Rich Habits Podcast – Q&A: Starting a Franchise, Balance Transfer Credit Cards, & What NOT To Do In Real Estate

Date: August 28, 2025
Hosts: Austin Hankwitz & Robert Croak

Overview

This episode of the Rich Habits Podcast features Austin and Robert answering real listener questions covering key personal finance decisions: buying into a franchise, handling low-rate mortgages, using balance transfer credit cards, best practices for real estate investing, and more. Pulling from their unique backgrounds—Robert as an experienced business owner/investor and Austin as a younger entrepreneur—they offer direct, actionable guidance, dish on real mistakes, and keep the tone approachable yet honest.

This is a dense Q&A session with clear answers to broad financial dilemmas facing their diverse audience—from those just out of college to seasoned investors.

Key Discussion Points and Insights

1. Franchise Opportunities: "Should I Invest $75k in a Franchise After Layoff?"

• Listener Context: Laid-off tech worker (35, Seattle), $200k invested (half in IRA), $420k condo, considering a $75k franchise buy-in, asks about funding options.
• Robert’s Take (05:15):
  • Due diligence is crucial. Quiz potential franchisors about success/closure rates.
  • Franchising isn’t “rainbows and unicorns”; some locations succeed, others lose money even in a proven concept.
  • Funding: Don’t overextend yourself; consider SBA loans. Personal network resource offered (“my dearest friend is a franchise analyst—email me”).
  • “Franchising can be... a great way to add income streams without buying a job, especially if it isn’t super labor heavy.”
• Austin’s Take (07:13):
  • Cautions against a sudden career pivot out of discouragement.
  • “Franchising is great, but I think about it more as an encore career or side income, not a day-one pivot.”
  • Suggests job-hunting for another tech role at $120k–$180k first, then revisit franchise in a few years.
  • Concerned about taking on $75k debt now as unemployed – “That doesn’t look fun to me...as someone who’s unemployed, I would argue you can’t right now.”

Notable Quote:

“Do really, really good due diligence... The person selling you will make it all rainbows and unicorns, and it’s not always the case.” – Robert (05:40)

2. Paying Down a Low-Rate Mortgage vs. Investing

• Listener Context: Nelly with a 2.6% mortgage asks if she should pay extra or invest surplus cash.
• Austin’s Math (10:56):
  • Strongly sides with investing – can make ~10%+ in markets versus saving 2.6% in interest ($7,800/year vs. $32,490 in potential market gains).
  • Explains arbitrage: “You pay $7,000 to make $30,000... That’s how you should be thinking about it.”
  • Breaks down simple vs. compound interest: mortgage = simple (interest decreases), equities compound (grow exponentially).
• Robert’s Supporting View (13:31):
  • “If I can make more with my money than what I pay on borrowing, I always borrow. That’s positive arbitrage.”

Notable Quote:

“Debt is not bad. The wealthiest people use debt, but to their advantage.” – Robert (16:39)

3. Balance Transfer Credit Cards as a ‘Wealth Hack’

• Listener Context: James, transferring credit card debt to 0% card (3% fee), wondering if he should invest the payoff funds instead, aiming to earn more via dividend ETFs.
• Robert’s Take (18:14):
  • Warns this is a “dangerous hack”—not truly a wealth building strategy, but potentially a savvy move if all goes perfectly.
  • Key risk: “All of this sounds good – until it doesn’t.”
• Austin’s View (20:00):
  • Math checks out if markets cooperate, but “with all stuff like this comes risk.”
  • Risk: Stock market could drop, leaving not enough to pay off the debt.
  • “If I were in your shoes—no, I would just pay it off and be done with credit card debt, because...credit card debt is the one type that gives me the heebie jeebies.”

Notable Quote:

“Would I do it? No, I’d just pay it off and be done with credit card debt.” – Austin (21:56)

4. Where to Park a Down Payment Fund—for a Home in 2 Years

• Listener Context: Young married couple (age 28), $180k in the market, $9k/yr cashflow from rental, saving for next home’s down payment within two years.
• Austin’s Advice (24:35):
  • Use a split approach: ~75% in high-yield savings (stable), 25% in market (some upside).
  • “I don’t know what the stock market will be like in two years...I don’t want you to say ‘we can’t afford our house’ because markets went down.”
  • Notes you can keep funding Roth IRA even if incomes climb via backdoor Roth or self-employed plans.
• Robert’s Reinforcement (28:08):
  • Two years is too tight for full equity exposure.
  • “Keep 75% in high-yield savings, 25% in the market...no matter what, you’re still growing your money, but you’re not over-leveraged.”

