We spoke with Austin Hankwitz of Witz Ventures on everything from the intersection of personal finance and the creator economy, to how hard budgeting and investing really are, to his favorite stocks to invest in right now (hint: ETFs FTW). Read on to learn more about Austin, his advice for the bear market, and his (highly unconventional) go-to recipe right now (spoiler: it involves meatballs and grape jelly).
Austin is the co-founder of Witz Ventures, a driver of venture capital activity for fintech startups and the creator economy. He is also known for his popular Substack publication, Rate of Return, as well as his viral TikTok account (@austinhankwitz) with more than 575,000 followers. Last year, he decided to pursue this "finfluencer" path full-time and currently spends his time creating content, mentoring other creators in the space, and advising fintech startups backed by Y-Combinator, Forerunner Ventures, Norwest Ventures, Upfront Ventures, and many more.
BE: Okay, welcome to the pod everyone. I'm here today with Austin Hankwitz, who is the co-founder and Executive Chairman of Witz Ventures, which is a driver of VC activity for FinTech startups in the creator economy. And he also advises a ton of FinTech companies in the space. So thank you so much for your time today, Austin, I'd love to hear, starting with your advisory work. What is one piece of advice that you find yourself giving to companies over and over again?
AH: Really good question. And hey, everyone, thanks for having me. This is really exciting. Again, my name is Austin Hankwitz, I create personal finance and investing content on mainly Tiktok. But it's normally short form video content that sometimes makes it over to my Substack in a written format. But yes, I do a lot of advising for a lot of startups I've invested in I think, 24 startups in the last 18 to 24 months, with a lot of those being startups in the creative economy, as well as companies started by other creators. But to your question, specifically, I think advice, I see myself giving a lot to some of these companies, and several of them are starting to think about this on their own. But if you're going after a consumer, you should be meeting consumers where they are, versus trying to convince a consumer to meet you where you are at already, right. So consumers are on Tiktok, consumers might be on YouTube, consumers might be in a podcast; figure out who your target consumer is, and meet them where they are by either creating content that they want to consume organically, or by sponsoring content that is already being consumed by them.
And so I guess a really good example of this in a company I'm really excited about is called Nursewallet. And so what Nursewallet does is they've kind of created from scratch an app that's created specifically for nurses if they're right out of college, or if they've been in practice for 20 years. But I don't know about you and I don't know much about nursing, but I do know that they have a very interesting pay schedule. They get paid extra at night, they get paid on a specific weekly basis, or if they’re a travel nurse, it's all these different things. And it all depends on how often they work, and it's really confusing. And so this app came out, and it's a way for these nurses to best track their budgeting, track the money coming in, as well as helping them pay off those student loans and to them I said, “Hey, guys, think about where these nurses are living?” I see them on my for you page all the time, specifically during the pandemic, talking about their trials and tribulations being nurses. And you know, where are they consuming their content? And then begin making content that they'd organically want to consume but they're not making it as like, “hey, go download Nurse Wallet,” make it in this sense of like, Hey, anyone makes content for two reasons to entertain or to educate, right? Do both. Educate them as to how they should be thinking about their budgeting, how they should be thinking about paying down those student loans. Explain to them what interest is on those student loans and how this can impact their financial futures. Right? Think about really, really adding value for these people through education or entertainment and meet them where they are. If that's TikTok, if that's Instagram, or if that’s YouTube. Maybe this is my lack of understanding the nurse culture but maybe there's an awesome nursing influencer like Dr. Mike (I think he's an actual doctor though). But like a cool nursing influencer on YouTube, go talk to her, figure out what her audience likes to hear and go sponsor her content and encourage her to use your app and provide value to not just her but her audience as well. So I think a really big piece of advice I try to give to a lot of startups, and this is more in the consumer facing side of the world, but meet your audience where they are and meet your customers where they are.
