08:12
Peter Dunn
All right? So we all have bad days. We all have bad days. And sometimes when we interact with people in the midst of our own bad day, they get the other side of it, right? So, dame. Hello, Dame. Hello. Hi, Dame. Something happened yesterday afternoon, and I need you to decide, am I being oversensitive? So let's just go with the game is called Is Pete being oversensitive? Are you okay with this?
08:44
Damian Dunn
You have my please, if you're going.
08:47
Peter Dunn
To err in any way here, can you please err on the side of I'm wrong?
08:52
Damian Dunn
Okay? I will slant my bias towards Pete.
08:55
Peter Dunn
Is wrong, which is a natural bias for you. Hello, Brian. Hello, Jason. And hello, Jeremy. From 30,000ft, flying to Seattle right now. Okay. Dame young Theodore. Eleven year old kid that looks like me in my home, that has hair, calls us after school. This is about 330 yesterday afternoon, flat tire on his bike. Okay? Flat tire on his bike. And so I'm, like, walk home. It's a mile. You're fine. I'll put hair in your chest. But I was like, okay, I'll go pick him up. I was working from home yesterday afternoon, news. And so I went and picked him up, put the bike in the back, and I was like, all right, I'll deal with it later. And it was a pop tire. So I go to the local bike shop about an hour later, and I just walk in and I say, hey, I got a flat tire.
09:50
Peter Dunn
And the guy says he's sitting at a computer, just sitting. He looks up and he's like, okay, the next appointment is in two weeks. And I said, you don't have five minutes. Maybe that you could just pop this on, pop this, back off. I said, I can do it. It's just I know it'll take you probably less than five minutes. He's like, do you want to call the other 180 people that have minor repairs in front of you so you can tell them that you need this done right now? And I was like, if we can back up for a half second here. Dame first of all, I'm not going to name the shop. I'm not that sort of person. I'm not a bully.
10:31
Damian Dunn
Pulpit person.
10:32
Peter Dunn
Number two, I wasn't having the best day myself.
10:34
Damian Dunn
Okay?
10:35
Peter Dunn
Right. Not the greatest day. Days can be hard. And I was just like, okay, can I just have the tire? I'll do it myself. Am I wrong to think that maybe I definitely got the short end of that was a little hot, right?
10:54
Damian Dunn
I can see this. Well, yes, if the tone was as you described, which I have no reason to believe it wasn't.
11:01
Peter Dunn
Sure.
11:02
Damian Dunn
Yeah, that was a little aggressive.
11:04
Peter Dunn
My tone or his tone? His tone was exactly as I described. I'm trying to be honest when he said, yeah, it'll be two weeks, the next appointment. I said, you don't have five minutes. I could have said it like that, or I could have said it like, hey, you don't have five minutes you could put to this. It could have been on a spectrum. It wasn't bad, but it could have been like, you don't have five minutes. And then that's when he hit me with the do you want to call the 180 people? So that was it. That sort of was not the best.
11:40
Damian Dunn
I have to side with Jeremy on this one. Customer service seems a little lacking. Maybe the case, maybe the policy, maybe how that shop does business. It certainly could have been communicated better to the customer and explaining why rather than, I don't care. Let's wait two weeks.
11:59
Peter Dunn
So do you want to hear the rest of the story?
12:01
Damian Dunn
How long did it take you to change the tire, Pete?
12:04
Peter Dunn
About 25 minutes. And then Ted rode to Theodore young Theodore rode to soccer practice last night, called me after soccer practice, dad my tires. So clearly I did not find whatever penetrant was in the outer tire. And so then this morning, I ordered on Amazon a tube replacement, because I'm not going back to that shop. So I actually ordered two. So those people lost out on $12 because of that. How you like them apples?
12:36
Damian Dunn
You get a patch kit, too?
12:39
Peter Dunn
I have a patch kit, but, like man, let me tell you, walking in my you know me very well, me walking in my house with something a other than a fish hook stuck in my hand, but with my hands just covered in chain grease. It's a weird. And I'm just like I don't have, like, the Pumice stone or Lava soap like I used to when I had an honest man's hands.
13:05
Damian Dunn
Occasionally I'll come in from the barn, similarly marked up, and it's like I'm chasing to find just running to find. Cassie, look, I'm a real every. I've got proof.
13:19
Peter Dunn
Yeah. And needless to say, Ted thanked me for the initial bike repair, but then after it flattened again, he said, maybe you can have someone else do the second one.
13:28
Damian Dunn
That's a great time to teach him how to change a bike tire and where you might have made a slight error the first time, and persistence pays off. I don't know. There's life lessons there somewhere.
13:41
Peter Dunn
Kristen is clearly not here. She is gallivanting across the south. I don't know what's she doing.
13:47
Damian Dunn
I have no idea what she's doing today.
13:48
Peter Dunn
All right, kristen's not here. Dame is. I am. Jeremiah is. And Jeremiah Dame will have you know that I made a very important point just before the show. Dame. What did I say?
14:00
Damian Dunn
It can't be an extended version of the show, but we're not going to rush through the show.
14:04
Peter Dunn
Rush through the show.
14:05
Damian Dunn
A comfortable show.
14:06
Peter Dunn
Probably 54 minutes, if I had to guess.
14:09
Damian Dunn
Comfortable show today.
14:11
Peter Dunn
Damn it. We're going into the mailbag. All right, we're digging into the mailbag. And then we've got a 529 thing we're talking about. So let's start with the mailbag.
14:20
Damian Dunn
Excellent.
14:22
Peter Dunn
Okay. I also should have muted slack because now I'm reading slacks coming in, and I'm about to start the show, so this seems like a bad idea.
14:33
Damian Dunn
Dame part of my two step process every time I sign into the show.
14:37
Peter Dunn
Yeah.
14:41
Damian Dunn
Jeremiah, I appreciate the heads up. We will make sure we keep it under 65 minutes, though, to keep you on schedule.
