164: How to Build Wealth on $60K, $100K, & $250K Incomes

18:37Austin Hankwitz:Get a professional, spend the time, and get ahead of it so you can really optimize your money because we always say it's not what you make, it's what you keep. And also, real estate enters the conversation at$250 ,000 a year in a way that it doesn't at lower income levels because now you have the capital for down payments and the income to be able to absorb carry costs and other associated fees. and cash flowing real estate. Properties that generate income after expenses is one of the most effective wealth building vehicles at these income levels because it combines appreciation with cashflow while also offering meaningful tax advantages through depreciation.

19:20Austin Hankwitz:And this is something that I've been doing for decades and it is so, so important. And I actually talked to a lot of people in the Rich Habits Network about this that are high earners that earn that$250 ,000 or more and they don't have any strategies. They're not thinking about the benefits of real estate. So please, for everyone listening at every step of the way today, make sure you understand to utilize the tools that are in front of you and have these strategies in place.

19:44Robert Croak:Another one to consider, Robert, is estate planning. Estate planning starts to matter a lot at this income level. If your net worth is growing and you are now inching closer, if not above millionaire status, and you've got dependents, you've got assets in multiple accounts, different structures, you need to have a will, you need to have a trust, you need to have beneficiaries, you need to have at minimum at least one conversation with an estate planning attorney. Go pay the two or three thousand dollars you need to have all this figured out because at the end of the day, it will save so much. It's responsible stewardship of what you are building and the people who do this work early are the ones whose families actually get to benefit from wealth that was created.

20:25Robert Croak:That is how generational wealth gets passed on generation after generation after generation. Last thing I want to address here, Robert, is something that doesn't really get said enough at this$250 ,000 income level. That's the accountability gap. And I would argue, I fell for this, Robert, I'm sure fell for this, a lot of people listening right now, because at$60 ,000,$70 ,000,$80 ,000, the margin for error is small. And it's small enough that your budget tends to keep itself in place. I clearly only have 800 bucks a month for groceries. I clearly only have this much for transportation, whatever, insurance, my cell phone.

21:04Robert Croak:If I spend more than that, it hurts. I see it. It's really tight. At$60 ,000, you're not really bumping around too much. But at$250 ,000,$300 ,000, $350 ,000, there's enough slack in your budget that if you start making bad habits, those bad habits do not show up in your financial planning and could hide for years before they become visible. You could overspend, you can undersave, you can neglect tax strategy for a really long time at this income level because you feel comfortable right up until you do. The discipline required to build wealth at$250 ,000 a year of annual income is arguably higher than the discipline needed to build wealth at$60 ,000 a year because the temptations are bigger and the feedback loop on your mistakes is slower.

21:58Robert Croak:Something I do, and if you are at this income level, I highly recommend doing the same thing. Track every dollar you spend. It doesn't mean it has to be in the perfect column or category. I'm not saying, oh no, you went over your budget. I'm not saying to judge yourself on your spending. I'm just saying to track your spending. Because what I and I'm sure Robert and many other people listening right now, they're like, wait a second, I just made all of this money. Where did it go? I only invested X amount of dollars last year. And I paid X amount in taxes. Did I really spend the difference? Right?

22:31Robert Croak:Like, please, if you are making 180, 200, 250, 350, you're up there in annual household income, you need more discipline than if you are only making$60 ,000,$70 ,000,$80 ,000 because the margin for error, you get a little wishy-washy, and the bad habits don't present themselves fast enough.

22:51Austin Hankwitz:Yeah, and I just want to click back again. If you are making$50 ,000,$60 ,000,$75 ,000 a year and you're not there yet, that is not a death sentence. It just means you have to have the practices and the strategies and all of the things we're covering today in the playbook, in your tool shed, because you want to make sure you're doing it right because your income is going to keep growing. But if you get all of these habits and structures in place early, you're going to do so much better because Austin is 100 % correct. People that make a lot of money many times don't have the structures in place.

23:23Austin Hankwitz:And that's why they live paycheck to paycheck. And also people that don't make a lot of money get it backwards. They think, well, rich people have all this money. They don't have to budget. And actually it's the opposite. Most wealthy people that I know are very strict with their money. They budget everything. They watch every dollar, every dollar has a job. Yet the people that aren't making a ton of money, they just spend their money, you know, however they feel like and wonder why they're not getting ahead. So make sure on both ends of this spectrum, you understand the strategies and discipline are probably the most important because you can always grow your income, but it doesn't mean you can always get those structures in place if you don't start early.

