Q&A: Big Beautiful Bill Tax Deductions, Buying a House w/ In-Laws, & Saving for an MBA

These are our Thursday episodes where we answer your questions as if we were in your shoes.

You can ask us questions on Instagram @richhabitspodcast, you're just a little DM over there. Or you can email us your questions @[email protected].

“More than welcome to send us emails, actually I think most of this episode comes from our Gmail account email there.”

So, go send us some emails, send us some Instagram DMs, get our attention, any which way you possibly can. And we'll try our best to answer it. Give us some grace, though, Robert, we're getting thousands of questions every single week across platforms. And we've got six or seven questions in this episode that we're answering. So, if we don't answer your question live, please just give us some grace.

That's right, there's a lot of ways to find us out there on Instagram and TikTok and LinkedIn and Spotify and Apple. Just get in the game, get involved with us. There's so many ways to get access to Austin and I. And we'd love to have you guys in the network rocking and rolling with us, especially during these volatile times. So, just make sure you understand we're trying to get to all the questions, but we're excited for this episode. And that's right, and this episode of The Rich Habits podcast is brought to you by public, the investing platform for those who take it seriously.

Because on public, you can build a multi-asset portfolio of stocks, bonds, crypto options, and now generated assets, which allow you to turn any idea into an

“Investible Index using artificial intelligence.”

And it all starts with your prompt. The renewable energy companies with high-free cash flow to some of my conductor suppliers growing revenue over 20% year over year. You can literally type any prompt and put the AI to work. It screens thousands of stocks builds a one-of-a-kind index, and even lets you back test it against the S&P 500. All would just a few clicks.

Generated assets are like ETFs with infinite possibilities. They're completely customizable and based on your thesis, not someone else's. The public dot com slash rich habits in earned an uncapped 1% bonus when you transfer your portfolio. That is an uncapped 1% bonus when you transfer your existing portfolio to public dot com using our referral link. Again, got to use that referral link if you want that uncapped bonus.

That's public dot com slash rich habits paid for by public investing full disclosure in the podcast description.

So our first question comes from Nicky via email. Nicky says I'm 30 years old living in Chicago.

I make 61,000 per year with the ability to work overtime. I'm in the process of switching careers and hoping to land a new job this year with at least an 85,000 dollar salary. But job hunting is hard right now. And I'm still learning some new skills to get into this new career field. I'm currently living with my parents and they don't charge me rent.

I luckily have no student loans or credit card debt. Last August, I traded in an old damaged car for $8,500. And then I bought a new car and paid $5,000 cash as a down payment. And now I have a $35,500 loan with the 7.7% interest rate. That comes out to about a $550 monthly payment for 84 months that will total $46,200 of total payments,

which is about 10,600 in interest. I've received a letter in the mail stating that I qualify for the passenger vehicle loan interest deduction, which was passed as part of the one big beautiful bill act. This deducts up to $10,000 in car loan interest on my federal tax return each year. So I'm currently paying an extra 150 a month in principle toward my car loan to paid off early.

I've already paid over $1,000 in interest since I got this loan. And I have the opportunity to refinance at a lower interest rate.

“But my question is, if I qualify for this loan deduction, should I stop trying to pay off my car early?”

Just pay the minimums knowing that I can take this interest and ride it off my federal taxes. Should I then take that maybe extra 150 a month and invest it toward my Roth IRA? Right now, I've got 22,000 in a high-yield savings, 143,000 in a 401k, 22,000 in my Roth IRA. And 32,00 bucks in my Bridger count on public. Thank you guys so much for your help.

This is a really interesting question, Robert. What's your initial take? Well, the initial take is, if you can get the free money from the big beautiful bill, take it. You just have to make sure you qualify, obviously you bought a new car, so you do qualify in most instances, because for everyone out there that thinks they get this for a use car, make sure you read the fine line because I don't believe it covers use car purchases.

But I think it's a good idea if you can take advantage.

We always talk here at the rich of its podcast.

It's not what you make, it's what you keep, and this is very well thought out, which I appreciate because they're looking for ways to improve and already good situation.

But I would not be paying the extra 150 per month in the principle towards the loan. I would keep that rockin' and rollin' in that Roth IRA. If you're not already maxing out the Roth IRA or put it in the bridge account,

because I always feel like it's a better idea to do that to keep you investing in compounding over time,

“versus paying down debt like a car loan or a mortgage, that's what I would do.”

