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Rich Habits Podcast
Q&A: When To Rebalance A Portfolio, Robert's Altcoins, & Weekly Dividends
00:40:33
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- [00:01]
A
So good, so good, so good.
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B
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A
You're about to make a trade which you do, you listen to. Is it get optioning those options or let's do a little research. Learn more@finra.org TradeSmart hey everyone and welcome back to the Rich Habits Podcast Question and Answer edition. These are our Thursday episodes where we sit down and we answer your questions as if we were in your shoes. We get hundreds of questions asked to us every single week. So if we've not yet answered your question, thank you for your flexibility. You should just see the email and Instagram DMS that we get from you guys. It is just, it's overwhelming sometimes, to be quite honest with you, but we get through it. We're here finding the best ones, trying to, you know, jump in every single week and answer these as thoughtfully and tactically as possible. Right? Because Robert, the whole purpose of this show is not to just have these like high level ideas and breakdowns, but more specifically to give people tactical money advice.
- [01:26]
B
Yes, we are definitely here for the people and I like that sentiment around overwhelming at times because I think people feel we probably outsource all of this work going through the DMs, getting the questions put together to some intern or something. But nope, we do it all right here live because we want to make sure we give you guys the best product we can in every single episode because personal finance is personal and no one else is going to be able to help us answer these the same way that we would provide the the information to you. So we love these episodes. So keep those questions coming.
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A
You're totally right, Robert. We get so much. And again, if you have a question for us, email us at rich habits podcastmail.com or DM us on Instagram at Rich Habits Podcast. You should also just be following our Instagram account. We post clips, we post little updates in the stories. We got all the fun stuff over there. Even started doing these like kind of static images that break down general investing concepts and some personal finance behavior stuff. It's really interesting. So Rich Habits podcast on Instagram, go check us out. But Robert, before we jump in to our first question Gotta remind everyone that the only way you're ever going to retire is if you have a nest egg that's growing for you over time.
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B
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A
Right, Robert, so our first question comes from Xavier D. Xavier says, I've been following your podcast for the last three years and I've been maxing out my Roth IRA for the last 10 years. I'm 29 years old. My annual gross income is 230,000. My total debt is 19,000. That's with student loans and I've been trying to pay them off. I'll be financing a new vehicle as my used vehicle that I purchased after college is coming to an end. My combined monthly debt payment between my new car that I'm financing as well as my student loans come to about 1700amonth. I also live out of the country, so my cost of living is dramatically lower, coming in at only $1,200 a month. With all of this extra money that I find myself with on a monthly basis, I'm kind of not sure what to do with it. I could put more in my savings account. I could use it as a down payment one day. But I just want y' all's suggestions on what to do with all this extra money. This is a pretty cool situation to be in, right? So we got a guy that's making about 230,000 a year. He lives out of the United States, therefore he is able to keep his cost of L very low. So combined, I mean, he's spending about 3,000amonth of this. 230, right? So let's Call it, I don't know, Robert, maybe $15,000 a month that he's taking home, only spending three. So now he's saying, wait a second, what should I do with the other, you know, 12,000 or so, right. It's about 150 grand a year post tax. So Robert and I always say match beats Roth, beats taxable. That's sort of the 1, 2, 3 as it relates to investing. Because you want to invest up to the match at your 401k to get that free money, then you go max out the Roth ira because you have autonomy over those investments and you will have all this money in retirement. If you have Autonomy in your 401k, you go back to that, you max that out. But if not, because a lot of us don't, we then shovel as much as we can into that taxable account on public.com, which is also dubbed the bridge account. So, Xavier, I think that's the move for you. You didn't mention an emergency fund in your question here. So definitely go put three to six months of spending in some sort of emergency fund. High yield savings account. You can do that on public, on we front, on SoFi. There's a bunch of different ways that you can go earn some interest on your money there. But after you have that three to six months of expenses saved up and put to the side, I would just start shoveling money into ETFs and index funds that are inside of your taxable brokerage account. Let that grow for you over time and maybe you'll be able to retire early.