24:05Austin Hankwitz:So that's the big takeaway for me. And here's what ties all three of these income levels together. The number on your paycheck is not the primary variable. At every level, the people who build wealth are the ones who spend less than they earn, invest the difference consistently, and make intentional decisions about where their money goes before lifestyle creep fills the gap. Remember that the average American considers$2.3 million wealthy. And that number is reachable on a consistent savings and investment discipline, even starting at$60 ,000, assuming time and compound growth do their work. And it's also completely escapable on$250 ,000 if the income goes to status instead of assets.

24:49Austin Hankwitz:Income is not destiny, behavior is.

24:53Robert Croak:And that's why the name of this podcast is Rich Habits. That is right. Mic drop, let's go. So Robert, let's now jump to the Q &A section of this episode. As a reminder for everyone listening. If you have a question to ask us on the show, DM us on Instagram at richhabitspodcast or email us at richhabitspodcast at gmail.com. I think all of today's questions come from Instagram. So shoot us a little DM on Instagram, follow us on Instagram, right? We're always doing fun stuff over there. So our first question comes from Angela on Instagram. Angela says, hi, here is my question. I saw Invesco QQQ doing massive advertising during the March Madness 2026 college basketball.

25:36Robert Croak:I hear you talk about this ETF often. And if they're spending massive money on advertising, is it still a low expense ratio ETF compared to alternatives with the same objective? It's kind of counterintuitive. Thank you so much. What a good question. Yeah. So like, it's kind of funny, Robert, you know, you see QQQ in these commercials all the time. I see them for college basketball, college football. I mean, I see them all the time. Now, the core of your question, Angela, came about the expense ratio. Austin, Robert, what is an expense ratio? An expense ratio is the management fee that investors pay to the issuer of the ETF for investing our money.

26:19Robert Croak:All ETFs have expense ratios and they range dramatically. For example, you can get an expense ratio that's like literally 0.015%, right? Like literally so small. or you can get an expense ratio that's 1.5%. They can range dramatically. QQQ has an expense ratio of 0.18%. Arguably, that's a pretty good expense ratio. So let's put this in perspective, Robert. For every$1 million that someone has invested into QQQ, every single year you are paying 0.18 % on that money to the issuer, Invesco, for having your money invested. That is$1 ,800 per year paid to Invesco for investing in QQQ. I've seen other NASDAQ 100 ETFs like QQQM, which is arguably a little bit cheaper, but you're still paying$1 ,500 per year per$1 million invested.

27:20Robert Croak:VOO, you're paying about$300 per year, but you're now investing in the S &P and not the NASDAQ. But at the end of the day, again, if the expense ratio is around 0.2 % or less, I generally think that is a pretty affordable expense ratio. Because again, they've got expenses. Now their expenses are commercials on college basketball, but their expenses nonetheless, there's no free luncheon investing. So I'm okay to spend a little bit of money to ensure that I'm investing in the best benchmarks using the most reputable ETFs with liquidity and good things of that nature. But Robert, what's your take on this question?

27:53Austin Hankwitz:I love the question and it doesn't bother me a bit because QQQ, I think everyone watching this podcast or listening should own QQQ as part of their core satellite portfolio. We say that about VOO as well, because we want to make sure that we have these big funds, these ETFs like QQQ in your portfolio at all times, especially as you're working towards your retirement, because we just think that they're just really great and they're very affordable to own so i don't think there's any worry here that they did a bunch of advertising at the ncaa because the expense ratio has not changed in a very very long time and it's very affordable to own and you normally are beating a lot of the benchmarks i forget what it was the other day but it was something like 85 percent of professional money managers don't beat the returns of voo and qqq yearly over a 10 20 30 year period so just keep that in mind, but I love the question.

28:48Robert Croak:Well, yeah, Robert, I just looked at the annualized historical returns because I agree. I think people should be invested in the NASDAQ 100 via QQQ or QQQM. And over the last 20 years, QQQ, if you reinvest the dividends, has annualized 15.2%, which means if you put$10 ,000 into QQQ 20 years ago, it's now worth about$170 ,000 without adding any more money to it, right? It just 17X'd essentially, right? Over 20 years. So I agree. I think everyone should be invested. I got a ton of money in QQQ. I think the NASDAQ 100 is a great mechanism for building wealth over a long period of time because tech is cool and tech is going to continue to do what tech does and that is go up and to the right.

