Q&A: Unemployed MBA Grad, Starting a Fitness Business & Paid-Off Truck

0:00This episode is brought to you by Accenture. When your advertising operations fall out of sync, everything else follows. Spotify and Accenture are working together to reinvent the rhythm of ad sales, using automation, analytics, and smarter workflows to simplify campaign delivery and access better data across the business. The result? Less time spent on operations, more time connecting brands with the moments and fandoms that matter most. Learn more at Accenture.com slash Spotify. This episode is brought to you by Facebook. So you were scrolling on Marketplace, and there it was, the bike you'd been searching for.

0:39You sent a message, and it turned out the seller was super chatty, kind of funny, and an avid cyclist. The next thing you know, you're in a cycling crew. Well, a community cycling group. The thing about Facebook, you might find more than what you're looking for. From a browse to a bike ride, this summer, find more on Facebook. Hey everyone and welcome back to the Rich Habits Podcast question and answer edition brought to you by public.com. These are Thursday episodes where every Thursday we put ourselves in your shoes, pretend we're going through whatever you're going through and answer your questions.

1:15You can ask us questions on Instagram at richhabitspodcast or you can email us questions at richhabitspodcast at gmail.com. We've got, I don't know, Robert, another 100 questions coming at us via email this last week and another 200 in the Instagram DMs. So if your questions have not yet been answered, please don't lose patience with us. We're trying to get back to everyone, do everything we can. And I'm excited for this episode, Robert. Let's just jump right in, man. Let's do it. So our first question comes from Nick D. Nick says, hey, I'm 30 and I paid off my house and my truck this year. Wow, Nick.

1:50Let's go, dude. Nick says, I make$75 ,000 a year and I have$18 ,000 in a six-month CD paying 4%. I also have$4 ,000 in a high-yield savings account. I keep$4 ,000 in my checking. My Roth 401k has$125 ,000 and my Roth IRA has$15 ,000. Which, by the way, holy smokes, all that at 30 years old, you know, plus the paid-off house and the truck, like, I don't know what you're doing here, Nick, but you're making some good money and you're making some good money decisions. So this is awesome. Nick says, my question is, I'd like to tear down my house and build a new one. I'm currently saving by moving my money into my Roth IRA every year and then pull the principal out once I hit a certain number.

2:31Is there a different account I should be using instead? Thanks again. I really appreciate the podcast. Good question, Nick. So first off, I'll answer your question directly. You should be using a different account. You should treat your Roth IRA as your retirement account, an account that you're only contributing money to and investing through and building, right? Because remember, all the profits in this account are tax-free. They'll never be taxed by the federal government. So what's taking place now inside this Roth IRA, these contributions of$7 ,500 a year get invested, they compound. And yes, you can pull your principal out penalty-free, tax-free.

3:10You can do that, but that's not a good wealth building strategy. We want people to contribute money to this Roth IRA, Robert and I believe it's the best, most powerful wealth building tool that's given to us as US citizens here is to contribute to this Roth IRA, let it compound and grow tax free. Do not be using the Roth IRA as this kind of piggy bank. If you want to use a piggy bank, just do your high yield savings account, you can earn interest in that high yield savings account of three or 4%, I guess, depending on what the Fed's got going on. And that's how you can really piggy bank and have your number that you want to hit and pull it out and whatever you want to do there.

3:44Robert, I'll let you give your take, but I want to hear your perspective on having a paid off house and then tearing it down to build another one, which, I mean, you do a lot of real estate. What is this? Yeah, I think it's bad timing, honestly, because he's doing so well right now. And the way I look at it is, let's say they tear down the house, that costs 20 grand. Then they build a new house and let's say it's 500 grand and you do a construction to permanent loan to build the house, prep the land, get all the things done. And that down payment is 10 to 20%, which is pretty traditional. You put yourself in harm's way to where all of a sudden, all that money that Nick's got saved up and doing well and all of that goes bye-bye.

