102: Building Automation With Your Money

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0:57Hey everyone and welcome back to the Rich Habits Podcast, a top five business podcast on Spotify brought to you by Public.com. My name is Austin Hankwitz and I'm joined by my co-host Robert Croak. Robert is a seasoned entrepreneur in his 50s with lifetime revenue of over 300 million and I'm an entrepreneur in my late 20s with a background in finance and economics. Since quitting my full-time job in corporate finance a few years ago, I've built a seven-figure media business and actively advise some of the most well-known fintech companies around the world. Now, as the show name might suggest, every episode, we talk about rich habits as they relate to business, finance, and mindset.

1:35However, we try and bring you two unique perspectives. One from an industry veteran, which is Robert, and the other myself, someone who's still in the process of building wealth and figuring it all out. So Robert, what are we gonna be talking about in today's episode? In this episode of the Rich Habits Podcast, we're gonna share with you how we build automation with our money and how you can too. Automating your money is a very important skill to learn when it comes to wealth building because it enables you to take the emotion out of the equation and solely focus on your investment strategy. It also prevents you from sitting on the sidelines and trying to time the market because when you're automating your money, you're investing without even thinking about it.

2:16So I want you all to hear this loud and clear and really take it to heart. By automating your money, building wealth is inevitable. By automating your money, building wealth is inevitable. I love that phrase. I love that term. I think we should put it on a t-shirt. Yes. But at the end of the day, it's entirely true, right? Because if you've automated your investing, your budgeting, your spending, it's all automated, then all you have to do is project how much you can continue to invest, how much more you can invest, and what that's going to turn into throughout your life. So that is a wonderful phrase.

2:51Automating your money sounds complicated. It sounds intimidating, but we promise. This episode, we're going to break things down in a super simple format. We have three easy to implement strategies that will allow you to automate your monthly spending, your saving, and your investing. So if automating your money is something you want to dig into, and try to master in 2025, this episode is going to be the playbook. Yeah, and I think it's really important for everyone to understand. This might sound complicated, like Austin said, but I promise you, once you get through this episode, and if you take notes and take action, life is going to get a lot easier, and you won't have all that fear around when to invest, how much to invest, because you're going to have a plan, you're going to automate it, and it's just going to make it so much easier.

3:37So let's get into number one, automating your bills. What does that mean? When it comes to automating your bills, having complete clarity into your monthly spending across all of your accounts, credit cards, and subscriptions is paramount. The easiest way to start automating your bills is to, of course, create your honest budget using the link in the show notes below. And once it's created, you need to calendar your payments so there's no surprises. is this is a key, key element to this strategy to make sure you're doing it right and you keep consistent. So listen very closely. I want you to open up a Google Sheets or a notepad or anything you use for your note-taking and write down every single date that you know a bill is due.

4:21This now allows you to have full clarity before the month even begins as to what you'll be spending. Write down things like your streaming subscriptions, your car insurance, cell phone bill, utilities, and everything else you're paying over and over on a monthly basis. This is really important. You will now have full visibility into when money will be leaving your checking account. This will not only prevent overdrafts, which can be very, very expensive, but also prevent surprises that might cause you to swipe a credit card during the month or sell your investments to cover a bill. And we don't wanna see you do that because we wanna have it dialed in so you know where all your money is going throughout the month and you can prepare ahead of time to make sure you have enough money on hand.

5:06So now that you have complete visibility, it's time to put all these bills on auto pay. Having them on auto pay, one, ensures they get paid on time and you're not liable for late fees and penalties. But two, you know week to week where your money is going so you know now to better prepare for upcoming investments or sinking funds. This is also very important to keep track of. So I guess what you're trying to say here, Robert, is that the key to automating your bills is to one, understand exactly when that bill is due. And then two, put that payment on auto pay. My girlfriend did this recently.

