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.
- (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
- (21:39) Jason Thomas, CFP®: Is Ego Driving Your Spending?
- (33:06) Jason Thomas, CFP®: The Starve & Stack Method to Financial Independence
“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.
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?
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
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 email@example.com and give Joe and Big Al a piece of your mind – maybe they’ll even put you on the show!
(21:39) Jason Thomas – Is Ego Driving Your Spending?
JA: Hey welcome back to the show, the show is called Your Money, Your Wealth®. My name is Joe Anderson, I’m a Certified Financial Planner. Big Al has left the building. He went on vacation. He went to Chilly. But Big Al likes to call it Chile. I don’t know. He’s just getting warmed up there. Filling in for the big man is Jason Thomas. He’s a Certified Financial Planner. He’s been the man on the street on our TV program, and he writes a ton of blogs and teaches a bunch of adult education courses. Jason, welcome for filling in for Big Al – you’ve got some big shoes to fill bud.
JT: I definitely do. Thanks for having me here while he is having more fun than either of us can imagine in Chile.
JA: Chile. Is that what you call it as well?
JT: Not until he did, but I think I’m going to try to emulate Big Al in that way as well. (laughs)
JA: Well why don’t we do this. Why don’t you give a little bit of a brief background, because you live up in Los Angeles, you help with our education for the firm – just tell our listeners a little bit more about you.
JT: Yes, I’ve been doing some of the education stuff with the company. Our classes at various college campuses throughout the Southern California region, including in Los Angeles County, our two-day our retirement planning seminar, and I’ve also been doing some education-related videos for the YouTube site of Pure Financial and also just some writing, and other educational resources for the site as well. So hopefully as those start trickling out people will be able to see and read quite a bit of that content.
JA: You know it’s weird because as soon as you came on our viewership went down. (laughs)
JT: (laughs) I am not surprised – maybe that’s why Al is in Chile now. (laughs) He’s lost hope.
JA: Well you know it’s funny. Living in Los Angeles, I live here in San Diego, and I’m originally from Minneapolis, and Los Angeles is an interesting part of the country. There’s a lot of status when it comes to money. We were talking a little bit before we got on the air of what people’s perception is. Our ego gets in the way for making some sound money decisions.
JT: Yeah, I thought that would be a fascinating topic, because it’s been something that I’ve been thinking about just incidentally, and there isn’t really a lot of writing about it. We have terms like “status symbol” and “conspicuous consumption” that come from someone that’s been dead since the 20s named Thorstein Veblen. But it’s an interesting topic that a lot of people don’t think about at all. But we all see that people, not ourselves of course, but other people, are affected by ego decisions when they decide what to spend, or what they want to own, or what they want people to know that they have. And I think that this can often have a really big financial impact that people don’t even really think that much about, because again, no one is going to talk about that – or people are reluctant to.
JA: It’s funny I was just listening to a podcast, and they were talking about how people looked at wealth a long time ago was by how much cattle that that individual or that family owned. So they could count how many cattle, and they would say well there’s a lot of wealth. And so it was a little bit more transparent. Now it’s a little bit different, where someone might have you know a million dollar, 2 million dollar home and a nice car, but they’re broke.
JT: Yeah it really is something that you don’t see. So there’s an even bigger possibility for people to put on a front. And a friend of mine is going to kill me for saying this, but we were having a topic, because he’s really into real estate, and wants nothing else of any kind. We were just kind of chatting about various investment stuff, he’s a successful investment guy, but only in that area. And he eventually said, when he was talking about stocks versus real estate, he said, “you know the problem with stocks, Jason, people can’t see those. I want people to see what I have.” And he was only halfway joking. I wondered to myself when he said that, “what if you got a stock brokerage account warming party?”
JA: Yeah right? We have housewarming parties. (laughs)
JT: So it’s not just that you’re building wealth, but people perceive that as a way to build social status as well. Whereas their brokerage account or their investments on paper are not necessarily known to the public.
JA: Yeah but you know what that whole thing with real estate is that I want a tangible asset that I can go and take a look at. Well in the 2008 credit crisis, it’s like okay well yeah, we’ll drive by that house that you spend $500,000 for, and look at it – it’s worth $200,000. I mean, what’s the difference?
