have helped me out personally a lot and I just want to thank you all for that. But I do still need some help. My current situation is I'm 22 years old, I'm in school and I have a full time job with enough to invest at the moment and I have no high consumer debt. My car is completely paid off. However, I do live with my parents so I don't own a home or have any high crazy rent. Now I'm currently paying for my tuition out of pocket because I can afford it and I'm currently enrolled in a local community college but I tend to get my associates and then take that degree and enroll in a proper university so I can get my bachelor's. My question is, do you guys think that I should continue to and pay for my tuition out of pocket or do I take on student loans when I get to university? The idea of going into that much debt is a really scary thing to me and I could use some wisdom on the subject. Robert, you want to kick this one off first?

[Robert]

Yeah, this is a tough one because you can go all over the place with this scenario. So let's start with college tuition. I would first do as much research as you can to find out what is the interest rate going to be, what is it going to cost you to have these student loans? If you can find a situation where maybe the student loan interest rate is 5 and a half percent or lower I would say get the student loans, but also, before you do any of that, make sure you fully flush out what are you going to school for. Because I believe we're in a place now where unless you have a specified, really highly skilled degree that you're going to go after, I don't know that it makes sense to go that much in debt for a college degree if it's just going to be generalized. So those are the two things where I would start, because you also have to look at the future of the workforce is this degree that you're going to get in five years from now, four years from now, or even two years from now with that associate's degree, you have to make sure that this role, this position, this career is even going to exist and be paying you enough to go through school for it. So make sure you guys all flush that out, because right now, so many different career paths are going to change dramatically because of AI and humanoid robotics in the next four or five years. I love where you're at, and I love where your head's at on this subject, but there's just so much going on, and I want to make sure you fully think ahead, not just what's happening today, but what it's going to look like for you in four or five years.

[Austin]

I think that's a really great answer to this question, Robert. I really want to give Jay some props here, though, because he's doing the exact playbook that I would encourage almost anyone, if they could figure it out themselves to do, which is go to a community college, a junior college, some sort of cheaper education institution like that, get the associate's degree, and then take that associate's degree and all the credits that you've earned and go transfer to a proper university. So when you graduate with your bachelor's, it now says from the University of Tennessee, for example, Right. So there was Pellissippi Community College in Knoxville. A lot of people would go to that community college for two years, get their associates, pay a couple thousand dollars a year in tuition, and then they'd transfer to the University of Tennessee, take all those credits with them, get their bachelor's, and when they graduated, it said, from the University of Tennessee, despite the first two years being at Pellissippi. So I love the way you're doing this, Jay. If I were in your shoes, I would do exactly what Robert just said. I'd make sure I was studying if it was finance or accounting or nursing or engineering, like you are studying something that has a clear path to earning 60, 70, $80,000 a year entry level out of college, like right off the rip. So for me, for example, I studied finance. I got my degree in finance and economics. I did mergers and acquisitions when I graduated and I was making 65,000 a year back in 2018, I was having a blast. It was a perfect segue. I was able to pay off my student loans, right? I was able to do everything because I had a clear amount of money that I knew I was going to make ballpark that would supplement my life and allow me to pay this debt off. People sometimes make the mistake of getting a more generalized degree if it's psychology or communications or something like that. And then they try and go find a job and either they one can't find one or two are forced to take a job that pays much less, perhaps 30, 40 or 50,000. Now they've got the 40, 50, 60,000 of student loans and it's a really tough situation to be in. So Jay, here's what I would do. I'd continue to make sure that whatever you are studying and whatever you're trying to graduate with with has a career trajectory ahead of you. I'd also make sure that in total, when you are at this university, which I don't think you will, but make sure you do not borrow more than the first year salary of this potential role. So let's say you're going to earn 70,000 at this job. Make sure you do not borrow more than 60, 70 ish thousand dollars because affording that monthly payment now becomes a lot harder. And then the last thing is I would try and just kind of keep tuition paying out of pocket if you could. You're living at home, you're making some money with a full time job. If there's a world where you can graduate with no student loan debt and you're now making 60, 70, $80,000 a year without a payment in the world because you don't have any credit card debt or high interest debt, you now have a really cool situation where you can invest 5, 10, 15, $20,000 a year at the age of 24, 25, 26. And you've built your base very quickly. By the age of 30, you've got hundreds of thousands of dollars invested versus just tens of thousands. Like the average person, you are setting yourself up for an awesome situation. So you really can't go wrong either way. There's just specific considerations to take into account depending on what situation you want to pursue. So our next question comes from Christina C. Christina says hi. Robert Nauson. I absolutely love listening to your podcast. Thank you both for all you do. I'm 29 years old. I live at home with my parents in New York, so I don't have to pay a mortgage or pay rent. I earn $94,000 a year. I've got $14,000 in student loans at 4.3% interest, a $19,000 car loan at a 7.5% interest rate, and both of these monthly payments come out to about $170 and 380 do, respectively. Thanks to your advice, I've opened up a Roth IRA in 2023 and I maxed it out every single year. I have $109,000 in my Roth 401k, $76,000 in my Bridge account, and $77,000 in a high Yield Savings account. However, I feel like I could be doing more with my money and I want to take my wealth building to the next level. What would you both do if you were in my situation? Thanks so much. What an interesting situation to be in. Robert, you want to kick this one off?

