1 00:00:00,080 --> 00:00:02,880 Hey everyone, and welcome back to the Rich Habits Podcast 2 00:00:02,880 --> 00:00:06,720 Question and Answer edition. These are our Thursday episodes, 3 00:00:06,880 --> 00:00:09,600 which in my opinion, one of my favorite episodes of the week, 4 00:00:09,600 --> 00:00:12,640 Robert, where we get to answer your questions as if we were 5 00:00:12,640 --> 00:00:15,760 going through whatever you're going through with you, 6 00:00:15,760 --> 00:00:19,560 alongside you in your shoes. Robert and I are off the Dome 7 00:00:19,560 --> 00:00:24,000 here just kind of talking about in real time through everything 8 00:00:24,000 --> 00:00:25,480 that you might have to share with us. 9 00:00:25,480 --> 00:00:28,520 If you have a question you want to ask us, you can e-mail us at 10 00:00:28,520 --> 00:00:31,640 Rich Habits Podcast at gmail.com, or you can DM us on 11 00:00:31,640 --> 00:00:34,160 Instagram at Rich Habits Podcast. 12 00:00:34,360 --> 00:00:37,200 Before we jump to the episode, I think this is a really, really 13 00:00:37,200 --> 00:00:41,040 cool thing we're doing, Robert. We are hosting A webinar 14 00:00:41,200 --> 00:00:46,360 alongside Publix COO Steven Sykes all about their new AI 15 00:00:46,360 --> 00:00:49,120 agents. A lot of people have been 16 00:00:49,120 --> 00:00:50,920 saying, hey, I just got off the wait list. 17 00:00:51,120 --> 00:00:56,120 I'm on Publix AI agent access, but I don't know how to build 1. 18 00:00:56,120 --> 00:00:58,240 I don't know what strategies to use. 19 00:00:58,240 --> 00:01:01,160 I don't know what it is capable that's not capable of. 20 00:01:01,160 --> 00:01:04,680 Can you guys please share some of your own AI agents? 21 00:01:04,680 --> 00:01:06,160 I mean, how you guys are thinking about this? 22 00:01:06,320 --> 00:01:09,160 And we've done a pretty good job of sharing some ideas inside the 23 00:01:09,160 --> 00:01:12,600 Rich Habits Network, but we wanted to open this up to every 24 00:01:12,600 --> 00:01:15,560 single person that listens to the Rich Habits podcast. 25 00:01:15,560 --> 00:01:20,840 So join us Friday, July 10 at noon Eastern Time. 26 00:01:20,840 --> 00:01:23,400 There's going to be a link in the show notes below and it's 27 00:01:23,400 --> 00:01:26,640 going to be a lot of fun there. And join us to get all your 28 00:01:26,640 --> 00:01:29,200 questions answered. Join us to get off the wait 29 00:01:29,200 --> 00:01:30,440 list. If you're still on the wait 30 00:01:30,440 --> 00:01:34,200 list, join us to build your own AI agent in real time. 31 00:01:34,200 --> 00:01:37,800 We'll have Steven create agents from prompts that you submit to 32 00:01:37,800 --> 00:01:40,200 us in the chat. We're going to walk through baby 33 00:01:40,200 --> 00:01:42,440 Publix. Even most compelling pre built 34 00:01:42,440 --> 00:01:47,000 agents to to hedge against inflation or repositioning with 35 00:01:47,000 --> 00:01:51,680 what the the the feds deciding or reinvesting dividends or 36 00:01:51,680 --> 00:01:52,920 whatever. Right. 37 00:01:52,920 --> 00:01:54,920 Like this is going to be a workshop. 38 00:01:54,920 --> 00:01:56,560 This is going to be the master class. 39 00:01:56,560 --> 00:01:59,920 This is going to be the coolest webinar we've hosted today 40 00:02:00,200 --> 00:02:02,720 because we're literally going to be building these agents, these 41 00:02:02,920 --> 00:02:06,840 AI trading agents and investing agents on public.com right in 42 00:02:06,840 --> 00:02:11,160 front of you in real time. So come again, Friday, July 10 43 00:02:11,160 --> 00:02:13,520 at noon Eastern Time. There's going to be a link in 44 00:02:13,520 --> 00:02:15,880 the show notes below here or it's going to be everywhere. 45 00:02:15,880 --> 00:02:17,920 So just you'll find some information about it. 46 00:02:17,920 --> 00:02:19,640 You're going to join us. It's going to be a blast. 47 00:02:19,640 --> 00:02:23,080 You've got me hyped, but if there was ever a day to skip 48 00:02:23,080 --> 00:02:27,200 going to get the Poke Bowl, Friday, July 10th, noon Eastern, 49 00:02:27,280 --> 00:02:31,240 we are going to be building these lines right before your 50 00:02:31,240 --> 00:02:34,720 eyes with Steven from Public An. It's free. 51 00:02:34,720 --> 00:02:36,440 You're going to get all the sauce. 52 00:02:36,440 --> 00:02:39,120 Like Austin said, it's going to be incredible. 53 00:02:39,200 --> 00:02:41,400 It's free, so put it in your calendars. 54 00:02:41,400 --> 00:02:45,280 Now, July 10th, we're super excited and we want to teach all 55 00:02:45,280 --> 00:02:48,360 of you what all the talk is about these AI 56 00:02:48,360 --> 00:02:52,280 agentsthroughpublic.com and we're super excited about this 57 00:02:52,280 --> 00:02:53,480 one. So make sure you're there. 58 00:02:53,480 --> 00:02:55,960 Speaking of public, got to give a shout out to Public, the 59 00:02:55,960 --> 00:02:59,400 investing platform for those who take investing as seriously as 60 00:02:59,400 --> 00:03:01,480 we do here on the Rich Habits podcast. 61 00:03:01,480 --> 00:03:05,000 Because on public you can build a multi asset portfolio of 62 00:03:05,000 --> 00:03:08,600 stocks, bonds, options, cryptocurrency and now they've 63 00:03:08,600 --> 00:03:11,640 also got generated assets. That's which allow you to turn 64 00:03:11,640 --> 00:03:15,720 any idea you have into an investable index using AI. 65 00:03:15,720 --> 00:03:17,440 And it all starts with your prompt. 66 00:03:17,680 --> 00:03:21,080 From renewable energy companies with high free cash flow to 67 00:03:21,080 --> 00:03:25,480 semiconductor suppliers growing revenue over 20% year over year, 68 00:03:25,480 --> 00:03:28,480 you can literally type any prompt and put the AI to work. 69 00:03:28,480 --> 00:03:31,680 It screens thousands of stocks, builds a one-of-a-kind index, 70 00:03:31,680 --> 00:03:35,400 and even let you back test it against the S&P 500, all with 71 00:03:35,400 --> 00:03:38,000 just a few clicks. Generated assets can be thought 72 00:03:38,000 --> 00:03:40,880 of as ETFs, but with infinite disabilities. 73 00:03:40,880 --> 00:03:43,840 They're completely customizable. They're based on your thesis, 74 00:03:43,840 --> 00:03:47,680 not someone else's. So go to public.com/rich Habits 75 00:03:47,680 --> 00:03:52,040 and transfer your portfolio to publicthatspublic.com/rich 76 00:03:52,040 --> 00:03:54,040 Habits and transfer your portfolio. 77 00:03:54,040 --> 00:03:57,160 Paid for by public investing. Full disclosure in the podcast 78 00:03:57,160 --> 00:03:59,160 description. As you can tell, Public is a 79 00:03:59,160 --> 00:04:02,880 very AI forward company. They've got their AI generated 80 00:04:02,880 --> 00:04:07,560 assets, their AI agents, they all things AI Public is doing. 81 00:04:07,560 --> 00:04:09,480 They're doing a really good job of building out an awesome 82 00:04:09,480 --> 00:04:13,440 product and they're super excited to be hosting again this 83 00:04:13,440 --> 00:04:19,040 webinar with their COO, Steven Sykes on July 10 at noon Eastern 84 00:04:19,040 --> 00:04:21,680 all about AI agents. Now our first question comes 85 00:04:21,680 --> 00:04:24,920 from Calvin S via e-mail. Calvin says, Hey Austin and 86 00:04:24,920 --> 00:04:27,680 Robert would love to have you guys give your feedback on this 87 00:04:27,680 --> 00:04:29,480 situation. I'm 21 years old. 88 00:04:29,480 --> 00:04:32,320 I'm working a blue collar job making 65,000 a year. 89 00:04:32,320 --> 00:04:35,080 I didn't discover you guys before making the decision but I 90 00:04:35,080 --> 00:04:39,840 currently own A4 unit property in Pittsburgh PA and living in 91 00:04:39,840 --> 00:04:42,000 one of the units. When it's all said and done it 92 00:04:42,000 --> 00:04:45,880 cash flows about 170 a month. I've been maxing out my Roth IRA 93 00:04:45,880 --> 00:04:48,960 for years and I currently have $55,000 in there. 94 00:04:48,960 --> 00:04:50,760 Into the ETFs you guys talk about. 95 00:04:51,000 --> 00:04:54,160 That's crazy. First off, pause 55,000 in a 96 00:04:54,160 --> 00:04:57,160 Roth IRA at 21 is wild. Good for you. 97 00:04:57,160 --> 00:04:58,600 Holy smokes. He says. 98 00:04:58,600 --> 00:05:01,960 I also have 66,000 in an individual brokerage account 99 00:05:01,960 --> 00:05:05,360 saying he got lucky on a few individual trades but have since 100 00:05:05,360 --> 00:05:07,480 rolled into the ETFs you guys talk about. 101 00:05:07,640 --> 00:05:10,160 I've also got 20,000 in an emergency fund high yield 102 00:05:10,240 --> 00:05:13,000 savings and another combined high yield savings with my 103 00:05:13,000 --> 00:05:16,160 fiance where we've got 20,000 in there that we're saving up for 104 00:05:16,160 --> 00:05:18,760 our property together. All right, we get it. 105 00:05:18,760 --> 00:05:21,560 You are loaded here at 21 years old. 106 00:05:21,560 --> 00:05:23,680 Congratulations Calvin, that is awesome. 107 00:05:23,680 --> 00:05:27,040 So Calvin says my fiance is graduating her undergrad in the 108 00:05:27,040 --> 00:05:29,560 winter time then we'll move to a different state for her grad 109 00:05:29,560 --> 00:05:33,120 program the following school year, which is why we're saving 110 00:05:33,120 --> 00:05:35,320 for another place. But the only issue is we don't 111 00:05:35,320 --> 00:05:36,680 know where we're going to end up. 112 00:05:36,760 --> 00:05:39,720 Meaning I don't know what the markets going to look like 113 00:05:39,720 --> 00:05:41,360 because I don't know where I'm going. 114 00:05:41,360 --> 00:05:44,200 So my main question is, do you guys think it makes sense to 115 00:05:44,200 --> 00:05:47,120 keep saving money to this high yield savings account for 116 00:05:47,120 --> 00:05:49,880 another house that we can house hack in, knowing that we're 117 00:05:49,880 --> 00:05:52,600 going to move in a year, but not know where we're going to move? 118 00:05:52,960 --> 00:05:56,920 Or should we just not purchase one of these altogether and do 119 00:05:56,920 --> 00:06:00,640 something other than house hacking with this $20,000? 