Q&A: Millionaire w/o a Bridge Account, Advice for Entrepreneurs, & 100% 401(k) Match w/ NO Limit

24:48It just doesn't work that way. And it might only take you a few months or maybe eight months, 12 months, but sometimes it's two years before you ever see any fruits of your labor for starting out in entrepreneurship. So I would always rather see people, and I didn't heed this advice, but now I can share it with you. I would rather see people get a job. You don't have to love the job. It doesn't have to be your passionate job. It has to put food on the table, keep your cell phone on, and keep gas in your car so you can work on yourself and your career. So that's number one is tenacity to get started.

25:22Number two, in my opinion, you have to be so into learning. You have to be a tenacious reader. You need to be an avid learner because you want to figure out what it is you want to do with your life. I've had multiple journeys in my career of different things where I was heavy in real estate. Then I wasn't. I was big online. Then silly bands happened. I've been all over the place. But one thing I've never swayed from is I always am an avid learner. I have to stay ahead of the curve so I know what's going on in the world so I can use it to my advantage. So number two for me is education. I'm not saying go buy all the fake guru courses for$5 ,000 or$10 ,000.

26:02I'm saying using AI as your friend, use books as your friend, and use the internet as your friend because everything you need to know is already out there and it's already been taught. You just need to absorb how it affects you. Those are the two things, tenacity and education. And number three is you need to be able to keep going. That's kind of tenacity. But the number one thing is a lot of people do is they quit too early. They start something. They get into entrepreneurship. They're three months in and they give up too soon because they expected it to be easy and they expected to make all this money.

26:38Trust me. I've been all over the place. I was very fortunate. I came from a broken family. So I was very poor growing up and I was able to build a decent amount of wealth by 24 years old. But that was because I worked nonstop from my teens into my twenties when all my other friends were out getting drunk and going to parties on weekends. I wasn't that person. So those would be the three things for me is tenacity. Don't give up too soon and be an avid learner. So you're always educating yourself right now. If I were 21 years old doing it again, I would move somewhere warm where all the money is.

27:12I would absorb every bit of AI and where things are going in the future so I could figure out where I could fit into that to build wealth and have a higher paying career or service that I would provide. And that is exactly where I would be because the sooner you get all of that out of the way, like Austin did and like I did, the easier it is because you let compounding build on itself and build more wealth because you're investing consistently over time because you're a higher earner from these three things. That was great, Robert. I largely agree with all of that. I want to emphasize a couple things.

27:47The first one I want to emphasize is the proximity. You mentioned to move somewhere where all the money is. You can't live in small town Utah. You can't live in small town North Carolina, small town Tennessee. I grew up in a town called Kingsport, and it's very small. And I'm so glad that I moved to Nashville because now I feel like I'm around more people that are moving and shaking. But it's like one of those things like you can't stay in your small town and expect to have access and proximity to these people that are doing millions, if not tens of millions with their business. Like, sure, there are some successful people every town.

28:23Don't get me wrong. But if you are trying to go find your tribe, there are other places that you should consider moving to to force yourself to be around those people. If you want to go work in legislation, you've got to be in Washington, D.C. If you want to go work in finance, you've got to be in New York City. If you want to go work in AI and tech, you got to be in San Francisco. Like there are some very specific places that is just a breathing ground for success as it relates to a theme. Or on the flip side, if you don't care about any of those things and you truly want to be like an online person, like that's cool too.

28:55But just like make sure you understand that you are picking one or the other, right? Another thing I would say, one of the best things that I learned about being an entrepreneur, and this goes for anyone 18 to 68 on your entrepreneurial journey, figure it out. Be resourceful. It has never been easier to, back to what Robert said about education, to just figure it out. Just figure it out. It's on the internet. Just go figure it out. I don't know. How do I go build an app? How do I go start doing TikTok shop? How do I think about whatnot? What do I do about clipping? How do I run a social media?

