50: Real Estate is Not the Best Way to Get Rich in 2024

0:28Shopping is hard, right? and welcome back to the Rich Habits Podcast, a top five business podcast on Spotify. My name is Austin Hankwitz and I'm joined by my co-host Robert Croak. Robert is a seasoned entrepreneur in his 50s with more than 200 million in company exits under his belt and I'm an entrepreneur in my late 20s with a background in finance and economics. Since quitting my full-time job in corporate finance a few years ago, I've built a seven-figure media business and actively advise some of the most well-known fintech companies around the world. As the show name might suggest, every episode, we talk about rich habits as they relate to business, finance, and mindset.

1:06However, we try and bring you two unique perspectives, one from an industry veteran, which is Robert, and the other myself, someone who's still in the process of building wealth and figuring it all out. Robert, what are we going to be talking about in today's episode? In today's episode of the Rich Habits Podcast, we're going to explain why we believe real estate is not the best way to get rich if you're starting your wealth building journey in 2024. Don't get us wrong. We're both real estate investors and real estate has made us both a lot of money. However, real estate is a very long-term game.

1:40If you're looking to build serious wealth over the next several years, real estate might not be the right way to start, especially with interest rates the way they are right now. Throughout this episode, we'll share three alternative ways to build serious wealth faster without going into massive amounts of debt to do it. This episode is really important because if you're like me, you like to see cash money hitting your bank account, not just to see the value of your real estate tick higher on Zillow, right? Real estate has always been a diversification method in my mind, not exactly a way to build cashflow and generational wealth, allowing me to quit my nine to five job.

2:21Some people think that, oh, I just go buy a rental property, cashflow from it, I buy a couple more, and I'm good to go. Sure, that's a way to do it, but it's a little bit slower of a process than you might think. So I'm excited to dive into these three different methods, Robert, because not only are they really easy to comprehend, but anyone could start these and really start 2024 off with a bang and make tens of thousands, maybe even hundreds of thousands, depending on how successful some of these methods might be for them. So kick us off with method number one. Yes. Method number one is creating a product.

2:53Everyone listening and following along knows that I've been a product guy for 30 years. Silly Bands was my biggest hit. We've got several really good products right now that are in the markets. And what I love about creating a product, it can be a consumer product, it can be a tool, a beauty product, or it can even be an existing product that's been in the market for decades, but hasn't been updated in all these years. So that's really important to understand. And with TikTok shop, it's easier than ever to make your first 1 million in sales. So for example, I found a guy who's selling these$108 handcrafted leather belts out of his fricking garage because he published great videos demonstrating how the belts work.

3:36Everyone wanted them. This guy did over a million dollars in sales in only six months in 2023, selling freaking leather belts. I want everyone to understand it's not as daunting as you think. There are so many ways to get started in this product development world and be able to either create your own product, white label a product, or create a new version of an already existing product. I have actually seen that guy on TikTok as well. I don't know who films his videos, but they do a really good job. It's literally him like punching the holes in the belt. But then you can click to see how many belts have been sold in the reviews and stuff.

4:13And you do the math. It's well over a million in sales. So Robert, as someone who has built countless products throughout their life, walk our listeners through the idea to go to market strategy with some of these products, right? You have an idea. How do you take an idea to an actual product? I love it. And we have an example that is happening right now today, right in front of our eyes. So a few months ago, Elizabeth, she is very much into puzzles. And we were sitting there and one night she was just kind of mumbling on and complaining about how all the puzzles had these antiquated graphics in the big flimsy boxes.

4:47And I was like, why don't we start a puzzle company? You love puzzles. You know the market. I know products. We can do it different. So we started going through it like what could we do better and different in the puzzle industry? And so we came up with this idea to do these really outlandish designs. We use AI to really create these beautiful in-depth colors and really intricate designs. But then the key stroke of genius was screw the box. We're going to put them in bags, these cool coffee bags that are resealable. So then all of these people that are living van life and traveling a lot and couch surfing can take their puzzles with them.

