Rich Habits Podcast – Q&A: Vending Machines, Financial Advisors, and Shrek

Intro

In this episode of the Rich Habits Podcast, the hosts answer questions from listeners on a variety of topics, including investing, financial advisors, and unconventional ways to build wealth. They provide valuable insights and practical advice to help listeners make informed decisions about their finances.

Main Takeaways

Investing Strategies

• Vanguard is recommended as a good platform for a 529 account with a $3,000 initial investment minimum and autonomy in investment options.
• Target date funds are not preferred as they do not take into account market conditions. Instead, a blended mix of index funds like VOO, QQQ, and VGT is suggested.
• Rolling over a 401k into an IRA should consider market conditions and performance rather than investing in target date funds.
• The rule of 72 can help figure out how many years it will take to double your money.
• Consistency and time in the market are key for compounding and wealth building.

Financial Advisors and Portfolio Diversification

• Getting a financial advisor is only necessary for complex financial situations. For simpler situations, investing in passive index funds is recommended.
• Diversify your portfolio to avoid market crashes and prioritize cash flow and long-term value.
• Consider alternative strategies for building your portfolio, such as investing in real estate, artwork, vintage collectibles, and startups.
• Use different platforms like Public, M1 Finance, Fundrise, Masterworks, Rally Road, and Vino Vest to achieve diversification.
• Weight your portfolio based on your risk tolerance and investment goals, but don’t go below 50% in equities.

Building Wealth through Unconventional Means

• Consider renting out properties as a way to generate income and build wealth.
• Research the equity and capital appreciation potential of the property before renting it out.
• Explore the 1% rule: Can you rent the house for the same amount as what you paid for it?
• Rent your new home for a year to learn the area before purchasing.
• Consider hiring a property manager or trusted friend to troubleshoot problems.

Vending Machines and Side Hustles

• Vending machines can have cash on cash returns between 50-60%, but they require constant maintenance and problem-solving.
• Successful vending machines are placed in high traffic areas where people are willing to spend money.
• Bringing down costs can increase profit margins in the vending business.
• Consider side hustles as a way to generate more income to pay off debt and become cash flow positive.
• Side hustles can be a powerful tool in getting out of debt quickly as long as the money isn’t allowed to seep into the spending habits that got you into debt in the first place.

Summary

Investing Strategies for Wealth Building

The hosts emphasize the importance of autonomy in investment options for a 529 account and recommend Vanguard as a reliable platform. They advise against target date funds and suggest a blended mix of index funds like VOO, QQQ, and VGT for investment. Rolling over a 401k into an IRA should consider market conditions and performance. Consistency and time in the market are key for compounding and wealth building.

Financial Advisors and Portfolio Diversification

Financial advisors are only necessary for complex financial situations. For simpler situations, investing in passive index funds is recommended. Diversifying your portfolio is crucial to avoid market crashes, and alternative strategies like investing in real estate, artwork, vintage collectibles, and startups can be considered. Different platforms like Public, M1 Finance, Fundrise, Masterworks, Rally Road, and Vino Vest can be used to achieve diversification.

Building Wealth through Unconventional Means

Renting out properties can be a lucrative way to generate income and build wealth. It is important to research the equity and capital appreciation potential of the property before renting it out. The hosts suggest exploring the 1% rule to determine if the rental income matches the property’s purchase price. Renting a new home before purchasing allows time to learn the area. Hiring a property manager or trusted friend can help troubleshoot problems.

Vending Machines and Side Hustles

Vending machines can provide high cash on cash returns, but they require constant maintenance and problem-solving. Placing vending machines in high traffic areas is crucial for success. The hosts also discuss the effectiveness of side hustles in paying off debt quickly. However, it is important to ensure that the money earned from side hustles is used exclusively to pay off debt and not to fuel spending habits.

Conclusion

In this episode, the hosts of the Rich Habits Podcast provide valuable insights and practical advice on investing, financial advisors, and unconventional ways to build wealth. Listeners are encouraged to take control of their finances, diversify their portfolios, and consider alternative strategies for wealth building. Whether it’s investing in index funds, renting out properties, or exploring side hustles, the hosts emphasize the importance of consistency, research, and smart decision-making in achieving financial success.