All right, soup is on, I’ve got some stuff for you to chew on stuff for you to chew on stopping to think about to ruminate on, bounce around your head. To use your fast brain and your slow brain, every part of your brain may or may not be required for this conversation, how much? How much do you need to save for retirement? Never going to retire, I’m going to die at my desk, no. Wrong answer. Your future self will be super mad at your current self. If that is the approach that you take God willing, unwilling at some point, the distant future, you will be an older version of you. And that older version of you will be really grateful this current version of you save some money, put some money aside, but how much? How much do I need to be saving. And I know this is hard. Some of us are living hand to mouth we are paycheck to paycheck, it’s a bad situation to be in. But whether or not you’re able to actually execute, and to save as much today, as is required to fund your desired retirement later, I advocate that it’s wise for you to know, I advocate that we must have the information. As GI Joe used to say, knowing is half the battle, then I don’t know if it’s half, maybe 10%. It’s enough to get us started. There’s this number that’s been floating around. And if I knew where to correctly attribute attribute it, I would I don’t want to be accused of plagiarism or anything like that. That number is $3.4 million. It’s been floating around that people are saying this is the amount that you will need in order to retire. Now, is that true? I don’t know. I think what is for sure true is that it’s important for you to determine what the amount is. That is correct for Believe it or not you. So whenever we are talking about retirement planning or financial planning, I want to put a just draw a line in the sand and say, Hey, this is something that anyone is capable of doing. You do not know or need to have a fancy financial person help you with this certainly can. And there’s value in that. But you can figure this out for yourself without question. There are wonderful computer programs and financial calculators, at your fingertips at your disposal that will help you to figure all of this out. But simply put, I mean, if you went on vacation last summer, you made a financial plan, you figured out where you’re gonna go when you’re going to go there? How are you going to get there? What you’re going to do while you’re there? Where are you going to stay? Where are you going to eat all these things, basic elements of making any kind of a plan, our financial plan. So for retirement, we need to make decisions about this is when I’d like to be able to step away from full time work. Okay, so I want to have that flexibility to be able to be independent. So we need that that date in the future, we need to know how much I would like to have. So this is a little trickier because I don’t just want a big chunk of money. Don’t get me wrong, I want a big chunk of money. But that’s I don’t want just have an account balance. Or to own a real estate portfolio, I want income. If I’m stepping away from full time work, I’m going to be missing my co workers. But I’m also going to be missing the fact that I get that paycheck every other week or whatever it is the frequency that hits my account. That’s what I want. I want income coming in. So I don’t want $3.4 million. I want the amount of income that that’s going to help me to get so but we need to plan sort of it’s kind of the same number, but I’m going to help you figure that out. Okay, so we need to figure out when is you want to retire or be able to have the ability to retire and how much income you’d like to have. And then you could figure out okay, based on that I need to know or I can figure out how much I need to accumulate in order to do that. And then of course, how long do I want that money to last for? Because if you retire at 65 years old, you could easily live until you were 95 or 105 or 150. So you’ll work for 30 years and 40 years and you’re essentially going to be retired for almost the same amount so well to save a lot of money. So maybe that’s where that $3.4 million number comes from. Regardless, those are some of the variables that we need to figure out. But it is a feature and bug That I do not want to complicate things, maybe I’d like to make things a little too easy, which is evidence that I’m not very smart. Again, I’ll let you be the judge of that. But when you hear that number, when you hear I need to save a million dollars, while that’s been watered down, a million has been watered down by a billion and now a trillion. It’s still a lot of money. And it can still be daunting. So when you hear it, what do you think what do you feel? Is it motivating, I need to get to work, I can make this happen. Or maybe it’s demotivating. Like, oh, my gosh, I there’s no way I’m ever going to be able to do that. Well, this is why we need to make a plan. Because when we are overwhelmed or demotivated or unsure, that’s