00:11
Peter Dunn
Fire. Good day. Good day. Good day, everyone. It's Peter Pete, who's on screen right now. There I am. Hello. Oh, good Lord. Dame. I tried to do the Open with the music the way we do the music in the Open, and surprisingly, it didn't work.
00:30
Damian Dunn
Well, I am so shocked. Who could have foreseen that event?
00:36
Peter Dunn
I asked right before I did. I was like, do you have faith in me? And you answered my question with a question which is generally a sign that a person does not have faith. Derek, hello. Thanks for joining us. Hello. Good to be with you. Derek McClain. Long time. Talked to Derek forever, Danza. Hello, Danza. Good to be with you both. All right, Dame, here's what's on the show this week. As usual, I have got a tight schedule on a Friday, so hey, Mike. Hello. Good to be with you. For those listening on the podcast, we stream this live Friday, noon Eastern. By noon, I mean 10:00 a.m eastern every Friday on Facebook Live. YouTube Live. And now Twitter. So we're doing that at Twitter. So you can follow at Pete the Planner. All one word. Why? Well, it's a Twitter handle, Dame, on the show this week.
01:24
Peter Dunn
Here's what we've got on the lineup. Number one, segment one, would you work a job for $3,500 a week for six months if the job was a nightmare? We'll explore that. Segment two, why people should actually care about the debt ceiling getting raised. Segment three, should use your home equity for home improvement and what are the pros and cons of that. And then, of course, segment four of Guam and current events. I will also tell you that during the breaks between the radio segments, I have got two Doozy's in terms of on the Road with Peter, the travel log of Peter Dunn. So two insane stories this week, Dame, both related to me being perceived as creepy.
02:11
Damian Dunn
That's not a stretch.
02:12
Peter Dunn
No. Did I tell you speaking of creepy, before we get started here, because these are the perception that I'm creepy, which I'm not, but we'll get there. Did I tell you the story about the young woman who was the clerk at the grocery store, that I talked to her about her hair?
02:28
Damian Dunn
Did I tell you about I don't think so.
02:31
Peter Dunn
It's like a month ago. It's after a soccer game or something. I go to the local grocery store, and this 19 year old girl, 18 year old woman, whatever you call she is there scanning me out. I was going to say checking me out, but I didn't want to say that because then the creepy thing starts to go, and she's got this lovely auburn colored red hair. And as I'm sitting there thinking, I was like, that's what my hair used to look like. My hair used to be that color. And so as she's skating my items and just trying to be relatable, I go, yeah, I love your hair. My hair used to be that exact same color, and look on her face was just like, what's wrong with you? And then Ollie was with me. My daughter was with me, and she looked up at me, and she was like, what have you done to this woman?
03:22
Peter Dunn
That's how you know. It's so creepy. The color of your hair used to be the color of the hair I have.
03:32
Damian Dunn
Yeah.
03:34
Peter Dunn
I'm not creepy. It's not with ill intent. It's not like I want to make a skin suit out of you.
03:40
Damian Dunn
No, it comes natural.
03:42
Peter Dunn
Yeah, I'm naturally creepy, but it's not like ill intent creepy.
03:46
Damian Dunn
Right. Totally different.
03:48
Peter Dunn
I think it might be. Let's start the show. Okay. Are we going to have the spooky ghosts going?
04:00
Damian Dunn
Sure. We can only do this one month a year.
04:03
Peter Dunn
That's true, I think. There we go. The ghost is going to be with us the whole time. Perfect. Okay, now I got to change. I've got my stuff together. Every time, I'm like, hey, I got a hurry today.
04:16
Damian Dunn
Dame, the first time you've ever done this?
04:19
Peter Dunn
It does feel like that a lot of times. Okay, in three, two wait, hold on.
04:25
Damian Dunn
Not ready.
04:29
Peter Dunn
Three, two, one. This week on the Pete the Planner Show, we answer your money questions. Here's how the show works. You email us, askpete at pete theplaner.com. That's askPete @petetheplanner.com, and we'll answer your question. And we're actually doing that here on the show today. Joining me, as always, is Damian Dunn. No relation. Hello, Dame.
04:48
Damian Dunn
Good day.
04:48
Peter Dunn
Pete vice president of advice at your Money Line and hey, money. Dame. This week on the show, we're starting here. I was in Boston this past week, and of course, I'm reading my local hometown news indianapolis to see what's going on. And this article pops up on WTHR.com jobs at Camp Atterbury, offering up to $3,500 weekly. I was intrigued. I took the bait. I clicked. And then I read this article that has had me thinking about this nonstop since, well, October 5. So, Dame, let's walk through it. Let's understand the particulars, and then you and I are going to walk through how someone is to make the decision to work a job for $3,500 a week with very little skills needed, with all due respect, for six months. Okay? So let's figure it out. Like, what's involved? So a company, Aim World Services, is offering up to $3,500 a week for janitors, cooks, food service workers, and dishwashers at Camp Atterbury.
05:59
Peter Dunn
Now, here's the thing. While that is certainly a lot of money, not all of those positions qualify for that $3,500 a week pay. From the way this article reads it's, the food service workers that are at the top of the food, changing $3,500 a week to be a food service worker at Camp Atterbury. And I'm connecting the dots here. This is to serve and provide services to the Afghan refugees who are now living at Camp Atterbury, who were evacuated in an emergency setting from Afghanistan when sort of Afghanistan fell to the Taliban. So dame $3,500 a week. Here's the catch. It's 75 hours a week, so the shifts are six days at 12 hours a day for six months. So 26 weeks, you're going to make well over $90,000. It's like 92 or $96,000 or something like that over a six month period. I want to start with you, Dame.
07:10
Peter Dunn
Would you take a job? First of all, you'd be fired from the shop, but would you take a job 75 hours a week, you know, going into it for $3,500 a week? Because you would know within six months you'd make nearly $100,000? Go.
07:27
Damian Dunn
No, for one reason, I would be away from my family entirely too much for that period of time at this phase of my life. That does not sound attractive to me.
