Rich Habits Podcast Q&A: Passive Investing "Bubble," Overlapping ETFs, & Diversifying $200K

Hosts: Austin Hankwitz & Robert Croak
Episode Date: January 8, 2026

Episode Overview

In this special Q&A edition, Austin and Robert respond to listener questions covering nuanced real estate concerns in disaster-prone states, ETF portfolio overlap, the so-called "passive investing bubble," strategies for beginning rental property investments, career and money optimization in your 20s, and smart diversification of a large windfall. The hosts combine relatable anecdotes, candid investment advice, and real talk about building wealth—always geared toward actionable takeaways for listeners at every stage.

Key Discussion Points & Insights

1. Real Estate Investing in Disaster-Prone States

Timestamp: 03:21 – 08:29

Listener Question:
Should I be wary of buying a primary residence in Florida due to high and rising insurance costs from natural disasters? Is it worth the trade-off?

Robert’s Perspective:

• "It's a little tough because this is a great question and I think you have to build it in as a cost you just have to deal with to live in paradise." (04:44)
• Insurance on a Florida home is likely 4x more expensive than in low-risk areas.
• Factor in year-round sun, weather, and no state income tax for primary residences.
• "There are benefits besides the weather and beaches — weigh total cost of ownership versus lifestyle priorities." (06:19)

Austin’s Take:

• Not just home insurance—car insurance is also extremely high in Florida.
• "If you are a outsider looking in, maybe not investing in Florida real estate. If you want to live in Florida, rock and roll. It's the cost of doing business there." (07:41)
• For out-of-state investment properties, Florida's high taxes, insurance, and hurricane risks often outweigh benefits.

Memorable Quote:
"You just have to consider what is more important to you...you're not going to have all the bells and whistles and tax benefits of Florida." – Robert (06:53)

2. ETF Portfolio Overlap in Roth IRA

Timestamp: 08:54 – 13:35

Listener Question:
Seth asks: “I have various overlapping ETFs—should I consolidate or diversify into other sectors?”

Austin’s Advice:

• Confirms overlap: SPYI, SPY, VOO, and VTI are 90–95% the S&P 500.
• Recommendation: Consolidate into VOO (lowest fees for S&P 500 exposure); keep a small allocation to SPYI for monthly income.
• Add diversity: Consider sector ETFs like VGT (tech), SCHD (dividend), AIQ (AI/innovation), and some precious metals. Don’t get fancy—“No more than 4–6 ETFs, all investing in different market parts, majority in broad US indexes.” (13:07)

Robert’s Additional Tips:

• "Make sure you understand what you own, how much overlap there is...do the deep dive at least quarterly." (13:35)
• Suggests testing for overlap using ChatGPT or other planning tools.

Memorable Quotes:

• "Four of the five ETFs you have...are invested in the S&P 500. There's just 95% overlap across these four ETFs." – Austin (09:57)
• "Helped someone the other day...they were just paying all these additional fees to own three or four of the same thing and it just doesn't make sense." – Robert (13:35)

3. The “Passive Investing Bubble” Debate

Timestamp: 14:12 – 19:25

Listener Question:
John asks: “With critics like Michael Burry warning about passive investing damaging price mechanisms, is there real danger for individual investors?”

Austin’s Breakdown:

• Defines passive investing: Funds buy/sell based on rules, not company fundamentals.
• Critics say: inflows push prices up artificially, outflows can exacerbate declines during market stress.
• "It’s all a bunch of hocus pocus...Yes, at a system level for market-makers there's complexity, but as an individual, ride the wave." (17:26)
• Stresses the S&P’s long-term performance trumps “bubble” fears.

Robert’s View:

• "Don’t have knee-jerk reactions to headlines. Michael Burry and Michael Green are headline gobblers—they are pushing their own narrative." (18:17)
• Always look beyond alarming headlines and understand the ulterior motives.

Memorable Quotes:

• "Passive funds buy and sell based on rules, not fundamentals. So when money flows in, it pushes prices higher...the dynamic amplifies upside and downside, but this is not an individual concern." – Austin (15:44)
• "...just be careful and watch out for that hocus pocus." – Robert (19:25)

4. Getting Started with Real Estate Rental Properties / Flipping

Timestamp: 19:25 – 27:08

Listener Question:
Joe and his wife want to use $25K savings to buy and flip, or rent, a Midwest property under $100K. Is this feasible? Should they flip first or jump right into renting?

Robert’s Guidance:

• "Dipping your toes in real estate, I always tell everyone, start small." (21:38)
• Midwest remains a great market for entry-level flips and rentals. The “1% rule” still applies ($1,000/month rent on $100K spent).
• Early pitfalls: Underestimating carry costs (loan interest, delays in renovation/sale/rent), and overtrusting contractors. Buy your own materials when possible.
• "You’ll learn a lot on this first property that’ll set you up for future deals." (22:51)

Austin Builds On:

• Reinforces importance of hands-on involvement, particularly early on.
• Home Depot “pro account” can make projects more affordable.

