Ron Lang: Good morning, there’s always some  interesting things. I know you got some  

fun stuff I got some fun stuff and we’ll always  sprinkle in some business and economic things, too

Jeff Kikel: Absolutely.

Jeff Kikel: And today is one  of our learning sessions,  

too So at the end i’m gonna share with  you guys a little bit about Answering the  

question. How much do I need for retirement?  We we heard from The federal government this  

week that it takes about 1. 4 million from  the average, American to live in retirement.

Jeff Kikel: So we’re going to figure out  how we come up with that number. And I’m  

going to show you a quick back of the napkin  way of [00:01:00] doing that. So stay tuned  

for the end of the show. So I think Ron,  you had some stuff to start with, correct?

Ron Lang: Yeah, always some good fun stuff here.  So here we go. Let me know when you see it.

Ron Lang: There you go. So some bad business  decisions. Everybody remembers excite. com one  

of the original search engines. Yep. They passed  up for buying Google for under a million dollars.

Jeff Kikel: Oh, they would have screwed it up.

Ron Lang: Exactly. And that’s actually what this  

article talks about that they made  up just, it’s like Facebook, right?

Ron Lang: They buy a competitor  to just get rid of them.

Jeff Kikel: Yeah.

Ron Lang: And I don’t think Google would ever  have been what it is today. If Excite would  

have bought the, remember Microsoft  had a 40 billion deal on the table to  

buy Yahoo. Yep. 20 something years ago.  And they, the board didn’t approve it.

Ron Lang: Yahoo’s board and here they  are. They’re sucking wind now. So I  

thought that this was a fun, bad decision,  but maybe it was a great decision for Google

Jeff Kikel: that they did [00:02:00] pass  on them the best business to it. And the  

good part is Google then went on  to buy up some competitors and  

integrate them in smartly into their  business, like YouTube and all that.

Jeff Kikel: They basically own number one and  number two search engines in the world now.  

So that would have not happened with Excite. I  don’t even remember using Excite quite frankly.

Ron Lang: I remember What was the dog one?  That, that had the dog logo? Oh. Darn,  

what the hell was the name of? I can’t remember.

Ron Lang: Anyway. I used to, but yeah, there  was a bunch of ’em out there. Yahoo. Yeah. I

Jeff Kikel: used to use Netscape. I used Yahoo a  lot in the early days. And then ask Js, I remember  

was one of the other key, like the first, briefly.  Yeah, that was one of the very first ones.

Ron Lang: I got you. All right. We got one more.

Ron Lang: This is one of my favorite ones.  Blockbuster rejecting to buy Netflix. Bye bye

Jeff Kikel: Blockbuster. Yeah, so much for that  idea. I think that, if I remember correctly now,  

the final [00:03:00] Blockbuster video,  the one that was left up in in Portland,  

finally closed. I think last year or during the  pandemic or something like that, they closed,  

but they were awesome because they  had a, the best Twitter channel ever.

Jeff Kikel: It was the funniest thing ever.  Just wa watching what they would put out.

Ron Lang: The amazing thing is this,  this is before ne when Netflix went  

streaming. Yeah. So think about it again.  Oh yeah. What was Blockbuster’s Bread and  

butter and cash flow renting out DVDs and  tapes, right? Yeah. Do you how resistant.

Ron Lang: Would they have been to streaming?  They, cause they’re looking at it.

Jeff Kikel: Yeah, it’s for, they’re  looking at it from the point of, Hey,  

we, people still want to come into the video  store and browse and everything else. No, I,  

I do not overlook the the laziness  of the American consumer anymore.

Jeff Kikel: If it can be delivered to  them, they’re going to do it that way.

Ron Lang: But think about it with all  the inventory. [00:04:00] They had all  

the brick and mortar. Yeah, they  would have Squashed yep streaming  

because that means all their stores  would have gone away it’s just like  

we talked about in the last episode  kodak rejecting the digital camera.

Ron Lang: It’s the same thing It’s the same thing.  So I thought this was funny. All right, so let’s  

jump into it I’m going to go through some of these  slides quickly This is a reiteration of like where  

we are With some of the things that we have just  beaten the drum on over the last year Here it  

is credit card rates are just at an absurd level  again, and they keep ticking You Keep ticking up.

