Meta & Microsoft's $150B Shopping Spree, The Fed's Dot Plot, and Tunnels Under Nashville

0:00Rinse takes your laundry and hand delivers it to your door. expertly cleaned and folded so you could take the time once spent folding and sorting and waiting to finally pursue a whole new version of you like tea time you or this tea time you or even this tea time you said you hear about Dave or even tea time tea time tea time you so update on Dave it's up to you we'll take the laundry rinse it's time to be great

0:33When did making plans get this complicated? It's time to streamline with WhatsApp. The secure messaging app that brings the whole group together. Use polls to settle dinner plans. Send event invites and pin messages so no one forgets mom's 60th. And never miss a meme or milestone. All protected with end-to-end encryption. It's time for WhatsApp. Message privately with everyone. Learn more at whatsapp.com. Xena.com presents the Rich Habits Radar, a new Friday episode of the Rich Habits Podcast, where every Friday morning, we're coming at you with the biggest headlines impacting you and your money.

1:11My name is Austin Hankwitz, and I'm joined by my co-host, Robert Croak. The three things sitting at the top of our Rich Habits Radar this week include meta and Microsoft capital expenditures, second quarter GDP results, and Jerome Powell's decision to keep interest rates at four and a half percent. And be sure to stick around to the end so you can hear all about Elon Musk's new caves that he's digging here in downtown Nashville. So, Robert, let's jump into our first story. Before we jump into things, though, we need to give a huge shout out to our newest title sponsor, Xena.com. Don't skip this ad because this is very important for all of you listening right now.

1:48If you're a side hustler, a small business owner or entrepreneur, you need to know about Xena. Xena is a business expense card that uses AI to help freelancers and incorporated business owners alike put expenses in the right spending buckets. As you all might know, I'm currently flipping three homes in the Toledo, Ohio area, and I can tell you it is easy to mistake buying materials for one of these flips and expenses and exchange of them into the wrong houses, which is why Xena has been such a game changer for me. And Christian, I have a marketing consulting business and went to an agency that we've been building for the last five years, Xena helps us bucket our spending by customer, making it easy during tax time to figure out who we paid, who paid us, and where to attribute the profits.

2:36So go to xena.com forward slash rich habits. Again, that is zena.com forward slash rich habits and open a Xena card today. By using our referral, you'll get 10 % cash back on the first$500 you spend with your Xena card. And that is on top of the other insane spending rewards they're offering right now over at Xena. So if you're someone making side hustle money, or maybe you have 50 employees working for you, Xena can help you stay organized. Now, Robert, let's jump into the first headline of the Rich Habits Radar. Yes, the first headline today is Meta and Microsoft CapEx Spending. Meta and Microsoft just dropped Blockbuster Q2 earnings results with massive capital expenditure projections, which means they're doubling down on the AI boom.

3:27Yeah, Meta reported revenue of over$47 billion. That's a 22 % increase year over year. And they raised their 2025 CapEx guidance to$70 billion. That's a 50 % jump from last year's$28 billion. Microsoft posted$76 billion in revenue with their Azure cloud business growing by 39 % during the quarter. They also confirmed that their 2025 CapEx spend will be$80 billion compared to the$56 billion in 2024. And these numbers totaling nearly$150 billion combined are all about reinforcing their AI infrastructure. Think data centers, GPUs, and talent. We've all been hearing the headlines of Mark Zuckerberg absorbing all of the talent he can find around the country to stay ahead in the AI arms race.

4:19So remember, CapEx is for capital expenditures. Think about a company reinvesting their profits back into growing their business however they deem necessary. And obviously growing the business for Microsoft and Meta right now means reinvesting as many billions as you can get your hands on into this AI stuff because it's definitely moving the needle. Meta CEO Mark Zuckerberg is betting big on full general intelligence. That's what he calls it, full general intelligence, pouring funds into the super intelligence labs and these AI driven tools that actually, back to this moving the needle thing, boosted their ad revenue by 9%.

4:56Right, so get that. They used AI correctly, back to this idea of reinvesting back into the business. They learned how to use AI for their advertising and it made their ad revenue jump by 9%. That's real money being made. And Microsoft CEO highlighted how Azure's AI services business hit$13 billion in annual recurring revenue. That is up 175 % year over year. That is AI-specific revenue being generated from Azure's cloud business. That didn't exist three years ago. Zero to 13 billion in like three years time. It's kind of crazy. It's obvious that both of these companies are leaning into AI as a long-term growth engine.

