00:10
Peter Dunn
Fire. Good day. Good day. Good day, everyone. It's peter Dunn, Pete the Planner, host of the Pete the Planner show. Every Friday around 10:00 a.m. And by around 10:00 a.m.. Yeah, I was a minute and a half late today, everybody around 10:00 a.m., we live stream the recording of our syndicated radio show. Joining me, as always is Damian Dunn. Hello, Damian.
00:33
Damian Dunn
Hello, Pete.
00:34
Peter Dunn
First time viewers, we are not related, are we? Two bold white men of the same age and same family structure. We, in fact are. Do we have the same last name? In fact, we do. Could we pass as brothers? Oh, absolutely. Are we related? No. Dame I have got not a lot of time today to record the show. Last week's podcast and show was an hour long because I was very talkative there's. Our friend Jeremy joined us. Facebook Live. Hello, Jeremy.
01:04
Damian Dunn
I think people enjoyed it.
01:06
Peter Dunn
You think so? The longer. Yeah, today, not so much. Today I've got a big day planned of it doesn't particularly matter. All right, Dame, let's get ready to record the show. Here topics this week. Can you go over them real quickly for me again?
01:25
Damian Dunn
No, I can't.
01:27
Peter Dunn
That's a problem.
01:30
Damian Dunn
Okay, we're talking about confidence in retirement.
01:33
Peter Dunn
Yeah, retirement. Let's start there. Okay, restart the show. I'm ready to start the show 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 when you do that, some magical things will happen. Actually, we might just answer your email. Damien Dunn joins me, as always. He's the vice president of advice at your Money Line and Hey, Money. Hello, Dame.
02:04
Damian Dunn
I don't know if I've ever heard somebody say Dame Dunn before.
02:07
Peter Dunn
It's sort of like Dame Dala. What? Dame Lillard from the Portland trailblazers. That's his rap name. I happen to know that because I have a nine year old son who cares. All right, Dame, this week on the show, a few things. First segment here, we're going to talk about retirement confidence and why it actually matters and why it is studied. And the next segment after that, which would be segment number two, we're going to talk about how income differential amongst married people when it's very big can create some unique challenges. Segment three, we're going to talk about the big buy now, pay later phenomenon that's happening all over the Internet and why it has some interesting data surrounding it. And of course, biggest waste of money of the week and the news, Dame? Well, actually, I think it's like 30 years or so there has been a study of people's confidence in their ability to retire.
03:03
Peter Dunn
In fact, there's annual retirement confidence survey, and it's the 31st annual, and it comes from the Employee Benefit Research Institute and the Greenwald Research Institute. And this year's Flavor suggests that people have misplaced confidence in their ability to retire, and it manifests itself in weird ways. For instance, a significant number of people within retirement prior to retirement feel like they're going to receive support from family members or friend, something like 40%, when in fact it's actually 15% of retirees receive financial assistance from families and friends. So actually it's 35% of people think they will, but the number is so much smaller. Why do you think things like this cause so many problems?
03:56
Damian Dunn
I'm still trying to wrap my mind around. 35% of people think they'll be receiving assistance from friends or family members in retirement. That's way higher than I would have expected. Now, maybe there are some deals that have been made with kids or siblings of some sort, and maybe assistance is counted as mom's moving in with us after dad goes or something like that. I guess I could understand that, but the immediate thought of having dollar bills transferred, one or the other 35% seems higher than I anticipated because that doesn't seem like something someone would readily admit to. So the fact that it's 35% is really a head scratcher. Why is this probably a lack of communication? It would be the number one people assume the family member might have meant one thing when really there was nothing of the sort that was intended. That's just going to get back to a really common place that we seem to find ourselves in around the show.
05:01
Damian Dunn
Pete, is really rough relationships, strained relationships because of miscommunication between two different parties.
05:08
Peter Dunn
The other interesting aspect is the number of people who think they will work for income in retirement compared to the number of people who actually do work in retirement for income. And this is a really significant point because what will happen when someone just gets exhausted with their work career and so they start just doing some math and they're saying things like, okay, well, I got Social Security, got a little bit of a nest egg. If I supplement those things with some work income, I can actually retire. I'm only going to need to work ten to 15 hours a week. So dame even before they don't end up working ten to 15 hours a week, that's a problematic plan because eventually they won't be able to work ten to 15 hours a week. But man, I still see that idea out there quite a bit.
06:00
Damian Dunn
I would be interested to know, are those numbers close by? Did they say what percentage of people thought they would versus do work in retirement?
06:10
Peter Dunn
They are I'm trying to find out the share of retirement say they receive income from a prod. No, that's on that the answer is no, I don't have it close.
06:18
Damian Dunn
I would guess it'd be flip flop from the last number. I would guess that more people would or fewer people would assume that they are going to work in retirement and more people end up working in retirement to make ends meet? That would be my assumption, yeah.
06:31
Peter Dunn
So 68% of people think working for pay is going to be part of their strategy. And the number is significantly less. Of course, it's not in front of me, which makes for a great radio show. You know what I mean? Let's do a show where I don't actually give any data, but the segment is based in data. How about that?
