00:13
Peter Dunn
Good day. Good day. Good day, everyone. It's Peter Dunn, Pete the Planner, host of the Pete the Planner show. And yeah, I nailed the intro this week. Sort of been a good week. Joining me as often? Not a whole ways. I mean, sometimes he's like, I'm going to go be with my family in a locale that's not northern Indiana. It's Damian Dunn. Hello, Dame.
00:32
Damian Dunn
Hello.
00:32
Peter Dunn
Pete just described a vacation in the simplest of terms. How you doing?
00:38
Damian Dunn
I'm doing very well. Not as good as I'd be if you had a big old can of Miguel sitting in front of you, but I'm all right.
00:43
Peter Dunn
I still have hot coffee from my home this morning, so I think it's like bourbon, chocolate coffee, but it's flavor. There's no actual bourbon and or chocolate in the coffee. It's okay.
00:57
Damian Dunn
You need to fix it.
00:59
Peter Dunn
I know. Believe me. The post work cocktail while working more at home this week became a norm. Hello, everybody. Welcome to the show. Dame, lots to cover this week. What are we talking about? We're talking about ETF tax implications.
01:17
Damian Dunn
Hello?
01:17
Peter Dunn
Lil spence. That'd be like a rap name. Ted wants to be like his rap name. Have I told you? Ted's Rap name?
01:27
Damian Dunn
You have, but there's no way I could remember that.
01:29
Peter Dunn
89 diamonds. 89 diamonds is Ted's rap name. My son Ted, I don't know why one day he just was rapping, and I was like, what are you doing? He's like, I'm 89 diamonds. And I was like, this is peculiar. Lil Spence 49 is also a good rap name. Mine's. Just Pete, the planner. What would yours be, little Dame?
01:49
Damian Dunn
Let's leave that up to the people in the comments. They can come up with a rap name for me.
01:54
Peter Dunn
All right, fair enough. Good day to the hello. Hello. All right, Dame, let's get after it. Here the comments. I can't see them. What's going on here?
02:06
Damian Dunn
You can't?
02:07
Peter Dunn
I can. But I can't. Something weird's happening. Oh, there we go. Lol is what I missed. Well, glad I saw that. Okay, so I'm back. Dame, are you ready to start the show? It turns out I've got a lot of things to do after the show, and I can't stick around and just with this Tom foolery.
02:22
Damian Dunn
Well, let's make sure that you continue your momentum and get out of here as soon as possible.
02:27
Peter Dunn
I do not have time to mess with you today of all people.
02:30
Damian Dunn
I know.
02:31
Peter Dunn
Let's see. Okay, pulling up the clock. People love this podcast is like, oh, I'm switching to Joe Rogan. Okay, here we mad. Someone's mad.
02:46
Damian Dunn
What?
02:47
Peter Dunn
Mary Lou gave us the angry face. Why are we getting the angry face? Mary Lou. Oh, no. What's happened? What do we do? She'll tell us later. Did you do something, Dame?
02:57
Damian Dunn
Probably.
02:57
Peter Dunn
Okay, I assumed that was the case. Oh. Little Spence 49 says, I am a twin. However, my brother's bigger than I am, so he was Lil when he was born. There's Big Spence and Lil Spence.
03:11
Damian Dunn
I don't think they have the same know.
03:14
Peter Dunn
Well, their last name is probably Spencer. I guess it could I'm little know.
03:21
Damian Dunn
You know, what do I know?
03:24
Peter Dunn
Let's start the show in three, two, one. This week on the Pete the Planner Show, we answer your money questions. You email us, askpete@peteplanner.com that's, askpete@petetheplanner.com, and here's how the show works. You email us, askpete@peteplanner.com that's, askpeet@peteplanner.com, and here's how the show works. Beyond that, we may answer your question. Joining me, as always, is Damian Dunn, vice president of advice at your Money Line and hey, Money. Joining me, as always, is Damien Dunn, vice president of advice at your Moneyline and hey, Money. Hello, Dame.
03:53
Damian Dunn
Hello, Pete.
03:54
Peter Dunn
How was your week?
03:55
Damian Dunn
Was great. How was your week?
03:57
Peter Dunn
Good. Filled with coffee and other liquids. Oh, I don't know what that means, Dame. We did get some questions this week. One of them revolved around ETFs and the tax implications of, you know, you and I have been in the financial business for a long time, and sometimes people ask a question. It's not a bad question. It's more of like, I just hadn't thought of it because I either know something or I take for granted that I already knew that. But this is one of those questions I was, I haven't been asked this in a while, so let's explain that. Hi, Pete. Thank you for your show. You are the most entertaining financial leader that I know. Clearly this person doesn't have a huge circle of influence within the financial world. I have probably a dumb question about taxable accounts. It's oddly not a dumb question at all.
04:51
Peter Dunn
No, it's an incredibly smart question. If I own 500 shares of a single ETF, for example, how many times do I pay taxes on this? Do I owe annual capital gains tax if I never sell or change the shares in any way? Do I only owe long term capital gains if I sell the ETF shares or withdraw from the account in the future? I guess what I'm asking is if I invest in an ETF, say the VTi, for example, never touch the investment until I retire. When and how often will I owe taxes on this passive investment? Please and thank Diane. Diana. Ever do that? Where someone has a name like Diana and you call them Diane, or there's like Christy and you're like Christine and you just embarrass yourself all the time?
05:46
Damian Dunn
I got to be honest, I am really quick to assign nicknames to people off of their real, just shorten it. And I never ask if I can do that. And I've probably gotten in trouble a few times.
06:01
Peter Dunn
Yeah, that's big white guy energy coming in and just being like, I'm going to call, you know, it's like, well, my name's Carol. It's like quiet flounder. All right, so where do we begin with this? There's a difference between a qualified investment and a non qualified investment. So Dane let's start there.
