Q&A: AI Picks + Shovels, Favorite Credit Cards & Kettle Corn Side Hustle

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1:02Robert Croak:These are our Thursday episodes where every Thursday, Robert and myself sit down and we answer your questions as if we were in your shoes, going through whatever you're going through. You all do a wonderful job of asking us questions all across the board. They're so much fun to answer. And you can ask us questions in the future for future episodes at richhabitspodcast on Instagram. Just send us a little bit of a DM there or email us at rich habits, podcast at gmail.com. We've got, I think Robert six or seven questions for this episode and it's going to be a good one.

1:33Austin Hankwitz:I love it. I enjoy these episodes because personal finance is personal and people just get to plug away and see what our brains come up with to help them figure it all out. That's what we're here for is to bring a ton of value. And because everyone's situation is different and we're here to just give our experience, give our lessons and try to figure it all out alongside all of you.

1:55Robert Croak:And before we answer our first question, this is a great opportunity to remind everyone that this episode of the Rich Habits podcast is brought to you by public.com, the investing platform for those who take it seriously. Because on public, you can build a multi asset portfolio of stocks, bonds, options, cryptocurrency, and now generated assets, which allow you to turn any idea into an investable index using AI.

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2:58Austin Hankwitz:As always paid for by public investing, full disclosures in the podcast description.

3:03Robert Croak:So our first question comes from Matthew N on Instagram. Matthew says, Hi, Austin and Robert, I've been listening to your podcast for over a year now, and I love it. You too have done an amazing job discovering what the audience wants to hear and continually delivering on that. Thank you so much. Here's my question. I'm a 21-year-old and have a year left in college. I have a taxable brokerage account with$29 ,000 in it. My portfolio has performed really well in the last 12 months. I'm about 45%. But I think I might be spread too thin and it's hard for me to manage my winners and losers, especially when there's volatility in the markets.

3:41Robert Croak:So here's my breakdown. I have 29 % of the portfolio in Schwab mutual funds, 23 % in the ETFs you guys all talk about, and 48 % into individual single stocks, specifically 16 of them. How do you suggest that I downsize the positions in my portfolio so it's easier to track? And what do I do with that money? Do I just put it all into the ETFs? Should I open up a Roth IRA, a high yield savings account? How should I think about this? All right, Robert, so we've got Matthew here, who has a couple mutual funds, probably a half dozen ETFs, like most people do, but then 16 single stocks in a portfolio, despite that portfolio only having $29 ,000 in it.

4:29Robert Croak:So maybe let's first answer Matthew's question about how we would approach consolidating those positions and consolidating the portfolio, and then explain how to go about the Roth and the high yield savings.

4:41Austin Hankwitz:Yeah, first and foremost, and we've been talking about this for years, Matthew, we love that you're thinking like this, asking these questions at your age. It's incredible that you are this far along, but you're right. I do think you're spread too thin. You're trying to do too much with too little. And I know that sounds bad. It's not bad and it's not meant to be harsh. But when I look at SWPPX and presumably you have VOO, which is one of the ETFs we talk about all the time, you're basically owning the same thing only in an index version versus a mutual fund version. I don't think you need to have both of those.

5:14Austin Hankwitz:And I think 48 % of the portfolio across these 16 individual stocks is why you're probably performing very well right now, but it's also putting you in the danger zone of risk because so much of this money is in individual stocks. And at your age and with this amount invested, I would flip that. I would have more in VOO, more in QQQ or QQQM if it's long term, and more in something else besides international and this SWPPX, which is basically a mutual fund for the S &P 500. That's what I would do. And you don't mention, as Austin alluded to, having this Roth component. That is something very, very important.

5:58Austin Hankwitz:In my opinion, the Roth is the greatest wealth building tool, especially if you're younger. And everyone should have a Roth the day they turn 18 years old. And they should try to max it out every single year. So that's my take. I would move this money around a little bit more, get more into the QQQ and the VOO, less into the individual stocks. I'd probably at your age maybe add in a semiconductor or an energy ETF, one of the ones we call out, to get yourself some more exposure to the AI boom that we're working with right now. And that's the take I would have of what to do next, because we want to get you into that base of that$100K saved and invested, but we want to do it in a way that is less volatile and more built on the core portfolio structure.