Ron Lang: It’s absolutely insane,  right? And then of course,  

credit card balances that are more than  30 days old Here we are at a 15 year high  

so here it is people keep putting more in  a credit card debt rollover balances are  

near 1. 1 trillion at like almost 22%  And here you have almost [00:05:00] 1.

Ron Lang: 7 to 1. 8 percent that are more than  30 days past due. So in addition to paying over  

21. 5 percent interest, now they’re paying  late fees. Where does it stop and here we go.  

So this is just amazing here with this is just  credit Card balances, right? This is you know,  

another 15 year high credit card and  revolving plans this isn’t going to stop.

Ron Lang: This is the one it’s  almost so near 1. 1 trillion  

How can this happen and we already talked about  a couple prior episodes banks and credit card  

companies are not increasing Credit lines. Yeah,  they want people to pay Because at some point,  

bankruptcies are just going to spike and go  parabolic. So I thought this was interesting  

as a comparison of the blue and the maroon  of delinquency rate on credit card loans.

Ron Lang: All banks, compare  comparison by quarter, where again,  

we’re at [00:06:00] a five year high,  how does this get resolved? However,  

it gets resolved this badly, wage growth is  down, but, minimum wage is going up. They’re  

still spending instead of paying down the debt.  Instead of going out, they pay down the debt.

Ron Lang: But if they stop going out, then  those businesses would suffer. At some point,  

you may feel a big owie. That big  owie is a bite in your rear end.  

That bite in your rear end is, this  is going to come to an end badly.

Jeff Kikel: And it’s going to come from that point  where there’s not the new jobs. That are out there  

or, the jobs are going to decrease, unemployment’s  going to go up and that’s going to just cause.

Jeff Kikel: A flutter effect going in. Once again,

Ron Lang: stop going to restaurants,  but if you got 21 meals in a week,  

if you’re doing three squares  a day, I heard a number,  

which was absurd that people are eating  14 to 16 of those [00:07:00] meals

Jeff Kikel: outside of the home  which off of our last episode,  

the number I had was that one  month year over year went up 4.

Jeff Kikel: 2%. And now you pack on more  wage increases in that lower end of the  

market. And those costs are going to continue  to go up up and up. But that was literally  

the previous three months. They went up 0.  3, 0. 2 and 0. 3. And then last for March,  

it went up 4. 2 percent in that  category, eating away from the home.

Jeff Kikel: It’s insane. So let’s get  back to something a little bit more fun,  

’cause that was a little bit yeah

Ron Lang: please let’s get some levity here.

Jeff Kikel: A little bit more  uncomfortable. Let me blow this  

one up. Yay. Florida man. Florida man. So  the, this’ll be the best of Florida, man.

Jeff Kikel: I I went, what the hell  is that? Look at this. Have you seen  

my banana? This Florida man, somebody  stole his 18 foot, excuse me. Excuse me.

Ron Lang: I’m sorry, [00:08:00] Jeff, did  you swap out your picture for this guy?

Jeff Kikel: I, Jeff, that, that was,  it was before I shaved the beard,  

but yeah, have you seen my 18 foot banana?

Jeff Kikel: I’m just trying to  figure out who’s got this thing  

walking around the streets with an 18  foot banana on their shoulders there.  

Florida man arrested after wife hit with  flying chicken wings. So just so that do  

not throw chicken wings at your spouse  because you could be arrested for it.

Jeff Kikel: Florida man arrested for  sexually assaulting a stuffed Olaf. I  

had to actually look this up. Olaf was in  frozen. I’ve never seen the movie frozen,  

but Florida man assault, sexually assaulted  Olaf at a target. I have a question. Yes, sir.

Ron Lang: I can understand  abuse. Of a stuffed animal. Oh,  

is it sexual assault if they  have no sexual genitalia?

