XYZ's of Money - Lesson 1: Ultimate Retirement

Let's go, baby!

One on one financial. Who can answer again? We got it. Akina.

The key to financial success is financial education.

Welcome to our XYZs of Money.

Well, Alan, you're you're amazing and super honored to be on here.

Alan, thank you as always. There are very few people.

in an industry like this that are as real as Alan Akina. And Alan, I thank you for what you do and how you serve

these people so passionately. We're gonna go ahead and get started, everyone, and thank you for letting me know where you're from. Hello, Megan from Vegas. I, I'm excited to be here. I'm glad to be back teaching again. Different groups. So for those of you that don't know me, my name is Alan Akina, and I am one of the biggest advocates for financial education. Like, I am— I'm a huge believer in it. And I truly believe that everyone deserves to have financial literacy. Everyone deserves that opportunity to have a happier life that comes from being financially literate. And so I believe in that so much so that I started a company almost 18 years ago. It's called 101 Financial. It's now grown into like one of the largest and fastest growing financial education companies in the country, in the US, and I'm very proud of it. And I think for those of you that don't know me, you'll come to realize that the foundation for my drive, the foundation for my passion with regards to personal finance comes from my childhood days. So I was born and raised, very lucky to be born and raised in Hawaii, and I come from an amazing family. The only thing that wasn't so amazing for us was our financial situation. So I grew up on the free lunch program at school. That's why I'm so glad even during this pandemic they're still serving free lunch, because that would have been, that would have been us going to get that free lunch. I had free lunch, free breakfast. We had WIC, food stamps, government cheese to survive. We moved around from house to house. That was throughout my entire, you know, career and my high school and elementary days. Now, I'm not here to try to get sympathy from you. I'm just saying that I actually appreciate that because I really believe that it, it put me in this place to be an advocate for financial literacy. And so in March, when the pandemic hit, I was on a Zoom like this and we were talking to some, some of our students and, and they're like, hey, Alan, can you do something for our kids? Can you teach our kids about money? What are you doing with your kids? Well, I was teaching my kids in the living room. And so I said, sure. So, so we put together— my team and I at our company put together a program called the ABCs of Money. This is for kids like 5th through 12th grade kids. And we had an amazing time. So it was all of April, half of May. And we had thousands of kids on, lots of parents, and it was a success. And during this time, I would get messages, text messages, DMs, comments like, hey, Alan, this is great. I'm on it with my kids, I love it, but can you do something for us adults? And so our team got together at One On One Financial and said, okay, let's do something, let's take it to the next level. So we have a new program, which today I'm very proud to announce to you the first lesson for the XYZs of Money. We are gonna cover throughout the next 5 weeks real life lessons. These are— this is real life stuff that we're talking about, real money, Real situations, real people, and we're going to get real results. And that's the goal. Now, this is free. And you know what happens, parents, when we give things away for free? People can take it for granted. And I'm sure some of you do. But my challenge to you is this, is to put in as much as I'm putting into you. And to do it not for me, but to do it for yourself, to do it for your family. And if you take that challenge starting today, that you're going to put in as much as you can, as much effort into learning as possible, you're going to come out of this in the next 5 weeks a much better person, a much more educated— you have more clarity in your financial life, which will bring you more success. And I promise you, I'm going to do my best to, to give you the opportunities to learn. I'll be there to answer any questions that you may have. And, and my job is really to be, be the guide, be a guide for you. So what's going to happen is every Wednesday from now until the end of June, I'll be going live on Zoom, and that'll be at 9 AM Hawaii time. That's 12 noon Pacific or 3 PM Eastern. So depending on where you're at, I'm sorry, I don't know what the time, the time is in Switzerland, but it's It's going to be every, every Wednesday. And I'm also doing one before this on Instagram. It's not as clean because it doesn't have the slides like this. But for those of you that, you know, you have people on Instagram, more than happy to jump on my IG. You can follow my IG. It's Alan, A-L-A-N underscore Akina. And we'll be covering the same lesson. So if you want to get a double dip, no problem. Just hit it. Okay, so Dusika, I think that's how you say your name. Dusika, I'm sorry if I mispronounced that, but it's 9 PM in Switzerland. Hey, good to know, guys. Anyway, we are going to go into lesson number 1, guys. So lesson number 1 is about retirement, how to build the ultimate retirement plan with these 3 assets that I'm going to cover today. Now, why did I start with this? Well, because I'm starting with the ending line. So I want to start with something that is big for all of us, but can be vague or mysterious. And then the lessons that we will do over the course of the next several weeks will, will add to this. Okay, so we're going to build up to this. We're going to set the bar here and then we're going to build up into it over the course of the next few