07:35
Peter Dunn
Okay, so let's say you did not have young Dunns, and that's not to say that your wife is not young. This got weird.
07:42
Damian Dunn
Yeah.
07:43
Peter Dunn
Let's say you didn't have children. Okay. Would you consider it potentially?
07:49
Damian Dunn
I mean, my wife is a CPA. She is not a stranger to working long hours for many parts of the year, and it's something that we've dealt with. So if there were no kids involved, it might be on the table.
08:06
Peter Dunn
All right, how about if you're single?
08:09
Damian Dunn
Yeah.
08:11
Peter Dunn
Okay. So what's fascinating about this to me is they're hiring about 100 people for these different positions. They range in $3,500 a week to $1,000 a week. $1,000 a week puts you on pace to earn $52,000 a year. And again, I respectfully say this is manual labor. Right? I mean, it is not super highly trained technical skills, although, as you know, there is some skill involved with certainly manual labor, but custodial services and dishwashing and those sorts of things. Sure, this is an interesting thing because a person can completely change their financial life forever, but they have to go through what I would consider to be a nightmare of six days at twelve hour shifts. But maybe I'm in the dark here. Maybe people already work six days a week at twelve hour shifts, so that isn't scaring them.
09:12
Damian Dunn
I think there are a number of manual laborers that work well into 60, 70 hours a week on a regular basis. And so if that's something that they are used to and then fantastic. I'm not saying that it's not possible. It certainly is possible. Gosh I know plenty of people that have had a full time job and a very aggressive part time job on the side, and they just make it part of their lifestyle, and that's how they pull themselves together or out of a situation that they might have found themselves in. And we've talked about what a part time job is, or maybe a quick change in employment to try and get your financial ship righted real quick. But that all gets balanced out with the demands that are going to be put on you and those around you. And if you're not comfortable being away from your group of people, whether that's family, friends or whatever it is, for essentially six months, probably going to go really bad for you.
10:16
Peter Dunn
Doesn't this feel like some sort of military contractor style gig or some sort of deployment where you just got to mentally prepare for what will be very tough work conditions? And the tough work conditions, by the way, that I'm describing are being on your feet for 12 hours a day for six days and probably being in pretty hot, tight quarters. That's got to be mentally challenging. It does make you think what you're willing to do to improve your financial life. I know a lot of guys, and ladies for that matter, that have thrown boxes, as they say, sure for Ups or FedEx at the airport as an overnight job to make ends meet. I, of course, know people that bartend and do those sorts of things a few nights a week to accomplish financial tasks. I'm really trying to get deep within myself to think, all right, first of all, I can't imagine being single.
11:15
Peter Dunn
That's the toughest part of this.
11:17
Damian Dunn
That's good, right?
11:18
Peter Dunn
I guess so, yeah, I can't imagine that. But if I were, would I do something like this? And again, I'm assuming I'm not doing this for a living, but is that something I could do?
11:30
Damian Dunn
You know who, I think this sets up really well for somebody who is young and has a business that they are interested in trying to launch themselves and they need some runway, they need to try and get some capital really quick. They're already going to be putting in ridiculous hours trying to launch their own business once they get to that stage. So the time is not that much of a factor in reality for them. But if they can get some debt cleared off the table, maybe bank some cash in the meantime. Because if you're working six days a week and you're working 70 some hours, you're not going to be spending anything you're going to be sleeping on when you're not working. So that money is just going to start accumulating in your bank account whether it's there for the future as you do something else or paying off debt to clear the deck for whatever you've got in the store.
12:15
Damian Dunn
But I think this opportunity would set up really well for somebody in that position.
12:20
Peter Dunn
I think that someone that has just left the military or something like that could be interesting. But of course then you've got the aspects of your back on a military base. There could be a lot of sort of a mental burden if you're trying to get part from that. But yeah, this is also, again, this is the idea of as I've said, what are you willing to do to eliminate your past or to set yourself up for the future or to take control of your present? Now we're getting to job season, right? I mean, that by in terms of seasonal employment. Workers are going to be needed more than now everywhere. And workers are already needed. You've got the holiday shopping season. You're already going to have supply chain issues which are going to make it the difficult time. So we said it this summer, but it's especially true in the fall.
13:16
Peter Dunn
Going into holiday season, if you need to make ends meet, come up with a plan, figure out exactly how much money you have to make, go make it, and then get out of there. Is there ever a better opportunity to do that? And again, I'm saying this knowing that I'm coming from a point of privilege, and I say this with respect. There has never been a better time to get your stuff together than right now. We go to break. Come up after the break. Why the debt ceiling matters. I'm Pete the Planner, and this is the show. I almost missed that break.
13:54
Damian Dunn
Almost.
13:55
Peter Dunn
But I didn't. All right, Dame, do you want the first creepy travel story or the second creepy travel story?
14:01
Damian Dunn
Let's go with the first.
14:02
Peter Dunn
Okay, well, here's the choice you can have. They're both really good. One's longer than the other, and one is laugh out loud funny, while the other one is like, that's unfortunate. Which one do you want?
14:15
Damian Dunn
That's unfortunate.
14:17
Peter Dunn
All right, dame. So I check into my hotel in Boston this week, and I'm in one of those hotels where you have to put your key card in the elevator before it will let you access the floors, right? And that's great for safety, whatever, who cares? But it's also sort of burdensome for someone with bags and all sorts of things they're carrying. So I check in, I go to my room, go out on a walk, come back. This woman probably late fifty s. Sixty s. Either that or she's lived. She's in her twenty s and she'd lived really hard. That seemed unnecessarily rude. Yeah. Beautiful. And so she had her hands filled with bags and stuff, and we're entering the elevator at the same time. So I popped my card in, right? And I say what floor? I'll hit it for you just as a courtesy.
