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. I hope you're having a great day. If you didn't notice, if you're watching on Facebook Live or YouTube Live, I am back in our actual studio, the real studio. I'm back. Started back this week, came back from vacation. I was like, you know what? I'm going back to work. So I am back to work. And joining me, as always, is my good friend, no relation, Damian Don. Hello, Dame.
00:44
Damian Dunn
Hello, Pete.
00:46
Peter Dunn
It's wild. I'm back in the studio. I feel really good.
00:50
Damian Dunn
It looks great. I never left my studio. At times it felt like I was here for the entire thing.
00:57
Peter Dunn
Jameson weighing in from Texas. Hello, Jameson. Thank you, everyone for letting us take a week off. We needed it. I was on vacation. A staycation. Dame just didn't do the show last week. Still doing all the good work that he does. Dame, I've had a few blips coming back into the workforce this week. I wanted to share one good story and one unfortunate story that I wanted to save.
01:21
Damian Dunn
To tell you these stories here today, I can't wait.
01:24
Peter Dunn
Okay, so here's the thing, Dame. When I came back into the all, I'm going to start. Do you want the good story or the bad story first?
01:33
Damian Dunn
Dealer's choice.
01:36
Peter Dunn
We'll go with the good story.
01:38
Damian Dunn
I would have gone with bad.
01:40
Peter Dunn
When we came back to the office, I was like, hey, man, I got to wear a suit. I got to look good when I come back because I gotta feel like I'm back in it. So first day I came back, I wore, you know, in a suit, looked good. Second day back was yesterday, which was Thursday the 15th. And I am suited up. I'm feeling good, looking good, walking like I'm talking. And so there's a Starbucks about 150 yards from our office across the parking lot. So midday yesterday, I walk outside and I start walking across the parking. I'm strutting I'm going to be honest with you. It's probably noon and I'm just like I'm feeling myself. I've been working out. I have a beautiful suit on. And I make it a halfway across the parking lot and this truck is driving by and there's this woman in the truck and she's moving at a pretty good rate of speed.
02:34
Peter Dunn
She slams on the brakes, rolls down her window and says, d***, you look good today. D***. I'm telling this happened. No, this happened. This is the greatest thing that's ever happened to me. And it happened yesterday. So I'm feeling this vibe of human interaction. I was thinking, does she have a scene? Eye dog in the car? Like I didn't know what was going on. So I'm thinking, okay, well, this is what it is to just make people feel good again, to talk and to see people. So now it's time for the bad story. Later that afternoon, I'm here in our office building, and I've been drinking a lot of liquids. I went to Starbucks, I had some other coffee. So I'm hitting our restroom over here pretty regularly. Well, about the fourth time I make my way there in the course of the day, I noticed that all the other three times, the same woman from a different business was going to the bathroom at the same time as I was.
03:38
Peter Dunn
It was just sort of weird and mystical, right? And of course, because I'm thinking human interaction is what people need right now. On the fourth time, I'm walking in there and I go, looks like we're on the same liquid schedule. She has a mask on, but you could just see her face contort to like, you're the creepiest person I've ever encountered. But it made sense at the time, right? Because you just want to be with people and feel human again. And so I went from a woman complimenting me on how nice I looked, and it made me feel like a million dollars to possibly having, like, a restraining order filed against me by a woman in our building.
04:25
Damian Dunn
Did you go to the upstairs bathroom after this trip?
04:30
Peter Dunn
No, I just went in your office in the other room. Awesome. But anyway, so we're back. We are back in the studio. We've got some new little kitty cat friends on the show, if you're watching on Facebook Live and all that good stuff. So, Dame, here's what we're going to do. We're going to start the show. We've got quite a few really good segments on tap today. I got to grab my things, get ready. Okay, let's start the show. Ready? All right, in three, two this week on the Pete the planner show, we answer your money questions. Here's how the show works. You email us, ask Pete at pete theplaner.com that's ask Pete at pete theplaner.com, and we will answer your questions. And were actually doing that this week. When I say we, I mean not yes in French. I mean we as in Damian Dunn, vice president, advice at your moneyline in hey, money.
05:23
Peter Dunn
Hello, Dame.
05:23
Damian Dunn
Hello, Pete.
05:24
Peter Dunn
Let's start off by telling everybody the good news here. We have a brand new affiliate on our radio network, wshy, the patriot, I believe, 104.3 FM in West Lafayette, Indiana, and 14:10 A.m.. Thank you for carrying our show. You will be modestly pleased with what you've done. Your decision won't be that regrettable. Right.
05:54
Damian Dunn
Dame, I appreciate you setting a not too hard by not too high bar for us to see. Already paying down.
06:03
Peter Dunn
Good job, Patriot. So, anyway, so, Dame, we've got several questions this week on the show. One about I wrote about in USA Today this week, and it came to us via Ask Pete@peteepplaner.com. Dear Pete, I can't believe it, but we more or less survived the last twelve months without too much financial damage. We did spend through our emergency fund of $15,000 and go into about $5,000 worth of debt, but given I was jobless for nine months, I'm okay with that. I have a job now, and I'm ready to get back on solid ground. Should I focus on paying off debt or building my emergency fund back up first? This is from a guy named Bradley in Atlanta, Georgia. Dame it's funny sometimes when you hear these stories of someone blowing through their entire emergency fund and going into debt, sometimes the first inclination is to be like, oh, man.
