Q&A: Our Favorite AI Stocks, Inheriting $850K, & Improving Credit Scores

0:00Hey, everyone, and welcome back to the Rich Habits Podcast. question and answer edition brought to you by public.com. These are our Thursday episodes, Robert, that we sit down and we answer your questions. That's what we do. We answer your questions as if we were in your shoes. If you have a question to ask us, you can ask us via email at richhabitspodcast at gmail.com. You can DM us on Instagram at richhabitspodcast or you can join the Rich Habits Network and join us on a Tuesday night, two hour long live stream and get your questions answered face-to-face with Robert and myself. But these Thursday episodes, we try and come at you guys with some really fun questions.

0:40You guys have a ton of questions all the time. And to be honest with you, Robert, these episodes are becoming my favorite. Yeah, definitely. These episodes have come a long way and it's just really cool to see so many people getting involved and getting entrenched in our ecosystem, whether it's the newsletter, the Rich Habits Network, or just watching the podcast and getting these questions out to us is so important for everyone because we all have blind spots, personal finances, personal. In these episodes, we just really try to do our best to answer all these crazy random questions to help each and every one of you through your financial journey.

1:17And whether it's mindset or you're trying to figure out a side hustle, whatever it is, we're here for it and we appreciate all the questions. Well, my favorite part about these episodes, Robert, is it really shows the diversity of our listenership, right? Our audience base. We've got questions from people that are 23 and questions from people that are in their late 60s. Like it's so cool to be able to answer questions across all these different backgrounds and, you know, age demographics and everything like that. So let's get ready for it. But before we jump into the episode, got to give a shout out to public.com, the title sponsor of all of our Thursday episodes.

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2:31Generated assets are like ETFs with infinite possibilities. They're completely customizable and based on your thesis, not someone else's. So go to public.com slash rich habits and earn an uncapped 1 % bonus when you transfer your portfolio. That's public.com slash rich habits to earn your uncapped 1 % bonus when you transfer your portfolio away from whatever stinky broker you use right now and put it on public. Paid for by public investing. Full disclosures in the podcast description. All right, Robert. So our first question comes from Debra S. Debra says, Dear Austin and Robert, I'm a recent listener of your amazing podcast.

3:10I accidentally found your show on my way to work, and I'm currently playing catch up by listening to two to three episodes a day. Oh my gosh. Thanks, Debra. Debra says, as a high school advanced personal finance teacher, I have shared many insights from your show with my students, and we've even watched snippets of your YouTube podcast in class. What's up, Debra's class? If you're watching this episode, that's so cool. Listen to her. Debra's a smart woman. Debra says, I am riding to seek your perspective on a significant decision my brother and I are facing regarding our late father's home. Last October, we inherited our childhood home in a medium income neighborhood.

3:46The house is approximately 2 ,100 square feet with an in-ground pool and is located just half a mile from the beach. It's currently valued at$550 ,000. While I could use some cosmetic updates, it requires no major repairs. We're torn between selling the property or keeping it as a short-term rental. As a realtor myself, I'm leaning toward keeping it as a revenue stream and a family gathering place. However, there are several factors to consider. The first one is financial impact. I have considered buying out my brother's share, but I'm hesitant to tie up my retirement funds as I plan to retire within the next two years.

4:21My brother is not in a position to buy my share. The next is our current housing situation. My husband and I currently live three and a half hours away in our dream home that we custom built three years ago. It carries a$4 ,000 monthly mortgage. Moving to this property is an option, but it would mean leaving the home we just settled into. The next is our family sentiment. Our children and grandchildren view this home as their home base, making the emotional attachment quite strong. And finally, the holding costs. The monthly cost to maintain the house, insurance, utilities, lawn service, and pool cleaning is$2 ,000 a month.

4:57And my sister-in-law is currently living there to keep the property secure until we settle the estate. I'm 64. My husband is 70 and he's already retired. My father left my brother and I$150 ,000 each, which we have invested into annuities. I also have an IRA with$62 ,000, a 401k with$44 ,000. My husband has an IRA with$80 ,000. We have approximately$15 ,000 in checking,$20 ,000 in a high-yield money market account, and a total net worth of$1.5 million, and we do not have any other loans or outstanding credit card payments. Given your expertise, I would love to hear your thoughts on whether settling or converting the home into a rental property makes more sense in this market.

