Q&A: Paying for Infertility Treatments, Living at Home at 28, & Launching a Consumer Product

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0:42Because Marshalls believes everyone deserves access to the good stuff. Visit a Marshalls store near you or shop online at marshalls.com. Hey, everyone, and welcome back to the Rich Habits Podcast, a top five business podcast on Spotify. As you all know, every Thursday we come out with our question and answer edition of the show. You all submit questions via email at richhabitspodcast at gmail.com, via Instagram DMs at richhabitspodcast, or inside of the Rich Habits Network, which is our sort of private community now where we have almost 500 members that we talk to on a daily, weekly, and monthly basis.

1:21It's been a lot of fun over there. But this episode is answering all those questions. Now, before we jump into the questions, I want to remind everyone that today, October 17 at 4 p.m. Eastern Time, we are hosting another free webinar alongside the managing partners of Neos Investments. These are the guys that created the SPYI, QQQY, IWMI ETFs. They have over$5 billion in assets under management. They've been working on Wall Street for decades. And the whole premise of this webinar is to get the expert opinion as what to expect in Q4. October, November, December. How's the election going to impact things?

2:00What's going on with the Fed cutting rates? Is inflation staying low? How is the underlying economy doing? Is the unemployment rate going to go up? All the things that are going to help drive the stock market up, down, left, and right, and in circles will be touched on and talked about during this webinar. Again, it's completely free, so be sure to join us today, Thursday, October 17 at 4 p.m. Eastern Time. There's going to be a link in the show notes below. Yes, I am so excited for today's webinar. And don't forget to go back and listen to the episode with Harley Finkelstein. It was incredible, so informative, especially for all you entrepreneurs out there that are building new businesses, building side hustles and trying to figure it all out.

2:40It was awesome. Also, just a quick heads up, folks, interest rates are falling, but you can still lock in a 6 % or higher yield with a bond account at public.com. That's a pretty big deal because when rates drop, so can the interest rates you earn on your investment. Now, unlike a high yield savings account, a bond account allows you to lock in a 6 % or higher yield with a diversified portfolio of high yield and investment grade corporate bonds. So while other people are watching their returns shrink, you can sit back with regular interest payments. But you might want to act fast because your yield is not locked in until you invest.

3:21The good news, it only takes a couple of minutes to sign up at public.com, lock in a 6 % or higher yield with a bond account only at public.com forward slash rich habits. Brought to you by Public Investing, member FINRA plus SPIC. As of 10-14-24, the average annualized yield to worst across the bond account is greater than 6%. Yield to worst is not guaranteed, not an investment recommendation. All investing involves risk. please visit public.com slash disclosures slash bond dash account for more information. Major shout out to public.com for always supporting the Rich Habits podcast. Robert and I could not be more thrilled that Public supports the show and is an easy way for all of our listeners to start investing and diversifying their portfolios with the T-bills a couple years ago.

4:08Now it's the bond account. Then it was some cryptocurrency, some other collectibles. I mean, one stop shop right here for your portfolio with Public. Yes, we love Public and we've been talking about it for years now it's one of my favorite platforms and i just think they crush it by always staying ahead of the curve and offering everyone these easy ways to really maximize their gains with various products so i love it so our first question comes from amir amir says hello austin and robert my name is amir and i have a pretty general question you both often discuss maximizing the ira and the 401k contributions for retirement but i don't quite see the benefits of accumulating wealth for when I'm 60 or even 70 as the laws may change them.

4:50Why not take risks to retire early? I'm currently making$85 ,000 a year in my first job in the United States, which I started three months ago. All my savings are invested in real estate in my home country, and I haven't decided whether to bring that money to the US or not. My question is, wouldn't it be better to invest in a small cash producing business like a laundromat rather than putting money into an IRA for a future I can't predict in terms of health or enjoyment? Or alternatively, should I invest directly in the stock market to grow my wealth and pay taxes while I'm still young enough to enjoy it?