weeks. Okay. Now, Like I said, retirement is vague. People talk about retire this and that, but what is it like? How do I get there? What are some of the specifics that I need to build into, into my retirement? So let's start out with what retirement is. Okay, so, so basically, folks, retirement is being able to do what you want to do, when you want to do it, where you want to do it. And with whom you'd like to do it with. Or a lot simpler way to say this is living happily ever after, right? Isn't that the— isn't that the ending of our story? If we were to write a book in our life that we want to live happily ever after. Well, I want to help you to create that happily ever after. We're going to talk about that today. Okay, but, but why? Is it so hard for most people? Why is retiring so hard? Well, here's a couple reasons that I put here. I think it's just so far away for most people. It's 20, 30, 40, 50 years away that we don't even care. We're worried about today. We're worried about to the next paycheck. And I get it. I understand my company. We deal with that every day with people in their day-to-day financial lives. And so It's tough, but we're going to need to overcome that way of thinking, that mindset. I'm going to help you throughout today to overcome that. And the other reason I think is, is it's so hard is because we don't make it a priority. Retiring is not really a priority for us. And I found something funny that I thought I'd share with you. You mean I need to plan for retirement? It's not going to happen automatically? Yes, you need to plan for retirement, and today is going to be maybe A first step for a lot of you, or maybe some of you already have done it, and we'll continue to work through this and I'll guide you through it. Okay. Now, here's some facts. So, um, if you're between age 55 and 64, according to CNBC, most of you only have about 12% of what you need saved up. And you look at some of these numbers, right? Healthcare is definitely going to go up in our retirement years, an additional $4,300 at minimum. I know a lot of you are from Hawaii, so that number is probably going to be a little higher, and spending about $46,000 a year on expenses. Again, depending on where you live, those numbers will adjust accordingly, but this sort of gives you an idea. We have these numbers ahead, but in our Social Security retirement, a lot of us are planning on that. This is the average. This is the average Social Security check that you can expect is about $1,400 a month. Nowhere near, nowhere near the amount of money that we will need to have Happily ever after life. So most people though, if you— when you have surveys, again, it's another survey done— most Americans want to retire by the age of 67. I'm not sure where you want to go or how long you want to work, but that's average. But here's some, some numbers to back this up. Okay. I can retire right now today. As long as I die within the month. I thought this was kind of funny, but it's not really funny because we have to cover things, right? We have to cover things. So I want to talk about some of the things that you'll need to cover in your retirement. This is just a general list to sort of get you started, if you will, in retirement. So we're One thing that you're gonna have to do is project out what your living expenses will be in your retirement years. So living expenses will be things like food and transportation and, you know, insurance type of costs, cell phone, utilities. Then you'll have healthcare, which you know is going to go up. We have travel. Some of you, or a lot of you, may want to travel in your retirement years. So, So let's say you plan 2 big trips a year, or you need to project for that, or it's One trip every month, one trip every quarter, you can go see the grandkids, you travel around the country. We need to put that in there. Another factor is debt payments. You know, what are some of the debts that we're still going to have, which a lot of people still do have debt in their retirement, and then fun stuff we want to do. Do we want to help out with kids' college or maybe grandkids' college education? So these are things that we need to think about. Right, these are things that's going to help us to formulate our plans for retirement. Now, one of the— this is, this is some good news. This is from US News and World Report. So the average retired household will have about 22% lower expenses, lower cost than you would when you were working. So that equates to about $14,000 a year in savings. or less expenses per year. Okay, now this is according to the US Bureau of Labor Statistics. So that's good news. Okay. Bad news is that healthcare goes up and we still have debt. So some 60% or more of those that are retirement age, so 65 years and older, will still carry some sort of debt. This report from Forbes was in 2016. Now I believe as we come out of COVID-19 that that percentage and the total debt amount per family is actually going to increase significantly. So you're talking, you know, 60%, 70% of retirees having debt, but now increased debt because of this time that they have to take to, you know, go through this pandemic. And this is going to put a strain on on us. And so this is something that is very scary that we need to be aware of. Now I want to start to get into the mechanics. Okay, I want to get into the mechanics of what we, what we call your happily ever after number. Okay, so we're going to start with the end in mind. So anytime we do things, when I plan things out, I plan for an event or financial things, we're going to start with the end. So what is the goal? So where do you want— where do we want to be financially when we retire? That's the end. And then we're going to work backwards to today to figure out what the steps are, and then we tackle