In short
The episode is about recovering from “holiday debt” (credit card balances built from gifts and travel) and preventing it next year. Hosts Austin Hankwitz and Robert Croak (entrepreneur with finance/econ background) claim the average American adds about $2,000 in holiday debt and that minimum payments can keep people in debt for years due to ~20–30% APR interest (example: $2,000 debt costing ~$1,500 in interest over ~6 years). Key steps: stop using credit cards (“stop the bleeding”), prioritize repayment using debt avalanche (highest APR first) or debt snowball (smallest balance first), and do a 30-day no-spend January (only essentials; no restaurants/online shopping). Mindset fixes include budgeting, resisting social pressure, separating celebration from spending, and forecasting instead of reacting.
Notable examples
“No Spend January,” secret Santa, and using cash/debit only.
Guests
none in this episode (Q&A only).
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Chapters
Tap a time to open that second in VOUnderstanding Holiday Debt Hangover
0:31 to 0:52
Discussing the impact of holiday spending and the average debt incurred.
“And for a limited time, college students get the best of both worlds.”
Understanding Holiday Debt Hangover
1:40 to 2:46
Discussing the impact of holiday spending and the average debt incurred.
“that hits everyone in January, which for us is right around the corner.”
The Real Cost of Holiday Debt
2:52 to 4:38
Exploring the financial and psychological costs associated with holiday debt.
“But before we jump into the episode, let's talk about the real cost of this holiday debt.”
Steps to Recover from Holiday Debt
4:41 to 7:40
Outlining actionable steps to stop accruing debt and prioritize repayment.
“So now that we understand the real cost of it, let's start walking through how to think about getting out of this holiday debt, the prioritization of paying it off, the mindset shifts, everything you need to do.”
Implementing a No-Spend Challenge
7:42 to 10:46
Introducing the 30-day no-spend challenge to help curb unnecessary spending.
“In the month of January, for the next 30 days, right, you spend money on only the absolute essentials.”
Mindset Shifts to Avoid Future Debt
10:51 to 14:00
Identifying key mindset changes necessary to prevent falling into holiday debt again.
“You pay off the debt, which is incredible, but if you don't fix the underlying mindset and the habits, you're going to be back to where you were this time next year.”
Preventing Holiday Debt Cycles
14:00 to 16:46
Learn strategies to avoid accumulating holiday debt through budgeting and saving.
“With all that interest, you're going to end up paying.”
Broke vs. Wealthy Mindset
16:46 to 17:01
Understand the difference between reactive and proactive financial planning.
“So I think, Austin, to wrap this up, one of my favorite things you say is that broke people react and wealthy people forecast.”
Preventing Holiday Debt Cycles
17:01 to 18:16
Learn strategies to avoid accumulating holiday debt through budgeting and saving.
“And you might want to rewatch this episode a couple times because it'll help you get through and never make these mistakes again.”
Anonymous Listener's Beach Property Dilemma
18:29 to 22:24
Explore advice for a listener considering purchasing a beach property amidst market concerns.
“Full disclosure in the podcast description.”
Show all 14 chapters
Morgan's Financial Journey After Injury
22:24 to 28:00
Discuss a young listener's options for managing settlement money and building wealth.
“that is making me conclude that you should not be doing this, aka buying a house in Florida.”
Investing Bonuses Wisely
28:00 to 30:04
Learn how to effectively manage unexpected bonuses for long-term financial goals.
“Now let's build it for the future by doing what we laid out, and you'll be in great financial shape later on in life.”
Student Loans and Financial Strategy
30:04 to 31:29
Understand the implications of using student loans for investment purposes.
“So our final question comes from Jamila on Instagram.”
Building Wealth Without Shortcuts
31:29 to 32:06
Discover why shortcuts in financial strategies often lead to failure.
“In life, when you're trying to get financially free and build wealth, Shortcuts generally don't work out.”
Transcript
Automatic transcript. May contain errors.0:00Robert Croak:This Father's Day, do more with Dad and spend less with low prices guaranteed at The Home Depot. Get him fired up with a new grill and accessories, like the Nexgrill 5 Burner for just$299, so you can spend more time together while he becomes the grill master he was always meant to be. Or build memories with savings on top brand power tools so you can tackle projects side by side. Gift more and do more together this Father's Day with help from The Home Depot. Exclusions apply. See homedepot.com slash price match for details. Study and play. Come together on a Windows 11 PC. And for a limited time, college students get the best of both worlds.
