The X’s & O’s

If you’re looking for a place to start with savings, retirement planning, and budgeting, you might have encountered some of these rules of thumb. But do they actually hold any weight? We’ll find out which are useful and which you should definitely take with a grain of salt.

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The Hosts:

Brent Pasqua, Matthew Theal and Joshua Winterswyk




Matthew Theal: Josh, I haven’t seen you for a while. You look tan and you acquired some new jewelry. What’s going on?

Brent Pasqua: Yeah. Where are you been?

Josh Winterswyk: I got married on June 15th. I married my girlfriend of 14 years, my high school sweetheart, and we finally took the leap and got married in Oceanside at the San Luis Rey Mission. We had our reception in Temecula and it was the best day of my life.

Brent Pasqua: You knew you had to say how many years you’ve been together, right, because I was going to call that out anyway.

Josh Winterswyk: I wanted to avoid you asking me how many years we had dated. But yeah, I was 14 and I get a lot of slack for that so.

Brent Pasqua: Well it was a beautiful day and the ambiance was great. I mean set the stage for what the ambiance was like that day.

Josh Winterswyk: Yeah, we wanted the very outdoor… It was on a vineyard, so the farmhouse tables with just really bright pink lighting, and we wanted just to it to be fun and for everyone to feel like they could let loose and enjoy the day and enjoy the moment and celebrate our love. And I felt like that’s the way it was. It came out exactly the way we wanted it to. So we had just a great day, and we went on our honeymoon to Cabo this last weekend and talked about it the entire time of how much we had fun and how much we enjoyed spending all of our time with all of our closest family and friends. And thank you guys for being there. You guys seem like you guys were ready to dance and I like that. So that was good.

Brent Pasqua: I don’t think there was a single person there that wasn’t having an amazing time. I mean the sky was beautiful, the weather was perfect. It was just a-

Matthew Theal: Oh, I mean I can name a few people who look like they were sleeping or not having that good of a time, but we’ll save that for another day. It was a beautiful reception.

Josh Winterswyk: Thank you guys. Yeah, we were really happy with the way it came out and just happy to start our next chapter being married.

Brent Pasqua: Oh, you guys deserve it. And we wish you all the happiness.

Josh Winterswyk: Thank you.

Matthew Theal: You guys ready to start the show?

Brent Pasqua: Let’s go.

Josh Winterswyk: I’m ready.

Matthew Theal: All right. Let’s start the music. Welcome to the Retirement Plan Playbook. I’m Matthew Theal, investment advisor with RPA Wealth Management. I’m joined by the founder and president, Brent Pasqua.

Brent Pasqua: Hey everybody.

Matthew Theal: How’s it going today, Brent?

Brent Pasqua: Doing good. Glad to be here.

Matthew Theal: Good. And then joining us as always, our newlywed investment advisor at RPA Wealth Management, Joshua Winterswyk. Josh, what do we have on deck for today’s show?

Josh Winterswyk: First I just want to see, do I sound different now that I’m married?

Brent Pasqua: Oh, you sound like big married guy for sure.

Josh Winterswyk: Yeah, to start today’s show though, really excited about all the topics, but at the start of our show, we’re going to look at popular personal financial rules of thumb and discuss whether we love or hate them. It’s similar to a very popular fantasy football article that’s written every year by Matthew Berry from ESPN that we like to joke and have fun about. So since fantasy football’s coming up, we thought this love hate segment will… You guys will enjoy. So I hope everyone does.

Matthew Theal: Yeah, I mean, I’m a big fantasy guy. I’m trying not to take it too seriously this year. But Matthew Berry’s article’s always good. I feel like he misses on every recommendation, but-

Josh Winterswyk: So just do the opposite?

Matthew Theal: Yeah, like a good idea is to do the opposite. All right, well, our first rule of thumb today is the 50/30/20 budgeting rule. So what this rule is, is you look at your after tax income, so the money you’ve already been taxed on. I’m going to divide it into spending buckets, or you could think kind of like cups of water. You spend 50% on your needs, 30% on your wants, and then you save 20%. If you have debt, you allocate the 20% towards paying down your debt. Brent, love it, hate it. What do you think?