06:52
Damian Dunn
That is a bleak number. Two thirds of Americans that are approaching retirement assume or think they're going to have to work to make ends meet in retirement. Yeah, I watched neither here nor there, but talking about this topic in a little bit different terms, a debate between two individuals and the pictures they painted couldn't have been more stark about retirement in America today. One person, of course, wanted to blow everything up and go to basically guaranteed pensions for everyone that are funded by the government. And the other person thought that things were going quite nicely and enough people had savings, that there were very few people that needed extra assistance to try and make it through retirement. That number right there tells me 68% of people think they're going to have to work in retirement. There's a disconnect somewhere.
07:49
Peter Dunn
Okay, well, I found the data, so you want to talk about the disconnect. 68% of people think that they will work for pay as a means to fund retirement when the actual survey of retirees suggest 20% of people, two in ten actually work. So from seven out of ten believe that it's going to happen. Two out of ten actually do. That's a problem. And I find the strangest part of this survey about retirement confidence that's going to confuse everyone now is the only thing that people tend to place confidence in and in which they are correct and they're underestimating the positive impact. Social Security. It is the one element of this survey which continues to over deliver on what people expect. I was at a symposium, actually, I don't know. This is a conference. I don't actually know the difference.
08:46
Damian Dunn
Wow.
08:47
Peter Dunn
Anyway, I was there a couple of weeks ago. We're talking about this topic. What other sort of conference am I going to go to? Like a modeling conference? I'm going to talk about Social Security benefits. Dame the whole concept of this session I went to was that, yes, Social Security is struggling. You hear all these stories about how the fund is going to be gone. Never going to happen. It's never going to be gone. It will not fail. And I'm not teasing it or testing it or I'm not jinxing it or anything like that. Social Security will be around. There will be some small adjustments here and there. What is withheld from our paychecks to fund Social Security? Oh, that's going to go up. Absolutely. The age of which you can claim it could go up, but it will absolutely be there.
09:32
Damian Dunn
Absolutely. Even if no changes occur going forward right now and it goes not bankrupt, but if it just gets by on revenues collected as they are, benefits will be about three quarters of what they are now. That's a big difference for some people, for sure. However, it's not going away. There's no politician that's going to allow this to go away at this point unless they really feel good about it and want to lose their jobs the next election.
10:00
Peter Dunn
It's time for math on the radio. Dame. Let's say Mrs. Planner and I collectively go let's say we get $4,000 a month in Social Security retirement. Okay? Let's say that's $48,000 a year. I did the math for you there. Okay? Now, let's say we receive that for 20 years. That's almost a million dollars. It's $960,000 we would receive from the system. That is why the system is better than everyone wants to give it credit for. Is that what I just gave? Very reasonable numbers there. And I will have a million dollars worth of income from the system. That's why it outpaces the confidence that people place in it.
10:45
Damian Dunn
Yeah. Social Security is not just some chump benefit, for sure. It's real.
10:50
Peter Dunn
And while it's popular to beat up everything that the government does, that system actually works. Coming up after the break Dame income differential amongst couples. Does it make someone sleep on the couch? Probably. I'm Pete the Planer and this is the show. Weird. So, Dame, you know this, but I thought I would complain publicly to everyone else here today, Tuesday, Wednesday and Thursday, between those three business days, as we call them, I did twelve live shows. And I can barely think at this point in time. And I know that every day of a teacher's life or six to 7 hours worth of live shows, I understand that. I'm cognizant of that, I'm appreciative of that, acknowledging of that. But there's something about doing twelve live shows in three days, and I can't even think.
11:43
Damian Dunn
I don't think I had ever put the teacher equivalent in there. It puts a little bit different perspective.
11:49
Peter Dunn
On it because clearly not married to a teacher.
11:52
Damian Dunn
Their crowds are rough.
11:54
Peter Dunn
Yes, they are. All right, so girls soccer team update, I'm the fun coach. And the other coach is also fun, but he's also the tough coach. So I'm the assistant coach, the tough coach. The actual coach that knows what he's doing was out on Tuesday, so I'm the only coach. And when the fun coach is the only coach there, it's a nightmare. It was nightmare. In fact, what ends up happening is it's like you're a substitute teacher and no one listens to you. So that was a nightmare. Then last night at practice, the good coach is back. Right? And then so now I'm just the fun coach again, which takes all the pressure off. But then at the end of the practice, coach will give people, like, a pep talk. We had a tournament this week, and we want to win. Of course, he's like, all right, we're going to win this tournament.
12:43
Peter Dunn
He points me to coach, you got a thing to add? And I go I'm just like I wasn't thinking. It passed to me. And I go, you girls, you want to have fun? Best way to have fun is to win. And my daughter gets this look on her face, and she mouths to me, awkward. And it was incredibly awkward.
13:12
Damian Dunn
I can't wait for the update next week on how whatever the name of the team is did this weekend.
