Peter Dunn
After two days of having a constant headache, I am back to sea level and back to the viscosity of my blood that I desire. Hello, everyone. It's the Pete the planner show. I'm Pete the planner. Hello, Dame.
00:16
Damian Dunn
Hello, Pete.
00:18
Peter Dunn
Good to be with you. Kristen's not here this week, and so she likes the wide shot. She likes when we pull the camera back. That's her preference. She's not here, so we're going tight shot. If you're watching the live stream, you're getting an eye full of bold.
00:32
Damian Dunn
Man I immediately had to push my computer back to try and get a little distance between my camera and my face because it was overwhelming.
00:39
Peter Dunn
Good morning, Big Rick. Swink. Good to be with you, Dame. I was in Salt Lake City this past week. Almost wasn't. Almost was in the bottom of the Salt Lake, I think. So there was a massive storm over the Salt Lake City airport on Tuesday night. So we circled for 45 minutes or whatever they call that, in a holding pattern. And went around four or five times and the pilot came on and said, look, this is oh, there's pilot Jeremy. Jeremy, you're going to have to help us out on this one. The pilot came on and said, we're going to go on our last path around on this holding pattern or we're going to have to divert to Idaho and go refuel because if we don't, we will run out of fuel. And he said that and so everyone's like, what the heck? Maybe you shared a little too much.
01:28
Peter Dunn
And then he was like, oh, right. As they turn to go get more fuel. Then we landed. And I then had altitude sickness for two days because I'm a pasty Midwesterner that can't handle altitude.
01:42
Damian Dunn
Did they bring you down a little faster than you feel like they normally would? Because they saw a.
01:49
Peter Dunn
Very it was a weird thing, but Jerry says that's true. He had to deal with it. He had to fly around it from Austin to Seattle. Dame, how are you doing?
02:01
Damian Dunn
I'm all right. I do want to point out Caitlin made it in today even though her sister's not on. Maybe that's why she's here today. Nobody knows. We're not going to guess, but I had lunch yesterday with someone who I wasn't aware was a listener of the show.
02:16
Peter Dunn
Whoa.
02:19
Damian Dunn
They brought me a gift.
02:20
Peter Dunn
Wait, you got a gift from a listener of the show who you didn't know was a listener of the show?
02:25
Damian Dunn
Yeah. And do you know how I know? They listened fairly recently.
02:29
Peter Dunn
How? Well, I can't see. Hold it up. Irish Spring soap. Okay, can we do this? Can you pull it out of the box and then carve a little piece out like they do in the commercial? I know you have a knife on you.
02:45
Damian Dunn
I don't know.
02:50
Peter Dunn
Hold on. Can you use your flashlight to shine the soap?
02:54
Damian Dunn
I don't have one of those in my pocket either.
02:56
Peter Dunn
What are you going to do in a dark stabby situation?
03:00
Damian Dunn
I could use a little key that I had in my desk.
03:03
Peter Dunn
I tried to like, oh, man. Jameson and I are on the same page. Last week, Damien, you missed it. I broadcast from home from my courtyard, which I think you picked up on. You were watching from just I wanted.
03:18
Damian Dunn
To make sure everything was under control.
03:20
Peter Dunn
Big Rick Swink brings up an interesting point. Dame, are you wearing pants right now? Because those pockets are usually filled with illumination and stabs.
03:27
Damian Dunn
I will not stand up to confirm or deny.
03:30
Peter Dunn
Do you feel like your Krav MAGA is at like a heightened level without a weapon on you?
03:36
Damian Dunn
It has to be.
03:37
Peter Dunn
Has to is. This is a phenomenal start to the show. I love it. Andy asked a little bit earlier. There was a massive bumblebee that tried to kill me at the end of last week's podcast Livestream. And I did survive it and it was very large. Thanks for asking, Andy.
03:58
Damian Dunn
Was it a carpenter bee?
04:00
Peter Dunn
Carpenter bee? My boss is a Jewish carpenter. Isn't that like the Jesus bumper sticker?
04:07
Damian Dunn
Exactly, right, yeah.
04:08
Peter Dunn
Was Jesus a carpenter, too, or just Joseph? Was Jesus doing? Woodwork. Do you I don't because that's the thing I feel like was Jesus Christ a carpenter? This is a very fair question.
04:25
Damian Dunn
I think it's assumed that he did some woodworking, but I don't know if it's ever confirmed in any of the gospels.
04:32
Peter Dunn
Man. I wonder if he did like farmers markets and did like wood made snowmen.
04:43
Damian Dunn
Those little tricks where there's like that little ball inside of the single piece of wood.
04:50
Peter Dunn
He'd call him christ puzzles. That was his name of his stand where he'd like, make the no move along.
04:58
Damian Dunn
Yeah.
05:04
Peter Dunn
He had a wood turning YouTube channel. That's Jameson's joke.
05:10
Damian Dunn
Like and subscribe. Like and subscribe.
05:13
Peter Dunn
Okay, this is a good probably was a carpenter b. Oh, wait, Rick's, I thought you were back to where the b was a carpenter. Okay, here we go.
05:21
Damian Dunn
See what somebody else agreed with the carpenter. It was huge as carpenter b. Like he says, find the hole.
05:30
Peter Dunn
Okay, same. This week on the show, we've got someone who wants to borrow from their 401K for maybe a good reason. I don't know. We can debate that. It's car related. Number two, we are going to talk about the intersection of a lifestyle that you can afford and that you want.
05:49
Damian Dunn
Is that what the life you can afford and the life you think you.