5:27Whereas in the past, all puzzles were in boxes. So they're really hard to travel with. So we created a company called Paragon Puzzles. If you want to check it out, it's paragonpuzzles.com. That's my shameless plug. But anyway, we started out by finding one of the graphic designers that we currently use. He's very gifted in AI art. So we talked to him. We came up with the concepts for the first drop. We got the AI designs ready. then I went to work finding the best possible manufacturer. So a lot of times what I'll do here is I'll use Alibaba. And what you need to do and understand with Alibaba is be careful.

6:03Make sure you sign a contract, at least an NDA with these factories before you lease your designs or your concept. And don't tell them any more information than you need to until you have these contracts signed. So anyway, a few steps ahead, we find a great factory, really modern tools, great quality. We got samples from them first of a current puzzle that they'd made not related to us. So we could check the quality, the thickness, I guess in puzzles, you know, not having a lot of dust in the puzzle pieces is really important. And so that was it. We wrote a contract with them. They were our factory.

6:37So we moved ahead to the bags. We wanted to have these really cool coffee bags that were resealable that could have this really vivid art on them. And that was the next step. And that was a little bit of a bumpy road. We found a factory. Then they bait and switched us on the pricing, but we got through it. And the whole process from start, this iteration process of that first conversation to having puzzles in my warehouse was about five months. And, you know, let's say$40 ,000. But what's beautiful about it is we control it. We own it all. Elizabeth and I, it's our baby. She's running it. And it went from idea to concept to design to on the shelves now and tons of interest.

7:21It's really doing well all in the course of four or five months. And this company, like any other product company could go on to generate millions of dollars a year of revenue. So that's what I love about products and why I think it's number one in this episode, because I think if you develop, invent, or reinvent or redesign an existing product, that in my opinion is the fastest way to massive wealth. You see it all the time on TikTok where someone has a product that gets really, really viral. They go huge and they do 10 million in sales in year one, which we could have never done in the past without the likes of TikTok or Instagram.

8:00So that's why I put products as number one here in this episode and why it's a great example and illustration of Paragon puzzles of what you can do from start to finish. It's not that expensive like you would think. It's not this mind bending hurdle after hurdle. You just have to do the work, put one foot in front of the other and kind of follow these steps to be able to create that product brand on your own. This is a real good story about Bronx and his dad, Ryan. real United Airlines customers. We were returning home and one of the flight attendants asked Bronx if he wanted to see the flight deck and meet Captain Andrew.

8:38I got to sit in the driver's seat. I grew up in an aviation family and seeing Bronx kind of reminded me of myself when I was that age. That's Andrew, a real United pilot. These small interactions can shape a kid's future. It felt like I was the captain. Allowing my son to see the flight deck will stick with us forever. That's how good leads the way. Hablas Español. Spreys to George. Condénosque. If you used Babbel, you would. Babbel's conversation-based techniques teaches you useful words and phrases to get you speaking quickly about the things you actually talk about in the real world. With lessons handcrafted by over 200 language experts and voiced by real native speakers, Babbel is like having a private tutor in your pocket.

9:17Start speaking with Babbel today. Get up to 55 % off your Babbel subscription right now at babbel.com slash Spotify. Spelled B-A-B-B-E-L dot com slash Spotify. Rules and restrictions may apply. And I think what's really important to share here as well, Robert, is this cost you about$40 ,000 from start to finish, right? Where maybe someone else has an idea for a product and it might only cost them 6 ,000 or 15 ,000, right? You don't need$40 ,000 to go start a product. And additionally, something else I wanted to call out as well, Robert, you know, let's say that you sold out of this first drop.

9:45I mean, I'm sure you guys are going to make out like a bandit and the money you'll make from this, I'd love to think like, okay, maybe that's around 80,$90 ,000. Like, well, Robert, newsflash, the annual median household income here in the United States is about 70 grand. So like this for you is a fun project that you're enjoying and you're scaling and having a blast with while also making as much money as the average American household, which is crazy to think of. Yeah. The simple math on Paragon puzzles for this particular project is we did six designs, a thousand puzzles of each. So that's 6 ,000 puzzles of inventory to start.