13:19
Peter Dunn
I will tell you this, that on Tuesday, at one point during practice, I'm coaching. I'm making the girls run so much because they're not listening. Like, fun coach turned into angry over his head coach. At one point, they're running so much and still not listening. What I ended up doing was I was like, all right, you guys, pick one girl to race me. If she beats me, you don't have to run anymore. So they picked the fastest girl on our team. Of course I smoked her. I smoked her. Now I can't walk. My left hamstring has given up.
13:53
Damian Dunn
How far was this race?
13:58
Peter Dunn
Well, I'm smart. I went 40. I went like a 40. Okay. Yeah. If I had gone, like, the whole length of the eleven B eleven field, I would have been in trouble. All right, Dame, back to the show. Income differential amongst couples. Three, two, one. Back on the Pizza Planner show. Dame, hello, by the way. All to our listeners on the network Indiana, all over the state of Indiana on your lovely radio station, you're hearing these words and, of course, the Pizza Planner radio Network. Dame. So I was doing a live event this week, a live streaming event for a client, and I realized that I may have gotten one of the best questions during the Q and A session that I've got in a really long time. And the question went like this. What do I need to consider outside of the obvious, given that my spouse and I make very different amounts of money, and we're newly married, and we don't talk about money a lot.
15:00
Peter Dunn
And I was like, okay. I don't want to call it problematic, but it's certainly something to think about, and it's certainly something to get out in front of. And Dame, I'm going to start in a really dark Pragmatic place, and then we will get to maybe a little more a lighter place from a Pragmatic standpoint. That's why life insurance exists, because if you have a household income and we'll just make up numbers here, one person makes 150,000, the other person makes 30,000. It's 180,000. I did the math for you. If the 150,000 person earner is dead, then the $30,000 is not going to cut it because your lifestyle is likely based on the combined income. So that's why life insurance starts.
15:46
Damian Dunn
Life insurance is very important. The other overlooked, often overlooked aspect of insurance is disability insurance. Same process, except now you've got still the same number of people living in the household and drastically less income. So you've got to figure out a way to make your household function financially from month to month. And if you've already got obligations you can't easily adjust or defer or just get rid of, you're going to need some income. So disability income, you're way more likely to need that as a young couple than you are life insurance at that point, so often overlooked. Check with your employer, see what kind of deals they've got for disability insurance, but maybe go look for some on your own too. That might be the better option for a lot of people, especially if you are in a very specific profession, doctors, things of that nature, you're going to need some special disability.
16:39
Peter Dunn
The flip side of the life insurance argument though too, is not only does the person who earns a lot more need life insurance, but the person who doesn't earn as much also needs life insurance. And then I will also go to the point if one person earns everything and the other person earns nothing and the other person who is at home provides care to children, for instance, they still need life insurance, which is often ignored because of the dynamics of splitting duties. Right now let's go away from life insurance because the point of this conversation is not really about life insurance, about the dynamics of two adults sharing money and then seeing different value in the amount of money they bring in. I think the biggest challenge is when a couple that is in this situation, and you and I have seen this situation a lot, dame, is when they don't share common financial goals.
17:37
Peter Dunn
Because inevitably what happens is, and I'm going to not split words here, I'm just going to say it in the easiest way to say it, the person who makes the most money has their goals. The person who doesn't make much money compared to the other person has their goals, but their goals are reliant on the other person's income. No, that's not the way you should think of it. But that's what ends up happening if you don't have that conversation.
18:03
Damian Dunn
Yeah, we end up getting to a place really easy where if you do have this conversation and it doesn't start to go well, typically the higher earner might think, well, $1 equals one vote. I got all the dollars and I'm going to make the decisions on what we actually do with this cash. It can't be that way, it can't be that way. There's no quicker way to destroy a relationship rather than basically putting somebody in a position of, well, since we're just saying it almost financial abuse at that point, saying I've got the money, and I'm going to determine what we do with our cash at that point. There has to be a conversation. It has to be a group choice, a group decision. And frankly, it's a great exercise to get on the same page, to figure out what are we going to do to make our life together better.
18:51
Peter Dunn
Financial abuse is more common than most people think, and it's a form of bullying, right? It's a form of control. And you often boy, I'm treading lightly. You often see it where someone is given an allowance that doesn't otherwise have an income. Right? Now, that's not always the case. That's not always like, well, that's abuse. But abuse could be present. Financial abuse. Financial bullying. When someone makes all the money and the other person doesn't make much or any at all, and then they are given money out, and then they must budget it, and if they have enough, they have to go back to the person, they run out, they have to go back and ask for more, it gets sticky.
19:34
Damian Dunn
Yeah. That's a horrible situation. Now, don't misunderstand what Pete and I are saying. An allowance isn't the concept of an allowance isn't necessarily horrible. If you are budgeting all of your money and you've got X amount of dollars that you can spend on whatever you want per month and you each get a certain amount of money, okay, that's fine. You're trying to figure out how to make your financial life go and make sure you're accomplishing all those financial goals that you've hopefully established together, and you've decided that you're going to put some financial constraints on yourselves to make sure that you can achieve those goals, that's fine. But when it is used as a means of power over somebody else to make somebody else feel inferior to you, yeah, that's absolutely bullying and absolutely abuse, and it can't happen that way. And hopefully these are conversations that get had prior to being married or entering into any serious relationship at that point, but so often they don't because people just don't want to talk about this stuff.