5:23For context, I'm 34, I'm renting, I have no debt, and I have a net worth of around$300 ,000, which is all invested abroad out of the United States. Thanks a lot for your great podcast, and I look forward to hearing your insights. Robert, do you want to kick this one off? Yes, I love this question. Amir, you're on the right track. You know, back in the day when I was coming up and I was 34 years old, I was very aggressive and I invested a lot more money in small businesses like you're speaking of. And I didn't balance it out enough, in my opinion, in retrospect, with having the Roth maxed out, with having the bridge account maxed out as much as I could every year.

5:59So I think you're on the right track, but you have to also ask yourself, what if you take all of this money from the$85K per year, you invest it in a laundromat, maybe you invest it in a landscaping business, and you start buying pieces of all these small businesses, and what if they don't make money, or worse, they go out of business? Then your money goes to zero and it could be two, three, four, five years worth of your investment capital goes to zero, which in the stock market, in the ETFs and index funds that we talk about, the likelihood of going to zero is almost zero. Because with the stock market, like we talk about the NASDAQ and the S &P 500, generally there's going to be some volatility, but they go up and to the right over time.

6:43So that's where I'm at on this. I think you could do both. I wouldn't bet the farm on small businesses only and individual stocks. I would really hedge my bets by having some money into these funds we talk about and making sure that you are balanced enough to where you can take some shots in investing in these small businesses, but not with all of your funds, because I just think that's too risky. You never know what's going to happen. And you just always want to make sure that you have some diversification. I think what's also important to remember, Robert, and people don't exactly take this into consideration unless they're told it.

7:20They explicitly understand this concept. The stock market, unlike a laundromat business, unlike real estate, unlike private investing via startups or whatever else, right? The stock market is 100 % liquid. If tomorrow I needed to liquidate my entire portfolio and I needed to take out$100 ,000, I can do it. I absolutely can do it, right? I can sell my stocks and get my money out tomorrow. If you needed to sell your laundromat, right? If you needed to, now sure, your laundromat theoretically could be valued at two, three, four times owner's profits. And so like in your brain, there could be a specific, you know, valuation or price on this laundromat.

8:00But if you wanted to tap into that, right, if you wanted to sell that, it's going to take you months, if not maybe a year or two to even sell this laundromat. And so, Amir, I just want to remind you that, one, the concept of liquidity is very powerful, especially when the thing that you're investing into, the S &P 500 in this case, over the last two years is up 53%, right? That means if you invested$100 ,000 into the S &P 500 on January 2nd of 2023, when the stock market opened, it would now be worth$152 ,000. And the best part, if you needed the money tomorrow, you can sell all$152 ,000 of that right now and it be deposited to your checking account the very next day.

8:42So that is what's so powerful about investing in the stock market is you're getting the best of both worlds right now. Not only are you seeing the awesome gains, especially if you're investing your money correctly, but you also get liquidity. Now, the other side of this equation, to Robert's point, and I really agree with him here, why not both, right? It's like you don't have to be so exclusive to, okay, should I be taking risks at a younger age to maybe retire early? Of course you should, absolutely, right? You're 34, I see that you're renting, maybe there's a world where you want to buy a house one day in the United States, we really encourage you to do that.

9:12But, you know, there's absolutely a world where you can take risks, you can start new things, you can listen to Monday's episode with Harley and figure out how to be an entrepreneur and what really drives you. But don't do those things and completely forget about the Roth IRA and completely forget about the 401k and completely forget about the vehicles and strategies that we talk about on a weekly basis that will all but guarantee you to retire wealthy if you consistently invest over the next, call it 30 years of your life into this machine that we call American capitalism, aka the S &P 500. So I think it's a balance.

9:49I don't think they're mutually exclusive by any stretch of the imagination. And I also just want people to understand how important it is to have liquidity, especially with the returns that we're seeing in the stock market. I think that is a great bow to put on my answer because liquidity is so incredibly important. And I see it every day where people don't even consider liquidity. They say, well, I'm going to go invest in this real estate deal, or I'm going to go invest in this restaurant deal. And all of that sounds great if you're getting distributions, but that does not mean you're liquid.