4:30Because then all of a sudden, he's doing great. And it seems like he's on top of things. But then if you have to come out of pocket$100 ,000 to build this home and furnish the new home and do all of these things, all of these hidden costs, Nick's going to be going backwards for a very, very long time. And I don't like to see that because in this situation, Austin, you and I talk about building the base of that$100K. Nick has done that. But then he dips below that base. And to me, that's the scary zone because you always want to have that$100K as soon as possible saved and invested and let compounding do its job.

5:04So I think, Nick, you should push this back two years. I think you should get all the money you can set aside for the home so you don't have to go into these accounts or go into them very little. Because what I don't want to see happen is you build the house at the top of the market. You're not forcing equity right out of the gate. You may have a little bit of equity, 5 % maybe, but you're just putting yourself in harm's way by having to eat away at all this money you already have working for you in these accounts. You know, on top of all this, Nick, and I can appreciate all you've accomplished just making$75 ,000 a year.

5:37I breezed over that in the beginning. Like really, really good job here, man. On top of all this, right now, all you pay are taxes and insurance on your house. I don't know what your house is worth. It's probably two, three hundred thousand dollars maybe considering, you know, that you've got it paid off. Maybe it's less, maybe it's 150 or 200 ,000. I really don't know. But you don't have a payment, right? You don't owe a bank anything right now on this mortgage. And interest rates right now are six and a half, seven percent for a 30 year, depending on your credit. And so just know that by knocking your house down and building a new one to Robert's point, I would imagine you wouldn't be doing that in cash.

6:13You've only got 15 ,000 in this Roth IRA and you're talking about pulling principal out once you hit a certain number. I'm assuming that certain number is your down payment on a larger mortgage of some sort so you can go build this house. You are trading what could be a lot of financial freedom, very low monthly overhang, very low spend for what could turn into you're now spending thousands of dollars more every month servicing this debt. You've got a higher property tax because I'm assuming the house you're going to buy is going to have a higher assessed value than the one you're in there now.

6:46Higher insurance costs, because I'm assuming it's going to be worth more than what you're doing and have right now from a replacement cost perspective. So just know if you do want to do this, which again, do whatever you want. Personal finance is personal. You can obviously afford this. You're investing while doing all the cool things, just know what you're getting yourself into. The last thing I want to see happen here, Nick, is making$75 ,000 a year. Then you go do these things or have some sort of goal in mind. You accomplished that said goal, but now you're house poor because 48 % of your monthly take-home pay goes towards servicing this new mortgage plus the taxes, plus the insurance or whatever utilities.

7:25It's a bigger house, a more utility cost. So just make sure you run the numbers and you are very, very comfortable going from no mortgage, no payment, no nothing to I'm going to go likely again, the way you described it is that you're saving for a down payment, borrow a bunch of money and have this big new cost. Yeah, I don't have anything to add to that. Nick, keep doing what you're doing. Personal finance is personal, but that's a great take, Austin. Our next question comes from Andrew in California. Andrew says, Hey guys, huge fan and follower of you both. Thank you for sharing your wisdom.

7:55My wife and I are in our early 50s. We We have two teenagers. I'm a W-2 employee with about$900 ,000 saved in my 401k and IRA accounts. And we have another$200 ,000 in a bridge account as well as one rental property. My wife is a fitness coach. She's in the process of starting an online training business to help with the college expenses that are going to be around the corner for us while still being able to earn money when we travel. She will set up an LLC, but we'll be doing a little DBA action here under her personal brand. Few questions are, do you recommend a platform for LLC formation? Do you suggest a specific online bank?

8:31Is there value in using a local bank? Can you share tips on marketing and social media? I'd like the teenagers to help with the content. How should we consider paying them? Does maybe forming an S-Corp make sense? Thank you all so much. I really appreciate it. Robert, I'll let you just answer these one by one rapid fire. So here, I'll ask you and you answer. Do you recommend a platform for LLC formation? Yes, I like Taylor Brands because you can do it all in one place. Do you suggest a specific online bank? I don't. I know you have one you love. I like Chase Bank because if you go into Chase Bank and you seed$5 ,000 for 30 days, you make sure to set up the business account, the LLC account with the right NAICS number.