5:44I think this was a big thing for her in 2024. She sat down and she said, okay, I've got Wi-Fi, I've got my car insurance, my cell phone bill, I've got all these subscriptions, whatever. She's spending money on even groceries, right? So it's like, I've got these things that I know I have to pay for every single month. I go grocery shopping every Sunday. My auto insurance is on the 14th. My Wi-Fi is on the 7th, right? And sitting down, having a calendar in front of you and saying, okay, if I get paid on the 15th and the 1st, and I've got$4 ,000 in my checking account, and I know that my Wi-Fi bill of$90 is on the 4th, then I'm going to have$90 less of whatever I started the week with.

6:21So having that visibility and having that clarity week to week, month to month as to what your money is going to be doing, in my opinion, gives you a sigh of relief. I always have to know how much I'm starting the month with, how much I'm ending the month with. I love to know that. But also too, to your last point, this allows me to say, okay, what margin do I now have for investing? Maybe I have a little bit more than I thought or I have a little bit less than I thought. And if it is less, what side hustle can I implement to maybe get that up a little bit? Having this part of your money management system automated in 2025 is going to work wonders from a wealth building perspective because spending is half the problem when it comes to building wealth, right?

6:58It's spending and it's investing. So once you get the spending part figured out, now you can focus entirely on the investing. Yeah, I wanna tell a quick story. And I know I talked about this in the Rich Habits Network, but I had a client and a friend who owned multiple businesses and I'm not gonna say his name or the year that this happened. It was a few years ago, but he wanted to go through and audit everything with him and figure out why he wasn't making any money. And because he wasn't planning ahead, he wasn't budgeting, and he did not have any automation. In the year that I helped him, he had over$100 ,000 in overdraft fees throughout all of his accounts for these businesses.

7:37And right there was the big glaring thing. And that is why this part of this episode is so important. A lot of people are reactive with their money rather than proactive. And they get themselves in trouble because late fees on payments, overdraft fees and checking accounts, all of this adds up. And no matter what the fake gurus tell you, little leaks sink ships. And it's so important. And the more automation you have and the more preemptive planning you have, the better off you'll be, whether it's your personal account, your investment account, or your business accounts to have this in place. One of my favorite quotes that I think you might've shared a while ago was broke people react, wealthy people forecast, right?

8:19So having these bills automated in this calendar figured out for when stuff is due, you can forecast months and years ahead of time. It is wonderful for wealth building. So let's jump into our second way to automate your money in 2025, which is by automating your 401k contributions. As we know, Robert, 78 % of Americans are offered a 401k and half of those offer a match to their employees. So we are very big believers in investing up to that match to get the free money. In case you're new around here, the equation and sort of order of operations is very simple. You invest up to the match to get the free money and then everything above the match you then take and you max out that Roth IRA.

9:03You invest that into the S &P 500, the NASDAQ and other awesome index funds. If you have autonomy over your 401k and you can choose the investments inside of it, aka it's not bonds and target date funds, then you go back and try and max out that 401k. And if you still have money left over, that's where the bridge account comes into play. And you do that on public.com. So that's kind of how we think about the priorities here. But the priorities start with automating those 401k contributions, assuming you have a match. Now we could not make an episode about automating your money in 2025 without mentioning how important it is to automate your 401k contributions.

9:38I know, for example, Robert, when I first started working at a job out of college, I didn't contribute to my 401k. I don't think for the first like six or seven months. But once I went to our HR person, I was like, hey, can you help me set this up? They were one super impressed that I was a 20 something year old trying to invest to my 401k. But two, I only did it for like two years, two and a half years after I quit, right? And once I quit, I had like 20,$22 ,000 in this account. Like, that's awesome. It didn't feel like I was actively investing. It didn't feel like I was, budgeting in a perfect way to save a couple grand here and there.

10:11It was just automated. And sometimes having that automation for people is the only way they're going to be investing because it's like, take it out of my check before I even see it. If I see it, I'll spend it. So make sure that you are automating your 401k contributions, but you only want to do this assuming you do not have high interest debt. Remember, Robert, we cannot out-invest high interest debt. You've got nine, 10, 20, 30,$40 ,000 of credit card debt at 30, 40, 50 % interest or a title loan or a, you know, whatever's going on, right? You've got these crazy interest rates, pause the 401k investing, pay off the high interest debt, and then go back to the 401k match.