6:46Robert Croak:Yeah, I think that's a great segue into explaining that core satellite portfolio strategy we always talk about, which means 65 to 85 percent of someone's portfolio is invested into the index funds and ETFs that we know and love that trend up into the right over a long period of time. You've got SWPPX, which is, again, the S &P 500 there with Schwab. That's great. Rock and roll. Those are the types of index funds and ETFs we're talking about. But I think what's also just as important here for Matthew's situation is leaning back on what you were talking about with being spread too thin and trying to do too much with too little.

7:22Robert Croak:We always want to see people build their base first before they begin to diversify into a ton of different single stocks or different asset classes or things of that nature. Which means, Matthew, love that you've got$29 ,000 in your taxable brokerage account. Building your base means you have$100 ,000 invested into these index funds and ETFs across all your different retirement and investment accounts. So as Robert said, love the fact you've got this$29 ,000, but would also, if I were in your shoes, consider taking out$7 ,500 of this, putting it into the Roth IRA and putting that into the VOOs and QQQs and AIQs of the world, things like that in your retirement account that are going to trend up into the right over a long period of time.

8:10Robert Croak:because money that grows in compounds in that Roth IRA that you take out is not taxed when you are of retirement age, so 59 and a half or older. Whereas money that grows in your taxable account in compounds, which of course you're young, you'll definitely see some compounding in your life, that money will be taxed. Now is it taxed at long-term capital gains, ordinary income, whatever, it depends on how long you hold the investment. That doesn't matter with the Roth IRA. So definitely take Robert's advice, open up that Roth IRA. You can do that on public.com. You can do that on Schwab, which it seems like you're using right now.

8:46Robert Croak:Or you can transfer this portfolio, get a 1 % bonus, which is pretty cool. But regardless of what you're doing here, it's important to focus on that Roth IRA, contribute, max it out, get that money invested into the index funds and ETFs and continually invest in that Roth IRA. And you might say, oh my gosh, I didn't make$7 ,500 this year. I'm in college or whatever's going on. That's fine. Maybe you made$4 ,000. Take$4 ,000 from this 29 and put that in the Roth IRA because only money you can put in this Roth IRA is money that you've actually earned in your W-2.

9:20Austin Hankwitz:I love that, Austin. And it just makes me so happy to see so many younger people because our audience is so vast and wide in age groups that are asking questions in the podcast. It means that everything we do each and every week here at the Rich Habits podcast and in the Rich Habits Network is working and providing value that we're getting people so young interested in investing and learning on what to do makes me so happy.

9:48Robert Croak:And you know what, Robert? Shameless plug. Our friend Matthew mentioned they've got 16 individual stocks. If you find yourself with individual stocks in your own portfolio, go figure out what Wall Street thinks about them at wallstreetfavorites.com. It's a platform that Robert and I built that essentially says, hey, here's what Wall Street thinks about your personal portfolio. All the price targets, the hedge fund activity, it's all over at wallstreetfavorites.com. Now, Robert, our next question comes from Blake on Instagram. Blake says, hey, guys, I love your show. My buddy from church and I have started a kettle corn business called Cowtown Crunch in the Dallas Fort Worth Metroplex.

10:28Robert Croak:Let's go, dude. Our goal is to make money through events and weekend vendor markets, but also be involved in the community and help fundraise with churches and school districts. Do you have any suggestions on how to grow this business with marketing? How would you handle finances on savings, taxes, supplies, and maybe even paying ourselves in the future. We're hoping to be successful in this to help support our future family with an additional income stream. Let's go. I love this, Robert. This is the American dream. Kettle corn and Cowtown Crunch in Dallas, right? That's what it's all about.

10:59Austin Hankwitz:They better send me some because I love kettle corn.

11:02Robert Croak:So Robert, what would you do in their situation? You've got this really cool kettle corn business. My brand immediately goes to, you know, they mentioned the fundraisers with churches and schools, you know, talking about the maybe some farmers markets, things like that. But I'm thinking like even more local, like neighborhoods. For example, there's someone here in my neighborhood specifically that is always, she has a wonderful bakery business that she runs out of her house. And I mean, top tier, like doing some really cool cakes and cake pops and cupcakes. Like she's really good at it. What she does all the time is she'll make an extra half dozen cupcakes or make an extra cake here or there and just offer it to people in our neighborhood helping.