5. Getting Started in Real Estate as a Young, Mobile Professional

• Listener Context: Dylan, 24, aspiring college basketball coach, $11k invested, wants to try real estate but expects to move often.
• Austin’s Guidance (29:16):
  • Build up a “base” first—$100k–$200k in investments—before diving into physical real estate.
  • Suggests REITs, Fundrise, or syndications as alternatives until a stable base is set; “Wait till you’re stable before direct ownership.”
• Robert’s Perspective (32:26):
  • “What are you doing with the rest of your time?” Recommends a remote side job in finance or work for a local developer/flipper to gain hands-on experience while building base.
  • Shares personal story of being a fired high school basketball coach for rewarding students with pizza – “It was the most rewarding time I could spend.”

6. Teen Investing: Starting with a Custodial Roth IRA

• Listener Context: Natalie, high schooler, works part-time, curious how to invest on a small/minimum wage income.
• Austin’s Advice (35:13):
  • Highlight: “Be a kid,” but investing a small percentage (10-25%) is a power move.
  • Custodial Roth IRA via a parent, invest in VOO, “then forget about it.”
• Robert’s Story (37:15):
  • Built wealth slowly: “$20 a week isn’t dumb; in a few years I had $15-20k.”
  • Suggests asking parents to match investment.
• Key Rule: Don’t touch this money; the only way it changes your life is surprising yourself with it 50 years later.

Notable Quote:

“Don’t tell anyone it’s there...as you’re building your future, you never want everyone to know [about your money] and have to cry on your shoulder to get help.” – Robert (40:05)

7. Entering Real Estate in Your Early 20s: What Not To Do

• Listener Context: Sydney, with husband (early 20s), low expenses for next six months, wants to start in real estate; unsure whether flips/rentals/Airbnb is best.
• Robert’s Guidance (41:17):
  • Do not jump in if you haven’t built a financial base ($100k+ investments).
  • Big risk: “If you’re wrong or it doesn’t perform well...we don’t want to see you go to zero.”
  • If going ahead: Start with “house hacking” (duplex/triplex/fourplex, live in one unit, rent others).
• Austin’s Nuance (43:00):
  • Agrees: “House hacking” is the lowest risk/smartest first move.
  • Criticizes Airbnb arbitrage—“that’s just hokey pokey, too much risk.”
  • Emphasizes running the numbers, minimizing risk, and opting for owner-occupied multi-family as a starter, not flips or rentals with all their operational risk.

Notable Quote:

“That is why we never want to see people robbing from their future to invest in the now. We always want to see that base that's set aside that you don’t touch because investments don’t always go as planned.” – Robert (45:08)

Memorable Moments & Quotes

• “Because personal finance is personal. But a lot of us, life gets in the way... and we don't know what to do about it. And that is why I love these episodes.” (Robert, 01:21)
• “Facts are your friends. Math is fun here.” (Austin, 20:00)
• “All of this sounds good—until it doesn’t.” (Robert, 22:56)
• “Be a kid. You should go out, get ice cream with your friends, go to the movies...” (Austin, 35:13)
• “I used to be a high school basketball coach... It was the most rewarding time I could spend.” (Robert, 34:31)

Timestamps for Important Segments

• 05:15 — Franchises: Due diligence, risk, and funding options
• 10:56 — Should you pay extra on a low-rate mortgage or invest? Arbitrage explained
• 18:14 — Credit card balance transfer ‘hacks’, risk, and mathematical/psychological downside
• 24:35 — Where to park a down payment fund for a 2-year time frame
• 29:16 — Young and on the move: Real estate investing for coaches/nomads
• 35:13 — High school investing: How to start, what not to do
• 41:17 — Early 20s & real estate: What NOT to do, house hacking starter strategy

Key Takeaways

• Franchising: Don’t let desperation drive big money moves; do your homework and view franchising as a later, not immediate leap.
• Mortgages and Debt: Leverage positive arbitrage (borrow cheap, invest for more) as long as you’re disciplined.
• Credit Card ‘Hacks’: Short-term, market-linked arbitrage is risky—math works until it (inevitably) doesn’t.
• Down Payment Savings: Don’t let risk jeopardize home-buying plans; split between safe and growth.
• Real Estate: Build an investment base before buying physical property; consider house hacking first.
• Teen Investors: Start small, be consistent, enlist parent support, and practice extreme delayed gratification.
• General Principle: Always build and protect your financial base before diversifying into riskier or more operational investments.

For further advice, check out past Rich Habits episodes, the Rich Habits Network, or direct questions to the show via Instagram or email.