Nicky, let's talk through this. You've got my brain rattling because this is obviously a new thing, right? The one big beautiful bill is new and being able to write off the interest on your passenger vehicle is a new thing. And so let's just be clear as to what that actually means. You say that since you've got this loan, you've paid about a thousand dollars of interest,

which means you can now write off a thousand dollars against your taxable income as it relates to your federal income taxes. Knowing you make about 65, 75, 85,000 a year somewhere in that range, we're talking about a 10% effective tax rate. So if you're able to take this interest, write it off your taxes here,

you're saving about 10% or about a hundred dollars in effective taxes that will be paid to the government. At the end of the day, I don't believe that a hundred dollars is going to materially change your wealth building journey. If I were in your shoes, I would refinance my car at this lower, call it 5.8% interest rate, coming in at about $600 a month, about 50 bucks a more extra here. So I would refinance my car at lower interest rate, 5.5.6%.

I would continue to max out my Roth IRA, like that's like a non-negotiable. You've already got 22,000 in your Roth IRA. Let's get that maxed out every single year if we can. And if you have money left over, then sure, use that money to pay your car loan down a little bit more aggressively. But I don't think a 5.5 or 6% interest rate on your car at about 600 bucks a month

is a reason to not invest into your Roth IRA.

Because that's essential what you ask.

He said, "Hey, do I stop paying these extra payments?" And instead use that money to invest in my Roth IRA. Yes, I would stop paying extra out of five and a half percent interest rate.

“Knowing now that you can max out this Roth IRA, I think five and a half is okay.”

And I don't think though that like the interest saving arbitrage from the one big beautiful bill of like a hundred or two hundred dollars is going to be the needle mover for you. I think having the Roth IRA maxed out is going to be the needle mover for your wealth building journey. I hope that makes sense. I explained that okay.

Yeah, I think you explained it really well. And I want to just really talk about this just a little bit longer. And that is we always want all of you to max out the Roth IRA before you even think about starting to pay down other debts and pay extra payments unless it's high interest. And this is on that border at seven percent where you could say it's high interest especially with the markets where they are right now. If this was 23 or 2000 and 24 even earlier in 2025 when the S&P was making 20 percent or greater,

it's a little bit more of a broad spectrum of that positive arbitrage that could go into your bank account.

Right now, it still is close. I would always make sure you're maxing out the Roth first and then pay any extra payments like Austin alluded to.

Once those things are all in done, then you can add the extra payments to pay down the car a little faster. But I think your breakdown was perfect. I even understood the situation better through your breakdown.

“Yeah, I think at the end of the day here, the most important thing to remember is you can't out invest high interest debt.”

If you're not calling, if our friend here actually does refinance their auto loan at this five and a half six percent interest rate, that's not high interest debt, my opinion. Right, you're calling it five six, like that's fine. Now, if it was seven and a half, eight and a half, nine and a half, ten percent rate double digits getting really close to that, then yeah, that's a different conversation, but call it five and a half six percent.

If you can afford that monthly payment for your car, rock and roll, just know that you are someone that maxes out your Roth IRA. That's a non-negotiable. So our next question comes from in a anonymous listener. Our anonymous listener says, "Hi Robert Noston, please keep me anonymous." Thank you for your show.

I'm a new listener and I've really enjoyed your advice around career and future planning. I'm 24 years old. I'd love your perspective on how you approach my situation in my shoes. Right now, I make $100,000 a year pre-tax working full-time. I've got $70,000 invested across my Roth IRA and a taxable bridge account.

And I currently invest 35 percent of my after-tax paycheck. I also have an emergency fund with four months of expenses set aside and I high-yield savings account. My goal is to start a full-time MBA program in the fall of 2027. I'm extremely fortunate that my parents plan to cover tuition, but I know I'll still need to fund my own living expenses.

but I don't want to be forced into making a bad decision because I under-saved for my monthly expenses. My question is, "How would you plan for this if you were me?"

“Would you continue aggressively investing in the market between now and 2027?”

Or perhaps start redirecting a chunk if not all of that 35 percent into a dedicated MBA living expenses bucket?

Any guidance on how you think through this would be super helpful? If you're not an honest listener, you are good with money, you're 24 years old, you make a lot of money and I think you answered your own question here. That's what I would do. If I were you, because it's like, "Well, what's the alternative?" Right? Let's say it's fall of 2027. Your parents are so kind and generous that they want to pay for your tuition, but you've got to pay your rent.

You've got to buy your food. You've got to do different types of activities that might come with purchasing different books or software. Whatever is, you know, MBA related expenses here. That is now thousands of dollars per month. Are you going to go into student loan debt? Are you going to swipe the credit card? Are you going to cash out on your retirement accounts? No to all of that. What are you going to do? You are going to use a savings account bucket.

You just mentioned it here. Think of it as like a sinking fund for this specific experience.