14:48
Peter Dunn
All right, great. Here we go. I read the slack. Okay, dan I was opening up to time the show calculator. Open the calculator. Big Rick Swink, everybody tried to find the live stream on LinkedIn so I can deactivate my Facebook account, but I couldn't figure it out. Lol hey, I am all in support of deactivating a Facebook account or Meta. How about it? You know what? How many people but most of our listeners are via Facebook, so I don't really want to cancel that.
15:22
Damian Dunn
Can't do that.
15:23
Peter Dunn
Okay, here we go. In figures three, two, one. This week on The Pete the Planner Show, we answer your money questions. Here's how the show works. We email us. Ask Pete@peeptheplanner.com that's. Ask Pete. Peteeplanner.com and here's what happens. We answer your questions. By we, I mean Damien andrew Dunn from your moneyline and me pedro de Pesos. Pete, the planner from your moneyline.
15:49
Damian Dunn
Hello.
15:50
Peter Dunn
Dame.
15:51
Damian Dunn
Good day, Pete.
15:52
Peter Dunn
Dame this is one of those radio shows, financial shows even, where the answer isn't. Call us on Monday and we'll sell you things. We just answer stuff. We have some we. We don't actually work with individuals. We work with companies and the individuals at those companies. So don't call us unless you want to add this as a benefit at your company, then call us, right, dame yeah.
16:15
Damian Dunn
Or drop cookies off by the office, either one.
16:18
Peter Dunn
Yes, dame email bag for us. This first question is addressed to Kristen and Co. And oddly enough, Kristen, our co host, is not here this week, so we will just say, dear and Co, I've got another question for you, if y'all have time and interest. Timeout. Do I have a timeout? Two, do you think? Do you have time and interest is a financial joke? The interest part or not?
16:45
Damian Dunn
That's fair. Well, I mean, time as well. It's a key component, but I wouldn't put it past the writer because we.
16:51
Peter Dunn
Are familiar with one of my friends has I'm back in the email now because, you know, I don't have friends.
16:57
Damian Dunn
True.
16:58
Peter Dunn
One of my friends has a 2018 subaru with 120,000 miles on it, and they are going to sell it, and I have the option to buy it if I want it. They're asking Cad11,000 for it. It's American, but it's pretty close, right?
17:17
Damian Dunn
I don't know. I haven't looked at that exchange rate.
17:19
Peter Dunn
Would you be interested in Dave timeout? I'm using them both in the first segment.
17:22
Damian Dunn
Gutsy call.
17:24
Peter Dunn
Dane would you be interested in where's this currency from? Segment, like where I look up world currencies and you and Kristen try to guess where it's from.
17:33
Damian Dunn
That actually might be fun now. Can I take another time out?
17:37
Peter Dunn
Yeah, go ahead.
17:38
Damian Dunn
We might end up blown up this whole segment.
17:40
Peter Dunn
Sure.
17:41
Damian Dunn
I was shopping for vehicles in the not too distant past, test drove a couple, and I came to find out the type of vehicles were looking at were commonly imported from Canada and federalized at the border. They're new, like, within four years old vehicles. So they come in, they get a whole dash swap out, and then they make their way to the dealers because a lot of new car dealers in Canada don't sell used vehicles. So if they get lease trade ins, they don't have anything to do with them. So they ship them across the border. Or they sell them and then ship them across the border to be sold in America. The interesting part is not this is.
18:24
Peter Dunn
In itself incredibly interesting. So whatever you're about to say is more interesting.
18:28
Damian Dunn
The factory warranty doesn't carry over the border.
18:32
Peter Dunn
Okay, I think we've just deviated from this here email. So how much do you know? Because I'm about to start firing my I'll say something like, slightly interesting to Mrs. Planner, and then she'll ask me all the questions that I don't know the answers to. This could happen right now. Are you comfortable with this?
18:49
Damian Dunn
That's exactly what's going to happen right now, but you can ask me whatever you want.
18:52
Peter Dunn
So this email is from Ian. But Ian, we don't care about your email anymore. And good luck. I hope the subaru runs well. All right, so Dame, first of all, I'm stuck on the word federalized. It's federalized at the border. What does that mean?
19:08
Damian Dunn
It has to take a US. Citizenship test and they have to get a 70% or better.
19:12
Peter Dunn
Absolutely.
19:13
Damian Dunn
Yeah. It has to get converted. Like, the dash has to go into miles per hour, apparently. I don't know, because it comes across the border with kilometers and liters. So they swap the dash out so Americans can read it.
19:27
Peter Dunn
But I'm confused, though, because on my dash it's got moof and kilometers, right? It's got miles per hour and kilometers an hour. And when you're in Canada, just fix your eyes on the kilometers per hour.
19:40
Damian Dunn
Well, yeah, but they're more talented north of the border, and we have a hard time focusing on the correct numbers, apparently. I don't know. Yeah, it gets deleted, as Jeremiah would say. So what's the whole federalization process? I don't know, but a dealer told me that was the term that is used and there's steps involved.
20:01
Peter Dunn
So you are geographically located, theoretically relatively close to the Canadian border.
20:11
Damian Dunn
Yeah, I could be in Canada in two and a half hours.
20:17
Peter Dunn
Yeah, and I welcome that, but I'm thinking, could you do that and make a poutine run. Sure.
20:24
Damian Dunn
I'd be cold by the time I got it down to the office, though.
20:28
Peter Dunn
So do you think a lot of cars in the area that you're in, used cars have been federalized from Canada?
20:34
Damian Dunn
That's what I'm really starting to wonder, because I had no idea that this was happening, but it turns out that it might be a little bit more common than I had anticipated. And I don't know how many people are aware of it, because unless a dealer would have spoken up about it, I never would have asked that question. But it was only when I got to the warranty question that it came up. Now, the carfax could have shed some light on that, so it's potential that I would have seen that and discovered that on my own. But for car buyers who aren't digging in that deep, they just want to find reliable transportation and they may not go quite as in depth, they may end up getting a new car that may not have all of the benefits they thought that they were getting.
