Rich Habits Podcast

Episode: Q&A: Mega Backdoor 401(k), Medical School Debt, & Losing a $50K Investment
Hosts: Austin Hankwitz & Robert Croak
Date: November 27, 2025

Episode Overview

In this special Thanksgiving-themed Q&A episode, Austin and Robert answer listener questions about advanced retirement savings strategies (like the mega backdoor 401(k)), tackling medical school debt, the risks of private real estate investments, structuring your financial foundation in your twenties, and smart ways to manage and escape high-interest credit card debt. The hosts combine years of experience and practical anecdotes, providing honest, actionable advice while maintaining their signature candid, encouraging tone.

Key Discussion Points & Insights

1. Mega Backdoor 401(k) Contribution Priorities

Listener: Kaylee F.
Topic: Whether to prioritize a mega backdoor Roth 401(k) after maxing out other retirement and education accounts

• Austin explains the mega backdoor Roth 401k (04:32–08:35):

  • This employer benefit allows combined contributions (employee + employer) up to $70,000/year, making it an uncommon but powerful savings tool.
  • The classic hierarchy: “Match beats Roth beats taxable.”
  • Kaylee and her husband already maximize their matches, backdoor Roth IRAs, and invest in 529s/brokerage.
  • They’re wondering where the mega backdoor Roth fits, given finite resources.
  • Austin’s guidance: “If you're investing 25% of your annual pre-tax salary/income, you guys are probably good. $70,000 to a retirement account per year is probably overkill for a lot of people…especially if you can't touch till 59½.”
  • Important to balance long-term retirement savings with mid-term funds (brokerage/529), making sure not all wealth is locked away.
  • Robert adds: “You don’t want to be a net worth millionaire, but not have access to these funds to allow you to retire early if you wanted.”

• Memorable quote:

  • “Personal finance is personal…I like to get a lot of money turbocharged and invested into these retirement accounts, but there’s got to be a balance.” — Austin (08:18)

2. Aggressively Paying Off Medical School Debt or Invest?

Listener: AA (Doctor, 30)
Topic: Whether to lump sum pay ~$150K student loans at ~4–6.5% or balance investing and debt paydown

• Robert’s advice (12:06):

  • Don’t liquidate investments to pay off the debt in one shot. “What I would say is I would do a really strong honest budget…and I would accelerate my savings…to knock out the higher interest loans first.”
  • Maintain a hybrid approach: “Do some on the student loans and some towards the future at the same time.”
  • Leverage young age and high income to maximize compounding in the market.

• Austin’s tactical plan (13:11):

  • Given AA’s after-tax margin of ~$15,000/mo, “Focus on getting your nest egg growing for another two years…once that’s at ~$500K, flip to pay off student loans aggressively.”
  • Rule of thumb: “Don’t aggressively pay off student loans until you have the same amount or more invested.”

• Memorable quote:

  • “The first $100,000 saved and invested is the hardest…but after that, it is the best feeling on earth seeing your account grow every single day.” — Robert (33:50)

3. Retiring Internationally: Does Match > Roth > Taxable Still Apply?

Listener: OE
Topic: Efficient retirement saving if planning to live abroad (lower cost, lower future tax)

• Robert’s big-picture strategy (16:39):

  • Given flexibility, prioritize a brokerage account for access and minimal penalties. “You get to rock and roll and do your own thing.”
  • Building both a brokerage (“bridge”) and retirement account provides maximum freedom, especially if planning early retirement or frequent travel.

• Austin on arbitraging taxes (17:39):

  • If effective tax rate now is 33%, with plans to live on less abroad and have a much lower future tax rate, “arbitraging” with traditional (pre-tax) contributions makes sense: “Be my guest.”
  • Confirms the ‘match beats Roth’ order is flexible when international retirement materially alters future tax assumptions.
  • “Personal finance is personal…I think this makes sense in your unique situation.” (18:56)

4. Stuck in a Private REIT: What Are Your Options?

Listener: Nathan L.
Topic: Invested $50K in Diversifund (a private REIT), original maturity date pushed back, legal options limited

• Robert’s practical steps (21:37):

  1. Request all P&Ls with fee structures for the past three years, making sure terms match the original agreement.
  2. Ask management if they're “freezing all future fees,” given the extended wait.
  • Legal recourse is very limited, best (but rare) next step would be a class action with other investors.
  • Cautionary tale to listeners: “Be careful where you invest money in these REITs. Anyone can make a slick website…do your homework.”

