00:00
Peter Dunn
You? Have you ever been sitting in a regional airport getting ready to board a small plane? Look over to the person next to you is holding a classic business briefcase in their lap. They put their thumbs on the two latches and pull them apart so that the lid opens up. And inside the briefcase is a Danielle Steele novel and a hard boiled egg I have, because that's what happened to me in Redmond, Oregon this past week. Welcome to the Pete the Planner show, everyone. Hello, Kristen.
00:45
Kristen Ahlenius
Hello. Hello. That's incredible.
00:48
Peter Dunn
It was so and again, just an observation. I shouldn't say it's weird because that seems super rude, but it was unusual. Unusual. Open it up. That click sound on those old briefcases, it opens up Daniel Steele novel, which is like a harlequin, I think, right? It's like a romance. She backside, like those sorts of things. And then a hard boiled egg and the person squeezed the egg, the shell was still on it squeezed it sort of came off in one piece. The trash can was next to us, dropped it in and then just popped the whole egg in their mouth, opened up the book and it was just chewing yolk and reading love.
01:32
Kristen Ahlenius
That's vile.
01:34
Peter Dunn
It was gross. I will also say there were two hard boiled egg incidents on the road this week. At another airport, I think this is in Salt Lake City, a guy ate six hard boiled eggs at the gate. And I know that a hard boiled egg is like a power know, but I was thinking, God, I hope I don't sit next to this gentleman because that could get foul. Right?
02:05
Kristen Ahlenius
That's aggressive. Six eggs.
02:10
Peter Dunn
Six eggs, six hard boiled I'm like, this guy clearly doesn't have a cholesterol issue. Or does he? Kristen, Dame is not here this week. He is on his well, he's on his rewards trip. Dame's been here five years. Here at your moneyline. You're here for five years. We kick you out. No, we send you on a nice little vacation. So Dame is on his rewards trip, I think. I don't know where they went. We'll let him tell us where they went. Although there could bears there. That's all I know.
02:38
Kristen Ahlenius
That is true. My biggest bear.
02:41
Peter Dunn
Kristen, have you ever seen a bear in the wild?
02:44
Kristen Ahlenius
Yes, I have. And I literally did the thing that you're not supposed to do when you.
02:48
Peter Dunn
See a bear in the wild, sing it a lullaby.
02:54
Kristen Ahlenius
I wasn't running, but I might as well have been running.
02:58
Peter Dunn
You ran from a did?
03:01
Kristen Ahlenius
I did. In a very remote area in Lake Tahoe, California.
03:07
Peter Dunn
Oh, I've been to Lake Tahoe. Was that the point of this story? To just tell us what sort of luxurious vacations you go?
03:15
Kristen Ahlenius
No, that's a warning for one of our coworkers who is going to Lake Tahoe. Just watch for bears, man.
03:21
Peter Dunn
Oh, I don't even know who this is. I feel like I've had very uncertain encounters with bears. We were on the way to South Carolina last year and were in North Carolina, and we think we saw a bear on the side of the road going through some garbage, but we're not sure. Like, it was one of those peripheral vision. We're going 70 miles an hour. Was that a bear? Was it a rock? No one knows. And then, honestly, when I was in Oregon this past week, this is crazy. Okay, so it's about three in the morning, two in the morning, I hear just this roaring and I'm in the woods in Oregon. I'm in Bend, Oregon, and I'm like, I feel like that is a bear roaring. But then I was so tired. It's also possible this is not a joke, by the way. It's also possible that the room next to me, the walls were so thin, it was just a very large man snoring.
04:24
Peter Dunn
It was equal possibility there.
04:27
Kristen Ahlenius
Yeah, that's valid.
04:30
Peter Dunn
How are you doing? You had a good dinner party last week. I know you were hosting a dinner party. It went well.
04:35
Kristen Ahlenius
I did. It went very well. So I love to host. It stresses me out, but I also love to put unnecessary stress on myself. It's one of my favorite things. So I had a blast.
04:45
Peter Dunn
I love to have people over. Mrs. Planner doesn't share that same preference, so we don't have a lot of people over. You know what I'm saying?
04:56
Kristen Ahlenius
Yeah. I like it because it keeps me accountable to making sure that my house is really clean because you always want to be on your best behavior when other people are coming over. So I like to kind of use it as accountability. If I'm feeling like, man, I do not want to do this, well, I'm now having dinner on Saturday at my house, so now I have to.
05:16
Peter Dunn
Kristen I may be in a good mood next week on the show because the big soccer tournament is this weekend. My girls, my 14 year old girls going to try to win the Challenge Cup. I'm very excited.
05:29
Kristen Ahlenius
Wonderful. I thought you were going to tell me it was like some national or world tournament that I should know about. And I was like, oh, this is about to be so embarrassing. I thought you were going to quiz me. But we're good. I'm excited for them.