JT: Exactly. I think for many people, the difference is a symbolic one in some ways. And that may or may not be a good decision, from a financial standpoint, as far as how one is going to build wealth over time. And we also have not, just what people buy, but the choices of careers. Everyone seems to want, in the recent past, jobs that are perceived a certain way, even if they’re not necessarily economically beneficial, but there are shortages in the trades. And there are quite a number of good jobs out there to be had. But many people don’t want to take them, despite that. And I think the only the only explanation for that is perhaps the perception that some people might have, and how that might be getting in the way of an economically beneficial decision, in the same way that people’s desire to spend on things that might have a very prominent public face might kind of cause the same problematic issue from their budget.
JA: That’s an interesting thought. My father was a cabinet maker. He was a jack of all trades I guess, handyman, he was an electrician, he was a cabinet maker, a carpenter, and everything else, and made a very good living doing that. But you’re right, there’s a shortage of electricians or plumbers or people that are working in the trade that make very good incomes. But they might say, “well I would rather have a different type of title. So when I’m at a cocktail party I can say I’m a VP,” but they might not be making any money, versus hanging out and having a couple of beers with some plumbers that are making three times as much.
JT: I grew up with my grandparents, but my grandfather was doing construction and similar stuff, and he did very very well doing that. But I think even many people in that situation, they are enamored with the idea of their children going to college. I think part of that is simply the ceremonial aspect of, you get to attend a celebratory thing at the end. You get to put the bumper sticker on your car. But that doesn’t necessarily mean that, monetarily, that’s a good move. So some of those opportunities that are out there might be a great fit, financially, for a lot of people, and some of those jobs are fun and have some other significant advantages to them as well.
JA: What jobs do you think are fun?
JT: Well, this one of course. (laughs) But I’m just saying, there are a lot of people that would like to be outside, or doing what my grandfather or your father did. So that’s I think not something that they should not overlook. It’s funny, you mentioned being a VP or something. There’s a phenomenon of “up-titling.” I remember reading an article, I wish I could remember where it was a few years ago, about certain firms that were not able to provide increases in salary to keep up with the market rate of what their workforce was able to get elsewhere. So they were more frequently up-titling. People were VP of whatever it was that they did. Not just the title of what they did. People were senior whatever it was. And a lot of people stayed for that reason. And I’m sure many people were incentivized to come to the role for that reason, which doesn’t necessarily make any sense, financially. The number is what the number is, one way or the other, whatever someone’s making, but that’s obviously an important component that influenced that person’s decision.
JA: It is so true. Right now, our company has close to 60 employees. and some of the biggest challenges… we’re in the business of helping people grow wealth. And you’ve got a volatile stock market, you have insane tax laws, estate planning, risk management everything else. And so we have very bright, smart, people that work at our firm. But some of the bigger challenges that I’ve had is figuring out titles! “Well no, I want to be a director.” It’s like well there’s no pay increase. “I don’t care!” I don’t understand that. But I guess you’re right, I guess there’s something that goes with – that there’s this status that people strive for. I would much rather be broke and not have a title than to have this nice title and be broke! I’d much rather have wealth without a title, I meant to say, versus being broke with a really nice title.
JT: I don’t doubt that, and that would definitely make sense. But if you look at the first job that I ever had, part-time, answering phones in the financial services industry for a major bank that will go unnamed, was a job in which every single person in the department was senior plus the title. Like literally, every single one, like 60 something people. And it was just kind of a running joke, “well, senior to what? Everyone is.” And I think you very rarely see a job for anything with the word “junior” in the title. (laughs) Obviously, because it’s going to make it difficult to fill for that reason.
Southern California, getting the tools and confidence you need to make informed retirement decisions requires more than listening to this crazy show. There are plenty of opportunities for you to learn from our team, including Jason Thomas, CFP® – in person at our two-day retirement courses, or at our free monthly Lunch ’n’ Learn events. All of our classes are designed to give you the information you need to help you plan the retirement you’ve always dreamed of, in spite of market volatility. For dates, times and locations for our Lunch n Learn events and retirement classes in San Diego, Orange County or Los Angeles, just visit The Learning Center at YourMoneyYourWealth.com or call (888) 994-6257. That’s (888) 994-6257.
(33:06) Jason Thomas – The Starve & Stack Method to Financial Independence
JA: You’ve had some interesting jobs. You’re a stand-up comedian.