21:20
Peter Dunn
Did this all come up because you were on the lot and you told the guy the car looked nice and he said, of course it's nice, it's Canadian. Is that how it started? It was the warranty thing, so the warranty just so how many miles were on the car?
21:34
Damian Dunn
It was still under the bumper to bumper warranty, or at least it would have been under the bumper to bumper warranty. I don't remember the exact number of miles, though.
21:41
Peter Dunn
Wow. Was this a domestic car?
21:44
Damian Dunn
Indeed. One of the big.
21:46
Peter Dunn
Oh, speaking of the Big Three, we're really just punting on Ian's email, right? Like, I think now we can't go back to it.
21:55
Damian Dunn
Well, you know what, he wanted to talk to Kristen anyway, so he can wait a week.
21:59
Peter Dunn
He can wait a week. Any thoughts on the big three thing? I'm just curious, do you think this has a massive impact on the economy?
22:06
Damian Dunn
I think it could. I've got, actually some news stories where I found out I saw an article that has four of the demands that the union is fighting for and I thought it might be kind of interesting for us to let's do it now. Look at those. You want to go through those?
22:19
Peter Dunn
Yeah. For those that don't know, Chrysler being stalanis, GM and Ford workers UAW, all on strike right now.
22:31
Damian Dunn
First time ever that all three have coordinated for a strike.
22:35
Peter Dunn
All right, so in two minutes and 15 seconds, we are going to go learn the demands of the strike.
22:40
Damian Dunn
All right? Just some I'm sure there are plenty more first pay increases proportional to executives raises. Yeah.
22:48
Peter Dunn
Are we doing is this fair? How are we doing that?
22:51
Damian Dunn
I don't know. I don't know if we want to look at it from both sides of the table or the possibility of it passing, frankly. I think this one is more symbolic than anything else because if I'm one of the big three, I just change pay structure. I don't really give much raises and I aim at all to bonuses.
23:10
Peter Dunn
I was about to say same thing. I was like, that's actually fair if it's on base pay. But the second you change the shape of the dollar and make it a bonus and there's nothing you do about it yeah.
23:18
Damian Dunn
So I think that's more symbolic than anything else. Okay, good. Removal of what the union considers a tier system that makes earning top wages take eight years.
23:29
Peter Dunn
Well, again, I'm thinking about public education. I'm thinking about teaching how long it takes someone to be a veteran teacher to hit the top of the scale. It seems commiserate with that. Right.
23:40
Damian Dunn
I think it's pretty comparable, honestly. The 32 hours work week with a 40 hours pay to compensate for mandatory overtime burnout.
23:52
Peter Dunn
This one seems a little more difficult.
23:54
Damian Dunn
Yes.
23:55
Peter Dunn
This is an interesting topic for me. Wait. Okay. So it's a 32 hours work week, but they're getting paid as though they're getting 48 hours for free. And the reasoning is mandatory overtime burnout.
24:10
Damian Dunn
Because they're required to work overtime.
24:13
Peter Dunn
So would that mean any hour over 32 would now be overtime time but they're actually working like, 50?
24:24
Damian Dunn
I don't know. I would assume that's what that means, but I don't know.
24:28
Peter Dunn
Are those all the demands or are there more?
24:29
Damian Dunn
One more restoration of traditional pensions and cost of living raises.
24:33
Peter Dunn
Okay. That I get.
24:34
Damian Dunn
Yeah.
24:35
Peter Dunn
Okay. Look at us. Look at us. Kristen's away and the show goes to pieces. We just changed segments in the middle of the segment. Coming up after the break, will we stick to the topics? Probably not, because this is the Pizza Planner show. I actually kind of liked that segment.
24:52
Damian Dunn
I did too. Sorry, Kristen.
24:54
Peter Dunn
Not. Sorry, Ian. Why are we being mean to he seems like a reasonable person.
25:00
Damian Dunn
He's written some really great emails to.
25:03
Peter Dunn
He has, but all right. Jeremiah's asking if he gets a timeout because we just crossed the border in June for a lunch. Told Border Patrol were going over for some French fries and gravy. Also came home with some all dressed chips and chocolate Canadian. Smarties. Yeah. Have you taken the kids? Just, like, drove them up to Canada?
25:25
Damian Dunn
No, we thought about doing a trip, kind of headed east and doing the whole Niagara Falls thing and going through Canada one direction, whether it's out or back. And we just haven't done it one Direction.
25:38
Peter Dunn
What does Harry Styles have to do with this?
25:40
Damian Dunn
Everything. Have you seen that man? He's gorgeous.
25:42
Peter Dunn
Oh, my gosh. He's really been working to if you.
25:47
Damian Dunn
Could have hair but you had to wear it like Harry Styles, at this point in your life, would you do it? This is a game I play frequently.
25:53
Peter Dunn
That's a really good question. I think if I looked cooler. It just wouldn't work. You know what? I am I am now on brand as kind of schlubby, and I think if I had too many handsome elements going on, we'd be in trouble. I don't I yeah. If I had to look like Harry Styles'hair, I could probably do it right.
26:18
Damian Dunn
I could suffer through that.
26:19
Peter Dunn
Probably if you had assigned me a celebrity haircut, because this week was bald Appreciation Day on Wednesday.
26:26
Damian Dunn
So I was told.
26:27
Peter Dunn
Bald Head appreciation day. I wish Dame a happy day, and said we should get together and rub our heads together. And I was told by our human resources person to not say that in all team meetings, but here we are.
26:41
Damian Dunn
Alas, here we are.
26:44
Peter Dunn
Dame, if you could assign me any celebrity haircut and I just have to rock with it, and you can go nice, you can go mean, you can go funny, where do you go?