05:44
Peter Dunn
Just my 14 year old girls. All right, Kristen, this is a financial show, and so let's do financial things. First segment, we're going to call Pete and Kristen react to Tweets about Money. It feels like sort of a tired thing where we react to tweets, but I will say these two tweets are interesting and we have thoughts. And so we will just share different perspectives based off of these tweets that I don't want to say they went viral because that's weird, too. It's just like people saw them and people reacted, and we're going to react. Then we're going to talk about housing. 66% of people apparently think that owning a home is hopeless. These are renters that believe that. Third segment. What do we say? That oh, third one is my column, right? We're going to do my column. Is that what you're doing?
06:35
Kristen Ahlenius
Yes.
06:35
Peter Dunn
Okay. From this week and then Bomb and News. Obviously, Dame is out this week, probably riding a bear. I don't know. All right, Chris, you want to do this thing? Suppose, suppose. Let me set up the clock here. Podcasters. Hello, podcasters. Oh, we are very close to the 500th episode, actually. Let me see what we're on right now. Do you know what we're on?
07:03
Kristen Ahlenius
I do not know, but on your spreadsheet, you said.
07:08
Peter Dunn
Go figure. I have a spreadsheet. Really? This episode is 495. Getting so close. It's so close that we're absolutely going to forget when it's episode 500.
07:22
Kristen Ahlenius
Oh, yeah.
07:23
Peter Dunn
Oh, 100%. I'm not going to remember. Okay, here we go. 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@petetheplanner.com that's, askpete@petetheplanner.com, and here's what will happen. Occasionally, we'll answer your question on the air. Occasionally, it'll get stuck in spam, and you'll just think, we don't care about you. Occasionally, we don't care, and we just want to answer it. Joining me as generally all the time, kristen Ahlenius, director of Education at Your Moneyline. That's still your title, right?
08:04
Kristen Ahlenius
It is still my title. Thank you.
08:06
Peter Dunn
Fantastic. Good to be with you again. Damien Dunn is on sabbatical this week. Fancy vacation. Okay, Kristen, here's what's on the show this week, we are going to do P and K react to tweets. I don't know what that is. Second segment, we're going to talk about how renters are feeling, like the idea of homeownership is a hopeless endeavor. And then third in the show, we're going to talk about my Indianapolis Business Journal column this week that I actually feel really good at. Kristen, you know, from time to time, I create these metrics and scales and these different things, and sometimes they're good, sometimes they aren't. The game we're going to play today is this a good one? It's a new one.
08:46
Kristen Ahlenius
Oh, no.
08:47
Peter Dunn
Well, I sent it through the Slack channel. That article. Did you happen to read it?
08:50
Kristen Ahlenius
Yes. Well, I skimmed it.
08:53
Peter Dunn
Is that yeah, I think so. All right, so let's get started. Kristen, there were two tweets this week that we want to discuss that we saw. And by the way, we I mean, not me, because I'm not on Twitter. What is the first claim that someone made? This is a financial person made this claim on Twitter.
09:13
Kristen Ahlenius
This person's actually a CFP and said, quote, so fancy quote, I'm definitely oversimplifying, but for most people, if you save 20% of your gross income, you don't need a budget. Spend the rest.
09:32
Peter Dunn
Okay, so the person definitely is oversimplifying, but it's okay because sometimes when you give advice to the masses, Kristen, you have learned you have to oversimplify. And we've talked about this on the show, and you are going to hit the wrong audience with that piece of advice, and it will not apply to them. What do you think about the merits of this one?
09:54
Kristen Ahlenius
I do appreciate this content creator getting out in front of it and being like, hey, maybe this won't apply to you, but I also don't think that it's applicable to enough people for it to be shouted to the masses. And maybe that was ultimately the goal is to just stir traffic around the topic. But I think that it oversimplifies not just your financial health, but us as people. I just think that we need more structure than that to hit our goals or to optimize our life. And truthfully, coming from a CFP, that's why it was so surprising to me, is I feel like financial professionals tend to say, okay, let's come up with a plan for this and this and this, and it's like, oh, do we need all of this? And then here we have someone just, like, totally scaling that back on something that I feel is a pillar of financial health.
10:45
Peter Dunn
Look, I do love distilling down really complex things into very bite sized pieces. This one I think I disagree with, too. And again, it's just a perspective, opinion thing. The person could be right, I could be wrong. I'll just give you my wrong opinion, though. We like, around here, 12% to 14% of gross minimum, just for long term savings. Okay? So that's the long term savings. And look, I don't want stability and financial health only when I'm 59 and a half years old. I want some stability and financial health both now and five years from now, even though it looks like I'm 54 and a half years old. And so I have an issue with that because I think it shorts out the short term and midterm savings goals. That's where I end up having an issue with it. Where's your issue? Exactly? Oh, my gosh.
