Asset Trip with Austin Hankwitz: TikTok Star Shares His Crypto-Heavy, Passive Income Investing StrategyMoney influencer with 500k followers talks about winning stock picking strategies, early retirement, financial independence, and why almost half his portfolio is in crypto.
Sep 16, 2021
Remember when the California gold rush happened and people were panning for gold, but the people who really made all the money were the ones selling the pans and the shovels? I’m trying to find the companies that are selling the shovels.
25 years old
Single, no kids
40-50% income invested
Big Ws & Ls
First Investing Platform:
Penny stocks and crypto in 2017
Favorite Crypto Platforms:
Coinbase and Gemini
Favorite Real Estate Platform:
Can you talk a little bit about your current asset allocation and what your strategy is there?
Generally speaking, early in my investing career, a lot of my asset allocation was in stocks. I really got started investing through Betterment. It was required of us in high school to watch these Dave Ramsey episodes, and he was talking about “Roth IRA this, Roth IRA that”, and I thought, “You know what? I’m 18, I’m gonna open up a Roth IRA.” So I googled it, and Betterment popped right up, and I only needed a couple hundred bucks to get rocking. That was way back in the day, when I was 18, which was in 2014.
Then I studied finance and economics in college. Probably in the latter half of college I really got into single stock investing. I was able to begin investing into both index funds and those core companies that should encompass a stock portfolio, which I think are those companies that have been around for decades and continue to show free cash flow gains. Companies growing their revenue and their margins, things of that nature. That’s your Apples, Amazons, Microsofts, Targets, Walmarts, Proctor & Gamble, Johnson & Johnson, all the companies that you know and love.
That makes up the vast majority of my single stock investing. But I definitely have a lot more speculative ideas, which are more high-growth tech companies that have IPO’d recently. Those would include Upstart, Asana, Sea Limited, Zscaler, Fortinet, some cybersecurity companies.
So that’s the stock portfolio, and that’s around 40-50% of my portfolio.
That used to be 70-80% of my portfolio, but back in my senior year of college, I made an investment into cryptocurrency that turned 12 grand into about 350 grand in 3 or 4 years. So now the cryptocurrency stuff makes up the other half of my portfolio.
Another little bit is in Fundrise. I also have a little bit in collectibles, like Rally, and a little bit with wine on Vinovest—a couple of these platforms that I discovered on MoneyMade, that I’ve been able to throw a couple grand here and there into.
But most of it is single stocks and Roth IRA retirement stuff, as well as cryptocurrency and a little bit of real estate.
When it comes to picking stocks, can you talk a little bit about your process of researching and choosing them?
When it comes to picking single stocks, for me, what I like to look at is: Is this stock operating in a secular growth trend? Are they operating in some sort of trend that’s going to continue to go forward over the next decade? For some people, this could be online sports betting and gaming, or cybersecurity, or streaming, whether it's YouTube or Roku, Amazon Prime video, stuff like that. Is this company operating in a growth trend that's expanding and will continue to expand over the coming decade? If it’s a yes, then that’s a big check for me. If it’s a no, then I ask what else really gets me excited about this.
So if it’s a yes, I’ll look back over the last three or four years and see how they’ve done from a revenue growth perspective. Because that’s the number one thing that really should matter: if a company is growing consistently, over a period of time. Hopefully their revenue is growing, hopefully their gross profit on that revenue is growing. Then I look at their expenses as a percent of total revenue. Maybe their expenses are staying the same, or even decreasing a little bit, but hopefully they’re not increasing more than the revenue is increasing. This will lead into where their income or net profits are increasing in relation to revenue. What's really important to me is free cash flow. I think free cash flow per share is a really good metric to look at as an investor. Because as we all know, cash is king.
When it comes to actually finding new companies, I think I’ve had a lot of success looking at the top 50 or so ETFs by market cap. Looking at all their holdings and just culling out random companies. That’s how I found Sea Limited, DraftKings, Roku, Upstart, Asana, a lot of these really cool companies that I’ve invested into. Just finding them organically, reading through their 10-K, their S-1, things of that nature, making sure I understand what the company does. That's also the biggest callout for me: I will not invest into a company if I do not understand what it does.
