Q&A: $1.3M IRA, Aging Parents & SpaceX's IPO

24:50You literally have so much customizability here. It is awesome. Shout out public and their AI agents. But Chris, I don't have a real framework. The only thing I think about is like, what in my portfolio is undervalued, historically speaking, in my opinion, I'm going to redirect some of those distributions toward that so I can accumulate some shares here as I believe it's undervalued. Our next question comes from Carrie Ann W. Carrie Ann says, Hi, Robert Nostin. I have a question regarding aging parents. I'm in my early 30s with parents in their late 60s. My mom has entered in retirement last year and is receiving social security.

25:22But other than that, my parents have not had any money saved for retirement. My mom currently nannies my toddlers and I've been paying her$800 to$1 ,000 a month to do so, which is saving me a ton of money and avoiding daycare costs. She definitely has not been comfortable taking the money, but it was a non-negotiable for me because I wanted to compensate her for her time and also gave me a lot of peace of mind knowing that I could count on her to be available every day. In turn, she buys the kids new toys and clothes, which they don't really need. I think it makes her feel better spending that money on them.

25:54I've recently been thinking maybe it could be a win-win situation to open some sort of joint brokerage account to deposit this$800 to$1 ,000 a month into if she doesn't actually need the money that month. This could help them build a small nest egg over time, and then when they eventually pass away, the funds could then go back to my kids if there's anything left over at that time. What are your thoughts on this idea? I'm a little bit lost on if I should be doing a joint brokerage account or just opening up her own account and depositing the money in there without my name on it. Maybe a trust.

26:25I really don't know. Thank you for your thoughts. I love the podcast. I love this idea, Robert. What do you think? I think it is awesome. And more people should think like this, especially if their parents aren't prepared for a comfortable retirement. I love, love, love this Carrie Ann. I would do a joint account. That way you have access to it. You can decide what the money goes into, how it's invested and really set it up well. I don't think at this stage you need an irrevocable trust or even a revocable trust unless they have property that would then get passed on to you. But I love this joint bank account idea.

26:59It's super simple for you. And I would give them that thousand dollars a month. Tell them, hey, please, we don't need any more toys. We don't need any more clothes. You're doing a service for us. I would love to be able to pay you this money. Here's what I want to do. I'm going to invest it in some things that are going to be safe and less volatile for you to build you that little nest egg over the next few years. I love this idea. It's super simple. You could sit down with her, do it in a few minutes, maybe 10 or 15 minutes, get it up and running, and then really set them up. It might not grow to a ton of money over the next two, three, four, five, six years, but it's definitely going to be better than them wasting it on toys and clothes because she feels guilty taking the money from you.

27:42I love this idea. I do too. And heck, put it into like SPYI and QQQI because you're talking about social security, no nest egg, no income, things like that. $1 ,000 a month,$800 a month, whatever it is, let's just call it$900. $900 a month over the course of 12 months is about$11 ,000, which will then begin to pay about$100 a month of income from NEO's funds into that brokerage account. Now,$100 a month isn't like crazy, but you do that for four, five, six years, grows over time. Maybe you reinvest it, whatever. You now have some sort of vehicle that's paying you$500,$700, maybe$1 ,000 a month, depending on how much money is eventually in here that could really help your mother in her retirement.

28:23So listen, I love this. Now, as it relates, Robert, to the having your name on it, I think you should have your name on it. So you have access to deposit stuff. And it's not if you want to call up public and say, hey, public, I want to deposit. it, oh, you're not, your name's not on the account. I don't know if we can do anything like just, you know, joint joint brokerage sounds cool to me here, but no, I really commend you Carrie Ann for thinking about this. It's so kind of you. And I, I love that, you know, you're thinking about not just helping your mom, but also helping your children. I mean, this is, is a really, really cool thing.

28:51Yeah. And if you think about it, Austin, they're in their late sixties, people are living longer, assume they're healthy and maybe they get another 20, 30 years and the investments stop in five or six years, maybe because the children are old enough and they're off to school, then that money just keeps growing and compounding for another 10, 20 years. Then it's a huge nest egg that passes directly onto the kids and could go into the custodial Roths right from that brokerage account once the parents were to pass away. So I love this. Any remaining funds could go right to the kids and it's going to be growing and growing over time.