05:53
Peter Dunn
Deserve and so much more. All right, so let's start the show. I got some things sorry. Jeremiah, are you ready?
06:02
Damian Dunn
Yeah.
06:04
Peter Dunn
Oh, this is episode 499.
06:06
Damian Dunn
Yes.
06:08
Peter Dunn
Jeremy asked if I had a Miguel before the show and Dame, we had just talked about that. Did I did not have a Miguel. I had two cups of strong coffee and I'm scared of the Miguels now. I don't know why.
06:21
Damian Dunn
It's just Pete's natural excitement of getting to talk to me.
06:23
Peter Dunn
Dame, you have a young boy that lives in your right occasionally. Yeah. Has the prime sports drink phenomenon hit Indiana? Yeah.
06:35
Damian Dunn
Yeah. We've got prime powder that we can add to not just the pre made bottled drinks, but we've got the powder that we can add to whatever vessel we want.
06:46
Peter Dunn
My young doppelganger and all of his friends are obsessed with prime sports drink.
06:54
Damian Dunn
I've never tasted it. What's the benefit? Over like gatorade is it just flavors do the same stuff. I don't even know.
07:04
Peter Dunn
It's made partially with coconut water, kind of like body armor is. So it's super hydration.
07:13
Damian Dunn
I'm going to really show my country bumpkin here. What's the difference between coconut water and coconut milk?
07:20
Peter Dunn
Coconut water is hydrating. It's like the thinner.
07:26
Damian Dunn
Looks like water.
07:27
Peter Dunn
And coconut milk is, the thicker a lot of fat in it.
07:32
Damian Dunn
Who knew coconuts had multiple fluids?
07:34
Peter Dunn
Yeah. Two sets of utters inside those coconuts. Yeah. Let's move on. Okay. In 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@peteeplanner.com that's, ask Pete@peteeplanner.com, and here's what will happen. We'll answer your question on the air. That's what we do occasionally is you will email us, we will read it aloud and we will answer it. By we, I mean today. Damien Dunn, vice president of advice at your moneyline. Hello, Dave.
08:08
Damian Dunn
Good day, Pete.
08:10
Peter Dunn
Kristen is on sabbatical like a one day sabbatical.
08:13
Damian Dunn
One day sabbatical.
08:15
Peter Dunn
Well, at what point does sabbatical just be like, hey, I'm not going to work for a why? Why are we calling things a sabbatical?
08:21
Damian Dunn
That's a great question. How long does a break from work have to be a sabbatical?
08:25
Peter Dunn
Was your vacation last week a sabbatical?
08:27
Damian Dunn
No, it was a vacation.
08:28
Peter Dunn
Okay, Dame, we did receive a question this week, and it says, dear Dunn, brothers and miscellaneous important things to note is that you and I have no relation that we know of.
08:39
Damian Dunn
I just had somebody else ask me about that very thing recently as well.
08:43
Peter Dunn
I am in desperate need of a car. I'm reading the email now. The problem I have less than ideal credit. Okay. It's pretty bad. I haven't found a lender who can give me a loan of less than 12% yet. I'm thinking about taking a 401K loan because my coworker anytime an email says because my coworker told me it's usually a bad thing because my coworker told me I can just borrow from myself and then pay back myself instead of paying the bank or some other lender. I've heard mention on the show that you're not fans of the 401K loan, but I'm not sure I understand why I would appreciate your discussion on the topic. I don't know who sent this. Kristen put it in the radio anyway. All right, dame. Interesting. So I first read it and I thought, what is a good reason to take a 401K loan?
09:38
Peter Dunn
Like, on what point does it make more sense to do that than anything else? And the reason we generally don't like it is because you're robbing from your future to deal with something in the present. And that math doesn't work very well. There's also some ugly tax ramifications that can occur, but more than anything, it's the old Leonard Skinner. Two steps forward and one step back. There's a one step forward and two steps back.
10:07
Damian Dunn
Give me three steps.
10:09
Peter Dunn
Yeah, toward the door. Anyway. So what do you think? Do you think the person should borrow from the get a lower interest rate to avoid the 12%, or is there a better way to solve this problem?
10:21
Damian Dunn
I'm not 100% convinced that this is the best way to solve the problem. It is a way to solve the problem. It's probably the easiest way in the moment to save the problem, solve the problem. But there are consequences for making this decision. First, for those of you that may not be up to speed on what 401K loans are, you're obviously taking money out of your account that you've saved. You are capped at how much you can take on a 401K loan. 50 grand or have 50% of the balance, whichever is less. So you may not even be able to get all of the money you want to get the vehicle you're looking at, or whatever goal you're trying to fund with this 401K loan.
11:03
Peter Dunn
Can I get a timeout I knew the 50K cap. I don't think I knew or I have forgotten the 50% rule. I didn't know that.
11:11
Damian Dunn
Yeah, 50K or 50%. When people think 401K loans, they may not be aware of some of the restrictions they're going to be put on. The other thing to keep in mind, when you take a 401K loan out, yes, you're paying it back. You're also paying it back with after tax money. You're paying it back with your paycheck, essentially at that point. So you're not only paying it back with money you've already paid taxes on, you're going to pay taxes on that money when you take it out in the future as well. So you're going to get double dipped on those contributions. So even though it's easy to access that money, relatively easy to access that money, there are considerations. Also, if you lose your job, for whatever reason, that loan becomes almost immediately taxable. If you don't pay it back, it becomes a loan or sorry, a distribution, premature distribution, then it becomes taxable.