Brent Pasqua: I really don’t care for it all that much. And the reason why is because very few people could actually fit these percentages into those budgets to make them work. A lot of times people do have a much higher amount that needs to be applied to debt, and their needs will sometimes exceed that 50%. So even though I don’t love the percentage breakdown, I do like people having some sort of budget and knowing how to fit the percentages into the budget. But to me the rule of thumb just doesn’t really work.

Brent Pasqua: Wants should be taken down a lot if somebody does have a higher amount of debt. Wants need to get pushed aside, increased savings, increased payments to debt, but 30% on it on wants is a lot. So I’m just not a big fan of those percentages. I don’t see them fit into the mold for a lot of people, but they can work for some.

Matthew Theal: Yeah, I agree. I mean you can easily take a doctor’s budget, and they might want a Tesla with that 30%, but they probably need to pay that student loan down and maybe be allocating up to 40% of their income to getting rid of those student loans as fast as possible. Joshua, love it. Hate it. What do you think?

Josh Winterswyk: I think there’s things that I love about it and things that I hate about it. Things that I hate about it being a general rule of thumb is if your situation already has debt and expenses, like Brent said, that needs bucket might be filled very quickly. So when you look at the budgeting rule, you know, let’s say it’s $2,000 towards your needs, but you already have 2,500 worth of liabilities and needs in debt. So I don’t like that. What I do love though is just a really easy way to calculate your savings rate.

Josh Winterswyk: So you know, 20% of… If you’re looking of what I should be saving, even if your income goes up or down, it’s 20% of that monthly after-tax income. And it’s a really quick, great way for someone to have a rule to start saving, which is really important obviously.

Brent Pasqua: Completely agree. And what I’ve seen and what I think is a possible solution is someone needs to first figure out what their real expenses are. You know if you sync up to a, you can find out what you’re spending on wants, you can find out what you’re spending on needs, and then adjust the percentages accordingly to make it fit your own rule of thumb. 50/30/20 doesn’t work for everybody, but creating some rule of thumb for budgeting can make sense for most.

Josh Winterswyk: Yeah, it gives you just a good starting point I think.

Brent Pasqua: Absolutely.

Matthew Theal: Yeah, that’s a great recommendation. And then I even think taking it a step further, the part I like about it is the 20% savings. That’s big because it’s going to help you build up that emergency fund that we always talk about. And in the emergency fund is usually, correct me if I’m wrong, Josh, it’s you take your expenses and basically multiply by three or multiply by six, right? So it’s three to six months expenses in a savings account.

Josh Winterswyk: Yep, that’s correct.

Matthew Theal: And so if you’re saving 20% of your income on a monthly basis while sounding hard to do, it’ll help you get to that emergency fund level. The other thing I don’t like about this is the word budgeting to me sounds like the word dieting and dieting doesn’t work and neither does budgeting. Creating systems and ways to either save your money or control your food intake works a lot better than budgeting or dieting

Josh Winterswyk: Which is like automating all of it also.

Matthew Theal: Right or even how you eat. So maybe you’re like, “Well, I’m going to eat home cooked meals every day of the week, but Saturday.”

Josh Winterswyk: Creating a routine.

Matthew Theal: Exactly, creating a routine, a system, anything left on this 50/30/20 rule?

Josh Winterswyk: No, I think it’s covered pretty well. And I like that you mentioned how we create that emergency savings rate. One thing I think that maybe we miss a little bit too is that 20% could also be completely towards debt if there’s a lot of debt. I know Brent, you kind of touched on that, but I think that’s important to, again, for someone who’s starting looking to how much should I be putting towards my debt? I just think that that’s also important and I love about the rule.

Matthew Theal: Yeah, and I actually, to bring up what Brent was talking about on the debt side, I do 100% agree with him that if you’re in debt, you probably overspent your want bucket already. So then you need to increase your savings or debt pay down bucket by a dramatic margin. Like you don’t really get 30% of wants. You maybe get 10 or 5% of wants.