it in short little steps instead of saying, okay, well, I need $2 million in my retirement by this age. And then that's it. No, we need to, we need to break that up. We need to break that big goal up and work backwards, and that makes it a lot more doable. We can accomplish it more. So I'm going to say, when we start with the end in mind, we're going to have our HEIA number. Okay, our HEIA number— oops, excuse me. HEIA stands for Happily Ever After, and I hope you can see my board there. Okay, Happily Ever After number. What this is, okay, I want to break it down into a monthly cash flow number. So HEIA is monthly Monthly income. So write that down in your notes. What do you need on a monthly basis to retire happily? You see, you see, that's the keyword, is happily. Not to just get by. I don't want to just get by retirement. I actually want to be happy. I'm going to work all these years so when I'm retired, I can be happy. That is the number, the target. Okay, I'm not sure what that number is. I'm just going to throw something out so that this number, let's say $10,000 a month, that number is going to make you happy. Okay, that's our goal. Now, how do we get there? Okay, how do we, how do we achieve this? Well, I want to talk to you about the 3 assets. Okay, so we're talking about 3 assets that can help you to get to your retirement. Okay, so we're going to talk about paper assets today. We're going to talk about real estate assets and business assets. Now, paper— things like stocks and mutual funds, bonds, and that sort— that's what paper is. For today's real estate, we're going to talk mostly about rental real estate, rental properties, and then your own business or investing in business. Okay, but the key word here is diversification. So if you see at the bottom, diversification. is definitely needed in retirement and in building a portfolio of assets. Now you will see from— some of you may have financial advisors, financial planners, and they talk to you about diversifying your portfolio. 100% true, and I agree with them. Here's my only problem: they're only talking about one category. Which category is that? Paper assets. That's what they focus on. is paper assets, selling you investment opportunities, mutual funds, ETFs, bonds, things of that sort. You need that. You need to have large-cap stocks, small-cap, international funds, bonds, and things of that sort, right? For paper assets, you need that. But here's what I believe. I believe to have a happily ever after retirement You need to have diversification amongst all 3 asset categories. So you're going to need income, monthly income coming in from paper assets. You need monthly income coming in from real estate assets and then business assets. And that will give you true diversification. Why? Because when the stock market may be down, people still need a place to rent, so you'll still have rental income. Or real estate may not be so hot right now in your area and The rental market softened up, but maybe your business is going to be able to, to do well and start to grow. So this gives you a greater chance. Does it protect you fully? No, nothing, nothing really does. And you see what happened to us with this pandemic. But at least it increases your chance of success. And today in our lesson, I want to help to build that roadmap and put things into your mind. So with that, I want to start with paper assets. Okay. So paper assets will be things like your 401 at work. You might have a traditional IRA or a Roth IRA. You may have a pension plan, an HSA, a health savings account, or you might just have stocks, you know, invested in a few different stocks, a portfolio that you have in an account. These are all You know, the main asset, the main pieces of paper assets, and then within those you'll have different stocks and mutual funds and different types of products. Now again, you need to diversify that, you need to have that, and this is probably the one that the majority of you have or should have. And we're going to spend, I think, lesson 4 on those different kinds of IRAs— IRA, Roth, a SEP IRA. and other things with regards to paper assets, and we'll be able to drill down a little bit more. But I want to talk to you about the 4% sustainable withdrawal rate. So write this down in your notes, okay? The 4% sustainable withdrawal rate. Okay, so what this is, is— and again, there's many, many, many, many different ways of trying to figure out retirement. This is just one of them. I'm not saying this is the perfect one. This is not like in concrete, but this is something that we could use to get the conversation started to develop your ultimate retirement plan. So what this is saying is that if you have so much put away in paper assets in, in an investment portfolio, in your 401, let's say, experts say that you can realistically withdraw 4% of that every year without affecting it too much. Why? Because they're estimating that you're gonna get a return of 6% a year so you can cover that withdrawal. So here's 3 examples here. $20,000 a year, if you wanted $20,000 a year out of your paper assets, you need to have $500,000 of stocks. Paper assets. $40,000 is $1 million, and $80,000 a year of withdrawals is— you're going to need to have $2 million. Okay, so let me, let me tell you how you can calculate yours. So write this down. Okay. To figure out how much you'll— how much income you'll need in your retirement, take your estimated monthly expenses. So that's the first thing we started with, right? How much is it going to cost you to live? travel and do those things and put the fun things in there as well. We're not going to try to scrimp. We're going to put a target out there. We're going to go after it. We got to get out of that fixed mindset again to a growth mindset. So we put that out