JT: Well, I was the target of many tomatoes in the Los Angeles area for a while. (laughs) It’s funny. If you look at almost any field, there are some things that people would never pursue if it weren’t for something non-monetarily related. So to assume that we are all these rational beings pursuing profit and we make decisions based on that. Well, of course, there are other reasons. I was looking to just have a good time and enjoy something. But a lot of people, for whatever it is that they’re looking to do, is maybe they have a different objective entirely, and the money is just an ends to that. That doesn’t necessarily seem like a crazy premise.
JA: How many times were you on stage? What was the biggest crowd that you were trying to tell jokes for?
JT: I would say probably a couple hundred times.
JA: A couple hundred! (laughs) You’re a glutton for punishment.
JT: Yeah well, you know the funny thing about that is, there’s just no way to get around that you’re gonna be horrible for about a year doing that. And then most people are horrible after that. Just look at how many people you watch a standup special on Netflix or something. They’re professionals and you still don’t think they’re good. (laughs) So there’s just no getting around that. Then you see well-known people that are bombing, like so and so that’s really well known at a club, and they have an off night and they’re bad, and it just kind of makes you think, “wow, it puts things into perspective a different way,” it’s like kind of like the first time – Joe, do you remember the first time a girl ever told you to buzz off? And then you remember time number 10? Time Number 10 was probably no big deal, right?
JA: Come on, Jay. What are you – I’m still trying to experience that. (laughs)
JT: (laughs) I thought you were going to say that that never happened.
JA: It happens every day of my life. What do you mean? I’m immune! It’s old hat!
JT: You’re saying it happens even unsolicited. They come up, just in case. (laughs)
JA: Just in case you were thinking about approaching anything close to them. (laughs)
JT: And that world is like that. It just becomes no big deal.
JA: I was reading this article about, there’s a lot of individuals now that, there’s this gig economy. And MarketWatch, they did this article it was like “try this two income strategy and you could retire with millions.” So of course, that title gets your attention. It’s like oh wow. Two income strategy. And so it’s called “starve and stack” method. What do you think?? You want to you want to get involved.
JT: I don’t know if I like part number one – starve. That’s not necessarily my thing. If you direct people to maybe my image on the site they’ll understand that. (laughs) So how does that work? Starve and stack? What are those? (laughs)
JA: (laughs) What are you saying, you’re not a yoga instructor in your spare time, there?
JT: Not particularly, I don’t have a six-pack yet, I’ve got the keg. (laughs)
JA: Well all you have to do is just live off of one income. So you get let’s say a side gig, you for instance. So the reason why you came to Pure Financial Advisors, of course, was the title. Because you have a really good title. I think it’s called “financial guy.” And secondly, you can still do your standup. So you can live off of your stand-up monies that you bring in. And then you just save everything else that you’re doing with Pure Financial Advisors. How does that sound?
JT: I think the person that wrote this starve and stack article lived somewhere other than LA, but I’m still listening, because I guarantee you that person is going to be in a cardboard box here.
JA: It’s it’s like, well what is the starve and stack method? Basically, the starve and stack is a financial strategy that you can use if you have two incomes. Jay, you’re a single guy, correct?
JA: So you need to get married or get a few more jobs, then this will apply to you. So like the combination of you and your partner’s salaries, or if you have a full-time salary plus a side hustle, live off only one. In other words, income A covers regular household bills and expenses, and then income B, put toward your financial goals. I actually heard something that Jay Leno actually did this. He would go and still do you know some side standup gigs and things like that, and then his salary from the Today show, he tried to bank all of that. So he just tried to live off of the lower of the two salaries and bank. And I guess that’s how and why he’s so successful. So it does have some validity to some degree, but I don’t know how many people that actually applies to.
JT: Yeah, I think a lot of the people that I know are struggling to find the first job that makes sense monetarily, anyway. The gig economy, well you might have a lot of jobs – you might be doing Uber and Task Rabbit and these other things.
JA: Task Rabbit?
JT: You can get somebody to do whatever – you just put a task, hey, I need somebody to wash my clothes or rearrange this Excel sheet or whatever.
JAL Is it Pass Grab It or Task Rabbit?
JT: Task Rabbit.
JA: Oh I thought you said pass and grab it. I’m like what?! (laughs)
JT: That’s another strategy, that’s going to be somebody else’s article. (laughs) You steal your way to wealth with that one. You pass people on the street, you grab their purse and you run for it. I don’t think we want to recommend that one though. (laughs)
JA: So Task Rabbit. So have you ever done Task Rabbit?
