Q&A: Investing During Times of War, Vanguard's Drawbacks, & Buying a House at 62

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1:16As you can see, we're in a studio today, which is really exciting. And we cannot wait to jump into some of these incredible questions you all have asked us. But Robert, before we jump into this episode, I think we need to remind our listeners about something very important. That is absolutely correct. Austin and I have a very special announcement to make. You all have asked for more content and more episodes and we're delivering. Debuting on Friday, August 1st, we're so excited to announce the introduction of a new Friday episode we're calling the Rich Habits Radar. These new Friday morning episodes will be Austin and myself breaking down the biggest headlines that have impacted your portfolio that week.

1:55We are so excited for these episodes. That means every Friday, we'll be walking you all through the most consequential, market-moving headlines and happenings. We want this new episode to become your go-to weekly summary of the stock market, economic news, and headlines that matter most to you and your money. We all know Dave Ramsey's entire message is paying off debt. Well, we're doubling down on our own identity and messaging of earning more money. So the Q &A section of these Friday episodes, we'll be answering your questions from side hustles, solopreneurs, small business owners, and anyone else out there trying to earn more money.

2:33Robert has earned hundreds of millions of dollars. I've earned millions of dollars, and we want to help you do the same. So if you have a question to ask us for these new Rich Habits Radar episodes, be sure to send it now via email at richhabitspodcast at gmail.com or DM it to us on Instagram at richhabitspodcast. And do not forget to click the subscribe, follow, whatever button you're watching us on right now. If it's Spotify or YouTube or Apple, just subscribe and get notified for these new episodes. Because they're going to be a blast and we cannot wait. Friday, August 1st, we're going to see you there.

3:06Alright Robert, let's now jump into this episode. We've got a ton of really cool questions to answer coming from, I see Tammy, I see Kate, I see Andy, I see Rachel. We've got a ton of exciting people here today. So our first question comes from Tammy via Instagram. Tammy says,

3:49And are there any other investments I should be considering right now? Robert, why don't you talk about the 62 wants to buy a home? You cover that, and then I'll jump in as it relates to the Roth IRA. I love it. And then let's both give our takeaway on other types of investments. So are you too old? Is it too late to buy that home? Absolutely not. I love this idea. You've already dialed in your retirement. You have a lot of money. You've got it set up there. So we know that you can follow the 4 % rule and live comfortably. So I love the idea of buying a home. Now, how much home should you buy?

4:24I think that's going to be the critical factor. We don't know how you're currently living and what your lifestyle looks like, but I would want you to really focus in on buying a home that is going to meet your criteria of what you're currently paying or close to it in the mortgage and total cost of ownership. I think that would be a great strategy because at the end of the day, you're still quite young. And over the next 10 years, you can really pay that home down and have a solid place and foundation for your retirement with your own personal home. I love that idea. So something that we talk about, right, is unfortunately a lot of people go into their retirement years and they've got this big mortgage payment still.

5:05And it's$2 ,000,$3 ,000,$4 ,000,$5 ,000 a month. It's eating into their lifestyle expectations, and they're now having to pull more and more money out of their retirement accounts to float this payment. And so what I would love to see Tammy have is a home, a modest home,$250 ,000,$350 ,000,$400 ,000 that she pays for out of this$1.8 million. Now, if you want to go do that, right now, interest rates are 6.5%, 7.5%, 8.5%, depending on what your credit is. And of course, the rates will hopefully begin coming down in the next two, three, four, five years. To reiterate what Robert said, it's not too late for you to buy a home.

5:41But what you need to be is very methodical as to how you do it, right? Because like, here's the deal. You don't want to be 78 years old and still have this monthly mortgage payment when you've got$3 million in your retirement account. That doesn't make any sense. Tammy, if I were you, I would run some numbers. I'd say, okay, what can I afford from a purchase price perspective, right? What does that translate into a monthly mortgage? And if that number is just too high and this home's$350 ,000,$400 ,000, I would really consider saying, okay, maybe it's time for me to cash out some of this Roth, cash out some of this 401k, maybe some of this individual, figure that out and say, I'm going to go now have a million and a half dollars in this retirement accounts combined for me to live off of and a paid for home that's not at a 7.5%, 8.5 % interest rate.