5:34The AI boom is here. It's alive and well. and these tech giants spending$150 billion next year is definitely the fuel for it. They're just powerhouse companies that are really, really all in on the AI boom. And if you're part of the Rich Habits Network, you might remember Austin and I have also talked about the grid and the paved ETFs as good ways to have exposure to the companies who would be realizing this$150 billion as revenue next year, potentially boosting their stock prices. So keep an eye on those as well. All right, Austin, so let's get into the second headline, which is GDP growth. The U.S.

6:11economy is defined as GDP grew at an annualized rate of 3 % during the second quarter of 2025, which is a solid rebound from the first quarter's contraction of a half a percent, according to the Bureau of Economic Analysis. This 3 % growth exceeded expectations, which were around 2.3 to 2.6%. Now, there were two big factors that drove this GDP growth. The first one was a massive 30 % drop in imports, and the other one was a 1.4 % rise in consumer spending. So something you need to understand is that imports subtract from GDP. So if there are more imports, there will typically be a lower GDP that quarter, which is why when imports surged by 11 % last quarter, because everyone is trying to buy their stuff before these tariffs actually were implemented, we experienced a negative GDP reading.

7:06Now, since all of these companies front-loaded those imports for the year, right, last quarter, we are experiencing now a 30 % contraction in imports during Q2, which boosted GDP. So to just make sure we're on the same page, during the first quarter, all these companies that didn't want to pay tariffs because this was before tariffs went into effect, they imported everything they possibly could, right? That was an 11 % surge in imports in Q1. Now in Q2, since everyone imported during the previous quarter, we're not really importing this quarter. We already have it all. It's all here in our warehouses.

7:38And so that is why imports contracted by 30%, positively impacting GDP. But also something to note is consumer spending grew by 1.4%. This was definitely better than Q1's 0.5 % growth, showing us that households are cautious, but definitely not retreating. Business investment was also soft with only 1.9 % growth and residential investments contracted 4.6 % due to high mortgage rates and economic uncertainty. Now inflation, which is measured by the PCE price index, ticked up to 2.1%, which is just barely above the Fed's 2 % target. The big picture is that the economy is resilient, but not exactly roaring.

8:22Averaging together Q1 and Q2 GDP, growth was just 1.2%, down from 2.8 % in 2024. Tariffs in policy uncertainty are certainly weighing on sentiment, and forecasters expect growth to continue to slow to even under 1 % in Q3 and Q4. But these economists also thought we were only going to grow by 2.3 to 2.6. We grew by 3%, so what do they know? So here's what that all means for you and your money. The stock market and the economy are not the same thing, but the economy and the businesses operating inside of it are definitely impacting the stock market. We always want to see low single-digit GDP growth on an annualized basis because that indicates a healthy consumer, strong corporate profits, and big money in our brokerage accounts when the S &P 500 inevitably hits another all-time high.

9:17You can say that again. Big money in our brokerage accounts. Let's see the more all-time highs, Robert. All right, Robert, let's wrap up our headlines here with the Fed not changing rates. I was expecting maybe a little bit of something this week, but let's dig into it, right? So the Federal Reserve, in a 9-2 vote, kept its benchmark federal funds rate unchanged at the range of 4.25 % to 4.5 % at its July 30 meeting, marking the fifth straight hold of this year. Now, this decision comes amid uncertainty after President Trump's tariffs and their impact on inflation and growth of the economy. Now, remember, the Federal Reserve has one job, keep inflation at or below 2 % while simultaneously keeping unemployment low.

10:04Unemployment has ticked up marginally from 3.5 % to about 4.1 % over the last two years, right? This isn't a skyrocket, a quick thing. This has just been a nice, small, gradual incline. But during that same period of time, inflation dramatically fell from 7.5 % to about 2.1, 2.2 % right now. So I don't know, Robert, what's your take here? Well, Fed Chair Jerome Powell emphasized a wait and see approach. We've heard that before. So I don't know. I feel like, you know, sometimes it's a little too late. I'm not sure. But tariffs are obviously the wild card here. They've already pushed core PCE inflation projections to 3.1 % for 2025, up from 2.8 % in March.