29:27Now, before we jump to our next question, Robert, I just have to shout out public. I feel like I've shouted them out three times this episode, but they are the title sponsor of these Friday episodes and y 'all definitely need to be trying them out. We talked about the generated asset stuff. And I want to make sure we're on the same page about what that is. You literally go to like your chat GPTs, your clods, and you like prompt it with a question. You do the exact same thing here in public. You say, hey, I want to invest into companies that are going to profit from the rise of peptides. I think peptides are going to be super popular.

29:55How can I invest in companies are going to profit from peptides. Public will go in with a generated asset strategy, identify all the companies that could profit from peptides. Think supply chain, think suppliers, think compound pharmacies, like whatever. They'll identify all that stuff. They'll tell you the names and then you can just click invest, deposit$1 ,000 into the strategy they just built for you and it's automated and you're off to the races. Like that's how easy it is. I want to invest into airline stocks that are going to benefit most from Spirit Airlines being shut down. I don't know if that's a real strategy to consider, but it could be, right?

30:32And the cool part too, Robert, is it back-tested against the S &P 500 to tell you if it's historically speaking a good investment strategy or not. We've never been in a better place in the history of investing to be able to keep an eye on our money and control how it's invested and the outcomes using these AI tools at public.com. I think it's incredible. I play around with it all the time. And for any of you that have been on the fence of joining the Rich Habits Network, you should really consider trying the seven-day free trial because we have all kinds of different things inside of the Rich Habits Network around these prompts and how to use these tools.

31:10And I think it's a really good way to get more access to Austin and I rather than just the podcast episodes. So check that out because public is doing a really good job. And there's a ton of good prompts and information about it within the Rich Habits Network. Robert, while you were talking, I literally went to generated assets in my public account and I typed in word for word, I want to profit from the rise of peptides. It's doing its thing right now. And it automatically has pulled up Novo Nordisk, Altimmune, Eli Lilly, Ironwood Pharma, Viking Therapeutics. Like there's just a bunch of names in here I've never heard of, but they align well by about, yeah, 259 different stocks that they're like cross-referred.

31:52It's crazy. It's crazy stuff. So if you have an idea, any idea you have, go to Generated Assets, prompt it, say, hey, I want to learn about this. How do I invest in this? Tell me more about it. And it will pop up and I'll show you everything. So our next question comes from Thomas P. Thomas says, hi, I found the podcast this January and listened to you guys every time I'm in the car or I'm walking, which means every single day. Thanks, Thomas. Keep your eyes on the road. You're driving right now. You're wearing a seatbelt. Thomas says, I'm going to be 68. I found a contract job four years ago when I retired from my high stress job and I've been making 220 ,000 a year for the last four years.

32:27I have two pensions totaling$2 ,100 a month. My wife and my social security total now$5 ,100 a month. I have made$600 ,000 this past year through what I've called Wild West Investing. I understand it's not recommended, but it's worked for me. I have a total of$1.7 million between my 401k and my Roth IRA, another$16 ,000 in a high-yield savings, and$30 ,000 in an emergency fund. So I've managed my funds my entire life. In the last five years, I've made anywhere between 10 % and 40 % above the S &P 500. My question is, should I turn$1.5 million to a finance company to manage it at 1.25 % annual fee or continue managing my funds myself.

33:12Have to admit, I can make money but don't fully understand the best way to handle taxes. I do not intend on taking any withdrawals on the 1.7 million until I stop working in about six months from now. Please give me some advice. Thomas, love the question. Love that you've done some Wild West investing and you've been able, I'm not going to call it investing, Wild West trading, and you've been able to figure out some cool stuff that works for you, that's awesome. If I were in your situation, I would pay for a fee-only fiduciary advisor. The easiest way to find them is on hellonectarine.com. Shout out Jeremy Schneider.

33:47He's on the podcast, Friend of the Pod. He created hellonectarine.com where you pay an hourly fee of$100 or$200 an hour to meet with fiduciary advisors in your state that will sit down with you and help you craft a strategy, a formula, they'll look at your taxes, they'll look at your whole picture, I'm sure, and figure out the best way to go forward without paying 1.25 % of assets under management. You're 68 years old, which means you should be in the capital preservation time of your life, not just accumulation. So I'm sure you're going to get diversified here, recommended by some of these fiduciaries to diversify into some cash equivalents, some interest-bearing bonds, some international, you know, some large index funds and ETFs, nothing too crazy here, right?