6:25Like if you're doing that at 62, 65, 67, you're having a really good retirement. Yeah, I think the key takeaway here is understanding, like right now, if she's paying$2 ,500 a month in rent, I don't want to see her go buy a home that's$4 ,500 for the mortgage payment and the all-in ownership cost. So I think it's okay to buy the home, like you said, as long as she's staying within what she's already paying, so she's not eating away at her retirement just to own a primary home. So I think it was great coverage, and that's exactly what I would do. So speak to our audience about the Roth component now of what do you think she should do, the best way to contribute to the Roth, and what other investments we should both cover.

7:03Tammy mentioned that she makes too much money to contribute to her Roth individual retirement account. As you guys know, they do have some income limits there. If you're single, Tammy mentioned she was. I'm pretty positive the annual income limit's about$150 ,000. And so Tammy's caking. She's making some great money. But with that being said, she cannot contribute directly to the Roth IRA. But that's okay because there's a backdoor component to the Roth IRA, which essentially means what, Tammy, what you're going to do here is you're going to open up a traditional IRA. You're going to deposit$7 ,000 into your traditional IRA, convert it into a Roth IRA, and then go invest the money.

7:42So bank account, traditional, convert traditional into a Roth, then the money gets invested. If you do that, you do what millions of Americans do that make too much money to contribute to the Roth IRA, including myself. Now, as it relates to other investments, I mean, Robert and I say after you build your base of$100 ,000, it's always a good idea to diversify. That diversification can come in many forms. If it's real estate, right, you can think of REITs that are publicly traded like VICI Properties, Realty Income Corporation, or just Vanguard's REIT Index VNQ. You can also think about Fundrise, which is more of like a robo-advisor REIT.

8:15They give you a lot of exposure to a bunch of different types of real estate. But then you can also think about precious metals. There's cryptocurrency. There's startup investments. There's some very high-risk and low-risk types of ways to diversify your portfolio. What are a couple of your favorites, Robert? Yeah, I would say you already listed them. I would love to see her have a portion of her net worth in cryptocurrency. Just the basics, though. Nothing crazy. No meme coins. None of these new coins that are dropping every day. I'd love to see you own four or five of the top cryptos like Bitcoin, Ethereum, XRP, maybe some Chainlink, something like that in a nice portfolio.

8:49Maybe 2 % to 5 % of your net worth. But also I think it'd be really smart right now to get some of that money working in precious metals. You can keep it super simple. You could do gold and silver and you could use the ETFs GLD and SLV. Gold and silver are outperforming almost all asset classes right now. So I think that'd be a good idea as well. And I think you're on your way. You've done a great job putting yourself in this position you're in leading up to retirement. And that's just it. I would diversify a little bit. Make sure if you're buying a primary home that you do it right. Or you could even go one step further with the home.

9:23Buy a duplex. Buy something where you have a neighbor that pays a lot of the mortgage, keeping your expenses down. So there's a lot of things you can do here. Great question. We really appreciate you. Good question, Tammy. Now, our next question comes from Hayden on Instagram. Again, if you have a question to ask us, DM it on richhabitspodcast on Instagram or richhabitspodcast at gmail.com. Hayden says, hey, guys, my name's Hayden. I'm 28 years old and I live in San Francisco. I just want to say how grateful I am for your show. It's completely changed my outlook on financial success. Until recently, I only had a 401k through my work.

9:54But after listening to your show, I finally opened a Roth IRA. I'm excited to start contributing$500 a month. Let's go, Hayden. Yes. Hayden says my portfolio is made up of VOO, VXUS, and QQQ on Vanguard. The issue is, however, that Vanguard doesn't allow me to buy fractional shares of QQQ because it's not an ETF that they created, which means I can't automate that portion of my portfolio away. So what's the best way that I can handle this? Should I let part of my contribution sit in this like cash settlement fund until I can afford a full share of QQQ? Or is there a better way to have this money invested instead of sitting idle for months.