10:47And Powell warned of a meaningful price increases ahead. But we're not seeing those price increases. And we've been doing this tariff stuff for about four months now. So who knows? Well, the Fed's dot plot still projects what you were alluding to, right? two 25 basis cuts by the end of this year, likely starting in September, if tariff-driven inflation does not spike. Now, if we do see some tariff-driven inflation, then you can throw those projections out the window. Uncertainty remains high. The markets now only see a 50 % chance of a September cut, down from near certainty before the GDP data was released earlier this week as well.

11:23For consumers, this unfortunately means higher borrowing costs, if that's with HELOCs, personal loans, auto loans, and higher mortgage rates since they're tied to treasury yields. We've all heard the phrase, don't fight the Fed, which essentially alludes to being bullish during times of easing and bearish during times of tightening. We saw the Fed raise interest rates at the fastest pace in 40 years in 2022, and we all know what happened to the stock market then. It's obvious interest rates will be lower in 9 to 12 months from now, and lower rates means easier financial conditions. All right, Robert, let's now rapid fire through some of our favorite headlines.

12:01I brought three, you brought three. I'm going to hit you with mine here. I'm going to talk about trade deals. I'm going to talk about Figma. And I'm also going to be talking about the boring companies. Let's kick this off with some trade deals. Trump announced a trade deal with the European Union. The EU will purchase$750 billion in U.S. energy and make new investments of$600 billion in the United States all by 2028. And the second trade deal that took place was South Korea, right? South Korea also agreed to invest$350 billion in the United States in projects selected by Trump and to purchase energy products.

12:36Of the total, about$150 billion is aimed at a shipbuilding partnership, while$200 billion would include chips, nuclear power, batteries, and biotechnology. Keep an eye on those trade deals that are getting announced week after week. Something I'm sure we've all had our eyes on, including Robert and myself here, was Figma's IPO. Time of recording right now, Figma is trading at$103, which is way higher than that$33 pricing that they were giving institutions. Wink, wink. We're mad at you, Figma. You should let us have some shares too. I only got one share, unfortunately, at$33. Maybe next time. But anyway, here's what's important.

13:16Figma, at$100 a share here, is now assuming a revenue multiple, a forward revenue multiple, of over 50 times. That is absurd. I'm going to wait for this one to cool down a little bit before I start nibbling at it. You guys do what you got to do. Personal finance is personal, not financial advice, but I am not touching this one just yet. Let's round off this rapid fire with The Boring Company and what Elon is doing. So get this, Robert, I just read that The Boring company plans to dig 10 miles of underground tunnels here in my hometown of Nashville, Tennessee. On Monday, the Boring Company and state officials divulged that Musk's venture would dig its tunnels under state-owned roadways in order to connect downtown and the convention center to Nashville's international airport with a transit time of eight minutes or less.

14:07Now, I'll tell you what, if I can jump in one of those little robo taxis, go through a tunnel and get from downtown to the airport, which probably takes like 30 ish minutes. If I can do it in eight, I'm a happy camper. But dude, there's no way that they're going to figure out how to do all that stuff. It just doesn't make sense. I don't know if they're going to figure it out or not, maybe in the next five to 10 years. But I love these headlines because it's so fun seeing all the crazy stuff that's happening in the market. So I want to dig into my three and then unpack Figma because I agree with you.

14:37I think we all have to kind of sit on the sidelines and wait a little bit right now, because when it launches at three times what we expected and we only got one share each, it's pretty sad for us. So come on, Fig, let us in, give us some shares and let the general public play along with the big guys. We appreciate it. So my three headlines today are JP Morgan Chase and Coinbase have struck a deal. It allows you to fund your wallets through using your Chase credit cards and debit cards and even redeem rewards and points for crypto. And you can even also buy your crypto using your credit cards and debit cards, although I don't recommend it.

15:14Number two, this is a huge headline, is BlackRock has filed an amendment with the SEC to allow their iShares Ethereum Trust, Ether, to be able to stake your Ethereum holdings. And this is awesome because staking, I love staking. I do a lot of staking myself. And what this does, it opens up the billions and billions of dollars being held in these BlackRock vehicles to be able to be staked as well. So what does that mean for you? It means you're going to get that three or four extra percent of earnings if you choose to stake your funds within the Ether ETF. So I think this is huge news relative to more adoption of what is happening in the crypto market.