when we have a tendency to procrastinate or like, oh, I can’t do this right now. I just cannot right now, down the road, next week, next month, next year. But you know, you can’t do that because money has time value. That means that we benefit from the amount of time that we are invested time in the market, not timing the market. There’s all these fun ways to save. best time to plant a tree was 30 years ago, that’s when I should have started saving. Next best time is today. So got to know. That’s what I want to help you figure out here. So it says a story about overcoming overwhelm, and starting to take beneficial inspired aligned action in service of the things that you want. And in this context, it is being able to accumulate assets for our retirement. So once you figure out, Okay, here’s the plan, how much can I start saving today, that’s awesome, you start doing that, we’re now taking action, things are starting to be created. So before we get into the actual numbers of it, want to have a conversation about my perspective on this. I’m completely agnostic when it comes to what vehicle or approach that you want to take to accumulating your assets. If you want to collect stamps, or wine, or cars, or buy real estate, or cryptocurrency or, or invest in the stock market or gold, I don’t care. I don’t care at all. I am completely agnostic. I am not an any team, or anything like that. But all that being said, I’m going to use traditional stock market investing. Because I believe that while the idea of becoming a real estate tycoon is awesome, it’s not as accessible to everyone. But we can all open up an IRA, an individual retirement account, if you work at an employer has a 401k We can all take part in that pretty easily. The barrier of entry with these things is super minimal. Okay. So what is an IRA? What is an individual retirement account? What is a 401k? Are these things good or bad? And that’s a whole nother thing too, that I will do an episode on his people out there talking about how 401 k’s are bad. And, you know, fundamentally, it’s neither good nor bad. Nothing is inherently good or bad. Death is not good or bad. It just is death. Divorce not good or bad. It’s just divorce. Some people, two parties get divorced, one person probably thinks it’s awesome. The other person probably thinks it’s terrible. You know? You you get the idea here. So 401 k is not good or bad. Ira is not good or bad. Crypto not good or bad. They just our same thing goes for annuities. So not good or bad just is. So how much do I need? How much do you need to save for retirement? Answer is probably more.

Hmm, not necessarily super helpful. In all seriousness, let’s run some numbers. Now. Reading off me reading off or going through a ton of numbers on a podcast does not necessarily make for an awesome podcast. But although it’s not ideal, it is essential because I want to give you heard numbers telling you to just do something, save more, not helpful, not constructive. And that’s what I want to be I want to be helpful. I want to be constructive. So I’m going to be going through a lot of numbers, which will be listed. I will just put them right in the notes of the show. So you can follow along and read along as I’m going through all of these and then go through three different scenarios. If you like we can call it person a person B and Person C I’m assuming that the amount of money that we’re planning off of is $100,000. Okay? So that could be a lot based on your perspective and your current situation, or it could be a very little, again, not good or bad. It’s all relative to your situation. But 100,000, it just makes for easy math. And life is hard enough as it is without complicating things with difficult math. So the scenario is, we’re going to talk about these three individuals or families who are saving 15% of their of that 100,000. So $15,000 a year 20, or $20,000, a year 25%, or 25,000. Okay, and we’re going to do it over the course of 30 years. So you may have more time than that, you may have less, but you get the idea. Here, there’s a theme, it’s all subjective, and relative to what your situation is. Now, I’m going to apply a percent rate of return on this money. I just heard half the audience gasp and say how in the world are we going to get an 8% rate of return, the other half said, Well, that’s dumb, I can get a 20% rate of return, whatever you choose, you do it that, my goodness, everybody take it easy, pump the brakes a little bit, we’re going to use an 8% rate of return on the growth. And then finally, when it comes to actually take this money, the sum of money that we have accumulated saved up and turn it into income that we want to use forever. The traditional investment manager folks out there will talk about the 4% rule. Maybe now it’s the 2% rule, which says this The amount that I can safely withdraw from my portfolio every year, without totally exhausting it. Fair enough. I’m going to use it 8% payout, because I am going to assume