0:40Robert Croak:Get the Unreal College Deal. Everything you need to study and play with select Windows 11 PCs. Eligible students get a year of Microsoft 365 Premium and a year of Xbox Game Pass Ultimate with a custom color Xbox wireless controller. Learn more at windows.com slash student offer. While supplies last, ends June 30th. Terms at aka.ms slash college PC. Hey everyone, and welcome back to the Rich Habits Podcast, a top 10 business podcast on Spotify brought to you by Public.com. By the end of this episode, you will know exactly how to recover from holiday debt and never repeat the tragic cycle again.
1:17Robert Croak:My name is Austin Hankwitz. I'm joined by my co-host, Robert Croak. Robert is a seasoned entrepreneur with lifetime revenues of over 300 million, and I'm a multimillionaire in my late 20s with a background in finance and economics. As the show name might suggest, every episode, we talk about rich habits as they relate to business, finance, and mindset. So Robert, what are we going to be specifically talking about in today's episode?
1:39Austin Hankwitz:In this episode of the Rich Habits Podcast, we're talking about the financial hangover that hits everyone in January, which for us is right around the corner. Think about it like this. You just had a great holiday season, you bought gifts, you traveled, you celebrated, and now you're staring at credit card statements that make you want to throw up. You're not alone. The average American adds around$2 ,000 in debt during the holidays, and unfortunately, some people add way more. Now it's January, the bills are due, and you're in a hole.
2:09Robert Croak:But here's the good news, Robert. This is very fixable. It's fixable fast if you're willing to be aggressive for the next 30, 60, maybe 90 days. So today, we're going to break down exactly how to rebound from holiday debt. Specifically, we'll talk about repayment prioritization so you're not wasting money on interest for months and months and months, the 30-day no-spend reset that's going to force you to get your spending under control, and the mindset shifts that you need to make to ensure that this tragedy never happens again.
2:40Austin Hankwitz:The holiday debt hangover isn't just about money. It's about the habits and beliefs that got you here. If you don't fix those, you'll be up to your eyeballs again in debt next January, and we don't want to see that happen.
2:52Robert Croak:We definitely don't. But before we jump into the episode, let's talk about the real cost of this holiday debt. Because I'm sure some people are listening right now. They're like, oh, yeah, I've got my credit card and I travel. I'm getting ready. And it's getting up there. And so, for example, let's say someone's got$2 ,000 on their credit card and they're looking at it. It's January here right around the corner and they're saying, oh, I can pay it off throughout the year. It'll be fine. That's the wrong mindset. That$2 ,000 is probably at a 20, 25, or 30 % interest rate, which means if you only make minimum payments of 50 bucks a month, you're going to be in credit card debt, Robert.
3:26Robert Croak:Here we go. First six years. And no one wants that to happen. During that six-year period of time, you're going to pay over$1 ,500 of interest. So that$2 ,000 of holiday credit card debt has now cost you$1 ,500 of interest, which if you just invested that interest, you could have had thousands, if not tens of thousands of dollars more in your lifetime, but all because you need to buy that cousin Billy, the sweater that he's probably just going to toss in the back of his closet anyway, right? Don't do that. Here's what you need to remember. Broke people pay interest, wealthy people earn it. So let's talk about getting rid of this interest and actually starting to earn it.
4:03Austin Hankwitz:And Austin, that's just the financial cost. There's also the psychological cost. High interest debt creates stress. It sits in the back of your mind. You wake up thinking about it. You avoid checking your bank balance because of it. You feel guilty every time you spend money on anything. And that's definitely not a way we want to see anyone live. And here's what really gets me. Holiday debt is 100 % optional. I'm going to say that again. Holiday debt is 100 % optional. You choose to spend that money. Nobody forced you, which means you can choose not to do that next year. But first, you need to clean up the mess you've created.
4:40Austin Hankwitz:And we're going to break that down right now.
4:42Robert Croak:That's right, Robert. So now that we understand the real cost of it, let's start walking through how to think about getting out of this holiday debt, the prioritization of paying it off, the mindset shifts, everything you need to do. So if you find yourself in January up to your eyeballs in credit card debt from travel or gifts or whatever else went on over the last two or three weeks here, a holiday debt hangover, as the title calls it, step one is you need to stop the bleeding. No more spending on credit cards, not a single dollar. If it's not in your checking account, you can't afford it. I don't care if it's a great deal.