One general note: another way that I find companies is I just look around and see where I’m buying my products from, where my friends are buying their products from, and what products they’re buying. For example, over in Knoxville, which is the college town that I went to, a massive Dick’s Sporting Goods opened up and people flocked to it and loved it. So I thought, “Is that publicly traded?” You look at their stock, and it’s gone up 5x in the past 18 months, it’s crazy. So I’m just making those general observations about what's going on around us and where I can begin to think about the next thing that could take off, maybe before the market realizes it.
That's great advice. I think it's a good balance between getting into the nitty-gritty and doing the research but also peeking out into the world and just looking at what's going on around you.
Have a little bit of fun with it! I think people are intimidated by investing, thinking “Oh I don't want to read this, I don't want to know the numbers." And I get that, but...are you shopping at Target? Or are you shopping at Walmart? You shop at Target. Alright, go buy some Target stock.
I know you have a good chunk of your assets in crypto, and part of that is because your crypto investments have done so well in recent years, but a lot of investors would consider this to be pretty risky. How do you feel about that?
The main cryptocurrency I have a lot in is called Chainlink. I’m an investor in the sense that I’m not trying to pick specific companies that I think will win in the space...remember when the California gold rush happened and all the people were panning for gold but then the people who really made all the money were the ones selling the pans and the shovels? I’m trying to find the companies that are selling the shovels and selling the pickaxes to the miners.
I’m not here to pick which blockchain is going to be the next Bitcoin or Ethereum. I don’t know which project’s going to win. But I want to invest in a company that is blockchain agnostic and feeding valuable data to everything else. So in that sense, I guess having my money in Chainlink, which is a project that provides real-world data to any blockchain, is not a bet on any one cryptocurrency itself, it’s a bet on crypto in general and decentralized finance in general. Which I think is risky, yes, but by the same token, it's not risky like I’m betting on this one specific thing to happen.
I’ve done so much research around this project, a lot of the people involved with it are very smart, and there's a lot of things that they’re doing that are kind of revolutionary. For example, they just did something with Mastercard, that’s really cool. The co-founder of Docusign sits on the board of directors. The head of product at Facebook sits on their board. A lot of really cool people are working over at Chainlink to help them build some really interesting things. So I think that’s more of a bet on crypto in general vs a specific project. That’s why it’s a little less risky in my eyes.
Can you talk a little bit about what your investing goals are and how you manage risk and also liquidity in relation to those?
I think at the end of the day, my investing goal, (and I think everyone's investing goal), is to make so much passive income that I don't have to trade time for money anymore. And the easiest way to make that kind of passive income is to have a lump sum of cash that you can withdraw 4 to 5% off of every single year that’s invested in the markets, where that 4 to 5% covers your monthly expenses or your annualized expenses. Because if you can do that, you’re financially independent, and you’re retired for the most part.
So that is my investment goal at all times. I’m currently in the stage of trying to build up as much money as I can through real estate, single stock investing, and cryptocurrency investing. But once I get to that stage where I have that $1.8 to $2.5 million, then I can just park it in a fund, stick it in the S&P 500, forget about it, and that's it, I’m done.
Hopefully, in my thirties or early forties it’s wrapped up and I don’t have to work at a corporate job, I don’t have to be a content creator anymore. This lump sum can be parked in an index fund, and I can just take 4 to 5% off every single year and can be financially independent.
I think that's a very appealing goal to a lot of people right now, whether it's building enough passive income to retire completely or just enough to work a little less and spend a little more time doing what they love.
I think people are sort of intimidated by the word retirement. People think they need to have $70,000, $80,000, or $90,000 coming in every year, when in actuality retirement and financial independence are two different things.
If I look at my budget, I’m spending between $2,700 to $3,000 dollars per month. Which means on the high end, if I can have a way for this 4 to 5% to equate to $36,000 per year, which is $900,000, which is a lot less intimidating than a 2.5 to 3 million number—that’s financial independence.