06:56
Peter Dunn
But the real emotion here should be like, oh, man, you did it. You did it. The plan worked. Dame why is that when you have a beautiful backup plan that works, it still hurts sometimes?
07:11
Damian Dunn
I have no idea. And we see this all the time. People have an emergency fund set aside and an emergency occurs and they're reluctant to dip into it for whatever reason, they can't bring themselves to spend that money, and they go and maybe take out a little bit of debt to bridge that gap, whatever it may be. So I think certain personalities just have a really hard time executing the plan once it finally presents itself to be put into action. So I can't put a finger on it, but I am thankful that this particular individual was able to have that emergency fund first and foremost. Great job building it up and then go into what I would assume is probably a very manageable amount of debt to bridge to that next job. Nice job.
07:58
Peter Dunn
I'm totally with you. And it got me thinking that as we try to recover from whatever it is we've lost collectively in year 2020, that when we repair ourselves in 2021, sometimes we're going to be cleaning up some of those messes. But then it got me thinking about 2022, and it's not like this person needs to be completely out of the jam that they found themselves in by 2022. However, time ticks on my friend, there could be something else on the horizon. You read in the news this week that Pfizer saying, hey, by the way, you're going to need another shot. You're likely going to need a booster, and who knows if we ever get to herd immunity in the first place based on the reluctance of some folks to get vaccinated and understandably so who is it for me to say? And then also with the Double Johnson news this week, what I want to make sure in stories like this is that we're not just celebrating the recovery that people have and their emergency plans, but we say we need to fix these sooner rather than later, even though we're all congratulating ourselves because whatever's coming next is still coming.
09:11
Peter Dunn
And so that's what worries me, especially with this consumer boom that's beginning to happen right now with free spending people getting excited about things opening back up, not to be dunny downer, as I often am here, however, I think people got to understand that they've got to resecure themselves, just like Bradley in Atlanta, Georgia.
09:34
Damian Dunn
Here's the good news for Bradley, at least. What I think might be a silver lining here for those nine months that Bradley was out of a job, he was probably living pretty darn lean for trying to make that $15,000 goes as far as it could and not having to not get into, I should say, as much debt as he needed to. Now he's got income back, and so hopefully he can maintain a thin lifestyle for a while to give himself that jump start to do exactly what you said, get back into a good, strong position with an emergency fund, get rid of that debt, which over order maybe you and I are going to talk about here soon. And I think there is a right choice there, by the way. Pete. But if he can maintain that lifestyle now that he's got income, he can do just what you said, get back in an advantageous position relatively quickly.
10:28
Peter Dunn
What do you think the best order is? And by the way, TD says hello.
10:37
Damian Dunn
I see that. Hey, bud.
10:38
Peter Dunn
Happy birthday, TD. Dame so what do you think the best order is?
10:43
Damian Dunn
I think you got to go with the emergency fund first, even if it's just a small cushion to help you. When life inevitably happens again to you, whether that's a major car repair that has to happen or something else that's unforeseen, you got to have that buffer between you and needing to take out more debt to make sure that your life is going on. So get that emergency fund set, whether that's $1,000, $2,000, whatever you can amass relatively quickly, and then focus on getting rid of that debt and then head back to the emergency fund.
11:15
Peter Dunn
Every once in a while, I'm reminded that you and I don't share a brain, but more often than not, we do share a brain. I feel like you could have just written this column because I said the exact same thing. I also think sometimes when people find themselves in a jam and let's say it took this guy a year to get into this jam, to undo the jam, even though he's fine to undo the jam, a lot of times you got to give yourself equal time to get out of the jam that it took you to get into the jam. That's a really weird rule of thumb that doesn't always work. But I have to tell you, Dame, it works a lot. I mean, I would fully expect it to take twelve months to refill the $20,000 at least. And that's if he's living super lean, he's taking advantage of what her Uncle Stemmy's giving him.
12:10
Peter Dunn
He's got a tax refund. And I don't know, but if this guy happened to have children, the advanced child tax credit could certainly refill those coffers. And like we've said here on the show, probably for the last six weeks, you're just going to hear more and more about the advanced child tax credit until those payments start coming out in July. And I still think they're going to shock people, and people are going to think they're fake and that there's some sort of weird catch.
12:38
Damian Dunn
Yeah, the IRS commissioner, I think, was on the Hill this week and said they're working towards making sure that those payments are going to go out hopefully starting in July. If they aren't ready, they're not going to go out in July because they don't want to open up their systems to any kind of unexpected fraud that would come through this. And I also don't think they've decided on whether they're going to go out monthly or periodically, and there is a difference there. Monthly, obviously, we all understand what that is. Periodically, I think. I don't have a whiteboard, but I could probably explain it to you if I had to. But periodically, you end up getting about three checks, one in July and then one about a quarter later and then again in December for those payments. So they haven't settled on that either. But they are trudging right along.
13:26
Damian Dunn
It looks like we are going to start seeing some money if you qualify in the middle of the year. Real quick here.
13:33
Peter Dunn
Before we wrap up this segment, Dame, I have to say you and I are not debating the importance of these payments because it doesn't really matter because it's happening. What I would be willing to weigh in on at this point is it should be monthly, and the reason is, if it needs to have the best effect, I think you got to get it's all about getting money into people's hands sooner rather than later so that their troubles don't accumulate. And so while there are other reasons, I'm sure that they want to spread it out, I don't really think they should. So, Dame, let's do this. Coming up after the break, I have a guaranteed two segments one question, because it might be the longest question we've ever asked on the show, but it's such an interesting question, and the discussion afterwards will be interesting as well.