9:13Make sure you write that down for any of you starting a business, you get the seating, the NICS number, and you present the operating agreement for the business. You can get so many perks from Chase Bank. That's why I like them the best. And then the one that you were alluding to that I like is called RHO, R-H-O, just online bank. I use them. They're super simple. Is there value in using a local bank? There is sometimes if you have a relationship with them and you plan on getting loans. I like Chase Bank better. But if you have a small local bank, especially if you're extending your rental property portfolio, I love keeping them in the pocket as well.

9:51Can you share tips on marketing and using social media? Yeah, you're going to have to do a lot of marketing. I would start doing that now ahead of it all, which I'm sure you're already doing. I think the main thing is if you think about the fitness industry when it comes to social media, it is jam packed. It's like long care for the trades. Anyone can start a fitness business because everyone thinks they're qualified. I would figure out what is your niche. I would figure out what you're best at and who your audience is first and foremost, because the more you know your avatar, the more you can create the content around that avatar.

10:25Is it younger people? Is it older people? Since you guys are in your fifties, maybe it's how to build the best longevity fitness programs and you build the content around that and be consistent. Last, I would like my teenagers to help with content. How should we consider paying them? And does forming an S-corp make sense for that? Yeah, I would put them on payroll, pay them a normal fee. Don't give them crazy hourly rates or salaries. Give them a normal fee for the job. Include them in the social media so you don't get audited because it's totally fine. You can have them under 16 and doing the things that you want them to do within the social media.

11:03and an S corp makes sense maybe down the road. But right now, I always tell people this rule. Don't form an S corp first until you've established the business because it costs more to operate and takes more time from an accounting perspective. I always like to tell people, start with a traditional LLC, get up and running, you can be a sole proprietor, whatever you wanna be. And then once you start making consistently over 75 or$80 ,000 a year, You can then turn it into an S-Corp to get the advantages of an S-Corp. But when you start as an S-Corp, you can't then roll it back to a normal LLC. Great rapid fire there, Robert.

11:41Only thing I'll add is that Stand Store, I think it's just stand.store, they've got a ton of tips on social media for content creators that are monetizing their audiences with digital downloads, courses, classrooms, communities. Like Stand Store's got all the good stuff. So definitely have her do her homework with the stuff that Stan's store has shared in the past. Good question, Andrew. And we are rooting for you. Our next question comes from Nicole. Nicole says, Hi, Austin and Robert. I started listening to you all at the end of last year, even though I had your podcast saved. And then she's got the emoji of like a face palm.

12:14Oh, gosh. I'm a little late to the game. Anyway, I'm following all your steps to get where I want in life. But the question I have is, I'm a small business owner and I'm adding my daughter to payroll. I want to set up the checking account or savings account to a UTMA custodial account. I did some deep dives on some AI chatbots and they've given me a few options to try. I'm looking to do it with Fidelity so I can do it in all sort of a one-stop shop here, but I noticed Fidelity only offers their own ETFs. They do not offer VOO or SPY. How do I invest in those types of things on Fidelity? Or maybe should I go to a different brokerage?

12:55That's a good question, Nicole. So yes, when it comes to Fidelity and Schwab and, you know, some of the Vanguard, right? VOO is Vanguard's S &P 500. FXAIX is Fidelity's S &P 500, right? It's the exact same underlying investment, but the different platforms have their own way and title to invest in that. So by talking about VOO and SPY, of course, Fidelity is not going to offer a competitor's ETF on their platform. They want people to invest in their ETF so they can make their fees. FXAIX is the way to do that on Fidelity. You can still do all that stuff that you were alluding to on Fidelity. You don't have to flip back and forth or do anything crazy there.

13:37Just know a little bit ahead of time as to what you're investing in, how to search. right? I'd probably search S &P 500 index for the title there, keywords, instead of VOO or SPY, because again, they're not going to have their competitors' funds pop up when you search. But remember, the underlying index of the S &P 500 on Fidelity is the same as Vanguard, is the same as Schwab, is the same as insert other thing here. And then the only thing I'll add, Austin, is for the payroll part, we use Gusto. We love it. I have so many small businesses. So I think there are really good cost-effective option.

