00:10
Peter Dunn
Fire. Look, I'm as disappointed as all of you are. Oh, for several reasons. I missed the blip at the beginning of the song again. Then I went live with a black screen. Hi, everybody. It's the illustrious Pete the Planner Show podcast and radio show. It's not the radio show yet until we start a segment. By we, I mean Dame Dunn. Hello, Dame.
00:33
Damian Dunn
Hello, Pete. Just thinking about those broadcasting skills were talking about earlier.
00:37
Peter Dunn
Oh, my gosh. So, Dame, I need some people to load in here. People are joining us right now, but I've got some news I need to share with people. Dame knows it there's. Danza. Hello. Wake up. It's time to go. All right, I'm just starting. Here we go, everybody. Damian Dunn is a radio star. He's found himself on a trucker podcast. He's doing a live radio interview next week throughout Indiana. He is a big deal. I feel at some point in time that he's going to be too big to do this show, and I'm slightly intimidated by his broadcasting skills.
01:17
Damian Dunn
Man, wouldn't that be something if I was too big for your show?
01:21
Peter Dunn
That'd be great. Yeah. So, Dame, you're doing a lot of a little outside radio and broadcasting work. Good for you.
01:28
Damian Dunn
Yeah, it's been a great experience so far to work with professionals and figure out what shows look like when they're done outside of our network and just getting some experience.
01:41
Peter Dunn
I love it. All right, so, Dame, we've got a very diverse show this week. Probably not as crazy as last week's program. No one ever said anything other than here on the live show when were watching videos of me being a moron. No one from the podcast said anything. So we're just going to keep it normal today. That's the goal today. All right, we have a question about permanent life insurance to start. We've got a question about how do you actually get money out of your 401K when you go to retire and what should you do? And then a BNPL question. Do you know what BNPL stands for?
02:13
Damian Dunn
Buy now, pay later.
02:14
Peter Dunn
There it is. And then finally the bomb. And you know what that stands for. Good morning, Jeremy. Good to be with you live on Facebook. All right, so, Dame, are you ready to go? Let's just do the thing, as the kids say. I don't know if anyone says that.
02:28
Damian Dunn
You do, and that's good enough.
02:30
Peter Dunn
I'm an assistant coach of a twelve year old girls soccer team.
02:35
Damian Dunn
You got a really Snazzy shirt, though.
02:37
Peter Dunn
Oh, yeah, I do have my money mechanic shirt on this morning.
02:41
Damian Dunn
No, I met your soccer shirt.
02:43
Peter Dunn
Oh, my soccer shirt. It says Caramel Football Club on it.
02:46
Damian Dunn
Yeah, the schmedium.
02:47
Peter Dunn
It is a schmedium. It was a medium and I put it once I got home because I'm not going to try a shirt on the store. I'm not a savage. And turns out it's tight. Yeah, you can see all my anatomies. Okay, let's do 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 at PetethePlanner.com, and we'll answer your questions right here on this very air. Very air. It's like dairy. Damian Dunn joins me, as always. Hello, Dame.
03:29
Damian Dunn
Hello, Pete.
03:30
Peter Dunn
Nothing like a weird joke like that to start the show. Dame. We've got several questions this week and so let's get to it. People can email us by going to Askpete@petetheplanner.com. That's sending an email to askpete@petetheplanner.com Dame. The first email I ever sent in my entire life, I sent to my friend Devin when I was a junior in high school. This was about 1995. He was in college, and so I just got a brand new computer, right? And I went and entered his email address in the web browser address line and was confused for about 90 minutes. So anyway, hopefully that's none of you. You can go to your actual email settings and hit us up at askpete@petetheplanner.com. Dear Pete, 25 years old and have recently started meeting with a financial planner. They have recommended a whole life insurance policy as a part of a way to build equity.
04:27
Peter Dunn
I've read various things about this cash value life insurance, but I was hoping to get more clarity from you. Is this something you would recommend at my age, or should I put my money into Roth IRA? I have no student loans. The only debt I have is a car payment each month. Big fan of the show, Michaela from Minnesota. Nice Dame. This is a good opportunity for me to say we don't like and or dislike specific financial products. What we like and or dislike is the fit for a particular person of those financial products. So for us to come on the air and say things like annuities are amazing or annuities are terrible, you'll never get to hear us say it. And while people like to make it that clean and neat, it just isn't most, if not all. I'm hedging. Financial products exist for a particular reason, for a particular audience, and serve a beautiful purpose within a person's financial life.
05:33
Peter Dunn
So then this question becomes, is whole life insurance appropriate for a 25 year old who doesn't look like they're maxing out their Roth IRA or arguably their employer's retirement plan as a way to build wealth? Now, Damon, did this person indicate as to whether they were betrothed in any particular way?
05:57
Damian Dunn
I do not believe they did.
05:59
Peter Dunn
So we could argue at the very beginning here, one of the reasons to purchase life insurance is if there is a survivor need in the event that Michaela were to move on to a better place, and I don't mean out of Minnesota, I mean dead. Just like straight up, just real dead, then it doesn't seem as though that someone would economically suffer because of that. Right.
06:26
Damian Dunn
It seems highly unlikely. I mean, there's no debt outstanding. There's nobody that would be left burdened with any potential debt either, at this point that we know of. I'm still in favor of younger folks seriously considering insurance and making sure that you get coverage. You never know what the next day is going to hold. You never know what your health may do. And you may qualify for an incredibly cheap rate right now with term life insurance and that may not be the case in the near future. So if you are considering it or have some extra cash and you want to make sure you're covered for the foreseeable future yeah, insurance go for it even if you don't have a specific reason to necessarily have it right now. It might not be the worst idea in the world, but a whole life insurance policy at 25 with no specific reason other than it might be a good way to build wealth right now seems like somebody might be trying to squeeze her into a product.