that you will use something called an annuity to turn the amount of money that you saved into income that will be there for as long as you want it. Why is that? Well, I’m looking at ease here, I’m looking at simplicity. Now, you may have strong feelings about annuities one way or another. It’s the only way that I know that I can guarantee that the income is going to be there for as long as you need it. If you live for 50 years, and annuity will pay you are all 50 years, lots of different kinds of annuities. Happy to have a deeper conversation about that. And perhaps one day, we will have very deep conversation about that. But for our purposes today, and use a percent. Why 8% Because that’s around the payout that you can go and go to an insurance company and say I’ve got a million bucks. And they’ll say we’ll give you a percent for the rest of your life on that money. Now, lots of nuance, lots of variables, lots of different kinds. Well, let’s keep it simple. It’s the idea 30 years, a percent rate of return the accumulation of a percent payout on the money that you saved after 30 years. Okay. Benny, that seems unreasonable. Again, don’t ask me, bro. The idea here to give you something to chew on, hold dinner bell thing at the beginning, something to chew on something to think about. There are a million ways for you to do this. It’s not that complicated. You can use whatever numbers you want. Let’s get started. So I talked about 1520 25. That’s the amount percentage that will save the money we have coming in. Okay, 100,000. So if somebody says $15,000 a year for 30 years, and an 8% rate of return, they would have approximately $1.6 million. Okay, cool. Somebody saves $20,000 a year for 30 years and an 8% rate of return, they would have approximately $2.1 million even cooler, somebody saves that 25% or 25,000 a year for 30 years at an 8% rate of return, they would have approximately $2.7 million. Again, super cool. We’re not anywhere close to that 3.4 number, but we’re getting there. Okay, so now we’re going to start with the the small number again, the 15. So if you were able to save 1.6 million, you got an 8% rate of return from your from your guaranteed monthly income, that’s going to give you just under $130,000 a year for the rest of your life. That’s awesome. A percent at the 20% number, a percent of 2.1 million. That will give you approximately $1.7 million, or I’m sorry, not that much. $172,000 for the rest of your life. A percent on 2.7 million comes out to be approximately to $216,000 for the rest of your life. Okay. That works great. That is a lot of money. Now Now talks about the cost of waiting. So this time would have been 30 years ago to start saving, ideally would have been before you were even born, your parents opened up, somebody can have some kind of an account for you. And we’re putting money in on your behalf. You can call them right now say, why didn’t you do that? Why didn’t you have the foresight or more money to be able to save money for me and my retirement, but cost of waiting. So let’s talk about if, instead of doing it for 30 years, you do it for 2015 10 years, actually, I think I’m going to do so 30 years, again, somebody says $15,000 a year, for 30 years a percent rate of return, they would have approximately 1.6 million. If somebody saved that same 15,000, for 25 years, instead of 30, that it would move from 1.6 million to 1.4 million 20 years have moved from 1.4 to just about a million dollars. If you only had 15 years to save, save 15,000 For 15 years at that 8% rate of return, you will accumulate just over $620,000 a year, somebody saved 15,000 for 10 years, you would accumulate $217,000. Okay, so we’ll go through this 8%, again, you’re able to get an 8% rate of return, which is the number we’re using for the withdrawal on 1.6 million, that gives you the $130,000 a year forever, a percent on 1.4 million comes out to $110,000 a year forever, a percent on 1 million comes out to about $85,000 a year, a percent on 620,000 is approximately $49,000 A year 8% on 217,000 is approximately $17,000 a year for the rest of your life. Okay. So we just ran through a lot of different numbers. But that gives you an indication and it’s obvious. If you have longer to accumulate money, you will have more of it. And obviously, the more you’re able to put away, the more you’re going to have on the back end. I think that we all intellectually understand that. But until we run the numbers for ourselves in our situation, that’s when things really get hammered home gets about as close to home as as as is possible. So what’s the starting point of all of this? Is it is it possible to do this with a plan? Well, maybe. But to really make it real. So we need to do is to have that plan to set goals. Obviously, we’re not doing that we are just sort of going at it blind. And if you just blindly save a ton of money, that’s fine. But the unfortunate reality is that most of us are not saving enough. And we’re just not positioning ourselves for success. So the starting point is you need to figure out what kind of investor you are. Because if you are a conservative person and you start investing too aggressively, you’re not going to be happy or comfortable, you will be uncomfortable, you’ll be staring at the market all the time, you’ll be giving yourself an ulcer and all kinds of bad things. And alternatively, the flip side of that coin is if you are an aggressive investor and you’re too conservatively invested,