15:54And then last but not least, my third headline today is Nova Nordisk is down 63 % over the past year. And they are getting crushed because of cheaper weight loss solutions. They're also replacing their CEO. And all of this comes after their brutal breakup with HIMSS and HERS, which was a great call out by Austin a while back. We've all been making a ton of money from that. Since this happened on June 23rd, Nova Nordisk is down 30 % and HIMSS is up 65%. That's why you got to stay on top of things. And that's why these new episodes are going to be so fun for us to provide you the headlines and what is happening with your money every single week.

16:34So be sure to leave a comment below and let us know if you enjoyed sort of the rundown we just gave you here as it relates to Microsoft and meta earnings, a little bit of Jerome Powell and the Fed, a little bit of GDP, a little bit of economic stuff. If you want it to be more earnings related, maybe more economic related, more just headline news related, like this boring company stuff with Elon, please leave us a comment below. These episodes are new. We're open to adding, subtracting and molding them into what makes the most sense for you, your time and are just awesome, awesome listeners that come back every single week.

17:09We are super, super grateful. So, Robert, we've got the Q &A. As you guys know, these new episodes, Q &A is exclusively focused on small business owners, right? The Xena card, it is for side hustlers, solopreneurs, small business owners, entrepreneurs, everyone in between. If you're making money outside of your W-2, you need a Xena card. And so we want to make sure these new episodes are answering questions from our fellow small business owners. So Robert, let's jump into our first question coming from Nicholas End. Nicholas says, Hey Austin and Robert, I hope you had a great weekend. Thank you for all you do.

17:41and I look forward to these new Friday episodes. Well, here we are. Thank you so much for tuning in, Nick. I have a question regarding opening a business, but first, here is my background. I'm 23, I'm living at home, I make$70 ,000 a year in salary, I've maxed out my Roth IRA, I invest$1 ,000 per month to my bridge account, and I've saved up four months of expenses in my emergency fund. I have$30 ,000 in student loans with an interest rate of 5%, but it is deferred until six months after I finish my master's, which will be around next spring. I'm a part-time personal trainer and I have a really good relationship with my boss.

18:17I've been wondering about approaching him in regards to partnering to open a new location. At what point, if at all, does this make sense for me to approach him with this idea? And what are some things that I should know or maybe financial boxes that I need to have checked before going through with it all? I really appreciate you guys' help and I look forward to hearing back from you soon. This is a really cool question. All right, Robert, let's talk through this. So Nick is 23, and he's doing great with his normal job making$70 ,000 a year. It seems like he's also getting his master's degree.

18:47Looks like he'll finish that up next spring. So he's got probably, I don't know, it's got like 12 more months, nine to 12 more months to get that master's degree. My first question is, I wonder if he's getting the master's degree while also being a personal trainer. He says he's a part-time personal trainer, but that makes me think maybe he shouldn't approach his boss with this idea of a new location until he's wrapped up on his master's degree because if his boss does say yes let's go forward with it he'll still be suffocating in school drowning with all those tests and studying while also trying to do this personal trainer stuff so i guess just like talking through it out loud here the first realization for me is you should probably finish school before you approach the boss about being a personal trainer partnering up things like that.

19:34Now let's fast forward nine or 12 months. You have a master's degree, you're making a fine salary, I'm sure. And now this personal training stuff can actually begin to flourish. So Robert, a couple things I'm thinking about as it relates now to ensuring whenever we do approach this personal trainer's boss that we're doing it methodically the right way. So I guess the first thing I'd want to call out is just making sure that your boss doesn't take this as a jab. I'm going behind your back. I want to like, you know, try and weasel out extra money from this part-time personal training job. We're in this together.

20:08We're a team. You have your own awesome characteristics in business. I love personal training. How can we work together to make one plus one equal three versus just one plus one equal two? How it is right now is me working for you. More tactically speaking, I would first want to make sure that if you did do this with your boss, all the paperwork's figured out. So whenever you have your operating agreement, make sure you include the five D's. This is death, disability, disagreement, divorce, and drugs. You have no idea what's going to happen here, either if it's with you or with him. Maybe you get in a car accident and you can't do what's expected of you anymore.