120 00:06:01,040 --> 00:06:03,760 Long question, I know, but greatly appreciate your advice. 121 00:06:03,760 --> 00:06:06,160 Robert, what's your take here? Because it seems like Calvin is 122 00:06:06,160 --> 00:06:08,320 crushing it. Oh my goodness, this guy is just 123 00:06:08,320 --> 00:06:12,880 printing money at 21 years old blue collar jobs, 65,000 a year, 124 00:06:12,880 --> 00:06:15,200 65,000 a year. Like that's that's a solid 125 00:06:15,200 --> 00:06:16,520 amount of money for a 21 year old. 126 00:06:16,520 --> 00:06:20,360 So kick us off, Robert. Yeah, I think Calvin is crushing 127 00:06:20,360 --> 00:06:22,680 it. It reminds me of me at 21 years 128 00:06:22,680 --> 00:06:26,360 old because I was super focused and dialing in all of these 129 00:06:26,360 --> 00:06:29,200 things while all my friends were going out and spending their 130 00:06:29,200 --> 00:06:31,400 money on the weekends drinking and having fun. 131 00:06:31,800 --> 00:06:36,080 So Calvin, if you weren't who you are, I would say don't buy 132 00:06:36,080 --> 00:06:39,200 another property in house hack. But because you've proven 133 00:06:39,200 --> 00:06:42,520 already that you know how to invest and you know how to be 134 00:06:42,520 --> 00:06:46,760 diligent and stick to the plan. I absolutely love the idea. 135 00:06:46,880 --> 00:06:49,840 Not ahead of the time. Get there, learn the lay of the 136 00:06:49,840 --> 00:06:51,720 land. So if you're going to move out 137 00:06:51,720 --> 00:06:55,800 of state, I would probably get a six month lease in the new area 138 00:06:55,800 --> 00:06:58,320 where she's going to go to school and I would learn the lay 139 00:06:58,320 --> 00:07:00,760 of the land, learn the areas, learn what neighborhoods are 140 00:07:00,760 --> 00:07:03,800 best to buy in. And I would certainly then after 141 00:07:03,800 --> 00:07:06,600 that six month or a year period and you know what you're doing, 142 00:07:06,880 --> 00:07:10,760 then I would buy another property and house hack and do 143 00:07:10,760 --> 00:07:13,000 it all over again. There's just so many great 144 00:07:13,000 --> 00:07:16,000 programs out there for house hacking people to be able to 145 00:07:16,000 --> 00:07:19,080 invest in these two 3-4 unit properties. 146 00:07:19,160 --> 00:07:22,200 So I think you're spot on. It's exactly what I would do. 147 00:07:22,200 --> 00:07:25,600 I just wouldn't do it ahead of moving there because then you 148 00:07:25,600 --> 00:07:28,880 put yourself in a situation you might not like the neighborhood, 149 00:07:28,960 --> 00:07:31,360 there might be barking dogs, there might be issues you don't 150 00:07:31,360 --> 00:07:33,640 like. Get there, learn the lay of the 151 00:07:33,640 --> 00:07:36,280 land, and then house hack again. I love that. 152 00:07:36,400 --> 00:07:39,520 Keep the one in Pittsburgh. So since it's cash flowing, 153 00:07:39,720 --> 00:07:42,320 probably doing pretty well for you and keep doing what you're 154 00:07:42,320 --> 00:07:43,400 doing. Yeah, that's what's so 155 00:07:43,400 --> 00:07:47,120 interesting about this is the four unit in Pittsburgh cash 156 00:07:47,120 --> 00:07:51,640 flows 170 a month while they live in one of the units, 157 00:07:51,680 --> 00:07:54,400 correct. So if they start renting out one 158 00:07:54,400 --> 00:07:58,120 of the units for, I don't know, 2000 or 1500 bucks a month, 159 00:07:58,120 --> 00:08:00,400 whatever it might be, that cash flow is going to skyrocket, 160 00:08:00,400 --> 00:08:03,360 which is really, really cool. What advice do you have for 161 00:08:03,440 --> 00:08:05,840 maybe like, you know, not Calvin because he's figured it out 162 00:08:06,120 --> 00:08:08,640 right now, but maybe for someone who wants to start house 163 00:08:08,640 --> 00:08:10,240 hacking. You mentioned barking dogs. 164 00:08:10,240 --> 00:08:12,800 You mentioned, you know, living and, and being familiar with the 165 00:08:12,800 --> 00:08:14,720 area. If someone wants to go and house 166 00:08:14,720 --> 00:08:18,000 hack in a new area for the very first time, what are maybe like 167 00:08:18,000 --> 00:08:22,200 3 things they need to always consider before they sign the 168 00:08:22,200 --> 00:08:25,400 dotted line and close on their their first, you know, multi 169 00:08:25,400 --> 00:08:28,040 unit property? I love this question because so 170 00:08:28,040 --> 00:08:32,159 many people get it wrong. They tour these places, these 171 00:08:32,159 --> 00:08:36,280 properties on a weekend. Everything is staged by the real 172 00:08:36,280 --> 00:08:38,760 estate agent. They're in and out in 20 173 00:08:38,760 --> 00:08:39,919 minutes. They're happy. 174 00:08:39,919 --> 00:08:42,600 They got a cookie from the agent when they did the tour, whatever 175 00:08:42,600 --> 00:08:45,040 it was. I like to tell people go there 176 00:08:45,040 --> 00:08:48,960 during the week when everyone's home, when everyone's around, 177 00:08:48,960 --> 00:08:51,360 when the companies in the neighborhood are up and running. 178 00:08:51,360 --> 00:08:53,760 I remember we were getting ready to buy and this is two different 179 00:08:53,760 --> 00:08:55,600 stories. I was getting ready to buy a 180 00:08:55,600 --> 00:08:58,680 property one time. It was a four unit and we didn't 181 00:08:58,680 --> 00:09:02,080 realize the neighboring property, property across the 182 00:09:02,080 --> 00:09:06,400 alley was running an illegal kennel operation with all these 183 00:09:06,400 --> 00:09:09,760 barking dogs and it was loud and we couldn't figure out why this 184 00:09:09,760 --> 00:09:12,360 property sat on the market too long, so long. 185 00:09:12,360 --> 00:09:15,480 And it was that. But another time I looked at a 186 00:09:15,480 --> 00:09:17,760 property on a weekend. It was magical. 187 00:09:17,760 --> 00:09:20,560 I went back during the week and this is what I always recommend. 188 00:09:20,880 --> 00:09:24,320 Go to the property, sit in the neighborhood, whether you sit 189 00:09:24,320 --> 00:09:28,080 outside, sit on the hood of your car for an hour or so and see 190 00:09:28,080 --> 00:09:30,800 what's going on in the neighborhood and really take a 191 00:09:30,800 --> 00:09:31,160 look. Look. 192 00:09:31,320 --> 00:09:33,840 And we found out this property, and this was a waterfront 193 00:09:33,840 --> 00:09:38,160 property was across the Bay from a machine plant. 194 00:09:38,240 --> 00:09:42,600 So all day long you could hear this equipment hammering away 195 00:09:42,800 --> 00:09:44,920 from 9:00 to 5:00 Monday through Friday. 196 00:09:45,120 --> 00:09:47,240 And I wouldn't recommend living there for anyone. 197 00:09:47,240 --> 00:09:50,960 So just always make sure you're not in a rush, especially if 198 00:09:50,960 --> 00:09:53,440 you're buying out of state. You see all the fake gurus 199 00:09:53,440 --> 00:09:56,400 talking about, oh, you can buy the property and do it remotely. 200 00:09:56,400 --> 00:09:58,240 You don't even have to ever see the property. 201 00:09:58,560 --> 00:10:01,480 That's ridiculous. Go see the property if you can 202 00:10:01,680 --> 00:10:04,640 go look around or have somebody there that you trust that can 203 00:10:04,640 --> 00:10:07,280 really check out all these things because you just want to 204 00:10:07,280 --> 00:10:08,960 make sure it's really good for you. 205 00:10:09,000 --> 00:10:11,600 And the other thing that's kind of long winded, but I'll keep it 206 00:10:11,600 --> 00:10:15,160 short, is also understand if you're doing this for 207 00:10:15,160 --> 00:10:18,720 investments, make sure you're finding a property that's near a 208 00:10:18,720 --> 00:10:22,320 Starbucks, that's near a Target, that's near a Home Depot. 209 00:10:22,480 --> 00:10:24,960 Because trust me, if you're renovating a house and you're 210 00:10:24,960 --> 00:10:28,760 using subcontractors and the nearest Home Depot is 45 minutes 211 00:10:28,760 --> 00:10:31,600 away, it's going to add thousands of thousands of 212 00:10:31,600 --> 00:10:34,080 dollars to your labor and your bottom line when doing the 213 00:10:34,080 --> 00:10:37,600 renovation because you can't get materials quickly. 214 00:10:37,720 --> 00:10:39,600 So I hope that helps. Calvin, I love what you're 215 00:10:39,600 --> 00:10:41,680 working on here. You obviously got your base 216 00:10:41,680 --> 00:10:46,520 built right, 55,000 in your Roth IRA, 66,000 in a bridge account, 217 00:10:46,520 --> 00:10:49,160 20,000 in an emergency high yield savings account. 218 00:10:49,160 --> 00:10:51,720 You're crushing it at your age. I think the next big thing that 219 00:10:51,720 --> 00:10:55,320 you need to consider, seriously consider is having those 220 00:10:55,320 --> 00:10:59,680 conversations with your fiance now that you are obviously the 221 00:10:59,680 --> 00:11:02,080 person maybe in the relationship ship who's really good with 222 00:11:02,080 --> 00:11:05,680 money, who's been house hacking, who's, you know, diligent and it 223 00:11:05,680 --> 00:11:08,720 is always being as responsible and forward thinking as possible 224 00:11:08,720 --> 00:11:11,480 with their portfolio. Ensure your fiance is on the 225 00:11:11,480 --> 00:11:13,840 same page with you on that one. That's the only advice I can 226 00:11:13,840 --> 00:11:16,320 give you. Our next question comes from Ian 227 00:11:16,400 --> 00:11:19,600 N Ian says, hey guys, my name is Ian. 228 00:11:19,600 --> 00:11:23,600 I'm 40 years old and I recently left a long career and built up 229 00:11:23,600 --> 00:11:25,880 a concentrated net worth position. 230 00:11:25,960 --> 00:11:30,040 It totals $9 million and the majority is in a single long 231 00:11:30,040 --> 00:11:32,240 term stock from a former employer. 