11:42Robert Croak:Oh my gosh, I just tasted your cupcakes. This is amazing. My, you know, Nephew has his ninth birthday coming up. Can I buy some cupcakes? Stuff like that. So I think it's all about getting, especially if your kettle corn is as good as you think it is, getting the product in people's hands so they can experience how great you've built this. And that might be just normal neighborhood Facebook groups or maybe even Facebook groups for your smaller suburb of Dallas, Fort Worth. I'm not too sure there, but what's your take, Robert?

12:10Austin Hankwitz:Yeah, I agree with you. And I love this type of business because you can literally do these festivals You can do these farmers markets and really build the brand. You could start out with a little pop-up tent in a plastic table from Home Depot and still crush it. But the main thing I want to add in here, because you asked about how to grow with marketing, you should be filming all of this. Every single step of the way you should be filming, even if you're not doing TikTok, even if you're not doing a lot with Instagram yet, because that's the next phase. Everybody loves to support a small company, whether it's a soap company, a cake pop company, or a kettle corn business.

12:52Austin Hankwitz:So once you get to that point and you're ready to start doing TikToks and try to go viral of you guys at this cool farmer's market or this church event or whatever, you're going to be able to build a much bigger audience through social media because they're going to see you guys giving out the product, doing the taste testings at all these cool festivals. That's number one. is make sure you're filming along the way so you have all of this content ready for when you feel it's time to expand. But I do love Austin's idea of keeping it super niche down in your area till you get all the processes dialed.

13:28Austin Hankwitz:You mentioned savings, taxes, supplies, because in the beginning, all of us have done this, where we're starting out, we're going to the store four times a week to try and get it all figured out. We're not sure what to do about taxes and savings, but use AI as your friend. Hey, I just launched a small business. What type of structure should I set up for this business? How should we do the documentation? Use AI, even if it's just ChatGPT as your friend to figure it all out. That way you can get the right bank account set up. Maybe you can go into your local bank, get yourself a credit line so you make sure you have enough money to grow when you start scaling.

14:04Austin Hankwitz:All of that is important. And then down the road, when you feel like you've made profits and you're growing and the bank account is stable, then look to start doing an owner's draw or maybe a paycheck. Because like a lot of times in a small business like this, you wanna have that cash reserve. It might only be$5 ,000. It might be$10 ,000 that you set as your minimum. That way you have money to work with because you never know. You go viral one time and all of a sudden you have 400 orders over a weekend. It happens all the time to us with our consumer products. You need to be prepared. So that would be my take on what to do about savings, taxes, supplies, and eventually paying yourself.

14:45Robert Croak:What I love most about your answer was the document the journey and make the content. You know, we have a mutual friend named Evan Van Auken at Vinader, Vinader, growth, V-A-N-A-D-E-R-G-R-O-W-T-H on Instagram. And Vinader, V-A-N-A-D-E-R on YouTube here. hundreds of thousands of followers, literally go get inspired by what he does. Because you're like, oh, I don't know how to make content. That sounds like it's for, you know, my teenage daughter who's doing TikToks. Oh, no, it's not even that, man. Go sit down in your kitchen and just talk to the camera about how excited you are to make this kettle corn.

15:25Robert Croak:Or, hey, y 'all, it's a big Saturday. We have this big thing going on with the farmer's market and the kettle corn. Or, hey, we're collaborating with this church here. Come along for the ride for the day on a Sunday. And this of what we're doing and just talk about what you're working on because people follow people. People want to support other people. And I think if you've got a product like a kettle corn, maybe you've got different types of flavors. Maybe you've got different sizes, different skews, things of that nature. People are going to get and resonate with that type of stuff. They're really going to see this and say, I really want to support this person.