there. Okay. And once you get that number, you're going to take that, that retirement number and divide it by 4%. So let's say, for example, you needed $50,000 to live. So you take that $50,000, divide that by 0.04 or 4%. Which will give you $1.25 million that you'll need in your 401 or across your 401, IRA, and pension, you know, just in, in total. Okay, that's— so that's the, that's the 4% rule there. Now here's a couple things, couple exercises that I want you to do to start Taking inventory of paper assets. So the first thing, and I'm sorry, in Switzerland, I'm not sure if you have the Social Security, but here's what I'd like you to do is get an estimate of what your Social Security benefit will be. Now this will only apply to you if you've worked for, I think it's 10 years or 40 quarters. that you need to contribute. So if you've been contributing, you've been working, they've been taking out that Social Security tax and putting it away for you, you can go on and check. So go to this website and find this calculator. Okay, so the website is ssa.gov/benefits/retirement/estimator.html, or just Google Social Security benefits calculator and you'll be able to find it. Once you get in there, click on that blue button. And it'll ask you for some personal information to verify that's you, and then it'll take you through to your report to give you an estimate. And the, the closer you are to retirement, the more accurate it will be. This is just, just a guide again to start to set some markers for you in building your retirement plan. The next thing I want you to do with regards to paper assets is to check with your employer. Okay, if you have a large employer, you probably have a pension plan administrator. So I want you to call them or email them and ask them for an estimate of what your portfolio is doing for your retirement. And so when you, when you have this, you're going to need— remember I talked about your HEIA number, your happily ever after number? You're also going to need to set an age. Okay. What is your target age that you want to retire at? 65, 67, 50, 70? You know, I'm not sure what it is. Everybody's different. And it doesn't matter. This is up to you. This is your deal, right? So you put down the age that you want to retire at and, and then give that to your Your administrator. Now, if you don't have an employer pension plan administrator, then call HR, HR, and ask them for the same thing, and they'll, they'll be able to help you to start doing it. If they ask why, just tell them that you're doing projections for your retirement and you're trying to gather as much information as possible. Okay, so that is paper assets. Let's, let's go into real estate assets. And here's several reasons why I think real estate is a great addition to your retirement portfolios, because it provides a steady stream of cash flow during your retirement years. People always need a place to live, right? Especially if you're following, you know, one of my good buddies, John Schaub. He's a best-selling author. If you follow his advice, buying good houses in good neighborhoods, people always will want to be there. Another reason is because real estate provides great tax benefits. Taxes is something that can eat away at our wealth, eat away at our HEIA number. And so having real estate to be able to offset some of those tax expenses is, is a great thing. Also, over time, your rents are going to continue to go up. So if your retirement lasts— I think the average retirement is 16 or 18 years. Let's— people are starting to live longer. So let's say you're living longer, you live 25 years past your retirement. Well, pretty much rents are going to go up in general. So if you think about, think about this, the house that you live in today, what is the rent like? Like, what are you paying for rent? Or if you own it, what could you rent it for today? Compare that to what you could rent it for 10 years ago and 20 years ago. I can almost bet and put money down that the rent today is higher than it was 20 years ago, even 10 years ago. So that's— that is a hedge against expenses and the inflation, cost of living going up wherever you live, and that'll offset some of that. Another benefit is equity buildup. Equity is this: the value is going up over time, just like rents are going up. Value of your house or your property Properties are going up over time, while the the debt, the mortgage balance is going down. Right? So values go up, balance goes down. The difference between the two is equity. This adds to your net worth. How much are you worth? And it gives you access to capital for your retirement years. And then one of the last things is is the real estate is easy to pass on to kids. You put that in your will and your trust, and your kids can take over. the rental property, and it's a great asset to pass on. So my question I want you to write down is this: how many rental properties do you want to have in your retirement? Okay, so you're gonna look at your retirement, your age, and the HAYA number. What percentage of your rental property income is going to contribute to your happily ever after number. And that if in this case it was $10,000, what percentage of it would it cover in the $10,000? Okay, we are gonna have another lesson on real estate, how to build an empire starting with your first property in real estate. I think it's lesson 3. So what we'll add to this piece— I'm not gonna spend a lot of time here, but it is an exciting piece of And could be a really good part of your future retirement plans. I'm gonna leave it at that. Okay, next and third and final asset I want to cover today is business assets. So why do I say business assets? Because in my opinion, it's one of the fastest ways to build wealth or to generate income. Okay. If you compare the 3 asset