Rich Habits Podcast: Q&A Edition Summary Episode: Multi-Level Marketing Schemes, Turn-Key Real Estate Investing & High-Interest Student Loans
Release Date: May 15, 2025
Hosts: Austin Hankwitz and Robert Croak

In this engaging Q&A episode of the Rich Habits Podcast, hosts Austin Hankwitz and Robert Croak delve into a variety of financial challenges and investment strategies posed by their listeners. The episode offers actionable insights, personal anecdotes, and expert advice aimed at empowering listeners to take control of their financial futures.

1. Navigating Significant Student Debt

Question by Spotify Listener: Student struggling with high-interest loans

Discussion Summary: A listener expressed concerns about substantial student loan debt with high-interest rates (10-11%) and overwhelming monthly payments consuming 66% of take-home pay. Austin and Robert provided strategic advice on refinancing options and balancing debt repayment with investment.

Key Insights:

• Refinancing Solutions: Austin recommended SparrowFi as a tool to compare and refinance student loans effectively.

  “Think of SparrowFi as Google Flights for student loans… they shop your student loans to find better rates” ([03:22] Austin)

• Investment vs. Debt Repayment: Robert emphasized the importance of continuing to invest even while repaying debt, leveraging compound interest to offset high-interest obligations.

  “Debt can go to zero, but if you invest that same amount, compound interest could significantly grow your net worth over time” ([07:19] Robert)

• Balance Priorities: The hosts stressed maxing out a Roth IRA while managing debt, ensuring long-term financial growth alongside debt reduction.

  “You want to at least be maxing out your Roth IRA at that $7,000 a year… because compound interest works in your favor” ([07:19] Robert)

2. Using Dividend Stocks to Pay Off Student Loans

Question by Juan T (Rich Habits Network): Should I use dividend stocks to pay my wife’s student loans?

Discussion Summary: Juan sought advice on whether to utilize dividend-paying stocks to cover student loan payments. Austin and Robert evaluated the risks and benefits of this approach, recommending stable, income-generating investments.

Key Insights:

• Recommended Investments: Austin suggested the NEOS funds for reliable monthly income, while Robert agreed, cautioning against high-risk strategies.

  “The NEOS funds… pay consistently and are very tax efficient” ([12:50] Austin)

• Avoid Overcomplication: Both hosts advised against overly complex investment strategies that could introduce unnecessary risk to debt repayment plans.

  “Don’t get overly fancy. Make sure you understand the fee structures and red flags” ([14:52] Robert)

• Strategic Allocation: Emphasized integrating dividend stocks within a diversified portfolio to ensure steady income without jeopardizing financial stability.

  “Investing early and often, even if it’s smaller amounts, can still end up with millions down the road” ([10:49] Robert)

3. Evaluating Turn-Key Real Estate Investing Companies

Question by Brandon L via email: Are turnkey property companies like REI Nation and Rent to Retirement worth using for real estate investing?

Discussion Summary: Brandon inquired about the legitimacy and effectiveness of turnkey real estate investment platforms. Austin and Robert dissected the pros and cons, advocating for transparency and hands-on investment approaches.

Key Insights:

• Start Small and Local: Robert recommended beginning with local real estate partnerships to gain hands-on experience before considering turnkey companies.

  “Find a local contractor or investor and start with something small, preferably a fixer-upper” ([15:36] Robert)

• Transparency Concerns: Both hosts expressed skepticism about the fee structures and guarantees offered by turnkey companies, highlighting the importance of understanding costs.

  “We couldn’t find the fee structure on any of these websites… they might make a ton of fees off of people” ([17:21] Austin)

• Alternative Options: Suggested alternatives like Fundrise and real estate-focused ETFs for those seeking real estate exposure without high fees.

  “There are things like IvyRI, Realty Income Corporation, Fundrise, VNQ… that might be cheaper and can have more outsized returns” ([20:33] Austin)

4. Exploring Alternative Investments: Private Capital and Debt

Question by Zach H via email: Recommendations for platforms and allocations in private capital and debt investments

Discussion Summary: Zach sought guidance on diversifying his investment portfolio with alternative assets, specifically private capital and private debt. Austin and Robert provided platform suggestions and strategic allocation tips tailored to accredited investors.

Key Insights:

• Platform Recommendations: Both hosts endorsed platforms like Fundrise and Yieldstreet, cautioning against high-risk startup platforms like WeFunder and StartEngine for serious investments.

  “When I make my serious investments… they’re alongside professional venture capital firms” ([23:44] Austin)

• Investment Criteria: Emphasized the importance of track records, experienced management teams, and scalability when selecting alternative investments.

  “Understand what you’re investing in, understanding the numbers and understanding the team” ([25:01] Robert)

• Rich Habits Network: Encouraged joining their network for access to vetted investment opportunities and expert-led deal flow.

  “Join the Rich Habits Network… we can send you some of those ideas” ([26:38] Austin)

5. Assessing Multi-Level Marketing (MLM) Schemes

Question by Rudy H via email/Instagram: Should I join Amway despite skepticism about it being a pyramid scheme?