14:13You can also research and see what else is out there. There's Toast Payroll and all these other ones, but I use Gusto. I think it's great and you should check it out. Yeah. I think with Gusto, actually, I know they've got some referral thing. I wish I could tell you the Gusto referral so we can make a buck here. But with Gusto, what's cool is I think they charge, I don't know, 40 bucks a month to run payroll or something of that nature. It's super cheap. It's super reasonable. It's awesome. I've got myself on payroll. I've got Ireland on payroll. Like it just you can add people, subtract people so easily.

14:44It's awesome. So Gusto, definitely recommend them. But to Robert's point, maybe do some shopping. Maybe see, maybe you don't need a Gusto. Maybe you need something much less, which I don't know what competitors are more flexible than Gusto, but who knows, right? If you want an ADP payroll or you want to Robert's point toast or something, right? Like it's all the same stuff. Just go with whatever's easiest for you. Now, before we jump to our next question, got to give a shout out to public.com, the investing platform for those who take investing as seriously as we do here on the Rich Habits podcast.

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16:31Yeah. Public definitely has the best tools and they're always making these changes to stay with the markets and what's working. And so I think for anyone that's just getting started or even people that already have things up and running, they should definitely check out public. And of course this is paid for by public investing full disclosure in the podcast description. So our next question comes from Noah. Noah says, Hey, guys, I've been following your podcast for a few years, and I really appreciate all you do. I'm 22 years old. I'm graduating in May of 2027 with my MBA, and I have a bachelor's in finance.

17:04I'm looking to move with my girlfriend to Billings, Montana after we graduate. I'm currently$80 ,000 in student loan debt. And I'm asking, how would you guys suggest I find a job, especially one that helps me pay off my debt as fast as possible. Everything I see is saying that the job market is very bad right now. What would you suggest? What would you guys do if you were in my shoes? Good question, Noah. So Robert, you've hired a bunch of people throughout the years. I've hired a handful of people over the years. I've helped people get hired. My biggest piece of advice when it comes to anybody finding a job is you will never get a job in 2026 by clicking Easy Apply on LinkedIn or one click apply on Glassdoor or one click apply on Indeed, you will be a resume among 137 other resumes.

17:53And I've been given 137 resumes and I give each one about 10 seconds of reading before I scroll to the next one. Right. So like by doing the easy click apply, whatever. Yeah, you're getting your name out there technically. And it's a numbers game at that point. You're gonna have to apply for a thousand of those until maybe your resume eventually boils up to the top and someone likes it, but you're just going to be another resume. The advice I could give people is to not do the one-click apply. Yes, apply to the job, right? But also apply to jobs that you have a warm introduction to. I think Ken Coleman calls it the proximity principle, where like the best people that are able to, you know, get the job, do the thing, accomplish the goal, are surrounded by other people doing the job, accomplishing those goals, getting those things already, right?

18:42For example, I've helped people get jobs in the past. And what that simply means is, hey, my friend, Martha, just applied for this really cool job at XYZ Company. I'm connected to someone that works at XYZ Company. I'm friends with them. Let me reach out on Martha's behalf on LinkedIn or text them or send them an email. Hey, George, just want to let you know that Martha has applied for this role at XYZ Company. Martha is so excited about it. I would really appreciate it, George, if you pulled her resume out of the pack and hand-delivered it to the hiring manager or just share her name with the hiring manager so that the hiring manager can find that resume and really thoroughly review that application.

19:26Not expecting you to give her the job, but just give her a better chance. Give her a little bit more time of reviewing her application there. Thank you so much, George. wishing you the best, my friend. And it's just that right there normally turns into at least an interview, right? It doesn't always turn into a job hire, but you go from someone in a pack of 137 to now in interviews of six other people. And then it's up to you to actually get the job and prove yourself. Like that's nothing I can help you with here with this advice of, you know, star method, do all the prep work, stuff like that.