- [05:53]
B
Yeah, I think that's a great breakdown. And it's important for everyone listening to really understand. You have to make your money work as hard for you as you work to get it. Write it down, get a tattoo, put a post it note next to your desk, whatever you need to do. Because in this instance, and I like the term shoveling the money, you literally need to get that money working. I don't want to see a bunch of it sitting in a savings account. Like Austin said, get the high yield savings loaded up so you've got that three to six months emergency fund. Everything else is going into that taxable brokerage account on public, and you're going to be investing consistently to build that up so you can retire early. I love this playbook, Austin, and I think everyone needs to follow it if they want to be able to be financially free sooner than later.
- [06:37]
A
Well, I mean, tactically speaking, like that is the playbook. You're totally right. You Want to be investing toward your retirement via up to the match with your 401k so you can get that free money. And then of course, the Roth ira. But our goal of course as human beings is I don't dream of labor. Right. What's my dream job? I couldn't tell you. I don't dream of labor. Right. I want to retire early. And so when it comes to retiring early, the only way you're going to be able to do that is if you have access to money that is not penalized or you know isn't. There's no barrier between you and that money like there are with these retirement accounts. Right. So a Roth IRA, specifically the earnings in your Roth IRA and pretty much everything in your 401k can't be touched unless you're 59 and a half years old. And if you're someone who has hundreds of thousands, if not millions of dollars like it seems like Xavier D. Here is on track to, to achieve in their 40s or 50s, you gotta wait until you're in retirement age to play with this money and use it and benefit from it. Where if you've built this taxable bridge account we like to call it, you can go open one up on public. Do you now have money that's working for you, that's accessible? Yeah, it's tax, but that's okay. It's accessible. That's what matters most. And you can always offset those taxes with, you know, long term capital gains, direct indexing, automated tax loss harvesting. There's a bunch of different, you know, tax saving strategies that you can implement to offset those taxes later on in the future.
- [07:59]
B
Wow, that's a great breakdown.
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A
So our next question comes from O on Instagram. O says, hey, Robert Noston, you can call me O. You talk about rebalancing your investments and taking profits. But my question is when should we actually do that? Is it a time of year? Is it when we experience a big profit in a specific part of our portfolio? Thank you so much for your help. So Robert, let's kind of take a step back for a second. I want you to walk our listeners through how you personally manage your portfolio, both from a risk perspective from different types of asset classes and you know, risk profiles with those investments and how often you are rebalancing, which is defined as selling parts of your portfolio using the proceeds to buy different parts of your portfolio. So walk our listeners through that.
- [08:45]
B
Yeah, I think this is a great question and very important for everyone to understand. And I'll give it A shot. And then Austin, you can give me your take on it. But for me, it's all about, like you said, rebalancing. So like with Nvidia, it's been a very outsized position for me. So as I go throughout the year, maybe in Q3, Q4, things are really going well. I'm going to sell off a position of that. So I generally, once I get up, I have a rule of thumb is once I get up 50% of a position, I sell off 25. Once I get up 50% again, I sell off 25% again. And I do that throughout the course of the position that I'm in. And so when it comes to my overall portfolio rebalancing, I try to look at it from a totality of how risk on am I and what is my risk tolerance within my own portfolios. Because everyone is different and personal finance is personal. So if you want to be really risk on, you might stay heavier in these secular growth trends. Whereas if you're looking to dial it back a little bit, you might want to have a higher percentage in bonds or some of these ETFs that we talk about. So for me, I try to rebalance once every couple quarters or maybe once a year. I don't think you need to do it constantly. Some people do. I think Austin does it more frequently than I do. But Austin is also very, very good at this. But for me, I'm more of a long term holder. So rebalancing isn't as important unless there are these outsized returns. Like we've seen this past couple of years with the Nvidia of the world or the Palantirs or the Microns of the world. So that's my take on what to do. And then what you can do when you do this and you sell off some of that position is then you roll it over into something more risk off. Or to rebalance the portfolio, let's say you want to up your international exposure and you're a little light, you could then move some of that money away from say Nvidia or something like that into a fund like AIQ to rebalance along the way.
- [10:41]
A
So walk me through more of your rule. You mentioned you get up 50%. So let's say you put in $10,000 into a single stock. That single stock is now worth $15,000. It's up 50%. So you're saying that you would sell $3,750 of the 15,000, you know, total aggregate balance there. Where does that $3,750. Go. Does it stay in cash? Where else does it get deployed in your portfolio?