14:21
Peter Dunn
That's all next on the Pete the Planner show. I'm Pete the planner. Okay, well, I forgot to stop the clock there, and it got weird.
14:33
Damian Dunn
Welcome back.
14:35
Peter Dunn
Welcome back. All right, Dame, so what do you think there? First of all, we got to wish your son a happy birthday. So that felt pretty good in the middle of the segment with just no context that I provided to any of the radio audience. So our new affiliate in West La Fiatz could be like, what are they talking about? Yeah, that's not voice, by the way.
14:59
Damian Dunn
It could be can I just run.
15:01
Peter Dunn
Down the affiliate list just because we're not on the radio, probably I'll do.
15:04
Damian Dunn
That on the radio to have maximum effect. I don't think the podcast I don't care that much.
15:08
Peter Dunn
I'm a professional. Did you see the screen pop up of my daughter's face on my iPad? Because I was trying to switch something over. Did you happen to see that?
15:18
Damian Dunn
Totally did. And it did not throw me this time. Yeah, there is. Beautiful.
15:23
Peter Dunn
Okay. All right, let's get to it. This is an unbelievable question that we're going to ask here, and it's long. I'm going to try to get through it without too many jokes, but it's a good question that you and I can debate. All right, so let's get started. In three, two, one. Back on the Pete the Planner show. Dame we go to the email bag to pull up an email question for those listening for the first time. Askpete@petetheplanner.com that's. Askpete@petetheplanner.com again. Welcome to our brand new affiliates and Wes, our affiliate, I should say, in West Lafayette, Indiana. The patriot. Wshy. And while we're at it, hello to folks at Wvki in Knox, Indiana. WTRC, michiana zone 95, three FM, and some other ones that we'll hit later because we have things to do. Dame all right, here's the question. This is a long one. Good day.
16:26
Peter Dunn
Done. Bros, no relation. I recently turned 52 and I work full time and my wife will soon be 53. Old lady and works part time. Our combined gross income is about one hundred K a year and we are empty nesters. We currently have about $75,000 in cash, 760,000 in Roth and traditional retirement accounts, and $80,000 in a high yield corporate bond that pays monthly dividends. That represents a 5% annual return based on the current bond fund price. These dividends are reinvested and it is not in a retirement account. Therefore, Dam is non qualified. Our annual contribution towards a retirement account is currently 30 grand a year. In 2020, I received a 4% 401K match and another 10% in the ESOP. Very nice. Usually the ESOP contribution is 5%, yet this person got a 10% contribution in 2020. I wonder what industry they're in. Our only debt is a mortgage balance.
17:29
Peter Dunn
This is where people need to start listening to the details because this is where it gets super interesting. Our only debt is a mortgage balance of $127,000 on our home, worth $350,000. Our principal and interest each month is only $965 a month. If we don't pay any additional amount towards the principal, our mortgage will be paid off September of 2034 when I will be 65 and my wife will be 66. So, Dame, if you're like me and you were reading through this question, you're like, perfect, beautiful. You've matched up paying off your mortgage with your retirement age. Done deal. Thanks for emailing, thanks for listening to the show. And obviously you're into older ladies. That was my thought. But then I read the next sentence and this is where this gets really complex. However, it's like, oh, boy. If we can figure out the health insurance puzzle, I would like to retire from full time work at age 60 and plan to pay off the mortgage.
18:28
Peter Dunn
By then, we will be receiving an inheritance of around $300,000. My original plan was to pay off the mortgage balance and free up that $965 a month of principal and interest. However, here are the three main financial scenarios I can think of. And we want to know what is the best option according to you two. So, Dame, it is important to say I read this part several times because he left out a word. We will be receiving an inherence of around $300,000 soon. I read through it. That is what he's implying. He's not like, hey, eventually we're going to get $300,000. No, he's getting it now. So we've got $300,000 to work with to figure out the best path for this person. I love these. This is why I got in the business, because I love this situation. Okay, option pay off the mortgage balance of $127,000 right now and invest some or all of the $965 a month that's been freed up.
19:26
Peter Dunn
Okay, that's option one. Don't pay off the mortgage. Invest what is representative of $127,000 in equities, then pay off the mortgage at age 60 without any extra principal payments. We will have a balance of $60,000 when I reach age 60. So I did read this part a couple of times. The first time. So what it means, Dame, is instead of paying off the $127,000 that he would have available via this inheritance, he would just keep making his payment like he normally does. But age 60, when he plans on retiring, he's just going to say, oh, what's my balance now? Now I'm going to pay that off. And that balance would be $60,000 at age 60. Option three, invest the $127,000 into the high yield corporate bond fund, redeem $500 a month in dividends, and put that towards our mortgage principal. I realize the dividends and share price can fluctuate in the future, and the yield may be under 5%.
20:22
Peter Dunn
We can write out any share price decrease before we cash it in. So I'm not concerned about the value of age 60. With this scenario, the mortgage will be paid off in 2029, june 1 of 2029, or a few months before I turn 60. He put together a spreadsheet for us showing the potential value of the equities depending on what he does before we get to that. Dame, the third option of using the bond fund yield to pay off the mortgage, is that something that you're even considering in your top two options, or have you dismissed it like I have? I don't know why I've dismissed it, but I've dismissed that.