BE: Absolutely, I think that's a huge part of the beauty of TikTok and content that goes organically viral on Tiktok is that, in its most essential form, meets people exactly where they are in terms of their interests, what catches their eye, what catches their attention span, especially if you only have 15 seconds. So a lot of your work, especially the content you create centers around financial empowerment and supporting or advising your followers in their financial journeys. What do you see as the biggest blocker to people, to the average person from being financially secure or financially stable?
AH: Okay, so, yes, that's absolutely what I'm trying to do, right? I guess people are like “what do you do?” It's like, I want people to make the most informed decisions with their money, right? I just want them to have all the knowledge before they go make that decision. And the biggest blocker, as funny and weird as the sounds, is, and I think it's an ego thing because I certainly had that ego before I really came into this space and really decided that I want to take advantage of my personal finance journey and where I am. Make that first budget. Making that first budget. It's like, oh, I don't need a budget. I'm smart with money, budgets are for people who suck, or like, Oh, I don't need a budget like I'm never overspending. But until you know where every single dollar is going, if it's to entertainment, to rent, to transportation, to investing to whatever that is, until you know where all this money is going, it's so hard for you to see what the future can look like. And I think a lot of people, unfortunately, especially in their 20s, and maybe even sometimes in their 30s are drifting through life in a sense that they don't know how much money that they might have in a brokerage account by 28, they don't know how much they need to have saved up to go buy that first home, they don't know when they'll actually pay off their student loans, they don't know when these very specific things happen.
I've spent a lot of time with my audience, and specifically those that used to support me on Patreon and now Substack. But I used to host these live streams every single week and once a week, I would have someone share with me what they plan to not only save, but invest toward their future. And I'd help them model out what that would look like with compound interest and how often and historical returns and things of that nature over the next 20 years. And then also put an age next to that year and say, “Hey, by the time you're 47, if you do these various simple things, right, we found this money in your existing budget, just imagine how much more you'll make in your future career. But if you do these very simple things, you'll have this much money at 47, or this much money at 52, and this will be set aside for your child by the time they really want to go to college.” And they're like, oh my gosh, it's like a massive epiphany for them to really begin seeing like, I can do this. I can start budgeting, I can start investing, I can have this awesome future. It's not so overwhelming anymore. Austin spelled it out for me very simply. And I think the first step for everyone to see that realization is to make a budget.
BE: That first step can be so hard though, you know, I've done all of this research on the psychology behind budgeting for articles on our website. And what's crazy is that when people hear the word budget, your brain has the same response as if it hears the word diet, right? It expects a period of starvation or deprivation. And that's not really what budgeting is. It's more of just having a plan for your money. And that positive reframing – that it sounds like you've done a lot of work to do with your followers – is transitioning the idea of deprivation to something like this is just a spending plan or a plan for my money, and illustrating what the long term returns and gains are. And I think that’s an example of something Acorns does really well. They have these ads that show you if you invest this much every month until the age of 45, this is how much you would have. And that first step is that much harder if you don't have, you know, those visual cues or that easily digestible information, which I think is a huge niche that TikTok and the personal finance creator economy is stepping into and still growing into.
AH: And before we jump to the next question. I was gonna say I'd also add to that, you're right, like seeing those illustrations by Acorns to say if you just invest $2 a day, for the next whatever or $20 a month or whatever that number is. And like seeing that, it is cool to see those things, and I feel like people get excited about that. But what I've really seen work and be very positive for people's actual experience is just starting with whatever amount it is, if it's $2 a day, $20 a month or $200 a month, in seeing that for six months time, it'd be like, “Yo, I'm up $74, this is kind of cool, right?” It's like, oh, wow, like it gets addicting even like I kind of find myself like, you know, not going to a restaurant one weekend, so I can have the extra 70 bucks to invest toward an index fund or I find myself saying, oh my gosh, like, do I really need to take this vacation like this is an extra like $2,000, I would love to put in the stock market right now or I would love to put into some sort of investing platform. So yeah, it's definitely one thing to see it. But man, you really feel it once you get started for sure.