34:34Capital preservation. So I would imagine do some of that stuff, but keeping that, I mean, you kind of just need a plan. And once you have the plan, it's very set it and forget it. Maybe you rebalance once every six months, which is pretty simple to do on your own. And you can always go work with the same advisor, I guess you worked with that recommend the plan to you. That's going to help you think about the tax situation. But long story to say, I don't think you should go pay 1.25 % a year for a finance company to manage your money. I mean, let's just put in perspective what that looks like, Robert.

35:02$1.5 million at 1.25 % is$17 ,000 for them to invest it into stuff that you probably already know about, and then also rebalance it and maybe help you navigate taxes. So you want to pay someone$1 ,400 a month? Don't get me wrong. Financial advisors are great, but I think they're more so for people who need a holistic picture with a state plan. A lot more goes into it versus like, hey, I feel pretty good about investing myself, but they want me to pay a fee so I can feel more legit. I don't know. What do you think, Robert? I think you covered one of the most important parts of all of this for Thomas, and that is capital preservation.

35:47He's lived in the wild, wild west. He's done all these crazy things to get here. Now he needs to preserve it. And I think you nailed it. I would go spend$2 ,500 on one of these advisors, paying them hourly, say, hey, here's where I'm at. I wanna get out of the wild, wild west and I wanna be more of a lakefront guy now. And what should I be doing with this money to preserve it? Here's the goals that I have and the outcomes I'd like to achieve. And then the only other money I would spend, because obviously you understand enough of what you're doing to be able to handle this on your own and not give up so much money.

36:21The only other thing I would do is I would probably then engage a local estate attorney to say, okay, here's my plan. I'm going to spend$1 ,500,$2 ,000 with that estate attorney and have him set up anything that you need, whether it's a revocable trust, whatever you need to do because we don't know your entire family situation. And that is it. And then I would just keep rocking and rolling with that plan. Keep doing what you're doing because you've done a great job. And now you need to take the risk out of it and start getting into that capital preservation stage. So I think Austin, you covered it well.

36:55Hire somebody to help you. Don't give away all that money. Or if you're going to and you want somebody to take that yoke off your shoulders, find a place that will do it for a lot less than 1.25%. That's too much given the amount of money. I think you could find somebody for under a percent, but that's what I would do and follow Austin's blueprint and then add the lawyer in. You'll spend probably five grand total, but you'll have the entire plan, all the documents you need, and you'll be up and running. Heck, go spend$14 ,000,$15 ,000 total. You're still not ahead if you just do this once versus having it sit with someone for three, four, five.

37:33I mean, that's wild to think, Robert, because the money is going to grow over time. So the fee proportionally increases over time too. After five or six years, you pay$100 ,000 to one of these firms, like$100 ,000 of your money. It's just insane. Well, the way to look at it, though, in defense of, let's call it my family's office, Crow Capital, in defense of those fees, keep in mind, if they're managing the money and they're beating the benchmarks and doing better with the person's money than the person could do on their own, let's say they're 3 % better a year, but they take a percent, it's beneficial if they're giving you all of the tax planning, all of the estate planning and giving you direction on everything else.

38:15If you're just giving it to them, this money, just to tell you what ETFs and stocks to buy, then it's not worth it. But if you're getting a true fiduciary that's gonna give you everything else, I think it's worth it, but you just have to find the right one. Yeah, it reminds me of this video I saw online where it was this kid that was at the subway in New York and he was standing around, you know the subway was coming in and he like pretended that he was slowing down the subway like he was running next to it and you know pretend that he was the one slowing it down people were walking in so he just like you know how over here it showed them the door and then he started running next to the subway like he was pushing it off and the meme was when you're financial when you pay a financial advisor one percent to put you in index funds it's like yeah what are we doing you can do that yourself it's so true and i mean i come from that background and it's so true, but that's why you have to be careful.

39:08You have to make sure you're getting a true fiduciary, estate planning, all of the things you need to take that yoke off your shoulder. Otherwise you can do it on your own. So our last question here comes from Emma G. Emma says, Hey Robert Nostin, long time listener, hoping you can help me actualize your advice. The issue is nearly every episode you reforce the importance of buying a multifamily home as your first home purchase, but the math isn't making sense to my husband. Here's our background. My husband and I will live in different states for the next three years. He's in the army, based temporarily out of state.

