Q&A: YieldMax ETFs, When To Invest For Your Children, & A Special Guest!

24:45He wants to have some fun. He's got$4 million. He's done the studies, the Monte Carlo simulations, all that stuff. And so he knows that if he invests his money correctly, it's going to grow tremendously over the coming decades as he's only in his early 60s. I would agree with Robert's stance of like, you know, we talk about this core satellite portfolio structure, which is 65 to 85 % of a portfolio should be invested into the index funds and ETFs we talk about. And the other 15 to 35 % is diversified. Now, if you want to diversify that into single stocks, assuming they're blue chip, be my guest.

25:20If you want to diversify that into bonds and real estate and precious metals and fine artwork and fine whiskeys and wines and whatever else you want to diversify your money into, be my guest. You know, cryptocurrency, like it's all part of that diversified portfolio. So, you know, to Robert's point, 70 % of this could be invested into the index funds and ETFs that we talk about. The other 30 % could include bonds, 5, 10, 15, 20%, depending on how risk on or risk off you want to be. but it could also include real estate investment trusts like VNQ or Realty Income Corporation or VICI properties.

25:53It can include silver and copper and platinum and gold. It can include some Bitcoin. It can include, you know, all these other different things that help round out a well-diversified portfolio. So Dave, that's how I would approach it. To your point, I 100 % agree with you. You have a portfolio of$4 million. And I'm assuming between the social security, your$4 million portfolio and everything else that you've got going for you here, you're very low cost of living because you don't have a mortgage, right? You're going to have a wonderful retirement, which means maybe you're only spending$80 ,000,$100 ,000 a year.

26:25$100 ,000 of annual income off of a$4 million portfolio is only two and a half percent, which is well below that 4 % threshold that we talk about. That same$100 ,000 to your point, let's say that$4 million portfolio contracts by 25 % because we have another crazy something with a trade deal or war, whatever's going on. Now you have$3 million. That$100 ,000 on 3 million is still only three and a third percent. So you're still within that 4 % rule. And so that's where your question derives from, if I'm correct, you're saying, hey, I've got all this money, like I know I'm going to have 80, maybe$100 ,000 a year of income, I can really withstand a drastic drawdown on this portfolio before I start digging toward the rule not making sense.

27:08So you're thinking about this completely correct. And I think between Robert, myself and Zaid, hopefully we answered your question. Listen up, folks, you can lock in a 6 % or higher yield with a bond account on public. But remember, your yield isn't locked in until the time of purchase. So you might want to act fast. Lock in a 6 % or higher yield with a diversified portfolio of high yield and investment grade corporate bonds only at public.com forward slash rich habits. So our next question comes from Christina L. Christina says, hi Austin and Robert. My fiance and I bought a house, got engaged, and had a baby within the past few months.

27:43Big summer for Christina. Let's go. Congratulations. That is all so exciting. Christina says, now that we're finally beginning to feel like all the chaos has crawled down a bit, we're planning for our future and a few different aspects. Do you guys recommend combining financial accounts when we get married? Are there any true benefits to combining all of these accounts or is it okay that we just trust each other? Additionally, we want to set up our daughter and future kids up financially. We've heard about the 529, the custodial IRAs, but we don't really understand all the differences here. So could you give us some direction?

28:19And then finally, we are happy paying for daycare now, but when we have more kids, I would consider taking a break and quitting my job completely to help raise them. Would you recommend doing so financially? And do you have any ideas on how I can minimize a career hit? For context, we're both 29 years old and have good jobs, making$120 ,000 and$160 ,000 a year. I have health insurance, I've got a Roth 401k, and we live right outside of Houston, Texas. Thanks in advance. We appreciate the knowledge you guys share. Well, Zaid, you also live in Houston or right around Houston, so why don't you kick us off?

28:53I also do. I live right outside of Houston as well in the suburbs. and there's a lot to take in. First of all, congrats on the huge summer. I mean, married, baby, a lot going on right now. As far as, you know, combining versus separate accounts, you know, I've always been in favor of having both, right? So like me and my wife, we have separate accounts but we also have one joint account where we contribute into for expenses and things like that. That's what I've been doing since I've been married for 10 years, almost 10 years now. As for setting up your kids, 529s, I have two kids as well. 529s, that's what we do here.