26:56
Damian Dunn
That's a really great question. Are you at the point in your life where it's hard for you to imagine yourself with hair?
27:02
Peter Dunn
Oh, I can't. Other than this business of ours occasionally, constantly reminds me that I once had hair and a beard. Dame I would give. Jason momoa's hair.
27:18
Damian Dunn
Oh, I would love that.
27:19
Peter Dunn
You would look so good as, like, Aquaman.
27:22
Damian Dunn
I was going to go with something a little bit more conservative for you, like George Clooney or something like that.
27:27
Peter Dunn
Oh, I'd take yeah, I'd go with the George Clooney. All right, let's do a show next onto the next question, since we took care of Ian's. Okay.
27:36
Damian Dunn
Nobody had hair talk on their bingo card today.
27:39
Peter Dunn
Well, yeah, good call. We did talk about Kristen's hair the last couple of weeks because the way her lighting changed off her camera, it looks nice.
27:50
Damian Dunn
Not that it didn't look nice before.
27:52
Peter Dunn
Yeah, well, okay, let's get started. Three, two, one. Back on the Pete the Planner show. It's a mailbag episode of the show where your emails submitted to Ask Pete. That's all one word, askpete@peteeplanner.com. We answer emails, and that's what we're doing today. By the way, Pete is spelled P-E-T-E-I went to a coffee shop the other day and the person spelled it P-E-A-T. No, they didn't. They 100% did.
28:23
Damian Dunn
Really?
28:23
Peter Dunn
And now I'm worried about the future of society. Yeah. Good day, Pete, Dame, and Kristen. I'm out of time outs. By the way. As you guys were discussing the downsides of taking out a 401K loan, dame mentioned they had to be repaid with after tax dollars. Can you further explain that point? Now, there's a bunch of other questions here, so I'm going to keep going in the dame that's the first one you're going to answer. That's not a timeout. That's just context. In terms of tax implications, a 401K loan feels like any other type of loan. Is it related to the pretax component of contributions? Not following the argument and would love additional clarification on it. Full disclosure I have an outstanding 401K loan. Outstanding. Dame how does he know it's so good?
29:16
Damian Dunn
He knows.
29:16
Peter Dunn
Let me read that with slightly different inflection and just say how funny it is. For disclosure, I have an outstanding 401K loan. Full disclosure I have an outstanding.
29:37
Damian Dunn
That.
29:37
Peter Dunn
We used to invest in a family business. I hope this email doesn't turn sad or I'm going to feel really bad. By the way, I know this email and I really like him, so aaron, I'm sorry. The business has consistent proven returns of roughly 15%, so were willing to take the risk. I also got lucky in terms of timing as we took out the loan september of 2021 and the market dipped considerably after we took out the loan. We're planning to repay the rest of the loan later this week. Lump sum. Now that the market is about at the point in which we originally borrowed, weren't trying to time the market, but being able to borrow high and repay low along the way has a nice benefit in our situation. Secondarily I know I don't have any timeouts, but I want to say something.
30:22
Damian Dunn
I'll allow it.
30:24
Peter Dunn
You usually don't hear the word secondarily. You don't read it, you don't hear it. It's a solid word. I write a lot and I never use the word secondarily.
30:38
Damian Dunn
Percentage chance that secondarily appears in one of your columns in the next two months.
30:43
Peter Dunn
Okay. I'm writing a column on Sunday and it will be in next week's column. If someone does have a 401K loan, do you have a preferred strategy for repayment? For example, pay it back as soon as possible via a lump sum when able regular pay period repayments for the full term of the loan. Accelerated pay period repayments to attempt to dollar cost average. Thanks, Aaron. Great email. Great question. Dame let's begin with the after tax component, or, pardon me, the pre. Can you further explain your point on why you say it has to be paid with after tax dollars?
31:20
Damian Dunn
Okay, that part is 100% true. The 401K loan is repaid with after tax dollars. The tax considerations that did catch my eye when I read this question and it got me thinking. Aaron's not wrong. Any other loan would be repaid with after tax dollars. You should be repaying a loan you took out with after tax dollars. Let's keep in mind that there is no tax implication when that loan is dispersed. You're not paying a penalty or income tax or anything like that. You're simply removing money from your 401K with the promise to repay it. If you don't, that's when you get hammered with the tax problems. So you are repaying a loan just like any other loan with after tax dollars. We're all square there. You then get taxed when you take the money out in retirement, just like a normal 401K. So I might have changed my perspective on this.
32:16
Damian Dunn
I got to be honest.
32:17
Peter Dunn
As far as Aaron's email changed your mind?
32:19
Damian Dunn
Well, it just got me thinking through this again before. I always you're going to pay with after tax dollars and you're going to get taxed again. No, you're not getting taxed again. You're going to getting taxed once. You're still repaying a loan with after tax dollars, just like you were any other loan.
32:38
Peter Dunn
So you're saying he does have an outstanding 401K loan?
32:42
Damian Dunn
Well, he made an outstanding point. I don't know if it's an outstanding loan.
32:48
Peter Dunn
The timing, the market element of this is where I'm getting caught up. It's interesting. I have two thoughts. Number one, maybe it's not as even of a swap as he thinks, or he's the luckiest person in the world and he's right. You know what I mean?
33:14
Damian Dunn
You missed a golden chance to say, secondarily.
33:18
Peter Dunn
What am I even doing anymore? This might be the last show I still stand by. Well, what do you think about this idea that he was taking the 401K loan and putting it into something that got 15% returns and that was justification? It's interesting, and it sounds like he was right, but that's a tough prediction when you're in the moment.
33:48
Damian Dunn
Yeah, well, if you're in the moment, I think it's much easier to justify for yourself if that's what you want to do, because you're going to come up with any reason to support your intended or desired course of action. And now if you've got an unbiased third party that you're bouncing this off of, that's where somebody's going to throw the flag and say, hold on just a minute. Let's rethink this.