[Robert]

Yeah. This is just an incredible, incredible situation, especially at. And I think Christina's spot on. I think there's too much money in the High Yield Savings account. I think that's going to underperform dramatically and I would only have maybe 25 or 30,000 in there and get the rest invested. I'd probably add that into the traditional brokerage account because you already have the Roth maxed out each year. That's what I would do. And I would also start looking at maybe some diversification now that you've got your base built and you're doing really well. Maybe add some individual stocks in there, maybe a small portion, 5% of your net investable capital into some cryptocurrencies like Bitcoin, xrp, chain link, stuff like that. And really just get more diversification, but also do exactly what you're thinking, Christina, and that is get the money working harder for you because right now having 77,000 in a high Yield Savings, I applaud you because it is making probably 4%, which is better than most people because so many people just let it sit in a checking account. I think it's amazing, but I think it's too much money sitting in that account. So I would move 30, 40,000 of that out, get it into the traditional brokerage account, maybe get a public dot com account opened up so you can start buying the cryptocurrencies we're talking about. And I think you'd be good to go there and in a much better position in the coming months.

[Austin]

I agree with that. Assuming that that 77,000 isn't already earmarked for some sort of down payment on a real estate purchase. I feel like, Christina, you are primed to house hack. You're 29 years old, which means time to move out, right? No need to still live with the parents here. You're almost 30, right? Let's go, like move on and start our lives and really begin to be that independent person. And I think the best way for you to do that now is to start house hacking. Robert and I always talk about the 5% down Fannie Mae, which means to buy a duplex, triplex or quadplex up to it's like 1.3 million.

[Robert]

1.3 million, yep.

[Austin]

And all you have to do is put 5% down. They lend you the money and you now live in one of the units, rent out the others, and you're rocking and rolling. So you could use part of this 77%, $7,000 that's in your high yield savings account to go buy a duplex or a quadplex. And I would house hack that. I would live in one of the units and then have someone else rent out the other unit or other three units, depending on how big of a multifamily that you bought. And then make sure that you don't forget that house hacking is not always a situation where people completely pay for your mortgage, but it could be a situation where it brings down your living expenses dramatically. So by house hacking, sure. We would love for our tenants, quote unquote, to completely offset and pay for our mortg, but even if it means that they don't. But instead of a mortgage of 2300, we're only paying 1800 or 1100 because they are supplementing some of that with some rental income. That is a great situation to be in as well. I love what you've got here. Going on with the Roth 401K, the traditional brokerage account, and this big beefy high yield savings account. I truly think the next move to make is go house hack. You're old enough to go start your own sort of independent life here, and house hacking at your age is a wonderful idea.

[Robert]

I love it and couldn't agree more with that answer. Great take.

[Austin]

So our next question comes from Jeff Z. Jeff says, I've got a question about your advice on cryptocurrency. I currently only have a little bit of exposure in crypto via the GBTC ETF how do you all feel about the grayscale ETFs and would you recommend increasing exposure there or more directly via cryptocurrencies or do you think there's a better crypto ETF out there? Would love to hear your perspective. Thanks. I'll kick this one off. Robert. Jeff, I love this question. BTC was like the OG Bitcoin ETF from back in like gosh, I think it was like even 2000, 2018 or 2019. I remember it's been around for a long time. So the thing about GBTC is two things. One, it's not exactly, at least how I remember it, it's not exactly a spot bitcoin etf. It's like a futures bitcoin ETF in the sense that they are not exactly tracking the performance of Bitcoin one to one but instead they're like trading and holding futures contracts which are like derivatives and it just all this fancy active management and because of all that active management the expense ratio on that ETF is one and a half percent which is egregious. Right. So if you are someone who wants to have some bitcoin exposure in their portfolio, there's a couple ways to do that. The first one is BTCI which is the NEOs Bitcoin High Income ETF. It's a spot Bitcoin ETF essentially that does a covered call option contract strategy that allows you to have direct exposure to Bitcoin while also generating some income in your portfolio. It's got about a 25 to 30% annual yield on it. I hold a bunch of it. I think it's awesome. I also hold another Bitcoin ETF. Ibit. Ibit. This is the iShares spot Bitcoin ETF. It is a one to one up and down performance relationship with Bitcoin. There's no like sexy strategy around it. You're just get exposure to bitcoin and I think the expense ratio on IBIT which is comparable to GBTC is 0.25% which is 1.25% less than GBTC.

