Rich Habits Podcast – Q&A: My Dad Gifted Me A House, Closing Credit Cards, & Mortgage Worries

Hosts: Austin Hankwitz & Robert Croak
Date: October 2, 2025

Episode Overview

In this Q&A edition, Austin and Robert dive into real listener questions covering home buying strategies, what to do with a fully paid-off house, whether to aggressively pay off a car or prioritize investing, best practices for inherited real estate, credit card account management, and the eternal balance between saving and living life. The hosts combine personal anecdotes, clear financial frameworks, and practical advice, all with a friendly and encouraging tone, making complex finance decisions approachable for listeners at all levels.

Key Discussion Points & Insights

1. Adjustable Rate Mortgages & Buying New Construction (Nicole R.’s Question)

• Listener Situation: Nicole, 40, saved up for her first home in SoCal and asks about adjustable rate mortgages (ARMs), specifically a 2:1 buy down on new construction with closing cost help.

• Robert’s Breakdown:
  Adjustable Rate Mortgage (ARM) – “An adjustable rate mortgage is exactly what it says. The rate adjusts accordingly along the way versus a fixed rate mortgage.” (06:56)

  • A 2:1 buy down means the interest rate is 2% lower in year one, 1% lower in year two, and returns to the original rate in year three.
  • Gives more buying power with lower initial payments and the flexibility to refinance if rates drop.
  • Many builders are offering these incentives now to move inventory.
  • Caution: “We don’t want to buy too much home because of it.”

• Austin’s Perspective:

  • ARMs track with the 10-year treasury yield: if the yield (rates) rise, so will payments; if they fall, payments drop.
  • The plan is to refinance into a 30-year fixed mortgage when rates (hopefully) come down in the next 1–3 years.
  • Current rates: 30-year fixed at 6.3%, trending down from late 2023 highs.

Quote:
"It's really all about understanding the improved buying power with these options." – Robert (11:47)

Timestamps:

• Explanation of ARMs and 2:1 buy down: 06:56–08:44
• Current interest rate trends & refinance strategy: 08:44–11:47

2. Should I Sell, Rent, or Keep My Million-Dollar Home? (Sophie T.)

• Listener Situation: Sophie, close to retirement, owns a mortgage-free home with $1M in gains, a $1.5M retirement portfolio, and $70,000/year in expenses. She asks whether to sell and invest the gains, do a 1031 exchange, rent, or keep it.

• Austin’s Framework:

  • Financial freedom = portfolio income ≥ annual expenses.
  • 4% rule: $1.5M x 4% = $60k/year, or $75k/year if using a 5% withdrawal.
  • If she sold, could use half the gains to downsize and invest the other half for an estimated $20,000/year in additional income.
  • "If you like living there and you want to retire there… that's amazing. You have a big enough portfolio… to supplement [$70k/year]." (16:39)
  • Retire with a paid-off home for security, but consider if invested equity could be put to better use.

• Robert’s Addition:

  • “I have a smaller house that I downsize to in Ohio, which I own free and clear… I think everything Austin said is spot on.” (17:21)
  • 1031 exchange can help minimize taxes if downsizing.
  • Paid-off home in retirement is about peace of mind; but both keeping and selling are valid choices.

Quote:
"So many people just leave the house in their name and then they pass away and the house ends up in probate... whereas if you have estate planning... you are so much more protected in the end." – Robert (29:12)

Timestamps:

• Retirement withdrawal calculations: 12:35–16:39
• Estate planning and security: 29:12–31:09

3. Aggressively Paying Off a Car vs. Investing (Clarissa B.)

• Listener Situation: Clarissa, 22, has $15,000 left on a 6% loan for a used Tesla. She's torn between hammering the loan aggressively or diverting funds to her Roth IRA, brokerage, and travel savings.

• Robert’s Advice:

  • Roth IRA should be the first priority: “No matter what, the Roth always comes first.” (21:06)
  • Car is a depreciating asset; paying it off quickly is good, but not at the expense of tax-advantaged compounding.

• Austin’s Calculations:

  • Max out Roth at $583/mo, use remaining $1,400 toward the car—extending payoff from 7 to 11 months.
  • After payoff, funnel all freed-up cash into investments.
  • Early, aggressive Roth contributions can translate to massive wealth later due to compounding.

Quote:
"Every month you max out your Roth IRA at your age is another $41,000 in retirement." – Austin (22:00)

Timestamps:

• Roth vs car divide & investment math: 21:06–22:00

4. Buying Inherited/Family Property – Legal & Financial Pitfalls (Tim S.)

• Listener Situation: Tim is renting his father’s US home (father is overseas) at a “friendly” price of $450k, while comps are $650k. He’s thinking of buying as his first property with $90k in savings.

