Q&A: When To Talk About Money While Dating, Driving Uber Full-Time, & Pensions

0:00Rinse takes your laundry and hand delivers it to your door. expertly cleaned and folded. So you could take the time once spent folding and sorting and waiting to finally pursue a whole new version of you. Like tea time you. Mmm. Or this tea time you. Or even this tea time you. So did you hear about Dave? Or even tea time, tea time, tea time you. Mmm. So update on Dave. It's up to you. We'll take the laundry. Rinse. It's time to be great. When it comes to what your family eats and drinks, you know your choices matter. You're the expert because you know what fits your life. And getting it right starts with good information.

0:42That's why America's beverage companies are sharing more information about our ingredients at GoodToKnowFacts.org. No spin, no judgments, just the facts straight from the experts for more than 140 beverage ingredients. Visit GoodToKnowFacts.org. Hey everyone and welcome back to the Rich Habits Podcast question and answer edition. These are our Thursday episodes where Robert and I answer your questions as if we were in your shoes. You ask us questions via Instagram DMs at richhabitspodcast or you can also ask us questions via email at richhabitspodcast at gmail.com. Again, just want to emphasize how grateful I am for all of your patience and flexibility as my dad died on July 8th.

1:26It has been a roller coaster of emotions, but we are back. We love doing the podcast. It makes me very happy. So I am excited to be here filming on July 14, 2025 for our Thursday episode coming up here in a couple of days. With that being said, you're a serious investor. You need to know about public.com and how you can use their platform to invest towards your financial future. On public, you can build a multi-asset portfolio of stocks, bonds, options, crypto, and more. And shout out to Bitcoin for hitting like$122 ,000 recently. that's a good something we'll talk about later. But that's not all.

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2:55You invest in the ETFs and index funds we talk about, roll it over into public and you get that 1 % match. Again, that's on IRA deposits, transfers and 401k rollovers. So really, really exciting stuff. Now, our first question is coming from Warp W. I think this is a fake name to stay anonymous, which we appreciate. But Warp says, good afternoon, gentlemen. Thank you so much for your podcast. It's been a great help to me. I have a few questions as I feel like I'm starting fairly late in my investment journey because I don't have a lot of money in my 401k or my IRA that I can physically see, but I do have a pension.

3:32I've been working for the same company now for over 10 years and we have a pension plan. I'm in my late 30s, married, and I have one child. I've been well off and I've had a pretty solid increases as it relates to my earnings over the last several years as I now earn$120 ,000 a year. With that being said, I only have$5 ,800 in my IRA,$9 ,500 in a 401k, but I do have$250 ,000 of equity in my home at a 2.6 % interest rate. So here are my questions. With a good pension like the one I have from my job, should I even worry about contributing to my IRA at the moment considering I have a HELOC of a$30 ,000 loan at a 7 % interest rate and a car loan of$11 ,000 at 2.5%.

4:18So should I focus on paying down those debts or should I focus on getting my Roth IRA funded and invested? And then finally, can you further explain what it means to build your base? I want to understand your perspective on that as it also relates to the savings portion. Robert, you want to kick this one off? Yeah, I do. Warp mentions that he has been well off and doing so great, but I have a problem with this because I feel like Warp really needs to focus on getting this Roth built up. We always talk about you shouldn't be out there doing a bunch of different things with your money till you have that base build up and you're making money while you sleep.

4:53And in this instance, with that much income, I'm just shocked that Warp does not have more money put away. Because when you think about late 30s, and only 5.8k in an IRA, that is really, really low. And I want to see that get addressed first. Now the HELOC is on the verge of being high interest. So we do have to pay attention to it. But I would rather see that IRA get maxed out every single month right now while still paying down the HELOC, but not avoiding the Roth because you need to get that retirement money built up. And then also, I think it's a little bit tricky in this situation because you do want to have that emergency fund.

