ANNA MARIA – Some might call it a tragedy, but to Rita Payne, the day she dropped her $800 iPad in her driveway and it shattered into a thousand pieces became her lucky day.

“I had already gone through three phones by dropping them, so I went to the Apple store and asked for a case to keep my electronics safe,” she recalled. “All they had was a piece of plastic that goes over the screen. It offered no protection at all.

“I realized there was a huge need for something to protect people’s electronics. It had to be portable and impact and water resistant; something to go to the beach or coffee shop or carry on your bike.”

Payne headed for the Goodwill store, bought quilts and dresses and began sewing. She solicited the help of Mary Pat Swamy, of Key Royale, for a design. Her first prototype had a pocket, a flap and a strap, and she sold 45 to 50 at the Bridge Street markets.

“Then I realized that if I dropped it, it would break because the corners were only protected by a little bit of material,” she explained. “On these types of electronics, if you hit the corner, they shatter.

“I looked at wetsuits, yoga mats and shower curtains and then I had an 'aha' moment when I sewed the yoga mat and shower curtain together and put a strap on it. The beauty of it is that you never have to take it out because you can operate it through the vinyl.”

She added diagonal pieces of Velcro to protect the corners and mesh pockets for additional storage. When she saw that the shower curtain created distortion, she replaced it with marine vinyl to make it crystal clear.

Rap Pacs are born

She named the cases using her initials Rap (Rita Ann Payne) Pacs and added a charging port under a flap, so the tablets can be charged without taking them out of their pacs. Next came the true test.

“I threw one off my deck 12 feet up onto the ground, and it was still operating,” she said. “I threw it into a puddle in the pouring rain and opened it to show it was still running. My neighbor videotaped it, and it’s on the website.”

She found a pattern maker, Patty Spiro, of Sew Tec in Chipley, Fla., and after receiving her first pattern, she decided to have patterns made for smart phones and Kindles also. Spiro made the first samples, adding some finishing touches such as a handle and a clip on the tablet pac for a phone.

Payne’s goal to seek an American manufacturer led her to a company in California. She sent a pattern and received a sample, but when she called, the person on the other end of the phone spoke Chinese.

“I asked for my pattern back, and when they wouldn’t return it, I hopped on a plane and went to Los Angeles,” she recalled.

“I rented a car and drove to the factory to get my pattern. I investigated and saw giant boxes from China. They were sending everything to China to be manufactured.”

Made in America

Undeterred, she looked at an atlas and picked eight towns with populations of less than 1,000 and high unemployment and called the chambers of commerce and mayors’ offices to try and find a light industrial labor force.

“I got one response, and it was a dead end,” she continued. “Then I went to Craig’s List, and a woman named Arline Parvin in Lakeland responded immediately. I took the patterns to her, and she made them in two days.

“The pacs float, and the electronics can be used while they are inside the case. They can be cleaned and disinfected with household cleaners.”

Another of her goals, to put women to work, was being realized a little at a time. To add to that, two sisters at Quest Outfitters in Sarasota make the Velcro, webbing and clips, and Debbie Wohlers, of Holmes Beach, created the website.

Ten percent of the proceeds from the pacs goes to micro loans for women in the U.S. through Payne’s group Women Working for Women at Work. All the materials used in the pacs are produced in the U.S.

Rap Pacs

www.RapPacs.com
970-209-3683 or
941-778-8650

In Part I of this article two weeks ago we reviewed the concept of the safe withdrawal rate from diversified investment portfolios, as originated by William Bengen, a California-based financial planner who pioneered this concept about 20 years ago. His conclusion was that the safe withdrawal rate from a diversified portfolio, allowing for inflation adjustments, was 4.5 percent per year. At this withdrawal rate, a portfolio should last 30 years before the owner would run out of money.

For most retiring at a typical retirement age of 65 or so, their money would more than likely outlive them based on typical life expectancies and allowing for the outlier of those making it well into their 90s. In the first part of this article, we discovered that the worst case scenario, so far, for all the 30-year retirement periods since the one starting in 1926, was the retiree who got the gold watch and called his career over in 1969. This date was right before the stock market spent about 14 years fluctuating quite a bit, but not eclipsing the level at the time of retirement to stay until 1983.

I hinted that there were other factors than just the performance of the stock market at work in determining the success or failure of a portfolio and pointed out that the 1969 retiree’s portfolio actually still had the original 1969 value as late as 1989, but then began a steady decline causing the investor to run out of money in 1998. What could cause the portfolio in this case to last fewer years than someone who retired in 1926 right before the 1929 stock market crash and Great Depression? The answer – inflation!

The retiree in 1926 had to put up with a shrinking investment portfolio, but also had to withdraw less each year during the Great Depression because of the deflationary spiral during that time. As long as the retiree was willing to adjust his or her withdrawal downward with deflation, the impact of the poor investment climate for the first 15 years of retirement was minimized.

The retiree in 1969 was not so lucky. Even though the stock market’s performance in the 1970s was not as poor as in the 1930s, inflation was beginning to run rampant in the high single digits and spent a few years in double digit territory in the late 1970s and early 1980s. The retiree who inflation adjusted their withdrawals to keep up with the rising cost of living for the first half of their retirement then found their portfolio value was not large enough to keep up with the withdrawals, even when the stock market performance was better in the mid-1980s through the 1990s. Another factor at play was the poor performance of the bond market in the high inflation days of the 1970s, when in the 1930s bonds did very, very well.

In Part III of this series we’ll review another important factor to maximizing the longevity of your portfolio during the withdrawal phase and also review how a portfolio containing more diversification than just the traditional stock and bond mix might improve the chances of success.

Tom Breiter is president of Breiter Capital Management, Inc., an Anna Maria based investment advisor. He can be reached at 778-1900. Some of the investment concepts highlighted in this column may carry the risk of loss of principal, and investors should determine appropriateness for their personal situation before investing. Visit www.breitercapital.com.