21:01
Damian Dunn
I think he's trying to split the difference on something, and I don't know if I want to go that route, but it's probably not the top two.
21:11
Peter Dunn
Yeah, I don't know why.
21:13
Damian Dunn
I don't either.
21:14
Peter Dunn
And so what he does is he shows us at various rates of return, what putting away. The first thing I'm going to share with you is if he paid off the mortgage right now, paid off the $127,000, and then just invested the $965 a month at various rates of return, this is what it would show in terms of his balance when the mortgage would be paid off. Otherwise paid off. At 5% rate of return, it'd be $120,000. And he gave us a bunch, but I'm going to say at 8% rate of return, it'd be $137,500. So that is another way he essentially breaks even. If he were to do that particular plan, his mortgage rate, as everyone is wondering, is 3.25%. Then he said, all right, instead of doing that, instead of paying off the mortgage, I'm going to take that $127,000 that I just inherited on top of the rest that I inherited.
22:10
Peter Dunn
And instead of paying off the mortgage, I'm going to invest it in an equity fund and just keep paying my mortgage as normal and see if I can grow that money at a higher rate of return and then deal with the ramifications later. At a 5% rate of return, he's at $187,600 over the next eight years, and at an 8% rate of return, he's at $235,000. Now, what's really important to consider here is net rate of return, because he's going to have to pay tax on the gains depending on how the money is invested each of the next eight years if he chooses to not use a qualified vehicle or anything like that. So it adds a little bit more complexity to that. So dame first, we have two minutes left. That's a seven minute question, but this is a lovely conversation. I'm not in this situation that this gentleman is, other than I'm in striking distance of my mortgage being paid off, too, around.
23:21
Peter Dunn
It would be a similar age to this sort of situation. It'll be paid off by the time I'm 53. But if money came my way, I would try to figure this sort of thing out, too. So I think this is why this resonates where are you leaning right now?
23:33
Damian Dunn
And why I was really hoping I could go an entire segment without saying a single word, so I thought you'd stretch it, but you didn't.
23:40
Peter Dunn
So are our listeners. Yeah, go ahead.
23:45
Damian Dunn
I think I'd pay it off. I think I'd pay the mortgage off.
23:48
Peter Dunn
Now we're on opposite sides, little teeter totter action. All right, done and done. Okay, so here's what we're going to do. The next segment of the show, you and I are going to have an old school debate, which will end in me siding with you, probably like I always do. You and I are going to talk about our top three reasons why we're going to do what we do and I also have to say this is the glory of not doing show planning. I think your wife just weighed in as well, and I think she agrees with you.
24:30
Damian Dunn
For those of you on the new affiliate, don't forget we have a live stream that goes at the same time we record the show and people can comment. So if you are interested, check us out at new pete wherever we are.
24:41
Peter Dunn
Fridays at noon on Facebook at the Pizza Planner page and or YouTube at the Pizza Planner page. Fridays at noon Eastern. So anyone ever listening on their radios on the weekend or on the podcast, you can watch us happen live and you can contribute to the conversation and we occasionally reference those comments without context to the radio audience. So, Dame, let's do this. Let's take a break, come back. The great debate is on and it's next on the Pizza Planet show. Oh, my gosh. How about that for an outro there? Okay, so now we got a bunch of people weighing in here. Kathy agrees with you. Nick Jackson agrees with Dame Jameson's. Going for jokes. What a condone.
25:28
Damian Dunn
That's reasonable. James that's okay.
25:32
Peter Dunn
Daniel says, are you guys going to be good done, bad done routine on this emailer?
25:36
Damian Dunn
I don't know how we could pull that off for this. Right done, wrong done.
25:43
Peter Dunn
Todd says, did the gentleman say what industry he works in? He's assuming that job income is always going to be there. That's actually a good point. Well, hold on. Don't make points. Can someone help me, please? Kate invest the inheritance. She meant to say the, but she said tagi. Okay. And then, of course, Dan does get a side of it. D***. I'd rather depend on not having to pay bills. Okay.
26:11
Damian Dunn
Criticizing people that agree with you probably isn't going to get more people to agree with you. Just saying.
26:16
Peter Dunn
Welcome to my life. All right, so I'm going to take a drink of this premier protein lean protein shake right now.
26:25
Damian Dunn
A new sponsor?
26:26
Peter Dunn
No, I'm drinking this because I feel like I'm going to have to battle you in the next segment.
26:30
Damian Dunn
No free ads.
26:33
Peter Dunn
Sorry. All right, dame. Okay, so real quick for those that are just joining us, earlier, I was telling a story about how a woman slammed on her brakes to compliment how nice I looked yesterday. And then later that afternoon, I made a comment to a woman walking towards a public restroom that her and I were on the same liquid schedule. And, Dame, I'm wondering as to one is the high of a high and the low of a low, which has a bigger magnitude to it. Like, in your opinion, if someone were to stop you and tell you how good you look versus you say something creepy and then after the fact you realize it, and then can you risk like, arrest and things? Which has a bigger match, the high of the high or the low of the low?
27:19
Damian Dunn
Probably the low of the low, because there's a reasonable chance that I'm going to see that person periodically for a long time.
27:27
Peter Dunn
I had not considered that.
