🤑 20%+ Returns for 37 Years

& going from $66K to $2M...

Together with Frec

Good morning,

A quick breakdown — in case you just don’t have the time.

  1. Addressing what “10% a year” really means for stock returns.

  2. We spoke w/ Jeremy Schneider about going from $66K to $2M.

  3. Long-term belief in crypto is still lower than you may think.

  4. Microsoft, Nvidia, & Apple now make up ~20% of the S&P 500.

  5. NFL Sunday Ticket is in a $18 billion fight.

  6. You can find the best card for you w/ our updated credit card matrix.

Market Overview

As of market close on 6/5/2024

Chart of the Week

In honor of hosting Jeremy Schneider from @PersonalFinanceClub on the podcast this week, we decided it would be a good idea to share one of his illustrations!

You’ve probably been told “On average, the S&P 500 returns 10% per year.” And this statement is correct!

Since the S&P 500’s inception, the index has averaged an 11.9% annual return — and when you adjust for inflation your real return is around 10%. But what’s funny about that statement is how seldom this “10% figure” is actually returned to investors during any given year.

As you can see above, the number of times the S&P 500 returned between 8-12% since 1926 is precisely six — that’s right, only six times!

10% is the average! The index experienced annual returns above 12% a whopping 52 times since 1926 — with 37 of those years being returns above 20%. This is a great illustration to remind you that timing the market is a fool’s errand — buy, buy, and buy some more!

Over a long period of time your returns will speak for themselves.

We’re thrilled to announce our partnership with Frec, bringing direct indexing to every investor. 

Two decades ago, ETFs reimagined mutual funds by helping investors save on fees and have more flexibility in their portfolios. Now, direct indexing is taking index investing to the next level — by offering significant tax savings to investors like you. 

How does it work? Direct Indexing is nearly identical to investing in ETFs, but with a key advantage: it allows you to reap tax benefits by directly owning the underlying stocks.

How can you invest? With Frec Direct Indexing, you can invest in popular indices like the S&P 500 while Frec automatically harvests your tax losses. It’s automated and effortless.

Why now? Thanks to recent technological innovations, Frec has made this strategy available to all investors at a low 0.10% fee. Billionaire family offices have been using it for decades as a way to lower their tax obligations.

We’re excited to share yet another strategy to help with optimizing your wealth building journey! 

Rich Habits’ host Austin Hankwitz is a client of Frec. Frec paid a one-time fee for this sponsorship. Investing involves risk, including the risk of loss.

In Case You Missed It…

Jeremy is clearly a funny guy!

In this week’s episode of the Rich Habits podcast (linked here) — we spoke with Jeremy Schneider of Personal Finance Club. He’s a self-made millionaire who’s passionate about simplifying finances for those that need it the most.

A few things we discussed include:

  1. Keep it Simple — Jeremy prefers to invest his millions through target date index funds. Jeremy believes by having exposure to bonds and international funds his fortune is guaranteed to be safe.

  2. Dealing with Financial Mistakes — Jeremy’s biggest financial mistake was selling his winners too soon. He quickly doubled a $400K investment into a stock back in 2016; today that investment is worth over $8M. If you have a thesis, stick to it!

  3. How to Live Off Your Investments — Jeremy’s $5M+ net worth is split between index funds and real estate. At the start of every year, Jeremy sells 3-5% of his index fund portfolio to pay for his lifestyle — and he’s been doing this for years.

We had a blast chopping it up with a fellow millionaire! Be sure to check out Jeremy’s new company, Nectarine, if you’re looking for investment advice from Certified Financial Planners — no strings attached.

During our Q&A episode that was posted this morning, we answered questions from Tikkos, Megan, Paul, Willie, Riley, Danny, and Nancy!

We prioritize questions via Instagram DMs — if you’re not yet following us, be sure to follow here! 

Thanks so much for keeping the GREAT questions rolling in.

Special thanks to Tikkos, Megan, Paul, Willie, Riley, Danny, and Nancy for sending in your questions for this week’s episode!

Follow and direct message the Rich Habits Instagram page if you want to submit a question!

Robert’s Callout

Real estate is the most-favored investment type by the wealth.

According to a recent Gallup survey, when asked “Which of the following do you think is the best long-term investment?” an overwhelming amount of Americans, despite their socioeconomic status, stated Real Estate is the best long-term investment.

A few things about this chart caught my eye — and by understanding these callouts you’ll be best setting yourself up for financial freedom.

  • Lower-income individuals favor Gold — whereas the wealthy know that Gold has underperformed the S&P 500 for decades.

  • Lower-income individuals favor Savings accounts — whereas the wealthy know these accounts don’t grow exponentially like stocks.

  • Crypto remains the most underrated investment type on the list — something I’m very passionate and optimistic about.

This chart does a great job of illustrating how the wealthy invest, and where the lower-income lack from a mindset perspective. The lower-income save, save, save — whereas the wealthy put their money to work.

Austin’s Callout

@KobeissiLetter on X.com

The Top 5 Technology stocks are carrying the S&P 500 higher in 2024.

Similar to 2023, the Top 5 technology stocks (Amazon, Apple, Microsoft, Google, & Nvidia) are the reason the S&P 500 has returned +11% year-to-date. These five names have rallied a combined average of +27% this year — now representing nearly a ~30% weighting inside of the benchmark index.

For comparison, the equal-weight S&P 500 Index (RSP) has only returned +5% year-to-date. Investors remain optimistic as to how these large technology companies will be able to monetize their AI offerings — with Nvidia being the “picks and shovels” of this revolution.

There has been skepticism of these multi-hundred billion dollar investments — but it’s not stopping Wall Street from cashing in on the trend. I’m happy to be along for the ride!

The Rich Habits Radar

  • 👉 BlackRock & Citadel are planning a new stock exchange in Texas.

  • 👉 Chainlink believes NYSE pricing issues can be avoided in the future.

  • 👉 Microsoft is laying off hundreds of Azure employees.

  • 👉 E-Trade is considering banning “Roaring Kitty” after GME run-up.

  • 👉 DirecTV & the NFL could lose $18 billion in ‘Sunday Ticket’ lawsuit.

  • 👉 Poppi (the soda) is being sued for misleading gut health benefits.

  • 👉 Champion sportswear is being sold for up to $1.5B.

  • 👉 Dr. Pepper is now tied w/ Pepsi as America’s second favorite soda.

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  • Suriance — Protect your family with term life insurance

  • Video Course — Use code “Newsletter” for 15% off

  • Seeking Alpha — Optimize your portfolio

  • Credit Card Matrix — Find your next favorite card to swipe

  • Roi — Use code “Habits” and start tracking your net worth

  • Dynasty — Protect your home in a trust

Disclaimer: This is not financial advice or recommendation for any investment. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.