06:20
Damian Dunn
Sure. Qualified investment is going to mean that it is tax advantaged in some way. So four hundred and one K. Four hundred and three B. IRA Roth IRA, you're not paying annual taxes on those investments as you hold them over the course of your lifetime. When you take them out that's when you'll pay the tax ban on those things. Non qualified investments however do have the possibility of kicking off interest, dividends, even capital gains that may become taxable on annual basis. So when you're a non qualified account you have to be very conscious of the investment that you're buying because you may end up with a tax bill throughout the course of the year. Those are typically happen individual stocks. Mutual funds ETFs are a little bit different animal though. ETFs and mutual funds differ slightly even though they all hold various investments inside of them.
07:18
Damian Dunn
But as I said they are managed slightly differently. Mutual funds are typically actively managed. That means there's a group of managers that are deciding what they want to hold inside of those investments they sell investments sell individual companies or bonds, buy new ones and they create gains or losses when they do that.
07:38
Peter Dunn
And that's called turnover by the way. So sometimes those gains or losses are dictated by the percentage of turnover within the portfolio. You can look on just about any investment site. If you pull up, I'll pull up. Like American Funds Growth Fund of America. One of the classics, right? One of the largest mutual funds in the world. I'm going to pull that up as you're talking here. Dame if I can remember the ticker, I just missed it. It's agtx. I'll find it anyway. I'll give you the turnover on that. Keep going. I'm sorry.
08:10
Damian Dunn
Interrupt ETFs however are typically managed off of an index to mirror some index. So unless there's some major change in the index that it's tracking there's not that likelihood of having gains throughout the year because you're not buying and selling individual investments inside of that. So does that mean you won't pay taxes on an ETF? Well maybe not. There still could be those capital gains although probably not as frequently as a mutual fund. But you could still have interest and dividends. Those are the ones that you have to pay attention to. So you could end up having to pay taxes although probably not very much on annual basis but then have to worry about the bigger tax bill when you make a transaction of a sell down the road.
08:56
Peter Dunn
I looked up American Growth fund. American Funds Growth Fund it was 7% portfolio turnover which is really low. And then I looked up Fidelity Magellan which is another classic mutual fund. It's at 42% sometimes. Growth Fund and Magellan are some pretty broad categories there but if you get in like small cap funds and things like that you're going to get or international funds, you get some major turnover in there, which then creates those tax burdens you're talking about.
09:24
Damian Dunn
Yeah. And if you have some investments in a qualified account and some in a non qualified account, sometimes your financial advisor, if you're working with 1, may talk about location of investments to make sure that things that have higher turnover or kick off higher dividends may get put into a qualified account. So you're not faced with the tax bill until much later down the road on those things. So pay attention to what you are investing in and what type of account you're using to invest in those, and you may end up saving yourself some dollars.
09:57
Peter Dunn
So do we feel like we've answered Diana's question?
10:02
Damian Dunn
I do. I think we've done a very thorough job, actually.
10:05
Peter Dunn
So here's where I want to go with this, though. I think this also goes to explain reinforce the idea of what is triple tax advantage, what are the different ways that you can have tax advantage on investment? I think this also begs the question, how does annuity come into all of this? I think it's really interesting because if you think about from an ongoing basis, your capital gains are either taxed or they are deferred, right? They either taxed in a given tax year or they deferred. Taxed is just a non retirement portfolio. However, there are other things that have triple tax advantage or a degree of that deferral, like an HSA, you put money into a health savings account, you get to deduct that contribution off of your taxable income. You then get to defer the taxes on the growth as it grows, the underlying investments.
11:01
Peter Dunn
And then when you take money out for qualified reasons, for appropriate reasons, you don't pay tax on it. Know? Dame sometimes you see financial professionals suggest people take non qualified money like Diana's talking about here, and in order to create some tax sensitivity around it, they put it into annuity, which is an insurance product, which then at that point in time re enters into a period of tax deferral. I'm curious on your thoughts on that.
11:34
Damian Dunn
There's all sorts of ways to go about trying to avoid the taxes that are going to come due. And sometimes it's very dependent on the situation that you're facing as the individual or what the goals are for that money uses as well. So is it reasonable to do things like that? Yeah, absolutely. But the taxes are going to come due eventually. You're going to end up making that check to the government unless you move on to post retirement and then somebody else worries about it.
12:05
Peter Dunn
Dame here's what we're going to do. This show is going to get interesting and people are like, oh good, finally here's what we're doing after the break. I had this mental breakthrough this week when I started to think about how financial stress impacts us and how it can be an amazing motivator and guide until it's not. Then it becomes worthless and you have to find something else to guide you. We're going to talk about that not only the next segment, but theoretically the next segment as well. We're also going touch on the record growth in the economy, 6.9% growth in 2021. I'm Pete the Planner. I'm Pete the planner. Could you tell that was just a big wind up so I could hit the post?
12:50
Damian Dunn
Yes.
12:50
Peter Dunn
Okay. By the way, Mary Lou says it was an accident. You were perfect this week. Seems like she might be overselling a little bit. Danza. Hello, Danza. Good to be with you. All right, Dame, someone on Twitter hit me up last night, said they appreciated the Premier League reference or the Champions League reference on the show last week. A little soccer action there. You ever noticed Dame Jeremy arguably going to be did we ever name Listener of the Year in 2021?
13:24
Damian Dunn
We did not.
13:27
Peter Dunn
It's got to be Jeremy, with all due respect. It's got to be Jeremy, because not only did Jeremy start watching us on YouTube this morning, but somehow switch to Facebook as the comments are coming through.
13:40
Damian Dunn
Wow, that's dedication.
13:43
Peter Dunn
All right. Oh, Rick. Rick's making a run for 2022 Person of the Year. Hello, Rick. Okay, Dame, are you ready for this super heady financial concept that you're just going to shake your head at in awe and possibly disagreement?
14:01
Damian Dunn
Well, we can only hope.
14:03
Peter Dunn
Okay, that's how the show gets good. Let's do it because I've got a lot to do after the show. So much people are throwing out Dame's rapper names. Day Money. Someone else said Mr. Clean earlier.
14:18
Damian Dunn
Jeremy day money.
14:21
Peter Dunn
Brittany that's a good one. I like that Dame diddy it could be Dame Dala, but that is Dame.
14:27
Damian Dunn
Lillard's nickname, not encroaching on that territory.