10:24And if those sell out at$20 each, then you're looking at$120 ,000 in revenue. So with an expected rate of return of 20 or 30%, we could even see, you know, 40, 50,$60 ,000 in profit, depending on what we spend in marketing just on the first drop while we're building the company. And then each drop is going to get better and better as we get momentum, because we're going to be able to bring our costs down, obviously, because we'll buy more inventory and we're going to have more and more sales each week, each day. So it's really exciting. Just always important for everyone to understand and why this episode is really important and near and dear to my heart, because I believe creating a product is the best way to create great wealth in a shorter amount of time than anything else.

11:14And for Robert, that might be silly bands and puzzles and other products for you listening. I mean, that might be an example I recently bought was a drinking game with like a deck of cards. I guarantee you some random person in their 30s was like, oh, I've got witty ideas for a drinking game. Like, I bet I can go find a manufacturer and I spent 30 bucks on it, right? Like that's the type of products we're talking about. We're not saying to reinvent the wheel. We're not saying to invent the next MacBook Pro here. We're just saying there are so many cool ways. Everyone listening is so creative and thoughtful and there's so many things that can inspire us to make cool products.

11:46And this episode will hopefully inspire you to make something fun in 2024. Now, Robert, with that being said, what is the second method that people can begin to build real wealth quicker than real estate? Yes. Number two is create a brand. It's never been easier to share your unique perspective and experience on life with millions of strangers on the Internet. By creating a brand, this could be a personal brand, a travel brand, a lifestyle brand, or it could be any other popular niche that you can grow and monetize. you're building not only a recognizable, but also a lucrative business by doing this.

12:22You hear about it every day. You see it every day on TikTok and Instagram and some of these other platforms. And so you have to think, why can't it be me? You can create a brand around any niche, any career, anything that's interesting that has an audience, and it can be you. And so that's why creating a brand is number two for me. I'm right there with you, man. There are thousands of people on the internet making an extra$50 ,000 to$150 ,000 a year building out their own personal and lifestyle brands. This might be Amazon affiliates, TikTok affiliates, advertisements, subscription support via Patreon or Substack, or even ad revenue generated on Twitter.

13:01I've got friends making thousands of dollars a month right now just by tweeting. And thinking about these sort of niche lifestyle brands as well that I've seen on TikTok, I used to follow this person whose whole thing was the afternoon soda, the afternoon drink, right? So what she would do is she'd have all these different flavored sodas and she'd make a video of herself pouring the soda into a nice glass, adding her little syrups and sugars. And then that was her little thing. And she made a really cool video about it. She posted it every single day. Well, before you know it, companies like Poppy and Spindrift and other companies were sponsoring her so she can make videos about their brand.

13:37It's crazy, right? People love little things. You all listening right now have your own little thing, if it's cleaning, if it's sodas, if it's technology, like whatever your thing is, talk about it on the internet. Because I promise there are tens of thousands, even thousands of people, I guarantee you, elsewhere around the world that also resonate with what you're doing. Yes, we live in the greatest time in history for making money. And we see it every day where people are talking about some crazy thing that someone went viral. And there's another thing where someone's doing this and they went viral and now they're making millions of dollars and they're famous.

14:13You've got Alex Earl out there who the get ready with me, she's created that craze and now she's a multi-multi-millionaire. It is happening before your eyes. So it's really just important for our listeners to understand that when building this personal or lifestyle brand, it really just takes creativity and consistency. And always remember, I know it's easy to want to give up. You do 30 videos, nothing goes viral. You're stuck at 500 views. You're not sure what to do and you don't want to do it anymore. But if you're passionate about it, you're good at it. You're learning. You just have to understand you truly are one viral video away from huge success.

14:53Look at me. I've had massive success in my career over the last 30 years. And a year ago, a year and a half ago, I had 72 ,000 followers on TikTok and everyone was clamoring saying, why don't I do more in social media? I should come out from behind the brands. I should build my personal brand. So I said, okay, I've got an idea. I'm going to do this. So I did two videos and this is how I met Austin. And in those two videos, I went from 72 ,000 followers on TikTok to over 650 ,000 followers on TikTok in 30 days time. I found my niche. I found my calling and people loved it. So just don't give up because you can be so, so close and not even know it.