29:26I don't know. Go figure it out. It's all right there on the internet. Like we figured it out. There are people that are trying to sell you a$10 ,000, whatever to figure it out, but you don't need that. Watch people on YouTube, go spend 3000 hours reading AI X, watching YouTube videos, listening to podcasts, like after the first, maybe about 3000, we'll call it 1000 hours, at least like it takes a long time to figure some of this stuff out. But being resourceful enough to want to spend your nights and weekends being resourceful. That's what separates you from the pack. And I think that's what Robert was alluding to when he was younger, spending his nights and weekends working and surrounding himself with people that worked in real estate, surrounding himself with people that were in sales, surrounding himself with people that were in the restaurant business, like figuring it out and putting yourself in a situation to succeed.

30:12And the last thing I'd really want to talk about, which is something that you didn't mention, but I think is very important. The sooner you realize it's not a zero sum game, the faster you will win. I have tons of partners. I've got tons of people that I build things with that I work with that, you know, I can't touch every single dollar in my industry. I realize that. And there are competitors in my industry that I have very close relationships with because there are times that clients will come to me for a service or a product that I offer that I simply can't meet because of so much high demand or whatever it might be.

30:51And so I give it to a competitor and that's all cool. It's fine. There's so much money out there to be made. And I guess what I'm trying to say for you here, Grayson, is there might be people on X or Instagram or TikTok or whatever that are building a similar product or building in the same space as you. And you might have this lack mentality mindset of like, oh, they're trying to take my customers. I need to make sure that I steer clear of them. I don't want to know. Mr. Beast has very famously talked about how when he first started building his YouTube channel, every single day for like months, him and like three or four of these other YouTubers would jump on a Zoom call and talk about their thumbnails, give feedback on each other's videos.

31:30And like they all tried to succeed together. And I think as entrepreneurs, we have this automatic victim mentality mindset of any other entrepreneur that's working or doing anything in my space as a competitor. And I need to make sure that I just wall garden and don't collaborate or don't share anything or don't do anything with them. And that could not be further from the truth. Some of the best relationships I have, some of the best friendships, some of the best business partners, you know, turn out to be business partners in the future. We're competitors, quote unquote, on the surface. And so as an entrepreneur, no matter, again, this is Grayson or anyone else listening, the sooner you realize that it is not a zero-sum game, that as entrepreneurs, we can all win together, the faster you will be wealthy.

32:11This is a big episode. This is a good one. Yeah, man, I'm having fun. Our next question is coming from Trevor. Trevor says, hey, Austin and Robert, started listening to your show about a month ago, and I really like your content. I'm taking it one episode at a time, still back in 2023 episodes. But I'm wondering, what are your stock allocations in reference to the ETFs you mentioned? Do you have SPYI or VOO in your portfolio? How do I think about building a portfolio with these NEOS funds inside of it? I just switched over from having 100 % of my 401k into the S &P 500 now into a different plan where I can diversify significantly.

32:51I have$370 ,000 in there. How should I be thinking about this? So Robert, maybe walk people through our perspective on building the core satellite portfolio and then maybe where you think NEOS funds could fit into the equation here? Yeah, I like this, Austin. This is a great question. And core portfolio strategy, we always want to see you follow this in the beginning. And there are different ways you can look at it, but we want to make sure that you're looking at that 50%, 60%, maybe even 70%, depending on your age. We don't have the age here, where you have these low-cost ETFs that we talk about.

33:24So you have the diversity in the S &P 500, in the NASDAQ. Maybe you have some AI. We like AIQ as well, something like that. But then when you think about the rest of it, that additional 30%, you asked about SPYI. These would be NEOS funds. We love NEOS funds if you're looking to produce income. So that's a nice thing. So make sure you understand that because you want to understand the difference between the income with growth, but or just more a growth oriented portfolio. So it's important to understand that. In my opinion, without knowing your age, I think the average person should maybe have 5%, maybe 7 % of these income-based ETFs.

34:03But it's not a versus. For me, I own VOO in my retirement accounts, and it is a major portion. I think for me, it's like 45%, maybe 50%. But I also own SPYI and QQQI to mimic VOO and QQQ. But I don't believe unless you're older and you're looking for the income for your portfolio that you should have equals in those. And it's definitely not a versus. You can own both because they both do different things for your portfolio over time. VOO and QQQ are your growth strategies, especially if you're younger. And SPYI and QQQI are the income portion of that to give you some of that balance throughout your career of investing.