5:15Robert Croak:I don't care if something's on sale or your friend's having a birthday. You are in debt recovery mode, which means the only way you're going to be able to dig yourself out of this hole is for the hole to stop getting deeper and deeper. You need to look at your checking account and ask yourself, how much money do I actually have? Because that is your new reality. That's the number that we have to work with. Every spending decision from here on out for the next 30, 60, 90 days is based on that number.
5:41Austin Hankwitz:And step number two, you need to prioritize your debt repayment. So now let's talk about the repayment strategy. If you have multiple debts, you need a system for which to pay off first. And there are two main approaches we like, the debt avalanche and the debt snowball strategy. These are both great, and we're going to break them down for you. Debt avalanche means you pay off the high interest debt first. This saves you the most money in interest. If you have a credit card at 25 % APR and another at 18%, you focus all of your payments on the 25 % card while making minimum payments on everything else because we want to knock out the high interest card first.
6:18Austin Hankwitz:Mathematically, this is the most efficient method and you'll save more money and get out of debt faster.
6:23Robert Croak:I prefer the debt avalanche. You're going to save the most money doing that. But there's also the debt snowball method. The debt snowball means that you pay off the smallest balance first, no matter what the interest rate is. So if you have$500 of debt over on this card,$2 ,000 of debt over here, maybe$4 ,000 on another, you focus on the card that's got the$500 of debt. And then you go to the$2 ,000 and then you go to the$4 ,000. This strategy helps you build momentum from one card to the next, one debt after another. So which one should you use? It's honestly up to you. Again, I prefer the Avalanche because I think it's going to save you the most money in interest.
6:59Robert Croak:But if you are someone that's like, listen, I got to pay this off here. I'm going to roll it over here. feeling that momentum, the snowball rolling down a hill, whatever you got to do to get out of the debt. That is what's most important.
7:10Austin Hankwitz:The key is to pick one you will commit to. So many people get started and then they end up just making minimum payments on everything. And that's how you stay in debt forever. So pick one, read up, see what works for you and keep going because you want to target this debt, throw every dollar at it and knock it out as soon as possible.
7:29Robert Croak:So Robert, to recap, step one, stop the bleeding, right? We're not digging ourselves into a deeper hole. We're not spending more on these credit cards. The second step was for us to figure out what debt to pay off. I got to prioritize my debt repayment. Now, our third step is to do the 30-day no-spend challenge. Here's how it works. In the month of January, for the next 30 days, right, you spend money on only the absolute essentials. Think rent, utilities, groceries, gas, minimum debt payments. that is it. Everything else is off the table. No restaurants, no coffee shops, no online shopping, no runs to Target, as my fiance calls it.
8:07Robert Croak:No just browsing into buying something. No TikTok shop, right? Absolutely nothing. And it's funny because I have friends that do this. I think it's called No Spend January. They just, at the first of the year, they don't spend any money on anything. And I'm going to do it this January, right around the corner here. I'm really excited because it really helps you put in perspective how much money you frivolously spend on things that you do not need. You eat what's in your pantry. You make coffee at home like I do. You become a spending minimalist for 30 days because then once you have those 30 days go by, you look around, you say, oh wait, I don't have to go to the bars every weekend.
8:44Robert Croak:I don't have to go to these restaurants. I don't have to go buy those little lunchly packets at Kroger. I just needed to make my one sheet pan meals and I really have a sort of better understanding of what's real and authentic spending for my day-to-day life and what is more of a want type of category.
9:01Austin Hankwitz:I love this because so many people feel they have to do taco Tuesday and something on Thursday and go to the game on Saturday and go to the bar on Sunday. All of this stuff, even if you stop it for that 30 days during January might sound extreme because it is. That's the point. You're in a hole. You need extreme measures to get out fast. And that's what this episode is about. So here's what happens during a no spend challenge. First, you immediately free up hundreds of dollars. The average American spends three to$400 a month on restaurants alone. It's a lot higher for me. So this is a wake up call for me as well.
9:37Austin Hankwitz:Cut that out and you have$300 to throw at that debt immediately to wipe out these credit cards. Second, you break bad spending habits considering most spending is habitual. And third, you recalibrate your sense of what's necessary. That 30 days within it, you realize you don't actually need all of this stuff you're buying. You survived without it. You didn't go have the$17 avocado toast at your favorite cafe twice that month, but you were fine eating scrambled eggs at home. And that mindset shift is what we're all about here today, helping you guys overcome it so you start the year off on a bang and on a good note and wipe out that holiday debt.
