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Jackie Beck

ABOUT Jackie

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Joseph Anderson

ABOUT Joseph

Alan Clopine

ABOUT Alan

Jason Thomas

ABOUT Jason

Published On

March 2, 2018

How to retire rich & happy: the two income starve-and-stack strategy, losing the ego, and the Pay Off Debt by Jackie Beck app. Oh, and Rondo soda pop, and never saying the word “tissue.” Joe and Big Al also talk a bit about retirement readiness and taxes before Al heads to Chile leaving poor Jason Thomas to talk ego and self-reflection with Joe.

Show Notes

(01:01) Fidelity on Retirement Readiness, The New Tax Law’s Really Big Post Card, Rondo & Tissue
(12:01) Pay Off Debt By Jackie Beck Smartphone App

Transcription

“It’s fake news.” “Oh boy, this has now become a political show.” “Mondo!” “Mondo. You like that word?” “I do. Have you ever had the soda, Rondo?” “Rondo, no.” “Oh, it’s delicious.” “What is it?” “It’s – I forget what it tastes like. I’d rather have that than you ask me if I’d like a tissue. I’d be like, ‘get the hell outta here. That’s gross.'” “Right.” “You send me a text message and say “Hey, loser!” (sings) Payin’ off your debt!” “Maybe that’s why Al is in Chile now, he’s lost all hope!” – Your Money, Your Wealth ep. 157 highlights

Today, an episode of Your Money, Your Wealth so far off-course that Al leaves in the middle of it to go to Chile. The fellas do manage to talk to guest Jackie Beck about her award-winning smartphone app that helps people pay down debt, and they get in some discussion about retirement readiness, taxes, and other foolishness. Plus, Jason Thomas, CFP® joins Joe to discuss ego, starving and stacking your way to wealth, and getting turned down in dating and in stand up comedy. Now, here are Joe Anderson, CFP® and Big Al Clopine, CPA.

(01:01) Fidelity on Retirement Readiness, The New Tax Law’s Really Big Post Card, Rondo & Tissue

AC: I got some good news, finally. On U.S. retirement, because we always read these articles, it’s gloomy, it’s desperate. We’ve got big problems. Fidelity Investments, they just looked at 3,000 working households that have started saving for retirement.

JA: Yeah, and they polled everyone from La Jolla. (laughs)

AC: So there’s a caveat here: 3,000 working households that have started saving for retirement – so that eliminates half or more right there.

JA In a very affluent area in Rancho Santa Fe. (laughs)

AC: If you go with those 3,000 that are saving for retirement, after tallying up how much they’re saving in their 401(k) accounts, their expected Social Security benefits, and other assets, Fidelity says the typical saver is on track to have about 80% of the income they’ll need to cover retirement costs. And you just go back a decade, a little bit more, 2005 – that amount was 62%. So now we’re up to 80%. So that’s good news to me.

JA: How do they know this, Alan? I’m trying to think of how they surveyed these people. So they went to Rancho Santa Fe and then La Jolla. (laughs) No. So they’re saying you’re 85% funded for your retirement goal? Well, how does Fidelity know how much money that they’re spending?

AC: They’d probably have to ask some basic questions, I guess like.

JA: Here’s what my experience is, and I don’t mean to be doom and gloom here, but people lie on surveys that have to do with their financial lives.

AC: Well they’re lying more now.

JA: Because I teach a retirement planning class. You know this. It’s been many years I’ve been teaching this class.

AC: Yeah, a decade or more.

JA: Yeah. Decade. That sounds important. Just – it’s ten years. There’s the Retirement Benefit Research Institute. (editor’s note: Employee Benefit Research Institute, the EBRI.) They do this survey of consumer confidence. It’s the Retirement Confidence Index. And every year, they’re saying, “OK well, 70% of people feel very confident, or somewhat confident, that they’re going to have enough money to cover the basic necessities.” And then the other statistic is “70% of people that we surveyed feel very confident or confident that they’ll cover the basics and be fine.” So almost 70% are like, “hey, we’re going to kill it in retirement.” 80% said, “hey, we’re going to be just fine.” 20% said, “eh, we’re not as confident.” But we know what the true numbers are.