34:48Yeah, I love that balance. Personally, I've got six figures. in NEOS funds. I get paid well over 1 ,500, 1 ,800 something dollars a month here. My NEOS funds are incredible. And it's that awesome monthly income that I can receive now in my portfolio. It's not a versus, it's a compliment too. And so to your specific question here, Trevor, just like what Robert shared, you got the core and you got the satellite. The core is that 65 % to 85 % into the index funds and ETFs we talk about. The satellite is that 15 % to 35 % diversified elsewhere, sometimes even into different asset classes like real estate on Fundrise or blue chip artwork on Masterworks or venture with some of the stuff we're doing in the Rich Habits Network.

35:31That is a different way to sort of think about it as well. And so if I were in your shoes, put the vast majority, I'm not going to give you numbers here, but put the vast majority of this, like Robert shared, into the index funds and ETFs we talk about. Have 5%, 10%, whatever, 15%, whatever's comfortable for you in some thematic ETFs like NEO's funds, like an SPYI, a QQQI, a BTCI, an IAUI, IYRI. I love all these funds. I can go on forever about them. I got them all in my portfolio. And get yourself some of that passive tax efficient monthly income. And then what you can do with it is choose to say, hey, do I want to reinvest it back into these, right?

36:09The drip stuff, dividend reinvestment plan, or do I want to take that distribution and put it elsewhere in my portfolio. Right now with Bitcoin where it is, I've just been taking my BTCI distributions every month and reinvesting it back into BTCI. So I'm lowering my cost basis, knowing that Bitcoin will go back up in the future, right? So it's like, however you want to think about that, it's a really, really cool opportunity to make some choices with your money because of how often you get paid. So our next question comes from Carlum C. Hey guys, my name name is CJ and I'm 25. I currently have monthly income that ranges between$10 ,000 and$20 ,000 a month pre-tax, both from my business and my 9-to-5 job.

36:47These numbers are fairly new as of this year, and I finally got over that stagnant period of seeing little to no results and very excited about it. I've got a$14 ,000 car loan,$13 ,000 in student loans, and I was wondering, since these are not that large of balances, should I just pay them both off as soon as possible? or do I just continue to pay the monthly payments? Also, as my stock portfolio begins to grow, for future reference, I was wondering, how do wealthy people pay their bills using leverage out of their portfolios? Is it something that I should be considering now that I'm starting to make a little bit of money?

37:21Thank you so much. So I'll start with the second question, Robert. How do wealthy people pay their bills using leverage in their portfolios? Well, let's be very honest here. I only think like multimillionaires, centi millionaires like those are the type of people that are borrowing hundreds of thousands if not millions of dollars against their investments at a very favorable three four five percent interest rate and then using that to fund their lifestyle by whatever you know thing they want to go buy like you know things of that nature there i'm not doing that i don't think robert's doing that i don't think cj should be doing that the people that do that again are like the elon musk of the world that are like oh i've got all this tesla stock or spacex stock and it's worth $100 billion, I'm going to go ask JP Morgan or Goldman Sachs for a billion dollar loan or a$100 million loan.

38:11Gosh, could you imagine a billion dollar loan? That's crazy. $100 million loan even at a 4 % interest rate. And that's just stuff that I'm not doing. And I don't encourage people to do that. But that's kind of how it works, right? They don't sell it. They borrow against it. It's called, what is it called, Robert? Buy, borrow, die. Buy, borrow, die. That's what it is. So they buy the stock, they borrow against it, then they die. And then they you know, don't have to worry about taxes and stuff like that. But CJ, don't worry about that stuff, my friend. You are on a completely different tax bracket than those people.