5:34Robert, I will let you kick this one off. Yeah, this is a toughie because I get the sentiment part. You want to have that family home. You've got all the memories. You guys have been going there forever and all of that. But here's the problem that I have. I don't understand where the 1.5 total net worth is coming from based on the numbers provided. But let's skip over that for now and dig into the home. I think it's a tough situation because on one side, I'd love to see you buy out your brother, get him flush. You own the property. You can do your renovation right off into the sunset and you have this beautiful home for the family.

6:10But the other side of this tells me you don't have enough in retirement to be able to tie up that much capital in this home to be able to keep the family heritage. I kind of went through this myself a few years back. I had a home that I thought I would never, ever give up. But then I realized that the carry cost and the expense was greater than the joy that I would get from the home because I didn't use it that often. And I feel like that's what would happen here with you. So in my opinion, I think you have two options. you buy your brother out maybe you can work it out where it's a smaller monthly payment over time and then if you ever sell the home he gets a bigger cash out or you just sell the home you you both take your money you do your thing you already have your dream home and you host all of the events at the dream home that you just built because it sounds like to me you're basing this decision on sentiment more than financial prowess and understanding what's best for you long term And what I don't want to see happen is you keep this home, you buy your brother out, you've exhausted a lot of your retirement funds, and then it becomes a drain for you.

7:15Because let's be honest, how many times a year are you actually going to enjoy the home like you once did when your parents were there? So that's my take on it. I would probably sell the home, move on, because you can build new memories in the dream house you already have. Yeah. And I want to caveat all that with I could only imagine how hard it might be right now to weigh this option of keeping the home and not keeping the home. My dad died in July. So again, I'm sorry. I'm just really sorry to hear about your father's passing. And I still have my late father's home. And I'm going through the same situation where I can keep it as a rental property if I wanted to.

7:56The mortgage is very cheap. I got it at a 3 % interest rate. I mean, it's a very low cost thing to keep around. But for me, I think it's more of a closing the chapter of my life and not having to deal with tenants ruining a place that I see is sacred because my dad used to live there. It's a very emotional thing. So only you know the answer to this, Debra. But my advice to you is a lot of what Robert said. You have a dream home. Invite people to the dream home. You're three and a half hours from this home base. If your family doesn't want to drive three and a half hours to be in your dream home, that says more about them than it does about you.

8:34Also, we're talking about short-term rental. So you're going to put your family's home base on Airbnb or VRBO or one of these different short-term rental websites to have literal probably dozens if not hundreds of strangers come in and out and disrespect it on an annualized basis. All that just doesn't sound fun to me. I would rather say, listen, I'm going to honor my dad by making this home and fixing it up and doing what I can to ensure that I'm getting top dollar for it. And then I'm going to honor him by selling it to hopefully a new budding family that is going to, maybe they just had a child or maybe they've got a couple of kids and they're looking to finally expand their family.

9:12And you feel good about who is now taking over this house and living where your late father used to live. I would sell the house. I would allow someone else to live there, build their own family inside of it, have that be someone else's home base in their life and just honor your father that way. This also allows you to not have to tap into retirement. This allows you to stay in your dream home three and a half hours away. You don't have to be a long distance landlord. This allows you to close this chapter of your life in a respectful manner. And it's something I'm working on doing myself. Yeah, that's my advice.

9:44Yeah, I think that's a great takeaway because the grieving process, I think, sometimes prevents people from selling these assets. I went through it when my mother passed. I renovated her house. Then I turned it into a rental for two years. It was a mistake on my part because she too was right on the water, all of these things. And I wasn't ready to let it go. But then after the tenant kind of disrespected it, like you alluded to Austin, I was like, you know what? I'm going to clean it up. I'm going to sell it and let another family make their own memories in it. And that worked out really well.