And a lot of people get intimidated, like “Oh I can’t retire, I’ve got to have millions of dollars in the bank”. Well, you need to figure out specifically where you want to be spending your money, whether that's eating out or having a new car or a really cool cell phone. But be very intentional in where you spend your money. And be really intentional about what that number is, so you can check that box, take your 4 to 5%, and keep on rolling.
I think a lot of people are also intimidated by the idea that they’ve started late. A lot of people who will be looking at this Q&A probably didn't start investing at 18. Maybe they're just starting in their 20s or 30s. Do you have any advice for them?
Yeah it’s kind of funny, my most viral video of all time was a video that I made that detailed how anyone can retire a millionaire, leveraging a Roth IRA, over the course of about 30 years. That doesn’t mean $500 a month, maxing it out. I really ran the numbers with someone contributing just $100 to $200 per month. And I empathize with how hard that can be for some people, but we live in a gig economy that allows us to either drive Uber or deliver groceries or whatever that could look like, so maybe that $100 to $200 extra a month is a little bit more attainable now than it was, say 20 years ago.
I guess my advice is everyone’s advice: just start. Don’t beat yourself up, the past is the past, and at the end of the day, just be really intentional, not about trying to find more money to invest, but about the money you're making and spending right now.
For me, that was: I did not care to drive a really cool car anymore. I had a big ego when I first graduated college, got a brand new job in finance, and wanted to buy a brand new Lexus. I had a $440 car payment, and quickly realized that made me no happier than when I drove a 15-year-old car. So I got rid of the car payment and went and bought a beater car with cash, so I could then take that $440 and invest in the stock market.
I’m not saying everyone has a $440 car payment, but I am saying that people spend money in more places than they might realize. So just be really aware of where you’re spending money. You’ll quickly realize “Hey maybe I don't need to spend $75 per month on this specific thing, or maybe instead of having these four other subscriptions that I don’t really use, maybe I should just have it with this” and there you go, you’ve just found yourself $109 or $214 and that...that’s all you need. You just take that little bit at the age of 30, 35, or even 40, doesn't matter how old you are, park it in an index fund in a Roth IRA and you will end up with hundreds of thousands of dollars going into retirement, and it’ll be tax-free.
I think all the new investing platforms and apps that have popped up also help make investing less intimidating for people who are looking to do more with their money. You mentioned starting on Betterment, and you mentioned using Vinovest, Rally, and Coinbase. Can you talk about your favorite platforms and maybe any platforms you tried and didn't love?
I bought my first bitcoin on Coinbase, back in like 2016, so that was a great platform. I still use it today. Coinbase pro fees are really reasonable. Yes they have outages here and there, and that’s really frustrating and I tweet about that sometimes, but generally speaking, I like Coinbase. They get a big thumbs up from me. I’ve also tried Gemini for cryptocurrency, thumbs up from me. And BlockFi as well, they’re really great. And then as it relates to earning interest on my crypto, I have a lot of crypto parked in Celsius, I really like the platform. It’s really easy to use.
As it relates to single stock investing, I’ve used TD Ameritrade and Robinhood in the past, and I use Public now. Really happy with all those platform experiences. I think what's cool about Public right now is that you can share your thoughts in a way that people want to listen to and have a conversation about. So I can go buy stock in DraftKings and say "Hey guys, I like DraftKings for these reasons, what do you guys think?" And I can have seven people chime in and say “Yeah that’s cool” or “Nah dude, did you think about this?” or “Have you heard about this?” so I like the collaboration aspect of it.
We talked about Betterment. Wealthfront is a really cool company as well. Fundrise, I also use them, they're fantastic. Vinovest is really easy. I just signed up (because I read your CEO’s last interview) with Worthy for bonds. Worthy seemed pretty cool and easy. I think that might be the bulk of platforms I’m using.
Are there any other asset classes you're eyeing or curious about but haven't invested in yet?
You know, as much as I wanna say NFTs, I’m so scared to begin rolling the dice on that. I see people with the CryptoPunks doing all these cool things. My friend—we just started doing a podcast together—bought a CryptoPunk back in February and now it's gone up in price like crazy. And you see what Logan Paul is doing, he just had his thing with Mr. Beast, and he's got like 11 or 12 CryptoPunks. So yeah, NFTs is the asset class I wanna jump into. I know nothing about it though, so I’m kind of scared to dive in, especially after prices have inflated so much.