Memorable Quotes:

• "In this situation, I think it is the ultimate sweet spot, especially in the Midwest...you want to get opinions of contractors and other people and make sure you do it right." – Robert (21:38)
• "Every project costs more and takes longer than you expect...that carry cost is a month." – Robert (25:12)

5. Career Moves & House Hacking in Your 20s

Timestamp: 28:49 – 33:21

Listener Question:
Anonymous asks: “Am I making a mistake moving from a $160K solar commission job to a $100K salaried role in semiconductors? How should I approach house hacking and what milestones should I hit before diving in?”

Austin’s Perspective:

• "You're not making a mistake. If you want to work in semiconductors, making six figures at 24 is a great move...there’s a career ladder now." (30:22)
• Don’t rush big purchases or complex investments because you had a high-earning year; focus on long-term career and wealth building.
• Build an investment base first ($100K in ETFs/index funds), then plan for house hacking.

Robert’s Guidance:

• Sometimes you “go backward to go forward.” The career move brings more safety and growth potential.
• "I’d look at a duplex, a triplex or a quadplex. Live in one of the units, Fannie Mae 5% down... great way to start in real estate." (32:29)
• Do not jump straight into expensive single-family homes or complicated small business deals—start small, focus on learning and stability.

Memorable Quotes:

• "You have to sometimes go backwards to go forwards...safety, growth, and stability. That's what you want at 24 years old." – Robert (31:49)
• "Give yourself the next three or four years, let's call it by 30 years old...that's the type of time horizon you should give yourself." – Austin (33:21)

6. How to Diversify $200,000 in Cash (Without Just Re-entering the Stock Market)

Timestamp: 33:35 – 42:19

Listener Question:
Daryl (age 27, high earner, already maxed primary tax-advantaged accounts) wants to invest $200K from selling single stocks but doesn’t want to put it all in the market. Is oil & gas, real estate, or small businesses the best play?

Robert’s Advice:

• Avoid oil and gas: Only suits the ultra-wealthy chasing tax benefits. Poor liquidity and generally unremarkable returns.
• Start with real estate over buying a small business or illiquid energy investment. "Four units or less keeps it residential, much easier to manage." (36:19)
• Attend meetups, read key books (e.g., "The Multi Family Millionaire").

Austin’s Strategy:

• Keep $30K for an emergency fund, diversify the rest.
• Look at Fundrise for venture, private credit, and real estate portfolios (good performance, e.g., 43% up in venture, 8% in private credit in 2025).
• "Don’t get too fancy...the richest people we know? They have VOO, QQQ, VGT, AIQ and maybe a bond fund. Some real estate, maybe precious metals. That’s it." (41:28)
• Be wary of turnkey “business-buying” hype—most small businesses require more labor than expected.

Memorable Quotes:

• "People start making a lot of money, then feel like they have to all of a sudden get fancy with it. You don't have to get fancy with it." – Robert (41:28)
• "At the end of the day, you also don't want to take away from your current situation to where you've got this high earning job and you're not paying attention to your job and your career as well." – Robert (41:51)

Timestamps for Major Segments

| Segment | Timestamp | |-----------------------------------------------------|------------| | Real Estate in Disaster-Prone Locations | 03:21–08:29| | ETF Overlap in Roth IRAs | 08:54–13:35| | Passive Investing “Bubble” Concerns | 14:12–19:25| | Getting Started in Rental/Flipping Real Estate | 19:25–27:08| | Early-Career Income/Career Choices & House Hacking | 28:49–33:21| | Diversifying a $200,000 Windfall | 33:35–42:19|

Notable Quotes

• “Is it to have cheap insurance? ...But you're not going to have all the bells and whistles and tax benefits of Florida.” – Robert (06:53)
• "Four of the five ETFs you have...are invested in the S&P 500. There's just 95% overlap across these four ETFs." – Austin (09:57)
• "It’s all a bunch of hocus pocus...I'm personally just riding the wave. It’s all good." – Austin (17:26)
• "Start small...Buy it for $70–80K, put in $20–25K in 'lipstick' remodel, you're all in for $100K and can flip or rent." – Robert (21:38)
• "Sometimes you have to go backwards to go forwards. Safety, growth and stability—that's what you want at 24 years old." – Robert (31:49)
• "The richest people that we know...have VOO, QQQ, VGT, AIQ and maybe a bond fund, some real estate, some precious metals, and maybe a few other types of investments. That's it." – Robert (41:28)

Episode Takeaways & Tone

Austin and Robert combine pragmatic optimism with no-nonsense advice to demystify complex financial and investing strategies. Whether you’re worried about exposure to natural disasters, ETF redundancy, or diversifying a major windfall, their guidance is all about understanding risks, maximizing simplicity, and focusing on long-term fundamentals rather than headline-driven hype. Their unique dynamic—Robert’s seasoned investor lens and Austin’s relatable, learning-in-public approach—keeps discussion grounded, candid, and actionable.

Tone: Warm, focused, often witty, and always focused on actionable financial literacy and building sustainable rich habits.