- [11:08]
B
Yeah, that's a great comeback question. For me, it always gets deployed. I don't really sit in cash like many people do. I just feel that money sitting, you know, parked money is dead money. You guys hear me say that all the time. So for me, it's going to get repositioned somewhere. I don't always know right out of the gate, but I always have a list, kind of a waiting list of where am I light in my portfolio? Oh, man, I really want to up my stake in this stock or I really want to get some more money put into this etf and I might even rebalance into more gold and silver or whatever I'm working on at that time. So that's how I look at it. I know everyone is different, but that's how I do it.
- [11:47]
A
I think it makes a ton of sense. The only thing I would add is twice a year is when I like to do my portfolio reviews. You know, kind of like a summertime portfolio review. Like, all right, it's half time, we're halfway through the year. How am I performing? Did I see wilder swing to the upside and the downside than the S and P or the nasdaq? Am I outperforming or am I underperforming? If I am outperforming, why am I invested into more high beta stocks? Or am I invested into sectors that have just generally outperformed the S and P? If I'm underperforming, why am I invested into a specific position that has really underperformed my expectations? Or was it maybe a sector bet that I had made that is not coming to fruition? And then eventually, right, like, you ask yourself these questions and you say, okay, what changes do I want to make, right? Do I continue to stay excited about this underperforming name or this underperforming sector? If that's the case, cool, right? Investors have investor theses as to why they're buying and selling things. But maybe if I don't have the same conviction as I did in the beginning, where am I deploying that capital elsewhere? And then I think again, at the end of the year is a good time to do it too. Hey, the S and p is up 14%. My portfolio is up 18%. That's great. What allowed that 4%, you know, difference there? Or, hey, the S and p is up 14%. My portfolio only went up, up 9%. Okay, what happened to the 5%? Like, why did that happen? And I think something people forget to do is those check ins and they instead see like their portfolio swings and they say, whoa, I'm up a whole ton right now for year to date. This is great, I'm outperforming. Or they say, oh no, I'm down so much compared to the S and P, I need to sell things. And that's just where the emotion kicks in. And I think as long term investors, what's really important to understand is if you are not going to retire at that exact moment in time, you can never get, get mad at yourself for not selling the top or trying to time these markets because no one can time the markets. No one can time the markets. And now as we're seeing a general market pullback across the indices, right, The NASDAQ is down about 4 1/2% from late October. Same thing for the s and P500 and much more than that depending on the sector of the market you're specifically invested into. You can't be beating yourself up and saying, oh my gosh, I can't believe my portfolio is, is down since October. Like I can't, I, I'm, I'm getting so upset with didn't I sell? Why didn't I take profits, right? Why did I do these things when in actuality you have to tell yourself, I wasn't going to retire at the end of October anyway. Why would I have sold? I am in a long term investor. I'm, I'm a net buyer of assets. My portfolio will continue to grow over the years and decades. Why am I beating myself up for not having perfectly timed the markets? That is a losing mentality. The winning mentality is the opposite. You say I'm a net buyer of assets. I love dollar cost averaging into different sectors that make sense to and to Robert's point, when I am overexposed to a specific sector, I take my profits and I redeploy it elsewhere in my portfolio where I feel like Robert said, underweight. So that is a really cool way o from Instagram here to consider and thinking about a framework for not just building a portfolio but maintaining it over the coming years and decades.
- [15:00]
B
And that really highlights something that we talk about and have talked about since the day I've known you. And that is we really struggle with these advisors in these firms that have this set of and forget it mentality for people's money and they just don't adjust along the way. And something that you do really well. Austin is always making sure people are keeping their eye on the prize and adjusting accordingly by having that active management. Now by active management, we don't mean get into your portfolio every day and make changes and buy and sell and try to time the market. We just mean keeping your eye on the prize over the long term and doing those check ins on your money in your portfolios. Like Austin said, a couple times a year to make sure your your money is heading where you want it to head and where you expect it to head because you're keeping an eye on it.