14:33
Peter Dunn
Every time Ted hits a shot in his youth basketball game, he'll hit his wrist area because Dame Lillard will hit a three for the Portland Trailblazers and then it'll say, it's Dame time, but he hits the three. But when Ted will hit a shot, he'll run down the court just like, tap his wrist because he thinks it's cool.
14:57
Damian Dunn
Man.
15:00
Peter Dunn
I watched Ted, and I'm sure you do with this with your TD as well. And now that they're like they're the middle of elementary school, right? Sort of late middle of elementary school, and you can remember yourself when you were their age and you remember feeling cool and this whole world's around you. And then I look at Ted and I can see him in his own world, like, giving himself the Dame know.
15:26
Damian Dunn
Oh, yeah. I just had a very similar thought when driving by, like, old Little League fields and thinking about how big I thought those were when I was a little kid. And you drive by now and you realize how small they really are.
15:39
Peter Dunn
Every once in a while I'll drive through my childhood house drive by my childhood house which is in Claremont, Indiana and it looks so it looks like they built it within the convention center for the home show. But it's not. It is like a beautiful house but it looks so small. I just remember it feeling like a jeremy, you're just locked up listener of the year with your new rap name.
16:11
Damian Dunn
You don't have to say that one.
16:12
Peter Dunn
To the podcast, krav Medie. To be fair though, you could physically protect your family and I cannot protect mine. Yeah, Kravmadee. That's amazing. I'm going to be laughing for a day and a half on that one. Okay, are we ready? Sure. Back on the Pete the Planner show. Back on the pizza planner show. Dame, I had this thought occur to me this week and I want to share it with you. Feel free to beat it up. I think it's a reasonable thing to discuss and it has to do with what your primary motivation is at any given time when it relates to money. So will you indulge me and my.
16:56
Damian Dunn
Thoughts for a few moments, please expound.
16:58
Peter Dunn
Okay. So you and I do actually spend a lot of time odly personally and professionally talking about that. There are three groups of people in America today from a financial perspective. There are people who are really struggling. There are people who are not struggling but they're also not really stable. And then there's people who are stable. Right. Those are the three groups. We deal with them all the time. It is our professional life to not only acknowledge those groups dane but to treat them differently, respectfully differently because they require different medicine. So here is the thought I started thinking about, well, what motivates these three groups to either take action or what leads to mistakes because of this level of motivation. And here's what bubbled up in me this week. Number one, if you're struggling, what I encourage everyone to do here for a moment is not just say, oh, well, I'm not struggling, I'm not going to listen.
17:58
Peter Dunn
Here's what I'd like you to do. Think of a time, dan wants you to think of a time in which there was some financial struggle in your mean. It can be something as simple for a lot of people as the next payday is not coming soon enough. You're running a little low on the coin in the account, which can happen from time to time. All right. So Dame, do you have a period of your life in your head as it relates to financial struggle?
18:21
Damian Dunn
I think so.
18:22
Peter Dunn
All right, I've got one too. Everyone else?
18:24
Damian Dunn
Okay.
18:24
Peter Dunn
Good. Now, what likely motivated you to take action, to act in any particular way was stress. Right. The stress of the moment is the main feeling you had. Right. You're laying in bed at night, you're stressed about money and what you do next, the next morning, the next day, how you cope with that stress, how do you solve the underlying issues which leading to the stress? That is your motivation, right?
18:59
Damian Dunn
Yeah.
19:00
Peter Dunn
And sometimes that's good. And I would actually note it often is good for a while, right. Because it's action. It's like this animal instinct of survival. There's stress. I got to solve it. I got to do something. Now. Even if you make the right decision under stress can't consistently be the optimal Motivator for you because it's just too much to bear. Right. I mean, it's like athletes that play with a chip on their shoulder. It's the person that tells themselves a story that this team didn't draft me, and so I'm going to be angry for the rest of my career. Some people are able to pull that off, but the vast majority of people that try to act like that's their Motivator, it sort of falls apart at some point, right?
19:48
Damian Dunn
Yeah, I think so.
19:51
Peter Dunn
Then it progresses to a person who is no longer completely unstable. This person has some stability, and they're not necessarily struggling. So at this moment, when things are not ideal and they're not awful, reality is what should be the guide, right? It's like you're supposed to see the scenario and take action based on the information in front of you. But what every single one of us know from a behavior standpoint is that on a daily basis, we process information, we synthesize it, and we still make a decision that goes against our best interest. We all do that. Shall I make myself another boulevardier as I go over this spreadsheet decisions that obviously don't make sense. We have all the information, but we do it anyway.
20:39
Damian Dunn
Yes.
20:39
Peter Dunn
Okay. So it should be reality. And I think this is why you and I, as an organization, our organization, spend so much time dealing with people who aren't necessarily struggling but aren't necessarily stable. And it's because there's so much chaos because people tend to be motivated inappropriately by opportunity as opposed to reality. You know what I'm saying?
21:08
Damian Dunn
Okay. Yeah.
21:09
Peter Dunn
So here's proof of that. Let's say there's a listener right now who has not a full emergency fund. They don't have three months, they don't have two. And let's say they're not putting the right amount into their retirement plan. They're 24 years old. They're not putting away 12% annually. Combined with their employer, they're putting in 7% annually. And let's say that their housing expense is a little more than it should be. Let's say they got a couple of $1,000 in credit card debt. So dame. I've just painted a picture. You know, our scoring metrics or matrix around here, you know that they are not stable.
21:51
Damian Dunn
Correct.
21:53
Peter Dunn
But they have a crypto wallet. They're day trading. This segment is not about crypto. What it is when people aren't stable and they look to use their economic resources. From an opportunistic standpoint, their instability gets worse, not better. But they think it will get better. They try to shortcut the process. Does that resonate?
22:17
Damian Dunn
Yeah. I think you could also look at that as opportunity also presents itself clothed as hope and distraction.
22:31
Peter Dunn
Totally.
22:32
Damian Dunn
It's easy for someone who could recognize the situation they're in, who knows that work needs to be done, and they get drugged down by it. It may seem insurmountable, whatever situation they're facing, whatever hole they perceive, they need to dig themselves out of, but there's something else out there that says, I can help you do this faster, or I can help you forget about the stresses that you've got right now. And it is very natural for so many of us to look for that relief, to give ourselves a boost of confidence, whether it's artificial or not, to make sure that we're getting out of the situation that we find ourselves in. So opportunity, yes, but I think it goes beyond just that word itself, and you can get to the root of what that opportunity really provides to the individual.