AC: Yeah, they’re not near as good.

JA: Right? Well, what is the average balance of a retirement account?

AC: Well I think it hit $100,000 for people that have retirement accounts. But the average retirement account if you include the people that don’t have retirement accounts is about $10,000.

JA: Right. So how is that 85% of their goal?! (laughs)

AC: (laughs) So here’s the thing. So it’s it’s 80%, first of all.

JA: I’m sorry, I’m just raining on your happy parade.

AC: But they backed it up. Maybe this will give you some…

JA: OK yeah, so give me some meat.

AC: Much improvement is due to workers saving more of their pay because the typical savings rate is now 8.8%, more than double the 3.6% rate in 2006.

JA: They should be saving 20%.

AC: Agreed. But at least they’re improving.

JA: All right, so then what does that get? “Everyone out there, save 8.8% and you’re right there.”

AC: Boy oh boy, you’re tough. (laughs) No, I would say, and it even says in this article, that Fidelity and other advisors recommend 15%. I would honestly say 15 to 20% is probably the right number that you want to get to.

JA: What do you think your buddy Mumula would say? (editor’s note: Joe is referring to Chris Mamula.)

AC: Well he was at 65%, which is even better. (laughs) I’m just trying to be realistic for everyone else.

JA: You’re very optimistic.

AC: And 20 is pretty tough. Actually, 10 would be a miracle for a lot of people. But anyway, the average is 8.8%. Whether these numbers are exactly right or not, you can’t dispute the savings rate – the savings rate is higher. That’s a good thing. So do we agree on this point? (laughs)

JA: Yes! (laughs) I can sleep better at night.

AC: The baby boomers, Joe, they’re in the best position.

JA: Cruise control.

AC: These are savers born from 1946 to 1964, which I fall into that. So we’re on track to have 86% of our income that we’ll need in retirement. So we don’t have to give up much.

JA: What’s the backdrop of this again? How did they do this?

AC: Fidelity Investments looked at more than 3,000 working households that started saving for retirement.

JA: And how did they calculate that 86%? Is there a footnote there? (laughs)

AC: No, no footnote. Have to take their word for it. It’s from Associated Press. (laughs) You want to get into this study, don’t you?

JA: I do, because I think it’s fake news. (laughs)

AC: Oh boy. This has now become a political show. Changing the topic. (laughs) Do you know, Joe, that one of the benefits of this new tax is to be able to fill out your taxes on a postcard? Did you hear about that?

JA: Yeah, it’s a pretty big – it’s a post-er.

AC: So that’s what this article in Forbes, just came out, it said “the new tax laws really, really big postcard” and here’s why. Because the current form 1040, which is what most taxpayers use, certainly most ones that listen to this show, includes 98 lines and boxes for tax calculations, and as we know a lot of these lines just simply refer you to a schedule that’s on another page. So they’re saying that the best that this author can figure, maybe five or six of those lines might go away. Of the 88 lines, I think is what I said. But they are going to have to add at least one or two or more, for some of the new things – like that 20% business deduction. Anyway, the point is this is going to be a mondo postcard.

JA: Mondo.

AC: Like that word?

JA: Yeah I do.

AC: Yeah. Or el postcard grande.

JA: Have you ever had the soda, Rondo?

AC: Rondo? No.

JA: Oh delicious.

AC: Yeah. What is it?

JA: I forget what it tastes like. I think it was like a citrus drink. It was like – remember Squirt?

AC: Yeah. It’s like that?

JA: Kind of. Rondo. We gotta bring Rondo back.

AC: So I’m a Baby Boomer, so we’re of the age where we try not to drink soft drinks.

JA: I’m saying I haven’t seen Rondo in probably 25 years. This is when I was a child. I don’t think I’ve had a soda pop in, I don’t know, probably 15 years.

AC: See I like that – soda pop. That shows you’re from Minnesota.

JA: Yeah, pop was what we usually called it.

AC: We call it a soft drink here in California, buddy. (laughs)

JA: I went to the University of Florida.