11:42
Peter Dunn
Your audio went out. Did you just mute yourself, Kristen? Oh, my gosh. I cannot hear you. What an awkward moment. What an awkward moment. All right, we will try to get your sound back. I cannot hear you. That is okay. Are you back? All right, here's what you'll do. You reset, you come back. I'll continue the idea here. So here's the challenge. I like 10% of your income to go to short and midterm savings. We love twelve to 14% to go to long term savings. And the other factor here in this, with this piece of information, it doesn't account. Do you have a two income household? One income household or anything in the like we talked about it before. We want to simplify your financial life. I love the idea. Again, I've given some pretty simple things. I like the idea that 25% of your income goes towards housing that's take home pay.
12:45
Peter Dunn
I like that no more than 15% of your income goes towards transportation. But we also at the same time, when we give that piece of advice, we acknowledge the fact that it's entirely possible it doesn't apply to you. You may live in an area that's virtually impossible to have. 25% of your income goes towards housing. You may live in a scenario in which you should absolutely not have 15% of your income go to transportation. It should be closer to five based on what's going on in your life. So that is always the challenge of a financial life is these rules of thumb are sometimes not applicable. I will also note the reverse can be true. You often hear from people like us that you should hit the match at all times. You should hit the employer match. While we agree with that, there's what comes after that statement where people often forget, if you only hit the match, if you only contribute up to your 401K, where your employer stops contributing, you will not accomplish your financial goals.
13:48
Peter Dunn
And if you say things like, well, I'm just going to hit the match until I take care of this, you still will not hit your financial goals. That's why that twelve to 14% is so important as opposed to a big gross 20% number. Kristen is efforting her way back into the show right now. This is the nature of live radio. Sometimes you drop off and the other person stammers around. Now, another piece of advice came in and what we'll do is we'll make it the next segment here. Another tweet that we saw this week was a pretty aggressive checklist on whether or not you should be a homeowner. There is no doubt, there is absolutely no doubt that homeownership is a lot harder than it used to be. But some of these factors that is reported here today as to what makes you eligible to own a home, we think they're a tad bit aggressive.
14:51
Peter Dunn
Now, we did get an email in that we'll cover here today at askpete@petetheplanner.com. Someone email us and it said, dear Pete, not a question, but thought you would want to see this. Oh, great. So thanks for sending a thought. Good day, sir. Pete, at the end of episode 492, which was three episodes ago, us feeling a bit left out as you teased up some hilarious Carmelite nonsense from your trip to England. I wanted to let you know that there might be a tiny market of people, myself included, that would be willing to pay a negligible amount of money for a subscription to the show if you told these very insightful Carmelite things. Well, here's the thing, I will not do that. Kristen joins us back on the show. Hello, Kristen.
15:37
Kristen Ahlenius
Hopefully Kristen has audio.
15:39
Peter Dunn
Kristen has audio. Kristen, read the tweet. Thank you for that comment. Aaron, read the second tweet for us, if you would, please.
15:47
Kristen Ahlenius
Sure. The second tweet. Should I buy a house? A checklist. The items are will I live here for ten plus years? Is the total monthly housing cost lower than 28% of gross monthly income? Have I saved 20%? Am I okay if the value goes down, am I excited about buying?
16:10
Peter Dunn
Okay, so let's just tackle these on their merits, and then we will probably bleed into the next segment here. Let's start with the ten years thing. That's pretty aggressive. That's pretty aggressive. I've always liked the five year marker. Ten would suggest that you're going to go through two market swings. Do you think ten is too aggressive?
16:29
Kristen Ahlenius
I don't think people stay in houses for ten years anymore. It's too much.
16:33
Peter Dunn
Well, that doesn't mean that they shouldn't. I mean, it's a different issue.
16:36
Kristen Ahlenius
Yeah.
16:37
Peter Dunn
I mean, if this person is saying to do it in a perfect world, ten years is great, but I agree with you, it is unrealistic. Let's do this. Let's take a break. Coming up after the break, we're going to comb through the rest of the list. A very distilled homeowner's checklist that's next right here on the Pete the Planner show. I'm Pete the planner. You get paid the big bucks around here to know what to do when things go wrong, and that's my job. Odly. Enough. You know, I had to fill some space there. I didn't love my performance.
17:10
Kristen Ahlenius
I did not touch anything. I have no idea what happened.
17:15
Peter Dunn
I'm not worried about it. I am frustrated with my own performance there, though. I will do better next time. No, don't apologize. I am sorry. I will do better next time. That is amateur hour right there from me. All right, let's come back. Let's do the rest of it. Jason makes a really good point that I'll probably steal. I think people who got two to 3% rate mortgages are going to stay in their houses for ten plus years. Absolutely. Here's the other thing, and I guess maybe I should save it for there. But I'll tell you, Kristen, because I'm going to forget, and you can just remind me what my brilliant point was. With interest rates so high, why commit to staying in that home for ten years when it may not make sense if interest rates are going to come back down? I know that can be a refinance thing and all that.