12:09
Damian Dunn
So there's all sorts of possibilities. So if you are dipping into your 401 to fund whatever issue you're trying to solve, and you're doing it from a point of financial instability, you could be setting yourself up for big issues down the road. So that's one of the big reasons that we are generally not in favor of 401K loans.
12:31
Peter Dunn
One of the most common reasons people take out a 401K loan is to pay for college tuition. And without sounding harsh, that's a really bad idea. That is not something that we generally think is a good idea. And it's because there are other means to borrow for a college education, no matter the interest rates. There is not another means to borrow for retirement stability. And so just don't do it. I just think it's a bad idea. Now. Dame I think one piece of information that is implied in this email is that the emailer has enough margin in their budget to cover a car payment of some amount. And I don't want to gloss over that because I think that's interesting. They didn't really define what it was. Was it $200? Was it $500? Was it I don't know. But I'm going to figure it out because I think this significantly plays into this, because if they're going to borrow, making things up now, $20,000 for a car out of their 401, but they've only allocated $230 a month to pay the thing back, that's a bad situation.
13:50
Peter Dunn
That's a really bad situation.
13:52
Damian Dunn
Yeah. There has to be a lot of financial confidence if you're going to go this route to make sure that you're not going to cause yourself multiple issues going forward. Another thing that occurred to me while you were talking there, I wonder if this might be a case where somebody is trying to outsmart the room because we hear the bank on yourself, the ads or things like that, where, well, gosh, I borrow from my 401K, I'm going to pay myself back with interest. Why in the world wouldn't I borrow from myself and get my car and put a little bit more money into my four hundred and one K at the same time? Doesn't that make sense? And you're right, you are paying yourself back with interest. I can't argue that. But in many plans, you're not allowed to make contributions to your 401K, not that you may be even able to afford to make contributions to your 401K while you're repaying that loan.
14:46
Damian Dunn
So it's a little bit more complex of a decision than I think most people give it when they're making the decision to go that far.
14:55
Peter Dunn
All right, so you and I have said our piece. What should this person do?
15:02
Damian Dunn
I'm going to make the assumption that it's really necessary to get the I don't think they said they had to take the loan to get a new car, or that they had to get a new car, but I'm going to assume that they have to get a new car at this point. If this is the only route, take a very small loan and get the least expensive, reliable transportation they can that works. I would not go buy what you would normally buy if you had to or could if you were in a better financial spot. But if you need something to just get you by, get by with as little as possible if you have to take it out of the 401K loan. Otherwise I would go to work on your credit score. If you can manage to delay that purchase 6812 months, go to work on your credit score and put yourself in a better position.
15:57
Damian Dunn
Continue to make that loan payment you would have otherwise paid back to yourself. Into a savings account and have a little bit of a down payment along with your trade in or your car to get the next vehicle.
16:12
Peter Dunn
Yeah, you can't look at a car loan that you would get under normal circumstances and compare it from an apples to apples perspective with a 401K loan that you would use to buy a car. So I'm with you, dude. Eight, $9,000 car. Like, if something that's going to get you there, it's not going to be pretty. But what's worse is if someone's like, well, I was going to buy a $25,000 car with a car loan, but 12% is too much. So now I'm going to buy a $25,000 car with a Ford Klein. That's where it goes off the rails immediately. You have to cut it back. You know what else? We're going to cut back the last few seconds of this segment as we.
16:56
Damian Dunn
Head into a break.
16:57
Peter Dunn
Coming up after the break, how do you get your head around a life you want versus a life you can afford? That's next on the Pete the Planner show. I'm Pete the planner. It actually plays really nice into that segment. Dame. I was in Salt Lake City, as you know, this week I heard something, just a phrase and then a concept that I don't think I've ever heard my life, it was talked about so not casually, so freely that it's just a thing out there. And I don't believe in a thing here, so I want to talk about it because maybe what do they say? What, do you live in a what? Vacuum?
17:40
Damian Dunn
Bubble.
17:40
Peter Dunn
Bubble. Maybe I live in a bubble. Summer sales.
17:46
Damian Dunn
Like retail sales? Summer retail sales? No, summer door to door sales.
17:51
Peter Dunn
It's what high school college kids do. They go around door to door in various industries and sell things door to door. What do you think?
18:03
Damian Dunn
Like cutco knives?
18:06
Peter Dunn
Yes, but like solar panels. But it's door to door sales, and I respectfully, I was just like, hey, that wouldn't really fly. It's so culturally accepted. Do people just answer the door? Because I'm not answering a door unless I see tag alongs. A red box of tag along?
18:28
Damian Dunn
Yeah. That's really interesting. It never would have crossed my mind that would be a common practice, especially for high school age and college age kids.
18:43
Peter Dunn
Summer sales, it's the thing. And I was hearing one example where someone was selling solar panels and the systems are like, 2020, $5,000. This student, college student, I believe, made 40 grand over the summer selling solar panels door to door, and that was an average output. People who did the best got 80 to 90,000.
19:07
Damian Dunn
That'll really charge up your savings account.
19:12
Peter Dunn
Yeah, I liked that. Anyway, summer sales, not really a thing here in the Midwest. I couldn't do it there because the altitude would tire me out so much. I would have to sell, like, Advil in prime so I could stay hydrated.
19:29
Damian Dunn
So I don't know what the average elevation of Salt Lake is, but in Colorado, there were stores that sold cans of oxygen, and I immediately thought of the movie Spaceballs.
19:44
Peter Dunn
Great movie.
19:46
Damian Dunn
Yeah, I almost bought one just to walk around and take a hit of oxygen every once in a while just because.