Brent Pasqua: You’ve already bought your wants. They’re just on the credit card now.

Matthew Theal: Yeah. Or you paid for it through education, whatever.

Josh Winterswyk: It’s just going to be a lot harder to create those routines you were talking about.

Matthew Theal: Yeah, it is. Cut those wants people. All right, so our next rule of thumb has to do with life insurance, and this rule says that you need to have seven to 10 times your annual salary in life insurance. So putting that in dollars and cents, that means if you’re making 100,000 a year, you should be looking to purchase a life insurance policy that has 700,000 to a million dollars in face value.

Matthew Theal: Life insurance is an extremely complex topic. So let’s get some definitions out of the way. Josh, what’s the difference between term insurance and permanent insurance or whole life insurance?

Josh Winterswyk: So great question, Matt. I know we get this a lot, this question asked to us, and first I just want to start with life insurance and what it provides. So it provides a death benefit. So if you know a person dies, it gives a lump sum to the beneficiaries and then there’s two very popular types of life insurance, like you mentioned, permanent life insurance or whole life life insurance and then term. And the difference is is you can kind of take it from the name. So permanent or whole life means that it remains in place for your whole life or for permanent until you pass. Also, meaning it is more expensive.

Josh Winterswyk: It’s going to last you all the way until your dying day hopefully. And it’s going to be a lot more expensive with a side benefit of it can potentially build some cash value in it as well. And term life insurance is a lot more simple. It has a very specific premium payment, so it’ll keep the same premium for a certain amount of time. And then after that term is done, the insurance just stops. And you can kind of relate it even to more like your auto insurance. Your payment stays the same for the year and you have like a renewal on it. But the term insurance has a specific timeframe. So five, 10, 15 years.

Brent Pasqua: Yeah, with term insurance, if you have a 20-year term, you pay the same thing for the 20 years. If you don’t die, there’s no death benefit and the contract just expires.

Josh Winterswyk: Yep. Biggest difference between the whole life. Pretty simple.

Matthew Theal: Yeah, it expires. So for younger people, whole life insurance is probably quite expensive, right? So if we’ve established that you need a death benefit of 700,000 to a million for every hundred thousand you’re making, it’s going to be very hard for someone in their 30s or 40s to purchase a whole life insurance policy for $1 million. I mean, that’s going to be very expensive.

Josh Winterswyk: Yeah, you’re probably not wanting to fit that into your budget.

Matthew Theal: Which is why term was created. Brent, who really needs life insurance?

Brent Pasqua: The people who need life insurance is basically anyone who would be financially affected if a spouse or a partner or provider had passed away. Some people who provide for their family need life insurance. If you’re married, if you have kids, if you’re a single parent, if you own a business. Those are all examples of people who would need life insurance.

Matthew Theal: So do I need life insurance?

Brent Pasqua: Are you married?

Matthew Theal: Yes.

Brent Pasqua: Then under the rule, potentially, yes, you would need life insurance.

Matthew Theal: Yeah, I would think so too. What do you guys think about this rule? Is that a good rule of thumb? Love it. Hate it. Josh, what do you think?

Josh Winterswyk: Again, being a general rule of thumb, I am a believer of having life insurance. So is it a good starting place? Although I don’t like… What I hate about it is that life insurance, I feel, needs to be tailored to everyone’s situation and that rule of thumb might leave you under-insured, which is a huge threat as you’re building wealth. And so I don’t like that, especially with insurance about that general rule of thumb.

Brent Pasqua: So I actually love it, especially being a dad and having a family. I see so many people that are actually under-insured and I love it if a family is protecting themself on the term insurance side. If something were to happen to me, being that my wife stays home and takes care of the kids, she was a teacher, she did work. Once our second child was born, she now stays home. If something happens to me, I want to know that her and my kids are going to be taken care of for the rest of their life. And in order to do that, to have that peace of mind, I need to have a certain amount of insurance. The other side, and sort of something to think about, and something that I always kind of struggled with is, as my wife stopped working, I always thought, well I don’t need insurance on her, a life insurance policy on her, because if something happens to her, I’m still going to be able to work.