AC: Yes. What do they call it?

JA: Coke.

AC: Just Coke? They don’t even – it’s a coke. Or 7-Up.

JA: What flavor? I was a bartender. So I bring the guy a Coke. He’s like, “I wanted a ginger ale.” (laughs)

AC: I wanted a cherry Coke. (laughs)

JA: I’m like, “well then why don’t you just ask me for a ginger ale?” But everything’s Coke. It’s like Kleenex instead of face tissue. What the hell is that?

AC: There’s no better name for it. What else would you call it?? A tissue, I guess.

JA: Yeah. And I hate that word. It just kind of grosses me out, actually.

AC: Yeah. I would agree to agree with you on that one. I don’t like that word either.

JA: So that’s the Kleenex of soft drinks.

AC: It’s just not manly enough. It’s like, “Joe, would you like a Kleenex?”

JA: Yeah, sure. I’d rather have that than you asked me if I’d like a tissue. I’d be like, “get the hell outta here. That’s gross.” (laughs)

AC: Well anyway, it’s a big postcard and this postcard is going to have multiple pages to it. So it’s going to be a lot of the US Post Office getting excited about this I think.

JA: In your opinion, are you a fan or not a fan of the Jobs Act.

AC: The Tax Act? Well that’s that’s a loaded question.

JA: Of course. (laughs)

AC: I will say yes and no. How about that for non-definitive. I like the fact that it reduces taxes for many taxpayers, that we reduce corporate taxes, which will help jobs, will help expansion. What I’m concerned about Joe, is I don’t think the increase in the economy is going to cover the shortfall in taxes, and I base that on what most economists say, which then means we would add more national debt, which means we’re kind of kicking this debt issue down the down the road. That’s my quick analysis.

JA: Don’t you think there’s not a lot of arrows in the quiver here, if something goes bad. So the economy’s doing well. The market’s doing well. Unemployment’s pretty low. Corporate profits are up.

AC: Yes. So it’s lower taxes at a time when…

JA: When things are good? Does that make sense?

AC: Because when a recession happens, and by the way, it will happen…

JA: What do you got? You gonna lower them more?

AC: Yeah, let’s lower the taxes more, whoops we already did, that that blew up, let’s lower the interest rates more, whoops, they’re already at all time lows. They’ve gone up a little bit in the last few months. I agree with that. But you’re right, there’s not much left to be able to the next one.

JA: it’s coming at some point. Who knows when. And so you just want to make sure that you are prepared.

Thanks to Joe and Al’s BSing I’ve just learned on Wikipedia that Rondo was the inspiration for Brawndo, the thirst mutilator juggernaut from the movie Idiocracy, which to me is one of the funniest, scariest comedies of all time that has become a documentary about what happens when you kick the can down the road of too long – welcome to the year 2505, folks, get out your tissues. Anyway, if you want to make sure you’re as prepared for retirement as you can possibly be, visit the white papers section of the Learning Center at YourMoneyYourWealth.com to download our free Retirement Readiness Guide.You’ll learn little-known secrets about controlling your taxes in retirement, and preparing for increased longevity, rising healthcare costs, Social Security uncertainty and market volatility – and it won’t cost you a thing to download the Retirement Readiness Guide from the White Papers section of the Learning Center at YourMoneyYourWealth.com.

(12:01) Pay Off Debt By Jackie Beck Smartphone App

JA: It’s that time of the show again, Big Al.

AC: It is. Can’t wait.

JA: This is the coolest name I think we’ve had on the show with this app. Pay Off Debt by Jackie Beck. That rhymes! (laughs) It just feels good. Because when you think of debt, you get depressed.

AC: Yeah, you want to get that stuff paid off. Best you can.

JA: We have Jackie on the line. Jackie Beck, welcome to the show.

JB: Hey, thanks for having me.

JA: So tell us a little bit about your story. How did you become a debt freedom expert?

JB: Basically, by being really in debt and getting out. My husband and I owed over $147,000, which we didn’t actually know until we had completely paid it off. And so we figured out what it took to get out of debt. And now I teach other people to do the same.