15:15
Peter Dunn
And she goes, oh, no, you put your floor in first. I thought she was just being funny, but then it occurred to me she thought I was a creep and I was going to follow her to a room. Now, I realized that men have caused this problem by being horrible humans and following women to their rooms. But there was a lot of I mean, in this moment, it all happened very fast. Like she had just read a brochure on elevator safety number two. She took me to be the sort of person that was going to follow her to a room, and then I felt awkward. But then the rest of the day, I was like, man, men suck, right?
16:06
Damian Dunn
Was it just the two of you on the elevator?
16:07
Peter Dunn
Yes.
16:08
Damian Dunn
If she was that concerned, why'd she get on the elevator with you?
16:11
Peter Dunn
I don't know. And then I don't want to be overcritical of her. She didn't do anything wrong, but I didn't do anything wrong. I was trying to help her out.
16:18
Damian Dunn
I mean, I think that's fantastic situational awareness from her, but yikes.
16:27
Peter Dunn
I know. You know, Krav MAGA, but I can't handle myself.
16:30
Damian Dunn
No, she could have wiped the floor with you.
16:32
Peter Dunn
I did want to hit all the buttons like an elf.
16:37
Damian Dunn
Part of me thought that was exactly where you were going.
16:40
Peter Dunn
No, I didn't want to traumatize her, but it was like one of those, oh, our colleague Chad was on the trip with me, and were sort of talking about, like, airline safety and TSA, and it's like we may have had this conversation before. Can you imagine when commercial flight just became a thing and people were dressing up, getting on planes, and it's like amazing. No one imagined that this new amazing technology and luxury would be turned into a weapon. Where if you try to tell someone who got one of the first commercial airflights, hey, someday people are going to try to blow these up and wreck them into things and then everyone is going to have to prove that they won't do that prior to getting on airline. That's wild, right? Yeah, it's so sad. It's wild. I don't know. This has nothing to do with our show.
17:34
Peter Dunn
What happens when we're on the road? I just think and that's bad. All right, here we go. Dame, why the debt see, it why the dead ceiling matters. That was my Ted Kennedy since I was just in Boston. Okay, in three, two, one. Back on the Pete the Planner show. Dame, I don't know if you heard, but there's a debacle over the debt ceiling. Once again, the debt ceiling being how much the government is able to borrow, it needs to be raised because if it doesn't get raised, then the government will be unable to pay some of its obligations. And so what I wanted to do is talk through this a little bit, see what is really at stake. My job isn't to convince people that it should be raised. My goal is to help you understand what happens if it doesn't get raised. The debt ceiling has been raised numerous times.
18:37
Peter Dunn
Numerous dozens. And it was raised three times under the previous administration, the Trump administration. So I know we love to make things political and make it binary between parties, but every party who has been in charge has raised the debt ceiling. And so I want to understand what would happen if the debt ceiling didn't get raised. To my current understanding. Dame, are you hip to what's currently happening right now?
19:05
Damian Dunn
I believe I am.
19:07
Peter Dunn
You want to give it a spend?
19:09
Damian Dunn
Yeah. So spending is going to cap itself out. We have enough obligations going forward that we needed to increase the limit on our credit card. I know that's a horrible personal finance analogy, but essentially what it has we need to get a raise in our credit limit so we can continue to pay our obligations. That can't happen without an agreement between the Houses of Congress and the President. So what we are doing floatered a bill through, I believe it was agreed to in the Senate last night. This is Friday the 8th, by the way. I don't think it's gone through the House yet, but we will get that through and we will get some additional spending. I think it's just under $500 billion, if I remember correctly, and that will get us not very far down the road, and we'll have to revisit this all over again.
20:02
Peter Dunn
Yeah. And I think what sometimes can happen is if there's one party in control and the other one can mess things up, they can make it seem like you can lay this problem at the feet of the party in control. Right. They can sort of bluster and say, well, let's let this thing go down that way. We can say this went down under their watch. Now, that is one thing they do. And I'm not being so cynical as to suggest that's the only reason people would oppose this. The other one is people are fiscally conservative. They don't want to raise the debt limit by $500 billion. It is, I believe, the 14th Amendment of our Constitution that requires the government to pay its obligations. And so this isn't just a political issue. It's not just a financial issue. It becomes a constitutional law issue. And I say that as someone who is not a social media constitutional law expert, like so many people tend to be these days.
21:03
Peter Dunn
So there is also this theory that even if the debt limit wasn't raised, the President could theoretically have the treasury issue bonds anyway to raise more money, which would allow us to pay our bills. But then the Supreme Court would have to take up the case to say whether that debt issuance was legal. And this is something that has been mildly entertained by previous administrations, but it never got to the point where it was going to have to happen here's what would happen if the debt ceiling was not raised. I'm going to just go through a list of things just so people know. And I want you to remember this now, and I want you to remember this the next time this happens, which will be what, next year?
21:55
Damian Dunn
The year after I think it's December that this is projected to get us to okay.
22:00
Peter Dunn
Yeah. So it's 480,000,000,000 is the extension. And then so this is going to happen all over again in December. And here we go. This information comes from the Committee for Responsible Federal Budget, a nonpartisan organization. When you read nonpartisan organization, are we so skeptical that we don't believe it's a nonpartisan organization?
22:23
Damian Dunn
Totally.
22:24
Peter Dunn
Okay. 15 million seniors could stop receiving Social Security payments, or they would see delay. 30 million families could stop receiving President Biden's expanded child tax credit payments or see delay. Let's put a note in that one and come back to that one. Okay. US. Military service members could stop receiving paychecks. Veterans I struggle to say that word veterans benefits could stop or be delayed. Postal workers and federal employees could stop receiving paychecks. The United States creditworthiness could be downgraded spiking interest rates, which would raise mortgage, car, and credit card payments. Doubt in the typically reliable US. Currency could tank the markets, hurting 401 KS and other investments. The S and P 500 lost 17% in the months surrounding the last debt ceiling standoff. Let's put a pin in that one, too. FEMA funding for hurricane and wildlife wildfire victims could stop. Wildlife victims. I don't think there's a lot of funding for wildlife victims, but wildfire victims, public health funding for pandemic mitigation efforts could be cut off, and child nutrition program and other food assistance could stop.