10:18Robert Croak:That 30-day no-spend January. I'll got to try it. It's really going to help put in perspective what is a need, what is a want, and the money you're frivolously throwing away every month. Oh, Austin, Robert, it's not even the holiday debt. Oh, I can't max out my Roth IRA or I can't invest a dime. I don't have any of the money. You go do a no-spend January or a 30-day cleanse of your wants type spending category, and you're going to realize that you have a lot more money than you think. Now, Robert, you mentioned the mindset shift, so let's talk about how to use this mindset shift to prevent this happening next year.
10:50Robert Croak:Now, it's been a couple months. You pay off the debt, which is incredible, but if you don't fix the underlying mindset and the habits, you're going to be back to where you were this time next year. So let's talk about how this happened in the first place, Robert. Give me some reasons as to why people find themselves into so much holiday debt.
11:07Austin Hankwitz:Yeah, reason number one, you didn't have a holiday budget. You winged it and hoped it worked out and it didn't. And next year, you're going to do the same thing. And here's my solution of what I would like to see everyone listening do. Create a budget based on every person you want to buy for and assign a dollar amount to each person. That way you're just not out there winging it and buying all this stuff because it was cute or on sale or whatever. And you stick to the budget. That's reason number one for me, because if you have a total budget and break it down by person, not just by overall, because if it's overall, you're going to go way past it because there's so many cute things you see on TikTok or at Target or wherever you're going.
11:46Austin Hankwitz:So that's the key for me and reason number one.
11:48Robert Croak:Reason number two, why people find themselves in all of this holiday debt is you feel obligated to spend money, right? Family expectations, friend expectations, social pressure. You spent money you didn't have to avoid disappointing people. so next year have some of these conversations earlier hey guys we're doing smaller gifts this year or let's do a secret santa instead of buying gifts for every single person or hey we're not traveling this year we're gonna stay at home we gotta we're gonna put some money away right just set these expectations early before the holidays hit to give you an example here we're actually doing this with my fiance's family going up to asbury park new jersey which is where she's from and we're gonna do what is it we've all got like the the secret santa thing right so i'm getting a gift for one family member, not gifts for the 18 of them, right?
12:34Robert Croak:So it's just like we all get one person. We all get a gift. It's great. Have those same conversations. Do that same thing yourself.
12:41Austin Hankwitz:Yeah. And reason number three for me is you've used spending as a way to show love or to celebrate. You're making more money. Life is going better. You want to be the cool uncle or the cool dad. And you spend way more than you should because it felt good in the moment. It made you feel generous. It made you feel festive, but feelings fade and debt doesn't. You need to separate celebration from spending. This is the key here. And you can have an amazing holiday without going into debt. Homemade gifts, quality time, experiences that are free or cheap. Love isn't measured in dollars. So maybe instead of doing that lavish trip, do a staycation with family.
13:19Austin Hankwitz:Invite everyone in and get a big Airbnb in the mountains or something that's a lot cheaper than everyone flying to Florida to the beach or whatever. So these are my ideas and that's number three for me.
13:29Robert Croak:Yeah. And I think the final reason, the final mindset shift that you have to make to not find yourself up to your eyeballs in credit card debt again next year is falling for the phrase, oh, but I worked so hard this year. I deserve to splurge. Maybe, maybe you did work hard, but did you deserve to start January in a financial hole? Did you deserve the stress and the guilt that came with this? Probably not, right? So treating yourself is fine, but going into debt to treat yourself is not really treating yourself. It's stealing from your future self. We talked about that. With all that interest, you're going to end up paying.
14:02Robert Croak:Please do not do that.
14:03Austin Hankwitz:And we're giving people a lot of leeway in this episode because I know a lot of people watching right now are thinking about this. They don't wipe out that credit card debt in the first two, three months. They have it carry over into the fourth, fifth, sixth, seventh month of the year because they went wild during the holiday season. They play catch up for months and then all of a sudden you're in summer and it's wedding season. So you're traveling all the time for that. And it's just a vicious cycle of never getting ahead because you're not budgeting your spending for entertainment, holidays, and birthdays.
14:35Austin Hankwitz:And that all stops with this episode. So what is the prevention plan for next year? What's the playbook? Here's how you make sure it never happens again. Open a dedicated holiday savings account in February, Set up automatic transfers based on your budget. So if you want to spend$1 ,500 on the holidays, save that$125 a month starting in February. And by December, you'll have the cash ready. No credit cards needed. Make a list and budget before November. Who are you buying for? What's the budget per person? What's your total budget, including travel, food, decorations, everything? Write it down and commit to it.