BE: Absolutely. So when people sign on to Mooch and they start using it for the first time, you have two types of envelopes, you have expense envelopes, so things that you pay every month, and then you also have savings goals. And the minimum time period of a savings goal envelope is six months. So if you're putting away, say, $100 a month for six months, not only do you have that money budgeted in the app for you, you earn a return on that. So at the end of six months, you're gonna have $600 that you barely even remember budgeting because you're basically on autopilot plus the interest that you earn. And if you leave it in the app every month, you earn interest on top of that. So it's a great way to show people, similarly, how easy it is to budget, especially when you're using Mooch and it's basically on autopilot. So that's something that we're definitely working on over here as well. It sounds like we're aligned on that.
BE: On the TikTok content creation side of things, we both know TikTok has a huge desire, especially Gen Z, for feeling in control of their finances and also, you know, investing especially in a socially responsible way, which is so cool. What is one thing that surprised you about the feedback and demand that you found in creating this type of content?
AH: That's a really good question. I think I was most surprised by now, I know some people might take this the wrong way. But I think I was most surprised by how kind of pessimistic people feel about the current environment. I feel like a lot of people, especially between the ages of 18 and 35, feel like a lot of the cards are stacked against them, which I would agree with, right? My dad could have bought a house (I think I tweeted about this like two weeks ago), but like, my dad's 76 now, so very old, boring 45. But what I'm saying is like, my dad could have bought a house when he was like, in his early 30s, for like, $35-40,000. Now it's worth like, 2 million. And I'm like, That's crazy to me, right? And so it's like, I can totally see how people think like, oh, you know, this system was built for them, and we just kind of get their scraps. And yes, like, I definitely empathize with that. And I see where people are coming from with that perspective. But I would argue that there's a lot to learn still, in the sense that this system, if used correctly, which I believe a lot of people cannot, there's a lot of free resources to learn how to use the system correctly, right? How to begin investing toward index funds, how to leverage an FHA loan to buy a house with 3% down, how to file your taxes for free to save money, how to leverage cool, DeFi apps and get a guaranteed return, right? There's a lot of really cool things that people can do that I think they just don't know what they don't know. And until you teach them and show them like, hey, actually, I totally see why you're upset about this. And I totally understand why you have this perspective. But the reality is, this is kind of what we're looking at, this is how this is going to take place. And if you participate, this is what your future could look like.
And the biggest surprise, to answer your question, was that people didn't understand that. They didn't know that the stock market wasn't just for the suits on Wall Street, that anyone can go download a Robin Hood, or Republic or a Webull, and invest $1 towards it, right? They didn't know that real estate wasn't just for old boomers that had a bunch of money or the big, you know, Tricon residentials, who are buying up all those single family homes in America, right? Oh, I can go on fundrise.com, invest $10 towards real estate and see a cool return. They didn't know that these tools existed. And surprising to me that that was the case. But then also what's cool is like showing them like, yo here's how I'm using these tools, being very transparent and showing them here's how much money I've invested on a monthly basis. One of my really cool series I do on my Tiktok every month is I update people on my Fundrise portfolio, which is this real estate investing app. And I'm like, I invest $100 a month, which is a lot of money to some people, but also obtainable to other people. Very reasonable, in my opinion, right? I invest $100 a month since last August. Here's the progression of my portfolio. Here are the different properties that got me in and here's how often my money is moved from one thing to another. So it's just transparency around the board. And I think it just surprised me that so many people thought the system was stacked against them, which I empathize with. And I definitely agree a lot of parts of it are. But I also want to say that there's a lot of parts that are not, and it takes someone who wants to know how to use this system in their favor to want to really benefit from it.
BE: Absolutely, I think it's easier sometimes even to focus on all of the things that have changed or why conditions are so much harder, especially in the recent weeks. But you know, one thing that people don't focus on as much is what has stayed constant and what has stayed consistent. And I think that's a really interesting lens with which to view the financial landscapes. So what is one thing you personally expect to stay the same in the next 10-20 years in the investing and financial services space?