[Robert]

I really like that answer and the only thing I would add is the only ETF I think anyone should own at this point right now would be btci. Just because I love Neo's funds, what they're doing, everything is really good about it. Otherwise in most instances, especially if you're just starting to get into cryptocurrency, I think you just have a public.com account and you start buying the asset directly because at the end of the Day. It's not like when you're buying bitcoin, you need anyone to manage it. It's not like the S&P 500 where they have to make decisions based on WA or any of these other things. You're just buying that individual asset like you would an individual stock. So in my opinion, I don't think it's a good world to be owning the Micro Strategies and all these other ones like grayscale and all of this. I think it is better to just own the asset directly. You can do that through public.com, you can do it through Coinbase and that way you know what you have, you have the ownership and you're not paying all these additional fees. So I agree with Austin on this one, 100% and I want to linger.

[Austin]

On that for a little bit because to your point Robert, a lot of people go out there and they do buy like the Micro Strategies and they buy these covered call crazy leveraged debt, all these crazy things thinking that it is a way to, instead of getting a one to one return, they can get a five to one return. I can buy MicroStrategy, that'll go up a ton. And you are right, there are some situations where MicroStrategy or Coinbase or whatever other I hold, Bitcoin mining, whatever stock you can think of here could outperform Bitcoin in a short period of time. All of these are very speculative trades and gambles. Right? You're rolling the dice here, assuming that it will outperform Bitcoin, whereas Bitcoin itself just owning 5 to 15% of your portfolio, having some crypto exposure, which we say essentially is Bitcoin, having that in your portfolio for a long period of time will outperform, right? That is what we've been saying for years now. I continue to hold several Bitcoin Robert, same deal with him. And like we are just such big proponents that you don't have to overthink this, this. It doesn't have to be altcoins, it doesn't have to be futures trading. It doesn't have to be what Robert calls an action movie of investing. It really just means, oh yeah, every other week I systematically purchase some bitcoin in my public account and I forget about it, right? It could be as simple as that.

[Robert]

Investing should not be an action sport. It doesn't need to be emotional, it doesn't need to be fancy. So many people as they're getting started in their investing journeys or in the mid stages try to get too fancy. And too cute with too many different things. And that to me is just a recipe for disaster. And that is why we try to lay out the blueprint of what works, what has worked for decades to help everyone understand you don't have to be in the new, latest, greatest, crazy, cockamamie, you know, investment strategy to really, really beat the markets and beat the benchmarks. So I think it's important for everyone to keep that in mind when you're selecting what to invest in.

[Austin]

Here's a fun story before we move on to our next question. I want to share about exactly that. Robert I saw an interview with Warren Buffett Profit that said when he bought his first stock, he was 11 years old and he bought that first stock in 1944. He bought three shares of it for $114 of a total investment back in 1944. He said that that was a bad investment and ended up not working out for him. But if he instead took that hundred and fourteen dollars and instead invested it into the simple s P500 and reinvested his dividends from 1944 to 2024, then that $144 would be $400,000. That's not Action Sport anything. That is parking your money in a low cost index fund that we've been talking about for as long as I can remember now and just letting it ride. $400,000 now, of course, as over a period of 80 years. The guy is old as sliced bread. But it's an interesting story to share because it just reminds you that to get outsized returns you don't always have to be thinking like a John Wick mov 100%.