17:59
Peter Dunn
It just seems weird to commit for ten years. I mean, it's good advice, because he's right. But it's just so unrealistic.
18:11
Kristen Ahlenius
It's good medicine. That's what I like to tell people. Like, good medicine is good medicine, but are people going to take it? No.
18:19
Peter Dunn
Is it a good idea to give my wife a foot rub for 30 minutes every night? Yes. Do I do it? No. Right it's a great idea. Brilliant idea. Can't execute on it.
18:30
Kristen Ahlenius
That's valid. I like the metaphor.
18:33
Peter Dunn
Maybe not. Maybe she won't. Okay, so let's come back and hit that, and let's hope we can hear Kristen throughout the show so you don't get to see my just remedial effort to kill time was bad. I went to the shop. Oh, I just got an email from Aaron.
18:57
Kristen Ahlenius
Oh, no.
18:58
Peter Dunn
Okay, neat. In three, two, one. Back on the Pete the Planner show, joined by the very audible Kristen Alanius. Kristen, you were just reading a tweet that suggested that a person, in order to feel comfortable buying a home, they should commit to living there for ten years. They should make sure their payment is no larger than 28% of their gross income. They want to put 20% down. They want to be a homeowner. And what are the other two, like, qualitative ones?
19:33
Kristen Ahlenius
If they're okay. If the value goes down, yeah.
19:38
Peter Dunn
Okay, so we're back to the ten year thing. You and I think it's a good idea, but it's just unrealistic.
19:45
Kristen Ahlenius
Yeah. I don't think it's realistic at all.
19:48
Peter Dunn
Here's why I think it's unrealistic. Who in the world knows the next ten years of their life when they're in their 20s?
19:57
Kristen Ahlenius
Bingo.
19:58
Peter Dunn
So is the person saying, hey, by the way, when you're in your 20s, don't buy a home?
20:03
Kristen Ahlenius
Yeah. Our life circumstances change all the time. And even if you get okay, so let's say you have kids in your younger twenty s, and then you say, okay, well, 30s. This is going to be the year that we're going to stay. Okay. What happens when your family dynamic change? If a kid moves out or if you have a boomerang kid life is just not I know it's an oversimplification and I'm kind of feeding into it, but it is. It's just too simple.
20:28
Peter Dunn
Maybe this episode should be called The Danger with over distilled financial advice.
20:35
Kristen Ahlenius
I like that. Yeah.
20:36
Peter Dunn
I think it fits the second factor, and I think we could actually debate this one for a little bit. I don't know where you stand on this. 28% of gross income that your payment is no more than 28% of gross income. I don't know if you know this, Kristen, but the ideal household budget created by Pete the Planner is based off of net income. Because I feel like making your payment based off your gross income makes absolutely no sense whatsoever.
21:03
Kristen Ahlenius
Yeah. It doesn't take into consideration other goals. It doesn't take into consideration, what am I saving for retirement? What do I need to be putting in some emergency savings? An intermediate goal that I might have? I just prefer to look at take home, like, what's in my pocket? And then how much is that going to squeeze my monthly budget on top of this?
21:20
Peter Dunn
Think about this for a moment. Let's say you live in a high sales pardon me, a high state income tax. State a high one. And you also have bad coverage, health insurance coverage, or expensive health insurance coverage through your employer and you're saving a lot. And you happen to have some other thing that you're deferring your paycheck to and you go off the gross number. That's unrealistic. It's terribly unrealistic. By going off of net take home pay, what hits your account, you're much more accurately to feel how your lifestyle and your choices impact each other. Now, I do know that banks, they look at your gross, but then they also look at your obligations off of your gross. But just simply looking off your gross without looking at the obligations, it's bad medicine.
22:14
Kristen Ahlenius
Okay?
22:15
Peter Dunn
You said good medicine earlier. I wanted to be cool. I don't know what that means, but you sounded so cool saying it.
22:22
Kristen Ahlenius
Well, I appreciate that. I do like, though I don't want to be exclusively negative with respect to this Tweet, but I do really like the 28% I think still pulls people down from what we're currently collectively spending on housing. And I do think it's important to remember that just because you can get a loan for a higher amount of your monthly income doesn't mean that you should try and grow into a mortgage payment. All these things that we say all the time. I know that people on the coast tend to get really upset when we say things like that, but I still think it's true.
22:56
Peter Dunn
That's fair. After we disclose this last element of this Tweet, I have a secret I'm going to share with you, Kristen, that has just occurred to me.
23:04
Kristen Ahlenius
Oh, no.
23:04
Peter Dunn
So the next one is that a 20% down payment, Kristen? That's a lot of money. Again, what we are saying again is this Tweet suggests that no one in their 20s is buying a home.