Brent Pasqua: But the problem is if something happened to my wife, I’d be emotionally devastated. I would run into a time where I needed a lot of time off of work. And so there would be loss of wages of some sort. And so I would need time to take care of my kids, get the house in order, and that would take time. So just because she doesn’t provide an income doesn’t need that the spouse doesn’t need some sort of life insurance on them also. But it is so critical that the main provider and the family has enough insurance to cover if something were to happen.

Matthew Theal: That’s a great point. And actually I think another reason why you might want a policy on your wife is, I mean she’s doing so much of the childcare. You probably want at least a small hundred to $250,000 policy to cover the cost of childcare because you have to go work. If she’s not around, someone’s got to take care of your kids.

Brent Pasqua: Yeah, our complete schedule as a family changes.

Brent Pasqua: I mean I’m doing drop-offs in the morning, they’re going there five days a week. I mean everything would change and that would be very, very difficult and that would have some emotional effect.

Josh Winterswyk: And I think it’s really, really underrated is that emotional impact it’s going to have. I don’t think anyone can predict how you’re going to feel at that moment. So making sure that your finances are taken care of to where you can really heal and all of that other stuff is just really, really important. I think it’s underrated.

Brent Pasqua: You would have to get yourself in an emotional position to get back to work and that can take some time. It can take a lot of time.

Josh Winterswyk: Yeah, absolutely.

Brent Pasqua: A lot of people that we see come in here, you know, they just have a small policy through work. They haven’t put a lot of thought into it and that could be really emotionally devastating to take that stance.

Josh Winterswyk: I had a really good… Sorry man, I had just a really good statistic that I found on life insurance that MarketWatch did, but it states that 84% of Americans say that they potentially need life insurance. They respond that they need it, but only 59% actually own it. That’s a pretty big gap of people that think they need it, but that actually own the life insurance, and I think that’s kind of alarming or a red flag for people to look into.

Brent Pasqua: And life insurance has gotten a bad rap because of all the permanent whole life and policies that are just written so poorly. But you know to get a term policy is relatively cheap. It’s very easy to get nowadays. There’s just really no excuse to not have a policy that’s can protect your family.

Matthew Theal: If you have young kids, look into the term policy, it’s pretty much a no-brainer. All right, so our next rule of thumb has to do with home buying. And what this rule of thumb says is your home payment should be around 20 to 28% of your gross income. And when we mean your home payment, what we mean is your principle, interest, taxes, and insurance. So that would pretty much cover the total cost of your home. One mistake a lot of people make is they look at just the principle payment and forget that they’re also paying property taxes, hey might have the PMI or homeowner’s insurance, and there’s also interest on the loan for the mortgage. So a household income, let’s take 100,000 again, it’s a nice easy example then, would have at max around 28,000 a year to spend on housing costs and that breaks down to 2,300 a month. I think this is a great rule of thumb to help you keep your housing expenses in line.

Matthew Theal: I’m though very against people rushing into buying houses. I think the biggest mistake people make is they try and buy a house because it’s what their parents did or it’s the so-called American dream, and they end up with a large mortgage payment and they’re stuck in it for 30 years.

Brent Pasqua: Right, and all the expenses that come with owning a home.

Matthew Theal: Right. I mean I’m personally not a home owner, but Brent, I’ve heard quite a few expenses out of you in the last few months.

Brent Pasqua: Right. There’s always something going on, something that needs to be fixed, unexpected expenses that come up due to owning a home.

Matthew Theal: Yeah, totally. Josh, what do you think?

Josh Winterswyk: I really love this rule of thumb just because coming from the CFP Board, it is a little bit more conservative and I agree with you. A lot of people rush into purchasing a home and I just love the rule because it is more conservative because I feel like a lot of even family, friends, clients, when they go to buy a house, the percentage that they can afford is based off of their max, according to their income, not necessarily their lifestyle or their overall budget.