categories to like being on a track team, So if you're on a track team, the, uh, the paper assets— so paper would be like a marathon. So paper assets is like running a marathon, okay? So if you're on the track team, paper assets is long, it's, it's not fast, it's consistency over time, okay? Real estate Is like the 5 to 10K race. So like the, the 5 to 10K race, it's not a sprint, it's not a marathon, but you're, you're moving ahead, you're moving steady. That's sort of what, uh, the, the real estate assets are like. And then business assets is like the, the, uh, the mile, the 1 mile. It's not the 100-meter, but it's that 1-mile. You just— oh, you can move fast, you get to cash flow quick. Businesses today can be started without much money with technology, with outsourcing, freelancing. There's so much, so many ways that you can build a business. I mean, even Facebook just launched, I think last week, Facebook Stores, which is a competitor to Amazon. So you can sell stuff right on your Facebook now. With very, very little cost. A business, you can flip a business, you can sell businesses, you can pass on to your kids. And if you don't have a business idea, which I really believe you do, but you don't, if you don't feel like you have a good one, then you can invest in other good businesses. And really, it's investing in the business ownership is key. So with regards to business, I love business. I think it's It's great. And the key to starting the business is like what I shared with the kids, the ABCs of Money. I talked about kids starting a business based off of the movie Robots. So it's like a cartoon movie. I'm not sure if you've seen it, but they, they shared something very important to start a business. It's see a need, fill a need. See a need, fill a need. Now, what is your expertise? So write that down. What expertise do you have that you can add value to other people? That's what business is all about, is how do you add value to other people's lives? How do you make their lives better? How do you make what they do or eat better? And if you have an expertise that can add value, then there is a potential business behind it. So I wanted to include that in there for you today as we talk about business and adding value. But I do want to say this, that when it comes to retirement, it is 100% of your responsibility. It's not your employer's job. Yeah, they're giving you a 401, but it's not your employer's job to set yourself up for retirement. It's not your pastor at church. It's, it's not your neighbor or your friend. It is solely your responsibility. And once you understand that and you take responsibility, you take action, you can change the direction of your financial life. It can be done. But if you let fear overcome you, you let doubts about yourself, you let the uncertainty of not knowing how to do things hold you back. Then you know what, it is your fault. And you're going to get every time of what you get. But what I think all of you are here for today and why there's so many of you on today is because you are responsible. You do have a growth mindset. You do want to have a better financial life. You want to have HEAR, Happily Ever After Retirement Plan, set up. That's why it's going to be a little bit of a journey. This is going to be a little bit— you're going to get a little uncomfortable. It's going to be a little bit of a struggle. This isn't a thing where you come and watch me for half an hour like, yay, what a great class, I feel so much better, thank you, Alan, and then boom, gone, and you do nothing. Today is about making that shift. shift, that mental shift, that you will do whatever it takes. You will take that responsibility. And the reason I share with you this is because I'm going to give you some homework, just like I gave your kids homework. You're gonna get the same homework, but this homework is going to be— is designed to help you to, to build this HEIA, your happily ever after retirement. So here's your homework. Okay, first off is to double up the plan. Double up your retirement plan. Here's why I say this, and, and here's why I have a problem with the traditional retirement methodology and plans and just general thinking, right? That they, they all say, like all these advisors, okay, plan to retire on 70% of what you make today. Now, how does that make sense when what, what most people make today they can't even live on? And you expect people to retire on 70% of what they couldn't live on in the first place? Does not make sense. This is crazy, ludicrous. Because isn't the keyword here on this screen happily? How can we be happy living on 70%, 60%, or Or 80% at best is what these advisors are saying. How can we be happy living on 80% of what we couldn't do in the first place? It's just mind-boggling. So I'm challenging that perspective today on retirement, and I'm challenging you to double it. Yes, it's gonna be scary because your retirement should have been $5,000. Yeah. My $5K a month, I would have been happy. I would have been okay. I can get by. Most people say, you know, I can get by on that. So when they design your plans, like, can you get by? Can you think you get by on $3,000 to $5,000 a month? Yeah, I should be able to make it if I cut back on this. I cut back. I don't do this. But no, you're different. We are different. We don't want to cut back. We want to be happy. We want to create an amazing life. In retirement. So it's going to take that mentality now today. That's why I say double up, maybe triple up. And if it was hard for you to write this number down, that $10K, your hand was shaking and you felt some nerves like, oh boy, this is a little scary, kind of big. You know what? Good on you. Good on you. That's what we want, that challenge to push us to do something, because if you write it down Guess