23:47
Peter Dunn
Okay, let's go back to our first point, the expanded child tax credit thing. I will start with a question to you, Damien. In your expert opinion, based on what you know about the personal finances of Americans and how vulnerable they are at times and how cash flow works at the lower end of the income spectrum, do you believe the advanced child tax credit program will end up extending beyond December 15 of 2021?
24:18
Damian Dunn
I do.
24:20
Peter Dunn
Again, I'm not asking whether you think that is good or bad. I'm simply asking do you think it will happen? And I have come to the same conclusion. I absolutely think that will become a thing. And I also have to note as well, I'm not saying it's good or bad. It is still a zero dollar change in how things work because people still get the tax credit. This is all money people get at tax time in the form of a tax refund. They're just getting it advanced to them now. And I'm sure there are conflicting reports, but the reports that I have read have suggested that this has been a really good thing for child poverty and child nutrition. So I think that'll keep up. The second thing I wanted to put a pin in, and we're going to revisit here is the fact that the S and P 500 lost 17% in the month surrounding the last debt ceiling standoff.
25:09
Peter Dunn
That would absolutely happen again. Right? People panic and freak out. I'm not sure the way this is written, though, that we can assign all of the blame for the S and P 500 going around down 17% around the month surrounding the debt ceiling thing as the cause. Like, correlation does not make causation.
25:31
Damian Dunn
Yeah, I think there's probably some other factors that were in play during that last round of increasing debt ceiling. I would have to look into, see what month that was and what time period and what else was going on. But I would totally expect the markets to pull back during that time period. 17%, possibly. But there's usually a confluence of circumstances that would make that happen.
25:56
Peter Dunn
Do you remember 2019 when there was an actual government shutdown and 800,000 federal employees were impacted? We did some work with our Congressman to help federal employees deal with their financial lives as we all try to help each other go through those tough times. The 800,000 federal employees did nothing wrong. It's just the Congress could not come to terms on a spending plan. This is not that the debt ceiling is not that. This isn't about the cash flow of the fiscal year, the budget. This is about being able to pay our obligations that we've already made and so our debt obligations. So this doesn't just affect 800,000 people. It affects the hundreds of millions of people that I just mentioned there. If you have a 401, if you have a mortgage, if you have a credit card, the rates indexes and all those things would be affected with this.
26:55
Peter Dunn
So dame it's with that you and I will revisit this exact same conversation in two months. Good job, Congress.
27:03
Damian Dunn
Keep it up.
27:04
Peter Dunn
I will note, you know, some people there just like, let's just let the whole thing burn. A lot of people feel that way. That doesn't make them the majority, but there are people that feel that way. Coming up after the break, home equity. Should you use it to improve your home? I'm Pete the Planner, and we'll talk about that next. Sort of a weird outro, if I'm being honest. If we're in a state of true transparency here, I think it's important to note that I once subscribed to the let it burn ideology. This is probably four or five years ago. It's like, well, what's the worst could happen? I'm somewhat fiscally conservative of that time. I was certainly more fiscally conservative than I am now. And I thought, well, yeah, let's just press reset. It's just a reset. It doesn't really work that way, though.
27:55
Peter Dunn
There's no mechanism to press reset.
27:58
Damian Dunn
No. And I think you and I will both agree and some people may be really glad to hear this, that it's not unreasonable for people to want their government to be fiscally sound and potentially even conservative with their spending. So certainly, where I fall, gosh, I saw a list of potential Republican presidential candidates in the next because, of course, we're a couple of years away, so why not start projecting stuff like that? I thought of the conversations that you and I have had about who we would love to see in positions on either side of the aisle to make this. And one of the people that you and I are both very fond of is somebody from the state of Indiana who is very good fiscally, and he was nowhere on that list, of course. Man, I would love to see somebody make a run at it who could really just focus on domestic sorts of issues and spending being one of them and trying to get things more in line.
29:01
Damian Dunn
But that ship may have sailed.
29:05
Peter Dunn
No, I think he's out of it.
29:07
Damian Dunn
No, I mean, not even for him. Just in general. The spending may just be a thing of the past, and we're arguing over where the dollars are going at this point.
29:17
Peter Dunn
Second creepy travel story. Are you ready?
29:19
Damian Dunn
Yes. This is the laugh out loud one, right? You said that last segment. You put a lot of pressure on yourself, so make sure everybody in the comments. If you don't laugh out loud, just reply with a me.
29:32
Peter Dunn
I told the story to Oz this morning, and she laughed out loud. Or yesterday.
29:36
Damian Dunn
Yeah.
29:39
Peter Dunn
Okay. You ready? So as part of this conference that I was at, the entertainment was a dinner cruise in Boston Harbor. So I'm on a giant dinner cruise liner. It was really nice. Big boat. It's called, like, the Boston Odyssey or something like that. So you're eating dinner, and then there's a DJ there, and there's a dance floor, and people begin to dance. So one of my friends who's at the conference, I see her over there dancing. She's dancing with this other woman. And I'm having my conversation with sort of my table. It's four people there. I'm being one of them. And out of the corner of my eye, I see a couple more people come over to the dance floor. And then one of my friends at my table, Cherie, she says, oh, my God, look at that guy. I was like, okay, turn around.
30:29
Peter Dunn
And then all of four of us at the same time, it hit us. This person from the back looks exactly like me. Exactly like me. So it's at about this time he starts getting handsy with one of the women he's dancing with on the dance floor. Seconds later, the table behind us. This woman goes, oh, my God, look at Pete the planner. Their whole table turns. Because I was the keynote speaker at this event, of which I was paid to be there. Hey, not a weird flex here. I was the big star of the show, right? So this table is like, oh, my God. And then they see me sitting right there, like, oh, my God, that guy looks exactly like you. So then the head of the entire event, about two minutes later, if we're all just laughing, comes over here to me, and she goes, we all thought that was you.