10:15So love your takeaway, Austin. And I think I agree 100%. Debra, we're rooting for you. We are heartbroken to hear about your father's passing, but we hope that Robert and I's advice is helpful as you navigate a very difficult time in your life. So our next question comes from Joseph M. Oh, this is a good one, Robert. Joseph says, good morning, fellas. My name is Joe and I'm from South Texas. I've got a question for your Q &A episodes. I'm 42. I've retired from military service. Thank you for your service, Joe. And after taxes, I make$7 ,000 a month. I have$14 ,000 and a high yield savings account, which equates to three months of emergency fund.

10:51I've got two loans, one for my mortgage at$2 ,000 a month, and one for solar panels at$700 a month. Both of these loans are under 3 % interest. Wow, that's awesome, Joe. Joe says, my wife works and her money is used for groceries and birthday and Christmas and stuff for the kids. Each kid has a nearly fully funded college fund. And after all the bills are paid and fund money is allocated for, we still have$2 ,200 a month leftover. I do not need to buy these things, but I want to buy these things in the next few years. And so my question is, what is the best way to buy a hunting property, a used pickup truck, and an RV that we can travel in?

11:31Thank you so much, Joe. Robert, what a cool place to be in, right? Retired from the military, put in his years, and now Joe just wants to go hunt in his truck and hang out in his travel RV. I love it. The American dream right here, Robert. So what's your advice for Joe? Yeah, Joe's not going to like this advice because here's the problem. If Joe were a single man, 42 years old, out there ready to rock and roll with the hunting property and the truck and the RV and all of that, that'd be great. But Joe's got to remember a few things. He's got kids to take care of. So there's that legacy. He has the wife to take care of.

12:10And it's just one of those things. I think Joe needs to hold that dream a little bit longer, maybe five, six, seven, eight years and get more money saved for retirement to really set himself up to where God forbid, if something were to happen to Joe, the kids in the family are going to be okay. That's my take because right now, yes, it's a dream. He's ready to rock and roll. He wants to go hunting on the weekends, have this hunting property. All of that is great. But the problem is I don't think Joe has enough reserves in retirement and set aside for the future if something goes awry to be able to do that just yet.

12:47I'd maybe start looking for the property because you could get ahead of it because properties do appreciate. So we could start looking there. Then maybe two, three years down the road, okay, I've got the property secured. Now I'm going to get the truck and so on and so on. But I wouldn't only be saving and working towards that goal without at least having one and a half to two million dollars set aside and growing for retirement already. So that's my take. Joe is definitely not going to like that answer. Don't worry, Joe. I'll cut you some slack. So first thing I'm going to do for you, Joe, is I'm going to encourage you to get a term life insurance policy.

13:22They might have something similar like that in the military just already. I genuinely don't know. But go to the link in the show notes, shurience.com slash rich habits. That's how I got my term life insurance policy. I've got a$2 million policy through Prudential. But Shurience is going to go shop you all the different types of term life insurance policies, and they're going to get you a good rate. For me, I mean, it's literally like$30 a month,$40 a month. It's very cheap. And Joe, it's going to allow you to what Robert said. If anything does happen to you, go get a million dollar policy for$40 a month.

13:54and like if anything happens, like your income is gonna get replaced, you're gonna be just fine. So do that first. You mentioned you've got 2200 bucks a month left over after the fund money, after some other things you had mentioned here. My question is, is that 2200 dollars left over after you max out the Roth IRA for you and your wife and after you guys are investing, let's call it 15 to 20 % of your take-home pay every month? Because if you guys are genuinely investing 20 % of your take-home pay every single month by maxing out the Roth IRAs. It goes to the public taxable bridge account. Maybe you've got some other cool stuff with your wife and how she's working.

14:33Maybe she's got some 401k stuff there. Who knows? But if you guys are genuinely investing 20%, 15, 20 % of your take-home pay every single month, and you've got$2 ,200 left over, I would be like, okay, cool. I'm going to set aside maybe $1 ,000 a month or$1 ,500 a month for the next 12 months to go buy a used pickup truck that's$18 ,000, $20 ,000. Boom. Now you got to use pickup truck RV. I mean, here's, here's the thing. The mistake you don't want to make Joe is by having too much of your net worth tied up in things that go down in value, right? Use pickup trucks go down in value. RVs go down in value hunting property that should go up in value, but I'm specifically talking about the RV and the pickup truck.