10:53That's the best way to do it. And I want to touch on a few things. And that's a great breakdown for this section of automation is to get people number one, remember, you're just going up to the match. You want to get that free money because most 401ks are going to underperform the other strategies we talk about on a daily basis. So I want to make sure we understand that, but also understand the reason automation is so important. We've talked about this till we're blue in the face over the years is because if you have the money sitting in your checking account and your checks are deposited in there and there's no automation, you see that money, you believe that it's available to you.

11:28So you get bored on a Saturday, you go to the farmer's market on Sunday it's raining and you can't go outside. So you go to the mall and guess what? You spend the money because it wasn't automated. It wasn't spoken for. We don't want you to ever have money just constantly sitting in checking accounts or savings accounts, making no money. And that is why automation is so incredibly important because like Austin alluded to over time, it just builds and compounds. And it seems like the easiest money you've ever made because it was taken out of your hands before you could get on it and spend it on something you don't need or something that's a depreciating asset.

12:06So please, please really pay attention in this episode because automation is your friend for the longterm. I love that breakdown, Robert. I want you to say that one more time about the spoken for say that one more time. That was good. It's just really all about, you should not have money that is just sitting there because so many people have 10 ,000, 20 ,000. I see people with hundreds of thousands of dollars just sitting there and it's not spoken for. I, like Austin, my money is spoken for before it ever even hits my account because I have a plan every month. What am I investing in? Where is this money going?

12:39What are my bills? So I know exactly because I don't want money sitting idly by because park money is dead money and we want your money always making money while you sleep. I am 100 % in agreeance there. And to your point, you're right. I've already figured out it's January 22nd, the day that we're filming this, and I've already figured out what I'm investing and how much I'm investing and what I'm doing in the month of March. I already know exactly how much is going to get deposited. I already know exactly how much is going to get invested, where it's getting invested, what ETFs I'm buying, you know, everything.

13:11I already have it spoken for. So the only way I have that clarity, of course, goes back to automating my bills, calendaring my payments, things like that, and making sure I'm on the same page about that with my honest budget. But having that money and that clarity allows you back to this first sort of quote that we had, which is forecasting. We can now forecast days, weeks, and months ahead, allowing us back to this original point as well, to jump on an investment opportunity that might come our way or begin to build a sinking fund to go buy a multifamily or go start something new or do something like that.

13:43So it's just having that money spoken for. I want everyone to write that down and just make sure your money is spoken for before it even hits your account. I love that. Yeah. One of my favorite things that we discuss and pass along to our millions of followers is make your money work as hard for you as you work to get it. That should be a t-shirt as well, because if people understood that, they wouldn't just let it sit in their accounts so they could look at it. They would have it making money while they sleep. Totally agree. Now, this third way to automate your money in 2025 is probably my favorite, and that is the investment plan from public.com.

14:19An investment plan from public is a collection of stocks, ETFs, and cryptocurrencies that you can automatically contribute to on a recurring basis. Robert, you were talking about this earlier, how you had someone ask, hey, you know, I've got all these different brokers. I got these accounts. Like, how can I just like set it up where it just does it automatically? You know, the first and the 15th of the month, it just takes a hundred bucks and it goes, right? Fundrise does this for Robert. Now we've got a hundred bucks. It just goes every single week. It just, they do it automatically. investment plans by public is how you can do this automatically in your public broker.

14:53So you say, I want to invest a hundred bucks every Monday toward this specific strategy and public.com will automatically withdraw that amount of money from your checking account and then invest it accordingly. Now, the cool thing about this is you have full autonomy as to how this money is invested, right? So you can, if you want to choose from their catalog of plans, which covers a wide range of styles and themes and risk tolerances and everything in between. Or you can do what I prefer to do and build your own investment plan from scratch using up to a total of 20 stocks, ETFs, or cryptocurrencies.