20:36
Peter Dunn
The other sign that the allowance is going off the rails is if one person's fund money. People call it all sorts of things, right? I don't know why fund money always bothers me, but when one person's fund money account is a lot more than the other person's fund money, like the allowance, it's like, well, I get 200 a month and you get 100, and then there's always some sort of reason why that doesn't seem exactly fair.
21:00
Damian Dunn
No, not at all. That's another way to create division in the relationship. You're already going to say, I make better decisions than you, I have more responsibility than you, I'm going to take more than you do, and you're just going to be okay with it. That's a good way to end up in a very bad spot.
21:21
Peter Dunn
I feel like we talked about this topic in some capacity in the last couple of weeks. We're not suggesting there's one way to run the money in your household. That's just not true. There are several different ways to do it. What we're suggesting is if the way you're doing it isn't working and people are getting sideways feelings, stop doing it that way and try something different. That's what scares us, is that it goes back to two checking accounts versus one. I think. Dame in your household, you guys have one checking account. In our household, mrs. Planner and I have separate checking accounts. It's all our money. It's just a logistical thing. And by the way, we used to have one checking account. It just became easier to have two. So you just got to find what works. I'm a big believer in our money. I will also note and this is where some really smart female financial advisors have schooled me, and they have said the big power dynamic here that people ignore is that the person earning less will have fewer retirement accounts and will be less prepared for retirement.
22:32
Peter Dunn
So then they become too dependent on the other person. And in the event of divorce, even though they equally had the same lifestyle, one person comes out on the other side naturally in a worse position because they don't have their own retirement accounts. And then you get into, like, divorce settlements and things like that. But that is the power of different perspective. By the way. The financial industry is just dominated by men, has been for decades. The idea that you're getting different perspectives on things like that from female advisors is exactly why there needs to be diversity in terms of gender within our industry.
23:09
Damian Dunn
Yeah. If you are a budding financial planner, there are a number of niches that you could go into to provide massive value inside that industry. So I encourage you to explore those and find what fits for you.
23:20
Peter Dunn
Dame coming up after the break by now, pay later. It is a huge thing on the Internet right now. And there's some new data that suggests, well, there's a weird secret behind it all. That's next on the Pete the Planner show. I'm Pete the planner. Our good buddy, Gordon Wayne. Hey, gordo, I got to cough a lot today. I'm going to mute my hi, Gordon. Gordon notes on Facebook. What if Gordon likes being called Gordo or not? That just occurred to me.
23:51
Damian Dunn
I never have.
23:52
Peter Dunn
So from a financial perspective, getting doesn't gordo mean fat in Spanish. Yeah, that got weird. From a financial perspective, getting married is not the same as two buddies just living together. What's mine is mine and what's yours is yours works fine in the latter. And as a recipe for disaster in the other, marriage creates a family. I agree. Thanks, Gordon. He just said he does not like being cold. Gordo. And, boy, did that get weird. Sorry, Gordon. Dame are you going to do the heavy lifting on this segment? Sure. All right. Tell me when you're ready. My brain is like, four steps slow today.
24:39
Damian Dunn
Are you going to introduce it?
24:41
Peter Dunn
Yes. Okay. Did I misrepresent within the tease of what you're going to offer us?
24:48
Damian Dunn
No, we'll work it out. Even if it didn't, nobody remembers after no break, nobody cares.
24:56
Peter Dunn
Can I complain about something real quick and so it's not on the air?
25:00
Damian Dunn
Old man gripey edition.
25:04
Peter Dunn
A little bit. It's a really unpopular opinion.
25:09
Damian Dunn
Okay.
25:11
Peter Dunn
I hate all the gambling that's going on right now.
25:16
Damian Dunn
Everywhere you turn, there's an ad for the new gambling app or the new sports book that's going into professional stadiums. I understand that Europe has had this forever, but it is so weird to see it here.
25:31
Peter Dunn
I admit I am lame. I am a square. I am old fashioned in many respects. I hate all the gambling, I hate all the sports. It's everywhere. It's everywhere. And it's like, yeah, people can do whatever they want with their money and I can't control it and I don't want to control it. But I'm just saying, like, I think you take the increase of sports gambling. You take something like Robin Hood, which has sort of turned investing into gambling. You take cryptocurrency, which has turned currency into gambling, and now you just got a bunch of gambling and it's like, what are we doing? That's not a strategy. That's just gambling. It's entertainment mixed in. It sucks.
26:11
Damian Dunn
Yeah. I was going to try and make a joke about gambling the new way using crypto, but you already covered it.
26:19
Peter Dunn
And I know we took a pretty good break talking about crypto on the show and all those sorts of things, but it's in the news. China just burst the bubble, man, with all the regulation, they're like, nah, cryptocurrency transactions are illegal now in China.
26:34
Damian Dunn
Yeah. It's going to be interesting to see where this all leads.
