DeepSummary
The episode begins with Austin and Robert introducing the Q&A format and encouraging listeners to submit questions. They then proceed to answer a series of listener questions, covering topics such as investment return assumptions, adding Bitcoin to a Roth IRA, the Section 121 tax exclusion for home sales, using HELOCs for investing, paying for school vs investing, using leveraged ETFs, and deciding whether to sell an investment property at a loss.
In discussing return assumptions, Austin and Robert explain that they generally use 11-12% based on historical S&P 500 returns, acknowledging that some may be more conservative with 6-8% assumptions. They recommend adding a small percentage of a Bitcoin ETF to a Roth IRA for exposure. On HELOCs, they advise against using them solely for investing in the market, but support using them for controlled investments like real estate or home renovations.
For the question about selling an investment property at a loss, they suggest considering the area's capital appreciation potential and exploring options like refinancing or renting it out temporarily. Throughout, they emphasize principles like avoiding excessive student loan debt, building an investment base before diversifying, and understanding the risks involved in leveraged investing.
Key Episodes Takeaways
- Use reasonable, historically-grounded return assumptions (e.g. 11-12%) for investment projections rather than overly conservative ones.
- Consider adding a small crypto allocation to retirement accounts for exposure, but focus first on building a solid base of index funds.
- Avoid taking on excessive student loan debt that will outweigh expected future earnings from the degree.
- Explore leveraged ETF strategies cautiously to amplify potential returns in bullish markets, but understand the risks.
- Use HELOCs strategically for controlled investments like real estate or renovations rather than solely for stock market exposure.
- Prioritize investments that generate compounding returns over aggressively paying off low-interest loans.
- Maintain a balanced perspective on real estate investing and the potential to buy at inopportune times in the market cycle.
- Consider refinancing options and capital appreciation outlook before selling an investment property at a significant loss.
Top Episodes Quotes
- “We've discussed many times recently about where we think the markets are going, let's say, for the next 18 months. And if we're still this bullish, then why not, you know, double down and two x our returns on the s and P 500 by using a fund like you pro.“ by Robert Croak
- “I read a stat the other day that the average plumber right now, in 2024, has a higher net worth than the average doctor until they reach 44 years old. Because of the fact that the doctor has so much debt for decades that they can't get ahead.“ by Robert Croak
- “We want to set ourselves up in a place where our money is always working for us and compounding over time versus working against us by being parked, paying off a simple interest loan.“ by Austin Hankwitz
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Episode Information
Rich Habits Podcast
Austin Hankwitz and Robert Croak
6/13/24
In this week's episode of the Rich Habits Podcast, Robert and Austin answer your questions!
- What return assumptions do you use?
- How should I add Bitcoin to my Roth IRA?
- What is Section 121?
- Should I take out a HELOC to invest?
- Pay cash for school or build my base?
- Should I use a 3X leveraged ETF?
- Should I sell my investment property for a loss?
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