Josh Winterswyk: So being more conservative is good. And I can give an example of, you know, you walk into the bank to get a mortgage and they’re going to say we can lend you, on a monthly basis up to 45% of your income. That’s a big difference from the 28% that the CFP’s telling you, just relatively generally if you’re comparing them. So I think that I really, really, out of all of them, this might be my favorite because it is a very conservative… and putting people in a better position for home ownership going forward.

Matthew Theal: So the way that rule works is do they use gross income?

Josh Winterswyk: Yeah, depending on the company, but yeah, they’ll look at gross income and they have their calculation to calculate what your monthly income is. So let’s say it’s 2.000 so you use really small, easy numbers, $2,000 of income. They’ll say they’ll lend you up to a thousand dollars of mortgage liability expense, or a little less than that and you can say 950 or 45 to 50% of what your overall income is to come up with that number. So it is a big difference than the 28% of your gross income, comparing it to 45%.

Matthew Theal: Are they including the potential insurance costs or the property tax costs and that number?

Josh Winterswyk: Yeah, most of them do depending on the lender because let’s say you’re not putting 20% down, then you have to impound and you have private mortgage insurance. So the whole payment does have to go in there. So I’d say for the most part, yes it is included but still a lot higher of a percentage.

Brent Pasqua: Do you see a lot of people borrowing at those higher percentages?

Josh Winterswyk: Yeah, I think right now actually, getting ready for this show, that average right now is about 36%, and we’re using the rule of thumb of being around 28% of gross income, but the average in America’s about 36%, but yeah, absolutely. I mean, even from my experience at the bank, you’re seeing a lot of people go to that max number because they want the bigger house. They expect to generate more income in the future, get raises or advance in their careers. So they’re like, “We can afford it.”

Josh Winterswyk: So when I was at the bank, I saw a lot of people go to that max. They feel a lot of pressure. I mean if you ever met with a real estate agent, they want to put you in the biggest house, which you know, there’s good and bad to that, but-

Matthew Theal: Got to make that commission.

Brent Pasqua: Yes, commission.

Josh Winterswyk: Yeah, but there’s obviously good and bad to that, but you know, there’s just a lot of pressure to buy a bigger house and have a bigger mortgage payment.

Matthew Theal: Yeah, I love this rule of thumb. I would add another little personal rule of thumb that I think that if you have debt, you shouldn’t be buying a home. If you have credit card debt, if you have student loan debt, pay that debt off first and then you could take down the good debt, which would be considered mortgage debt.

Josh Winterswyk: Take life in stages.

Matthew Theal: Yeah, I agree.

Josh Winterswyk: That’s a great point. Yeah, I like that too.

Matthew Theal: Ready to move on to the next one?

Josh Winterswyk: No, I think we have… Brent, love or hate for the mortgage rule?

Brent Pasqua: I actually… I love it. It’s a great rule of thumb to follow, and I think what it can do is prevent people from getting into financial trouble in the future. Like you said, if your debts are all paid off, and then you go buy a home, but then you’re getting a home to where you’re overextending yourself, there’s so many unforeseen expenses that come with owning a home that you could be two or three years down the road and now you’ve racked up all this debt because you didn’t follow this simple basic rule.

Brent Pasqua: And like you said, Josh, so many people want the bigger house, the better, they want more. I almost sort of fell in this trap years ago where I wanted to get a new house, I was going to buy the bigger home, and then came to my senses because I have two great advisors that are sitting across from me and said, “Well, are you going over this rule of thumb?” The answer is yes. “Do you need bigger and better?” The answer is no. I don’t need bigger and better. I like a smaller home. I like keeping things simple and so if you follow this… And that could’ve gotten me into a lot of financial trouble. Who knows? I’m more comfortable staying in this 28% range and I think many people should actually follow that. They don’t need bigger and better. Life is already expensive as it is. Stick with this rule because it will keep you in a in a nice constraint with your finances.