23:19
Kristen Ahlenius
No, absolutely not. The median home price is like 400 and some thousand now or something like that. I have a hard time believing that 20% is realistic. I also think that I like the principle of, hey, save 20% of your income. Prove that you can break dependence on your income because homeownership will force you to do that. But I don't think that it has to necessarily be in the form of a down payment. And full disclosure, I did not put 20% down on my house for that very reason, because I don't necessarily think that you have to.
23:53
Peter Dunn
Every once in a while, someone will give you a recipe online and you'll make the recipe and you'll realize that it doesn't have the right amount of baking soda, the actual chemistry of the recipe is nonsense. It can't succeed. This tweet cannot succeed. And here's why. If you are taking 28% of your income to go towards housing and you've not factored in what's coming out of your paycheck before it hits your bank account, in order to have the retirement stability, one must have there's no way to save 20% down payment while you were in your 20s. You also can't actually commit to living someone for ten years early in your career. None of this actually sticks together. In a perfect world, in a vacuum of which I'm taller and have hair and smell better, is it possible? Yeah, of course it's possible. But this is why I want to reveal a secret to you, Kristen.
24:56
Peter Dunn
Oh, no, it's a good secret. Maybe you can find a tweet. I promise you don't take the time to do it because it's silly. You can find a tweet of mine probably ten years ago in which I gave very similar advice, but here's what mine was. 25% of take home pay, five years, 10% down payment. Your boy distilled down the same thing, but he did it in a way that actually makes sense. And the thing is, I believe the down payment is an incredibly important function and mechanism within the process of buying a house. And it's not to have a lower payment, it's to show that you have the muscle to accumulate funds, because in order to be a homeowner successfully, you're constantly going to get kicked in the shorts with expenses and maintenance, and if you are not the person that can rub two nickels together, you're in trouble.
25:51
Peter Dunn
The 20% is just silly. I know it's meant to avoid PMI, but there's so many other ways to avoid PMI. Kristen, I know that arguably, I'm your employer. I do know that technically, I am your employer. I mean, if we really went and looked through it, if we looked at the paycheck, I believe my signature is somehow on there. But I will note, this is it might be I don't know if I don't know. We'll look at this, but my guidelines are a lot better than this person's guidelines.
26:17
Kristen Ahlenius
Yes.
26:20
Peter Dunn
And by the way, I follow my own guidelines. At some time, I put 10% down and then I did an 80 1010, as they used to call it, in the biz, which was 80% loan, a 10% loan and a 10% down payment, and it worked out just fine.
26:36
Kristen Ahlenius
Yeah. I think the thing to drive away from what you just said there is it's about proving that you can flex that saving muscle. I don't want the takeaway from this to be like, oh, yeah, you can put a really small amount down well and meet the other criteria. Well, you still need to be able to save as you go as well. So if you're putting less down, it has to be in lieu of another big goal that's moving your financial health forward or something that's also contributing to power percentage. It can't just be like, well, I want to keep the money and use it for whatever I want.
27:06
Peter Dunn
I hate to make this segment about how hard it is to give advice to the masses, but it's really hard. And this person who retweeted this, by the way, has a much larger platform than I have, right? I mean, this person has a Netflix show. I just disagree. I mean, it's okay.
27:25
Kristen Ahlenius
It's so hard to give people advice and you can even come at it. With the other tweet that we looked at that was like, I'm definitely oversimplifying. And then you're still going to have people like us who are going know, break it over the coals. But that is what's so hard is you can put all of these if, ands or buts in front of it, but to just give advice like some of us try to do or like we do, it's not easy.
27:47
Peter Dunn
I would also like to say sometimes these big oversimplified advice people don't check their privilege at the door.
27:55
Kristen Ahlenius
Yes.
27:55
Peter Dunn
And the idea that let's say you grew up in a one parent household and you are a first generation college student, all of the things we've just described, you're not a homeowner until you're 40 under most circumstances. And so I think it's unrealistic advice that is not helpful to people who did not grow up in an ideal situation. Off the soapbox onto my advice from this week's newspaper column. Kristen will tell us whether it's good or not. That's next on the Pete the Planner show. I'm Kristen's co host. Look, I've never really consumed that person's content in Mass. I just haven't. I've read a couple things, tweets or maybe an article, but I've always really respected the person other than the tagline. I don't love, but I respect their approach. I don't respect the tagline. I think that's gross. But I really like the person's demeanor.
28:58
Peter Dunn
I just so disagree with that. I don't know. Do you have a feeling on this person? I know this is so weird. People we're just trying to be honest. The person is probably great. They're doing their best and they've helped millions of people. They've helped millions of people. I don't know. I just think they missed the target on this.