26:39
Peter Dunn
Gordon with another point that is the real sad part of this. He says, guarantee that there are kids going to bed hungry tonight because of gambling. 100% true. Dame, I can tell you our business, for those that don't know your money line, is we're professional financial problem solvers, which sounds crazy, but our big team goes into businesses and those employees have access to people like Damien and his team. And we just solve people's financial challenges all the time, all day long for hundreds of thousands of people around the country. And so, Dame, this all started because I used to go into break rooms in the workplace and do one ones with people all day long, all week long, and just try to do that same thing. And I can tell you, I've had these conversations about gambling in the past, and this is before the prevalence of sports gambling.
27:33
Peter Dunn
This is when your Ups guy used to go around and he was your bookie. That was the whole thing. Did you know that?
27:38
Damian Dunn
No.
27:39
Peter Dunn
Oh, my gosh. Yeah. I don't really want to say more because I don't want to get sued or something, but at one point in time, a delivery person who would go to several business would run, and it wasn't ups. Okay. Of course not. They would run the sports book because they would go to one place, and they would whatever. Anyway, on these counseling sessions with people about money, and it comes out that they like gambling addictions, and it is horrifically sad. It is horrifically sad.
28:12
Damian Dunn
Sure.
28:13
Peter Dunn
All right. That's genius, though. If you're a delivery driver and you've run in a sports book genius.
28:20
Damian Dunn
Think of all the other kinds of deliveries you could make on the side.
28:24
Peter Dunn
I have some more old man grapey. I need to get out.
28:27
Damian Dunn
You want to wait for the next break?
28:29
Peter Dunn
No, because it's similar. Okay. I feel the same about the lottery, and this is obvious. A bunch of old, funny duddies feel this way about the lottery. I don't like all the PR the lottery does to say all the good it does, because it traps you into going, okay, it's fine. I don't know.
28:53
Damian Dunn
We've done gambling. Well, that sort of stuff. Then lottery. I really don't want to ask your opinion on the toll road at this point.
29:02
Peter Dunn
I love the toll road.
29:04
Damian Dunn
Do you like that we sold it or leased it?
29:06
Peter Dunn
That doesn't bother me that much. Okay.
29:08
Damian Dunn
That's where I was going. Because some people are really against that.
29:11
Peter Dunn
Next week, we're going to explore why I hate dancing. No, I'm just kidding. All right, here we go. In three, two, one. Back on the Pete the Planner show. Dame, we've talked about on the show recently this idea that if you're on the Internet and you want to buy something and you don't have the money to buy it's a big ticket item. Whether you're a 16 year old kid or a 43 year old handsome Midwesterner, that's a little heavy. There are options out there with buy now, Pay Later that have been digitized, they have been modernized, and it is all the hotness right now and is helping retailers have record sales. But, Dame, recently we've learned that there's some interesting data around the types of people using these services that speak to something a little deeper and a little scarier. Help us understand what I'm talking about here.
30:04
Damian Dunn
Yeah, these transactions don't always work out quite as well as maybe they were intended. A third of us. Consumers who used buy now, pay later services have fallen behind one or more payments, and 72% of those people said that their credit score has declined.
30:21
Peter Dunn
Okay, read the numbers again. I got distracted. I was looking at myself in the mirror.
30:26
Damian Dunn
A third of us. Consumers that have used this service have fallen behind one or more payments.
30:33
Peter Dunn
Okay. A third of people are missing payments. On these pay easier processes. So that is not terribly surprising. But then the next part is these things do show up on your credit report.
30:48
Damian Dunn
72% said that their credit score has declined.
30:53
Peter Dunn
See, just so people understand here, we don't particularly care about credit scores in the sense we don't think they make you healthy or not healthy. However, there are certain elements of the credit report that actually make a lot of sense. The ability to pay your bills on time, the willingness to pay your bills on time, and the track record of paying your bills on time is why you should or should not have a high or low score. And this is certainly proof positive. Dame just before we go any further in the study, what's on the horizon for those people that decided to buy something on Amazon and make five easy payments of $6 and then miss a payment? What is on the horizon for them in terms of their financial life in the coming years because of their missed payments?
31:40
Damian Dunn
They're going to have to be patient for that credit score to come back up. But in the meantime, they're going to not get quite as good a deals for financing. Their insurance rates may actually increase. If you change jobs and you go to a job that checks your credit score for whatever reason before you go in, it could potentially damage job prospects as well. So it could have some very serious consequences to your life. Even though you think it's just a couple of payments that I missed, it's not that big a deal. Well, it could be. Even if you don't care about your credit score, somebody else might. If you need to borrow money or get a new gig or whatever the case may be, it could wreak some havoc on you.
32:21
Peter Dunn
Do those companies run credit checks and stuff when you apply for $4 a month financing?
32:28
Damian Dunn
It's a fair question. I've never done it. I don't think they do, however.
32:32
Peter Dunn
All right, I'm looking right now. I love that. I just do the research on the air. Do my research on the air.
32:40
Damian Dunn
Everybody else loves it, too. Can I give you another stat here?
32:42
Peter Dunn
Please do.