AH: I love this question. It's very new, in my opinion. So when you say stay the same, I think it's going to evolve a little bit over the next year or two. But once it's here, it's not going away. And that is shareholder activism. I think that there's going to be a lot of people that say, “I don't agree with these oil companies or I don't agree with what Tesla is doing or I don't agree with what Amazon's doing, or I don't agree with what ABC XYZ is doing.” It came to us with GameStop. It came to us with AMC, right you own stock and AMC you now get free popcorn, you own stock in GameStop. Like you now have this cool, we’re all part of the same team feeling. I feel like shareholder activism is going to erupt over the next 24 to 36 months. And if it's different apps who are showing you the best way to vote toward proxies that are happening into these companies that you own. If it's apps like Stakeholder Labs that's unlocking perks. With companies, if you own their stock, you get a discount to the product or your preferred customer, whatever. Like there's going to be a lot of transformation in that space in the next two or three years, but I think once it's figured out, and once people realize, “Wait, I fly American Airlines. But if I own American Airline stock, I get treated completely differently. And I get a say as to what snack they should have on their airplanes next year. That's cool to me.” Right? I just think that people are gonna want to have a say in what's going on. And we see this with people having everything to say on Twitter, or just the rise of social media in general. And everyone has something to say, everyone wants change, and ever wants to work toward change. And so to work toward change, let's all now come together as shareholders of companies that we’re already customers of if that's American Airlines, Lululemon or Nike or Amazon, tell them how we want this business to change, how what we believe in, what we think is important, and encourage upper management teams to do that.
BE: Definitely, and beyond just actually having shares in companies, people more and more, it seems are viewing their money and their spending power as a way to express their values and their personalities, and Gen Z more than ever, right? It's going to be a driving force, especially as they come of age and their purchasing power grows. And I think that that's something that's so cool about the younger generation is that more than ever, people care so much about how their money is used, where it's spent, and like the American Airlines example you gave, they're realizing like, actually, I have control here, especially if I'm investing it properly. So building on this idea of forces for change, if you had a billion dollars to change the financial services and FinTech space for the better, how would you use it?
AH: Oh, my gosh, I feel like there's no right answer here. Because I'm gonna say something and people will be like “why didn’t you think of this? Why don't you do that?” So here's the reality. We have a massive wealth gap in the United States and around the world. And I think the only way that we can close the wealth gap in a meaningful way, is to get as many people as possible in the investor class, full stop, period, that is it. Right? To not just be consumers, but to be owners. I don't just shop at Walmart, I own stock in Walmart, I don't just shop at Amazon, I own stock in Amazon, which has gone up 100x over the last 25 years, right. Like that's how people build wealth. That's how you close the wealth gap between straight up consumers and the people who start these corporations and sit on their boards and profit from the consumers. So I don't know if the answer is do everything I can to make sure that everyone has a brokerage account. I think it's more like, I want people to say “I don't have to cut my dinner expense tonight.” The harsh reality is a lot of people see it as, put gas in my car or invest in Amazon. Put dinner on the table or invest in the S&P 500. It's a very effort “if” or “or” kind of thing, right? And that's unfortunately, like I said, the case for a lot of people. And if I had all this money, what I would do to specifically impact financial services and what all this is looking like. I would want to do as much education as I possibly can around how important it is to be an owner, not just a consumer, and then give that first $10, that first $20, that first $5 to someone who says, “Okay, I shop at Nike I shop,” whatever you believe in? Right? Where are you a consumer of because you're familiar with the company, you're familiar with the products. Like don't go buy some biotech company, you have no idea what they're working on with Alzheimer's. Go buy stock at Target because you have a Target Red Dot card, and you shop there twice a week, right? Or Starbucks, or whatever. But I want to educate people on specifically what it is to be an owner and then give them their first $5, $10, $20 to go own stock in that company. And yeah, I think that hopefully would give them enough dopamine, a cool dopamine hit to say, “okay, cool. I own stock in this company now, I want to begin shifting my lifestyle toward being more of an owner in how I think about the stock market in the world.”