15:37And I hope this episode resonates with you and gets you to keep going because in life, there's no greater way to live and build wealth and build your career than doing something that is what you set out to do and what resonates with you, with your heart and your soul and gets you excited every day to get out of bed. And for me, that's teaching and giving educational insight in finance, business, and mindset. And that's why the rich habits podcast has become such a huge success because I've got 30 years of experience and Austin is extremely gifted in his parts of this as well. So that combination just really resonates with people because everyone is looking for those insights to be able to build wealth for themselves.

16:20And please do not listen to your friends that might call you cringe or weird for posting about stuff you love on the internet. Post that first YouTube video, tweet that first tweet, share that first Instagram reel because you never know what's going to happen. I've got a friend named JC Rodriguez on Instagram. He was stuck at a couple thousand followers for a long time. And then he made a video of him cutting his own hair. That video got 20 million views in two days on Instagram. It was crazy. So like you never know what's going to go viral. You never know. But like you do know that you all have a very specific knowledge, a very specific niche that you just are super passionate about.

16:58Again, Robert and I, that's business, finance and mindset for you that might be cleaning, that might be garage sailing, that might be sneakers, that might be anything else, but just share it, talk about it, build that brand on the internet because I guarantee you people will resonate with it. Now, Robert, what is our third method for building wealth faster than real estate? Number three is create a service. This one is my favorite way to build high income fast. This could be using AI, video editing, copywriting, or any one of hundreds of other online services. I get asked about it every single day.

17:31And there are so many ways to do this. At the end of the day, you have specific knowledge of a service that is marketable and monetizable. A service I would love for someone to create that I would use and likely invest in would be like tech stack creation and management for small businesses. Right now we use ClickUp and they do an amazing job for my project management and it's great. But I was very fortunate to know one of the founders of ClickUp to help us put everything together and get it organized. So look at a service-based business for those of you out there that are tech savvy, that you could literally create a service-based business where you're going to help small businesses with their tech stack from start to finish.

18:12You're going to charge them a monthly retainer. You're going to charge them service fees or whatever, just to help them create a manageable tech stack. So everything is not so fragmented. Trust me, there are thousands and thousands of small businesses and entrepreneurs out there that need help like this, that do not have an in-house tech person to help tie all the services together in a way that makes it make sense and makes it affordable. So that's just one idea that I have that someone could run with and really thrive. And with that business, think about it this way. If you mastered the art of cold DMs and cold emails for this service, oh my God, your sales would go through the roof because everyone needs help with this.

18:56Yeah. Speaking of things that I would happily pay a pretty penny for and do right now is video editing, right? If it's for this podcast, my own content, YouTube videos, things like that, right? Video editing is never going away. Other services I know my friends pay a pretty, pretty penny for right now are ghostwriting LinkedIn posts and Twitter threads, UGC videos for their startups or their brands, appointment setting, I think like virtual assistant stuff. And even my favorite, because actually I did this, is building and selling websites. It is so simple to build a website these days, go to a mom and pop, go to these boomers who have these terrible websites on Yelp, you know, find these crazy people who had never thought about SEO or website design, any of that stuff.

19:38Build a website for$1 ,000,$2 ,000 and sell it to them. Make an easy$2 ,000 a month, right? Like that's$24 ,000 a year, which invested into the stock market is going to be your first$100 ,000 before you know it, right? That's the type of stuff we're looking for here, people. We want you all to be creative. We want you all to be thinking about what you have, again, that specific knowledge in. For me, I've got specific knowledge, I guess, now in podcasting. So I could, I guess, go and sell that as a service. Robert's got specific knowledge in building businesses. He'd be an advisor for small businesses, right?

