Q&A: $25K Coaching Course, Cancelling Life Insurance & Timeshares

0:28This episode is brought to you by Accenture. This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome, that's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required, compatibility and availability varies 18+. Hey, everyone, and welcome back to the Rich Habits Podcast. question and answer edition brought to you by public.com.

1:03These are our Thursday episodes where you can ask us questions about whatever and we'll answer them as if we were going through whatever you're going through. You can ask us questions on Instagram at richhabitspodcast. Just shoot us a little DM over there, which we've got a couple Instagram questions in this episode, but you can also email us your questions at richhabitspodcast at gmail.com. We've also got some of those here as well. And if you want your questions answered face to face with Robert and I outside of this podcast, consider joining the Rich Habits Network, which is our community for our biggest fans of the show.

1:37We have over 1 ,060 people now that are inside the Rich Habits Network. A hundred and like 30 people have joined just this month in August alone. We're so grateful for those who have joined the Rich Habits Network. But the reason I mention it is because we host a two-hour weekly live stream every Tuesday night. And during that live stream, you can turn on your Zoom camera, you can turn on your microphone and say, hey, Robert Austin, I got a question. I've been needing to get it off my chest here. And then you just you get our honest feedback. And we also have Friday office hours where we hang out for an hour on Friday afternoons inside the Rich Habits Network and people have their cameras on, off, whatever.

2:13We're just chatting and having a good time. So if you want more access to Robert and myself, please consider joining the Rich Habits Network. We're still running a seven-day free trial using the link in the show notes below. Definitely. And office hours are becoming a pretty cool Friday afternoon kind of hangout online. I'm usually in the car eating tacos or something, but they're growing very quickly. And it's cool to see so many people just casually on a Friday getting together with Austin and I and Eric and going through things because personal finance is personal and we are here to provide as much value as possible in any way we can throughout all of the rich habits entities.

2:52All right, Robert. So our first question here comes from an email we got from Ryan S. Ryan says, thank you all so much for everything you do. I've learned so much and the advice is beyond great. I'm 48 years old, currently receiving 7 ,000 a month in dividends between SPYI and JEPQ. I currently reinvest this money each month, but I now have a senior in high school that's going to college next year and another child that's going to need a car in the next couple of years, and they'll go to college eventually too. So I will most likely be using some of these dividends to try and fund these costs.

3:29My wife and I both have pensions, so we will not have to rely on our investments and savings and things for retirement. So my question is, when I no longer have college to pay for and all of these costs are behind me, should I leave the investments alone and let the dividends continue to come in and then I maybe reinvest them or do whatever I want? Or should I switch out of dividend investing and invest instead into index funds? Thank you all so much for the help, Ryan. This is a really good question, Robert. So like, let's kind of break down for people listening right now when dividends and income focus should be, you know, paramount versus growth instead.

4:05So let's be clear, right? Dividends are paid by companies that have long track records of cash flow. Think Coca-Cola or Home Depot or Lowe's, right? These companies have been around for decades and they continue to pay their investors healthy dividends every single quarter, year, things like that. Now, SPYI and JEPQ have really taken advantage of this. And what they've done is they've essentially built out a systematic way to invest into the index funds we know and love, like the S &P 500 or the NASDAQ 100, but sell covered call option contracts against those indices, allowing the holders of these ETFs, like SPYI, for example, to receive monthly distributions from NEOS themselves, which is selling those covered calls, receiving the premium, you're off to the races.

4:59If you're someone who needs the income, yes, Neos funds absolutely can solve that problem. And when I say need the income, I'm specifically talking about people who are saying, okay, I'm ready to set aside growth. I'm ready to stop focused on the volatility, the high beta, the AI names of the world. I'm ready to just kind of like take a little bit easier, have more of a consistent, predictable type of portfolio that's going to serve my needs in retirement or whatever's going on here and use that money to sustain my lifestyle. Normally, people do that, Robert, when they're older, right? When they're ready to kind of slow down, retire and live off of their portfolio.