38:39So Robert, what advice do you have for CJ here earning, call it 15 ,000 a month, first time of his life, he's making this kind of money, mix of side hustle, business, entrepreneurship, and nine to five. What would you do in CJ's shoes? We're going to go back to the 1800s. CJ, don't put the cart ahead of the horse. You are talking about all these crazy things, like you're already making$100 million a year. You don't need to worry about securities-based loans. You don't need to worry about putting your stock shares up. You've got a few years ahead, and I hope you keep crushing it. But for right now, you need to build your base.

39:11I don't think I would even worry about paying off the car or the student loans just yet, because from what I see, you don't even have an emergency fund to keep you away from putting things on credit cards if an emergency pops up. So first and foremost, CJ, congrats on the new money. That's awesome. Build the base. We want to see you have that$100 ,000 saved and invested, get that Roth IRA set up. If you don't have it yet, I don't see it listed that you have that. Get the VOOs, get the QQQ, get the AIQ, maybe VTI, get this built. So you have$100 ,000 saved and invested and making you money while you sleep.

39:49Now for the car and the student loans, I'm assuming the student loan debt is probably five and a half or 6%. I would leave it rock and roll right now because there's always a way or always an opportunity where maybe down the road, the government changes the interest on these, makes them no interest to get people out of these debts. I don't know about that. And then same thing goes with the car. It's not a big note. So if your interest rate is five or 6 % on the car, we don't have those details, then I would just keep making the payments until you have the emergency fund built at the very least.

40:20Because right now you don't have anything to fall back on, but you're doing very well. That's where I would go right now at 25 years old. Congrats, you're doing a great job. But that's where I would start. And then after the base and after the emergency fund, then you might want to start chunking away to pay off the student loan and the car. I think that's great, Robert. That's very much the similar path that I was on when I was around his age. I think that's just around what I was making on a pre-tax basis when I had first sort of started my entrepreneurial journey. And the things I focused on were building my emergency fund.

40:52At the time, I think only had about, you know, three or four or$5 ,000 in it. It was very, very puny. built that up to 10, 15, 20 ,000, got that in a high yield savings account because it's very important to have that buffer between you and life. The other thing that I started to fall for that I encourage you, CJ, not to fall for was like, oh, I need to figure out my tax optimization strategies because he mentioned this is all pre-tax. You know, CJ, you're going to see a lot of Facebook ads for tax strategists or you've probably heard about bonus depreciation with Airbnb or all these little things that people are trying to do to save money on taxes.

41:27I don't believe you are earning enough money at this moment in time to really invest in these types of strategies. To Robert's point, I would much rather see you open up maybe a solo 401k, make some pre-tax contributions in your solo 401k to help you build your base. And you can use that maybe to offset some taxes if that's something you're genuinely scared about. What I did instead is I did the mega backdoor Roth solo 401k. So it's after tax dollars that went into my account, but everyone's different. But I would get that base built. And then after you have$75 ,000,$100 ,000,$150 ,000 invested by the time you're in your late 20s, then it's time to go around and say, okay, what's my car loan?

42:04What are my student loans? Let's just knock these out. Personally, I graduated with student loan debt, and it was one of the first things I knocked out because I hated it. I felt like I had a shackle around my neck of like, I need to get rid of this debt before I start moving forward. And that's what I did. But I did it after I had my emergency fund. I'd invested a good chunk of money, and I paid them off. So I love your situation here, CJ. I'm excited things are breaking for you and moving in your direction. I hope it continues. And for everyone else listening, I see it every single day in my DMs and emails, people I meet on the street, is realize this.

42:36If you're 25, 35, 40 years old out there, make the changes, but don't beat yourself up. Less than 25 % of U.S. adults, 35 and over, don't have a fully funded emergency fund. Less than 25%. But it's not too late to make that change, especially CJ here, 25 years old. You've got this rock and roll. But if you're 30, 35 years old, you know who you are out there and you haven't yet done the honest budget. You haven't set up the emergency fund. Guess what? Today's a great day to start after watching this episode or sharing this episode with a friend that you know is in that situation because it's never too late to get yourself on the right track financially.