10:32Thanks again. The show has made a huge difference in how I approach my financial future. Wow, Hayden, it's like as if there's more online brokers out there than Vanguard. It's like public.com doesn't also have a wonderful Roth IRA product that is offering a 1 % match now on all contributions, and you can automate fractional shares across the gambit. You kind of see where we're going with this, right? So yes, Vanguard is very rigid in the sense that if you are not investing in their ETFs, right? If it, you know, Vanguard, whatever ETF, VOO, VTI, VGT, yeah, you get the point. Those ETFs, you can do fractional shares because they're, you know, want to make sure that you buy them.

11:10But other ETFs, right? QQQ is Invesco, right? And you'll see SPY, that's Spider. And so these other ETF issuers, they don't offer fractional shares, where on the flip side, public.com does. And public.com also offers investment plans, which means you can just automate a percentage to whatever specific ETF you want from, let's say you mentioned this$500 a month, right? I think it was 500. Yeah. So let's say$500 a month. Let's say half of that is going to go to VOO, 25 % is going to go to VXUS, and the other 25 % is going to go to QQQ. That means that 25 % of your 500 every month goes automatically.

11:47You don't have to let it settle. You don't have to wait to buy a whole share of QQQ. It gets invested immediately. So there are a ton of ways to go about this, but the easiest is to simply migrate off of Vanguard onto public, receive a 1 % match on that deposit, which is amazing, and then rock and roll with your investment plans and just do the normal percentages that way. And just everyone needs to understand, you can have multiple platforms. You can use many, many platforms for different aspects of your investing style and portfolios. I have multiple. I have Vanguard. I have Schwab. I have E-Trade.

12:22We use Public. Public is probably our favorite. So just understand it's okay to have your money in different places as long as there's a purpose for it. Public is our favorite because they cover so many different aspects of investing from high yield savings to crypto to fractional share ownership. Yeah. So for example, Robert, to your point, having a brokerage platform for a specific reason, I have a Vanguard account. I have it for the 529 account, right? That's the only thing I use Vanguard for because it's super simple. It's really easy. I deposit$200 a month into there and it gets invested into VOO and VUG and it's cool.

12:57So I totally agree, right? Public.com is the easiest way for anyone to start investing. And now because they offer their retirement accounts, they got the crypto, the options, they got all these cool new features to their platform. They truly are head and shoulders above the Vanguards, the Schwabs and these others who haven't adopted yet fractional shares or investment plans and things like that. Yeah, I couldn't agree more. And Public is just a prime example of adapting to the audience. A lot of these incumbents like Vanguard, they just haven't made the changes necessary for retail investors who don't have thousands of dollars a week or thousands of dollars a month to invest.

13:33And so the fractional share part is just one of the great features that Public.com offers. And I really love that for the retail investors. So our next question comes from Pete on Instagram. Pete says, hey, guys, Pete here. What's up, Pete? What's up? Pete says, so I just started investing a little bit. I'm 43. I'm a disabled veteran at 100 % service connected. I manage a private sober living company, and I've been doing that for five years. I make about$500 a month from my job, but I get free rent and I live on a lake, which isn't too bad. All my bills are completely paid for from this job. I'm a full-time college student leveraging the GI Bill.

14:12My healthcare and dental are completely free because of the VA. So what is your advice on what to do with my money? I'd say on average, between the private sober living company I work for and everything else that's coming in, I'm making about$4 ,100 to$6 ,000 a month tax-free depending on my school schedule. With that being said, the GI Bill ends November, 2026. I've maxed out my Roth IRA for this year and it's sitting at$14 ,000. I also just opened up a brokerage account on Fidelity and I have$6 ,000 in that. And I have$125 ,000 in my high yield savings account earning 3.6 % interest. Please tell me how to be smart with my money.

14:51I just sold 49 pairs of my shoe collection to get my savings up. How cool is that? Yeah, I like it. I'll take this one first. I think$125 ,000 sitting in a high yield savings account is way too much. I don't know what it's there for. There's a saying that Austin and I use all the time, and that is you need to make your money work as hard for you as you work to get it. And in this instance, I'm happy that it's in a high yield savings at making that 3.5%, 3.6 % interest, but you should be making more. You're not going to maximize your returns having so much sit in this high yield savings. So I'd rather you curb that down, get that down to maybe$25 ,000 or$30 ,000, take the other$100 ,000, get that working in the markets.