I would personally know how much money you have. Right? You've got $70,000 already in your Roth IRA and your bridge account. You are so good to go. So if I did my math right, that 35% of your after tax paycheck. When you annualize that number, it's about $28,000 a year. So call it 2300 bucks a month.

“I think that you should set aside $625 of that 2300 bucks a month to continue to max out your Roth IRA.”

And the Delta is then set aside in a sinking fund high yield savings account earning three or four percent, which between now and the fall of 2027 should make up about 30 to $40,000, which in my opinion is going to be good amount of money here for you to cover your expenses. Your rent, your food just like got to be frugal about it. Get some roommates, right? But I absolutely think you should try and pay for this in cash versus swiping the credit card or going into student loan debt.

Or, you know, caching out your Roth IRA to pay for this.

Like, I don't think that's the solution. I think you can continue to invest in your Roth. And this is now a, I'm investing in my future type sinking fund bucket that you know you're going to spend this money on living expenses and things you need for your MBA. And there was one more part of the question that I want to read and I want to address that as well. And it is one idea I've had is to buy a house or small property near my future school and have two to three roommates

and sell me cover the cost of the mortgage so I can avoid paying rent. Is that something you'd seriously consider in my situation? Or would you rather keep it simple and just rent and stack cash?

“I think you should keep it simple. You're on a good path right now. My fear is this.”

You buy the house, there's some unknowns. You get caught up in repairs and more things you have to pay for. All of a sudden you're putting it on credit cards. Like Austin said, we don't want you taking from the Roth or the Bridge account. And then all of a sudden you're focused on being a landlord instead of focusing on getting your money right. You've already done a tremendous job. You're getting the MBA which is going to really help you at the next state of things.

So I would focus on that. I don't mind the renting part. You can have roommates to keep it cheap, but I would not buy a house right now because there's all of the unknowns that come with it. And unless you're in an area where the capital appreciation is 15% or greater, I think it would be more of a distraction and less of a good financial move to buy a small property at this time.

Yeah, I mean at the end of the day, Robert. It's like our non-mistler here. You're going to go, you're going to school to study and get a degree. You're not going there to be like a ad hoc landlord. Or you know, like that's not the end goal. The end goal is not to be a real estate mogul and like start investing in real estate. The end goal is to live as cheaply as you can.

Think your parents for paying for your tuition and working a part-time job and living cheaply and relying on your savings here to not go in a credit card debt or to cash out your retirement funds. With the goal of having this piece of paper that's hopefully going to allow you to earn 141/61/80 because you have the MBA, not, oh, I like kind of slid by because I was working on the landlord stuff but I got this cool rental property, but like I didn't really make the best grades

because I was spending my weekends fixing up the kid shit. Like, don't worry about that stuff. I do a Robert said rent cheaply, live frugally, get your education and don't go into high interest debt doing it. Our next question comes from Laura. Laura says, "My husband and I make $180,000 a year pre-tax

and I've already enrolled into my company's 401k, which offers a 4% match." I also opened up a high-yield savings account on public. I'm 42 years old, no kids, no debt, no loans whatsoever

My question is, I have an apartment in the country where I previously lived.

It's tax exempt because it is in a tourism developing area. It's totally paid for, there's no mortgage on it. Right now it is being rented, but I'm starting to wonder if it makes more sense to sell it and invest the money into the US stock market or even just put it in a high-yield savings account.

“I think right now I could sell it for $150,000.”

The rent is making me about $650 a month. What would you do in my shoes? Robert, how about you walk our friend Laura through what it means to have cash on cash returns and just talk about real estate and her returns right now versus what could happen if it was in a high-yield savings or in a stock market?

Yeah, I look at it this way. If you could sell it and get that $150,000, let's say after everything you net it, $120,000, $110,000. And then we put it into just the simple S&P 500 of the NASDAQ generally over time and we're going to make 10% on that $120,000. We're going to make $12,000 a year.

We don't have to worry about a broken pipe. We don't have to worry about vacancy rates. We don't have to worry about any of that stuff. Just money in our pockets. Instead, right now you said you're making around $650 monthly, so with that in mind and let's say that that $650 is whatever that is,

$8,000 a year in income. And you made that same 10% then you can see the difference. It's a huge disparity here between what you'd be making with the $120,000 versus the $8,000 you'd be getting yearly in income from the apartment. So personally, I would probably sell it, make sure you understand all the tax implications

between whatever Caribbean country. It's in versus the United States because long-term at 42 years old you have a long investing time horizon. You'd be way better off with that money than having the property. Now, a lot of people and I'm not saying don't buy property.

I want everyone to own real estate.

