155: The Advice Your Parents Gave You That’s Now Wrong

17:55Austin Hankwitz:the median age of first-time homebuyers is now over 40 years old, which is a crazy stat. For me, most families need two incomes and nobody is getting a pension. So you got to change with the times. And that's what this episode is all about.

18:09Robert Croak:Yeah, we are not playing the same game our parents played. We are playing life on expert mode and it is kicking our butts for some of us. Everything costs more, pays less, and requires more strategy, more thoughtfulness as to actually executing upon those ideas. Following their playbook is like using a roadmap from 1985. And it's hard to do that because the highways have changed over the last 40 years, right? Let's be clear though, Robert, we could talk about the doom and gloom. We can talk about how different it is. We can talk about how much more expensive it is and all this stuff, but that's not what the show's about.

18:39Robert Croak:Our show does not take pride in the doom and gloom, the woe is me. We are not victims. We are victors, right? We are always victorious over here on the show. And we always like to ensure that people have hope because there's a lot to be hopeful about. There are thousands of more opportunities in today's economy to make money and grow in your career with AI and the internet and Shopify and Stand Store and social media and TikTok shop. Like if you lock in in 2026, you can make a life-changing amount of money if you know where to look. And we take pride in knowing that this podcast covers ideas. We talk about things on our Friday episodes where we're giving you the updated modern approach here on this episode.

19:21Robert Croak:It's like you just have to have an understanding that things aren't what they were. You can grieve that, but you have to keep moving forward no matter your circumstance, right? We're all dealt a pair of cards and we got to make the best situation out of what we are dealt.

19:33Austin Hankwitz:I will say this as the elder statesman of this show, I am so excited every single day to be alive and well and thriving in today's world and being able to get to do this show with you every week, Austin, because we do provide all the sauce. What's happening? How can you work around it? How can you thrive in this economy? And episodes like this mean a lot to me because I am the elder statesman. I've lived all the different worlds over the last 40 years. And right now I think is the greatest time to be alive, to be able to build wealth as an individual, whether you were born in a good family or born with wealth or not.

20:10Austin Hankwitz:There are so many incredible tools to help you get started and be able to thrive in this economy. So here's the playbook for 2026 and beyond. First, prioritize investing over home ownership until the math actually works. Your investment account is your real asset, not your address. Second, change jobs strategically every few years. Your biggest raises come from leaving, not staying. Loyalty is to your career, not your employer unless of course you have a wonderful job with a wonderful company but all others you should definitely be looking out for yourself and third treat education as an investment with measurable roi if the numbers don't work find another path skills matter more than degrees in

20:55Robert Croak:almost every situation robert what a fun episode i i really enjoy kind of because this is fun right you got to go through a lot of that stuff i mean theoretically speaking you're 30 years older than me. So you are the age of a hypothetical father. So it's kind of fun to see how different it is, you know, your upbringing, I'm sure your ability to get into real estate, buy a home, build a career, do investing and how different that is from what I'm going through right now and others that are near my age. I turned 30 here later in 2026. So people that are listening right now in their late 20s, 30s and 40s, right?

21:27Robert Croak:It's a little bit different for us. But at the end of the day, it's exactly what I said before, hope. There's so much to have hope about. There's so much to be excited about. Opportunities are abundant. New year, new me. I know we're up in the next month. So like if you didn't do your New Year's resolutions, new month, let's rock and roll. Let's get to it. But there's a lot to be excited about, Robert. And we're going to keep this excitement all of 2026 and lay out all the blueprint you guys need to print money in the stock market, in your own personal finances, and have your net worth explode over the next 5, 10, 15, 20 years.

21:58Robert Croak:Because again, Robert, the big thing people need to understand, it's all about getting rich slow.

22:03Austin Hankwitz:Yeah, one of the biggest perspectives is kind of funny, and you brought it up earlier, is having a map in the 80s. Think about it from this perspective. Every one of you that is, let's call it 45 and under, you never had to go on a road trip where you didn't have GPS. You could just plug it in the phone and it tells you where to go and you got a nice voice guiding you. Back when I was in high school and college, you had to have somebody with you. Otherwise, you had to have a map up, holding it up, trying to find the road to go where you want to go. So that's just one example of how wonderful the world is and how much less stressful it is because of tools and modern technology.

22:39Austin Hankwitz:So just make sure you get ahead of it. You use the Rich Habits Network and Podcast as a way to understand what's next in all of these technologies with AI and everything else so you can thrive and build financial freedom.

22:52Robert Croak:I want to really encourage people before we jump to our Q &A section. If your life is not exactly what you want it to be, spend your weekends building the life that you want to live. We talk about this all the time. Robert says this all the time. Being able to wake up Monday through Friday and love your life is really, really important. The mundane Tuesday is what I like to call it. Ensuring that those Tuesdays are always the best days ever because you've spent the weekends building that life. If it's a routine, if it's a new career, if it's a side hustle that turns into a business, if it's whatever it wants to be for you, like build your dream life.