32:44
Damian Dunn
Most consumers who use these services, these buy now, pay later services, said the purchase was for $500 or less on average.
32:53
Peter Dunn
What percentage?
32:55
Damian Dunn
Just says most. It didn't give me an exact percentage, but most. So that's got to be like 80%. No, I have no idea what percentage it is, but most consumers say it's $500 or less, which is surprising to me.
33:08
Peter Dunn
I will also note that from where I've seen these services online, they're not for Necessities, necessarily. They're for the Gap or for Banana Republic? They're just for, like, sites that yeah, people need clothes. I get that. What you and I are not saying is low income people should not have access to credit. That is not our point whatsoever. Our point is that people are buying nonessential goods once, if you will, in a very dangerous way. In fact, afterpay who is one of these services? A digital payment platform offered to online shoppers that allows them to delay payments on purchases. No credit check is required to use after pay. And here's the other element that also bleeds into a question I got during a live event the other day. There is no interest charged on some on this one. Now, I got a question the other day in an event.
34:11
Peter Dunn
This person said they had $10,000, but it was 0% interest. So should they still consider that credit card debt, $10,000 balance on a credit card, 0% interest. They wanted to know, since they don't have interest, if it's still bad and it's still considered debt.
34:30
Damian Dunn
Yes.
34:35
Peter Dunn
Next question, and I'm not making fun of that person, but that sort of thinking is created with these buy now, pay later mechanisms.
34:46
Damian Dunn
Yeah, little addendum to that last stat. Of the $500 or less, the low cost purchases were most common among Gen Z that hits home, nearly half of which used these services for expenses to pay $100 or less.
35:03
Peter Dunn
Do you know how they spread it out? Is it just a year usually? Is that the most common?
35:10
Damian Dunn
I think a lot of it depends on the amount that's financed or that goes into the agreement. So if it's underneath $500, you probably have four to six months, I would guess, to pay it off. If it's over a certain dollar amount, it stretches the terms out a little bit. But these services are relatively new and they do differ quite a bit. Some are no interest. Some do charge interest on top of everything else. So you got to know what you're getting yourself into.
35:37
Peter Dunn
All right, so I'm looking at after pay, which is one of these right now. Pay over six weeks, never pay interest.
35:44
Damian Dunn
Six weeks.
35:45
Peter Dunn
Six weeks paid off over six weeks, never pay interest. Make the first of four payments now. So you pay four payments within six weeks. What?
36:03
Damian Dunn
Okay.
36:05
Peter Dunn
My guess is that is because it matches up with pay periods. I bet that somehow, if I did the math here, it would be the bi weekly pay frequency. Yeah.
36:17
Damian Dunn
And if we're looking at this through a different lens, the proclivity of check cashing places or payday advance places, this service does line up pretty well with what we see in those industries as well. I would be really interested to know more on the demographics of the people that responded to the survey. And it wasn't a small survey. It was a large survey, statistically significant survey that was performed here on this. And depending on what the demographics were of what they chose, these numbers are a little shocking.
37:00
Peter Dunn
Can I make a point here about I'm an old man gripey, everyone knows this, but I want to make a counterpoint to my normal old man gripey about this. How people pay in fintech and in sort of digital payments is completely evolved from where you and I were when were in our 20s. Right? It is night and day difference. So that's to say, there is going to be growing pains as we more efficiently transact business with people to the point where one of the first iterations of this was the Starbucks app on your phone. Right. I remember when this came out, it was revolutionary that you could just scan your QR code at the register and all of a sudden that you're making a payment. And that was a really important step with alternative payment methods. And since then, it just has continued to evolve.
38:01
Peter Dunn
And so there are going to be steps back, which I believe to be the case with some of these buy now, pay later solutions.
38:09
Damian Dunn
Yeah, I was speaking with one of our coworkers, Lisa, about this very thing earlier this week, and she spent a significant amount of time overseas, and she said, you'd be surprised at how advanced some of the other countries are with things just like this. They've been around for longer than we've really experienced them here in the US. And she had some really interesting stories.
38:28
Peter Dunn
Okay, before we go to break, if you get a chance to pay at a pay terminal, are you inserting your card? Are you swiping your card? Are you tapping your card? Are you tapping your phone? Are you tapping your watch? How do you pay with your debit card?
38:42
Damian Dunn
I would love to just tap, but I can never get the darn thing to work consistently.
38:45
Peter Dunn
So I insert old man problems, I tap my card, but I've now started tapping my phone, and I am thrilled. Coming up after the break biggest waste of money of the week in the news right here on the Pete the planner show. I'm Pete the planner. All right, you got your news stories ready to go here?
39:07
Damian Dunn
I have to reorder them now that I just burnt one on segment three.
39:12
Peter Dunn
All right.
39:12
Damian Dunn
Yeah, I'm good.