31:25
Peter Dunn
Like all the directors of this event. And they. Were like, man, Pete the Planner is really letting his freak flag fly. Like he's out there on the dance floor, like, getting handsy with this woman. So not only did this guy look a lot like me, but no one knows this part, but he was wearing a sweater that I own. No one knew that. But I'm now going to show you a picture that I took with this gentleman after the debacle was figured out. I have video evidence, audio. So here we go. This is a picture of me and the guy. Do you see it, Dave?
31:58
Damian Dunn
Yeah, I do.
31:59
Peter Dunn
And so we look enough alike that if you turn around the side, it's just a shaved, bald white man head. Okay.
32:05
Damian Dunn
Oh, my gosh.
32:06
Peter Dunn
So now what I'm going to do is I'm going to show you a video of him dancing that someone took and then posted on the app to the conference questioning whether I was dancing with this woman. How does this stuff happen to me? Are you ready?
32:23
Damian Dunn
I was really hoping the picture you're going to show was the two of you from the back.
32:27
Peter Dunn
Okay. Watch the guy in the green sweater. It's hard to see, but look at him.
32:32
Damian Dunn
Oh, yeah. Okay. He's on the far side.
32:34
Peter Dunn
Don't worry about the guy running up.
32:36
Damian Dunn
Like, I don't know what, yo, gabba.
32:39
Peter Dunn
Gabba character, but the guy in the green, he's just getting it. Can you believe that? So here all these people on the boat that weren't in on it. Thought I was getting handsy with this woman. Turns out the woman is the man's wife.
32:54
Damian Dunn
See, it has a good ending.
32:56
Peter Dunn
That is the good ending. It's not a story about affairs at conferences. That's a whole other show.
33:05
Damian Dunn
I think you need to keep that guy's phone number for double work in case you need somebody to do an event for you.
33:12
Peter Dunn
You did laugh out loud. I want you to know I did. I don't know how in the world this stuff happens to me. There's always something crazy as long as.
33:23
Damian Dunn
Everybody knows all the details and didn't think that you were a creeper.
33:27
Peter Dunn
But that's the thing. It's like we just talked about previously. I somehow am accidentally creepy, but I'm not outwardly creepy, right? I think it's my age.
33:40
Damian Dunn
Yeah, you're kind of right in that sweet spot for creepiness, isn't it?
33:44
Peter Dunn
Yeah, I think there's like this inherent, like a middle aged white man creepiness that's out there, you know? And I think I got it. Well, I don't view you as creepy, though. And we're the same thing.
34:00
Damian Dunn
I just don't publicize all my creepy stories.
34:04
Peter Dunn
Oh, I bet yours are creepier then.
34:06
Damian Dunn
Probably.
34:08
Peter Dunn
Okay, let's start the show. Okay. Oh, my God. Okay, three not ready. Really surprising. Two, back on the Pete the Planner show. Dame. We got an email at the email in bag. Box. Bag. Creepy for the show. AskPete@petetheplanner.com. It's from Dara or Dara how do you think it's pronounced? D-A-R-A?
34:40
Damian Dunn
Dara.
34:41
Peter Dunn
Dara.
34:42
Damian Dunn
Yeah.
34:43
Peter Dunn
Dara. So, like, it's sarah dara.
34:48
Damian Dunn
That's true.
34:49
Peter Dunn
Sara dara.
34:50
Damian Dunn
One of us is right, dear pete.
34:53
Peter Dunn
What are your thoughts on getting a home equity loan or line of credit to update current home while rates are low? Or should we stick with the slow cash flow approach process so not to incur debt? Thank you. Deradara. Deradudura. All right, so I'll start with you, Dame. Do you have a rule of thumb that you want to share? Do you think that the current interest rates and the housing market are informative to your rule of thumb? Like, where are you at?
35:27
Damian Dunn
We hear people ask us about taking a home equity loan or line of credit for a number of things these days, whether it's school loans, whether improving the house. Once upon a time, the interest on a home equity loan was deductible. It is only deductible now for funds that are going to be used directly for the house. So in that respect okay, that's one tick in the pro column. I know you're a big fan of T charts, Pete, so we'll put up.
35:57
Peter Dunn
All right, I'm making a T chart. Hold on. Okay.
36:00
Damian Dunn
All right.
36:01
Peter Dunn
Making a t chart here. Pros and cons home equity, pro deductible interest used for to improve the house. So if I use it for buying tickets to a dinner cruise in Boston or something like that is theoretically not deductible.
36:22
Damian Dunn
It's not even theoretically, it's not deductible.
36:24
Peter Dunn
How would you be able to prove that one way or the other? Yeah. How would you be able to prove that.
36:31
Damian Dunn
There'S some really bad tax advice and things I could give right now that I won't?
36:36
Peter Dunn
Because you're married to an accountant?
36:38
Damian Dunn
Yes.
36:38
Peter Dunn
Okay, so next what it will so that's one pro. Okay.
36:43
Damian Dunn
Funds are available immediately. You don't have to postpone the work that you want done.
36:49
Peter Dunn
Buy now, pay later, is what you're saying?
36:51
Damian Dunn
Essentially, yes.
36:52
Peter Dunn
Funds available immediately. Okay.
36:58
Damian Dunn
Potentially increase the value of your home.
37:00
Peter Dunn
Okay. I like the word potentially, because we know I've done segments on this show for a lot of times over the years about what specific home improvements give you the best bang for your buck. Now, I have to say, though, I haven't done one of those in at least five years, maybe longer. I think that's possibly changed. I think just the way people spend money and what a home buyer looks at could be different. It was always kitchens and bathrooms, and I still think that's true. But there's some outdoor spaces that I think matter a lot now, too.
37:33
Damian Dunn
Yeah, that'd be interesting to see. I bet kitchens and bathrooms are still right up there in the top three or four, for sure. But maybe some landscaping hardscaping stuff. I don't know. The home offices now, I don't know.