34:13
Peter Dunn
Yeah. Here's where my head goes. And Aaron, look, I like you a lot. You know this, and I like your family. So disconnect yourself from this. If a family business needs a loan, is the family business in a position to tell someone that there's 15% returns attached to the loan, whereas a bank would have said no? Right. Like, if you're going to family for a loan, for a family business, that generally means traditional lenders have said no. And if the traditional lender said no and there were 15% returns on the horizon, how does that work?
34:56
Damian Dunn
Yeah, my thought was, how did we get here? What other avenues were explored and didn't come to fruition? Because if a bank said no or multiple banks said no, this becomes a much riskier proposition, I think anybody's reasonable estimation. So it worked out. It reminds me of I'm deviating apologies, but my advisor in college told me and the entire class of story, pete, you and I went to college at the same time. There was a little tech boom going on around that time.
35:30
Peter Dunn
Pets.com. Yeah.
35:32
Damian Dunn
He had a student that got his credit card statement, and back then we used to get blank checks that would come with statements every once in a while. Convenience checks. Yes. He maxed his credit card out by writing those to a brokerage account and used that money to invest everything into I believe it was Sun Microsystems, but I don't remember. And it worked. I hit big for him.
35:59
Peter Dunn
Horrible risk.
36:01
Damian Dunn
Terrible risk. And is it a direct correlation to what Aaron's going through here? No, but, man, I see a lot of similarities.
36:12
Peter Dunn
That is fascinating. Yeah. Because sometimes you end up being right, but the risks you took were the you shouldn't have taken. Yeah, I'm not saying Aaron should have taken the shouldn't have taken the risk. Here's another element of this, too dame to bring it back. Do you remember back at the beginning of 2023 as an executive team, we're like, hey, you just never know how these years going to come. Let's go get a giant line of credit just in case. We don't think we're going to need it. We don't think we're going to need it, but let's go get a giant line of credit. We already had a line of credit that wasn't in use. We're like, let's go get a much bigger one. Now, here's the thing about lines of credit. With 15 seconds left, they're usually given to people who don't need them.
36:54
Peter Dunn
But this was at the same time of the Silicon Valley bank meltdown, and no one was getting lines of credit. We never needed it. We wanted it. We couldn't get it. And now that we're ten months past it, we never needed it at all. It wouldn't have mattered. That's the nature of risk. Great story, Pete. Okay, coming up after the break, the new change to 529 plants makes them attractive, just like Dame. I'm Pete the planner. Do you remember that whole thing?
37:23
Damian Dunn
Yes, of course.
37:25
Peter Dunn
Pretty irritating. Strange. It's like, okay, we are doing the Prudent thing. We are trying to take out a giant line of credit, and we're not going to use this in case this and now we are at the moment when you would have conceivably needed it, and we're not even close to needing it. A lot of lost sleep over that.
37:51
Damian Dunn
Yes.
37:53
Peter Dunn
Here's the good news. I didn't eat anything this morning, and I have coffee. Just tearing my stomach apart.
37:59
Damian Dunn
I'm sorry. You got two more segments?
38:02
Peter Dunn
I don't know. I'm forwarding an email real quick. Sorry. Okay, now how I go. All right, let's do oh, my favorite thing in the world is today.
38:14
Damian Dunn
Oh.
38:15
Peter Dunn
Get to go pay my mortgage this afternoon in person.
38:18
Damian Dunn
Did they say your name when you walk in?
38:19
Peter Dunn
Like, no, they don't even know me. No, and I wish they did. I think they got a massive marketing opportunity.
38:28
Damian Dunn
Customer service narcissistic there.
38:33
Peter Dunn
I'm so excited. I'm going to break under a meaningful breakpoint of the loan amount today. Sure.
38:42
Damian Dunn
Excellent.
38:43
Peter Dunn
Kind of a big deal right here, actually.
38:45
Damian Dunn
I think we break through one in two months.
38:50
Peter Dunn
Congrats.
38:51
Damian Dunn
Yeah.
38:52
Peter Dunn
I'm going. To make an obnoxiously big deal when I pay off that stupid mortgage, but it's two and a half percent, so it's actually a beautiful mortgage.
38:59
Damian Dunn
Who are you going to make a big deal obnoxiously big deal to anyone.
39:04
Peter Dunn
Who has ears or eyes or a mouth.
39:10
Damian Dunn
I'm out of retirement and Twitter just to be obnoxious for his mortgage.
39:15
Peter Dunn
Yes. Oh, my gosh. Hear my stomach growling? I'm putting the microphone up to my stomach. Oh, it's not growling out, but if you hear what sounds like sully from Monsters Inc. At some point in the next segment, it's because I've put the mic up to my stomach.
39:33
Damian Dunn
Yeah.
39:34
Peter Dunn
We got our favorite coffee. We ordered our favorite coffee. We do it once a year. It's from New Orleans, and it's bananas Foster coffee. Bananas Foster flavored coffee. It is unbelievable. It is so good. We order, like, four pounds of it and we just have it in the fall and we brewed it for the first time this morning. And that is as exciting as paying my mortgage is later today.
40:00
Damian Dunn
So is that like your daily for a while or do you just break it out on specialish occasions for a while?
40:06
Peter Dunn
It's our daily because you know how it gets. If you stretch it out, then it starts to okay, let's continue. Sorry. Going to show. Three, two, one. Back on the Pizza Planner show. Dame. You know, there were some changes with the 529 college savings plans that some experts and some critics believe to now make the 529 plan undoubtedly the best way to save for college. I have always been fond of 529 plans, and not just because they have paid me to say that at one point in my career, but because it is the way I am saving for my kids college. But there is a new provision within them that makes them relatively attractive. But there's more to the story. So, Dave, can you just catch us up? Like, what's the new provision? Yeah.
40:57
Damian Dunn
So very recently, you are able to transfer a balance from unused 529 accounts into a Roth IRA for the beneficiary. There are some stipulations that come along with that, some rules we have to follow, and I'm sure that's something that pete, you're going to want me to cover.