5:38You want to have that set up. I think three, four months is fine in your instance because you have to get this bridge account and the Roth IRAs maxed out. That's my take on this. I really want to figure out and understand better why there's not more put away with such high earnings. And that might be a spending problem because you don't have an earning problem. And that's something you need to address as well. And that could come by doing an honest budget to figure out why you're not putting away more money to all of these important investment structures within your portfolio. I love that breakdown.

6:12If I'm doing my math right, our friend Warp here is taking home about$90 ,000 to$100 ,000 a year, which is just around$8 ,000 a month. So assuming you're taking home about$8 ,000 a month, and that's after your taxes, maybe some health insurance, maybe some pension stuff, you should be in that ballpark. Let's call it seven, just to be conservative. You are in your late 30s, you're married and you have one child. I would imagine that your household could probably run pretty well on about$5 ,000 to$6 ,000 a month of spending, right? You, your wife, and your one child, you can probably spend between$5 ,000 and$6 ,000 a month and you guys are living a normal American life, right?

6:55With that being said, that now frees up another$1 ,500 to$2 ,000 that you should be able to set aside to save and invest. Now, to Robert's point, 100 % agree. You need more money invested that's tied to your social security number and not to some company's ability to do a pension. Pensions are not guaranteed. Pensions are not legally binding. There's a lot of things with pensions that give me kind of a weird pit in my stomach where when it comes to my Roth IRA, that's my money. I get to invest that money how I want it invested. I get to grow that money. I get to allocate that toward different funds or strategies.

7:29And I get to have that money grow for me tax-free throughout my life. And I get to reap the rewards tax-free after I'm 59 and a half years old. So Warp, if I were in your situation here, I absolutely would start maxing out the Roth IRA. Let's call it$580 something a month, I think is what it comes out to. So$584 a month, you get to max out your Roth IRA. do the same thing for your wife, right? She's probably in her 30s as well. You both now are maxing out your Roth IRAs. And by doing that from age 40 to 65, assuming you've got this$5 ,800 already in your account and the money grows at about 8.5 % per year on average, you're gonna have$650 ,000 at 65, which means your wife will likely have about a half a million or more as well.

8:15That is how you all can just simply put away money into your Roth IRA, have it invested correctly and grow for you over the next 25 years so you can retire with dignity. And to Robert's point about the savings and the HELOC and the car payment, keep the car payment interest rates low. The HELOC, everything above the maxed out Roth IRA, right? So let's say you do that 583 a month and you still have$700 a month left over. That's the money you're going to throw at the HELOC and you want to get that paid down because it's at about that 70 % interest rate as well. Not so high where it's alarming, right?

8:46That interest rate isn't terrible, but it's definitely not low interest debt, low, low, like your car loan is here at two and a half percent. And then to Robert's point as well, right? Having that savings, that three, four, five, six months, I think three months for you is perfect. You're making great money. You have one kid, you're married, your life seems pretty stable. So for you, that might be$15 ,000 sitting in a high yield savings account on public.com earning 4.1 % and you're off to the races. There's a world, in my opinion, Robert, where Warp here is able to be, has his base built, hundreds of thousands of dollars invested, hundreds of thousands of equity in his home, and his pension's doing its thing by the time he's, let's call it mid-40s.

9:24I mean, that world can absolutely exist just depending on to your ability, Warp, to get the honest budget dialed in, be able to max out the Roth, be able to pay off some of this debt, and really be intentional with your money. We talked about it, Robert, on last week's episode, the habits that allowed us to build our first million. And one of those habits that's really important for people to hone in on is being intentional with their money, especially as a high earner, right? If you're making a lot of money, you feel like you can kind of just be willy nilly with it. Like it's always going to be there.

9:58And you're at that point warp where your money, you know, you're making 120 a year, you're making some good money here. And I'm sure you're feeling as if you can't make any mistakes. And now maybe now in your late 30s, you're kind of looking back and saying, man, where'd all that money go? I need to be more intentional. I couldn't agree more of that take because I see every day and talk to people in the Rich Habits Network every day that are high earners, but don't have much to show for it because they always believe the money is going to be there and those big paychecks and bonuses are going to be there.