- [15:46]
A
So our next question comes from Laura C. On Instagram. Laura says, Hey y', all, I love the podcast and I've learned a lot from the content. Thank you so much. And Thursday episodes. Robert has talked about five cryptocurrencies that he believes people should learn more about. I think I understand more than the average person about crypto, but it's still very confusing to me. There are so many crypto names out there, literally thousands. Can you talk about these specific names, what makes them special and why you think people should learn more about them? And then she goes on to mention hbar, xlm, XRP and a couple others. So Robert, I'll give you the floor to explain what these cryptocurrencies do and why you believe people should learn more about what they do and why they could be important and perhaps even part of a well diversified portfolio.
- [16:30]
B
Yeah, this is a great question. And the cryptos that she's speaking of are the ones that are called ISO 2022 compliant. What does that mean? We have been on the Swift Banking system for decades and decades and we are currently under full migration away from the Swift banking system to the ISO 2022 compliance system which is on the blockchain. And these coins that I mentioned, HBAR, XLM, XRP, ADA quant, these are all ISO 2022 compliant coins that will have a purpose in this migration to how all of our central banking system money is handled in the future for processing payments and everything cross border, all of the international trading that happens and wires and all of that in the money system. So that is why I think everyone should be keeping an eye on this specific sector in these coins. Especially because these coins are also US based tokens. So they are going to get to enjoy the advantages of the taxation rules that are in favor of these American based coins. So that is why those specific ones I feel are very important over the next 18 to 24 months because this migration is happening right now as this episode is being filmed and I think it goes fully live on November 22nd. So keep an eye on those coins. That is the importance from my perspective. I'm not saying all of them are going to skyrocket and go to the moon, but I do believe these coins along with link will be very important to own in a well diversified crypto portfolio.
- [18:06]
A
Well, speaking of well diversified crypto portfolio, gotta address the elephant in the room which is like, hey guys, Bitcoin's at 95,000. What's going on? So Robert and I, for the last, since we started this podcast right in February 23, said, hey, add bitcoin to your well diversified portfolio. It should make up between 5 and 15% of your, you know, invested capital. We think that bitcoin is something to have in your portfolio over years and decades. And we were right obviously Bitcoin. I think the stat is like 6, 7 or 8x Steven, since those lows of 2023, I'm just gonna actually pull up the price of bitcoin here. If we go back to, yeah, April of 23. We started the show back in February of 23, so it was $23,000 a coin. If you bought and hold and did that stuff, you'd be up multiples upon multiples of your money, which is exciting. That's what I was doing, that's what Robert was doing and we enc to do that as well. 5 to 15% of your invested capital should be in bitcoin. Slash some cryptocurrencies. I'm sure a lot of you got, you know, red pilled into not just buying bitcoin, but a bunch of altcoins as well. I've got a handful of altcoins, I've got some chainlink, Ethereum, I've got some XRP and I've got a handful of others, some Solana, some Sui, things like that. But it doesn't make up like it's like a fraction of my crypto holdings. Right. Like bitcoin has always been sort of that like dominator part of my portfolio. And now that we've seen bitcoin start to falter, I would argue that we should be prepared for what could become a bitcoin bear market. It's trading at about 95,000 right now. It peaked at about 126,000 in late October. So about two weeks ago, three weeks ago. What to look out for from our experience of looking and kind of riding these cycles is two weekly closes below the 50 week moving average for bitcoin. We just experienced our first weekly close below that 50 week moving average. Average at about 103,000 a coin. It's now again at 95. If we have another week go by where bitcoin is below that 1002003000 range, I would argue that the cycle top is in and that you should expect to see bitcoin come down dramatically to, I don't know, 40, 50, 60, 70,000. I have no idea how low it can go, just like no one knows how high it can go. But I think it is always smart to be a prudent investor to play and invest in the market that's being presented to you and not the market you want to see. And so if you are someone who, like me, you're up hundreds of thousands of dollars on your bitcoin position and your cryptocurrency position in general, take some profits. I took some profits over the summertime. I think I told you guys that sold some bitcoin, I used it to buy a boat, which was a great decision. But yeah, just if you are someone who has not been able to handle a lot of the volatility and again, you're up a ton and you are ready to rock and roll. Take some profits. Be our guest. Maybe we have a relief bounce above a hundred thousand and our alt coins do some stuff and some bitcoin goes up. But like, generally speaking, a lot of people, including ourselves, believe that the top is in for bitcoin on this cycle. Again, could we be wrong? Of course. But I think at the end of the day, what's important to consider is it's not about timing the market perfectly. It's about making and taking profits on much of the move, right? So like, if you were someone like us that bought bitcoin in the 20, 30, 40,000 range and you want to take some profits at this 9,500 thousand range, like, like, nice, you look three extra money. Now, could you have perfectly timed the market, Robert, and try and sell at 127,000 or whatever it was like, I guess I can't do any of that. But I think this is still really exciting. And again, we're not telling people to abandon cryptocurrency out of their portfolio. Also not telling you to do anything. This is not financial advice. We're just sharing what we're doing with our own portfolios. But I think what's important is to think like, if you want to have crypto like myself in your portfolio forever, which I have bitcoin in my Roth IRA for a reason, right. I think it's going to be an asset Class to own. Great. But if you are someone who's trying to like time these market cycles, these four year cycles, I would argue now is a a great time to take some profits.