• Austin’s reflection (23:46):

  • “If you lose the $50,000, what lessons did you learn? What red flags should you have caught? The most important thing is how you move forward — and don’t beat yourself up.”
  • Publicly traded REITs or longer-standing platforms (like Fundrise) are less risky alternatives.

• Quote:

  • “You are one bad tenant, one water heater, one insert thing away from losing money…” — Austin (29:44)

5. Financial Chaos at 24: How To Get Focused

Listener: Alex (24, Engaged, Side Hustles, Rental, Little Invested)
Topic: How to prioritize and build wealth from a scattered financial position

• Austin’s initial reaction (26:57):

  • “You are all over the place. You gotta get very concentrated and focused, step by step, on how you want to build wealth in your life…unfortunately, the way you are approaching it is the opposite.”

• Robert’s foundational approach (27:47):

  • “We want to see everyone, before they start building homes and doing all these things, have that $100,000 base built and invested.”
  • Caution against wedding/house spending before building an emergency fund and basic investments.
  • Focus on building margin and prioritize saving/investing over “leveling up lifestyle and chaos.”
  • “Maybe push the wedding back two, three years, get yourself dialed in.”

• Austin’s practical steps (29:44):

  1. Go simple/courthouse for the wedding—avoid debt.
  2. Consider selling the rental, deploy equity to fully fund emergency and Roth IRA.
  3. Build a $15K–$20K emergency fund; invest methodically.
  4. Delay building a home until after base is strong.
  • “You don’t want to be house broke and in chaos financially...optimize for peace, especially in the beginning.”

• Quote:

  • “Financial stress is the worst stress there is, besides health stress. And you don’t want to be in that situation.” — Robert (33:54)

6. Escaping High-Interest Credit Card Debt with HELOC

Listener: Warren P.
Topic: Should I use $200K home equity to pay off $30K high-interest credit card debt?

• Robert’s endorsement (37:09):

  • “In this instance, and only this instance, I think this is a good idea.”
  • By moving debt from cards (29–30% interest) to a HELOC (7–8%), you’ll save thousands per year and cash flow becomes manageable.
  • Warns: Only do this if you’re disciplined, and don’t run debt back up.

• Austin’s additional points (38:18):

  • “This only works if you pay it off…You are literally moving debt around.”
  • Shop around for both interest rates and origination fees.
  • Consider using all assets, including non-retirement investments, to get rid of the debt — “You can’t out-invest high-interest debt.”

• Quote:

  • “This outcome will quite literally save you almost $400 a month of interest every year…that is material.” — Austin (38:45)

Notable Quotes & Timestamps

• “If you're investing 25% of your annual pre-tax salary... you're probably good.” — Austin (08:18)
• “You don’t want to be a net worth millionaire... but not have access to funds to retire early.” — Robert (09:17)
• “Do some on the student loans and some towards the future at the same time.” — Robert (12:14)
• "The first $100,000 saved and invested is the hardest…but after that, it is the best feeling..." — Robert (33:50)
• “Personal finance is personal…in your unique situation, I think this [traditional IRA over Roth] makes sense.” — Austin (18:56)
• “Be careful where you invest money in these REITs. Anyone can put together a slick website…do your homework.” — Robert (21:48)
• "You are one bad tenant, one water heater, one insert thing away from losing money." — Austin (29:44)
• "Financial stress is the worst stress there is, besides health stress." — Robert (33:54)
• "This outcome will quite literally save you almost $400 a month of interest every year…that is material." — Austin (38:45)

Structure & Flow of the Episode

• 00:56: Thanksgiving gratitude and show appreciation
• 04:32: Mega backdoor 401(k) deep dive
• 12:06: Doctor’s dilemma — student debt vs investing
• 16:39: Retirement planning for expats
• 21:37: Losing $50k in a private REIT, lessons and tactics
• 26:57: 24-year-old listener in financial chaos — “how do I get focused?”
• 37:09: Using home equity to pay off credit card debt

Closing Thoughts

The episode is a strong blend of tactical advice, tough love, and encouragement. Austin and Robert emphasize that building wealth is about clarity, patience, and discipline—not chasing every opportunity for the sake of “leveling up.” Their advice consistently returns to:

• Build your base
• Optimize for peace of mind, not chaos
• Take smart risks from a strong position
• Prioritize access to funds as well as long-term compounding
• Learn from setbacks and move forward stronger

This Q&A installment is packed with real-life scenarios and practical frameworks, making it highly valuable for listeners at various stages of their financial journeys.