I think there are also some really meaningful projects out there. World of Women is a really cool project that brings a lot of awareness to a really cool cause, so perhaps that would be a good idea. But I think NFTs is my answer, as an asset class I wanna jump into. I’ve been eyeing it, just haven't pulled the trigger yet.
Well actually, shameless plug, but for the people reading this interview: go and search Rally on MoneyMade’s search tool, use their referral link to click and create an account. And then you can go through them to buy the shares of a CryptoPunk NFT that I believe will be live this Friday or sometime next week, for the low, low price of $72,000. Which is kind of crazy, because a lot of CryptoPunks right now are north of $400,000.
Yes, this whole concept of fractional ownership and these platforms that let you become a partial owner of collectibles and NFTs and art and stuff is a really great way for people to get started in other asset classes but who don’t wanna dive in headfirst and just dump all their money into buying a CryptoPunk, for example.
I’ve recently invested about a quarter of a million dollars in startups over the last maybe 18 months. It’s been really interesting and fun! I was super grateful to have a lot of leading fintech companies, including Public, Finery, Griffin, Creative Juice...a lot of really cool companies that reached out and said “Hey, we love what you’re doing on TikTok, we love the creator economy, we’d love to have you give us some pointers and some thoughts.” And I asked if I could write a check and sit on their cap table. They agreed, so I’ve been able to jump into that new asset class.
It’s scary though, cause what’s the end game? They either IPO or get acquired.
Can you name your biggest investing win and biggest investing loss?
The biggest investing loss was senior year of high school. I got an account on TD Ameritrade. My friends and I tried to figure it out. We were all conniving, thought we were going to get rich on the stock market, and we figured out what the company was that was going to make the LCD screens for an iPhone 5 or 5s. I thought if we could buy stock in this penny stock company before Apple announced they were using them, we were going to make all this money, the stock would go to the moon. And it didn't happen. At the time I think I lost a couple hundred bucks, and it was the first big smack in the face, like “you’re an idiot, why would you do that”.
My other biggest loss was the crypto hype back in 2017. I feel like I lost about $7,000 or $8,000 doing that. I rode it up like 200% and then back down.
But that leads to my biggest win. I took that and some other money I had in my savings, I just closed my eyes and dropped it in Chainlink back in 2019, at around 50 cents. Right now it's about $29 or $30. I’ve got north of $400k in there. That was certainly my biggest win, with that specific cryptocurrency.
I love sharing that story, cause people are like “Why don't you cover penny stocks, can we invest in some?” And I say go for it, but I’m not going to do that. I learned my lesson seven years ago.
My final question for you—I ask everyone this—if you could hop in a time machine and go back to age 18, what would you change about your investing journey thus far?
I feel like the general answer to that, everyone would tell themselves, oh go buy Bitcoin, so I’m not gonna say that. But of course that’s what I would say.
I think a really meaningful thing I would try and change about my investing journey is to get as many of my friends and family involved as possible, with me, when I was that age. Now it’s like a fun thing to do, 14-year-olds are out here making TikToks about the stock market. But back in 2013 and 2014, that wasn't the case. And people were still using TD Ameritrade or Fidelity to make their commissioned $7 trades.
That’s what I would change about my experiences: sharing with my friends what I was doing. Moves I was making, money I was making, money I was losing. I see my friends now (I’m 25), 7 years later, saying “Hey man, how do I start investing? You’ve been doing this for a little bit, where do I go? How do I start?” I wish we could’ve done this together. That’s my big takeaway there: if I could change anything, I would change my efforts to get people to do it with me.
You can follow Austin Hankwitz on TikTok for more.
Take your own Asset Trip
If you're interested in investing like Austin, you can check out these platforms:
- Gemini: With Gemini, you can research the crypto market, buy Bitcoin and other cryptos, and build a portfolio for the future of money.
- Public: Make your investing social and follow other investors, discover companies you believe in, and invest in fractional shares on Public.
- Vinovest: Vinovest chooses investment grade wines and authenticates, stores, and sells them for you, so you can diversify your portfolio as a beginner.
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