“But you have to look at the returns like Austin alluded to that cash on cash return”

of where is the better opportunity long-term for your money to get you to that place where you desire financially for retirement. So that would be my take in this particular situation at 42 years old. That's what I would do. Yeah, so I'll jump in and explain some numbers here for you.

So what does cash on cash return mean? So cash on cash return is essentially how much cash left your bank account to acquire the property and how much cash flow is now coming into your bank account as you rent the property and what's the sort of the ratio there. So I'm going to pretend that you, I mean, this whole thing is paid off.

I have no idea how much you actually paid for it. What was the total cost? How it has appreciated whatever. So if we just use 150,000 dollars, let's say many years ago, you came in with 150 grand.

You bought this apartment in the country used to live in.

So $150,000 to a Roberts point at the moment at 10 percent.

Well, it's called at $150,000, then maybe you pay some capital gains. Let's call it 120. That $120,000 to Roberts point at 10 percent invested in the S&P is earning about $12,000 a year. And you don't have to worry about the broken pipes and things like that.

So that's a 10 percent return on that hypothetical 120. The 10 percent is also hypothetical. But we know over a long period of time it tends to go up. It takes 50 a month over 12 months is $7,800. If you divide now that $7,800 into the $120,000 that you plan to receive,

if you did sell this and pay your capital gains or whatever, that's a six and a half percent return. Right? So $7,800 per year out of this 120 is six and a half percent return on your investment. Now that six and a half percent is paid to you in cash as you know, because you're getting that as monthly rent.

Six and a half is lower than 10, but also the 10 is not guaranteed. Or maybe the six and a half is also not guaranteed because maybe you've got some fixes. You've got some things you got to pay here. So the 7,800 actually maybe only turns into 4,000.

“So I think Roberts answer here is correct where you're probably better off taking the”

$120,000 after you pay your capital gains and things like that. And if you still want to have some exposure to real estate, consider neos funds. Or yourself into an IYRI ETF or maybe you want to put yourself into, you know, maybe they're S&P or they're, you know, Nasdaq.

What are these other ETFs from Neos funds?

It's going to pay you 10, 12, 14 percent annually on your money.

So you're actually still getting those monthly payments, those monthly distributions every single month. Let's say you took that $120,000, figured out a blend between SPI, QQQI, maybe IYRI, those three ETFs here,

some real estate, some Nasdaq and some S&P. And your blend is now 12 and a half percent. You are now receiving $1,250 a month in Neos fund distributions

That's twice as much money as you're getting right now. And there's no broken pipes. There's no I'm laid on rent. There's no, you know, whatever.

“Now what there is, though, on the flip side is,”

whoa, stock market went down 20 percent. Whoa, Nasdaq went down 35 percent in 2022. Right, that's going to pull back those monthly distributions in proportion it, right? But at the end of the day, if you believe like we do,

that the US stock market and US capitalism goes up over a long period of time. And you think that having some S&P, some Nasdaq, maybe some IYRI real estate exposures, a good idea, then this call it 1250 per month is going to be

pretty consistent over a long period of time as well.

Yeah, and I always feel like anyone that's interested

in real estate has to look at it at scale. If you're going to own one apartment and you're just going to hold it because it makes you $650 a month, if you enjoy that great. But in most instances, if you're getting into real estate,

the more real estate you own, the more economies of scale work in your favor. Because if you have four or five properties, you can hire an in-house manager and maintenance guy at all of these things, it's just like being

in the restaurant business. When you own one restaurant, it's hard. If you own five restaurants, because you have

“these economies of scale, everything gets easier.”

So keep that in mind, for any of you considering getting in the real estate business, you want to try and build it up in scale, and have a portfolio, because everything gets less expensive and more profitable.

100%.

Our next question comes from Savah.

Savah says hello rich habits podcast team. I'm a listener from Canada, and I'd really appreciate your advice on student loan payoff strategies. I'm 30 years old. I've got 12,000 CAD in student loan debt,

and my main goal is to have it paid off completely before. I start a family. I want to approach this in the smartest and most efficient way possible. I'm considering investing in low cost index funds

to grow my money, and then use those returns to help eliminate the debt faster, but I'm unsure whether that's the best approach versus aggressively paying it down directly. What do you guys recommend for your student loan payoff

approach strategy? All the good stuff here. Robert, let's talk about it.

“So what we encourage people to do is first off”

no one should have student loans forever. The goal is to not go into your retirement years with student loans in a mortgage, and all this debt up to your eyeballs. You want to be retired or work optional or whatever you want

to do with as little debt as possible, especially high interest debt. Now, some people want to hang on to some debt at a mortgage of 2.75% or maybe some student loans at 3% whatever, like figure it out,

personal finances, personal maker and decisions. But what we like to see people do specifically as it relates to the student loan debt is have at least an equal amount of money invested in the markets.