19:54
Peter Dunn
All right, Dame, let's do the segment. Do you want to set up the can? I can get us in, but if I can get to you or do you want me to just mess with it myself and see where we end up?
20:05
Damian Dunn
Just mess with it yourself. And it's the excursion of Pete.
20:09
Peter Dunn
Yeah, sometimes good. Sometimes actually, the first one wasn't that good. All right, in three, two, one. Back on the Pete the Planner show. You ever wonder how you can get your head around this idea that you want to live a particular lifestyle? It's something you plan for, you act on it. But then there's the idea of how that lines up against what you can actually afford. It's the lifestyle you desire versus the lifestyle that is practical. And what's the give and take? How long can you live a lifestyle you can afford out of? I can do what I want until it becomes problematic, and then you have to drop that lifestyle. Damon, did I properly set that?
20:59
Damian Dunn
I mean, I hadn't considered the possibility that somebody dives headlong into the lifestyle that they think they deserve only to have to try and make that decision. They're going to have to dial it back in the future. I think that would be enormously more difficult than sitting around thinking, I deserve X, Y or Z. How in the world do I get there? Because this is all I can afford. I hadn't gone that far. And I think that's a much different challenge than kind of what we're talking about, somebody who is aspiring to that next level, in this case. We've all likely, most of us, have financial aspirations, goals, whether it's a vacation home or our first home, or a better car, or sending our kids to college or whatever that is. But sometimes we're all limited. We're all mostly all limited financially on trying to achieve all of those different goals.
21:59
Damian Dunn
And it's a challenge mentally and emotionally to be able to reconcile your current state with where you want to go. And so what I thought would beneficial today is you and I just to kick around. How do we deal with that? How do we make sure that we're living within our means but still not losing sight of those aspirations and doing what we can to get there and maybe getting a taste of it every once in a while? Does that make sense, Pete?
22:25
Peter Dunn
Well, I'll tell you this. Last couple of months, I've personally been a little guilty of, well, I want to I'll buy something. Nothing crazy. I mean, $100 or less. I mean, it's all relative, which is not something I typically do. I don't go out, buy random stuff. Last couple of months, dude, I got to be honest. I've done it a couple of times, and I'm just like, well, I wanted it. I needed it, and it's not consistent. Now I save money. I'm saying best money. I'm funding my goals, but that's just not consistent. But to me, it's that ping of I want this, and I don't necessarily care that it probably is not a good idea. That's on the spectrum, right?
23:11
Damian Dunn
Yeah, I think so. I find myself doing that every once in a while. It seems like it goes in streaks, if I'm being honest. It's not something I find myself doing all the time. And I don't want to say it's easy for me to shut that off. When the reality of situations finally set in, I'm like, hey, you got to stop doing that. But once I notice that I'm making some we'll call them abnormal decisions that I would normally be in, I don't necessarily feel guilty about what I've done because I'm not harming my family's financial future for any of that. But it's not necessarily a trend that I want to settle into, because if it's a random $100 purchase today, either maybe they become more frequent or that dollar figure starts to creep up, and then before you know it, we're talking about genuine lifestyle creep that we come back to every once in a while on the show.
24:09
Damian Dunn
So it's a pattern to be aware of. I think the one off stuff is, okay, assuming it's manageable and affordable for your lifestyle, but like I said, if we can get somebody to prioritize what they want in the future and then examine is their spending lining up with that, basically? Are you currently obviously covering all the day to day living expenses and whatnot, but whatever goals you've got outside of that, are you able to fund your future goals? Whether it's setting money aside or maybe getting a comparable alternative is something that's maybe a little less expensive. Say if you wanted to go spend a week at the beach in Florida or two weeks at the beach, maybe you only go spend a week. Or maybe you go into Michigan and spend a week on the Great Lakes where it might be a little more affordable.
25:06
Damian Dunn
I have no idea if it's more affordable to go to Michigan to spend a week on the beach there or not. I'm just saying it. But yeah, I think there are options for you to try and make sure you're not setting yourself up to make it harder.
25:17
Peter Dunn
How much do you think when you feel susceptible to random spend? Like, I feel like I have been the last couple of months, including this week, just, again, trying to be as honest I can on the show.
25:27
Damian Dunn
Sure.
25:28
Peter Dunn
How much of it is stress related for you? How much of it is works maybe a little harder or this isn't going well and I need to feel a sense of accomplishment. How for you is that?
25:44
Damian Dunn
Yeah, I think it's very frequently stress related to you get that natural rush. It's called retail therapy for a reason. It quickly fades, and that's usually when the regret sets in. But if I had to go back and analyze my patterns, it's mostly stress induced. Whether it's work, whether it's family, whether it's something that's completely out of my control or a decision I made, it's usually stress induced.
26:19
Peter Dunn
Yeah, interesting. I'm the same way. I think sometimes when I feel like I'm working very hard and I feel like I'm stretched thin and my time is a resource I don't feel like I have a good control over because I'm just burning it with hard work, not just sitting around watching TV. I feel like the other resource money, the other economic resource, goes to reward the time that I spent. That's the best. I can break down my own brain there, but that's how I feel.
26:53
Damian Dunn
Here's a question. Do you think when you start to fall into these periods of your life or these episodes, do you spend more on convenience or material stuff?
27:05
Peter Dunn
Oh, that's a great question. Material stuff, I think, because again, I bought like, a random shirt the other day. It was a nice shirt. I probably could have found a less expensive shirt. I don't need a shirt. I mean, I should always wear a shirt. If you have a body like this, you got to cover it.
27:27
Damian Dunn
I understand.