Matthew Theal: Can we talk about your personal finances for a second?

Brent Pasqua: Sure.

Matthew Theal: And you also did something that was really cool and more people should do this. Instead of buying the bigger home, didn’t you refi to a 15-year?

Brent Pasqua: Yeah. I was able to look at my budget, saw that I could refi my loan down, was able to get a lower rate because I went to a 15-year loan. With where rates were and with where the money situation was with the loan, we were able to… I had a great mortgage expert, someone that knew a lot about mortgages sitting across from me, so he was able to talk. We worked out all the numbers, calculated everything out, made sense for me to sort of buy it down a little bit at the time and so everything really worked out where I basically was able to break down the loan to a much shorter term, didn’t need bigger and better, and still do not regret staying in my home. I did not need to buy a bigger home.

Josh Winterswyk: That’s an awesome story. Thanks for the shout out.

Matthew Theal: Really cool story. And for those… If we can just explain that a little easier, that essentially means that Brent’s home’s going to be paid off in 15 years.

Brent Pasqua: Yup. And you apply a little bit of extra and you amortize a loan and you work on a calculator and you crunch the numbers and all of a sudden you can see, hey, well if I just pay a little bit extra we can cut this down to 12, it saves this much in interest, and you know, every advisor’s expertise is different. And as a group, we all have some different expertise and it was extremely helpful in that situation.

Josh Winterswyk: And I feel like it’s just another strategy for building wealth. I mean, you’re creating more equity in the home, which is another asset too. By paying it off sooner, I’m giving you more options for when you do want to… If your family’s growing or buy that bigger house, you’re just in a such better position to do.

Brent Pasqua: And I love being in a meetings with clients, and we’re talking about mortgages, and we’re talking about houses and then we come to these difficult decision-making processes and then we bring Josh in or we bring Matthew in and we add a meeting of the minds together to really come to a good conclusion because it brings out so many options. It’s so helpful. You may think of option one and two on the surface, but bringing in somebody else also helps tremendously.

Josh Winterswyk: Yeah, and creating that specific plan for you, like you did-

Brent Pasqua: Absolutely.

Josh Winterswyk: … in your life and it’s worked out, seems like it’s worked out pretty well for you.

Brent Pasqua: Yeah, I mean I could’ve made the mistake that so many people make.

Josh Winterswyk: Yeah, yeah, absolutely.

Matthew Theal: Yeah, totally. I mean, it’s good that we’re eating our own cooking, right?

Josh Winterswyk: Absolutely.

Matthew Theal: All right, moving onto the next rule of thumb, this one to do with retirement, and I like this rule of thumb. It’s a good starting point, but what it is is whatever your desired retirement income is, you take that number and you multiply it by 25 and the amount you get is the amount that you should have saved for retirement when you retire. So let’s put some numbers behind it. So if you want your retirement income to be $100,000 a year in retirement, say at age 65, then you multiply that by 25 and you come up with 2.5 million. By the time you’re 65 and ready to retire, you need to have 2.5 million put aside to get that 100,000 in income. Like I said, I love it because it gives a guidepost. Brent, what do you think? Do you love it? Hate it?

Brent Pasqua: I like it. I can’t say I love it. I can’t say I hate it. The reason why I do like it though, and if I had to pick, I’d say I love it between the two because it is a guidepost, it does set some targets, it does set some goals. The problem with it is it is very general. People can still have state and city, county jobs, where they’re getting pensions. They may not need to save that much, but for people who are on a more general fixed income in retirement, yes, saving these amounts of money can be very helpful and puts them on a target goal.

Matthew Theal: That’s a great point. Yeah. I would say that this is for people who are going to be paying into social security only.

Brent Pasqua: Yep, absolutely.

Matthew Theal: Josh. Love it? Hate it?