10:20Many times in real estate, you might have your money tied up for five, six, seven years and you can't touch it. I have that situation right now with an LP where I invested$250 ,000 into an oil refining company. That was supposed to mature in seven to eight years. It's been 15 years and my money is still locked up. That is not a good place to be. That's why you want to have diversity and you want to make sure you don't have all your eggs in one basket because then if you need the money for a great deal, a health issue, or any reason you'd want liquidity, you don't have it and it's just really a tough situation.

10:56So I'm really glad you brought that up. Now, our next question comes from Anna. Anna says, good afternoon. My name is Anna. You've answered a couple of my questions on the podcast before, and I've been a big supporter ever since. I'm currently working with my parents running our family construction business. Lately, we've run into many employee issues and issues with general time scheduling and cost-effective ideas. I have so many thoughts on how to improve the company, but I am shot down left and right. I've worked here for five years doing all aspects of the job, and I've even increased our installations by over 100 projects per year.

11:27I know what I'm doing and I need advice on how to handle employee conflict along with ownership conflict. I have lost two lead employees and now two more part-timers are threatening to leave due to the working conditions. However, my parents who own the business won't change. They don't agree with what the employees asked. However, I do. I'm at the point where I need to choose disobeying or even disrespecting my parents or letting them ruin the company they've spent 30 years creating that I hope to inherit one day. Thanks for all your help, Anna. Robert, this is right in your wheelhouse. I love this and I don't admire your situation, Anna.

12:03I went through it earlier on in my career with my mother. We took over my grandparents' restaurant and bar and we renovated it under the guise that we would do it my way. And that lasted about six months. I went on vacation and I came back and she took away the fresh chicken, the homemade pasta. She bought all this store bought stuff because it was cheaper to get profits up. And she really decimated the business because she wasn't listening to how I was doing things. And in your case, it's even more difficult because you are in the trades. The construction business I've been in for over 20 years is very difficult because you're always going to have people coming and going and even key employees may not stay because it's so easy for them to get their side hustle going by meeting all of your clients and then your clients going to them and saying, hey, can I just hire you to do this side job rather than going through the company?

12:59Or hey, how about you just do the work next time with the crew and we won't tell anyone. It is an endless battle. I went through it right before COVID with my construction company where I had two of my key people started taking my customers from me because they could offer lower pricing. So it's a very difficult situation. We would gladly, or at least I would gladly take a look at your business plan, but I think it really comes down to having the hard conversation with your parents. They may be stubborn. They're set in their ways. Like you said, they've been doing this for decades, but you can look at it and you can approach them in a way that's professional.

13:36Maybe you put together your business plan or a PDF that says, here's where I feel what we're doing wrong. Here's how I believe I can improve on that. But you have to be able to give me some leeway to be able to make these changes, because the problem is many companies are successful despite the ownership. And so you might have a goldmine right in front of you if you can get your parents to listen. So I think the first step is having the hard conversation with them almost in a disobedient way because they have to understand where they lack in knowledge or keeping up with the times of how to change that culture and how to be able to keep people.

14:15Because I truly believe throughout all of my companies right now, culture is almost as important as pay, even though people are complaining that they can't make a living wage or the times are tough. But people want to go to a job where they're respected and they feel cared for as equal, in my opinion, to the money itself. So that's where I would start. I would really look at it from a cultural perspective and an educational perspective with your parents and see how it goes. And if you need any help from there, DM me in the school community and I'll do what I can do. I think the only piece of advice I could share to Anna here is that as a fellow entrepreneur business owner, I don't have a construction business with all these employees.

14:57I've got a much smaller business here. But if one of my employees was just completely saying, hey, this doesn't work. This is what you should do. Hey, Austin, you need to change these things. I'm stuck in my ways. I don't want to do any of that. But if that same employee to Robert's point said, hey, here's the problem. Here's a proposed solution. Here's how this proposed solution will impact the financials, the marketing, the customer demand, everything else a part of the business that you have such great insight into. And here's what, you know, this proposed solution, how it's implemented and what, you know, goes on over the coming years.