This could be in your retirement account. This could be in a bridge account. This can be whatever. But have that equal amount or more invested into the S&P 500, the Nasdaq,

the Dow Jones, all the things we talk about the index funds and ETFs before you begin to pay off your student loans aggressively. Now, at this 12,000 figure, it's kind of not a big deal if you don't do that.

But more specifically, this advice goes for people who have 100, 200, 300,000 a student loans. I mean, she is the least. I'm not going to name names, but there's a very prominent online personality

who talks about personal finance and investing a lot that paid off like $400,000 of student loans. And that's great. That's really cool. They did that.

But student loans can only go to zero. Money invested in the markets can go up into infinity. It compounds over time. It's simple interest versus compound interest. And so if you have $400,000 in the markets,

seven years go by, it's now double to 800,000. Seven years beyond that, it's now 1.6 million. So you're 400,000 has doubled twice to 800 and then to 1.6 million where that same 400,000, seven years later, you go pay it off its zero.

Seven years after that, it's still zero. Right, so whenever you have a large amount of student loans,

we always like to help people before you go pay it off

aggressively because we want your pay off. We do. But before you do that, go get an equal amount of money invested in the markets growing for you over the next several decades.

So you don't make the mistake of spending 10 years paying off your 200,000 of student loans. Wherever that same 10 year period of time, you could have invested in the markets and it would have grown and doubled and it would have worked

much more favorably at the end of the day for your net worth than just paying it off just straight up how it is there. Now with the 12,000, you know, you're 30, you make great money.

I'm sure, like, pay it off and then go invest, like, invest paid off doesn't really matter. It's just a small amount of money here. But that's the general approach we like to tell people when it comes to student loans.

There is no words I can say to improve on that answer. So let's keep moving on. But before we move on, Robert, got to give a shout out to public.com. If you all have not yet checked out generated assets,

Log into your public.com account right now.

Click on the generated assets button and then literally come up with anything you want. I want investing companies that sell GLP ones. I want investing companies that advertise at the Super Bowl. I want to invest in companies that are growing their free cash flow

by 10% year over year have paid a dividend and are growing their free cash flow and revenue. Like who knows? Figure it out. Come up with some crazy ideas.

Inside the rich habits network,

“I think Robert, we came up with like 13 or 15 different generated assets strategies”

that out performed over a long period of time. I think it was CROIC. I think there was like founder-led companies. There's a couple things out there that we came up with. So be sure to check that out if you haven't already

if you're inside the network. But at the end of the day, generated assets makes it really easy for anyone that has a little bit of a hunch. A little bit of you know what?

I've noticed that people that do this or companies that have this or what I want to invest in that. Or maybe it's the flip side. Maybe you're like listen, I hate it when companies do this.

I don't want to own companies that do this and you can do that too. Give me companies. Invest in companies that do not do these things but also are in the S&P 500

or do not do these things

but are also larger than 100 billion market cap.

Whatever. It'll figure it out. You can take your ideas and make a generated assets strategy out of it. Go check out public.com/richhabits

that uncapped 1% bonus. Go check them out. It's awesome. You guys all know that we love public

“and this tool is one of the coolest they've ever created.”

We love it. We use it like Austin said. There's a bunch of really cool strategies in the rich habits network. So if you haven't joined yet,

make sure you check out the 7 day free trial in the show notes below and go check out generated assets at public.com. So our next question comes from in a anonymous listener.

Our anonymous listener says, "Hi, Austin and Robert. I'm a longtime listener of the show and thank you for all you do and provide. I'm way more financially literate now

than it was two years ago

because I started listening to your show." My wife and I are in our late 20s and we're evaluating a potential home purchase in San Diego it's about five minutes from the coast.

My father-in-law is willing to invest alongside of us and we're considering a 50/50 ownership structure in this home via an LLC. The home is valued at $975,000,

but it has an assumable VA loan. At a 2.7% interest rate with $527,000 left on the loan. The all-in monthly payment would be only $3,500.

Our goal is to live in the home for several years and then eventually in the long-term rented out for $4,500 a month or more.

As you guys probably have already done from the math, we'll have to put down about $450,000 split between us and our father-in-law that's $225,000 a piece.

We plan to also pay for closing costs of $20,000 and then split any major expenses.

“My household income is about 200,000 a year.”

We have half a million invested across our retirement accounts, our bridge accounts, our HSA, all the fun stuff, and 30,000 in a high-yield savings.

This would put roughly 45% of our invested assets now into this property. I'm looking for your perspective on whether that level of concentration

makes sense given our age, single income household status, and desire to maintain long-term flexibility. Thanks for all you do.