23:28Robert Croak:And sometimes building your dream life might feel embarrassing because your dream life might be, you know, starting a candle making business and you don't want your friends from church to be laughing at you about it because you're going to go start this, you're going to start a candle business. Okay. Yeah. Good job, Austin. Go have fun with that. Right? Like just go build your dream life because the people that you admire that have the life that you want They're never going to judge you or laugh at you for trying to do anything to better yourself The only people that are judging you and laughing at you are people that are envious of your own situation So go change your life 2026 is just getting started here.

24:06Robert Croak:Our lives are not what they used to be when our parents were around But i'd argue that's better My dad didn't have the opportunity to go do fun podcast stuff on the internet. I do and i'm having a blast

24:15Austin Hankwitz:Yeah, it reminds me, and I'm sure you went through it just as much as me a couple of years back, is how's that little TikTok thing going? And now it's like the last laugh, you know, just to be able to build something that's really meaningful and have such a huge podcast that hundreds of thousands of people watch and enjoy and learn from. So I love it. I love the internet and everything that we're doing, but also sharing with our audience.

24:39Robert Croak:All right, Robert. So before we jump to our first question, got to give a shout out to public.com, the investing platform for those who take it seriously. Because on public, you can build a multi-asset portfolio of stocks, bonds, options, cryptocurrency, and now generated assets, which allow you to turn any idea into an investable index using artificial intelligence.

25:01Austin Hankwitz:And 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, all with just a few clicks.

25:23Robert Croak:Generated assets are like ETFs, but with infinite possibilities. Completely customizable and based on your thesis, not someone else's. So go to public.com slash rich habits and earn it uncapped. 1 % match when you transfer your portfolio. That's completely free money. 1%. You transfer it over. Go to public.com slash rich habits and get your 1 % free match when you transfer your portfolio.

25:47Austin Hankwitz:Paid for by public investing. Full disclosure in the podcast description.

25:51Robert Croak:So our first question comes from Brandy D on Instagram. If you have a question for a show, please DM us on Instagram at richhabitspodcast or email us at richhabitspodcast at gmail.com. It's actually funny, Robert. This is actually pretty timely. Brandy says, how early do you put your startup online business into an LLC?

26:10Austin Hankwitz:Yeah, that's a tricky one because on one side, I think you should get the idea up and running, get your social handles, get your website done and all of that stuff, and then do the LLC. but I generally do the LLC first because, you know, I kind of have a little bit of arrogance and insuredness in my career that it's going to work. But if you're not sure and it's a side hustle, you don't know how much money you're going to make and it's a smaller idea maybe in the beginning, I think you could get up and running and test it and do all that. And as soon as you figure it out and realize, whoa, this is really going to work, then I would definitely draw the line in the sand, get the LLC, get the operating agreement, separate it all out, get the business bank account, make sure you do all the things right.

26:54Austin Hankwitz:Because once you're making real money, you want the tax advantages of these LLCs and you want the write-offs, but you also want the liability protection of having an LLC for your business.

27:06Robert Croak:I really, really liked that breakdown, Robert. So if it were me, and yeah, I kind of have that arrogance too, where it's like, oh, I'm doing this. I'll just start the LLC now because I know it's going to work because I know exactly what to do. But back in the day, he was like, actually what I did. So I started posting videos on TikTok in March of 2020. And in April of 2020, I started monetizing and building a business around those videos. And so I started making money in April, in May, June, July, and not until August of 2020 did I finally create an LLC. I want to say this was after I made maybe like three, four,$5 ,000.

27:44Robert Croak:And then I was like, oh, this is real. Okay. I'm going to go make an LLC and like actually do this now. You know, again, I was making a couple hundred bucks here, a couple hundred bucks there. Like, yeah, that's fun. But that's of course not the goal. The goal is to make a lot of money with an online business. But until I saw the clear path to making thousands of dollars, I didn't think about making the LLC. But once I had that path and I saw where I was going and how I could put fuel on this fire with more time and energy and focus and really begin to blow up a business, then I was like, oh yeah, I need to get an LLC.

28:12Robert Croak:So in my opinion, if I were you, I would maybe do the same thing, which was like, hey, I've got to start. I just made an account on Stan Store. So S-T-A-N dot S-T-O-R-E. And now I'm selling consultations on makeup design for people that want to redo their makeup. I'll sell a consultation on Stan for$42 a session. And for 30 minutes, we talk about your makeup and all that stuff. And if you're doing 40, $80,$120 a month on those consultations, like, yeah, I guess you can get an LLC, but I feel like you might pay more for the annual report, the bookkeeping, the account, all the stuff that goes with having an LLC.