15:15If you're over here telling me that you want to go buy a$40 ,000, 20, 23 GMC Sierra pickup truck, like that's a lot of money for you, Joe, talking about, you know, seven ish thousand dollars a month here. Or, hey, I want to go buy a$80 ,000 RV that the family and I can go take cross country. Maybe you should rent it, Joe. Maybe you shouldn't put all that money in an RV that's going to lose 20 % in value in the first three years. So that's kind of like the framework I would use is if 20 % is already getting invested, like, yeah, go pay cash for a cool pickup truck, go pay cash for an RV. But just make sure that you have a fraction of your investment account, a fraction of your net worth in the used pickup truck, in the RV, compared to your total net worth, because you want more things to be invested into things that go up in value than things that go down, right?

16:05So you want more money there than things that go down in value. Now, when it comes to the hunting property, Robert, what's your take on like, do you have any tips and tricks as it relates to buying land? Yeah, that's a great question. And I don't know that I do. You know, I always look at land when people are selling courses or trying to charge people all this money to teach them how to buy land. If no one has bought the land prior or it's been sitting forever and ever and never been developed, that can be a good thing if you can buy it right. But it can also be a bad thing because it generally means there's not a lot of capital appreciation.

16:38And a lot of times when people are thinking about buying this hunting property, they're going to put a cabin on there. They're going to be able to use it when they want to go hunting. They're going to put a couple deer stands in, all of that. but they forget the fact that they have to insure the property now that people are going to be on it. They have to pay property taxes on the property. So that's another expense. So I don't really have any hacks. I just want people to understand we are here to help you create and build your dreams. So I don't want Joe to think I'm coming at him, but I also want to make sure Joe doesn't at, he's 42 now, at 62 go, oh no, we ran out of money.

17:15We have this cool hunting property and all this stuff, but we don't have enough money for the kids and down the road. And, you know, because people are going to live longer, Austin. We talk about this all the time with modern medicine and technology. People are going to live longer, and I want people to better prepare for the future of living longer, but also have fun along the way. So I don't really have a hack. I don't know if that helped much, but I'm trying to just get Joe in the right mindset to live the dreams, but prepare for the future, I guess, is my take. No, I think it helps a lot because Joe, whenever you're sort of weighing your options here with the hunting property, you have to understand the totality of ownership.

17:53right i think that was robert's takeaway which is like it's not just about financing this this hunting property and being able to enjoy it but it's also the extra thirty nine hundred dollars a year of expenses that you weren't accounting for or i don't know nine thousand you like whatever it turns into i genuinely don't know i would treat this hunting property as the same like we actually had a question i think it was recently maybe it's on monday's episode but someone had a question about like how do i think about a vacation or a second home right how do i think about one of those like vacation properties, a beachfront condo, whatever.

18:26And Robert and I's answer to that was, if you can afford the monthly mortgage payment while also simultaneously investing 15 to 20 % of your take home pay, then like, go get it. You're rich. Congrats. Right? So Joe, it's the same thing for you. If you can afford to finance a hunting property, while it not negatively impacting your retirement investing over the long term, because you're still investing 15 to 20 percent of your take-home pay, congrats. You're rich. You saved enough money for a big down payment or you got your income up or your wife is just doing like whatever. That's the framework I would use is I would make sure that I could do it not at the expense of my retirement investing.

19:07I want to click back one more time for Joe and anyone else thinking about something like this. You could also consider going in on a property with two other couples. I'm sure you have hunting buddies. Maybe you go to them. Maybe the property's$80 ,000 for 15 acres and some woods. on a creek somewhere. That sounds amazing. Maybe you go in on the property and then you split up the total fees and the total cost of building out the property and the infrastructure you need. That's another option you can do. Obviously, have a lawyer with a good contract of states of who owns what and how it works, but you can almost timeshare it.

19:42So where it lowers your overall cost down to have the property while still enjoying it with friends. So that's another another option that I would look at. That's great. I didn't even think about that. There we go. Now, before we jump to our next question, quick reminder, generated assets, really cool new product feature on public.com. You can type in, just like go to chat GPT or Gemini or Grok or whatever, type in, I want to invest in companies that had Super Bowl commercials in 2026. Boom. It would go and find all the companies that ran Super Bowl commercials this year, and it would put money into a portfolio that you can invest in them.