BE: Not to put you on the spot here. Do you have any thoughts about what percentage of the current population currently participates in the investment class, or just people with brokerage accounts? Do you have any idea of what that looks like?
AH: That's a good question. I don't know the specifics. But I do remember a Wall Street Journal article in early 2021 that said during the pandemic, there were like four and a half million people in the United States that opened up their first brokerage account, which is great, right? How many of those people are still hanging around and investing, who knows? But I would imagine, tens of millions, but yeah, that's the only context I have to answer that question.
BE: Right. Yeah, super interesting. I think that dopamine rush that you're talking about is the best way to motivate people, right? Because it's no longer “Oh, I'm bored sitting around in a pandemic and the stock market seems to be doing well so I'm just gonna try out Robinhood,” especially, you know, with current market conditions. I'm sure it's super discouraging for some people, they see these clickbaity, really scary articles about people who are losing all their life savings and went in on these crazy crypto investment ideas and you know, it's been reduced to nothing. So what has been your personal and also your professional strategy in dealing with an and advising during this current downturn period we're experiencing?
AH: Yeah, that's a really good question. Um, so not to toot my own horn but so I have a Substack, right. It's all dated, right? Go back and check with the dates. But back in like I want to say like late November, early December, I was like, “Alright, guys, things are getting a little a little frothy here, I'm going to start to pivot my portfolio into more like long term stable ideas versus these crazy one off growth tech stocks.” But specifically, two things, right. The first one is dollar cost averaging. Dollar cost averaging is the simplest way that anyone can build wealth over their lifetime. It's so boring, it's so annoying, you want to see the big run up in price, you want to see the big green days, you want to see those big payouts but the reality is that that's not that's not gonna happen, right? We're all just putting $10, $20, $100, $200 a month toward the stock market for our lifetimes. And that's in a bear market, a bull market, whatever it looks like. So if you don't care about specifically looking into companies, single security companies and just actually investing in single stocks, right? Dollar cost average into these indices, and just keep on rockin and rollin with your life, don't even worry about the bear market or a looming recession. Don't even sweat it.
The other side of the thing, though, is we've been talking about the Fed right? Don't fight the Fed. And I think that's very true. I think that as we see the Fed, tighten, as we see monetary policy change, as we see them shrink their balance sheet, like that's going to be the big determining factor, in my opinion, as to when the markets will begin to rebound. Obviously, that paired with inflation, we saw Joe Biden release his three point plan to try and figure out or I guess, to address inflation, it was pretty much saying the Federal Reserve is in charge. And we've got the best people to try and figure this out with us, we've realized that this is the number one economic challenge, and we are going to address it. The second one was to pass different bills in Congress to try and get some tax credits and just rebuild our infrastructure, if its supply chains, if it's whatever. And the third point he made was, oh, gosh, I just made a TikTok about this yesterday, I forget.
Anyway, but long story short, what I'm saying is the first point is the Federal Reserve, right, the Fed are the people in charge of this. And that's confirmed by obviously a lot of people as well as the President of the United States. So what I've been trying to tell people is like, just just wait. Just wait here, let's, let's, if you want to DCA, dollar cost average, continue doing your thing. But I will wait until I see what the Feds gonna do. If the Fed is dove-ish, if they're hawkish Whatever it looks like, that's when we have a better understanding of what this looks like.