41:17
Peter Dunn
Here I am. But when I first saw that this was coming down the pike is it pike or pike? We've covered this on the show, too. I think it's the pike.
41:26
Damian Dunn
I think it is, too. Nope.
41:29
Peter Dunn
Did you get the stomach growl there?
41:31
Damian Dunn
I didn't, but nobody on the radio heard the setup for that in the.
41:34
Peter Dunn
Break, so that's awkward. All right. So, Dan, when I first heard about this, I thought, oh, good, my kid gets the scholarship or doesn't go to college, and I can take the money that I've saved and I can put it into a Roth IRA for me so I can stop working someday. And I was very excited about that. And then, Dame, you ruined my dreams. You went right up to the punch bowl and dropped a foreign object in it. And you said, Pete, it's actually a rollover for the beneficiary. So your kid goes to school or they don't go to school, and you're like, you know what, here's $35,000 to start your life. But Dame, I can't just dump it all in. There's more to it than that.
42:16
Damian Dunn
Yeah, there are a few things that come along with that. First, you're subject to the annual contribution.
42:23
Peter Dunn
Limit, which is what?
42:25
Damian Dunn
Right now I know, $6,500, I believe, this year with non ketchups or mustards. So, yeah, you can't just stroke one check or set up a transfer for $35,000 and push it all at one time. It will take a number of years if you've got 35,000 plus left in the 529.
42:45
Peter Dunn
And this is where this goes off the rails for me, honestly. It's not the five years it takes. It's that in a perfect world, in a vacuum of which we don't live, because we are two bald men, we do not live in a perfect world. The male part was the imperfect part, not the bald. Bald is beautiful. I am concerned that the opportunity to develop savings and investing habits early in a career gets overlooked because someone else is dumping in that money for you. And whereas you could put money in a 401K or another qualified plan, I don't like the idea that Mommy and Daddy are filling up that account for you, when really it should be a muscle. You learn to flex yourself.
43:33
Damian Dunn
What if the parents set it up as a matching type of contribution for the 401 contributions by the student now.
43:42
Peter Dunn
Employee, one of those family contract sort of things?
43:46
Damian Dunn
Yeah, the money was there for college. You didn't need it. Thanks. But we're going to continue to teach you some good habits. And if you make your contributions to your four hundred and one K, four hundred and three B, whatever, we will match dollar for dollar or $0.50 on the dollar. If you really want to push the student or new employee to develop that habit and it comes out swimmingly, well.
44:09
Peter Dunn
In the long run, I don't mind that. How many doublings do you think, let's say a person has their account fully funded by the time they're 27. Let's say they work till they're 67. Let's do some math here. So let's say there's 40 years. How many doublings will you give me? Will you give me that's a really.
44:29
Damian Dunn
Interesting question now, because we used to figure it was once every seven ish years. Do you think that's reasonable going forward?
44:35
Peter Dunn
I would always go eight or nine personally, but you go seven.
44:40
Damian Dunn
Rule of 72.
44:41
Peter Dunn
But let's go eight. Okay, so five doublings.
44:46
Damian Dunn
Yeah, math easy that way.
44:47
Peter Dunn
Okay, so 35 turns into 70, right? You're here to check the math. That's double number one I don't have.
44:57
Damian Dunn
A calculator going right now.
44:59
Peter Dunn
Oh, it's okay. One doubling, one doubling. That's the math I need. Okay. Then you get to 140,000 American dollars, two doublings, 285, 60. A million, 80,000. Is that the fifth one? Yeah.
45:18
Damian Dunn
Over I don't think I could over a million.
45:20
Peter Dunn
So it's a million dollar day here. I'll feed the planet show. So that's interesting. Yeah. I mean, there's no way it was designed that way, but that's interesting.
45:33
Damian Dunn
Here's the thing. How many 529s do you think are going $35,000?
45:39
Peter Dunn
The best question, and by the way, is this not a benefit for the rich? Yes, it is not a benefit at all for anyone. This is the ultimate serve the wealthy and wealthy alone, because no one's going to have an extra $35,000 if we're.
45:57
Damian Dunn
Going to be a little bit more gracious than that. And you have why? You absolutely don't have to be. Let's say middle income family manages to scrape together ten grand for one of their kids, and let's say they end up getting a scholarship and they don't need it if they don't take that money back out for themselves, which they could do with a little bit of penalty and tax sorry. On the growth only. And they decide they want to give it to the student after they graduate. You want to go through the five doublings again with $10,000 for a middle income student.
46:37
Peter Dunn
Ten to 2020 to 40. 408-081-6163 to 20.
46:44
Damian Dunn
It's not horrible.
46:45
Peter Dunn
It isn't, but I feel like at some point this is some very smart family CFO, as sometimes they're called these days, will say, all right, well, let's just load that thing up and this is a great way to transfer wealth.
47:01
Damian Dunn
Sure. I would have to go back in and see how long somebody has to be a beneficiary of the account before they are eligible for this provision. Like, I know the account has to be open for 15 years, but I don't know how long a beneficiary has to be in place in order to have some of this money transferred to them. And let's just say you have a 529 left over with $70,000. Is it possible that I transfer 35 to two over a course of number of years? I mean, how many times can I do this?
47:27
Peter Dunn
So, Damien, you and I are in a similar boat in the sense that our kids are similar age. I'm a year ahead on the oldest. I think about college so much more in this calendar year than I ever have before. And I start thinking, okay, I think I know where she's going. I don't know any sort of financial aid or merit, whatever. And so I'm trying to hit that number on the head with also knowing that I got a son three years younger, that I got to try to do the same thing to him, too. So this news story, this provision is compelling to me, but I can't imagine a circumstance in which I'm going to have 36 and I am busting my hump to put money away. There's a lot of money there. There are no ways it could be $36,000 extra in there.