29:18
Kristen Ahlenius
I think on this because I've seen other videos that people have shared of this person speaking that I've been like, yes, I subscribe to that. So I just think that maybe on this one, it was a miss. But to your point, I don't know what my temperature is overall of being like, yeah, I feel like we're in the same lane, or I feel like we're not because I think most of my exposure to this point has been in maybe a subsector of the way they talk. I don't know if that's how this person presents themselves all the time.
29:49
Peter Dunn
Feels like middle school, like we're not giving the person's name. Also here, I want to say a thing and then I will say the person's name. I have absolutely put advice and guidance out there that has missed the mark. And I encourage anyone, whether they have a higher or lower profile than we do here. To criticize it and I would love to get better and not give weird advice sometimes, but I don't know this one. I will teach you to be rich person. What's the person's name?
30:23
Kristen Ahlenius
Ramit.
30:24
Peter Dunn
Ramit. Great work. Very successful. Big. I was going to say big fan. That's insincere. I think the person's great, but I don't know much about them. But that just misses the mark. And I've discussed this before and we are veering way off topic. To be in the public and to be in the media and to feel like you need to stay relevant is an unbelievable pressure. It just is. And there's a couple of different paths you can go. One is to make constantly bolder and bolder statements hot takes that are provocative. The other, and it's the path that I've chosen to take. And so, of course, it's the one I agree with, is to try to become more realistic and try to become more down to earth and stay more down to earth. And look, I hope there's not a point in time, honestly, that I cross over to unrealistic and not down to earth and I'll stop this when I do, but I want to be more understanding of why people can't as opposed to harder on the people who say they can't.
31:35
Kristen Ahlenius
Yeah, I think I fully agree with that take. And there's another content creator on TikTok who does not subscribe to that idea. And I just have a really hard time. They're becoming pretty popular in the space and I just have a really hard time with it and I don't think I get it. It's this thing that drives algorithm and drives views and I don't think that it makes us collectively, so oh, Kristen.
32:02
Peter Dunn
I just got a payout from the videos I posted eight years ago on Udemy. U-D-E-M-Y. Have you heard of Udemy?
32:12
Kristen Ahlenius
No.
32:12
Peter Dunn
It's like one of those sites where you can go and learn anything. And like years and years ago, we put a series of videos out there and someone has taken a course of mine and I just received.
32:24
Kristen Ahlenius
Like a royalty check.
32:25
Peter Dunn
Yeah, I just received $3.34. Now, will the I will teach you to be rich guy like that? He taught me how to do that. He taught me how to do that again, dude. Not that he's not consuming us, unless he has got the old comb the Internet for my name being said, he's not going to hear that crappy little joke of mine. I also don't care. Okay, good work, buddy. That was to both you and him. Thank you, Chris. Why did I open that? Okay, we're going to talking about content that sucks. We're now going to do my column for this week. I like this one. This one sort of hit me. It was on an airplane. It made sense to me. So we're going to please be honest and critical if you can. Okay. Can you do that?
33:22
Kristen Ahlenius
Sure.
33:24
Peter Dunn
All right, where is it? Oh, there. It ready? I'm ready.
33:31
Kristen Ahlenius
Ready?
33:32
Peter Dunn
Three, two, one. Back on the Pete the Planner show, kristen, I write a newspaper column, amongst other places, the Indianapolis Business Journal. It's a journal with business topics in.
33:48
Kristen Ahlenius
The Indianapolis area named pretty appropriately then, isn't it?
33:53
Peter Dunn
Yeah. And this week's column really was. This is my 25th year officially this month, my 25th year in the financial business, which is I'm a quarter century. Heck, man, you're barely 25.
34:10
Kristen Ahlenius
I was going to say that's not good. Yeah.
34:14
Peter Dunn
So what I love about this business, and it actually plays into what we just talked about, is the further I get into it, the more I realize how complex things are that they're not actually simple. And so early on in my career, I'd give hot take advice in which I just really simplify things and be like, yeah. And then the older I've gotten, I started to realize, like, man, you know, there's a little bit more complicated than you think. And so there's one peculiarity that I've noticed that I still struggle, get my head around, and I believe this to be true, and it just blows my mind. And it's this a pay raise is more likely to make your retirement goals harder as opposed to easier. And that is a mind blowing realization over the last 25 years for me, is that when a person gets a raise, that raise will likely lead to retirement being harder for them than easier for them.
35:20
Peter Dunn
And I would love to walk you through it. So, Kristen, you are nearer the beginning of your personal finance journey than me. At first glance, I give you the phrase, you didn't fake like, your sound went out, did you? What do you think about it.
35:36
Kristen Ahlenius
So far? I really love it because one of my favorite things to say kind of internally is when you need less. So if you live a simpler life, if you have a lower income, we talk about this on the show sometimes, where we have someone who's trying to pay off that mortgage right as they're trying know, get Social Security checks. And you're like, well, the beauty of this is that you're used to having this squeeze on your monthly. And like I said, you and Dame more than the three of us have talked about that a lot. So I think when you need less.