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B
Yeah, I think that's a really good breakdown and no one knows what the prices are going to be. We can do our best to deduce all of the research to figure out where things are going, but it changes daily. And just make sure you're always keeping eye, taking profit and rebalancing as things change and as things move along. That is the goal for any long term investor in building wealth is to just keep an eye on the prize and make sure you're doing all the things that we talk about so you are prepared. Austin always says it in the Rich Habits Network that if you are surprised by the markets, we're not doing our job. And the same thing goes for this podcast. We always want to prepare you guys as well as we can to make sure you know what's happening in the market so you can adjust accordingly.
- [22:50]
A
Now Robert, you know all about transparency here. Are you planning on taking profits? You're just riding the bitcoin wave on a you've got a ton of bitcoin in your own portfolio. Like do you find yourself to be over allocated to bitcoin and crypto like I have been the last couple of years or do you find it to fit well, like how are you kind of playing this if at all?
- [23:06]
B
Yeah, that's a great question and I am definitely over allocated from bitcoin. But here's why it's okay in my position. I got into Bitcoin in 2011 and so since then I have sold a ton of bitcoin over the years. I sold a bunch at 1700, a bunch at like 4500, a bunch at 10,000, 20,000. So along the way I have cite cycled out all of my initial capital and even though I still have dollar cost average along the way, it doesn't even compare to what I've taken from bitcoin over the last 14 years. So for me I might consider taking a little bit more profit maybe with five bitcoin. But the rest of it I'm gonna let it ride for a very long time because I've already made so much profit from bitcoin trades that for me, me I'm more risk off already because I've already I'm playing with the house's money essentially. So but for the average person, I think it's important to understand you always should be taking profits Especially if you got into bitcoin earlier from following us and you were ahead of the curve. I think it's a great idea to take some profits when you can.