48:19
Damian Dunn
No, the same here. And I don't know how you feel about this particular approach, but my family will probably cash flow some amount, a not insignificant amount of the college need, although we will have a very significant amount of money saved in 529 by the time that comes. So I don't know. I can't envision a scenario where this is going to be a commonplace transfer unless you fall into that tier, as you were discussing, where you can just load up a 529 and then start shipping it out to a Roth for the beneficiary.
49:00
Peter Dunn
I've mentioned this before, but by the mere fact that I've mentioned it before, it makes it untrue. I am not a cynical person, however, honestly, short of and I just can't this only benefits upper class families from a financial perspective, because even if you had a family that modestly saved and then their kids got a scholarship, I guess you're right that $10,000 turns into 360, and it's somewhat compelling anyway, 320. Whatever it was, no one cares. Damn. Let's do this. Let's take a break. Let's hose ourselves off. We'll come back with the biggest waste of money of the week and the news. A lot of news this week. The financial world. Dame Summarizes reads it all, puts it into Chat PTG, and then we spit out a good radio show. I'm Pete the Planner, and the radio show will be good in just a moment.
50:00
Peter Dunn
How about half the world's worst outro boy? I have the confidence of a whatever.
50:07
Damian Dunn
That'd be interesting if I put my news stories in GPT and told them to rewrite it. And then I just read at a GPT generated news. It might be fun one of these weeks.
50:16
Peter Dunn
We do have some AI components to our software that we build, and I still think we should call it Chat.
50:21
Damian Dunn
PTP, but we can't.
50:24
Peter Dunn
We can. I'd have to sell the executive team on that idea, and I don't have a lot of credibility amongst them.
50:31
Damian Dunn
I don't think anybody really understands who PTP is that uses the platform at this point anyway.
50:36
Peter Dunn
See what everybody okay, let's oh, I got to pull up my stuff. Are you ready, Dame?
50:43
Damian Dunn
Of course I'm ready.
50:44
Peter Dunn
Let's keep it moving. I might be able to go pay my mortgage sooner than I thought.
50:48
Damian Dunn
So excited for you.
50:49
Peter Dunn
I am frustrated that they don't know me.
50:52
Damian Dunn
Try a different branch.
50:54
Peter Dunn
I can't. It's the only branch.
50:57
Damian Dunn
It's banked with a mob. My offering for you.
51:04
Peter Dunn
All right, that was a Godfather reference. Okay, in three, two, one. Back on the Pizza Planner show. This week's biggest waste of money of the week. Right here on the Pizza Planner show is dame. Do you like how I butchered? Coming back into the fourth segment, I usually just start with this week's biggest waste of money of the week, and I kanye West Grammy worn Nike Air Yeezy prototype sneakers. Before the official release of the Air Yeezy in 2009, kanye west debuted his collaboration with Nike at the 50th Annual Grammy Awards. The rapper had just released his album Graduation and was up for eight nominations. Yay unveiled the sneakers during his performance of Stronger with Daft Punk and the rest is Sneaker History. Designed with Mark Smith, the size twelve prototypes featured a black leather upper with a tonal swoosh on the side, a Velcro lace strap, and bright pink laces pardon me, bright pink lace locks donning the signature Y medallion.
52:14
Peter Dunn
Inside, there's a sample marking and size tag that reads 2007-1211, referencing the date they were made. December 11, 2007. The Nike Air Yeezy prototype will arrive in a wooden box made specifically for the sneakers for Dorn Becker auction. Okay, Dame, how much for the only pair of Air Yeezy prototype sneakers from 2007?
52:47
Damian Dunn
Used sneakers, I might add, by Yay himself.
52:51
Peter Dunn
And by the way, Kristen's not here to have a terrible guess, but if we're being honest, she guessed exactly right last week, which we did not spend enough time talking about.
53:01
Damian Dunn
First of all, let me just say that these look like bad imitation Jordans that also ate some really old seafood. It's not an attractive sneaker in my.
53:12
Peter Dunn
That is the most accurate description of the shoe that I can possibly imagine. That is exactly right. The Jordans, the old black Jordans with the toggle on them, but they're sort of puffy and so they look like they ate bad seafood. Dame, that's unbelievable. That's why you get you the big bucks here.
53:31
Damian Dunn
There we are. All right, my guess, we're guessing auction estimate is that what we're buy now.
53:36
Peter Dunn
It says, I don't know how, but. Okay, hold on a second. The starting bid was $65,000. Okay, right now there are 19 bids and it's $180,106. That's just asinine dame, what's in the news this week?
54:08
Damian Dunn
Goldman Sachs is preparing to offer wealthy clients more access to a unique investment the chance to own a piece of a private sports team. The bank is creating a, quote, sports franchise unit within its investment banking division that will combine Sports, M and A with sports financing. A top goal is to work with asset and wealth management to pitch wealthy clients on investing in teams, stadiums, and other flashy deals. Goldman declined to say which teams its clients might be able to invest in. The bank has worked on deals across the US. And internationally, including sales of Chelsea football club Formula One, and a minority stake in the Tennessee Titans football team. Goldman's offering will involve pitching clients on the chance to own a slice of a team or in some cases, buy an entire team. Goldman's clients can also invest in both equity and debt deals.
55:00
Damian Dunn
Institutional clients, including hedge funds, sovereign wealth funds, and private equity firms can also.
55:06
Peter Dunn
Invest before we comment too much, can I just give the general professional reminder that we have multiple sports organizations clients here at your moneyline?
55:19
Damian Dunn
Yes.
55:19
Peter Dunn
Okay. I'm saying that to myself as well as a reminder of what not to possibly say. I think it's genius, frankly. I mean, let's say someone wants to get liquid a major owner, and they're like, all right, well, buy 100 million, give me $100 million and put it in your little fund there golden sachs. It's genius.