what? The chances of you getting it just went up. If you continue to educate yourself, your chances go up. If you take action every week, every month, you're taking action, your chances slowly go up. That's the key. That is the key. So here's my, my homework. So I want you to write this down, gang. Write this down and take a screenshot of it, okay? And first is we're going to calculate— we're going to make a list of all your projected retirement expenses. So you got to be very decisive on this. You have to be very thorough. Take the time to figure out what are things going to cost and how much you spend on food and this and, you know, all your retirement expenses. Okay. Second thing is I want you to calculate your happily ever after number. What is that number? What is that total number that's just going to make you shake a little bit? And you're going to write that down. And then next to it, you're going to write the date or the age. So let's say you want to retire at the age of 65. So if you're me, that's 30 years from now. I'll be 65. I'm just kidding. Don't listen to me. But, but, you know, in your future, whatever that is, write that target number. I'm just joking, guys. Okay, I'm not 35. I'm a little bit older than that. So write that number, the, the HEIA number, next to your age and put a date to it. That's our target. See, I want you to take inventory of all of your assets. So you might say, okay, my paper assets, my 401. 401, I have $200 grand in it right now. I have $200 grand in that. I have a Roth IRA. So I have a Roth with $35K in it. Okay, then you do the same thing with real estate. So, okay, you know, I have one rental property. So real estate, I have one property, and that property brings in about $1,800 a month in rent. And then business, let's say you have a business, or maybe you don't have a business. I have nothing, no business there. That's your inventory. It's what it is right now today. Now, I, I, I'm a huge advocate of having true diversification, so assets in all 3 categories. But I also understand that some of you may be retiring in the next 5 years. So it may not make sense for you to contribute a lot of money into the stock market, right, and building up a portfolio there. So you may not have many much paper assets there, but you can do real estate or you can start a business based on your expertise and add value. So those are things that you can do. And then, you know, some of you may only have 2 of the 3 assets, which is fine, just absolutely fine. I'm just giving you a roadmap. Okay. Now, once you take inventory of all of your assets, I want you to determine how much of your happily ever after number will come from each asset. So let's say you got to get to $10,000, your $10,000 a month in, in 15 years of retirement. Okay, and so you might say, well, I can get— I'll have, um, $4,000 a month coming from paper. $4K a month from paper. I'll have another couple rental properties. In, um, in the next few years, so I can generate another $4,000 from real estate, and in my business I can earn $2,000 a month. Takeoff. There's your $10K. There's your $10K. And the, and the paper, you know, is— the paper is what it is, right? Your 401 is what it is. That's just what it's going to be. But you can have a direct impact on, on your, your other assets, your real estate and business. You know, you might, you might, uh, have a scenario where you might have— because some of my students are buying a property every year— or you might say, I'm gonna buy a property every year for the next, uh, every 2 years for the next 10 years, so I'll have 5 houses. Okay, so 5 of these houses And in 10 years, each house is going to be renting out for $2,000 a month, right? So now 5 times 2 is $10,000 in total rental income. Now, does that mean it's all yours? No, because you have things to pay like mortgages, taxes, insurance, property management, and other things— HOAs. But E Is getting out of debt quickly. That's your next financial homework. Why? Because that is like the number one wealth killer. When you're paying all that money to the banks in interest and principal and amortization, it just eats up your wealth. And so we got to get out of it quick. Now, that is a tough thing, but can it be done? Absolutely. If you need help in that area and you're not familiar with us, That's what our company does, 101 Financial. We are the experts in it. We're one of the best at helping people to get out of debt quickly. I mean, houses— my students are paying houses off in 4 to 6 years. That's how good we are at that. So if you need help in that area, just shoot me an email. My email is alan@101financial.com, and I'd be happy to connect you. And here's the key thing about getting out of debt is let's say you have all these properties, but if you paid off those mortgages in a Or less of the time, your cash flow just went through the roof. Why? Because all that money that was going to a mortgage principal and interest payments now becomes free cash flow or freed up cash flow that can help you to build up to your hit number. Okay. And F, we're going to strategically add assets to help you to get there. So we're not going to do all this at once. We're going to start buying paper, real estate, and starting a business all at once. This is a strategy. We're going to figure out based on where you want to go and what you want to do, a strategy. We're going to do this so much a year in paper. We're going to try to find one rental property a year or one every 2 years, and I'm going to come up with the business. I'm going to research the business. We're going to put a plan together. We're going to do this, but it's just going to be over time. And, and if you are consistent over time, you're going to add You can add to your portfolio. Okay, and then last thing is