29:31Robert Croak:Now, before we jump to our next question, got to give a shout out to Neos Investments. Neos offers ETFs that seek high levels of monthly income with a keen focus on tax efficiency while providing core portfolio exposure across equities, fixed income, real estate, cryptocurrency, and cash alternatives like T-bills. Their ETFs may be especially interesting for investors looking to generate tax-efficient monthly income inside of their investment portfolios. Their funds may serve as a compelling income-focused alternative or complement to many of the investments already in many investor portfolios.

30:04Austin Hankwitz:And if you're looking to add passive income-focused ETFs your portfolio, consider learning more about NEOS ETFs at neosfunds.com. And as with all investments, investors should carefully consider their investment objectives, risks, charges, and expenses of NEOS exchange-traded funds before investing. To obtain a prospectus containing this and other important information, please visit neosfunds.com and please read the prospectus carefully before you invest. An investment in NEOS ETFs does involve risk, including possible loss of principal, and there is no guarantee that the NEOS ETFs will make monthly distributions and the amounts may fluctuate from month to month.

30:45Austin Hankwitz:And cryptocurrency is relatively new and the market has its own specific risks. NEOS ETFs are distributed by Foresight Fund Services, LLC.

30:54Robert Croak:And they also have their own NASDAQ high-income ETF, QQQI. So go check that one out. Our next question comes from DB on Instagram. DB says, hi, Robert and Austin. I freaking love your podcast with like nine different O's. Thank you, DB. We're glad you love the pod. DB says, AI has made so many changes to my financial situation. And although I'm still far from where I wish I was, I'm better than I was 10 months ago. And I've got your podcast, the thing for it. I want to get your opinion. I'm married. I'm 38 years old with two daughters. One is attending college next fall. The other is still in elementary school.

31:29Robert Croak:I decided to go back to school to get my bachelor's degree in finance since I already have industry experience with the intentions of getting better financial opportunities and a higher paycheck. I still have one and a half years to go until I graduate. All the money for school is coming through FAFSA and with AI, knowing that a finance degree is highly at risk. Do you think it's a good idea to complete my degree or do I just drop out, save the one and a half years of student loans and invest that money instead. Maybe even toward my oldest's college tuition. Robert, you kicked this one off.

32:06Austin Hankwitz:I knew you were going to kick this to me. This is a tough one. Part of me thinks save the money. Don't get any further in debt with these loans, even though these FAFSA loans are lower interest. It's still a lot of money. But the other thing is you're two and a half years in. So maybe there's a world, you have the degree, Some companies are going to care. Some finance jobs are still going to be out there. But if you're going to finish this degree, I would really, really focus on what's next in AI, how you can be the best of the best in AI integration into your work, because a lot of entry-level finance jobs are going to be gone, poof, cooked in the next two, three, four, five years.

32:47Austin Hankwitz:And I would hate to see you have all this debt in a pretty degree plaque on your wall that you can't really do much with. So I'm leaning towards finishing because you're so far along. But if you are just getting started or in your first year or anyone thinking about it, I would say don't do it. I would change my focus to a job that's going to have 10, 20 years of runway ahead. So that's what I would do because I'm just a little bit nervous about all this debt coming out of college for a job that's literally not going to exist in two or three years. So that would be my take. Finish the degree, focus on AI, and make sure you're really good at understanding it before you even have the degree.

33:25Austin Hankwitz:Because maybe there's a world you can consult, or maybe you can be a prompt engineer in two years helping people figure out how to invest their money. Something like that could work, but that's my take.

33:36Robert Croak:So I got a degree in finance and economics, as you guys know. And there's really like three things you can do with a finance degree. You can go to Wall Street and be an investment banker and then do that, do private equity, whatever. You are 99 % sure you're not going to do that. You're 38 with two daughters. You're not going to go be an investment banker working 100 hours a week in New York. Then there's the other side where you can go do corporate development, mergers and acquisitions, financial planning and analysis. That's the kind of stuff that I did out of college. And then there's even a different side of it where you could do financial planning and the sense of like, you know, be a financial planner, wealth management, insurance, stuff like that.

34:14Robert Croak:I would argue that the immediate money is what stuff that I did, right? I was doing mergers and acquisitions out of college, financial planning and analysis, corporate development, stuff like that. You could go do that stuff, probably make$65 ,000,$85 ,000,$120 ,000 working at a Fortune 1000 company in the United States. I would argue you need experience. Before you do that, you mentioned you have some industry experience. I don't know what that experience is. Maybe there's a world where you can have some sort of summer internship this summer at a company that is local to you and your family, and you are able to apply your finance degree in a way that allows you to analyze income statements and cash flow statements and make financial planning and analysis decisions, right?