Josh Winterswyk: I say I love it because again, it’s like planning for the the worst case scenario. Like you know, let’s say that there’s no more pensions and social security went away and it’s all gone. You’re not even accounting for that in the projection. We can get very detailed with the retirement projections with your income that you can rely on in the future, but this is just giving you that number. Like, if you want your income to be x, you need to save y. And you know, really good for especially like younger people who are want that idea of how much should be in that account. We can work backwards of saying you need 2.5 million, and let’s show you how to get there. So I guess I lean to love it with this rule of thumb.

Matthew Theal: Yeah, it’s better than not saving, right?

Josh Winterswyk: Yeah.

Matthew Theal: Any other thoughts?

Brent Pasqua: Save, save, save, invest correctly and have a plan to hit your goals.

Matthew Theal: Yeah, I agree. I think this was a great show and all these rules of thumb, they’re great to follow, and they’re good guideposts. We can’t really hate any of them. I mean, I guess if we disliked one of them, it was the budgeting, right?

Brent Pasqua: Right.

Matthew Theal: But other than that, if you have kids or you depend on your spouse, good a term life insurance policy, save for retirement, and don’t spend too much on your house, Josh.

Josh Winterswyk: Yeah, all good rules. I think we’re going to have to eventually add some topics where I can hate some of them completely and just be really strong about that hate. But all of these were good, good starting points for people.

Brent Pasqua: I think rules of thumbs in general are really good. I don’t think all rules of thumb are for everybody, but I think a lot of them can be tweaked and adjusted to apply to most people. So rules of thumbs are there for a reason. I think people should use them, help them plan and get and set targets. But I think rules of thumb in general are very good.

Matthew Theal: I agree. All right, so I think we’re going to talk a little bit about McDonald’s.

Josh Winterswyk: Are we going to do or do you love it or hate it or…

Matthew Theal: Well not really. Brent, you got a story to tell us today, don’t you?

Brent Pasqua: Well, the movie Toy Story recently came out, and we took our kids to go see Toy Story 4. So McDonald’s is having with their Happy Meal, a Toy Story toy. My kids, my daughter’s three, my son is five, they’ve never been to McDonald’s in their whole life.

Josh Winterswyk: Are you serious?

Brent Pasqua: Not one time.

Matthew Theal: It’s an American institution.

Brent Pasqua: We’ve never stepped foot in a McDonald’s. I’m not a big McDonald’s guy. Just, we don’t eat there and we’ve never taken our kids there for a Happy Meal. I think even if the grandparents asked to take them there, we’d probably tell them no anyway.

Josh Winterswyk: So you’ve been robbing them of Happy Meals their whole life so far.

Brent Pasqua: Yeah, you could say that. So my wife calls me yesterday and says that she was taking them to McDonald’s to get a Happy Meal because they have the Toy Story toy. And so my kids thought that was the greatest thing. I mean they got a toy with their food.

Josh Winterswyk: How happy were they?

Brent Pasqua: Oh they… So Toy Story and McDonald’s have 10 toys now that come with the Happy Meals. There’s 10 different toys. So my son is like, “Okay, well I have one toy now,” and if you get all 10 toys, it builds like this little caravan. So he’s counting that he needs to go nine more times to McDonald’s so he can build the whole set. I don’t even want him going to McDonald’s one time. So now he thinks he needs to go to McDonald’s nine more times.

Matthew Theal: Yeah, that’s how they get you, man. I remember that Monopoly game. I used to go every other day and house a 20- piece McNugget, trying to win that million.

Brent Pasqua: So last night online I was looking on Amazon and ways for us to be able to buy the toys without taking our kids-

Matthew Theal: To McDonald’s.

Josh Winterswyk: I was actually kind of making fun of you that they haven’t been, but then when you tell this story of how McDonald’s ropes you into up going back 10 times, maybe it wasn’t such a bad thing that you hadn’t taken them so far.

Brent Pasqua: And I found a set online for $60 for the 10 pieces. You can order them online. I’m like, well is it really worth that?

Matthew Theal: So instead of feeding your kids pink slime, you’re going to pay 60 bucks, order the set online.