36:14
Peter Dunn
Can you do that with anything? Like I like cheese. I like cheese. Couldn't you do that with anything?
36:21
Kristen Ahlenius
I feel like that's not the same.
36:22
Peter Dunn
I brushed my teeth this morning. I brushed my teeth this morning. It's not the same thing.
36:29
Kristen Ahlenius
Not the same.
36:30
Peter Dunn
I'm sorry. Okay, there's a couple things we need to get out of the way to discuss this appropriately. First off, if you don't get a pay increase that is equal to inflation rate, then that's super problematic, right? We at least need you to get up there. So I'm talking any compensation boost or promotion for that matter, above the rate of inflation. Now, in the last couple of years, this has certainly pulled us into a fit of attention. Like we're like, oh, my gosh, inflation in previous years, two to 3%, was much easier to stomach. But here's where I think my point begins to make sense. Okay? So I want everyone right now to think about all the stuff and the categories of stuff in their life. Okay? So, Kristen, I want you to think about the quality of car you drive and what you spend on it, the quality of food you buy and what you spend on it, the type of vacations and what you spend on it.
37:36
Peter Dunn
And I want you to put them on a scale of one to five. At one is inexpensive, low quality, and at five is expensive and high quality. My assertion is this is that at the beginning of your career, which we're going to call the baseline, you have to make decisions about what you're buying and how you're spending money on this quality of stuff scale, one to five. So, for instance, you might have a three level TV, a two level car, a two level wardrobe, a two level home expenditure, and a one level food and drink relationship. Okay? So that's your base level. And on top of that, you have a certain amount of money you set aside for short and long term goals, which hopefully is more than 20% of your gross income. Are we level set so far, my friend?
38:31
Kristen Ahlenius
I think I know where you're going with this. I think I understand. We're good.
38:34
Peter Dunn
Okay, so then as things change, sometimes just taste, sometimes just understanding yourself. Like maybe you got to switch to a more expensive deodorant because the one you were buying, which is a level one, irritated you. Or maybe you find a better conditioner for your skin or whatever. It's just like these things are a quality of life or trash bags that don't rip. And so you go from a one to a two, and then you're like, you know what? I like wine, so now I'm going to spend two or three, or, I don't want to go to Champagne, Illinois for vacation. I want to go to Chicago, Illinois. So you go from a two to a three, and so all of these things happen, and all of a sudden you realize that it's your pay increase, which makes the natural ones like, hey, my deodorant stinks.
39:22
Peter Dunn
I need a new one. That's a smelly joke. And also, I want a better car. It starts to eat up whatever gains you make. And so you get into this point in time of that the reason you can't actually successfully retire is because more of your income is used to create a dependency on all of these obligations as opposed to creating equality within your financial baseline, which is how much you're saving towards your short term and long term goals. Now, Kristen, I know this is a very complex concept that I was able to capture in 737 words, but is this tracking or are you calling BS on this?
40:04
Kristen Ahlenius
No, I am tracking with it. I also would like to push the point a little bit further, maybe and say that is it not just about quality, but I think quantity of consumption enters the chat as well. When you think about when you were at the beginning of your career, I think we tend to pay attention to things like the temperature in the House for the AC bill or we pay attention to, again, the temperature for the gas bill. I think that quantity is part of that conversation as well. When you have that comfort and you increase your income, you're like, we can afford to turn thermostat down or we can afford to do these other things. I'm totally on board.
40:45
Peter Dunn
I think I have a really old guy hot take that's about to come out of my lips.
40:51
Kristen Ahlenius
Wonderful.
40:52
Peter Dunn
Okay. So there are things that I like that also happen to be branded. Like I wear a lot of tech vests, like a Tech pro. I wear Patagonia vests and I like it. I like the quality. Do I like the fact that the patch is there? I would say no, but I don't know, maybe I do. But if someone is buying branded things because it's the branded thing and they have to pay a lot for that and am I talking Louis bags? I don't know. Possibly. How much of mean so you're going from I need something to carry my stuff into. I'm paying a six on the five scale to carry my stuff. That seems problematic.
41:43
Kristen Ahlenius
It does seem problematic. And I think that another takeaway or another parallel I would like to draw is I asked the question years ago, I was like, how much money do you have to feel like it's no big deal to fly first class all the time? Is that on this scale too? Like the plane is going to get there?
42:03
Peter Dunn
Man, can we do a whole segment on that next week?
42:05
Kristen Ahlenius
Okay, sure.
42:06
Peter Dunn
Can we? Because I have thoughts. Needless to say, I have thoughts and I will share those on that. Can I go back to the purse thing for a half second?
42:15
Kristen Ahlenius
Yes.