27:33
Damian Dunn
Can you just start wearing a wig to the bathroom or something?
27:38
Peter Dunn
Brittany says it's low, too. You know what? I'm going with the high. The high.
27:41
Damian Dunn
You got it. At this point, you have to.
27:48
Peter Dunn
Okay, I'm ready. I got to write down my three point. Do you have three points? I'm going to have to just make them up on the flag.
27:54
Damian Dunn
At least three.
27:56
Peter Dunn
Oh, God. Can you stop reading the Facebook Live comments? Because I feel like people want to help you because they feel sorry for you. Okay. Three, two, one. Back on the Pete the Planner show. All right, Dame, we just had the world's longest email question, and it boils down to this. This person has $127,000 left on their mortgage and they just inherited a bunch of money. They've got eight years until they want to retire. Is that right? Yes. If the person pays off the mortgage with $127,000 and then invests what his mortgage payment is. Now, that's one option. And option two that you and I are debating is, should he just invest the $127,000, pay his mortgage as normal, and then at the end of the eight year period, just make a withdrawal out of that investment to pay off the remaining balance. And at the break, you said you went with option one.
28:53
Peter Dunn
I'm choosing option two. Let's have it. Would you like to go be first and wrong, or do you want me to go first and be right? How do you prefer?
29:03
Damian Dunn
Do you want to go back and forth as well? You give a point and then I give a point.
29:08
Peter Dunn
You go first. Ladies first. Okay. Go ahead.
29:10
Damian Dunn
Appreciate it. Job stability. Who knows if that job is going to continue or if they're going to have to. There's a health issue that requires them to pull back a little bit or take a different job that may not have the same income. If you can have that mortgage paid off and have that stability in your life, which is something that we champion around here quite a bit, is stability. I think you're going to sleep a lot better knowing that there's going to be a roof over your head for as long as you want it to be.
29:40
Peter Dunn
I will say that you threw stability in my face. Felt a little condescending.
29:43
Damian Dunn
I just wanted to say that publicly. Sorry.
29:46
Peter Dunn
Okay. Fair point. What's your name? David. Fair point. Damon. I think this if he inherited $300,000, right, which is what he said, it's not like he only inherited $127,000. If he loses his job, he's got plenty of an emergency fund. I don't think that it's worth giving up what really matters in this situation to mitigate an issue that's already mitigated with the rest of. His, dare you say stability that already exists. So as the audience is looking on Facebook live and overwhelmingly says, I win round one. Dame what about you? What's your round two point?
30:32
Damian Dunn
I'm going to just try and rebut that point of yours before I even get to my round two point. They've got a really nice nest egg set aside for retirement already. If they do nothing else and get average market returns, they're going to have close to one and a half million dollars sitting aside, ready for retirement. Which, if they make $100,000 a year, if you include any Social Security or possibly pension payments to go along with that, do they really need the extra growth of the $300,000 for the next ten or so years, give or take, depending on what route they take? I would argue no. It's not really that crucial to their long term success. Whereas they could get that extra stability now with the 300 with the $127,000 to eliminate the mortgage point dose.
31:20
Peter Dunn
Wait, that is your .2.
31:22
Damian Dunn
No one no, that was me arguing against your point that they do I.
31:27
Peter Dunn
Get to rebut your rebuttal?
31:28
Damian Dunn
Sure, show man. You do whatever you want.
31:30
Peter Dunn
I completely dismiss your rebuttal .2.
31:37
Damian Dunn
All right. Flexibility. And they can do whatever they want at this point. If they pay off the mortgage, they can possibly sell the house and downsize and have all of that set aside for equity on the next house, or then take some of that and invest that as well. If they want to work longer, they can without any concerns to mortgage payments or anything like that, or relocate and chase kids. I don't know if they have kids. Maybe I just granted them kids, who knows? But they have ultimate flexibility with the mortgage paid off and they are less dependent on that income.
32:13
Peter Dunn
All right, I think that my point, too, happens to be the exact opposite of that. It's the flexibility that causes the issue, because if you look at the language of this emailer, he says, and invest some or all of the $965 a month. Dame he ain't going to do it. That flexibility is tempting him. It's like when you go to the bathroom the same time as someone in your building at four times in one day. The temptation to say something like, we're on the same liquid schedule, it's too much for some people. This flexibility is too much for this person.
32:59
Damian Dunn
It's possible he's just saying some or all because he's not sure which direction he needs to go to make this work, if anything.
33:06
Peter Dunn
Do you have a good point that you're going to make?
33:08
Damian Dunn
Yeah. Market fluctuation. We have no idea what's going to come in the next .3. Market Fluctuation there's no guarantee that there will be any or all of that money set aside to pay off this mortgage when he needs it at age 60, without maybe presenting other problems.
33:28
Peter Dunn
Okay. I see your market fluctuation and raise you. What's it matter in eight years if his money has dipped? He just waits longer. He's got plenty of money. This is the elementary mistake people make in retirement planning that thinks if they have some down years leading into retirement that it ruins everything. No, it doesn't, because it's not like they're taking max income off all this stuff. I don't think it really matters at all as long as he is invested according to his risk tolerance with a decent asset allocation. And he's working with a financial advisor that can even set up some degree of a bucket system with this. And never mind mo frere. He's got another $173,000 from the inheritance that he could also depend on if things get weird. These three reasons that I've just given, I was forced to give in retaliation in sort of response to some lesser points, have me the winner of this particular debate.