15:28Then I'd have a much higher propensity to hear them out, right? So maybe your parents and their defense are like stuck in their ways. They think that you've got this idea or two and they're like, I don't know about all that. I don't know how it's going to impact the business right now. We're making a little bit of money. I don't want to change anything, right? They kind of feel like if they move at all, things could change for the worse. And so I wonder if there's a world where you could show them, here are the solutions. Here's how those solutions might impact these profits and the customers and marketing, everything else that goes into this business, and what might transform into a great solution over time.

16:00I don't really have a perfect answer, but in their defense, that's maybe what's happening. I just think, and that's a great takeaway, Austin. I just think that in my experience and use this how you will, the more I empower my key people, the better off I do. And that's something you need to get your parents to understand. If you're in there grinding it out, finding ways to increase business, increase profitability, better processes, you need to get your parents to understand to let you have some empowerment so you can thrive. It has worked very well for me over the years, and I just think that's the best strategy moving forward.

16:35So good luck. Our next question comes from Christian. Christian says, hey guys, I recently found your podcast on Spotify and I binged eight episodes just yesterday. I was actually considering going down the Dave Ramsey route since a friend used it to pay off more debt than I currently have. But after listening to your content, I'm rethinking my approach. I'm Christian. I'm 28 years old. I work in marketing. I make$82 ,000 a year. I have no 401k. I have no Roth IRA and I only recently started saving money. I owe$83 ,000 in student loans with monthly expenses of about$2 ,000. I could reduce that to$1 ,500 by paying off some of my smaller debts.

17:13I have a take-home pay of about$5 ,000 a month, and I only started earning this much as of recently because I was making$45 ,000 for the last couple years, and I didn't really have anything left over. However, I still live at home. I help my parents with the bills, which is much cheaper than living on my own, as a one-bedroom apartment around here is$2 ,000 to$3 ,000. I'm considering moving out maybe with some roommates, but my goal is to invest in real estate and generate about$6 ,000 a month in passive income eventually so I can quit the nine to five grind. My main dilemma though is whether to stay at home and aggressively pay off my debt before moving out or move to a new city and focus on building connections.

17:50Staying home to pay off my debt seems like the responsible long-term play, but moving out also feels more exciting and can open up some new opportunities. I'm looking for advice on what you do in my situation, specifically how to balance paying off debt, moving out and planning for the future. I feel like I'm really behind compared to others that are my age and I really wanna catch up. What is the best path forward for me? All right, Robert, I'll take this one first. So Christian, really, really proud of you for making now$82 ,000 a year. That's awesome. You've gone from 45 to 82. You should feel really, really excited and proud of yourself for just absolutely doubling for the most part, your income, right?

18:27That's gonna be a really, really big help. Now, I'm on the fence about you living at home at 28 years old to save money. In my opinion, I think that everyone should eventually, you know, call it before 28, move out of their parents' house, be on their own. There's some sort of dignity that comes with doing your own laundry and making your own food every day and having to take out your own trash and be a responsible young adult, right? So I definitely think that you should move out as soon as you possibly can. However, with that being said, you are in a really good spot right now. Your monthly expenses are about$2 ,000.

19:03You take home about five, which means$3 ,000 a month year can be saved to either pay off your student loans early, which I think we certainly should do, but more importantly, start investing, right? The big thing that you said here, you have no 401k, you have no Roth IRA, you have none of these things. Dave Ramsey would tell you, don't even invest toward those things. Go focus on your student loans. And at, let's call it$3 ,000 a month, it's gonna take you three years to pay off your student loans. Now, in my opinion, I think that you can kind of do a sort of hybrid approach, which is what Robert and I really, really encourage our listeners to think about here.

19:38My girlfriend's a great example of this. She has student loan debt. She's got like 30,$35 ,000 worth, but she also now has 20-something thousand dollars in her Roth IRA at 26 years old because she's balancing paying off the debt while also investing. And so Christian, I want you to do the same thing. I want you to do three things specifically. So the first thing I want you to do is build an emergency fund. Let's call it three months of expenses because you are living at home, so things are pretty cheap right now. So go put six or$7 ,000 aside, put that in a high yield savings account on public.com and that's gonna be the buffer between you and unpredictability that comes with life.

