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."

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.

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.

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.

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]).

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]).

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]).

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])

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.