5:42On the flip side, right? If you're in your 20s, 30s, 40s and even 50s, people tend to instead focus their capital and invest their capital into index funds and growth ETFs. Because the goal here is, of course, to grow your capital while you're still young and you've got decades of compounding in front of you. And then once it's grown as high as you need it to be, most people then say, okay, I'm going to rebalance my portfolio to then focus on the income. I am pretty much following that same approach. I've got six figures in NEOS funds because I love the income they pay me. But I have the rest of my portfolio, Robert, right, invested into growth and index funds and things like that.

6:19So if I were in Ryan's shoes here, if you want to use these dividends to fund college and, you know, the car and things like that, rock and roll, you're obviously getting 7 ,000 a month. That's great. But you also said, hey, I don't need this money. I'm only 48 years old. Fast forward five, six years in the future, you're going to be in your early to mid 50s. Yeah, if you wanted to focus on those index funds and growth for another 5, 10, 15, 20 years, I wouldn't blame you. You still have some good compounding ahead of you. But what's your take, Robert? Yeah, I wouldn't change a thing from what you said.

6:51I think Ryan is way too young to be focusing on income right now versus growth. And unfortunately, we don't have Ryan's total picture of net worth and what they have everywhere else. So that kind of puts us at a hindrance here for this answer. But I agree with you 100 % Austin. I think at 48 years old, Ryan should keep rocking and rolling, put that money towards growth to build those portfolios as large as he possibly can. And then maybe in seven, eight, 10 years, then dial it back and take some of the income like the SPYI that he mentioned. So I agree with you 100 % here. I don't like to see people take their foot off the gas too early for dividend growth unless they need the income.

7:34And in this situation, he doesn't. So I agree with you 100%. So our next question comes from Tom B. Tom says, Hi, Austin and Robert. My wife and I just got married about a month ago, and we've not had the chance to combine all of our finances since getting back from the wedding and the honeymoon. I make$150 ,000 a year. I currently have$35 ,000 in a high yield savings,$68 ,000 in a Roth IRA, $140 ,000 in my Roth 401k and$130 ,000 invested in my individual brokerage account. Additionally, we took your advice and bought a duplex last summer. It has a$360 ,000 mortgage and we are house hacking. My wife is a pharmacist at our local children's hospital.

8:12She makes$100 ,000 a year, has just under$100 ,000 in student loans, and she qualifies for the Public Service Loan Forgiveness Program. At the moment, we're paying$900 a month, which is her minimum payment, on her student loans and another$900 we are putting in a money market account. She has$15 ,000 in this money market account. We're not touching that$15 ,000 in the event that the PSLF program disappears in seven years when the loans would need to be forgiven. She makes$100 ,000 a year, has$2 ,000 in her high yield savings,$60 ,000 in a 403B,$15 ,000 in an individual brokerage account, and again, that$15 ,000 in a money market.

8:57She's very passionate, however, about starting her own online women's health coaching business as a side hustle. After quite a bit of research, she took an online seminar for a business coaching program and she just completed it. The people promised that they would help us get her business off the ground. Now, obviously, mentorship and business coaching is incredibly valuable, but the problem is they're asking $25 ,000 for an all-in-one, one-on-one coaching service. We have vetted them to make sure that this is legit and that it's not some crazy online Ponzi scheme. My question for you guys as entrepreneurs is, do you think that this is worth spending$25 ,000 for having the coaching to get her coaching business off the ground?

9:41And if so, do you think that we should use the$15 ,000 of her loan money? Do you think we should use money in her brokerage account? We feel strongly that this could be a very successful business venture and it would be an avenue to help her pay off her student loans quicker and create extra source of income. Okay, Robert, you kick us off. Yes, Tom, I'm going to make this really simple for you guys. No, I don't believe it's worth$25 ,000 to get started with a coaching program. Here's why. If you guys were already up and running and you were doing$5 million,$7 million a year and you were trying to get to$20 million a year, then maybe a$25 ,000 course would make sense.

10:21But I think with so much information available out there to be able to put together a coaching program using ChatGPT or Gemini or ClaudeWork or whatever you wanted to use, I think it's not a great idea to pay someone$25 ,000. We live in a world right now where everyone is a coach teaching coaches how to coach. And I believe that there's just so much information out there you can get for free. I would rather see you save the$25 ,000, do the work yourself to be able to build out the program, or pay somebody hourly to build out the program for you that would probably cost you$2 ,000,$3 ,000 rather than the$25 ,000.