37:48
Peter Dunn
I don't like the term hardscaping. I just wanted to put that out there.
37:51
Damian Dunn
Fair enough.
37:52
Peter Dunn
It's not your fault you didn't come up with it. No, I think it's because it's actually really great. It's just too tight for me.
38:01
Damian Dunn
Really?
38:02
Peter Dunn
Yeah. I don't know, it's just too clever. I've never been accused of being too clever.
38:07
Damian Dunn
Okay, what are the pros? You got any pros that you can come up with for this list, Pete?
38:11
Peter Dunn
I mean, the funds available now is also another way of saying that is like you get to enjoy it now while you're paying it off. Right. I think it is worth a disclosure here. When Mrs. Planer and I were going to finish our basement years and years ago, we specifically saved for it. Like we said it as we're going to do this and then we actively saved money to get it done and then wrote a check to pay for the whole thing as opposed to what we're talking about now. So I just like to get that out there. Not that I'm right and you're wrong or anyone's wrong. It's just get it out there. The first con I have is that construction prices are really high, and that doesn't necessarily mean they're going to stay high, but it just seems like you're buying at the top of the market.
39:04
Damian Dunn
Yeah, I think that's legit.
39:07
Peter Dunn
What do you think about the low interest rate argument there? I mean, that would be a pro, right? You get cheap money. But of course the alternative is that as you go to save that money, it's not like you're going to get an equivalent rate of return on your money that will help you save the money.
39:24
Damian Dunn
Right, yeah. Because this is very short term money that we're looking at. So you're not going to invest into the stock market or anything of that nature because too much volatility, too much exposure to volatility, that could make it take longer to achieve your goal. So no, the interest rates, very positive on the negative interest of the negative interest rate. The low interest rate. If you decide to borrow the cash.
39:48
Peter Dunn
What do you think about this idea of the backlog of getting in the queue, getting on a person's schedule? Is that a negative or is that a positive? By like, doing it now gets you in the queue.
40:00
Damian Dunn
That's interesting.
40:01
Peter Dunn
Yeah.
40:02
Damian Dunn
You might be able to hop the line a little bit if you're able to bring cash to the meeting for that. So potentially the other side of this is how long is the housing market going to stay hot? We don't know. Is it possible that you still got your mortgage and then you take out another line of credit and then let's say the housing market swings the other way? Is it possible you end up underwater on your house?
40:27
Peter Dunn
Yeah, that happened so much in 20 05 20 06 20 07 So much, yeah.
40:36
Damian Dunn
I don't think anybody would argue that we are really high on inflation or on real estate prices right now, and so it's reasonable to think that we're going to have a pullback at some point. So I would be really cautious on how much you take out on a line of credit for this.
40:54
Peter Dunn
I actually wrote an Indianapolis Business Journal column this week about do you consider the equity in your home or part of your net worth?
41:01
Damian Dunn
Right.
41:03
Peter Dunn
My answer was depends on what you're using your net worth to try to figure out. But a part of this evaluation process is, do you view the particular asset as an investment? Are you willing to sell it at some point in time? And so do you think that plays into this question, too, of if the person is viewing their home and as investment and this will improve the resale value? I think oftentimes people say that, but they have no intention on selling it. Do you think that matters?
41:30
Damian Dunn
Yeah, I totally do. I think that's a really good point that I was hoping I was going to make before. You to sound intelligent, but if you're not planning on selling the house, then you better not be saying, well, I'm going to get an X percent return on investment by updating this kitchen or bathroom or whatever it is, because frankly, it don't matter.
41:50
Peter Dunn
That's true. It's just about enjoyment. And I think that's what the Pandemic home spending was really about was like, okay, well, we're here. Let's enjoy the space more. Right. I don't think many people during the Pandemic were like, this will increase our property value. People just wanted to be at home. They wanted to enjoy the space more.
42:11
Damian Dunn
Yeah. Frankly, it was probably the better option than going out and overspending on another house at that point.
42:20
Peter Dunn
Do you feel like if they were to write a check, they would be more sensitive to costs and more sensitive to getting a good fair deal with good value in it, as opposed to writing a blank check and then paying it off later? It's a loaded question because that's how I feel.
42:41
Damian Dunn
I do. I think when you are writing a check for money you have toiled to save and set aside, you're going to be a lot more concerned with where that money is going. Rather than accessing a pot of cash that you can use for X, Y, and Z, and then you're just going to pay it back over a course of X number of years at a few hundred dollars a month. I think it's really reasonable to think that somebody who has saved the cash and set it aside ahead of time is going to be way more conscious of how that money is being spent.
43:13
Peter Dunn
All right, so what's our conclusion with less than a minute left in this segment for Dera Daradera? Do we think it makes sense? I mean, there's obviously a big depends here, but there are no major red flags that says, this is a horrible idea. Don't consider it. I think the fact that there are low interest rates is a good thing. I think the scary thing is the increased price of construction materials and labor. But you can't say that waiting and saving the money is going to solve that problem.
43:46
Damian Dunn
No, like you said, it's just a big depends question. I hate giving that answer, but I think that's where we fall.
43:53
Peter Dunn
I do, too. I really do. But I would rather do that than just give general advice that doesn't serve anyone. Coming up after the break, more general advice that doesn't serve anyone. I'm Pete the planner. That was good. That was funny. All right, so I had a guy blow my mind on a call yesterday with a phrase that I want to see if I can remember it and share it with you. So this is a person that I'm considering hiring to do some consulting for our organization. Right. And part of the onboarding process to figure out if they can help is that we had our initial calls 30, 45 minutes, and then we're going to have a deeper call that's 90 to minutes to 2 hours right. Next week. And he said, as we're picking the time, we picked the time. He said, look, this next session is free.
44:46
Peter Dunn
It does not cost anything. It's part of our process. Because the only thing is I ask is that you treat that time like you're paying for it. And I was like, oh, my God. That is good. That is good. Right? Interesting, because I just know that people tend to take things more seriously when they have to measure the experience against the value they perceive that they're getting from the experience based on what they paid.