- [24:12]
A
Yeah, totally. And for the people asking, Austin, what are you going to redeploy? Right. So my goal is to sell probably 80 to 90% of my total crypto holdings. I want to buy a new house next year. So my goal is to take a lot of that and use it for a down payment. As you guys might know, I like to say turn magic Internet money into real things. Right? Turn clicks on the Internet into bricks. We've heard that a couple times. So I will be turning my magic Internet money called cryptocurrency into a house. Hopefully we'll see how that goes. So want to clear the room there, make sure everyone is on the same page as to what we think now as we record this on November 17, 2025. If you want a more active perspective on what Robert and I are doing with our money and thinking about the markets in general, consider joining the Rich Habits Network. We talk about this stuff nearly every week near really every day inside of there, to be quite honest with you. So if this is the type of analysis that you want to have more of in your life, consider joining the Rich Habits Network. You can use the link in the show notes below for a seven day free trial. All right, Robert, our next question comes from Ann C on Instagram. And C on Instagram says, where's the best place to get good AI training? We saw this question and we're like, this is a cool one. Let's see if we can figure out like the trees from the forest on this because I'm sure there's a lot of people that are saying, like, I'll teach you AI or do this for AI or this YouTube video or whatever, right? So we think we have a good list here. Also to find all of this. It's going to be in the show notes below. We've linked out everything, so starting with some courses on coursera.org there's a course by a man named Andrew that 2.2 million people have already gone through on Coursera called AI for Everyone. Definitely check that one out. 97% positive rating. It's got 4.8 stars, over 50,000 reviews. It's got about four hours of video coursework for you to review, which is really exciting. So go check that one out. Link in the show notes below. Below another Coursera course that is offered by IBM called Introduction to Artificial Intelligence. 21,000 reviews on this one, 96% approval rating. Looking at about 11 hours of video coursework on here. Again, all this stuff is free. Just want to make sure we're on the same page here. Next one to call out is elements of AI.com. this one is another free online course. Tons and tons of information in here. This one actually has over 30 hours of coursework inside of it. Over 1.8 million people have already taken it. Highly rated for clarity. So elements of AI.com now this one is from Google. This one is called Essential AI Skills for everyone. Tons and tons and tons of stuff in here. This is 10 hours of coursework all for free from Google on Google's website. And finally, can't forget OpenAI Academy. This is unlock the opportunities of the AI era by equipping yourself with the knowledge and skills to harness AI. AI effectively. Right? We love that. Right? So tons of stuff there. This one is about 20 hours of video coursework to to review there. But long story short, there's a ton of good places for good AI training. We just named five of them for you right here. Link in the show notes for all of them below. Robert, why don't you spend some time talking about how important it is for people to, you know, familiarize themselves with AI and take courses like this. Not just because it's going to impact their day to day lives and more specifically their careers.
- [27:31]
B
Yeah, it's highly because we, we keep seeing this headline that's getting run around the Internet a bunch that says AI is not going to take your job. The person that's better at AI than you is going to take your job. And although I don't agree with it totally, because AI is going to take your job, not the person next to you, we're going to see hundreds of thousands, if not millions of jobs replaced by AI in the next three to five years. So I do agree with Austin and I'm so glad we got asked this question because everyone should prepare. Whatever your job is, whatever your sector is, whatever your profession is, prepare. And it's really easy right here. Austin just named off five tools that are free to educate you. So you are better than 95% of the people out there at understanding where AI is going, how it affects your position, your sector of business and life, and how you can use it to be more efficient for yourself. We use AI in all of my companies. Austin uses AI like a madman every single day and it really helps us be better at what we do. And everyone listening this podcast should prepare because if you Put your head in the sand and say, oh, that's okay, I'll figure it out later. You're gonna get left behind. Just like what happened with the Internet when all these CEOs didn't prepare, they didn't learn how to use the Internet or email and they got rendered useless and out of their positions. So I love this question. AI is massively important. Are there bad things? Are there downsides to AI? Yes, there are. But as long as you stay ahead of it and you're following the Rich Habits podcast, so you will, I think you'll be just fine because there are going to be so many things that are positive for humanity coming out of AI, especially to help people be more efficient and make more money at what they do.