15:13Austin Hankwitz:and you will be a winner for the holidays, and you'll still feel like you're being festive, and you did all the right things you wanted to do.
15:20Robert Croak:And not just that, Robert, but shop with cash or debit only. Leave the credit cards at home. If the money's not in your bank account, you don't have to spend it. And what you are spending, you should be tracking. Track your spending in real time. Every purchase, put it down in your own honest budget. Know where you stand relative to that budget, and don't wait until January to find out that you actually overspent.
15:43Austin Hankwitz:Holiday debt sucks. There's no sugarcoating it. You're starting the year behind instead of ahead, but this is fixable. Stop the bleeding. Prioritize your debt repayment. Do a 30-day no-spend challenge in January. Increase your income temporarily and get aggressive for 60 to 90 days and knock this out.
16:01Robert Croak:But more importantly, Robert, you got to learn from the mistakes. Everyone makes mistakes. That's what we're here for. We're full of mistakes. We're here to teach people what we've learned from our own mistakes. And so you got to start learning from yours as well. Next year, you need to have a plan. You need to have a budget. You need to have savings set aside. You need to set some boundaries with some friends and family members. Separate celebration from spending psychologically. And you don't need to go into debt to have a great holiday season. You need to be intentional. You need to be planning.
16:29Robert Croak:And you need to have discipline along the way. Y 'all, we are so excited that the holidays are upon us here. Christmas is in a couple days. New Year's is in just over a week from now. And so we hope all of you are getting excited to drink some eggnog, watch the Home Alone movies and do all fun things that happen during the Christmas holiday season.
16:47Austin Hankwitz:So I think, Austin, to wrap this up, one of my favorite things you say is that broke people react and wealthy people forecast. So everyone, please remember that as you exit the holiday season and you're figuring it all out. And you might want to rewatch this episode a couple times because it'll help you get through and never make these mistakes again.
Read the full transcript
17:07Robert Croak:Yeah, Robert, don't be reacting to this mountain of credit card debt forecast ahead of time so that this does not happen in the future. I think that is a wonderful phrase. Broke people react, wealthy people forecast, forecast your holiday spending for next year and do this 30 day no spend challenge with me. It's going to be fun. All right, Robert. Now, before we jump to the Q &A section of this episode, got to give a shout out to Public, the investing platform for those who take it seriously. Because on Public, you can build a multi-asset portfolio of stocks, bonds, crypto options, and now generated assets, which allow you to turn any idea into an investable index using AI.
17:45Austin Hankwitz:That's right. It all starts with your prompt. From renewable energy companies with high free cash flow to semiconductor suppliers growing revenue over 20 % year over year, you can literally type any prompt and put the AI to work. It screens thousands of stocks, builds a one-of-a-kind index, and lets you backtest it against the S &P 500. Then you can invest in just a few clicks.
18:09Robert Croak:Generated assets are like ETFs, but with infinite possibilities, completely customizable and based on your theses and not someone else's. So go to public.com forward slash rich habits and earn an uncapped 1 % bonus when you transfer your portfolio. That's public.com forward slash rich habits.
18:27Austin Hankwitz:Paid for by public investing. Full disclosure in the podcast description.
18:31Robert Croak:As a reminder, if you have a question to ask us, send us a DM on Instagram at rich habits podcast. email us at richhabitspodcast at gmail.com or join the Rich Habits Network. We're still running that seven-day free trial. You'll get access to Robert and myself for two hours every Tuesday night via a Zoom call live stream we do. We had a blast, actually. It's so much fun to do those every single Tuesday night. We actually are filming this Wednesday afternoon. So last night was our live stream. It was about two hours, maybe hour 45, something like that. And over 200 people hang out and talk and chat, and it's fun.
19:05Robert Croak:So check out the Rich Habits Network. Now, this first question comes from an anonymous listener. Our anonymous listener says, fellas, please keep me anonymous. I love your podcast. Thank you for taking the time to read my email. My wife is 36. I'm 44. And we currently make a combined$340 ,000 a year plus bonuses, which is about$130 ,000 for this year. We've just started making this level of money very, very recently. Our current situation is as follows. We have 450 ,000 in our retirement accounts, 400 ,000 in our company stock, we have a brokerage account with about$100 ,000 in it,$75 ,000 in savings, which is going to be used to finish some renovations on our house,$30 ,000 in a vehicle replacement sinking fund,$20 ,000 in our emergency fund, and our only debt is our mortgage at 2.89%, which is about$280 ,000 of debt.
