Rich Habits Podcast — Q&A: Portfolio Adjustments, Ice Vending Businesses, When NOT To Use A 529

Hosts: Austin Hankwitz & Robert Croak
Episode Date: October 23, 2025

Episode Overview

In this special Q&A episode, Austin and Robert answer real listener questions covering portfolio strategy adjustments, side hustle ideas, handling windfalls from property sales, strategies for funding kids’ college education, and making smart investment moves when interest rates are changing. The hosts bring their relatable, conversational energy to every topic—sharing lessons from their backgrounds as a decamillionaire entrepreneur and a hungry, learning 20-something, always emphasizing actionable financial habits.

Table of Contents

1. Entrepreneurship and Hobbies vs. Investment (Sarah, 19) (03:33)
2. Using a Rental Sale Windfall Wisely (Jeremiah, 44) (10:44)
3. Best Use of Home Sale Proceeds (Johnny, 38) (17:09)
4. When to Use or Avoid a 529 Plan (Leslie, parent of two young children) (23:38)
5. Navigating a Six-Figure Inheritance at 18 (Ethan, 18) (26:39)
6. Ideas for Labor-Heavy College Side Hustles (Gus, in college) (30:49)
7. Portfolio Moves as Interest Rates Fall (Jillian, early 30s) (34:00)

1. Entrepreneurship and Hobbies vs. Investment (Sarah, 19) [03:33]

Sarah’s Situation:

• 19 years old, earns $2,500–$3,000 monthly from serving.
• $3,500 in S&P 500 Vanguard brokerage, adds $200 from each paycheck.
• $5,000 cash, interested in ice vending machine for passive income.
• Expensive hobbies (skydiving, biking), $500/month for parachute, 7 months left (interest-free), and up to $300/month for jumps.
• Aims for house-hacking (duplex purchase) in 5+ years.
• Wonders if she should cut back on expensive hobbies, whether to pursue the ice vending machine/business loan, or just invest/save for a house.

Key Insights & Guidance

Robert’s Take:

• "I think Sarah is putting the cart ahead of the horse. I think she needs to get that base built, keep putting that money away every single month. When it comes to should I cut back on these expensive hobbies? ... The answer is yes." (05:23)
• Suggests dialing back expensive hobbies until a solid financial base is built.
• If unwilling to cut back, consider a hobby-funded side hustle.
• Caution: Buying an ice vending machine is easy, but profiting from it is hard unless you have the right location.

Austin’s Angle:

• Encourage focus on career development: "How do you plan to make six figures by the time you’re 29 or 39? ... Are you in college? Are you in a trade?" (07:05)
• Emphasize investing 15–20% of income, ideally maxing Roth IRA.
• "Every dollar invested in your 20s turns into $70 in retirement." (08:42)
• Hobbies are fine if she’s investing first; discipline counts early.

Memorable Moment:

• Robert recounts a story: "I told this to a nurse... pick up one extra shift a week. She said it changed her life ... Invest all of it, and pretend it doesn’t exist." (09:50)

Key Quote:

"We just always want to see all of you get the base built first before you start going in all these different directions. And then maybe the ice machine can come later."
— Robert, (06:28)

2. Using a Rental Sale Windfall Wisely (Jeremiah, 44) [10:44]

Jeremiah’s Snapshot:

• Married, near Orlando, substantial income ($200k + commissions + $4k VA + wife’s $60k salary).
• Planning to sell a rental and use proceeds to build a garage, reroof (to save on insurance), and pay off SUV/other debts.
• Savings from these (insurance, payments) = $2,400/month, wants to redirect into IRAs, also $100/mo to each of 3 kids’ stock accounts.
• Already has $400k+ in 401(k)s, high yield emergency fund.

Analysis

Austin:

• Positive on using windfall to eliminate debts and improve home value, if savings go directly to investment: "The whole thing about ... paying off debt early ... is always predicated on if you’re taking that monthly payment and making it work for you." (13:25)
• Cautions about lifestyle inflation: “Y'all should have more money invested making a quarter million a year in your mid-40s. ... Just be careful of the lifestyle inflation.” (14:50)
• Emergency fund should be used for true emergencies: "Not going into debt to keep it around like a pet." (14:11)

Robert:

• "Every dollar needs a job." (15:18)
• Urges a full plan for every dollar, not just big debt payoff.
• Warns how windfalls disappear if left unassigned.

Key Quote:

"Every dollar needs a job ... Make sure you're not just paying off debt because you want to feel better, but not having a plan with all the net new money."
— Robert, (15:18)

3. Best Use of Home Sale Proceeds (Johnny, 38) [17:09]

Johnny’s Setup:

• Just bought a new home, must sell old one (HOA rules), netting $300k after mortgage/fees.
• Married, two kids (8 & 2), $200k income, both max 401(k) and IRAs, contribute to 529s.
• Debating: $100k to pay down mortgage (current $265k @ 5.5%), $100k invest in ETFs/index funds (via direct indexing/tax loss harvesting), $100k to save for investment property.
• Looking for input on overall allocation.

Host Analysis

Austin:

• "I just want to make sure you have this windfall of taxable money that you have to invest. Invest it in a tax efficient manner via direct indexing." (17:57)
• Advocates for dollar-cost averaging large lump sum (especially if it's >20-25% of net worth), to manage volatility.
• "Debt can go to zero, but money invested can compound to infinity." (21:17)
• Recommends letting the majority of the windfall work harder if current investments are not large.

Robert:

• Likes investing unneeded mortgage paydown into markets for higher expected return.
• "If you feel good about [paying down the mortgage], I would maybe adjust that. I would put $50k to lower the mortgage and the other $150k into the market." (19:36)
• Advocates for some risk with youth; includes ideas of diversification (some crypto, precious metals).