34:30
Damian Dunn
First of all, your fancy foreign language isn't winning you any points with our listeners. I don't know who you think you are or who you're trying to pretend to be, but that's just not the case.
34:38
Peter Dunn
What was my foreign language? What I say?
34:39
Damian Dunn
Monfre.
34:41
Peter Dunn
Oh, I didn't even realize. What language is that?
34:44
Damian Dunn
I believe it's French. Please correct me in the comments if I'm wrong. If the market goes down, Pete, not only is this $300,000 going to go down and what he's got sitting there set aside for the mortgage payment, but his retirement is going to go down, too, making this money even more crucial. Whereas if he pays the mortgage off, he can dollar cost average back into the market while it's lower in order to catch that wave back up as.
35:10
Peter Dunn
It rebounds, by the way, dollar cost averaging has proven to be completely overrated.
35:16
Damian Dunn
Only when you don't do it right.
35:18
Peter Dunn
Okay, so I will say this. We've just said can I time out our photo debate here? Sure. Are you answering this as to what you would personally do, or are you answering this as to what he should do?
35:33
Damian Dunn
I'd pay off the mortgage.
35:35
Peter Dunn
Okay, so you're doing this as me. Okay, I will be me for a second, which is very difficult. Okay. I would probably invest it. Okay. No, I would pay it off. No, wait. I would invest it. I would invest it.
35:55
Damian Dunn
Make up your mind, man.
35:56
Peter Dunn
No, I'm not going to pay it off. I would invest the money because what I know about myself is flexibility ain't a good thing behaviorally, in all areas of my life. If I leave wiggle room for the might isn't going to happen. If I say it's what I'm doing, it happens. And so what I'm doing is I'm taking that additional $127,000 and I'm vesting it, and it's going to be conservative ish, and there you go. And if I lose my job, I still have the other $173,000. And, you know, these people have a hearty emergency fund, too. He didn't mention, oh, $75,000 in cash, and it probably's just in a safe, and he should send us the combination and their address. But now, by the way, emailer, did he put a name on this?
36:52
Damian Dunn
So wait a second. You're going to invest the money and you're totally discounting put it in the bond fund that's given 5% and pay it off a little early with the dividends?
37:04
Peter Dunn
No, listen, I'm dismissing it in the sense that he already has a conservative part of his portfolio that's represented with that money. And so this allows him to take some calculated risk. And by the way, it's Rob from Minnesota that sent this email, and we have 30 seconds left. Let me say this, Rob. I just gave you my opinion as to what I would do with my situation. Dame gave you his opinion, and I do want to say this, and maybe Dame agrees. I think either option is probably fine. The more conservative option would be to pay it off now, and you're just going to have to monitor your behavior. And I also want to say congratulations for putting yourself in this situation. Dame and I both think that it's fantastic. Coming up after the break, the biggest waste of money of the week and the news right here on the Peter Planner show.
37:49
Peter Dunn
I'm Pete the planner. All right. Right now, facebook live, YouTube live. Who won? Put a name. Dame repeat. Who won?
38:01
Damian Dunn
There will be no hard feelings, and it's not pretty watching Pete cry. So if you vote, Pete, I understand.
38:05
Peter Dunn
Brittany says I won. Amanda says I didn't make any points. I just rebutted yours. I have to admit it did seem that way. However, because Dame and I do this for a living, those are more or less the three main fulcrums of decision. And so were going to be on either side of it based on our justification. So it did seem that way, but they were isolated points. Danza trying to keep things in line here, says it's a draw. Jameson said Pete. But then here's the thing. Jameson said that you should invest before we started talking. Anyway. Kate says Pete. Amanda says Damien. I think it's because I just said that she was wrong about me just rebutting. Nick says we're both winners, which we know is not true. And then Kate says, Winter. Winter chicken dinner.
38:53
Damian Dunn
Okay, good enough.
38:59
Peter Dunn
I really would invest it okay.
39:04
Damian Dunn
I would really pay it off.
39:05
Peter Dunn
Do you think his age matters to this, or is it not a matter is his age but the distance from retirement?
39:13
Damian Dunn
That's a fair question.
39:16
Peter Dunn
Now I ask a good question.
39:21
Damian Dunn
I don't know. The age is interesting. Although if you could be young and have no mortgage for a long time and you brought up a good point. If I said I might do this and it doesn't happen, I think that's an excellent point, but that's where automation comes in. You don't give yourself the chance to not do it. You get it set up once and it rolls on forever, and you just forget it's happening. So you can mitigate that risk pretty easily.
39:52
Peter Dunn
You can also de automate something pretty easily. I'll just say again, my answer is literally for who I am as a person who've gotten to know myself, I will be mortgage free at 53. And what terrifies me about that is all the freedom that comes with it. I would much rather and I'm not saying I'm retiring at 53, that's not where this is going. I would much rather change to my new income need, which is a way to say retirement at the exact same time I become mortgage free. That is my preference. And no, I did not just announce my retirement at age 53, but that's the way my brain works. Okay, that's fascinating. The other factor here, too, is the second he hits 59 and a half, all that qualified money becomes available, both raw and traditional, which makes it more of a backup plan, which makes me right.
40:50
Peter Dunn
Okay, Dame, are you ready for the final segment? I hated to embarrass you in front of your son, knowing that he's watching the show right now.