Brent Pasqua: Yeah. You know, it’s definitely an option. I don’t want them going to McDonald’s 10 times.

Josh Winterswyk: Did you have any French fries?

Brent Pasqua: I didn’t get to go because I was working, but they enjoyed the French fries, and I think I deprived my wife of McDonald’s also, so she was excited to have a cheeseburger and French fries also.

Josh Winterswyk: What’s Landon and [Laken’s 00:29:29] favorite Toy Story characters?

Brent Pasqua: Landon loves Buzz and Laken likes Jesse and Bo Peep.

Josh Winterswyk: Oh, very cool. I remember watching Toy Story. I love Toy Story. I’m going to have to see Toy Story 4 here soon.

Brent Pasqua: Yeah, they’re all really good. It’s good that they finally came out with the fourth one.

Josh Winterswyk: Matt, are you going to go to McDonald’s after this?

Matthew Theal: I mean, talking about McDonald’s is taking me back to my fat kid days, and I could see an extra large fry and a 20-box of nuggets in my future.

Josh Winterswyk: You’re throwing a mini-cheeseburger in there.

Brent Pasqua: How long it has it been since you’ve been to McDonald’s, Matthew?

Matthew Theal: I don’t remember the last time. Actually, you know what, I’m lying. I think when I was at the river like five years ago, before we went on to the actual river, we stopped and picked up McDonald’s for breakfast. So that would have been probably five years ago, but I don’t remember the last time I had it previously.

Brent Pasqua: Yeah, we have a pretty strict eating schedule in the office, which I’m sure will come out over time. But McDonald’s would not be acceptable in our office if we brought it in, like somebody would get crucified for doing that.

Josh Winterswyk: Oh yeah. I’m excited to talk about the lunches here and the restrictions on lunch to bring into the office. But McDonald’s I think is probably up there with one of the worst things you can bring into the office for lunch, right?

Brent Pasqua: Just to set the record straight. I mean, who’s the most judgmental person here in the office about food?

Josh Winterswyk: Matthew by far.

Brent Pasqua: Oh, by far. I can’t even bring a sandwich in the office without getting looked at. I kind of judge you for that too because we killed all the bread in the office. But…

Brent Pasqua: Yeah, I mean I put some rice in my meal and it’s like I’m eating at the worst fast food chain.

Matthew Theal: Yeah. I’m a big food shamer.

Brent Pasqua: Yeah, you are.

Josh Winterswyk: You’ve been like that for a long time. And sometimes we just want breakfast burritos in the morning, man.

Matthew Theal: Well, when you overindulge the night before, breakfast burritos are called for, but they’re not called for everyday.

Josh Winterswyk: Yeah, I mean that’s happened one time in the last two years.

Matthew Theal: It was an LASC game.

Josh Winterswyk: Yeah, wedding one’s coming up too. So breakfast burritos coming soon.

Brent Pasqua: I mean, Matt even has his snack at the same time, his tea at the same time. I swear there’s an alarm clock going off for him to eat at the same time every day.

Matthew Theal: There’s an alarm clock going off right now. I’m two minutes past snack time. We got to close the show up.

Brent Pasqua: Yeah, and there’s alarm clock on the show. There’s alarm clock on your food. There’s alarm clock on everything.

Matthew Theal: Any parting thoughts?

Brent Pasqua: Rules of thumb are great, keep following them.

Josh Winterswyk: Yeah, but if you have no plan or haven’t taken the time, keep following these rules of thumb.

Brent Pasqua: But create a plan that’s going to fit around these rules of thumbs also, so it all comes together.

Josh Winterswyk: I agree. What about you Matt? You got any closing thoughts?

Matthew Theal: Yeah, create the plan that fits your lifestyle. All right, well thank you for joining us on the Retirement Plan Playbook. If you’re enjoying the show, please rate it and leave a review on the Apple podcast page. It would really help us out, and for more information about the podcasts, you could go to and click on our podcast page. We’ll have show notes and you can also stream the show from your computer. Thank you and have a great day.

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