55:38
Damian Dunn
Yeah. And I aren't going to have any issues selling that. If they can get their claws into either sections or entire teams, they will absolutely find investors to chew that up. What would the fees be on that, Pete?
55:54
Peter Dunn
Two in 20. It's going to be like hedge fund fees. I would say that this does seem culturally more popular than it used to be, even. Dude, perfect has become connected with English premier league football. Like burnley, they become minority owners along with JJ. Watt and his wife, who's a professional soccer player. Know tom brady has ownership stakes and LeBron james has ownership stakes in is a. And obviously Ryan reynolds and rob McElhenney bought REXHAM FC. So it is a thing. And I think it's because of events like rexam and JJ. Watt becoming a minority owner of burnley. I think that's why this trend will continue.
56:43
Damian Dunn
Yeah. Would you ever do mean let's take the ultra wealthy section out of it. But if you could buy a minority piece, a very minority piece of a team just to say you have a.
56:54
Peter Dunn
Slice of the pie, not only because it's fun to say you have a slice of the pie, but I think, too, we have not seen a dip in the valuation of sports franchises quite yet. And with a lot of money from the middle east flowing into sports teams right now, it just seems like an amazing investment. That is not investment advice. Thank you, Dane. What else is in the news?
57:15
Damian Dunn
Federal tax cuts are here to stay and so are exploding budget deficits. President Biden and the GOP are gearing up for an election year battle over extending the 2017 law that lowered taxes for individuals and businesses. Ignore the noise. The republicans promised to continue all tax provisions scheduled to expire after 2025, while biden has proposed extending them for almost all households. He wants a sharp tax increase on roughly the top 2% of US. Income earners, but it's doubtful that he could achieve that even if democrats control both houses and congress. The two parties tacitly agree that income taxes on the vast majority of Americans can never go up, which means a permanent budget imbalance that both bemoan but don't seem eager to change.
57:59
Peter Dunn
So you had tacitly and bemoan in that copy?
58:02
Damian Dunn
I did. And I almost read one of those sentences perfectly, but I missed it.
58:06
Peter Dunn
That's the worst. Isn't that the worst? Yes. I read an article this week that childhood poverty has increased again, and it's drawn to the Advanced Child Tax Credit that was around from July 15 of 21 to December 15 of 21, where cash payments were made to individuals. You can call it stimulus, you can call it whatever you want, but the hypothesis here is that those six months went a long way in addressing childhood poverty and hunger. And then when went back to the old system of not having those Advanced Child Tax Credit, that childhood hunger and poverty were on the rise again. Now, as you would hope, Dame, I am in support of the decline of childhood poverty and hunger, but I am somewhat skeptical not cynical, skeptical that those six months of payments, of stimulus payments in 2021 actually significantly led to less childhood poverty.
59:12
Peter Dunn
On paper, yes. But knowing how many people got that money, and none of those people were impoverished, I struggle to look at correlation versus causation.
59:24
Damian Dunn
Yeah, I would love to see the data used and collected to draw that conclusion. And what I didn't see, I saw something very similar to the piece that you're talking about. Did they say it has surpassed what the poverty rate was before this stimulus, or has it just come back to equilibrium?
59:41
Peter Dunn
I don't remember. Now you're asking me to remember things, and that's where the show usually goes off the rails.
59:46
Damian Dunn
I should have known better.
59:47
Peter Dunn
Yes. What else? Final story.
59:49
Damian Dunn
The Consumer Price Index, a measure of goods and services and prices, rose 0.6% in August from the month prior, the fastest pace in more than a year. More than half of that was due to higher gasoline prices. So called core prices, which strip out volatile food and energy, rose by 0.3% last month after even lower readings in June and July. The August increase reflected higher costs for items such as airfare and vehicle insurance. The upshot? The Fed would likely hold interest rates steady at their meeting next week. And US socks stocks sorry, not socks. Maybe socks. Edged higher after the no Surprises inflation report.
01:00:24
Peter Dunn
Do you really think they're going to hold interest rates steady next week?
01:00:26
Damian Dunn
They might.
01:00:28
Peter Dunn
You want to do a little gentleman's bet? Sure. When's the meeting? Do you know? Will we be together in person? When that's going on?
01:00:35
Damian Dunn
I want to say either a Tuesday or Thursday. I can't remember which.
01:00:39
Peter Dunn
Okay, gentlemen's bet for lunch. I say they will increase rates again, and you say they will not.
01:00:44
Damian Dunn
I'll say this the same, sending you.
01:00:46
Peter Dunn
Good vibes, because good vibes are all that's in the budget. Thanks for listening to Pete the Planner show. I'm Pete the planner. Okay. Look at us, dame. I said this show would last 54 minutes today, and we're at 52 and change right now.
01:01:03
Damian Dunn
Are you going to do a little tap dance to get us up to your prediction.
01:01:07
Peter Dunn
Yeah, clearly we've met. I left up the bomb graphic during the rest of that segment, which is annoying. All right.
01:01:17
Damian Dunn
Nobody wants to look at me. They were just looking at my description of the shoes.
01:01:20
Peter Dunn
Dame, are you excited for dinner next Monday night?
01:01:23
Damian Dunn
I am. I need to go rescout the menu. I only took a quick glance at it, though.
01:01:30
Peter Dunn
We've been there together, have we not?
01:01:31
Damian Dunn
Yeah, I think it was a year and a half ago, maybe.
01:01:36
Peter Dunn
Yeah. Okay, great. Well, were going to do it again. You know what? I think? I think we're done here. I think we're done here. I'm going to go pay my mortgage and then be just a cheer dad this weekend. Because that's the world I found. I went from being a soccer dad to cheer dad with just one tryout. Just like that? Just like that.
01:01:56
Damian Dunn
Happy for you.
01:01:58
Peter Dunn
Really?
01:01:59
Damian Dunn
Yeah. Better you than me.
01:02:02
Peter Dunn
All right, everybody stay getting money. Bye.