40:59
Damian Dunn
Doesn't care. He's used to it.
41:01
Peter Dunn
He likes it. He's like, yeah, get him again. Uncle Pete.
41:05
Damian Dunn
Not Uncle Pete.
41:06
Peter Dunn
Not Uncle Pete. Three, two, one. This week's bomb. The biggest waste of money of the week right here on the Pete the planer show is by the way, if you're just joining us for the first time on our new affiliate the patriot in west Lafayette, Indiana, every week in the fourth segment, we have something called the biggest waste of money of the week, the bomb. And it is something that happened in our world that if you were to spend your money on this, it is probably a big waste of money. Sometimes we highlight things that are not a waste of money. Now, Dame, I don't know if you remember, but a few weeks ago, the Evermore, I believe it was called the everGiven, there was a ship called the Ever Given that was jammed inside of the Suez Canal. Do you remember this?
41:56
Damian Dunn
I think I heard something about it.
41:58
Peter Dunn
It shut down the world. I mean, it really did. It slowed down a lot of things. So the Suez Canal Authority was like, you knew they were going to punish the Ever Given in some way over this debacle because it really shut them down. And as we learned a couple of weeks ago, anytime you pass through the Suez Canal, what do we say the fee was? $700,000 or so. It's a lot per ship. So with all the ships not able to go through, you knew they were going to be level five, heated. Well, they have taken control of the ship. The Suez Canal Authority and until the owner agrees to pay for $1 billion in compensation and fines, the ever given will not be given back. And that is this week's biggest waste of money of the week. So, Dame, if you own the everGiven, would you pay $1 billion to get your ship back?
42:55
Peter Dunn
And I know you're saying, well, it depends what the ship cost me. It depends what's on the ship. What do you do here? Do you just tell the Suez Canal to pound sand? What would you do?
43:08
Damian Dunn
There's so many things. If I tell them to pound sand, do they stop me from my business from sending any more ships through the canal until that money is paid? Which could be a big problem. The other thing I'm wondering is how many mercenaries could I hire for $50 million to fly in there on little helicopters and hijack my own boat and bring it back to me and make a movie out of this? Because I think you could very easily make some cash out of this.
43:34
Peter Dunn
I mean, this has got I'm your captain now written all over it.
43:37
Damian Dunn
Totally.
43:40
Peter Dunn
Here's the other thing that's worth noting. Who in the world oh, you say a billion. Hold on me. What do you put in the memo section? You got an extra bill laying around your studio north there right now.
43:54
Damian Dunn
It's a business expense, Pete. It just comes off on taxes.
43:58
Peter Dunn
I love when people say as a business owner, one of the funniest things is when you're out with another business owner and the person grabs the check, I'm just going to write it off and it's like, you do realize you're still paying for it, right? Just write it off. Or sometimes non business owners like, oh, you can just write it off and it's like, yeah, you still pay for it. You just don't pay taxes on the money earned. Dane, what's in the news this week.
44:27
Damian Dunn
On the first play from Scrimmage this spring, the University of Central Florida quarterback at underscore, Dylan Gabriel completed a five yard pass to tight end at Jake Hescock and a new era of UCF football had begun. I'm not just talking about the Gus Miles and coaching era. No. I'm also talking about the name, image and likeness branding era. That's right. UCF's players did not have their names on the back of their jerseys during Saturday's spring game. They had their twitter handles.
44:59
Peter Dunn
This is like, he hate me.
45:01
Damian Dunn
Exactly like that.
45:02
Peter Dunn
That's genius.
45:04
Damian Dunn
Yeah. So UCF has not decided if they will continue the practice in the fall, but it is under consideration.
45:11
Peter Dunn
I just thought of something terrible. Okay, so, Dame, here's the reality of the 21st century. When you and I were in high school, there was no social media, there was no camera phones. Thank God dumb things happen via the brains of young people. And that's okay. You and I have done a lot of dumb things. I continue to do dumb things. I just do them less publicly, maybe in the lobby of our building here, but less publicly. What are the chances that someone's putting their Twitter handle on there? Someone goes to the Twitter handle and sees all the horrible things they've done over the last several years and it actually ends up hurting them. I think the chances of that are pretty high.
45:53
Damian Dunn
I mean, I would think this is a 40 something year old adult now, that maybe it puts a little pressure on you to keep things neat and tidy on your Twitter if you're going to be putting your name out there that much.
46:07
Peter Dunn
Well, I know myself too well to know. I guess this is just a conversation about wisdom. I've been off of Twitter the last two weeks, and it has been the best two weeks of my life. I don't feel the need to try to put any hot takes out there. I don't feel the anxiety and stress of everyone being mad at everything, and sometimes rightfully so. Anyway, what else is in the news?
46:32
Damian Dunn
Apple's share of smartphone ownership continues to increase, according to Piper Sandler's taking stock with teen spring 2021 survey. Of the 7000 respondents, 88% have an iPhone, the highest percentage they've seen in the survey and up from 85% in the spring of 20. In addition, iPhone may have room to move higher, with 90% of teens anticipating their next phone to be an iPhone. This metric is also the highest ever in their survey, and up from 88% in last spring's survey. Apple's other hardware products showed strong results as well, with 28% of teens owning an Apple Watch and nearly 70% of teens owning AirPods, which I would bet a high percentage of those 70% of teens own probably three AirPods.
