Q&A: Starting From Scratch, Patents, and WTF is TSLY

0:00This is a real good story about Bronx and his dad Ryan, Real United Airlines customers. We were returning home and one of the flight attendants asked Bronx if he wanted to see the flight deck and meet Captain Andrew. I got to sit in the driver's seat. I grew up in an aviation family and seeing Bronx kind of reminded me of myself when I was that age. That's Andrew, a real United pilot. These small interactions can shape a kid's future. It felt like I was the captain. Allowing my son to see the flight deck will stick with us forever. That's how good leads the way. Long day. Late night. Love putting on your makeup, but hate taking it off?

0:36There's really no better feeling than coming home, getting comfy, and removing your makeup with Garnier Waterproof Micellar Water. It easily removes even stubborn waterproof mascara. None of that harsh rubbing needed, and you don't even have to rinse afterwards. It leaves skin cleansed, refreshed, and never dry. Head to Amazon to shop Garnier Waterproof Micellar Water now. Hey everyone, and welcome back to this week's episode of the Rich Habits Podcast. our Q &A edition. We've got a bunch of really good questions in store for y 'all. These are dive deep questions. These are high level questions.

1:09They're weird. They're funny. They're cute. They're everything in between. So we can't wait to jump into things. But before that, we just also want to thank you all so, so, so very much for taking us to the top of the Spotify business podcast chart last week. It was an insane moment for Robert and I. We are incredibly grateful. And It doesn't matter if we're number one, number two, number three, number four. All that matters to us is that we are building the most generous, thoughtful, amazing, like-minded community of all time here at the Rich Habits Podcast. So with that being said, let's jump into our first question.

1:43Our first question comes from Nico B. Nico asks, I'm receiving roughly 50K on my birthday this year. I am 35 years old, so I'm starting late on this financial journey. So with that as a factor, should I still proceed to invest in the Roth IRA, index funds, high yield savings strategy? Or does my age and late start mean there's a more optimal approach? Nico B, I think this is a great question. And yes, it is not too late. 35 is so very young in your investment in retirement journey. So I wouldn't sweat it one single bit. And yes, I love the Roth IRA, index fund, high yield savings strategy. And on top of that, I would carve out a piece for public.com to get those treasury bills and get you invested in cryptocurrency as well.

2:33And then maybe even take a look at one of our favorites, and that's fundrise.com. And maybe look at getting some of that 50K put into fundrise into the real estate portion, and maybe even the innovation fund. I love both of those. And just to add some additional color to Robert's answer here about the fact that you are not late to your wealth building journey, right? At 35 years old, assuming you took all of this $50 ,000 and parked it into the S &P 500, right? VOO, or even another more aggressive ETF like VGT. And from 35 to 67, you earned a 9.5 % annualized return on average over that 32-year timeframe.

3:14your$50 ,000 would be$1.1 million adjusted for inflation at age 67, right? So you are not late to the game. If you do it right, you will be a millionaire. And that's after, you know, assuming you don't add anything more to this principal amount, right? You are absolutely gonna add some more in the future. So don't have that mindset. You are so early, you're crushing it, you're gonna do a really good job. And just wanna reiterate to what Robert said, right? Make sure you got that maybe a little bit, you know, three to six months in a high yield savings. Make sure you don't have any high interest debt.

3:43We don't want any of that. But yeah, go for the stock market. Go for that VOO, VGT, VTI, and diversify through T-bills or music royalties or even in the Fundrise Innovation Fund like Robert awesomely pointed out there. Really good question, Nico. Our next question comes from Jordan. Jordan says, I'm active duty military, so I don't have time for side hustles. Jordan, thank you so much for your service. I pray that you stay safe. With that being said, can you explain to me how covered calls work? I'm trying to generate real passive income. Okay, so let's just take a step back for a second. Robert and I are absolutely going to host a covered call focused webinar.

4:19At some point, it's going to be a nice live stream. We're going to walk you through the entire process, exactly how to execute the covered calls, what stocks to buy, just every part of it. Jordan, what I want you to do instead of actually trying to do these covered calls is I want you to focus instead on covered call ETFs, specifically single stock covered call ETFs like TSLY. TSLY is a single stock covered called ETF that follows the stock of Tesla, right? TSLY. And they have an annual distribution yield of some 50 or 55 % because of the premium collected on those specific calls that they are able to write.

4:54And if you instead just play super passive income, all good, don't even care about learning this stuff, TSLY is a really good alternative as you wait for Robert and I to kind of build out the back end of this webinar that we will absolutely invite you to, right? But if you really want to dive deep, go check out just Covered Call YouTube videos. Go check out Covered Call stuff on Investopedia. If you want to try some Covered Calls, check out the stock SoFi, S-O-F-I. You can write a Covered Call in 100 shares. It'll cost you about$900 right now, which is very affordable compared to some others like Tesla, which are like$25 ,000 or$26 ,000.