07:25
Peter Dunn
Yeah, a couple other things I want to note. I want to expand on a particular point that you said. I think guaranteeing future insurability is a really important concept. So, whereas Michaela is 25, at some point she will not be 25. And I would also argue that Michaela also might not be as healthy as she happens to be right now. Later. Right. So that is to say, if she has a history in her family of a particular medical condition and she wants to lock in her insurability at a high health quality, buying some sort of life insurance now to ensure that she will always be able to be insured does make sense, like you said. Now, the other aspect of this that sort of bothers me is I don't mind cash value life insurance to maximize a tax situation, to take advantage of the tax efficiency of the life insurance plan.
08:26
Peter Dunn
But I think you have to exhaust some more conventional means prior to doing that. Now, this is my opinion, by the way, and I know a lot of people do it different ways. I like the idea of maxing out a Roth IRA. Back when I used to provide life insurance to people as part of a financial plan, we used to say, because were trained to say it this way, that the glory of permanent life insurance from a tax sensitivity standpoint mirrors a Roth IRA to some degree has the same sort of tax functionality. So, d***, if that's the case, why not start with the OG, which is the Roth IRA? I think that's got to be the place to start.
09:11
Damian Dunn
Roth IRA is going to be less complicated, quite possibly less expensive with fees and whatnot, way more portable. It just seems like, as you said, I don't know why in the world again, we're very similar in this instance, why somebody would make a whole life insurance policy one of the first tools they employ to build long term wealth. They do certainly have their role to play in some situations for individuals. But as a 25 year old, I just think there are other accessible things or tools that you could use to get to this particular goal. Not to mention the fact that it doesn't always have to be tax qualified savings either at this point. Make sure you've got that emergency fund. She's 25. She doesn't really have any debt. We haven't even got to that point. So if somebody's trying to really gobble up a big chunk of your monthly income, which I would assume that there's going to be a pretty hefty price tag that comes along with this potential policy.
10:17
Peter Dunn
You know what? Good point. And let me step on you.
10:20
Damian Dunn
Okay.
10:20
Peter Dunn
What do you think the premium is? Okay, because this is a person that doesn't have survivor needs, right? This is someone who's 25. We think based on the name, this person is a female, meaning that they're going to be less expensive than insuring a male. $100,000 whole life policy for someone that age. Man, this is where I'm going to just show my lack of recent experience. What do you think? $90 a month, probably.
10:48
Damian Dunn
I was trying to guess what the value of the policy was that she was being sold and I was going to go with 100 just because I think that's a kicking off point.
10:56
Peter Dunn
They've got to learn how that works.
10:57
Damian Dunn
Ability to go down if the client or the prospect hedges a little bit and they want to go down to 50. But the prospect, I'm trying to use the right terminology for this particular supposed institution, yeah, probably $90 would be my guess. And for 100 grand, if you were to get a comparative term policy would be $12.
11:25
Peter Dunn
Not much, but by the way, and it is worth saying $90 for $100,000 of permanent coverage. Unlocking that in it is a good deal. It is the coverage you would theoretically have forever. And Michaela, if you happen to have an extra $90 laying around after you've maxed out your roth IRA and arguably maxed out your 401K, then go ahead and do it with a minute. We have left here's who I love whole life insurance for, or any version of permanent life insurance, highly compensated people that want to squirrel away tax efficient money after they've exhausted other ways to do it. And I think it's great. I think it is a great tool for physicians and attorneys and people who make a lot of money and who will always make a lot of money. That's a big key to this, too. If you happen to be doing well now, but you don't think that will persist, this ain't the rodeo for you.
12:24
Peter Dunn
And it's with that we take a break. Coming up after the break, when you have a you go to retire. How do you get paid? All that's next on the Pete the Planner show. I'm Pete the Planner. The outros are back. Could you tell?
12:37
Damian Dunn
It's right on right?
12:39
Peter Dunn
Last week was an abysmal situation. Troy Montana joins the show and the live stream. Look at that, man. The best. You know what I think is interesting about Troy talking here? He had a child born on May 29. And the only reason I know that is because he used to be in charge of Indiana's 529 plan. And so his child was born on 529. I have a son born on 401, as in 401 April 1.
13:16
Damian Dunn
I have a daughter that was born on January 23 and I said that was because I was too dumb to remember anything other than one, two, three.
13:24
Peter Dunn
See, it all works out. You know what this all adds up to? Nothing. Literally nothing. Okay? I don't hate life insurance. I don't hate annuities. I think they're fantastic for the right person, a single 25 year old that's not maxing out things. Probably not what I would do.
13:46
Damian Dunn
No.
13:49
Peter Dunn
I know.
13:50
Damian Dunn
Send all the hate mail to askpeetnml.com that's, right.
13:57
Peter Dunn
I'm just kidding. Okay, that's going to catch some ire. Let's do it. Three, two, one. Back on the Pete the Planner show. Dame, you never wonder what happens when you retire and you got this 401K or a 403 b and you're ready to go a different direction in your life. And by a different direction, I mean you're retired. How does the money actually get out of the 401, right? How does it happen? So we got an email about this sort of this week. Let's take a look. When a person retires and no more paycheck, does their funds okay, I'm just reading this as written, okay, so look, when a person retires and no more paycheck, does their funds balance in 401K stop or freeze at that time, or is it still susceptible to the ups and downs of the market? Okay, so we're going to pause that question as I continue to read because we're going to come back and answer that initial question.