19:55Robert Croak:Now, we started debating recently purchasing a beach property in the panhandle of Florida. My wife's family's from there. She currently lives there. We would like to use it a few weeks out of the year and then rent it out for the remainder of the year. Our goal is to move to that area in about 10 years, but obviously that could change. I am very risk averse and don't want to over complicate our financial situation. I think we're in a really good spot. We live comfortably below our means. We're not extravagant. However, it would be nice to have a place at the beach and potentially offset some of the costs by renting it out.
20:26Robert Croak:What is your best advice in my situation? My main concern is missing out on what looks like a slowing market in that area. Any ideas? Thanks guys so much for your assistance. Robert, you are a Florida real estate guy, so I'll let you kick this one off.
20:39Austin Hankwitz:Yeah, I think you guys are in a great situation. 44 years old, you have a million dollars in net worth. You're making a lot of money, but I do feel you're a little ahead of the horse here. Everyone dreams of a beach house. The Florida panhandle is an amazing place, but the market has slowed. So there's two sides of this coin. Destin, for instance, let's use Destin Watercolor Area, generally has a capital appreciation of about 12 to 14 % year over year, but that has slowed tremendously in the last 18 months because the market is down. We had a bad hurricane season in Florida. So a lot of people are moving away from these beach house waterfront properties.
21:17Austin Hankwitz:My suggestion to you, if you really wanna have this property because you wanna have capital appreciation over the years, have a cool house you can rent out and stay in and see the family and friends, I would go off the water a little bit Because at the end of the day, in those markets like Destin, you can be two blocks off the beach where you're a little safer, a little bit more preventative maintenance away from flooding, and get into a house that's more affordable. Because at a million dollars net worth, I don't want to go see you spend a million five on a beach house right now that could set you back, especially if there were more bad hurricane seasons coming.
21:52Austin Hankwitz:That would be my take because I get where you're at. Everyone wants a beach house, but I don't want you to be house broke either or worse, have so much upkeep on this house because you overbought in the beginning. So I would dial it back a little, find something off the beach that's still affordable, but also desirable for rental, because then that way you can still make money and offset the cost of the home without having so much risk being right on the water.
22:18Robert Croak:There you go. The fun part about this podcast is Robert and I are allowed to disagree, and I'm on On the other side of the fence on that one, Robert, a couple of things stood out to me that is making me conclude that you should not be doing this, aka buying a house in Florida. The first one was, I am very risk averse and don't want to overcomplicate my financial situation. The other one was, we would like to use it a few weeks a year and then rent it out the remainder of the year. So if you're very risk averse and you don't want to overcomplicate your financial situation and you're going to go to Florida for, let's call it three weeks out of the year, dude, just do the Airbnb.
22:54Robert Croak:That's what I do. I go to Florida all the time. I like Florida. I went to 30A earlier in May. It was a weekend trip, but do a month-long Airbnb, pay$1 ,500,$2 ,500,$4 ,000. Who knows? Pay a lot of money. Go enjoy that and then say, cool, not my house, not my insurance, not my hurricane season, not my anything that comes with it. And then you're talking about, it's like, oh, okay, let me rent it out for the remainder of the year. Sure, let's go hire a property manager. Let's go figure out tenants. Let's go figure. Is it Airbnb? Is it VRBO? Is it a long-term tenant? Is it a short-term tenant? Like there's a lot that comes with this that, you know, if you were someone that says, Hey, I'm ready to rock and roll.
23:31Robert Croak:I was like, yeah, dude, go for it. You have enough money. You can afford it. You guys make a ton. But if you're saying I'm only going to be there two or three weeks out of the year and I'm very risk averse, it's like, okay, then just rent a hotel or do the Airbnb thing or like just rent a house for a month at a time and go pay$5 ,000 or$10 ,000 to do it. You can afford it. You make a ton of money. If I were in your shoes with that same mindset, that's what I would do.
23:54Austin Hankwitz:Well, that's it. Two different takes. Hope it helps.
23:57Robert Croak:So our next question comes from Morgan C on Instagram. Morgan says, Hey, Austin and Robert, I want to thank you so much for your hard work on this podcast. You guys help so many people. Here's my situation. I'm 23 years old. I make a whopping$30 ,000 a year working for a nonprofit organization. I still live with my parents and I was recently in a boat accident and received$150 ,000 from a settlement to pay for existing bills from my injury. Because of my physical therapist, I started listening to your show and I opened a brokerage and a Roth IRA on public. I invest a little bit of money each week.