you'll learn to do whatever it takes to get you there. Learn whatever it takes to get you there. Why? Because again, retirement is your thing. Retirement is, is, is your baby. This is your opportunity to have that retirement that you desire. And I'm saying that, I'm suggesting that you make it a happy retirement. That's what we call the happily ever after number. Can you get there? Absolutely, you can get there. If you're committed, you're focused, you're going to find a way, just like whatever it took for you to be successful in whatever you do right now. Whether it's you're a great mom because you raised some amazing kids. And I see a mom here that— from Provo that has raised some amazing kids that are great at football and sports, right? Some of you have done really well in real estate. Some of you are great teachers. Some of you are great at your profession. Use whatever made you great to build your retirement, that same motivation, that same drive to get you there. And I promise you it will happen. And I'll be your guide. I'm gonna be here to help you through that process through the next 5 weeks. And with that being said, I'm going to open up for questions. Okay, but and so go ahead and in the chat box write down your questions, any questions that you have. And in the meantime, I hope you found some value in this. Hope you found some value in what we're doing today with our first lesson. And if you have, you know, share this with people. This is the one thing that our world lacks is financial education. Share this with others, get the word out. Follow me on my Instagram. My Instagram is alan_akina, and there's a flyer there that you can share. Get the link out to register for the Zoom and then get on that email list. A lot of you signed up for the notification for this, so we're going to be emailing out updates and tips and recaps on what we've covered. And also, I'm going to have 2 special secret lessons that we're going to do not on a Wednesday, right? All the XYZ is going to be on Wednesday, but we're having different times and different days on different subjects that we're going to— we're going to invite you out through that email. So be sure that you get on that email list to, to get connected. Now, how do you do that? Go to 101financial.com/xyz. And you'll be able to put, put your name and your phone, your name and your email address, and you'll be on the email so we can get you going there. Okay, so with that being said, I am going to pull up the chat box and take any questions that you have. Okay. Okay, if you acquire— Sheena says, if you acquire a property through a lease option, which is a great option, Does that count towards your portfolio? Absolutely, absolutely, because you can eventually take it over and then refinance them out once you get into a position that you get a bank loan for it. So great technique. Um, where can I find the formula about the 4% you talked about? Okay, so just real quick, the formula is you're going to take your monthly living expenses, so whatever you figured out. Okay, so let's see, you need $50,000 A year to live. Divide that by 4%, and that'll give you your total number you need to have in that portfolio. So 50,000 divided by 4% gives you 1.25 million. Okay, that's the 4%. A question: I have a 401. Is it possible or a good idea to turn it into an IRA or? Just leave it as is. Very good question that has a lot tied into it depending on your age, how much you have in there, and if you turn into an IRA, I would most likely suggest going to a Roth IRA as opposed to a traditional IRA. But but go ahead, Jana. Go ahead and email me. My email is alanalan@101financial.com. I can Talk to you offline about that. Cowie, okay. So that was the— what was your question, Cowie? Okay. I'm not sure what your question is. I did miss a question from Amber. We are recording this webinar. We'll make it available on YouTube. So get on that email list. So go to 101financial.com/xyz and we will post and email you the YouTube link to this recording here. Okay. Yeah, is the formula monthly or yearly? So Annual living expenses, right? And I hope, I hope you don't have $50,000 a month in living expenses, but annual living expenses divided by 4% gives you the total you need in your paper assets. Okay, 25 years, that'll last 25 years, Josie, is about the projections. Um, Pele, what is your ideal HEIA and retirement age, just to give us an idea? Wow, that is actually— that's kind of hard because for me, I don't really plan to retire. I plan to slow down, but I love what I do. I don't plan on stopping teaching people. So I don't know. So you just gotta look at what you want to accomplish. What do you want to accomplish in your retirement? So write down what are some of your goals. You want to travel more? Do you want to spend time with kids? And then try to gain some clarity on what you see as your retirement. looking like. So envision what it looked like, you traveling every month, going with the kids, the grandkids, going to Disneyland, doing this and that. And that'll help you to figure out what your retirement age is. But typically, statistically, it's 67. That's the statistics that we have recently from the Department of Labor. Yeah, so 4% is for 25 years is what it is, Josie. Kevin, not familiar with stocks, so can you take 4% out annually of your portfolio? Yeah, you can just sell it. You just sell off a percentage to withdraw. And, and that projection is based on a 6% return on your portfolio. So let's say you have $100,000 in your portfolio. This general— the 4% is a general rule of thumb. Like I said, there's many other ways to figure this out, but they're figuring that 6% a year. So you take 4%, you might not affect the principal all that much. Okay. If you have a traditional IRA, would you suggest changing it to a