15:34Maybe you open a traditional brokerage account like we talked about on public.com, get you a basket of the index funds we talk about all the time, maybe get some exposure to Bitcoin, maybe get some exposure to GLD and SLV, the two ETFs we love for precious metals for gold and silver. But right now, that's what I do. You're so young, and I don't want you to leave too much money on the table every year by playing it so safe. So that's what I would do if I were in your shoes right now. So you're 43, you're going to college, getting a good education. Hopefully that turns into a really fruitful career.

16:09You're making$4 ,000 to$6 ,000 a month tax-free, which is amazing, and you don't have any expenses. What you should be doing is taking$4 ,000 to$6 ,000 a month and investing it. So you've done a great job. You've got$14 ,000 here in the Roth IRA. You've got$125 ,000 saved. You've got$6 ,000 in your bridge account. So here's exactly what you should do. Max out the Roth IRA for 2025 if you have not already, and make sure that that money is invested into VOO, VGT, QQQ, VTI, AIQ, all the things that we talk about for the Roth IRA. Now that you've maxed that out for 2025, I want you to start beefing up this account in Fidelity that's got$6 ,000 in it.

16:46So let's say, for example, if you have$5 ,000 a month for the next six months, the rest of this year that you are now putting into this Fidelity account. You'll have$36 ,000 to$45 ,000 in this account by the end of the year, depending on the growth. That's amazing. And to Robert's point, you have this$125 ,000 in a savings account. If I were you, I'd have a plan for that. Either that means let's get it invested, right? The NASDAQ's up 7.5 % this year. The S &P's up 5.5%. Gold, silver, precious metals, things like that are up 20%, 30%. So there's money to be made in these markets. So let's get this$125 ,000 invested.

17:20Maybe not all of it. Maybe you've got to set aside five, maybe$10 ,000 for a true emergency fund for you. But let's call it the other 115. Let's get that working for you. Let's get that invested on your Fidelity account. And then also, once that base is built, do you want to be living and doing this for the rest of your life? Maybe there's a world where you want to own real estate one day. Maybe there's a world where you want to house hack and buy a duplex or a triplex. There's a lot of things to get excited about at 43 years old. You've got so much life ahead of you. It's just time now to make a plan now that you have some financial flexibility given your current situation.

17:54We got to remind people here real quick, though, about public.com, right? Public.com is this investing platform for those who take investing seriously. No gambling, no day trading, none of that stuff. If you're serious about investing toward your financial future, it's time that you learn about public.com. Because on public, you can build a multi-asset portfolio of stocks, bonds, options, cryptocurrency, and more. And that's not all. Publix artificial intelligence isn't just a feature built into the platform, it's woven into the entire experience. From portfolio insights to earnings call recaps, Publix gives you smarter context at every touchpoint of your investing journey.

18:31And for a limited time, you can earn a 1 % match on all IRA deposits, IRA transfers, and 401k rollovers. Let me say that again, 1 % match on all IRA deposits, transfers, and 401k rollovers. Fund your account in five minutes or less at public.com forward slash rich habits. Paid for by public investing, full disclosure in the podcast description. Public.com forward slash rich habits. You heard it here first, ladies and gentlemen. Our next question comes from Rachel on Instagram. Rachel says, hi, Austin and Robert. Thank you so much for all you do. I've been listening to the show for just over a year now and have saved my 100k base, have 529s for both my boys, 30 ,000 in my bridge account, and 50 ,000 in my 401k.

19:16Let's go Rachel. Boom. And I'm on track to max out my Roth IRA for the second year in a row as well. So here's my question. Can you guys delve into how to calculate the ROI for those of us who are managing our own investments? For an example, there's no real easy way for me to view this value through fidelity. It actually requires a lot of computation that must be done by the actual owner of the stock. Thanks so much. I appreciate you guys more than words can say. It's a good question, Robert. Let's just start at the beginning. Yeah. Okay. So let's say, for example, you go out and you've got$1 ,000 and you want to buy 10 shares of some stock at$100 a share.