Personally, I've been doing a lot of real estate investing, if you kind of rewind back into the 1970’s and early 1980’s, when inflation was sky high, interest rates were also sky high, which is kind of what we're potentially heading toward now. But back then, the price of real estate and the median sales price of a single family home tripled over a 10 year time period in the 1970’s and 80’s, between those two decades. And I'm not saying that we're going to triple, right. But it's also very interesting to see a lot of people have this flight to safety away from speculative growth stocks, specifically toward companies with utility as well as actual real assets, if that's real estate and or if that's a REIT or whatever. But yeah, that's kind of how I've been thinking about it. Also, there's a really cool ETF called TACK, created by Katie Stockton, she's an absolute wizard with technical analysis. And what TACK does is it looks at different types of momentum indicators, different things we see on moving averages, whatever you have and it will move between 100% invested into the S&P 500. So you're seeing the same return as the index. Or once things kind of turned wrong it will shift over to a 75% invested into stable assets, I think like gold and treasuries and only 25% in the S&P 500. And because of this tack is only down like 3% compared to the market being down 9% over the last two months or so. Yeah, long winded answer there. But that's kind of where I'm looking.
BE: Yeah, I mean, ETFs are always a good bet, but I'll have to look into TACK that sounds super interesting. Final question here. Just in terms of something you're passionate about, it doesn't have to be necessarily investment related, it can be anything big picture here. But what's something that you're passionate about learning more about right now and how do you go about learning? Like what's your learning journey when you're diving into those passion projects?
AH: That's a really good question. What am I passionate about recently? I wish I had a good answer for you there. But I would say, my learning journey to learn about anything and I think kind of weirdly enough, like, I want to buy a home here pretty soon. And so I'm learning as much as I can about that entire process. I've already purchased my first home, I was lucky to get one of these 3% down loans before COVID happened. And I'm just ready to figure out what that looks like. And so I've been really getting into custom home building, buying farmland. I just want to figure out what that looks like. But something I guess I'm really passionate about is probably cars. I like cars a lot. Cars are cool. I just bought a Four Runner recently. Really excited about that.
I'm cooking, I cook a lot. It helps me decompress for sure. But you know, how I do that is I start on YouTube, I go find, you know, back to the thought that just the power of social media and the power of YouTube as an awesome search engine, not just for creators, but also for consumers, right? I just search on YouTube, like, “Yo, how do I make a beef Wellington? How do I make homemade chicken noodle soup? How do I do these things?” And then spend the day, spend the weekend figuring that stuff out? Yeah, I'd say that's probably where my head's at right now. But if we're being completely honest, I'm a super nerd. And I love finance. And I'm always geeking out on anything and everything finance. So I would definitely say that I'm passionate about finance. But besides that, those are a couple other examples.
BE: What's your go to recipe right now?
AH: You know what? My girlfriend and I just went to a Memorial Day barbecue on what was that like Monday, right? We just went to Memorial Day barbecue and she just taught me how to make these incredible, sweet and spicy meatballs. And you just kind of eat them as meatballs right? They're like a little something you bring to the tailgate or something to bring to the barbecue. But it's so easy. You just go get the frozen meatballs from Costco, pre-cooked right? So you're just going to heat them up in the oven again, you get a can of grape jelly in a can of Heinz chili sauce. You put it in a pot, you mix those two things together. One part grape jelly, one part chili sauce, and however many meatballs you want. Simmer the sauce, put the meatballs in to warm them up and keep them warm and then serve them. Chef's kiss. Insane.
BE: Wow, what an unconventional combo.
AH: Yeah I was like “you want to put grape jelly with this?” And she was like “Yeah, it's great. It's great.” So I was like “Okay, I'll try it.”
BE: What a great recipe. We'll have to pin that in the write up of this piece.
AH: Absolutely, definitely do it. And then we were talking about it and we're like, how does every college kid not know that this exists? Like it's the easiest meal to make in college. If I was in college, I'd be eating this every day now.
BE: Perfect budget recipe TikTok idea right there.
BE: Well, thank you so much for your time today, Austin.
AH: Yeah of course. This was a blast and if you ever want to do it again, let me know.
BE: Definitely. Thank you.
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