Roth? Megan Brown, Las Vegas. I would consider that. Definitely, definitely consider that. And there are some things happening right now in the environment, the world of investing, that may allow you to do that with very minimal. So I would see advisor for that if you have one. Mahalo, mahalo, mahalo, Tesalyn. I have a personal question. Email me, Alan at One One Financial. So, Amber, I have a 403, state Hawaii employee. Ooh, can you take your 403 from being a state employee and move it into a Roth 401? Now, do I know? I don't know if that's the case, but here's my suggestion. Number one, I love the that you're thinking Roth 401, I think that's a great idea, especially depending on how old you are. But I would contact the benefits administrator at the state of Hawaii to see if that's something you can do. Great concept. If it fits, then definitely do that. Okay. And now I just want to be clear, because this is recorded, I'm not a financial advisor. I'm not licensed to give you financial advice. I just think it's a great idea. Um, does the 4% apply to business assets as well? I have 3 businesses. Not so. So you would— so for business assets, you would just withdraw the income, the retained earnings. So if there's any retained earnings, you could, you could do that. But that 4% is mainly just for your paper assets. Kevin B came across Velocity Banking Real Estate for real estate, good, bad, ugly. I don't know a lot about Velocity. I've heard from a few people that they're similar to what we teach at One on One Financial. I don't know a lot about them to recommend them, but I do know a lot about One on One Financial, and I highly recommend One on One Financial. In fact, If you want, Kevin, I am doing a 60-minute web workshop this afternoon at— where are you? It's going to be 7 PM Mountain Standard Time or 3 PM Hawaii. It's the same webinar. The, the flyer for that is posted on my Facebook and on my Instagram or Email me, Kevin. I'll send you the flyer. Come see me there. And I think that'll give you a better idea. But if, if, if they do what we do, it's killer for real estate. Like, we, we just absolutely— our students love, love our system for real estate investing. With everything going on, should I decrease my weekly contributions to my 401? Great question, Christopher. Now here's my— I'm glad you asked. Here's, here's my response. To that, and it depends on your job. So if your job is steady and you're going to still continue to work and go, nothing's really changed for income-wise. Then I say definitely do it, or maybe bump it up a little bit. Why? Because right now during this time, the stock market has gone up today, but it's maybe twenty to thirty percent lower than its highs of. a year ago or earlier this year. So we're actually buying the same investments at a 20% discount. And so during this pandemic, I've been, I've been putting a lot of money in the paper. I've been buying a lot of stocks, and I did not take away from my contributions to my, my retirement plans and my kids' plans that I have set up for them. I kept it. I kept it going because they're going to be able to acquire it and lower the cost per share, the average cost per share. So I think it's a great idea if your cash flow can handle it. If you're tight, financially tight, and you're going to have to use credit to live, to buy food and gas and other things, I wouldn't do it. I'll just stick to that. I understand. You're welcome. Okay, can you give your Facebook link over here? Yeah, so, um, my Facebook is just Alan Akina, all one, Alan Akina. Just, just search that. Or Instagram is alan_akina. Okay, and that's my Facebook. Um, Jared, how much do I know about IULs? I have a good idea about IULs. I, I don't know a ton of About it, but I know enough to make me dangerous with IULs. I think that there's a place for it in your overall diversification of your portfolio, and so I'm not opposed to it. I like it. And is it for everybody? No, but it it could be a great way to diversify. So very good. Jared. Sione, thank you. That is my Facebook there. So again, in closing, if you haven't done so yet, um, and a lot of you may already be on this, uh, go to 101financial.com. Uh, I'm gonna type it in here, 101 Financial. /xyz to get on my email list. And then next week Wednesday we'll be here. Okay. Um, so, uh, Miss Nakua, great job. I heard a lot about your kids. I don't know if I ever had the pleasure of meeting you, but I heard a lot about your boys. Great job raising them. Very proud of you. Excited for upcoming classes. I got some of the boys watching along with me. We appreciate your talents and teaching us about money. It's perfect that we can Pull your videos on YouTube. Yes, I'll make sure we get that up. Now, next week we're going to talk about how there's going to be several ways, 4 to 5 different ways to fund your kids' college education. I have one way that I created using some systems that I put together I think is awesome, awesome, awesome. So please join me for that. And then the following week we're doing How to build your real estate empire starting with your first investment property. That, that is, that's going to be a cool one. And then I think week 4, we're into IRAs. So we'll talk about Roth IRAs, traditional IRAs, a SEP IRA. It's a self-employed pension plan IRA, and a few other things that I can try to squeeze in like 30 minutes, 30, 40 minutes. So anyway, thank you guys. It's been a great hour with you. I hope you got a lot of value out of this. If you have, go ahead and follow me on my Instagram, like it, share the flyer with everyone. Thank you for everyone for being here. Victor Dusika from Switzerland, thank you. Would love to see more Swiss on. That'd be very fun. And hey, God bless you all. God bless you all. You guys take care, and aloha everyone. Aloha.