Jeff Kikel: I just trying to figure this  [00:09:00] whole thing out. And I can’t  

the images in my head. I just can’t get out of  my head at this point. So we’re just going to  

leave it at that. Oh, hello. To make sure  we’re gender neutral when it comes to the  

show. We have a Florida woman story. 93 year  old Florida woman arrested for not paying rent.

Jeff Kikel: She says she thought  she was going to die soon. Good  

excuse. She wasn’t using the money that she wasn’t

Ron Lang: paying for rent for her dental work.

Jeff Kikel: That’s exactly right.  Yeah, but she was arrested. 93  

years old. Now she’s got free rent, which  is good, actually. For three hots and a cot  

at this point. The final one is my favorite,  so the video game industry is getting into,  

making sure we do this Florida man  simulator for the Nintendo switch.

Jeff Kikel: Now here’s the funny part. The  person that created this thing doesn’t spell  

very well. So you don’t want to, you, if you’ve  ever dreamed of becoming a Florida man with half  

it and [00:10:00] without having to ember ass  yourself here’s the tool to do it. Maybe he was

Ron Lang: embracing himself. He

Jeff Kikel: was no ember assing.

Jeff Kikel: Yeah. You just don’t want to  ember ass yourself with that, but the video  

game industry is definitely getting into the  video or the Florida man game at this point.

Ron Lang: God bless never ending content.

Jeff Kikel: It’s awesome. I love it.  Let me get out of this because I think  

you’ve got a few things left or  no, I went through everything.

Jeff Kikel: Okay. The last piece of the pie  here today, I want to cover. How you figure out,  

cause I get this question all the time. It’s  actually the number two question that when I  

did my chat GPT search a few months ago  the number two question that people ask,  

how much do I need for retirement? And there  was a study the other day that said you need 1.

Jeff Kikel: 4 million. The average American  needs 1. 4 million. So how do we back into  

that number? So this is what I, when  I started in [00:11:00] this industry,  

there wasn’t all this fancy software and things  like that. We use this thing called a pen,  

a yellow legal pad and a financial  calculator to figure this out.

Jeff Kikel: But I also figured out a way  to do it really simple on the back of the  

napkin. So let’s start off and say, how much  do you need to live on? So that’s the number  

we have to have first. You need to really sit  down and figure out what does it take to run  

your household. So we’ll use an example  of. I need 7, 000 to run my household.

Jeff Kikel: Okay. All right. How much am I  going to get from social security? So when I  

get to retirement, so let’s say full retirement,  I’m going to make 2, 150 a month. That’s your  

average American making 60 to 70, 000 a year.  They’re going to make about 2, 100 from social  

security. Okay. All right. So we need to take our  7, 000 that we need minus our social security.

Jeff Kikel: That gets us The 4850 per month.  [00:12:00] That’s what our investments need  

to actually make. Now, there might be  other sources of income that you have.  

Let’s say you have a pension. Let’s  say you have, oil wells or whatever.  

You just subtract all that out. To get to  this main number here, this 40, you got

Ron Lang: to take taxes out of social security.

Jeff Kikel: Yeah we’re not even going to  worry about that at this point. We’re just  

big dollars and we’ll work our way down.  So my investments need to generate 4, 850.  

So let’s talk about withdrawal rates now. So  if you talk to financial planners, Advisors,  

they will typically tell you that you can take  a withdrawal rate of four to five percent.

Jeff Kikel: Ron, is that the number you use? The

Ron Lang: four percent, I don’t actually because  the four percent rule worked back in the day. It  

has basically been debunked in the last 10 years.  Because of inflation and so many other [00:13:00]  

costs that have come into play that really  weren’t around 25, 30, 40 years ago. Yeah.

Ron Lang: It really depends. It’s a case by case  basis. So that may work for a lot of people.

Jeff Kikel: Yeah. It is. And it’s the rate I  use because if I’m running the money for people,  

I know where I can, I know where the top  end number is, what I can make them With  

the strategies that I use and then subtracting  out inflation gets me to that withdrawal rate  

number But for a safe basis, i’ll typically sell  somebody four to five percent is where you would  

want to be typically if you’re retiring younger, I  would say four is a much more conservative number  

If you’re retiring later in the 70s, let’s say  you retire around age 70 Five percent probably  

will work But you’ve really got to watch your top  end growth number that you have in your portfolio.