[Robert]

Yeah, I just see some of the best portfolios I look at are people that invested early in Apple and Amazon and some of those and they put five grand in 20 years ago and they just didn't touch it right now. We live in an age where there's so much information in front of us all day, every day and so many clickbait headlines that people just let emotion take over. And a lot of times they end up buying high and selling low because they get caught up in that cycle. And that is why I enjoy doing this with you every day, Austin. Because making a difference in thousands and thousands of people's lives and giving them the guidance and the understanding to keep the emotion out of it is so important. Now before we jump into our next question, listen up folks. Time could be running out to lock in a 6% or higher yield at public.com you can lock in a 6% or higher yield with a bond account. But remember, your yield isn't locked in in until the time of purchase. So you might want to act fast. Lock in a 6% or higher yield with a diversified portfolio of high yield and investment grade corporate bonds only at public.com forward/rich habits.

[Austin]

All right, let's now jump to our next question. So our next question comes from Beau on Instagram. Bo says hey Austin and Robert, I love your content. I've been listening to you guys for a year now and it's been incredibly helpful. I'm 33 years old and I don't own a house yet. I'm currently saving toward that goal. Most of what I hear around financial freedom and investing focuses on retirement that's 25 to 30 years away, which is great. But I'm really curious about midterm goals that are more 10 to 15 years away. For someone like me who wants to grow their savings beyond what money markets or high interest savings accounts offer, but still plan to use that money before retirement to buy things like a house, a boat, or maybe even a cottage or something, what kinds of ETFs or investment strategies would you recommend? How should I think about risk and allocation for these types of goals that fall between short term savings, safety and long term retirement? I'd love to hear more about strategies for investing toward meaningful milestones that come before retirement. Robert, you want to kick this one off?

[Robert]

I would love to. Bo, this is a great question and I really love how you framed it. Yes, we are always talking about and educating about long term investing, but you're right, there are short term goals you're going to want to meet and sometimes you want to have those alternate ways to get to those goals. Goals. And that is why you always hear anyone listening and following along hears Austin and I talk about two types of accounts and that is the Roth IRA and the bridge account. Now the bridge account is simply a traditional brokerage account that you have full autonomy over. You can invest in it, you can take the money in, you can take the money out and you have no restrictions on your money in a traditional brokerage account. And I think that's where you fall in. Bow, I would really focus on getting those ETFs you talked about into that traditional brokerage account and really build that up because then you can do whatever you want in 5 years, 10 years, or 15 years while not ignoring a Roth IRA, because I think that's super important for the long term and for retirement. But having that traditional brokerage account really crushing. It is important. What would I do with it? You already alluded to it. Get Those low cost ETFs that Austin and I always talk about, the Voos, the QQQs, the Vugs of the world. Get a mix of those may some AIQ if you want to take a little more risk into the future of AI. But that's what I would do if I were you. Because then that money is growing what we believe to be at the best, safest rate. But you still have full autonomy to do what you want with it in the next five, 10 or 15 years.

[Austin]

So here's the exact strategy that you're looking for. Bo if you have a financial milestone or a purchase that is more than two years away, save your money by investing it in The S&P 500, the NASDAQ, VTI, VUG, everything that we talk about from an ETF perspective, more than two years away. If it is less than two years away, I would begin to scale out of those investments into cash to ensure that I have the money ready for that purchase. So let's say you plan to buy your dream house 15 years from now. So you have absolutely nothing saved for it. But you're going to start putting aside $800 per month and you're going to invest that money in the s and P500. So throughout that 15 year period of time, it can grow for you much more than a savings account. For example, over 15 years that we've talked about, your total contributions would be about $144,000. But the value of this account would grow to about 350,000. Now, to my point, earlier, around year 13, you would begin to scale out of these investments, which means that you would sell your shares of the S and P, sell your shares of these ETFs, so when you get closer to wanting to put a down payment on this house, you actually have the cash to do so. Because like we saw during the month of April, volatility is real and it can absolutely wipe out a lot of the gains that you've experienced over that period of time. So by scaling out two years ahead of your purchase, you're giving yourself ample time to still earn a little bit of money by having some money parked. But you don't have all 100% of these $144,000 of contributions sitting in this account and growing, as well as the 200 plus thousand of profit that you've probably experienced by that 15 year period of time. You begin to pull the profit out, pulling out your contributions and now you've got this 350ish thousand dollar nest egg to then go use to go buy this dream house in 15 years.

[Robert]

Yeah, I just love that people are really starting to take notes and take action and really kind of lay out the plan and then we're just here to tweak it, help and give our insight so people can really be financially free. Because that is our goal. Goal. If we can get a million people to become millionaires over the next five or ten years through the education we're providing, then my life is complete and my career is a win no matter what else happens.