39:15
Peter Dunn
Okay, I'm going to pull up my biggest waste of money of the week, and we're good to go. Let's just go. All right, in three, two, one. This week's biggest waste of money of the week right here on the pizza planar show is dame. Every once in a while, I do a biggest waste of money of the week that is not actually a waste of money. It is, in fact, kind of awesome. And this week I have a really expensive one that's kind of awesome. Sylvester Stallone's, rocky Three boxing gloves. They're certainly not as desirable as his gloves from the original Rocky, but seen as how those are now part of the national museum of American history, sylvester Stallone's boxing gloves from Rocky Three aren't a bad consolation prize. The red tuftware brand gloves are display ready and are coming up for auction as part of a larger collection of Stallone memorabilia that will be sold by Julian's on Sunday, December 5.
40:12
Peter Dunn
Or something like that. I clicked away december 5. What do you think, dame? The starting bid is $10,000 for Rocky gloves from Rocky Three.
40:25
Damian Dunn
Which movie was Rocky Three? Was that Mr. T or was that Hulk Hogan? I can't remember.
40:31
Peter Dunn
I think they're in the same one. Yeah, it's clubber Lang is Mr. T and Thunderlips is Hulk Hogan. So that is the one. Rocky Four, of course, is the Russian. The Russian? Yeah. Rocky Two is somehow forgettable in some regard. I think that's the one that Carl.
40:52
Damian Dunn
Weathers is the rematch right between Apollo Creed. Yeah.
40:57
Peter Dunn
The latest rock. I don't remember which one it is. The latest one was amazing.
41:05
Damian Dunn
Is it creed two? Are you counting the Creed movie?
41:07
Peter Dunn
Oh, I guess I should. The latest Rocky one was amazing. But I also loved Creed. And I love Creed, too.
41:13
Damian Dunn
I don't know if I've seen two yet. What piece of movie memorabilia would you buy?
41:21
Peter Dunn
I'd say the bone organ from Goonies. Yeah, I mean, that's obvious.
41:28
Damian Dunn
Yeah, I mean, that's the only that's.
41:29
Peter Dunn
The only thing I would buy.
41:30
Damian Dunn
Clearly, I'd have to go with the Tomcat from Top Gun. Yeah, that 14. It looked great in my driveway.
41:38
Peter Dunn
Did we mention on the show that Top Gun got delayed again? You're never going to see that movie.
41:45
Damian Dunn
No, Penny Benjamin is going to get Social Security before that movie comes out.
41:51
Peter Dunn
Dane, what's in the news this week?
41:54
Damian Dunn
A bill introduced by senators from both parties would help high school students achieve financial literacy by giving them money and then matching a portion of that which they continue to save. The program to get this name this is possibly the longest name of a bill I've ever heard.
42:11
Peter Dunn
Okay.
42:12
Damian Dunn
The program to inspire growth and guarantee youth budgeting advice and necessary knowledge.
42:18
Peter Dunn
What's the acronym?
42:19
Damian Dunn
Piggy bank.
42:20
Peter Dunn
Oh, stop.
42:22
Damian Dunn
The piggy bank act.
42:26
Peter Dunn
Okay. So you give teens money and they can either spend it or save it.
42:30
Damian Dunn
No, hold on. If passed, the bill would create a financial matched savings pilot program where high school students would receive $300 initial deposit and have up to $25 per month of extra savings put into the account matched. The program would require students to make sorry. To take a financial literacy class. The students would then be able to withdraw their funds a year after graduating high school for certain things such as paying for education, starting a business, buying a house, or to offset medical hardship.
43:02
Peter Dunn
I don't mind this. I was trying to hate it for a second, but I actually don't mind that something's going to go wrong and it will likely never happen. But it makes sense.
43:13
Damian Dunn
Yeah. Between the name of the act, the piggy bank act, which I can fully get behind the idea of that. And also, when you look at the other stats that say only about 57% of American adults are considered financially literate. That's not great. Better try and get in front of that train as early as you can. If you can do that while they're in high school and you're giving them a little bit of money to get started, I think I'm okay with that.
43:42
Peter Dunn
Yeah. So here's my thing with government spending. I'm not getting political, I promise. I promise. But likely I'm I want targeted spending to help those who are marginalized. That's what I want. Right. So to me, this has the potential to do that much in the way that I feel like the advanced child tax credit accomplishes the same thing. It's reduced child or poverty and children going hungry because of that functionality of making the tax credit an advanced tax credit. And I like that. I will note, and I'm trying not to be cynical isn't it more likely that a more financially stable family will have a student working and so therefore it will more benefit people who are financially stable as opposed to people who are not? Or is that anecdotal nightmare that I've just introduced?
44:42
Damian Dunn
I don't know if more financially stable families have their kids working because I don't think a lot of kids work today anymore. I think the kids that work do so because they don't really have any other choice. If they want some money, they're going to have to go get it.
44:53
Peter Dunn
What else is in the news?
44:55
Damian Dunn
Guessing game time, Peter.
44:57
Peter Dunn
Oh, yeah. Okay, I'm ready.
44:59
Damian Dunn
What percentage of Americans trust human financial advisors?
45:04
Peter Dunn
Oh, jeez. What percentage of Americans trust human financial advisors? I'm going to go 62%.
45:16
Damian Dunn
Little high. Little high.
45:19
Peter Dunn
Really?
