Rich Habits Podcast – 23: Our Biggest Financial Mistakes & How to Avoid Them

Intro

In this episode of the Rich Habits Podcast, the hosts discuss their biggest financial and business mistakes. They emphasize the importance of learning from mistakes and understanding the ups and downs of growing wealth and businesses.

Main Takeaways

Missed Investment Opportunities

• Robert Croak shares a missed opportunity to invest in Bitcoin in 2010. The cost to invest was $10,000 for 166,666 Bitcoin at six cents a piece.
• Robert’s accountant and lawyer advised against investing in Bitcoin, causing him to miss out on potential gains.
• Robert learned that you should only take advice from qualified mentors who understand the sector or technology.
• Asking unqualified people for advice can lead to missed opportunities and negatively impact financial life.

Contractual Obligations and Tariffs

• The federal government imposed a tariff tax on silly bands, resulting in a $423,000 bill for back taxes.
• UPS provided the tariff code but had a disclaimer in the contract that indemnified them from any legal issues caused by the tariff code.
• The main takeaway is to read every inch of your contracts to ensure that the other party does not have any unfair advantage.

Building Wealth and Protecting Assets

• Holding companies and LLCs can provide liability protection and tax benefits.
• LLCs, holding companies, and trusts provide layers of isolation and anonymity for better protection against inside and outside attacks when building wealth.
• Using a registered agent is important for setting up business structures and keeping anonymity.

Real Estate Investing and Tenant Vetting

• Proper paperwork and vetting tenants is crucial in real estate investing to avoid potential problems and complications.
• Tools for vetting tenants have improved over the years, making the process easier and more efficient.
• Eviction processes can be difficult, and it’s important to handle them properly to avoid potential conflicts or issues.

Investment Strategies and Financial Advisors

• Personal finance goals should guide investment decisions.
• Start investing on your own with index funds like VOO, QQQ, and VTI.
• Consider AIQs or VGTs for a more aggressive approach.
• Only consider hiring a financial advisor once you have significant funds or life changes.
• Interview multiple financial advisors and look for someone with the heart of a teacher.
• Understand the difference between a financial advisor and a fiduciary wealth advisor.
• Fiduciary advisors provide long-term strategies for wealth building and making the right decisions.
• It’s important to consider fees when choosing an advisor.

Summary

Missed Investment Opportunities

Robert Croak shares his regret of not investing in Bitcoin in 2010, despite the opportunity to purchase 166,666 Bitcoin at six cents a piece for $10,000. He received advice from his accountant and lawyer, who advised against it due to the risk and lack of personal protection. However, he later invested $15,000 in Bitcoin, realizing the importance of taking advice from qualified mentors who understand the sector or technology. This highlights the need to be careful who you listen to when making financial decisions.

Contractual Obligations and Tariffs

The hosts discuss a situation where the federal government imposed a tariff tax on silly bands, resulting in a hefty $423,000 bill for back taxes. UPS provided the tariff code, but the contract had a disclaimer that indemnified them from any legal issues caused by the tariff code. The main takeaway is the importance of thoroughly reading contracts to ensure that the other party does not have any unfair advantage.

Building Wealth and Protecting Assets

The hosts emphasize the benefits of using holding companies and LLCs for liability protection and tax advantages. They also mention the importance of using a registered agent to maintain anonymity when setting up business structures. These strategies provide layers of isolation and protection against inside and outside attacks when building wealth.

Real Estate Investing and Tenant Vetting

Proper paperwork and tenant vetting are crucial in real estate investing to avoid potential problems and complications. The hosts mention that tools for vetting tenants have improved over the years, making the process easier and more efficient. They also discuss the challenges of eviction processes and the importance of handling them properly to avoid conflicts or issues.

Investment Strategies and Financial Advisors

The hosts provide insights into investment strategies, emphasizing the need to align investments with personal finance goals. They suggest starting with index funds like VOO, QQQ, and VTI for individual investors. For a more aggressive approach, they recommend considering AIQs or VGTs. They also advise on the right time to hire a financial advisor and the importance of interviewing multiple advisors to find someone with the heart of a teacher. Understanding the difference between a financial advisor and a fiduciary wealth advisor is crucial, as fiduciary advisors provide long-term strategies and prioritize making the right decisions. Lastly, they highlight the importance of considering fees when choosing an advisor.

Conclusion

In this episode, the Rich Habits Podcast hosts share their biggest financial and business mistakes, highlighting the importance of learning from these experiences. They discuss missed investment opportunities, contractual obligations, building wealth and protecting assets, real estate investing, and investment strategies. By sharing their insights and lessons learned, they provide valuable advice for listeners to avoid similar pitfalls and make informed financial decisions.