Notable Quote:

"If you’re trying to invest a lump sum ... more than 20–25% of your total net worth, … you need to spread that out over several months."
— Austin, (22:20)

4. When to Use or Avoid a 529 Plan (Leslie, parent of two young children) [23:38]

Leslie’s Situation:

• Has 10-month-old and 2.5-year-old.
• Her dad funded a joint brokerage for her as a teen, which helped pay for wedding, school, down payment.
• Wonders if joint brokerage for her kids is better than 529s, or whether to do both.

Guidance

Austin:

• Lays out 529 basics: tax-free growth for education expenses, rollover up to $35k to child’s Roth at age 18 if not used. "That $35,000 turns into $1 million adjusted for inflation in their retirement by 65." (24:34)
• "Why not both?" — Suggests splitting contributions between a 529 for education and a brokerage for flexibility (down payment, wedding, etc.).
• "It's not as black and white as you’re putting it. I think you do both." (25:51)

Robert:

• Echoes the dual approach and the importance of prepping kids for success: “I wish more parents did … you’re setting them up for success.” (25:55)

Notable Quote:

"That $35,000 turns into a million adjusted for inflation in their retirement account by the time they're 65...guaranteed millionaire."
— Austin, (24:38)

5. Navigating a Six-Figure Inheritance at 18 (Ethan, 18) [26:39]

Ethan’s Position:

• Inherited $100k (from deceased father, invested in a money market).
• Wants to invest in real estate but feels the market in Utah is too competitive.
• Has no debt, lives at home, small business on the side.

Key Advice

Austin:

• Deeply empathetic response acknowledging Ethan’s loss.
• Recommends maxing a Roth IRA with $7k, invest the other $93k in a broad, low-cost ETF portfolio ("core satellite"), then leave it alone.
• "You’re too young … to want to make a mistake and pay a stupid tax ... buying the wrong real estate." (28:05)
• Use future earned income for more speculative or entrepreneurial ambitions.

Robert:

• "It is very, very hard to get the first $100,000 saved and invested. ... Do not touch that money. Pretend it doesn’t exist." (29:12)
• Warns against dipping into the base for short-term projects or impulsive investments.
• "Shout out to your father, so now you have to let that grow." (29:47)

Memorable Moment:

"What comes fast can go just as fast. So please heed our warning of not dipping into this and using it for other spontaneous ideas."
— Austin, (30:49)

6. Ideas for Labor-Heavy College Side Hustles (Gus, in college) [30:49]

Gus’ Q:
Wants actionable side hustles that are labor-driven to earn extra money during college.

Suggestions

Austin:

• Used the Sylvania Headlight Restoration Kit, cleaned headlights for $75/car with $25 kit, hustled via flyers. "I made like $3,000 one summer doing that." (32:21)

Robert:

• "Go on Facebook Marketplace, get a used landscape trailer ... and go jobsite-to-jobsite ... roofing companies ... demo and clear out." (32:46)
• Suggests construction site cleanup, leveraging a low-cost trailer, basic tools, and flyers for steady work.

7. Portfolio Moves as Interest Rates Fall (Jillian, early 30s) [34:00]

Jillian’s Dilemma:
With rates dropping, should investors move money from high-yield savings/T-bills into stocks, real estate, or bonds?

Deep Dive

Austin:

• Explains rate cuts, impact on loans and consumer/business borrowing.
• Lower rates = more favorable conditions for stocks, real estate, buying power.
• "Your emergency fund is not an investment. It is insurance against your investments." (36:12)
• If you have T-bills or bonds in your diversified portfolio, that's fine, but don't be overly conservative.

Robert:

• "We’re always going to be a net buyer of assets ... this is a good time ... I would start rotating back into stocks more and make sure you have a little more risk-on approach." (37:52)
• Tailor bond vs. T-bill allocations to yield and personal situation.

Austin’s Note on Optimization:

• "A lot of people need to understand that they are ... walking over dollars to pick up quarters." (39:15)
• Don’t obsess over maximizing every fraction of emergency fund yield. Just have a good plan and keep investing.

Key Quote:

"We say this all the time. Your emergency fund is not an investment. It is insurance against your investments."
— Austin, (36:12)

Notable Quotes Recap

• "Every dollar needs a job." — Robert, (15:18)
• "Debt can go to zero, but money invested can compound to infinity." — Austin, (21:17)
• "What comes fast can go just as fast. So please heed our warning..." — Austin, (30:49)
• "We're always going to be a net buyer of assets ... start rotating back into stocks more." — Robert, (37:52)

Conclusion

This episode is packed with down-to-earth, practical wisdom for every stage of the wealth-building journey—from first investments in your teens, to handling six-figure lump sums, side hustles, optimizing for tax efficiency, managing lifestyle inflation, and adapting portfolios as the economic winds shift. The hosts return again and again to two timeless lessons: Build your financial base first, and assign every dollar a job before it slips away. Their dynamic, supportive tone makes this episode a strong primer for anyone serious about developing rich habits—no matter their starting point.

Episode Segments & Timestamps:

• [03:33] Sarah (19): Hobbies, Ice Vending Business, and Investment Priorities
• [10:44] Jeremiah (44): Rental Property Sale, Roof/Car Repairs, Investing Debates
• [17:09] Johnny (38): Home Sale Proceeds—Mortgage Paydown vs. Investment
• [23:38] Leslie: 529 vs. Joint Brokerage for Kids’ Education
• [26:39] Ethan (18): $100K Inheritance, Best Next Steps at 18
• [30:49] Gus: Heavy Labor Side Hustle Ideas for College Students
• [34:00] Jillian: Adjusting Investments As Interest Rates Fall

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