10:30So they live beyond their means. They're letting lifestyle creep get in the way. And I just love to get people just pounded in people's heads that if you get your money put away in your Roth, you get your bridge account set up and you have money making while you sleep, then you're always prepared. So I love your takeaway there to really get people to understand that if you make these good decisions for the long term and let compound interest work its magic, you'll be way better off than just always thinking the money is going to be there piling up for you to spend. So our next question comes from Gian.

11:04Gian says, Hey, Rich Habits podcast team. First off, thank you for your amazing content. Your podcast has genuinely shifted the way I think. I'm 20 years old, currently in college studying business, but honestly, I've learned more practical and mindset shifting knowledge from your episodes than I have in any of my classes. Right now, I'm working at a shoe store while staying focused on building my financial foundation. I've saved up$8 ,500 so far and just recently began investing. I currently have$300 a month being split up between SPY, QQQ, and NVIDIA, most of it going into SPY and QQQ. But starting next month, I plan to consistently invest$350 to$400 per month into those three names.

11:44On top of school and work, I also run a side hustle where I resell clothes, shoes, and electronics. I know my numbers aren't huge yet, but I've been super disciplined and intentional about shifting away from that consumer mindset. I'm thinking long-term and building strong habits now to set myself up for of the future. So here's my question. With$8 ,500 saved up right now, how would you suggest I allocate that money to maximize growth while staying smart about risk? What are other suggestions you might have for me as well as a young man entering this new stage of his life? Thanks again for all the value you share.

12:15Your podcast is part of the reason I'm thinking 10 years ahead instead of just 10 days. Let's go Gian. What a awesome, awesome listener. Shout out to this incredible human being. That's so exciting. I would max out the Roth IRA as soon as you possibly can. If that means taking$7 ,000 of this 8 ,500 that you have saved up, dropping it into your Roth IRA, and maybe dollar cost averaging it all into the S &P 500, the NASDAQ 100, maybe even Nvidia, right? That could be in there too. Maybe iBit, right? Bitcoin, have some exposure to that. Having those three or four names in your Roth IRA and getting them invested within the next three months.

12:52Depending on the size, you could put it all in on one day and just invest it and let it go. I'm not mad at that because you are going to have it for a very long time. Maybe you want to break it up into a couple of weeks, a couple of months. I'm not mad at it. But what's most important than trying to strategically dollar cost average into the market any which way is that you are investing into the market. You're not overthinking it. You're not having analysis paralysis. You're getting your money invested. You're riding the wave. And that money will double every seven years, assuming a 10 % return in the markets, right?

13:22I know this sounds crazy, but because you are so young and the stock market grows exponentially, if you invested$8 ,500 today and it grew at 10 % per year over the next however many, let's call it 50 years or so, your money would be worth just over a million dollars adjusted for inflation. So like that's how important it is to get invested as quickly as possible. Do not worry about the, you know, oh, I got to have all this money sitting in a savings account because I want to make sure that in case something like savings is important. If you want to put a thousand of this 8 ,500 in savings, get that$7 ,000 invested and growing for you at 20 years old, your 65 year old self will thank you so, so much.

14:07I love this takeaway. And it reminds me of a story from my youth. When I was 21 years old, my 20-year-old girlfriend got hit by a motorcycle and it didn't do a lot of damage. It broke her leg and it was pretty tragic, but she received a check in the settlement of around$10 ,000. So at that time, even at only 21 years old, I had her go meet with Tim Croak, who now runs Croak Capital. And he talked to her and he said, look, if you invest this$10 ,000 right now, get it out of your hands. She really wanted to buy this convertible, this Chrysler convertible. If he would have been able to talk her into doing that, she would have had over a million dollars in retirement with that initial investment without adding any more money.

14:49But instead, she bought the convertible. And a few years later, that convertible was basically rendered useless. And she had some fun with it. And to this day, I spoke to her a few years ago. She never got to the million dollar mark in her investment portfolios. So it really illustrates time is on your side. Gian, you've already won the battle because you're thinking about investing and you're doing investments at 20 years old. A lot of people don't really start investing till 25, 35, or even 45 years old. So I love the fact that you're ahead of the game. You're thinking about how to do it. And you're following along with the Rich Habits podcast and the Rich Habits Network to get you ahead of the game and keep you ahead.