43:16That's a great reminder, Robert, because I think a lot of people have this sort of mentality of, oh, emergency fund. Cool. I'll just save it up real quick. No problem. No. Emergency funds, on average, I think it's like take 18 months. They take a really long time to build. Just like building your base. I think building your base, it takes on average five to seven years, depending on your income, to get your first$100 ,000 invested. It takes a long time to get there. And I think as people don't see the progress that they were expecting in a short period of time, to your point, they kind of fall off and they're like, oh, this is never going to work for me.

43:49I don't want to do this. But once you stick to doing something for three months, six months, nine months, 12 months, and you start to see that progress and you said, okay, entered 2026 with$2 ,500 in savings. And I exited 2026 with$10 ,000 in savings. That's cool. Let's now do that again in 2027. So it's 15 ,000. And then again in 2028. So it's 20 ,000. and now I've got that fully funded emergency fund. That's okay. That is normal. It doesn't take an overnight, oh, you guys talk about these$20 ,000 emergency funds like they grow on trees. They don't. They take years to build and that is what's normal for people.

44:25And I think having this like sense of urgency of like, oh, I need to go do this and do that and invest and build an emergency fund. And like, it's important to really have a priority list for yourself and figure out what is the one thing that I really need to lock in on and do really, really well for the next 12 months. And then what's the thing after that? And what about after that? It goes back to our phrase of forecasting, right? Wealthy people forecast, and you need to be forecasting too. Yeah, it's called an emergency fund for a reason. I see it all the time. People are like, well, I had an emergency fund, but then I went on this trip and then I went to a wedding and I bought a new phone.

44:59That's not what it's for. I mean, I'd rather you do that than put it on credit cards, but an emergency fund is for emergencies. It's not to upgrade your lifestyle. So just keep that in mind. It is critical to have the base and have the emergency fund. So for anyone out there, I know this was a very long winded answer, but well worth it if it helps any of you change your path. And before we answer our final question, got to give a shout out to public.com, the investing platform for those who take it seriously. Go check out Generated Assets. It's the coolest product we've ever played with. It essentially allows you to say, I have an idea where I want to invest in drone stocks, or I want to invest in companies that benefit from Claude, or I want to invest in companies whose founders, I don't know, are over the age of 50 or younger than 50.

45:51Like, I don't know, like you come up with anything you want, type it into generated assets on public, and they will screen 1000s of stocks on your behalf that align with that specific filter you're trying to invest toward give you 2030 names, if that like, who knows, depends on what your strategy is. And then you just click invest 1000 bucks, boom, and now you're investing in that strategy. It's awesome. So go to public.com slash rich habits, get an uncapped 1 % bonus when you transfer your portfolio and go check out generated assets. So our last question comes from Dylan W. Dylan says, Hey, guys, I love the show.

46:27You all are so helpful. I wish I would learn these things in school at some point. Instead, I'm in my 30s and I learned them for the first time. Well, you know what, Dylan, that's okay. That's that's everybody. That's the reality that a lot of people have and you are not behind, I promise. Dylan says my employer matches 100 % with no contribution cap to my Roth 401k and my pre-tax 401k. Which one do you guys think I should be putting money into? I'm 33 years old living in San Diego. Cost of living is very high. I have three kids. I own a house, so I am not getting taxed that much at the moment.

47:02So that's why I was leaning toward maybe the Roth 401k. I'm still getting back a big tax return this year, about $8 ,000, but I make about$110 ,000 a year. Wow. No cap on contributions. So the question is pre-tax or Roth 401k. Robert, what's your take? Dylan, great situation, but I want to clear up something real quick for anyone else that's listening as well as you. Having an uncapped 401k, Roth 401k here is a great opportunity, but just keep in mind for 2026, that$72 ,000 is the max and that's combined. That's your contributions and the company's. So make sure we clear that up first. I don't think you're there yet where you're going to be able to eclipse that amount, but I just wanted to be clear.