35:01Robert Croak:FP &A, that's what it is. So maybe there's a world you can do that. But again, I don't think those jobs, to what Robert said, are going to be around for another five or 10 years. Like I've seen artificial intelligence model out in Excel what would have taken me hours and it does it in 10 minutes because it's what Claude can do, right? Like that stuff is nuts. And I think that's where the industry is going. On the flip side, maybe you're really into wealth management and financial planning and, and things of that nature. I think you have to go be a certified financial planner, which is, I think, a master's degree, if I'm not mistaken, if you really want to get into that.

35:37Robert Croak:If not, maybe you just jump right in, take the SIE exam, Series 7, Series 63, and you can start doing financial planning. Maybe you can work at a financial planning firm. Maybe that's what you're really into, right? There's a lot of different... I wish you gave us more than like, I have industry experience in finance. It's like, what does that mean? You know, mortgage, like, I don't know. But like, there's a ton of different routes you can go here. I hope, DB, that when you took on this opportunity to go back to school, get your bachelor's in finance, that it was with a clear path. That your employer said, hey, listen, DB, we want to make you a VP.

36:11Robert Croak:We want to make you a director. We want to get you that, but you can't do it until you have this bachelor's degree because you're just a high school graduate. And we want you to have that bachelor's in finance before you take over this department or before you have direct reports, whatever it might be. So I'm hoping what you can do is take that bachelor's degree, go back to your employer and say, listen, I grinded for the last four years and I got it. Give me that promotion. And hopefully that's all this turns into. But if you've got to figure out something beyond that, you got to start looking now.

36:41Robert Croak:You need to start getting that experience now because again, three, five, seven, 10 years from now, those FP &A jobs and Excel and all that stuff, it's going to be automated very, very, very easily by AI and they're not going to need you.

36:54Austin Hankwitz:Amazing takeaway, Austin. I just want to clarify, you don't need a master's degree to become a certified financial planner, a CFP, but you do need a master's if you want to be covered in personal financial planning. Just a small distinction, but I wanted to make sure all of our listeners knew that.

37:11Robert Croak:Yeah, great call out. I did not know that. I did have a friend, though, that was a CFP, and she was getting her master's in something. But regardless, appreciate the call out. That's super important to keep in mind. Yeah, we just looked it up. and three years of experience gets you the CFP designation. Don't need a master's degree. So I am corrected. Thank you, Robert. Great question though from DB. Let's now jump to our final question from D. Another D name. Here we go. Wants to be anonymous. Says, hey, call me D. D says, hi, Austin and Robert. If you air the question, just call me D. I'm 42.

37:45Robert Croak:I found your podcast a year ago. Up until then, I was a Bitcoin maximalist, never investing in stocks, but I would buy Bitcoin like a madman. I was able to stack 72 % of a Bitcoin. That's awesome. Good for you. It was a mix between iBit and cold storage. So when I found your podcast, I made sure to stop doing that and go build my base. Now that I've been dollar cost averaging into the S &P and a few thematic ETFs and Bitcoin, every time I get paid, I've got my base built. I'm feeling good. Here's my question. Should I back off the Bitcoin? Should I sell any Bitcoin and reallocate it? Maybe I stopped DCAing for a while.

38:25Robert Croak:Personally, I'm really proud of what I've been able to accomplish, but I'm starting to question if my money could be better invested elsewhere. Thank you for your time and thank you for your podcast. It's extremely valuable and I love sharing your show. D, thanks for sharing the show. That's awesome. We really appreciate it. Robert, you like Bitcoin. I like Bitcoin, but we have sort of a framework for people to consider when they buy Bitcoin. So I'll let you walk everyone through it.

38:50Austin Hankwitz:D, I'm so glad you found us and I'm really happy that you're crushing it. You're building the base. I think you're in a really good spot at 42 years old. So here's my take. I love that you have three quarters of a percent of one Bitcoin. Something that I tell everyone on their wealth building strategies is try to get to one Bitcoin. So my answer to you would be, I would keep DCAing into Bitcoin to get to that one Bitcoin, especially while we're in this price drawdown. And then I would move away from that and DCA more into the other things you're doing and make sure you're fully diversified. I see you have a few thematic ETFs.