27:27
Peter Dunn
Yeah. I'm not mowing the grass shirtless for the neighbor ladies or fellas. No, but yeah, we're not talking luxury, but we're talking material. But for me, again, everyone's different and we're trying not to judge. We're just trying to be honest with ourselves. I don't think and you feel free to call me out, I don't think I make purchases to outwardly show something to someone else as, look what I have, it's my own personal enjoyment. Feel free to call no way on that if you like.
28:01
Damian Dunn
I don't think so. From what I know of you and how you live your life outside of work, that doesn't seem like something that I would have assumed in one way, shape or another. So I believe that. It doesn't surprise me that it's material stuff because I think that's probably what it is for me, too. And as we know we are related. So that makes sense. Yeah. Convenience. Seems like it would almost make more sense, though, if we're stressed and we're trying to figure out let's have somebody else take care of X, Y, or Z or I'm not making dinner tonight or whatever it is, but I think it's usually material stuff. I don't know. It's something tangible that maybe helps with the stress.
28:47
Peter Dunn
I don't know.
28:48
Damian Dunn
That's interesting.
28:49
Peter Dunn
Yeah. Mrs. Planner and I went out to dinner on Monday night, which is something we would never typically do. We went out a couple of weeks ago, one because it's a summer and we can because the kids are home or whatever, but I've been traveling so much, and went to a decent restaurant where spent probably a little bit more than we would spend on a Monday night dinner. And it wasn't convenience, but it really was that stress relief of, like, I feel like I've been burning the candle from both ends. And since I've been using time, I'm going to spend money to feel better about this time. I don't know, dame. That's where I'm at with this. Let's spend some time right now paying for the show. We have commercials coming up, and then here's what we'll do. After the break, maybe we'll explore this more.
29:30
Peter Dunn
Maybe we'll talk about one of our other glorious topics of the day. Who knows? We'll talk about it during the commercials. I'm Pete the planner. Come back and find out soon. Are we going to keep going on that? I mean, I could keep going on that, but I don't know. We just like it's spinning in circles. It's interesting to me. I think I would be great if.
29:49
Damian Dunn
Kristen was here because it turned into a therapy session and she'd be able to tell us exactly why we're doing what we're doing, but she's not. If somebody in the comments wants to throw a suggestion in there, please, by all means. For the next segment. Happy to take suggestions.
30:09
Peter Dunn
Do you want to do the financial advisor mean that's one of those that I think you and I could tackle together.
30:14
Damian Dunn
We can.
30:15
Peter Dunn
I wonder if Kristen what Kristen's perspective adds I mean, what her perspective adds to it versus because she's been a financial problem solver, but she has not specifically been a financial advisor. So I wonder if that approach I'm.
30:31
Damian Dunn
Pretty sure she has.
30:32
Peter Dunn
Has she?
30:33
Damian Dunn
For not a very long period of time, but I'm pretty sure she has.
30:36
Peter Dunn
Okay. Look at you. I don't know. That's all right.
30:40
Damian Dunn
Like I said, it wasn't a long time.
30:41
Peter Dunn
Let's save that one for her. Save that one for her.
30:45
Damian Dunn
So now we're back to square one.
30:51
Peter Dunn
All right, let's do some expanded news. I got an economics thing. All right. So we can do a little bull market. We can do a little this engagement ring thing I have.
31:02
Damian Dunn
Okay.
31:02
Peter Dunn
All right. You good with that?
31:04
Damian Dunn
Yeah.
31:04
Peter Dunn
All right. We're going to flex some muscles here.
31:07
Damian Dunn
Make it work.
31:09
Peter Dunn
Yeah, that's what I do. All right, ready? In three, two, one. Back on the Pizza Planner show. Dame, I was reading an article this week, and it noted that the engagement ring industry is reeling because people in 2020 weren't out forming relationships, which would then later lead to getting engaged. So some of the volatility to this is due to the pandemic. We believe weddings were also canceled in droves during the lockdowns. They did bounce back in late 2021 and throughout 2022. But wedding related activity does appear to show some early signs of life here in 2023. Yet the jewelry industry is reeling because one of the primary reasons people buy jewelry is to symbolize the beginning of a relationship, and those things weren't happening. Did you take into account that new relationships were not anew? And by the way, you don't really buy jewelry for divorces?
32:14
Peter Dunn
No. What do you think? Is this shocking?
32:18
Damian Dunn
I hadn't really realized it until you started reading this piece or talking through this piece, but I think I'm in that period of life where I don't go to weddings right now. You do when you're young and getting married and all your friends are doing the same thing, and then you kind of hit that lull, and then eventually you get to a point where all your friends kids are getting married. I just realized that I'm in that sweet spot where I don't have to go to twelve weddings a year here's.
32:49
Peter Dunn
The other elements of this recent consumer confidence has fallen. There's been lower tax refunds, economic concerns triggered by the regional bank failures and continued inflation led to a weakening trend in jewelry sales. On top of that, prices have climbed about 15% cumulatively over the past three years, as measured by the Personal Consumption Expenditures Index. Weird time to own a jewelry store. You had to think that, though. Think about the pandemic and who was struggling, who was fine. Were a bunch of people out buying diamonds while were all just wiping down our groceries?
33:25
Damian Dunn
I certainly wasn't. I did notice when Mrs. Advice and I were walking around window shopping on vacation. Jewelry is ridiculously expensive right now, and maybe it's just the old guy and me coming to the front, but I can't imagine trying to buy a suitable engagement ring right now. If I was looking at wifing up right now, it would be crazy.