Robert, I'll you kick this off. Yeah, this is a tough one because if you look at it from an investment perspective, I'm sure in this area in San Diego

there's good capital appreciation year over year. Let's say it's six or eight percent, maybe 10 percent. So that part of it I like

but the cash flow part of it is not going to be great assuming that the payment on this is not going to be great. I think they said would be around

3,500. And you state that in a few years down the road, you could rent it you believe for 4,500. So there's not a lot of cash flow

out of the property, so I would have to really consider is it worth tying up that much money like you alluded to a big percentage of your net worth

into this one property as a rental. Now, I get it. You want to enjoy it for a few years. Because of the loan terms, but you're still coming out

of pocket $225,000 plus your pro-rata share of the expenses for the down payment closing costs and all of that. So for me,

I think it's got to be more about what is your desired outcome versus do the numbers make sense. Because we all want everyone

to have home ownership, but we also don't want you to be house broke. And in this situation, I feel like you're kind of

putting yourself right on that fence where it could be great. If the house goes up in value over the next 10 years by, let's say $500,000,

then it could be a really good outcome for you. But if it doesn't, and you turn it into a long-term rental, you have a lot of cash tied up

to produce you much income.

I think that's a wonderful breakdown. It's funny. As you, as you walk through this, I'm on Zilla right now trying to

find the actual home, because I'd imagine someone would call it out that it is in a sumable. I've not yet found it though.

“Anyway, it's my curiosity got ahead of me here.”

You mentioned a couple terms that stood out to me at the end here. This would put roughly 45% of our investable assets into the property. I'm looking for your perspective on

whether that level of concentration makes sense, given our age, single income household status, and desire to maintain long-term flexibility.

That last bit there is really interesting. Because at the end of the day, owning a home is the opposite of flexibility, right?

Owning a home means the only way that this actually turns out in your favor historically speaking is you live there for five, seven, ten years, right?

You live at a home long enough where it appreciates so much that it offsets the interest you've paid while you live there. And that is like a positive,

you know, outcome for it for owning a home. But on the flip side, if you live there for two years, or three years, then like

and you try and sell it, it doesn't make sense. But you mentioned, which I thought was really interesting, it could rent for 4,500.

So maybe you do have a little bit of flexibility. If you do want to move around and have a little bit more autonomy over your living situation,

and at $3,500 a month, I mean, that is a decent monthly payment,

but for a million-dollar property,

that's peanuts. Because you're essentially right only a mortgage on half a million. So good, discretionous.

What would I do? This is a really, really cool situation to find yourself in. My head goes a couple places.

The first one is like, you know, there's a book called die with zero. As someone who's not read this book, but if I heard some cool snippets

and I want to make sure I give credit where it's due, right?

“Die with zero is the book I'm thinking about”

here to come up with this ideology and strategy. It's like, give your children your money while you're still alive

and while they can really use it to upgrade their lifestyle. And so it seems like your father-in-law is doing that. You guys are in your late 20s.

Your father-in-law's got so much money that he's able here to come in with nearly a quarter million dollars and really, you know,

maybe this would have been, you know, you're inheritance here, but he's taken that and given it to you now, so you can really enjoy it

while you guys are young and still alive and everyone can enjoy this home. I would just think about a couple things

and Robert,

I'm going to actually let you

spows upon this with the structure of the LLC and stuff like that. So I'll let you talk more about that. But as it relates to

doing that as a whole, just make sure that you now at Thanksgiving dinner, it's not weird. Right?

Oh my gosh, my father-in-law, I haven't paid him the mortgage this or hasn't done this or I owe him this much money.

Like whatever you guys end up doing here just make sure it's kosher and I'll let Robert, I guess, dive into the details. I do not think having

45% so $225,000 of your total investable assets into something like this would be detrimental.

I'm just looking through because you mentioned total invested assets at 515 taxable brokerage at 350 retirement accounts at

120 HSA at 25. Are you planning to sell your taxable brokerage? It seems like you are sell your taxable brokerage

used to 25 from the 350 and use that for that's the thing. I think it's fine. Your retirement accounts

are great. You've got great income. You're going to bring up that taxable brokerage account again in the future.

Like Robert has helped me understand this more over the last like 12 to 18 months if you are about to

make a decision that's going to allow you to be so much happier in your day-to-day life.

It's okay for the perfect numbers to not perfectly fit together. Right? So like for example,

you're here saying yourself, "Oh my gosh, half my net worth is in this property." Like maybe, but given your income

and given your ability to be prudent with money, that 45% is going to shrink to

25% by the end of the debt kid, and at that point it doesn't matter. Right?