5:28But with that being said, Jordan, look at the Covered Call ETFs, dabble into those a little bit, TSLY specifically. And once you kind of understand what the premium looks like and how you're able to generate that through the single stock ETFs as you learn more about it behind the scenes, including from us, then begin to dip your toes in the actual stuff, which we will teach you all about very soon. It's too much to dive deep into just this Q &A episode, but I didn't want to leave you hanging, man. So TSLY is your answer for right now. Yes, and that is a great question. And we will definitely get this webinar out for everyone listening because we have been inundated with people interested in this topic and this investing strategy.

6:07So we will get on that right away as soon as we get through our epic week at FinCon this week coming up. So it's pretty exciting. Our next question comes from AQSO. AQSO asks, my girlfriend has amazing drawing skills and she does this as a hobby while being a full-time teacher. Last year, she found out that there's a massive market for expensive and thematic personalized school and office furniture, such as planners and calendars and stickers, stamps, reward jars, things like that. A few episodes ago, Robert mentioned that you can contact factories directly through Alibaba. How do we do this stuff?

6:40Is there an opportunity here? Is this a business opportunity? How do we even think about this? I love this question. And if ever there was a question that's right up my alley, it's this one. So thank you for bringing this up, AQ. So yes, the answer is you can definitely use Alibaba. It's a great place to go to find real factories to be able to handle any of these products you're considering. Now, let's get to the important part of this equation. Make sure you don't share your ideas with any factories until you have a manufacturer's agreement in place. So you don't share your designs, you don't share your ideas, you don't do anything until you have that executed.

7:16Number two, when you're researching factories on Alibaba on the right in the navigation, when you're looking at the names, just be very cautious if it says limited in the name, because what that means, it's the technical name for what type of company it is, but it's very limited because it means they are a reseller and they're not the actual factory. So keep that in mind, a lot of what you're going to see is Shenzhen, you know, factory XYZ limited. So they might not be the actual factory. So then you're paying a middleman. So try to find the correct factory and the actual factory for the product you desire.

7:55And number three, another little tip that'll help you a lot is to look at the ranking, the rating of it, just like you would see anything else. How long have they been in business? If it says 18 months, you might want to be a little fearful. If you see eight years and a lot of reviews, that's going to be a really good thing as long as they're strong reviews. So just make sure when you're reaching out to Alibaba, you take these items into consideration. I have seen people get$2 million in on their sales for a product that they invented, and then all of a sudden lose control of the product because they never had a manufacturer's agreement in place.

8:31And the factory that they used was a middleman who was sharing their idea to many others in the business. So just protect yourself early on and make sure you get linked up with a good factory. I want to double click on that, Robert. You mentioned manufacturer's agreement twice. What is a manufacturer's agreement? How do you find one? Is there templates on the internet? There are definitely templates on the internet, but what a manufacturer's agreement is. We all hear about NDAs, non-circumvent agreements. It's very similar to that where you're spelling out the relationship of you sharing your idea with them, but you're making sure that the language reads that it's your product, your invention, your idea, your design, whichever form of that it is.

9:15And then you are making sure that they sign and execute that properly to cover you, to make sure you don't have to worry down the line. And God forbid, if they were to go outside the boundaries of that contract and start selling your product and your idea to someone else, you would have legal recourse to go after them. And so this is very important. And I do with every product before I ever even share what the product is with a factory. I make sure they execute it. Really good question, AQSO. So our next question comes from Curtis O. Curtis says, good day from Australia, mate. What's up, Curtis?

9:50That was a terrible accent. I hope everyone just laughed listening to that. Curtis says, my question is, is there a safe way to invest your emergency fund, call it two to three months worth of wages, into stocks and ETFs while maintaining flexibility of withdrawing the money and not having to wait days for it to transfer? Okay, so this is actually a mindset shift I think that a lot of us need to make. It took me a while to make this mindset shift as well. Your emergency fund is not your investments. Your emergency fund is insurance against high interest debt. and making bad decisions with money, right?

10:25So let's say something terrible went happened and you need to replace the transmission on your car or go get new tires, something very unexpected happened overnight and you need$2 ,000. Well, if you didn't have an emergency fund, you would just swipe that credit card at that 30 % interest rate and you'd be in this high interest debt now until you paid that off months and months and months into the future. But because you have an emergency fund of five, 10,$15 ,000 that was not already trying to earn you interest invested in the markets and big tech or whatever that is, sure, you can have it parked in T-bills or even a high yield savings account.

10:56But if Curtis is a little weary here about like the days to transfer, I totally get that. Just keep it in cash, man. Keep it in a cash checking account or a cash savings account if you like. But I don't want you to think that, oh my gosh, my money, I'm not earning any money with this money. I'm making a mistake. No, like you're actually saving the 30 % interest on that potential$2 ,000 expense, right? Like that's how you should be thinking about it. This is insurance. This is not an investment. You invest your investments. You have your investments invested. They're earning your money, like compound interest.