33:54
Peter Dunn
A soccer game last weekend, and our goalkeeper played so well, I told him that he was going to be the best man at my next wedding, and my wife didn't think that was funny. Dame, I don't know if you also saw this week that we have found our way into a bull market. That's right. For those that don't know, a bull market is when the market goes on a good run. The bear market is when the market pulls back in a bad way. Dame the market is running rampant. The S and P 500 so far this year is up twelve point 55% as of June 9, around 10:30 a.m. You and I aren't exactly shocked by this. This is in line with some of the predictions we've made about the market this year. But I guess I didn't expect come June that we'd be in a bull market.
34:45
Damian Dunn
If you go all the way back to the low in October, it's up 20% from its low. So that's obviously a greater period of time. But it feels like it's been a quiet recovery for the most part into that bull market. And I think it just goes to illustrate that you can anticipate turns in the market every once in a while. Every once in a while you're completely wrong. But if you're not in the market, you're not going to participate in the market, participate in these returns. And if you're sitting on the sidelines because you got freaked out when things were going down again, sometimes that's very understandable. You're going to miss the upside, and you have very quietly gotten 20% returns on your money since last October. That's pretty amazing stuff.
35:32
Peter Dunn
That's the real story here. This is not about, hey, the market's doing great. This story is about people flipping out in October, looking for alternative ways to find yield or growth, even if it was because CDs are paying 5% and now they have locked in a loss. If you have made portfolio moves in, looks like the 11 October may have been the low point, the twelveTH of October was the low point, and your advisor said, hey, let's move into some fixed stuff, and you went for it. You have missed out on a 20% return, which is a big return.
36:14
Damian Dunn
And you and I both know that advisors are sometimes susceptible to panic and trying to make the right moves. Hopefully they're always susceptible trying to make the right moves for their clients. But every once in a while they get caught up, especially if they've experienced everything from the late 90s up until now and seeing the peaks and the valleys and how they get bigger and sometimes more frequent, and thinking that, you know what, we're going to get out, we're going to catch it on the bounce. It just doesn't always happen that way, and it's why pete I'm not going to put words in your mouth, but I believe you and I are very staunch advocates of just stay in the market, make sure you are allocated and diversified, and that your risk tolerance is in check and your investments reflect that. But the longer you can stay in it, the better and smoother your experience is going to be in the long run.
37:10
Damian Dunn
Otherwise, you and I, I'm sure you saw the same reports when you were doing this full time. The average investors returns versus the market returns and the average investors returns are significantly lower than the annual S and P 500 return because the average investor makes some crazy moves and they decide to jump out and then jump back in. And we're talking if the SP returns, if the market returns 10%, the average investor is getting three. Because you can't put it together yourself because you are tied to emotions.
37:47
Peter Dunn
Let me make the argument for people that disagree with our way of thinking. Okay, sure. I'll start with what I believe to be our shared way of thinking. The market's in a tough spot. Let's find some return with opposite movement. Like let's sell short. Let's look for opportunity here and there. That is the value prop for some investment advisors. They say, look, you can make money in down markets. What you and I when were in that business were more likely to say is, yeah, you could potentially make more money in down markets. We don't think it's worth the risk of the upside. So we're just going to calm down, take a breath, have some matcha. I don't know where that came from and just hold. Now, people who feel differently than we are may clip this radio segment and play it for their clients to say, see these dummies?
38:48
Peter Dunn
They're doing it the wrong way. Which is fine. I just think it's just a different philosophy.
38:54
Damian Dunn
In my opinion. You're always playing catch up when you're taking that strategy. You are behind. You don't decide to make money in a down market until the market's already down and you've already lost. And then you are going to miss out on the rebound because you're still going to think it's a down market. The other way. You're not going to recognize the inflection point and the market starts to go back up. It's going to take you a while to recognize that. So you're going to start missing on these windows of the tops and the bottoms and it's going to end up if you're making money on the down, it's probably going to end up costing you money on either side of it and it's likely going to come out in the wash. I don't have any numbers to support that, but no.
39:36
Peter Dunn
Why would we do that reasonably?
39:38
Damian Dunn
That makes sense.
39:39
Peter Dunn
You know that I'm a massive fan of financial advisors and investment advisors. We support them. People should have them. Is it also possible, without sounding too cynical, that the reason that an advisor might go, that more active path is to show value? To show value, whereas what you and I are saying as advisors is the value we're showing is just let the market do its thing. And our value is suggesting you do that versus having to outsmart the market, which I think then increases your risk.
40:06
Damian Dunn
I sometimes think the biggest value an advisor brings is to be a roadblock between you and making changes in your portfolio. Not necessarily the advice or the investments they pick, but just being an impediment to say, hey, this is what you're trying to do. This is how you agreed to do it. We're still on track. Take a deep breath. Have that matcha that Pete likes so much, and it's going to be okay.
40:33
Peter Dunn
Yeah. If you're going to your advisor consistently with fancy ideas, they should probably slap them down. If your advisor is constantly coming to you with fancy ideas, then you have to be the one to slap them down. Dame. Coming up after the break, biggest waste of money of the week and the news right here on the Planner show. I'm Pete the planner. Hey. We made chicken salad.
40:58
Damian Dunn
Yeah, that worked out well.
41:02
Peter Dunn
Okay. When I travel, I do not wear my wedding band, because when I travel, my fingers swell like kill bosses, and it turns out there's no impact on my life. No one is ever coming on to me. People are like, hey, Uncle Fester, no one's into me. So what is this really?
41:31
Damian Dunn
A reminder to yourself? You go with one of those silicone bands when you travel, have a little.