Now if you said 80% of your net worth was in this property, I'd tell you not to do it. But 45,

it's like that's going to shrink a lot. Robert says it all the time and personal finances personal at the end of the day is this property

going to give you the biggest just level up. You're going to be five-minute walk

to the coast. You're going to be closer, maybe do some friends. Maybe like,

is your lifestyle? Is your day-to-day happiness? Just going to explode where you guys are in the best

marriage possible and everything is wonderful. You feel really, really incredible.

If that's the case, dude, who cares about the 45%? Go be happy.

That's how you should be thinking about this. And that's why I'm like the biggest believer

with real estate. It all comes down to this specific situation. More in my opinion

than it does with the numbers. Right? Now of course, you should be

learn house broke, but like, if things don't perfectly fit together in this puzzle piece

at that exact moment when you buy this house, but you do have a plan for the next three four

or five years to make it come into that sort of framework as it should.

Right? 45% turns into 25%. So now it's

nothing burger and congrats. You're now living as awesome home.

That's I think how people should be thinking about real estate.

Versus it has to be this perfect this and perfect that.

And my money is going to do this.

if you play your car right,

and you've got consistency

and a little bit of predictability with your income, you guys are going to be just fine. I think that's a great

takeaway. And when you really think about the situation because real estate

and personal finances always situational, a million dollar

home, 2.75% interest rate on the mortgage,

$3,500 a month all in is what

they stated. So I'm assuming that

includes property taxes and everything they need to pay if there's

an H.O.A. or whatever. That is an incredible

scenario to build a high quality of life, but to get to the structure as

Austin alluded to for Thanksgiving dinner. Make sure everything is

spelled out in the operating agreement. Make sure you have all of it

dialed in so it's never weird when you're at Christmas dinner.

So have that LLC make sure you're both listed on it. Make sure you

spell out every detail of how this is supposed to work.

Who is in charge of maintenance is everything pro-rata split

down the road for if you have to replace a hot water tank or something goes bad.

Or is the father-in-law only on the hook

for the 225 he gets back XYZ are the

profits down the road when you split and sell the property

split 50 or do you get a

higher proportional amount because you've maintained the house

you've lived in the house and done all that. A lot to

think about, but make sure this is all spelled out in your agreement. So

that way it's smooth and cooler than the other side of the pillow

you've never have to get in a fight about money with the father-in-law and

lastly I did a quick look up it appears that most of

San Diego has around an 8%

capital appreciation year over year

even with the most recent

downturn so that's pretty strong

as well so if you think about that

five years down the road if you decided to

sell it you still made

45 percent on your money

everyone wins and you got to live

in an awesome house with an awesome

situation relative to your budget yeah

I wouldn't sell it though

not no way no way 35 bucks for a

million dollar home like that is nuts

i'm for perspective i'm building a home

in twenty six and i'll be borrowing

about a million dollars and my monthly payments

like seventy 200 so like

half of that it's it's pretty cool

so rock and roll you got this but to Robert's

point i just want to make sure that you understand the

structure right it doesn't matter how you structure it but there's a lot of things to consider

and make sure that everyone's on the same page about that right when the home

eventually does sell like how does that get split out when the water heater

does need to be replaced to the roof like who does that who pays for that is it used at the

that is it who knows y'all could choose whatever you want to choose doesn't matter

what you choose it's just the fact that you chose something and it's written down and everyone's on the same

page about it so our final question comes from Tyson Tyson says

what's up Austin and Robert i've been listening to y'all for about a month now and i'm trying

to wrap my head around and building rich habits i figured I'd ask some knowledgeable people in the finance world

well Tyson we are at your service my friend thanks for tuning into the show

Tyson says i'm 19 i just got my first job as a machinist apprentice

say that ten times fast making about thirty one thousand dollars a year

before this i was making and selling knives to friends for about two hundred dollars per knife and i was

profiting about one twenty give or take i've been doing the knife things since twenty twenty two

and i have a good crap for it now i'm considering content creation with a knife gig

on the side with a goal of mine to buy my own house in the next few years if it's feasible

how would you guys play your cards if you were in the position i'm in now i've got fifteen hundred

dollars total to my name Robert what advice do you have Tyson here is nineteen

he's got fifteen hundred bucks in his bank account and he wants to buy a house probably in his early to mid 20s of possible

he's making thirty one thousand a year right now as a machinist apprentice and he's got a side gig of selling knives

for a hundred twenty dollars per profit per knife this question makes me giddy

because it's so incredible

he went out he got to figure it out how to get this machinist job making good money it's going to keep going up

because you know this kind of field is not going to be taken over by AI he's got this side hustle that he's thinking about

taking more seriously I think he has spelled it out perfectly that I would yes do the social media