28:48Robert Croak:But if you're making hundreds and now thousands of dollars a month with your business, and the cost of maintaining an LLC is dramatically lower than the amount of profit you're making, it definitely makes sense to have an LLC. And to all the stuff that Robert just said about like the write-offs and home office expense, anything that you are spending money on to run your business is a write-off against your taxable income for that business.

29:12Austin Hankwitz:And one more thing I want to add to this, and we can go to the next question that I think is a nice little hack for people, is when you're naming your LLC, it doesn't need to be the name of the product. Why is this important? It gives you a little bit of anonymity, but it also gives you flexibility. So let's say you have 1, 2, 3, 4 Main Street LLC, but your app idea is about pet something, pet training, let's say. Then you can have it be DBA, BD's pet training, Brandy D. And then that way, if that doesn't work, you don't have to abandon the LLC and you can keep that LLC and pivot the use to another new business if that one were to fail.

29:52Austin Hankwitz:So just keep that in mind. You don't have to name the LLC after the business idea or concept. And that's a way to save you time and money down the road if you were to fail.

30:01Robert Croak:I really, really like that. And don't forget, once you get the LLC, go apply for your EIN, your employer identification number, and then go use that to open up a business bank account. Because if you're making enough money to want to get an LLC, you're going to need that business bank account. You're going to make sure you're tracking all the money coming in, going out. It's going to be all over there. Always keep those things separate. It's going to make tax time much, much easier. So our next question comes from Caleb B on Instagram. Caleb says, I'm starting to build a nest egg for our next home upgrade.

30:32Robert Croak:We live in a small town, currently in a very small home, and will be looking to buy in the next four to five years. We currently have$100 ,000 of equity in our home. We make$250 ,000 combined between both of us, and have started paying off my wife's pharmacy school student loans of$2 ,000 a month. We're looking to invest$2 ,500 a month or more in the coming months with bonuses toward saving for this nest egg. How would you invest this nest egg to make sure it stays safe and secure, but it also grows over this four to five year period of time. I'm thinking about 70 % of it should be in cash and 30 % of it should be in the markets with 20 % of the 30 % in dividends.

31:14Robert Croak:Would love to get your perspective. Robert, I know you're just squirming looking at some of this. I'll let you chime in.

31:19Austin Hankwitz:I am squirming because I think you're on the right track, but you need to flip flop this because the key here is, and this is something Austin and I cover all the time, is if you're building this nest egg to buy a house in a year, even two years, I'd say this could work. But if it's four or five years down the road, I think you're leaving way too much money on the table by having this strategy. I would flip flop it. I would have 50 to 60 % in VOO. Then I would probably have 10 % in dividend, 10 % in bond, 10 % in treasuries, like some T-bills. And that's the the way I would do it more so because right now I just feel like you're too much in cash and to risk off for a four or five year span.

32:03Austin Hankwitz:You'd leave way too much money on the table, especially with investing$2 ,500 a month.

32:08Robert Croak:And then though, let's talk about when it makes sense to go back toward cash. So for example, I plan on buying slash build, I'm building a home this year and that's going to take place in like October. We're filming this in late January. So for me, all cash, that's not invested, my down payment, it's over here. I don't want something stock market related to be rocking and rolling. Then boom, Trump tweets something crazy. And my down payment is now worth 30 % less. I don't want to do that. I don't want those market dynamics. So for me, I always think if you're within 12 to 18 months of purchase time, of financing time, move away from the markets and put it in a high yield savings account, which is where mine is earning like three and a half or 4%, whatever it might be.

32:50Robert Croak:So in your situation, Caleb, I'd do what Robert said. I would do the stock market stuff for that first, call it three, three and a half years or so. And then after three and a half years, flip-flop. Have maybe a little bit of money in the markets if you want, but make sure the majority, 70, 80, 90 % is sitting in those treasury bills that are earning three or three and a half or 4 % or high yield savings or something of that nature. So our final question comes from H on Instagram. H says, hello, I'm married. I'm 69 years old and I have two and a half million dollars in a Charles Schwab account that's 100 % invested into stocks.

33:26Robert Croak:Over the lifetime of this account, the returns have been 24 % per year on average and I'm very happy with it. That's awesome. That's pretty good. We own our house outright. It's valued at$900 ,000. We own a business debt-free that's valued at$2 million. We have $180 ,000 in cash in various bank deposits earning 2 % or 3%, I was thinking to start taking social security of$4 ,100 a month on my 70th birthday and take some monthly dividends, which might also be about$2 ,300 a month. I can also take up to$10 ,000 a month out of the business and it won't affect things that much. The problem we're having is our lifestyle.