15:00
Peter Dunn
For example, because we get an example here. A person retires with $250,000 in account. Does that balance gain loss as usual, or does it freeze? Freeze tag was an underrated game as a kid, was it not?
15:16
Damian Dunn
It always boiled down to people being upset and the freezing really not working out so well. I mean, it was great for like 5 minutes.
15:25
Peter Dunn
Wasn't there a version of freeze tag to unfreeze someone that you crawled through their legs? Yes. Is that the primary version of freeze tag?
15:32
Damian Dunn
I had forgotten about that, but I think it might be the primary rule in freeze tag.
15:38
Peter Dunn
See, for my son to have fun today, he's either on video games or some giant mechanism. When were kids, were breaking each other's arms with Red Rover and were climbing between people's legs to unfreeze them from a temporary paralysis brought about by touching.
15:56
Damian Dunn
Yeah, jumping off swing sets that were like 12ft tall and just flying through the air. Remember those great times?
16:02
Peter Dunn
Do you remember swinging, flying off of a swing that you swung up, flew off the swing, 300ft in the air. Not once did you get hurt?
16:12
Damian Dunn
Never.
16:13
Peter Dunn
But where you did get hurt is when you'd go swing back on the swing and your friend was walking by and you'd kick them right in the jibs.
16:20
Damian Dunn
Yeah.
16:21
Peter Dunn
Anyway. Or does it freeze instead? Balance is what they have to withdraw from forever. Or like I said, that figure can go up or down, depending on the market. I'm back to the email. For those that don't know, I still have four or five years before retirement. I assume the balance in your four one K does not retire with you and is still invested in the market but not adding to it. Is that the case? Is there a safety strategy to minimize losses, change percentage in stocks and bonds? Thank you. No nameoz. Took the name off of this one. Sometimes you and I, Dame, because we do this for a living, we realize that we take for granted that people just understand how all this stuff works, which is why I'm glad we're here, so that no one feels silly that they don't understand this.
17:08
Peter Dunn
Dame, what happens when your employment status goes from employed to unemployed via retirement? What happens to your account? Like, does it freeze?
17:20
Damian Dunn
The complicated term I think that we use is nothing. Nothing changes with your account.
17:26
Peter Dunn
Not a thing.
17:27
Damian Dunn
Whatever it was the day before you walked out the door and the day after you walked out of the door, unless you go on and make changes inside of that account, it's going to be invested the exact same way. Now, maybe you do decide to make some changes and the author of the email says is there a strategy to minimize losses? Well, yes, potentially there is. And it depends on just how complicated or how safe. Air quotes safe you want to be. You can increase the amount of bonds, potentially to take some of the volatility out of the portfolio, or you could go all the way to cash, which is not usually the very best answer for you as well. But yeah, you can minimize the volatility that you see inside of the value of that account after you retire. It just depends on, well, honestly, how much money do you need and for how long are you going to need it.
18:19
Damian Dunn
And trying to line up all those.
18:20
Peter Dunn
Things, this question seems rather simplistic. But I have to be honest, there's a lot of complex movement to this because not only does this person really asking about time horizon, their time horizon begins four to five years when they retire, but it's not vanquished upon retirement. Their time horizon persists throughout retirement. So that impacts their risk tolerance and their allocation. I would also note that, like you said, nothing actually happens. Let's say they have a growth account right now. Maybe that's their objective. It switches to growth and or income growth and income and or income after that. And it also has to do with how much money you need off of this account as a percentage of your overall retirement income. If Social Security gets the job done, then don't touch it. Don't just withdraw money because you can and I would say dame, and you've seen this, sometimes people think they retire, therefore they should pull money out of their retirement plan prior to 70 and that becomes an issue.
19:34
Damian Dunn
Yeah, and you brought up a good point just a minute ago. It really depends on what your needs for this account are. If you're one of the few folks in the country that still gets a pension and Social Security and that covers all of your living expenses, you could feasibly leave your 401k or IRA or whatever. 403 b 457 in. A pretty aggressive portfolio and really not have too much to be concerned about because all of your income needs are taken care of by fixed resources at that point. So you're going to have to make sure that you understand how much you need and roughly what that time horizon is. And you're right, Pete, it is a more complicated question than a lot of people give it credit for.
20:20
Peter Dunn
The idea of a pension is it a form of annuity where annuity over time? An annuitized annuity, I should say it is where a payout occurs over a certain period of time indefinitely. Right. And so people just assume because they grew up around pensions or their grandpa had a pension and that person grandpa got a check every month, that the 401K has that same mechanism. It doesn't.
20:49
Damian Dunn
Yeah, well, in theory you could set up the account to send you a check every month.
20:55
Peter Dunn
Yeah, I'm saying it naturally doesn't.
20:56
Damian Dunn
Yeah, it naturally does not. The beauty of annuity or a pension is that payment is going to be fixed and you're going to get it regardless of market performance going forward and you can count on it month to month. 401k, you can set up to get a check every month. And yes, that check will be consistent from month to month until there's no more money there. And that's the problem that you potentially run into. And it's a not insignificant problem when it comes to making sure you've got money to live on retirement.
21:31
Peter Dunn
This is sort off topic, but who really cares? I have found that when someone retires and they don't have a lot of investment savvy, something that can commonly occur is that they'll look at their very big balance from a relative perspective. To them. They'll say, hey, this is $250,000. And I'm not here to say $250,000 is not a lot of money. But I am here to say that it can't independently support a retirement. It just can't. There's no ifs, ands, or but. At best, it can perpetually give you $1,000 a month. And that's not going to support anybody in retirement. And that's very generous, by the way, saying $1,000 a month, perpetually. Dame. Here's what I find people do. They'll see $250,000, they'll say, that's a lot of money. I want to take five grand and go on my retirement vacation. And they don't realize the impact of that exorbitant withdrawal from a percentage standpoint has on the remaining 30 years of their retirement.