JT: I have not. I’ve thought of downloading it and using it whenever I need some minor errand done. I’m sure there’s a lot of stuff out there, but if you have five different jobs, and none of them are necessarily kind of knocking it out monetarily, then you’d probably rather have one that is more substantial from an income standpoint.
JA: Most definitely. But there are all sorts of different ways to create wealth, I guess. I think the moral of the conversation is, what’s really important to you? Is it the ego side of things? Is it the title? Is it having the nicer home, but not necessarily being financially independent, or secure financially? Or is it on the other side of this spectrum, where, hey let’s just live very frugally and do some task rabbits and live off of that. And then you save your full-time job earnings. So it can be all over the place.
JT: Yeah, I would be very surprised – it would be interesting to see people that are substantially high earners, but are doing let’s just say, very stressful or very dangerous jobs, perhaps. And then looking at people that are doing something like what you just described, maybe they’re getting by but they’re not living an extravagant lifestyle, but maybe they have something else they’re interested in. They have more free time. They like what they’re doing, or the people they work with, or whatever it is – there’s something else that’s the carrot that’s driving them there. They may be happier. I saw a number and I don’t remember where this was, that some researchers determined that money does have a substantial effect on happiness, but it stops doing so after about $70,000 or so. And I’m sure maybe that’s different geographically and so forth but I’m not sure how old that study is, but I can see that well yeah, there’s a certain amount that is going to affect people’s level of contentment or happiness in what they’re doing, but then anything on top of that is kind of gravy. I don’t know. Maybe the solution is somewhere in between, or maybe everybody’s got their own solution, and who knows, maybe some people aren’t even aware of what it is that they want themselves, and maybe that’s kind of the challenge for a lot of them.
JA: You’ve been doing this quite some time, helping people out. You’re a Certified Financial Planner, and we see people that don’t necessarily have a lot of wealth, but they’re the happiest people that you’ll ever meet, because their goals are in line with their values, and they’ve saved enough to be happy, and they’re doing different things, and they’re doing all the things that they want to do, and even if they had a couple of extra million bucks or a couple extra dollars, it wouldn’t necessarily change their lives. And then we run into people that have more money than most, that are miserable. They continue to spend to try to find happiness, and they’re not finding the happiness, so they continue to spend more. So they have very high incomes, but they’re a little bit lost, I guess in some instances, to find their true wealth. So I think the starting point is really – not to be all warm and fuzzy here with you, Jay, but self-reflect a little bit, and figure out what the hell you want to do with your life.
JT: No question about that, and I think, I would imagine the town that I grew in, in Cleveland, Tennessee, might be probably economically similar to the area of Minnesota you were in. And you see a different attitude when you go to a place like L.A. or San Diego. Just because you don’t have the option to just kind of get by in the same way. So a lot of people, I think, in more urban areas might have the attitude, “well, if I have to do something. If I have to get up to the next level, that’s not really a choice economically, then maybe my outlook is different.” So I think that might be one reason when I go back to visit, and I know I know you just went back to visit, there’s a different type of contentment that a lot of people have that really, they’re living a lifestyle that would be very difficult here, without necessarily needing to be at an economic level comparable here to do that. And they’re pleased as punch. I mean, it seems like when I talk to people when I go back home, the kind of general level of pleasantness, for lack of a better term, let’s just say it’s slightly different than Los Angeles.
JA: I was back home for the Super Bowl. I didn’t go to the game. I’m from Minneapolis. I went back, had some family business, visit my family but I took my nephew and we walked around the stadium. It was so bitter cold – it’s below zero. And there are hundreds of people, just walking around the streets like it’s middle of summer. But they did have parkas on, they knew how to dress. I felt like everyone had the big wool hats on, and snowmobile pants, and walking around drinking beers at 8:30 in the morning. It was like, “wow! A little bit different.” But I don’t know how you live in the cold, man, I guess that’s why I live in Southern California. So, Jay Thomas, you’re writing some blogs, aren’t you? Getting some videos done? What’s the latest blog you’re writing?
JT: The latest one that I’m writing is, wow, we’ve got like five of them that are that should be up in the near future. They are all kind of retirement checklist related, or the majority of them, like seven tips for retirement planning, so those should be up and done in the near future.
JA: 7 Tips, wow, that’s marketing at its best right there, brother.
JA: Exactly. Everything is a list now. No one no one wants to read anymore. (laughs)
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 firstname.lastname@example.org, 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.