11:02Because you have to remember, these high ticket sales coaching programs can work for some people if they're already at a high level and trying to build higher. But with just starting out, I think that's way too much money to spend to probably and likely get very rudimentary information of how to set up the coaching program. That would be my take. And I think you'd be better suited joining the Rich Habits Network and using the seven-day free trial and getting in there because there's so many smart people in the Rich Habits Network to help you guys get this off the ground. Yeah. I don't know if I would spend$25 ,000 to have someone teach me how to build a coaching program.

11:42I feel like could be wrong here, but like what all goes into a coaching program besides coaching people, right? Like sure, you have to figure out like some, you know, drip campaign, email stuff, maybe a community like school to like host it on. But it's it's not$25 ,000 of like, I don't know that to me, like, I'm sure they're great. I have no idea who you're talking about here that's charging this. Like, I'm not calling them anything. I'm just saying I would much rather you see and have a quarter of that money, right? Let's just call it five or$10 ,000 of that and use that money to invest into different AI, you know, agent workload processes, or maybe hire someone part-time to help you with your marketing.

12:24Or like, I just, I feel like for 25 grand, they're going to build it all from scratch and get my first hundred customers for 25 grand. Like, holy smokes, that's a lot of money. Here's what I would do. Tactically speaking, you mentioned women, online women's health coaching business as a side gig. Go to school.com, S-K-O-O-L.com. Click on their discovery. And if you type in women health, you have a thousand results that pop up. So there's already a thousand people who are already offering this online women's health coaching business on school. And I'm looking at it. We've got Dr. Purity Menopause Reset, $99 a year, 334 members.

13:02That's pretty cool. We've got Bikini Bliss Fitness, 143 members at$44 a month. We've got, oh, Body Smart Challenge, the number one woman's health group, get expert nutrition tips, support and guidance to feel strong. 11 ,000 members are inside of this one, I guess what I'm trying to get at here is there's a lot of maybe competition plus existing successful people that are doing something in this niche already that you can gain inspiration from that you could perhaps join. And I don't know, I just feel like there's a lot out there right now that is free or very low cost that's going to help you go from zero to one from starting your woman's health coaching business as a side gig versus spending$25 ,000 and having some mentor slash coach do something else for you.

13:53That to me is like a big price tag. Now, if it was$2 ,500 $100? Sure, maybe it's worth it, right? Like that's fine. And you have clearly the amount of money to do it. But$25 ,000, now that's a big price tag. So that's my take. I would start yourself first and see if you really can get something like this off the ground before investing so much money. And then of course, like as always, when it comes to investing money into a business like this, there has to be a clear ROI. If I spend this, how much will I make on the back end, right? Just like marketing. If I spend$10 ,000 in my marketing, is it going to make me 40 ,000 of sales?

14:25And is the margin on those 40 ,000 of sales going to pay for the marketing? Right. So it's like, that's how you should be thinking about this. And just by looking at 25 ,000 here, I don't know if you're going to make 25 ,000 in profit, even the first year. You mentioned side gig. I mean, you have a full-time job as a pharmacist. Like that's just, you know, mathematically speaking, how my head goes as well. And the other thing is for me that I'll add, the last thing is when considering these high ticket courses, if these people were so good at their jobs, why are they only selling courses of how to coach and do all this and charging people so much money?

15:02I get it that it's one to many for them. And if they can build out this ecosystem and charge people$25 ,000 and they get 10 people a year, great. They made$250 ,000. But I just think with today's tools and modern technology with the right prompts, even in just chat GPT, I think you could get all of the framework laid out in a couple hours, put it to work, get up and running, and then reevaluate after a few months of getting started. Yeah, Robert, I totally agree. Now, our next question comes from an anonymous listener. They say, I want to thank you for the advice I've learned from your podcast over the last few years.