20:10There's a ton of different ways that all of us can monetize our knowledge, our skills, and different experiences that we've created and used throughout our lives. So when you think about selling a service, I just want everyone to realize that it's a lot easier than you think and to reflect upon what you're good at. If you can be self-aware enough to know what those things are for you, the sky is the limit. Yeah, I have a friend right now and it's kind of a funny thing when you think about how simple it can be. He makes good, good money, six figures for sure. And all he does is optimize people's LinkedIn pages.

20:45I have a friend, I don't want to mention his name here, but he has 40 ,000 followers on LinkedIn and he pays someone thousands of dollars a month ghost writing posts on his LinkedIn. Obviously, he approves them and edits them and stuff, but like thousands of dollars to write like 10 posts. It's crazy. So seriously, y 'all, money is everywhere in 2024 and we want you to go find it, take it, take what's yours, take that money, invest it, build your cash flow around your investments if that's with SPYI, QQQI, or writing covered calls. Reminder, we have the covered call webinar coming out here, February 7 at 4 p.m.

21:17There's a link in the description below to go learn more about that. We're going to walk you through how I generated$4 ,050 writing covered call option contracts against my Tesla stock since September 12th. I'm going to show you all my transactions, every single thing you need to know. We're going to be joined by the NEOS team, the Wall Street experts about covered calls. It's going to be a really great webinar. Right now, I think we only have about 200 spots left. So if you've not yet saved your seat, you need to do that now register using the link in the description below. Robert, what a wonderful episode.

21:46I feel so motivated. I feel so excited now to get after it in 2024. And I want to add one more thing because yes, I'm obviously pumped up from this episode and no, it's not from caffeine, but I just think this is something that just should be able to shift so many people's mindset to understand it's all possible. And there's an older quote that I really love. And I think it's really relevant for this episode. And let me see if I can get it right, but it's, you don't get what you deserve, you get what you negotiate for. And I've always really loved that quote. And I think it resonates well with this information because I think so many people sit on the sidelines and they think they have that lack of mentality.

22:21They think like, that's not for me. I'm not meant to be rich. I could never do that. Well, guess what? There are people that I see every day in my private community that I'm shocked at how good they are at what they do. Whether it's someone that's really, really great at organizational skills or really, really great at mortgages and understands the complexities of every different type of mortgage. That's a niche in itself that you could build off of. So there are so many different ways you can build these brands, build these services, and you just have to know that it's for you and put the work in.

22:56Trust me, I am a prime example of what it can do if you go all in on yourself and what you're good at. So please, please take notes, take action because I love this episode as well. I don't know about you, Robert. I'm ready to run through a brick wall. Man, I am so excited and pumped up for 2024. So I hope all of our listeners are, to your point, taking notes and taking action. Before we jump into everyone's favorite section of the episode, our question and answer section, let's take a quick moment to hear from this episode's sponsor. This episode of the Rich Habits Podcast is brought to you by Neos Investments.

23:30Neos offers ETFs that aim to offer monthly income while providing core portfolio exposure across equities, fixed income, and cash alternatives like T-bills. Their ETFs may be particularly interesting for folks looking to generate passive income inside of their investment portfolio. They even offer ETFs that provide exposure to the S &P 500 Index or the NASDAQ 100 Index while aiming to offer high monthly income beyond what investors would receive from plain exposure to those indices. Their funds may serve as a compelling income-focused alternative or complement to many of the investments already in most investors' portfolios.

24:09If you're looking to add passive income-focused ETFs to your portfolio, consider learning more at neosfunds.com. 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. Please read the prospectus carefully before you invest. NEOs ETFs are distributed by Foresight Fund Services, LLC. See, an investment in EOCTFs involves risk, including possible loss of principal. The equity securities purchased by the fund may involve large price swings and potential for loss.

24:50A fund's income may decline when yields fall. Fixed income securities will decline in value because of an increase in interest rates. With that being said, Robert, they have just announced two days ago their QQQI ETF. That's why we can now say the NASDAQ 100 index is a part of this ad. We are so excited. The distribution yield, Robert, of this ETF. Not only are they aiming to track the performance of the NASDAQ, which Newsflash was up like 40 something percent last year, but they're also paying out 13 to 14 percent of that in income, tax efficient income every single year to those shareholders.