23:27
Peter Dunn
I think you're right about distraction. I think if you are in, let's say, paying off student loans for five to ten years, like Brittany expresses here on Facebook Live, as we broadcast live on Fridays at 10:00 a.m Eastern dame, if you're in this window five to ten years where you're just doing the same thing, you're not struggling. You don't have all the stability you need. You want to be distracted, you want to care about something else, which is natural. Hope is an interesting word, though, to this, too, because, and I'm just making a hypothesis here, I think hope often crosses someone over from struggling after stress, jump starts their journey. Hope is what bridges it to the degree of some stability. I think hope is so important to transition from struggling to not struggling, but not stable. And then I also think that on the top end of the second category, before you get to stable, hope also comes into play there.
24:33
Peter Dunn
I don't think, and this is my opinion I don't think hope resides significantly within the second group for a very long time. I just don't.
24:49
Damian Dunn
That they don't see it, that they don't it doesn't motivate them.
24:55
Peter Dunn
I don't think there's people in the middle group who aren't struggling but don't have stability, who wake up every day driven by hope.
25:05
Damian Dunn
Yeah, no, I think that's why when you use the word opportunity, I think that's one of the things that they attach to that is that here's an opportunity, here's some hope for me to move on to that next. And that's why it could be a little bit distracting, because they're trying to get off the treadmill of doing what they know might be able to change their situation long term, but they see something else, and they see that opportunity as hope to get to that next level quicker.
25:33
Peter Dunn
So here's what we're going to do. Coming up after the break, I want to talk about why we're talking about this. The point is to get stability so you can be driven by opportunity. That's what we all want. We want to make decisions on opportunity alone. And the way you do that is via stability. That's all. Next right here on the Pete the Planner show. I'm Pete the planner. I mean, I buy this. It needs developed, right? I'm just being honest. It needs developed. But there's something here, and the hope thing is super interesting.
26:10
Damian Dunn
Everybody on the podcast, you're listening to us workshop an idea right now.
26:14
Peter Dunn
Dane, we took I wouldn't call them personality tests. What would you call those?
26:19
Damian Dunn
Personality tests.
26:21
Peter Dunn
Okay, so we took personality tests as an organization, but they're professional personality tests.
26:26
Damian Dunn
Yeah. It kind of gives you insight to your traits and preferences.
26:29
Peter Dunn
What are those things that people talk about? Enneagrams? They're not that, but it's like that, right?
26:34
Damian Dunn
Yeah.
26:35
Peter Dunn
I don't have any interest anyway, so these things were good, and I felt they were speaking for myself. I felt it assessed me quite accurately, and I feel like it more or less assessed you quite accurately. Do you agree with that?
26:47
Damian Dunn
Yeah, it was 75, 80%. Right.
26:50
Peter Dunn
Rick just noted he hates those things. Same Rick. I mean, I typically hate those things, but I will note they were very practical as to how were using them. It was a pragmatic exercise. Here's why I bring this up. Dame just said you're watching me workshop something I think out loud. I think out loud. You do not like to be put in a position when you're forced to think out loud.
27:18
Damian Dunn
Can everyone imagine how difficult this show is for me at this point?
27:24
Peter Dunn
So, Dame, I presented live in person yesterday for one of our clients, four different sessions, 30 minutes each. My entire presentation was more or less this topic, and so I had not really even thought about I wrote one tweet earlier this week about this. So the first group, I workshopped it. The second group got better. The third group and then the fourth group. And that's how I have to work for me to go in there, like, okay, with budgeting 25%, like, I don't care to do that. I have to think out loud. And I generally have to think out loud with incredibly high stakes and the fear of absolute failure.
28:06
Damian Dunn
Did you do any crowd work when you did stand up?
28:11
Peter Dunn
No, but there's a different reason. I would love to, and I think CrowdWorks is easy, but the reason I didn't do it because it felt cheap, and that's insulting for actual comedians to hear me say that who love to do crowd work, it just feels cheap. It's the same reason I didn't use profanity on stage. It just feels cheap. It's like, I mean, what do you do for a living, sir. I'm a truck driver. It's just like okay, I get it. Thank you.
28:42
Damian Dunn
It just seemed like that might have been a natural fit for someone with your personality type to be able to have that interaction, try and work things out on the fly.
28:49
Peter Dunn
It does, but I get that. It's too easy, though. As a former improv comic prior to being a stand up comic, making something up on the fly is good. It's just not high enough stakes to do crowd know. I don't know where we're went. I want to note, addendum to a thing we talked about a couple of weeks ago. Crackers, downtown Indianapolis was closing.
29:15
Damian Dunn
Yes.
29:16
Peter Dunn
They are now not closing.
29:17
Damian Dunn
What?
29:18
Peter Dunn
I don't know that's. Crackers? No, I don't. They apparently worked it out with their landlord after the news press release about them.
29:27
Damian Dunn
Oh, so same name? Not like marshmallows or something. No.
29:34
Peter Dunn
You should do some crowd dame. This is a pointless question I'm about to ask you. Tell me about what you would be thinking if you literally had to get on a stage and do a six minute improv set or just be funny. Tell me about what you're going through.
29:53
Damian Dunn
Death. At that point, I would have to prepare a week for six minutes.
30:02
Peter Dunn
Well, that's true. I mean, it is six minutes hard. I'm curious. Do you get energy from people laughing at you?
30:09
Damian Dunn
Yeah. If I knew I had a tight six minutes that was reasonably funny and I could at least get a couple of chuckles, I think I could do it.
30:18
Peter Dunn
Do you ever feel like you get a room or you're reading the room, people are responding to you, so you put more energy into their response and it builds into hilarity. I mean, you feel like that's a thing for you?
30:32
Damian Dunn
Yeah, sure. I mean, I don't know about hilarity. That might be a little strong.
30:35
Peter Dunn
It was a bit strong, yeah.