AC: So did that include your home mortgage or was that other kind of debt?

JB: That was our home mortgage and credit cards, car loan, a student loan, I think we had a home improvement loan. All the loans.

AC: So when did you decide that OK, this seems like it’s getting out of control, and then what were some of the initial steps that you took?

JB: Well I felt that way for a really long time, and I struggled, and failed, and failed over and over again, to try to get out of debt. And then, when my husband and I got together, things really changed because we had a similar mindset – which I think is super important. And what really was the catalyst for me to actually get this thing done was I had lost my job, and I couldn’t find another one. And I was actually unemployed for several years. So when I finally got a part-time job, I thought, “I never want to be in that position ever again. I do not want to owe this money and have no way to pay it.” And so I was super motivated. And so I started by paying off my student loan, and then things kind of snowballed from there.

JA: Do you think the loss of your job motivated you more? If you would continue to have income – was that the catalyst you think? It was like “oh my God here we go again. I need to buckle up. I need to figure out a strategy.” Do you think that was a catalyst that helped you?

JB: Yeah, I think that was a huge catalyst because I realized that this is a really precarious situation. You don’t realize what happens if you do lose your job until it happens. People don’t want to think about that. But it really made a difference, because I had this panic and I didn’t want to feel that way again. So that was definitely a huge catalyst.

JA: Good for you, because I think sometimes it takes a shock to the system to really change. And there’s been stories after stories where that shock has happened to multiple people many times, and they still continue to do the bad habits. And so for you to realize and say I don’t want to do this, and really take the bull by the horns, is commendable. What are some of the strategies that you implemented to get out of debt? I mean there’s the snowball effect, or you pay the high interest – were you using any of those types of strategies? How were you able to do this?

JB: Well I did sort of accidentally use a debt snowball. I hadn’t heard of it at the time, but I did basically focus on one debt at a time, and I happened to do the one with the lowest interest rate first because that was my student loan. So I did use that, but I didn’t really know about it until afterward. The biggest strategy that I did was I stopped borrowing. And that sounds kind of goofy, but so many people pay off debt on one hand, and then they borrow the other. And you’re not going to get anywhere until you stop digging that hole. So that was the most important thing. To quit borrowing, build up an emergency fund, and then go from there and actually paying the debt down.

AC: And Jackie, were you one of those that tore up your credit cards and just went to debit cards?

JB: Yeah I was. But that was sort of unrelated, that happened actually with my ex and I got divorced. We had to cancel all the accounts, obviously. So I just didn’t get a new one at the time. And that turned out to be a really good decision.

JA: So it just it has to be a disaster! (laughs) I gotta lose my job. I got my ex-husband, then he’s stealing money from me so everything’s gotta be cash!

JB: (laughs) No, no, no, no stealing of money. But it started terrible, but actually, it turned out to be really awesome, because life is so great now and I couldn’t have done it unless I made the changes.

AC: So let me ask you, Jackie. It’s one thing to want to pay down your debt. It’s a whole nother thing to take the action steps to do it. And you’ve set up this app to help people pay off their debt. How does that work?

JB: Well the app is a huge motivational tool. And basically it’s on your phone or your tablet, and you can input all your debts, and it’ll tell you how long it will take each one, and how soon it’ll be when you’re completely debt free. And then you can play around with it to see the impact, like if you pay a little bit extra, what difference will that make, or if you pay one debt before the other, you can rearrange things. So it’s really a good way for people to obsess about getting out of debt. And obsession is super important if you have a big goal like that. You want to focus on it all the time, and you want to be able to see every little bit of progress, so the app really helps people do that.

AC: The stuff that’s in the app, is that something that you were able to develop on your own, and so you kind of put this into an app, or is this something you kind of learned after the fact?

JB: Well, I did the math on my own, and my algebra teacher was right, I would use that someday. The actual development, I hired people to code and then the process – it’s out there. I mean, basically, there are three ways you can pay off debt. You can do the lowest balance first, regardless of interest rate, or you can do highest interest rate first, or you can do it in any order that you want. So I basically put all those methods in there, so people can use whatever works best for them, and they can check and actually see what’s going to be most effective in their case.