45:20
Damian Dunn
Now, what percentage trust robo advisors?
45:25
Peter Dunn
Can you tell me who did this survey first?
45:28
Damian Dunn
Vice. V-I-S-E. Not Vice the News group, but News group. Yeah, Vice.
45:37
Peter Dunn
What is vice? Oh, there it's a robot. Eleven what? I don't want to make this about the story. I want to make this about me. Those were some bad guesses.
45:53
Damian Dunn
Yeah. It was not great.
45:55
Peter Dunn
However, 11% of people trust robo advisors.
45:58
Damian Dunn
Yeah. Which is crazy.
46:00
Peter Dunn
Makes no sense.
46:01
Damian Dunn
I know.
46:02
Peter Dunn
I mean, I trust financial advisors and I don't want to say I trust robo advisors more than financial advisors, but I know the one thing you're removing by getting a robo advisor is human emotion. And that's what makes it theoretically better.
46:21
Damian Dunn
Yeah.
46:22
Peter Dunn
What?
46:23
Damian Dunn
Yeah. People are not smart in theory. In general, plain vanilla investing a robo advisor should be a genuine consideration for most people because there is no human element. All you do is worry about putting money towards the goal or the account and it just happens.
46:43
Peter Dunn
What's the name of this survey? Who did it?
46:45
Damian Dunn
It was in USA Today. Let me send you the link real quick.
46:49
Peter Dunn
What's the name of the company? V. What? V-I-S-E-V-I-S-E.
46:54
Damian Dunn
Probably just giving this company way more publicity than we should.
46:58
Peter Dunn
Well, no, here it is. Technology powered investment manager that provides financial advisors with customized and intelligent investment solutions to help their clients. So to me this is about the advisor and not robo advisors. They are saying advisors are more trustworthy than robo advisors. Is that their offering?
47:17
Damian Dunn
That's what they're saying. But I'm not really all tuned up about either of those numbers.
47:23
Peter Dunn
I understand people not trusting financial advisors. I absolutely do. And I think sometimes it's an education situation. Right. You don't trust what you don't understand. But they really don't understand robo advisors then.
47:38
Damian Dunn
No. Do we need to do a quick what is robo advisor? RoboAdvisor is basically a computer algorithm, computer program, whatever you want to call it, that picks your investments based on answers that you give to certain questions, figures out your risk tolerance based on time horizon and all sorts of good stuff and then manages your portfolio for you. It checks it on a daily basis, makes the adjustments whether it's a weekly, quarterly or whatever basis it gets set up on. And there's no emotion to it. It just says this is where you need to be and it figures it out for you. Use ETFs, very low cost investments. There's no emotion in it. It just makes the changes as they're needed.
48:18
Peter Dunn
I just don't understand what is there to not trust? Do they think like the terminator army is going to take their yet whoever survey also trusts cryptocurrency just so you know. Probably, yeah. What's the third option? Cryptocurrency. Oh, 100% trusted. Absolutely.
48:34
Damian Dunn
All in?
48:34
Peter Dunn
Yeah, I'm in. Yeah, it's the blockchain.
48:37
Damian Dunn
Blockchain solves everything.
48:41
Peter Dunn
Dame, do you have a ten second story?
48:43
Damian Dunn
No.
48:45
Peter Dunn
Then we're stalling. This is the Pete the Planner show right here on the Pete the Planner radio network. Dame, thanks for all of your work this week. For all our listeners. Mom, I love you. We will talk to you next week here on the show sending you good vibes because good vibes are all that's in the budget. This is the pizza planner show right here on the pizza planner radio network. There you go. I'm on the Vy's site now.
49:10
Damian Dunn
I probably should have looked that up before I the future.
49:12
Peter Dunn
Hey, this whole show is about making statements and not having any data or supporting evidence. Viz is a technology powered investment manager that provides financial advisors with customized and intelligent investment solutions to help their clients achieve their goals. That's a lot of copy.
49:27
Damian Dunn
Yeah.
49:30
Peter Dunn
You know what I hate? I bet we even say this in some of our copy. I hate the phrase a personalized approach. I don't know why. It's like unprecedented times. Right? It's nothing.
49:55
Damian Dunn
Personalized approach. I'm going to try and remember that. Slip it in at various points and meetings from now on.
50:04
Peter Dunn
What I'm sucked into the site now so I can create silence for the podcast so I can just read this site.
50:12
Damian Dunn
You can go cut it out and post.
50:15
Peter Dunn
That's true. Yeah, because that's what I want to do. Is that it? All right, everybody. Dame? I'm good to go.
50:25
Damian Dunn
Good.
50:26
Peter Dunn
Best of luck with your life, everybody. Oh, wait. Michael says you will get your stride back for live and in person events. That's an interesting point, Michael. I have been doing more in person events recently, and still the live virtual events. And part of me thinks my fatigue is the fact that both are happening and they're so very different that they take different types of brain power. It is different. And by the way, no one feels sorry for me. I'm not asking you to feel sorry for. I'm just tired. So don't feel sorry. Everything's fine. All right, Dame, see you later. Everybody else, as you know, stay getting money.