20:19That's how cool it is, how easily it works. Any idea you have, you can type it in. It'll figure out how to invest in that and you're off to the races. So please go to public.com slash rich habits, transfer your portfolio over, get that uncapped 1 % bonus. But while you're in there, go create a generated asset strategy where you can use AI to build an investing strategy that is completely customizable and is entirely based on your thesis, not someone else's. Public.com slash rich habits or use the link in the show notes below. Our next question comes from Vonna A. Vonna says, good afternoon, gentlemen.

20:55I'm writing this after listening to episode 143. I make about$54 ,000 a year in upstate New York at 23 years old. I started this year by saving 15 % of my income along with any additional leftover income because I have a goal of saving$20 ,000. I'm a little late to the wealth building game, but I'm ready to go all in. Vonna, you are not late. You are 23. You are very early, actually. Vonna says, I've already read and finished a couple books that have helped me overcome certain bad money mindsets and habits. I don't have any recurring payments besides rent and student loan payments and groceries, of course.

21:31So here's my question. I have a decent credit score, but it was hit because of my first student loan payments. I've got about$10 ,000 of student loans. I don't have any credit builders besides a mattress payment that's almost fully paid off because I've been working on that for a while now. Would it be worth getting a secured credit card to build my credit or should I get an unsecured credit card? How do I go about building credit in a responsible manner or should I just focus on building wealth and investing instead? Robert, you want to kick this one off? Yes, I love this question. And I think you should do both because we want to make sure you're always investing, especially because you don't have a lot of outstanding consumer debt.

22:08For those of you that have credit card debt, you can't out invest high interest debt. So don't try to invest alongside paying 25, 32 % on credit cards, pay them off first. But in this instance, I would go get the secured credit card, go take them 500 or$1 ,000, get the secured credit card. That way you're up and running and you can use that credit card for some smaller things and pay it off every month to build the credit score back up. but I would also keep investing so you're building towards your future. And I wanna really click back on this, you feel behind at 23 years old. You are so ahead of the curve, it's incredible.

22:48We talk to people every day that are 30, 35, 40, 45 years old that aren't even where you're at because you've got your mindset already trained like an investor and not a consumer at 23 years old. And that is the biggest hurdle most people have to go through. So if you're out there listening to this episode or watching this episode right now, and you're 21 to 35 years old, please follow this because you have to start setting aside the money and building your portfolios early so you can let compound interest work its magic over time. I think that's a great synopsis. Yeah, you're doing a great job at 23 years old.

23:27The first credit card I ever got was a secured credit card. All my friends, when they were 18, 19, 20, 21 in college, they all went and got like the Amazon student card. They got the Discover It 5 % cash back card. And I applied for all of them, just like everyone else, but I was always denied for some reason. And it made me so upset because all my friends had credit cards and I didn't. And I felt like I was left out of the cool club. So I had to go to my local Bank of Tennessee branch in Knoxville, Tennessee at the time. And I walked in, I said, hey, can I please have a secured credit card? It's just so we're on the same page.

24:01What that means is you are securing the credit card by giving them cash and then you're borrowing against that cash. So they said, sure, give us$300 Austin in cash and then we will let you have a$300 limit on this credit card. So what I did is I gave them$300 cash, they opened it up, and I put one tank of gas on it every single month, and then I paid it off every single month. And I did that for about 18 months. After that period of time, I had a credit score somewhere in maybe the mid to high 600s, maybe low 700s. I genuinely don't remember. But it was enough where I can go to Discover and I got that 5 % cashback card.

24:40And then I still have that Discover card today. And then I kept doing the Discover, just a tank of gas, a Netflix subscription here, like whatever. You all have to know that there's like a specific sort of, and we have a whole episode on this. So please go find the episode in our catalog. It's slipping my brain at the moment. But what we do in the episode is we break down for you the difference between the balance due date, the statement date, the, you know, when the cycle ends. There's a lot of kind of confusing jargon as it relates to credit cards. Go listen to that episode. But long story short, what you have to do here, Vonna A, is just make sure that when you have the secured credit card, you put something very small, less than 10 % of total utilization on the card, call it a Netflix subscription of$27 a month.