22:32
Peter Dunn
Am I saying they shouldn't go enjoy themselves? No, that's not what I'm saying. I'm saying when people don't have a good concept, a good grasp of a percentage withdrawal off of an asset or a nest egg, it leads to a retirement lifetime filled with challenges based one or two decisions at the very beginning of retirement. And I know you've seen that, too. Yeah.
22:56
Damian Dunn
Is this big spend worth taking a permanent reduction, a most likely permanent reduction in your monthly income?
23:04
Peter Dunn
Exactly. So here's what we're going to do after the break. There is a trend called BNPL. Buy now, pay later. It's like a fancy layaway for internet folks. We'll explain what it means, why it is the next frontier in consumer debt, and why it's just like, come on, we're just reinventing the wheel for no particular reason. I'll give you my real feelings. All that's next on the Pizza Planner show. I'm Pete, the planner. Lori joining us from Alaska. Good day, Laurie.
23:36
Damian Dunn
Before sunrise, probably there.
23:39
Peter Dunn
I've always wanted to go to Alaska.
23:41
Damian Dunn
It's a summer, so the sun might have been up for like 8 hours already, though.
23:45
Peter Dunn
Have you been to Alaska?
23:46
Damian Dunn
I have not, but my in laws want to take the whole family there because they did live there for a while.
23:52
Peter Dunn
I would love to go to Alaska. I've been to Hawaii, but I was only there for like, three days and was for work, and I did not really get to do anything that much fun.
24:02
Damian Dunn
And by work, you mean a conference where you got to talk a couple of times and sit on the beach, I'm guessing.
24:07
Peter Dunn
I finished a book. And I don't mean reading a book, writing a book on Waikiki Beach at like three in the morning, Hawaii time, because I was wide awake. This is 2015, is when I was there, and I was there for like 72 hours. It was very strange.
24:26
Damian Dunn
That's brutal.
24:27
Peter Dunn
It was not great. Did I ever tell you about the flight home from Hawaii?
24:32
Damian Dunn
I don't think so.
24:33
Peter Dunn
I was at the airport. I was going to fly I think it was flying American, maybe, I don't remember. And I had to fly through Dallas, and I was checking in for my flight. I was flying coach, and I saw this glitch, like I could get a first class ticket for like $178 upgrade. And I was like, yeah, I'm definitely doing that, right? And so I did it. And I end up sitting next to this woman who was probably 24 years old. She was from Denver. She was a bartender at an airport hotel in Denver and she was flown to Hawaii by two men who this isn't going to go as weird as you think. I mean, it's going to be weird, but it's not going to be super weird. That constantly drank at her bar. And she was their favorite bartender, so they flew her to make her them drinks in Hawaii.
25:32
Peter Dunn
And so then they flew her first class to do this. And so on the way back, we're sort of just chatting before the flight. She's a bartender. She just starts drinking a lot. And it's watching movies and just cracking up. People are trying to sleep. And the flight attendant wakes me up and goes, is she your travel companion? And I was like, what? And I'm like, out of what? And they're like, is she your travel companion? I was like, no. I was like, why? Because she needs to get under control or we're going to have to turn this plane around. And she's sitting right next to me and all these people are looking at me because we had been conversing earlier on, so they thought we're together. And this woman is about to get thrown off of a cross trans Pacific flight. And then she passed out at one point because she had drank so much.
26:24
Peter Dunn
We land in Dallas and it was wild. It was wild. There you go.
26:32
Damian Dunn
Holy smokes.
26:33
Peter Dunn
Jeremy, our pilot friend, says, wait, everyone doesn't do that in first class. That's so true. Okay. People like the stories they tell in this show.
26:46
Damian Dunn
I don't care what anybody else thinks. I do.
26:48
Peter Dunn
We all have that friend that thinks their stories are good, but they're not. They're terrible. And I don't want to a, be that person or B, turn into that person, but it's inevitable.
27:03
Damian Dunn
I can't fake that kind of appreciation or enjoyment so you'll be able to tell if I'm not digging it.
27:12
Peter Dunn
My son reminded my Tito loves NBA basketball jerseys. He likes having jerseys and he wants a Dikimbi Mutumbo jersey right now. Like the classic nuggets, like super colorful Dickimbi Mutumbo jersey. Neil. My friend Neil just distracted me, so I'm interrupting a story with a story. Last night I had a dream that my good friend Neil was kidnapped for his bitcoin. And I was involved and I had to figure out his bitcoin password, which was go Irish. And I don't know why. He's not a Notre Dame fan or anything. Maybe he's been to Clauda pub, I don't know. But we got him back because I told his kidnapper that his bitcoin password would go Irish. And then when we recovered Neil he was mad because then he lost all his bitcoin, and so Neil chimes in. Anyway, back to the story. So Ted wants a decembi Mutumbo jersey, which brought up one of my all time favorite stories of seeing Dakimbi Mutumbo on vacation at a table next to ours at dinner.
28:25
Peter Dunn
Dame, I have told you this story, have I not?
28:28
Damian Dunn
I don't know. I don't think you have.