[Austin]

Well, I think what's interesting too about what Bo said is he very much understands the opportunity cost. Right. He said for someone like me who wants to grow their savings beyond money markets or high interest savings accounts, what strategies do you recommend? That is exactly what we alluded to when it comes to these contributions. If you just put this 800amonth into a yield savings account, you'll have saved about 144,000 plus or minus some interest. Let's call it $160,000 total. So you'll have 160 in this account or by investing it, letting it grow by 8, 9, 10, 12% per year, you'll have 350. So we're talking about a $200,000 difference over that period of time by strategically investing it and being thoughtful about the risk you're taking on closer you get to that purchase. So our next question comes from Adam J. Adam says hi. Austin and Robert love the show and I'm so grateful for what you guys do. I the show was around 20 years ago. Teachers in New York City have a retirement fund which is a tax deferred annuity or a tda. The selling point has always been that the money that goes in is pre tax. The question has always come up about whether or not we should additionally open up an outside Roth IRA through a company like Schwab or public and there's been mixed opinions. I just read though that in 2026 we are now going to have the option for a Roth TDA pay through the Teacher's Retirement System. We will have the option to contribute to either one or both. So here's my question. What do I do which is better? What's the best move from here from listening to you guys? It seems like the Roth option is always better because we don't know what the tax rate is going to be in the future. But I'm curious to know if we'll be able to directly choose our investments or if it's going to be some sort of traditional TDA where they choose the funds for us. I don't really know. I have limited information but I'd still love to get your guys perspective on my situation.

[Robert]

Adam, I think you're spot on in you're thinking and I'm here to flesh it out for you. With Austin, it's always Roth. We want to make sure everyone is maxing out their Roth every opportunity they get. You've already brought it up. It is great that they're thinking about giving you this teacher's retirement system Roth. But again, if you don't have any way to control what you're investing in, you don't know what you're getting, the money is being put into and it's very limited, which I assume it will be, you're going to underperform in the long term and that is going to be problematic for me. So the way way I look at it is I would always have an external Roth outside of the company because then you can choose what goes in it, you can choose the investments and you have full autonomy to make sure that it performs well. But obviously if it's a company and they're going to issue this because you're in the teacher's union or whatever it is, you have to at least take a look at it and see if it's any good. But in most instances you're going to have limited options, high fees and it's not going to perform as well as if you set up your own own autonomous Roth IRA on your own.

[Austin]

I 1000% agree with you, Robert. And that's not just for the teachers in New York City, that's for every single person listening to this podcast right now. You not only should be investing up to the match if a employer sponsored retirement account is offered to you to get the free money, but you should always be investing in maxing out your Roth ira. Let's just do a quick like refresher here, Robert. So we've got two types of retirement accounts. We have employer sponsored retirement retirement accounts like a 401k or this tax deferred annuity for teachers in New York. You also have like TSPs and 403B's right? These are employer sponsored. You need to be working for somebody and they will allow you to invest into these retirement accounts. And then there's the individual retirement accounts, the Roth IRA and the traditional ira. You can do both at the same time. Want to make sure everyone understands that. Because in this question you said it's always come up about whether or not we should additionally open up a Roth ira. Yes, yes, everyone should always additionally open up a Roth ira. No matter if you've got a employer sponsored retirement account or not. This is your retirement account tied to your Social Security number that you can invest toward. Be aggressive, be conservative, whatever you want to do inside this retirement account. And if you open it up on [e-mail] rich habits, you get a 1% match on your contributions. Now to answer your question, yes, 100% in agreeance with Robert, you need to be choosing the Roth variance anytime you can, which means that that you're not converting your traditional TDA investments into a Roth. That's a taxable event. You are just pausing the traditional specified contributions over here and instead diverting new money into the Roth tda. So you're not converting, you're not doing anything like taxable here. You're simply not contributing anymore to the traditional account and now contributing to a new Roth account. This new Roth account will be with after tax return dollars. But remember, it's going to grow tax free. So when you are ready to retire, all that money that you'll be making is tax free.

[Robert]

100%. I love it. Great question and great take, Austin.

[Austin]

So our last question comes from Jordan W. Jordan says. Hey guys, my name is Jordan. I love the work that you all do. I'm currently 25 years old and I work for Amazon as an Engineer. I make $120,000 a year. I have $40,000 invested into ETFs, single stocks, REITs and more. And I also have $30,000 in a high yield savings account for my emergency agency fund. I'm wondering what I should do with my Amazon restricted stock units that will be awarded to me over time. I'm torn between selling them as soon as I get them and offloading that money into VOO straight away or being a little bit more risky and holding on to them to see if they can grow a little bit more. I know that I'm young and I can afford to take on the risk, but I also know that putting all of your eggs in one basket is not a good idea either. What are your thoughts, Robert? You want to take this one?