JA: What are some of the motivational tools that it will give me? So if I’m in debt, I’m using your app how do I continue to stay motivated? Just by looking at the balance going down, or is there other things that you’re using?

JB: Yeah you can see the balance going down with a little graph that shows it reducing, and then there’s like a bar graph, and there’s also a graph where you can see the slope going down. But the main thing that actually a lot of people like, is the icon that says “paid.” So every time you look at your phone, you’ll see that, and you realize that you’re going to get there one day. So you just keep at it.

JA: Why don’t you send, like, text messages. So if my balance goes up, you send me a text message and say “Hey, loser.” (laughs)

AC: What are you doing, Anderson? (laughs)

JA: Right? And if it goes down, just say “awesome.” You know? That would get me motivated, see, because I’m very shallow and insecure. (laughs) I need some of that.

JB: (laughs) Well, yeah, I would agree with the awesome part, that would be pretty cool. I’m not gonna tell you you’re a loser though, so I don’t know. I’ll consider that in the future maybe. (laughs)

AC: So the people that are using your app, what kind of feedback are you getting?

JB: Oh, I get really great feedback, people are super excited. Sometimes I’ll get e-mails from someone who’ll say “I’ve been using your app for years and now I’m completely out of debt. And thank you, this helps so much.” It’s just really nice to hear from people. And then other people have ideas, like you guys, on how to make that better, so that’s good too.

JA: Yeah, that was really good feedback. (laughs)

AC: Don’t take any of Joe’s ideas seriously. (laughs)

JA: Pay Off Debt By Jackie Beck. That’s awesome. That’s really catchy.

AC: You got to think of something with Anderson.

JA: You know what you need? you need a little ringtone, so when you open up the app, it’d be like (sings) “payin’ off your debt!” See, I got all sorts of ideas, Jackie! (laughs)

AC: She’s going to hang up on you. (laughs)

JA: We gotta do this! So where can people go where you have people download the app, where can people read all the great stuff that you’re helping people with?

JB: Well they can get the app on the App Store or Google Play, and they can find out more about me on JackieBeck.com.

JA: Thank you so much for joining us this was a lot of fun.

JB: Yeah, thanks.

Okay, if you’re in debt, here’s what I want you to do, after you check out the Pay Off Debt By Jackie Beck app – if you’re driving right now, don’t do this, but if you’re not, hit up YourMoneyYourWealth.com and type “debt” into the search bar at the top. Ya see all that great stuff? Should you pay off debt or save for retirement? 3 innovative ways to reduce debt. The value of debt in building wealth. 4 steps to get out of debt and tons more. Now, try that with just about any personal finance topic you can think of – type it into the search bar at YourMoneyYourWealth.com and see what you get. Hours of fun for the whole family, I swear. If you search and don’t find what you’re looking for, email info@purefinancial.com and give Joe and Big Al a piece of your mind – maybe they’ll even put you on the show!

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How do you even recap today’s show? Drink Rondo, don’t say tissue, have an app that sings and tells you you’re a loser, save more than is humanly possible, do some self-reflection and you too could end up in Chile – or sub-zero Minneapolis, whichever you prefer. Let’s hope Big Al is back next week to right this sinking ship.

Special thanks to our guest, Jackie Beck. Learn more about her methods for paying off debt, and her smartphone app, at JackieBeck.com

For more punishment, subscribe to the podcast at YourMoneyYourWealth.com, through your favorite podcatcher or on iTunes, where you can also check out our ratings and reviews. And remember, if you have a burning money question for Joe and Big Al to answer on Your Money, Your Wealth, just email info@purefinancial.com, or call 888-994-6257! Listen next week for more Your Money, Your Wealth, presented by Pure Financial Advisors. For your free financial assessment, visit PureFinancial.com

Pure Financial Advisors is a registered investment advisor. This show does not intend to provide personalized investment advice through this broadcast and does not represent that the securities or services discussed are suitable for any investor. Investors are advised not to rely on any information contained in the broadcast in the process of making a full and informed investment decision.