232 00:11:32,240 --> 00:11:34,960 What I'm trying to better understand is how to think about 233 00:11:34,960 --> 00:11:38,560 sequencing risk in situations like this, More specifically 234 00:11:38,560 --> 00:11:42,160 when someone has a large appreciated concentrated 235 00:11:42,160 --> 00:11:44,600 position and wants to diversify over time. 236 00:11:44,600 --> 00:11:48,840 What frameworks do you use to balance tax efficiency versus 237 00:11:48,840 --> 00:11:52,880 concentration risks versus behavioral factors like over 238 00:11:52,880 --> 00:11:55,880 attachment or waiting for the right time to act? 239 00:11:55,880 --> 00:11:58,560 In other words, how do you structure a transition plan so 240 00:11:58,560 --> 00:12:01,600 it's disciplined and durable through market cycles rather 241 00:12:01,600 --> 00:12:03,760 than reactive? Thanks for the podcast. 242 00:12:03,760 --> 00:12:05,640 It's a daily ritual for me. Awesome to hear it. 243 00:12:05,640 --> 00:12:07,080 Ian, thank you so much for tuning in. 244 00:12:07,240 --> 00:12:10,480 I'll take this one off, Robert. I think the first realization 245 00:12:10,560 --> 00:12:14,920 Ian has to come with, and this is I've done this, Robert's done 246 00:12:14,920 --> 00:12:17,360 this. And I guarantee you anyone that 247 00:12:17,440 --> 00:12:21,000 that's made a ton of money or had a position go up a ton, like 248 00:12:21,000 --> 00:12:23,520 whatever it might be, also had to come to this conclusion, 249 00:12:23,520 --> 00:12:29,080 which is I cannot time the market and the decision that I 250 00:12:29,080 --> 00:12:33,840 make to diversify away from might not be the perfect 251 00:12:33,840 --> 00:12:36,120 decision. Like a great example, I invested 252 00:12:36,120 --> 00:12:40,920 a ton of money into some crypto currencies back in like 2017, 253 00:12:40,920 --> 00:12:44,240 2019, and it made me hundreds of thousands of dollars. 254 00:12:44,560 --> 00:12:47,800 I did not perfectly time anything with that that I'm 255 00:12:47,800 --> 00:12:51,160 still very happy with the outcome, but I did not perfectly 256 00:12:51,160 --> 00:12:54,160 time anything. And Ian, I would argue the same 257 00:12:54,160 --> 00:12:55,560 thing is going to happen to you here. 258 00:12:55,680 --> 00:13:00,160 Let's say 678 million of this $9 million is in a single stock. 259 00:13:00,160 --> 00:13:02,960 You are going to have and figure out a framework that we'll share 260 00:13:02,960 --> 00:13:05,280 with you here as to how I approach this and how Robert 261 00:13:05,280 --> 00:13:07,400 would approach this. And you're going to act upon it. 262 00:13:07,600 --> 00:13:10,480 And in 24 months from now, you're going to look back at 263 00:13:10,480 --> 00:13:14,040 this and be like I just left $900,000 on the table. 264 00:13:14,200 --> 00:13:17,640 I should have just held it or whatever, but like at the end of 265 00:13:17,640 --> 00:13:20,520 the day, you have to come to the conclusion that there is no 266 00:13:20,520 --> 00:13:22,880 right answer. You know, you've got to balance 267 00:13:23,080 --> 00:13:28,120 this sleep well at night mentality with upside potential. 268 00:13:28,400 --> 00:13:32,520 And the, the big, the keyword there is is potential because 269 00:13:32,520 --> 00:13:36,560 potential's not guaranteed, whereas sleep well at night very 270 00:13:36,560 --> 00:13:38,720 much is guaranteed. So here's how I'm approaching 271 00:13:38,720 --> 00:13:40,320 this. There's a couple really 272 00:13:40,320 --> 00:13:42,680 important things to consider with the framework. 273 00:13:42,880 --> 00:13:44,920 I don't have a specific framework to build out, but we 274 00:13:44,920 --> 00:13:47,440 can talk through it live here. The first consideration is tax 275 00:13:47,440 --> 00:13:50,080 efficiency. I'm assuming a lot of this is 276 00:13:50,080 --> 00:13:53,120 going to be tax efficient considering you probably have 277 00:13:53,120 --> 00:13:56,080 held the stock for a long time, long term capital gains, things 278 00:13:56,080 --> 00:13:57,720 like that. However, when we talk about 279 00:13:57,720 --> 00:14:01,480 millions of dollars, you have to be very thoughtful now as to 280 00:14:01,480 --> 00:14:03,880 what those long term capital gains look like. 281 00:14:04,200 --> 00:14:06,720 Depending on how much income you're taking in on an 282 00:14:06,720 --> 00:14:10,160 annualized basis, it might be between 15 or 20%. 283 00:14:10,160 --> 00:14:15,680 Another thing to consider here is does that 5% actually matter 284 00:14:15,680 --> 00:14:19,600 if the stock is moving up and down more than 5% on a weekly or 285 00:14:19,600 --> 00:14:21,520 monthly basis? You might say to yourself, I'm 286 00:14:21,520 --> 00:14:24,920 going to stagger out the sales so I'm not in that 20% tax 287 00:14:24,920 --> 00:14:26,720 bracket and I keep it under the 15. 288 00:14:27,000 --> 00:14:29,520 But maybe over the next half of many years, you do that, the 289 00:14:29,520 --> 00:14:31,920 stock falls calls by more than 5% and now you just shot 290 00:14:31,920 --> 00:14:34,040 yourself in the foot. Kind of goes back to my first 291 00:14:34,040 --> 00:14:37,280 point of no matter what decision you choose here, it's going to 292 00:14:37,280 --> 00:14:39,160 be the wrong 1. So it's just like come to that 293 00:14:39,160 --> 00:14:41,000 conclusion. Ian, The other thing that I 294 00:14:41,000 --> 00:14:42,960 think is a wonderful tool for people that are in your 295 00:14:42,960 --> 00:14:46,760 situation that I've done myself is covered calls. 296 00:14:47,000 --> 00:14:50,320 If you're able to say, hey, I've got thousands or 10s of 297 00:14:50,320 --> 00:14:52,920 thousands of shares of this company's stock, I mean $9 298 00:14:52,920 --> 00:14:55,560 million, who knows how many shares you have, I'm going to 299 00:14:55,560 --> 00:14:59,640 start selling covered call options against it at a strike 300 00:14:59,640 --> 00:15:02,360 price that I'm super comfortable selling at. 301 00:15:02,360 --> 00:15:06,720 Even if that strike price is at or, you know, marginally below 302 00:15:06,720 --> 00:15:09,880 where it's currently trading at. At least you're locking in now 303 00:15:09,880 --> 00:15:13,360 premium income that yeah, you're going to have to pay taxes on. 304 00:15:13,480 --> 00:15:17,040 But you can set that money aside and use that, all of that 305 00:15:17,040 --> 00:15:21,280 premium income to help offset what your taxes might be on this 306 00:15:21,280 --> 00:15:24,480 entire game itself. So you're kind of thinking about 307 00:15:24,480 --> 00:15:27,760 this is like a way to say, let me sell some covered calls 308 00:15:27,760 --> 00:15:31,080 against the specific stock position in My Portfolio, not as 309 00:15:31,080 --> 00:15:34,200 a way to generate income or build wealth, but as a way to 310 00:15:34,200 --> 00:15:37,800 help offset what the taxes might turn into on my position. 311 00:15:37,800 --> 00:15:41,080 Here's my thing. I do not enjoy and then I'll 312 00:15:41,080 --> 00:15:44,520 flip it over to Robert. Having a single stock make up 313 00:15:44,520 --> 00:15:48,880 more than six, 1012% of my net worth. 314 00:15:49,200 --> 00:15:53,600 Now I have exceptions. There are start-ups, privately 315 00:15:53,600 --> 00:15:57,400 held multi billion dollar companies that make up 7 figures 316 00:15:57,400 --> 00:15:59,680 of my net worth, which is exciting because I believe in 317 00:15:59,680 --> 00:16:02,040 those companies and, and a lot of that is, is just 318 00:16:02,040 --> 00:16:04,000 appreciation. And I also don't have the 319 00:16:04,000 --> 00:16:06,080 liquidity to get out of that or I guess I would already start 320 00:16:06,080 --> 00:16:08,320 doing that. But when it comes to publicly 321 00:16:08,320 --> 00:16:11,640 traded single stocks, I don't like to have more than call it 322 00:16:11,640 --> 00:16:14,920 six, 1012% of my net worth in one of those. 323 00:16:14,920 --> 00:16:18,720 Because what could happen is you see Tesla, which is a great 324 00:16:18,720 --> 00:16:23,600 example from 2023 throughout 2024, Tesla was trading in the, 325 00:16:23,920 --> 00:16:27,840 you know, 200 ish range, one 80s, two 20s all around that. 326 00:16:28,080 --> 00:16:33,680 Then it spiked up to 421 share. Then it spiked to $450 a share, 327 00:16:33,840 --> 00:16:37,320 fell back to 260 a share. Now it's back to four O 9 a 328 00:16:37,320 --> 00:16:40,600 share. I mean, that is a recipe for 329 00:16:40,840 --> 00:16:44,200 emotional stress and disaster if you don't have the discipline 330 00:16:44,200 --> 00:16:45,640 around it. Microsoft's another great 331 00:16:45,640 --> 00:16:47,920 example. Microsoft has been trending up 332 00:16:47,920 --> 00:16:52,280 and to the right was as low as 350 in April of 2020. 333 00:16:52,360 --> 00:16:56,400 Five got as high as 550 in August of 2025. 334 00:16:56,400 --> 00:17:00,240 Now it's 371. So like these single stocks go 335 00:17:00,240 --> 00:17:03,840 all over the place. So the goal here is to diversify 336 00:17:03,840 --> 00:17:07,760 away from them as it makes up a bulk of your net worth. 337 00:17:08,000 --> 00:17:13,440 And now move a bulk of your net worth into index funds and big 338 00:17:13,560 --> 00:17:16,640 ETFs that are operating in secular growth trends that we 339 00:17:16,640 --> 00:17:19,839 all talk about and believe in. Not because you think they're 340 00:17:19,839 --> 00:17:22,480 going to outperform the single stocks, but because they do you 341 00:17:22,480 --> 00:17:27,560 yes, swing 1015%, but they don't have these violent 40% swings 342 00:17:27,560 --> 00:17:31,160 like a Microsoft is down 38% from its recent all time highs. 343 00:17:31,320 --> 00:17:34,560 In a matter of half a year, index funds will move and groove 344 00:17:34,560 --> 00:17:37,400 up and to the right. That is a great way to preserve 345 00:17:37,560 --> 00:17:40,880 that that net worth that you've made here concentration, you 346 00:17:40,880 --> 00:17:43,600 know, helped you make the net worth index funds and 347 00:17:43,600 --> 00:17:46,440 diversification helps you preserve your net worth. 