45:21
Damian Dunn
Totally. If you go to a restaurant and pay $100 a plate for a dinner and comes back and you thought, well, it would have been good for $50 a plate, you got to try and assign value to the time that you are spending or the good in this case. I think that's a fantastic concept to keep in mind for the next 90 to 120 minutes on that phone call.
45:46
Peter Dunn
Now, this is probably an off the air conversation that you and I should have. I wonder if our callers to your moneyline who their employers pay for their thing. I wonder if that gives a weird vibe or if there's any utility in that of saying, look, your company is paying for this. Our hope is in this conversation that you're I don't know, is there any value? Maybe we should talk about that off the air.
46:09
Damian Dunn
Maybe.
46:10
Peter Dunn
Seems like a lot of pressure to put on somebody.
46:14
Damian Dunn
Yes, I have thoughts. We will talk later.
46:18
Peter Dunn
Yeah, it seems like it could be cheesy. Hey, welcome to our business, everybody. All right, dame, let's do the show. Okay, so I'm ready if you are.
46:32
Damian Dunn
Well, first, I'm skeptical.
46:36
Peter Dunn
Okay. Three, two, one. Back on the Pete the Planner show. This week's biggest waste of money of the week right here on the Pete the Planner show is now dame. During the break, I told you a story in the Facebook live audience story about my time on a dinner boat in Boston this past week, the Boston odyssey. Because I'm a tedious individual, I read the reviews of the Boston odyssey before I went on the Boston odyssey and is tradition these days. There are tremendous number of just really unhelpful reviews. One woman gave and this is the biggest waste of money of the week is this woman's spend. She gave the Boston odyssey one star stating I should find it, I should have found it. That said something to the effect of I couldn't find parking. Miss the boat. That's a waste of $400. And I thought, how is this Boston odyssey's problem?
47:40
Peter Dunn
Why would you leave that review? Do they control Boston, the harbor parking area? And how is that their problem?
47:50
Damian Dunn
It wasn't at all.
47:52
Peter Dunn
So she biggest waste of money a week was her spending $400. And it's her fault. It's not. Boston odyssey dinner cruise. I love terrible reviews. I love to read them because they make me mad. I read this once. This person said, I stood up from the restaurant and hit my head on the chandelier. Don't go there. Like, she was at her table at a restaurant and there was like a low hanging chandelier. She hit her head on it. She's like, no one should eat there. And I've been to this restaurant. I know exactly what she's talking about. It's her fault.
48:25
Damian Dunn
Nothing is anybody's fault anymore.
48:27
Peter Dunn
Pete I also had a friend who owns a restaurant, not the one that everyone thinks I'm talking about, a different one, truly. And he was telling me that this group came in the restaurant typically doesn't serve a lot of children. It's more of an adult restaurant, which is different than like, an adult movie theater. It's adult restaurant. Anyway, so the kid orders a salad off the menu. It's a delicious salad. I've had the salad, but it's sort of a gourmet salad, right? I mean, it's sort of like a taste for adult. Server comes over, oh, Timmy, you want a little salad? Tim no, I don't like it. Timmy's mom's like, he doesn't like it. Can you make him something else? Server is like, sure, yeah, we'll get him a different salad. Brings a salad over. They like, that salad. Check comes, both salads are on there.
49:17
Peter Dunn
And then the people were like, you can't charge us for both salads. You ordered another salad. Nothing was wrong with the salad. He just didn't like the salad. And then they left a terrible review saying they made us pay for both salads. And it's like, I want to review the reviewer. You're a terrible diner.
49:39
Damian Dunn
You remember that old quaint saying the customer is always right?
49:43
Peter Dunn
That can go right into the Boston Harbor. Dame, what's in the news?
49:49
Damian Dunn
Do you have the siren sound queued up so we can play that? Oh, my gosh, he does.
49:58
Peter Dunn
That's all I could come up with in the time you gave me. That's pretty good.
50:07
Damian Dunn
It's not great. US. Department of Education is streamlining its most criticized loan forgiveness program, making it easier for more than half a million borrowers who work in public sector jobs to have their loans canceled. Is that the ghost beside you or a siren?
50:26
Peter Dunn
I don't know.
50:28
Damian Dunn
The changes to the public service loan forgiveness program will help alleviate problems caused by complicated eligibility rules, loan servicing errors, and other technicalities. The education department said most of the improvements stem from a temporary waiver running through October 22. Sorry, october 2022. That'd be a short timetable. It expands what is considered a payment, and that also would count towards forgiveness altogether. The education department estimates the changes announced Wednesday will help at least 550,000 borrowers automatically qualify forgiveness faster, including some 22,000 who will be immediately eligible to have a combined $1.4 billion in loans canceled. The government also estimates there are about 27,000 borrowers who could see roughly 2.8 billion forgiven if they can show they were employed in an eligible job.
51:23
Peter Dunn
We live in that world. We help people with public service. Student loan forgiveness all the time is literally part of our business model. This will be helpful to help people get more people student loans forgiven. The program is actually no simpler, just so you know. It just makes more people eligible for a really complicated program, and we will continue to navigate the waters for our clients. Dame, what else is in the news?
51:49
Damian Dunn
Well, many consumers are unhappy that car insurers use their credit histories in setting premium rates. Now an alternative is in sight, and some might like it even less. Social media close insurers would be able to track how, when, and where they drive.
52:08
Peter Dunn
Oh.
52:09
Damian Dunn
Since late summer, car insurer allstate has been talking to state regulators about helping to lead an industrywide effort to transition in the coming years from sizing up risk in applicants with factors including credit scores to largely using telematics to determine rates. With telematics, insurers monitor policyholders driving behaviors either through smartphone applications or devices embedded in their vehicles. Insurers slice the tracking data to tailor individual rates.