Jeff Kikel: But for grins, we’re going to use  that. We need to then figure out what your  

withdrawal factor is. So your withdrawal factor in  the [00:14:00] case of 4%. Is 25. So where did we  

come up with that number? 100 percent divided  by four is 25. 100 percent divided by five is  

20. So that’s a factor we can work  with to come into this number.

Jeff Kikel: So now let’s  actually do the math. So we have,  

we need our investments to generate 4, 850  a month. Times 12 times 25. If we’re using  

the 4 percent scenario. So that means we need  to have 1. 455 million right on that number  

that just came out this week. What about 5%?  So if I am going to withdraw 5 percent or if  

I have a portfolio that will support that  withdrawal rate 4850 times 12 times 21.

Jeff Kikel: 164. So that’s a way that you can  back of the napkin your way into. What your final  

number needs to [00:15:00] be. Now, if your final  number ain’t there what are you going to do about  

this? There’s a ton of different strategies that  I use. This is the point where you need to find a  

good financial planner that understands how to  be, that can look beyond just your portfolio.

Jeff Kikel: So it might be that, you’re, you have  600, 000 in your home. In equity in your home,  

you can use that equity through a reverse mortgage  

to make this number a little bit less. Maybe,  maybe you 48 50 includes a 2, 000 mortgage. If  

you could eliminate the 2, 000 mortgage, I don’t  have to have near as big of a portfolio there.

Jeff Kikel: Making sure that your  portfolio is generating the right  

amount of money. Making sure that you’re  protecting that income that you need with  

something that’s guaranteed. So there’s a ton  of different strategies. Can you do this DIY  

yourself? [00:16:00] Yeah. But should you  know find somebody that can work with you?

Jeff Kikel: That’s where we make our  that’s where we help you make money  

as an advisor doesn’t have to be ron  or I but find somebody that’s a good  

planner that understands this stuff  Ron, do you have any comments on that?

Ron Lang: I do because i’m it’s interesting.  You did it this way I’m going to give you  

my back of the nap napkin dirty math while I  work with prospects And that’s the following.

Ron Lang: I know all day, at least for  the time being in the last many years,  

I could get 5 percent annually for a client  very simply. So what I always say is. Okay,  

how much income do you think you need on an  annual basis? Because the way we like to build  

our portfolios is we want you to live off the  dividends and interest and not touch principle.

Ron Lang: So how do we get  there? Real simple numbers.  

You want 100, 000 a year? Multiply that by 22.

Jeff Kikel: 2.

Ron Lang: 2 million. That’s it. That’s how we  get there. That’s your bogey. You [00:17:00] get  

the 2. 2 million. I could get you a hundred  thousand dollars a year. Pretty simply with  

some buffer room, not including social  security. That’s my quick calculation.

Ron Lang: When people are like how much do  I need for retirement? How much do you think  

you need annually? You need a hundred thousand  times 22. You need 2. 2 million. You’re like,  

Oh my God, I’m 55 and I only have 75. Okay.  We’re not going to get there. Yeah. Okay.  

But let’s let’s try and plan accordingly, but  that’s just the quick down and dirty number to  

work with before you get, knee deep and waist  deep into good financial planning software.

Jeff Kikel: Absolutely. But like I said,  this is a number for those of you that are  

sitting out in the audience today, and you’re  still trying to wonder about that. If you’re  

sitting there at 55 with 70 or a hundred grand  you need to work with somebody quick to figure  

out how you’re going to get there and have  a strategy in place for the next 10 to 12  

years to make sure that you put yourself  in the right kind [00:18:00] of position.

Jeff Kikel: The sooner you  can do this type of stuff,  

the better it’s going to  be for you in the long run.

Ron Lang: Now, good stuff. Good  stuff. Hopefully that was helpful.

Jeff Kikel: Yes. I hope everybody enjoyed that.  Once again, we do these shows for you guys,  

so make sure that you subscribe to  the channel so you don’t miss a show  

and make sure you give us that upvote  so that we know that you’re out there.