15:56Robert Croak:Maybe I'm not into kettle corn, but I love Blake and what Blake is doing. And if I can buy some of Blake's kettle corn to get him excited, I'm going to do that. And I just I really want to double down on that piece of advice that Robert gave, because it's really important to document the journey, you don't have to have a perfect outcome, a perfect day, a perfect anything, just document what you're doing, filming videos, maybe you're just posting some stories like, but let people know, and open up and show people what you're working on, because people follow people and they want to support other people that they resonate with.

16:33Robert Croak:So our next question comes from Tanner on Instagram. Tanner says, Hey Austin and Robert, I've been following your podcast for a while and it's been so helpful. I even got my mom hooked. Nice. I just graduated college and my first credit card was the Discover It student card. I'm joining the workforce and I was wondering, do you guys have any advice as to what credit card slash cards I should get? My friend just told me about the Sapphire, the Chase Sapphire, but that seems geared toward traveling lifestyle. Maybe I should just stick to the Discover It for now. I feel like it doesn't give me any perks.

17:09Robert Croak:What would you recommend in my position? I would appreciate if you guys wanted to do different types of credit cards and their perks and rewards in future episodes. Good question, Tanner. I'm not a credit card expert where I think Robert and I should do a whole episode about it. We have done a great episode, I think about a year and a half ago, about how credit cards work, the statement balance versus the due date versus minimum payments and like the interest and all that stuff. Right. So we've done some stuff on that in the past, but I will, as someone who, you know, spends probably three, four or 5 ,000 a month on, on credit cards that I pay off every month.

17:44Robert Croak:I really like my Robin hood card. I get 3 % cash back on every single purchase with that. So here's the thing, Robert, like there are some people that love to do this credit card point stuff. They will, open up this card, buy this thing with it, do this thing, take the points, convert it from Chase to Hyatt, go fly Emirates, all these crazy cool things. There are people that are really good at that. I'm not one of those people and genuinely don't care to do all that stuff. What I care about is the cash back. And I find myself with the Apple card and the Robinhood card getting sizable amounts of cash back on a monthly basis.

18:22Robert Croak:And then I take that cash back because it's free money and I invest it into the stock market. So literally with Robinhood, what I've done, I've got over $1 ,000 now invested into VGT, the technology ETF we all know. And all of that money has come from cash back that I got from spending with my Robinhood card. So the Discover It has a great 5 % cash back rotating categories. I think it's a great card. I had that card. Robert had that card. I mean, it's a solid card. I think everyone should use it. I mean, cash back to me is what's

18:52Austin Hankwitz:important but Robert what's your take yeah I agree I would keep the discover it card I still have mine and I don't even know how many decades I've had that card but I think the chase freedom unlimited is a really good card for someone that's just entering the workforce there's no annual fee really good perks and I do think that one is better for someone starting out rather than the chase sapphire especially if you're not going to be traveling a lot but I agree with you I'm not one of those credit card expert people. I feel it's a full-time job trying to strategize how to get the most out of my credit cards.

19:26Austin Hankwitz:I think I do an okay job with it, but for me, I would just add one or two more cards to discover it. Get the cards that work best for you. You don't need a, you know, a platinum American express at this point or any of those things. Just get things that work for you to get the points and get the rewards and rock and roll.

19:45Robert Croak:Yeah. Maybe we should be more honest here. That's a trap. Don't get your platinum card. Don't like don't pay$900 for some, you know, reserve card like that stuff is so silly, especially when you're right out of college, just trying to figure all this stuff out. Now, don't get me wrong. There are people out there that spend a ton of money and they're actually getting real perks from using their cards that they pay a yeah, that they pay big annual fees for. But if you are someone who's putting a tank of gas a week on this, your Netflix subscription and some groceries, do what Robert said and do not get a card with an annual fee to it.

20:21Robert Croak:That just doesn't doesn't make sense for your situation. Even if the fee is like$95 or something like it just doesn't. It doesn't make sense, my humble opinion. Once you find yourself in the situation where you are traveling more, you will use the perks, you will use the hotel credits and the airline, stuff like that, then sure, maybe, you know, kind of do a little cost analysis there. But where you are right now, Tanner, I don't think it's worth it. So our next question comes from Yee. Yee says, Hi Austin and Robert. I love your podcast. Always motivating me to do more with my money. My name is Yee.