348 00:17:46,440 --> 00:17:49,040 So I like how you've kind of done this here, Ian, but those 349 00:17:49,040 --> 00:17:51,680 covered calls might help a ton as you think about taxes. 350 00:17:51,880 --> 00:17:54,240 Robert, did I miss. You didn't miss anything. 351 00:17:54,240 --> 00:17:58,520 That was a master class for this situation. 352 00:17:58,520 --> 00:18:02,280 But I'm just going to add a couple little doses of insight. 353 00:18:02,320 --> 00:18:04,920 For me, hope is not a financial strategy. 354 00:18:04,960 --> 00:18:09,520 And you mentioned that you have this, you know, risk behaviors 355 00:18:09,520 --> 00:18:13,080 and all these things you're worried about over time here 356 00:18:13,080 --> 00:18:16,800 because you have this high concentration in one stock and 357 00:18:16,800 --> 00:18:20,720 you got here by doing that. But now you have to diversify. 358 00:18:20,960 --> 00:18:23,920 You have to take it out of your mind that you're going to leave 359 00:18:23,920 --> 00:18:26,520 money on the table or pay these taxes. 360 00:18:26,760 --> 00:18:30,880 Because if you don't, you could find yourself in a really bad 361 00:18:30,880 --> 00:18:33,800 place where let's say it goes down this stock over the next 362 00:18:33,840 --> 00:18:38,080 year, 2 years goes down 50% and then you're going to to kick 363 00:18:38,080 --> 00:18:39,960 yourself for not doing something. 364 00:18:39,960 --> 00:18:41,360 So I think you're on the right track. 365 00:18:41,680 --> 00:18:45,440 Everything Austin said is exactly what I would do. 366 00:18:45,560 --> 00:18:48,120 You got to get out of it. You don't necessarily have to 367 00:18:48,120 --> 00:18:50,640 sell it all at once. Whatever you want to sell down 368 00:18:50,640 --> 00:18:53,920 to, to get the diversification, you could take it over 1-2, 369 00:18:53,920 --> 00:18:56,160 three years. But just be careful there as 370 00:18:56,160 --> 00:18:58,720 well because you don't know what the markets are going to do with 371 00:18:58,720 --> 00:19:00,880 that individual stock over the next three years. 372 00:19:01,160 --> 00:19:04,920 But the main thing is getting over what you said is the 373 00:19:04,920 --> 00:19:09,240 behavioral factor, because right now you're operating more 374 00:19:09,240 --> 00:19:12,960 emotional and less tactical because of the fact you're 375 00:19:12,960 --> 00:19:16,440 fearful of leaving money on the table because you've built so 376 00:19:16,440 --> 00:19:20,600 much wealth from this one stock. But remember, this is not real 377 00:19:20,600 --> 00:19:22,800 gains until you do something with it. 378 00:19:22,840 --> 00:19:25,280 This is unrealized gains. And you have to get that 379 00:19:25,280 --> 00:19:30,040 diversification so you do have protection against one single 380 00:19:30,040 --> 00:19:32,280 stock that could go down at any given time. 381 00:19:32,360 --> 00:19:35,760 And I think I know another mental model here to think about 382 00:19:35,760 --> 00:19:38,240 is I had a really good friend. I don't want to name his name 383 00:19:38,240 --> 00:19:40,880 because he's very rich now, but he started a really cool company 384 00:19:40,880 --> 00:19:45,920 in college and he got a, a windfall in his mid to late 20s 385 00:19:45,920 --> 00:19:51,880 of 20, five, $30 million. And he looked at me and we 386 00:19:51,880 --> 00:19:53,560 talked about this is like, wow, man, that's a lot of money. 387 00:19:53,560 --> 00:19:54,520 Like, what are you going to do with it? 388 00:19:54,520 --> 00:19:58,400 And he goes, I'm going to put it all in the index funds because 389 00:19:58,400 --> 00:20:02,480 literally if I do nothing and American capitalism and need a 390 00:20:02,800 --> 00:20:06,320 rule of 72, like all that stuff continues to happen, this will 391 00:20:06,320 --> 00:20:10,600 be worth hundreds of millions over my lifetime versus I'm 392 00:20:10,600 --> 00:20:12,600 going to get cute with it and buy some single stocks. 393 00:20:12,600 --> 00:20:14,840 I'm going to get cute and try and do this venture investment. 394 00:20:14,840 --> 00:20:17,560 I'm going to get cute and do whatever, whatever, just taking 395 00:20:17,560 --> 00:20:21,080 this money in and saying after taxes, you have 6 million or 396 00:20:21,080 --> 00:20:22,960 whatever the number is here. I don't know your, you said 397 00:20:22,960 --> 00:20:25,400 9,000,000 total. Let's say it's $6 million after 398 00:20:25,400 --> 00:20:27,880 taxes in seven years, that's 12 million. 399 00:20:28,200 --> 00:20:33,560 In 14 years, that's $24 million, Ian, by just sitting in index 400 00:20:33,560 --> 00:20:35,040 funds. And another way to think about 401 00:20:35,040 --> 00:20:39,200 this, and this is actually a, a, a mental model that Dave Ramsey 402 00:20:39,200 --> 00:20:43,560 popularized, which was every day that you own so much of the 403 00:20:43,560 --> 00:20:47,480 single stock, you have to flip it on its head and ask yourself, 404 00:20:47,480 --> 00:20:53,080 would you take $8 million today and buy that stock with it right 405 00:20:53,080 --> 00:20:55,560 now at this price? Because that's what you're 406 00:20:55,560 --> 00:20:57,560 doing. If whatever the stock price is 407 00:20:57,560 --> 00:21:01,280 for this company, would you say I'm going to go take $8 million 408 00:21:01,280 --> 00:21:05,160 and 92% of my net worth and buy this specific stock at this 409 00:21:05,160 --> 00:21:08,080 specific price right now, today? If the answer is no, and you 410 00:21:08,080 --> 00:21:10,040 would not do that and you're like, whoa, that's actually 411 00:21:10,040 --> 00:21:11,680 crazy. I would not do that right now. 412 00:21:11,880 --> 00:21:15,440 Then that's another kind of like flashing red, you know, red 413 00:21:15,440 --> 00:21:17,760 light to say, maybe I should not be holding this position. 414 00:21:17,760 --> 00:21:19,840 There's a lot of little different ways to think about 415 00:21:20,040 --> 00:21:22,560 owning a very concentrated position that makes up a ton of 416 00:21:22,560 --> 00:21:25,480 your net worth. And again, do some covered 417 00:21:25,480 --> 00:21:27,440 calls, do what you can to help with the taxes there. 418 00:21:27,800 --> 00:21:30,200 Oh, last point, Robert, maybe you can talk toward this. 419 00:21:30,480 --> 00:21:35,080 Any financial advisor, any online guru, any anyone that's 420 00:21:35,080 --> 00:21:38,400 going to say, let me take that. I can perfectly time the market 421 00:21:38,400 --> 00:21:39,800 for you. I'll make sure you get out of 422 00:21:39,800 --> 00:21:42,760 this with as much tax efficiency, as much upside 423 00:21:42,760 --> 00:21:43,960 potential. You're going to have all those, 424 00:21:43,960 --> 00:21:47,240 all they are lying to you. No one can time the market. 425 00:21:47,240 --> 00:21:51,200 So please be weary of someone trying to take this 8,000,009 426 00:21:51,200 --> 00:21:54,800 million from you and say put it in this whole life insurance 427 00:21:54,800 --> 00:21:56,880 policy. You can then borrow from it here 428 00:21:56,880 --> 00:21:59,200 and then you cannot pay taxes on the game here, which you're 429 00:21:59,200 --> 00:22:01,600 going to say just be careful my friend. 430 00:22:01,760 --> 00:22:05,120 Just be careful. I live this exact moment and to 431 00:22:05,120 --> 00:22:10,800 this day, and this was 16 years ago, still is a defining moment 432 00:22:10,800 --> 00:22:13,400 of my financial career and my life. 433 00:22:13,720 --> 00:22:17,320 My cousin Tim walked in unannounced during the heat of 434 00:22:17,320 --> 00:22:19,600 silly bands when everything was going crazy. 435 00:22:19,800 --> 00:22:21,640 He walked in and I'm like do we have a meeting? 436 00:22:21,640 --> 00:22:24,280 And I said he said no. I said what are you here for? 437 00:22:24,280 --> 00:22:28,720 He goes, write me a check for $5,000,000 right now so I can 438 00:22:28,720 --> 00:22:32,880 get it out of your mind and out of your coffers and I'm going to 439 00:22:32,880 --> 00:22:37,120 put it into the S&P 500 and the NASDAQ and you're going to 440 00:22:37,120 --> 00:22:40,720 forget about it so you never have to think about money again. 441 00:22:41,120 --> 00:22:44,600 And I didn't do it. I gave him $1 million on the 442 00:22:44,600 --> 00:22:45,960 spot. I think it was 1 million or 2 443 00:22:45,960 --> 00:22:48,640 million. And that is this exact story. 444 00:22:48,640 --> 00:22:52,040 You have to take money out of high concentrated risk and get 445 00:22:52,040 --> 00:22:56,040 it somewhere else so you can let it grow and compound over time 446 00:22:56,160 --> 00:22:59,440 without being in that high risk bucket any longer. 447 00:22:59,560 --> 00:23:01,920 So, Austin, that's a great, great call out. 448 00:23:01,920 --> 00:23:04,080 So our next this question comes from an anonymous listener. 449 00:23:04,200 --> 00:23:06,760 They say, hey Robert and Austin, I love the show and I listen 450 00:23:06,760 --> 00:23:08,880 every week. My wife and I in our mid 30s and 451 00:23:08,880 --> 00:23:12,320 we invest 10% of our paychecks into our respective Roth 41 KS. 452 00:23:12,320 --> 00:23:14,760 After all bills and expenses are paid, we have an additional 453 00:23:14,760 --> 00:23:18,560 $2000 a month surplus and would love your breakdown as to how to 454 00:23:18,560 --> 00:23:22,800 prioritize this extra cash across 5 competing options. 455 00:23:22,800 --> 00:23:28,040 Option one is we have a car loan of about $39,000 at 7% interest. 456 00:23:28,040 --> 00:23:32,320 Option 2 is we've got some short term debt of 5000 on a 0% 457 00:23:32,400 --> 00:23:36,040 interest deferred until July of 2027. 