52:38
Peter Dunn
Okay, here's my thoughts on this. A person could theoretically, I use that word too much. A person could say, I'm okay with that. And because I'm okay with that, I want a lower rate. It's just like that plug and play thing that you see. Like, you'd plug it into your car, it would take your speedometer and stuff like that. So I think on the surface, I have no problem with this. I think where it gets hairy is requiring it.
53:07
Damian Dunn
Do you feel differently if somebody wants to opt in? Yeah, I've got no problem with that. But to require it. I'm not a big fan of yeah, I know.
53:18
Peter Dunn
There's a yeah, I don't know if I have a problem with this, if you opt in at all because I feel like both parties are saying, go ahead, and the other party is like, we will, and then you hear a siren down there like that. Right. Yeah.
53:37
Damian Dunn
I actually know somebody who entered into this agreement with their insurance company already and they are tracked, I think, through their cell phone, if I remember correctly.
53:45
Peter Dunn
You do. You sort of buried the lead here. You didn't tell me about this. Or are you making this up?
53:49
Damian Dunn
No, I've known him for a very long time. I think he and everybody, all the drivers in his family have an app on their phone that monitors how, when, where they drive.
54:00
Peter Dunn
Wow. Wonder if they then sell that data to advertisers. They have to, right?
54:06
Damian Dunn
They should.
54:07
Peter Dunn
I mean, that's the genius part of this.
54:09
Damian Dunn
Yes.
54:10
Peter Dunn
Oz get allstate on the phone. That's not the way it works around here.
54:17
Damian Dunn
I'm sorry.
54:18
Peter Dunn
Yeah, Oz being our coworker who would get allstate on the phone and she.
54:22
Damian Dunn
Could do it too.
54:23
Peter Dunn
Oh, she absolutely could do it with a smile. Dame, what else is in the news?
54:26
Damian Dunn
BlackRock is putting annuities in American workers 401 KS. The investment giant said five employers have signed up for a new retirement product that will allow workers to receive a stream of payments for the rest of their lives. A small number of 401K plans currently incorporate annuities. Employers who offer retirement plans worry about annuities complexity and their cost, and about being sued if the insurer that stands behind the annuity fails to make payments. A 2019 law now protects many employers from legal liability. Pete, I've got a gob of other information on this if you really want me to go through it. However, I think you and I can make some relatively informed comments.
55:06
Peter Dunn
I'm curious what you think about it. I'll say this, I have absolutely no problem with this. And here's why. Accumulation is the period of time in which money goes into your four and 101K. We'll say here, like, it goes in. Oh, it's going in. It's going in now. I'm retiring. Now we're to the distribution phase. You would not believe how much people misunderstand the distribution phase or where's my check? There's no actual mechanism to just send you a check. It has to be managed. This gets a mechanism similar to a pension to a defined benefit plan. And yes, it's going to cost more, and yes, there's other risks, but I have no problem with this.
55:46
Damian Dunn
I will tell you, one of the things that would come up are fees. And these contracts are really reasonably priced.
55:55
Peter Dunn
They are. Can you tell me?
55:58
Damian Dunn
Ten bips?
56:00
Peter Dunn
Wow, that's a steal. Yeah. That's all we have time for this week on the Pete the Planner show, I got Damian to laugh at least two or three times this week. Send you good vibes, because good vibes are all that's in the budget. I'm Pete the Planner, and this is the show sorry. This is how I know I've had the right amount of caffeine. The 1010 basis points is nothing for this.
56:35
Damian Dunn
So they're going to use target date funds for a lot of it for getting people to the point where they would get into the annuity. The fees could rise, but they'd be capped to about 16.
56:54
Peter Dunn
I literally have no problem with this. I mean, a lot of times in the qualified money let's get super in the weeds here so people we lose everybody here in the qualified money space. There's a lot of issues with putting annuity inside of a tax qualified vehicle because you get sort of double tax benefits that you don't need because one already has the tax benefits, and you have to pay to get that. So that becomes pretty controversial, actually, in the financial planning world. But the point of this is not to get additional tax benefits. The point of this is to have a structured payment mechanism on the back end at distribution, which is why I have no problem with it.
57:38
Damian Dunn
Yeah, this is just structuring somebody's distribution phase and potentially cuts out the need for a financial advisor.
57:46
Peter Dunn
Sure. I mean, there's that.
57:48
Damian Dunn
Andy loves your spooky voices. Appreciate you, Andy.
57:50
Peter Dunn
Thank you, Andy. Andy's got a great podcast. Send people his podcast. It's it's much better than ours.
57:59
Damian Dunn
Yeah. Andy, if you want to plug it in the comments, go right ahead.
58:02
Peter Dunn
Yeah.
58:03
Damian Dunn
Marriage, kids, and money.
58:04
Peter Dunn
Marriage, kids, and money. Dame's been on that podcast. I've been on that podcast. I think Andy it's great. Didn't he just win an award or he wins awards for having a better podcast.
58:16
Damian Dunn
Yeah, his show is an award winning show that ours is not.
58:21
Peter Dunn
I think he actually won the 2020 award for much better than the Pizza Planner show. I think it actually says that on the plaque.
58:28
Damian Dunn
It's reasonable. If not, we can make a plaque and send it to him to put the real plaque.
58:32
Peter Dunn
You know what we should do is have a bunch of plaques made up for people with podcasts and be like, you won the You're Better than our Show award.
58:38
Damian Dunn
Can we send him one of our awards?
58:40
Peter Dunn
The golden.
58:41
Damian Dunn
Peters. Yeah, sure.
58:44
Peter Dunn
I mean, they're out of print anyway. I got to go. Damien, anything you want to say to the peeps?
58:51
Damian Dunn
Stay getting money.
58:52
Peter Dunn
Oh, gee. Many Christmas. Can you imagine someone in a network television show saying the person's tagline over them during a show?
59:07
Damian Dunn
What you gonna do?
59:09
Peter Dunn
You it. I don't even want to say it, but I got to. I hope everyone on here has a good week. Dame. I hope you have a good week next week. Dame will not be here next week, so the show will better. All right, everybody stay getting money.