29:24It's great. contribute to that every month or so and then let that compound hopefully it's enough to pay for the kids colleges or whatever they choose to do later in life and the tricky question though has to do with daycare versus career and that's a very personal question what my wife did when we had our kids was she did uh she scaled back she's a nurse so she scaled back from working full-time to part-time so it's a little bit less hit with daycare we also have grandparents in the area to help us out as well so that's a very very personal question it's hard to say because you're right you do take a career hit when you take a decade off to raise your kids.

29:58So I'd like to get y 'all's take on how to handle that. Robert, you want to kick us off? I would love to. I think it's a little difficult for me to think about the numbers and the math of how it works to work towards retirement. Because remember, in the question, they said having more kids. So when I think about a one income house of let's say the$120 ,000 and then all of a sudden after taxes, that's 90 ,000 net and that's with one child. I think that's fantastic. You can do just fine, live a great life, pay all your bills, have a nice car, nice house, all of that. But when you add kid number two and kid number three and you're a single family home, my fear is that you're going to have bills that are higher than what would allow you to put away enough for retirement because when you have kids and you add them in the mix, you always have to remember that that retirement amount has to be much, much higher because you want to be able to set them up well upon your passing.

30:59So the way I look at this is I think you could do this for three, four, five years and it would be just fine. But my biggest concern would be is that you won't be able to put enough away for retirement because I think if we do the math, you're only going to be able to save$800 to$1 ,000 a month, which will still get you to a decent net worth, but it's going to get less and less over time as you add more kids and a larger home and additional cars and all of that. So that's my take on it to make sure that you're looking at the totality of the single family income and where it's going to go in three, four or five years as you add more children to the mathematical mix.

31:36Now, Zade, I know you've got a couple of kiddos and I guess this question is for you now before I answer, but I've always heard no mom and dad are rich. You guys are kids. You guys are not rich. We are rich, but you're not rich. Right. And so like, that's the type of mentality I think I'm going to take whenever I start having children, which is like, take care of what we've got going on. Of course, do what I can with the 529 and everything. Like I'll be able to afford all that stuff. But like, let's say in this situation with Christina, I would much rather see Christina and her husband prioritize investing for their own retirements and their own trajectory as human beings versus cutting that short, not doing anything for their own retirement just to try and beef up some 529 accounts or beef up some other things of that nature.

32:24But how have you navigated that as a father? Great question. 529 and investing towards the kid future is definitely lower on the totem pole when it comes to priorities of investing. So you've got the Roth IRA. You want to maximize that. You got the 401ks. You want to take advantage of all the money matched there. You want to invest as much as you can towards your retirement as parents. And then whatever's left over, if you have enough income, if you're, you know, if you've got a promotion, bonuses, things like that, that can go towards the kid's future. So I've kind of thought about it the same way as you have.

32:52Essentially, I want my kids to obviously have opportunities when they grow up. I want them to have as much money as they do, but I'm not kind of prioritizing that. In other words, you're not sacrificing your future for theirs. Correct. Correct. Absolutely. You know, I mean, obviously, like I said, it's not like I don't want them to have a nest egg and whatnot, but you have to make sure the parents are set up for retirement. Because the last thing you want to do is if you're older and you're in your 60s and 70s and don't have enough money, then you're relying on your kids to then support you, support your lifestyle, whatever the case may be.

33:21So you want to make sure that you're set up as much as you can be. So then maybe down the line, if your kids need help when they're in their 20s or whatever, then you can help them if they need that help. But you can't do that unless you're set up yourself. The biggest takeaway for me that I think you guys both nailed is setting yourselves up first. So many people, they get married, then they have kids, then they upgrade the house, then they upgrade the cars. All of that over a 10, 15 year period. And they're not investing towards their futures and their retirements. Then all of a sudden they're 45 years old.