458 00:23:36,040 --> 00:23:39,360 Option 3 is retirement acceleration maxing out both of 459 00:23:39,360 --> 00:23:43,600 our Roth IR as option 4 is a college savings fund. 460 00:23:43,600 --> 00:23:46,920 We've got a couple kids we could do a 529 ages one and three or 461 00:23:46,920 --> 00:23:49,600 option five, our low interest debt, which is our mortgage at a 462 00:23:49,600 --> 00:23:51,720 beautiful 2 1/2 percent interest rate. 463 00:23:51,720 --> 00:23:56,160 Mathematically, the 7% car loan and the 0% deferred interest 464 00:23:56,160 --> 00:23:59,880 deadline seem urgent, but we want to balance aggressive debt 465 00:23:59,880 --> 00:24:02,600 pay off with building wealth. How would you rank these 5 466 00:24:02,600 --> 00:24:03,760 buckets? Good question. 467 00:24:03,880 --> 00:24:06,320 So I kind of want to start over because it all comes back to our 468 00:24:06,320 --> 00:24:09,160 phrase of match beats Roth, beats taxable. 469 00:24:09,160 --> 00:24:12,320 So up to the match with your 4 O1 Ki, think you guys are going 470 00:24:12,320 --> 00:24:14,040 above that. I don't know if your 4-O1K is 471 00:24:14,040 --> 00:24:17,240 giving you a 10% match. So up to the match, which in 472 00:24:17,240 --> 00:24:20,040 your case is probably 3-4, maybe 5% if you're lucky. 473 00:24:20,040 --> 00:24:23,360 Then you Max out the Roth IRA because you have complete 474 00:24:23,360 --> 00:24:26,240 autonomy over it and you can make sure it's invested into the 475 00:24:26,240 --> 00:24:32,280 right things like VOO or QQQ and then back to that four O 1K. 476 00:24:32,400 --> 00:24:34,760 If you have autonomy in that and you want to put more money into 477 00:24:34,760 --> 00:24:37,360 those retirement accounts and get a lot more invested, and 478 00:24:37,360 --> 00:24:39,840 then if you even have more money, that's when the bridge 479 00:24:39,840 --> 00:24:42,640 account comes into play. So I would have reimagined how 480 00:24:42,640 --> 00:24:44,600 you're prioritizing your Roth IRA. 481 00:24:44,600 --> 00:24:47,240 The third thing there, retirement acceleration, maxing 482 00:24:47,240 --> 00:24:50,240 out both of our Roth IR as I want to make sure that's done. 483 00:24:50,280 --> 00:24:52,160 You guys have $2000 more a month. 484 00:24:52,160 --> 00:24:54,280 Like figure out where that fits into the equation because you 485 00:24:54,280 --> 00:24:58,000 guys both need to Max out these Roth IR as that is a great, 486 00:24:58,000 --> 00:25:01,120 great, great idea. However, you mentioned high 487 00:25:01,120 --> 00:25:03,880 interest debt of a car loan here at 7%. 488 00:25:04,080 --> 00:25:08,080 Now I would argue that 7% is right on that cusp of. 489 00:25:08,320 --> 00:25:11,920 It's not high interest credit card at 28%, but it's also not a 490 00:25:11,920 --> 00:25:16,240 low interest mortgage at 2 1/2%. So I'm not mad about wanting to 491 00:25:16,240 --> 00:25:18,920 get rid of that car loan. But there is another thing 492 00:25:18,920 --> 00:25:22,400 jumping out at me that's a little scary, which is the short 493 00:25:22,400 --> 00:25:27,200 term 5000 home remodel loan. I can appreciate the 0% interest 494 00:25:27,200 --> 00:25:31,360 deferred until July 2027, but I got a funny feeling that this 495 00:25:31,360 --> 00:25:36,560 might be on a throw credit card, 0% whatever that after 18 months 496 00:25:36,560 --> 00:25:39,960 is going to jump to 27 1/2 percent or whatever is going on 497 00:25:40,160 --> 00:25:42,520 and you're going to be up to your eyeballs and high interest 498 00:25:42,520 --> 00:25:45,120 debt now from this home remodel. So let's do this. 499 00:25:45,400 --> 00:25:50,160 Let's figure out how to start putting five $600 a month toward 500 00:25:50,160 --> 00:25:53,960 this Roth IRA of this $2000. So you're maxing it out now on 501 00:25:53,960 --> 00:25:55,560 an annualized basis going forward. 502 00:25:55,560 --> 00:25:59,880 Let's also figure out how to get rid of this home remodel loan as 503 00:25:59,880 --> 00:26:04,280 quickly as possible, but absolutely before this July 2027 504 00:26:04,280 --> 00:26:06,880 number kicks out. And then, you know, I'm not mad 505 00:26:06,880 --> 00:26:08,560 about the car loan. I'm not trying to pay it off 506 00:26:08,560 --> 00:26:10,840 aggressively per SE. I'd like to see, you know, a 507 00:26:10,840 --> 00:26:14,400 couple 100 bucks maybe into funding that 529 account. 508 00:26:14,400 --> 00:26:16,760 You can do this on Vanguard. That's what I do for my nieces 509 00:26:16,760 --> 00:26:18,760 and nephews. I think it's like 200 or 250 a 510 00:26:18,760 --> 00:26:21,720 month I put in there. It's already worth like $20,000 511 00:26:21,720 --> 00:26:23,080 and I've been doing it for like 3 years. 512 00:26:23,080 --> 00:26:24,960 It's just, it just sits in the S&P and it grows. 513 00:26:24,960 --> 00:26:26,720 It's, it's really, really cool. So go do that. 514 00:26:26,720 --> 00:26:29,960 And then if you really got some extra here and you want to get, 515 00:26:30,240 --> 00:26:32,400 you know, aggressive on the car, be my guest. 516 00:26:32,400 --> 00:26:34,640 But don't touch that mortgage. That's the last thing. 517 00:26:34,640 --> 00:26:36,280 Don't touch it. Don't touch it. 518 00:26:36,280 --> 00:26:38,400 Don't touch it. Yeah, I love that breakdown. 519 00:26:38,400 --> 00:26:41,760 And it's really this simple. Max out the 2, Ross, that's 520 00:26:41,760 --> 00:26:46,160 $12150 a month. Take the $750 a month that's 521 00:26:46,160 --> 00:26:49,640 leftover after that and you're going to take that and put that 522 00:26:49,640 --> 00:26:53,360 towards that $5000 short term debt even though there's zero 523 00:26:53,360 --> 00:26:56,400 interest because you don't want to wait till June of next year. 524 00:26:56,400 --> 00:26:58,920 And then all of a sudden you're like, Oh no, we forgot. 525 00:26:58,920 --> 00:27:01,000 We got to come up with five grand all of a sudden and you're 526 00:27:01,000 --> 00:27:03,440 pulling it out of something that's making money. 527 00:27:03,520 --> 00:27:07,240 You're going to do those two things to get the Roth maxed 528 00:27:07,240 --> 00:27:10,040 out, get that ahead of it so you can pay it off. 529 00:27:10,040 --> 00:27:12,920 And then the rest you can put somewhere else into your 530 00:27:12,920 --> 00:27:14,680 traditional brokerage account or whatever. 531 00:27:14,840 --> 00:27:17,120 But you guys are crushing it. You just need to make a couple 532 00:27:17,120 --> 00:27:19,920 little adjustments here, like Austin said, and you'll do just 533 00:27:19,920 --> 00:27:22,360 fine. Hey, and you mentioned the kids, 534 00:27:22,360 --> 00:27:25,480 ages one and three. I love this 529, but don't 535 00:27:25,480 --> 00:27:28,360 forget too about that Invest America account, the Trump 536 00:27:28,360 --> 00:27:30,320 accounts going on right now through the Treasury. 537 00:27:30,320 --> 00:27:33,120 I think they get funded here in the next couple weeks. 538 00:27:33,120 --> 00:27:35,960 I think it's on July 4. The $1000 gets dropped in there. 539 00:27:36,200 --> 00:27:39,320 Plus depending on your zip code, you get an extra 250 from 540 00:27:39,320 --> 00:27:42,400 billionaire Michael Dell. I was also talking to my fiance 541 00:27:42,400 --> 00:27:44,960 and some of the companies, for example, the company that she 542 00:27:44,960 --> 00:27:48,200 works at, iHeartMedia, they offer a contribution. 543 00:27:48,280 --> 00:27:51,960 So like figure out if where you work at is a perk to get a 544 00:27:51,960 --> 00:27:54,080 contribution to the Invest America account. 545 00:27:54,280 --> 00:27:56,640 This is free money that your kids are going to be able to 546 00:27:56,640 --> 00:27:59,880 take and now use. It flips into a Traditional IRA 547 00:27:59,880 --> 00:28:01,680 by the time they're 18. It's really cool stuff. 548 00:28:01,920 --> 00:28:03,920 Go check out those Trump accounts, the Invest America 549 00:28:03,920 --> 00:28:04,960 accounts. They're really, really 550 00:28:04,960 --> 00:28:07,280 important, especially from a free money perspective. 551 00:28:07,280 --> 00:28:09,920 Now before we jump to our next question from Joseph, got to 552 00:28:09,920 --> 00:28:13,480 give a shout out to Equable Shares and their hedged equity 553 00:28:13,480 --> 00:28:18,200 ETF ticker HEDG. If you've been thinking about 554 00:28:18,280 --> 00:28:22,360 how to balance market exposure with a discipline risk approach, 555 00:28:22,640 --> 00:28:25,200 HEDG could be the right fit for you. 556 00:28:25,520 --> 00:28:29,360 It's an actively managed ETF that combines large cap U.S. 557 00:28:29,440 --> 00:28:34,160 equity exposure with an options hedging strategy that seeks to 558 00:28:34,160 --> 00:28:38,040 mitigate your downside risk with a partial put spread and covered 559 00:28:38,040 --> 00:28:40,760 call writing. So in plain terms, as an equity 560 00:28:40,760 --> 00:28:44,320 strategy that just doesn't sit there hoping the markets go up, 561 00:28:44,640 --> 00:28:48,040 it is built in tools that seek to manage risk and create more 562 00:28:48,280 --> 00:28:51,560 disciplined low volatility strategy for long term 563 00:28:51,560 --> 00:28:53,640 investors. To learn more about Equable 564 00:28:53,640 --> 00:29:00,840 shares Hedge equity ETFHEDG, visit equableshares.com/fund/H 565 00:29:00,840 --> 00:29:03,120 EDG and. As with all investments, 566 00:29:03,120 --> 00:29:05,280 investors should carefully consider their investment 567 00:29:05,280 --> 00:29:07,880 objectives, risk charges, and expenses before investing. 568 00:29:08,080 --> 00:29:10,920 Prospectus contains this and other important information and 569 00:29:10,920 --> 00:29:13,080 can be obtained at equableshares.com. 570 00:29:13,280 --> 00:29:14,800 Please read it carefully before investing. 571 00:29:14,800 --> 00:29:16,760 Investing evolves risk, including possible loss of 572 00:29:16,760 --> 00:29:19,080 principle distributed by our distributors. 573 00:29:19,080 --> 00:29:23,920 LLCHEDG could be an interesting alternative for our friend Ian 574 00:29:23,920 --> 00:29:27,320 to consider who has now that $9 million net worth. 