42:16
Peter Dunn
The idea that there are counterfeit purses and counterfeit Rolexes, I feel like that illustrates my point. I feel like that illustrates the point that it's like this isn't about the quality, it's about the appearance of the quality. Which means you're going up to five on the scale for no reason.
42:38
Kristen Ahlenius
For the appearance, I guess.
42:40
Peter Dunn
I see, I told you these are old guy hot takes. But anyway, if you want to read the column, go to Ibj.com. But subscribe to the IBJ. I feel like I have to say that contractually that's fair. I don't think I can repost the articles for free on our blog.
42:58
Kristen Ahlenius
That's probably not allowed.
42:59
Peter Dunn
No, I think that's a copyright infringement. All right, let's do this. Coming up after the break, biggest waste of money of the week and the news. Kristen, you're reading the news this week since Dame's on his little getaway?
43:11
Kristen Ahlenius
I sure am.
43:12
Peter Dunn
Next on the Pete the planner show. I'm Pete the planner. I have lots of opinions on first class.
43:20
Kristen Ahlenius
Same.
43:22
Peter Dunn
Do you want to do them now? Well, now we promised the radio audience. I feel bad when we, you know, sometimes when we do that where there's not continuity in the show, we'll either bring up something on the radio that we talked about on the pod or vice versa and it feels bad.
43:39
Kristen Ahlenius
We do that.
43:45
Peter Dunn
I had another bubling hot take start to appear this week. Again, the more travel I do, the more I just get annoyed at things and then that's where hot takes happen and it became like the I'm actually not going to go into it. It's so offensive. Okay, I'll tell you out there.
44:03
Kristen Ahlenius
The show within the show. Within the show.
44:05
Peter Dunn
Oh, yes. What? Danza there are plant based. Reese's cups aren't peanuts plants?
44:14
Kristen Ahlenius
Yeah, but it's going to be the chocolate. But I mean, if they just use dark chocolate, why wouldn't it be plant based?
44:20
Peter Dunn
I would assume it's the dairy within the milk chocolate.
44:24
Kristen Ahlenius
And I'm sure that they put some dairy byproduct in the peanut butter to make it creamier.
44:29
Peter Dunn
Yeah. Good call. Your twin, your doppelganger. You've been in the business almost as long as I've been alive. Thanks, Caitlin. Thanks a lot. Not on the Christmas card list. Do you send holiday cards, Kristen?
44:45
Kristen Ahlenius
No, I don't. I don't have it that together. Maybe someday.
44:50
Peter Dunn
I used to think they were a waste and then now I'm the old guy that loves seeing people's kids and families and stuff.
44:56
Kristen Ahlenius
I love it because I have friends literally all over the world because of life circumstances and seeing them on the fridge is so nice. I still have one of my friends announcements that they were pregnant on the fridge that was part of their Christmas card because I'm just like I literally never see her, so I like it.
45:19
Peter Dunn
We've started taking the image of me off of Christmas cards that I don't like people seeing me age on their fridge. Pilot jeremy weighs in. Just signed in. Want to be part of the conversation next week on first class. We can wait a couple of weeks. You're on vacation next week. Don't consume us when you're on vacation with your family. Please don't subject your family to us.
45:42
Kristen Ahlenius
Yeah, speaking of which, do you think that Dame is not watching.
45:50
Peter Dunn
Mean? Here's the thing. The show doesn't happen when I'm with all due respect, when I'm not. Wouldn't but if it was, I would never log on if it was just you two. I mean, I love you both, but I wouldn't log on. You log on when you're not supposed to be. And Dame's totally watching right now.
46:08
Kristen Ahlenius
Well, and maybe that's the difference in I don't know what types of vacations, but I generally just take a long weekend just so that I can start my weekend early. That's really common for me. So if I'm not here on a Friday, it might just because I wanted to start my Friday early. So I don't feel but if I was on, like, a week long deal, I don't think that I would watch the show. I think it's different.
46:32
Peter Dunn
No one knows. Kristen all right, you ready for bomb and news? Did you write fun jokes like Dame does?
46:40
Kristen Ahlenius
I did not write fun jokes.
46:42
Peter Dunn
I'm not funny when Dame does his news. Half the time I'm like, this sounds horrible. This is going to sound terrible. I'm like, did someone else write that or is he writing that?
46:54
Kristen Ahlenius
I think that he gives himself that much time to think about the news because Dame is funny. You just got to give him a minute sometimes to be funny, and he comes up with some real zingers sometimes.
47:06
Peter Dunn
He is funny. He is funny. That's funny. I don't know why I said it in that voice. Let's move on. Okay, let me get ready here, old man. All right. Feeling pretty good about this first one here.
47:26
Kristen Ahlenius
Oh, no, it's just me guessing.
47:27
Peter Dunn
Yeah, I know. That's why I win.
47:32
Kristen Ahlenius
I get to win for once.
47:35
Peter