39:43Combined, we pay$3 ,500 a month in rent and nearly$5 ,000 in taxes due to no deductions for home ownership, etc. We have$400 ,000 invested into the ETFs and index funds you talk about, excluding our retirement funds. We are 30 years old. First off, That's crazy. $400 ,000 in your bridge account at$30 ,000 is insane. Good for y 'all. The decision we have to make is I'd like to use$100 ,000 of that$400 ,000 as a down payment on a two-unit home. So a duplex. I would live in one unit for the next three to four years. Then when my husband moves back, he would join me. After a couple of years, we would buy our own single-family house.

40:20Then we'd keep the multifamily and rent out both units, making sure that the two units cover the cost of the mortgage. My husband thinks this is a poor use of$100 ,000 because it won't appreciate as much as the stock market. I tried to explain that the investment is not only the appreciation of the real estate, but also compounded by all rental payments made toward the house by others. The return is appreciation plus rent plus the money that our renters are paying off of our own mortgage. He is so stressed about this and he thinks we need a professional financial advisor. It all seems pretty simple to me, thanks to your podcast, but could you please break down this decision in a bit more detail to help us understand the pros of diversifying into multifamily housing rather than renting and keeping everything in the stock market for another three years.

41:07Robert, I'll let you kick this one off. Emma, you are spot on. There are so many good pros to what you want to do here. And let me dig in deeper and then Austin can kind of fill it in with the math. I think you're right on. If you were to put$100 ,000 down and let's say a traditional mortgage buying a duplex, you can buy a$500 ,000 duplex with that 20 % down payment. So you're spot on there. Will it make more money in the stock market? Maybe, but I don't think the math adds up here. And here's the difference. If you want to do this and kind of meet in the middle with your husband, maybe you consider that same$500 ,000 duplex and you use the Fannie Mae 5 % down mortgage instead of a 20 % down payment.

41:49That way you're not using that whole$100 ,000 and you can keep some of that in the stock market. So that's one thing I would look at, the Fannie Mae 5 % down. Second, and one of the most powerful things of your thought process being correct is that you're gonna have so many other advantages to doing this where you're house hacking. Not only are you gonna have the long-term capital appreciation, you're gonna have a tenant paying most of this mortgage on this duplex while you live there, dramatically lowering the cost of your cost of living every single month during that period until you buy that primary home, that single family home.

42:29And you also have all of the other operating expenses, right off depreciation deductions. You can write off mortgage interest. So there's so many other financial matters that go into this strategy that make more sense for you guys. So I think overall long-term you would dramatically benefit from this strategy over simply keeping the$100 ,000 in the stock market over time. So Austin, break down the math that we did for this question, because I love this strategy, because we think everyone should own real estate. And this is a really good example of how to look at it from a financial perspective of keeping in stock market, which generally doubles every seven years versus investing in a property that gives you all these other advantages.

43:17Yeah. So you mentioned that you guys are renting at$3 ,500 a month and you guys would continue to rent for four years and you'd buy your own single family home. And let's literally pretend there's no duplex inside of this. So you continue to rent for four more years. So that's$3 ,500 a month times 12. So that's 42 ,000 a year. Rent goes up every year, but let's assume it doesn't here. So times four, that's$170 ,000. Just see you later by. So you're now out$170 ,000. which means the$100 ,000 that you have invested in the stock market needs to at least cover that, which probably will, you know, four years, 70 % appreciation, that makes sense.

43:58So that's totally fine here. But let's now assume the opposite, which is what Robert was trying to explain here about the house hacking. You're not deciding between put$100 ,000 in stocks or put$100 ,000 in real estate. You're essentially saying, do I continue to rent for three or four years while keeping nearly all of that$100 ,000 invested or use$100 ,000 of my$400 ,000. Again, you already have so much money invested. It's incredible to control a much larger appreciating assets while I have tenants helping me pay it down. So let's suppose that you buy a half a million dollar duplex, you put$100 ,000 down and you borrow$400 ,000.

44:32Your property is probably going to appreciate between the three and 5 % per year, depending on the location. That's important. Robert can talk about how important it is to find the right type of property in the right neighborhood, the right location. Like it's like, if you don't have that appreciation, then yeah, I could see how your husband's argument begins to kind of have some legs here. But you also now think the rent is covering most of the carry costs. Your tenants are paying down your mortgage every single month. So after let's call it five years of having this duplex, your duplex that you paid 500 ,000 for is now worth over$600 ,000.