- [29:22]
A
I appreciate that breakdown. Robert Our next question comes from JMac on Instagram. JMac says, hey guys, I love the show. I've been listening to you guys for a while. I sent my son a couple of your episodes that cover this, but maybe a refresher for me could be great so I can give my son better advice. I have a 24 year old son that has recently graduated nursing school debt free. He has $70,000 in savings. No retirement has yet been set up and he just started his job in Alabama. A 403B is also offered. I want to tell him to fund this, but I also want him to put 25,000 of his 70,000 in a bridge account on public, put it all in the S and P and let it sit for 30 years. This of course will allow him to retire early assuming he has some access to capital in this bridge account. So could you guys please explain this one more time for him? I would really appreciate it. It's kind of funny, Robert, we actually just answered a question similar to this, but yeah, let's talk about it. Right? So you have your son J. Mac, who first off, nursing. That is a career that AI is not going to take. Lots of nurses love, love us some nurses, shout out to the nurses. I just, I love that career. I think it's incredible. And humanoid robots aren't going to come for your nursing jobs anytime soon. So your son is, is really going to be benefiting from that 70,000 in savings. First 24 year old job out of college here, living in Alabama. So here's what I would do, right? First thing is let's make sure that we outline what that honest budget looks like. And this is for everybody, not just the 24 year old out there. This goes for the 54, the 64 year old, the 34 year old. You have to know where your money goes every single month. So you sit down and you write out the honest budget. This breaks out between necessities, right? Needs and wants. Understand exactly how much you need to survive every single month. And then what those wants are on top of that, in case you actually ever do lose your job, you can cut down on the wants, like eating out subscriptions, you know, buying stuff at the mall. Other wants that you have in your budget, you can cut those out and live off less. But generally speaking, what I like to do when it comes to the emergency fund is figure out what that three to six months are of spending on both, not just the needs, but both the needs and the wants. So assuming you're 24, you're probably going to get about 15 to 20,000 in this emergency fund, which conservatively speaking, is going to leave your son with about 50 grand to invest again. Max out that Roth IRA, we love that as a general strategy. And then the other, let's call it $43,000 that your son has here. Yeah, go open up an account on public.com, go deposit that. Maybe you want to not just buy the S and P, maybe you want some VGT or perhaps some VXUS or some SPYI, some other different index funds and ETFs that yes, track American capitalism, but allow you to diversify a little bit with some international things as well, and then close your eyes and forget about it for 30 years. And then your son's in his mid-50s and I'm sure this amount will turn into hundreds of thousands of dollars over that period of time.
- [32:17]
B
That's a really good breakdown. The only thing I would add is for that international exposure, I would look at AIQ as well. It's one of my favorite funds that has done really well over the past few years. And it's basically international investing into the AI sector. So I think it's a good one to hold. But also I love this question because more people should be sharing this podcast with their kids, their grandkids, their friends, because everyone out there there has blind spots and things they need to work on. And this podcast is free. Our network has a seven day free trial. Our newsletter is free. So there is a wealth of information at People's Access every single day to help guide them in their own personal journey. So I really, really appreciate questions like this because more people need to share the wealth per se by letting people know how they can learn about all of these things that we cover. Cover within the rich Habits Podcast okay, so listen up folks. You can lock in a 6% or higher yield with a bond account on Public, but remember, your yield isn't locked in until the time of purchase, so you might want to act fast. Lock in a 6% or higher yield with a diversified portfolio of high yield and investment grade corporate bonds only at public.com forward/rich habits.
- [33:35]
A
All right Robert, so our next question comes from RS on Instagram. RS says hi. Can Austin and Robert please do a podcast about these new weekly paying dividend ETFs from companies like Yieldmax and Roundhill? I'm not sure if you've covered this topic in a post or podcast, but I'd like to hear your detailed thoughts about them. The weekly dividends are high, but the net asset value erosion is pretty high as well, which completely undermines your investment. According to a stock analysis website I use, there's over a hundred of these weekly paying ETFs. Perhaps some of them are good. Which ones are good? Good? Who knows? I'm looking forward to your thoughts and analysis. This is a good question, Robert. So let's just like make sure we set the table here correctly. Yes, there are ETFs out there that pay monthly income. We've all heard of NEOS Funds. Just this Monday we had Troy and Garrett on the show to talk about their covered call ETFs. We've been talking about Spyi, QQQI and all of their other awesome covered call ETFs on the show for years now. We have been big believers and SPYI just got a five star rating on Morningstar. QQQI was named the best new active ETF in 2025 by ETF.com like they are building some incredible products that really help a lot of people. I've got so much of my own money. I'm making nearly a thousand dollars a month now with my own NEOS funds, right? So like I believe in this. This is where I'm invested as well. On the flip side, you are seeing other ETF issuing that are creating not just, you know, monthly distributions like NEOS Funds is doing, but weekly distributions. And to create these weekly distributions, they might be taking on more risk, but they also might just be paying you back your own original investment, which is what RS was alluding to. So every single ETF out there has something called net asset value. Acronym for that is NAV or Nick nav. Right? And so RS alluded to the weekly dividends are high, but NAV erosion on some of these is pretty high as well, all that means there is, they're saying, hey, we aren't able to generate real returns inside of this etf. So to trick you, essentially what we're going to do is pay you back your own money so you're not really making anything. Now that's different than return of capital. Return of capital, sort of a tax strategy that a lot of these covered call ETFs use. Lose your NAV stays the same and even goes up despite return of capital taking place. When NAV gets paid back to investors. Right. Erosion takes place and you're actually losing money over time, which is what happens nine times out of ten with these weekly dividends. So if you're someone who's like, wait a second, I'm seeing a lot of the sexy headlines of the weekly payments. Yeah, I get two, I get a paycheck every Friday, not just from my, my employer but also my broker. This is great just because, careful, these weekly ETF covered call, like I don't use them, I don't generally believe in them. I think that they are kind of gimmicky and they're taking on a lot of risk. To try and do this to you, I would much rather kind of take a step back, take the slower approach of the monthly distributions via spyi, qqqi, iyri, you know, other neos funds that are built for long lasting appreciation of the underlying investment investment versus taking that underlying investment and just giving it back to you and trying to trick you like that. So Robert, what's your take on these weekly dividend ETFs?