15:39Here's my question. I'm 32 and my fiance is 31. We're planning to get married in the fall of next year, followed shortly by my separation from the military in early 2028. Thank you for your service. Due to this, I want to start saving$3 ,100 a month between the both of us in a high-yield savings account in separate accounts. The plan is to have$25 ,000 set aside for a wedding in a year and a combined emergency fund of$60 ,000 to$80 ,000 by the start of 2028 as I transition out of the military into a potentially high-paying but furlough risky career. My fiance will have to move and seek new employment as well, which is why we want to be very cash heavy.

16:21We plan to only max out our Roth IRAs and receive the employer matches during this next two-year span as we save up the$60 ,000 to$80 ,000. I'm very much committed to this career transition and will redeploy the cash assuming the transition is seamless. We currently make$200 ,000 a year pre-tax. I have$300 ,000 in retirement accounts,$47 ,000 in a bridge account, and my high-yield savings sits at$20 ,000 for my emergency fund at the moment. I listen to your podcast every day, and I'm looking for permission to execute this plan or any additional advice you can give. Robert, what's your take here?

16:56I think, anonymous listener, this is an incredible plan. It's very well thought out. I like the fact that you're thinking ahead saying, all right, we're going to need some extra cash to make this transition during this furlough risky career move. I love everything about this. You definitely have my permission because what so many people do when they have a major life change and they're not prepared with that emergency fund or even having additional money in the emergency funds, they go to the credit cards and they're like, Hey honey, we're going to be all right. Let's run the credit cards up for a few months till we get back on track and we don't want to see that happen.

17:33So you 100%, I love this for you guys. You have thought through every bit of this and I think it's a great plan and you definitely have the thumbs up from me. Yeah, because a couple of things stick out. I agree with you, right? They're still going to be maxing out those Roth IRAs. They're still going up to the employer match, right? So like the compounding hasn't stopped. They're still going to be investing and doing the right things. They're just kind of slowing it down and redirecting this extra capital to a nice big high yield savings account, which by the way, you're going to be earning interest along the way, which is good.

18:01So you're not just going to be deteriorating against inflation. So you've got this high yield savings account earning some interest over there. And then they also said, listen, if everything's fine and works like we hope it does, we're going to just invest the money like it should be and go back to our normal, call it emergency fund of 10, 20,$30 ,000. I think this is great. The only thing I would add though, Robert, is proactively, what can we do now to ensure that your fiance that's going to be seeking new employment can get that employment? Maybe we work with a recruiter. Maybe we work with someone that can help us brush up the resume now that everyone's using AI.

18:33Maybe we could do some interview coaching. What can we do now to ensure that when that time does come and they come in, call it 12, 18, 24 months, that your fiance is getting a new job, that they are set up for success and that new job process is going to be seamless for them as well. Yeah, I love that takeaway. And that's a good kind of additional way to think of this because he's obviously a high earner making the transition. They're both really setting themselves up well. I mean, having 300 ,000 in retirement accounts at 32 years old is just really, really awesome. So I think they're going to crush it.

19:07And I love this takeaway. So before we jump to our next question, got to give a shout out to public.com, this episode's title sponsor. Public is the investing platform for those who take investing as seriously as we do here on the Rich Habits podcast. On public, you can build a multi-asset portfolio of stocks, bonds, options, cryptocurrency, which like Robert, we've seen some action with Bitcoin and Ethereum lately. Hope you all have been dollar cost averaging. But now they've also got generated assets, which allow you to turn any idea into an investable index using AI. And it all starts with your prompt from renewable energy companies with high free cash flow to semiconductor suppliers growing revenue over 20 % year over year.

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20:21Yeah, Robert. I mean, this is a good time to remind everyone that Public has recently come out with their AI agents, but beforehand you had to be on a wait list to use it. Now anyone can use their AI agent product. So you can have AI agents in your portfolio trading on your behalf, doing and investing in things that you're interested in. that is completely open to the public now. So go check out AI agents. And they also have a catalog of strategies. So you're like, I don't know what to tell an agent what to do. You can go browse strategies that other people are using. So public, they're awesome.