20:13The second thing after you've done that, which again, that's two months of savings for you, right? So after two months now, it's January. The first thing you're gonna do is open up that Roth IRA and you're going to start maxing it out. That is about$600 a month that you'll be investing into this Roth IRA. You're going to be investing it to VOO, VTI, QQQ, right, the S &P 500 at large, and that's going to continue to grow for you throughout your life. And now the third thing I want you to do after you're, you know, maxing out the Roth IRA, after you've begun to have this emergency fund, is now if you want to put a little bit extra toward paying off these student loans, right, you're at about probably$800, maybe$900 a month in payments.

20:53If you want to double up your payments and do maybe$1 ,500 or$1 ,600 a month, so begin to snowball these student loans down, that could be a cool idea. But just don't make the mistake of following this Dave Ramsey ideology of going all in on paying off debt and not taking advantage of the number one thing you have right now at 28 years old, which is time. Time in the market. Compound interest is a beautiful thing. You are not too late. You're only 28 years old. You've got 40 more good years of investing ahead of you before any sort of nice retirement. And in 40 years, every dollar you invest right now is worth$30 in the future because of compound interest.

21:32I love this. You crushed it. Again, we need our mic drop, our foam mic drops. I would add one thing. It's a little different. Only because 29 years old was one of my best years in my entire career as far as advancement, financially and growth, I would stay with your parents for one more year. I would get the Roth going. I would get the emergency fund going, get all of that set up and started so you can let time and compound interest help you. So that is the one thing that I would do differently is I would suck it up, do one more year with the parents and get as much money put away in that and keep making the regular payments on the student loans.

22:13Because as you all know, we don't agree with Dave Ramsey's method when it comes to paying off debt. We think that good and low interest debt is fine in your wealth building journey. So that's the only change I would make is to look at maybe putting off the networking and all the fun and all of that and moving to a cooler city for maybe six months to a year. So you could get those other things up and running because compound interest is your friend. And the sooner you get that started, the better. My fear is if you move out now, yes, you're going to feel better. Yes, there's going to be more networking and the network effect may help you earn more money, which it probably will in the long run.

22:51But in the beginning of this stage, you need to get the Roth moving and you need to get money saved and invested, period. My fear is if you move out with buddies, you get to a new city, you're going to start partying more. You're going to start going out and doing cool stuff. That's going to eat up a lot of your free cash flow and you're not going to get started. That's my take. 100 % agree. And also it's like Christian, you are 28 and you work in marketing, you absolutely should have your own little agency, right? You should be doing social media marketing for small businesses around you. Maybe you do website design.

23:25Maybe you do social media posts and management. Like there's a ton of different things that you can be doing right now. I mean, go find 400 of your favorite content creators on YouTube, Instagram, Twitter, and whatever other platforms you want and DM every single one of them saying, hey, let me help you repurpose your content on LinkedIn, right? LinkedIn's a big thing right now. Everyone's trying to figure it out. Or let me help you repurpose your content on Twitter, right? You're a big Instagrammer, you're a big YouTuber, like, let me help you cross post some stuff. We pay people hundreds of dollars a month to help us do that because we don't have time to do those things.

23:58And these people do it great. Why aren't you one of those, you know, people that could help? There's a ton of different ways to make money in marketing. We're rooting for you. And we really, really believe that call it two, three, four years from now, you're going to have call it 30, 40, 50,$80 ,000 invested in the stock market that's only going to continue to double every seven years. You're going to retire a multimillionaire in your 60s and 70s and we cannot be more excited for you. All right, our next question comes from Lisa. Lisa says, Hi Austin and Robert, thank you so much for all the information and inspiration you provide.

24:29I've learned so much since starting your podcast and my husband and I have made several improvements with how we manage our money. We are both in our mid 40s and have two young children. We're in the process of buying a house and selling our current one. The price difference is less than$100 ,000 and we have a good amount of equity in our current home where we only owe$55 ,000 on the loan. I have two questions. Question number one, should we use all the equity and put it into the new house or take some out and invest it? And then question number two is, should we consider a 15, 20, or a 30-year mortgage when we do this?