39:27Austin Hankwitz:That sounds fantastic. You've got the S &P 500, but I want to be clear. I would make sure a big portion of your money is going to the S &P 500 and the NASDAQ 100. Everything else is diversification, and I'm okay with thematic ETFs. I own them. Austin owns them. But I just want to make sure you're not chasing hype and you have a lot of this portfolio management going into the base. So I really like where you're at. I would keep DCA-ing into the Bitcoin to get to one full Bitcoin. I still believe Bitcoin in the next four, five, six years is going to continue to accelerate up over time. I could be wrong, but I do believe in it.

40:07Austin Hankwitz:I'm still buying Bitcoin and dollar cost averaging, but I would love to see you get to that one Bitcoin. I think it'd be really cool.

40:13Robert Croak:Yes. And the framework I was alluding to is we like to tell people to keep their total Bitcoin cryptocurrency portfolio in between the 5 % and 15 % range of their portfolio. So, oh my gosh, I'm so conservative, whatever. I just want five percentage points of my portfolio in Bitcoin. That's great. Go do that. It's a little bit, if it goes to zero with this quantum computing stuff, you're not going to lose out on much. It's 5%. If it does really well like it has done for the last 10, 15 years, congratulations. That 5 % is not worth a whole lot more. So if I were in your shoes, maybe there's a world where, because again, you probably have much more than 15%.

40:54Robert Croak:Maybe there's a world where all net new dollar bills start getting deployed into the S &P, the NASDAQ, the Dow Jones, some of these ETFs and maybe even blue chip single stocks you're excited about, like Amazon or a Microsoft or a Meta or a Google or a Tesla, things of that nature. And as that happens, the percentage of your portfolio invested in Bitcoin naturally decreases over time because you're not adding that new money to it unless it just like goes up a ton in value, which would be great because we want Bitcoin to go up. But that's kind of how I'm thinking about it, right? So instead of like pouring more money into your Bitcoin, maybe you start to say, hey, I've got a lot.

41:32Robert Croak:This is cool. Net new capital. Maybe it goes elsewhere in the portfolio. And I let the Bitcoin ride the wave, do its thing. You're a Bitcoin maximalist. You're excited for it. That's awesome. I'm also excited for Bitcoin. So rock and roll. Appreciate the question, D.

41:45Austin Hankwitz:I love, love, love this episode because we want to make sure everyone understands one thing that the fake gurus drive me nuts over when they say, if you're not making$400 ,000 a year, don't even bother doing X, Y, Z, or you're a loser. Don't listen to those people. Some of the wealthiest people and the most percentage of millionaires are retired teachers, engineers, dentists, lawyers, people that sometimes make$670 ,000,$80 ,000,$90 ,000 a year, but they had the right structure, the right mindset, and they lived below their means to be able to retire comfortably. So make sure you understand that.

42:21Austin Hankwitz:Don't chase hype. Don't listen to them because they don't know the numbers and they don't care about your future like we do here in the Rich Habits Podcast.

42:29Robert Croak:Everybody, thanks so much for tuning in to this week's episode of the Rich Habits Podcast. Please consider doing what Dee does and share the episode with your friends. If you know someone, you got a tight-knit friend group here, and you know your friend's making$100 ,000 or this friend's making$60 ,000 or that friend's making$250 ,000, share this episode with them. So they have the tools and resources they need to make the best decisions with their money over a long period of time. That's what these episodes are about. Giving you all the resources to make educated decisions with your money. We put so much research, time, and energy into filming these episodes.

43:05Robert Croak:And we're so grateful that tens of thousands of you come back every single week to listen to the show. You read the newsletter. You're subscribed to the newsletter. You're in the Rich Habits Network. It is just, we're so, so grateful. and please consider sharing this episode with a friend because that is the easiest way that you can say thank you. Oh, and drop us a five-star review. We always appreciate those two.

43:26Austin Hankwitz:And I want to give a quick shout out before we sign off. We just updated wallstreetfavorites.com. It's 2.0. It's incredible. I wish we had time to share all the crazy stats we've been getting already out of the gate in the last few weeks since we launched. So make sure you go check it out, wallstreetfavorites.com. We built it right here. the team inside of the Rich Habits Podcast and Rich Habits Network. I think it's one of the best stock aggregating help you out tools on the internet right now. So go check it out.

43:57Robert Croak:Thanks, everyone. And we'll see you on Thursday.

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