34:07Robert Croak:We spend$14 ,000 a month on high value travel and dining out. What should we look at as far as our market risk and taxes going forward? A pullback in lifestyle is hard giving our continued lifestyle. We have no credit card debt. This is all from working hard for the last 55 years. If I need to fill the gap and get that $14 ,000, how do I obtain it? Good question, Robert. So let's talk through this one together. They need$14 ,000 after taxes. $14 ,000 a month right now is$168 ,000 a year. So you're looking at about$200 ,000 of pre-tax income that they need to come up with. They mentioned already that they can get$4 ,100 from their social security, which like, why have you not done that already?

34:54Robert Croak:That's a great idea. I firmly believe that you should take social security as soon as possible because you can go put that money to work better than the government can do it for you. and not to be morbid, you have no idea when you're going to die. What happens if you died at 68 and this 4 ,100 a month that you could be taking like sucks, right? So like 4 ,100, love that. Keep going. You mentioned a 2 ,300 of the dividends. Now we're at 6 ,400 a month. And then you mentioned up to 10 ,000 a month out of the business. But something we're not talking about or something you haven't mentioned here, H, is the two and a half million dollars in your Charles Schwab account.

35:27Robert Croak:Why don't you just put the 4 % rule to work, take out$100 ,000 a year from that account, so that's exactly, let's call it$8 ,300, add the$6 ,400 to it, which we just talked about,$2 ,300 from the dividends, $4 ,100 from the Social Security. Now you are over$14 ,700 a month to fund your lifestyle. I think that's what you end up doing. You keep your nest egg growing for you in the Schwab account. You're taking your well-deserved Social Security. You're taking some dividends, which I think is fine too. And if you need to have a big expense, you have the flexibility to tap into that business.

36:06Austin Hankwitz:I think that's a great breakdown. And the number one thing I want to click back on here, H, is you say the problem is our lifestyle spends well over$14 ,000. It's not a problem. You've crushed it. You've set yourself up well. You have money everywhere. you still have the business money that you could take out$5 ,000 or$10 ,000 a month from, and it sounds like wouldn't affect the business at all. You are crushing it. Live your life. Consider the 4 % rule to get you above that$14 ,000 a month you need and call it a day. You have crushed it, and you should be high-fiving the monitor in your bank accounts and really excited to keep rocking and rolling into your retirement because you've set yourself up well.

36:47Austin Hankwitz:And one more thing I want to add, just a couple more points, is this. You say that you're all in this 100 % mix of stocks that have done well over the years, but at 69 years old, I think it might be time to dial that back a little bit, get a little bit your foot off the gas, so to speak. And I would maybe look at a portfolio that's 60 % stocks, 40 % bonds. So you've got a little more protection against volatility. I think that would be a good thing to integrate here as well. But then also consider this because you mentioned taxes. If you worked with this 4 % rule that Austin broke down, you have to look at it from that portfolio income.

37:24Austin Hankwitz:You're only paying long-term capital gains as well on the 4 % rule of the money you'd be taking out to get you above that$14 ,000 a month. So those are two more considerations tactically that I think would help you really thrive in retirement and keep you on the right track.

37:40Robert Croak:Yeah, make sure you learn all about qualified dividends. Make sure you understand long-term capital gains. Because when I see Social Security at$4 ,100 a month, Social Security is taxed at regular income. At least that's how I understand it. I think that's what my dad paid, right? You pay taxes on a tax. It's crazy. But long story short, just make sure that you're optimizing for taxes. You're working with a professional, a CPA or financial advisor that's going to help move you along here and show you, okay, here's how we can reimagine the portfolio so it's a little less aggressive. Here's how we can be thinking about the 4 % rule for lower taxes.

38:12Robert Croak:Here's what we can do for some qualified dividends, things of that nature. So be sure to think about all that stuff here, H, as you enjoy your retirement. $14 ,000 a month. Heck, double it to$28 ,000 and go really enjoy yourself in 2026. You can afford it. You're rich. You're filthy rich.

38:28Austin Hankwitz:I love it. What a great episode. It was so fun, kind of like leaning in our age gap here of 30 years of what worked back when I was young versus what works now and really breaking it down. That was a blast.

38:41Robert Croak:Absolutely. Everybody, thank you so much for joining us on this week's episode of the Rich Habits Podcast. And don't forget, before you go, we publish an episode in January sharing our 2026 money calendar. The month of January is gone, right? We are now in February, which means that you need to go make sure that you actually did that January thing. Those January things were to track your net worth and to make your honest budget. This is your reminder. If you've not yet tracked your net worth for January, go do it. If you've not yet created an honest budget, click the link in the show notes below and create one and go start budgeting your money better in 2026.

39:16Robert Croak:For one month in, you got to lock in. We gave you the playbook. It's up to you to actually go do it.

39:21Austin Hankwitz:Thank you, everyone. And we'll see you on Thursday.

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