28:31
Peter Dunn
Okay. Mutumbo is with his family. Mrs. Planner and I are on a trip to the Bahamas. We're in Atlantis in the Bahamas. I think were eating at a Bobby Flay restaurant at the time. It was a mesa grill. We're sitting there. De Kempe and his family are sitting there. It's he and his lady friend and four or five young children, small children. And so the kids are acting a fool. Why? Because everyone's kids act a fool. And so they bring out bread and rolls and things like this. And this kid eats a roll and then eats another roll. I'm all witnessing this. And he gets to this point where Dikimi's like, no more roll. Because he sounds like Cookie Monster. And that's just what he sounds like. No more roll. And so the kid goes to grid. Another roll. Dickimbie reaches across the table in this eight foot wingspan, slaps a roll out of the kid's hand, and then gives him the dickimbie finger, and he goes, no roll.
29:28
Damian Dunn
I have never heard that story before.
29:30
Peter Dunn
I've never told you that story. When I die and I get to heaven ish and God is like, So tell me about how everything went. I will tell God that story. He's seen it. That's my favorite story. Now, to be fair, Mrs. Planner does not consume our media. She does not watch the show. She's not entertained by me in life and or work. She contends that did not happen.
29:55
Damian Dunn
What?
29:56
Peter Dunn
She says it didn't happen. It totally happened.
30:01
Damian Dunn
So why would you put that question of doubt in my head now?
30:04
Peter Dunn
Well, because I like to be transparent, but it totally happened. Her back was to the situation. I'm staring at the man. It's hard not to stare at a seven foot four man eating dinner at a Southwestern restaurant in the Bahamas. He slaps the roll, goes, not normal. Roll like this. And I was like, what? I had hair. It was a different time.
30:24
Damian Dunn
What are the chances we can get De Kimbey on the show to confirm this story?
30:30
Peter Dunn
Well, here's the thing. That would be amazing. But that also sounds like effort. And we are against effort on the show. For those just joining us, because I know we've got more people here than earlier, damien Dunn is a radio star these days. What was the name of the Trucker podcast you were on?
30:47
Damian Dunn
Drive.
30:49
Peter Dunn
That's a good name for a show. So people can go to the Drive podcast and listen to Dame talk about Truckers financial lives. And then this. Coming week, Dame is going to be all indiana, which I believe is a W FYI. NPR Radio Indiana is going to be a guest on that program. He's a big star. So at some point in time, his demands are going to be a problem for this show. Yeah.
31:11
Damian Dunn
Looking for that comp boost for the celebrity and notoriety I'm bringing to the show.
31:16
Peter Dunn
In three, two, one. Back on the Pete the Planner show. If you ever want to catch what we talk about during the break on this show, go get our podcast. It's just called the Pete the Planner show. Dame, if I'm being honest, like, when I say, hey, go to this place and get our podcast, I'm telling the radio audience this right now. Where do you tell somebody to go get a podcast? I used to say, like, go to itunes or go to Stitcher or go to I don't care where you go to get the podcast and just Google it or bing it and you'll figure it out.
31:52
Damian Dunn
Yeah. We don't get paid for the podcast. So whether you get it through, you.
31:58
Peter Dunn
Don'T get paid for the radio show. Yeah.
31:59
Damian Dunn
Or overcast or any play. Wherever. Wherever you get your podcast, look for us.
32:04
Peter Dunn
What do you listen to? What podcast platform do you listen to?
32:07
Damian Dunn
Overcast.
32:08
Peter Dunn
Me too. All right, Dame, so not too long ago, I was dealing some surfing on the Web. Do people say that anymore?
32:17
Damian Dunn
I don't think so.
32:18
Peter Dunn
You know what people do say? So go to www.petetheplanner.com. Why do people still, in 2021, insist on shorthand for a World Wide Web in an email address, like on a radio advertisement? You know how long it takes to say www on a radio advertisement? Too long.
32:42
Damian Dunn
Yeah.
32:43
Peter Dunn
And it's not necessary.
32:44
Damian Dunn
That's fine. Does anybody actually type www anymore?
32:48
Peter Dunn
I think people who hear about something on a commercial, but why not? Here's what I truly don't get. Is it a way to alert someone they're about to hear a Web address, because that could theoretically be the case. It's like, www. And you're like, oh, here comes the WA. And then you go and you're getting ready to write. Is that what happens?
33:07
Damian Dunn
Here's the other thing. How rarely do you type in an exact Web address anymore? You just go to Google or Bing and type it in and look for the result.
33:19
Peter Dunn
One of the hottest trends in the financial and commerce space right now is something called BNPL. Buy now, pay later. It is a payment plan, like QVC Quick Pay, I think something like that. What happens is you are making a purchase. You're buying a pair of trousers, and you don't want to part with the $80 in your checking account, or you don't want to commit to paying $80 on your credit card later. So you choose a site financed option which involves you making payment plans over time to this third party that's attached to the ecommerce site. Did I explain that in a really clunky way?
34:06
Damian Dunn
Yes, but it's mostly right.
34:09
Peter Dunn
Did I get anything wrong?
34:10
Damian Dunn
No, I don't think so. I just said mostly.
34:13
Peter Dunn
So this is a big thing. There's some big names in it. After pay is one of them, which in itself just the name of the business. After pay makes me it's very descriptive, sure, but it's like, come on. It's a big thing that people are doing all of the time. It is a massive movement. And I'm not talking about, oh, hey, I need some Beats headphones and I need to pay $299 over the course of these six easy payments. I'm talking about people are buying things for like 1999 and paying $4 a month for five months.