30:36
Damian Dunn
But that give and take with a group of people or an audience or a crowd, whatever you want to call it. And, yeah, I think it's natural for a presenter or comedian or whoever just to feed off of the energy that they're getting back.
30:53
Peter Dunn
Dan, I have to present at a school board meeting here in a couple of weeks.
30:56
Damian Dunn
It's going to be a tough crowd.
30:59
Peter Dunn
No, I'm present about the work we're doing for that organization, but given how school board meetings are these days, I don't have nerves about presenting. I don't really talk about all day. I do have nerves about the other vibe of what's going on there because I have no interest in any of that.
31:13
Damian Dunn
You don't walk in with security.
31:16
Peter Dunn
I should. I need to bring in someone that knows how to handle themselves in hand to hand combat. What are you doing on the 15th?
31:23
Damian Dunn
Getting my bowling ball redrilled.
31:27
Peter Dunn
Is that a thing? I would just want to know, are we just in for. A whole episode of really good Dame jokes. Is that where we're at?
31:37
Damian Dunn
No, I don't think I've had a good one yet.
31:40
Peter Dunn
Okay, but you're going to keep trying jokes is what you're saying.
31:43
Damian Dunn
Yeah. The only person I know that doesn't like them is you.
31:47
Peter Dunn
When I don't laugh at your jokes, does that hurt you?
31:52
Damian Dunn
No.
31:54
Peter Dunn
How about when I just ignore them?
31:58
Damian Dunn
Ignoring is interesting because I'm not sure if you just didn't catch it. Because I know that's happened before, but.
32:04
Peter Dunn
That'S 50 usually, right? Like I'm just mine's going too fast and I miss it or I hear it and it's just I don't want to reward you.
32:13
Damian Dunn
Yeah, that's fine. I understand.
32:16
Peter Dunn
Mary Lou notes that you're busy because you'll be washing your hair.
32:20
Damian Dunn
Yeah, that's a good one.
32:22
Peter Dunn
Ted loves making fun of my mean, just, oh, my gosh. And he thinks it is so funny and clever. I don't get mad. I don't really care because I lean in. That it. But he thinks it's the funniest thing in the world. He'll be combing his hair for school in the morning. I'll walk in the bathroom like, hey, buddy, have a good day. And he's like jealous. Oh, man. Okay, let's pick up where we left off.
32:53
Damian Dunn
I don't even know where that was.
32:55
Peter Dunn
Three, same thing. Three, two, one. Back on the Pete the Planner show. Dame, are you burning any incense? Because it is getting pretty philosophical here on the show this week.
33:10
Damian Dunn
I thought you were going to say it was something else.
33:12
Peter Dunn
Oh, I don't know. Dame, were talking about before the break, there are three groups of people in America as relates to money. There are people who are struggling. There are people who are not struggling, but they're not stable. And there are people who are stable. And what were noting before the break is that people who are struggling are often initially motivated by stress until they get to the point of which they're not struggling, and then something else has to take over. Our hope is that people who are in the middle group, right, people who are not struggling but not stable. Our hope is that they make decisions based on reality, and sometimes they don't. Stress still exists. But what I have found in my six days of study of this topic anecdotally is that people often get distracted in this middle group and they're seeking opportunity.
34:02
Peter Dunn
They'll get distracted by exchanging money for time to purchase convenience, and that is not reality. If you have more time than money and you're exchanging money for time, that's not reading reality. That is seeking opportunity. That doesn't exist. So Dame wants someone to become stable, though, which is all we want. Opportunity is brilliantly. The guide. And that feels good. Yay.
34:32
Damian Dunn
Yay.
34:35
Peter Dunn
I'm going to take a good drink of coffee. And the yay was a question mark. You were rolling.
34:39
Damian Dunn
I thought you were just going to keep right on going with it. No. Opportunity is fantastic. It allows you to take advantage of whatever comes across your path and you can make sometimes huge changes in your life, whether it adds to your stability, whether it provides you an opportunity to build wealth faster, or just take chances. So stability fantastic.
35:04
Peter Dunn
I have another example of the middle group where they rely on it's opportunity. But reality is what's suffering. Okay, so this one I think is a better example than crypto. Although I like the crypto example too. Let's say you're attractive dame. So just everyone I'm attractive. Okay, well, I'm just saying like people have to visualize that in some bizarro universe.
35:29
Damian Dunn
You said, let's say, okay, oh, I.
35:32
Peter Dunn
Forgot the jokes extended beyond the commercial breaks. Dame, let's say that you are in your thirty s and you are not a homeowner. And you keep noting that homes are going fast. I got to become a homeowner. And you realize that you could become a homeowner for the exact same payment of what you're paying for rent. Okay, so far I've just identified reality. But now you're like, there's an opportunity here. Unfortunately, here's the rest of the reality. You wipe out all of your savings, you go cash poor as the down payment for the home. So now you enter this starter home that has starter materials and products within the home because that's the price of the home you can afford and you don't have the means to maintain and repair that home. That is a perfect example of someone who is not struggling. I mean, they get approved for a home loan, but they're not really stable.
36:33
Peter Dunn
But the bank doesn't necessarily care. And you use the resources and the reality you have and you blow right through it because you're distracted by the opportunity. Thus you ignore the reality. That's a better example.
36:46
Damian Dunn
You know what compounds this problem?
36:49
Peter Dunn
Oh yes, please do.
36:50
Damian Dunn
When someone you know and love is encouraging you to take that opportunity. We just had an email come in this week, very similar situation. Fresh college graduate mom wrote us an email asking if we had any comments on her potentially buying a house. She hasn't even graduated yet. She'll graduate this spring. And what were our thoughts and our response was whatever it was. But you got the idea and the impression in that email that mom had a point of view that was probably going to conflict with our answer and it was an interesting response.
37:31
Peter Dunn
This is actually one of my favorite topics. I don't think we've talked about this in a while. Do you know my favorite, least favorite thing?
37:43
Damian Dunn
No, I do not know what your.