[Robert]

Sure. I'll start this one off. I love it. You're in a great situation. I think Austin and I will definitely agree 100% that in this situation I wouldn't sell at all. I would take the risk. I would maybe do 50% cash out 50%, hold and ride the Amazon wave for the future. That's what I would do in your position. You're making great money. You're off to a really Good start at 25 years old, this is an amazing situation for you to build a lot of wealth. Just make sure you don't live beyond your means. Keep your expenses low and really, really stockpile money and this stock money as well. Because if you do the work and really set yourself up for the next five or ten years, you will be mega wealthy later on in life. So that's what I would do. I would definitely sell some, get it into the V of the world, the QQQs, keep the rest and take the risk because you can do it at your age.

[Austin]

I agree 100%. I would sell half of them and park that money in the S and P and then I'd keep the other half and ride the wave. Think it's very obvious that Amazon's going to continue to be a wonderful multi trillion dollar company over the coming years. If it's with aws, if it's with robotics, if it's with whatever else Amazon's doing. Andy Jassy's got it figured out and he's going to keep that ship rocking up into the right, in my humble opinion. So, Jordan, I would do exactly that. Take some risk, have some fun. You're 25 and just round of applause for this guy making $120,000 a year at 25, working at Amazon as an engineer. You know, this goes back to our previous question with Jay. Who's thinking about this college tu trying to go from a community college to a university. What do I study, you know, all that stuff. Jordan studied engineering and now he's 25, making $120,000 a year. That is unbelievable. Unbelievable. And he's got $40,000 invested, 30,000 saved. He's got $70,000 set aside rocking and rolling for him, working for him in a correct manner because of this awesome income and these awesome habits that he has built since graduation. So he Jordan, round of applause for you, my friend. What an inspiring situation to be in for not just other people who are engineers, but also people who are thinking about what to study in college. What is an engineering degree turn into for me, things of that nature. So, Jordan, you're crushing it. Congratulations and keep up the good work.

[Robert]

And I think it really speaks to what we talk about a lot is going to college is great, getting a degree is great, as long as the degree is valuable. When you graduate doesn't matter what it does now, now it's what it looks like in that field of expertise when you graduate. So I love these questions. So many great questions in this episode.

[Austin]

Yeah, major shout out to Jordan and everyone else who asked an awesome question on this episode of the Rich Habits Podcast. Don't forget, if you want to ask us a question, you can either email [e-mail], dM US on Instagram at Rich Habits Podcast or always get your questions answered by joining the Rich Habits Network. This is is our community for our biggest fans where we get back to every single question. We've got over 650 people now that have joined the Rich Habits Network. We are hosting two hour weekly live streams over there, answering questions live, looking at you guys face to face on a zoom call, as well as eight hours of video coursework about personal finance, investing, entrepreneurship, building your credit, everything like that. And most importantly, you guys get access to our deal flow. So if it's a real estate deal that Robert's doing or a pre IPO deal that I find or anything in between, you guys all always get access to things that we're personally investing into in the private markets. So join the Rich Habits Network by using the link in the show notes below as well as subscribe to the Rich Habits newsletter, a completely free newsletter that came out this morning every single Thursday.

[Robert]

Yeah, we have built an incredible community. I am so proud of it and just really enjoy the interaction and what we've built. So any one of you that are listening out there, share the podcast with someone that might need some help with their mindset, their business, their finances and check out the seven day free trial for the Rich Habits Network. I promise you there will be a ton of value, you'll be blown away and it is just an incredible place to be if you're looking to level up and maybe you feel a little stuck, you're trying to get your finances in order or you just really want to take it seriously and learn more.

[Austin]

We'D love to have you 100% seven day free trial. Literally no money leaves your bank account for the first seven days, which means if you hate it, you can cancel and you are good to go. No strings attached, no hard feelings, but we love to to have you there. With that being said everyone, thanks so much for joining us on this week's episode of the Rich Habits Podcast, Question and Answer Edition, brought to you by public. Com. And if you learned something or you enjoyed this episode, please consider leaving us a five star review on Spotify or sharing this episode with a friend. Thanks everyone and have a great rest of your week.