47:47But the other part of this is I think at your age, the Roth 401k is the better move as long as you have a decent amount of diversity that you can have within the Roth 401k. I'm assuming you do because we always want to make sure you have options enough so you're not in just some target date fund that you can have the VOOs in the QQQs of the world. So you have S &P 500, you have NASDAQ coverage, maybe some small cap coverage, maybe a little bit of bonds, stuff like that. But overall, you're in a great situation having this uncapped 401k situation. So I love this for you, but just make sure you have that diversity and understand the total cap because there is a cap of$72 ,000, but that is the combined amount of what you would put in and the company can match.

48:34Yeah. So your employee limit is$24 ,500 here for$2026. And the employer could obviously put up the rest of$72 ,000 total, but I don't think, you know, that just doesn't make sense in your situation. So it's really, do you want to put in and max this out if you can afford it and get a free$24 ,500. I mean, man, if I were in your situation, I would be doing everything I possibly could to get this free money. I would be scrimping on eating out, subscriptions, vacations. Like, think about it. Literally every dollar that you don't spend in real life and instead put in this 401k gets a 100 % return on investment immediately.

49:16Every single dollar up to$24 ,500 because that's how much you can contribute. So it's like, dude, I don't know what you got going on on the weekends, but I'd be working crazy side hustles so I can contribute more from my 401k and take lower paychecks, right? Because more money is going to go to that 401k. Now the question of Roth or traditional, I would choose Roth because you're 33 years old. You've got obviously 30 more years of investing ahead of you. I have no idea what the tax situation is going to be like in 30 years from now. You're not making a crazy, you know, half a million, million dollars of taxable income so you don't really have to worry too much about like trying to optimize for taxes and things like that making 110 three kids own a home like that's all great if i were you like you're getting this big tax return of eight thousand dollars i wonder if there's a world where you can boost up your 401k contributions for the next couple months live off of this eight thousand dollar refund you know you know i'm saying you're trying to put the pieces together for a limited time boost that 401k contribution so you can get the match while you live off this$8 ,000 refund.

50:18And then maybe you pull the 401k contribution back down. I don't know how often you can change these contributions. At my old employer, I was able to change them every single pay cycle. So maybe you're able to move them around. It's not an annualized kind of thing here. But again, Dylan, 100 % match with no cap is literally the craziest thing I've ever heard. I've never seen something like this before. And I would be, like I said, doing everything to get$24 ,500 contributed to this 401k. So you get a free$24 ,500 match from your employer. I mean, just think about how much money that is going to turn into.

50:58I mean, we talk about this all the time. What's the number, Robert? Every dollar invested in your 30s turns into how much in your 60s? Yeah,$26. dollars. Yeah. So if you're in your late twenties and early thirties, every dollar you invest turns into$26 in retirement, which is just insane. Yeah. So one year here of getting all $24 ,500 from them is essentially 500 to 600 ,000 in retirement. Like every year that you like scrape and do everything you can to get this a hundred percent match is half a million more dollars in retirement. Like think about it like that. Like this is a crazy cool blessing.

51:36I'm glad you're in this situation, Dylan, and we're rooting for you, my friend. Everybody, thanks so much for tuning into this week's episode of the Rich Habits Podcast, question and answer edition. As a reminder, we've got the Rich Habits newsletter completely free. Go check that out. Just type in Rich Habits newsletter on Google. We've got the Rich Habits Network, seven-day free trial on that. Please go check that out if you want more access to Robert and myself via weekly live streams and investment opportunities into things like SpaceX and other really cool stuff. For example, you probably saw that Jane Street just invested into FluidStack, this sort of NeoCloud company at an$18 billion valuation.

52:12We in the Rich Habits Network invested into FluidStack at a$700 million valuation. So nice little 20X on our money over the course of about two years here. Really cool stuff. So like, again, that's an anomaly, but those are the type of venture investments we're making inside of the Rich Habits Network. So if that's interesting to you, if you're at that part of your wealth building journey where you can do some of that stuff, feel free to join us over there. And as always, we are so grateful that you watch us on Spotify, leave us comments, vote in the poll, leave us these five-star reviews on Spotify and every other platform that we're on.

52:44We're just so grateful and we are so excited for the rest of 2026 with you guys. Thank you everyone. And we'll see you tomorrow for the Rich Abbott's Radar episode.

53:08We'll be right back.