34:53
Damian Dunn
Yeah, this was an advent that I don't think anybody really needed. It seems to me that it seems to be very fraught with potential danger for folks compared to the original layaway. I still understand that one. You're going to pay and then get the item, but now you're getting the item and then paying over time, which I understand as a credit card, I get that it's not really helping someone control their spending in any way, shape or form.
35:33
Peter Dunn
It is a solution to a problem that does not exist for consumers, although it is a solution to an opportunity for retailers. A firm is one of these companies. The maximum value that can be taken out on a single payment plan with a firm is $17,500. It's just another way to finance a purchase. Now, Dame, there will be someone, because there's always that someone that says you're being privileged. People need this. I don't think they do because there's other means to accomplish this. And I find this to be incredibly opportunistic from these payment companies perspectives. And I don't necessarily even extend the blame onto websites that give people this option. But this is a bad thing. This is like credit and not calling it credit.
36:31
Damian Dunn
Totally. I mean, it's exactly what it is. Except the difference being instead of an open ended payment that you can make over the course of who knows however many months or years, it's typically four to six months for these. So if you're looking for something that's a little bit more structured, yeah, I guess that works. Or you could be patient and save the money you need and then pay for it when you buy it.
36:58
Peter Dunn
I have to say my favorite alternative payment scheme, there's two things that just happened there. I love the use of the word scheme in a non negative usage because overseas they talk about your retirement scheme. They don't mean it in a derogatory way. And I also like mispronouncing things. Anyway, my favorite alternative payment scheme is layaway. And I mean it layaway has a horrible reputation and I'm not sure why because it's wildly responsible is it not like you have to have it paid off before you get the joy, whereas credit is you get the joy, and then you have to figure out how to pay it off. And to me, that's backwards.
37:47
Damian Dunn
I understand layaway, and I like it. What's the difference, though, between just saving money into a savings account other than you've officially made that commitment to the store? That, hey, that one's mine, and I'm just going to pick it up in six months after I've paid this thing off.
38:06
Peter Dunn
I feel like we set this segment up so I could answer that question, because I would love to answer that question. There's a couple of different reasons. Number one, it's so that you know that you have that item. It's like it's a particular shirt that you want or a particular handbag that you want, and maybe it's a fast moving item. You secure it, they take that item, and they set it aside in the layaway room, and then you make payments on that particular item. Okay, so that's number one. Number two, it's just a lot more tangible that you go and make payments on it. Now, again, this is why it gets a bad reputation, because it seems a little strange. You visit your purse, right? It's like, hey, I got to go to Marshalls and checking on the purse that I'll own in three or four months seems weird.
38:53
Peter Dunn
Seems like there's something wrong with that, but I'm not sure there is. I find it to be responsible.
39:00
Damian Dunn
Yeah, it's responsible. It's also incredibly countercultural right now. I mean, I can't see young Pete walking into Chess King making payments on a pair of pants.
39:15
Peter Dunn
I ou.
39:17
Damian Dunn
Yeah, for six months, especially now, you're going to go and you're going to buy them and you're going to figure out how to pay them later or not pay them and go into bankruptcy. I don't know. Pair of pants from Chess King putting you into bankruptcy is kind of a funny thought, but I don't see traditional layaway coming back in any shape or form. But man, it'd be great if it did.
39:45
Peter Dunn
I will have to say. Live Stream viewer Danza notes that she loved layaway back in the good old days. Got a lot of my clothes growing up that way helped me as an unbanked teenager. That is the other element to this day. It helps the unbanked. And it is, of course, like you said, the opposite of instant gratification, which is why there will be no new form of layaway. If for some reason these buy now, pay later services spin off the new Fangled layaway plan, it will never take off because it is pay now, buy later. What would we even call that? It would be called pay now ish get later. Yeah, it doesn't really sound that great.
40:33
Damian Dunn
I'm sure we can come up with some acronym that would make it really cool and trendy.
40:38
Peter Dunn
Dame. Let's do this after the break. Coming up, biggest waste of money of the week, and by God, thank God for Louis Vuitton. They give me so many things to explain how wasteful the purchases of their product are. All that is next right here on the Pete the Planner Show. I'm Pete, the planner. Pinkens. I am so with you. My friend Brian says as a middle school and high school kid utilized layway at Value City and the classic Dunhams sports. Pink was this at the 34th and High School Road, Dunhams? Because that's the one I used to get down at Dunhams. There are a couple around. Isn't there one up near you, Dame?
41:21
Damian Dunn
Yeah, there is. It hasn't been around very long. I mean, as far as northeastern Indiana is concerned, dunhams is a fairly new store. I had no idea they'd been around that long.
41:31
Peter Dunn
And I think there's one in Columbus, Indiana, but they used to be in central Indiana a long time. I mean, talking when like, middle school for me, and it was always I'll just speak to my experience 30 years ago, it was always kind of weird. They didn't have a lot of stock of anything. It's like you went and it's like, we have a baseball. It's over there, and you go get the baseball. And then they had like a bright pink shirt and then like a cooler, and that's all there was. And it was this giant store that never could keep stock. And it was like, well, do people go there a lot? Is that why they're so low on stock? But I don't know. Do you learn how to do inventory at Dunhams and then you go work at Dicks? I don't know. Any of that works.
42:17
Damian Dunn
Interesting.
42:20
Peter Dunn
So I guess it's not that way anymore.
42:23
Damian Dunn
I mean, our Dunhams has fluctuated with inventory at times, but I think that was a big issue for a lot of people last year, for obvious reasons. So it's not something that I've typically experienced too often out there.
42:39
Peter Dunn
I am a sucker for a great sporting goods store.
42:42
Damian Dunn
Oh, yeah?
42:43
Peter Dunn
Did you ever go and hang out? What was the one in Chicago? Was it model's?