19:53So your investment is that$1 ,000. So ROI stands for return on investment. So we know what our investment is, right, the$1 ,000. And now let's say those$100 per share stocks that we have 10 of go up to$150. So now it's been six months, 12 months, 18 months, they go up by 50 % from$100 to$150. And so now our 1 ,000 is 1 ,500. Well, if we invested 1 ,000, and now it is 1 ,500, that return on that original$1 ,000 investment has been$500. Therefore, our ROI is 50, percent. Anything to add? Yeah, I would say people many times don't understand ROI at all, what it means. So that was a great explanation.

20:40But also take it one step further. We have to account for taxes. So you're either going to pay on those profits, either short term or long term capital gains taxes. So that is another way to determine and help you understand what is your net profit, the net ROI at the time of sale when you exit that position. And the other consideration for this would be is when your dollar costs averaging into these positions, you're going to have a different price for every purchase. So you have to take that into consideration overall, because in your brokerage account, you should be able to figure it out. It'll show you what you bought each one at.

21:16And when you have that breakdown, then you can come up with your overall ROI, your return on investment, because it'll provide you with the individual share price you paid and then what the blended average is so you can calculate your total return on that investment prior to taxes. And if you want to calculate that blended average for yourself, it's super simple. How much money was invested and how many shares do I have? So that's your average blended share cost that then you can say, okay, I paid 43. Now it's worth 57. What is my ROI and how can I now begin to compute taxes and things of that nature as well whenever you're trying to figure that out?

21:54So Rachel, great question. Thank you so much for listening to the show. Our next question comes from Ayinda. Ayinda says, hey Austin and Robert, with all of this war talk going on in Israel and Iran and America potentially getting involved, I wanted to know, should I still invest heavily into the ETFs you guys talk about, aka VOO, QQQ, VGT, SPYI, and others? Or should I be redirecting my money into more defensive things like oil and gold and things that are hard assets that do well during times of volatility? I'd really appreciate your advice. This is a wonderful question. And honestly, I had a lot of people that asked us this question recently, right?

22:32Because they're thinking, oh, my gosh, like the markets are going crazy. Trump's tweeting. Iran's doing stuff. Israel's going nuts. Like, what do I do with my money? Is it still business as usual? And the answer is yes. It's always business as usual. So let's just take a step back and think about two other times that we experienced any of this sort of conflict. Most recent ones were Hamas and Israel and what happened then. And the market sold off about two or three percent, but then they rebounded back to where they were previously over the next month and a half. Before that, we had Russia and Ukraine.

23:10Main markets sold off a little bit more dramatically and quickly, but they did rebound. And now we're back to all time highs. So I guess the lesson to learn here is that generally speaking, there's always a headline. There's always geopolitical tension, conflict. There's always something that's going to move the markets up, down, left and right in circles. But if you have a long term investing mentality and history tells us that we're going to be just fine, right? The markets have always hit new all time highs. American capitalism is winning. So as long as you have this long-term mentality, no matter what might feel extreme in the moment, if it's war, if it's inflation, if it is a global financial collapse, like, I don't know, whatever feels extreme in the moment, you fast forward five years, everything's gonna be great.

23:51For me, the big takeaway, and I love this question and your breakdown was phenomenal, is to understand your time. What is the ROI for your time? I think everyone needs to understand that because so many people get in the weeds trying to think, how do I time the market? How do I make these adjustments? What do I do? Because there's uncertainty, there's volatility. But at the end of the day, you have to decide, is it worth it for you to give up maybe your family life or your freedom or your hobbies to be able to keep your eye on the prize all the time? And that's very difficult to do. Even professionals struggle with trying to time markets around the headlines and volatility that we see on a regular basis.

24:33So I think it's important to understand that because a lot of times we want you to have active management. We want you to keep an eye on your money, but we also want to make sure you're enjoying life and really living a meaningful life because you don't want to be looking at your accounts all day, every day, worrying about a headline, making knee-jerk reactions. Because at the end of the day, the market's always correct and go up and over to the right. So our next question comes from Andy P on Instagram. Andy says, hey guys, thank you all so much for your content. my self-directed account with the ETFs that you have suggested is crushing it right now.