• Robert’s Crucial Advice:

  • “Make sure you have proper documentation and paperwork because you never know what can happen…” (25:02)
  • Use a land contract, ensure clarity for probate protection, even though it’s family.

• Austin on Family Finance & Estate Planning:

  • Open communication is essential to prevent future family tension.
  • Highlights value of giving inheritances (or assets) while parents are alive to benefit children at impactful ages.

Quote:
"You always want to be as open and communicative about these things as possible to avoid any of that tension in the future." – Austin (26:43)

Timestamps:

• Legalities/probate pitfalls: 25:02–26:43
• Estate planning advice: 29:12–31:09

5. Should I Close Old Credit Cards? (Sean F.)

• Listener Situation: Sean has an old Chase Freedom Unlimited card he never uses, but fears closing it will hurt his credit.

• Austin’s Experience:

  • “I think, Sean, in your situation, the misconception is you gotta keep using it to keep it alive. I don’t think that’s the case.” (33:58)
  • If no annual fee, just keep the card open—aging accounts help your score.
  • No harm in light/occasional use, but not required.

• Robert’s Confirmation:

  • “I just don’t recommend you close out these older accounts because it just helps you long term, show your credit history.” (34:26)

Timestamps:

• Credit score impacts of card closure: 33:58–34:26

6. Dialing Back on Retirement Savings to Live Life – Europe Trips with Kids (Sandra P.)

• Listener Situation: Sandra, 50, single mom, saves 22% of income, wonders if she can afford to travel more with her daughters before they’re grown, or if she risks her retirement goals.

• Austin’s Suggestion:

  • Drop savings rate temporarily from 22% to 15%; use freed-up cash ($11k/year) for family vacations.
  • Alternatively, keep current savings and pick up extra shifts to fund travel.
  • “You’re not stopping investing… you’re just dialing it back a little bit.” (35:16)

• Robert’s Life Guidance:

  • “So many people spend decades saving money… but they forget to live along the way.” (38:55)
  • Consider side hustles to fund travel, and don’t neglect living life for the sake of a slightly larger nest egg.

Quote:
"I would rather have a little less in retirement and get to enjoy the kids and do these European vacations..." – Robert (38:55)

Timestamps:

• Travel vs investing tradeoff: 35:16–38:55

Notable Quotes & Memorable Moments

• On perseverance in entrepreneurship:
  “He got turned down 93 times for one project and then finally got his first investor…” – Robert, referencing a previous guest (02:06)
• On buying power with ARMs:
  “It gives you more buying power out of the gate…" – Robert (06:56)
• On estate planning as a gift:
  “It’s a good thing to bless people in their lives while they’re still alive, not just after you’re gone.” – Austin (26:43)
• On investing with a Roth IRA:
  “Every month you max out your Roth IRA at your age is another $41,000 in retirement.” – Austin (22:00)
• On living, not just saving:
  “So many people spend decades saving money and building up their portfolio, but they forget to live along the way.” – Robert (38:55)

Episode Standouts (with Timestamps)

• What’s an ARM/2:1 Buy Down? (06:56–08:44)
• Should you sell/rent/keep a $1m primary home as you near retirement? (12:35–18:45)
• Early-career car loans vs investing (21:06–22:00)
• Avoiding probate/family disputes in inherited real estate (25:02–31:09)
• Does closing that old credit card hurt your score? (33:58–34:26)
• Should you cut back on retirement savings to enjoy time with family? (35:16–38:55)

Final Thoughts & Takeaways

• There’s no one-size-fits-all rule in personal finance—your values, goals, and stage of life matter.
• Maximize opportunities for tax-advantaged investing (e.g., Roth IRA) early and often.
• Estate planning is for everyone, not just the wealthy.
• Balance the future with living today—especially when it comes to experiences with loved ones.
• Clear family conversations and documentation are critical when transferring assets.
• Old credit card accounts? If there’s no annual fee, just let them help your credit history.
• Automation and good financial behaviors are core to building wealth (products like GetSequence IO are featured).

Hosts’ Tone:
Supportive, pragmatic, and straight-talking, Austin and Robert share from both personal experience and financial expertise, aiming to empower listeners to act confidently and wisely with money.

For more real-time Q&A or to go deeper, check out their Rich Habits Network or join the weekly livestreams where questions like these are answered in even greater detail.