15:26So like, for example, you can go, all right, I want to make an investment plan a hundred bucks a week that goes into VOO, VGT, VTI, Moat. And then I also want to have some go to Bitcoin, Ethereum, and Chainlink. And I also want to have some go to like Palantir, Tesla, Nvidia and Amazon you can do that the total numbers there are under 20 and you can just have a plan go you click the right percentage weightings for whatever names you want maybe want like 80 % of it to go to VOO and the other 20 % to be evenly divided like they do all the guesswork for you so there's no hassle there's no complication when it comes to this you don't have to ask yourself okay I got a hundred bucks how many shares of this do I have to buy how many you know crypto do I get on that like it's all done automatically which I think is really really cool kind of allowing you now to just sit back and invest.

16:11Yeah. And like I talked about earlier, what this really does with this automation is prevents people from sitting on the sidelines. So many times people hear a news cycle or they hear a hype cycle and they're not sure when to invest and they end up sitting on the sideline for months because it's not automated. Austin and I, we don't look at day-to-day prices. We don't care. We know what our investment thesis is and we know what we're investing in. So we don't care what the daily or weekly prices are because we're dollar cost averaging through our automations of our investments and not everything is going to be automated.

16:45There are going to be some things where you maybe get a bonus and that wasn't automated in the equation, but as long as you have a plan for it, you will utilize the money properly. So here's my favorite part getting back to public is you can invest based on your risk tolerance as well. So for example, if you're someone saving for a down payment on a house and want to be investing the money along the way, then you can select from one of their predetermined plans that includes diversified bonds and other low risk investments to prevent you from dealing with any volatility or fears of a market downturn.

17:18And they also offer thematic investing as well. So if you're someone that wants to be a little more risk on through AI or bioscience or manufacturing or anything else in your portfolio, they've already built an investment plan around that theme for you. And you just deposit the money, let public do the work and just be in the market dollar cost averaging through the automation and you will continue to win over time. And let me be clear, Robert, public offers these investment plans, but so do a lot of other brokers. I'm sure like Fidelity has something like this. I know M1 finance does. I'm sure maybe Robin hood does.

17:53I don't know. Right. But like, it doesn't matter what brokerage you use. Obviously this podcast is presented by public. So we're going to highlight an awesome product that public offers because we believe in it. But what's more important than using a public investment plan to automate your investing is that you're just automating your investing to begin with. Regardless. You don't care what you're using. The principle of this strategy is to automate your investing. If it's weekly, bi-weekly, monthly, whatever you're doing, you're investing into your bridge account or your Roth IRA, whatever it is, it is completely automated.

18:22And all that money is spoken for before it even enters your checking account. You know it's going to get auto invested on the 14th or the 27th or the 9th or whatever it is. It's going to automatically be invested perfectly across everything that you've already described. Or maybe you're saving for a down payment. And by doing this, you can sort of start buying up some bonds or T-bills or things like that and automatically save for something. But the key term here is to automate everything. If you do not automate it, your emotions are going to get in the way. To Robert's point before, you might get scared about a hype cycle in the markets or maybe some guy on Twitter is talking about how something's overvalued and you don't want to buy the S &P.

19:01Whatever it might be, if it's automated, you don't have to worry about emotions. You don't have to worry about analysis paralysis or anything like that. So if you do not already have your money automated in 2025, let this be your reminder to sit down and figure out what the auto pay is on your bills. Have this be your reminder to go set up that 401k contribution for the first time, or have this be a reminder to start using investment plans on public or whatever other auto invest feature you use with your personal online broker. And just keep in mind, we love Public. They're a sponsor and we use them personally, but there are some platforms that are great, but do not allow the automation like Public does.

19:43So just do the research on what you feel comfortable with and which platform does what you need it to do for this automation and then select that accordingly. But it doesn't matter what platform you use. What matters is that you're investing and you're automating your money in 2025. Now, before we jump into this episode's Q &A section, let's take a moment to hear from this episode's sponsor, Masterworks. Now, here's something from Bank of America that I found pretty incredible. They said in just two years, so by 2026, ultra high net worth individuals could be devoting approximately 11 % of their portfolios to fine art and collectibles.