20:53Go to public.com slash rich habits and explore their whole platform. Robert, our next question comes from Cis K. Cis says, Hi, Austin and Robert. I have been listening to your podcast for years and really appreciate all the advice and knowledge you both share every week. My question is regarding my term life insurance policy. Currently, I have term life insurance with a$1 million benefit. And as I understand it, it's a good thing to have in case something happens to me one day, my family is going to have enough money to be fine. However, I recently looked at my overall financial picture, and I wonder if I really even need a policy.

21:28I only have one mortgage with$300 ,000 of debt, and I will be done paying it off in 10 years. I have no kids as I'm single and I only take care of my mother who is in her early 70s and I'm in my 30s. I have$1.5 million invested in my retirement accounts, my bridge account, as well as my savings. And that is not counting my current home that I'm living in. I reside in California, work in healthcare and make$180 ,000 a year. I have a$300 ,000 whole life insurance policy as well. So if I die, my whole life insurance policy will pay off my home. My mother will live then in a paid off home and then she would take the 1.5 million of investments and savings I have and use that for her remaining years.

22:09Do I still need this$1 million term life insurance policy? What a good question. Well, you mentioned you have a$300 ,000 whole life insurance policy. Not a fan of that. Whole life insurance policies are full of fees. They underperform. I can go on and on and on about how bad a whole life insurance policy is. If I were you, I'd cut that, take the cash benefit that you can get and invest that somehow, some way yourself. Take those monthly contributions you are making and invest that too. Like it just whole life is bad. That said, you might find yourself here at a point where you're what's called self-insured.

22:43And this is the point everyone wants to get to is self-insured. What does that mean? To be self-insured means you have enough assets, enough investments, enough cash, enough everything, savings, that if something did happen to you, the people that would inherit those assets would be fine, right? It's like they inherited a million or$2 million from a policy anyway. So you seem with 1.5 million plus this 300k of debt with the mortgage, like technically speaking, your mother could use a part of that 1.5 million to pay off the mortgage debt, have 1.2 million and then live in a paid for house. You're self-insured.

23:16That's pretty cool. That's everyone's goal. Because the goal here, right, is like when it comes to term life insurance, its purpose is to help kind of bridge you from I'm just getting started with building wealth to I'm now self-insured. and if something bad happens to me when I die, the people that inherit my money are going to be fine because I have enough money for them to inherit and live off of that we don't need that one or two million dollars of term life insurance anyway. Now, if you were 27 years old, you're a new mother or father, you just got married, have a couple kids or whatever's going on there, and you have not yet built out that big one or two million dollars, then yeah, term life insurance is definitely a useful product there.

23:53But I think you're self-insured. I would agree with you here. So here's perhaps something I would consider. One, get rid of the whole life insurance policy, take that cash benefit, go put it into the markets, let it grow. And then whatever monthly payments that you were paying toward your term life insurance and your whole life insurance, that new payment there could be added to the cash balance that you had just invested. And now you've got this other sort of nest egg growing for you. Maybe add it to the 1.5 million. Like there's a world here where you have no policies, but you have so much money invested for you that you don't need it.

24:27And the money you're saving from those policies gets invested too. And you're just building wealth into perpetuity. Yeah, I would say, sis, I agree with that, Austin. And the number one thing people need to consider in their 30s or even 40s now, even 50s, I mean, is with modern technology and AI and everything that's happening in the medical fields. we are in a world where so many of these doctors and so many of these studies are saying that aging is gonna be a thing of the past and people are gonna live infinitely longer than they are right now. So I just wanna make sure everyone listening that setting themselves up and obviously SIS did a really good job getting to this much net worth already, but you don't wanna be in a situation where you're taking your foot off the gas because you have$1.5 million now because let's say if everyone in this podcast watching today is in their 30s or 40s, and they're going to live an additional 10 years on top of the expected amount of time they're going to live moving forward, you're going to need more money in retirement.

25:27So I want to make sure you keep that in mind, like Austin said, because I'd love to see the whole life insurance policy go away. That money keeps investing and compounding because you're going to need more money in the future than you think you do for retirement. And I would hate to see so much of it set up in these insurance policies for what might happen to your mother down the road. Let's hope that she lives many, many years to come, but you just want to be prepared, but not so over-prepared that you're not taking care of yourself as well. So our next question comes from Alex H. And this is on Instagram.