- [37:02]
B
Well, you know, I don't touch them either. There is no world I'm going to own anything from a yield max, that's for sure. And I think this really is a good question because it highlights the fact that a lot of people when they get excited about investing and I forget what we used to say, it was something about investing shouldn't be an action sport. It should be like having ice cream cream. And I forget what we used to say, but it's so true because people get excited about investing and then they read up about these crazy things and these headlines that look so sexy. But at the end of the day we like to keep it simple, help you guys build real wealth and not put you in harm's way from a risk perspective or a loss perspective. And yieldmax is just one of those products like they have these three times leverage products as well. Well, I just don't do it. I like to make my money the old fashioned way. So that way I can really control and understand where my money's going. So I agree with you, Austin. I wouldn't touch these. I just don't think it's a good strategy and they just don't really work.
- [38:04]
A
Right there with you, Robert. So here's what you need to do. If you are someone who's looking to like add or you know, learn more about these covered call ETFs. No matter the type of issuer, if it's NEOs, if it's Roundhill, if it's Yieldmax, whoever you're looking at, do this one thing. Go to morningstar.com m o r n I N G S T A r and on Morningstar.com you can type in the ticker symbol in their search bar. The name of the ETF is going to pop up and what I want you to do is click on Performance. It's a little tab, you'll see. Scroll down and look at total return, Total return because the total return return is going to have and show you what the net asset value does. Is it going up or is it eroding and going down? With spyi, for example, the total return when you include the the nav, right, it's 13.9% right now, year to date. So that means you made 13.9% on your money right up and to the right. You can then look at some of these other ones. Like, I don't know, let's just look at tsly, which is the yield max Tesla, you know, crazy stuff here, year to date on that one is only 3.6% compared to actual Tesla stock being up 11 and a half percent during the same period of time. Right? So 11 and a half over here, but because you did like this high income payout weekly, whatever, right, you left essentially 8% returns on the table for the year. So all I'm saying, please do your research, go check out Morningstar and type in. This is not sponsored by anybody. This is us just telling you, tactically speaking speaking, right? Come back to. We talk about every week how important it is to understand what you own. So this is a great question. This was awesome. With that being said, everybody, thank you so much for tuning into this week's Q A episode of the Rich Habits podcast. Don't forget to come back tomorrow where we will be publishing our Friday episode, otherwise known as the Rich Habits Radar, where we talk about the biggest headlines impacting you and your money. Just last week we Talked about the 50 year mortgage, we talked about the government reopening, we talked about hims and hers coming out with the our new product labs and stuff. It's really interesting. So if you've not yet listened or tuned in to the Rich Habits radar, please give it a shot. We are loving making these episodes. We've actually had a lot of you guys give us some really positive feedback on them as well. So thank you all so much for the support.
- [40:26]
B
That's right. We love that you guys are enjoying the new Friday episodes. And honestly, I don't even think you need the Internet or any other channels. Just follow along, send it to a friend, send it to a family member. Get these people involved, involved in everything. Rich Habits Network and Rich Habits Podcast and everyone will be so much better off financially. Mindset, business, all the above. We cover it all right here.
- [40:50]
A
Thanks everyone for tuning in and we'll see you tomorrow. Sam.