33:53The kids need to go to a private high school. The kids got sports. All of this. Once you do that cycle for 10, 15, 20 years, you're putting yourself in harm's way, you and the spouse, rather than setting yourself up early. So Zade, I think you and Austin nailed it. Set yourself up first, then worry about the 529s and the other things for the kids down the road. Once you have a solid nest egg that is put away for later, I think you guys absolutely crushed it. And it's such an important distinction that a lot of people miss along the way when building their family. Kids are definitely expensive.

34:28Don't get me wrong. I think the fact that you live in Houston does help. It's a relatively low cost of living compared to other parts of the country. But I mean, you know, I know everybody says this, but you can figure it out, you know, with additional kids and things like that. Like you make cuts here and there. I know it sounds scary to have a second kid or a third kid, but parents, you can figure it out. And it's just one of those things where like parental instincts kick in. eventually, like you'll figure it out. But yes, don't forget to prioritize your retirement and health and, and long term future.

34:56So Christina, to answer your questions, do you recommend combining financial accounts when you get married? I vote yes. I think that there's so much data and studies and there's so many things that point to if you guys have, you know, you can do what Zaid does and have a joint account and you guys, you know, spend the household money out of that. Maybe you just have one joint account and you guys don't have any separate anything and there's full visibility. You mentioned trust. I don't think it's so much a trust thing that it's holding each other accountable thing. I think that's a lot to it as well.

35:25But having that we're in this together, we're planning, we're seeing the progress together. I think that holds a lot of weight. As it relates to the 529s, IRAs, things like that, if I were you, I'd start with the 529. You can go to Vanguard.com, which is what I did. I think you can fund a 529 with as little as$1 ,500, maybe as little as$2 ,000. I funded mine with$3 ,000 two or three years ago because that was the minimum at the time. It's now worth$10 ,000. I just put in$150 a month. The markets go up until they're right. I get to enjoy that. And again, I don't even have kids yet and I'm already investing toward their 529, which is great.

36:00You can do the exact same thing. And whenever that child turns 18 years old, assuming the 529 account has been building for X amount of years, I don't know the exact term here. I think it's 10 or 15 years, whatever it might be, you can begin to now transfer money out of the 529 into their Roth IRA at age 18, which is like a game changer. So, and that's up to$35 ,000. And then that invested throughout their life turns into a million adjusted for inflation. So we're talking about generational wealth. And when it comes to this daycare stuff, I emphasize what Zaid said. I feel like there's a we'll figure it out type vibe, but just also want to reiterate, put on your oxygen mask before you help others, right?

36:37That's what they say on the airplanes, right? Put on your mask before you put on other people's masks. And so I think you guys have to have that same mentality here. If you only have so much money on a monthly basis, yes, we want to give our children everything. And I don't have children yet. Zaid obviously does, so he's able to talk toward that. But I want to make sure that I take care of myself and my spouse and we're trending in the right direction. So to Zaid's point, we are not a burden, right? Whenever we're in our retirement age of 70s and 80s, and we don't have to now be sort of taking money from our children when they're in their 30s and 40s and things of that nature.

37:10So great question, Christina. Thank you so much for listening to the show and we are rooting for you. So our next question comes from Jared H. Jared says, Hey fellas, thank you for taking the time to read and answer our questions. And of course, for all of the valuable insights each week, I noticed something in the episodes that I thought was awesome and interesting. And I wanted to ask for y 'all's input. And the early episodes, Austin was described as the young guy just trying to figure it all out. While Robert was a successful entrepreneur with hundreds of millions and company exits. Now, just a few short years later, Austin is a multimillionaire.

37:40And of course, Robert is still continuing to grow his knowledge and net worth as a seasoned entrepreneur. Obviously, Austin has done a great job to position himself for all the success he has seen at such a young age and deserves all the credit in the world. But my question is, how valuable has it been to have someone like Robert in your corner? And do you feel like mentorship is essential in building meaningful and long lasting wealth? And for Robert, does having an up and comer who you may see some of yourself in help you stay motivated and continue growing as well. Thanks again, Jared. Jared, you noticed that we did change the intro of the show.