you’re just not going to be a happy investor. Now, why do I even bring that up? Well, because I talk to people on at least a weekly basis, who have money that they believe is invested, but then they go and check it. And sometimes they figure out that it’s just in some kind of a checking account, like a holding account that not receiving any kind of rate of return at all. And the flip side of that also happens. So we just have to know you need to make a plan. Need to figure out what kind of investor you are all these things, and not rocket science. But it does require some doing on your part, doing doing doing doing that’s kind of the thing. I’m fine to talk about how I’m a human doing more so than I’m a human being. Maybe one day when I retire. I’ll move more towards that whole human being thing. But for right now we need more doing and less being. Now I’m not just going to tell you to just do it because that’s not a super helpful thing. I would like to help you figure out how to put this plan together. Step number one, I really want to advocate that you examine your existing beliefs and emotions around money, financial success and retirement. When those things go into your ears and into your brain, what is the response that you get both emotionally and intellectually? How do you feel about that? Again at the top I was talking about A lot of us feel demotivated by these things. And that wall an honest emotion is not helpful because it just causes us to do nothing. So need to take some action, I want you to figure out how it is you would like to feel. And you’d like to think about this. So we have the choice, we have choice, I get to choose how I think and feel about wherever I am. I may not have any control over what my current situation is. But I have absolute control over Hong and I think, feel and respond and take action. So you get to decide, do you want to feel good about money? Do you want peace of mind? Do you want to stop stressing? How do you want to feel about it? Now we need to get really clear in what those goals are and what that plan is, when do you want to retire? How much income do you want to have? How long do you want to last for based on that, you can just plug whatever numbers you want into the little model that I read through with you, and you are well on your way. So make your plan, create your plan, make the plan start executing it. Just because the plan says you have to save $1,000 a month and you can save 200 You should start saving the 200 and work your way up to the 1000 Whatever it is, get started. So we need to make it real and sustainable in our lives. This is not a one time thing, doing it once sitting in forgetting it. It’s better than not doing anything. But ideally, we will give ourselves or schedule in some kind of a monthly money meeting monthly money meeting an M three monthly money meeting where you will review your cash flow, review all your transactions from the previous month, you’ll review your budget are you doing we’re ahead we’re behind. We just nailed it right on the nose. Awesome. We want to review all of our accounts, got our IRA, we’ve got our 401k got our start, whatever, look at it, review it, review your goals, talk about what needs to change what tweaks, you get better at it, I encourage you to do it the same day and time. So do it on a Sunday at nine o’clock or Sunday at whatever just needs to be a time that you can stick to that’s actually going to fit. And then as you are moving along, you will encounter roadblocks, you will encounter impediments that slow you down or stop you, whatever. We need to be able to navigate those. Everybody’s got a plan until they get hit in the mouth punched in the mouth. Like Mike Tyson famously said, will your plan survive its collision with reality? I don’t know. It. I think it can and it will. You just need to make the decision that it can and it will and just update things and move through the process appropriately and as is required. All right. Nice work by me right now. Totally nice work by me. If you got questions by this stuff, hit me up. Hit me up, send me a message. Send me an email. Tell me how dumb I am. Tell me how brilliant I am. Somewhere in the middle. Check out money alignment Academy, got questions and looking for additional resources, get the support you need and want to talk to somebody I can introduce you I can help. Finally, rather than reminder, never going to be anybody more interested in your financial success than you are. So act accordingly.