575 00:29:27,320 --> 00:29:29,200 So Ian, maybe that's something to to check out. 576 00:29:29,200 --> 00:29:35,000 Also don't forget we've got that public.com AI agent webinar July 577 00:29:35,000 --> 00:29:37,240 10. It's a Friday at noon Eastern. 578 00:29:37,280 --> 00:29:39,760 You guys are going to want to definitely sign up and be there. 579 00:29:39,760 --> 00:29:42,240 It's going to be so much fun. We've already got a couple 100 580 00:29:42,240 --> 00:29:45,000 people that are signed up just from inside the Rich Habits 581 00:29:45,000 --> 00:29:46,880 Network. So be sure to get your seats 582 00:29:47,080 --> 00:29:49,600 live, live, live. It's going to be so much fun. 583 00:29:49,600 --> 00:29:51,840 We can't wait to have y'all. There's a link in the show notes 584 00:29:51,840 --> 00:29:53,280 below. Be sure to go check that out. 585 00:29:53,280 --> 00:29:55,840 Now Robert, let's jump to our question from Joseph. 586 00:29:56,120 --> 00:29:58,840 Joseph P says, hey guys, I hope you're doing well. 587 00:29:58,840 --> 00:30:00,960 I got a question. I recently got engaged. 588 00:30:00,960 --> 00:30:03,640 Now my fiance and I are going to start saving for a wedding. 589 00:30:03,640 --> 00:30:06,520 Where do you recommend we put our cash, the stock market or 590 00:30:06,520 --> 00:30:08,480 high yield savings? Robert, what's your take? 591 00:30:08,480 --> 00:30:11,120 Well, it depends on when the wedding is. 592 00:30:11,360 --> 00:30:14,240 If they're saving for a wedding that's in the next, let's call 593 00:30:14,240 --> 00:30:17,760 it two years, then I would definitely go to public.com, the 594 00:30:17,760 --> 00:30:20,680 sponsor of this show. I would open up that high yield 595 00:30:20,680 --> 00:30:24,040 cash account and I would rock'n'roll there, get it up and 596 00:30:24,040 --> 00:30:26,920 running right away. I think that'd be a great place 597 00:30:26,920 --> 00:30:28,880 to start. The only way I would go 598 00:30:29,000 --> 00:30:32,160 elsewhere and put it in the market, the stock market, is if 599 00:30:32,160 --> 00:30:35,440 you say we're not going to get married for three or four years, 600 00:30:35,440 --> 00:30:37,000 we're just trying to get ahead of this. 601 00:30:37,000 --> 00:30:40,880 Then I might, you know, say that you could do 50% in some of 602 00:30:40,880 --> 00:30:46,000 these ETFs we talked about like VOO and QQQ and 50% in high 603 00:30:46,000 --> 00:30:47,760 yield savings. You just want to make sure 604 00:30:47,760 --> 00:30:50,560 you're not trying to time the market because the worst thing 605 00:30:50,560 --> 00:30:52,880 that could happen is you're getting married in two years. 606 00:30:53,080 --> 00:30:56,760 There's a down market cycle in 18 months and all the money you 607 00:30:56,760 --> 00:30:59,000 saved is down 30% when you need it. 608 00:30:59,240 --> 00:31:02,160 That is why you need to look at it from a long term perspective. 609 00:31:02,280 --> 00:31:05,840 So that would be my breakdown. If it's two years, around 2 610 00:31:05,840 --> 00:31:08,720 years, do the high yield savings, save yourself all the 611 00:31:08,720 --> 00:31:11,640 stress, make that three 4% and you'll be good to go. 612 00:31:11,640 --> 00:31:15,560 Couldn't agree more. I'm getting married May of 2027 613 00:31:15,760 --> 00:31:17,320 and it's all in a high yield savings. 614 00:31:17,600 --> 00:31:19,920 It's about one year away from here sitting in a high yield 615 00:31:19,920 --> 00:31:23,000 savings. I'm making my 3 1/2% whatever it 616 00:31:23,000 --> 00:31:25,800 is every single month paid to me and interest and it's just 617 00:31:25,800 --> 00:31:27,960 rolling and having a good time. So totally agree Robert, what a 618 00:31:27,960 --> 00:31:30,360 great breakdown. Our next question comes from 619 00:31:30,360 --> 00:31:33,760 Jeff B Jeff says I'm a new listener as of a couple weeks 620 00:31:33,760 --> 00:31:35,960 ago and I'm eating your podcast up. 621 00:31:36,280 --> 00:31:37,480 Thanks Jeff. Appreciate it man. 622 00:31:37,480 --> 00:31:39,240 Jeff says I've been listening non-stop. 623 00:31:39,240 --> 00:31:42,040 Love the advice and topics and really appreciate the Q&A. 624 00:31:42,200 --> 00:31:44,800 So here's my scenario. My wife and I are both 41 years 625 00:31:44,800 --> 00:31:46,720 old. We own and four rental 626 00:31:46,720 --> 00:31:51,680 properties that net US 20 to $25,000 per year and have about 627 00:31:51,680 --> 00:31:55,960 600,000 in equity all together across the four of them. 628 00:31:55,960 --> 00:32:00,320 I'm AW2 employee making a salary of 135 a year and I get up 30 to 629 00:32:00,320 --> 00:32:03,840 $40,000 bonus per year as well. I'm also a real estate agent on 630 00:32:03,840 --> 00:32:06,760 the side and manage our own properties and another one. 631 00:32:07,040 --> 00:32:10,160 My wife owns a small business. It's projected to net 200,000 632 00:32:10,160 --> 00:32:13,480 this year and growing. We have 650,000 in invested 633 00:32:13,480 --> 00:32:18,440 retirement assets, 80% of that in the S&P, 520% in big tech 634 00:32:18,440 --> 00:32:20,680 stocks. So my question is how do you 635 00:32:20,680 --> 00:32:25,320 factor real estate into your net worth in terms of being prepared 636 00:32:25,320 --> 00:32:27,160 for retirement with their incomes increasing? 637 00:32:27,160 --> 00:32:30,240 We intend to keep investing in real estate to help with the tax 638 00:32:30,240 --> 00:32:33,120 benefits and such, but how do you think about investing in 639 00:32:33,120 --> 00:32:38,320 real estate and calculating that as it relates to early 640 00:32:38,400 --> 00:32:39,880 retirement? Really good question. 641 00:32:39,880 --> 00:32:44,480 So Robert and I have been talking about the 4% rule in the 642 00:32:44,480 --> 00:32:47,440 Trinity study for quite some. All that means is a couple 643 00:32:47,440 --> 00:32:50,360 decades ago at Trinity University, there was a study 644 00:32:50,360 --> 00:32:55,280 that took place that essentially said if you have 60% of your 645 00:32:55,280 --> 00:32:59,320 money invested into equities and 40% of your money invested into 646 00:32:59,320 --> 00:33:05,560 bonds, that portfolio, it is fine in quotation marks here to 647 00:33:05,560 --> 00:33:10,480 withdraw 4% of that portfolio's value every single year. 648 00:33:10,720 --> 00:33:13,840 And if you do that, history tells us that you shouldn't run 649 00:33:13,840 --> 00:33:17,880 out of money for about 30 years. And so that has been sort of the 650 00:33:19,000 --> 00:33:23,440 way and the the kind of cookie cutter retirement portfolio for 651 00:33:23,440 --> 00:33:28,000 a lot of people as they get closer to retirement age, 606570 652 00:33:28,000 --> 00:33:30,760 years old. So they do the 6040 equity to 653 00:33:30,760 --> 00:33:35,040 bonds, they withdraw 4% of that and then they cross their 654 00:33:35,040 --> 00:33:38,880 fingers and hope that they don't run out of money for decades to 655 00:33:38,880 --> 00:33:41,320 come. As it relates to calculating 656 00:33:41,520 --> 00:33:45,280 your freedom number, we had a whole episode about this. 657 00:33:45,280 --> 00:33:47,200 Highly recommend going back and finding that or maybe just 658 00:33:47,200 --> 00:33:49,440 Google rich Habits podcast freedom item number. 659 00:33:49,640 --> 00:33:52,280 But essentially what the episode does is it breaks down. 660 00:33:52,280 --> 00:33:55,040 What do you have today in your retirement accounts? 661 00:33:55,040 --> 00:33:59,520 What do you spend today? What do you think you're going 662 00:33:59,520 --> 00:34:02,400 to spend in retirement? What's the difference there? 663 00:34:02,640 --> 00:34:06,600 How do we make sure that your retirement spending is now 664 00:34:06,880 --> 00:34:10,400 inflation adjusted? And then how much money do you 665 00:34:10,400 --> 00:34:14,960 need invested into your, you know, stock market, whatever it 666 00:34:14,960 --> 00:34:18,239 might be there. So that 4% of that figure in 667 00:34:18,239 --> 00:34:23,120 that portfolio reflects the inflation adjusted annual 668 00:34:23,120 --> 00:34:25,320 spending you plan to have in retirement. 669 00:34:25,320 --> 00:34:28,080 Inflation's been hot lately, call it 3 percent, 4%. 670 00:34:28,080 --> 00:34:31,199 So a lot of people's, you know, 4% withdraws had to go up a 671 00:34:31,199 --> 00:34:33,000 little bit because of this inflation spending. 672 00:34:33,000 --> 00:34:35,520 So here's how I personally would think about this and maybe 673 00:34:35,520 --> 00:34:36,880 Robert has a different take on it. 674 00:34:36,880 --> 00:34:42,120 I would include that 20 to 25,000 per year in your 675 00:34:42,120 --> 00:34:46,320 portfolio income as it relates to what you need in that 676 00:34:46,320 --> 00:34:47,840 retirement because that's what you're spending. 677 00:34:47,840 --> 00:34:53,120 So this is a real number, $75,000 of after tax money spent 678 00:34:53,120 --> 00:34:58,040 today in 2026, that same buying power assuming 3% inflation. 679 00:34:58,040 --> 00:35:01,080 Remember we're at 4.2 right now and have been as low as like 680 00:35:01,080 --> 00:35:04,600 2.62 point 7 recently. But let's call it 3% inflation 681 00:35:05,200 --> 00:35:10,440 in 25 years when our friend Jeff is let's call it 66 years old. 682 00:35:10,720 --> 00:35:15,720 To have the same buying power in 25 years as $75,000 is today, 683 00:35:15,720 --> 00:35:19,640 Jeff is going to have to spend $157,000 a year. 684 00:35:19,640 --> 00:35:23,120 So now Jeff has to ask himself, I need if I want to spend 685 00:35:23,120 --> 00:35:27,640 $75,000 a year as in 2026 money, and I want to have that exact 686 00:35:27,640 --> 00:35:30,560 same buying power in the future. Assuming a 3% inflation, I 687 00:35:30,720 --> 00:35:34,760 that's going to be 157,000 in future money that I'm going to 688 00:35:34,760 --> 00:35:39,160 have to spend every single year. What amount of portfolio size do 689 00:35:39,160 --> 00:35:45,160 I need to be able to afford 4 percent, $3,925,000. 