37:44
Peter Dunn
Favorite, least favorite thing is. Here it is. This happened a lot in the late ninety s and early 2000s. Still probably happens today. I just don't see it as much. Because your team would be seeing these things. I wouldn't because I'm just not on the front lines. The parents gifting the down payment money to young adults to trick the system to prove housing affordability. It's like, well, we pay $1,200 for rent, but if we had a down payment well, we don't want you to waste your money on rent. We'll give you the $12,000 as a down payment. But the people still don't have savings. And more importantly dame and this is where people get angry, because it's true. They haven't proven their ability to create margin and savings, because half the glory of saving for a down payment is learning what it takes to do it.
38:45
Peter Dunn
Because once you're in that place, you're going to have to consistently create margin so you can repair and maintain the place you couldn't afford anyway.
38:53
Damian Dunn
Yeah, nobody seems to mention that in the brochures about homeownership when you're getting all excited about moving out of your apartment and moving into your own place.
39:01
Peter Dunn
So that's why it's my favorite, least favorite thing.
39:04
Damian Dunn
It's great.
39:06
Peter Dunn
Dame the gross domestic product accelerated at a 6.9 annualized pace in the fourth quarter, well ahead of the 5.5 estimate. Consumer activity and business spending led the gains, which propelled the US. Economy to its strongest full year since 1984. Is that the George L. Orwell book?
39:25
Damian Dunn
Yes.
39:27
Peter Dunn
Who wrote Animal Farm? Gosh darn it, I feel like Animal Farm and George Orwell wrote Animal Farm. Who wrote in 1984? See? Now I'm distracted. George orwell he wrote both.
39:45
Damian Dunn
Perfect.
39:45
Peter Dunn
Anyway, back to the financial show. Jobless claims remained elevated at 260,000, while orders for long lasting goods hit their lowest point since April 2020, signaling end of year slowdown. Dame is this the sign that everything's fine?
40:05
Damian Dunn
No.
40:08
Peter Dunn
I mean, it's a byproduct of what we all knew. A bunch of artificial income pumped into the economy, pent up consumer demand was working itself out. The supply chain is still a wreck. Just wait until you see the first quarter of 2022 before you get excited.
40:24
Damian Dunn
Yeah, we're going to have some drastically different numbers this year, and not because things are so much worse than they were last year, but we're comparing two similar years at this point, and we're going to have some much smaller numbers.
40:39
Peter Dunn
I would like to make a bold prediction.
40:43
Damian Dunn
It's time. We need music when you get ready to make bold.
40:48
Peter Dunn
Sometimes when you're old, it's time to get bold predictions. How's that?
40:56
Damian Dunn
Did you just come up with that?
40:58
Peter Dunn
Yeah, here's my bold prediction. I think Q Two is going to be a dumpster fire from an economic standpoint, and the reason why, but there's a caveat here. If student loan payments get pushed back, the need to make those repayments gets pushed back into out of the second quarter because right now they're scheduled to come back in May. Then I want to change that to third quarter will stink. I think the economy is going to shrink when 86% of Americans who are not making student loan payments, have to start making student loan payments again.
41:36
Damian Dunn
Well, this goes back to a topic that we previously discussed about the possibility of student loan payments actually happening on May 1 in an election year, and it's not going to happen.
41:49
Peter Dunn
Can we not talk politics, but also talk about the financial ramification of politics for a second? I don't want to use loaded words like failed agenda because that feels incredibly loaded, whether it's true or not. I mean, I'll let someone else debate that. I think perceived failures of an agenda will lead to actions which will feel more like wins.
42:18
Damian Dunn
Such as I said.
42:19
Peter Dunn
Do you have an example pushing student loan repayment out of May into like, January of 2023?
42:27
Damian Dunn
Yeah, I could see that.
42:28
Peter Dunn
This is the Pete the Planner radio program. I'm a Pete the planner. This is the Pizza Planner radio program. I don't know. I'm sorry. I still am not convinced student loans get forgiven. I get that question a lot. You get that question a lot. A guy asked me yesterday, he's like, do you think it's worth adjusting my strategy on the belief that student loans will be forgiven en masse? And I said, no, I do not believe so.
43:04
Damian Dunn
No, I don't think they will.
43:07
Peter Dunn
I do think there's going to be actions that lead to the desire for a perceived victory with the administration.
43:18
Damian Dunn
Absolutely.
43:19
Peter Dunn
It's coming. I just don't know. A student loan thing could definitely be one. All fairness, in all fairness, I think you naturally do get a win by appointing a Supreme Court justice. I mean, that always feels like a right.
43:36
Damian Dunn
Sure.
43:37
Peter Dunn
Yeah. So but then is it going to be student loan forgiveness? Is it pushing the student loans back? Is it another round of stimulus? Is it the child tax credit thing gets like, something's got to happen, I just don't know what it is.
43:51
Damian Dunn
Yeah, it'll be interesting to see what they come up with because they desperately need some positive mojo.
43:57
Peter Dunn
And here's the thing. I did say perceived positive mojo to your word, but I think there is utility in it. Right? I mean, like the child care tax credit, there's some negative aspects to it, but I think in my opinion, uninformed opinion, unexpert opinion, I think it has more good than bad. So even if that ends up happening again, it is both perceived as good and arguably good.
44:22
Damian Dunn
Sure, yes. I will say there will be a lot of good that comes out of that. You just have to wait versus the long term costs because nobody seems to want to stop spending money in Washington. I'm not saying that we shouldn't do that, but we need to be a little bit more conscious with where we're spending cash.
44:43
Peter Dunn
And I do realize it's a more targeted form of stimulus, slightly more targeted form of stimulus than just broad stimulus. I think I would be against another round of broad stimulus at this point.
44:54
Damian Dunn
I would.
44:58
Peter Dunn
Know.
45:00
Damian Dunn
But we're not going to talk politics.
45:01
Peter Dunn
I don't think we are. I think we're talking economics. Are we talking politics?
45:05
Damian Dunn
No.
45:05
Peter Dunn
Policy. Where does it policy? Yeah. Where does it cross over of, like when do you start pond hot takes, I think, become part of that.
45:14
Damian Dunn
Yeah, for sure.
45:17
Peter Dunn
Okay. I've got a great use of money this week, as opposed to a waste of money.
45:22
Damian Dunn
I love these. I love great uses.