42:50
Damian Dunn
Walked past one a couple of times, but I don't think I ever went inside.
42:54
Peter Dunn
No, I don't know if that was it. There was, like this eight story sporting goods store in downtown Chicago that we used to go in back when I was in second grade. And they had like all these Walter Payton things, which I think was amazing. But I still love a good sporting, good store.
43:07
Damian Dunn
I dig like the giant cabelas.
43:11
Peter Dunn
Yes. Bass pro. Come on.
43:13
Damian Dunn
So much fun to go into.
43:14
Peter Dunn
Now. Here's the thing about that. There's just outdoor sports. Not that soccer isn't outdoor, but there's not like ball sports, traditional sports. It's hooking and shooting.
43:26
Damian Dunn
That's right.
43:28
Peter Dunn
In three, two oh, wait. I'm not ready. Everybody relax. Go, go figure. I'm not ready to do something. Three, two, one. This week's biggest waste of money of the week. Right here on the Pete the Planner show is Dame. Like I said earlier, thank God for Louis Vuitton. The Louis Vuitton pizza box case. It might be called a pizza box, but it's not made for carrying a pizza. Instead, this cleverly named case from Louis Vuitton is made for carrying vinyl records, CDs, and other audio accessories. It's shaped like a pizza box at roughly 14 inches square and one and a half inches tall, but is built like one of the company's iconic trunks with a monogram canvas exterior, natural cowhide lining, and snap closure and gold colored hardware. Finished with the message LV Sound Design and Record Club in white on the top. Dame, guess how much this dumb thing is?
44:34
Peter Dunn
OOH. You are so far off last week, you actually have a great guess. And I don't even remember what it was. I just was so impressed all week, I could barely stand it. $2,090, man. Can you imagine how many layaway payments you'd have to make on this?
44:51
Damian Dunn
Like, five years worth.
44:54
Peter Dunn
What in the world? There are certain things I try not to judge people too much. Right. I try not to say people have different tastes and feelings and goals. I will judge you hard if you buy this.
45:09
Damian Dunn
Those white letters on the box look like they're the peel and stick kind that you would get from Value City or Dollar General.
45:17
Peter Dunn
Yeah.
45:18
Damian Dunn
And it looks incredibly bad.
45:22
Peter Dunn
Okay, here's a question for you. Do you think at Louis V. People call it that? Louis V?
45:29
Damian Dunn
Yeah.
45:29
Peter Dunn
I don't know. Do you think at LV headquarters there's one of two vibes going, they made this, and we're like, wow, this is amazing, or do they make it and go, some suckers going to buy this? This cost us $17 to manufacture. We've just made upwards of $2,083. What do you think the real vibe is there?
45:53
Damian Dunn
I think it's a lot of, let's see if we can get people to buy this. There's no reason to buy virtually anything that they make and pay the prices that they charge. This is dumb.
46:10
Peter Dunn
Now, I don't mind something that's very expensive because it is functionally better than other things, like amazing speakers, and the sound really is better than anything you've ever heard or a car that performs better, but it's a box that holds stuff. It doesn't function well.
46:31
Damian Dunn
This kind of gets back to a debate that you had a couple of years ago, I think, with one of our coworkers Chad, about are yetis worth.
46:42
Peter Dunn
The price, and he suggested, what did I say?
46:46
Damian Dunn
You said no. Absolutely not.
46:48
Peter Dunn
I don't still own a yeti. Dame, what's in the news this week?
46:53
Damian Dunn
The Biden administration is extending a moratorium on federal student loan payments through early 2022. The Education Department made the announcement last Friday, and it follows an earlier extension that President Biden made when he took office. The moratorium was set to expire at the end of September and has been extended until January 31. The Education Department said that this would be the final extension. However, loan repayments and interest accrual has been paused for borrowers with federal student loans since March 13 of 2020. Collection on defaulted loans has also been suspended as well. The moratorium applies to about $1.4 trillion in federal student debt owed by some 42.8 million borrowers. And for those of you playing at home, more than $5 billion a month interest has not been collected during the moratorium period.
47:46
Peter Dunn
Okay, so I have an opinion. My opinion is coming from a place of privilege. Admittedly, I think this is a mistake. I think that this is a situation that hurts people more than it helps them. It does help some people, which I love. Right. I love the idea that it helps some people. I think there just needs to be more qualification as to how you achieve the unnecessary aspect of pain. Right. I feel like just a blanket you don't have to pay is going to hurt people. Because as you and I talked about before the show, what ends up happening is you don't have this obligation to pay. So then you reassign that money to other things in your life, which often aren't necessarily moving you forward financially. They're just creating new habits and obligations and then come with the end of this moratorium. You've had 24 months of not having a payment.
48:40
Peter Dunn
And while it'd be great if you moved forward for those 24 months or survived those 24 months, but most people at this point are just forming new habits, and they're going to be in a much worse position when this is over. That's my view.
48:53
Damian Dunn
I think that's a common and a reasonable view. Pete, nice job.
48:58
Peter Dunn
I also have to say that's exactly what's going to happen with an advanced child tax credit. Will it stimulate the economy? Yeah, it will. Will it help some people get kids out of poverty and will it put food on the table? Yes. And I love that. I think that is great. But again, I think the way to do these sorts of things is to have it not be for anyone who makes under $150,000 as a household. It has to really serve the people who really need it, because otherwise it will create behavioral issues.
49:35
Damian Dunn
You think the child tax credit sticks around in its current form next year?