15:28So we really appreciate this question. So our next question comes from Rafael M. Rafael says,

16:02was originally a 30-year loan term. Our home's value has increased by about$900 ,000 Australian in just over three years, which is really great. But the remaining loan balance is$1.1 million Australian dollars. We're leaning toward the variable rate as we believe interest rates will likely continue to fall over the coming months. But I'd love to hear your thoughts or if you have any strategic recommendations for a situation like ours. Robert, you go first. All right. So, So, Rafael, great question. It's a unique situation because it is Australia. In the United States, we, of course, get a fixed rate for 20, 30, 15, whatever years we do.

16:38And so we have that advantage. But in your situation, I personally would either go for the one-year fixed rate or the two-year fixed rate. And here's why. I don't like variable rates because you don't have any control of where they're going unless they're a capped rate. So that's why fixed rates just come into play and I think are much more safe. And in your instance with Australia, these are going to readjust every single year. So I would do the one year rate because without knowing what the economic conditions are going to be in a year from now, you want to always be optimizing as much as you can to keep your rate as low as possible.

17:15And that is why I like the fact because the one and two are so close. It's very nominal in the amount you would save if you went with the two. But I think the upside of going with the one-year rate could be greater if the overall markets get better in real estate. That would be my opinion for this particular situation. Yeah, I really want to emphasize how small the outcome difference here is. So for example, you talked about the variable rate at 5.44%, the one-year rate at 5.29%, and the two-year rate at 5.19%. And so we're talking about 20 basis points, 25 basis points between the variable rate and the two-year fixed, which on a loan of 1.1 million Australian dollars is about$2 ,000,$2 ,500 a year.

18:07Now, I'm not saying that$2 ,500 a year, right? Let's call it 200 bucks a month is not a lot of money. $200 a month is a lot of money for a lot of people. However, you live in a house that has appreciated by$900 ,000 in three years, and you have a loan balance of 1.1. So you live in a$2 million house. If you make the wrong choice here by trying to time the interest rates on your mortgage and try and figure this stuff out, you're really going to be out 200 bucks a month. I don't think that is life-changing money for you at this point in your wealth building journey. so I don't think it's worth like stressing over or burning some crazy brain calories or keeping you up at night.

18:43I mean, what I'm trying to say here is that if you want to go with the one-year fix, which is probably what I would do, go for it. And if the variable rate would have been lower by 20 basis points, because it keeps like, don't beat yourself up for it, right? We're talking about a couple hundred bucks a month until you can refinance at a lower rate again. Now, on the flip side with the variable rate, rates could go up. I'm looking at Australia's mortgage rates right now and rates went up from March to April. They went up from 5.97 to 5.99. So they did go up marginally there, but they went up. And so I don't know what's going to happen in Australia's mortgage scene and how that works behind the scenes there.

19:20But what I do think is having a fixed interest rate for that one year period of time at 5.29 % sounds like a pretty good deal. And if one year goes by and now you could maybe refinance it somewhere in the fours or maybe in the low fours or even high threes, go do that. That's fine. It's totally cool. I love when people are thinking like this and really digging into their finances. But my main takeaway that you touched, and you do this a lot and very well, is getting people to understand what are those brain calories that you call them? What is the ROI on those brain calories? Because I do see some people that are just in the minutia so much over maybe their credit card points, or they're trying to optimize their loan and their mortgage amount and all of that.

20:02And many times that the outcome, good or bad, is so small that it probably isn't worth worrying about and burning those brain calories because it's not making a meaningful difference one way or the other financially. So I like that takeaway you had on that particular point. So our next question comes from Ben D. Ben says, hey, guys, my name is Ben. I live in Jacksonville, Florida, I had a quick question regarding long-term, aka retirement account investing compared to more mid-term, 10 to 20 years type investing. I grew up listening to Dave Ramsey, so I understand long-term investing and the beauty of compound interest.