47:24
Peter Dunn
Did you write that joke before the show or did that just happen?
47:26
Damian Dunn
It just happened.
47:28
Peter Dunn
Are you sure?
47:29
Damian Dunn
Yeah.
47:29
Peter Dunn
That's really funny. I'm not doubting you, but the voice sounds like I'm doubting you. Have you ever owned android?
47:38
Damian Dunn
Yes. It was like a Galaxy Four or something. Like it was it's been a long time.
47:43
Peter Dunn
And when you switched, were you like, oh, or did it not matter to you?
47:49
Damian Dunn
It did, because I didn't have to restart the darn thing like twice a day.
47:54
Peter Dunn
I switched a Mac, probably all Apple products, probably in 2006, and I've not looked back. I don't think I've owned another PC or Windows based device since then.
48:10
Damian Dunn
I am so deep in the ecosystem at this point that I don't even want to think about getting away from it, with the exception being like, Alexa type products, amazon Little Echo products, stuff like that. But even then it's like, do I really want to dip my toes here or not?
48:29
Peter Dunn
And now I'm giving news. Did you see the report this week that Apple TV will now actually likely be a TV that includes an embedded camera in it? And it's like, okay, there's a couple of things to consider here. I just said I'm all in on Mac. The worst thing about anything apple is actually Apple TV. Compared to, like, a fire stick, it's firestick thousand times better. In my non expert opinion. I look at people via camera all the time, like all of us do. I don't want it on my TV. I get it. To have a family chat and just be sitting in your living room talking to people, I get it. But I'm not going to change out my TV for that. Would you?
49:10
Damian Dunn
Oh, not specifically for that. Not at all. I've never used a fire stick, so I don't know any good. It's so great. Maybe you can get as a holiday gift for everybody in the office.
49:24
Peter Dunn
I will. I will do that. I will get everyone fire sticks.
49:27
Damian Dunn
Write it down. Write it down.
49:29
Peter Dunn
The feast of the Epiphany.
49:30
Damian Dunn
Whatever you want.
49:32
Peter Dunn
What else is in the news?
49:34
Damian Dunn
It's not quite nearly the $1 billion blunder that Citigroup made last summer, but Charles Schwab accidentally sent more than a million dollars to a Fidelity brokerage account of a woman in Louisiana. Schwab blamed the issue on a software enhancement for erroneously transferring $1.2 million in February to the Fidelity account of Kellen Spadoni rather than the $82.56 she had requested.
50:02
Peter Dunn
So she just reported the error? Right.
50:05
Damian Dunn
Well, after a month of failed attempts to recover the cash because Spdoni wasn't answering her phone, schwab filed a criminal complaint on April 6. Spdoni, 33, was arrested the next day in Harvey, Louisiana, on charges of bank fraud, theft, and illegal transmission of monetary funds. She transferred about $350,000 into another account and used it to buy a new SUV and home.
50:29
Peter Dunn
The reason she didn't answer her phone? Because she had android that wouldn't work. All right, Dame, that's all we have time for on the show this week. Wow. Thanks for a new affiliate. West Lafayette. In West Lafayette, the Patriot Sorry about everything sending you good vibes, because good vibes are all that's in the budget. I'm Pete the Planner and this is the Pete the Planner show. If this is your first time as an affiliate where you receive our radio show and all of that just happened, I mean, I'm being half serious here. Are you pleased or are you like, what have we done?
51:05
Damian Dunn
I think we had a couple of solid segments there, but I think it really depends on what time block they're going to try and put us in. I mean, if it's going to be an overnight, then what do they really care? It's just two guys filling up some dead space. But if it's one of the more prime times, which it's not going to.
51:24
Peter Dunn
Be, no, it'll be on the weekend. They carry The Dave Ramsay Show during the week, and then I think they do, like, a recap on the weekend. I would love to be just right next to Dave's show. That way you can see what apples and oranges taste like, right?
51:43
Damian Dunn
Absolutely.
51:45
Peter Dunn
By the way, I just got a note from our flagship WIBC indianapolis. We are at a different time this weekend due to an indie car race. Due to an indie car race.
51:55
Damian Dunn
What was the grand prix this weekend of Alabama?
51:59
Peter Dunn
That's true. Grand prix of Alabama is this weekend.
52:04
Damian Dunn
Best of luck and stay safe to everybody racing. Of all of the friends of the.
52:07
Peter Dunn
Show, dame, there was something else I was going to tell everybody this week. I don't remember what it was. I don't know. Remember. Oh, I did want to thank Jeremy, our friend Jeremy who's joining us on the show. Our pilot, Jeremy, as we like to call him, send us some nice spherical ice cube makers so that we can pour liquor in our face that's at the right temperature. So thank you for doing that.
52:32
Damian Dunn
Yeah.
52:33
Peter Dunn
Nice, Dave. That said, I'm going to go see if our coworker Oz is back. We're working together again. Masks distance doors between us. It was so good to see her. It was fantastic. Oh, danza. We're ending with this. Danza says Ramsay would condemn Pete as an idiot for choosing to invest rather than pay off the mortgage. Hey, maybe the Ramsay audience will like you, dame.
52:57
Damian Dunn
Maybe. Who knows?
53:01
Peter Dunn
All right. Hey, everybody, have a good week. Stay safe, wash your hands, eat some vegetables and finally only buy two ply. Bye.