yes solidify this side hustle as a real business get that LLC up and running so that way you can have some

write-offs you've got it all dialed in you've got a business bank account I would do all of that and it's okay

that you only have fifteen hundred

“dollars in your bank account at the moment”

because you've already proven that you can make money on these knives it's like a forty percent return on each knife and then once you get the social

up and running and you start reaching a larger audience you're one or two cool videos away of going viral of having a thriving knife business which then you might have to get a little shop

do all of that I love the situation for you and I would definitely do it and keep going because you can have the job by day

as the machinist and on nights and weekends really rock out the social media and build up this knife business which is your passion

but could be a really large money maker I love that yeah just looked up the career path for the machinist apprentice and it seems like your apprenticeship

is going to last about four years

“so you're making call it thirty thirty two thirty five thousand”

dollars for the first couple years there but then you're a journeyman machinist which is now making sixty to sixty five thousand a year so let's call it by twenty three twenty four years old you're now making

essentially the same amount of money I made out of college right sixty two thousand a year which is pretty cool and then you can continue to do this and they've got other sort of you know career master machinist ten years experience eighty five thousand a year

like whatever right so this is a good career you're well on your way to high five figures perhaps low six figures and your twenties and thirties depending on how long you do this and how good you get

so keep doing that rock and roll emergency fund no credit card debt max out your off IRA anything above that go put some money aside

give yourself a five year shot clock to save up let's call it thirty thousand dollars hopefully for a down payment on a home do the three and a half percent FHA loan depending on the type of home you get

maybe you end up doing something with a quadplex

“or a triplex or something there's different loans for that as well”

but I love what Robert said about kind of doing both right go be a machinist apprentice go make your thirty thirty five thousand dollars over here but then with the knife stuff go make content about it on TikTok

I've talked about this in the past but there's a guy that makes leather belts I forget his name

but he's sold over one and a half million dollars of leather belts

because he's made videos about them on his TikTok account and he makes them in his garage he just makes these leather belts sell them for eighty ninety hundred ten dollars about and they're all leather

they're what up like you can do the exact same thing and I'm not saying you're going to make a million dollars from this but you might make four thousand two hundred and twelve between now and the end of the year and that's four thousand two hundred and twelve dollars

you didn't have right and that's only going to build on itself and the last component don't forget about live shopping maybe there's a world where you've got so many of these different designs different lengths or whatever else you got going on

and you start selling them on whatnot or TikTok shop live or whatever is going on and now you're you're really you know grinding out during the day with your job you're making some content here

and now maybe there's a world where you're selling so many of these that the profit from the knife business offsets the take home pay from the machinist apprenticeship and now all in your making sixty thousand in two thousand twenty seven thirty something over here

and thirty something over there there's a lot of different ways to play this the last piece of advice I'd give you at nineteen years old do not ignore artificial intelligence

I need you to spend ten hours this weekend chat GPT.com type in Google Gemini type in cloud AI and just brain dump ask it

what are you capable of here's what I do

every day how can you help me how have you helped other people how do people use you how can I use you like just understand this technology I know it's it's a little different I you know you make a knives you're a machinist

or in the trade you're probably not one of these tech nerds that's eighteen that's trying to go build a billion dollar start up right so I understand it might not feel so easy for you maybe depending on how much you actually care about

this stuff it seems like I like to work with your hands which is the opposite of technology so that's totally fine both can be

“rocking and rolling but I think it's really important”

for you to understand this type of tech especially at nineteen years old and how other nineteen and twenty something also using it to build and optimize their own businesses. Wow what a great

episode such a wide array of incredible questions really love the last one as well so just a great episode and we appreciate each and every one of you that stops by every week gets the questions

in the DMs email us send us some unspotify remember we have followers unspotify as well you can reach out to us there and just really send us these awesome questions so we can make episodes

that is all about you because personal finances personal and we love to answer your questions yeah all of our followers are unspotify

we're coming in on about a quarter million here

really exciting thank you guys so much and be sure to leave us a comment vote in the poll below if you've not yet subscribed on Spotify please click that subscribe button you will know whenever we post episodes

up to three episodes a week now which is awesome and of course don't forget seven day free trial for the rich habits network all the details for that in the show notes below thanks everyone

and we'll see you tomorrow for our Friday episode of the rich habits radar [Music]

get a lot of students. The master by today

laptop is soft behind the internet so master is really great

you can say that you can go back

you have a lot of stress but you don't have to do that.

you have to do it for the first time

make the whole thing like this and if you work then you can do it that's right. Save like this you have to go back

now you can go back mama how much the big love you love hmm you say

and so creamy hey we can go to papa Nutella or from mama and papa no Nutella is Nutella