Discussion Summary: Rudy sought advice on joining Amway, concerned about its reputation as an MLM and potential financial pitfalls. Austin and Robert strongly advised against participation based on statistical outcomes and relationship strain.

Key Insights:

• Low Success Rates: Highlighted that less than 1% of MLM participants earn significant income, with the vast majority losing money.

  “Less than 1% of Amway sellers make money. It's an MLM… only the top make money” ([27:20] Robert)

• Relationship Risks: Warned that MLM involvement can damage personal relationships due to constant recruitment and sales pressures.

  “You'll ruin your friends' friendships and annoy them” ([28:14] Austin)

• Alternative Income Streams: Recommended more reliable side hustles like driving for Uber or delivering for DoorDash over joining MLMs.

  “You're better off driving for Uber, delivering for DoorDash… than trying to join one of these MLM schemes” ([30:17] Austin)

6. Effective Note-Taking Strategies for Podcast Listeners

Question by Jordan M via email: How to take notes while listening to the podcast during activities like walking or driving

Discussion Summary: Jordan sought advice on capturing valuable insights from the podcast while multitasking. The hosts offered practical solutions to enhance learning and retention.

Key Insights:

• Transcription Apps: Recommended using apps like Snipt, Momento, and AIR to transcribe podcast content for later review.

  “There are transcribing apps that you can use… Snipt, Momento, AIR” ([31:28] Robert)

• Dedicated Notebooks: Suggested maintaining a specific notepad or digital notes app exclusively for podcast takeaways.

  “Have a notepad just for Rich Habits Podcast… to always have this reference” ([32:28] Austin)

• Re-listening and Action: Encouraged re-listening to key segments and implementing learned strategies promptly to bridge the gap between learning and action.

  “The most successful people… have that razor thin gap between I just learned about this and now I’m going to implement it” ([34:11] Austin)

7. Determining When to Sell High on Investments

Question by Truett F via email: How to recognize when an investment has plateaued and decide whether to sell or reinvest

Discussion Summary: Truett sought guidance on identifying peak investment performance and strategizing exits to maximize returns. Austin and Robert shared methodologies for profit-taking and portfolio reallocation.

Key Insights:

• Profit-Taking Strategy: Robert advocated for a tiered approach to taking profits as investments appreciate.

  “Once I’m up 50%, I take 25% off the top. Then another 25% when I’m up 50% again” ([35:57] Robert)

• Reassessment of Growth Potential: Emphasized evaluating whether the underlying company’s market position and future prospects justify continued investment.

  “Is AI going to take market share from this company? What’s the total addressable market moving forward?” ([35:57] Robert)

• Clear Investment Objectives: Austin stressed the importance of having defined reasons for entering and exiting positions, ensuring disciplined portfolio management.

  “Have a clear reason why you got in and a clear objective as to where you think it’s going to go” ([37:08] Austin)

8. Considering Opening a Pilates Studio and Mini Cafe

Question by Shush via Instagram: Should I open a Pilates studio and mini cafe next to my house?

Discussion Summary: Shush contemplated launching a Pilates studio and cafe while managing a full-time job and significant travel. Austin and Robert evaluated the feasibility and risks associated with the venture.

Key Insights:

• Business Readiness: Robert advised against starting the business without prior experience and adequate financial backing, highlighting the high failure rates of such ventures.

  “If you’ve never run a business, I don’t think you have the financial backing just yet” ([40:52] Robert)

• Operational Challenges: Austin pointed out the logistical difficulties of managing a Pilates studio alongside extensive travel, questioning the practicality of Shush’s plan.

  “How could you travel and then also open up a Pilates studio? I’m just not seeing” ([41:53] Austin)

• Strategic Delay and Planning: Recommended postponing the business endeavor until after completing the current contract and building a stronger financial foundation.

  “Finish your two-year contract, make enough money to beef up your brokerage account… then revisit this idea” ([44:07] Austin)

Conclusion

In this comprehensive Q&A session, Austin Hankwitz and Robert Croak provided nuanced advice across a spectrum of financial topics. From managing daunting student debt and scrutinizing MLM opportunities to optimizing investment portfolios and carefully considering entrepreneurial ventures, the hosts emphasized informed decision-making, strategic planning, and the importance of balancing debt repayment with wealth-building activities. Their practical recommendations and candid discussions offer valuable guidance for listeners striving to enhance their financial literacy and achieve long-term financial success.

Notable Quotes:

• “Debt can go to zero, but if you invest that same amount, compound interest could significantly grow your net worth over time.” – Robert Croak ([07:19])
• “Less than 1% of Amway sellers make money. It's an MLM… only the top make money.” – Robert Croak ([27:20])
• “The most successful people… have that razor thin gap between I just learned about this and now I’m going to implement it.” – Austin Hankwitz ([34:11])

For more insights and strategies, tune into the Rich Habits Podcast and join the Rich Habits Network for exclusive content and live discussions.