45:24
Peter Dunn
I saw this morning when I was in here at the office, and this coffee was fuller. This is my first cup of coffee. I'm still getting it. I don't know what's going on. I was like, I instantly wanted this. But the weird thing is I don't have the problem that it solves. It's a huge problem solver for a lot of people. I don't possess that particular problem, so I don't need it solved. But it's so smart that I was like, maybe I need to create that problem so I can get this to solve.
45:58
Damian Dunn
Could you buy it just to buy it and then gift it to somebody who has that problem?
46:03
Peter Dunn
I do. My brother in law has this problem.
46:05
Damian Dunn
Man, I'm really excited to see what this solves.
46:09
Peter Dunn
It's not a pill, don't worry. Okay.
46:16
Damian Dunn
Anyway no, I don't pete, you want to explain?
46:18
Peter Dunn
All right. Three, two, one. This week's biggest waste of money of the week, right here on the Pete the Planner Show is the AirTag wallet. That's right, the air tag wallet. Nimalist air tag wallet. Our premium Nimalist leather wallet has been designed to fully support Apple AirTag. It is the solution for those who tend to lose their important belongings more than others. Just let your phone just use your phone to ring your stuff or see where you had it on a map. So Dame, it's like the know, like, my wallet I got in my pocket. This is not helpful for the radio audience. And by the way, why am I showing my wallet? Because there's a wallet on the screen. It's just a good small sized wallet, but it's got an integrated slot for the air tag. I think that's brilliant. Do you?
47:18
Damian Dunn
Yeah, I think it's a natural use for that product that Apple created, and I think it's going to find its way into dozens of other everyday products that are commonly misplaced.
47:30
Peter Dunn
Yeah, Rick on Facebook just notes that they need to come out with one of these things for tape measures.
47:35
Damian Dunn
Tape measures, ten millimeter sockets, all sorts of stuff.
47:38
Peter Dunn
Don't start talking, man. Talk. Ten millimeter sockets? Well, I had to Google that later. It's 39 95 the Nimlest air tag.
47:46
Damian Dunn
Wallet, does it come with the air tag, too?
47:50
Peter Dunn
That's a great question. I don't believe so. I don't believe so. I'm looking now. I don't think so. Dame, I went to the hardware store four times on saturday.
48:04
Damian Dunn
It's about average.
48:06
Peter Dunn
So here's, can I explain.
48:07
Damian Dunn
What I was dealing with, please?
48:11
Peter Dunn
So our toilet, it's a Mansfield 210. Our toilet, the tank on it the flush valve. Not the flush valve. There's two valves. There's the flush valve and then there's the what are the two valves? Anyway? Something broke and I know how to fix it because I grew up in a plumbing family. I just odly enough, don't remember what anything's called. So I went to the hardware store to find what I needed and they didn't have it. Okay? So then I went home and I was like, I'll putts with it a different way. So I went to putts with it a different way. Needless to say, I ended up two other hardware stores. And then I got back and I was there and I was doing it. It was working. And I went to take off a bolt that was completely corroded. I had to get some WD 40.
48:58
Peter Dunn
It didn't work. And so then I had to go buy a sawzall and just cut the bolt. And then I repaired the toilet. And then I had to go to CVS and get bandages because I cut my hand. That was my weekend.
49:10
Damian Dunn
Did you really buy a sawzall?
49:12
Peter Dunn
It was a fill valve. Thank you, Rick. I did buy a sawzall. I never had one. And I bought one and I was reciprocating saw. And then I had explained to Mrs. Planner what a sawzall was, and she was like, you mean like saws all things? And I was like, yeah, but it's Sawzall, which is a Milwaukee brand name. But I bought a right, what's the green one? Ryobi.
49:38
Damian Dunn
Yes, Dame?
49:40
Peter Dunn
What's? In the news this week, nearly one.
49:42
Damian Dunn
Third of undergraduates borrow money from the federal government to pay for college. That's about 43 million Americans who owe a staggering total of nearly 1.6 to 1.7 trillion in outstanding student loans. A new survey found that 54% of federal student loan borrowers said taking on that debt was not worth it.
50:01
Peter Dunn
Overall.
50:02
Damian Dunn
However, 44% said taking on the debt was worth it, according to the CNBC Acorns Invest in you student loan survey done in partnership with Momentive. That's right. Three people involved or three organizations involved in that. Yet millennials and Gen Xers are far more skeptical. Some 63% of respondents aged 35 to 44, considering their current situation, said it was not worth taking out federal student loans.
50:31
Peter Dunn
Can I be condescending for a moment? Sure. Anytime I hear surveys like this where someone has asked an opinion to self evaluate their being within a financial scenario, like retirement confidence, for instance, I always get caught up the fact that the person, while it is their perspective, often it is a very uninformed perspective. And I know you have to account for that. I mean, that's the whole point. It is a self. But when I hear this, I'm thinking, okay, so 54% says it's a way, say it's waste 44%, say it's not. My head immediately goes to well, of those two populations, who has misdiagnosed their own situation the most? Do you think people are too critical of the money they spent on college, or do you think people are not critical enough? So I put that to you, dame who is actually missing it? Which population?
51:29
Damian Dunn
I'd probably go with the lukewarm and say there's got to be plenty of both in each camp. But it's interesting to see how the perspective seems to be changing a little bit. Saying it wasn't worth it, taking out all these money, all this money on loans, for me to go to college when maybe it didn't pay off like I thought it was. Maybe I'm not even doing anything related to my college degree, when for years and years, it's been a lot of, well, you got to go to college. You got to go to college. And now it seems like we might be having a little bit of a change in perspective around the country.
52:07
Peter Dunn
Maybe your rap name should be Switzerland.
52:09
Damian Dunn
Yeah, maybe.
52:11
Peter Dunn
What else is in the news?
52:13
Damian Dunn
After a few months of delay, the federal reserve released its study on if the US. Should create a central bank digital currency, a CBDC. And for now, the answer is you know that cute little shrug emoji that's like it's. That it's. That one. The central bank wrote that it takes no position on the ultimate desirability of a digital dollar. Pete, this is becoming something that lots and lots of countries are looking into, I think 87 countries to have a central bank digital currency.