49:39
Peter Dunn
Yeah, I think you can't put the genie back in the bottle on that one. I guess we'll see. That's the whole thing with economics in general that I learned back in college. I remember talking to professor about this whole idea of they tell you about these theories about Keynesian economics or Austrian economics, and you're talking about it, you're like, okay, so how does it work? And they're like, These are just theories of how it works. That's the weird thing about economics. It's just like, well, this is what we think is going to happen, but then something happens, and then both warring factions get to argue as to what just happened, which is sort of a mind blowing concept here. There are the basics of economics, but there are also it is really wrapped in theory. So my theory is that this will be bad for more people than good, but I'll never be proven right or wrong.
50:36
Damian Dunn
My ecom professor always said that he wished he could double the money supply in the US. Just to see what happened. And I have to think over the probably already happened. He's just sitting in his front yard in a lawn chair with a beer in his hand, just watching the world go by, taking notes he was right.
50:54
Peter Dunn
What else is in the news?
50:55
Damian Dunn
The US. Labor market hit a new milestone recently. For the first time, average pay in restaurants and supermarkets climbed above $15 an hour. Wages have been rising rapidly as the economy reopens and businesses struggle to hire enough workers. Some of the biggest gains have gone to workers in some of the lowest paying industries. Overall, nearly 80% of workers now earn at least $15 an hour, up from 60% in 2014. Job sites and recruiting firms say many job seekers won't even consider jobs that pay less than $15 anymore. For years, low paid workers fought to make at least that much, and now it's effectively become the new baseline.
51:34
Peter Dunn
Now, I will speak for myself here because I don't want to group you into my thinking. I have long supported wage increase at that level of income, and I also love that it happened more organically as opposed to forced increases via mandate. Your thoughts?
51:53
Damian Dunn
I think you hit the nail on the head. I'm all for higher wages as long as it's not a government mandate to make that happen, because I think that has some potentially adverse consequences that come along with it.
52:05
Peter Dunn
Now, there are adverse consequences that have come with sort of this movement, and that is that there are 10 million job openings and like, 7 million unemployed people. So I don't know. We've got this weird labor market going on right now, which we talked about a lot in the last couple of weeks. One more story. Dame, what do you got?
52:23
Damian Dunn
Disney plus has 116,000,000 subscribers, the company said in its earnings report yesterday. To illustrate how impressive that is, disney initially projected that the streaming service would hit between 60 and 90 million subscribers by 2024. Together with ESPN, plus and Hulu, disney has nearly 174,000,000 subscriptions, which is breathing down the neck of Netflix, which has 209,000,000 did you catch that story about.
52:47
Peter Dunn
ScarJo Scarlett Johansson a few weeks ago?
52:50
Damian Dunn
Yeah, the black widow stuff.
52:52
Peter Dunn
I have to side with her, and it's not just because I'm a fan. It's just that I agree with her. This idea that, hey, we're going to pay you on the back end of this movie coming out, and then they put it straight to stream and not in the movie theaters. And I think that's no good. No one cares what I think, Dame. That's all we have time for this week on the show. Remind you, email ask Pete at pete the punter.com. We'll talk about it. Send you good vibes, because good vibes are all this in the budget. Catch Damien Don, the radio star on a radio near you. Look at that. Look at that. What are you doing today, Dame?
53:27
Damian Dunn
I've got some phone calls this afternoon with some of my very favorite people.
53:32
Peter Dunn
You want a little bit of old man gripey?
53:34
Damian Dunn
Yeah. Do I ever?
53:39
Peter Dunn
So, you know I'm back on the road, right? I mean, I'm like, this is a thing. I'm back and going places and talking.
53:45
Damian Dunn
Not to the extent you used to.
53:47
Peter Dunn
Be, but yes, I'm about to be. I guess that's yeah, I have eight flights in the next two months. Actually, that's still not the case. Anyway, I'm speaking in California on no one cares, September 13 property. The deck. My PowerPoint presentation that I have to present to this group of people was due this past Monday, and I was like, I'm not sending it to you. It's not part of my workflow to give you a current events deck. 30 day, more than 30 days, because what's going to happen? They're going to get it, look at it, and it's just going to sit on their computer for a month. And meanwhile, I got other stuff to do, right? And so now they gave me a one week extension. So this afternoon I get to build a PowerPoint presentation for something I'm going to talk about in more than a month.
54:37
Peter Dunn
And that is so dumb.
54:41
Damian Dunn
Can you just give them a deck full of slides that say TBD on them and then give them an updated one a week before you go out?
54:48
Peter Dunn
Or a few I'm a guest. Anyway, this will turn in from old man gripey to, like, entitled elitist real quick. So I'm going to just shut this down. You want me there for a reason. Let me be the professional that I am and I'll deliver. You'll be okay.
55:08
Damian Dunn
Do they not understand that spontaneous Pete is often better than planned pete?
55:15
Peter Dunn
Yeah. The great glory here is it's Pete the Planner. Here's the plan. I'm going to be present and just make it happen in the moment. The only thing I plan is when I'm eating at a restaurant I'm going to six weeks from now.
55:27
Damian Dunn
Yeah.
55:28
Peter Dunn
Getting sweaty because I'm getting upset. Dame, I've had to use the restroom this entire show because of the amount of coffee I've had today. And I almost made you just carry a break while I went to the restroom.
55:38
Damian Dunn
Everyone appreciates you not doing that.
55:42
Peter Dunn
All right. Hey, everybody. I hope things are good because it's getting weird. Okay, dame mazeltov. On everything for the rest of your life. Thanks.
55:56
Damian Dunn
Same to you.
55:57
Peter Dunn
Okay, everybody stay getting money.