38:10In the beginning of the first two years, it was, you know, I'm Austin, I'm in my 20s, and I'm still figuring all out. And I'm still in my 20s. I'm 29. And I'm still figuring out life. But I would argue over the last, you know, couple years since doing this show, I figured out a lot. My net worth was millionaire status when we started this show. However, that has grown dramatically since because of a lot of things that I've learned from Robert and have continued to implement in my daily life as it relates to having rich habits, being consistent, consistently investing, being a hungry entrepreneur and always staying focused on what that long-term trajectory looks like.

38:46But to your point, having a mentor like Robert and the other incredible mentors I have in my life, yes, they are the reasons that I have experienced such success at such a young age. And I definitely cannot emphasize enough how important it is to have someone that has gone through it before you and someone that you can openly ask questions to and get some real tactical concrete advice from and we hope that this show is that for a lot of people that might not have that network already if it's myself if it's robert if it's a guest we bring on if it's zade we hope to have that sort of mentor mentee relationship for for some of you guys out there that are looking for that that don't have that network but robert answer the question about the being surrounded by someone who's younger?

39:34And do you have a lot of motivation because of that? I want to unpack first the importance of mentorship, whether it's younger, older, or whatever, because there is a message that's shared on the internet all the time that you are and become the five people you're closest to. It's just such a great message because it's so true. Because if you hang around people that are always lack mentality or victim mentality, or they're not growing and building along with you, you're probably going to get lazy in that scenario and not build yourself up as much. So in my situation, having Austin involved in my life and being an age gap of 30 years difference, it is incredibly motivating because we are always bouncing ideas off of each other for the podcast and for our community that are two completely different perspectives.

40:23So it is fantastic for me because he has a different skill set than I do. And therefore, it's just so incredible to be able to have that between myself, Austin, Christian, to be able to bounce all these ideas off for how we can bring the most value to everyone. So the answer for me is yes. It's very motivational. Austin has a ton of energy, which a lot of people say that I have way too much energy. Well, Austin can definitely compete in that category. So it's just magical when you can really put your heads together with other people that you work with and that you care about and that you love and respect, because then you're always going to do more and really find the best solutions for life.

41:05Because personal finance is personal. Life gets in the way. And that is why I love our age gap as educators to be able to help everyone figure it out from both perspectives. Zade, what's your take on mentorship? How did mentorship play a role in what you do now and what you will? We've been friends now for half a decade. We met like really early on in 2020 when we started doing this TikTok stuff back then. Have you leaned on mentors over this last five year period of your life as your career has just skyrocketed? Yeah, I mean, having having other successful people to talk to is just incredible, right?

41:39They've been through the battles. They've been through the wars. You can learn from their experience. But not just that, having someone that believes in you is such a powerful thing. So sometimes like you might not believe in yourself as much as your mentor or colleague believes in you. And just having that person is so powerful and they can unlock some stuff in you that you might not think that you had. And so just having that calming presence, having that person who's been through difficult times kind of coach you through it, just talk you through it, have someone to bounce ideas off of is just invaluable.

42:09I do think though, like the mentor content is a little too, you know, hustle culture, if you know what I mean? Like people are like, oh, can you be my mentor? I'll get DMs. Can you be my mentor? And I think the best way to like get a mentor though, is you have to first stand out yourself. Like if you can kind of stand out, provide value, people will come to you. People are going to want to mentor you. If you can already showcase that you're like someone who has that potential. So I do say that mentorship is awesome, but going about finding a mentor, finding someone you could bounce ideas off of.

42:37You have to be careful in how you do that. I think sometimes people are just like, please come and mentor me. And it's like, dude, I got like a lot going on. So you got to be careful with that. But I do agree that there's a lot of value in it. I would have I'd like to reiterate that in the sense of, you know, I love, love, love, love finding content creators, newsletter writers, podcasters, right? The Tiger Sisters podcast right now is sitting at number one on Spotify's business chart. Cherie is a good friend of mine. And we've been friends for three years and I've spent the last two years sharing everything I've learned about my show with her and her sister so their show could grow as well.