24:31Robert Croak:The settlement money is split three ways into two different CD accounts, making around 4 % per year. And I have a high yield savings making four and a half percent. I'd like to hear your opinion on buying a house with my settlement money and how I should continue to grow my investments. I only put money into public from my monthly earnings at work. Thank you so much for sharing your wisdom and expertise. Well, first off, Morgan, I'm sorry to hear about your boating accident and I hope that you've recovered. Obviously, you're working with a physical therapist, which means you're still kind of going through the motions on that.
25:01Robert Croak:Shout out to your physical therapist for recommending our show. That's really kind of them. Thank you so much. Wow. Okay, so you're 23 and you don't make that much and you probably have like 120 to 150 still left over here. I don't know, you know, you mentioned it's going to be used for your bills. So I don't know how much you're going to allocate there for your bills, but let's say I have over a hundred thousand left over. Congrats. You built your base in a very tragic way, but you built your base. I don't think this is time to go. I'm going to put a hundred grand down on a$800 ,000 duplex and then do the, the house hack that like, no way you're making 30 ,000 a year.
25:34Robert Croak:You're living with your parents. You don't need to go buy a house. Here's what you need to do. The first thing you need to do is double your income. This means over the next 18, 24, 36 months, I want you to either one, figure out how to make more than$15 an hour by learning a skill, learning some sort of, I don't know if it's an associate's degree or some sort of certification. Maybe you're working as a plumber, an electrician. Maybe you learn more about carpentry. Like there's a lot of skills out there that pay more than$30 ,000 a year. that's for sure. And the second thing I want you to do is to surround yourself with people who care most about you, like this physical therapist that are going to help you invest this money properly.
26:13Robert Croak:Your goal, of course, is to ensure this money is invested in the S &P 500, the NASDAQ, the Dow Jones, Industrial Average, things of that nature. But I got a feeling at 23 years old, you're going to have some friends come out of the woodwork and say, hey, man, I got this really cool investment idea for us. And your 100 can turn into 300 in a couple of years if we play our, let's go open a restaurant, dude. You make 30K now, we can make 300K with a restaurant. Let's go do a swimming pool repair company, whatever, right? Keep it simple, stupid, right? The KISS methodology there. Super, super important in this situation.
26:46Robert Croak:You're 23, you're learning, you're just getting into your career here, making a little bit of money. So one, let's figure out how to increase that income, learn some skills, do some certificates, do some sort of degrees maybe. And then two, ensure this money gets invested properly on public or if you want I even work with a financial advisor because at 23, I wouldn't know what to do with a hundred grand. No shame in that either. Just make sure it's put in the S &P 500.
27:08Austin Hankwitz:I love that take. And we're going to keep it really simple here, Morgan. It's very hard at 23 years old to get your hands on a hundred thousand dollars. So here's the playbook. I promise you everything Austin said is 100 % spot on. If you take that hundred thousand dollars, pretend it does not exist. You go invest that in VOO and the S &P 500 through your public account and just let it go. By the time in 35 years, let's call it 35, 36 years, you're at that 55-year-old range, you'll have$1.5 million if it just makes 8 % a year. And on average, the S &P 500 beats that, so you'll be in really good shape if you never touch it.
27:47Austin Hankwitz:That's what I would do. You could invest along the way with other money, but get that income up, pretend the$100 ,000 doesn't even exist, and you will be very wealthy in retirement as long as you don't nibble away at it over the years. Because if you start investing too early and you buy a property, you invest with a friend in a restaurant or a pool repair company, that money is going to be gone in two, three, four years so quick because you think you're a genius having that$100 ,000 when you've got, you know, sadly, you have your base built because of an accident. But you still have it built.
28:19Austin Hankwitz:Now let's build it for the future by doing what we laid out, and you'll be in great financial shape later on in life.
28:25Robert Croak:Obviously, people listening right now are like, okay, well, how does this relate to me? I'm not, you know, in an accident. I never got a settlement. I don't have all this money. It kind of goes back to our previous question from our anonymous listener who's like, hey, we get 130 ,000 in bonuses. So, you know, one of my best friends, he's a lawyer. He's expecting a$60 ,000 bonus this year, which is really exciting. And I think a lot of people make the mistake of, whoa, I got this, you know, 10 ,000, 5 ,000, 20 ,000, 80 ,000, whatever bonus I wasn't expecting, or maybe I was expecting it, but it feels like a little bit like free money, right?