20:42I'm 24 years old and I just opened a Roth IRA, as well as I'm about to be eligible for a 3 % match with my company. My understanding is that I can't access this money until I'm 59 and a half. What is the strategy with regards to investing and being able to access funds before that age. I understand that time is one of the most important aspects when it comes to building your wealth via compound interest, but I was wondering what a good route could be giving me accessibility or use of my money before essentially 60 years old. Hopefully this question makes sense and I'd love to hear a response from you guys.

21:16Thanks so much for all you do. Good question, Ben. Whenever we think about investing, especially at, let's call it, you know, 24, 25 years old. You have 40 years ahead of you until you are 65. During that 40-year period of time, you can easily extrapolate how much money you will have invested, assuming you invest the same amount of money every month. And if you assume a 8.5%, 9 % inflation-adjusted annualized return, you can easily computate what your nest egg will become over that 40-year period of time. If that nest egg is massive and it's bigger than you think, then essentially there will be a day, maybe in 10, 15, 20, 25 years from now, you can stop contributing and your investments will still keep growing for you.

22:01And it will hit a, what's it called here, like max velocity. And you will just continue to grow wealth over a long period of time because you have so much invested at such a young age. We want people to experience that. And when people are ready to experience that, we encourage them to look into the idea of opening what we call a bridge account. So what a bridge account is, is it's a normal taxable brokerage account that you can open up on public, Robinhood, Schwab, Fidelity, anywhere, Vanguard you want, doesn't matter. We prefer public. But you can open up this bridge account. You can deposit funds into it.

22:35You can invest money over however long you want. And what's cool about this is there's no fees or penalties for taking profits out of that account and using that money to retire early or bridge you from your maybe late 40s to early 50s into your early 60s when you can finally start tapping into this nest egg without the penalties and fees. Now, to answer your question technically, you can take money out of your Roth IRA without penalties and fees. We do not think anyone should do that. We want you to stay invested, right? Keep building wealth, but you technically can take out your principal without penalties and fees.

23:11But don't do that. Keep your money invested and grow it over a long period of time. But maybe, Robert, you can talk more about why we think the bridge account is so important and where it fits in someone's financial wealth building journey. Yeah, I think the bridge account is probably one of the most important tools as part of our message on how people can build wealth and retire comfortably. Because so many people don't understand. You can have a 401k and you can have equity in your house and still be broke leading up to retirement because to get the equity out of the house, you got to sell the house.

23:45And to get any money out of the 401k, you have to endure penalties. So that is why we don't like to see people borrow from their futures. So let's say you have a 401k and you have the Roth and you have equity in your home, but you don't have money growing that is available to you along the way. That is why we love the bridge account. Because if you're building the bridge account concurrently with the Roth and potentially the 401k, you always have accessible money without penalty or any concerns. If you want to go buy the boat, if you want to remodel the house, If you want to build a man cave, whatever the dream is, it comes from that bridge account rather than robbing from your future in the retirement account.

24:32Because the goal for us is that everyone have both. That way you're never going to be, we call it you're a net worth millionaire, but you're broke because you can't access the money. That is why the bridge account is so beautiful because you always have access. You have no penalties. You have full autonomy over that account. And as it grows, you can use it as you wish without dipping into retirement. That is it. Super important. I love that it is such a big part of our message here, Rich Habits, because I think it is critical to keep people on the right path pre-retirement and earlier on so they have accessible money without the fears of taking it away from their retirement.

25:14I couldn't have said it better myself. I think there's a lot of people out there that were told, yep, just invest towards your 401k and you're going to be just fine. And they do that, which is great. We want people to be investing in their 401k, assuming it's invested correctly, but now they're in their early fifties. They've got two and a half million dollars in this 401k. Technically speaking, they could retire, but they can't tap into this money for another five, six, seven, eight years. And now they're forced working until they can tap into this money without paying penalties and fees to the tune of 10, 15 plus percent, which no one should be doing that.