11:27That's a great thing. This is making sure that you don't have to sell your investments early to pay off a crazy high credit card bill because you didn't have that emergency fund in the first place. So I'm going to add another wrinkle to that. And Austin, that was an amazing explanation. So my takeaway on this question is, Curtis, you don't want to co-mingle the two and here's why. And again, it comes down to mindset. If you have all of your money invested and you're worried about that two, three day waiting period of getting that money back, Austin is exactly right. You're going to run it on your credit card.

11:57So here's the flip side of it. If you started taking it out of your investment portfolios, then it's not going to seem like an emergency fund anymore. And I feel you would dip into those investments more and more. I have certain accounts I don't touch no matter what. And I feel that having that separation between these are investments and these are savings for that small emergency fund will keep it that way for years to come and prevent you from constantly dipping into the investments for what you think might be an emergency. Really good question, Curtis. Our next question comes from Bristle Painting Company.

12:31What's up, Bristle Painting Company? I love the name. He says, my wife and I have heard you often recommend how important it is to find a really great tax accountant. However, we don't even know where to start. Do we look at referrals? Do we search Google? What do we do? How do we find that golden tax accountant? Robert, as someone who probably has had a ton of golden tax accountants, what have you done to find your great people? I love this question. And it is a very, very important one because I think besides an attorney that's very good with documentation, your tax accountant or CPA is probably the next most important person that should be in your life for a long time.

13:09So for me over the years, I've been very fortunate. I have found two people that have covered the basis for me over the last 25 years. So I've only had to go through two, but I've had experience with many, many others in the companies that I have invested in and taken equity in. So for bristle painting, I would say this, start by with referrals. So look around, ask people in your area, people that have successful businesses, where they found someone and who that is. Number two, and this might surprise people, find those firms that have social media, that are making an effort to be on Instagram, to be on TikTok and put out good content.

13:47Because then you can just peruse all of their content and see how good they really are based on the answers and the information they provide in that content. And then number three, meetups. I think if you go to some of the local entrepreneur or real estate or housing meetups, you can really have everyone in a room and just start asking around, hey, we're growing, we need this help. Who have you used? Who do you use now? And I think you can find that person, but just don't be afraid to make the move from one to another if you don't feel comfortable. I see so many people with their financial advisor, their accountant, their attorney, they feel bad parting ways with them because they built a relationship.

14:31Well, guess what? They're not going to feel bad getting rid of you if you don't pay the bill. So you shouldn't feel bad getting rid of them if you don't feel they're keeping up with all of the modern laws and rules and what's happening. Because think about this. Think about how many tax attorneys that are out there that don't know anything about crypto, don't know anything about blockchain, aren't aggressive enough and understand that it's not what you make, it's what you keep. You have to find someone that understands pushing the envelope and doing what's best for you and not just checking a bunch of boxes.

15:01This is very important for your future growth. Yeah, I think what's worked for me specifically has been the referral side of the equation and I guess the social media. So I was referred my tax accountant and he's a rock star. His name is Steven and he is the founder of Creative Advising out of Montana. No, North Dakota, somewhere over there. Anyway, great guy, also makes great social media content. He is very, very TikTok friendly, Instagram friendly, right? Always sharing his newest perspectives on if it's some sort of new change to a retirement plan, investing a change to a tax thing with COVID, right?

15:36There's a ton of things that have changed recently. So that's what I think is really important to your point, Robert, right? Finding someone who's, you know, definitely on the younger side, very ear to the ground. They understand what's happening on a day to day, week to week basis in the industry and is not just like a tax accountant, but also like has the heart of a teacher, right? You want someone that's going to be able to teach you as to why they're doing specific things and recommending specific things. So if you can find someone who is not just a rock star, but is also a rock star and can help you understand why they chose the things they chose to do or recommend to you, that's the best of both worlds.

16:08Yeah, I talk to my tax attorney pretty much once a week, and then we do a full-on call once a month because we have so many changing rules and regulations with the IRS and tax codes and everything else. And I want to make sure that we are on top of everything so we have the best strategies that we can, not only for my businesses, but also my partners throughout the United States. Really good question. All right. Our next question comes from Donnie. Donnie asks, how do I patent or trademark my invention if I can't afford it? What alternatives are out there for me? Well, it depends on how big you think this product or idea can get.

16:44One way you could do it is launch the product, get some traction, use that money to then patent and trademark the product. But you're putting yourself at risk because there are so many copycat companies out there that if they see you're growing and you're killing it, they're going to knock you off very, very quickly. And that's a very slippery slope for you. But you can also take this risk, test the market, see where it ends up, see how sales are, see what customer acquisition cost is, and then do the patenting and trademarking later. A couple things you can do. With your patent, instead of doing a utility patent, a much more affordable way is to do a design patent.