690 00:35:45,360 --> 00:35:47,720 So just take that number, multiply it by 25. 691 00:35:48,040 --> 00:35:53,000 So now you have $3,925,000 that our friend Jeff needs to have 692 00:35:53,000 --> 00:35:56,240 invested 6040 to peel off that 4%. 693 00:35:56,240 --> 00:35:59,680 That's going to be that $157,000. 694 00:35:59,920 --> 00:36:04,000 Now how I think about this, Jeff, is that 157 could be 695 00:36:04,000 --> 00:36:07,520 supplemented by that 20 to 25,000 per year. 696 00:36:07,520 --> 00:36:11,000 So now in this situation, just to kind of really dig into this, 697 00:36:11,000 --> 00:36:14,960 Jeff right now is making 20 to 25% net per year with his 698 00:36:14,960 --> 00:36:17,760 rentals. But let's call it in 25 years 699 00:36:17,760 --> 00:36:21,680 from now, he's going to net maybe closer to 40 or $50,000 700 00:36:21,680 --> 00:36:24,000 per year, about double. And so you can then take that 701 00:36:24,000 --> 00:36:28,080 157 subtract, let's call it 45,000 per year net. 702 00:36:28,280 --> 00:36:33,680 And now Jeff needs to come up with the other $112,000 per year 703 00:36:33,680 --> 00:36:36,480 from his portfolio. So now Jeff, you'll need $2.8 704 00:36:36,480 --> 00:36:40,520 million, assuming the 40 to 50,000 delta there came from 705 00:36:40,520 --> 00:36:43,920 your investment portfolio. And that 2.8 is invested again 706 00:36:43,920 --> 00:36:47,600 in the 6040 equities bond split with the 4% rule, withdrawal 707 00:36:47,600 --> 00:36:50,120 rate, all that fun stuff. So you can kind of see how like 708 00:36:50,120 --> 00:36:53,640 the portfolio is going to go do this, assuming you can also go 709 00:36:53,640 --> 00:36:55,320 make a little bit here with your rental income. 710 00:36:55,320 --> 00:36:58,480 You don't need as much portfolio income because you've got some 711 00:36:58,480 --> 00:37:00,680 other rental income over here and they kind of offset each 712 00:37:00,680 --> 00:37:02,520 other there. So that's how I would think 713 00:37:02,520 --> 00:37:04,280 about it. But I think a lot of people, 714 00:37:04,280 --> 00:37:08,200 Robert, and this is worth really harping on for a second, are not 715 00:37:08,200 --> 00:37:11,360 thinking through how big their portfolios might need to be in 716 00:37:11,360 --> 00:37:14,040 30-40 years from now. Like my age people, I just 717 00:37:14,040 --> 00:37:16,800 turned 30 this year. I've got 30-5 more years till 718 00:37:16,800 --> 00:37:21,400 I'm 65. We're talking about $200,000 of 719 00:37:21,400 --> 00:37:25,600 spending power is equivalent to 75,000 today. 720 00:37:25,600 --> 00:37:29,000 And don't get me wrong, 75,000 is a lot of money to spend, but 721 00:37:29,000 --> 00:37:31,240 it's not as much as you might think. 722 00:37:31,240 --> 00:37:34,560 And so like I just you should really think through if we have 723 00:37:34,560 --> 00:37:38,520 a consistent 2 1/2 to 3% inflation for the next 10:15, 724 00:37:38,520 --> 00:37:41,880 20-30 years, Robert, how does that impact my retirement 725 00:37:41,880 --> 00:37:44,200 planning? I want to spend so much per 726 00:37:44,200 --> 00:37:46,320 year. Do you have that actually 727 00:37:46,320 --> 00:37:48,600 calculated in your own Trinity study? 728 00:37:48,600 --> 00:37:51,280 4% withdrawal, They're like really do some research around 729 00:37:51,280 --> 00:37:52,400 that. Yeah, that's a really good 730 00:37:52,400 --> 00:37:55,360 breakdown. And I think there are a lot of 731 00:37:55,480 --> 00:38:00,320 holes in people's strategies when trying to figure all of 732 00:38:00,320 --> 00:38:01,880 this out. Because you think about this 733 00:38:01,880 --> 00:38:05,280 situation here with Jeff and his wife in the four rental 734 00:38:05,280 --> 00:38:07,400 properties. I guarantee you if they go in 735 00:38:07,400 --> 00:38:12,320 front of their CPA or, you know, their local financial advisor, 736 00:38:12,440 --> 00:38:15,080 he's going to give them all these glowing numbers from these 737 00:38:15,080 --> 00:38:17,640 rental properties. But he's not going to take into 738 00:38:17,640 --> 00:38:21,400 consideration real conservative moderate numbers of what the 739 00:38:21,400 --> 00:38:23,640 capital appreciation is per year. 740 00:38:23,800 --> 00:38:26,080 He's going to Google it and be like, yeah, these are going to 741 00:38:26,080 --> 00:38:29,800 go up 8 percent a year forever. So you're going to have all this 742 00:38:29,800 --> 00:38:32,280 extra equity and money to go towards retirement. 743 00:38:32,560 --> 00:38:35,800 And generally that's a mistake. And it's also people need to 744 00:38:35,800 --> 00:38:40,160 understand their total net worth versus their liquid net worth, 745 00:38:40,160 --> 00:38:42,920 because a lot of people want to look at their net worth and 746 00:38:42,920 --> 00:38:46,040 include their primary home. And I think a lot of times when 747 00:38:46,040 --> 00:38:49,840 you're calculating to get to the Trinity study and what that 4% 748 00:38:49,840 --> 00:38:54,240 rule is, you shouldn't include your primary home as an asset 749 00:38:54,400 --> 00:38:56,800 because I think it gives you misleading numbers. 750 00:38:57,040 --> 00:39:01,440 And then the last thing I'll add is people never put the numbers 751 00:39:01,440 --> 00:39:05,560 in of what it actually cost to sell these properties 20-30 752 00:39:05,560 --> 00:39:08,280 years down the road. For all the fees for closing 753 00:39:08,280 --> 00:39:11,680 costs and commissions and all the things that go into, they 754 00:39:11,680 --> 00:39:15,080 just say, OK, this house is going to be worth XYZ and we're 755 00:39:15,080 --> 00:39:17,920 going to own this. But they forget about all that 756 00:39:17,920 --> 00:39:21,000 money in that appreciation that's going to go out the door 757 00:39:21,000 --> 00:39:24,040 in closing fees and other fees. So I think you did a really good 758 00:39:24,040 --> 00:39:26,880 job, but there is always a lot to consider in this situation. 759 00:39:27,520 --> 00:39:30,720 I personally think people should not use their primary home. 760 00:39:30,920 --> 00:39:32,600 They should use their liquid net worth. 761 00:39:32,800 --> 00:39:37,240 They should be moderate with their upside on numbers and 762 00:39:37,240 --> 00:39:40,720 calculations for the long term over that 10 or 20 years because 763 00:39:40,720 --> 00:39:42,800 we see market pull backs all the time. 764 00:39:42,960 --> 00:39:46,800 The real estate market is up, down and sideways every 568 765 00:39:46,800 --> 00:39:48,960 years. So that's how I would do it 766 00:39:48,960 --> 00:39:51,880 because you want to make sure, like you said, people are living 767 00:39:51,880 --> 00:39:54,320 longer, they're going to need more money than they think, 768 00:39:54,320 --> 00:39:56,400 especially people your age, Austin. 769 00:39:56,400 --> 00:39:59,440 So I think they need to be more conservative with what they're 770 00:39:59,440 --> 00:40:02,720 saying things are going to be and what they actually need to 771 00:40:02,720 --> 00:40:06,200 retire comfortably and maintain the lifestyle that they want. 772 00:40:06,200 --> 00:40:10,320 Now here's the good news. Our friend here has $650,000 773 00:40:10,320 --> 00:40:13,160 already invested in the markets, and that's going to continue to 774 00:40:13,160 --> 00:40:16,200 double every seven years, assuming the S&P continues to 775 00:40:16,200 --> 00:40:19,000 return about 10%. So like, everything's cool 776 00:40:19,000 --> 00:40:20,560 there. You're going to have millions of 777 00:40:20,560 --> 00:40:22,640 dollars in retirement. So like, don't even sweat this 778 00:40:22,640 --> 00:40:23,800 stuff. This was more of a mental 779 00:40:23,800 --> 00:40:26,600 exercise. I guessed a straw man the other 780 00:40:26,600 --> 00:40:28,760 side of this against what I was saying. 781 00:40:28,920 --> 00:40:34,160 You know, the, the 157,000 in 25 years, equivalent to 75,000 of 782 00:40:34,160 --> 00:40:40,280 spend is and this is proven to be true as time goes on, things 783 00:40:40,280 --> 00:40:43,720 become deflationary. Like there are things that are 784 00:40:43,720 --> 00:40:46,920 deflationary in nature. And so not saying that that's 785 00:40:46,920 --> 00:40:50,240 like going to be the exact kind of apples to apples comparison, 786 00:40:50,240 --> 00:40:53,400 like groceries and fuel and like things absolutely go up in value 787 00:40:53,400 --> 00:40:55,760 overtime, medical care, transportation, stuff like that. 788 00:40:55,920 --> 00:40:58,480 But there are parts of the equation that do go down over 789 00:40:58,480 --> 00:41:00,760 time. So like I, I'm not saying that 790 00:41:00,760 --> 00:41:04,440 this 3%, like the 75 to 157 is going to be a linear line and 791 00:41:04,440 --> 00:41:07,000 that's exactly how much you need like all of this is up for 792 00:41:07,000 --> 00:41:08,720 grabs. That can be very different. 793 00:41:08,960 --> 00:41:12,520 But the point of me sharing all that was so I don't want people 794 00:41:12,520 --> 00:41:17,760 listening to this episode to say, OK, I spend $60,000 a year 795 00:41:17,760 --> 00:41:22,560 or $5000 a month, and that means I need to come up with $5000 a 796 00:41:22,560 --> 00:41:25,440 month and I can retire forever. Sure, you could retire in 797 00:41:25,440 --> 00:41:28,600 today's money, but as inflation continues to trend up into the 798 00:41:28,600 --> 00:41:32,200 right, as other things begin to happen, as the years and decades 799 00:41:32,200 --> 00:41:37,000 tick by, that's when you have to say, wait a second, 5000 dollars 800 00:41:37,000 --> 00:41:41,640 of 2026 is not $5000 of 2036. And I need to know how the 801 00:41:41,640 --> 00:41:44,120 portfolio that can reflect that appreciation. 