45:03That's a hundred thousand of appreciation. And you only invested a hundred thousand of your capital. So essentially you've two extra money cash on cash return there. So you compare that to the 100 ,000 that's invested in the markets, that's only up 70%. We've already jumped that mark. Now let's talk about this mortgage payment. On average, again, every number is different here. So give us some grace, but I would imagine your mortgage balance is being reduced by six, seven,$8 ,000 a year. So five years of that, that's now$35 ,000 of tenants paying down your mortgage. So now that 100, 110 ,000 of appreciation, you slap 35 ,000 more, not 140, 150 ,000 of equity now inside of this, which is awesome compared to again, your husband's situation of let's call it, we continue to rent, we pay, pay, pay all this money, 160, 170, whatever it is in rent.

45:52And then our 100 ,000 that we stay invested continues to grow. So it really, I understand both sides of this equation. It really depends. If you have this underlying desire to want to have some diversification into real estate via house hacking. If you do, the numbers can absolutely make sense in your situation. If you don't, and you're like, guys, I don't want to live in a duplex. I don't want to have a roommate. I don't want to be a landlord. I don't want to do those things. That's not fun to me. Okay, that's cool. Go put your money in the market and let it grow. That's fine too. I don't think it's so black and white as you both think.

46:29But I do think that as, and Robert talked about this, right? The depreciation, the mortgage interest, the, I mean, there's so many things now that's not just saying equity and rent, but it's also, you mentioned it, less taxes, less this, less that. Like you work with the right CPA and you're able to really take home some, some big numbers here and really have some tax alpha on top of this. So yeah, I could see where your husband's like, let's just have it invested. I don't want to be a landlord. That's fine. That's cool. Go make money. Yes, you're doing great. You guys have a ton of money, very smart people.

47:00But also it's like, hey, if I want to get a little bit frisky here, do some house hacking, be a landlord, take advantage of some depreciation, some appreciation, some equity, all this other stuff like that also is going to work in your favor. I love that. And one more thing I want to add to this painting the picture down the road. You said three or four years. Let's say you buy the duplex. Let's say you're not happy, you don't like being a property owner, and you want to go buy the primary home at that end of four years, remember, there's still the section 121 exclusion. So at the end of that, you're a married couple, you can write off a huge chunk of those capital gains to use that money then to go towards that primary residence if you didn't want to keep the duplex and rent both sides to offset the primary home mortgage, which is what I would do.

47:49I'd rather like to see you keep it. So they're just like Austin alluded to. There are so many benefits to help you better figure out the money here. And I hope this helps him have a better understanding so he can make the educated decision of what is best for you. Personal finance is personal. I would do it. I would talk him into doing it because I think it is the better play for you guys long-term, especially if you decide to keep this duplex after you get the primary home and you're done with this four-year journey and you're back living together. That's what I would do. But either way, I think you can't go wrong.

48:22And finally, thank you for your service. Really appreciate that. Shout out to all of our military. You guys are incredible. Everyone, thanks so much for tuning into this week's episode of the Rich Habits Podcast Question and Answer Edition. These are our Thursday episodes. We've got Friday episodes. We've got Monday episodes. We've got Tuesday night live streams inside the Rich Habits Network. We're filming every day, Robert, but we're having fun doing it And we're so grateful that 100 ,000 of you come back every single week to listen to our show and tune into the live streams and everything that we're working on.

48:52We have tens of thousands of followers now on Instagram to the Rich Habits Podcast Instagram, which is so incredible. We get tens of thousands of questions over the years. It's just so heartwarming. I get so fuzzy and excited thinking about that. We have such a strong base of people, of an audience that just is so, so excited about building wealth throughout their lives. And we're able to help point them in the right direction to do that. It is definitely so heartwarming for me as well, because yesterday I hit 750 ,000 followers on Instagram. And it really means a lot because it shows that between the podcast and the network and all the things we do here, there are a large chunk of people that actually care about learning and leveling up their knowledge on finance, mindset, business, all the things we do here.

49:38And it just means the world to Austin and I, because we don't want to be part of this clickbait world and comedy world and all this. We want to educate and bring value to everyone that needs it and wants it. And so it's so awesome that all of you guys follow along, share the podcast, and just really take part in this journey with us because we are here to provide as much value as we possibly can. Thanks everyone. And we'll see you tomorrow for our Friday episode called the Rich Habits Radar.

50:27We'll be right back.