43:12And now it sits at number one. And so, like, I wouldn't say, like, I'm officially a mentor or anything like that. But, like, once you learn something and, like, succeed in something, like, you want to, like, share it with people and see other people win. Like, the faster you realize that entrepreneurship and everything in this world is not a zero-sum game and that we can all win together. And, you know, the Tiger Sister podcast being number one on Spotify's business chart has nothing to do negative with our podcast not being or whatever. It's like the faster you realize that, that we can all just like trend in the right direction together, the easier it's going to be to win and the more you will win throughout your life.

43:46Yeah, for me, it's a little bit of a touchy subject because I think coaching and mentorship is great because you're hiring for speed. When I came up, we didn't have the resources we have today. We didn't have the Internet. We didn't have coaching. We didn't have mentorship. You knew a friend that was ahead of you and you latched on to them, hopefully, and you could learn together and grow together. Now we live in an era and it's getting better every year with all of the technology and places like our Rich Habits Network school community and places like that, where you can pay a small fee and get access to incredible information of people that have already done it.

44:23To me, that is one of the keys to really be able to build a meaningful career a lot faster because you no longer have to pay the time and the cost of mistakes because everyone else has already done it. And like you alluded to, Austin, sharing that information like we do in our content every single week, telling our stories of failures and triumphs helps other people learn from the mistakes we've already made so they don't have to go through the trials and tribulations of making it themselves. I think that's one of the most important aspects of coaching and mentorship, as long as you find the right people, because there are a lot of fake gurus out there that sell coaching courses.

45:04I don't think they're worth it. I don't think they're worth the$10 ,000 they charge. I would rather pay somebody that's done it, you know, on a one-on-one call or a consulting call to help me through a problem if I can't solve it on my own because you want the speed. That's the key for me. I am so grateful for the mentors I have in my life, including Robert and the friendships I have in my life, including Zaid. Zaid, I know we've been on the phone for hours at some points in the past, just talking about all things online, personal finance, content, podcasting, everything is just it's really important to surround yourself with those types of people and have just a wonderful network to lean on, ask questions.

45:43And that doesn't mean just ask, ask, ask. It also means give, right? Give 10 times more than you ask. So that's the secret to success. Give way more than you ask and you're going to be just fine. Zaid, thank you so much for joining us on this week's episode of the Rich Habits Podcast question and answer edition. I think you should just like be a consistent presence, man. If it's once a month, once a quarter. Yeah, definitely not as sporadic as it has been. You think you're so awesome. We enjoy having you on the show. And obviously, shout out to the rundown and all the fun stuff we're doing over there as well.

46:12Man, I appreciate you guys having me on anytime. I'll be on anytime. Just make the call. And I mean, just doing these questions and answers is so fun because you're hearing from the community. You're answering people's questions, solving their problems. So I love doing this and also allows us to, you know, get out some hot takes as well. So it's fun. It's a fun time all around. Definitely. We love having you, Zade. And don't forget tomorrow to come back because we have our new Friday episodes. They are incredible. Whatever topical news is happening, the headlines, anything that's affecting our money and your money, We're going to be covering it live every Friday episode for you.

46:45So make sure you check it out. We again want to thank each and every one of you for stopping by, joining the Rich Habits Network, checking out the free trial, and also giving us those five-star reviews because it helps us grow. And everyone needs a little boost here and there in their financial and their business and mindset journey. And we're here to provide that. I want to reiterate, please, please, please, if you enjoyed this episode, if you enjoy the podcast, and you've not yet left us a five-star review on Spotify, we'd very much appreciate it. These reviews tell other people if our show is good, if it's bad, if it's mediocre, and the reviews so far have been very, very positive.

47:25So thank you so much for all of you who have left five-star reviews, and if you've not yet done so on Spotify or Apple Podcasts, specifically Spotify, please do so. As always, thank you all so much for tuning in to this week's episode of the Rich Habits Podcast, question and answer edition. And we'll see you tomorrow, Friday, August 1st, for our first new Friday episode. Thanks. Rinse 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.

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