20:17And this is a generational investing change. That same report says 56 % of collectors now consider their art as a part of their wealth management strategy, including 98 % of younger collectors like millennials and Gen Z. And it's important to keep an eye on multiple asset classes like we talk about all the time, because we always preach diversification. And we have our own investments in art, and we've both been using Masterworks art investing platform to diversify for four or five years now. Both Robert and I invest with Masterworks, the sponsor of today's episode. And we even interviewed their founder and CEO, Scott Lynn, here on the Rich Habits podcast.

20:59So go listen to that episode if you haven't already. It is a wonderful one. Over the summer, they crossed over a billion dollars in capital raised. They normally offer paintings that range from about half a million to$20 million. But on Masterworks, you don't need to spend millions of dollars to invest in artwork or even be an art expert. Exactly. Masterworks has offered investments in over 450 works, with investors realizing annualized net returns, including 17.6%, 17.8%, and 21.5 % on works held longer than one year. Masterworks actually just crossed 1 million users, and you can join them at masterworks.art front slash rich habits, which is also in the show notes of this episode.

21:42As with any investment, past performance is not indicative of future returns. Investing involves risk. Sale returns are not inclusive of unsold works. Important regulation aid disclosures can be found at masterworks.com forward slash CD. Highly recommend checking out Masterworks. We love using them. It's so cool to diversify into the Basquiat's, into the Banksy's, and all the really cool things that they offer on their platform. All you need is a couple thousand dollars. So if you've already built your base and you're ready to start diversifying, start with Masterworks. It's a wonderful place to start.

22:13They've got some really, really cool things to offer, and they've got a wonderful customer service team. They really do. So let's get into our questions. So our first question comes from Matt N. on Instagram at Rich Habits Podcast. He sent us a DM. He says, Hey, Austin and Robert, I was never taught how to properly handle money. While my parents did their best, it was never really a priority in my family. I'm now 28, and I recently got a job that makes$99 ,000 a year. However, I have a credit score below 550, and I currently have$14 ,500 of debt. I did just recently sell my truck and I've been aggressively paying off my debts.

22:47My issue is though that I can't get approved for a car loan due to my bad credit and I travel a lot for work. To make up for not having a car, I've been renting one biweekly. I do not have any credit cards at the moment. I only have closed debt and student loan accounts. I stress frequently about money and I wanna make sure that I'm doing the best I can to get out of my current situation. Do you have any advice or guidance on the best way to get out of this situation? Robert, you want to kick us off? Yeah, Matt. You conquered one of the hardest things, and that is you're making$100K a year. Now you need to get your budget in order because I don't get it.

23:21How is it that you're making$100K a year at 28 years old, but you have all of this debt? It doesn't make sense to me, and you got to fix it. But also, if you have parents around, and they're helpful, and they see that you have a good job, have them help you get a car. Don't go get a new expensive car, get something that's good enough for now till you get your base built, till you get the high interest debt cleared out and get your credit score up so you can get financing on your own. Because the problem is with you buying a vehicle and renting a vehicle on one of these biweekly payment things, you're going to pay way, way too much for a car.

23:57And I know you need a car, but ask and see if your parents will help you. That's what I would do. So I would work on my credit score, get those debts paid down, see if you can get some help on a vehicle so you can get rid of what I assume is an egregious agreement on this current car and get your budget in order. Because if you're making$99 ,000 a year, you should not be having these problems and you must have a spending issue and you need to get out of that right away. I like that advice, Robert. Yeah. So let's do some math, right? You're making$99 ,000 a year. Let's assume you're taking home like 80 % of that after taxes.

24:30So, you know, let's call it$79 ,000,$80 ,000 there. Divide that by 12. So you're taking home about$6 ,000,$6 ,500 a month after taxes, after, you know, health care and all that stuff. You definitely don't want to be contributing to your 401k because we have a crisis going on right now, which is you got all this debt, you're renting. Like there's a lot of stuff to get to figure out. So if you are contributing to the 401k, I would pause that. But now let's assume you're living off of$3 ,500 a month,$4 ,000 a month, maybe$4 ,500 a month. Let's be a little aggressive here. You're 28, you're living off$4 ,500 a month.