28:55Robert Croak:And so you kind of want to spend that and be a little frivolous with it. Oh, I'll put it into the business idea. Oh, I'll put it over here. Yeah, I could throw it and chuck it into that. You need to pretend like this money doesn't exist, right? So if you're getting a bonus this year, I know it's, you know, December 22nd as this episode gets published and it's bonus season and you're over here getting excited about a 20, 30,$40 ,000 bonus around the corner for you. You need to treat that money as if it was part of your existing investing strategy, right? So that means either putting all if not most of it away toward your goals.
29:23Robert Croak:If that goal is a down payment on a home you want to buy, maybe your goal is to build your base. Maybe your goal is to get half a million invested, or maybe your goal is to retire early, or maybe your goal is to max out your Roth IRA or fund your 529 for your children. There's a lot of whatever, personal finance is personal. We say it every episode. Figure out what that goal is for you and make sure that these bonuses, and I'm sure a lot of you are receiving right now apply to those goals.
29:49Austin Hankwitz:Yeah, everyone just listen to what Austin's saying, because when you get these bonuses, it doesn't have to be something a windfall from something bad. You can't immediately level up your lifestyle and spend it frivolously because that is the money. Those lump sums are what set you up for the future and for life.
30:07Robert Croak:So our final question comes from Jamila on Instagram. Jamila says, Hi, guys, I've been listening to your show for a while now, and you've really helped me get my finances in order. I'm currently in college and I was wondering if taking out subsidized loans, which doesn't incur interest until six months after college graduation, and if I were to let it sit in an investment account or maybe a high yield savings account until I graduate, then keep the arbitrage of the interest there after paying my money back. Is that smart? Can I do that? Jamila, love where your head's at. That's cool. I'm all for the arbitrage and finding where you can make some extra money here and there.
30:44Robert Croak:I think like that, you're speaking like an investor, you're speaking like an entrepreneur, you're thinking about life correctly. However, what you're thinking about, to my understanding, is illegal, and you can't do that. If you are going to get student loans, you got to have the student loans, you got to use them for actual education expenses, like paying tuition or books and housing and things of that nature that student loans are used for. Do not go do the, I'll go borrow 20K from my student loans at 7%. Chuck them in the S &P trying to get nine and arbitrage the difference of two. Don't do any of that.
31:19Robert Croak:That's not a good idea, but I love where your head's at. That's really cool that you're thinking about money that way.
31:24Austin Hankwitz:Yeah, I definitely love the hustle and the effort and the thought process, but just always remember this. In life, when you're trying to get financially free and build wealth, Shortcuts generally don't work out. If they did, everyone would do it. And get-rich-quick schemes like this generally don't work out and can be illegal. So just keep that in mind. If you want to make more money during school or you're trying to figure it out, go get a side hustle. Learn an AI skill. Do something that can legally make you more money to get you ahead when you graduate.
31:56Robert Croak:Everybody, thank you so much for tuning in to this week's episode of the Rich Habits Podcast. We are so grateful that 100 ,000 of you come back every single week to listen to our show. Cannot believe still, Robert, that we were the top podcast for 77 ,000 people in 2025. Incredibly, incredibly humbling. And we're wishing you guys the best holiday season, safe travels, lots of good food, lots of good drinks, and lots of fun memories with your family.
32:22Austin Hankwitz:So have a great holiday. And don't forget, we're running a seven-day free trial right now for the Rich Habits Network. so if you want to treat yourself for zero cost join the network check it out join a live kick around and look at all the cool stuff and check out the community it's all free right now for seven days and we'd love to see you in there
32:41Robert Croak:and don't forget to come back on Thursday we will be posting an episode on Christmas but we will not be posting an episode the day after Christmas our Rich Habits radar is on pause during the holidays because we can batch record some of this stuff we can't batch record current news and events so thank you so much for your flexibility on that and we'll see you on Thursday.
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33:52Austin Hankwitz:You can't reason with the sun. Trust us. We've tried. This summer, it's time to put that angry ball of fire on mute. Columbia's OmniShade technology is engineered to protect you from the sun's harsh rays that can burn and damage your skin. The sun is relentless, but so is our gear. Level up your summer at Columbia.com to spend more time outside and less time slathering on aloe lotion. You're welcome. Columbia. Engineered for whatever. Thank you.
From the publisher
In this week's episode of the Rich Habits Podcast, Robert Croak and Austin Hankwitz fix the hidden hangover of holiday debt.
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