41:38
Peter Dunn
Bit of flex to, pilot. Jeremy suggests that pilots don't wear a wedding band when they travel. Wow. The pilot landing in Detroit yesterday from Salt Lake City slapped it down aggressive. Oh, my gosh. Are there tires on this minute? Whatever. I've been on a bunch, but, yeah.
42:08
Damian Dunn
We flew out of Detroit for our vacation. Had actually a really good experience flying out of Detroit. And I'll go ahead and name drop Delta. Delta Airlines. It was fantastic.
42:18
Peter Dunn
Always. Okay. I would do commercials for Delta, but I don't think they would pay me to do them, but I would now.
42:26
Damian Dunn
I'm envisioning a Delta commercial with Pete walking an aisle, and it'd be interesting.
42:32
Peter Dunn
I love delta. Okay, here we go. I don't have a visual for this week's biggest waste of money of the week, just so you know.
42:40
Damian Dunn
You don't?
42:41
Peter Dunn
No, because it's a news item that I've turned to guess, actually. Hold on. I can get a visual. Hold on. Give me a second here. Because the podcast listeners are like, I hope he gets a visual.
42:54
Damian Dunn
Yeah, they're waiting.
42:56
Peter Dunn
All right. Oh, man, this is going to be weird. Okay, here we go. What is happening? All right, here we go. Oh, what am I doing? Why am I doing this? This is going to feel weird.
43:12
Damian Dunn
I can hardly wait.
43:13
Peter Dunn
Oh, yeah. I'm going to under deliver. Don't you worry. All right, you ready? Three, two, one. This week's biggest waste of money of the week, right here on the Pete the Planner show is the offer that the Saudi Arabia soccer club or a soccer club in Saudi Arabia made to the world's best soccer player, Lionel Messi. As many of you learned this week, there's a soccer player named Messi. And as some of you also learned, he is going to begin to play for InterMiami, the Miami MLS franchise which is a coup in the soccer world. It is a big deal. Dame is not a soccer guy. I am a soccer guy. So I'm actually anxious to see what he thinks of this. But here's why this is the biggest waste of money of the week. Dame, the final offer that a club in Saudi Arabia made to Lionel Messi before he chose MLS Major League Soccer in the United States over the club in Saudi Arabia was.
44:21
Damian Dunn
Waiting for me.
44:22
Peter Dunn
To guess a three year deal. How much was the three year deal.
44:26
Damian Dunn
Worth, you guess, from Saudi Arabia?
44:29
Peter Dunn
Yeah.
44:33
Damian Dunn
I know the top tier soccer players are I was going to say ridiculously. I was going to say fantastically. They're really well paid. So I'm going to go with three years, $200 million.
44:50
Peter Dunn
Okay. Well, for some context, ronaldo recently signed, I believe, a two year, $200 million per year contract. So I think he's getting 400 million. They offered Lionel Messi three years, $1.6 billion.
45:09
Damian Dunn
What?
45:10
Peter Dunn
Yeah. And he said no. Good for him. That's a lot of money, isn't it?
45:21
Damian Dunn
In my neck of the woods, it yeah.
45:24
Peter Dunn
Yeah. Dame, what's in the news? This.
45:32
Damian Dunn
Mean? I have to admit, when I saw that he was going to play for Miami, I did go online and see if he was going to play in any close areas to where I'm at to try and go. And then I saw that tickets went from like twelve dollars to four hundred dollars for most of the games that he's coming to. My son never played an official game of soccer in his life, knows who Messi is, and asked for a jersey.
45:59
Peter Dunn
He has a wonderful left foot. Not your son. I don't know about your son's left foot. I never really looked at it. What's the news, Tim? All right.
46:08
Damian Dunn
Other US. Crypto exchanges are likely to be in the firing line after the securities and Exchange Commission this week sued Coinbase and Finance, two of the world's largest crypto exchanges for allegedly breaching its rules. The SEC on Tuesday alleged that Coinbase traded at least 13 assets that are securities which should have been registered, while on Monday it also accused Finance, the world's largest crypto exchange offering twelve cryptocurrency coins without registering them as securities. Pete, it seems to me that we said a long time ago that these feel a lot more like investments than Currencies, and the SEC agrees.
46:49
Peter Dunn
Well, were right about these speculative investments. Here's the thing. Is this a story, dame, in your opinion? Is this a story about that there isn't a market for cryptocurrencies, or is this a market for the people who have or is this a story about the people who have created a market, are doing so in an illegal right, or what the SEC deems to be an illegal? I don't as much as I'd love to say the opposite, I don't think this invalidates the importance and the place of cryptocurrencies, but I think it does talk about the unregulated nature of why they can create danger for people.
47:33
Damian Dunn
I think the one thing that I think this highlights, and it's a discussion you and I have had, it's an argument that I've brought up to our good friend and co worker Crypto Doug, is that it never felt like crypto has decided what it was going to be. Is it going to be a currency? Is it going to be an investment? What is it? Because that's my biggest issue with it is I don't know what it is. If it's going to be a way to pay for stuff, okay. Then we need to make sure it's being set up and used appropriately. If it's an investment, it needs to be regulated, just like the SEC is claiming that some of these products are. I've never felt comfortable with it from a perspective as I don't know what it to. There's a quote from Gensler, the dude in charge of the SEC.
48:28
Damian Dunn
Let me read it to you. I want to get your reaction to this quote. Look, we don't need more digital currency. We already have digital currency. It's called the US dollar.