52:45
Peter Dunn
Here's what I recommend. I'm by no means an expert in this, by the way. Let's let some other country do it, see how it goes.
52:53
Damian Dunn
They have. Nigeria launched one in October of 2020, which sounds like it's a big scam, doesn't it? Oh, no, because you always get that email saying, how's it going?
53:04
Peter Dunn
Do we know?
53:05
Damian Dunn
Well, three weeks after the enaria's debut, the country of 211,000,000 reported that 480,000 people had downloaded the consumer wallet needed to use the digital currency and 62 million naria, which sounds a lot, but that's only about 150 grand in US. Dollars had been transacted.
53:23
Peter Dunn
Yeah. So that's some data. But, I mean, do you think it's you're not an expert at this, either. I feel like it's a wait and see on those.
53:30
Damian Dunn
Yeah. Somebody's going to have to make the use case for it, just like we should make the distinction. These are not crypto assets. These are basically digital dollars that we're talking about.
53:44
Peter Dunn
Yeah. So there's no paper money to back it.
53:47
Damian Dunn
Correct.
53:48
Peter Dunn
Yeah. Interesting. What else is in the news?
53:53
Damian Dunn
Ford is cutting off customer orders for its new maverick pickup truck. Ford said it's maxed out on what it can build for the lower cost pickup that starts around $20,000 and is already straining to fill a backlog the unusual suspension of orders is a sign that American shoppers are hungry for more affordable options. As prices for new cars and trucks hit records and availability remains constrained, ford told US dealers it will resume taking orders for the 2023 Maverick in the summer.
54:19
Peter Dunn
You know the most shocking thing about you?
54:23
Damian Dunn
Please.
54:23
Peter Dunn
You don't have a pickup truck.
54:25
Damian Dunn
Yeah, I do.
54:27
Peter Dunn
You know what's shocking about me is I didn't realize you had a pickup truck. How come I've never seen you drive your pickup truck?
54:33
Damian Dunn
I don't drive it. I put a plow on it's. A work truck.
54:37
Peter Dunn
Okay, well, that there I feel validated.
54:42
Damian Dunn
It rarely leaves the county I live in.
54:44
Peter Dunn
Yeah, so, I mean, I didn't know you had a truck, but I was shocked by the idea that there was a possibility you didn't. But now that I know you do, I feel validated.
54:55
Damian Dunn
Pete, I've got two.
54:58
Peter Dunn
Don'T. I don't know where you live, budy. So, Dame, this week on the show, we talked about ETFs, taxation. We talked about qualified assets, non qualified assets. Then I went and I waxed poetic like I was in my Hanover College required philosophy course, in which I also did poorly. And then we talked about the economy and what we think is going to happen. Going just we pittered around current events and AirTag wallet. Quite the successful program this week.
55:29
Damian Dunn
I think it'll be very highly rated.
55:32
Peter Dunn
If you want to email us and have us do things to you, answer your financial questions, askpete@petetheplanner.com that's. Askpete@petetheplanner.com. If you want to email us and have us do things to you, answer your financial questions, askpete@peteeplanner.com that's. Askpete@peteepeplanner.com. Thanks, Dame, for your contributions. Primarily the humor you injected into the program this week.
55:53
Damian Dunn
You're welcome.
55:54
Peter Dunn
Everyone else, I'm sending you good vibes because good vibes are all that's in the budget. I'm Pete the planner. This is the PTP show.
56:06
Damian Dunn
You really didn't think I had a pickup truck?
56:08
Peter Dunn
Well, I was shocked you didn't. To be fair. A, we've never talked about this.
56:14
Damian Dunn
It's true.
56:15
Peter Dunn
B, I've never been to your house. C, you've never driven it around me.
56:21
Damian Dunn
It's true.
56:22
Peter Dunn
I've seen two of your vehicles. I've seen your car that you drive, and I see you guys, your family car.
56:31
Damian Dunn
I don't have that car anymore.
56:34
Peter Dunn
Your boss odly enough feels like my boss says, clearly you have a truck. Clearly we have a truck.
56:42
Damian Dunn
Clearly.
56:43
Peter Dunn
Well, I know it clearly, but I had no visual. Do you think I own a pickup truck?
56:49
Damian Dunn
No.
56:50
Peter Dunn
Why do you say it like that? I do tough things.
56:53
Damian Dunn
HOA probably doesn't allow pickup trucks in your neighborhood.
56:57
Peter Dunn
Your boss says you have an unreasonable number of vehicles. Wait, you have more than three? Yes.
57:04
Damian Dunn
Technically, yes, but okay, let's hear about it.
57:07
Peter Dunn
Big Mr. Money Bag one hasn't seen.
57:09
Damian Dunn
The road in years.
57:11
Peter Dunn
Are you working on it?
57:13
Damian Dunn
Yeah.
57:13
Peter Dunn
Do you lay on your back and slide under it and have a rag and come out and be.
57:18
Damian Dunn
No, I've got a lift in my barn that takes it off the ground so I don't have to get on my back to do that.
57:23
Peter Dunn
Rick says you have three Corvettes.
57:26
Damian Dunn
Rick I have one. That's the one that's getting worked on. I'm turning it into a go cart.
57:30
Peter Dunn
What?
57:31
Damian Dunn
Yeah.
57:36
Peter Dunn
Mentally, I have a pickup truck. I just drive around in it and put firewood in it. A rick or a cord.
57:46
Damian Dunn
We need to get you at a real go cart track and just let you have fun.
57:51
Peter Dunn
I have on hiking boots today.
57:53
Damian Dunn
Do you?
57:53
Peter Dunn
They're not fashion boots. They're hiking boots.
57:56
Damian Dunn
I love that.
57:57
Peter Dunn
I just possess fashion boots. I got to go. This sucks.
58:03
Damian Dunn
They got to get out of here.
58:05
Peter Dunn
I'm sorry. I have very important things to do. I got to go.
58:08
Damian Dunn
Yeah, Rick. Yes. Cletus style, but without the $25,000 motor in the front.
58:14
Peter Dunn
Hey, everybody stay getting money. Bye.