802 00:41:44,120 --> 00:41:46,120 And you make sure I'm earning a little bit here, stashing away 803 00:41:46,120 --> 00:41:48,600 stuff here. It's a very tricky thing and no 804 00:41:48,600 --> 00:41:50,480 one has the right answer here. And I'm not pretending that we 805 00:41:50,480 --> 00:41:52,520 do. But I do think it's very 806 00:41:52,520 --> 00:41:55,680 important to think about that as you are doing your retirement 807 00:41:55,680 --> 00:41:58,720 planning because inflation has reared its eyes a little head 808 00:41:58,720 --> 00:42:01,480 back up. And we have a 4.2% inflation 809 00:42:01,480 --> 00:42:04,600 rate right now. And the Fed, it's been 6 years, 810 00:42:04,840 --> 00:42:09,120 55 or six years since inflation came in 2021, late 2020. 811 00:42:09,280 --> 00:42:11,560 And it's not really gone away, right? 812 00:42:11,560 --> 00:42:14,720 Yeah, it was 9 or 8%. Now it's closer to 2, three, 4%. 813 00:42:14,720 --> 00:42:18,120 But it's still much higher than that long term average of just 814 00:42:18,120 --> 00:42:21,520 2%, which a lot of these retirement planners use that 2% 815 00:42:21,520 --> 00:42:23,600 model in their own. So if you have a financial 816 00:42:23,600 --> 00:42:26,560 advisor, ask them, Hey, with the stuff that you've shared me 817 00:42:26,560 --> 00:42:28,600 recently, what's the inflation rate on this? 818 00:42:28,600 --> 00:42:31,120 What are we assuming? Is it 2%, two and a half, three, 819 00:42:31,120 --> 00:42:33,120 3 1/2? How can we how can we make sure 820 00:42:33,120 --> 00:42:37,160 we have a buffer in this plan to assume that inflation might be 821 00:42:37,160 --> 00:42:40,880 stickier for however many years like it was maybe in the the 70s 822 00:42:40,880 --> 00:42:41,800 and 80s? Wow. 823 00:42:41,800 --> 00:42:45,400 What a great call out. So our last question here is 824 00:42:45,400 --> 00:42:49,800 coming from Freshwater Hustle on Instagram. 825 00:42:49,840 --> 00:42:51,880 I love it. They're saying, hey Austin and 826 00:42:51,880 --> 00:42:54,200 Robert, I discovered your podcast a few months ago after a 827 00:42:54,200 --> 00:42:57,560 client randomly mentioned QQQI, thought they were speaking 828 00:42:57,560 --> 00:42:59,760 gibberish. And I googled it and somehow 829 00:42:59,760 --> 00:43:02,920 found your podcast and the show has completely changed my life. 830 00:43:02,920 --> 00:43:05,680 That's cool to hear. If you Google QQQ maybe a 831 00:43:05,800 --> 00:43:07,600 stumble upon in the rich habits podcast. 832 00:43:07,600 --> 00:43:09,560 What a what an honor that would be right? 833 00:43:09,560 --> 00:43:11,920 So cool to hear that they said. I just turned 40 and thanks to 834 00:43:11,920 --> 00:43:13,400 you all. I'm currently building my base 835 00:43:13,400 --> 00:43:15,720 aggressively from scratch with the goal to have 100,000 836 00:43:15,720 --> 00:43:18,880 invested by the end of 2027. Right now my net worth's 50 837 00:43:18,880 --> 00:43:23,880 grand and I've got about 8000 in checking, 12,000 in ETFs, 10,000 838 00:43:24,080 --> 00:43:29,520 in a high yield savings, 2500 in a pension in 16,500 sitting in 839 00:43:29,520 --> 00:43:33,800 my teaching retirement system pension from days teaching 840 00:43:33,800 --> 00:43:36,400 public school. The TRS rate of return is very 841 00:43:36,400 --> 00:43:39,200 low and I'd love to get this money out of there if it's 842 00:43:39,200 --> 00:43:42,720 possible and into a Traditional IRA where I would have so much 843 00:43:42,720 --> 00:43:44,440 more control over how it's invested. 844 00:43:44,480 --> 00:43:47,760 I opened up a Roth and a Traditional IRA and I can do a 845 00:43:47,760 --> 00:43:50,360 direct rollover, not partial rollovers. 846 00:43:50,360 --> 00:43:54,600 But the problem is the amount of money that's in the TRS is above 847 00:43:54,600 --> 00:43:57,600 the acceptable IRA contribution limit for me. 848 00:43:57,600 --> 00:43:59,920 How should I think about rolling this money over? 849 00:43:59,920 --> 00:44:01,840 Do I need to do something special here? 850 00:44:01,840 --> 00:44:03,920 Am I forced to keep it in the TRS? 851 00:44:03,920 --> 00:44:06,480 I'm not sure how to proceed. So, Robert, this is a great 852 00:44:06,560 --> 00:44:09,200 opportunity for us to remind everyone the difference between 853 00:44:09,200 --> 00:44:11,560 contribution limits and rollovers. 854 00:44:11,560 --> 00:44:14,640 So all you got to think about here is when it comes to 855 00:44:14,640 --> 00:44:18,560 contributions, this is net new dollars that you are 856 00:44:18,560 --> 00:44:22,440 contributing from your checking account into this retirement 857 00:44:22,440 --> 00:44:24,440 account. You can only contribute so many 858 00:44:24,440 --> 00:44:26,960 net new dollars into retirement accounts every year. 859 00:44:27,160 --> 00:44:29,920 Right now, the maximum you can contribute to a Roth IRA is 860 00:44:29,920 --> 00:44:32,760 $7500. The maximum you can contribute 861 00:44:32,760 --> 00:44:35,920 net new dollars into a Traditional IRA is $7500. 862 00:44:36,080 --> 00:44:39,160 That's up from 7000 and it was like 6000 something a couple 863 00:44:39,160 --> 00:44:40,760 years ago. But like it goes up a little bit 864 00:44:40,760 --> 00:44:43,480 every year. But that's net new dollars that 865 00:44:43,480 --> 00:44:45,080 you can contribute to these accounts. 866 00:44:45,480 --> 00:44:49,480 Rollovers are very different because that's money you already 867 00:44:49,480 --> 00:44:52,920 contributed in the past. It does not impact your 868 00:44:52,920 --> 00:44:56,440 contribution limit. So you can roll over all of this 869 00:44:56,440 --> 00:45:01,760 money into a Traditional IRA, all 16,500 and you're off to the 870 00:45:01,760 --> 00:45:03,520 races. Everything's fine because it's 871 00:45:03,520 --> 00:45:05,640 not a contribution, it's a rollover. 872 00:45:05,920 --> 00:45:08,480 You've already attributed the money, you've already, you know, 873 00:45:08,480 --> 00:45:11,400 done the stuff. Now it's just moving it from one 874 00:45:11,400 --> 00:45:13,760 account to another. I recently did this with a Sep 875 00:45:13,760 --> 00:45:16,400 IRA. I had about 8590 thousand 876 00:45:16,400 --> 00:45:20,400 dollars sitting in a Sep IRA that I rolled over into a solo 877 00:45:20,400 --> 00:45:23,680 pre tax 401K. I've also done this with other 878 00:45:23,680 --> 00:45:26,000 accounts in the past. Like it's just you can move 879 00:45:26,000 --> 00:45:29,440 money just fine. Roll over, roll over, roll over. 880 00:45:29,480 --> 00:45:33,040 All good vibes and not have to worry about that contribution 881 00:45:33,040 --> 00:45:36,160 limit because as it kind of sounds, you're not contributing 882 00:45:36,160 --> 00:45:39,080 net new money to the account. You're simply rolling it over 883 00:45:39,080 --> 00:45:42,040 from one account to another. Now I'm no expert when it comes 884 00:45:42,040 --> 00:45:44,480 to the TRS, the teaching retirement system here, the 885 00:45:44,480 --> 00:45:46,600 pension you've got so make sure you've you're following the 886 00:45:46,600 --> 00:45:48,200 rules there. Make sure you do a little bit of 887 00:45:48,200 --> 00:45:50,120 research on like what those rollovers look like you 888 00:45:50,120 --> 00:45:52,560 mentioned you can do a no partial rollover so make sure 889 00:45:52,560 --> 00:45:53,880 you're rolling over all of that amount. 890 00:45:53,880 --> 00:45:55,680 Just make sure you're doing all the normal stuff there. 891 00:45:55,840 --> 00:45:59,040 Don't want to get what weird tax bill or a penalty or something 892 00:45:59,040 --> 00:46:00,720 weird without, so just do a little bit of research. 893 00:46:00,720 --> 00:46:03,320 But regardless, I love how you're, you're thinking about 894 00:46:03,320 --> 00:46:05,240 this. You're auditing your portfolio, 895 00:46:05,240 --> 00:46:07,800 you're seeing some low returns in one spot and you want to get 896 00:46:07,800 --> 00:46:10,440 it rolled over. Open up apublic.com account, 897 00:46:10,640 --> 00:46:14,280 open up a Traditional IRA on public, roll it over into there. 898 00:46:14,400 --> 00:46:16,400 You might even get a bonus if you're lucky. 899 00:46:16,560 --> 00:46:19,240 And then with that money, get it working for you in the index 900 00:46:19,240 --> 00:46:24,640 funds and ETF's we talked about like VOODIAQQQ and all the other 901 00:46:24,640 --> 00:46:27,760 fun stuff. Austin what an incredible 902 00:46:27,760 --> 00:46:30,080 episode. So many great questions and I 903 00:46:30,080 --> 00:46:31,920 just wanted to give a quick, quick reminder. 904 00:46:31,920 --> 00:46:37,680 July 10th, Friday noon, we are going to be building AI Agents 905 00:46:37,680 --> 00:46:41,640 live with public.com. It's a free webinar. 906 00:46:41,640 --> 00:46:43,600 Make sure you guys add it to your calendar. 907 00:46:43,600 --> 00:46:46,440 It's in the show notes below. And one more call out that we 908 00:46:46,440 --> 00:46:49,920 don't talk about enough is Wall Street favorites.com. 909 00:46:50,080 --> 00:46:52,400 If you guys are trying to figure out what stocks you own, are 910 00:46:52,400 --> 00:46:55,640 they the right stocks? Are are they performing as good 911 00:46:55,640 --> 00:46:57,280 as Wall Street thinks they should? 912 00:46:57,560 --> 00:46:59,680 All of the above. Make sure you guys check out 913 00:46:59,680 --> 00:47:02,920 wallstreetfavorites.com. Yes, Wall Street favorites. 914 00:47:02,920 --> 00:47:07,120 The easiest way to know what Wall Street thinks about your 915 00:47:07,120 --> 00:47:10,720 own portfolio and to learn more about what Wall Street is buying 916 00:47:10,720 --> 00:47:13,160 with their own money, wallstreetfavorites.com. 917 00:47:13,320 --> 00:47:15,000 There's a ton of cool stuff over there. 918 00:47:15,000 --> 00:47:17,200 Be sure to go check it out. Everyone, thanks so much for 919 00:47:17,200 --> 00:47:19,120 joining us on this week's episode of the Rich Habits 920 00:47:19,120 --> 00:47:21,280 Podcast Question and Answer Edition. 921 00:47:21,280 --> 00:47:24,400 And we'll see you tomorrow on Friday for our episode episode 922 00:47:24,400 --> 00:47:25,960 of the Rich Habits Radar.