48:41
Peter Dunn
That's lame. I'm sorry. Come on. Do you buy that with digital?
48:53
Damian Dunn
He's I'm sure he's arguing it's know, you can pay stuff online, you can use dollars through Venmo, and you can do this and do that. Completely different. But I understand why somebody from the government would be arguing that the US. Dollar is already digital. I get it.
49:10
Peter Dunn
We're going to play a little game called guess his age. Guess his age?
49:14
Damian Dunn
Are you looking it up?
49:15
Peter Dunn
I'm going to look it up. I don't even know his name. But hold on. Don't look.
49:19
Damian Dunn
No. The name is Gary Gensler. G-A-R-Y gensler. G-E-N-S-L-E-R.
49:26
Peter Dunn
So you guess his age and then I'll guess his age because that's out of touch comment, in my opinion. That's a good guess.
49:38
Damian Dunn
You can take the over or under.
49:39
Peter Dunn
I'll go over. I'm going to say 64. All right, let's look. And we're not ageists. No, just feels like a slightly out of touch comment. Here's how I feel about crypto and the crypto marketplaces. A little bit like how I feel about faith and religion. Faith can beautiful. Crypto arguably could beautiful. Religion sort of taints the faith. Could the crypto markets themselves, these exchanges, could they be the thing that actually taints crypto? Is that a reasonable metaphor or analogy or whatever it is?
50:18
Damian Dunn
Maybe. I guess I hadn't really I'd have to put more thought into it, surprisingly, before I weigh in on how I feel. But there could be something there.
50:27
Peter Dunn
I'm so happy that I got Gary Gensler's age within one year. Let's see how many months. Oh, he's going to be 66 in October. It would have been so much closer. What else is in the news this week.
50:41
Damian Dunn
Make sure you put that on your LinkedIn profile. Pete, do you want to talk about something about mortgages? Do you want to talk about trying to bring people back to work?
50:51
Peter Dunn
Bring people back to work.
50:53
Damian Dunn
Business software monolith Salesforce is reportedly so desperate to see its employees back in the office that the company will donate a little less than the price of a McDonald's Big Mac meal in some cities to charity for everyday workers who physically drag themselves back to the office. That's right. Salesforce confirmed with Gizmodo that the company is hosting a global program to incentivize workers to come into the office called, quote, Connect for good fortune. Originally reported Tuesday, based on an internal Slack channel, that each employee who decides to actually come to the office between June twelveTH and June 23 will make Salesforce donate $10 to a local charity. Some staff are still allowed to work from home, depending on the team. And in those special cases when they attend virtual events at Salesforce, they'll still donate $10. Pete, is tempting employees with charity a way to bring them back into the office?
51:49
Peter Dunn
Well, you know how I feel about this topic. Although last week I admitted I worked from home last week, and I was like, man, I did get a lot done. And I also love a good brainstorm. I love hair brained ideas. So you're telling me that the cost to get to the office to have lunch out, the fuel, the parking, everything else, and what I get for that is they're going to give $10 to someone else?
52:19
Damian Dunn
Yeah. By the way, it's a group of charities that you then vote on who gets money. You don't get to pick your own charity.
52:28
Peter Dunn
Man, I do not like to be cynical. I really don't, especially as it relates to charity or tough decisions around work from home. That makes no sense to me. And I like salesforce. God knows we pay him enough money around here. That makes no sense to me.
52:45
Damian Dunn
I don't see this having quite the influence with there. It almost feels more like a guilt trip than anything else.
52:52
Peter Dunn
Well, speaking of guilt trips, hope you have a good week, everybody. Send you good vibes, because good vibes are all that's in the budget. I'm Pete the planner. This is the Pete the Planner show. How was that for episode 499?
53:04
Damian Dunn
It's just setting us up beautifully for episode 500.
53:08
Peter Dunn
All right, everybody, here's what's up. Next week is episode 500 of the podcast, but I'm gone on Friday, so what we're likely maybe going to do is do this on Thursday. We want to all collectively get in on this right now and figure out when we can do it.
53:23
Damian Dunn
Yeah, let's do this.
53:25
Peter Dunn
All right, everyone pull up their calendars. Listeners, pull up your calendars.
53:30
Damian Dunn
Thursday the 15th. That's what we're talking about, right?
53:33
Peter Dunn
Yeah. Can you pull up Kristen's calendar?
53:34
Damian Dunn
Yep, I got it.
53:36
Peter Dunn
Do can you do can chris yes, you can. All right. Can you be so kind to send a calendar?
53:50
Damian Dunn
Won't you send it out anyway? That's fine.
53:52
Peter Dunn
Yeah, send it to me, too, please. All right, so everybody, noon. Noon it is. Wait a second. Kristen says she can wait. What? Be a proxy?
54:07
Damian Dunn
Did she text you?
54:09
Peter Dunn
No, we have someone in the chat that is allegedly speaking for Kristen. You see it? Is that her proxy?
54:18
Damian Dunn
Actually, yeah. Okay, that means that she's watching today.
54:25
Peter Dunn
I better be on our best behavior. Okay, 500th episode next Thursday at noon. Wow. Market.
54:37
Damian Dunn
Book it.
54:37
Peter Dunn
I'm going to have to do something special. And what do we do? Have, like, a crypto expert on no. All right, we're going to do something special. I don't know what it is. Maybe oh, I got an idea. I'll talk to you after the show. Dave oh, hey. Hope everybody has a good yeah. Gary Gensler, 65 years old.
55:02
Damian Dunn
Happy birthday.
55:05
Peter Dunn
All right, everybody stay getting money. Bye.