19:57Like go figure that out, right? But the advice I can give you is when it comes to applying to jobs, those warm intros, that proximity principle we're talking about here is invaluable because it's going to turn you from a 1 in 137 to 1 in 6. And getting a job going from 1 in 137 to 1 in 6 is like astronomically higher odds, especially if you're applying for multiple jobs, right? Because at that point, it's just a numbers game of like interview this, interview that, interview that. That's my advice. Definitely reach out to and apply for companies that you have people in your network. And don't be afraid.

20:31Don't be embarrassed by any stretch of the imagination to tap your network. Email everybody. DM every, hey guys, I'm looking for this job. I'm so excited. Here's what I want to be doing. If you know anyone, you know, my name's Noah. You know, I'm a hard worker. I've got this great MBA from this really cool school. I'm so excited to get hard work in here. I'm resourceful. I'm a sponge. No task is too small for me, right? Please let me know if you know anyone hiring. And that alone is going to make people start to say, oh, yeah, actually, I do know this here. And that can get you a couple of warm leads and maybe help you start this process.

21:03I'd say you killed that. The only thing I'll add is, and it's kind of piggybacking off of Austin's take, is understanding the difference if you're moving to Billings. Are you looking for a job or are you looking for the perfect job? That's a big distinction. Because when you get there, if you need money immediately, there's going to be jobs. Everywhere you go, everyone is hiring. And when people say it's tough to find jobs, it's just because they're not doing the work. They're not networking. They're not doing what Austin said, using their friends, family, and the people that they know from school to help them find something.

21:35So in my opinion, get to Billings, get settled in. The very next day, I don't even care if you have the IKEA nightstands put together yet. Go out, shake some hands, get around people, and find a job that pays the bills while you find the career. And it is always, always, I've learned this recently here. And if you connect with me on LinkedIn, hey, thanks so much. I'd never post on LinkedIn. I'm bad at it. I should be posting more, right? Like let people know. But I swear, Robert, every time myself or Christian, like if we post on LinkedIn about something cool, some people we used to work with or some cool opportunity just finds its way over to us, right?

22:13And so like Noah, I would post on LinkedIn every single day if I were you. I would say, hey, this is my new daily journal for finding a job now that I have an MBA. Come along for the ride. And just here's what I learned today about applying for jobs. Here's the mistake I made today about applying for jobs. Here's how I'm taking a break from applying for jobs or whatever's going on. But I would post. I want everyone to know who Noah in Billings, Montana is by the end of this year, because Noah is posting on LinkedIn about and then once you get the job. You can continue, you know, talking and stuff and stuff.

22:46But like the squeaky wheel gets the grease. Be that squeaky wheel, Noah. Let people know what you're up to. Our next question comes from Joe. Joe says, I've recently started listening to your podcast. Like the information that you provide. I'm 59, pretty well versed in investing, personal finance and taxes, and I've increased my financial education over the years. But I have run into a situation that I need your insight on. Several times I've talked to financial advisors and they've pushed me toward a significant bond percentage recommendation in retirement. And I know the 60-40 equity bond split is very common advice in financial planning articles, even in the highly referred to 4 % rule from the Trinity study.

23:30But I personally don't see the value in bonds. I realize bonds decrease volatility of a portfolio, portfolio capital preservation, but they also decrease the return of that portfolio. If I have two or three years worth of income sitting in a high yield savings account in retirement, are bonds still necessary? Would bonds be better? We also have rental real estate that's not correlated to the stock market that could potentially be liquidated in a major market downturn. Are bonds still necessary if someone's okay with market volatility and have those spending guardrails to decrease spending during a market downturn and to use that high yield savings account over savings?

24:09What am I missing? Joe, I love this question. If you have two to three years of income in a high yield savings account in retirement, I personally don't think bonds are necessary. Here's my rationale on that. If you have, let's say, a well diversified portfolio with equities, you got your real estate, maybe have some precious metals, maybe you have a small percentage, 5%, 10 % of some fixed income, right? Like, don't get me wrong, like a well diversified portfolio, not a 60-40, you know, cash and bond, like, you know, just a well diversified portfolio of stuff that we always talk about here. And that portfolio now gets smacked in the face, like it did in 2022, when the NASDAQ went down by 30 % or 35%, and the S &P went down by 25 or 28, whatever it was there.