17:23You can get this done for much less money. it's not going to be as hefty to protect you in the long term, but it will at least dissuade others from copying you because you do have a patent in general. Number two, you could go to taylorbrands.com and do the trademark on the name and the logo. This would be very inexpensive and a way to get some protective nature on the logo and the name and also the design patent for the product. But like I said, if you want to start out and take the risk, go for it, start building the sales and come back to the patent and the trademark. Yeah, I actually don't really have much of a perspective on this.

17:58I think the first place I would just start, right, is on Taylor Brands. I think maybe Doola has some stuff like that. I would imagine it's not that expensive. I mean, and if you really needed money, I'd imagine you could perhaps even start a crowdfunding campaign like a Kickstarter or an Indiegogo, have a whole idea around it, and maybe get featured on their front page if it does well. and then you'd raise a bunch of money really quick and then you could use that money to go patent the idea as well as build out the prototype and stuff like that. But good question, Donnie. I just, Robert's the CPG guy and he knows what the answers always are.

18:31Our next question comes from Ivy J. Ivy says, I've recently been gifted$500 to start investing. What do I do? Where do I put the money? Really good question, Ivy. So here's what I don't want you to do. What I don't want you to do is to just go straight to a public.com or a Robinhood or one of these online brokers that you see in the headlines and just deposit the money. That's not what we're gonna do. We're gonna be more thoughtful. We're gonna be more strategic. We're gonna be thinking about retirement, right? What I want you to do is I want you to head over to a vanguard.com, a betterment.com, wealthfront.com, or really just type in Roth IRA on Google search.

19:11There's gonna be a bunch of different results that pop up, they're all the same. I want you to open up a specific investing account called a Roth Individual Retirement Account. Now, why this is important, Ivy, is because the money you contribute, this$500, you seem pretty young in your profile picture, I'll give you mid-20s, that money is going to grow tax-free throughout your life when it's invested into VOO, which we'll get there in a little bit here, but that money's gonna grow tax-free throughout your life. So by the time you're 67 here, right, assuming you're in your mid-20s, that$500 will have grown to$27 ,000 after accounting for inflation.

19:49And then you can take out that$26 ,500 profit that you made throughout your lifetime tax-free, right? The reason it's tax-free is because you put it and invested it inside of this specific account. It's very important to use this account, right? Roth IRA. So once you open the account and you deposit the money, so money leaves your checking account and is now deposited into the investment account, you have to invest the money. So what are you going to invest it into? The S &P 500 through the ETF called VOO. It's the Vanguard S &P 500 ETF. The expense ratio is pennies. It is incredible. And you do that for your life, you're going to end up with an extra$27 ,000 in retirement.

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21:38orders over$75 and free returns. Have a great day. Hi, Vijay. Glad to see you're getting started on your investing journey. And let's hope with what Austin just spelled out, you will also start thinking about getting that side hustle, getting that second job, and taking those funds and also adding them to your Roth IRA so you can build tax-free wealth over time. Because remember, it's not about timing the market. it's about time in the market. And just to double click on that real quick, Robert, let's say that Ivy J did start that side hustle. She starts walking dogs. Maybe she's delivering for Uber.

22:12Maybe she's got a really cool crafty business, like something's going on. And let's say that$500, that was the stepping stone, but throughout the next 12 months, she ends up accumulating$5 ,000 and she's still in her mid twenties at this time. Well, that$5 ,000 is now worth$250 ,000 in retirement, right? Compound interest is beautiful and tax-free retirement money is even prettier, right? We love that. So it's not just about the small$500 here,$200 here, but the larger grand scheme of things of where things are going. It might seem small now, but it's gonna turn into hundreds of thousands of dollars in retirement.

22:48You just have to get started. Love it, love it, love it. Just always be consistent. Don't make investing a secondary thought. Make sure that you know where your money's going. every single month and get it invested and you will find your way to really good wealthy habits. Great question, Ivy. All right, our last question comes from S-N-E-H, so maybe Snay. She says, I'm really interested in real estate. I wanna start buying and selling different types of properties, but I lack the knowledge of getting started. I don't know where, who, what to do. I'm so lost. How do I go from where I am right now to a real estate investor?

23:27Really good question. So the first thing I want you to do is I want you to listen to, I think it's episode 16 of the Rich Habits podcast, becoming the first real estate investor in your family. We walk through a bunch of different loans that you might be able to qualify for to help you buy that first property. And investing in real estate doesn't always have to mean physical real estate. It could be investing through an online platform like Fundrise, who has$7 billion of real estate under their sort of umbrella from other investors like yourself here. Hundreds of thousands of people use their platform, including myself and Robert, and they do all of it for you, right?