20:44Maybe he gets in a divorce and the spouse now wants half of all the money you're making, right? There's a lot of things to figure out with that sort of agreement. But Robert, I'll pause there. I want to get your take here on how this relationship can begin to flourish, assuming that Nick does approach his boss and they begin working together. I love everything you said in the approach you said. The only thing that I would click back at and change, I would have the conversation now. So let's assume he has that nine to 12 months to finish the master's degree and get that out of the way so he can focus on the new location.

21:18I would want to have the conversation now with the boss and say, hey, I want to do this in one year's time. What can we do now to start preparing? How do we raise the capital? Can we start working together more closely so you can teach me the back end, the ropes, the marketing, the money, so I'm prepared and walking in fully ready when we start construction on the new location? That is the only change I would make to your response is have the conversation now because also you will learn from your boss so you don't have this anticipation brewing over the next nine to 12 months. Is the boss interested or is the boss going to shoot me down?

21:56If you get shot down, then you have nine to 12 months where you hone in, you learn everything you can from him, and then you go off on your own if you so decide. So that's the only change I would make. Have the conversation now, figure it out. That way you have nine to 12 months to really learn and get everything dialed in so you're not jumping in headfirst. So our next question comes from Alex S. Alex says, hey guys, I'm so glad you're doing these entrepreneur and business-related topics for Friday episodes. My name is Alex, and I've got one for you that may be related. A couple years ago, I partnered with a friend to purchase some rental properties.

22:30We have them in an Alabama 50-50 partnership LLC, and everything is going well except one thing. According to our accountants, we cannot leverage the depreciation against our W-2 income because of the partnership LLC structure. Apparently, we have to be considered professionals for passive losses like this to be deducted from our active wages. And that would require both of us to work like 750 hours or something in the business per year. And we don't do that. Our properties are doing well enough to not need the freed up cash from write-offs. And it feels nice to be able to write off some of that against dividend income since that's also passive.

23:08But since he and I both have household income in the mid to upper 200 ,000s, we would obviously like to be able to tap into that against our W-2 salaries. Can you think of any way that we can re-strategize to start using depreciation like this and write it off against our earned income? I'm at a loss here, but I believe there's something that can be done. Thanks in advance. Alex. Robert, I'll let you kick this one off. Yeah, Alex, I'm going to shoot you straight. You really have to consider becoming a real estate professional. One of you guys does, or your wives, if you have, either of you have wives or spouses.

23:40because at the end of the day, there is no cheat code that I'm aware of that just gets you out of and provides you these magical tax breaks. But it's not that difficult to become a real estate professional. And even if you have a W-2 job, I would strongly recommend it if you want to enjoy these tax breaks. It's not that difficult. And the hours are not as dramatic as you think to be able to do this. That's my take. I wish there was a magical wand I could wave and give you a hack. I just don't know of a safe legal one that you could integrate to be able to pull this off. Yeah, I'm right there with you, Robert.

24:15And the thing is, too, you know, Alex, you had mentioned that it's cool to be able to use some of these losses to offset dividend income because that's also passive. Like as your portfolio grows, like I'm so sure that you're going to be able to offset more and more of that dividend income. You can also think about maybe even restructuring some of your portfolio to be more focused on covered call ETFs like NEOs funds might be able to offset some of those dividend taxes. assuming they are even taxed. But instead of trying to focus on like, oh my gosh, I need to write off all this depreciation. I need to somehow perfectly do this perfectly, perfect, perfect.

24:47Remember, it's not all just about perfectly optimizing your tax situation. It's about building wealth over time. And so if you are able to have some of these rental properties that are cash flowing and you can use that cash flow to go buy more rental properties and then maybe even invest those profits into the markets or whatever else makes sense for you, as long as you're trending in the right direction, that's what I would focus on. Not so much like trying to perfectly save$5 ,000,$10 ,000,$15 ,000 here and there on a sporadic basis on your taxes because you want to try and do some passive losses.

25:19To Robert's point, if you or your spouse do want to become a real estate professional, that would make this situation a whole lot easier. But unless that's the case, just focus on building wealth and keeping that cash flow coming. Now, our final question comes from Dan F. Dan says, I love that you guys are doing the Friday podcast and plan to go deeper on topics for business owners. I'm hooked on your other episodes and I'm sure that this one will be equally as awesome. Well, Dan, we appreciate your kind words, my friend. Dan says, I own three businesses. I'm looking to sell them each individually over time.